Equal Pay: Service Related Pay Schemes

[Thanks to Ben Cooper of Old Square Chambers, junior counsel for Mrs Wilson, for providing this case summary]

The Court of Appeal's decision in Wilson v Health & Safety Executive is authority for the proposition that, in an equal pay claim arising from a service-related pay progression scheme which has a disparate impact on women compared with men, it is open to an employee to challenge both the adoption of length of service as a determinant of pay and the particular way in which it is used or applied.

In order to be allowed to pursue such a case, the employee is required to do no more than show that her claim has some prospect of success in the sense that there is evidence from which, if established at trial, it could properly be found that the adoption or use of length of service is not justified and/or is disproportionate.

The legal burden of proof in relation to objective justification, including showing proportionality, remains on the employer in accordance with ordinary principles under the Equal Pay Act 1970 (read together with the Sex Discrimination Act 1975). That approach is consistent with Community law under Cadman v HSE [2006] ICR 1623, ECJ. However, if Community law were less favourable to employees in that regard, domestic law would prevail because Community law sets only minimum guarantees.

Discrimination

[Thanks to Chris Milsom of St Philips Chambers for preparing this case summary]

The EAT (Cox J) has handed down its decision in Ministry of Defence v Debique, an indirect discrimination claim. The decision serves as an illustration of the tribunal adopting a practical approach to the doubly disadvantaged claimant and exemplifies a robust attitude towards the state as employer.

In dismissing the appeal, it was held that the Claimant, a female soldier from St Vincent with childcare commitments, had been the victim of sex and race discrimination by reason of two provisions:- (a) requiring that she be available for deployment on a 24/7 basis ('the 24/7 PCP'); (b) prohibiting her from inviting a member of her extended family not of British origin to stay with her in Services Family Accommodation (and thereby assist with childcare) ('the immigration PCP'):

• the EAT agreed that the combined effect of the PCPs should be assessed; "discrimination is often a multi-faceted experience" and should not be artificially compartmentalised;
  
• the MoD could not argue that this was a collateral attack upon immigration rules since discrimination arose out of the course of employment (under Pt III RRA) and the Crown (including the Home Office and MoD departments) was to be treated as a single entity. Parliament did not intend to remove the jurisdiction conferred by RRA and ERA 1996 where indirect discrimination arises from the exercise of functions by a different governmental department;
  
• it was immaterial that the immigration PCP was not applied by the Crown in its capacity as an employer since there was no requirement for this gloss to be put on RRA
  
• this was not a frontal assault on immigration rules but the application of those to the Claimant through the MoDs own policies.

TUPE Consultation

[Thanks to David Reade, who appeared for the CWU, for telling me about this case, and to Joanne Sefton - both of Littleton Chambers - for summarising it]

In Royal Mail v Communication Workers Union , the Court of Appeal has considered employer's consultation obligations in a TUPE transfer situation.

It held that the only obligation on a transferor employer is to communicate matters (such as the legal, social and economic implications of the transfer) as it believes them to be. It does not warrant the truth of what it says - so if it makes a mistake about the legal implications of the transfer, it will not (without more) be liable for a failure to inform and consult.

The case took place in the context of the sell-off of some post office services to WH Smith, where the Royal Mail took the view that TUPE did not apply (which, needless to say, influenced its view as to the legal implications of a transfer).

Giving the leading judgment, Waller LJ said: "It is a powerful argument that employees need to know where they are... But in my view it does not follow that the employer must, in effect, warrant the accuracy of the law." (para 62)

Whilst this decision will be welcomed by employers, it may be a difficult test to apply in practice, particularly where employers may be forced to waive privilege in the are unwilling to disclose the legal advice which they have received to make good the defence.

Employment Status

[Thanks to Patrick Green and Kathleen Donnelly, of Henderson Chambers, who appeared on behalf of the Appellant, for this summary]

The Court of Appeal yesterday handed down judgment in Autoclenz v Belcher, which primarily concerned the vexed question of employee/worker status. On this issue, the case is authority for the proposition that:

1. the practice of requiring car valeters to notify the company if they were not going to turn up for work was capable of being characterised as 'wholly inconsistent' with an express written term that there was no obligation for them to perform any work, such that the written term did not reflect the true agreement between the parties;

2. it was not necessary to find that the express written terms were a Snook sham (both parties intending to mislead others), as Rimer LJ had stated in Consistent Group v Kalwak [2007] IRLR 560; and Rimer LJ's reasoning was "not strictly necessary to the decision"; [para 48]

3. the Tribunal was "entitled to infer from the evidence recited that the substitution clause did not genuinely reflect the rights and obligations of the valeters", on the basis no real substitution had actually taken place [para 61] (with some hesitation - per Smith and Aikens LJJ).

As to perversity challenges to the decision of the Employment Tribunal, the case is authority for the proposition that:

4. although, as a general rule, it is not possible to mount a perversity challenge unless the court is provided with the evidence which was before the fact finder (usually agreed notes of the relevant evidence or the EJ's notes), it may be possible to mount a perversity challenge simply on the basis of the evidence recited and facts found in the judgment itself. [para 41]

Costs - just a thought...

I have long been vexed by the EAT's decision in Telephone Information Services v Wilkinson [1991] IRLR 148, in which the EAT held that it is not "frivolous or vexatious" for a Claimant to pursue an unfair dismissal claim even though the employer has offered to pay the maximum statutory compensation, as he is entitled to pursue his claim to obtain the declaration of unfair dismissal. In essence, this gives a Claimant carte blanche to force a Respondent to incur massive legal costs even though the Respondent is keen to settle its way out of the case.

Telephone Information Services v Wilkinson was decided under the old procedural rules. It would probably be decided differently now, unless the employee was seeking - and had a reasonable prospect of obtaining - reinstatement or reengagement.

This is because, in the absence of a request for reinstatement/reengagement, it would normally be unreasonable to continue with the proceedings once the maximum compensation is offered (the test of unreasonable conduct of proceedings did not exist when Wilkinson was decided - the costs triggers were simply frivolous or abusive conduct).

Alternatively, Telephone Information Services v Wilkinson could be distinguished on the basis it was decided at a time when the parties were not under a duty to follow the overriding objective (ie cooperating, and acting in a way to save tribunal time).

This decision has been quoted against me several times in the last couple of years. It might have been good law in twenty years ago, but it is time for a change.

Daniel Barnett is co-author of Costs in Employment Tribunals (Jordan Publishing)

Sky News: Sharon Shoesmith

Sky News picked up on a piece I did for LBC 97.3 this morning about Sharon Shoesmith. See the video below (I appear at 1:58).

Employment Tribunal Statistics 2008/09

The Employment Tribunal and EAT statistics 2008/09 have been published today.

Key findings:-

• 20% decrease in the number of claims accepted - but if multiple airline (cabin crew) claims are excluded, there is in fact a 4% decrease
• unfair dismissal, redundancy pay and breach of contract claims rose in number. Working time claims, equal pay and sex discrimination fell.
• maximum award (in a race case) - £1,353,432
• 21 age discrimination claims disposed of (average award £8k)
• costs awarded in 367 (0.2%) cases (average costs award £2,470)
• for the first time, the EAT rejected over 50% of all appeals at the sift stage

Default Retirement Age - More Detail

[Thanks to Schona Jolley for writing this case summary, and Declan O'Dempsey (who appeared in the Heyday case) for sending me the decision ]

Judgment was handed down today in the Heyday litigation. Age UK challenged the Default Retirement Age (DRA) of 65 in the Age Regulations arguing that Regulation 30 should be struck down since there was no clear and consistent social policy aim pursued by government. They argued the choice of a DRA at 65 was not proportionate. The EHRC submitted that 70 was the earliest appropriate age for a DRA.

The Government succeeded in respect of Regulation 30, but only just. Although the Court held that Regulation 30 (and a DRA in principle) was both legitimate and proportionate, there were powerful reasons why an age over 65 should have been adopted. Two days before trial the Defendant announced it would review Regulation 30 in early 2010. The Court considered that if there had been no indication of this imminent review it would have granted the application. Likewise, if Regulation 30 had been adopted for the first time in 2009, the application would have been granted.

The Claimants lost on their argument that the Regulation 3 justification test should be struck down for want of clarity since the Court considered the Government had spelled out sufficiently its social policy aims about the integrity of the labour market.

To listen to Daniel Barnett discussing this case on LBC 97.3, click here(allow 30 seconds for the download).

Breaking News: Heyday Decision Out...

The High Court has just handed down its decision in the Heyday appeal, ruling that it is legal for UK law to allow employers to force employees to retire at age 65.

BBC news story here... (and see the history of this litigation here).

Employment Status - Ultra Vires contracts

[Thanks to Chris Milsom of St Philips Chambers for preparing this case summary]

The EAT (Slade J) has handed down its decision in Shrewsbury NHS Trust v Lairikyengban. In upholding the appeal, the EAT ruled that an employment contract renewed in contravention of the NHS Regulations was ultra vires. However, an employee who continues to work under an ultra vires contract of employment is nevertheless entitled to be treated as an employee under the ERA (Eastbourne Borough Council v Foster [2002] ICR 234 applied).

The EAT stated that a failure to renew a fixed-term contract is not in itself sufficient grounds for a redundancy claim where there was no reduction in the overall level of work required to be completed by an employer and there remained a vacancy for a permanent employee. In those circumstances, the ET's decision to uphold a claim for contractual redundancy payment was perverse.

Further, the ET acted erroneously where it determined remedy on the evidence despite a previous agreement between the judge and the parties to conduct a split hearing.

Gordon Brown to fast-track agency workers' rights

[Thanks to emplaw.co.uk for allowing me to use their summary]

Speaking at the TUC annual conference in Liverpool, the Prime Minister has said: "I believe that the fight for fairness must include agency workers and so I pledge... that when parliament returns our new legislative programme will include equal treatment for agency workers".

It presumably follows that Gordon Brown intends to ensure that Britain does not delay implementation in the UK of the EC Agency Workers directive "on temporary agency work" of 19th November 2008). The Directive itself allows until 5th December 2011 for implementation.

See here for more.

Workers can reclaim holidays lost to sickness

[Thanks to Lionel Stride of 1 Temple Gardens for preparing this case summary]

The ECJ has handed down its decision in Pereda, which is authority for the proposition that a period of illness whilst on holiday does not count towards the minimum period of 4 weeks paid annual leave under the Working Time Directive (WTD).

Mr. Pereda, a specialist driver, suffered an accident at work around 14 days before the commencement of his allocated period of 4 weeks annual leave. The injury put him out of action for 6 weeks. His sick leave therefore almost entirely overlapped with his planned holiday but his request for an additional period of annual leave was refused. Under the ECJs ruling his period of sick leave should not have counted towards his holiday time.

The ruling emphasises that there can be no derogations from the entitlement to paid annual leave, the purpose of which is to enable a worker to rest and enjoy a period of relaxation and leisure. By contrast the purpose of entitlement to sick leave is to ensure that he can recover from being ill. Consequently, if a worker decides not to take annual leave during a period of illness, he must be granted a replacement holiday period to ensure that he is not deprived of his entitlement to rest, relaxation and leisure. This principle is likely to apply whether the employee falls sick before or during the actual period of leave.

Click to hear Daniel Barnett discussing this case with David Mellor on LBC 97.3

Avoiding the statutory uplift…

[Thanks to Ed McFarlane of EEF for preparing this case summary]

An interesting case...

The EAT has handed down judgment in the case of Tim Arrow & Sons v Olney, which is authority for the proposition that where a Tribunal award includes an uplift, if the respondent pays the claimant a sum to cover the award before Judgement, the uplift is calculated on the outstanding sum due, rather than the total amount of the award.

This case was decided under the Employment Act 2002, it is likely to have application under the 2008 provisions, given the similarity of the uplift provisions in the two Acts. Conversely, where a reduction is made to an award, by the same reasoning, any advance payment offset against an award would be likely to disregarded in any reduction of compensation. The EAT also overturned an award for loss of statutory rights where the dismissal was inevitable.

Norton Tool and Constructive Dismissal

The Court of Appeal has overturned the EAT (see summary of the EAT decision) in Stuart Peters v Bell, holding that the Norton Tool principle does not extend to constructive dismissal, and so a constructively dismissed employee must give credit for sums earned from other employment during the notice period.

For more detail, I recommend the summary of the Court of Appeal's decision on emplaw.co.uk (who tipped me off about this decision - thank you).

London (East) Tribunal is moving

No more trips to Stratford.

From 30th September 2009, the London (East) tribunal moves to new premises in London E14 (Docklands, near Canary Wharf). The old hearing centre closes for business on 24th September.

Full details here.

New DCSF Guidance on Employing Children

Ever wondered whether Mr Grimes breached health and safety laws when sending Tom up the chimney? Or whether Miss Hannigan breached the Working Time Regulations when forcing Annie to sweep the orphanage floor?

Well, wonder no more. The Department for Children Schools and Family has produced an excellent Guide on Employing Children, covering everything from the types of work children can (and cannot) do, through the number of hours they can be required to work, to specific health & safety requirements. It's a really good guide to print off and keep for future reference.

Costs: Lying Litigants

[Thanks to Will Dobson of Cloisters for providing this case summary]

The EAT in Dunedin Canmore Housing Association v Donaldson has held that it was perverse for the Tribunal to have refused to award costs where the claimant's assertions that she had not disclosed details of her compromise agreement in breach of a confidentiality clause were false.

The Claimant brought proceedings for breach of a compromise agreement, claiming she had not been in breach of a confidentiality clause. The Tribunal rejected her evidence and found she had made disclosures to two people. Nonetheless, it declined to award costs against her as it took the view that it was necessary for her to bring proceedings as the employer had alleged that the claimant had breached the clause.

The EAT disagreed and observed:

• there was no basis for the view that proceedings were 'necessary' or that the claimant had no other alternative but bring proceedings where she knew her assertions were false;
  
  
• the fact that the claimant was a lay person was irrelevant - what mattered was whether she had or had not, in simple human terms, approached the essential factual matters that lay at the heart of her case honestly and reasonably

Because she had not approached the case honestly and reasonably, the EAT reversed the tribunal's decision on costs and ordered the Claimant to pay her ex-employer's legal costs.

This case follows the EAT's earlier judgment in Daleside Nursing Home Ltd v Mathew which held that it was perverse for a Tribunal not to award costs where the central allegation of racial abuse was a lie.

TUPE and Constructive Dismissal (Important Case)

[Thanks to Ed McFarlane of EEF for preparing this case summary]

The EAT has handed down its decision in Tapere v South London & Maundsley NHS Trust, which is authority for the proposition that:

1. post-transfer, the test for whether a substantial change to working conditions - which covers contractual terms - is to the material detriment of a transferred employee, under TUPE 2006 reg 4(9), follows Lord Scott's formulation for detriments in Shamoon, a discrimination case, looking at the impact of the change from the employee's reasonable viewpoint, not by balancing the views of the employee and employer.
   
   
2. transferees cannot use a 'substantial equivalence' argument to defend breaches of pre-transfer terms, except when terms present practical difficulties, like share options. A mobility clause is unchanged upon transfer.

On these facts, changing the place of work, to a transferred employee's detriment, led to a dismissal. The EAT remitted the questions of fairness of the dismissal and redundancy pay to a new tribunal.

Disability Discrimination and Local Government Pensions

[Thanks to Emma Price of 1 Temple Gardens for preparing this case summary]

The Court of Appeal has handed down its decision in Booth v Oldham MBC, an interesting case about 1) the effect of a failed DDA claim on a breach of contract action brought in relation to an employer's decision about pension entitlement and 2) the need for exhaustion of remedies provided by the 1997 Pension Regulations before resort to litigation.

Mr Booth was dismissed in August 2001 on grounds of capability, having been signed off for stress and depression. He brought an ET claim for disability discrimination. Had he been deemed permanently incapable of discharging efficiently his duties of employment because of ill-health or infirmity of mind or body then - under regulation 27 of the Pension Regulations (which govern the Local Government Pension Scheme) - he would have been entitled to additional pension benefits. However, after the ET held that Mr Booth was not a disabled person for the purposes of the DDA 1995, the Council decided not to medically examine Mr Booth to establish if he qualified for those additional pension benefits. Whilst Mr Booth appealed the ET decision (unsuccessfully) he did not avail himself of all of the dispute resolution remedies provided by the Pension Regulations.

Mr Booth brought a breach of contract action several years later, arguing that, had they referred him for medical assessment, he would have satisfied the criteria for ill-health under regulation 27 and he would have been awarded permanent ill-health retirement.

The claim was dismissed by the High Court and, subsequently, by the Court of Appeal. The Court of Appeal held:-

• given the finding of the ET in relation to disability, Mr Booth could not successfully contend that the Council remained under a duty to medically assess him. Lord Justice Thomas stated that there was no need to consider whether a person who is found not to be under a disability under the DDA will always fail to establish permanent incapacity under the Pensions Regulations since there was clear evidence in this case that Mr Booth did not satisfy the latter test.
  
  
• as the Pension Regulations provided dispute resolution machinery by which to challenge the Council's decision, which Mr Booth had not availed himself of, he had no right to bring his claim at all.

Discrimination: Motive of Employer

[Thanks to Lionel Stride of 1 Temple Gardens for preparing this case summary.]

[Listen to Daniel Barnett discussing this case on LBC 97.3]

The EAT (Underhill P) has handed down its decision in Amnesty International v Ahmed, where it upheld the original tribunal's decision that Amnesty was in breach of the RRA 1976 by refusing to appoint a Sudanese woman to the post of Sudanese researcher, on grounds that the organisation would appear to lack impartiality.

In reaching this conclusion the EAT discussed the relationship between James v Eastleigh Borough Council [1990] 2 AC 751 and Nagarajan v London Regional Transport [2000] 1 AC 501, emphasising that the ultimate question in both cases (whether the discrimination is intentional, as in Nagarajan, or simply the unintended result of a benign policy as in Eastleigh) was the ground of the treatment complained of (i.e. the reason why it occurred).

The 'two-stage approach' advocated by Amnesty, applying a 'but for' test as to causation followed by an analysis of the motivation of the discriminator, was rejected. Accordingly, as Amnesty's decision not to appoint the Claimant as a researcher was solely based on her ethnic origins, there had been direct discrimination. Motive was irrelevant.