Important Case on Applications to Amend Notices of Appeal to the EAT

The Employment Appeal Tribunal has, in Khudados v Leggatte & ors, set out the principles to be adopted when it considers an application for permission to amend a Notice of Appeal.

Ms Khudados, a registrar whose career as a nuerosurgeon was not progessing as quickly as she would like, brought and lost a complex sex and race discrimination claim. She presented a Notice of Appeal which contained various clear and self-contained grounds. After the appeal was listed for a preliminary hearing, the Appellant wrote to the Registrar and 'reserved the right' to make amendments to the Notice of Appeal.

The draft amended Notice of Appeal was served four and a half months after the original Notice of Appeal was lodged. It contained 26 new pages containing new allegations of perversity. The effect of the new allegations was to require detailed consideration of the several weeks of testimony, and five lever-arch files of documentation, which had been before the employment tribunal.

At the hearing of the application for permission to amend, the delay was explained on the basis of the extreme complexity of the case (Ms Khudados had represented herself before the employment tribunal and needed to provide detailed explanations to her legal team as to why she was claiming perversity on so many grounds), coupled with the inevitable delay caused by other professional commitments of Counsel involved.

In a very thorough and robust decision, the EAT (HHJ Serota presiding) refused permission to amend and set out the principles the EAT should adopt. They include, at paragraphs 82-87:

• the Practice direction requires applications to amend to be made as soon as the need for amendment is known. This is not an aspiration - it is a requirement. Parties cannot 'reserve' a right to amend;
• the EAT's approach to dealing with time limits on appeals is stricter than that of the Court of Appeal; the EAT has now reduced the average waiting time between presentation of a Notice of Appeal and a final hearing, where no preliminary hearing is required, to between two and three months;
• the EAT takes a strict view of anything that might delay a final hearing, particularly where there has been non-compliance with a rule of the Practice Direction. A crisp point of law related to existing grounds of appeal is more likely to be permitted than wholly new grounds of perversity which raise complex issues of fact;
• the regime in the EAT is still largely 'costs-free', unlike in the Court of Appeal where the Court can compensate a party for delay and cost caused by the other side;
• the merits of the proposed amendments are relevant, in that they must pass a 'reasonable prospect of success' threshold;
• an extension of time is an indulgence.

The EAT specifically rejected the submission that the overriding objective requires a party to be allowed to ventilate any good ground of appeal he may wish to bring.

Khudados v Leggatte & ors.

Working Parents

Acas has just issued its sixth e-Learning Guide, this time on Working Parents.

The course covers:

• Maternity rights and pay
• Paternity leave and pay
• Adoption leave and pay
• Parental leave
• Time off to help dependants and
• The right to request flexible working

You need to register (free of charge) to access the guides.

Acas E-Learning Guides

Vicarious Liability

The Court of Appeal has handed down its judgment in Majrowski v Guy's & St Thomas's NHS Trust, an important case dealing with principles of vicarious liability both generally (for breach of any statutory duty) and in connection with breaches of the Protection from Harassment Act 1997.

General Principle
The Court of Appeal held, unanimously, that employers can be vicariously liable for breaches of statutory duty as well as breaches of common law obligations (subject to the wording of any given statute).

Surprisingly, this point had not been determined in any previous case in England (although dicta in cases such as Lister v Hesley Hall had suggested as such, and there was also a Scottish authority to this effect).

Protection from Harassment Act 1997
The Court of Appeal went on to hold, this time by a majority, that there was nothing in the wording or policy of the Protection from Harassment Act 1997 that prevented an employer being vicariously liable for harassment by its employees, as long as there was a sufficiently close connection with employment.

Implications
This decision means that an employee can sue a (solvent) employer for damages for harassment by a co-worker. 'Harassment' is not clearly defined in the Act, but probably includes workplace bullying or a series of unreasonable instructions.

Thus the employee has a cause of action against the employer which s/he might not previously have had - particularly if the employee has not suffered personal injury, or has suffered personal injury but cannot establish the strict foreseeability test laid down in Sutherland v Hatton and Barber v Somerset County Council, as Claimants are expressly permitted to recover damages for anxiety caused by the harassment under the 1997 Act.

Majrowski v Guy's & St Thomas's NHS Trust

DTI launches consultation on Code of Practice

The DTI has, today, issued a consultation paper on proposed revisions to the Code of Practice on Industrial Action Ballots and Notice to Employers.

The consultation document includes proposals to :

• ensure that the Code reflects the changes to industrial action law which are contained within the Employment Relations Act 2004;
• provide new guidance for unions and employers relating to the information that unions are required to give employers in advance of industrial action ballots and in advance of any subsequent industrial action.

The consultation runs for twelve weeks, ending on 3 June 2005.

DTI Consultation Paper (requires Adobe Acrobat - takes up to 30 seconds to load in)

Interest on Unfair Dismissal Awards

The Employment Appeal Tribunal (Burton P. presiding) has stated that it is legitimate to award interest (as long as it is not described as that) for unfair dismissal.

The accepted position for many years has been that, unlike in discrimination cases, interest is not recoverable for unfair dismissal.

However, the EAT has now held that when assessing such compensation as is 'just and equitable', since tribunals would give discounts for accelerated receipt at 2.5%, it is equally legitimate to give an increase for decelerated receipt at 2.5%.

Burton P. emphasised this was not, technically, interest - although the effect is much the same.

Although it was not an issue that required deciding, it must be that the 'uplift for decelerated payment' element is still subject to the £56,800 statutory cap (i.e. Claimant's do not get £56,800 plus an uplift).

Melia v Magna Kansei

Tackling discrimination and promoting equality - good practice guide for employers

Acas has revised its excellent advisory booklet, 'Tackling discrimination and promoting equality - good practice guide for employers'.

The booklet contains a sample equality policy for those who like to cut and paste, and really helpful checklists on how to avoid discrimination. This is very much a practical guide, not merely a recitation of the law.

ACAS: Tackling Discrimination and promoting Equality

London (Central) is closing down (2)

Whoops! Sorry, that should be 'Victory House', not 'Victoria House'. And an excellent name it is too.

So...

From 18th April 2005, London (Central) employment tribunal will be sitting at:

Victory House
30-34 Kingsway
London WC2B 6EX
DX: 141420 Bloomsbury 7

Telephone and fax numbers remain the same.

London (Central) is closing down (1)

... or at least, moving half a mile down the road.

From 18th April 2005, London (Central) employment tribunal will be sitting at:

Victoria House
30-34 Kingsway
London WC2B 6EX
DX: 141420 Bloomsbury 7

Telephone and fax numbers remain the same.

Money Laundering

The Court of Appeal has handed down its crucial judgment in Bowman v Fels, on the controversial issue of the extent to which the Proceeds of Crime Act 2002 prohibits solicitors and barristers from engaging in litigation where they suspect the client (or the other side) of dealing with the proceeds of crime without first notifying NCIS.

This is of importance to all lawyers, and has particular relevance to employment lawyers when dealing with (arguable) illegality points or litigation over tax issues.

The Court of Appeal has held:

• the Act is not intended to cover the ordinary conduct of litigation by legal professionals, including any step taken in litigation from the issue of proceedings and the securing of injunctive relief through to final disposal by judgment (para. 83)
• the Act does not override legal professional privilege. If information is the subject of legal professional privilege, there is no obligation to disclose it to NCIS (paras. 83-89)
• likewise, the Act does not override the obligation to keep confidential documents disclosed through the disclosure process (para. 90)
• nor does it cover consensual settlements within litigation (para 99). But is does cover consensual arrangements independent of litigation (para. 101).

Bowman v Fels

Employment Law Bulletin

This short, but important, point has been considered by the EAT in Dattani v Chief Constanble of West Mercia Police.

The EAT held that evasive, incorrect, or nil replies to questions asked in a race discrimination case can lead to drawing an inference of discrimination under s65 of the Race Relations Act 1976, even if the questions were not asked under the statutory procedure.

This conclusion was reached on two grounds. First, construction of s65, which refers to questions posed by an aggrieved person "whether in accordance with an Order under sub-section (1) or not" (that being the subsection enabling the Secretaty of State to prescribe forms for the questionnaire) - see para. 43.

Second, on policy grounds. The EAT held that "a respondent, asked a direct question in writing by an aggrieved person, who fails to respond, or does so evasively, ought to be treated in the same way irrespective of whether a question has been asked under the statutory procedure." (para. 44)

This may have an adverse impact on employers who are unfamiliar with the legal process, as a statutory questionnaire contains an express warning that evasive or equivocal replies can lead to the drawing of an adverse inference, so the employer is put on notice. A question in a letter is unlikely to contain such a warning. Having said that, this is undoubtedly the correct result bearing in mind that s65 was drafted long before the reversal of the burden of proof, and the reversal of the burden of proof means that every inconsistency by an employer is liable to be seized upon by an employee as grounds for drawing adverse inferences.

Dattani v Chief Constable of West Mercia Police

EAT Time Limits

An unusual case. The cut-off point for lodging an appeal is 4.00pm on the 42nd day after the decision is sent to the parties.

On the 42nd day, the Appellant started faxing its 21-page Notice of Appeal a minute or so before 4.00pm (the deadline), but the 21 pages did not finish transmitting until 4.09pm. And due to a queue in the EAT's fax machine, the Notice did not start PRINTING until 4.06pm, i.e. after the deadline.

Burton P., sitting alone, held that when a Notice of Appeal is lodged by fax, the trigger point is when it BEGINS being transmitted, rather than when it finishes being transmitted or when it is printed out. Thus the appeal was lodged in time.

Minimum Wage Increase

The DTI has, this morning, announced that the national minimum wage will increase from £4.85ph to £5.05ph with effect from October 2005 - and to £5.35ph from October 2006.

The youth rate, for 18-21 year olds, will increase to £4.25 in October 2005 and £4.45 in October 2006.

DTI Press Release 25/2/05 @ 11.15am

Equal Pay in the Civil Service

The Court of Appeal has just handed down its decision in the important equal pay case of Robertson v DEFRA. It has upheld the decision of the EAT (Burton P.), reversing the employment tribunal's finding that it is legitimate to make cross-departmental comparisons within the civil service.

Six male civil servants from DEFRA brought equal pay claims, citing female employees who were employed by a different government department, the DETR. Technically, they have the same employer (the Crown), but pay negotiation is delegated by the Crown to each of about 90 different government departments and agencies.

It was common ground that they could not claim under the Equal Pay Act 1970, as they did not work at 'the same establishment'. They accordingly relied on Article 141 of the EC Treaty (which is directly enforceable against the Crown).

The Court of Appeal held:

1. Working for the 'same' employer (the Crown) is not SUFFICIENT to establish common employment for the purpose of an Article 141 claim. To establish comparability, the ECJ has said that the relevant body is the one "which is responsible for the inequality and which could restore equal treatment". This will usually, but not always, be the employer.

2. The employment tribunal was wrong to hold that the Crown was the 'single source' for the terms and conditions of employment. For perfectly valid reasons, the Crown had delegated pay negotiations to different departments. Neither the Treasury nor the Cabinet Office were involved in negotiations within different departments, and there is no co-ordination between different sets of negotiations.

Thus it is not permissible to use comparators from different government departments for the purpose of an Equal Pay or an Article 141 claim.

A reference to the ECJ was refused.

Robertson v DEFRA

Court of Appeal hears 3 test cases on burden of proof

The Court of Appeal has, this afternoon, handed down judgment in the three test cases on the newly introduced shifting burden of proof in discrimination claims.

The Court has issued 'revised Barton guidelines' (as an annex to the decision).

The three key points arising from the judgment are:

(1) When deciding whether the complainant has proven facts from which the tribunal COULD conclude, in the absence of an adequate explanation, that the Respondent has committeed an act of discrimination, it is IMPERMISSIBLE to take into account the employer's explanation at that stage. The employer's explanation only engages at stage 2, i.e. whethern it proves it did not commit an act of discrimination (paras. 21-22)

(2) The case of Webster v Brunel University (see bulletin 14/1/05) should be overturned. The burden of proof does not shift just because somebody at the other end of the telephone says the word 'Paki', and that COULD have been an employee of the Respondent. The Claimant must still prove that the alleged discriminator has treated him/her less favourably (paras. 25-29).

(3) Paragraph 10 of the Barton guidelines, which requires the employer to show that its conduct was "in no sense whatsoever" on grounds of sex, race or disability, is correct. A later decision of the EAT amending paragraph 10, lowering the test to "not signifcantly influenced by", is wrong.

The judgment is not yet up on the internet; I will send another bulletin out with the web link when it is posted on the Court of Appeal website.

[Thanks to Daniel Ellis of Baker & McKenzie for sending me the transcript. Please note the transcript, whilst having been handed down, is still subject to editorial corrections].

Continuity of Employment

In London Probation Board v Kirkpatrick, the EAT has considered a specific aspect of the tricky question of whether employer and employee can agree periods of continuity of employment.In London Probation Board v Kirkpatrick, the EAT has considered a specific aspect of the tricky question of whether employer and employee can agree periods of continuity of employment.

Mr Kirkpatrick was dismissed. Two months later, he was reinstated in an internal appeal. A month after that, the employer reneged and restored the original dismissal. Unless the reinstatement meant that continuity of employment continued, Mr Kirkpatrick (a) was out of time to bring a claim based on the original dismissal; and (b) lacked one year's qualifying period in respect of the second dismissal.

The Employment Appeal Tribunal (HHJ McMullen presiding), recognising the existence of inconsistent authorities, held:

- it is open to an employer and employee to arrange, under s212(3)(c) of the ERA 1996, that absence from work should count towards continuity of employment;

- a reinstatement would qualify as such an arrangement; and,

- there is nothing in the wording of s212(3)(c) that requires the 'arrangement' to have been agreed BEFORE the dismissal. It is perfectly legitimate for the 'arrangement' to arise after the dismissal, i.e. following the internal appeal hearing.

The EAT was swayed by the policy argument that it is far better for an employer to be able to admit it has made a bad or unfair dismissal and to put it right by voluntary reinstatement, than for the employee to have to bring a claim and require an order for reinstatement via a tribunal or Acas (when, under separate statutory provisions, there is a deemed continuity of employment).

Mr Kirkpatrick was dismissed. Two months later, he was reinstated in an internal appeal. A month after that, the employer reneged and restored the original dismissal. Unless the reinstatement meant that continuity of employment continued, Mr Kirkpatrick (a) was out of time to bring a claim based on the original dismissal; and (b) lacked one year's qualifying period in respect of the second dismissal. The Employment Appeal Tribunal (HHJ McMullen presiding), recognising the existence of inconsistent authorities, held: - it is open to an employer and employee to arrange, under s212(3)(c) of the ERA 1996, that absence from work should count towards continuity of employment; - a reinstatement would qualify as such an arrangement; and, - there is nothing in the wording of s212(3)(c) that requires the 'arrangement' to have been agreed BEFORE the dismissal. It is perfectly legitimate for the 'arrangement' to arise after the dismissal, i.e. following the internal appeal hearing. The EAT was swayed by the policy argument that it is far better for an employer to be able to admit it has made a bad or unfair dismissal and to put it right by voluntary reinstatement, than for the employee to have to bring a claim and require an order for reinstatement via a tribunal or Acas (when, under separate statutory provisions, there is a deemed continuity of employment).

London Probation Board v Kirkpatrick

Disability Discrimination - Reasonable Adjustments

The Court of Appeal has, today (Thurs), handed down its decision in Williams v J Walter Thompson Group Ltd.

. Ms Williams, who is totally blind, was offered a job by JWT as a computer software operator. JWT knew of her disability, and that it would need to make reasonable adjustments, when offering her the job.

A period of two years elapsed during which "nothing much happened", i.e. JWT did little (if anything) towards making reasonable adjustments. Ms Williams eventually resigned and claimed disability discrimination and constructive dismissal.

The bulk of the Court of Appeal's decision simply upholds the ET's findings that there was an unjustified failure to make reasonable adjustments. There is little of legal interest there (although the facts of the case are quite interesting).

Of greater legal interest, however, is the Court of Appeal's statement that an important factor in making the finding of disability discrimination was that JWT employed Ms Williams knowing of her disability (paras. 53-57). Whilst the Court of Appeal does not go on to the next step, the logical inference seems to be that where an employer knows of a disability of a candidate for employment, it cannot offer her the job and THEN consider reasonable adjustments; rather, it must consider reasonable adjustments BEFORE offering the job (when the employer will know less about the disability and, in practice, will be more easily excused for failing to make adjustments). If interpreted strictly, this would seem to result in fewer disabled candidates receiving job offers. This would not appear to support the social policy behind the Act.

Williams v J Walter Thompson Group Ltd.

Costs - No reasonable Prospect of Success

An interesting aside from Burton P. in the Employment Appeal Tribunal, in which he emphasises the importance of abandoning a case as soon as a party realises (or is advised) it has no real prospect of success - see para. 39 of the decision.

He adds (at para. 40) that a useful test (probably more applicable to appeals than hearings before the ET) is whether the other side have been called on to respond ("the best test in our judgment as to whether case really has no realistic prospect of success is whether a case is so poor that it does not even get the other side up on their feet").

Thorpe v Eaton Electrical Ltd

Michael Rubenstein - Key Cases

The text of Michael Rubenstein's annual lecture, summarising the cases the appellate courts will be hearing in the next 12 months, is now available on his website.

This is one of the seminal talks for employment lawyers for the year.

NOTE: Last year when I announced this lecture, I received dozens of Emails telling me that the link did not work. It DOES work - it's just that the website goes slow when (literally) 5,000 people try to access it within the same few minutes. If you can't get through, try again later!

Michael Rubenstein's website - click here then select 'Recent Speeches'

Lodging Documents with Appeals

The President of the EAT, Burton P., last week handed down a new Practice Statement reminding Appellants of the documents that must be lodged with the Notice of Appeal, and making clear the consequences of a failure to comply (appeal not valid and no extentions of time permissible).

The Practice Statement is not yet available on the EAT website, so I reproduce it below.

PRACTICE STATEMENT

This is a Practice Statement handed down by the President of the Employment Appeal Tribunal on 3 February 2005.

1. The attention of litigants and practitioners in the Employment Appeal Tribunal is expressly drawn to the wording and effect of Rules 3(1)(b) and 3(3) of the Employment Appeal Tribunal Rules (1993) (as amended). As is quite clear from the terms of paragraph 2.1 of the Employment Appeal Tribunal Practice Direction 2004 handed down on 6 December 2004, a Notice of Appeal without the specified documentation will not be validly lodged. The documentation required to accompany the Notice of Appeal in order for it to be valid now includes a copy of the Claim (ET1) and the Response (ET3) in the Employment Tribunal proceedings appealed from, if such be available to the appellant, and in any event if such not be available for whatever reason then a written explanation as to why they are not provided. Paragraph 2.1 of the Practice Direction makes this entirely clear:

“2.1 …Copies of the judgment, decision or order appealed against and of the Employment Tribunal’s written reasons, together with a copy of the Claim (ET1) and the Response (ET3) must be attached, or if not, a written explanation must be given. A Notice of Appeal without such documentation will not be validly lodged.”

2. The reported decision of the Employment Appeal Tribunal in Kanapathiar v London Borough of Harrow [2003] IRLR 571 made quite clear that the effect of failure to lodge documents required by the Rules with the Notice of Appeal within the time limit specified for lodging of a Notice of Appeal would mean that the Notice of Appeal had not been validly lodged in time. The same now applies to the additional documents required by the amended Rule, namely the Claim and the Response.

3. It is apparent that both practitioners and litigants in person are not complying with the new Rules and Practice Direction, and not appreciating the consequences of their non-compliance. Between 2 and 26 January 2005, 20 Notices of Appeal were received by the Employment Appeal Tribunal and returned as invalid (compared with 4 during the similar period in 2004). Of those 20 Notices of Appeal, 7 would have been invalid in any event under the old Rules. 13 however were only invalid because they were neither accompanied by the Claim nor the Response nor by any explanation as to their absence or unavailability. If the Notices of Appeal are relodged well within the very generous 42-day time limit, there may still be time for the missing documents to be supplied and the time limit to be complied with. If however, as is very often the case, such Notices of Appeal are delivered either at, or only immediately before, the expiry of the time limit, the absence of the relevant documents is, even if speedily pointed out by the Employment Appeal Tribunal, likely to lead to the Notice of Appeal being out of time.

4. Of the 20 Notices of Appeal which were invalidly lodged during the period above referred to, only 10 were lodged by litigants in person and 10 by solicitors or other representatives: and it is plain that the latter ought certainly to have known of the requirements, although, given the wide publication both of the Rules and the Practice Direction, together with the guidance given by the Employment Tribunals, both at the Tribunal and sent with their judgments, there can be no excuse for litigants in person either.

5. The reason for this Statement in open court is to re-emphasise these requirements and the consequence of failure to comply with them, namely that an appeal not lodged within the 42 days validly constituted, i.e. accompanied by the required documents, will be out of time, and extensions of time are only exceptionally granted (see paragraph 3.7 of the Practice Direction).

6. From the date of this Practice Statement, ignorance or misunderstanding of the requirements as to service of the documents required to make a Notice of Appeal within the 42 days will not be accepted by the Registrar as an excuse.

The Hon Mr Justice Burton
President of the Employment Appeal Tribunal

3rd February 2005

[Thanks to David Jones, freelance employment consultant, for telling me about the new Practice Statement]

Giving Credit for Notice Monies

The EAT has handed down its decision in Voith Turbo v Stowe, dealing with the issue of whether an unfairly dismissed employee needs to give credit for earnings achieved in new employment during a period when the former employer was paying notice pay.

The Employment Appeal Tribunal (HHJ McMullen presiding) held that credit need NOT be given, i.e. that the employee effectively has a windfall of the additional monies.

This decision appears to conflict with last month's decision in Morgans v Alpha Plus Security Ltd. (see bulletin 24/1/05), holding that when assessing the 'just and equitable' losses, credit should be given for ALL income.

Thus it seems we are back to having a conflict of authority on this point again. The matter seems appropriate for the Court of Appeal - particularly as the same firm of solicitors (ASB Law) acted for the employer in both cases.

Voith Turbo Ltd v Stowe

Morgans v Alpha Plus Security