Effective date of termination

[Thanks to Justina Togher of Royds RDW, which acted for the Appellant in this case, for sending me details of this decision]

Judgment has been handed down today in Fitzgerald v University of Kent at Canterbury. This is an important Court of Appeal decision concerning the effective date of termination ('EDT') in unfair dismissal claims.

The issue was whether the EDT, which by law sets time running for lodging an originating application in the employment tribunal, is to be objectively determined or can be fixed by agreement between employer and employee. On the facts, the tribunal found the parties had agreed an EDT of 28th February 2001, even though the agreement did not occur until 2nd March. If the EDT was truly 28th February, the claim was out of time. If the true EDT was 2nd March, the claim was presented within time.

In a very readable judgment, Sedley LJ holds that it is not open to the parties to agree to vary the plain wording of the Employment Rights Act. This is both on policy grounds (to prevent the parties agreeing an incorrect EDT to circumvent the one year qualifying period or the upper qualifying age) and on statutory grounds, since it is an attempt to contract out of the Act and is therefore void under ERA s203.

This decision resolves tension between inconsistent EAT decisions, and provides welcome certainty on a difficult point of law.

Disability Discrimination - Justification

[Thanks to the Disability Rights Commission, who funded Mr Collins' appeal, for notifying me of this decision]

"This appeal raises a new and sharp question of discrimination law: can an employer's failure to make adjustments to accommodate a disabled employee be unreasonable but justified?"


So says Sedley LJ, in the opening paragraph of Collins v Royal National Theatre Board Ltd. (handed down by the Court of Appeal today).

His conclusion, in para. 32, is:

"In my judgment the only workable construction of s.5(4) [justification defence for failure to make reasonable adjustments], in the context of the DDA and its manifest objects, is that it does not permit justification of a breach of s.6 [duty to make reasonable adjustments] to be established by reference to factors properly relevant to the establishment of a duty under s.6"

This is a quite horrendously complicated decision. The Court of Appeal are basically holding that the threshold for the justification defence is much higher for a failure to make reasonable adjustments (as the questions relating to whether the employer has acted reasonably have already been canvassed - and rejected - in deciding whether there was a breach of duty in the first place) than for treating an individual less favourably on grounds of disability (where the justification defence is low - see Jones v Post Office).


NB The justification defence to a claim of failing to make reasonable adjustments is abolished, with effect from 1st October 2004, by the Disability Discrimination Act 1995 (Amendment) Regulations 2003.

Guides to Bullying and Harassment

ACAS has updated its two guides on bullying and harassment: one for employees, and one for employers.

Although quite short, they contain very useful summaries of the law and suggestions for bringing or avoiding claims.

PS The Court of Appeal's judgment in Dunnachie v Kingston Upon Hull City Council (on whether you can recover damages for stress and injury to feelings in unfair dismissal) is being handed down at 10.30am today. I will send out a bulletin as soon as the result is known.

Dunnachie Overturned

The Court of Appeal has, today, overturned the EAT's decision in Dunnachie v Kingston upon Hull City Council.

In three separate judgments, the Court of Appeal unanimously hold that damages for non-pecuniary losses are available for unfair dismissal. This includes damages for injury to feelings flowing from the dismissal. In so deciding, the Court of Appeal held that the seminal case of Norton Tool Co v Tewson [1972] ICR 501 was wrongly decided.

Giving the leading judgment, Sedley LJ also stated that such damages will not flow in every case, but only where there is "a real injury to [the employee's] self-respect" - which will most frequently be seen in constructive dismissal cases (para 48).

He also made it clear he was notdeciding whether it was possible to recover damages for injury to feeling arising from the fact, rather than manner, of dismissal.

Dunnachie Overturned - correction

CORRECTION TO PREVIOUS BULLETIN

In my bulletin sent 30 minutes ago, I wrongly said that the Court of Appeal's decision was unanimous. In fact it was a majority decision (Brooke LJ dissenting). My apologies for the error - the corrected bulletin is below.

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The Court of Appeal has, today, overturned the EAT's decision in Dunnachie v Kingston upon Hull City Council.

In a majority, decision, the Court of Appeal hold that damages for non-pecuniary losses are available for unfair dismissal. This includes damages for injury to feelings flowing from the dismissal. In so deciding, the Court of Appeal held that the seminal case of Norton Tool Co v Tewson [1972] ICR 501 was wrongly decided.

Giving the leading judgment, Sedley LJ also stated that such damages will not flow in every case, but only where there is "a real injury to [the employee's] self-respect" - which will most frequently be seen in constructive dismissal cases (para 48).

He also made it clear he was not deciding whether it was possible to recover damages for injury to feeling arising from the fact, rather than manner, of dismissal.

Dispute Resolution - Draft SI

Further to my bulletins dated 20th and 21st January, the draft statutory instrument containing the flesh of the dispute resolution procedures have now been published.

The snappily titled The Employment Act 2002 (Dispute Resolution) Regulations 2004 are available from the Stationery Office website (link below).

My seminar notes, which have been available to members of this list since the summer (link below), will be updated shortly to reflect the content of the new Regulations.

Lawson v Serco - Court of Appeal

The Court of Appeal has, this morning, handed down judgment in Lawson v Serco They overturn the EAT's widely-criticised decision, which held that an employee working anywhere in the world can claim unfair dismissal against any employer, if that employer has a place of business in England or Wales, irrespective of the governing laws or where the employee works. The Court of Appeal invited submissions from the Foreign & Commonwealth Office due to the far-reaching implications of the judgment.

Pill LJ said the right not to be unfairly dismissed applies only to "employment in Great Britain" (para. 8), and that although the residence of the parties might be relevant, the emphasis must be upon the employment itself (para. 28).

In coming to that decision, he recognised that it might be difficult to establish whether that is satisfied in some cases. He expressly rejected the argument that jurisdiction can be governed or influenced by the contents of the ET Rules of Procedure (para. 23), and also rejected the "substantial connection" test (paras. 23+24) (impliedly overruling Jackson v Ghost). Finally, he rejected the "base" test (para. 27).

Essa v Laing - Court of Appeal

The Court of Appeal has just handed down judgment in <>Essa v Laing.

Upholding the EAT's decision, it holds that an employee can recover for psychiatric injury flowing from an act of race discrimination, even where the employee's reaction is wholly extreme and unforeseeable.

Dispute Resolution - Draft ACAS Code

This bulletin follows on from yesterday's Email (dealing with the government's response to its consultation on the statutory dispute resolution procedures).

This morning, ACAS published the new draft Code of Practice on Disciplinary and Grievance Procedures. This will replace the existing Code of Practice, and it incorporates the minimum statutory and disciplinary procedures set out in the Employment Act 2002.

The draft Code has been published to give interested parties the opportunity to comment. Consultation closes on 14th April 2004.

Dispute Resolution - Consultation Results

As subscribers will know, new mandatory dispute resolution procedures come into force in October 2004. Failure by an employer to follow the mandatory disciplinary procedure will render a dismissal automatically unfair and lead to an increase in compensation for employees. Failure by an employee to lodge a grievance will (normally) prevent an employee from bringing a tribunal claim.

The government issued a consultation paper in July 2003, seeking views on a large number of issues arising from the new procedures. The government's response to the consultation has been published this morning.

Key points are:

• the disciplinary procedure will not apply to oral or written warnings, despite strong union representations to the contrary;
• it has been made clear the 'modified procedure' will apply only in a very small sub-set of gross misconduct cases;
• a formal definition of 'grievance' is introduced, namely "a complaint by an employee about action which his employer has or is contemplating taking in relation to him."
• an extension will be introduced to the 3-month time limit for unfair dismissal claims, where the employee has reasonable grounds for believing a disciplinary procedure is still ongoing when the 3-month limit expires;
• clarification of the overlap between disciplinary and grievance matters;

Interestingly, in paragraph 145 of the response, the DTI states "The government acknowledges that the Regulations are not simple..." - a far cry from the initial policy aim of a simple, straightforward disciplinary procedure to remove legal technicalities from the workplace.

Priests to be given Employment Rights

... or at least, so says the BBC news website this morning.

According to the BBC, the Church of England has announced it will give clergy employment rights, including the right to paid holiday, redundancy payments and the right to claim unfair dismissal.

Section 23 of the Employment Relations Act 1999 authorises the Secretary of State to extend employment rights to categories of workers who are not currently protected by the employment legislation.

It has been mooted for some time that employment rights would be given to ministers of religion. But my reading of s23 does not suggest that the Church of England has power to introduce an SI implementing employment rights for priests. So the BBC may have been meaning to say that the Church of England will recommend to the Secretary of State that an Order under s23 should be made.

It is unclear where this leaves ministers of other religions. The point is not yet free from controversy, so be cautious if advising ministers (or religious establishments) as to imminent changes to the law.

Conduct of Employment Agencies Regulations

The DTI has, today, issued guidance on how the long-awaited Conduct of Employment Agencies and Employment Businesses Regulations 2003 Regulations will work.

They are due to come into force on 6th April 2004. The main implication for employment lawyers is the way in which it requires employment agencies / business to specify the employment status of any individual who obtains work through the agency / business (i.e. self-employed, employed). It also requires the agency / business to give written notice as to the terms and condition on which the individual is employed or engaged.

Sychronised Dates

The DTI has, earlier today, published details of the Employment Regulations that are due to take effect in 2004.

They are split into two tranches, with harmonised commencement dates of 6th April and 1st October. This is a very useful guide to what's coming in the next 12 months.

New EAT Decisions

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

EFFECTIVE DATE OF TERMINATION - RESIGNING BY FAX AFTER OFFICE CLOSES
Potter v RJ Temple (HHJ Richardson, 18/12/03)

The employee sent a letter of resignation (accepting an alleged repudiatory breach by the employer) to the employer's office by fax at 8.21pm on Friday 13th September. The office had closed, and the fax was not seen until the following week. If the EDT was 13th September, then the IT1 presented on 13th December was out of time. If the EDT was the following Monday, then the IT1 would have been presented in time.

In a clear and well-reasoned judgment, the EAT drew a distinction between the strict common-law position on communication of acceptance of repudiatory breach by fax, and the 'common-sense' position that was called for under the unfair dismissal legislation. It held that the resignation had been validly communicated on 13th September, and accordingly upheld the tribunal's finding that the unfair dismissal complaint had been presented out of time.

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COSTS
Health Development Agency v Parish (HHJ Richardson, 24/10/03)

Even when costs are awarded in respect of unreasonable conduct of proceedings, a tribunal must disregard any costs incurred before the IT1 (or, if the Respondent, the IT3) was lodged - irrespective of whether the party was acting unreasonably in the period before the pleading was lodged. Rule 14 does not confer power to award costs in respect of this early period. It is founded upon a finding as to the way a party has brought or conducted proceedings, and this assumes that proceedings have been brought.

Comment: This decision may be controversial. Whilst the tribunal has no jurisdiction to award costs in connection with unreasonable conduct if no proceedings are actually brought, there seems to be no valid reason why - once jurisdiction is triggered - the entire costs should not be recoverable. This decision will encourage (a) proceedings to be issued swiftly, when negotiations might otherwise prove fruitful, and (b) parties to delay their investigations, and matters such as taking preliminary witness proofs, until after proceedings have been started.

EU Consultation on Working Time

The European Commission has opened a consultation on Working Time with a view to revising the Working Time Directive. This is triggered partly by recent ECJ decisions dealing with 'on-call' working time, and partly by a perception that the opt-out is being abused by employers or member states (primarily, according to the consultation document, by UK employers!).

The consultation asks for responses on 5 main issues, with a view to a future revision of the Directive:

• the length of reference periods currently four months, with certain provisions allowing for 6 months or a year;
• the definition of working time following recent European Court of Justice rulings on time spent on call
• the conditions for the application of the opt-out
• measures to improve the balance between work and family life
• how to find the best balance of these measures.
  

The consultation closes on 31st March 2004.

Part-Time Pensions - Preston v Wolverhampton (no. 3)

Perfectly timed to wrap up in a stocking, the EAT has handed down the latest decision in the Preston v Wolverhampton saga of pension cases. The series of cases represent the largest litigation ever in an employment tribunal, involving roughly some 60,000 claims, mainly by female part-time workers.

In an admirably clear judgment, the EAT (HHJ McMullen, sitting alone) asked and answered the following six questions (note: I have adopted the order used by the judge in his judgment, not the order used in the formal list of issues):

(1) Is there a breach of the Equal Pay Act 1970 where pension scheme membership is compulsory for full-time staff but part-time staff are excluded? Yes (paras 30-55)

(2) Is there a breach of the 1970 Act where scheme membership is compulsory for full-time staff and optional for part-time staff? No (paras. 56-66)

(3) Is there a breach of the 1970 Act where an employer has failed to inform staff of the removal of a barrier to scheme membership? Yes, but only where there is a policy of failing to inform, having a disparate effect on women (paras. 67-80)

(4) Did the Chairman err in his consideration of Mrs Savage’s and Mrs Thomas’ test cases? Yes - their cases should be dismissed. (also paras. 67-80)

(5) When does a “stable employment relationship” arise? One needs to look at the intention of the parties. (paras. 81-128)

(6) Does time begin to run in a claim against a TUPE transferor from the date of transfer, or does time not run until the end of an employee’s employment with the transferee? Since pension rights do not transfer under TUPE, employees need to sue the transferor as well as the transferee. Time, for the purpose of the six-month limitation period, starts running from the date of end of employment with the transferee, not when the transfer took place. (paras. 129-148)

Employment Status

The Court of Appeal has handed down its decision in Emerging Markets Partnership v Bachnak (19th December 2003).

It holds that where an 'employee' enters into two contracts with the 'employer', one (without any remuneration) in a traditional employee/employer relationship, and the other (with remuneration to the limited company) through the intermediary of a one-man limited company, the tribunal cannot simply say that the lack of remuneration on the one contract, and the absence of a direct contractual relationship on the other, means that the individual is not an employee (and thus cannot claim unfair dismissal).

What a tribunal should do is look at the two contracts in the round and decide whether, in the light of the co-existing contracts, an express or implied contract of employment arises.

It's not a very interesting case, but - hey - it's Christmas. Merry Christmas everyone.

Normal Retirement Age: Employees in Unique Position

Section 109 of the Employment Rights Act 1996 provides that employees cannot clair dismissal if they are over the 'normal retirement age' (or, if there is no normal retirement age, 65). This section, commonly known as the upper qualifying limit, was upheld as lawful recently in Rutherford v Town Circle (bulletin 2/10/03).

In a majority judgment handed down this morning, Wall v The British Compressed Air Society, the Court of Appeal has held that an employee's contractual retirement age, where he is the only employee in that position, sets up a presumption that that is the 'normal' retirement age.

Previously, the EAT had held that a employee holding a unique position cannot have a 'normal' retirement age, because the requirement for a 'norm' entails the need for a group of people with that retirement age within the company. These cases, Age Concern Scotland v Hines and Dormers Wells Infant School v Wells, have been overturned by the majority of the Court of Appeal.

Giving the leading judgment, Simon Brown LJ (with whom Evans Lombe J., agreed) stated that it was absurd that an individual aged, say, 68, with a contractual retirement age of 70, might claim unfair dismissal if there were two people in his position but was prohibited from claiming unfair dismissal if there was only the one person in his position. Accordingly, the majority held that an employee holding a unique position was not prohibited from establishing a 'normal retirement age'.

Giving a dissenting judgment, Scott Baker LJ held that a unique contractual right of a particular employee to retire on a particular date cannot, by itself, create a 'norm' so as to set a normal retirement age.

LINK: http://www.bailii.org/ew/cases/EWCA/Civ/2003/1762.html

Data Protection - Curtailment of Right to demand information

The Court of Appeal has decided an important case on the scope of the Data Protection Act 1998 and, in so doing, provides guidance on the extent to which employers are obliged to provide copies of employees' personnel files, Emails etc.. In short, it drastically curtails the right of employees to demand information by means of a data protection request.

The case, Durant v Financial Services Authority, provides as follows:

* 1. in order for data, whether held on computer or a manual file, to be 'personal data' (thus giving rise to a disclosure obligation), it must name or directly refer to an individual. But that it not enough: mere mention of a subject's name in a document does not make the information in that document 'personal data'. For the disclosure obligation to arise, the information must be biographical in a significant extent, and should have the data subject as its focus. Thus information stored by the FSA concerning a complaint by Mr Durant about Barclays Bank was not personal data which the FSA was obliged to disclose to Mr Durant (paras 26-28).

* 2. a 'relevant filing system', for a manual (rather than computer) system, is one where the information is structured by reference to that individual. Thus the FSA's file marked 'Mr Durant', which contained a large number of documents relating to his claim in date order, was not a relevant filing system because it was structured by reference to date, not to the individual (para. 35 and 48). The purpose of the Act is to protect the privacy of personal data, not documents. If the documents are not structured by reference to that data, the disclosure provisions of the Act are not triggered. Any manual filing system which requires an individual to "leaf through" multiple documents to find the personal data contained therein falls outside the scope of the Act. The fact a folder is labelled with an individual's name is not, without more, enough to bring it within the Act.

The Court of Appeal also considered the difficulties arising when personal data, which would otherwise be disclosable, identifies other people.

The Court concluded with criticisms of individuals who seek to use the Act as a method of obtaining information generally which refers to them by name, rather than information relating only to personal data. Mummery LJ described Mr Durant's application and appeal as "misconceived", which will not bode well for Applicants who put Respondents to cost in tribunal claims dealing with a (now) unwarranted Data Protection disclosure application.

New TUPE Cases

New TUPE Cases

Two new TUPE cases: one Court of Appeal, one Employment Appeal Tribunal.

Alderson v Secretary of State for Trade & Industry (Court of Appeal, 8/12/03)

A case of historical interest only: regulation 2(1) of TUPE used to define an 'undertaking' as including "any trade or business but does not include any undertaking or part of an undertaking which is not in the nature of a commercial venture."

The employees were employed by Liverpool City Council as refuse collectors. The refuse services were contracted out, and the employees were engaged by the new contractor on less favourable terms and conditions. They brought a Francovich claim against the DTI, arguing that by excluding non-commercial ventures (ie refuse collections for a local authority) from the scope of TUPE, the government had failed to properly implement the Acquired Rights Directive.

The Court of Appeal held that exclusion for undertakings "not in the nature of a commercial venture" did not apply to this case, because it was clear that (i) the undertaking was of a commercial nature after the transfer, and (ii) it had all the same characteristics, other than it was not operated for profit, before the transfer (para. 31)

As stated above, the case is of historical interest only because the non-commercial venture exclusion was abolished in 1993 by the Trade Union Reform and Employment Rights Act 1993.

LINK: http://www.courtservice.gov.uk/judgmentsfiles/j2135/alderson.htm

-------------------------------------------------------------------------------- Perth & Kinross Council v Donaldson (EAT, Lord Johnston, 30/10/03)

The EAT (sitting in Scotland) held that TUPE does not apply to a liquidator who is gathering in assets to dispose of them for the maximum benefit of creditors. Unlike receivers and administrators, "if [the liquidator] has to look over his shoulder at the TUPE Regulations, this might well fetter the extent to which he might perform his duty. (para. 19)".

Thus when the local authority took housing maintenance services back in-house (pun unintended), following the insolvency of, and appointment of liquidators for, the company it had contracted those services to, TUPE did not apply.