Immigrant Workers - changes from 29th Feb 2008

Thanks to Mark Barnett, head of Immigration at Steeles Law Solicitors, who wrote this summary (mbarnett@steeleslaw.co.uk).

2008 sees radical changes being introduced into all aspects of Business Immigration as a result of the introduction of Civil Penalties for illegal workers on 29th February 2008 and the new Points Based System being introduced on a roll out process by the Home Office which will affect 80 current work and study immigration categories.

The points based system will be based on a five tier structure and will have significant impact on those companies proposing to make new work permit applications and/or extension applications, in that they will need to apply to be licensed as a sponsor and have various ongoing obligations in order to maintain their licence.

Tier 1 which includes Highly Skilled Migrants is likely to be implemented in March 2008 and Tier 2 which covers the existing Work Permit Scheme albeit a greatly modified basis, to include an English language requirement and electronic certificates of sponsorship issued by the licensed UK companies , in Autumn 2008.

Further details here.

Agency Workers

The Court of Appeal has, this morning, handed down its decision in James v Greenwich Borough Council.

This case was widely expected to resolve the conflicting authorities on whether and when agency workers become employees of an end-user. A large number of tribunal cases have been stayed pending this decision, pursuant to the President's Practice Direction (see bulletin 30/11/07).

The Court of Appeal has not grappled with what many believe to be conflicting authorities. Instead, it has asserted that no conflict exists (see para. 46), and that all the authorities point the same way. The correct approach, according to the Court, is for an employment tribunal to decide - as a question of fact - whether it is necessary to imply a contractual relationship between agency worker and end-user. As a question of fact, it should not be reviewed by an appellate court unless a clear error of law exists.

So, it's an answer of sorts - but it doesn't provide the clear guidance or answer that many practitioners were hoping for.

Coleman v Attridge Law: Advocate-General Opinion

The Advocate General has, this morning, handed down his opinion in the important case of Coleman v Attridge Law & Steve Law.

In 2006, South London Employment Tribunal referred to the ECJ the question as to whether the EC Equal Treatment Framework Directive protects not only disabled employees from direct discrimination and/or harassment, but also those employees who are associated with the disabled, such as carers.

The Advocate General (whose opinion is usually followed by the ECJ) has stated that direct discrimination and/or harassment by association is prohibited by the Directive. He said that the Directive makes it impermissible for an employer to rely on religion/age/disability etc to treat employees less well than others, as to do so would amount to subjecting these individuals to unjust treatment and failing to respect their dignity and autonomy. This fact does not change when the employee who is the object of discrimination is not disabled herself. The Directive protects against discrimination "on the grounds of" disability, and the "ground" which serves as the basis of the discrimination the employee suffers continues to be disability.

Although the reference to the ECJ was limited to persons who are disabled, the Advocate General indicated that the same principle will apply to any of the prohibited grounds listed in Article 1 of the Directive (namely religion or belief, disability, age or sexual orientation). This means that the Directive would, for example, protect a person from discrimination because he or she is married to a person belonging to a particular religious group.

On the face of it, the Disability Discrimination Act 1995 does not prohibit discrimination by association - so, if the ECJ agrees with the Advocate General, the next hurdle for Miss Coleman will be to see if the UK courts are prepared to interpret UK law by, for example, implying additional wording into the DDA to achieve the purpose of the Directive. The same will apply to equivalent claims under the Age Regulations, for example. In the end, the Government may need to change the relevant legislation if necessary to bring it in line with the Directive.

[Thanks to Ruth Bonino of Reed Smith Richards Butler LLP for producing the above summary. Thanks also to Michael Herman of Times Online for telling me the opinion was being handed down today]

Compensation: Constructive Dismissal

The Court of Appeal, in GAB Robins v Triggs, has overturned the EAT's decision dealing with compensation for constructive dismissal (see bulletin 14/6/07).

The decision confirms that, even in cases of constructive dismissal, an employment tribunal can only award losses that flow from an actual dismissal and reverts back to the accepted orthodoxy seen in Johnson v Unisys and Eastwood and another v Magnox Electric Plc. Thus Mrs Triggs could not recover unfair dismissal compensation for losses caused by bullying at work, even though the bullying led to her (constructive) dismissal.

Rimer LJ stated that antecedent breaches could not be considered as "constituting the dismissal" and losses flowing from them fall outside the "Johnson exclusion area" as such losses are "not caused by, or a consequence, of the dismissal at all". It was held that in cases of constructive unfair dismissal the employer's repudiatory conduct is "not conduct that effects the dismissal" and "damage caused by that conduct is not damage suffered in consequence of the dismissal". The Claimant already has an "accrued cause of action" in respect of this damage in the form of a common law claim.

[Thanks to David Bickford of Penningtons LLP, who was instructed on behalf of the successful Appellant, for preparing this summary]

Time Limits under the Statutory Grievance Procedure

The EAT (HHJ McMullen QC) has held that the three month extension to time limits under the statutory grievance procedure means that the total time limit for (most) claims is six months less one day, not six months.

In so finding, it has declined to follow a previous decision of the EAT (Rainbow International v Taylor - see bulletin 27/6/06), a plainly incorrect decision which held that the time limit was six months (and not six months less one day).

Joshi v Manchester City Council

Holiday Pay for long-term Sick Workers

The Advocate-General has, this morning, handed down his opinion in Stringer v HMRC (previously known as Ainsworth v HMRC).

By way of background, in April 2005, the Court of Appeal held that the right to four weeks' statutory paid holiday under the Working Time Regulations 1998 does not continue to accrue whilst an employee is off on long-term sick-leave (see bulletins 22/4/05 and 3/11/05). But all did not rest there, for the employees appealed to the House of Lords, who referred the question to the ECJ (see bulletin 3/11/06).

The Advocate-General (whose opinion is normally followed by the full court) has stated:-

• entitlement to paid holiday does accrue whilst an employee is absent on sickleave;
• however, workers may not take their holiday while they are on sickleave; and,
• after termination of the contract, workers are entitled to a compensatory payment to reflect accrued but untaken holiday leave, even where the worker was on sick leave for the full holiday year.

The opinion is arid - verging on incomprehensible - but the brave-hearted can find it here. [Thanks to Michael Ford of Old Square Chambers for telling me about this opinion]

Territorial Jurisdiction

It looks like the House of Lords' decision in Serco wasn't the last word after all. The EAT has held, in Bleuse v MBT Transport, that different rules on territorial jurisdiction apply to statutory employment claims depending on whether:

• the legislation is primarily a UK concept (such as unfair dismissal), in which case the Serco analysis applies; or,
• the legislation derives from EU legislation with direct effect, such as (in this case) the Working Time Regulations 1998.

And on a frivolous note, it's time to launch the 2008 Silliest Names competition. This case starts the ball rolling with the fabulously named 'Dr Frankenstein' (see para. 10 of the judgment). All entries welcome...

Anyway, back to the law. The EAT stated that where UK legislation derives from EU legislation which has direct effect, the UK approach to territorial jurisdiction should be read subject to the assumption that the courts should strive to give effect to EU legislation. In other words, where a claim is based on EU legislation, a weaker link with the UK may suffice to bring the case within the jurisdiction of tribunals.

The facts of this case concerned a German lorry driver who worked throughout mainland Europe (but never the UK). However, his contract of employment was with a company registered in England and his contract provided that English law applied. The EAT held that, applying Serco, he was not able to bring claims for unfair dismissal or an unauthorised deduction from wages. However, he would be permitted to proceed with his claim under the Working Time Regulations, as UK courts must interpret legislation in a way which gives effect to EU obligations and nothing within the Working Time Regulations expressly prohibited this case going forward (see para. 57).

[Thanks to Naomi Ling of CMS Cameron McKenna for telling me about this case]

Statutory Grievances and Equal Pay Claims

The EAT has held, in The Highland Council v TGWU/Unison that an employee needs to identify her comparator (at least by reference to job type) in a statutory grievance. Thus a grievance comparing the Claimant with a man doing job type 'A' cannot suffice to permit an equal pay claim using a comparator doing job type 'B' to proceed. (see para. 31)

In circumstances where the Claimant discovers a materially different comparator after lodging her grievance, she has the choice of:

• lodging a further grievance letter - and it is always open to employer and employee to agree that one grievance meeting will cover both grievances (para. 33);
• if tribunal proceedings have already started, amending the existing claim under normal principles - when s32 of the Employment Act does not apply (para 34); or,
• if permission to amend is not granted, start afresh in respect of the new comparator, with a fresh grievance and a fresh tribunal claim (para. 34)

Statutory Dismissal Procedure - Extension of Time

The EAT (Burton J. sitting alone) has handed down an important judgment dealing with extensions of time for unfair dismissal claims when the employee has put in an internal appeal, and the appeal has been dismissed close to the end of the normal limitation period.

In Ashcroft v Haberdasher's Askes' Boys School, the employer dismissed Mr Ashcroft's appeal against dismissal at 6pm on the last day of three-month period. The effect of this was that, when the normal limitation period expired six hours later, at midnight, there was no pending appeal and therefore no automatic extension of time by three months.

Burton J. held that regulation 15 of the Employment Act 2002 (Dispute Resolution) Regulations 2004 effectively repealed the rule in Palmer v Saunders v Southend-on-Sea Borough Council (1984), namely that the existence of an appeal does not mean it is 'not reasonably practicable' to bring a tribunal claim within time.

The EAT stated, at para. 21, that Mr Ashcroft had the anticpated protection of regulation 15 (extending time for three months) up until 6pm on the last day of the limitation period, and given the purpose of the statutory disciplinary and grievance procedures was to discourage tribunal proceedings before an internal appeal was dealt with, it was not reasonably practicable to lodge tribunal proceedings within the normal three month period.

This case reaches the same result - but by a different route - as last month's decision in Royal Bank of Scotland v Bevan (see bulletin 6/12/07). Neither case was considered in the other.

Protective Awards

The EAT has held that the presumption of a 90 day protective award in collective redundancy consultation cases applies in the same way when the minimum period of consultation is 30 (rather than 90) days.

In Susie Radin, the EAT and Court of Appeal made it clear that a protective award was penal and that 90 days' pay should be awarded unless there were good reasons for awarding less. In this case, Evans v Permacell, less than 20 employees were made redundant, thus the consultation period was 30, not 90, days. The ET awarded 30 days' pay as a protective award, taking into account the lower duration of the consultation period. The EAT reversed this, holding the 90-day presumption applies equally to 30-day consultation cases as it does to 90-day consultation cases.

[Thanks to Asha Wije of Rowley Ashworth, who acted for the successful Appellant, for telling me about this case]

Annual Increase in Compensation Limits

The Employment Rights (Increase of Limits) Order 2007 has been laid before parliament.

This year's core compensation limit increases are:-

• week's pay (basic award / redundancy payment) - from £310 to £330
• maximum compensatory award - from £60,600 to £63,000

The new limits apply to dismissals occurring on or after 1st February 2008.

[Thanks to www.emplaw.co.uk, who featured this news in a recent bulletin]

Unfair Dismissal and Ill-Health Retirement

The EAT has held, in First Leeds v Haigh, that a capability dismissal will normally be unfair if an employer fails to take reasonable steps to ascertain whether an employee is entitlement to the benefit of ill-health retirement benefits.

This decision builds on the Apsden v Webb Poultry line of authorities, taking the implied obligation not to unreasonably deprive the employee of ill-health benefits into the field of unfair dismissal.

[Thanks to David Royden, who represented the successful employee, for telling me about this decision]

TUPE: Overseas application

Welcome back. It's 2008 and we're kicking off the year with a very important TUPE case.

The EAT has held, in Hollis Metal Industries v GMB, that TUPE 2006 has the potential to apply to transfers of businesses outside the UK (and, indeed, outside the EU). This is the first case to consider this issue.

Part of a curtain-making business was transferred from a factory in England to a new 'employer' in Israel, which is outside the EU. None of the employees were taken on.

The EAT (HHJ Ansell) held that TUPE did potentially apply to transfers outside the UK, notwithstanding that enforcement of any tribunal awards might prove difficult. Such a decision upheld the policy of TUPE and did not offend the principle that legislation should not normally be regarded as having extra-territorial jurisdiction, since the requirement that the business originally be based within the UK provided sufficient connection with the UK to give jurisdiction to UK courts.

The decision queried whether transfers outside the UK could normally be said to retain their identity as a discrete economic undertaking, bubt emphasised this was a question of fact for each case.

[Thanks to Dr John McMullen of Watson Burton LLP, whose book and articles were extensively quoted in the judgment, for telling me about the decision]

Equal Pay - Material Factor Defence

The Claimant police officers received less than their male comparator doing like work. The reason was that the men worked shifts involving night work and received a special payment (effectively a bonus) for this, but the women did not work those hours because they were incompatible with their child care responsibilities.

The Tribunal held that it was a legitimate objective to reward night work, but that the Chief Constable could have paid the claimants as though they had done night work, even though they had not. It would not have been a significant expenditure and would have eliminated the discrimination.

The EAT upheld the Chief Constable�s appeal and held that the Tribunal had misunderstood the nature of the justification defence. Elias P. stated at para. 46 that "The payment of money to compensate for the economic disadvantages suffered by those who have child care responsibilities is not what the Equal Pay Act requires. Nor is the assessment of the employer's ability to pay sums of this kind a task which Parliament could conceivably have expected Tribunals to do."

West Midlands Police v Blackburn

Employment Bill Published

After all the hype, it's finally arrived. The Employment Bill was introduced in the House of Lords last week. Key provisions are:

• abolition of statutory dismissal and grievance procedures (clauses 1-2)
• tribunals have a discretion to increase awards by up to 25% if an employer unreasonably fails to comply with a Code of Practice (clause 3)
• extending Acas's powers of conciliation and removing the fixed conciliation periods (clauses 5-6)
• doing a few other dull things to do with the minimum wage, employment agencies and miscellaneous sweep-up matters

The repeal of s98A of the Employment Rights Act 1996 means that Polkey will be back in full force - brooding and masterful as ever.

The commencement date is whenever the Secretary of State decides. I've heard a rumour it's likely to be Spring 2009 (but don't quote me!).

[Thanks to Michael Duggan of Littleton Chambers for telling me the Bill had been published]

Modified Dismissal Procedure

The EAT has taken a relatively strict approach to the applicability of the statutory Modified Disciplinary Procedure in O�Neil v. Wooldridge Ecotech Ltd, holding that it did not apply in a situation where the alleged gross misconduct occurred in the morning, the Claimant�s Line Manager consulted with other senior employees on the same afternoon, but he was not informed that he had been dismissed until the following morning.

Lady Smith stated that she was not satisfied that there had been a dismissal "at the time the employer became aware of the conduct or immediately after it" (the wording of Regulation 3 of the Employment Act 2002 (Dispute Resolution) Regulations 2004).

The EAT went on to find that, in any event, Step 1 of the modified procedure had not been complied with and there had not been a proper investigation. The extent that the original Tribunal had fallen into error was such that the matter should be remitted to a freshly constituted Tribunal.

[Thanks to Anthony Johnson of 1 Temple Gardens for preparing this case summary, and to Ed McFarlane of Mentor for telling me about the case]

Mutual Trust and Confidence

Last week the QBD handed down the high-profile decision, RDF Media Group v Clements. Quite apart from the media interest due to the personalities involved, from a legal perspective it dealt in some detail with the implied term of mutual trust and confidence (arising in the context of a restrictive covenant dispute).

The judgment contains one of the clearest explanations of the term of trust and confidence that I have ever seen - see paras. 100-106.

Further, it is authority for the following propositions:-

• a Board of Directors is entitled to discuss an employee in a negative manner without breaching the term of trust and confidence, as it is merely the brain of the company 'thinking aloud' and the obligation of trust and confidence does not go so far as to control thoughts (para 113)
• engaging in a campaign of vilification against your employee in the press, even on a non-attributed basis, will amount to a prima facie breach of trust and confidence - but there may be a rebuttal if the employee has, himself, first acted in breach of trust and confidence (paras. 118-120)
• there may be reasonable and proper cause to put out a press release, and even release confidential information to the press, when an employee resigns and is on garden leave
• importantly, an employee is not entitled to accept a repudiatory breach of the trust and confidence term in circumstances where he is himself in repudiatory breach of the same term (para. 140).

This last point appears to give employers another defence in constructive dismissal claims. It seems (if this case is followed) that an employer will not normally be liable for constructive dismissal if the employee has also breached the term of trust and confidence. Get the slingshots and the mud ready... but note that permission to appeal has been granted on this point.

Statutory Dismissal Procedure - Extension of Time

The EAT has, in Royal Bank of Scotland v Bevan, upheld the decision of a tribunal that time for presenting an unfair dismissal claim should be extended where an internal appeal is concluded just five hours before the three-month time limit expires.

Regulation 15 of the 2004 Dispute Resolution Regulations extends time from three to six months if, but only if, the employee reasonably believes the disciplinary procedure is still ongoing at the moment the three months expires. So where, as here, the appeal is disposed of five hours before the normal limitation period expires, regulation 15 does not operate to extend time.

However, the EAT held - somewhat controversially - that there is no rule of law that the existence of an internal appeal does not render it 'not reasonably practicable' to present a claim within three months, and that in those circumstances the tribunal was entitled to extend time.

[Thanks to Ed McFarlane from RBS Mentor Services for telling me about this case]

New Practice Direction: Agency Workers

The President of Employment Tribunals, HHJ Meeran, has issued a Practice Direction staying all agency worker cases. The stay will be lifted once the Court of Appeal gives judgment in James v London Borough of Greenwich.

[Thanks to Jonathan Cohen of Cloisters for telling me about this new Practice Direction]

Tribunal Chairmen to be Abolished

Okay - a slightly alarming (and inaccurate) headline. It's not the role that is being abolished, but the title which is being changed.

From tomorrow (yes, a Saturday!), employment tribunal chairmen become known as Employment Judges.

This change, which has received virtually no publicity, is contained in para. 36 of Schedule 8 to the Tribunals, Courts and Enforcement Act 2007. The commencement order is here.