Dismissals for Refusing Pay Cut

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The EAT (Langstaff J) has handed down its decision in Garside & Laycock v Booth , which is authority for the proposition that the question whether a dismissal is fair for "some other substantial reason", where the dismissal is for failure to accept wage-cutting proposals, is whether it was reasonable for the employer to dismiss, rather than asking whether it was reasonable for the employee to accept lesser terms offered to him.

In this case the employer needed to cut costs and increase profit. It asked employees to accept a pay reduction of 5%. Mr Booth refused and was dismissed from a job he had held for the previous seven years. Out of 77 employees he was the only one, by the time of dismissal, who held out against the change. The employment tribunal found the dismissal unfair.

But the EAT held the tribunal had gone wrong in a number of areas. Firstly, it was incorrect to say the test was that an employer may only offer less favourable terms if the very survival of the business depended on it. Catamaran Cruisers Ltd v Williams [1994] IRLR 386, on which the tribunal purported to rely, was not authority for such a burdensome requirement. Nor was it correct to assess the reasonableness of the employer's decision by asking what was reasonable for the employee to do. The test was whether the employer, having established "some other substantial reason", acted reasonably.

Inadvertent Conversation About Sexual Orientation

[Thanks to Sarah Russell of Ventura for preparing this case summary]

The Court of Appeal has handed down its decision in Grant v HM Land Registry, which is authority for the proposition that idle conversation about someone being gay, when he has already made it public, will not, without more, constitute discrimination.

The claimant was gay. He had been 'out' at Lytham Land Registry office. On transferring to the Coventry office he did not reveal his homosexuality. His new manager mentioned his sexual orientation to a colleague at Coventry. The Court of Appeal found that as his manager had no ill purpose, then there could be no direct discrimination or harassment.

Elias LJ emphasised that even if the claimant was upset by the disclosure, the effect did not amount to harassment, and tribunals ought not to allow trivial acts to be caught by the concept. 'Outing' someone could, however, be an act of direct discrimination and harassment in other circumstances.

Implied Terms

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for providing this case summary]

The EAT (HHJ Pugsley) has handed down its decision in Tasneem v Dudley Hospitals, which is authority for the proposition that there was no implied term in the claimant's contract of employment that he be informed of the opportunity of a new consultant's contract on offer in the NHS.

The Claimant was a locum consultant. In 2006, for quality reasons, the NHS Trust increased the number of substantive consultants over locums. The Claimant did not succeed in getting a substantive post and was dismissed from his locum post. The employment tribunal found this was for some other substantial reason and was fair. The claimant made various claims including breach of contract, the latter based on earlier events.

In September 2003 the NHS had sent a letter to NHS employers requiring that they give all consultants the opportunity of intimating by 31 October whether they wished to commit to a new contract. As the Claimant was not on the email system this was not copied to him. But the tribunal found that he was well aware of it and could have applied, but for his own reasons did not reply until after the deadline.

The EAT held that the Trust was not in breach of contract in not expressly informing him of the new contract. Scally v Southern Health and Social Services Board [1999] IRLR 215 could be distinguished. There it was found an employee cannot reasonably be expected to be aware of a change in pension arrangements. In this case the Claimant could reasonably be expected to know about the new contract opportunity and, as a matter of fact, did know.

The EAT also agreed the employment tribunal was right to dismiss the Claimant's claims for less favourable treatment on ground of fixed term status, race discrimination and unfair dismissal.

Tribunal Recommendations

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

The EAT (HHJ McMullen QC presiding) has handed down Judgment in Lycée Français Charles de Gaulle v Delambre which is authority for the proposition that an Employment Tribunal has a wide discretion in making recommendations when upholding a discrimination complaint, and on appeal, there is a narrow ability to interfere with that discretion.

The employer, a French school in London, committed age discrimination and victimisation against the Claimant, who remains employed there, after not considering her for promotion. The Employment Tribunal's remedies included three recommendations:

• informing the "governing board" and senior management of the Tribunal Judgments;
• engaging an HR Professional to review their policies and procedures;
• and having a programme of equality and diversity training cascaded through the organisation.

The employer argued that the three recommendations (prior to the Equality Act 2010, under the Employment Equality (Age) Regulations 2006) were inappropriate on various bases, principally being too broad. The EAT disagreed, holding that recommendations to ameliorate discrimination against the Claimant were within the Employment Tribunal's discretion, and, applying Fuller v London Borough of Brent [2011] EWCA Civ 267, resisted "...tinkering impermissibly in the proper province of the Employment Tribunal..." where it felt that it may have disagreed.

The appeal did not extend to the Employment Tribunal's rejection of a strong contender for "Cheekiest Legal Argument of the Year" from the employer, that in an age discrimination case "...being French was a mitigating factor..." (para. 10).

Agency Workers

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The EAT (HHJ Serota) has handed down its decision in BIS v Studders, which is authority for the proposition that no contract of employment existed between an agency worker and the employment agency when the contract between them showed no intention to create an employment relationship and neither of two key requirements of an employment contract- mutuality and an appropriate degree of control- existed.

Unity Personnel was an employment agency which supplied the claimants to an end user. The contract between the agency and worker stated it was not an employment contract. Unity had no obligation to provide work and the claimants had no obligation to accept work when offered. Unity became insolvent, owing the claimants remuneration. They asserted they were employees for the purposes of seeking re-imbursement from the Secretary of State under s 188 of the Employment Rights Act 1996. The employment tribunal found in their favour. The EAT reversed its decision.

It was not impossible to find an employment contract between an agency and a worker (McMeechan v Secretary of State for Employment [1997] ICR 549 was an example). But here the contract (and there was no suggestion it was a sham) was against it. Deduction of National Insurance and PAYE was a neutral factor, since ss 44-47 of the Income Tax (Earnings and Pensions) Act 2003 necessitated it. And the "irreducible minimum" requirement for an employment contract- mutuality of obligation and control exercised by the employer- was not met.

Legal Representation at Internal Disciplinaries

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

The Supreme Court has handed down its decision in R (on the application of G) v The Governors of School X which is authority for the proposition that there is no right, under Article 6 of the ECHR, to legal representation at a disciplinary hearing where dismissal could lead to a process capable of barring an individual from a profession, where the barring decision is sufficiently independent of the dismissal decision.

The Supreme Court upheld the Governors' appeal from the Court of Appeal by a 4-1 majority, Lord Kerr dissenting. Lord Dyson, with whom Lord Walker agreed, gave the lead majority judgment, with Lords Brown and Hope giving separate judgments concurring with Lord Dyson.

The Claimant, G, was dismissed by school governors after a disciplinary hearing over allegations of indecent conduct with a 15-year old. He was denied legal representation at the disciplinary. The governors were obliged to refer G to the Independent Safeguarding Authority "ISA", which conducts its own procedures to determine whether or not to put an individual on a 'barred list' of people banned from working in schools. G sought a judicial review of the dismissal on the basis that the disciplinary hearing breached Article 6 of the ECHR by denying him legal representation when his civil rights were determined -here the right to work in teaching- and sought a re-hearing with legal representation, which the High Court granted, the Court of Appeal dismissed the governors' appeal.

Lord Dyson held Article 6 was not engaged at the disciplinary hearing, the nature of the ISA proceedings, being independent of the employer's decision, and dealing with a different question - a decision on inclusion in the barred list - meant that there was no requirement for the School's disciplinary proceedings to comply with Article 6. There was no reason to suppose that ISA's decision, taken under its statutory scheme, and with scope to consider wider evidence, would be unduly influenced by the employer's decision to dismiss. Therefore, Article 6 (1) of the ECHR was not engaged at the disciplinary hearing as a safeguard against a person's civil rights being determined without the benefit of legal representation.

Lord Dyson did note that where a decision in one set of proceedings determines the outcome in subsequent proceedings that determine a person's civil rights, then the right to a fair hearing, and by implication, legal representation, may be engaged at that first stage, which leaves the door open to legal representation at disciplinary hearings in such circumstances.

Ex Gratia Payments Not Set Off Against Notice Pay

[Thanks to Alfred Weiss of Zenith Chambers for preparing this case summary]

The EAT (Mr Recorder Luba) has handed down its decision in Publicis Consultants v O'Farrell, which is authority for the proposition that ...the true construction of the meaning of the words used by an employer in a letter of dismissal in which it paid monies to an employee as an 'ex gratia payment', was a question of law.

An employee entitled to three months notice was dismissed with four days notice. The letter of dismissal stated that she would receive an ex gratia payment equivalent to three months salary. She brought a claim for breach of contract for failure to pay her salary for the three months notice period. The employer argued that the ex gratia payment was actually made in respect of the notice pay. The tribunal found that the payment was truly ex gratia and that the employer was in breach of contract.

The Employment Appeal Tribunal applied the principles in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, to be utilised in the interpretation of documents, and found that the money was unambiguously advanced as an ex gratia payment. If the letter had been ambiguously worded, it would have been appropriate to construe its wording against the employer, as the party who drafted the letter.

Retirement Notifications

[Thanks to James Medhurst of Employment Law Advocates for providing this case summary]

The EAT (Underhill P) has handed down its decision in Howard v Campbell's Caravans, which is authority for the proposition that a notification to an employee that he will be retired "after his 65th birthday" does not necessarily constitute a failure to comply with the requirement of the statutory retirement procedure that the employee must be notified of the intended date of his retirement.

It was concluded that a notification letter has to be considered in isolation and further letters cannot remedy a failure to notify an employee of his retirement date. However, nor can they cast doubt on the validity of the original notification if they specify a different date.

On the facts of this case, a natural reading of the letter would cause an employee to conclude that he was to be retired on the date of his 65th birthday, even though he was retired two days later.

Discrimination and Dress Codes

[Thanks to Louise Jones of Temple Garden Chambers for preparing this case summary]

The High Court has handed down its decision in SG v St Gregory's Catholic Science College, where Collins J found that a uniform policy of prohibiting a cornrows hairstyle for all pupils - without exception - can result in indirect race discrimination, but not sex discrimination.

Collins J found that there was evidence that there are those of African-Caribbean ethnicity who do for reasons based on their culture and ethnicity regard the cutting of their hair to be wrong, so that they need their hair to be kept in cornrows. As such, there was a group who could be at particular disadvantage by a blanket policy that refused to allow cornrows. The School's arguments that a blanket policy could be justified were rejected.

On sex discrimination, Collins J referred to the Court of Appeal's decision in Smith v Safeway [1996] ICR 868 and the guidance that rules concerning appearances that enforce a common principle of smartness or conventionality will not be discriminatory; a policy looked at as a whole that allowed cornrows for girls, but not boys, did not amount to unlawful sex discrimination.

The facts of this case had arisen in September 2009, and the question of whether there had been an unlawful refusal to accept the claimant in cornrows will depend on the determination of what the School knew or ought to have known at the time.

Collective Redundancies and Employee Representatives

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

The EAT (Jan Luba QC) has handed down its decision in Phillips v Xtera Communications Ltd, which is authority for the proposition that an 'election' takes place for employee representatives in redundancy collective consultations under TULRCA 1992 where the number of nominations equals the number of representatives' positions, even if there is no ballot.

The redundant Claimant argued that he was entitled to a protective award due to his employer's failure to hold an 'election' for employee representatives when the number of nominations matched the number of representatives, the employment tribunal disagreed.

The EAT dismissed the appeal, observing that there were sufficient safeguards for employees as the statute requires that the employer makes 'such arrangements as are reasonably practicable' to ensure that an election is fair, and an employee concerned about an employer 'rigging' the nomination process can trigger a ballot by standing themselves or nominating another candidate.

Collective Consultation and Protective Awards

[Thanks to Ed McFarlane of Deminos HR for preparing this case summary and thanks also to Ian Gatt QC of Herbert Smith for telling me about this case]

The EAT (HHJ Serota) has handed down its decision in Independent Insurance v Aspinall, which is authority for the proposition that in a complaint for a Protective Award under S188-189 TURLCA 1992, an award in favour of an individual claimant cannot extend to other claimants.

The Respondent insurance company went into provisional liquidation, failing to comply with its collective consultation obligations over the ensuing redundancies, and there was no recognised Union, nor employee representatives.

An individual Claimant, Mr Aspinall, won his claim for a Protective Award of 90 days pay, and the employment tribunal made the award for the benefit of Mr Aspinall and 350 of his redundant colleagues, who were not party to his claim.

On appeal, the EAT limited the award to Mr Aspinall, holding that where an individual employee claims a Protective Award, only that employee has the benefit of it. The representative rights to claim for a Protective Award only relate to claims by Trades Union or elected representatives for their 'constituencies'.

Tribunal Case Management Discussion - standard agenda

Most tribunals routinely send out hard copies of agendas for case management discussions. As delightful as it is for employment judges to wade through two versions (Claimant and Respondent) of this five page document, covered in handwriting, rumour has it that some judges prefer to receive typed copies.

It is not easy to get hold of as a Word document. Two tribunals told me that they cannot send out an electronic version. So when I received an electronic copy from Darren Smith of Boyes Turner - to whom the employment law world should send a big thank you - I thought it should go out to everybody.

Here it is: http://dl.dropbox.com/u/18097599/CMD%20Agenda.doc .

Please note, though, I have not checked this agenda is used in every region. Make sure it's the correct version for your region before using it.

Daniel Barnett

Costs in Employment Tribunals

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

The EAT has handed down its decision in two costs cases, which are authority for the propositions that:

A Tribunal did not err in making a costs order without taking into account a paying party's ability to pay, when a Claimant had left the hearing -but not the Tribunal building- being represented by a relative, and her conduct of proceedings overall had been 'outrageous'. The Tribunal has a wide ambit of discretion on costs, including whether it takes into account a party's means. The EAT approved the approach of a previous EAT in Jilley (bulletin 31 March 2008). (Mirikwe v Wilson & Co Solicitors & others).

An Employment Tribunal has no power to make a preparation time order in favour of a non-legally represented party for time spent in attendance at a hearing. The clear wording of Rule 42 (3) does not allow for preparation time to be awarded for time spent at any Hearing. The Judgment suggests that preparation time might cover time spent outside of Tribunal rooms, during or between days of hearings. (Andrew v Eden College & others).

TUPE and Collective Agreements

[Thanks to John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The Supreme Court has handed down its judgment in Parkwood Leisure Ltd v Alemo-Herron and others [2011] UKSC 26, holding that the question whether Article 3.1 of the Acquired Rights Directive precludes national courts from giving a dynamic interpretation to Regulation 5 of TUPE 1981 (now TUPE 2006 Reg 4) was not acte claire and should be referred to the ECJ for a preliminary ruling.

In the Court of Appeal it had been held that, following the ECJ decision in Werhof v Freeway Traffic Systems GmbH & Co KG [2006] ECR1-2397 on the scope of article 3.1 of the ARD, Regulation 5 should be read as meaning that the transferee was not bound by any collective agreement made after the expiry of an agreement that was in force at the point of the transfer if the employer was not party to the collective bargaining machinery concerned. This is the so-called "static" interpretation. The contrary, "dynamic", interpretation, would mean that a transferee would be bound to give effect to collective agreements negotiated by a third party from time to time as long as the original contract of employment provided for this. UK case law, including Whent v Cartledge Ltd [1997] IRLR 153, supported this "dynamic" interpretation. The CA held that Whent could not stand in the light of Werhof.

Therefore the question of whether national courts may give a more generous, "dynamic", interpretation of TUPE, notwithstanding the view in Werhof about the scope of Article 3.1, was referred to the CJEU.

Pre-pack Administrations and TUPE

[Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary]

The EAT (Cox J) has handed down its decision in Pressure Coolers v Molloy, which is authority for the proposition that, on a proper construction of Reg 8 (1)-(6) of TUPE, it was the transferee, not the Secretary of State, who was liable to pay an employee's basic award and notice pay following his unfair dismissal by the transferee after a "pre-pack" TUPE transfer.

The claimant was a bench fitter employed by Maestro International Limited. Maestro went into "pre-pack" administration for the purposes of allowing Pressure Coolers to acquire its business. The claimant was dismissed shortly after the transfer.

First, the purpose of the administration was not to liquidate the transferor's assets, but to sell its business as a going concern. Reg 8(7) of TUPE (which would otherwise have excluded TUPE if the purpose were liquidation of assets) therefore did not apply. (See now OTG Ltd v Barke where it was held in absolute terms that the purpose of administration is not to liquidate the assets of the transferor).

The transferee however relied on TUPE, Reg 8 (1)-(6), which states that liability for sums payable to an employee under the relevant statutory claims (here, the basic award and notice pay) does not pass to a transferee, but is, instead, picked up by the Secretary of State.

The EAT (Mrs Justice Cox presiding) held that it could not. For Reg 8(1-(6) to apply the relevant liability must have arisen prior to the transfer. The employee had been dismissed by the transferee after the transfer and the transferee was solely liable for the sums claimed.

Wasted Costs Against Representative

[Thanks to James Medhurst of Employment Law Advocates for preparing this case summary]

The EAT (Underhill P) has handed down its decision in Jackson v Cambridgeshire County Council, which is a case with extraordinary facts, including the covert recording of the private deliberations of the tribunal.

An order for wasted costs against the representative concerned was overturned on the grounds that the tribunal did not properly address his case that he was not acting in pursuit of profit. He was representing a family member and so there was no a priori reason to believe that he might be acting in pursuit of profit. In those circumstances, the tribunal needed solid grounds for a finding to the contrary. The fact that he was an unreliable witness in other respects was not sufficient.

The representative had made a complaint to the Regional Employment Judge about the Employment Judge hearing the case and had supported his complaint with transcripts of the unlawful recording, which he denied having made himself. He quoted selectively from the recording and it was found that he then destroyed it. He also engaged in correspondence described as "arrogant and bullying" and posted material attacking the respondent on Facebook. Unsurprisingly, there was no challenge to the conclusion that his conduct had been unreasonable.

Cost Alone Can Justify Indirect Discrimination

[Thanks to Neil Addison of Palmyra Chambers for preparing this case summary]

The EAT (HHJ Judge Reid QC) has handed down its decision in the case of Cherfi v G4S Security Services Ltd which holds - albeit obiter - that an employer can rely upon cost alone in order to justify an otherwise indirecrtly discriminatory policy.

Mr Cherfi, a Muslim, was employed as a security guard and regularly left the site on Friday to attend a Mosque. This was stopped by G4S on the grounds that they were contractually obliged to ensure that the specified number of security guards were present throughout operating hours.

Mr Cherfi brought a claim for indirect religious discrimination alleging that G4S's policy placed Muslims at a particular disadvantage but the ET held that the financial implications for G4S of being in potential breach of contract justified the requirement.

Mr Cherfi relied on Cross v British Airways as authority that economic considerations could not justify a discriminatory policy whilst G4S relied on Woodcock v Cumbria Primary Care Trust as authority that they could.

The EAT followed Woodcock and, as an alternative finding, held that financial implications were sufficient to make the discriminatory policy reasonable and proportionate.

Capability Dismissals

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

The EAT (Lady Smith) has handed down its decision in D B Schenker Rail (UK) Ltd v Doolan, which is authority for the proposition that in a capability dismissal the standard of enquiry required of an employer is from the familiar Burchell test, and the requirement to ascertain the "true medical position" (East Lindsay District Council v Daubney [1977] ICR 566) does not require a higher standard of evidence than in a conduct case. The decision to dismiss is a managerial one, not a medical one, and an employer should make its own assessment of the risk to an employee's health from returning to work.

The Claimant was a manager at a rail freight company, dismissed after a period of stress-related absence; he then took his pension early. The EAT overturned the Tribunal's decision that the dismissal was unfair and remitted it for re-hearing.

The EAT also observed that a re-instatement order to restore the Claimant to the Respondent's pension scheme should only require an employer to do what was within its power, and held that the uncertain terms of the order made amounted to an error of law.

Apportioning Liability in Discrimination Claims

[Thanks to Jahad Rahman of Kervin & Barnes Solicitors for preparing this case summary]

The EAT (Underhill P) has handed down its decision in the case of London Borough of Hackney v Sivanandan & Others, which is authority for the proposition that where an employer and employee are jointly liable for discrimination, there is on ordinary principles no basis for the apportionment of damages.

The claimant applied for employment with a charity but was unsuccessful. She claimed that her non-appointment was the result of discrimination and victimisation due to her previous discrimination claim against the charity.

The claimant brought proceedings against the charity and Hackney council, which funded the charity for race and sex discrimination and victimisation. She also named employees of the council and the charity and committee members as respondents in the proceedings.

The tribunal upheld the complaints of victimisation and determined that the respondents (save an employee of the council who was awarded to pay £1,250 for injury to feelings) are jointly and severally liable to pay the claimant £421,415.

The EAT dismissed the council's appeal against the tribunal's decision that the award be joint and several and held that compensation for loss caused by unlawful discrimination should follow the ordinary principles of the law of tort. As such, where an employer and employee are jointly liable for the loss caused - each is liable for the entire award of compensation and it is not necessary to apportion liability as between the discriminators.

Requests to Work Beyond Retirement

[Thanks to Jahad Rahman of Kervin & Barnes Solicitors for preparing this case summary]

Retirement notice under the statutory retirement procedures (now repealed).

The EAT has handed down its decision in the case of Bailey v R&R Plant (Peterborough) Ltd, which is authority for the proposition that when an employer provides written notice of its intention to retire an employee under the statutory retirement procedures, the employer must inform the employee that any written request to continue working must be in writing and must state that it is made under paragraph 5 of Schedule 6 to the Employment Equality Age Regulations 2006 (now repealed).

The EAT found that the Respondent's letter to the Claimant informing him that he would be retired and that he is entitled to make a request to continue working beyond his 65th birthday was invalid because the written notice did not state that the request must be made under paragraph 5. HHJ Richardson concluded by saying that "An employee is not informed of the statutory procedural right merely by being told that he may make a request not to retire. He is informed of the statutory procedural right only if he is told the essential conditions by which it may be exercised".

The EAT held that the reason for dismissal was retirement and the dismissal was unfair.