Contingency Fee Agreements

[Thanks to Alex Jones of Bunkers Solicitors for telling me about this]

The Law Society has, yesterday, published guidance on the Damages Based Agreement Regulations 2010 which regulate the manner in which solicitors can enter into contingency fee agreements (ie a percentage of the award) in employment claims. Barristers are still prohibited from entering into contingency fee agreements under the Bar Code of Conduct.

The new rules came into force on 9th April 2010, and the Guidance Note can be found here. The Regulations themselves are here.

Breach of Contract Damages

[Thanks to Marcus Pilgerstorfer of Old Square Chambers, who was junior Counsel for the employer, for providing this case summary]

The Court of Appeal (Ward, Lloyd, Moore-Bick LJJ) has today handed down its decision in Edwards v Chesterfield Royal Hospital NHS Foundation Trust [2010] EWCA Civ 571.

This case is authority for the proposition that a doctor, whose contract is terminable on 3 months' notice, but who suffers damage as a result of findings of misconduct leading to dismissal and loss of professional status that were made against him in disciplinary proceedings conducted in breach of a contractual disciplinary procedure, but which would not otherwise have been made, may recover damages at large.

The Court of appeal rejected the employer's argument that damages should, in accordance with Gunton v Richmond-upon-Thames LBC [1980] ICR 755, be limited to damages over the contractual period of notice plus the time it would have taken for a contractually compliant disciplinary procedure to have been carried out.

In reaching those conclusions, the Court held that:

(a) Comments in Johnson v Unisys properly understood did not require the result contended for by the employer (§23, §27), and the provisions of the Employment Rights Act 1996 did not take away rights enjoyed at common law or under contract (§38).

(b) The decision in Gunton supported Mr Edwards' case because "the decision in that case can be explained only on the basis that the employee had a contractual right to have the benefit of the agreed disciplinary procedure before he was dismissed" (§26, §40). Breach of the express term relied on by Mr Edwards gives rise to the normal contractual remedies: had he acted in time, he could have obtained an injunction (§50).

(c) In Skidmore v Dartford and Gravesham NHS Trust Lord Steyn held at §15 that: "The trust is entitled to decide what disciplinary route should be followed. That decision must, however, comply with the terms of the contract. If a non-conforming decision is taken and acted upon, there is a breach of contract resulting in the usual remedies".

(d) The reasoning of Slade J in Botham v Ministry of Defence was not correct (§42, §53).

The Respondent is seeking permission to appeal to the Supreme Court.

'Without Prejudice' Communications

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The EAT (HHJ Richardson) has handed down its decision in Woodward v Santander, which is authority for the proposition that the exception to the 'without prejudice' rule where there has been 'unambiguous impropriety' only applies in the very clearest of cases.

The without prejudice rule renders inadmissible in subsequent litigation evidence of all negotiations 'genuinely aimed at settlement whether oral or in writing' subject to certain limited exceptions. It had been argued that the case of BNP Paribas v Mezzotero [2004] IRLR 508 created a new and wider exception to this rule where discrimination is alleged.

However, the EAT rejected this submission, finding that the rule should be construed very narrowly. Thus, applying the leading authorities, the exception would only operate where without prejudice discussions would act as a cloak for perjury, blackmail or other clear and unambiguous impropriety regardless of the nature of the dispute.

Statutory Dispute Resolution Uplifts

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

The EAT (Underhill P) has handed down its decision in Lawless v Print Plus, which is authority for the proposition that, in choosing the size of the uplift for a failure to follow a proper disciplinary procedure, the relevant factors to be considered by a tribunal include:

(a) whether the procedures were ignored altogether or applied to
some extent

(b) whether the failure to comply with the procedures was deliberate
or inadvertent

(c) whether there are circumstances which may mitigate the
blameworthiness of the failure

The size and resources of the employer are also, in principle, capable of being relevant.

Equal Pay

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The EAT (Lady Smith) has handed down its decision in City of Edinburgh v Wilkinson & ors, which is authority for the proposition that white collar Claimants (APT & C employees) can bring equal pay claims using bonus-earning manual workers as comparators.

The Council argued that male manual workers were not valid comparators because they were not employed 'at the same establishment'; for example the bin men did not work in schools or on 'common terms and conditions' under s.1(6) of the Equal Pay Act 1970. The ET found in favour of the Claimants on the second point and the Council appealed. There was also a cross-appeal in relation to whether the comparators worked at the same establishment.

On appeal, Lady Smith held that:-

• A council is a single establishment for pay purposes.
• Even if they were not employed at the same establishment, there were common terms and conditions as between the Claimants and the manual workers.
• A broad approach is required when determining the issue of 'same employment' and the definition of 'establishment' and should not be limited to considering whether the work is undertaken at a single geographical location.
• Her own analysis in the Dumfries and Galloway cases was wrong. There is therefore no need to establish, as a fact, that there was a real possibility of the blue-collar comparators being employed at the same establishments as the Claimants.
• The Council should be considered the 'single source' of any unequal pay because they were responsible for setting the pay terms of both the Claimants and the comparators.

Compromise Agreements

[Thanks to John Bowers QC of Littleton Chambers and Stephen Miller of MacRoberts for telling me this decision had been handed down]

It's an employment tribunal rather than appellate case, but sufficiently important to warrant reporting.

McWilliam & Others v Glasgow City Council is the first case to consider the requirements of section 77 of the Sex Discrimination Act 1975. Section 77 sets out the criteria for a valid compromise agreement and in particular the need for the complainant to receive independent advice as to the terms and effect of the proposed contract.

Most importantly, the vice-president of the Scottish employment tribunals, Employment Judge Walker, held that it is not necessary that the advice is such as would allow the complainant to make an informed decision. All that is required is that the complainant is advised what the terms of the compromise agreement are and what they mean. This would include the scope of the claims, what claims are being compromised, how any payment would be treated for tax purposes etc.. This is to be distinguished from an assessment of whether or not the agreement is a 'good deal'.

Other points decided were that:-

• there is no requirement for a claim to be lodged with the ET before it can be compromised
• the solicitors who agreed the compromise agreements were independent even though their fees were paid by the City Council and had attended a meeting at which the logistics for mass advice sessions had been set.

Conduct Dismissals

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

The Court of Appeal has handed down its decision in Salford NHS Trust v Roldan, which is authority for three propositions:-

• the more serious the consequences of dismissal for the employee, the more careful an investigation is required. Thus, in this case, a more careful investigation was needed because the consequence of dismissal was thta the employee would be deported.
• an employer faced with a conflict of evidence between two witnesses is not obliged to believe one employee and to disbelieve the other. If it is unable to resolve the conflict, it is perfectly proper to give the alleged wrongdoer the benefit of the doubt.
• where a tribunal has properly directed itself in accordance with Burchell v British Home Stores, its conclusion should not be overturned unless there is no evidence to support it, or unless it is perverse.

Employment status

[Thanks to Chris Milsom of St Philips Chambers for providing this case summary]

In Leeds City Council v Woodhouse and anr, the Court of Appeal (Smith LJ giving leading judgment) has shed light on the meaning of a "contract worker" as defined in s7 RRA 1976.

W issued a claim of race discrimination against West North Homes Leeds Ltd (WN), Leeds City Council (LCC) and an employee of LCC (C). Following a government initiative to improve the efficiency of running housing operations, the Council founded a series of Arms-Length Management Organisations (ALMOs), one of which was WN. W, together with numerous other staff, transferred under TUPE from LCC to WN. LCC argued, without success, that W had no jurisdiction to bring a race discrimination claim as he was not a "contract worker" as defined under s7.

Whilst this was not a straightforward agency relationship, the Court endorsed the first instance reasoning that the legislation should be broadly constructed (see Harrods Ltd v Remick & Ors [1998] ICR 156). A purposive approach is to be taken given the aim of providing a remedy to victims of discrimination who would otherwise be without one.

Accordingly:-

(a) It is not necessary for a budding "contract worker" to establish a respondent has control or influence over the work he did.

(b) There was no need to show the primary purpose of obligation between the two contracting parties was the supply of labour. WN could not perform its obligations without employing labourers to carry out the work. As such, the supply of workers was pursuant to an obligation under that contract.

(c) Since WN was a wholly owned subsidiary with one client (LCC) everything done by WNs servants was being done not only for WN but for LCC as well.

Going forward, the tribunal is to take a pragmatic view to s7, focussing on the factual nature of the relationships between the parties rather than the written terms of service. Save in the plainest of cases, therefore, the totality of evidence should generally be considered by a fully constituted tribunal; the application of s7 should not be decided as a preliminary issue.

Closed Proceedings

[Thanks to Emma Price of Temple Garden Chambers for providing this case summary]

The Court of Appeal has handed down its Judgment in The Home Office v Tariq , which is authority for the proposition that: 1) an ET has the power to order a closed material procedure; but 2) the Crown must provide an employee and his legal representatives with a gist of the closed material on which it seeks to rely.

It was held that the ET Rules 2004 and the ET (Nat Sec) Rules 2004 did not breach EU law or Article 6 of the ECHR. However, the Home Office had an obligation, arising from the control order cases of A and AF No.3). Lord Justice Kay cited Lord Brown's interpretation (in AF(No.3)) of the impact of Strasbourg decision in A, that a "suspect must always be told sufficient of the case against him to enable him to give 'effective instructions' to the special advocate". That the Secretary of State was not seeking to subject Mr Tariq to a control order but was simply defending a discrimination claim did not mean that A and AF(No.3) did not apply.

The decision may mean the somewhat unpalatable choice open to public authorities is between disclosure of sensitive information and capitulation.

Magnifying Glasses and ET1s

[Thanks to Paul Lewis of St John's Chambers for providing this case summary]

The EAT (HHJ Serota) has handed down its decision in May v Greenwich Council, which is authority for the proposition that where part of a claim form is illegible, rather than rejecting the claim altogether, the correct course is for the Employment Tribunal to require a Claimant to provide a more readable copy within a defined period, and if necessary to impose sanctions on his failure to do so.

The Claimant presented an ET1 on the last available date of the 3 month period permitting him to do so, but the form contained some writing which was small and difficult to read. The Employment Tribunal rejected the claim on the ground that the claim form was illegible, effectively leaving the claim time-barred.

Allowing the appeal, the EAT made clear that the Employment Tribunal has no jurisdiction to refuse to accept the claim under rule 3(2) of the Employment Tribunal Rules of Procedure because of partial illegibility where the ET1 contains the required details. In any case, this particular claim form was legible. Per HHJ Serota, a document is only illegible if it is not capable of being read without the need to use a magnifying glass!

Reasonable Adjustments

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

The EAT (Cox J) has handed down its decision in Chief Constable of South Yorkshire Police v Jelic , which is authority for the proposition that swapping the role of a disabled employee with that of another employee is capable of being a reasonable adjustment for the purposes of the Disability Discrimination Act 1995 and the Tribunal was entitled to find that such an adjustment ought to have been made. The list of possible adjustments in section 18B(2) of the Act is not exhaustive. There is also no reason why the retirement of an employee on medical grounds and his re-engagement in a new role cannot be a reasonable adjustment although, in this case, the Tribunal had given inadequate reasons for such a finding.

There was no injustice to the Respondent in that proposed adjustments were raised at the "eleventh hour" in circumstances in which there was no objection during the hearing to the Claimant advancing the point, no application was made to recall witnesses and there was nothing to support the submission that there was further evidence that the Respondent would have wished to adduce. Any evidential disadvantage to the Respondent arose from its own failure to consult the Claimant.

Religious Discrimination

[Thanks to Anna Thomas of Devereux Chambers for providing this case summary]

The Court of Appeal has handed down a reserved judgment on a permission application in McFarlane v Relate brought by the Christian counsellor dismissed for failing to give an unequivocal commitment to counsel same sex couples. The application was refused and claims of direct and indirect religious discrimination dismissed. The judgment, applying London Borough Islington v Ladele, is authority for the proposition that there is nothing in the Employment Equality (Religion or Belief) Regulations 2003 or Article 9 ECHR that entitled Mr Mcfarlane to refuse to provide counselling services to all sections of the community. Laws LJ held:

• it was impossible to contend that Ladele had been decided per incuriam;
• the tribunal and EAT had correctly distinguished between the conduct which led to the act complained of and the religious belief of which the conduct was an outward sign;
• the observations in Lord Carey's supporting witness statement were misplaced and arose from a misunderstanding as to the meaning attributed by the law to discrimination, in particular that the law forbids indirect discrimination not by reference to the actor's motives but by reference to the outcome of his acts or omissions;
• there is an important distinction to be drawn between the law's protection of the right to hold and express a belief and the law's protection of that belief's substance or content. Only the former is protected.

Secret Policeman has a Ball at the EAT

[Thanks to Ed McFarlane of EEF for providing this case summary]

The EAT has handed down judgment in the case of Commissioner of the Metropolitan Police v Rixon which is authority for the proposition that an initial decision to reject a claim can be reconsidered at a PHR applying Rule 3 (9).

The Claimant, a serving Police Sergeant, had given anonymous evidence at the Stockwell Tube shooting inquest. He then made a timely but anonymous whistleblowing claim, giving only his representative's details. The Tribunal rejected the Claim Form, lacking required information, his name and address. He later e-mailed in his name and address, out of time, and the "complete" Claim Form was accepted. The Commissioner's contention at a PHR that the Claim Form was presented late failed, the Tribunal having extended time on the facts.

The EAT held, dismissing the appeal, that at the PHR the Tribunal ought, applying Rule 3 (9), to have accepted Claim Form as first presented, and observed that where a claim might be thrown out on procedural grounds "...elementary observance of human rights requires... an opportunity for input by a Claimant..." (para. 15).

Age Discrimination

[Thanks to Lionel Stride of Temple Garden Chambers for providing this case summary]

The Court of Appeal has handed down its decision in Homer v Chief Constable of West Yorkshire Police, which is authority for the proposition that requiring an employee to hold a degree in order to qualify for a higher pay grade did not amount to indirect age discrimination in respect of an employee who would not have time to obtain such a qualification before retirement. This was on the basis that the particular disadvantage to the employee flowed from the fact of his imminent retirement rather than his age.

However, all is not necessarily lost for claimants on the issue. H, a 61-year old legal adviser, had argued that a requirement that employees obtain a law degree before attaining the highest pay scale was intrinsically discriminatory, which was a question of law. As noted by both the CA and EAT, no factual evidence was presented to show that those in H's age group would be less likely to have a law degree, or would find it harder to meet the requirement. Such arguments therefore remain open if such evidence can be obtained.

Equal Pay

There has been another important development in the equal pay litigation, to which Andrew Short QC (instructed by Thompsons on behalf of the UNISON, GMB and Unite claimants) has asked me to draw people's attention.

An employment tribunal in Birmingham has just rejected the Genuine Material Factor defence of Birmingham City Council in an equal pay claim involving 4,000 female employees. The hearing, which took place in November and December 2009, considered the defence in relation to five comparator groups: refuse workers, grave diggers, road workers, road cleansers and gardeners.

In a 167 page judgment, the tribunal has rejected the defence in relation to each of the comparator groups. The litigation is the largest of the local authority claims arising out of the implementation of Single Status. Quantum has yet to be determined, and equal value remains in issue for some of the claimants, but has been estimated as potentially running into £100s of millions of pounds.

Industrial Action Ballots

[Thanks to Edward Kemp of 12 King's Bench Walk for providing this case summary]

The Court of Appeal has handed down its decision in Milford Haven Port Authority v UNITE, which is authority for the proposition that notice of separate, continuous and discontinuous industrial action can be given in the same document, provided that the notice otherwise satisfies the requirements of the provisions of the TULR(C)A 1992.

The Union gave notice of industrial action to the Port Authority in respect of launch crews and pilots of vessels navigating within Milford Haven. Each notice specified that the industrial action would be both continuous including measures such as an overtime ban and discontinuous consisting of a 48 hour stoppage.

The Port Authority challenged the validity of the notices and obtained an injunction. The High Court accepted the Port Authority's argument that s.234(A)(3)(b) of the TULR(C)A 1992 required a notice to specify disjunctively either continuous action or discontinuous action.

The Court of Appeal disagreed with this construction holding that the provision is disjunctive only in relation to particular action specified in the notice. The High Court's construction could generate more confusion than clarity. For example, more than one notice might cause concerns as to which is to be effective.

Comment on Sharon Shoesmith judgment

The High Court handed down its decision at midday today (23rd April 2010) in Sharon Shoesmith's claim for judicial review of the decision to dismiss her. You can see the full 200-page judgement or read the judge's 18-page summary.

In dismissing all of Sharon Shoesmith's claims, the judge made it clear that although there were several criticisms which could be made of the process leading to Sharon Shoesmith's dismissal, they were not serious enough to mean that OFSTED or the Secretary of State for Children Schools and Family had acted unfairly.

The judge was critical of the way in which the London Borough of Haringey took the decision to dismiss Sharon Shoesmith, but declined to make any ruling against Haringey, saying that the case would be better decided by a forthcoming employment tribunal hearing.

The judge was also very critical of Haringey's lack of process when dismissing Sharon Shoesmith. Although an employment tribunal is free to disagree, it is very likely to follow the judge's steer. However, unfair dismissal compensation from an employment tribunal is capped at £65,000, which is far less than Sharon Shoesmith has actually lost.

The judge criticised OFSTED for its failures to produce relevant documentation – especially the early drafts of its Report into Haringey Social Services – and has said he will be requiring an explanation from the Treasury Solicitor (the civil service’s chief legal officer). However, he did not think there was any real evidence that the report had been 'beefed-up'.

The judge also stated that Ed Balls was entitled to act quickly – he was entitled to view the interests of vulnerable children as taking priority over the employment rights of Sharon Shoesmith.

Finally, the judge ended his judgment by asking all parties to take at least 28 days to reflect over what they would do next. This is a clear steer that he thinks it is not in the public interest for Sharon Shoesmith to appeal, and perhaps not in the public interest for OFSTED and the DCSF to pursue Sharon Shoesmith for their legal costs.

Equal Pay - NorthEast Litigation

There has been an important development in the equal pay litigation to which Thomas Linden QC (who was Counsel for the Claimants) has asked me to draw attention. The appeal in Potter v North Cumbria Acute Hospitals NHS Trust (No 2) [2009] IRLR 900 (now Fox & Others v North Cumbria University NHS Trust (No 2)) has been dismissed.

The issue in the case was whether the introduction of Agenda for Change ("AfC"), of itself, triggered the 6 month limitation period under Section 2ZA Equal Pay 1970. The Employment Appeal Tribunal held that it did not on the basis that the cases in question were standard cases and AfC merely amounted to a variation, rather than a rescission, of the existing contracts of NHS employees.

The Court of Appeal reached the same conclusion by a different and shorter route namely that, applying Slack v Cumbria County Council [2009] ICR 1217, AfC did not, of itself, operate to terminate stable employment relationships in existence at the time of its introduction. Where such employment relationships continued after the introduction of AfC (as will generally have been the case) time only started to run if and when the stable relationship came to an end. The claimants were therefore entitled to rely on Section 2ZA(4) of the 1970 Act as they were at all material times employed on a permanent basis as full time nurses. The finding by the Employment Tribunal that there had been fundamental changes to their terms and conditions as the result of the introduction of AfC did not mean that this stable employment relationship ceased or was interrupted.

The Court did not hear argument on the rescission versus variation issue, or rule on it, as this issue became academic in the light of the ruling on the stable employment relationship case.

The Court's reasons will follow in due course.

TUPE: Service Provision Changeover

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

The EAT (HHJ McMullen) has handed down its decision in Ward Hadaway Solicitors v Capsticks Solicitors, which is authority for the proposition that, for the purposes of paragraph 3(1)(b) of the TUPE Regulations 2006, the question of whether the contracting out of activities constitutes a service provision change is a matter of law but the identification of the activities themselves is a question of fact and, therefore, the decision of a tribunal cannot be overturned on appeal unless it is perverse.

In this case, Ward Hadaway had been a member of a panel who provided legal services to the Nursing and Midwifery Council. There was no obligation for the NMC to allocate any work and no obligation for Ward Hadaway to accept it. The NMC decided to tender out its work to a single provider, Capsticks, but Ward Hadaway continued to carry out the work already allocated to it. Most future work of a similar nature was to be taken in-house. The Tribunal was entitled to find that only the work in progress, rather than the expectation of future work, was an activity and that, in any event, there was a change in the nature of the work carried out.

Equal Pay

[Thanks to Paul Doran of Stefan Cross Solicitors for providing this case summary]

Readers will remember last year's decision in South Tyneside v McAvoy, in which the EAT held that male employees can 'piggyback' on female colleagues' claims, so that (e.g.) male cleaning and catering staff can claim equal pay with female cleaning and catering staff who have increased their salaries through successful equal pay claims relating to (e.g.) male refuse collectors and gardeners.

The case, the impact of which is somewhat controversial, was due to be heard next week in the Court of Appeal. However, the case has just settled, meaning that the EAT decision stands.