Friday 25 May 2012

PILONs, Notice Pay and After-Discovered Conduct

[Thanks to Catriona Stirling of Cloisters for preparing this case summary]

Is an employer entitled to withhold a payment in lieu of notice if it dismisses an employee under an express term in his service agreement which provides for summary termination with pay in lieu, but later discovers that the employee had committed gross misconduct prior to the dismissal?

No, says the Court of Appeal in Cavanagh v William Evans Ltd.

The company decided that Mr Cavenagh was redundant and summarily terminated his service agreement, which provided for six months of pay in lieu of notice. It subsequently discovered that Mr Cavenagh was guilty of gross misconduct pre-termination and did not make the payment. Had it known about the gross misconduct when it exercised its contractual power, it would have accepted the repudiatory breach of the service agreement and regarded itself as discharged from liability for pay in lieu of notice.

The Court of Appeal held that Mr Cavanagh had acquired an accrued right to the payment, as his contract had been summarily terminated under the relevant contractual provision. There was no provision in the service agreement denying him the right to the payment in lieu if the company subsequently discovered that he had committed a prior act of gross misconduct. Nor was there any general principle of contract law barring or extinguishing his right to recover the pay in lieu as a debt from the company. The principle that a claim for wrongful dismissal could be defeated by relying on evidence of misconduct discovered after the dismissal did not provide the company with a defence to a debt claim.

Wednesday 23 May 2012

Dismissal Hearings and Article 6

[Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary]

Is Article 6 engaged when an NHS employer dismisses a consultant for misconduct?

No, says the Court of Appeal in Mattu v University Hospitals of Coventry and Warwickshire NHS Trust. All three judges held that a decision to dismiss is not a determination of the employee's civil rights, but the exercise of a contractual power. Dr Mattu argued that dismissal by the Trust made him unemployable in the NHS, effectively determining his right to practice his profession, but that was rejected both at first instance and on appeal as not made out on the evidence. Burnton and Elias LJJ went further, doubting Smith LJ's obiter suggestion in Kulkarni v Milton Keynes Hospital NHS Foundation Trust [2010] EWCA Civ 69 that Article 6 might be engaged where an NHS doctor faces charges so serious that, if they are found proved, he will effectively be barred from employment in the NHS. Sedley LJ expressly distanced himself from those doubts.

The Court of Appeal also considered and rejected contentions that the Trust had incorrectly classified the allegations against Dr Mattu as not being of professional misconduct; and that a refusal to adjourn the disciplinary hearing had been a breach of an implied contractual obligation of fairness.

Enterprise and Regulatory Reform Bill

The Enterprise and Regulatory Reform Bill has, this afternoon, been laid before parliament.

Quite separate from the Adrian Beecroft proposals which have been in the news this week, this new Bill provides for:-
  • a mandatory period of Acas conciliation before instituting tribunal proceedings (with heavy reliance on as yet unpublished detail by way of Regulations)
  • extension of limitation periods to allow for pre-issue Acas conciliation
  • introduction of 'legal officers' to make decisions in certain cases if all parties agree in writing
  • EAT cases to be heard by a judge alone, unless ordered otherwise
  • power for Secretary of State to limit unfair dismissal compensatory award to a maximum between the national median earnings and 3 x median earnings. [According to BIS, median earnings last year were £26,000, which gives a power to impose a cap of between £26,000 and £78,000]
  • alternatively, power for the Secretary of State to limit unfair dismissal compensatory award to one year's earnings
  • power for a tribunal to impose a penalty on employers of 50% of any financial award, subject to a minimum of £100 and maximum of £5,000, where there are "aggravating features" (not defined), with a 50% discount for payment within 21 days
  • defintion of 'qualifying disclosure' in whistleblowing legislation to be restricted to disclosures "in the public interest" (not defined)
  • 'compromise agreements' to be renamed 'settlement agreements'
The Bill is here (see sections 7-17, and Schedule 2)

Daniel Barnett

Monday 21 May 2012

TUPE - Pension Liabilities

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

Do entitlements to an early retirement pension transfer under TUPE, and if so, what is the scope of the transferee's obligations?

The High Court in Procter & Gamble v SCA clarified a number of issues in this highly important case.

In 2007 Procter & Gamble sold its Family Care business to SCA. TUPE applied. The dispute related to the pensions of employees at the P & G Manchester manufacturing site who transferred to SCA under TUPE. The P & G defined benefit scheme made provision for early retirement benefits (ERB's). It was common ground that SCA did not want to take on any pension liability.

Reg 10 of TUPE provides that so much of contract of employment as relates to an occupational pension scheme that concerns old age, invalidity or survivors' benefits does not transfer under TUPE. But following the CJEU cases of Beckmann v Dynamco Ltd [2003] ICR 50 and Martin v South Bank University [2004] 1 CMLR 472 early retirement benefits are outwith this exclusion, and transfer under TUPE. This was of critical importance to SCA with regard to its liability under TUPE and for both employers under the pensions provisions of the sale and purchase agreement. Hildyard J made the following points.

  • Even though the ERB entitlement was discretionary it fell within the concept of 'rights and obligations' transferring under TUPE;
  • The discretionary power (to be exercised in good faith) to provide ERBs therefore now vested in the entity that now employed the employees;
  • The next question was whether liability for all ERBs, or only liability in respect of the enhancement until normal retirement age, transfers under TUPE. In the hearing this was referred to variously as the 'windfall' or 'smiling pensioner' point, and sometimes 'the double pension issue'. For the transferring employees were already entitled to deferred pensions from the P&G Fund. So could it be right that the operation of TUPE entitled them also to claim from SCA pension benefits which (together with the enhancements) substantially duplicated deferred pension benefits?
But TUPE only protects employment rights. It is not designed to enhance them. So the transferee was only obliged to meet the enhancement until normal retirement age, and not thereafter.

Wednesday 16 May 2012

TUPE - Organised Grouping of Employees

[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]

If an employee works 100% of his time for a single client, is he necessarily assigned to an organised grouping of employees for the purposes of a service provision change and the transfer of his employment under TUPE?

No, says the EAT in Seawell v Ceva.

The claimant (Mr Moffat) was employed by Ceva Freight (UK) Ltd, which provided logistics and freight forwarding arrangements for Seawell, which owned offshore drilling platforms. Seawell then terminated this arrangement and took the service back in house. Seawell was not the only client of Ceva, but Mr Moffat spent 100% of his time on the Seawell contract, with other employees spending smaller percentages of time on this contract and the rest of their time on other contracts. An employment tribunal found that either Mr Moffat himself could comprise an organised grouping of employees or, alternatively, if the organised grouping of employees included Mr Moffat and colleagues, Mr Moffat was assigned to that organised grouping of employees as he spent 100% of his time on the service. On these alternative bases he transferred under TUPE.

The EAT disagreed. There was no basis for finding in this case that there was a group of employees specifically organised for this particular contract. An organised grouping of employees denotes a deliberate putting together of a group of employees for the purpose of the relevant client work. As the EAT put it: "it is not a matter of happenstance".

There was no such conscious employee grouping  on the facts of the case. As such there was no service provision change and no relevant transfer. In this regard, the previous EAT authorities of Argyll Coastal Services v Stirling (EAT S/0012/11) and Eddie Stobart Limited v Moreman (EAT/0223/11) were to be followed.

Illegality and Discrimination

[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 someone who is knowingly working illegally in the UK still put forward a claim of racial discrimination arising from her treatment by her unlawful 'employers'?

Not according to the Court of Appeal in the case of Hounga v Allen [2012] EWCA Civ 609.

Ms Hounga, a Nigerian national, was employed by the Allen family as an au pair. She did not hold a work permit and both she and her employers knew that her employment was unlawful. When she was sacked she brought claims for race discrimination as well as unfair dismissal, breach of contract, unpaid wages and holiday pay. All the claims except for race discrimination were rejected by the ET on the basis that she had no lawful contract of employment.

That problem did not affect her race discrimination claim because it was not dependent on there being a valid and legal contract of employment.

The Court of Appeal was asked to consider, along with other issues, whether Ms Hounga could bring a race discrimination claim even though she was working illegally. In deciding this point the Court analysed two cases Hall v Woolston Hall Leisure Ltd [2001] ICR 99 and Vakante v Governing Body of Addey and Stanhope School (No 2) [2005] ICR 231.

In Hall the claimant was allowed to bring a sex discrimination claim even though she had acquiesed in an ongoing illegallity by her employer whilst in Vakante an illegal immigrant was prevented from bringing a claim.

The Court held that there was no conflict between the two cases, in the case of Ms Hall there was no active participation by her in the illegality merely acquiescence once she realised that her employer was acting illegally whilst in Vakante by contrast he was an active party in the illegality.

Applying the same principles to the case of Ms Hounga she similarly was fully aware that she was not legally allowed to work and, even though the Court accepted that she was a vulnerable person, she nevertheless could not bring a claim which arose out of her illegal conduct.

As Lord Justice Rimer put it "If this court were to allow her to make that case, and so rely upon her own illegal actions, it would be condoning her illegality. That is something the court will not do".

Tuesday 15 May 2012

Consultation On Discrimination Law Reform

[Thanks to Laurie Anstis of Boyes Turner for preparing this summary]

The government has today announced consultation on the abolition of:

  • The rules on third-party harassment in section 40(2)-(4) of the Equality Act 2010 (here),
  • The tribunals' wider power to make recommendations in discrimination cases under section 124(3)(b), and
  • The long-established questionnaire procedure for obtaining information under section 138 (both here).
They have also given their response to previous consultation on the future of the Equality and Human Rights Commission, available here .

The consultations close on 7 August 2012.

Whistleblowing - Can an LLP Member be a Worker?

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

Can an LLP member be a worker?

Yes, says the EAT (HHJ Peter Clark) in Van Winkelhof v Clyde & Co LLP reversing an employment tribunal's decision that it did not have jurisdiction to consider the Claimant's complaint of detriment for making a protected disclosure as it was not satisfied she was a 'worker' within the definition of section 230(3) of the ERA.

The Claimant complained that she had been subjected to sex discrimination as a result of announcing her pregnancy and being expelled from the Respondent's partnership and that she was subjected to a detriment for making a protected disclosure, namely that she was disciplined and expelled as a member of the partnership. The employment tribunal found that the Claimant was entitled to bring her sex discrimination claim under the Equality Act 2010 but that as a member of an LLP it was not satisfied she was a 'worker' and therefore she could not pursue a whistleblowing claim. The Claimant appealed.

The EAT accepted that the formulation of the four statutory requirements under section 230(3)(b) for a worker were:

  • there must be a contract (in this case the LLP agreement with Clyde & Co),
  • under the contract the worker must undertake to do or perform work or services personally,
  • the work or services are to be done or performed for another party to the contract, and
  • the other party must not be a client or customer of a profession or business undertaking carried on by the putative worker (referred to as the 'exclusion proviso').
HHJ Peter Clark commented that it was 'plain and obvious' that the exclusion proviso did not apply to the Claimant. The Respondent was not the Claimant's client.

Monday 14 May 2012

Judicial Diversity Consultation Response

[Thanks to Paul Housego of Beers Solicitors for preparing this summary]

The Ministry of Justice response to the consultation document on diversity in the judiciary was published on Friday. There are several changes to procedures, perhaps the most important being that in future it will be the Judicial Appointments Commission that appoints deputy High Court judges from circuit judges and recorders. This may well prove important, as High Court experience is advantageous in obtaining full time appointment. The present process is not transparent, and judicial consultation is likely to help those better known to the existing judges.

The employment tribunals have proved that salaried part time working is a success, and this is to be extended to the higher courts, with the number of judges being expressed as full time equivalents.

The proposal to limit fee paid judges to 15 years will not be carried forward, as the report concludes that this would be regressive. It states that the measure would 'significantly impact specialist tribunal posts'. The councils of employment and of immigration judges submitted strong submissions opposing this proposal. There is a suggestion that salaried judges might not be permitted to become fee paid upon retirement.

There is to be further analysis of the fee paid judiciary so that the aim of 'refreshing' it to assist diversity is met. It may be that there will be an end to automatic renewal of appointments at the end of each 5 year term, and vacancies created by renewal only on merit. One might think that if the rest of the judiciary was as diverse as that of the employment tribunal there would be much less need for the consultation in the first place.

The equality assessment accompanying the report tells us that 43% of tribunal judiciary are female, and 8% have a minority ethnic background - but that statistic is impaired by there being 19% whose ethnicity is unknown. 6% state that they are disabled. Of applicants some 15% state that they have a religion other than Christian.

The press release accompanying the report refers to flexible deployment to enable individuals to move to different judicial posts more easily. This is in clause 19 and schedule 13 of the Crime and Courts Bill, also published last week, will permit deputy district judges (and those in higher courts) to sit in employment tribunals. How this may be implemented is not set out.

Thursday 10 May 2012

Vacancy: Executive Assistant

Executive Assistant to Daniel Barnett
Part time role – 4 or 5 hours per day
Central London based

The Role

Daniel Barnett is a practising employment law barrister at Outer Temple Chambers.  He also runs the Employment Law (UK) email bulletin service and owns two companies (one producing white-label employment bulletins, the other white-label prepack employment law seminars).

He is looking for an executive assistant with great IT and organisational skills. You will liaise with clients, deal with routine administration, provide Daniel with relevant information in a wide range of areas, and occasionally research issues ahead of public appearances and draft articles.

This role will be a position of trust, and the successful candidate would act as Daniel’s ambassador in his absence, representing him with confidence, courtesy and accuracy.

The role is ideally offered on a part-time basis (4 or 5 hours a day) but full-time applicants will be considered.

The Responsibilities

• Routine database and IT administration, including formatting email bulletins.

• Keeping on top of Daniel’s task list, and ensuring that nothing falls behind or is missed. You will be expected to provide reminders to Daniel when appropriate

• Substantial responsibility for client care within Daniel’s companies

• Assisting with marketing

• Maintaining (although not controlling) Daniel’s diary. You will liaise with Daniel and his clerks to ensure that his diary and, more importantly, his time, is well managed

• Managing incoming communication, whether post or telephone, and dealing with emails redirected by Daniel to you

• Writing short briefing papers for Daniel on a wide range of topics


• Exceptional organisational skills

• Excellent interpersonal skills and phone manner, including a clear, jargon-free, simple writing style and a friendly, approachable personality.  Must be at ease when talking with clients and able to avoid formality

• A thorough understanding of the Microsoft Office Suite

• Exceptional attention to detail

• A good understanding of html and Wordpress, or the IT skills and intelligence to learn it quickly

• Confident and able to accept criticism

• Able to act with discretion when dealing with confidential matters

• Self-motivated and proactive

• At least two years’ experience as a PA (or similar), or a University graduate with at least a 2:1 degree

• Some knowledge of employment law and/or basic graphic design skills will be an advantage, but are not necessary.


You must be well presented, with a consistently professional demeanour. You must be assertive, and prepared to stand your ground when appropriate.


Applications by email only, please, to :-

·      stating in the body of the email in up to 250 words how you meet the above criteria and why you believe you are a good fit for this role;

·      mentioning where your saw this advert (eg Twitter, Mumsnet, emailed by friend etc)
·     attaching your CV (no more than two pages, please).

Salary:  £23,000pa FTE (pro rata depending on number of hours, so a 5 hour day would be 5/8ths of the full-time equivalent rate)

Location:  You will share my room in Chambers (opposite the Royal Courts of Justice, Strand) most of the time, but some home-working will be possible.

Closing Date:  Tuesday, 29th May 2012

NB: You will be employed by Daniel’s company, Employment Law Services Ltd., not by Daniel Barnett personally.