Employment Law Update

1. Age Discrimination

Bloxham v Freshfields Bruckhaus Deringer  2205086/2006

In one of the first age discrimination claims a year after the Regulations came into effect, an Employment Tribunal has dismissed Mr Bloxham's claim of direct and indirect age discrimination against his former partnership. The claim arose out of changes the firm had made to the partners' pension scheme. The Tribunal held that although the arrangements were prima facie discriminatory, they were justified, as a "proportionate means of achieving a legitimate aim". 

Retirement and Age Discrimination

The ECJ has handed down its opinion on the important case of Palacios de la Villa v Cortefiel Servicios SA holding that the EU Equal Treatment Framework Directive does not prohibit member states for introducing mandatory retirement ages, as it was a proportionate means of achieving the legitimate social aim of promoting employment opportunities and reducing unemployment. This decision may well affect the Heyday challenge currently before the ECJ on whether the UK' s retirement provisions are discriminatory.

The Department for Work and Pensions has begun a further consultation about age discrimination and pensions. The pension industry and employers have commented that without further guidance they are unclear on what might be discriminatory or acceptable practice in relation to flexible retirement.  Flexible retirement is one of the main areas where there is uncertainty about the impact of the 2006 Regulations.

2. Individual's Rights and Responsibilities of Employees

The DBERR has produced a useful 80 page guide for employers and employees on individual rights and responsibilities. Complimentary copies are available on request.

3. Sick Leave and Medical Evidence

Taylor v Merseyrail Electrics 2002 Ltd  2007 AER 44

Ms Taylor was a penalty fares inspector with her employer. She had sick notes covering her sick leave period May to July 2006 but she was notified that she would not be paid her contractual sick pay as her employer did not accept that she was genuinely ill. She brought a successful claim for unpaid wages.

On appeal by the employer, it was held that once a medical certificate had been produced it was not open to an employer to go behind what appeared on the face of that medical certificate in the absence of contradictory medical evidence. At the initial stage the employer was entitled to express doubt as to the reason for the employee's absence. However, once the general practitioner has not only certified that the employee was suffering as in this case from acute stress reaction, and that that was the cause of her absence from work, any initial doubt was removed. Employers wishing to challenge sick leave notes should obtain independent medical evidence where the case demands it.

4. Immigration

Points-based immigration to be introduced

The Minister of State for Nationality, Citizenship and Immigration has recently announced that Tier 1 of the new points-based immigration system will be implemented by March 2008. Tier 1 seeks to attract highly skilled migrant workers to the UK .

In addition, he has announced that the restrictions placed on the free movement of workers from Bulgaria and Romania into the UK will remain in place at least until the end of 2008.

5. Employee's Alcoholism - contributory fault

Sinclair v Wandsworth London Borough Council  2007 AER 67

Mr Sinclair was a business support assistant in his employers' technical services department. He was observed drinking alcohol whilst on duty and told the investigating manager that he had a drink problem and considered himself an alcoholic. Following a further incident, an investigation and a disciplinary hearing, he was dismissed. He appealed and then brought a claim for unfair dismissal. The Tribunal found the dismissal had been unfair in relation to the application of the employer's alcohol policy. It also held however that a Polkey reduction should be made on the basis that if the employer had acted fairly, the consequence would only have been to delay the dismissal for a period of some 4 weeks. Accordingly, the compensatory award was limited to 4 weeks and a contribution reduction of 25% made. Mr Sinclair appealed against the imposition of the 4 weeks limit and the employer cross-appealed on the 25% reduction. The Appeal Tribunal held that the Tribunal had erred when deciding that alcoholism was an illness and could not amount to contributory conduct as well as assessing contributory fault at only 25%. The case is an interesting one for employers and shows the benefit of having an effective alcohol policy.

6. Statutory Disciplinary Procedures

Dixon v Homeserve Emergency Services Ltd  2007 AER 478

In this case the Tribunal has been wrong in law according to the Appeal Tribunal to find that an employer had failed to comply with step 1 of the Statutory Dismissal and Disciplinary Procedures simply because the letter inviting their employee to the disciplinary hearing had not stated that the dismissal had been a possible outcome. On the facts of the case, it had been implicit in that letter that the employer had been contemplating a dismissal or other disciplinary action.

Mr Dixon was a chief service engineer. On 21 April 2006 he drove his company van to the location of a private job to fit a door, notwithstanding the rule that employees should not use company vehicles other than on company business. While fitting the door he was seen by his manager to whom he admitted carrying out private work. He was suspended and then summarily dismissed for gross misconduct. He brought proceedings claiming automatic unfair dismissal on account of a failure to complete the statutory disciplinary dismissal and disciplinary procedures. He was unsuccessful.

7. Constructive Dismissal

Wilson (t/a Reds) v Lamb  2007 AER 485

This case concerns an employee of a hairdressing salon employed under a Modern Apprenticeship Agreement where a minimum wage of £80 per week was required but the employee was not paid this. She worked for a year and then brought a claim for unauthorised deduction from wages. The employer had refused to increase her wages in accordance with the set minimum wage in breach of the Apprenticeship Agreement. All the evidence however pointed to an affirmation by the employee of the agreement, notwithstanding the breach as she did not leave the employment and indeed continued working for a year knowing of the breach which affected her weekly wage. Accordingly, her claim failed. Employees are reminded that similar claims will fail, if they delay too long in terminating a contract in response to an employer's breach.

GMB Union v Brown  UKEAT/0621/06

Ms Brown had a grievance against her line manager, a regional secretary of the GMB, following largely from the breakdown of their working relationship. She did not want him to deal with the grievance himself as she was suffering from stress and wanted someone else to hear the grievance. The manager refused to vary the contractual grievance procedure which provided that he should hear the grievance first, resulting in months of argument, stress, absence and eventually resignation by the Claimant. The EAT held, that the Union' s refusal to depart from the grievance procedure amounted to a breach of trust and confidence and thus the Claimant's constructive dismissal claim succeeded. It undermined trust and confidence to require an employee to discuss their grievance with the manager about whom they were making a complaint and employers' grievance policies should be flexible enough to reflect this.

8. Procedure - Claim 9 seconds out of time 

Miller v Community Links Trust  UKEAT/0486/07/05

The Employment Tribunal rejected a Claimant's representative four excuses for not presenting a claim in time, holding it was reasonably practicable for him to do so. The representative had pressed the "submit" button on the Employment Tribunal website one second before midnight on the last day for lodging the claim. The application was therefore received nine seconds out of time and could not be proceeded with. 

Parties are reminded that the deadline for claims is not flexible.

9. Reason for Dismissal

Jocic v Hammersmith & Fulham London Borough Council  2007 AER 443

Ms Jocic brought a claim for unfair dismissal, alleging her redundancy was a sham. She also brought allegations of discrimination. The Tribunal dismissed those claims but held that she had not been dismissed by reason of redundancy but for some other substantial reason, namely reorganisation. That dismissal was within the range of reasonable responses open to the Council as a reasonable employer. She appealed on the basis that that reason had never been pleaded or raised in the proceedings but her appeal was dismissed.

In the normal course of a Tribunal hearing substitution of the reason for a dismissal could not stand but in this case, the change was viewed as one of re-labelling which did not significantly affect the investigation before the Tribunal and therefore was allowed to stand. The introduction of a new label into the case had been no more than the attachment of a different label to precisely the same set of facts and had not, nor could have, caused any prejudice to the employee.

10. Rolled-up holiday pay

Lyddon v Englefield Brickwork Limited  UKEAT/0301/07

The EAT in this case held that a Tribunal had correctly found that an employer was entitled to offset rolled-up holiday pay against a worker's entitlement to annual leave under the Working Time Regulations 1998. The question the Tribunal must ask in this type of case is whether there has been a consensual arrangement between the parties identifying a sum properly attributable to periods of holiday pay. Here, Mr Lyddon was told that he would be paid the rate of £135 per day and that this would include holiday pay. His computer generated payslip showed rolled-up holiday pay.

It was held his entitlement to payments had been met and they were sufficiently transparent and comprehensible to amount to a consensual arrangement. Although the Company had not identified how holiday pay would be calculated or what the amount would be, it was clear that it was included in his global salary. At no time during his employment had Mr Lyddon enquired about the calculation of his holiday pay and had taken no issue with the fact that he was not paid when he took 2 weeks' leave. 

Employers should revisit the need for rolled up holiday pay for workers from time to time to ensure their practices are compatible with the Working Time Regulations.

11. TUPE

Jackson v Computershare Investor Services Plc  2007 EWCA Cir 1065

The Court of Appeal has held in this case that the 1981 TUPE Regulations could not be relied on to create an entitlement to a contractual benefit that an employee did not enjoy prior to the transfer of her employment.  Ms Jackson was employed by CI (UK) Limited until June 2004, at which point she "TUPE transferred" to CIS Plc. CIS operated a dual system of redundancy terms which offered more generous benefits for those who joined before 2002. When Ms Jackson was made redundant in 2005, she argued that since TUPE operates in such a way as to treat her as having continuity of employment with CIS dating back to 1999, she would be afforded the benefit of the pre-2002 terms. Her claim was unsuccessful.  The principle in this case would apply equally to transfers which occurred after 6 April 2006 when the new TUPE Regulations came into force.

12. Guide to The Companies Act 2006

The Corporate Responsibility Coalition has produced a new guide designed to help company directors comply with the new Companies Act. "The Companies Act 2006: Directors' Duties Guidance" promises to help directors with their new obligation to consider their business impact on people and the environment. The new Guidance will be sent to all FTSE 100 companies and AIM listed companies. Complimentary copies are available on request.

13. Paternity Leave and Pay

In May 2007 the Government consulted on the introduction of additional paternity leave and pay, enabling fathers to take up to 26 weeks' leave, some of which will be paid if the mother returns to work before the end of her maternity leave. It was originally planned that this change would apply when the baby was due in April 2009 or later. However, HM Revenue & Customs has now announced that this date will no longer be met and it is "planning" implementation for babies due in April 2010 or later, although no firm timing and decisions have yet been made.

14. Data Protection

The Information Commissioner's Office has published a reminder that from 24 October 2007 all non-digitalised records of personal information created before 24 October 1998 (including those kept in structured manual filing systems) will be subject to the Data Protection Act 1998 in the same way as other records. Employers who have not yet considered this new compliance requirement should now do so.

15. Religious Discrimination - Rastafarianism

Harris v NKL Automotive  UKEAT/0134/07/DM

Mr Harris worked as an executive driver.  He claimed he had been unfairly dismissed by NKL and had been discriminated against on the grounds that he was a Rastafarian. The Tribunal and the EAT accepted the employer's concession that Rastafarianism is a religious belief within the meaning of the Employment Equality (Religion and Belief) Regulations 2003. There has previously been academic debate over whether Rastafarianism qualified.  Rastafarians are not however protected under the race discrimination legislation as they do not qualify as an ethnic group. The EAT also accepted in this case the employer's argument that it was legitimate to have rules requiring tidy hair, irrespective of whether or not it was worn in dreadlocks.

16. Disability Discrimination and alternative jobs

Scottish and Southern Energy plc v Mackay  UKEATS/0075/06

The EAT in this case held that a failure to discuss options for alternative work with a disabled employee on long term sickness absence was not of itself a failure to make reasonable adjustments. However, it upheld the Tribunal's decision that the lack of consultation rendered the dismissal of the employee unfair. In this case, the employee had been on sick leave for over 2 years, yet the employer went wrong at the final hurdle when it dismissed the employee just a little too readily, when they decided that in reality the employee lacked commitment to retrain for a vacancy that had come up, based on his demeanour at the final meeting. The correct approach for employers is that set out in Tarbuck (2006).

17. Costs Award & Statutory Rights Compensation

Wolff v Kingston upon Hull City Council  UKEAT/0631/06

The usual ruling in an Employment Tribunal is that each party bears its own costs. However, the Tribunal must make a Costs Order in circumstances where the Chairman is of the opinion of the party has acted unreasonably in bringing or conducting proceedings. In this case, the EAT held the Tribunal had not erred in ordering costs against the employee on the basis that he had unreasonably continued to seek re-engagement where such a remedy was clearly not appropriate. The employee in this case was also entitled to compensation for loss of statutory rights, even though he had been employed in a new job for a year at the time of the Remedies Hearing. This right was not based on financial loss but the uncertainty that the employee had suffered during the first year of his employment with his new employer.

18. Protection from Harassment

Conn v Sunderland City Council  2007 AER 99

Mr Conn was a paver employed by the local authority. After he was terminated he commenced proceedings under the Protection from Harassment Act 1997, claiming that the local authority was vicariously liable for harassment inflicted on him by his foreman. He alleged five separate incidents of harassment.  Two incidents were held to constitute a course of conduct and his employer appealed. The appeal was allowed. Harassment was left deliberately wide by the statute and a civil claim could only arise as a remedy for conduct amounting to a breach which would amount to a criminal offence. What constituted the boundary between unattractive and unreasonable conduct and oppressive and unacceptable conduct might well depend on the context in which the conduct had occurred. The touchstone was whether the conduct was of such gravity as to justify a sanction of criminal law. In this case, the Recorder was held to have been wrong to find, that the conduct amounted to harassment. There was no threat of violence against the Claimant only a threat to damage property. Two other people involved in the incident were not bothered by it. The incident therefore had been well below the line at which criminal sanctions would have been justified and Mr Conn's claim failed.

19. The Queen's Speech 2007

The recently delivered Queen's Speech has highlighted a number of proposals and planned reforms affecting employers, not least of which is the likely extension of flexible working rights.

and finally

20. Lex Mundi Employment Newsletter

Lex Mundi, the world's leading association of independent law firms, of which Steptoe & Johnson are a member of, have published their inaugural Labour and Employment Practice Group newsletter. This is available through the Steptoe & Johnson website at www.steptoe.com/publications-4981.html