Tuesday 31 July 2012

Constructive Dismissal

[Thanks to John Cook of SAS Daniels LLP for preparing this case summary]

If an employer upholds an employee's grievance about treatment by his immediate manager, can this prevent the employee relying on the treatment to show a breach of the implied term of trust and confidence?

Yes it can, says the EAT in Assamoi v Spirit Pub Company.

The employee worked as a head chef and raised a grievance about how he was being treated by his immediate manager. This was upheld by more senior managers who took steps to rectify the situation.

The EAT found that although the immediate manager had behaved badly towards the employee this did not, by itself, amount to a breach of the implied term of trust and confidence. The actions of the more senior managers had prevented the matter escalating into a state of affairs that would have justified the employee leaving and claiming he was constructively dismissed.

There is a distinction between preventing matters escalating into a breach of the implied term of mutual trust and confidence and trying to cure a breach which has already taken place. Once a breach has taken place it cannot be cured - Bournemouth University Higher Education Corporation v Buckland [2010] ICR 908 CA.

Death in Service Benefit

[Thanks to Sian McKinley, Pupil Barrister at Cloisters, for preparing this case summary]

Can the estate of an employee who was unlawfully dismissed, and died shortly after, bring a claim for loss of a death in service benefit?

Yes, said the EAT in Fox v British Airways UKEAT/0033/12. Loss of a death in service benefit is a real loss to the employee and is recoverable by his estate.

Mr Fox died within days of being dismissed. His estate argued that his dismissal was unfair and discriminatory and brought a claim for both. The compensation in question was the value of the death in service benefit enjoyed by Mr Fox whilst in employment.

The Respondent argued, and the ET agreed, that the loss of the death in service benefit was not a loss to Mr Fox but to Mr Fox's beneficiaries. Accordingly it was not recoverable by Mr Fox's estate which could only claim in respect of losses suffered by him. The only loss suffered by Mr Fox was the loss of comfort of knowing his relatives would receive a payout in the event of his death. The ET valued this loss at £350, comparable to the loss of statutory rights.

The EAT (Langstaff P sitting alone) held that the death in service benefit was a contractual right which Mr Fox lost at the point he was dismissed. It did not matter that an employee would never be able to enjoy the proceeds of the benefit; the opportunity to use such a benefit for his dependents or causes he wished to support is also of value to the employee.

This loss would normally be valued as the cost of the insurance premium for a policy which will as nearly as possible provide the payment which the employee should have received under the death in service benefit. This premium will vary with the circumstances.

In this case, where the court knows that the employee died shortly after dismissal and no mitigation argument was raised, the cost of providing for payment of a lump sum known to be due within a short period of time is no less than that sum itself (the full value of the death in service payout). Langstaff P emphasised that this was because of the particular and unusual facts of this case.

The EAT also considered section 206(4) of the Employment Rights Act 1996 which provides for the appointment of appropriate representatives to instigate or continue litigation after the death of an employee. Langstaff P held that the correct procedure for instigating a claim is to make an application to the employment tribunal to be appointed as an appropriate representative and to wait for the application to be granted. Once it is granted, and only then, can a claim be validly submitted. If this means, through factors outside the representative's control, that a relevant time limit expires, then the employment tribunal will recognise that fact when applying the 'reasonably practicable' test in relation to time limits.

Friday 27 July 2012

Mutuality of Obligation

[Thanks to Neil Addison of Palmyra Chambers for preparing this case summary]

Can a person working under a succession of individual contracts be an employee. Yes, says the EAT in Drake v Ipsos Mori UK Ltd [2012] UKEAT 0604_11_2507, (HHJ David Richardson sitting alone), reversing an ET decision that had held there was no contract because there was no 'mutuality of obligation'.

The Claimant worked on an 'assignment by assignment' basis for the Respondent from 2 February 2005 until 5 November 2010. He claimed that each individual assignment was a contract of employment so giving him sufficient continuity of service to bring a claim for unfair dismissal. The Respondent's case was that even though the Claimant was a worker for the purposes of employment legislation he was not an employee.

The Employment Judge had held that the assignments did not amount to separate contracts of employment because any assignment could be terminated on either side without its being completed there was 'no mutuality of obligation' and hence no contract.

The EAT relying mainly on Ready Mixed Concrete (South East) Ltd v Minister of Pensions and National Insurance [1968] 2 QB 497, 515C held that there was a contract in place and sufficient mutuality whilst the Claimant was actually undertaking an assignment for the Respondent. Contrary to the EJ's decision the fact that the assignment could be brought to an end did not mean that there was no contract in existence while the assignment was continuing.

The EAT was clearly also influenced by the fact that the respondents own handbook referred to the assignments as being contracts. The decision therefore is primarily based on its own facts, however the reasoning in it provides an interesting review of the legal requirements for a contract of service as opposed to a contract for services. 

Discrimination Burden of Proof

[Thanks to Laurie Anstis of Boyes Turner who is standing in for Daniel Barnett during holiday absence, and to Michael Reed, Employment Legal Officer at the Free Representation Unit, for preparing this case summary]

Tribunals may draw inferences of discrimination by considering how a Claimant was treated compared to others. Even if the situations compared are not precisely the same, such inferences may justify shifting the burden of proof to the Respondent. So found the Supreme Court in Hewage v Grampian Health Board.

Mrs Hewage was a dentist at the Aberdeen Royal Infirmary. She said she had been bullied and harassed because she was a Sri Lankan women.

The tribunal agreed, in part because of the Infirmary's treatment of two white men: Professor Forrester and Mr Larmour.

Professor Forrester also had issues with the individual who bullied Mrs Hewage, but their roles were altered so they did not meet. Mr Larmour replaced Mrs Hewage. He received cooperation and assistance that she did not.

Mrs Hewage's circumstances were not exactly the same as either comparator. But there was sufficient similarity, given the stark difference in treatment, to justify the tribunal's inference of discrimination. It was then for the Respondent to prove they had not discriminated, which they failed to do.

The Supreme Court declined to give further guidance, saying the approach set out in Igen v Wong and Madarassy v Nomura was clear. They also noted that the burden of proof rules 'had nothing to offer' where a tribunal could make 'positive findings of fact'. 

Thursday 26 July 2012

Holiday Pay Carry Over

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

Can a worker, who has not taken paid annual leave in the relevant year due to sickness, claim a payment in lieu on termination of employment without having made any prior request to carry the leave forward?

Yes, says the Court of Appeal in NHS Leeds v Larner.

Mrs Larner was absent on sick leave for the whole of the leave year 2009/10. During that year she neither took paid annual leave nor requested NHS Leeds to carry it forward to the next year (2010/11). Early on in that year she was dismissed. NHS Leeds refused to pay her for the leave not taken by her in 2009/10. She claimed a payment in lieu of the untaken leave.

Under European law, and the interpretation of Article 7 of the Working Time Directive, holiday pay continues to accrue during periods of absence due to sickness (Stringer v Revenue & Customs (Case C-520-06); Schultz-Hoff v Deutsche Rentenversicherung Bund (Case C - 350/6)) and an employee who is prevented from taking annual leave through sickness must be allowed to take their annual leave that they missed later in the year, or if that is not possible, in a subsequent leave year (Pereda v Madrid Movilidad (Case C-227/8); Asociation Nacional de Grandes Empresas de Distribucion (ANGED) v Federacion de Asociaciones Sindicates (FASGA) (Case C-78/1). The Court of Appeal pointed out that the most recent ECJ decision, Georg Neidel v Stadt Frankfurt am Main (Case C-337/10, 3 May 2012) supported the claimant's case that Article 7 of the Working Time Directive does not impose any requirement of prior leave request.

Article 7 had direct effect against NHS Leeds as an emanation of the State. Therefore, in Mrs Larner's case, as her employment was terminated before she could take her carried forward leave, she was entitled to payment on termination for the paid annual leave she had been prevented from taking, irrespective of any prior request to do so.

The Court also stated that, had it been necessary (in the case of a private employer) to decide the case under the Working Time Regulations, these could be construed, purposively, to give effect to the position under Article 7 of the Directive. 

Employment Status

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

Was a GP carrying out hair restoration procedures for a private clinic a 'worker' for the purposes of employment legislation?

Yes, says the Court of Appeal in The Hospital Medical Group Limited v Westwood .

Dr Colin Westwood is a GP with his own practice. Having developed an interest in minor surgery, he was approached by Hospital Medical Group Ltd to undertake procedures relating to hair restoration on its behalf. HMG engages surgeons with practices in their own right and none are engaged on contracts of employment. Mr Westwood's engagement was terminated. An employment tribunal ruled he was not an employee but found he was a worker under section 230 (3)(b) of the Employment Right Act 1996 in order to hear claims relating to unlawful deductions from wages and accrued holiday pay. The EAT agreed.

The Court of Appeal upheld these decisions.

HMG's principal argument was that the definition of worker in s 230(3)(b) excludes a person who provides services to a 'client or customer' of any profession or business carried on by him.

But the Court of Appeal held that it was wrong to regard HMG as Dr Westwood's 'client or customer'. HMG was not just another purchaser of Dr Westwood's medical skills. Apart from his other work he contracted specifically and exclusively to carry out hair restoration surgery on behalf of HMG and was referred to as 'one of our surgeons'. He was clearly an integral part of HMG's undertaking and providing services even though he was in business on his own account.