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.