New EAT Decisions

A case on whether directors/shareholders of a company can amount to 'employees' for the purposes of the ERA 1996 (in particular, a redundancy payment from the DTI fund). The case contains a very useful analysis of the authorities and, whilst not laying down any new rules of law, is an excellent summary for anyone undertaking quick research into the point.
- http://www.employmentappeals.gov.uk/uploads/EAT386011652002/index.htm

Fixed Term Workers Regulations

Further to my bulletin dated 22nd January 2002 (reproduced below), the government has announced it is not able to implement the Fixed Term Workers Regulations by 10th July 2002, as required by the EC Fixed Term Workers Directive.

The reason given is that the Employment Bill has not yet received royal assent (so, blame the Queen!).

The DTI announces its current intention is to bring the Regulations into force on 1st October 2002.

This leaves the government open on a Francovich claim - workers may be able to sue the government, rather than their employer, for any discrimination they suffer on grounds of being a fixed-term worker between 10th July and 1st October.
Further to my bulletin dated 22nd January 2002 (reproduced below), the government has announced it is not able to implement the Fixed Term Workers Regulations by 10th July 2002, as required by the EC Fixed Term Workers Directive.

The reason given is that the Employment Bill has not yet received royal assent (so, blame the Queen!).

The DTI announces its current intention is to bring the Regulations into force on 1st October 2002.

This leaves the government open on a Francovich claim - workers may be able to sue the government, rather than their employer, for any discrimination they suffer on grounds of being a fixed-term worker between 10th July and 1st October.

See http://www.dti.gov.uk/er/fixed/index.htm for further details.

New EAT Decisions

The following decisions have been placed on the EAT website this morning:


Nicholls v London Borough of Greenwich (Bell J., 14th June 2002)

Ms Nicholls was employed by a local authority for many years. Her contract provided that, on retirement, she receive a sum of two weeks' pay for each year worked. However, under regulations made pursuant to the Superannuation Act 1972, the ability of local authorities to make payments on retirement was capped at a level below that which Ms Nicholls would receive under her contract.

The EAT held that Ms Nicholls could not sue on her contract to recover the difference. The local authority was prohibited by statute from agreeing to pay the excess, thus the relevant provision in her contract was unenforceable. Permission was granted to appeal to the Court of Appeal.

To see the decision, go to http://www.employmentappeals.gov.uk/uploads/EAT134002542002/index.htm



Robinson v The Home Office (HHJ Wakefield, 3rd May 2002)

The Applicant submitted a medical certificate in support of her written application to adjourn her discrimination claim. A chairman rejected her application, stating that the tribunal would permit her to take frequent breaks, if needed. She then submitted another medical certificate, bearing the same date from the same medical practice, but signed by a different doctor. The tribunal again refused an adjournment, implying (by using the word 'purported') that the medical certificates were not genuine. It heard the case in her absence and dismissed it.

The EAT quashed the decision on the basis that the tribunal had no grounds to doubt the authenticity of the medical certificates. It also referred to the Applicant's right to a fair trial under article 6 of the European Convention on Human Rights. Accordingly, the Applicant's case was remitted to a fresh tribunal.

To see the decision, go to http://www.employmentappeals.gov.uk/uploads/EAT53301352002/index.htm

[Employment Law List] Liversidge

I have been asked to see if any solicitors whose clients' cases have been adversely affected by the decision in Liversidge would like to get together to consider their options.

As those involved in discrimination claims against the police will know, last month the Court of Appeal decided in Chief Constable of Bedfordshire Police v Liversidge that the Race Relations Act (and, by analogy, the Sex Discrimination Act) did not permit claims to be be brought against a Chief Constable in respect of harassment of one police officer by another. To put it another way, Chief Constables are not vicariously liable for harassment by police officers against police officers.

This drafting omission in the Race Relations Act has been corrected. It has not been corrected in the Sex Discrimination Act.

There are 86 cases under the RRA which are affected by the decision in Liversidge. It is not known how many cases will be affected under the SDA, but it is likely to be considerably more.

I have been asked by a solicitor to enquire whether any people representing police officers whose claims will be struck out because of Liversidge would like to co-operate, possibly in considering taking the matter to the House of Lords or possibly to consider other options.

If you are representing a client whose claim has been affected by Liversidge, and would like to be put in touch with other solicitors in the same position, send me an Email at mail@danielbarnett.co.uk ?subject=Liversidge with your details (including the name of the case and the tribunal in which it is due to be heard). I will collate the responses and distribute them to those who have replied.

New Articles

I have (at last!) updated the articles on my website. I have added:
• 'Agency Workers lose out' (ELA Briefing, July 2002)
• 'More Power for the Workers' (Times Law Supplement, 25/6/02)
• 'Developments in Age Discrimination' (New Law Journal, 21/6/02)
• 'Damages in Discrimination Claims' (New Law Journal Discrimination Supplement, 5/4/02)
• 'The Decline of Anya' (Employment Lawyer, March 2002)

They can be seen at www.danielbarnett.co.uk/article-index.html

New Articles

I have (at last!) updated the articles on my website. I have added:
• 'Agency Workers lose out' (ELA Briefing, July 2002)
• 'More Power for the Workers' (Times Law Supplement, 25/6/02)
• 'Developments in Age Discrimination' (New Law Journal, 21/6/02)
• 'Damages in Discrimination Claims' (New Law Journal Discrimination Supplement, 5/4/02)
• 'The Decline of Anya' (Employment Lawyer, March 2002)

They can be seen at www.danielbarnett.co.uk/article-index.html

Postal Delivery of IT1: C of A Judgment

The Court of Appeal has, this morning, handed down its decision in Consignia plc v Sealy.

Facts
Mr Sealy was dismissed on 9th July 2000. He posted his IT1, claiming unfair dismissal, on Friday, 6th October 2000. The three months for presenting his claim expired on Sunday, 8th October 2000. Due to postal delays, the IT1 did not arrive at the tribunal until Tuesday 10th October.

The Employment Tribunal's Decision
The employment tribunal presented inconsistent summary and extended reasons. Accordingly the Court of Appeal remitted the case to a fresh tribunal for re-consideration. In doing so, the Court of Appeal set out guidelines relating to presentation of claims by post.

The Employment Appeal Tribunal
The EAT refused permission to appeal, so off everyone went to the C of A.

Court of Appeal
The Court of Appeal held that the crucial question is whether a tribunal could conclude that the employee had posted a letter which, in the ordinary course of the post, could reasonably be expected to arrive by the end of the three month period. If it could reasonably be expected to arrive by the end of the three month period, but due to postal delays does not do so, then it would not be practicable to present within three months and an extension of time should be granted.

The Court of Appeal also held that the ordinary course of events should be decided by reference to the Civil Procedure Rules, i.e. 2 days for 1st class post (excluding Saturdays, Sundays and bank holidays - see CPR 6.7 and CPR 2.8).

Implications of Decision
It would now appear to be safe for a solicitor to rely on the post for lodging an IT1, provided it is posted first-class two clear days before the end of the limitation period. Note that evidence of posting is always prudent. Although not expressly overruled, this case would appear to dispense with previous guidance that it is incumbent on a solicitor, when posting the IT1 close to the 3-month expiry, to telephone the tribunal to check the IT1 has arrived.

Readers will realise the irony in the Post Office trying to take advantage of its own delay in delivering the IT1 in order to avoid liability!

The decision is available at http://www.courtservice.gov.uk/judgmentsfiles/j1228/Consignia_v_Sealy.htm . Paragraph 31 of the decision contains summary guidance on the correct course to follow.

DTI Consultation on Young Workers

Following an initial consultation period last year, the DTI has issued a further consultation paper on the new laws required to comply with the Young Workers' Directive, having amended the original proposals.

The new law will apply to 'young workers', defined as those over school leaving age, but under 18.

The latest position, which will be introduced through amendments to the Working Time Regulations 1998, are:

Working Hours
• a young worker's time shall not exceed eight hours a day or 40 hours a week (whether working for one or more employers);
• the maximum 8-hour day / 40-hour week shall not apply where the work is necessary to maintain continuity of (or respond to a surge in) service or production, where the additional hours will not interfere with training and where there is no adult worker available to perform the work.

Night Work
• young workers are not permitted to work between either 10pm and 6am (the default position) or, if the contract of employment provides, between 11pm and 7am.
• unless they work in particular sectors (agriculture, retail trading, a hotel, a bakery, catering activities other than a restaurant or a bar, or postal/newspaper deliveries), when the prohibited hours of work are between 12 midnight and 4am.

The further consultation period is open until 6th September 2002, and the new legislation will be introduced very shortly afterwards.

For more detail, go to http://www.dti.gov.uk/er/individual/youngconsult.htm

Leaked Proposals to overhaul employment law

Very few people will have missed the front page of today's Times, which contained an article describing an impending consultation paper from the DTI, due this summer.

Apparently the consultation paper will seek views on changing the law to:
• abolish the rule for one year's continuous employment for claiming unfair dismissal;
• lower the threshold for union recognition;
• an increase in the £52,600 cap for the unfair dismissal compensatory award;
• greater powers for re-instatement of unfairly dismissed employees;
• abolition of 'zero hour' contracts.
More details in The Times 11/6/02, pp1 and 22.

New EAT Decision

This decision has just been placed on the EAT website. It is currently unreported, but may be reported in due course.

McLeod & Welsh v Phoenix Taxis & Rainbow Taxis (Lord Johnstone, 22/4/2002)
A surprising TUPE decision from the EAT. Phoenix taxis (a radio-cab company) sold its 'business' to Rainbow taxis. The employment tribunal found as a fact that, despite the description in the contract as a sale of a business:
• no assets had transferred
• no staff had transferred
• no premises had transferred
• the only thing that had transferred was the (temporary) use of the 'Phoenix Taxi' name and the Phoenix Taxi telephone number
The ET also held that the Phoenix Taxi undertaking ceased to retain its identity after the sale. Accordingly, after considering Spijkers, it held there was no transfer of an undertaking.

The EAT held that the ET failed to give sufficient weight to the label in the agreement of 'sale of the business'. Not only did the EAT allow the appeal, but it substituted a finding that a TUPE-transfer had occurred (rather than just remitting the case back to the ET).

This case seems to be authority for the proposition that the label the parties use is conclusive (rather than a balancing of the factors set out in Spijkers). It opens the way for purchasers of businesses to insist on writing into a contract 'there is no transfer of undertaking' and arguing that label is binding. That cannot be right.
• To see the decision, go to http://www.employmentappeals.gov.uk/uploads/EAT1344012242002/index.htm

Newsflash: Government Reshuffle

Following the resignation of Stephen Byers yesterday, 10 Downing Street has just announced that the new Secretary for Work and Pensions will be Andrew Smith.

And for those who are interested in such mundane matters, the existing Work and Pensions Secretary, Alistair Darling, will replace Stephen Byers as Transport Secretary.

New EAT Decision

This decision has just been placed on the EAT website. It is currently unreported, but may be reported in due course.

Hill v Howard Chappel (HHJ Peter Clark, 20/3/02)
An employer is not entitled to deduct overpaid holiday from an employee's final salary payment, in the absence of a 'relevant agreement' under the Working Time Regulations 1998 authorising such a deduction.

Thus, on the facts, Mrs Hill had taken 15 days' holiday in the holiday year when, on a pro rata basis, she was only entitled to take 10 days. The employment tribunal, when awarding Mrs Hill her unpaid salary, gave credit to the employer for the 5 days' additional holiday. The EAT reversed this, holding that (unlike reg. 14(2) of the WTR 1998, where an employee is entitled to compensation for untaken holiday on termination of employment) an employer cannot have credit for overpaid holiday under the legislative framework.
• click here for the full transcript

Chancery Division: Pensionable Salary

The High Court has held (London Borough of Newham v Skingle & The Pensions Ombudsman), on an appeal from the Pensions Ombudsman, that pensionable salary for local government employees does not include overtime payments.

The point (which is summarised in the one sentence above) is short but important, as it applies to a wide range of local government and possibly, other public service, employees.

Click here to see the Decision.

TUPE: Rossiter v Pendragon - Court of Appeal

According to a case summary issued by the Independent Council of Law Reporting, the Court of Appeal decided the appeal in Rossiter v Pendragon (and the associated case, Clarke v Air Foyle Ltd) last week. The transcript is not yet available.

The Court of Appeal has overturned the EAT decisions in both cases, and held that a change to employees' terms and conditions following a TUPE transfer does not automatically amount to a constructive dismissal - the employee still needs to establish a fundamental breach of his pre-transfer rights. Thus a transferee can vary terms in the same way the original employer might have been able to do, if such a variation would not have been a fundamental breach by the original employer.

I set out the full summary below (copyright ICLR)

An employee could not claim constructive dismissal on a transfer of undertaking where his working conditions had substantially changed to his detriment without showing a fundamental breach of contract by the employer

The Court of Appeal so stated when (i) allowing the appeal of Pendragon plc against the ruling of the Employment Appeal Tribunal [2001] ICR 1265 that its employee Mr Norman Rossiter had been constructively dismissed and (ii) allowing the appeal of Air Foyle Ltd against the decision of the Employment Appeal Tribunal on 3 October 2001 which, on a preliminary ruling, dismissed its appeal against an employment tribunal's decision that Mr Crosby-Clarke had been constructively dismissed.

The two conjoined appeals raised the same issue whether an employee employed on different terms on a transfer of undertaking could establish constructive dismissal by reason of substantial change in his work conditions to his detriment when the acts of the employer were not repudiatory or in breach of contract.

PETER GIBSON LJ said that it was quite clear from the language of reg 5(5) of the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") that no new right was thereby intended to be created . The regulation preserved the rights arising apart from TUPE and the only such right was that of an employee to resign when faced with repudiation of his contract by the employer. If there were a right to claim constructive dismissal if there had only been a substantial change in circumstances without breach of contract that would arise apart from not under TUPE.

The language of reg 5(5) was chosen to implement art 4(2) of the Directive and s 95(1)(c) of the Employment Rights Act 1996. Only conduct of an employer amounting to repudiation would entitle an employee to terminate a contract without notice.

The appeal tribunal in Rossiter's case[2001] ICR 1265,1275 erred in holding that s 95(1(c) should be construed in a way enabling an employee to claim constructive dismissal where there was no repudiatory conduct by the employer. The test in Western Excavating (ECC) Ltd v Sharp [1978] QB 761 still applied as much to a case involving a transfer of undertaking as when there was no transfer.
Jonathan Parker LJ and Sir Christopher Slade agreed.

Employment Regulation: New Report

The Better Regulation Task Force (a part of the Cabinet Office) has issued a report calling for reforms to the system of implementing employment legislation, referring to the unreasonable demands the method of regulation imposes on small and medium size employers.

Its recommendations include:
• commencement dates for new legislation be grouped together, so that various Acts / SIs take effect on the same date (perhaps once or twice a year), rather than at scattered intervals during the year;
• further research on the effect of employment legislation: in particular, its indirect effects on unemployment rates and investment, and degrees of awareness / penetration amongst workers;
• 'stress tests' for new legislation, to see which sectors of industry it might have the most effect on;
• a free interactive CD-ROM on employment rights, to be given to all employers (and updated regularly - either over the net, or by post once a year)
• a free or subsidised ACAS mediation service for businesses with less than 50 employees;
• free access to ACAS seminars for employers with less than 5 employees.

Click here to see the Report (Adobe Acrobat required).

Asbestosis Case: House of Lords Decision

The House of Lords has just handed down its decision in Fairchild, the mesothelioma test case.

The issue was whether employees who had developed mesothelioma from inhalation of asbestosis could bring a claim against various previous employers, when it was not clear (and, on current medical knowledge, impossible to prove) which of several employers had been the employer at the time of inhalation of the asbestos.

The Court of Appeal had held that, because it could not be said on balance of probabilities whether a particular employer was responsible, the claims must fail against all employers.

The House of Lords has reversed this, and permitted the claims to succeed. The basis of their decision is not yet known (a press release has been issued, but the judgment is not publicly available). It should become available later today, probably on the House of Lords website at http://www.parliament.the-stationery-office.co.uk/pa/ld199697/ldjudgmt/ldjudgmt.htm

Age Discrimination Bill 2002

The Age Discrimination (No. 2) Bill 2002 has been introduced to the House of Commons.

It contains the following provisions (applying to both employees and contract workers):
• making it unlawful to discriminate directly on grounds of age;
• making it unlawful to discriminate indirectly on grounds of age, unless objectively justified;
• making it an offence to specify an actual or preferred upper age limit in a job advertisement;
• making it unlawful to set a normal retirement age in contracts of employment, unless there is an objective justification (the example is given of a retirement age linked to an occupational pension scheme agreed between the parties)
• a defence where the age requirement is a genuine and determining occupational requirement
• imposing a duty on public authorities to promote age equality in employment practices;
• setting up an Age Equality Commission, to monitor implementation of the Act and work towards the elimination of age discrimination.
A reading of the Bill (it is a private member's bill) suggests it has been 'cut and pasted' from older discrimination legislation. For example:
• it refers throughout to 'industrial', rather than 'employment' tribunals;
• it does not contain any time limit for enforcement of rights (i.e. there is simply no reference to the normal 3-month time limit);
• however, it does use the more modern terminology for indirect discrimination, namely 'a provision, criterion or practice' rather than the older 'requirement or condition'.

Click here to see the Bill (Adobe Acrobat required).

New EAT Decisions

These decisions have just been placed on the EAT website. They are currently unreported, but may be reported in due course.

Paggetti v Cobb (HHJ Peter Clark, 22/3/02)
An employee's compensatory award was calculated on the basis of his actual wage, which was £1.88 per hour. The EAT overturned this, holding that when calculating a compensatory award, a tribunal should never base it on less than the minimum wage (then £3.60ph) because, to do so, would be to disregard the National Minimum Wage Act 1988 and allow the employer to benefit from his breach of that Act. Accordingly, the compensatory award should be calculated based on an hourly rate of £3.60, not £1.80.
• click here for the full transcript

Brown v Tomlinsons Dairies (Mr Commissioner Howell QC, 10/4/02)
The employee was at risk of redundancy, but had not been dismissed. He wrote to the employer, asserting he had been dismissed, and refused to attend work. After several attempts to persuade him he had not been dismissed, the employer eventually treated the employee as having resigned. The EAT confirmed this was a dismissal within section 95 of the ERA 1996, by way of the employer accepting the employee's repudiatory breach (refusing to work) and thereby bringing the contract to an end. However, the dismissal was fair, primarily because there was little else the employer could do.
• click here for the full transcript

Employment TaskForce Report

The Employment Tribunal System Taskforce, chaired by Janet Gaymer, has today published its report on reform of the employment tribunal system. The report was provided to the DTI and the Lord Chancellor.

The main recommendations are:
• establishing a high-level coordinating body to increase coherence amongst the regions, whose ambit would include IT strategy, research programmes, information for users, websites and complaint handling;
• greater emphasis on the prevention of disputes, including more involvement by ACAS;
• earlier disclosure of information by all parties, to help both sides understand if they have a case and enable better judicial case-handling techniques;
• improved infrastructure for ETs, including better IT links, appropriate resources for the workload, more training and more highly skilled administrative staff;
• generally more investment in the system

Other recommendations include:
• a review be undertaken into regulation of employment law advisers;
• a pilot scheme should be set up, piloting the concept of judicial assistants as used in the civil sector;
• the parties should be asked about their availability before a full hearing date is set;
• the time limit for the IT3 should be extended from 21 to 28 days - but should be enforced more rigorously;
• there should be better preparation for hearings before the case, including the chairman and lay members receiving papers in advance;
• the system of enforcing tribunal awards should be reviewed;
• a study should be undertaken to consider widening the jurisdiction of ETs to other employment-related claims;
• tribunal proceedings should be digitally recorded, so that a transcript may be produced in a cost-effective manner;
• the current register of applications should be terminated;
• stress counselling should be made available to those working in ETs.

Both a summary, and the full report, have been published on the internet.

UK in further breach of Working Time Directive

According to a press release just issued, the European Commission has upheld a complaint against the UK government, holding that the Working Time Regulations do not properly implement the EC Working Time Directive.

Amicus, the trade union, complained to the Commission that the WTR fail to implement the Directive because:

• under the Regulations, overtime hours on night shifts are excluded from the 48-hour working week limit, which contravenes the Directive; and,

• under the Regulations, people could volunteer to work additional hours which are unmeasured by the employer, thereby undermining the Directive.

According to the press release, the Commission has issued infringement proceedings against the UK, giving it two months to comply.

The government has already been forced to amend the Regulations, last year, on the basis that the 13-week qualifying period for holiday pay breached the Working Time Directive.