TUPE: Post-transfer obligations

Despite the dull title, this is an important case. It is authority for the proposition that a transeree is bound by pay increases negotiated by the transferor with a union under a collective agreement after the TUPE transfer has taken place.

For years, a line of authorities held precisely that (the lead case being Whent v Cartledge). In 2006, the ECJ held in Werhof v Freeway that the Acquired Rights Directive did not bind transferees in respect of contractual amendments negotiated post-transfer between transferor and union under a collective agreement. Everyone thought Whent was dead in the water.

Yesterday, in Alemo-Herron v Parkwood Leisure, the EAT held that Whent v Cartledge remained good law, as the UK was entitled to interpret the Acquired Rights Directive in a way more favourable to employees that European Law required. (NB the oral judgment was given in January, but the transcript only appeared yesterday).

HHJ McMullen QC, recognising the difficulty of this point, gave permission to appeal to the Court of Appeal. I understand that an appeal has, indeed, been lodged.

Illegality: Sham contracts

[Thanks to www.emplaw.co.uk, whose summary I am reproducing with their permission]

Mr Szilagyi worked for builders Protectacoat. He claimed unfair dismissal. Protectacoat, pointing to a written "partnership agreement", argued that he was a partner, not an employee, and so could not claim unfair dismissal. Mr Szilagyi argued that the practical arrangements (such as Protectacoat providing his van and tools, and their general degree of control over him) showed he was in reality an employee. Protectacoat's publicity material said that they did not employ sub-contractors. He said he was not free to do other work.

An employment tribunal held that the "partnership agreement" was a "sham" and that Mr Szilagyi was an employee.

The Court of Appeal has clarified the correct test for establishing a 'sham' contract. From the leading judgment by Lady Smith, the following principles emerge:

• the question is always what the true legal relationship is between the parties. If there is a contractual document, that is ordinarily where the answer is to be found. But, if it is asserted that the document does not represent or describe the true relationship, the court or tribunal has to decide, on all the evidence, what the true relationship is;
• the court or tribunal has to consider whether or not the words of the written contract represent the true intentions or expectations of the parties, not only at the inception of the contract but, if appropriate, as time goes by;
• commenting on Consistent Group Ltd v Kalwak&Ors [2008] EWCA Civ 430 (29 April 2008), a document which can be shown to be a sham "designed to deceive others" will be wholly disregarded in deciding what is the true relationship between the parties, but it is not only in such a case that its contents cease to be definitive.

Sedley LJ summed up the position most concisely, saying "...in the field of employment at least, it is more helpful and relevant..to ask in a case like this not whether the written agreement is a sham but simply what the true legal relationship is. Although there will be in many cases (as there was in this one) an intention to conceal or misrepresent the actual relationship, there is no logical reason why this should be a universal requirement.

"Protectacoat Firthglow Ltd v Szilagyi

Whispering Judges

An interesting little case, this.

A tribunal gave a liability decision in 2000. However, for a combination of reasons (in part the non-cooperation of the Claimant), the remedies hearing was not able to take place until 2006, six years later.

The tribunal decided to strike out the claim on the grounds that a fair trial was no longer possible, two of the three original tribunal members having retired.

The Court of Appeal (Elias LJ giving his first employment law judgment from the Court of Appeal) held that a fair trial was still possible, and that it was no impediment that the employment judge had formed a preliminary negative impression of the Claimant. He also stated (paras. 36-37) that it is legitimate for the employment judge to share those preliminary impressions with any new wing members who are appointed to replace the retired wing members.

Abegaze v Shrewsbury College of Art & Technology

[Thanks to Paul Lewis from St John's Chambers for summarising this case for me]

Limits of the Burns/Barke Procedure

The Court of Appeal has underlined the limits of using the Burns/Barke procedure in appeal proceedings.

This procedure allows the EAT, before it decides the appeal, to refer specific questions to the employment tribunal requesting it to clarify or supplement its reasons where no reasons were given, or where the reasons given were inadequate.

In Woodhouse School v Webster, the Court of Appeal reminded tribunals - in fairly uncompromising terms - that they must not go beyond this task, for example, by advancing arguments in defence of its decision or supplying information which is not requested. See paras. 25-29 for the Court of Appeal's comments.

[Thanks to Paul Lewis from St John's Chambers, Bristol, for preparing this case summary]

Harassment under the RRA 1976

Underhill P., in one of his first judgments as President of the EAT, has handed down a judgment analysing the requirements of 'harassment' (which is now a discrete form of discrimination under the various discrimination Acts).

In Richmond Pharmacology v Dhaliwal, a director had said to a senior employee who was leaving the company, "We will probably bump into each other in future, unless you are married off in India". She claimed that amounted to an act of harassment on grounds of her race.

Upholding the tribunal's finding that it did amount to harassment, Underhill P reminds practitioners that the 'old' caselaw on harassment, created before the statutory definition, should be largely disregarded - as should caselaw under the Protection from Harassment Act 1997 (para. 11).

He then proceeds to analyse the statutory provisions and set out what they require - five paragraphs which I recommend all practitioners read (paras. 12-16).

Proselytisation - spreading the (good) word

Where an employer omits to make a reasonable adjustment for a disabled person, when does limitation start to run? Limitation runs from a deliberate decision not to make an adjustment but when should time start to run where the employer failed to make any decision whatever?

In Matuszowicz v Kingston Upon Hull City Council, the Court of Appeal held that even where the omission was ongoing at the time of the claim but a future adjustment was still possible, the effect of Paragraph 3, schedule 3 of the Disability Discrimination Act 1995 was to create an artificial limitation start date. That was the date defined in paragraph 3(4)(b) as when the period expires within which he might reasonably have been expected to do the omitted act if it was to be done.

Where an omission is ongoing at the time of the claim, a Tribunal will have to determine the period during which a reasonable employer, under a duty to make an adjustment and intending to make it, would make the adjustment. Limitation starts to run when that period expires. Paragraph 3(4)(b) is not restricted to deliberate omissions.

[Thanks to Anthony Cutler, pupil barrister at 1 Temple Gardens, for summarising this case, and to Nick Siddall of Kings Chambers, who represented the Respondent, for telling me about it]

Disability Discrimination - Time Limits

Where an employer omits to make a reasonable adjustment for a disabled person, when does limitation start to run? Limitation runs from a deliberate decision not to make an adjustment but when should time start to run where the employer failed to make any decision whatever?

In Matuszowicz v Kingston Upon Hull City Council, the Court of Appeal held that even where the omission was ongoing at the time of the claim but a future adjustment was still possible, the effect of Paragraph 3, schedule 3 of the Disability Discrimination Act 1995 was to create an artificial limitation start date. That was the date defined in paragraph 3(4)(b) as when the period expires within which he might reasonably have been expected to do the omitted act if it was to be done.

Where an omission is ongoing at the time of the claim, a Tribunal will have to determine the period during which a reasonable employer, under a duty to make an adjustment and intending to make it, would make the adjustment. Limitation starts to run when that period expires. Paragraph 3(4)(b) is not restricted to deliberate omissions.

[Thanks to Anthony Cutler, pupil barrister at 1 Temple Gardens, for summarising this case, and to Nick Siddall of Kings Chambers, who represented the Respondent, for telling me about it]

Statutory Dismissal Procedure

The EAT has held, in Zimmer v Brezan, that a step 1 dismissal letter must state that the employer is contemplating dismissal. If it does not, then any resulting dismissal will be automatically unfair.


HHJ Burke held that even though the words of the statutory dismissal procedure did not expressly require the employer to state, in writing, that it was contemplating dismissing the employee, it was desirable to construe the statutory procedure purposively so as to include such a requirement.

Disability Discrimination: EAT follows Malcolm

Last summer, the House of Lords re-wrote the law on disability discrimination, making it much harder for a Claimant to succeed (see bulletin 27/6/08). However, the case was decided in the context of housing law, and there has been doubt whether the same restricted approach would be adopted in employment cases.

At 10.30am today, in Child Support Agency v Truman, the EAT handed down a judgment confirming that the Malcolm approach does apply in employment cases.

HHJ Peter Clark held, at para. 22, that "In our judgment the narrower comparator favoured by the majority in Malcolm applies equally in the employment context. The wider comparator used in Novacold should no longer apply (unless and until the legislation is further amended by Parliament)."

The EAT added that they were not considering the impact of Malcolm on the phrase "for a reason which relates to the person's disability" - this will have to await another decision.

Employment Judges Sitting Alone

The (draft) The Employment Tribunals Act 1996 (Tribunal Composition) Order 2009, which is due to come into force on 6th April 2009, has been placed on the OPSI website.

It extends the types of hearings when an Employment Judge can sit alone, to include holiday pay claims under the Working Time Regulations 1998 (and some other very obscure statutory instruments).

This supplements the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2008 (see bulletin 13/1/09) which, amongst other things, authorised Employment Judges sitting alone to hear Stage 1 equal value claims.

Norton Tool and Constructive Dismissal

Since 1976, tribunals have applied the controversial rule in Norton Tool v Tewson, which is authority for the proposition that employees are entitled to compensation for unfair dismissal for all of their contractual notice period, even if they found another job during that period or failed to mitigate their losses. This means that employees can benefit from double recovery, particularly when they have long notice periods.

In Stuart Peters v Bell, the EAT held that the same principle applies to constructive dismissals (as well as 'normal' dismissals). Although an appeal is unlikely in this case because of the small amounts involved, and because it would need the House of Lords to overturn Norton Tool, HHJ Burke concluded his judgment by expressing a hope that this principle might be reconsidered by the House of Lords when the opportunity arises.

Hot Stuff in the EAT

The Employment Appeal Tribunal admitted woolly hats as evidence of disability but, after hearing other evidence about underwear and thick overcoats, dismissed a claim that depriving an employee of his personal heater was discriminatory.

Mr Sawyer braved the breezy mid-20s temperatures of mid-August last year protected by no more than a heavy overcoat and two woolly hats, only to see his condition, that purportedly leaves him vulnerable to temperatures below 27 Celsius, dismissed as a disability in the EAT (Sawyer v Secretary of State for Work and Pensions). Mr Sawyer worked at Job Centre Plus and claimed for disability discrimination when his employer took away the personal heater that he had used (along with thick underwear, outer clothing and two woolly hats) to keep warm.

Spelling tests in tribunals?

The EAT has emphasised the importance of getting the spelling of the Respondent's details correct in the ET1.

In Anthony Chowles t/a Granary Pine v West, the EAT held that where a Respondent’s name had been misspelled and his address misstated on the ET1 (and that was the name and address to which it was posted by the Secretary), the claim had not been sent to him within the meaning of the Rules.

Accordingly, there was no need to enquire into the matter of fact of whether the intended Respondent had received the ET1. The usual consequences did not flow and, in particular, a default judgment that had been entered in the absence of a response was set aside.

The Claimant had been employed by Anthony Chowles but had entered the name 'Anthony Charles' on the ET1 and had made two errors in the address including omitting three digits from the postcode.

[Thanks to Anthony Cutler, pupil barrister at 1 Temple Gardens, for providing this summary]

Disability Discrimination - Reasonable Adjustments

Section 4A(3) of the Disability Discrimination Act 1995 provides that an employer is exempted from the duty to make reasonable adjustments if he did not know, and could not reasonably be expected to know, that someone is likely to be placed at a substantial disadvantage by a disability (my paraphrase). This defence is often used by prospective employers defending allegations of failure to make reasonable adjustments when (not) offering a job.

In Eastern & Coastal Kent PCT v Grey, the EAT has held that this requires each, not merely one, of the following four limbs to be satisfied, namely that:-

• does not know that the disabled person has a disability
• does not know that the disabled person is likely to be at a substantial disadvantage compared with persons who are not disabled;
• could not reasonably be expected to know that the disabled person had a disability; and
• could not reasonably be expected to know that the disabled person is likely to be placed at a substantial disadvantage in comparison with persons who are not disabled.

Michael Duggan's Case Index

Michael Duggan of Littleton Chambers has published the latest edition of his excellent case index. He has made it available to all - download it here.

NOTE: it is a large file and there is likely to be a lot of simultaneous demand to download it. Please try again later if it does not download immediately.

Care Workers - POVA List Unlawful

The House of Lords has, this morning, handed down a decision impacting on those advising or working in the care sector.

The case concerns care workers who look after vulnerable adults or children. Under current legislation, if the employer dismisses the employee because they have harmed (or placed at risk of harm) a vulnerable person, then their name must be included on a list held by the Secretary of State and they are banned from employment by any other care provider.

The problem is that people get placed on this list with little, if any, enquiry (and with no right to make representations). It takes many months for the appeal process to work, during which time the employee cannot work, and the majority of those who appeal succeed in their request to be removed from the list.

The House of Lords has held that the list is inconsistent with Article 6 of the European Convention on Human Rights, and has issued a Declaration of Incompatability. Of course, the consequence of such a declaration is that the legislation remains effective until amended by parliament (s4(6) of the Human Rights Act 1998), so it's all a bit meaningless, but it's a case that practitioners should be aware of.

R v Secretary of State ex p Wright & ors

Holiday Pay for Long-Term Sick Workers

The ECJ has, this morning, handed down its opinion in Stringer v HMRC (previously known as Ainsworth v HMRC. The judgment should be available this afternoon here, but for now, we simply have a Press Summary.

According to the Press Summary (which isn't entirely clear), the ECJ has held:

• a worker who is on sick-leave for the whole of an annual leave year is entitled to a period of four weeks' paid annual leave, despite the fact they are not actually at work. The national courts can decide whether the paid leave can be taken during that year, or whether it should be carried over to another year, but either way the employee is entitled to be paid at some point
• the right to paid annual leave is not extinguished at the end of a leave year if the worker was on sick leave for the whole of that year, or if he was absent on sick leave for part of the year and was still on sick-leave when his employment terminates

This is not going to be a popular decision with employers. The House of Lords will now give a final judgment, and (in the light of the ECJ opinion) will no doubt overturn the Court of Appeal's decision from April 2005 that the right to paid holiday leave did not accrue during periods of sickness absence.

[Thanks to Gillian Cumming of Just Employment Law for telling me about this]

TUPE Consultation

The EAT has decided, in Amicus v Glasgow City Council, that a transferee is not obliged to consult with transferred employees after a transfer, in relation to 'measures' it proposed taking in relation to them.

[Thanks to Lesley Murphy of Shepherd & Wederburn, acting for one of the successful Respondents, for telling me about this case.]

Employment Law Preview for 2009

I've just read Wragge & Co.'s employment law preview for 2009. It's so good, I'm sending the link around for everyone to read.

They've also produced a review of 2008, which is also worth a read.

Amendments to 2004 Procedural Rules

The Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2008 have been laid before Parliament. They make the following amendments to the 2004 procedural rules:-

• consequential amendments resulting from the Employment Act 2008, which repeals the existing statutory workplace dispute resolution procedures and makes changes to conciliation by Acas
• removing Employment Judges’ discretion not to issue a default judgment in certain circumstances;
• providing that, where electronic communications are used in public hearings, and oral evidence is given, the public must be able to see and hear all parties to the communication, and where the hearing is to be held in private and oral evidence is given the tribunal or Employment Judge must be able to see and hear all parties to the communication;
• clarifying provisions on the withdrawal and dismissal of proceedings, and a new rule providing for the automatic dismissal of proceedings, where the parties to an Acas settlement have confirmed in writing their understanding that the proceedings covered by the settlement will be dismissed and the claimant has withdrawn the claim;
• enabling an Employment Judge sitting alone to hear Stage 1 equal value claims

plus a whole host of minor and consequential amendments. The amendments take effect from 6th April 2009.

[Thanks to John Bowers QC of Littleton Chambers for telling me about this]