Tuesday 29 January 2013

Applications for Adjournment

[Thanks to Naomi Cunningham of Outer Temple Chambers for preparing this case summary]
Is an employment tribunal entitled to refuse a Claimant's application for adjournment supported by unchallenged medical evidence?

Yes, says the Court of Appeal (Mummery LJ presiding) in Transport For London v O'Cathail.

The Claimant's case was originally listed for hearing in October 2010. It was adjourned on grounds of the Claimant's medical unfitness, and re-listed for 21 to 28 February 2011. On 21 February, the Claimant sought a further adjournment, producing a letter from his GP stating that he was unfit to attend.

The employment tribunal refused to adjourn and heard and dismissed the claim. Its reasons for refusing the adjournment referred to the staleness of the proceedings; the previous adjournment at the Claimant's request; costs; the effect on other pending claims; proportionality; and the extent to which the claims could be determined on the basis of documentary evidence.

The EAT allowed the Claimant's appeal, citing Terluk v Berezovsky and holding that it should look for itself to see whether the effect of the decision had been to deny the Claimant a fair hearing.

The Court of Appeal disagreed. Terluk was decided under the CPR; appeal to the EAT was more narrowly defined. The EAT had wrongly substituted its decision on the employment tribunal's exercise of discretion. That exercise should not have been overturned in the absence of error of law or perversity.

Court Intervention in Disciplinary Disputes

[Thanks to Sarah Fitzpatrick of Collingwood Legal for preparing this case summary]
Do courts have the ability to intervene in disciplinary disputes between employers and employees?

Yes, said the Court of Appeal in West London Mental Health NHS Trust v Chhabra, but only in very limited circumstances.

If there is evidence disclosed in the course of an investigation which justifies the employer's decision to convene a disciplinary hearing and the employer has followed its own procedures throughout it is unlikely the court will intervene.

Whilst Dr Chhabra was a passenger on a train, it was alleged that she breached patient confidentiality.  The Trust appointed an independent case investigator who reported to a case manager.  The case manager determined that allegations of misconduct in relation to the breach of confidentiality would be referred to a disciplinary panel, which could determine that she should be dismissed.

Dr Chhabra alleged that the Trust should have treated the matter as less serious and followed a different procedure which could impose lesser sanction.  Dr Chhabra brought proceedings to the High Court seeking an order restraining the Trust from proceeding with the disciplinary hearing.  The High Court held that the proposed hearing amounted to a breach of the doctor's contract, that in the circumstances they had used the wrong procedures, and injuncted the Trust from proceeding.

The Court of Appeal unanimously allowed the Trust's appeal.  It was for the case investigator to provide sufficient information for the case manager to determine whether there was a case of misconduct that should be put to a disciplinary panel.   The manager was required to exercise judgment as to whether the alleged conduct was sufficiently serious to require a disciplinary panel. On the facts and evidence the case manager was entitled to convene a disciplinary hearing as the nature and gravity of the alleged conduct was sufficiently serious to justify that course of action.

Thursday 24 January 2013

Employment Status - Degree of Control

[Thanks to James English of Samuel Phillips solicitors for preparing this case summary]
Does an employer have to exercise actual day-to-day control over an employee for there to be an employment relationship?

No, says the EAT, in White & Todd v Troutbeck SA, as the contractual right to control is sufficient.

The Claimants were caretakers/managers of a small estate in Surrey on behalf of the 'absentee owners', who visited once or twice a year.  They were engaged under an agreement that set out various duties and responsibilities for the farm and grounds. There were no fixed hours, but several references in the agreement to 'employment.'

Overturning the employment tribunal's decision that the pair were not employees, HHJ Richardson held that the fact that the owners had divested themselves of day-to-day control was not conclusive.  The test from Ready Mix Concrete remains the 'classic description of a contract of employment'.  It is a multi-factorial test, rather than a control test.  The key question is whether there is a contractual right of control.  All aspects of control are relevant, and many employees decide how their work is done.  The starting point is the express terms of the contract and (unlike Autoclenz v Belcher), no party had argued that the agreement did not reflect the true relationship.

Wednesday 23 January 2013

Legal Advice Privilege

[Thanks to Laurie Anstis of Boyes Turner for preparing this case summary]
Does legal advice privilege (in England and Wales) extend beyond the traditional legal professions of solicitor, barrister and chartered legal executive (and their foreign equivalents)?

No, says the majority of the Supreme Court in R (on the application of Prudential plc) v Special Commissioner of Income Tax.

In that case, Prudential sought to claim legal advice privilege in respect of legal advice provided by accountants in connection with a tax avoidance scheme.

Giving the leading judgment, Lord Neuberger acknowledged that there was a "strong case in logic" for the expansion of legal advice privilege to cover a wider field of professional advisors, but held that it was preferable in the interests of certainty for the principle to retain its traditional boundaries, and that any expansion of the principle should be a matter for Parliament rather than the courts.

In dissenting judgments, Lords Sumption and Clarke considered that modern conditions required the protection to extend to professional legal advice on a more general basis, not limited to the traditional legal professions.

Tuesday 22 January 2013

Incorporation of Contractual Terms

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Can liability for enhanced redundancy payments arise from a policy in an employee handbook?

Yes, says the EAT, on the facts in Allen v TRW Systems.

In 1999 TRW agreed a policy with its works council for enhanced redundancy payments. The promise was subsequently added to the employee handbook and repeated in letters to the workforce on a number of occasions thereafter. The employment tribunal held, however, that because the policy was not referred to in the written statement of terms, it was not incorporated into employment contracts.

The EAT overturned the tribunal decision. In Keeley v Fosroc International the Court of Appeal held that if provisions about severance payments were apt for incorporation it was no obstacle in principle that they were in a handbook, as opposed to a statement of terms.

The tribunal was therefore wrong in this case to ignore the works council agreement, the express promise in the employee handbook, and the subsequent repeated promises in correspondence, in determining whether the enhanced redundancy payments had been incorporated into the contract of employment.  As the EAT put it: "how can an employer, having acted in this way, sensibly deny that employees could have a reasonable expectation that payment would be made in accordance with the promise?"

The case was remitted to a differently constituted employment tribunal to address these matters.

Thursday 17 January 2013

Internal Appeals and Dismissal

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
When, after an internal appeal against dismissal, a lesser penalty was imposed, did that expunge the earlier dismissal?

No, says the EAT in Piper v Maidstone & Tunbridge NHS Trust, on the particular facts of that case.

The Reverend Piper was employed by the Trust as a Chaplain. He was dismissed for gross misconduct. He appealed. The appeal was allowed to the extent that the Trust decided to substitute for the sanction of dismissal a penalty short of dismissal i.e. a final warning, demotion and transfer of work location. This was rejected by the employee who proceeded to claim unfair dismissal.

The Trust resisted the claim on the grounds that the original dismissal had been negatived by the appeal outcome and the employee had not therefore been dismissed. The employment tribunal agreed, and held it had no jurisdiction to hear the claim.

The EAT overruled this decision. Under the Trust's appeal procedure the employer was not entitled to impose the lesser penalty. It required the consent of the employee. If the employee had agreed, then, on the authorities, the dismissal would have been expunged. But as he had not agreed (as required by the procedure) the dismissal stood. His unfair dismissal claim could therefore proceed.

Important changes to Employment Law

The Department for Business, Innovation & Skills has announced / confirmed
it is:-

1.    imposing a cap on the unfair dismissal compensatory award of
twelve months' pay (and still capped at the current limit, if twelve
months' pay is greater) -

2.    amending TUPE, to remove service provision changes from the
definition of a transfer, repeal Employee Liability Information
provisions, and making various other (important) amendments -

3.    consulting on the detail of Early Conciliation via Acas -

And separately, the Department for Work and Pensions has announced:-

4.    a new Health & Work Advisory and Assessment Service, to be introduced in 2014, providing (amongst other things) state funded occupational health testing for employees who are off sick for more than four weeks - http://www.dwp.gov.uk/docs/health-at-work-gov-response.pdf

Tuesday 15 January 2013

Time Limits: Strict Approach in Discrimination Case

[Thanks to Simon McCrossan, squatter at New Walk Chambers, for preparing this case summary]
Did a tribunal commit an error of law by deciding it was not just and equitable to extend time for a race discrimination claim presented one day beyond the limitation period?

No, not when the Claimant was entirely at fault for the late presentation of her claim, says the EAT in DeSouza v Manpower UK Ltd.

The Claimant's employment was terminated with effect from 21 May 2009, according to both her dismissal letter and her P45. She saw a solicitor both before and after her dismissal.  Her ET1 was presented to the tribunal on 21 August 2009, mistakenly citing her effective date of termination as 23 May 2009. Whilst no letter before action, nor written confirmation of instructions were evident, the Claimant conceded that in her earlier meetings she had been legally advised of relevant deadlines but had initially declined to authorise the service of the draft ET1 prepared in June 2009 due to personal financial concerns.

The EAT accepted that the guidance cited in London Borough of Southwark v Afolabi was a relevant factor, but in directing itself to British Coal v Keeble, the EAT held that the tribunal had incorporated this guidance within its decision. Given the initial findings that the Claimant was entirely at fault, unlike her lawyer who was held to be free from error, no exceptional reasons for the delay arose on the facts and the EAT declined to substitute its view for that of the employment tribunal and dismissed the appeal. The EAT also noted that the first instance decision not to extend time may be construed as having been principally determined on the grounds of the Claimant's fault, rather than the balance of prejudice between the parties.

Religious Discrimination

[Thanks to Sarah Russell, solicitor at Russell, Jones and Walker, part of Slater & Gordon Lawyers, for preparing this case summary]
Does UK law provide sufficient protection against discrimination for employees who wish to manifest their religious beliefs in the workplace?

In many situations, but not all, says the European Court of Human Rights in Eweida & Others v UK.

Ms Eweida worked for British Airways, and Ms Chaplin as a geriatric nurse.  Both had sought to wear visible crosses, in breach of their employers' respective uniform policies.  Ms Ladele was a registrar, whose employer required her to perform civil partnership ceremonies.  Mr McFarlane provided counselling services for Relate. He was unwilling to provide sexual counselling for same sex couples.

Article 9 of the European Convention on Human Rights provides that there is a right to freedom of thought, conscience and religion, but a qualified right to manifest one's religion or beliefs.  This is subject to 'only such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health, or morals, or for the protection of the rights and freedoms of others'.

The Court essentially departed from previous case law and held that where an individual complains of a restriction on freedom of religion in the workplace, rather than holding that the possibility of changing job would remove any interference with the right, the approach at the ECtHR level is to weigh that possibility in the overall balance when considering whether or not the restriction was proportionate.

The Court held that the domestic courts accorded too much weight to British Airways' desire to project a certain image. Ms Eweida's cross was discreet, and there was no evidence that the wearing of items such as turbans and hijabs, by other employees, had any negative impact on British Airways' brand.  In the circumstances, the State had breached its obligations under Article 9 in failing to protect Ms Eweida's rights.

In respect of Ms Chaplin, the Court held that the importance of her being permitted to manifest her religion must weigh heavily in the balance. However, the reason for asking her to remove the cross, the protection of health and safety on a hospital ward, was more important.  The interference was necessary in a democratic society and there was no breach of her Article 9 rights.

In respect of Ms Ladele and Mr McFarlane, the Court has previously held that differences in treatment based on sexual orientation require particularly serious reasons by way of justification.  The Court commented that national authorities have a wide margin of appreciation when it comes to striking a balance between competing Convention rights.  The margin of appreciation was not exceeded by either case.

The judgment highlights that the justification of indirect discrimination will continue to be a highly fact specific exercise, although employers will now be required in many cases to accommodate reasonable requests in respect of uniform.

Note from Daniel Barnett: For more information on this decision, see blogposts here and here.

Friday 11 January 2013

Contract - Incorporation of Collectively Agreed Terms

[Thanks to James English of Samuel Phillips solicitors for preparing this case summary]
Did an employee have a contractual right to job evaluation based on a collective agreement?

No, says the EAT in Simpson v Hackney & Others.

The Claimant was employed as a teaching assistant by the London Borough of Hackney on the national pay scale.  She made a verbal request for a job evaluation in February 2005 and a written request in May 2006.  She was eventually upgraded following a local job evaluation process agreed between the unions and management in December 2008.  Throughout this time, her work was unchanged.

The Claimant's argument that she had a contractual right to job evaluation based on two collective agreements (the 'Green Book' and the 'Gold Book') was rejected.  Following NCB v NUM and Marley v Forward Trust Group Ltd, HHJ McMullen QC held that the relevant terms were not apt for incorporation.  Upholding the employment tribunal's decision on this point, he stated that whilst both the Green Book and the Gold Book had sections on pay, for example, that could be enforced, the provisions on the job evaluation process came under the joint advice sections, and so were not legally binding.

Religious Discrimination: Sunday Working for Christians

Is it discriminatory to require a Christian care worker to work on a Sunday?

Not here, held the EAT in Mba v The Mayor & Burgesses of the London Borough of Merton.

Ms Mba worked in a home providing residential care to disabled children with complex care needs.  The home was understaffed.  Ms Mba's contract required her to work on Sundays, but her beliefs forbade this. Merton began to rota her for Sunday shifts.

The EAT found that the tribunal had misdirected itself on indirect discrimination, but this made no difference to the outcome.  What should have been considered, per R (Elias) v Secretary of State for Defence and the ECJ case of Bilka-Kaufhaus GmBH v Weber von Hartz was not the discriminatory impact of a provision, criterion or practice ('PCP') in respect of a given Claimant but the discriminatory impact of that PCP in respect of a group (here Christians) taken as a whole.

In that context, it was permissible for the tribunal to consider whether refusal to work on a Sunday was a 'core' tenet of Christian faith, as this would affect the total number of people who might be impacted by such a decision.

The question of whether a PCP was justified is one for the tribunal, to be considered with 'anxious scrutiny', and with the onus on the employer to justify the discrimination.

Langstaff P stresses in the judgment that anyone looking for either 'a ringing endorsement of an individual's right not to be required to work on a Sunday [..] or an employer's freedom to require it on the other' will be disappointed, and that each case turns on its own facts.

It should also be noted that the ECHR decision on Eweida, Ladele etc is due on Tuesday, and this may change the relevant law.

Wednesday 9 January 2013

Definition of Disability

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
When assessing whether an employee is disabled should a tribunal concentrate on those activities which the employee cannot do rather than those which he can do?

Yes, says the EAT in Aderemi v London & South East Railway.

Mr Aderemi was a station assistant working in the station gate line as a first point of contact for customers and checking tickets. His role was not a static one as such but involved being on his feet for substantial periods of the day, for shifts of about 9 hours in duration.

He developed a back problem which precluded the long periods of standing at his job. He was dismissed for capability. The employment tribunal dismissed his claim for unfair dismissal and disability discrimination. In particular the tribunal held that he was not disabled because his impairment did not have a substantial adverse effect on his ability to do normal day-to-day activities. In so concluding, it set out a list of various things he could continue to do.

On appeal, the EAT held the tribunal had tackled this question in entirely the wrong way. It had set out a list of those things he could continue to do. But it failed to concentrate on various things he could not do, for example stand for periods of around 30 minutes, bend and lift, which not only hampered him at work but also may have involved substantial effects on the ability to carry out normal day-to-day activities.

Following the EAT decision in Paterson v Metropolitan Police Commissioner the focus should be on those matters which a Claimant could not do as opposed to those which he could do. The case was therefore remitted to the employment tribunal for a re-hearing.

Tuesday 8 January 2013

Reason for Dismissal - Redundancy

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]
Can the reason for dismissal be redundancy, even though the employer had issues about the employee's capability or conduct?

Yes, says the EAT on the facts in Fish v Glen Golf Club.

The Claimant was the club secretary of a golf club who was dismissed on grounds of redundancy. He alleged this was a pretext since the club committee had long-standing concerns about his conduct and capability. He also relied on the rushed nature of the consultation process and the haste to appoint his deputy to an alternative job instead of him.

However, the club was making serious losses. And Mr Fish was one of four employees dismissed on grounds of redundancy. The employment tribunal found that Mr Fish had been fairly dismissed by reason of redundancy.

Mr Fish appealed and essentially argued that the tribunal's decision was perverse. The EAT rejected his appeal and considered the employment tribunal was entitled to find, weighing the evidence, that the principal reason for dismissal was redundancy. The criticisms of Mr Fish were background, not the real reason for dismissal.

The case is a reminder of how difficult it is to argue perversity. As Langstaff P said, one way of putting it is that, for the argument to succeed, the tribunal decision "must be such as to cause astonished gasps from the well-informed observer". Such was not the case here.

Remedies - Reinstatement and Polkey

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

Can an employee be reinstated where the tribunal has made a Polkey deduction?

Yes, says the President of the EAT in Arriva London v Eleftheriou.

The Claimant was employed as a bus driver and was dismissed for capability reasons after having an accident at home that prevented him from driving.  At the date of hearing the employee had fully recovered and after finding the dismissal procedurally unfair, the tribunal ordered reinstatement but reduced the compensation payable between dismissal and reinstatement by 60% after finding that he would have been 60% likely to have been fairly dismissed given time and proper procedures.  The Respondent appealed.

The EAT held that there was nothing to prevent an order for reinstatement where there had also been a Polkey deduction.  The Employment Rights Act is prescriptive as to the order in which a tribunal is obliged to consider remedy.  It must consider reinstatement before it considers compensation.  In accordance with section 116 the tribunal must consider whether the complainant wishes to be reinstated, whether it is practicable for the employer to comply with an order for reinstatement, and, where the complainant caused or contributed to some extent to the dismissal, whether it will be just to order his reinstatement.

The EAT did not regard a conclusion as to a percentage deduction - reached in respect of the different exercise, which is the assessment of compensation - as having any relevance to the prior decision whether reinstatement should take place or not.  However, under section 116 a tribunal can still take into account matters which may themselves lead to a conclusion of a Polkey deduction.  For instance, in a conduct dismissal held to be unfair on procedural grounds it is likely to be highly relevant to know what the conduct was.  In a capability dismissal it may be highly relevant to know the nature of the illness concerned. If the reason were "some other substantial reason" then, again, a tribunal would no doubt wish to have regard to some of the underlying facts.

Monday 7 January 2013

Reasonableness of Investigation

[Thanks to Simon McCrossan, squatter at New Walk Chambers, for preparing this case summary]
Is it within the range of reasonable responses for an employer to refuse to undertake further investigations which would support the account of an employee accused of gross misconduct?

Usually not, says the EAT in Stuart v London City Airport, as a reasonable employer will normally investigate such matters unless there is a good reason not to.

The Appellant was employed in a position of trust as a Ground Services Agent. He entered a duty-free store within the airport to buy some presents which he held in his hands. Whilst queuing, the Appellant was re-directed to another operative till by a member of staff. Once in the second queue, he was beckoned outside the store boundary to a seating area by another member of staff for a social conversation, at which point he was apprehended for dishonestly removing goods without payment.

In dismissing the Appellant, the Respondent relied primarily upon their conclusion that the Appellant had in fact left the store boundary with the unpaid items and upon the vigorously disputed evidence of a store assistant who informed her store manager that she saw the Appellant conceal items in his jacket before he left the store.

The evidence of the store assistant was never tested orally during the internal appeal or subsequent tribunal proceedings.  During the former, the Respondent refused to interview the store cashier or the staff member who beckoned the Appellant outside of the store boundary. Moreover, the Respondent also failed to consider available CCTV footage of the Appellant's movements inside the store which would have assisted in determining the allegation of concealment and therefore dishonest conduct.

In allowing the appeal, citing A v B, the EAT noted that serious allegations of dishonesty required careful investigation. As such, the EAT ruled that the failure of the Respondent to carry out potentially exculpatory investigations, which would have supported the Appellant's account that he was at no time acting dishonestly, was objectively unreasonable and the tribunal's conclusion to the contrary was therefore unsustainable.

Thursday 3 January 2013

Wrongful Repudiation and Effective Termination

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary]
If an employment contract is wrongfully repudiated, does the termination take effect automatically - the 'automatic theory' - or when the other party accepts the repudiation - the 'elective theory'?

When the repudiation is accepted, says the Supreme Court, in Geys v Societe Generale London Branch.

The Claimant was told at a meeting in November 2007 that his employment was to end, with a payment-in-lieu of notice (PILON) being made in December 2007 for his 3 months' notice.  The Claimant reserved his rights and only in January 2008 did he receive a payslip for the PILON. A key question was when the dismissal took effect, as, under the contract, proper notice had to be given to terminate it, and a more generous termination payment was due if termination had taken effect in 2008 rather than 2007.

The Supreme Court decided (4-1, Lord Sumption dissenting) that the elective theory was to be preferred, and termination only took effect in January 2008. Automatic termination would permit a wrongdoer to choose a termination date potentially to the detriment of the wronged party.

Under the terms of the contract, the employer had not given proper notice of termination until January 2008, when the payslip was provided, despite the Claimant clearing his desk and receiving a PILON in December. Therefore, the Claimant qualified for a higher termination payment. Lady Hale's speech at paras. 57-61 comments on the importance of notice of termination being given in 'clear and unambiguous terms'. The fact that a PILON went into the employee's bank account was not sufficient notice to make termination effective: an employee '...should not be required to check his bank account regularly in order to discover whether he is still employed. If he does learn of a payment, he should not be left to guess what it is for and what it is meant to do...'.

Practitioners may wish to note the consequences of the judgment when termination dates and the validity of a termination may affect contractual entitlements. The judgment resolves a long-standing conflict between two theories on wrongful termination, and the same principles would apply to a wrongful termination by employer or employee.

Wednesday 2 January 2013

Employment Status - lap dancer

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

Is a lap-dancer an employee?

No, says the Court of Appeal in Stringfellow Restaurants Ltd v Quashie.

Ms Quashie was a lap-dancer at Stringfellows. She claimed that she had been unfairly dismissed. The preliminary issue in this case was whether Ms Quashie was an employee of Stringfellows or self-employed.

The EAT held that Ms Quashie was an employee and that there was a contract on the nights that she danced at Stringfellows because she was required to provide her work personally and the club was obliged to provide her with work. HHJ McMullen QC also found that Stringfellows had a degree of control over her because she was subject to the disciplinary regime of fines.

The Court of Appeal overturned the decision of the EAT and held that Ms Quashie was not an employee.

Whilst Ms Quashie worked under a contract, and there were mutual obligations of some kind in place when she was actually working, Elias LJ found that she had not been engaged under a contract of employment. This was because the manner in which Ms Quashie had been paid made it clear that Stringfellows had been under no obligation to pay her anything at all. The principle evidence for the conclusion was that Ms Quashie negotiated her own fees with clients and took the economic risk of being out of pocket on a particular night.

Elias LJ concluded by saying "It would, I think, be an unusual case where a contract of service is found to exist when the worker takes the economic risk and is paid exclusively by third parties."