Lawson v Serco - Court of Appeal

The Court of Appeal has, this morning, handed down judgment in Lawson v Serco They overturn the EAT's widely-criticised decision, which held that an employee working anywhere in the world can claim unfair dismissal against any employer, if that employer has a place of business in England or Wales, irrespective of the governing laws or where the employee works. The Court of Appeal invited submissions from the Foreign & Commonwealth Office due to the far-reaching implications of the judgment.

Pill LJ said the right not to be unfairly dismissed applies only to "employment in Great Britain" (para. 8), and that although the residence of the parties might be relevant, the emphasis must be upon the employment itself (para. 28).

In coming to that decision, he recognised that it might be difficult to establish whether that is satisfied in some cases. He expressly rejected the argument that jurisdiction can be governed or influenced by the contents of the ET Rules of Procedure (para. 23), and also rejected the "substantial connection" test (paras. 23+24) (impliedly overruling Jackson v Ghost). Finally, he rejected the "base" test (para. 27).

Essa v Laing - Court of Appeal

The Court of Appeal has just handed down judgment in <>Essa v Laing.

Upholding the EAT's decision, it holds that an employee can recover for psychiatric injury flowing from an act of race discrimination, even where the employee's reaction is wholly extreme and unforeseeable.

Dispute Resolution - Draft ACAS Code

This bulletin follows on from yesterday's Email (dealing with the government's response to its consultation on the statutory dispute resolution procedures).

This morning, ACAS published the new draft Code of Practice on Disciplinary and Grievance Procedures. This will replace the existing Code of Practice, and it incorporates the minimum statutory and disciplinary procedures set out in the Employment Act 2002.

The draft Code has been published to give interested parties the opportunity to comment. Consultation closes on 14th April 2004.

Dispute Resolution - Consultation Results

As subscribers will know, new mandatory dispute resolution procedures come into force in October 2004. Failure by an employer to follow the mandatory disciplinary procedure will render a dismissal automatically unfair and lead to an increase in compensation for employees. Failure by an employee to lodge a grievance will (normally) prevent an employee from bringing a tribunal claim.

The government issued a consultation paper in July 2003, seeking views on a large number of issues arising from the new procedures. The government's response to the consultation has been published this morning.

Key points are:

• the disciplinary procedure will not apply to oral or written warnings, despite strong union representations to the contrary;
• it has been made clear the 'modified procedure' will apply only in a very small sub-set of gross misconduct cases;
• a formal definition of 'grievance' is introduced, namely "a complaint by an employee about action which his employer has or is contemplating taking in relation to him."
• an extension will be introduced to the 3-month time limit for unfair dismissal claims, where the employee has reasonable grounds for believing a disciplinary procedure is still ongoing when the 3-month limit expires;
• clarification of the overlap between disciplinary and grievance matters;

Interestingly, in paragraph 145 of the response, the DTI states "The government acknowledges that the Regulations are not simple..." - a far cry from the initial policy aim of a simple, straightforward disciplinary procedure to remove legal technicalities from the workplace.

Priests to be given Employment Rights

... or at least, so says the BBC news website this morning.

According to the BBC, the Church of England has announced it will give clergy employment rights, including the right to paid holiday, redundancy payments and the right to claim unfair dismissal.

Section 23 of the Employment Relations Act 1999 authorises the Secretary of State to extend employment rights to categories of workers who are not currently protected by the employment legislation.

It has been mooted for some time that employment rights would be given to ministers of religion. But my reading of s23 does not suggest that the Church of England has power to introduce an SI implementing employment rights for priests. So the BBC may have been meaning to say that the Church of England will recommend to the Secretary of State that an Order under s23 should be made.

It is unclear where this leaves ministers of other religions. The point is not yet free from controversy, so be cautious if advising ministers (or religious establishments) as to imminent changes to the law.

Conduct of Employment Agencies Regulations

The DTI has, today, issued guidance on how the long-awaited Conduct of Employment Agencies and Employment Businesses Regulations 2003 Regulations will work.

They are due to come into force on 6th April 2004. The main implication for employment lawyers is the way in which it requires employment agencies / business to specify the employment status of any individual who obtains work through the agency / business (i.e. self-employed, employed). It also requires the agency / business to give written notice as to the terms and condition on which the individual is employed or engaged.

Sychronised Dates

The DTI has, earlier today, published details of the Employment Regulations that are due to take effect in 2004.

They are split into two tranches, with harmonised commencement dates of 6th April and 1st October. This is a very useful guide to what's coming in the next 12 months.

New EAT Decisions

The following decisions have been placed on the EAT website this morning.

EFFECTIVE DATE OF TERMINATION - RESIGNING BY FAX AFTER OFFICE CLOSES
Potter v RJ Temple (HHJ Richardson, 18/12/03)

The employee sent a letter of resignation (accepting an alleged repudiatory breach by the employer) to the employer's office by fax at 8.21pm on Friday 13th September. The office had closed, and the fax was not seen until the following week. If the EDT was 13th September, then the IT1 presented on 13th December was out of time. If the EDT was the following Monday, then the IT1 would have been presented in time.

In a clear and well-reasoned judgment, the EAT drew a distinction between the strict common-law position on communication of acceptance of repudiatory breach by fax, and the 'common-sense' position that was called for under the unfair dismissal legislation. It held that the resignation had been validly communicated on 13th September, and accordingly upheld the tribunal's finding that the unfair dismissal complaint had been presented out of time.

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

COSTS
Health Development Agency v Parish (HHJ Richardson, 24/10/03)

Even when costs are awarded in respect of unreasonable conduct of proceedings, a tribunal must disregard any costs incurred before the IT1 (or, if the Respondent, the IT3) was lodged - irrespective of whether the party was acting unreasonably in the period before the pleading was lodged. Rule 14 does not confer power to award costs in respect of this early period. It is founded upon a finding as to the way a party has brought or conducted proceedings, and this assumes that proceedings have been brought.

Comment: This decision may be controversial. Whilst the tribunal has no jurisdiction to award costs in connection with unreasonable conduct if no proceedings are actually brought, there seems to be no valid reason why - once jurisdiction is triggered - the entire costs should not be recoverable. This decision will encourage (a) proceedings to be issued swiftly, when negotiations might otherwise prove fruitful, and (b) parties to delay their investigations, and matters such as taking preliminary witness proofs, until after proceedings have been started.

EU Consultation on Working Time

The European Commission has opened a consultation on Working Time with a view to revising the Working Time Directive. This is triggered partly by recent ECJ decisions dealing with 'on-call' working time, and partly by a perception that the opt-out is being abused by employers or member states (primarily, according to the consultation document, by UK employers!).

The consultation asks for responses on 5 main issues, with a view to a future revision of the Directive:

• the length of reference periods currently four months, with certain provisions allowing for 6 months or a year;
• the definition of working time following recent European Court of Justice rulings on time spent on call
• the conditions for the application of the opt-out
• measures to improve the balance between work and family life
• how to find the best balance of these measures.
  

The consultation closes on 31st March 2004.

Part-Time Pensions - Preston v Wolverhampton (no. 3)

Perfectly timed to wrap up in a stocking, the EAT has handed down the latest decision in the Preston v Wolverhampton saga of pension cases. The series of cases represent the largest litigation ever in an employment tribunal, involving roughly some 60,000 claims, mainly by female part-time workers.

In an admirably clear judgment, the EAT (HHJ McMullen, sitting alone) asked and answered the following six questions (note: I have adopted the order used by the judge in his judgment, not the order used in the formal list of issues):

(1) Is there a breach of the Equal Pay Act 1970 where pension scheme membership is compulsory for full-time staff but part-time staff are excluded? Yes (paras 30-55)

(2) Is there a breach of the 1970 Act where scheme membership is compulsory for full-time staff and optional for part-time staff? No (paras. 56-66)

(3) Is there a breach of the 1970 Act where an employer has failed to inform staff of the removal of a barrier to scheme membership? Yes, but only where there is a policy of failing to inform, having a disparate effect on women (paras. 67-80)

(4) Did the Chairman err in his consideration of Mrs Savage’s and Mrs Thomas’ test cases? Yes - their cases should be dismissed. (also paras. 67-80)

(5) When does a “stable employment relationship” arise? One needs to look at the intention of the parties. (paras. 81-128)

(6) Does time begin to run in a claim against a TUPE transferor from the date of transfer, or does time not run until the end of an employee’s employment with the transferee? Since pension rights do not transfer under TUPE, employees need to sue the transferor as well as the transferee. Time, for the purpose of the six-month limitation period, starts running from the date of end of employment with the transferee, not when the transfer took place. (paras. 129-148)

Employment Status

The Court of Appeal has handed down its decision in Emerging Markets Partnership v Bachnak (19th December 2003).

It holds that where an 'employee' enters into two contracts with the 'employer', one (without any remuneration) in a traditional employee/employer relationship, and the other (with remuneration to the limited company) through the intermediary of a one-man limited company, the tribunal cannot simply say that the lack of remuneration on the one contract, and the absence of a direct contractual relationship on the other, means that the individual is not an employee (and thus cannot claim unfair dismissal).

What a tribunal should do is look at the two contracts in the round and decide whether, in the light of the co-existing contracts, an express or implied contract of employment arises.

It's not a very interesting case, but - hey - it's Christmas. Merry Christmas everyone.

Normal Retirement Age: Employees in Unique Position

Section 109 of the Employment Rights Act 1996 provides that employees cannot clair dismissal if they are over the 'normal retirement age' (or, if there is no normal retirement age, 65). This section, commonly known as the upper qualifying limit, was upheld as lawful recently in Rutherford v Town Circle (bulletin 2/10/03).

In a majority judgment handed down this morning, Wall v The British Compressed Air Society, the Court of Appeal has held that an employee's contractual retirement age, where he is the only employee in that position, sets up a presumption that that is the 'normal' retirement age.

Previously, the EAT had held that a employee holding a unique position cannot have a 'normal' retirement age, because the requirement for a 'norm' entails the need for a group of people with that retirement age within the company. These cases, Age Concern Scotland v Hines and Dormers Wells Infant School v Wells, have been overturned by the majority of the Court of Appeal.

Giving the leading judgment, Simon Brown LJ (with whom Evans Lombe J., agreed) stated that it was absurd that an individual aged, say, 68, with a contractual retirement age of 70, might claim unfair dismissal if there were two people in his position but was prohibited from claiming unfair dismissal if there was only the one person in his position. Accordingly, the majority held that an employee holding a unique position was not prohibited from establishing a 'normal retirement age'.

Giving a dissenting judgment, Scott Baker LJ held that a unique contractual right of a particular employee to retire on a particular date cannot, by itself, create a 'norm' so as to set a normal retirement age.

LINK: http://www.bailii.org/ew/cases/EWCA/Civ/2003/1762.html

Data Protection - Curtailment of Right to demand information

The Court of Appeal has decided an important case on the scope of the Data Protection Act 1998 and, in so doing, provides guidance on the extent to which employers are obliged to provide copies of employees' personnel files, Emails etc.. In short, it drastically curtails the right of employees to demand information by means of a data protection request.

The case, Durant v Financial Services Authority, provides as follows:

* 1. in order for data, whether held on computer or a manual file, to be 'personal data' (thus giving rise to a disclosure obligation), it must name or directly refer to an individual. But that it not enough: mere mention of a subject's name in a document does not make the information in that document 'personal data'. For the disclosure obligation to arise, the information must be biographical in a significant extent, and should have the data subject as its focus. Thus information stored by the FSA concerning a complaint by Mr Durant about Barclays Bank was not personal data which the FSA was obliged to disclose to Mr Durant (paras 26-28).

* 2. a 'relevant filing system', for a manual (rather than computer) system, is one where the information is structured by reference to that individual. Thus the FSA's file marked 'Mr Durant', which contained a large number of documents relating to his claim in date order, was not a relevant filing system because it was structured by reference to date, not to the individual (para. 35 and 48). The purpose of the Act is to protect the privacy of personal data, not documents. If the documents are not structured by reference to that data, the disclosure provisions of the Act are not triggered. Any manual filing system which requires an individual to "leaf through" multiple documents to find the personal data contained therein falls outside the scope of the Act. The fact a folder is labelled with an individual's name is not, without more, enough to bring it within the Act.

The Court of Appeal also considered the difficulties arising when personal data, which would otherwise be disclosable, identifies other people.

The Court concluded with criticisms of individuals who seek to use the Act as a method of obtaining information generally which refers to them by name, rather than information relating only to personal data. Mummery LJ described Mr Durant's application and appeal as "misconceived", which will not bode well for Applicants who put Respondents to cost in tribunal claims dealing with a (now) unwarranted Data Protection disclosure application.

New TUPE Cases

New TUPE Cases

Two new TUPE cases: one Court of Appeal, one Employment Appeal Tribunal.

Alderson v Secretary of State for Trade & Industry (Court of Appeal, 8/12/03)

A case of historical interest only: regulation 2(1) of TUPE used to define an 'undertaking' as including "any trade or business but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture."

The employees were employed by Liverpool City Council as refuse collectors. The refuse services were contracted out, and the employees were engaged by the new contractor on less favourable terms and conditions. They brought a Francovich claim against the DTI, arguing that by excluding non-commercial ventures (ie refuse collections for a local authority) from the scope of TUPE, the government had failed to properly implement the Acquired Rights Directive.

The Court of Appeal held that exclusion for undertakings "not in the nature of a commercial venture" did not apply to this case, because it was clear that (i) the undertaking was of a commercial nature after the transfer, and (ii) it had all the same characteristics, other than it was not operated for profit, before the transfer (para. 31)

As stated above, the case is of historical interest only because the non-commercial venture exclusion was abolished in 1993 by the Trade Union Reform and Employment Rights Act 1993.

LINK: http://www.courtservice.gov.uk/judgmentsfiles/j2135/alderson.htm

-------------------------------------------------------------------------------- Perth & Kinross Council v Donaldson (EAT, Lord Johnston, 30/10/03)

The EAT (sitting in Scotland) held that TUPE does not apply to a liquidator who is gathering in assets to dispose of them for the maximum benefit of creditors. Unlike receivers and administrators, "if [the liquidator] has to look over his shoulder at the TUPE Regulations, this might well fetter the extent to which he might perform his duty. (para. 19)".

Thus when the local authority took housing maintenance services back in-house (pun unintended), following the insolvency of, and appointment of liquidators for, the company it had contracted those services to, TUPE did not apply.

New ET Rules of Procedure: Consultation

A consultation paper has been issued in connection with revising ET procedu= res. The proposals arise primarily from the Employment Act 2002 and the Em= ployment Tribunal taskforce report.

The key reforms proposed are:

• the Rules of Procedure are to be recast so that they follow a more logical structure and are expressed in more 'plain English' terms.
• the IT1 and IT3 disappear, now to be called Claim and Response forms. The forms must contain specified information and, if not provided, will cause the forms to be rejected.
• the circumstances in which a respondent may gain an extension of time for submitting a response form are to be more tightly specified.
• there will be new pre-acceptance procedures to sift out claims and responses that (for one or more of a number of specified reasons) should not go forward.
• Acas's duty to conciliate is to be limited to a fixed period in most cases, to encourage parties to settle in good time rather than just before the Tribunal hearing. This fixed period will be either a short 7 week period or a standard 13 week period, depending on what the case is about. However, in discrimination cases, which tend to be particularly complex, Acas's duty to conciliate will remain unlimited in time.
• where a case is uncontested, the Tribunal will in future usually issue a default judgment against the respondent without holding a hearing.
• powers are to be provided for the Employment Tribunal Presidents to issue practice directions to ensure that a consistent approach is adopted to procedural issues.
• explicit provision is to be made for cases to be struck out at pre-hearing review, but only within the grounds on which Tribunals may currently strike out claims or responses outside such a review. (Such grounds include failure to comply with an order or direction, or the inclusion in the claim form or response form of anything scandalous, unreasonable or vexatious or conducting the proceedings in such a manner.)
• two substantial changes are to be made to the present costs rules: (i) there will be a new provision for awards in respect of preparation time in some circumstances; and (ii) it will be possible for representatives (except not-for-profit representatives) to incur a costs award on account of their own conduct.
• the rules will apply to the whole of Great Britain, replacing the current separate, but essentially equivalent, Rules for England and Wales and Scotland.
• Following this public consultation, it is intended that revised Regulations will be laid before Parliament in spring 2004 and come into force on 1 October 2004.

Annual Increase in Tribunal Awards

The annual increases in compensation have been published. They take effect from 1st February 2004 under the Employment Rights (Increase of Limits) Order 2003.

The main increases are:

• maximum compensatory award increased from £53,500 to £55,000;
• maximum amount for a week's pay (for calculating basic award or redundancy payment) increased from £260 to £270.

The full list is attached as a Schedule to the S.I. (see link below).

Employment Relations Bill - Correction

A keen reader has pointed out to me that I missed out the word 'Relations' = in the second sentence of the first paragraph below (aptly, she works for S= pecsavers). It should have said 'Employment Relations Act 1999', not 'Empl= oyment Act 1999'. Corrected version follows:

Employment Relations Bill
-------------------------
The government has, this morning, introduced the Employment Relations Bill = in the House of Commons. The Bill 'tweaks' the Employment Relations Act 19= 99, following the review that took place after the first three years of the= Act's operation.

The Bill contains:

• clarification of procedures for establishing what is an appropriate barga= ining unit for compulsory union recognition;=20
• an amendment incorporating the ECHR's decision in Wilson & Palmer, namely= that employers cannot pay an enhanced rate to 'buy out' an employee's righ= t to be bound by union agreements;=20
• greater case management powers for the CAC=20

and other similar matters

Employment Relations Bill

The government has, this morning, introduced the Employment Relations Bill in the House of Commons. The Bill 'tweaks' the Employment Relations Act 1999, following the review that took place after the first three years of the Act's operation.

The Bill contains:

• clarification of procedures for establishing what is an appropriate bargaining unit for compulsory union recognition;
• an amendment incorporating the ECHR's decision in Wilson & Palmer, namely that employers cannot pay an enhanced rate to 'buy out' an employee's right to be bound by union agreements;
• greater case management powers for the CAC

and other similar matters.

LINKS:
Government Press Release
The Bill

Court of Appeal - Challenging Jurisdiction

The Court of Appeal's long-awaited decision in Harada Ltd (t/a Chequepoint) v Turner has been handed down today (see bulletin 25/11/99 for earlier issues arising in this case).

Harada challenged the tribunal's jurisdiction as the employee worked overseas. They employment tribunal found it had jurisdiction. Harada's appeal to the EAT was dismissed, so it appealed to the Court of Appeal. The merits hearing was listed in the meantime, and Harada unsuccessfully applied to adjourn the merits hearing, then unsuccessfully appealed the refusal to adjourn to both the EAT and the Court of Appeal.

At the full merits hearing, it refused to participate as it said it did not want to be seen as subjecting to the ET's jurisdiction, pending the outcome of the appeal on jurisdiction.

Having lost (badly) on the merits, it appealed the chairman's refusal to grant a review on the basis that it could not have attended for fear of submitting to the jurisdiction. The ET and then the EAT rejected this argument (and the EAT awarded costs against Harada).

The Court of Appeal has, today, dismissed Harada's further appeal. It held that it was:

"nothing short of absurd to suggest that, having failed (before the Morison EAT and Mummery LJ) to stop the merits hearing being listed, and then failed again, once it was listed, to have it adjourned, Harada could conceivably have been held to have submitted to the jurisdiction and thereby abandoned its outstanding appeal against the earlier jurisdictional ruling had it, under continued protest, participated in the merits hearing." (para 35)

It also upheld HHJ Ansell's order for costs in the EAT, holding:

"In my judgment, after considering the facts of this case in some detail, it would have been very surprising had the Ansell EAT not made a costs order against Harada: there had never been any realistic prospect of a successful review application." (para 44)

A reminder...

[An advertisement for freelance solicitors for Sherrards appears below]

I rarely send out reminders about commencement dates, but since so much is = happening today (and tomorrow), I thought I would make an exception.

The following are coming into force today...

1. prohibition on discrimination on grounds of sexual orientation

2. ban on hand-held mobile telephones in cars, with liability for employers

3. the EOC Code of Practice on Equal Pay

and tomorrow...

4. prohibition on discrimination on grounds of religion or belief.

Remember how in April 2003, the government promised that it would arrange for harmonisation of commencement dates for employment legislation (bulletin 6/4/03)? It promised all new regulations would commence from one of two trigger dates, 6th April or 1st October. So it's nice that they're keeping their promise.