Reinstating Withdrawn Claims

The Court of Appeal has upheld the EAT's judgment in Khan v Heywood & Middleton Primary Care Trust (see bulletin dated 25/1/06). The case deals with the "lamentable" (para.78) drafting of rule 25 of the Employment Tribunal (Constitution and Rules of Procedure) Regulations 2004.

The case is authority for the proposition that:

• if a Claimant sends a Notice of Withdrawal to the tribunal, the claim is at an end and the tribunal has no power to reinstate the claim at a later date (despite the wording of rule 25(4));
• if the Respondent subsequently applies (successfully) for the withdrawn claim to be formally dismissed, then the Claimant cannot bring a fresh claim based upon the same or similar facts. If the Respondent fails to secure the formal dismissal of the withdrawn claim, the Claimant is free to issue a fresh claim (subject to limitation issues) based upon the same or similar facts.

It's a complicated judgment. Read it here...

Khan v Heywood & Middleton Primary Care Trust

Statutory Grievance / Tribunal Procedure

The EAT has handed down a decision dealing with an interesting little problem arising from the statutory grievance procedures.

The Claimant brought three discrimination claims to which the statutory grievance procedure applied. In respect of claim 1, she had waited the mandatory 28 days after submitting a step 1 grievance letter before presenting her claim. In respect of claims 2 and 3, the employer had completed its internal grievance procedure and she therefore presented her claims before the 28 day window had elapsed.

The tribunal heard all three claims, stating it would reach a decision on its jurisdiction to hear claims 2 and 3 as part of its substantive decision. It told the parties that if it found it lacked jurisdiction, it would simply express preliminary conclusions on claims 2 and 3. The Claimant would then be able to re-present those claims, as she was still within the extended limitation period.

In the event, the tribunal found in her favour but found it lacked jurisdiction. She presented fresh claims. By agreement, the evidence at the first hearing was allowed to stand as evidence at the second hearing. However, the tribunal refused to allow the employer to adduce further evidence at the second hearing, on the basis that the overriding objective meant the employer should not have a second bite at the cherry. Unsurprisingly, it found in favour of the employee.

The EAT (Elias P. presiding) held that the tribunal was wrong to refuse to allow the employer to adduce further evidence. It held (para. 30) that the employer is entitled to adduce evidence before a tribunal which has jurisdiction to hear the claim.

Interestingly, the EAT was critical of the existence of the 28-day period when an employee cannot present a tribunal claim - particularly in circumstances such as this where the parties had been through the internal grievance procedure within that period, where the bar on an employee bringing a claim was said to be "most unsatisfactory" (para. 29).

Exel Management Ltd v Lumb

Working Time / A "Weeks Pay"

The EAT has handed down a decision dealing with the complicated question of what does (and does not) fall within the category where "the employee's remuneration for employment in normal working hours...does vary with the amount of work done in the period". Readers will be aware that, under s221 of the Employment Rights Act 1996, a 'week's pay' is averaged over 12 weeks when the remuneration varies as above but not (normally) otherwise.

A problem has always occurred where workers are paid commission. Does their remuneration vary depending on work done? This is not straightforward, particularly if their working hours and activities do not change, and the question of whether they secured the 'deal' (and hence the commission) is dependent on luck or external factors.

The EAT (Elias P. presiding) held that where pay is related to output, and output is in turn significantly connected with the level of performance, then it can properly be said that pay varies with the work done. Thus in a typical 'productivity' scheme, where remuneration varies depending on output, a week's pay should be calculated by averaging over 12 weeks and not simply pitching remuneration levels at a specific, frozen, single week.

May Gurney Ltd. v Adshead (& 95 others)

ACAS Annual Report

Acas has today published its 106-page annual report 2005/06.

Key statistics include:

• the Acas helpline answered 908,553 calls, compared to 880,787 last year
• Acas intervention has avoided 73% of potential hearing days (86% if including claims which had been intimated but not presented to the tribunal)
• the Acas website received 1.7 million visits. The most frequently viewed pages are A-Z of work and Rights at Work
• it delivered 2,964 good practice training sessions to over 40,000 delegates
• there were 109,712 applications to tribunals compared to 81,833 last year (an increase of 25%). Unfair dismissal continues to be the largest category of complaint with 35,944 applications.
• the number of requests for Acas to intervene in employment disputes and conciliate between the two sides fell slightly from 1,123 last year to 952 this year. The issue of pay continues to be the single biggest category.

Acas Annual Report 2005/06 (.pdf file, 1Mb)

Working while asleep

The EAT has held, in Anderson v Jarvis Hotels, that a hotel night manager was entitled to be paid for work even when fast asleep.

The manager brought a claim for unpaid contractual wages (note: not under the Working Time Regulations) in respect of a nine month period when he was required to sleep at the hotel overnight. His presence was required in case of emergency (such as fire or flood), and in the nine months, he had only ever been required to work on one occasion (to deal with rowdy guests). On one other occasion he had left the hotel for half an hour, between 3.30am and 4am, and had received a verbal warning as a result.

The hotel argued that 'on call' time, where the risk of actually being required to do something was insignificant, should not be regarded as working time for the purpose of being paid under the contract of employment.

The EAT disagreed, overturning the employment tribunal. It held that time during which the manager was contractually obliged to be present at the hotel was plainly working time, and he was entitled to be paid in respect of it.

Anderson v Jarvis Hotels

Strike Outs

Yet another EAT judgment overturning a chairman's decision to strike out a claim ...

This case is authority for the proposition that a chairman is under an obligation to consider an adjournment (as an alternative to strike-out), even if the parties do not raise the possibility of an adjournment themselves.

All six Claimants were in breach of an order to exchange witness statements two weeks before the hearing (the strike-out application was heard one week before the hearing). Further, three of the six Claimants had failed to comply with an order that they provide a Schedule of Loss (the other three had provided a Schedule, but done so later than the date specified in the Order).

The chairman held that it was not possible to hold a fair trial the following week and struck out the claims. Neither side had raised the possibility of an adjournment.

The EAT (Cox J.) held that it was incumbent on the chairman to consider an adjournment, and to canvass the possibility of adjourning with the parties. It was an error of law to consider only "a fixed moment of fairness" (para. 23). She allowed the appeal and reinstated the claims.

Ridsill v Smith & Nephew Medical

Vicarious Liability: Protection from Harassment

Last week the House of Lords handed down its decision in Majrowski v Guy's & St Thomas' NHS Trust (see bulletin 16/3/05 for the Court of Appeal's decision).

The House of Lords upheld the Court of Appeal's decision, stating:

• an employer's vicarious liability arises under statute unless the statutory provision excludes such liability. In other words, vicarious liability is not limited only to common-law wrongs of employees, but extends to their breaches of statutory duty
• although the construction is finely balanced, parliament did not intend the Protection from Harassment Act 1997 to be an exception to that rule.

Thus employees (and ex-employees) can now bring claims against employers for damages if they are subjected to a course of conduct (meaning at least two incidents) amounting to harassment.

The advantages to an employee (and, concomitantly, disadvantages to an employer of bringing a harassment claim against the employer in the civil courts are:

• deeper pockets - the damages award can probably be met, unlike if the remedy exists only against the individual
• more grounds on which to establish harassment - not just sex, race, sexual orientation, age etc..
• the statutory defence (i.e. that the employer took all reasonable steps to avoid the harassment) is not available to employers. Lord Nicholls described this as "a discordant and unsatisfactory overlap" between the different pieces of legislation (para. 39)
• a six year, rather than a three or six month (depending on whether statutory grievance procedure applies) time limit applies
• unlike in the employment tribunals, costs are normally recoverable
• subject to means (and finding a lawyer who will take on the case!), legal aid is available

Majrowski v Guy's & St Thomas' NHS Trust

Fixed Term Contracts

A quick reminder that next week (10th July) sees the fourth anniversary of the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002. The significance of this anniversary is that, under regulation 8, any employee who has been on a fixed-term contract (or a series of fixed-term contracts) for four years becomes, as if by magic, a permanent employee. There is an objective justification exception, if the employer can objectively justify the fixed-term nature of the contract at the date of the last renewal.

In practical terms, nothing really turns on this (since expiry of a fixed-term contract is just as much a dismissal, for employment law purposes, as a straight sacking). There is one little point of interest, though...

Technically, the employer must (within one month of the fourth anniversary) give the employee a statement of changes to his terms and conditions of employment - so as to provide information as to the length of the relevant notice periods rather than the date of expiry under a fixed term contract (ERA 1996, ss1(4)(e) and (g)). Failure to do so can result in an award of two or four weeks' pay (Employment Act 2002, s38).

High Court Challenge to Age Regulations

Heyday, an organisation created by and closely associated with Age Concern, has issued a judicial review application in the High Court challenging the legality of the Employment Equality (Age) Regulations 2006.

According to their press release, the challenge is based upon the argument that the 2006 Regulations fail to implement the EU Equal Treatment Framework Directive, since the Regulations effectively exclude people over 65 from having a right to work.

Watch this space...

Appeals: New points and perversity

The Court of Appeal has, in part, overturned the decision of the EAT in Unison v Leicestershire City Council. See bulletin of 29/5/05 for the EAT's decision.

This case is authority for the propositions that:

• the fact that a case is of very large value or involves a complex and important point of law is not, without more, an 'exceptional' circumstance allowing a party to raise a new point of law on appeal which had not been raised before the employment tribunal. What is required is something akin to "a pressing public interest" (para. 21)
• the Employment Appeal Tribunal is not permitted to interfere with fact-sensitive assessments, such as the number of days' pay for a protective award (where the EAT reduced it from 20 to 10), unless the tribunal's assessment is plainly wrong in law or otherwise perverse (para. 34).

Unison v Leicestershire County Council

How not to conduct tribunal proceedings...

Whilst I don't normally announce first instance decisions, this case contains such an amusing summary of how not to conduct a tribunal hearing (in the context of a wasted costs order) that I thought it deserved wider distribution. See paragraph 20 for the tribunal's erudite exposition of how not to conduct a case.

The decision is also interesting because of the tribunal's finding that an employment consultant was lying about being a 'not for profit' representative (so as to avoid a wasted costs order) - see paras. 23-27.

Johal v Initial City Link

[Thanks to Simon Shepherd of Schofield Sweeney for sending me this judgment]

When is three months not three months?

The EAT has handed down a judgment dealing with time limits under Regulation 15(1) of the Employment Act (Dispute Resolution) Regulations 2004.

The Claimant resigned on the basis of constructive dismissal and served a combined resignation and grievance letter on the Respondent on 20 June 2005.

He then lodged his tribunal claim on 20th December 2005.

The finding of both the Employment Tribunal in a pre-hearing review, and later at the EAT, were that the claim was served on time. The EAT held that the extension of time under Regulation 15(1) means three months, and not three months less one day.

Rainbow International v Taylor

[Thanks to Helen Kennedy, trainee solicitor at Anthony Collins, who successfully represented the Claimant at both the ET and EAT]

Detriments to ex-Employees

The Court of Appeal has handed down an important decision in Woodward v Abbey National plc.

In 2003, the House of Lords ruled (in Rhys-Harper v Relaxion Group plc) that ex-employees were entitled to rely on the discrimination legislation in connection with victimisation occurring after termination of employment (such as the refusal to provide a reference).

Previously, in 2001, the Court of Appeal had held in Fasipe v Reed Nursing Personnel Ltd. that ex-employees could not rely on the Employment Rights Act 1996 so as to claim protection against detriments occurring after termination of employment, as the legislation only protected employees against detriments suffered whilst in employment.

In the current case, Woodward v Abbey National, the Claimant had complained of being subjected to various detriments - after her employment finished - because she had made a protected disclosure some ten years earlier whilst still employed by the Abbey National.

The employment tribunal, and the EAT, rejected her claim because they considered themselves bound by Fasipe, which they regarded as binding authority for the proposition that the detriment had to occur during employment in order to be actionable under the Employment Rights Act 1996. They considered that the discrimination legislation was a wholly different statutory framework, affected by considerations of European law, and Fasipe remained binding as it had not been expressly overruled by the House of Lords in Rhys-Harper.

The Court of Appeal has disagreed, overturning the ET and EAT. Following extensive analysis of the reasoning in Rhys-Harper by Ward LJ, which is worth reading, it held that the provisions protecting against suffering a detriment in the Employment Rights Act should be interpreted so as to include detriments suffered by ex-employees as well as existing employees.

Woodward v Abbey National plc

Date of TUPE transfers

The House of Lords has handed down a 4:1 ruling in Celtec v Astley, following the ECJ's decision last year.

Upholding the employment tribunal and Court of Appeal's decisions, but on different grounds, it held:

• following the ECJ ruling, a TUPE transfer must take place on a specific date, rather than over an extended period
• employees and employers cannot agree or arrange fo the transfer to take place on a date other than the true legal date of the transfer.

It is a complicated decision, made slightly easier if put into its factual background. In the early 1990s, the Department of Education created Training and Enterprise Councils (TECs) to take over its responsibility for training young people.

A large number of civil servants were seconded from the DofE to the TECs. Three years later, they were offered the opportunity to return to the DofE, or stay with the TECs and be transferred into the employment of the TECs. Thus in 1993, the Claimants resigned from the DofE and signed new contracts with Celtec (the employer)

The TUPE transfer (when the TECs actually opened for business) was found to be in September 1990.

When the Claimants were made redundant in 1998, they claimed redundancy payments based on continuity of employment back to the beginning of their employment with the DofE. Celtec argued that they were only entitled to continuity of employment from 1993.

The House of Lords, in five separate opinions, decided (4:1) that, in fact, the Claimants had all TUPE-transferred to Celtec in September 1990, irrespective of the fact that everyone believed they remained employees of the DofE and had simply been seconded out. Because it was not possible for the parties to agree a different transfer date, the operation of TUPE 'trumped' any understanding or arrangement between the parties. Accordingly, the Claimants were entitled to rely on their continuity of employment with the DofE.

The dissenting judgment (that of Lord Mance) is impressive and worth reading, to appreciate the potential commercial implications of this decision.

Celtec v Astley

[Thanks to John Bowers QC of Littleton Chambers, who represented Celtec, for telling me this decision was published]

Retrospective award for failure to provide written statement of terms and conditions

The Employment Appeal Tribunal has handed down a (short) judgment dealing with whether tribunals are entitled to grant a retrospective award of two (or four) weeks' pay against an employer who has failed to provide a written statement of terms and conditions.

This remedy was introduced under the Employment Act 2002 (section 38). It came into force on 1st October 2004. The EAT has held that an employee is entitled to the award, when judgment is given after 1st October 2004, even if the dismissal was before 1st October and the claim lodged before 1st October.

This decision is likely to prove controversial, although it is likely to have relative little impact as most cases going through the tribunal system will now be dealing with dismissals after October 2004.

Lewald-Jezierska v Solicitors in Law Ltd.

Whistleblowing - No case to answer

The EAT (HHJ McMullen QC presiding) has held that it is normally inappropriate to make a submission of 'no case to answer' at the end of the Claimant's case in whistleblowing cases.

Whistleblowing is a form of discrimination. As with all discrimination claims, it is possible that much of the relevant evidence will come from the Respondent's side. By cutting off a case at half-time, a tribunal denies the Claimant an opportunity to cross-examine the Respondent and seek to elicit favourable evidence - notwithstanding that the burden of proof is on the Claimant to establish a protected disclosure.

Accordingly the EAT set aside the tribunal's decision to dismiss a whistleblowing claim on a submission of no case to answer, and remitted the case to the same tribunal to hear the rest of the evidence.

Boulding v Land Securities

Breach of Contract: Can you recover the excess of £25k in the High Court?

At last, after twelve years of uncertainty, we have an answer. The Court of Appeal has, today, handed down judgment in Fraser v Hlmad Ltd, holding that the excess over £25k in a tribunal breach of contract claim cannot be recovered in the civil courts.

Mr Fraser brought a breach of contract claim in the employment tribunal and the High Court. His Claim Form in the ET expressly reserved the right to pursue the excess over the £25k limit in the High Court.

He succeeded in his employment tribunal claim and recovered £25,000, a shortfall of £55,000 on the full value of his contract claim.

Following a strike-out appliation by the Defendant in the High Court claim, the Court of Appeal held:

• Mr Fraser's wrongful dismissal claim merged into the judment of the employment tribunal on his wrongful dismissal claim
• his cause of action for wrongful dismissal ceased to exist independently of the judgment
• he no longer had any cause of action to pursue in the High Court, even for the excess over £25k
• it is not open to a Claimant to avoid the operation of a cause of action estoppel simply by purporting to reserve a right to make a second claim in the future.

As a postscript, the Court of Appeal recommended that the ETS review their literature to make it clear that wrongful dismissal claims cannot be brought in the High Court to recover the excess over £25k.

Mummery LJ also suggested that Claimants and their legal advisers do not bring wrongful dismissal claims in the employment tribunal unless they are certain they want to limit compensation to £25k. If the Claimant wishes to recover more, the claim should only be brought in the High Court. Finally, he suggested that the DTI reconsider the limits on the jurisdiction of the employment tribunal in respect of claims for wrongful dismissal.

Fraser v Hlmad Ltd

National Minimum Wage

The draft statutory instrument, raising the adult minimum wage to £5.35ph from 1st October 2006, has been laid before parliament. It also increases the minimum wage to £4.45ph for 18-21 year olds, and to £3.30 for 16-17 year olds.

The National Minimum Wage Regulations 1999 (Amendment) Regulations 2006

Holiday Entitlement - Consultation

The DTI has issued a preliminary consultation paper on extending the right to 20 days' paid holiday per year to 28 days' paid holiday.

The additional eight days are intended to represent the eight bank holidays, so as to allow employees a minimum of 20 days' plus bank holidays (although the holiday need not be taken on the bank holidays).

View Consultation Paper

Nurse Chaperones

The EAT has held that an NHS Trust discriminated against a male nurse who was required to have a female chaperone present when administering an ECG to a female patient.

Barts and London NHS Trust has a policy, in common with many other NHS Trusts, of requiring male nurses to be accompanied by a female chaperone when administering an ECG to a female patient, because the procedure would involve touching the patient's breasts. This might give rise to unjustified allegations of assault - hence the desirability of a chaperone. No similar requirement exists when a female nurse administers an ECG to a male patient.

The EAT recognised that such a policy was extremely sensible. Nevertheless, upholding the tribunal's decision, it noted that justification cannot be a defence to direct discrimination and therefore the Trust's policy was in breach of the SDA 1975.

It also held (overturning the EAT) that the male nurse, who felt upset and demotivated, had suffered a detriment - and therefore was entitled to compensation. It was an error of law for the tribunal to find that he had not suffered a detriment simply because no reasonable person could have objected to the policy. To find that was to introduce a justification defence by the back door. The test for establishing a detriment is much broader.

Accordingly the nurse's appeal succeeded. The EAT substituted an award for injury to feelings of £750, which it described as "very much at the lower end of the scale."

Moyhing v Barts & London NHS Trust