House of Lords on Victimisation

House of Lords Opinion - Victimisation under the Race Relations Act 1976

Yesterday (Thursday, 11th October) the House of Lords handed down its decision in Chief Constable of West Yorkshire Police v Khan, holding that an employer who refuses to provide a reference for an employee who has claimed race discrimination is not necessarily thereby guilty of victimisation.


Facts
Sergeant Khan had applied for, and been refused, promotion to inspector on several occasions within the West Yorkshire police. He lodged a claim with the employment tribunal alleging that the refusal to promote him was on grounds of his race (Indian).

Whilst that claim was pending, he applied for promotion/transfer to the Norfolk police force. The West Yorkshire police refused to provide a reference (after seeking legal advice) on the grounds of the pending litigation. They argued that they were placed in the invidious position of either having to repeat what might be a racially motivated assessment (thereby re-discriminating and possibly giving rise to an award of aggravated damages), or not repeating their previous comments and affecting the Force's credibility in Sergeant Khan's discrimination case.


Issue
By refusing to provide a reference because of a pending race discrimination claim, was the police force guilty of victimisation?


Decision
The House of Lords unanimously held that the police force was not guilty of victimisation.

Lord Nicholls pointed out that a finding of unlawful victimisation would mean that West Yorkshire police should have given Norfolk police a reference which have repeated the very views which were being challenged in pending judicial proceedings in the industrial tribunal as evidence of unlawful racial discrimination. This, said Lord Nicholls, "is a surprising proposition. To my mind it has only to be spelled out for it to be apparent that this cannot be right". He went on to say that "Employers, acting honestly and reasonably, ought to be able to take steps to preserve their position in pending discrimination proceedings without laying themselves open to a charge of victimisation".

The question which mattered was therefore "was Sergeant Khan refused a reference by reason that he had brought proceedings against the chief officer of police under this Act?"

The House of Lords said the answer was no. The reason why West Yorkshire Police refused to give a reference was NOT because Sergeant Khan had brought proceedings against them but because they were advised by their in-house legal department that it would be inappropriate to give a reference because there was pending litigation raising relevant issues. In traditional legal language, the institution of proceedings by Sgt Khan was a causa sine qua non of the refusal to give a reference but it was not the causa causans of that refusal.

Lord Mackay said that "once proceedings have been commenced, a new relationship is created between the parties. They are not only employer and employee but also adversaries in litigation. The existence of that adversarial relationship may reasonably cause the employer to behave in a way which treats the employee less favourably than someone who had not commenced such proceedings" and suggested that "a test which is likely in most cases to give the right answer is to ask whether the employer would have refused the request if the litigation had been concluded, whatever the outcome".

The House of Lords also considered who the correct comparator should be. Lord Scott stated that "the treatment of Sergeant Khan should be compared to the treatment that would have been accorded to an officer in a position the same in all respects as Sergeant Khan's save only that this hypothetical officer had not done the protected act, ie, in this case, had not brought race discrimination proceedings... It provides to employees who do one or other of the protected acts specified in section 2(1) the protection that Parliament must have intended them to have."


Thanks to Henry Scrope of DiscLaw Publishing (www.emplaw.co.uk) for sending me his summary of this case (which I have shamelessly plagiarised).

New TUPE decision

NEW TUPE DECISION

An important - and perhaps controversial - EAT decision considering when a TUPE transfer occurs. The case is reported on the EAT website.

CELTEC LTD -v- ASTLEY + others
(EAT, Hooper J. presiding, 5th October 2001))

Facts
Prior to 1990, vocational training and enterprise activities were managed by the Department of Education. In 1989, the government announced the creation of Training and Enterprise Councils (known as TECs). Approximately 80 TECs were set up, using (in the main) the same premises, databases and staff as had been doing the job under the Department of Education. They took over the Department of Education's existing contracts with suppliers and other third parties.

This case was concerned with the North Wales TEC, which began operations in about September 1990. In common with the other TECs, it was a company limited by guarantee and was initially staffed by civil servants, previously working for the Department of Education, who were seconded out for a 3-year period to the TEC. The terms of secondment provided that they continued to be civil servants and that, at the end of the period, they could extend the period of secondment or return to normal civil service duties.

In September 1991 the government decided to end the secondments and arrange for staff to be directly employed by the TECs. Following a period of consultation, all staff were offered the opportunity to return to the civil service at the end of their secondment, or resign from the civil service and enter into contracts of employment with the TEC. Many employees, including the Respondents to this appeal, adopted the latter option. The three in question, who brought their claims as test cases, resigned and entered into new contracts in about October 1993 (although the process extended until 1996 for other employees).


Issue
It was common ground at the appeal that a TUPE transfer took place. The question was, when did it occur?

If the TUPE transfer took place in September 1990, then "at the time of the transfer" (being the wording in ERA 1996, s218, dealing with continuity of employment) the employees were, and remained, employees of the Department of Employment. Thus s218 would not grant them continuity of employment.

If, however, the TUPE transfer was a gradual process occurring between September 1990 and October 1996 (as the staff transferred), then the employees would have retained continuity of employment for their years spent with the civil service.


Decision
The majority of the EAT (including Hooper J.) held that the correct test for the timing of the transfer is "when the new employer takes over the actual occupation and control of the old business". This occurred in September 1990, and thus the employees remained employed by the Department of Employment after the transfer. Thus continuity of employment was not preserved.

The minority member agreed with the decision of the original tribunal, holding that the transfer took place over a period of six years and was effected by a series of transactions, ie the transfers of the individual employees.

The EAT granted permission to appeal to the Court of Appeal without recalling the parties for argument - thus acknowledging the importance/complexity of the point.

[Thanks to John Bowers QC of Littleton Chambers, Counsel for the successful TEC, for sending me this transcript.]

Amendment to the Working Time Regulations

In the light of BECTU v UK (see bulletins dated 26th and 28th June 2001), the government has this afternoon announced an amendment to the Working Time Regulations. This follows a 4-week consultation period which concluded last month.

The amendment will remove the 13-week qualifying period for holiday pay, and will substitute a right to take one-twelfth of the annual holiday for each month worked, rounded to the nearest half-day.

This remains technically in breach of the EC Working Time Directive, since it replaces the 13-week qualifying period with, in practice, a one-month qualifying period. However, similar systems are operated by other European jurisdictions and it is unlikely that the new law will be challenged.

The amendments are due to come into force from 25th October 2001. The amending SI is not yet available, but soon should be placed on the HMSO website at http://www.legislation.hmso.gov.uk/stat.htm.


AND a reminder: from Monday, the national minimum wage increases to £4.10ph for adult workers (from £3.70), and to £3.50ph for workers under 21 (from £3.20).

TUPE CONSULTATION DOCUMENT PUBLISHED

After many months of waiting, the DTI has published its consultation paper on amendments to the TUPE Regulations. The consultation period lasts until 15th December 2001.

The main proposals, on which views are sought, are:

• options for new rules as to when TUPE applies, particularly in contracting-out cases;
• proposals for better protection of occupational pension rights;
• greater flexibility when applying the Regulations to transfers of insolvent businesses, to make it more attractive for potential buyers to rescue those businesses and save jobs (including that some - albeit limited - liabilities of insolvent transferors be met from the DTI National Insurance Fund);
• better guidance for both employees and employers on the extent of protection against transfer-related dismissals - in particular, clarifying the 'ETO' defence;
• making it clear that TUPE does not preclude transfer-related changes to terms and conditions, where the changes are made for an ETO reason; and,
• a legal requirement for the old employer (transferor) to give the new employer (transferee) proper notification about the rights and obligations being transferred.

The full consultation document, and information about the consultation process, can be found at http://www.dti.gov.uk/er/tupe/consult.htm.


[Thanks to Simon Jeffreys of CMS Cameron McKenna for notifying me of this news item]

NEW EAT DECISIONS

These cases are unreported (although some may be reported in due course). The transcripts were recently posted on the EAT website.


RUGAMER v SONY MUSIC ENTERTAINMENT UK LTD.
(Douglas Brown J., 10th July 2001)
A short delay by an employer in paying sick-pay, where there was a genuine dispute over whether the employee was malingering and the employer was seeking medical evidence, was not a fundamental breach of contract amounting to a constructive dismissal.


CHARLES v PROPERTY SERVICES
(Mr Commissioner Howell QC, 27th July 2001)
An employee claiming to be physically disabled within the meaning of the Disability Discrimination Act 1995, but who was actually suffering from a functional overlay (ie there was nothing physically wrong with them, but he had a psychological condition which had the effect of physically handicapping him) was not suffering from a 'physical impairment' within the meaning of the Act. Moreover, there is no duty on a tribunal to investigate whether the functional overlay amounts to a 'mental impairment' within the meaning of the Act unless the parties call evidence on the point and pursue it as a discrete argument.


CLARKE v ARRIVA KENT THAMESIDE LTD.
(Douglas Brown J., 25th July 2001)
A useful summary of the principles relating to when a chairman can sit alone to hear a case.


CAMDON GROUP LTD v LAMB
(HHJ Wakefield, 26th April 2001)
An unrepresented employer's witnesses failed to attend the tribunal hearing because, for unforeseen reasons, the employer was understaffed and could not spare the witnesses on the day of the hearing. The chairman proceeded with the hearing without asking the employer whether it wished to seek an adjournment. The EAT held that there is no duty on a tribunal chairman to ask an unrepresented litigant whether they wish to apply for an adjournment in such circumstances.

Leggatt Report

REVIEW ON TRIBUNALS - THE LEGGATT REPORT

The government has, today, published Sir Andrew Leggatt's report on the tribunal system.

The report is long! Readers brave enough to try it can access it, together with the consultation paper issued by the government based on the report's recommendations, from here. Ignore the date of March 2001 on the website - it was only made publicly available today!

With regard to employment tribunals, the main recommendations are:

(a) ETs should remain as tribunals - there should be no new 'employment court' system set up to deal with all claims arising from employment disputes (paras 3.22-3.24). However, further consideration should be given to transferring employment-related claims (eg personal injury sustained at work) to the ETs jurisdiction (Part II, ETs, para. 28)

(b) Administrative responsbility for ETs and the EAT should be transferred from the DTI to the LCD (paras. 3.25-3.28)

(c) A recommendation to the government that it introduces a system of licensing for unqualified employment advisers (or set up other safeguards) (paras. 4.33-4.39)

(d) Possibly increase the number of locations at which ETs sit (Part II, ETs, para 7)

(e) Legal aid should not be extended to employment tribunals (Part II, ETs, para 12)

(f) Costs should not follow the event (Part II, ETs, para 24) - although a study should be set up to look into this issue further in the future (Part II, ETs, para 23)

(g) The test for permission to appeal from the EAT to the Court of Appeal be brought in line with other areas of law, namely from 'real prospect of success on a question of law' to 'cases which raise an important point of principle or practice' (Part II, ETs, para. 29)

The consultation paper invites views on a vast range of issues. The closing date for submissions is 30th November 2001.

Burden of Proof Directive

Further to my bulletin dated 25th July, the SEX DISCRIMINATION (INDIRECT DISCRIMINATION AND BURDEN OF PROOF) REGULATIONS 2001 have today been placed on the HMSO website.

They come into force on 12th October 2001.

Burden of Proof Directive

SEX DISCRIMINATION - BURDEN OF PROOF DIRECTIVE ==============================================

The Sex Discrimination Burden of Proof Directive 1997 was due to come into force at the beginning of this week.

Richard Lister of Lewis Silkin tells me he has made enquiries of the Cabinet Office, who say that Regulations were laid before parliament last Friday, and are due to come into force in 12 weeks time.

The Regulations will make two changes to the Sex Discrimination Act 1975:

First, inserting a section 63A which provides that where an applicant proves facts giving rise to a prima facie case of discrimination, the tribunal SHALL uphold the complaint of discrimination unless the Respondent proves that he did not commit the act. In other words, the burden of proof formally shifts from Applicant to Respondent. This is no more than already happens in practice pursuant to King v GB China Centre.

Secondly, the definition of indirect discrimination will be amended from making in unlawful to impose an unjusifiable "requirement or condition" to a "provision, criterion or practice". This will not make a significant difference.

Tribunal Reform Consultation Paper

TRIBUNAL REFORMS - CONSULTATION DOCUMENT

Within a week of the introduction of the new procedural regime, the government has issued a consultation paper on further reform of the employment tribunals.

Subscribers may have seen some details of these proposals in a leaked report to The Times on Friday 20th July. The full consultation paper is now available at http://www.dti.gov.uk/er/individual/resolution.pdf . Responses are invited by 8th October 2001.

The main proposals, on which the government seeks views, are:


GRIEVANCE PROCEDURES
===========================
- organisations which do not have dispute resolution procedures in place - or do not use them when workplace disagreements arise - to have arrangements for managing such disagreements;

- increasing awards at employment tribunals where a basic new dispute resolution procedure has not been used by the employer - with awards being reduced where an employee has not used the grievance procedures before applying to the tribunal;

- limited extensions to the time limit for lodging tribunal claims where an internal disciplinary or grievance procedure is still in play - in order to facilitate resolution in the workplace;



COSTS
======
- an issue fee (£100 has been mooted) to issue an application in the tribunal. Exemptions would apply to those on benefits;

- a presumption in favour of awarding costs in 'weak' cases, with an obligation for tribunals to provide reasons where they do not award costs;

- tribunals to be allowed the discretion to award wasted non-legal costs (such as a party's overnight expenses) in circumstances where a party has acted vexatiously.



PROCEDURE
===========
- a fast-track system to be introduced for certain jurisdictions (such as unlawful pay deductions and breach of contract);

- allow the Presidents of the Employment Tribunals to issue practice directions, in order to achieve greater consistency throughout the country

- introducing a fixed period of conciliation to focus parties' minds within that period on whether or not they were interested in reaching a settlement.



UNFAIR DISMISSAL LAW
=====================
- a limited amendment to unfair dismissal legislation to allow employment tribunals to disregard minor procedural errors by employers, provided such errors have made no difference in practice and the dismissal is otherwise fair.

Upper Qualifying Age Decision

UPPER QUALIFYING AGE - HARVEST TOWN CIRCLE v RUTHERFORD

The Employment Appeal Tribunal has today handed down the long-awaited decision in HARVEST TOWN CIRCLE v RUTHERFORD, dealing with the question of whether the upper qualifying age for unfair dismissal and redundancy is contrary to Article 141 of the Treaty of Amsterdam.


FACTS
=====
Harvest Town Circle dismissed Mr Rutherford, who was aged 67. He claimed unfair dismissal. The Respondent relied on sections 109 and 156 of the Employment Rights Act 1996 (which states that employees cannot claim unfair dismissal / redundancy if they are over the normal retirement age, presumed to be 65).

Mr Rutherford responded by arguing that ss 109 and 156 were contrary to Article 141 - ie equal pay for men and women. This is because unfair dismissal and redundancy rights count as 'pay', and more men than women work beyond age 65. Therefore the upper qualifying age is indirectly discriminatory on grounds of sex against men, since more men will work beyond 65 and therefore fail to receive the 'pay' of unfair dismissal and redundancy rights.


1ST INSTANCE DECISION
=====================
The Employment Tribunal found for Mr Rutherford and, following the earlier case of NASH v MASH/ROE [1998] IRLR 168, held that ss 109 and 156 were unlawful and should not be followed.


THE EAT DECISION
================
The EAT overturned the tribunal's decision on technical points, but left the matter open for future attempts.

The basis of the decision was twofold:

First, the EAT held that the statistics used by the employment tribunal were unsatisfactory. It gave guidance on the statistics that would probably be needed to attack ss 109 and 156 successfully, and remitted the matter back to the employment tribunal.

Secondly, it held that the tribunal had erred in failing to invite the Secretary of State to give evidence on objective justification. It held that it was not for a small employer to justify such a fundamental statutory provision, and the Secretary of State should - if necessary - be witness summonsed to explain how the sections can be objectively justified or, alternatively, explain why he was not going to attempt to justify them.


COMMENT
=======
The upper qualifying age saga has not been laid to rest. The EAT's guidelines on the necessary statistics (which are set out in detail in the
decision) are cumbersome and will be an extremely difficult hurdle to overcome. Nevertheless, there can be little doubt that an attempt will be made. The decision is undoubtedly correct - and it is not for the EAT to make findings of facts on statistics that are not currently available.
However, it means that employers remain uncertain as to whether they have immunity from unfair dismissal claims when dismissing staff over retirement age.

New Tribunal Procedure Rules

CONTENTS
--------------
1. New Tribunal Procedure Rules
2. Advertisement - Boodle Hatfield


-------------------------------------------------------

1. NEW TRIBUNAL PROCEDURE RULES

The Employment Tribunals (Constitution and Rules of Procedure) Regulations
2001 come into force today, replacing the 1993 Regulations of the same name.
They apply to all tribunal proceedings, irrespective of when (or if) the case commenced.

The full Regulations can be downloaded from http://www.legislation.hmso.gov.uk/si/si2001/20011171.htm (and see http://www.legislation.hmso.gov.uk/si/si2001/20011459.htm for the amendment to the commencement date from 18th April 2001 to 16th July). They are already included in the latest update to Harvey on Employment Law at [R-1317].

The important changes are:

(1) introduction of an "overriding objective" to deal with cases "justly", which is defined to include ensuring the parties are on an equal footing, saving expense and dealing with cases in a way that is proportionate to the issues. The parties are placed under a duty to assist the tribunal in furthering the overriding objective. Users of the civil courts will recognise this formula from the Civil Procedure Rules. Applicants may wish to rely on this to persuade tribunals to order Respondents to share the cost of instructing experts. This 'proportionality' requirement may go some way towards limiting the effect of the recent House of Lords decision in Anya v Oxford University (see bulletin dated 24/3/01), which obliged tribunals to investigate every detailed historical allegation of less favourable treatment in discrimination cases.

(2) late IT3s are no longer deemed to include an application to extend
time. Such an application must now expressly be made (the old position being that there was a 'deemed' application if reasons for the delay were given when lodging the IT3).

(3) the costs rules have changed, so that the tribunal has power to award
costs if a party - or his/her representative - has acted "vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by a party has been misconceived". The introduction of the 'misconceived' test should, in theory, increase the number of costs orders made. Further, the tribunal now has power to assess costs in the sum of up to £10,000 (increased from £500). The ability for the parties to agree a higher sum of costs, or for the tribunal to refer the costs to the county court for taxation, remains.

(4) the rules relating to giving directions as to evidence have been simplified.

-------------------------------------------------------

2. ADVERTISEMENT
EMPLOYMENT SOLICITOR VACANCY
BOODLE HATFIELD OXFORD

Boodle Hatfield is a leading firm with 33 partners and a total of 170 staff, most of whom are in London with 40 in our central Oxford office.

Our renowned employment law team, led by Russell Brimelow and Warren Wayne, has developed a very high profile. All members of the team are encouraged to be involved in our broad range of work with blue chip clients, whether advising on legislation, drafting contracts, training line managers and HR professionals or representing clients in employment tribunals.

Due to ongoing expansion Boodle Hatfield is looking for an additional Assistant Solicitor to work alongside Russell Brimelow in our Oxford office, ideally with 4-5 years PQE. This is an ideal opportunity with excellent prospects if you want a change of environment and are looking to establish your own practice with a leader in the field.

In addition to quality experience of contentious and non-contentious employment law, you will be a strong team player, able to meet tight deadlines, with excellent communication skills and a practical approach to problem solving.

We offer a competitive salary and benefits package, combined with high quality work and a friendly environment. For more details please look at our website: www.boodlehatfield.com

To apply please send your CV plus covering letter outlining why you are suitable for this role, to:

Joan Bradshaw, HR Manager, Boodle Hatfield, 61 Brook Street, London W1K 4BL
e-mail: jbradshaw@boodlehatfield.com

Alternatively, for an informal discussion, please phone Joan Bradshaw on 020
7318 8126

New EAT Decisions

NEW EAT DECISIONS
------------------------------------------------
The following decisions have been placed on the EAT website in the last few days. The judgments can be downloaded from http://wood.ccta.gov.uk/eat/eatjudgments.nsf

* * * * * * *

DAN KIEN TRAN v GREENWICH VIETNAM COMMUNITY PROJECT (Mr Recorder Langstaff QC, 5th April 2001)

A standard misconduct unfair dismissal case. It is of use because of the proposition laid down by the court - perhaps more clearly than in previous cases - that:

"We think that in general terms any employer who operated a disciplinary process in which he who investigated the alleged defence was he who judged it, or any employer who operated a disciplinary process in which there was no right of appeal, would (and in most cases perhaps should) be found to have been outside the bounds of the fairness required by section 98 of the Employment Rights Act 1996. It must be all the stronger when those two features are present in the same process."

This will be a very helpful quotation for Applicants who are pursuing claims involving procedural unfairness. Note, on the facts, the EAT did not interfere with the finding that the dismissal was fair.

* * * * * * *

EKPE v METROPOLITAN POLICE COMMIESSIONER (Mr Recorder Langstaff QC, 25th May 2001)

This deals with the vexed question of what amounts to a disability. Several issues arose in the case. The interesting one deals with 'normal day-to-day activities'.

The Applicant had difficulty applying make-up and putting rollers in her hair. The tribunal held these were not 'normal day-to-day activity', because "they are activities carried out almost exclusively by women.
Secondly, using rollers is an activity that the Tribunal believes is only carried out by a minority of women. Even if the Tribunal is wrong as to the proportion of women who use rollers, it is clear that these are activities that are normal only for a particular group of people, namely mostly women."

The EAT overturned this, stating "we should nonetheless emphasise that what is normal cannot sensibly depend on asking the question whether the majority of people do it. The antithesis for the purposes of the Act is between that which is "normal" and that which is "abnormal" or "unusual" as a regular activity, judged by an objective population standard. Just as what is "substantial" for the purposes of the Act may best be understood by defining it as anything which is more than insubstantial, so too may what is "normal"
best be understood by defining it as anything which is not abnormal or unusual (or, in the words of the Guidance, "particular" to the individual applicant)."

* * * * * * *

LLEWELLYN RYLAND LTD. v JONES & KEMP
(Charles J., 15th May 2001)

An unremarkable case on the facts. It contains a useful analysis of the extent to which tribunals are obliged to give reasons, and contains helpful guidance on Meek v City of Birmingham and subsequent cases. A good case to rely on when attacking a tribunal's decision as containing inadequate reasoning.

Fixed Term Workers Regulations

DELAY IN FIXED-TERM WORKERS REGULATIONS
------------------------------------------------

Implementation of the Fixed Term Employees (Prevention of Less Favourable
Treatment) Regulations 2001, which were planned to come into force on 10th July 2001, is being delayed. No alternative commencement date has been announced.

For details of the draft Regulations, see bulletin dated 10th March 2001.

The government has explained the delay (at
http://www.dti.gov.uk/er/fixed/index.htm) as being due to "particular problems with implementation in the UK", without stating what those problems are. It relies on a clause in the Fixed Term Workers Directive
(http://europa.eu.int/eur-lex/en/lif/dat/1999/en_399L0070.html) giving member states up to an extra year to implement the Directive if "special difficulties" exist.

What the government omits in its press release is that the implementation date for the Directive was 10th July 1999. Even allowing for the extra year, the Directive should have been implemented by 10th July 2000. The UK has therefore been, and continues to be, in breach of the Directive.

announcement>

Fixed Term Workers - Correction

DELAY IN FIXED-TERM WORKERS REGULATIONS
------------------------------------------------

A correction to the previous message.

I stated that the Fixed Term Workers Directive had to be implemented by 10th July 1999. In fact, this date was a misprint in the English version of the Official Journal. The implementation date was corrected by a Corrigendum to the Directive, to 10th July 2001 with a 12-month extension if "special difficulties" exist.

So the government will not be out of time for implementing the Directive provided it can establish the "special difficulties".

(Thanks to the three people who corrected me on this!)

Seminar Notes - Remedies in Employment Disputes

SEMINAR NOTES - REMEDIES IN EMPLOYMENT DISPUTES
-------------------------------------------------

The notes from the 2 Gray's Inn Square seminar on Remedies in Employment Disputes (June 2001) are available free of charge to subscribers to this mailing list.

For a copy of the notes (Word format, 122K), please REPLY to this Email.

Consultation Paper on Paid Holiday

The government has today published a consultation paper proposing changes to the Working Time Regulations 1998.

These proposals are as a result of Tuesday's decision of the ECJ in BECTU v UK (see bulletin 26.6.01), holding that the UK 13-week qualifying period for holiday pay is in breach of the Working Time Directive.

Curiously, the proposed amendments provide that in the first year of employment, holiday pay "shall accrue...at the rate of 1/12th for each month of employment". In other words, holiday entitlement will not start until the worker has worked for one month.

This appears to remain incompatible with the Working Time Directive, which provides for the right to paid holiday to begin accruing from the first day of employment.

The consultation paper can be downloaded from http://www.dti.gov.uk/er/work_time_regs/palconsult.pdf (Adobe Acrobat needed). The closing date for responses is 27th July 2001.

Lord Chancellor changes Discount Rate

NEWSFLASH - LORD CHANCELLOR CHANGES DISCOUNT RATE
-------------------------------------------

This afternoon, the Lord Chancellor has announced a reduction in the discount rate to 2.5%.

This will affect awards for long-term future loss of earnings in unfair dismissal and discrimination claims (the reduction from the long-standing 3.0% discount rate means that multipliers will be higher, and therefore awards will be higher).

The change will take effect from 28th June 2001.

13-week holiday rule unlawful

A number of people have been having problems receiving bulleins recently.
Until the problem is resolved, all messages are being sent in 'text' format.
Apologies for the unattractive appearance.
--------------------------

NEWSFLASH - BECTU v UK
------------------------

The ECJ has held, following the Advocate-General's opinion (see bulletin 8th February 2001), that the condition under the WORKING TIME REGULATIONS stating that the right to paid holiday does not accrue until workers have been employed for 13 weeks is unlawful.

This means that the UK will have to change the WORKING TIME REGULATIONS to remove the 13-week qualification period for paid holiday.

This decision will particularly affect people working in the media (who usually work on short-term contracts). It will also affect sectors such as cleaning, catering and security services, where short-term contracts abound.
Likewise, supply teachers (who often work for short periods) and temporary workers will benefit.

TUPE decision - ADI v Firm Security

Instructions on how to subscribe to this bulletin, and a DISCLAIMER, appear at the bottom of this Email.

On Friday (22nd June 2001), the Court of Appeal handed down its decision in ADI (UK) Ltd v Firm Security Group Ltd..

Facts
ADI provided security services at a shopping center. ADI terminated the contract, and the shopping centre initially stated it would take over the employment of the nine security officers. However, following a dispute over terms (prior to the 'transfer'), with the officers apparently indicating reluctance to be transferred, the shopping centre announced it would not be taking on any of the nine security officers.

The Employment Tribunal
The employment tribunal held (by a majority) that the provision of security services was not a discrete economic entitity and, in any event, there had been no transfer because neither assets nor staff were taken on by the shopping centre.

The Employment Appeal Tribunal
The EAT held (again, by a majority) that there had been a discrete economic entity, but that - due to the lack of transfer of assets and staff - there had been no transfer of the undertaking.

Issues for the Court of Appeal
The Court of Appeal (in line with precedent, by a majority!) allowed the transferor's appeal. It considered the following issues:
1. whether the tribunal was under a duty to consider whether the shopping centre had avoided taking staff on the avoid the effect of the TUPE regulations; and,
2. if so, what the effect of that was.

Issue 1: Was there a duty to investigate the motive behind not taking on any staff?
Both May and Dyson LJJ considered that there was an active duty on tribunals to investigate the motive behind not taking on any workers - provided the issue was raised by one of the parties. May LJ went further, and stated that there was not a positive burden of proof on the person arguing against the transfer to establish the reason for not taking on the workforce.

Issue 2: What is the effect of deliberately not taking on the workforce?
May and Dyson LJJ held that transferees could not escape the effect of the TUPE Regulations by the simple device of refusing to take on a workforce - the very mischief which the Regulations are designed to prevent. Thus, if it is decided that the transferee failed to take on the workforce so as to avoid there being a transfer, the tribunal should treat the case as if they had taken on all of the workforce. It must be noted that this point, whilst clearly agreed with by the majority of the Court of Appeal, was conceded by the transferee and was not fully argued.

In the minority, Simon Brown LJ held that the reason for not taking on the workforce was not relevant. The simple question was whether the workforce transferred (this being one of the many factors in deciding whether a TUPE-transfer had taken place). The reason was immaterial - either the workforce transferred (pointing to a TUPE-transfer), or it did not.

Comment
Because the point about the effect of a deliberate refusal to take on the workforce was conceded by the transferee, this is not as authoratitive a ruling as would otherwise be hoped for. Nevertheless, it follows the clear and useful dicta of the Court of Appeal in ECM v Cox. A purposive construction of the Acquired Rights Directive has always been adopted, and this approach is more consistent with a purposive construction.

To all people with TUPE headaches - take courage! May LJ stated that sections of the 1977 Directive have been "emasculated out of existence by purposive judicial interpretation", and that "the concept of transfer is now a judicially constructed fiction derived from the purpose of the Directive and the Regulations...". It is always heartening to know the Court of Appeal has trouble with TUPE concepts too!

Please note that I have prepared this note from a copy of the transcript which has been approved by the Court but which is subject to editorial corrections. Any quotations from the decision cannot be regarded as authoritative.

Government to promote Dispute Resolution

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Determined to show it still has ideas after the general election, the government has this afternoon (Friday) announced a review of employment disputes to encourage dispute resolution.

Alan Johnson, employment relations minister, today announced that the government is concerned about the increasing number of tribunal claims - which do not appear to be related to the recently introduced causes of action (such as working time, minimum wage, parental leave etc.)

The government will therefore be issuing a consultation document shortly to consider alternative methods - other than litigation - of promoting good employment practice in the workplace. The review is not intended to amend employment rights, but will concentrate on the way in which those rights are exercised.

A factual background paper is available at http://www.dti.gov.uk/er/individual/dispute.pdf