Monday 17 December 2012

Conditional Benefits and Breaches of Undertakings

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Can an employer withdraw a conditional benefit under a compromise agreement when the employee is in breach of his undertakings?

Yes, says the Queen's Bench Division, on the facts in Imam-Sadeque v Bluebay Asset Management.

Mr Imam-Sadeque (I-S) was a highly paid and senior investment manager.  He wanted to leave his employer. If he resigned, he would be a "Bad Leaver" for the purposes of a share option scheme. However, he entered into a compromise agreement which would deem him to be a "Good Leaver", and allow him to exercise share options worth £1.7million. But this benefit was conditional on compliance by the employee with promises not to compete or solicit BlueBay's employees.

The employee broke these terms by secretly setting up in competition and poaching an employee. The employer withdrew the benefit on account of these actions.

The High Court held that BlueBay was entitled to do this on account of  I-S's repudiatory breach of the agreement, and the shares were forfeited.

Nor was the condition a penalty. All the agreement did was to confer rights on I-S which he would not otherwise have had. The agreement conferred a conditional benefit which simply never accrued because the employee failed to fulfil the condition, namely performance of the agreement on his part. Furthermore this was an agreement struck between sophisticated parties of comparable bargaining power.

In the words of Popplewell J, It would be an "injustice" to BlueBay if the employee could escape his bargain.

Wednesday 12 December 2012

Volunteers and Discrimination Protection

[Thanks to Sarah Fraser Butlin of Cloisters for preparing this case summary]
Do volunteers fall within "occupation" in the Framework Directive so they are entitled to discrimination protection?

No, says the Supreme Court in X v Mid-Sussex Citizens Advice Bureau, upholding the Court of Appeal's decision last year.

The Appellant was an HIV positive CAB volunteer.  She alleged that she was 'dismissed' because of her disability.

Lord Mance gave nine reasons for rejecting her appeal:

1. There is no general EU law principle of equality.  Protection is only afforded in specific contexts.

2. "Access to occupation" in Article 3(1)(a) concerns "access to a sector of the market rather than particular employment or self-employment".

3. If protection was intended, "occupation" would appear in Article 3(1)(c), dealing with "employment and working conditions".

4. "Occupation" derived from ILO Convention No.111, and the ILO definition i.e. "the trade, profession or type of work performed by the individual, irrespective of the branch of economic activity to which he is attached".

5. The original proposal and impact assessment did not address voluntary activity.

6. The Council of Ministers expressly rejected a proposal to include "unpaid and voluntary work".

7. No enforcement action had been taken for non-inclusion of protection for volunteers.

8. The Appellant and EHRC accepted not all volunteers were protected.  But the Directive gave no indication of where to 'draw the line' (offending against legal certainty).

9. Volunteers and workers were not comparable.  Hence the assertion that comparable situations ought to be treated comparably did not assist.

The request for a CJEU reference was rejected, as the answer was clear.

Monday 10 December 2012

Procedural Fairness and Disparity of Treatment

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
Is it perverse for an employment tribunal not to regard a dismissal as a reasonable response, if misconduct is committed by an employee in a safety critical role?

Yes, says the EAT in SPS Technologies Ltd v Chughtai, overturning a majority tribunal decision.

The Claimant was dismissed after admitting falsifying test data for the Respondent aerospace manufacturer. The employment tribunal found by a majority, the employment judge dissenting, that the dismissal was unfair. The majority held that dismissal was outside the band of reasonable responses, and found disparity of treatment by the employer of the Claimant and his supervisor, after the Claimant asserted that data falsification was 'common practice'. This was not backed up by the employer's thorough investigation.

The EAT held that the majority had fallen into error, having regarded the Claimant's evidence on falsification at tribunal as credible, they had substituted their view for that of the employer as to whether falsification was common practice. A disparity argument fell down as the employer would have dismissed anyone falsifying test data, but it reasonably found that there was no 'common practice' of falsification, so no action was taken against others. and the employer's clear evidence was that anyone falsifying data would be dismissed. The majority's view that the Claimant's dismissal was unfair as it was outside the band of reasonable responses was held to be perverse, with the appeal curing a procedural defect at the dismissal stage.

The EAT also overturned a finding of 30% contribution for conduct and no Polkey reduction, finding - like the employment judge - 100% on both contribution and Polkey.

Equal Pay

[Thanks to Sophia Berry, pupil barrister at Littleton Chambers, for preparing this case summary]

Do pay protection policies breach the Equal Pay Act 1970?

Not necessarily, said the Court of Appeal in Haq v The Audit Commission.

The Court held that the employment tribunal had not erred in law in finding that the Claimants had established a prima facie case of indirect sex discrimination. The employment tribunal was entitled to conclude that the Audit Commission's amalgamation of two administrative roles and its application of a pay protection policy to the affected employees had had a disparate adverse impact on the Claimants.

The employment tribunal's analysis of the objective justification question was, however, wrong in law. The Court of Appeal rejected the tribunal's suggestion that 'red circling' the pay of those employees with higher pay points or assimilating the roles and making the employees with higher points redundant would have constituted a less discriminatory means of achieving the Commission's legitimate aims than the pay protection policy. The EAT was entitled to substitute its own view of the matter for that of the employment tribunal and the majority (Lewison LJ and Sir Mark Waller) therefore dismissed the appeal. Mummery LJ, dissenting, concluded that the question of objective justification should be remitted to the employment tribunal as the EAT had approached it incorrectly.

Mummery LJ's judgment promotes negotiation as a means of saving time, effort and money and achieving better outcomes in equal pay claims. He notes that 30 years of equal pay litigation has not eradicated sex discrimination in pay and that courts may not be the best places in which to end the injustice of workplace discrimination.

Friday 7 December 2012

Trade Union Rights: Blacklisting

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Can an employer refuse to be dictated to about whom to employ without breaking trade union membership discrimination laws?

Yes, said the EAT, on the facts of Miller v Interserve Industrial Services Ltd.

In this case the employer provided labour for "shut-down" projects at oil depots. The business was highly unionised. A full-time trade union official from UNITE pressured the employer to recruit three named employees with a view to their acting as shop stewards. By all accounts the full time official's approach annoyed the employer who regarded the union official as having a combative manner. As a result the employer declined to recruit the individuals concerned.

The employment tribunal found that, as a fact, this was because he resented being bullied by the union and he did not wish to be dictated to about whom to employ. Because of this motivation the employer had not refused to employ the employees because of their trade union membership contrary to section 137(1) of TULR(C)A 1992.

The EAT agreed. The employees were simply caught in the "crossfire" between the employer's manager and the union official. Their non-recruitment did not relate to their trade union membership.

However, the EAT said, the outcome of this kind of case will depend entirely on the assessment of the evidence in each particular case. The EAT would expect this kind of employer's explanation to be scrutinised narrowly. But on this occasion the employer passed the test.

Thursday 6 December 2012

Time Limits: Acts Extending over a Period

[Thanks to Sarah Russell, solicitor at Russell, Jones and Walker, part of Slater & Gordon Lawyers, for preparing this case summary]
Is banning a contractor from site an "act extending over a period" for the purposes of calculating the limitation date in a race discrimination claim?

No, it is a one-off event, said the Court of Appeal in Okoro & Anor v Taylor Woodrow Construction & Ors.

The Appellants were engaged through an agency to work for Taylor Woodrow.  A dispute arose, and on 7th April 2008, they were told that they were banned from site.  Another agency then sent them to the site on 18th April 2008.  They were again told that they were banned.  The Appellants presented a race discrimination claim regarding the ban on 6th August 2008.

A continuing act can occur where a policy disadvantages a person or group throughout their employment.  Time then runs from the date of dismissal.  In this case, the ban was held to be a one-off decision, particularly as there was no ongoing relationship between Taylor Woodrow and the Appellants.  The case was therefore out of time.

The Court of Appeal noted that if there had been a reconsideration of the original decision, time would have started to run again from the date of the re-consideration.

Monday 3 December 2012

TUPE settlements and credit against compensatory award

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
Should a compensatory award be reduced to take into consideration sums received through a settlement with another party?

Yes, says the EAT in Optimum Group Services v Muir.

The Claimant won his unfair dismissal claim in a TUPE scenario against the Appellant, having settled his claim against the second Respondent before the hearing. The employment tribunal declined to reduce the compensatory award to take into account the Claimant's settlement with the second Respondent.

The EAT reduced the compensatory award to take into account the settlement with the second Respondent. Reminding tribunals that the compensatory award is not intended to operate as a 'penalty', the EAT held that it would not be right for a Claimant to make a 'profit' through double recovery; tribunals had no discretion in this matter. A Claimant's loss that has been made good must be taken into account (except where the Norton Tool principle applies to notice pay). The EAT also warned tribunals about taking into account irrelevant factors, such as a 'windfall' to a party, in these circumstances.

The EAT ordered the Claimant to disclose the amount of the settlement, and practitioners may consider it prudent to itemise sums paid for heads of claim if making a settlement in similar circumstances.

Tuesday 27 November 2012

Strike-outs and Core Factual Disputes

[Thanks to Sian McKinley of Cloisters for preparing this case summary]
Where there is a 'crucial core of disputed fact', can a case still be struck out?

Yes - provided evidence is heard on the factual disputes - says the EAT in Eastman v Tesco Stores.

Ms Eastman was a part-time customer assistant. As a result of personal difficulties, she sought and was granted a career break of four years. It was her case that there was an express agreement that she could return to her old job on the termination of the career break. This was denied by Tesco.

In 2012 she attempted to return to her old job but her request was refused. She brought a claim for unfair dismissal and relied on the alleged express agreement to show that her employment continued through the career break. At a PHR, the employment judge heard evidence from Ms Eastman and an employee of Tesco. He concluded there had been no express agreement that Ms Eastman could return to her old job on the termination of the career break. The case was struck out on the basis it had no reasonable prospects of success.

Ms Eastman appealed and contended there had been a misapplication of the law of strike-out. Ms Eastman relied on the proposition that, where there is a crucial core of disputed facts, these are not susceptible to determination other than at a full hearing having heard the evidence. Such a case is not suitable for strike-out.

The EAT noted that an employment judge may take into account oral and documentary evidence at a PHR. Having heard evidence, an employment judge is entitled to resolve a core factual dispute. Having so resolved the factual dispute, the employment judge is entitled to conclude that a claim had no reasonable prospects of success. This case could be distinguished from those cases where no evidence was heard and there remains a crucial core of factual dispute at the PHR stage, such as in Ezias, Balls and Shoebridge.

Dismissals involving accumulated warnings

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
When considering the fairness of a dismissal based on accumulated disciplinary warnings, may a tribunal look behind earlier warnings?

No, says the EAT in Wincanton Group v Stone, unless satisfied that an earlier warning was issued in bad faith or was manifestly inappropriate.

The Claimant (a lorry driver) was dismissed for misconduct after a serious driving accident, on the back of a written warning for different misconduct. The employment tribunal found the dismissal unfair, having considered that the Claimant challenged the earlier warning (here by a tribunal claim) and how it arose, although that warning was found to be valid.

The EAT overturned the finding of unfair dismissal, remitting the case for re-hearing and set out guidance for tribunals dealing with dismissals involving accumulated warnings (paragraph 37).

The overall question is the reasonableness of the employer's act of treating conduct as a reason for dismissal under Section 98(4) ERA, and tribunals should:

  • take into account the fact of an earlier warning;

  • take into account any proceedings that may affect the validity of a warning (usually an internal appeal), and consider what weight the employer gave to any challenge before dismissing;

  • avoid "going behind" an earlier warning by considering its validity, unless satisfied that to do so is appropriate.

  • But tribunals are not "going behind" a warning by taking into account the factual circumstances that gave rise to it, e.g. considering whether the types of conduct giving rise to an earlier warning and ultimate dismissal were similar or not, and tribunals may consider the particular features of a situation, as well as the consistency of the employer's approach.

    Unfair Dismissal and Article 8

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
    Does the 'band of reasonable responses' test in unfair dismissal have to be modified where an employee's rights under Article 8 of the European Convention on Human Rights are engaged as a consequence of the dismissal?

    No, says the Court of Appeal in Turner v East Midlands Trains.

    This case concerned the dismissal of a train conductor for alleged ticket irregularities. The employment tribunal applied the 'band of reasonable responses' test to both the fairness of the employer's investigation, and its ultimate decision to dismiss for the purposes of section 98 (4) of the ERA 1996 and found the dismissal fair.

    The question was whether the tribunal was right to do so if Article 8 of the ECHR (right to respect for private and family life) were engaged. The tribunal found that Article 8 was not in fact engaged. But even if it were, and section 98 (4) had to be read compatibly with Article 8 (in accordance with Section 3 of the Human Rights Act 1998),  the tribunal considered that (applying X v Y) the 'band of reasonable responses' test is in itself compatible with Article 8.

    On appeal to the Court of Appeal  the claimant pursued the argument that Article 8 was engaged and therefore the employer's investigation did not satisfy the alleged stricter procedural requirements which the proper protection of Article 8 rights requires. The employer argued that the claimant could not argue that her Article 8 rights had been infringed when she had brought the consequences on herself. That question could not be answered, said the Court of Appeal, until the fairness of the procedures and the proportionality of the sanction have been determined.

    However, the 'band of reasonable responses' test which, according to the case law such as A v B, requires a heightened standard to be adopted where the consequences of dismissal are particularly grave, adequately satisfies any Article 8 requirements as to procedure and thereby secures the benefit of the Convention right.

    Continuity of Employment

    [Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary]
    Are relations between employer and employee 'governed by a contract of employment' for the purposes of continuity after an offer of employment has been accepted, but before the employee has started work?

    Yes, says the EAT in Welton v Deluxe Retail Limited.

    Mr Welton worked at a shop in Sheffield. When the shop closed, he was dismissed.  During the following week, he agreed to accept employment at another shop owned by the same employer in Blackpool. He started work the week after that, and was dismissed a few months later.

    Langstaff P held that once the offer of new employment had been accepted, relations between the parties were governed by a contract of employment: it was not necessary for work actually to have started under the contract. That gave Mr Welton sufficient continuous employment to bring his claim.

    The President also held (obiter) that Mr Welton had in any event been absent on account of a temporary cessation of work. Mr Welton's final argument -  that continuity was preserved during his absence under section 212(3)(c) by an arrangement arrived at after the start of the new employment - failed. Such an arrangement could not be made retrospectively.

    The judgment is worth reading in full for its first-principles analysis of the contractual position - especially for anyone who missed the President's ELA Annual Lecture last week.

    Right to Legal Representation in Internal Disciplinary

    [Thanks to Angharad Davies of Dere Street Barristers for preparing this case summary]

    Is it unfair for a Claimant to not be permitted legal representation during an internal appeal hearing?

    Not necessarily, says the EAT in Ministry of Justice v Parry, unless the circumstances fall within an exceptional class of case in which the decision to dismiss from employment is also a decision which creates a legal barrier to the employee working again in their chosen profession, such that Article 6 ECHR guaranteed a right of legal representation at a disciplinary hearing.

    The Claimant was a District Probate Registrar and had a final written warning for gross misconduct, namely bullying and harassment. Further similar complaints were made within the currency of the warning. The complaints were upheld and the Claimant summarily dismissed.  The Claimant asked if she could be represented by solicitors at her appeal.  The request was declined but written submissions were prepared and considered by the Respondent.

    The EAT had to consider whether legal representation at the appeal was mandated and if so would a dismissal in the absence of such an opportunity be necessarily procedurally unfair. The EAT were referred to a number of authorities which demonstrated that a pragmatic, context-sensitive approach needed to be adopted to determine whether Article 6 was engaged.

    The EAT recognised that there was a contractual right to dismiss an employee but in some circumstances this decision could impact on an employee's broader civil rights: whether they could continue to work not simply in their role but in their chosen profession. In these circumstances where the employee's civil rights were engaged the guarantees provided by Article 6 must be observed. This was essential whether or not the decision regarding practice in their chosen profession would be taken at a later date by an external body. If there is a sufficient link between the internal proceedings and the determination of the employee's right to continue in their profession, Article 6 is engaged.

    The EAT held that the tribunal did not have sufficient evidence to decide whether Article 6 applied and therefore they were wrong to make the decision. The matter was remitted to a fresh tribunal.

    Tuesday 20 November 2012

    Facebook dismissal - court upholds traditional measure of damages

    [Thanks to Peter Taheri of 5 Essex Court for preparing this case summary]

    The High Court has handed down judgment awarding just £98 to the Claimant in Smith v Trafford Housing Trust; a breach of contract claim by a Claimant demoted for making comments on Facebook expressing his personal views on gay marriage. This case raises a number of issues:

    First, of interest is the reasoning on the factual issue of whether the Claimant had committed misconduct at all. Some of the points may well assist claimants in Facebook cases.

    Mr Smith's Facebook wall page identified him as an employee of the Trust. He had 45 work colleagues among his Facebook friends, including at least one who was offended by these comments. His wall was accessible by not just his 201 Facebook friends, but by friends of friends.

    In finding that the demotion was a breach of contract, the Court held that:

    1) No reasonable reader of Mr Smith's Facebook wall could rationally conclude that what he wrote about gay marriage was posted on the Trust's behalf. This was based on a reading of the wall as a whole, which included posts about sport, food and motor vehicles. It was clear that Mr Smith used Facebook for personal and social, rather than work related purposes.

    2) Encouraging diversity in the workforce inevitably involves employing persons with widely different religious and political beliefs and views, some of which, however moderately expressed, may cause distress among the holders of deeply held opposite views.  Such distress or offence is a necessary price to be paid for freedom of speech. Mr Smith's moderate expression of his personal views, on his personal Facebook wall at a weekend out of working hours, could not sensibly lead any reasonable reader to think the worst of the Trust for having employed him as a manager.

    3) Facebook had not acquired a sufficiently work-related context in this case to attract the application of the employer's disciplinary policies (even though those policies did to some extent cover conduct outside working hours and on Facebook). The Court distinguished this case from one of a targeted e-mail sent to work colleagues, or a case where work colleagues are invited to the pub for the purpose of religious or political promotion outside work; as Mr Smith's Facebook friends had each made a choice to be his friend on Facebook and so to seek his views.

    4) Mr Smith's postings on gay marriage were not, viewed objectively, judgmental, disrespectful or liable to cause upset, offence, discomfort or embarrassment. Nor were the manner and language in which he expressed his views.

    Second, it was held that the demotion, as a repudiatory breach of contract, constituted an actual dismissal, even though the employee claimed he had affirmed the employment contract, without waiving his right to damages for breach, by working at the lower grade under protest. Despite Mr Smith's argument that an "unaccepted repudiation is a thing writ in water", it was held that the original contract was at an end as Mr Smith had agreed to work in a different capacity for a greatly reduced salary under a new contract with the Trust. Unfortunately for Mr Smith, this was therefore held to be a case of wrongful dismissal.

    Third, damages for wrongful dismissal are limited to financial loss during the contractual notice period, which in this case was just £98 (the difference between earnings in the two jobs for the 12 weeks' notice period). Mr Smith's argument that the latter principle had been undermined by Durham Tees Airport v BMI Baby Ltd and anr did not succeed. As there was no unfair dismissal claim, the financial compensation awarded was very limited. This underlines the importance of bringing one's claim in time in the most appropriate tribunal.

    Friday 16 November 2012

    Statutory Dismissal Procedure

    [Thanks to James English of Samuel Phillips solicitors for preparing this case summary]
    Can a Claimant rely upon two letters, one sent before resignation and one after, as a grievance for the purposes of the now defunct statutory dispute resolution procedures?

    Yes, says the Court of Appeal in Dolby v Sheffield City Council.

    In a trip down memory lane for many practitioners, the Court of Appeal considered the statutory procedures under Part 2, Schedule 2 of the Employment Act 2002 and restored the employment tribunal's judgement that they had jurisdiction to consider a whistleblowing claim.

    In May 2008, the Claimant appealed the outcome of a Stage 2 meeting. Several days later, she wrote a further letter which referred to protected disclosures and detriments.  In July 2008, before the appeal hearing, she resigned.  In August 2008, her solicitors wrote on her behalf, and referred to constructive dismissal.

    Overturning the EAT decision, the Court of Appeal (adopting 'now discredited' over 'rebarbative' as their barbed epithet of choice) held that the two letters read together made the nature of the grievance clear. The fact one was sent after a Stage 2 meeting had been convened for an earlier grievance was irrelevant.

    Wednesday 14 November 2012

    Non Compliance with Unless Orders

    [Thanks to Simon McCrossan, squatter at New Walk Chambers, for preparing this case summary]
    When a party fails to comply with an 'Unless Order' does the employment tribunal possess any discretion to refuse to strike out a claim?

    No, says the EAT in Scottish Ambulance Service v Laing.

    Upholding the Respondent's appeal, Lady Smith held that an 'Unless Order' made under Rule 13(2) of the employment tribunal rules amounts to a conditional judgment, which will result in the automatic strike out of proceedings in the event of whole or partial non-compliance: "it is not open to a tribunal to revisit its decision that a failure to comply will result in strike out".

    In first instance, the tribunal had erred by applying the incorrect test under Rule 18(7) thereby incorrectly exercised its discretion in considering a variety of factors including the degree of compliance, fair notice and previous conduct which led to the eventual refusal (following further interim hearings) to strike out the Claimant's case on the grounds of insufficient particulars.  In any event, the EAT held that the Claimant failed to comply with the 'Unless Order' by the compliance date and that documentation considered after this time was not relevant for the purposes of striking out the claim.

    Permanent Health Insurance

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
    Can an employee dismissed for ill health sue for damages if he thereby loses benefits under a PHI policy?

    Not on the facts in Lloyd v BCQ Ltd, said the EAT.

    Mr Lloyd was dismissed because of ill health. One of his claims was that this was in breach of an implied term that the employer would not dismiss him if this had the effect of removing his entitlement to PHI benefit.

    In Aspden v Webb's Poultry and Meat (Holdings) Ltd Sedley J (as he then was) held that there was a term implied into the employee's contract that, notwithstanding an express term allowing for termination for prolonged sickness, this would not be exercised if it had the effect of depriving him of his PHI benefit in the absence of any fundamental breach by him. In Reda and another v Flag Ltd however, the Privy Council explained that Aspden was a case with special facts. On the evidence it was found that it had never been the employer's intention to exercise its contractual right of dismissal where to do so would frustrate the employee's entitlement to income replacement insurance. In Lloyd, however, no such background existed. And Mr Lloyd's contract contained an "entire agreement" clause. This was an express term and there was no scope for the implication of a term which contradicted it.

    In the alternative, the EAT held that if it were, in a given case, appropriate to imply a term restraining the exercise of the power of dismissal in this context, this could only be actioned where (per the Court of Appeal's view in Briscoe v Lubrizol) the dismissal was "without reasonable and proper cause". In this case, dismissal was for good cause because of the claimant's absence from work and lack of prospect of returning to work.

    Finally, in the event, Mr Lloyd had no claim as he received the equivalent of the PHI benefit and had suffered no loss.

    ECJ - Age Discrimination and Retirement

    [Thanks to Emma Price of Temple Garden Chambers for preparing this case summary]
    Is lowering the compulsory retirement age for judges from 70 to 62 justified age discrimination?

    No, says the CJEU in EC v Hungary, because it is not proportionate as regards the objectives pursued.

    The amendment gave rise to a difference in treatment based on age between persons within a given profession.  The aims of this amendment were legitimate: firstly, standardisation, in the context of professions in the public sector, of the age limit for compulsory retirement; and secondly, the establishment of a 'more balanced age structure' facilitating access for young lawyers to the professions of judge, prosecutor and notary and guaranteeing them an accelerated career.

    However, whilst the lowering of the retirement age was appropriate in pursuit of the first aim, it was not necessary considering the interests of those forced to retire early and the fact that the amendment was not gradually staggered.  The second aim was not appropriate as the short term effects of vacating numerous posts, which will be liable to be occupied by young lawyers, could not be said to achieve a truly balanced age structure in the medium and long term.

    Monday 12 November 2012

    TUPE Service Provision Changes

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
    Under TUPE, what is the interpretation of a contract for a 'single specific event or task of short term duration' for the purposes of determining whether there has been a service provision change?

    This issue was addressed by the EAT in Liddell's Coaches v Cook.

    Under TUPE, Reg 3(3)(a)(ii) a service provision change is excluded where the client for whom the services are provided intends that the activities concerned are in connection with a single specific event or task of short term duration.

    Liddell's had a contract to provide transport for schoolchildren during a limited period when they were 'decanted' from their school.  It was just for a year.  The evidence was that contracts of this nature were normally awarded for periods of between 3 and 5 years.  Did the exclusion apply?

    The employment tribunal held that the decant transport contract related to a single specific event and was of short term duration.  TUPE did not apply.  The EAT agreed with the result.  However, Lady Smith took the opportunity to analyse the exclusion.  The BIS guidance on TUPE indicates that both a single specific event, and task, must both be of short term duration.  Lady Smith disagreed.  The phrase could be construed disjunctively.  A single specific event spoke for itself. It did not necessarily have to be of "short term duration".  An event is an event. It does not require to be qualified by the words: "of short term duration". But in the outcome this did not matter.  The tribunal had correctly found that the contract (event or task) was, in this case, of short term duration.

    Fixed Term Contracts

    [Thanks to Michael Reed Employment Legal Officer at the Free Representation Unit for preparing this case summary]
    Does time worked under a training scheme count towards the four years a fixed-term employee needs to become permanent?

    No, held the Court of Appeal in Hudson v Department of Work and Pensions.

    The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 say that anyone employed under a succession of fixed-term contracts will become a permanent employee after four years "unless employment on a fixed term contract is objectively justified".

    There is an exception for employees on a training / work-experience scheme arranged by the government or funded by the European Community.

    In 2006 Ms Hudson began a fixed-term contract under such a scheme at the DWP. This was extended several times until Ms Hudson became a Support Officer in 2009. This was also a fixed-term contract, but not part of a training scheme.

    In 2010 Ms Hudson argued that, having worked for more than four years under fixed-term contracts, she was a permanent employee. She was no longer working under a training scheme, so the exclusion did not apply.

    The Court of Appeal disagreed, concluding that time worked under a training scheme does not count towards establishing the four year period.

    ECJ - Age Discrimination and Retirement

    [Thanks to Emma Price of Temple Garden Chambers for preparing this case summary]
    Is lowering the compulsory retirement age for judges from 70 to 62 justified age discrimination?

    No, says the CJEU in EC v Hungary, because it is not proportionate as regards the objectives pursued.

    The amendment gave rise to a difference in treatment based on age between persons within a given profession.  The aims of this amendment were legitimate: firstly, standardisation, in the context of professions in the public sector, of the age limit for compulsory retirement; and secondly, the establishment of a 'more balanced age structure' facilitating access for young lawyers to the professions of judge, prosecutor and notary and guaranteeing them an accelerated career.

    However, whilst the lowering of the retirement age was appropriate in pursuit of the first aim, it was not necessary considering the interests of those forced to retire early and the fact that the amendment was not gradually staggered.  The second aim was not appropriate as the short term effects of vacating numerous posts, which will be liable to be occupied by young lawyers, could not be said to achieve a truly balanced age structure in the medium and long term.

    Thursday 8 November 2012

    Discrimination on grounds of Political Opinion

    [Thanks to Sarah Russell, solicitor at Russell, Jones and Walker, part of Slater & Gordon Lawyers, for preparing this case summary]
    Does the UK provide adequate protection from dismissal on the grounds of political party membership?

    No, said the European Court of Human Rights in Redfearn v UK.

    The Claimant was employed by Serco providing transport services for children and adults in Bradford.  He was elected as a Councillor for the BNP.  Serco summarily dismissed him, citing safety concerns about his risk of attracting attack.  The Claimant had insufficient service to bring an unfair dismissal claim.  His race discrimination claim failed.

    The ECtHR held that the lack of unfair dismissal protection interfered with his right to freedom of assembly under Article 11 of the ECHR.  There is an obligation to provide protection against dismissal motivated by an employee's membership of a political party, or at least to provide the means for an independent evaluation of the proportionality of such a dismissal.  This applied notwithstanding that the views of that party might be offensive, because of the importance of democracy.

    It may now be arguable that political views should be treated as incorporated into the definition of philosophical beliefs for the purposes of the Equality Act 2010.

    Wednesday 7 November 2012

    Deductions from wages

    [Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
    Can individual clauses in an employment contract be construed in line with the principles of Autoclenz to establish the validity of a clause?

    No, says the EAT in Qantas v Lopez and Hooper.

    The Claimants, airline cabin crew, won tribunal claims for unlawful deductions from wages after a dispute over the payment of expenses, which were, for tax reasons, earmarked as allowances within salary. The EAT considered whether the principles of Autoclenz v Belcher (see bulletin on this here) meant that the Claimants' contracts should be construed so as to make their allowances payable on top of salary. The EAT upheld the appeal: it was not appropriate on the facts of this case to construe the individual clauses relating to allowances as allowing the payment of the allowances on top of salary, and there had been no unlawful deductions. There was no suggestion that the clauses themselves were sham clauses, and there was no need to depart from settled principles of construction.

    The EAT also held that the payments were 'expenses' within the meaning of S27(2)(b) ERA 1996 and were therefore excluded from the definition of 'wages' in S27(1), so there was no jurisdiction to hear the complaints. 'Expenses' covers a payment 'in respect of expenses', e.g. a generous mileage allowance, not only simple re-imbursement of costs incurred.

    The EAT also explored the application of misrepresentation and the non est factum doctrine to employment contracts.

    Tuesday 6 November 2012

    Restrictive Covenants and Fiduciary Duties

    [Thanks to Laurie Anstis of Boyes Turner who is standing in for Daniel Barnett. Thanks also to Caroline Field of Fox for preparing this case summary]
    Was there a breach of a non-solicitation clause and fiduciary duty, in a case where the former customers denied having been solicited?

    Yes, says the High Court in Safetynet Security Limited v Coppage, which found the Claimant's former customers to be "lying and acting under the control of [the defendant]" in denying solicitation.

    Mr Coppage was a director of the Claimant company (a security company). Within two days of his resignation, two customers had terminated their relationship with the Claimant in favour of a new company, which had not produced any marketing material and had no "shop-front". The start-up was incorporated by Mr Hadley, a trainee electrician who resigned from the Claimant company within an hour of Mr Coppage and had limited security experience. Disclosure revealed significant text and telephone traffic between the defendant and both Mr Hadley and the Claimant's customers, with whom the judge observed an "unusually close relationship" over a key period. This evidence was in direct contradiction with Mr Coppage's earlier correspondence.

    Even if the non-solicitation clause had been deemed unenforceable, solicitation may have been a breach of Mr Coppage's duty to avoid situations where his own interests conflict with the Claimant's interests.

    The case stresses the importance of credible testimony, which is consistent with what a witness has said on other occasions and contemporaneous documents.

    Apparent Bias

    [Thanks to Laurie Anstis of Boyes Turner who is standing in for Daniel Barnett.  Thanks also to Simon McCrossan Squatter, New Walk Chambers for preparing this case summary]
    Can an employment tribunal remain effective and lawfully constituted despite the revelation of circumstances which may have required members to recuse themselves on the grounds of 'apparent bias'?

    Yes says the EAT in Bhardwaj v FDA.

    In dismissing the appeal, it was held that the Appellant had been legally advised, informed of the material facts and afforded an appropriate period of time in which to make a free and unpressured decision. Therefore, by agreeing to continue (a position supported by the Respondent) and failing to make an application for recusal, the EAT ruled that the Appellant had waived her right to make such an application in future, which she could not go back upon.

    The Appellant's claims of 'apparent bias' concerned the appointment of two Respondents to her claim as members of the employment tribunal. The two Respondents were offered appointments prior to the commencement of the hearing and these were confirmed after the hearing had begun.  It was agreed that they would not sit until the current proceedings were resolved, but one of the Respondents fortuitously and momentarily came into contact with one of the lay members of the tribunal at a training event for employment tribunal members, which occurred when the hearing (although ongoing) had been adjourned.

    Whilst the Appellant complained that she had continued following disclosure of the above due to the financial pressures of self-funding, the EAT ruled that this did not prevent her waiver being free and fully informed notably by her counsel who himself sat as a part-time employment judge.

    Monday 5 November 2012

    TUPE - settlements

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
    In a TUPE transfer, does a settlement agreement with one employer automatically bar off claims against other actual or potential  Respondents?

    No, says the Employment Appeal Tribunal in Tamang v Act Security Limited

    When there is a TUPE transfer, there is often more than one employer in the frame.  This is particularly acute in service provision changes and in cases under TUPE regulations 13-16 (information and consultation) where, in the latter case, there is potential joint and several liability among the employers.

    On a service provision change concerning a security contract, an ACAS settlement agreement  releasing claims was entered into with the original employer, Reliance (now Securitas).   But this did not include two other potential parties, ACT Security Ltd and Euro Storage UK Ltd.  When the employees decided to prosecute claims against these other parties, were they prevented from doing so by the original compromise agreement?

    The employment tribunal said they could not sue.  It considered the agreement with Reliance was a release of all three tortfeasors (relying on Chitty on Contracts to the effect that a release by one debtor releases the others).

    The EAT held this was wrong.  On the true construction of the agreement this was a covenant not to sue Reliance, and not a release of all Respondents. Its scope only related to Reliance and not by implication to others.

    This shows how important it is for all potential parties in a TUPE transfer to be signed up to a settlement agreement if finality is required.

    Wednesday 31 October 2012

    Definition of disability

    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Peter Taheri of 5 Essex Court for preparing this case summary]

    To establish that a person has a disability under the Equality Act 2010, is it sufficient to have a life-long condition that makes one more prone to infections, which is controlled by medication, and which infections have once in the past caused substantial adverse effect on one's ability to carry out normal day-to-day activities?

    No, says the EAT in Sussex Partnership NHS Foundation Trust v Norris.

    Although the EAT accepted that the substantial adverse effect could be caused by the increased infections, rather than directly by the immune system condition itself, it was necessary that there be adequate evidence that the increased infections would themselves have a substantial adverse effect.

    Further, as the first-instance tribunal had concluded that the impairment was not long-term, the fact that the immune condition was life-long was not sufficient to show that any substantial adverse effect caused by increased infections was likely to recur. Even if the infections could well recur, there needed to be adequate evidence to show that they would be serious enough to have a substantial adverse effect.

    TUPE Service Provision Changes

    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

    On a service provision change under TUPE does the client for whom the activities are carried out have to remain the same?

    Yes, said the Court of Appeal in McCarrick v Hunter.

    Mr McCarrick was employed in the provision of property services to a property company, the managing director of which was a Mr Hunter. The lender on the properties appointed Law of Property Act Receivers who thereafter assumed control of the properties and appointed a new property services company, King Sturge. Mr McCarrick did not become employed by King Sturge but by Mr Hunter directly. He carried out property management services assisting King Sturge. Mr McCarrick was then dismissed by Mr Hunter and he brought a claim for unfair dismissal. To do so, however, he had to show his employment was continuous between his respective employers.

    He argued there was a service provision change under Regulation 3(1)(b) of TUPE. The employment tribunal upheld his claim. But the EAT reversed this.  Regulation 3(1)(b)(ii) of TUPE provides that a service provision change occurs where activities cease to be carried out on a client's behalf and are, instead, carried out by a subsequent contractor on the client's behalf. That, said the EAT, had to be read as meaning the same client. Here the properties had changed hands and the client was not the same.

    The Court of Appeal agreed. Although counsel for Mr McCarrick argued that a purposive approach ought to be applied to Regulation 3(1)(b), Elias LJ considered that there was no basis for giving the language of the regulation an artificial or expanded meaning.  This was domestic legislation and was not giving effect to EU law.

    Elias LJ did not rule out a purposive interpretation for some aspects of service provision change. For example, it might be necessary "not to be too pedantic" with respect to the question of whether the activities carried on before or after an SPC are sufficiently similar. Likewise, a broad approach could be taken to the question of whether an employee is employed in the service transferred. But there was no room for a purposive construction with respect to the scope of Regulation 3(1)(b) itself.

    Thursday 25 October 2012

    Equal pay claims in the Civil Courts

    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Neil Addison of Palmyra Chambers for preparing this case summary]
    Can an employee bring an equal pay claim in the civil courts rather than the employment tribunal, even if that means them circumventing the time limit for bringing tribunal proceedings?

    Yes, says the Supreme Court in Birmingham City Council v Abdulla.

    A large group of female workers had claims against Birmingham City Council for breach of the provisions of the Equal Pay Act 1970 (now part of the Equality Act 2010). Normally such claims would be brought in the employment tribunal, but the time limit for bringing claims before the tribunal is six months after the employment has finished and these employees were all over the time limit. They therefore brought their claims in the High Court in order to take advantage of the normal civil court time limit of six years.

    Birmingham sought to have the claims struck out under section 2(3) of the Equal Pay Act, which allows cases to be struck out where the court considers that the claims "could more conveniently be disposed of separately by an employment tribunal". This would have had the effect of ending the claims, which were out of time for a tribunal.

    Lord Wilson, with Lady Hale and Lord Reed, decided that since the effect of striking the cases out would mean that the claims died then it could not be said that the claims could be "more conveniently disposed of" in a tribunal. Parliament had allowed these claims to be brought in the civil courts as well as in the tribunal and so must have accepted that the normal six year time limit could apply to them. Lord Sumption and Lord Carnwath dissented, on the basis that such an approach would frustrate the policy underlying the limitation provisions of the Equal Pay Act.

    The majority went on to suggest that Parliament should consider relaxing the strict six month limitation period for employment tribunal equal pay claims, and warned that (1) Claimants who were found to have deliberately delayed bringing tribunal proceedings in order to gain an "illegitimate advantage" by bringing court proceedings risked having their claims struck out under the general rules on abuse of process, and (2) if a court decided that an individual should reasonably have presented a claim in time to the employment tribunal, this was something it could take into account in awarding costs.

    Monday 22 October 2012


    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Fatim Kurji of No 5 Chambers for preparing this case summary]

    Does a tribunal have to tell parties that it might find that the contract of employment is illegal prior to dismissing claims and counterclaims on that basis?

    Yes, says the EAT in Sheibani v Elan & Co LLP.

    The Claimant, a chartered certified accountant, was paid half of his salary through payroll, and the other half 'off the books' in order that both parties might save money. The tribunal did not accept any of the explanations given to it in the course of the hearing by the employer as to why that arrangement had been formed, nor by the employee as to why it had not been queried. Without informing the parties that it was considering the question of illegality, and therefore without hearing submissions on the issue, the tribunal concluded that the contract between the Claimant and Respondent was illegal and dismissed the claims for unfair dismissal, breach of contract and arrears of holiday pay, and the counterclaim for breach of contract.

    In allowing the appeal the EAT noted that had the parties been aware of the issue of illegality the cross-examination would have been differently conducted; re-examination would have been different; the witness evidence may have unfolded differently and the submissions certainly would have taken a different approach. Further, the EAT noted that where potential criminal offences may be under consideration, it was an essential matter of justice and procedure that parties should be told by the tribunal of the right against self-incrimination. These failings amounted to more than just a procedural irregularity: they amounted to a denial of justice and accordingly the matter was remitted to a fresh tribunal for reconsideration.

    Post-termination restrictions

    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Kathleen Donnelly of Henderson Chambers for preparing this case summary]
    Can an employee be bound by post termination restrictions contained within an unsigned version of a contract of employment?

    Yes, says the High Court (Chancery Division) in FW Farnsworth Limited v Lacy, if the terms of that contract have been impliedly accepted by the employee.

    The employee had signed and returned a contract sent to him early in his employment with the company, but not a later contract, sent to him following a promotion some years later. The later contract included post-termination restrictive covenants, and a number of elective employee benefits. Mr Justice Hildyard held that the employee's act of applying for private medical insurance, after having read the later contract, and without any protest or reservation, was an unequivocal act referable only to his having accepted all of the terms of the later contract, including the restrictive covenants.

    Practitioners will note more generally the comments of Mr Justice Hildyard at paragraphs 55-57 and 77-80 of the judgment, expressing misgivings at the directions given for the determination of the issue by way of a separate mini-trial where the issue was not properly a preliminary issue and not determinative of the proceedings.

    Adjournments on medical grounds

    [Thanks to Laurie Anstis of Boyes Turner, who is standing in for Daniel Barnett. Thanks also to Angharad Davies of Dere Street Barristers for preparing this case summary]

    How should tribunals approach an application for a postponement on medical grounds made by a litigant in person during a hearing?

    They should have regard to the medical evidence, including that in the bundle, and apply the guidance given in Teinaz v London Borough of Wandsworth, said the EAT in Iqbal v Metropolitan Police Authority.

    In Iqbal the Claimant made an application for an adjournment during the hearing, saying that his depression meant that he was unable to continue. The Claimant had consulted doctors about depression but had no formal medical evidence in support of his application. An occupational health report in the bundle referred to the Claimant suffering from depression and other psychological problems. The tribunal refused the Claimant's application for a postponement; the Claimant withdrew the claims he was making and the tribunal dismissed them.

    Noting the difficulties that such applications presented, the EAT concluded that based on Teinaz, the following should be considered:

    a. a litigant who is unfit to continue ought to be granted an adjournment;

    b. the tribunal is entitled to be satisfied that the reason for the adjournment is genuine;

    c. the onus is on the applicant to prove the need for the adjournment;

    d. where there is no direct medical evidence as to the litigant's fitness to continue, the tribunal should consider what medical evidence it has, including material in the tribunal bundle, and

    e. the tribunal should consider a short adjournment for further enquiries.

    In this case the tribunal had erred by not taking into account the Claimant's medical history, as outlined in the occupational health report, and not considering a short adjournment to enable him to obtain a medical opinion from his doctor.

    Friday 19 October 2012

    Redundancy - USA v Nolan

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

    Can the European Court give a preliminary ruling on the effect of the Collective Redundancies Directive, when the dispute concerns an establishment governed by public law, such as a US army base in the UK?

    No, says the ECJ in USA v Nolan.

    This case concerns a claim on behalf of civilian employees on a US military base in the UK that they had not been consulted soon enough for the purposes of Section 188 of the Trade Union and Labour Relations (Consolidation) Act 1992 when, by a decision to close the base, this led to multiple redundancies. The Court of Appeal referred the issue of when consultation should have begun to the European Court.

    Although UK domestic law, contained in Section 188, does not exclude public administrative bodies or establishments governed by pubic law and applies to all employers, Article 1(2)(b) of the Collective Redundancies Directive 98/59 excludes such bodies.

    The Court held that, whilst it was in the interests of the European Union to secure the uniformity of interpretations of an EU instrument and those of national law which transpose it, this was not possible where, as in the present proceedings, the EU measure expressly provides an exclusion from its scope. Therefore the European court did not have jurisdiction to respond to the question referred by the UK Court of Appeal.

    In due course, the Court of Appeal will have to make its own mind up on the question of when consultation should have begun in this case, resolving such issues as any conflict between the domestic authority of UK Coal Mining Limited v National Union of Mineworkers (Northumberland Area), and the ECJ decision in Akavan Erityisalojen Keskusliitto AEK ry and Others v Fujitsu Siemens Computers Oy on the question of timing of consultation.

    Thursday 18 October 2012

    Equal Pay

    [Thanks to Ed McFarlane of Deminos HR for preparing this case summary]

    Does the dissolution of an NHS Trust end employment for the purposes of an Equal Pay claim time limit?

    Yes, says the EAT in Foley v NHS Greater Glasgow & Clyde.

    The Equal Pay claims of sample Claimants in respect of employment before a reorganisation of NHS Trusts were struck out by the employment tribunal as out of time, as the claims were brought outside the 6-month time limit from the end of 'employment' on the Trusts' dissolution.

    The EAT upheld the tribunal's decision that the time limit ran from the Trusts' dissolution; there were two separate 'employments' and, whilst the transfer of NHS staff and associated rights and liabilities to new NHS employers by Staff Transfer Orders under the National Health Service (Scotland) Act 1978 provisions that closely reflected TUPE would have made the Claimants' new employers liable to meet any claims brought in time, there was a separate obligation on the new employers to comply with the Equal Pay Act.

    The EAT also rejected an argument for the Claimants that the time limit acted in an unfair way, in circumstances where TUPE consultation provisions did not apply, so as to breach the principle of effectiveness under EU law, and refused to make a reference to the ECJ.

    Redundancy: Single Establishment

    [Thanks to James English of Samuel Phillips solicitors for preparing this case summary]

    Can a local authority's education department be an establishment for the purposes of collective consultation?

    No, says the EAT in Renfrewshire Council v The Educational Institute of Scotland.

    Section 188 of the Trade Union and Labour Relations Act 1992 requires an employer to consult with the employees' representatives where the employer proposes to dismiss 20 or more employees at one establishment within a period of 90 days or less.

    The employment tribunal concluded that the establishment was the education and leisure service for the Council. The tribunal had been influenced by the EAT's decision in Wilkinson v City of Edinburgh Council (which was itself later overturned on appeal), in the importance given to mobility clauses in the teachers' contracts, which in practice were never relied upon.

    The Council appealed. Overturning the judgment, the EAT held that the assignment must refer to the factual rather than the contractual position. What matters is where the dismissal is at, not where the work may be performed. The suggestion that a school was not a distinct entity was unfathomable. The case was remitted to the tribunal for further consideration of the individual teachers' positions.

    Wednesday 17 October 2012

    Calculating Pilots' Holiday Pay

    [Thanks to Katarina Sydow, Pupil Barrister at Outer Temple Chambers for preparing this case summary]

    Does the employment tribunal have jurisdiction to determine what sums should properly be included in a pilot's holiday pay?

    Yes, says the the Supreme Court in British Airways plc v Williams & Others.

    The Supreme Court held that the employment tribunal has jurisdiction to hear pilots' complaints that their holiday pay has not been calculated at a representative rate.

    By Regulation 18 of The Civil Aviation (Working Time) Regulations 2004, the employment tribunal has jurisdiction to hear complaints arising from an employer's refusal to permit the exercise of a right related to paid annual leave, and to award compensation. This includes the jurisdiction to determine whether an employer's calculation of a pilot's holiday remuneration has taken account of the correct components of pay.

    The employment tribunal must determine whether the pilots' holiday pay should include a proportion of their "Time Away from Base Allowance". In accordance with an earlier ruling by the Court of Justice of the European Union [see bulletin on this], the employment tribunal will have to exclude from holiday pay any payments that British Airways genuinely intended to be made exclusively to cover the pilots' costs.

    Tuesday 16 October 2012

    High Court adjourns case for employment tribunal to hear allegations of sexual assault

    [Thanks to David Campion of Garden Court North Chambers, for preparing this case summary]
    Can High Court proceedings be adjourned pending relevant employment tribunal claims?

    Yes, says the High Court (QBD) in BUQ v HRE.

    The Claimant in the High Court action, a Managing Director of a group of companies, sought an injunction against the Defendant, a Chief Executive who had reported to the Claimant, prohibiting the disclosure of information of a sexual nature concerning the Claimant and his wife.

    The Defendant had named the Managing Director as one of four Respondents in employment tribunal proceedings, which included claims for unfair dismissal, harassment and sex discrimination.

    The Claimant applied for an adjournment of the High Court action pending the employment tribunal proceedings. It was submitted on behalf of the Claimant that financial allegations against the Defendant were an issue in the employment tribunal proceedings and also relevant to credibility in the High Court matter.

    The High Court acknowledged that the issue was 'finely balanced' and expressed concern that matters could still be contested via interim applications if an adjournment were granted. However, it was accepted that the employment tribunal, which would have to determine the financial allegations made against the Defendant, would be better placed than the High Court to determine the truth or otherwise of the sexual allegations made by the Defendant.

    The High Court hearing was therefore vacated to be relisted following the final determination in the employment tribunal proceedings.

    Monday 15 October 2012

    Transfer of Undertakings - Service Provision Change

    [Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
    When solicitors for administrators took over activities previously carried out in-house by a company in administration, was there a service provision change under TUPE?

    No, said the EAT in SNR Denton UK LLP v Kirwan.

    The Claimant was a solicitor who worked in-house for a facilities management company that ran into financial difficulties. As a result she was engaged for most of her time disposing of service contracts to third parties. Administrators were then appointed, who appointed SNR Denton to act for them in the administration. Their work involved continuing the disposal of the company's contracts. The Claimant argued that there was a service provision change and, therefore, a relevant transfer under TUPE.

    This raises not one, but three, interesting TUPE points. First, the employment tribunal had been correct, said the EAT, in finding that the activity of disposal of the company's contracts, which was continued after the handover, was essentially the same as that previously performed by the company in-house.

    But the tribunal had been wrong to ignore the fact that the services, previously carried on by the client on its own behalf, had been continued by SNR Denton thereafter on behalf of that same client. Denton was hired by the administrators, not the company. Therefore the client had not remained the same and Regulation 3(1)(b) could not apply (see Taurus Group Ltd v Crofts).

      Finally, the question arose whether the activities had been intended to be carried out on behalf of the client for a single specific event or task of short term duration (in which case the service provision rules are excluded). Although this was not necessary to decide the case, Langstaff J made some helpful observations. He pointed out that textbooks and commentaries focus on the temporal nature of the exclusion. But the real issue for the tribunal should be an examination of the intention of the client as to what should be the period of time of the contract concerned. In failing to look at this, the tribunal fell into error.

    Friday 12 October 2012

    Reinstatement - timing of practicability

    [Thanks to Ed McFarlane of Deminos HR for preparing this case summary]

    Should a tribunal consider the practicability of a re-engagement order for an unfairly dismissed Claimant based on the situation when the order takes effect?

    Yes, says the EAT in Rembiszewski v Atkins Ltd.

    The employment tribunal held that the Claimant architect had been unfairly made redundant, but declined to order re-engagement, basing its decision at a remedy hearing on the situation at the time of the liability hearing. The Claimant appealed.

    The EAT held that the tribunal had erred in law, and that the practicability of reinstatement or re-engagement is to be judged as of the date it is to take effect, which, in practice, is likely to require considering the matter at the conclusion of a remedy hearing. The case was remitted for reconsideration.

    The Respondent successfully cross-appealed to enable it to argue that the Claimant's alleged lack of trust and confidence in it was a relevant factor in considering the practicability of ordering re-employment.

    The judgment contains a useful discussion of the law on reinstatement and re-engagement.

    Guarantee Payments

    [Thanks to Peter Taheri of 5 Essex Court for preparing this case summary]

    Where a temporary variation of employees' working hours is agreed (e.g. to avoid job losses), are the employees entitled to receive guarantee payments in place of wages for time when they would 'normally be required to work in accordance with [their] contract of employment', under section 28 of the Employment Rights Act 1996?

    No, says the EAT in Abercrombie & Ors v Aga Rangemaster Ltd.

    The EAT rejected the Claimants' argument that a temporary variation of contract was not a change to 'normal' working hours. The mere fact that the variation was temporary was irrelevant.

    The Claimants also argued that sections 30(5) and 31(6) of the Employment Rights Act allow for entitlements to guarantee payments if the 'contract has been varied or a new contract has been entered into, in connection with a period of short-time working'. It was held, however, that these provisions were only concerned with the quantification of guarantee payments, not with establishing entitlement to them.

    Injury to Feelings

    [Thanks to Jahad Rahman of Rahman Lowe Solicitors for preparing this case summary]

    Should compensation for general damages be increased by 10%?

    Yes, says the Court of Appeal in the case of Simmons v Castle, revising its earlier judgement.

    The Court of Appeal made two important changes to its earlier judgement and held that, with effect from 1 April 2013, "the proper level of general damages in all civil claims for (i) pain and suffering, (ii) loss of amenity, (iii) physical inconvenience and discomfort, (iv) social discredit, (v) mental distress, or (vi) loss of society of relatives, will be 10% higher than previously". However, the 10% increase in general damages will not apply to claims that fall within Section 44(6) of the Legal Aid, Sentencing and Punishment Offenders Act 2012 ("LASPO"), that is Claimants who enter into a conditional fee agreement ('no win, no fee' agreement) before 1 April 2013.

    Whilst the case relates to a personal injury appeal, it is likely that injury to feelings awards in discrimination claims will go up by 10%.

    Recognition of Trade Union - Territorial Jurisdiction

    [Thanks to Sarah Russell, solicitor at Russell, Jones and Walker, part of Slater & Gordon Lawyers, for preparing this case summary]

    Could a group of pilots, the majority of whom were based outside the UK, still use the statutory system of trade union recognition?

    Yes, said the High Court in Netjets v CAC.

    The Claimant operates business jets. The proposed bargaining unit was all of their pilots. They were employed by a British company, on contracts subject to English law and the English courts. They lived across Europe and were paid in their local currencies. HR issues were managed from Lisbon.

    Netjets argued that there were no workers in the bargaining unit, as they were outside the jurisdiction of the collective bargaining provisions in Schedule A1 TULRCA 1992.

    The CAC proceeded by analogy to the test in Ravat v Halliburton Manufacturing and Services Ltd; whether as a question of fact the connection between the circumstances of the employment and Great Britain, and with British employment law was 'sufficiently strong' that it would be appropriate for the employee to have a claim for unfair dismissal in Britain.

    Mr Justice Supperstone upheld the decision, recognising that in practice, if the members could not bargain collectively in Great Britain, they would be unable to exercise their Article 11 rights.

    Monday 8 October 2012

    Au pairs & migrant domestic workers - minimum wage entitlement

    [Thanks to James English of Samuel Phillips solicitors for preparing this case summary]

    Is an au pair entitled to the national minimum wage if certain tasks are not shared with the family?

    No, says the Court of Appeal, in Nambalat v Taher & Ors.

    Under Reg.2(2) of the National Minimum Wage Regulations 1999, domestic workers and au pairs are exempt if they live in the family home, make no payment towards accommodation or meals, and are not family members but are treated as such in the sharing of tasks and leisure activities.

    On the one hand, an au pair who carries out most of the work in the home, with the family doing very little, will not be sharing in the household's tasks. At the other extreme, a working wife with little spare time would have to do something to be seen as sharing with the chores. How much sharing is required for the exemption to apply?

    The Court of Appeal held that an overall view is required. The central requirement is that the work is done in the context in which the worker is treated as a family member. People provided with free accommodation and meals would of course be expected to do more.

    New Employment Contracts announced by George Osborne

    The Chancellor of the Exchequer, George Osborne, has announced the introduction of a new type of employment contract, known as an 'owner-employee' contract.

    Under this new type of contract, employees give up their UK rights on unfair dismissal, redundancy, and the right to request flexible working and time off for training, and will be required to provide 16 weeks' notice of a firm date of return from maternity leave, instead of the usual 8. In exchange, they are given between £2,000 and £50,000 of shares that are exempt from capital gains tax.

    Legislation to bring in the new owner-employee contract will come later this year so that companies can use the new type of contract from April 2013. The Government will consult on some details of the contract later this month.

    Read more in the government's Press Release.

    Wednesday 3 October 2012

    Discrimination: Striking Out after Claimant's evidence

    [Thanks to Ed McFarlane of Deminos HR for preparing this case summary]

    Should an employment tribunal strike out a discrimination case after hearing only the Claimant's evidence?

    No, says the EAT in Timbo v Greenwich Council for Racial Equality.

    The employment tribunal had struck out the Claimant's case on the Respondent's application at the close of the Claimant's evidence. The EAT overturned this decision, remitting the case for rehearing at a fresh tribunal.

    The EAT reviewed a number of authorities on striking out and dismissal, and, giving a clear steer against striking out any cases part-way through a hearing, held that cases should be heard in their entirety where there is a crucial core of disputed fact, which cannot be determined except by hearing and evaluating evidence. Even in cases where a Claimant's credibility may be "severely dented" at "half time", the correct and appropriate course for tribunals is to hear all the evidence and determine cases on their merits to see if there is any underlying truth in allegations of discrimination.

    The EAT also said that the type of case that would be susceptible to an application to strike out during the hearing would be "so readily identifiable" that it would only require brief submissions from the party making an application.

    Wednesday 26 September 2012

    LLP Members are not Workers

    [Thanks to Dean Fuller of Fox for writing this case summary]

    Can an LLP member be a worker?

    No, says the Court of Appeal in Clyde & Co LLP v Van Winkelhof.

    Ms Bates Van Winklehof brought a whistleblowing complaint against Clyde & Co LLP alleging she had suffered a number of detriments, in particular being expelled as a member. The employment tribunal said it was not satisfied that she was a 'worker' and therefore she could not pursue her whistleblowing claim. She successfully appealed to the EAT. However, the Court of Appeal has today handed down judgment in the case, reversing the earlier decision of the EAT which had held that an LLP member could be a 'worker' within the extended definition in section 230(3)(b) of the ERA.

    The Court of Appeal agreed with the appellant that Ms Bates was not in a subordinate position and therefore a worker within the meaning of the relevant definition and that she could not be a worker because of section 4(4) of the Limited Liability Partnerships Act 2000. At para 67 Elias LJ concludes "a member of an LLP who, if it had not been registered as an LLP would have been a partner in an 1890 Act partnership, can be neither an employee nor a limb (b) worker...It follows that the Claimant cannot pursue her whistleblowing claim."

    Tuesday 25 September 2012

    Preserving Continuity Between Associated Employers

    [Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
    Is continuity of employment preserved when an employee is absent from work at one employer due to a temporary cessation of work, and then starts different work for an associated employer?

    Yes, says the EAT in Holt v EB Security Ltd.

    Fourteen days after the first employer dismissed the Claimant, he was taken on by an associated employer in a completely different job, then dismissed within a year. He argued that his continuity of employment was preserved, meaning that he could claim unfair dismissal. The employment tribunal disagreed.

    The EAT held that continuity was preserved under S212(3)(b) of the Employment Rights Act, following Bentley Engineering v Crown. Looking back from the vantage point of his new job, there was a temporary cessation of work, and the Claimant was absent from work due to that cessation. There is no need for the associated employer to resume the operations of the first employer; any work with an associated employer would suffice to preserve continuity.

    The EAT directly addressed the criticisms of Harvey as to the rightness of Crown, in which continuity was preserved during a cessation of work for the Claimants of up to two years.

    Monday 24 September 2012

    List of Issues

    [Thanks to Jahad Rahman of Rahman Lowe Solicitors for preparing this case summary]
    Can a tribunal refuse to allow the late calling of further witnesses in the absence of a proper explanation?

    Yes, says the EAT in North Bristol NHS Trust v Harrold.

    The Claimant alleged that the Respondent subjected her to direct discrimination on the grounds of her race and victimised her by giving false evidence to the Nursing and Midwifery Council such that they caused her to be struck off.

    On the third and final day of the liability hearing, the employment tribunal refused the Respondent's application to adjourn to call as witnesses the people who made the decision to report the Claimant to the NMC.

    The EAT upheld the tribunal's decision and held that when deciding whether to grant an application to adjourn to call further witnesses, an employment tribunal must balance the interests of both parties and "not accede automatically to the wishes of the Respondent". In particular, a hearing will not have been unfair if it caused no substantial prejudice to the party claiming to be aggrieved.

    On the facts, the EAT found that the Respondent should have appreciated that the critical issue was why the Claimant was referred to the NMC. This would have required the presence of those responsible for referring the Claimant to the NMC. There was no proper explanation as to why the Respondent had not arranged to call the witnesses earlier and in light of this, the EAT concluded that there was no injustice to the Respondent.

    Wednesday 19 September 2012

    Conduct Dismissals and Previous Warnings

    [Thanks to Rad Kohanzad of Atlantic Chambers for preparing this case summary]

    When deciding whether a dismissal is within the range of reasonable responses, can an employment tribunal take into account matters which the employer did not take into account?

    No, says the EAT in Nejjary v Aramark Ltd.

    The Claimant was dismissed for three matters. On appeal his employer upheld the dismissal, expressly relying on only one matter as gross misconduct. The tribunal found that the decision to dismiss for this one matter would have been outside the range of reasonable responses but given that the employee had previous warnings on file, it found that the decision to dismiss was within the range of reasonable responses.

    The EAT held that the tribunal had erred in taking into account matters which the employer had not had in mind as part of the reason for dismissal. The reason for dismissal "is the reason which was extant and operative in the mind of the employer".

    Inadequate Explanations and Burdens of Proof

    [Thanks to Rosa Dickinson of St Philips Chambers for preparing this case summary]
    Can a tribunal take into account inadequate explanations, falling short of dishonest explanations, in determining whether the burden of proof has shifted?

    Yes, says the EAT in Birmingham City Council and Semlali v Millwood.

    A black employee was treated disadvantageously when compared with an Asian colleague who was found to be in materially the same circumstances. The employment tribunal accepted that this did not, without more, justify a shifting of the burden of proof. The tribunal was however permitted to take inadequate explanations into account and in so holding, Langstaff P drew a distinction with the dicta in Madarassay where it was held that the absence of an adequate explanation is not relevant to whether there is a prima facie case of discrimination.

    The employee had not been offered a permanent contract. The tribunal disbelieved, and found inconsistent, the explanations that the employer had offered for this; but made no findings that the explanations were dishonest. Langstaff P held, "Although a tribunal must by statute ignore whether there is any adequate explanation in stage one of its logical analysis of the facts, that does not mean, in our view, to say that it can and should ignore an explanation that is frankly inadequate and in particular one that is disbelieved"

    On the facts, the tribunal did not make sufficiently clear precisely what it regarded as the shortcomings in any explanation of the employer as the "something more" in addition to difference in status and less favourable treatment, and the case was accordingly remitted.

    Friday 14 September 2012


    [Thanks to Michael Reed Employment Legal Officer at the Free Representation Unit for preparing this case summary]
    Can a tribunal hear a costs application if they have expressed an opinion demonstrating that they have already reached a conclusion on costs?

    No, said the EAT in Oni v NHS Leicester City.

    Mrs Oni lost her case. The tribunal found it was 'without foundation' and doubted the 'genuineness of these complaints'.

    The tribunal also said 'not only was the bringing of the various claims unreasonable but the manner in which they have been conducted was also unreasonable.'

    NHS Leicester City applied for costs. Mrs Oni asked the tribunal to recuse themselves because they had already said her claim had been brought and conducted unreasonably - the key issue when considering costs.

    The tribunal refused, but the EAT found they were wrong to do so. Tribunals may express themselves fully on the issues before them, which may involve trenchant critisism of the parties. But they should not reach conclusions on other issues, such as costs, until they become relevant.

    The EAT also advised that tribunals should enquire into a party's means when considering costs. The County Court form EX 140, used to gather information on a debtor's financial position, may be a useful tool for doing so.

    Government Response to Consultation on TUPE

    The Department for Business, Innovation and Skills has published its response to its call for evidence on the effectiveness of TUPE.

    It's very bland - quite extraordinarily so. It identifies the concerns expressed by employers, points out there are arguments against all those concerns, and also points out that the government's freedom to manoeuvre is limited by the Acquired Rights Directive. It concludes by saying the government will think about things, but might simply improve existing guidance rather than amend the Regulations.

    Vince Cable's Employment Law Consultations

    BLOGPOST substantially rewritten at 12pm 14/9/2012 following publication of consultation document

    Vince Cable has announced various consultations on employment law this morning. The consultation papers are here.   Here are my initial thoughts (and you can hear me on the Today programme on iPlayer, at 2:51:20).

    The consultation proposes reducing the cap on the compensatory award from £72,300 to the lower figure of the national median average earnings (£25,882) or an individual's annual net salary. The rationale is a huge increase in the award in 2000 (to £50,000) and above-inflation rises since then.  This is utterly disingenuous; the annual rises are inflation linked to the nearest £10 (thus, technically, there may be a rise that marginally greater than inflation; but it is deeply misleading of the government to suggest its anything other than trivial), and the increase to £50,000 was to link the compensatory award back to the inflation-adjusted equivalent to that which it had been in 1971.

    The government is being vague on the exact cap - it's saying a cap of one year's earnings, subject in any event to something between 1x and 3x median earnings.  Not to be decided by parliament, but by a statutory instrument.   Let's see how long we have to wait for that one.

    A lower cap doesn't make it easier to dismiss staff. An employer must still act reasonably to justify dismissing someone with more than two years' service. Instead, it makes it cheaper for employers to behave unreasonably.

    A reduction in the cap doesn't address the real problem that businesses face: that of vexatious or unreasonable employees with unrealistic expectations. That needs to be dealt with by rigorous enforcement of costs rules, and requiring employees who bring hopeless claims to repay an employer's legal costs, as happens in other areas of litigation.

    Many jobs last as long as a marriage - some last longer. People are as reliant on employment income as they are on spousal income. Nobody would suggest capping maintenance payments at one year's earnings; it is absurd to do so for unfair dismissal claims.

    The proposals mean that bad employers can take a calculated risk that the maximum exposure is £25,882 - and take a commercial decision to act badly when they might not previously have done so. Employment law comes down to three basic principles: (1) be reasonable; (2) be consistent; and (3) be nice - until it's time to stop being nice. If employers follow those three rules, they'll be fine.

    Employees will still try to claim discrimination - which has uncapped compensation because of European laws - in order to put commercial pressure on employers and inveigle higher payouts.

    There's nothing new about employers and employees being able to settle employment claims before going to a tribunal.

    Vince Cable is publishing standard template 'settlement agreements'. You can see sample templates at the back of the consultation document.  One question that DBIS is posing is whether there should be recommended tariffs for levels of settlement, depending on length of service, reason for dismissal etc.

    The government is missing, however, the sensible development of abolishing the need for employees to get independent advice from a CAB, union or lawyer before settling claims.  Many settlements are straightforward and advice isn't needed, just as it isn't needed when settling a claim for a neighbour dispute or a badly installed kitchen.  Admittedly there is a risk of employers pressuring employees to sign on the dotted line and withholding pay entitlements until they do. But as long as suitable safeguards are included, such as a cooling off period and a statement that the employee should consider taking advice, it would be a sensible move forward to save enormous costs for businesses.  But it's not going to happen.

    This is the most insidious of all the changes, although it's not obvious from the terms of the Press Release.

    Straightforward claims for unpaid wages will cost £390 to take to a hearing. There is no way an employee on £300 a week, who has been underpaid £50, can afford to bring a claim. It makes justice unaffordable for workers on low incomes and gives unscrupulous employers comfort that their actions won't be challenged.

    Claims such as unfair dismissal and discrimination will cost £250 to launch, and a further £950 to get a hearing date - £1,200 in total. This prices many ex-employees out of the tribunal, and will encourage employers not to settle claims because they will gamble that the employee can't/won't pay the £1,200 fee.