Appeals: New points and perversity

The Court of Appeal has, in part, overturned the decision of the EAT in Unison v Leicestershire City Council. See bulletin of 29/5/05 for the EAT's decision.

This case is authority for the propositions that:

• the fact that a case is of very large value or involves a complex and important point of law is not, without more, an 'exceptional' circumstance allowing a party to raise a new point of law on appeal which had not been raised before the employment tribunal. What is required is something akin to "a pressing public interest" (para. 21)
• the Employment Appeal Tribunal is not permitted to interfere with fact-sensitive assessments, such as the number of days' pay for a protective award (where the EAT reduced it from 20 to 10), unless the tribunal's assessment is plainly wrong in law or otherwise perverse (para. 34).

Unison v Leicestershire County Council

How not to conduct tribunal proceedings...

Whilst I don't normally announce first instance decisions, this case contains such an amusing summary of how not to conduct a tribunal hearing (in the context of a wasted costs order) that I thought it deserved wider distribution. See paragraph 20 for the tribunal's erudite exposition of how not to conduct a case.

The decision is also interesting because of the tribunal's finding that an employment consultant was lying about being a 'not for profit' representative (so as to avoid a wasted costs order) - see paras. 23-27.

Johal v Initial City Link

[Thanks to Simon Shepherd of Schofield Sweeney for sending me this judgment]

When is three months not three months?

The EAT has handed down a judgment dealing with time limits under Regulation 15(1) of the Employment Act (Dispute Resolution) Regulations 2004.

The Claimant resigned on the basis of constructive dismissal and served a combined resignation and grievance letter on the Respondent on 20 June 2005.

He then lodged his tribunal claim on 20th December 2005.

The finding of both the Employment Tribunal in a pre-hearing review, and later at the EAT, were that the claim was served on time. The EAT held that the extension of time under Regulation 15(1) means three months, and not three months less one day.

Rainbow International v Taylor

[Thanks to Helen Kennedy, trainee solicitor at Anthony Collins, who successfully represented the Claimant at both the ET and EAT]

Detriments to ex-Employees

The Court of Appeal has handed down an important decision in Woodward v Abbey National plc.

In 2003, the House of Lords ruled (in Rhys-Harper v Relaxion Group plc) that ex-employees were entitled to rely on the discrimination legislation in connection with victimisation occurring after termination of employment (such as the refusal to provide a reference).

Previously, in 2001, the Court of Appeal had held in Fasipe v Reed Nursing Personnel Ltd. that ex-employees could not rely on the Employment Rights Act 1996 so as to claim protection against detriments occurring after termination of employment, as the legislation only protected employees against detriments suffered whilst in employment.

In the current case, Woodward v Abbey National, the Claimant had complained of being subjected to various detriments - after her employment finished - because she had made a protected disclosure some ten years earlier whilst still employed by the Abbey National.

The employment tribunal, and the EAT, rejected her claim because they considered themselves bound by Fasipe, which they regarded as binding authority for the proposition that the detriment had to occur during employment in order to be actionable under the Employment Rights Act 1996. They considered that the discrimination legislation was a wholly different statutory framework, affected by considerations of European law, and Fasipe remained binding as it had not been expressly overruled by the House of Lords in Rhys-Harper.

The Court of Appeal has disagreed, overturning the ET and EAT. Following extensive analysis of the reasoning in Rhys-Harper by Ward LJ, which is worth reading, it held that the provisions protecting against suffering a detriment in the Employment Rights Act should be interpreted so as to include detriments suffered by ex-employees as well as existing employees.

Woodward v Abbey National plc

Date of TUPE transfers

The House of Lords has handed down a 4:1 ruling in Celtec v Astley, following the ECJ's decision last year.

Upholding the employment tribunal and Court of Appeal's decisions, but on different grounds, it held:

• following the ECJ ruling, a TUPE transfer must take place on a specific date, rather than over an extended period
• employees and employers cannot agree or arrange fo the transfer to take place on a date other than the true legal date of the transfer.

It is a complicated decision, made slightly easier if put into its factual background. In the early 1990s, the Department of Education created Training and Enterprise Councils (TECs) to take over its responsibility for training young people.

A large number of civil servants were seconded from the DofE to the TECs. Three years later, they were offered the opportunity to return to the DofE, or stay with the TECs and be transferred into the employment of the TECs. Thus in 1993, the Claimants resigned from the DofE and signed new contracts with Celtec (the employer)

The TUPE transfer (when the TECs actually opened for business) was found to be in September 1990.

When the Claimants were made redundant in 1998, they claimed redundancy payments based on continuity of employment back to the beginning of their employment with the DofE. Celtec argued that they were only entitled to continuity of employment from 1993.

The House of Lords, in five separate opinions, decided (4:1) that, in fact, the Claimants had all TUPE-transferred to Celtec in September 1990, irrespective of the fact that everyone believed they remained employees of the DofE and had simply been seconded out. Because it was not possible for the parties to agree a different transfer date, the operation of TUPE 'trumped' any understanding or arrangement between the parties. Accordingly, the Claimants were entitled to rely on their continuity of employment with the DofE.

The dissenting judgment (that of Lord Mance) is impressive and worth reading, to appreciate the potential commercial implications of this decision.

Celtec v Astley

[Thanks to John Bowers QC of Littleton Chambers, who represented Celtec, for telling me this decision was published]

Retrospective award for failure to provide written statement of terms and conditions

The Employment Appeal Tribunal has handed down a (short) judgment dealing with whether tribunals are entitled to grant a retrospective award of two (or four) weeks' pay against an employer who has failed to provide a written statement of terms and conditions.

This remedy was introduced under the Employment Act 2002 (section 38). It came into force on 1st October 2004. The EAT has held that an employee is entitled to the award, when judgment is given after 1st October 2004, even if the dismissal was before 1st October and the claim lodged before 1st October.

This decision is likely to prove controversial, although it is likely to have relative little impact as most cases going through the tribunal system will now be dealing with dismissals after October 2004.

Lewald-Jezierska v Solicitors in Law Ltd.

Whistleblowing - No case to answer

The EAT (HHJ McMullen QC presiding) has held that it is normally inappropriate to make a submission of 'no case to answer' at the end of the Claimant's case in whistleblowing cases.

Whistleblowing is a form of discrimination. As with all discrimination claims, it is possible that much of the relevant evidence will come from the Respondent's side. By cutting off a case at half-time, a tribunal denies the Claimant an opportunity to cross-examine the Respondent and seek to elicit favourable evidence - notwithstanding that the burden of proof is on the Claimant to establish a protected disclosure.

Accordingly the EAT set aside the tribunal's decision to dismiss a whistleblowing claim on a submission of no case to answer, and remitted the case to the same tribunal to hear the rest of the evidence.

Boulding v Land Securities

Breach of Contract: Can you recover the excess of £25k in the High Court?

At last, after twelve years of uncertainty, we have an answer. The Court of Appeal has, today, handed down judgment in Fraser v Hlmad Ltd, holding that the excess over £25k in a tribunal breach of contract claim cannot be recovered in the civil courts.

Mr Fraser brought a breach of contract claim in the employment tribunal and the High Court. His Claim Form in the ET expressly reserved the right to pursue the excess over the £25k limit in the High Court.

He succeeded in his employment tribunal claim and recovered £25,000, a shortfall of £55,000 on the full value of his contract claim.

Following a strike-out appliation by the Defendant in the High Court claim, the Court of Appeal held:

• Mr Fraser's wrongful dismissal claim merged into the judment of the employment tribunal on his wrongful dismissal claim
• his cause of action for wrongful dismissal ceased to exist independently of the judgment
• he no longer had any cause of action to pursue in the High Court, even for the excess over £25k
• it is not open to a Claimant to avoid the operation of a cause of action estoppel simply by purporting to reserve a right to make a second claim in the future.

As a postscript, the Court of Appeal recommended that the ETS review their literature to make it clear that wrongful dismissal claims cannot be brought in the High Court to recover the excess over £25k.

Mummery LJ also suggested that Claimants and their legal advisers do not bring wrongful dismissal claims in the employment tribunal unless they are certain they want to limit compensation to £25k. If the Claimant wishes to recover more, the claim should only be brought in the High Court. Finally, he suggested that the DTI reconsider the limits on the jurisdiction of the employment tribunal in respect of claims for wrongful dismissal.

Fraser v Hlmad Ltd

National Minimum Wage

The draft statutory instrument, raising the adult minimum wage to £5.35ph from 1st October 2006, has been laid before parliament. It also increases the minimum wage to £4.45ph for 18-21 year olds, and to £3.30 for 16-17 year olds.

The National Minimum Wage Regulations 1999 (Amendment) Regulations 2006

Holiday Entitlement - Consultation

The DTI has issued a preliminary consultation paper on extending the right to 20 days' paid holiday per year to 28 days' paid holiday.

The additional eight days are intended to represent the eight bank holidays, so as to allow employees a minimum of 20 days' plus bank holidays (although the holiday need not be taken on the bank holidays).

View Consultation Paper

Nurse Chaperones

The EAT has held that an NHS Trust discriminated against a male nurse who was required to have a female chaperone present when administering an ECG to a female patient.

Barts and London NHS Trust has a policy, in common with many other NHS Trusts, of requiring male nurses to be accompanied by a female chaperone when administering an ECG to a female patient, because the procedure would involve touching the patient's breasts. This might give rise to unjustified allegations of assault - hence the desirability of a chaperone. No similar requirement exists when a female nurse administers an ECG to a male patient.

The EAT recognised that such a policy was extremely sensible. Nevertheless, upholding the tribunal's decision, it noted that justification cannot be a defence to direct discrimination and therefore the Trust's policy was in breach of the SDA 1975.

It also held (overturning the EAT) that the male nurse, who felt upset and demotivated, had suffered a detriment - and therefore was entitled to compensation. It was an error of law for the tribunal to find that he had not suffered a detriment simply because no reasonable person could have objected to the policy. To find that was to introduce a justification defence by the back door. The test for establishing a detriment is much broader.

Accordingly the nurse's appeal succeeded. The EAT substituted an award for injury to feelings of £750, which it described as "very much at the lower end of the scale."

Moyhing v Barts & London NHS Trust

North East Equal Pay Litigation

The employment tribunal's decision in Allan v GMB was handed down earlier this week.

In a claim brought by five test Claimants against the GMB, the GMB has been held liable for sex discrimination and victimisation in failing to pursue Middlesborough Borough Council in connection with a long-running equal pay dispute.

The decision (139 pages) is deeply critical of the GMB, including findings that it misled and manipulated its "relatively unsophisticaed" members (paras 7.59 and 7.66), "rushed headlong into accepting an ill-considered pay deal" (para 7.60) and "neglected the interests of the back pay Claimants" (para 7.61).

The tribunal also found that the GMB victimised those of its members who had chosen to be presented by an external solicitor, by impeding the settlement of their claims with the Council, on the grounds that it regarded them as "pariahs" (para. 7.73).

The remedies element of the claim has been adjourned, and the GMB has indicated an intention to appeal. According to an item on the BBC news website, the potential cost to the the GMB is expected to exceed £1,000,000.

View judgment here (7Mb pdf file - please try again later if download does not work due to overburdened website!)

Notification of Redundancy Bill

The Notification of Redundancy Bill 2006, has been introduced as a private members Bill in the House of Commons.

If passed (which is unlikely), it will become a criminal offence for an administrator of an insolvent company to issue notices of redundancy to the workforce, without having first consulted with the employees about the management of the company's affairs, and subsequently waited for at least one month.

Not a very sensible contribution to the 'business rescue' culture!

Notification of Redundancy Bill 2006

Reviews, Rehearings and DDA

The Court of Appeal has handed down its judgment in Taylor v OCS Group Ltd., dealing with issues relating to unfair dismissal and disability discrimination.

Unfair Dismissal
The Court of Appeal stated that the distinction between reviews and rehearings (in connection with appeals against dismissal) is unhelpful. The essential question when deciding whether a dismissal is fair under ERA 1996, s98(4) is whether the employer acted reasonably. There is no rule of law providing that a 'rehearing' can cure earlier procedural defects, whereas a 'review' cannot.

In particular, the Court held:

• if a first hearing is defective, the appeal can cure the defect if the appeal is comprehensive (para. 37)
• to the extent that the well-known case of Whitbread v Mills suggests that a rehearing can cure defects, whereas a review cannot, Whitbread should no longer be cited to tribunals (para. 47)

Disability Discrimination
This part of the judgment is not quite as easy to understand. The Court appears to be stating that, in order to establish a claim of disability-related discrimination under the DDA 1995:

• an employer must have in mind the disability-related reason (para. 70). Unless that reason affects the employer's mind, he cannot discriminate (para. 72)
• but the employer does not necessarily have to intend to discriminate on disability-related grounds. Discrimination can be unconscious as well as intentional (paras. 72-73)

On the facts, an employer who had dismissed a profoundly deaf employee for misconduct, in circumstances where the employee had not had a fair disciplinary hearing because of his inability to understand what was going on, was found by the Court of Appeal not to have been discriminated against disability-related grounds.

Taylor v OCS Group Ltd

Age Discrimination - New DTI fact sheets

The DTI has just published eight 'age legislation factsheets'.

They provide concise advice on topics such as 'objective justification', 'service related benefits', 'occupational pension rights' and 'redundancy'.

To view, click the link below and then follow the links on the right-hand side of the page.

View DTI Age Legislation Factsheets

Acas World Cup Guide

Acas has, this morning, published a really useful set of FAQs, dealing with both employers' and employees' questions about 'sickies', pub lunches and similar issues for World Cup devotees.

View Acas World Cup Guide FAQs

No Response Form - No Costs

The EAT has handed down a decision considering whether it is possible to award costs against a Respondent who fails to submit a Response Form.

It held that a tribunal's jurisdiction to award costs under the rules, when an employer fails to enter a Response, is limited to costs caused or incurred in dealing with one of the express matters set out in rule 9 (essentially making an application for review of a default judgment). The EAT's reasoning was heavily based on the fact that there is no obligation on an employer to enter a Response, thus an employer is not technically in breach of any rule if it fails to do so.

Accordingly, the EAT upheld the tribunal's decision on review to overturn the making of a £5,500 costs order in favour of a Claimant where the Respondent had not entered a Response.

Sutton v The Ranch Ltd

BNP/Racial Discrimination

The Court of Appeal has, this morning, overturned the EAT's controversial decision in Redfearn v Serco.

Serco dismissed Mr Redfearn, a BNP local councillor, following complains by the union that its (predominantly Asian) members objected to working with him. It was common ground that, whilst he was an active member of a political party with unpleasant racial views, those views had not affected the way he conducted himself at work. However, Serco was concerned (following some bad publicity) that employees and clients would be worried about them employing an active BNP local councillor.

Mr Redfearn, who lacked the qualifying period to claim unfair dismissal, brought a claim of race discrimination.

Overturning the EAT, the Court of Appeal held that his complaint did not fall within the Race Relations Act 1976. It was wrong to say that he had been dismissed 'on racial grounds', simply because race issues had been in the employer's mind when deciding to dismiss, and that the decision could be said to be referable to race.

To the contrary, Mummery LJ held that to allow Mr Redfearn's claim of direct discrimination to succeed would "cover cases that would produce consequences at odds with the legislative aim" and "turn...the policy of race relations legislation upside down... Mr Redfearn was no more dismissed 'on racial grounds' than an employee who is dismissed for racially abusing his employer, a fellow employee or a valued customer."

Mr Redfearn's case of race discrimination accordingly fails.

[Thanks to Nick Thomas of Pinsent Masons for telling me about this decision]

Strike Outs

The Court of Appeal has, this morning, handed down a decision reinforcing the extreme nature of a strike-out order and emphasising how infrequently they should be made.

In Blockbuster Entertainment v James, the Claimant:

• in breach of a tribunal order, failed to provide adequate further particulars of his claims
• in breach of another tribunal order, refused to allow the Respondent to photocopy his disclosure documents, and attended the tribunal on day one of a six day hearing with previously unseen documents (including an undisclosed tape recording of an important conversation)
• in breach of yet another tribunal order, refused to sign his witness statement, and attended on the morning of the hearing having made changes without notice to the employer (albeit the changes seem to have been minor).

The Court of Appeal upheld the EAT's decision, overturning the employment tribunal's decision to strike out the Claimant's case. Whilst the reasons are largely fact-specific, Sedley LJ gave the following guidance:

• the first object of any system of justice is to get triable cases tried. The courts are open to the difficult, as well as to the compliant. It does not necessarily matter if the litigant is difficult, querulous and uncooperative (para. 18)
• it is undesirable for a strike-out application to be made (or granted) on the first day of a six day hearing. If non-compliance is serious enough to warrant a strike-out application, this ought to be clear before the trial begins (paras. 19 and 21)
• it is not satisfactory for a tribunal to simply record that a strike out is "the only proportionate and fair course to take". The tribunal's reasons should spell out why a strike-out is the only proportionate and fair course to take (para 20). Although Sedley LJ dos not expessly say this, it would seem desirable for a tribunal to expressly consider other sanctions (such as refusing to admit evidence) and explain why they are insufficient.

[Thanks to John Bowers QC of Littleton Chambers, who represented Blockbuster Entertainment Ltd., for informing me of this decision.]

Injury to Feelings

The Employment Appeal has handed down a (short) judgment dealing with awards for injury to feelings. Although a small-value claim, the decision has general ramifications.

The EAT held that:

• tribunals must not take the size of the employer's organisation into account when assessing injury to feelings (para. 16)
• the fact they took into account the "complete failure" of the Respondent's equal opportunity indicated that the award included a punitive element, which was not permitted in an award for injury to feelings (paras. 19-20)

Accordingly the EAT reduced the injury to feelings award from £5,000 to £4,000.

Corus Hotels v Woodward