Thursday 29 March 2012

Indirect Discrimination

[Thanks to Keira Gore of Outer Temple Chambers for preparing this case summary]

How does the reversed burden of proof affect the correct approach to an indirect discrimination case? Not very much, according to the President of the EAT in Dziedziak v Future Electronics Ltd UKEAT/0271/11.

The claimant had complained that her employer had taken poor time-keeping into account in a redundancy selection process, and this amounted to indirect sex discrimination. The tribunal had said in its judgment that it was not satisfied that lateness had been taken into account; the claimant argued that because there were facts from which the tribunal could have concluded that it had, s63A of the SDA 1975 (now replaced by s136 of the EqA 2010) meant that it should have so concluded unless the employer could show the contrary.

The EAT succinctly rejects that argument at para 42, explaining that the reversed burden of proof only bites after disparate adverse impact has been shown.

Wednesday 28 March 2012

TUPE - Service Provision Change

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

Is there a service provision change under Reg 3(1)(b) of TUPE when the service is conducted in a fundamentally or essentially different manner following the changeover?

No, says the EAT (Langstaff P) in
Johnson Controls v UK Atomic Energy Authority, but this is a question of fact in each case and requires an holistic assessment by the employment tribunal.

The claimant was a taxi administrator employed by Johnson Controls, which provided a taxi administration service for its client, United Kingdom Atomic Energy Authority. UKAEA then terminated this arrangement and took the activity of booking taxis in-house. Instead of using a taxi service administrator, it decided its secretaries could book taxis directly with taxi firms. Booking taxis no longer existed as a centralised service.

The Employment Judge held that, as a consequence, the services carried out after the change were essentially different from those carried out before and there was no TUPE transfer. The EAT upheld this decision, applying the guidelines set out by Judge Peter Clark in Enterprise Management Services Ltd v Connect-Up Ltd (EAT/0462/10). The process of defining the activities involved, and whether they remained the same, involved a question of fact for the employment tribunal, which was to be trusted to make that assessment.

We tend to forget that in 2005 the Government's public consultation document on what became the TUPE Regulations 2006 considered that there should be a relevant TUPE transfer by way of service provision change even where the service is to be provided in the future in a new or innovative manner (see para 27). But, contrary to this aspiration, recent EAT decisions, of which Johnson Controls is the latest, suggest there will be no service provision change under Reg 3 (1) (b) when the service is significantly re-modelled.

Tuesday 27 March 2012

Employment Law Reform

Laurie Anstis of Boyes Turner has trawled the small print in the latest documents from the government on employment law reform, including the BIS Employment Law Reform Annual Update 2012 and the Call for Evidence on Dismissal and Compensated No-Fault Dismissals.

He has identified the following proposals:-

  • reforming discrimination awards isn't possible, due to the European dimension, but information on median awards will be included in tribunal claim forms (Annual Update paras 4.26 and 4.30)
  • both employees and employers will be able to initiate 'protected conversations' (Call for Evidence, p14)
  • if a regime of compensated no-fault dismissal is introduced, the old rules will remain so that an employer can still dismiss an employee without payment of compensation if they had a fair reason for dismissal and acted reasonably in carrying it out (Call for Evidence, p14). If an employer opts not to use the 'no fault' procedure, and an employee subsequently claims unfair dismissal, it isn't yet clear whether their compensation will be assessed according to normal principles or will be capped at the 'no fault' level. The automatically unfair reasons (whistle blowing, trade union activities etc) will remain in place as valid unfair dismissal claims for employees of micro businesses (p41)
  • unfair dismissal law is not on the list of top 10 regulations deterring businesses from taking on staff (Call for Evidence pp29-30). The top slot is owned by health & safety.

Abandoning Claims at the Tribunal

[Thanks to Caroline Jennings of No 5 Chambers for preparing this case summary]

How should a tribunal approach a situation where a party appears to be seeking to concede, abandon or withdraw part of their case? With great care, according to the EAT (Langstaff P) in Segor v Goodrich Actuation Systems.

The Claim was for race and sex discrimination. The employment tribunal considered that the Claimant's lay representative had abandoned an aspect of the Claimant's discrimination complaint and so did not proceed to determine that aspect.

The Claimant's appeal against the non determination of part of her complaint was allowed. The EAT held that a tribunal should take great care to ensure that if a party seeks to abandon or to concede a central and important point during the course of a hearing, that that is precisely what the individual wishes to do. The EAT considered it important for a tribunal to pause, and check and note with clarity and care what precisely is being said. The individual should understand the significance of what is being said and, if they are unrepresented, they should understand some of the consequences that may flow. As a matter of principle, a concession or withdrawal cannot properly be accepted unless it is 'clear, unequivocal and unambiguous'.

Monday 26 March 2012

Collective Redundancies - AG's Opinion

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

What is the trigger point for the duty to inform and consult about collective redundancies? This must be determined by the national court in the light of CJEU guidance on Directive 98/59 says the AG's Opinion in
USA v Nolan.

This case was referred to the CJEU by the Court of Appeal. It concerned a claim on behalf of civilian employees at a US military base in the UK that they had not been consulted soon enough when, on a decision to close the base, this led to multiple redundancies for the purpose of s 188 of the Trade Union and Labour Relations (Consolidation) Act 1992. The decision to close the military base had been made by the Secretary of the US Army in September 2006. The British authorities were informed in April 2006. The commanding officer informed the workforce at that time. Consultation about redundancies did not commence until 5 June 2006.

Advocate General Mengozzi opined that an employer who is contemplating collective redundancies must begin consultations with the workers' representatives in good time with a view to reaching an agreement. In Akavan Erityisalojen Keskusliitto AEK ry and others v Fujitsu Siemens Computer Oy (Case C-44/08; [2009] IRLR 944) the Court stressed that the obligation should not be triggered prematurely. Akavan and Nolan concerned cases where the employer who is proposing a strategic or operational decision about closure ( in Nolan, the US Army) is in all probability not the same as the employer who is proposing consequential redundancies (in Nolan, the commanding officer of the base).

The Directive should therefore be interpreted as meaning that an employer's obligation to conduct consultations with workers' representatives arises when a strategic or commercial decision which compels him to contemplate or to plan for collective redundancies is made by a body or entity which controls the employer.

It is for the referring court to identify when a strategic decision which exerted such a compelling force on the employer, for the purposes of giving effect to the consultation obligation, occurred.

Thursday 22 March 2012

Can saving cost be a 'legitimate aim'?

[Thanks to William Young of Outer Temple Chambersfor providing this case summary]

The Court of Appeal today gave judgment in Woodcock v Cumbria Primary Care Trust. In dismissing Mr Woodcock's appeal, it rejected the argument that cost cannot be a legitimate aim, so as to justify some types of discrimination.

Mr. Woodcock was a displaced Chief Executive whose post disappeared during a large scale restructure of the NHS. He did not obtain a post in the new structure and his employment was transferred to the newly constituted respondent Trust as the successor to his former employer. The Trust gave Mr. Woodcock 12 month's notice of dismissal on the grounds of redundancy shortly before his 49th birthday and before the commencement of a formal consultation process between Mr. Woodcock and the Trust. The ET found that this had been done with a view to ensuring that the notice would expire prior to his 50th birthday, at which point he would have become entitled to a very substantial enhancement to his pension at an equally substantial cost to the Trust.

The ET found that service of the notice at that point was less favourable treatment on the grounds of the claimant's age. Nonetheless, they rejected the claim of age discrimination. The ET found that, by the time the notice was given, consultation would have achieved nothing. In addition, it accepted that this treatment of the claimant was a proportionate means of achieving the Trust's legitimate aim of achieving the dismissal of a redundant employee in a cost effective manner and so as to prevent him from benefitting from a windfall. This last finding arose from the fact that, but for what was later described as a 'chapter of accidents', the initial consultation meeting would have been held long before Mr. Woodcock's 49th birthday so that he would ordinarily have been given notice long before any prospect of the enhanced pension arose. This was found to have satisfied the 'costs plus' test that had been established in Cross v British Airways [2005] IRLR 423. As such, the treatment was justified and the discrimination claim (along with an unfair dismissal claim) was dismissed.

The EAT (Underhill, President) allowed an appeal substituting a finding that the dismissal was automatically unfair given that notice was served prior to the Stage 2 Meeting under the now repealed Dispute Resolution Procedures but awarded no compensation given that consultation would have achieved nothing. More importantly, it dismissed the appeal in relation to the age discrimination claim. In the course of his judgment, Underhill J noted that the "current orthodoxy" of the "cost plus" approach in Cross v BA, whereby an employer could not rely on cost alone but could rely upon cost together with something else, was difficult to justify on principled grounds. In addition, such a test resulted in artificial game-playing ("find the other factor") resulting in arbitrary and complicated reasoning. Despite this, the EAT was unwilling to depart from previous authority when it was not necessary to do so. Instead, it upheld the finding that the timing of the dismissal was based not on cost alone but also on the need to dismiss a redundant employee and to prevent Mr Woodcock from benefiting from a windfall.

Mr Woodcock appealed to the Court of Appeal. In the interim, the obiter comments of Underhill J were followed by a differently constituted EAT in Cherfi v G4S Security Services [2011] UKEAT 0379/10.

The Court of Appeal has now dismissed Mr. Woodcock's appeal. Giving the only judgment, Rimer LJ reviewed the domestic and European authorities as to justification and cost. He accepted that there were in fact two strands of authority. One established that a member state (with a notionally bottomless purse) could not be permitted to justify discriminatory social policy on the grounds of cost. The other, commencing in Hill & Stapleton v Revenue Commissioners [1998] IRLR 466, was to the effect that an employer could not justify discrimination "solely" on the grounds of cost.

He rejected as artificial a submission that this meant that that cost alone could not provide an employer with a legitimate aim, noting that almost every decision taken by an employer is going to have regard to cost. The legislation provided that would otherwise be discriminatory treatment may be justified (and therefore not discrimination) if it was a "proportionate means of achieving a legitimate aim".

As a result, he said that "the relevant question must be whether the treatment complained of was such a means". The guidance of the ECJ jurisprudence "meant nothing more than that the saving or avoidance of cost will not, without more, amount to the achieving of a legitimate aim". In the present case, the Trust's treatment of Mr. Woodcock was not to be characterised as being no more than treatment aimed at saving or avoiding cost. Dismissing a redundant employee was a legitimate aim. It was also a legitimate part of that aim for the Trust to ensure that the dismissal also saved the Trust the additional element of cost that it would otherwise have incurred.

He went on to reject a submission that, contrary to the decisions of the ET and EAT, the treatment was not proportionate, holding that "in the very particular circumstances" of the case the discriminatory effect of the treatment on Mr. Woodcock was outweighed by the needs of the Trust, particularly as the "corner cutting" in consultation deprived him of nothing of value given that the ET had held that it could achieve nothing.

In the light of this decision, it seems that future cases raising issues of cost will turn on substantive questions of proportionality rather than artificial debates as to whether behavior was properly to be characterised as cost or cost plus.

The Court of Appeal refused Mr. Woodcock permission to appeal to the Supreme Court.