Employment Law Update

Welcome to the latest issue of the Steptoe & Johnson Employment Law Update. 

The Employment Law Updates are aimed at providing information on recent developments in UK employment law.  It is our desire to provide you with not only an update of the law, but also a practical insight in managing workplace issues on a proactive basis.

To achieve our objectives and to continuously improve the Updates, it is important that we receive feedback from you.  With a view to this, please e-mail any comments or suggestions which you may have relating to the Updates to employmentgroup@steptoe.com.  We look forward to hearing from you.

1. Legislation – The Companies Act 2006

Further key provisions come into effect on 1 October 2008.  These include directors’ duties relating to conflicts of interests, directors’ interests and provision of financial assistance for the purchase of shares.  Further information is available on request about these significant changes.

2. Disability Discrimination

Coleman v Attridge Law C-303/06

The European Court of Justice has published its landmark decision in this case confirming that the Equal Treatment Framework Directive is intended to prohibit associative discrimination in the context of direct discrimination and harassment.  Ms Coleman was a legal secretary who complained she had been subject to less favourable treatment in connection with her son’s medical condition and disability for whom she was the primary carer. 

The Court held that the prohibition of harassment was not limited to people who were themselves disabled.  Where it was established that the unwanted conduct amounting to harassment, which was suffered by an employee, was related to the disability of the child, whose care was provided primarily by that employee, such conduct was contrary to the prohibition of harassment laid down by Article 2 in the Directive. 

Ms Coleman will have to return to the Employment Tribunal for a ruling on her claim under the Disability Discrimination Act 1995 in line with the ECJ’s decision but this decision should pave the way for other Tribunals to consider claims based on associative disability discrimination as well as in the context of sexual orientation, religion or belief. 

Key point: Employers should consider amendments to any relevant policies and practices to prevent associative discrimination particularly for carers. 

3. Age Discrimination – Redundancy scheme

MacCulloch v Imperial Chemical Industries 2008 UKEAT/0119/08

Ms MacCulloch brought claims for direct and indirect age discrimination in respect of a contractual redundancy scheme operated by her employer.  She was made redundant by ICI in October 2006.  Her severance payment amounted to 55% of gross annual salary.  She compared herself however with an employee of 10 years’ service who had reached the age of 50 who would receive 175% of annual salary.  She claimed therefore that the scheme unlawfully discriminated against her on the ground of age as she would have been entitled to a disproportionately higher redundancy payment had she been older and/or had longer service. 

ICI defended the claim on the basis that the aim of the scheme was to encourage and reward loyalty and gave a larger payout to older workers because they were more vulnerable in the job market.  The Employment Tribunal held this scheme as proportionate and therefore there was no discrimination.  Ms MacCulloch appealed. 

The EAT concluded that the Tribunal had failed to carry out the proportionality exercise and could not therefore have reached the conclusion with certainty that the age discrimination was justified.  Even if the scheme achieved certain business objectives in broad terms that did not necessarily establish the justification for the differential.  Her appeal was therefore allowed. 

Key point: Employers who operate contractual redundancy schemes should re-visit these to ensure that they can establish their justification in age discrimination cases.  There is a need to balance the reasonable needs of the business with the discriminatory effect on its employees even if the aims of the scheme are legitimate.  It should be remembered too that awards for age discrimination are not capped.

- Retirement at 64 and 634 days

Plewes v Adams Pork Produce Limited 2600842/07

The Age Regulations provide that an employer does not discriminate against an employee on the grounds of age if he dismisses the employee for retirement at or over the age of 65.  Any lower retirement age has to be objectively justified. 

Mr Plewes’ contract provided that his normal retirement date was the day before his 65^th birthday and he was required to retire on that day.  He did not want to retire and made a request of Adams to continue working.  This was refused and he was let go but returned as an agency worker at a lower salary for the same work.  Adams maintained that it had complied with the statutory procedures and that it had dismissed Mr Plewes lawfully on reaching his normal retirement age of 65. 

The Tribunal held that Adams could not rely on the default retirement exemption as that only applies to retirement at or over the age of 65, whereas Mr Plewes was made to retire the day before his 65^th birthday.  Adams did not advance any alternative interpretation of the relevant clause in Mr Plewes’ contract asserting instead that it had a genuine belief that it was able to dismiss him in the course of his contract and that it had mistakenly assumed that it had only therefore to follow the statutory retirement procedure. 

The Tribunal held that his dismissal was discriminatory.  Adams conceded that it was unable to objectively justify the dismissal and Mr Plewes received compensation of over £36,000 including £7,500 for injury to feelings. 

Key point: Employers should ensure that their documentation and any notice provided to employees under the statutory retirement procedure reflects the employees’ actual entitlement. 

- Notice of Intended Retirement date

Todd v Sanquhar Home Ltd S/116418/07

Sanquhar Home was a nursing home where Mrs Todd worked as administrator.  She made a successful request to continue working past her retirement date, but then made a claim to the Tribunal that Sanquhar had breached the Age Regulations by only giving her 12 weeks’ notice of her retirement date rather than the minimum 6 months’ required.  Sanquhar admitted liability so the issue only concerned quantum.  The Tribunal unanimously ordered Sanquhar to pay Mrs Todd one week’s pay at the statutory maximum of £310. 

In deciding what level of compensation was just and equitable the Tribunal took account of the fact that the breach was of timing only and this was not a case where the employer completely failed to comply with its duty.  The Tribunal had further regard for the fact that Mrs Todd continued to work for Sanquhar throughout the relevant period and so had sustained no wage loss. 

- Indirect Discrimination

Rainbow v Milton Keynes Council

An employer who advertised for candidates in “the first five years of their career” committed an act of indirect discrimination by failing to shortlist a 61 year old teacher with 34 years’ teaching experience for the position.  It was clear that people of her age were likely to have had more experience and accordingly would be put at a disadvantage when compared to other applicants.  The Council had failed to show that a decision to appoint a cheaper, less experienced employee was objectively justified on the ground of cost. 

The delightfully named Mrs Rainbow was in an age group disadvantaged by this 5 years experience or less provision.  If cost was to be used as a justification the evidence had to be such that the Council was compelled as it were to take the discriminatory decision by reason of the cost.   The school had not provided any such detailed evidence in order to prove that it could only afford to employ a person of 5 years experience or less.  Accordingly, Mrs Rainbow’s claim of indirect discrimination was upheld. 

4. Equal Pay and TUPE

Gutridge and others v Sodexo Ltd 2008 All ER 70

The case concerns cleaners, employed by a hospital who later transferred to Sodexo as part of a domestic services contract who brought an equal pay claim 5 years later.  The comparators were maintenance assistants were also employed by the hospital but who did not transfer.  The issues were whether the cleaners could pursue their claims where their comparators remained with the transferor and more than 5 years after the transfer. 

They claimed that the effect of the equality clause was to confer on them enhanced contractual rights which initially the transferor was obliged to honour and which then transferred to the transferee as contractual rights on transfer. 

The EAT agreed.  It was also held that the six month time limit ran from the date of the transfer for all equal pay claims against the transferor following the Powerhouse case whereas the time limit with respect to continuing liability of the transferee is 6 months from the termination of their employment with the transferee. 

Although Sodexo stood in the shoes of the Trust this did not change the time limits for those  equal pay claims.  The time limit with respect to the liability of Sodexo for equal pay in respect of the pre-transfer period had to be brought within 6 months of the transfer of their employment and therefore they were out of time. 

Key point: Details of the pay structures should be disclosed as part of the due diligence exercise and indemnities obtained where applicable and possible to provide for this type of claim.

- Pay Protection

Redcar & Cleveland BC v Bainbridge and others; Surtees v Middlesbrough BC

2008 EWCA Civ 885

The Court of Appeal has upheld the decision of two Employment Tribunals that temporary pay protection arrangements introduced by the GMB was indirect discrimination against union members by recommending acceptance of a single status pay deal.  Although the objective of securing a fair single status pay deal was legitimate the means used by the union to secure the deal including misleading the female claimants who would have been entitled to back pay meant that they had not pursued proportionate means for achieving that pay deal.  Permission to appeal to the House of Lords was refused and compensation will now fall to be assessed against the union. 

Key point: Pay protection arrangements may in principle amount to a genuine material factor (except in cases where the historical pay differential was directly discriminatory) but justification will be difficult to establish. 

- Justification

British Airways PLC v Grundy 2008 EWCA Civ 875

Mrs Grundy was employed by BA as part of a Support Cabin Crew.  They had different terms of employment to full-time employees.  She was able to nominate the days she wanted to work and was paid a daily rate for those days on which BA offered her work.  One of the terms of her employment was that Support Cabin Crew did not receive annual pay increments. 

In 2002 Mrs Grundy moved to a contract which required 75% of full-time work.  She brought a claim under the Equal Pay Act based on a comparator Mr Wynne who was engaged on like work, under a 75% contract, but who had never been part of the Support Cabin Crew.  She alleged that the arrangements for progression up the pay scale for such staff were indirectly discriminatory against women.  The Tribunal upheld her claim.  It held that the policy of not paying annual increments to the Support Cabin Crew resulted in a disparate impact on women and this was not justified for the reasons advanced by BA.  BA appealed but was unsuccessful.  Its argument that the Tribunal had lost itself in the details and forgot the bigger picture was not accepted.

Key point: The fact that the collective bargaining process results in greater benefits for one group - the full time cabin crew - than another did not justify the disparate impact on one gender in the Support Cabin Crew.

5. Religious Discrimination

Ladele v London Borough of Islington 2203694/07

Miss Ladele, a practising Christian, began working for the Council in 1992 and became a Registrar for Births, Marriages and Deaths in 2002.  She did not become an employee of the Council until 1 December 2007.  When legislation enabling the legal marriage of same sex partners came into being, as a temporary measure, the Council agreed that she would not officiate at civil partnership ceremonies, which she considered were contrary to God’s law, but should conduct civil partnership registration services.  She did not accept this and so the Council started disciplinary proceedings and threatened her with dismissal.  Further complaints were made against her that she was discriminating against the gay community. 

Miss Ladele complained the Council’s treatment of her amounted to discrimination.  The Council had understood the competing rights and the need to balance these but the Tribunal held that the Council had failed to show that her less favourable treatment, by commencing disciplinary proceedings against her, had been unconnected to her religious beliefs. 

On the question of indirect discrimination the issue was whether the Council was able to show that there was a provision, criteria or practice in place (PCP) which was a proportionate means of achieving a legitimate aim.  The Tribunal found that the PCP – that all Registrars were required to carry out civil partnership ceremonies - did have a legitimate aim namely, the promotion of the rights of the lesbian, gay, bisexual and transsexual (LGBT) community but the means of achieving it were not proportionate.  The Council had failed to take notice of Miss Ladele’s rights as an Orthodox Christian.  Nor had the Council consulted with her before appointing her as a civil partnership Registrar.  It had placed greater value on the rights of the LGBT community than it had on her rights as an Orthodox Christian.  The Tribunal also upheld her complaint of harassment as the Council had disregarded and displayed no respect for her genuine religious beliefs.  The Council has indicated its plans to appeal. 

6. Dismissal – Statutory Dismissal Procedures

Wilmot and others v Selvarajan 2008 All ER (D) 310

Mrs Wilmot and others were receptionists in Dr Selvarajan’s GP surgery.  Following an investigation and disciplinary hearing he dismissed three employees for gross misconduct arising out of alleged false overtime claims and holiday leave. 

The employees appealed by letter dated 8 March 2005 but these appeals were dismissed 4 months later on 8 July 2005.  The employees brought a number of employment claims including a claim for automatic unfair dismissal on the basis that Dr Selvarajan had failed to complete the statutory disciplinary process because there was an unreasonable delay by him dealing with their appeals.  He had failed to comply with the requirement that “each step and action under the procedure must be taken without unreasonable delay”.  The EAT upheld the employees’ appeal. 

On appeal to the Court of Appeal, Dr Selvarajan was successful.  The Court of Appeal held that there was a distinction between the procedural steps that had to be followed from the beginning to the end of the statutory process and compliance of the general requirements which are procedural standards to be observed in the process.  To claim automatic unfair dismissal the employee had to show the statutory procedure applied, that this was not completed, and the non compliance was down to the employer’s failure to comply with the general requirements of the procedure.  Only where the statutory procedure had not been completed was it relevant to consider compliance with the general requirements in order to decide who was responsible for the non-completion.

Key point: The impact of this decision is that if there is any unreasonable delay the employee would have to decide whether to press the employer to complete the process, rather than withdrawing from the procedure, which could give rise to a risk of losing a percentage of any compensation. 

Although the statutory procedures are to be repealed, in its place employers will be encouraged to follow the guidance set out in the revised ACAS Code of Practice.  It is proposed that an unreasonable failure to comply with the Code could lead to an uplift of up to 25% to any award of compensation. 

7. Redundancy - Entitlement to Enhanced Payment

Harlow v Artemis International Corporation Ltd 2008 All ET (D) 291

The case concerned a claim by Mr Harlow for approximately £62,000 being his enhanced redundancy entitlement.  His employment terms followed the multiple sales and acquisitions of his employer and the question to be decided whether or not the terms of the staff handbook, which included the Company’s redundancy policy was applicable to him. 

The Company argued that a statement in the enhanced redundancy policy that the Company “….will make an additional payment….” was a matter for discretion.  The Court disagreed and held that the redundancy policy was apt to be a contractual term and formed part of Mr Hawlow’s contract.  The fact the Company varied its practice in making redundancy payments to other employees did not affect Mr Harlow’s right to his original redundancy terms or those that were in force at the time of his redundancy.  Mr Harlow was therefore entitled to judgment on the basis of an express term of his contract. 

The Court also considered whether his contract could have been subject to an implied term to similar effect by an entitlement arising by custom and practice.  Implied terms are found on the basis that the courts are spelling out what both parties know and would, if asked unhesitatingly agree, to be part of the employment bargain.  The relevant factors in the similar case of Albion Automatic v Walker were:

• whether the policy was drawn to the attention of employees;
• whether it was followed without exception for a substantial period;
• the number of occasions on which it was followed;
• whether payments were made automatically;
• whether the nature of communication of the policy supported the inference that the employers intended to be contractually bound;
• whether the policy was adopted by agreement;
• whether employees had a reasonable expectation that the enhanced payment would be made;
• whether terms were incorporated in a written agreement;
• whether the terms were consistently applied.

In Mr Harlow’s case, the Court held the policy was not drawn separately and expressly to the employees’ attention but was published and available for all to see in writing on the website.  The Court considered that it had become the custom and practice of this company to compensate redundant employees in accordance with its enhanced redundancy policy.  Had the Court not already found that Mr Harlow had an express contractual entitlement to the policy terms, the policy would be implied in its current form as an implied term of his employment. 

8. Restrictive Covenants

Kynixa Limited v Hynes and others 2008 EWHC 1495

This case concerned the exit from Kynixa of three senior employees who left to join a competitor.  Kynixa is a specialist provider of rehabilitation and case management services for injured persons.  The Court held that substantial damages are to be paid by the three key employees who had deliberately misled their employer.  Two employees were also judged to have breached their fiduciary duties and contravened the restrictive covenants in their shareholders’ agreement to which they were also subject. 

Unusually, all three employees negotiated and signed contracts of employment with their new employer before they left Kynixa.  It was held that they breached their duty of fidelity by misleading Kynixa as regard their true intentions.  Two senior employees had breached their fiduciary duties to act in the best interests of their employment by not reporting their negotiations with a competitor group.

The Court also held that restrictive covenants in a shareholders agreement may also be construed against an employee although there is limited case law about full enforcement. 

The Court held that shareholders are seen as having significant bargaining power when entering into a shareholder’s agreement where they stand to make a great deal from their shares so their post-termination restrictions where justified.  In a second hearing, the Court ordered the two more senior employees to make interim payment of costs of £350,000 to the Claimants, a huge financial burden for an individual on any basis.

Key point:  Restrictions on competitive activities whether express or implied cannot be assumed to be unenforceable and the case is a reminder that employers may well be successful in seeking injunctive relief and substantial damages against senior employees who leave and join a competitor. 

9. EU – France

Franck L. v Enterprise Martin 2008 06/45800

French workers have recently lost their right to work only 35 hours a week and now the Cour de Cassation Chamber Sociale has ruled that the employers can monitor their employees’ workplace Internet use when they are away from work. 

The Court reasoned that any websites accessed using a workplace computer during business hours are “presumed to be of professional character” and that employers may therefore review records of the employees’ Internet use without the employee being present.  The Court upheld the Company’s dismissal of its former IT Manager who was removed after their review of his web browsing revealed that he had spent large amounts of time browsing non work-related web sites.  He had argued that under the European Convention on the Rights of Man inter alia he was entitled to expect that his private life be kept private even at his place of work, but this was unsuccessful. 

The employer may also look at logs of company telephones to check numbers called and the duration of calls but not listen in, without the employees’ prior consent.

Key point: There should be a policy in place limiting the use of workplace computers so employees can be made aware of the restrictions.

- Living Costs

According to Mercer’s latest annual survey of expatriate living costs, Moscow is the most expensive city in the world, with living costs averaging 42.4% higher than New York.  This is the third year in succession that Moscow has topped the list with the cost differential widening significantly each year.  London is the second most expensive European city, with Oslo following in third place. 

10. Race Discrimination - Advertisements

Centrum voor gelijkheid van kansen en voor racismebestrijding v Firma Feryn C-54/07

The ECJ has ruled in this case that discriminatory job advertisements placed by a Belgian door manufacturer amounted to direct discrimination.  The Advocate General had earlier opined that a public statement made by the manufacturer that he would in effect not employ Moroccans was direct discrimination contrary to the EU Race Discrimination Directive as it would dissuade certain candidates from applying.  The UK Government unsuccessfully intervened in the case to argue that the discrimination was only hypothetical as the employer had not acted on its discriminatory statement. 

The Advocate General considered that an injunction prohibiting discriminatory recruiting practises would be the most appropriate remedy in this case. 

Key point: If the European Court of Justice follows the Advocate General’s opinion, then under current UK law unless an individual complainant were to issue proceedings in response to an employer’s public statement of its discriminatory policy, the Equality and Human Rights Commission would not have any standing to bring proceedings in respect of any directly discriminatory practices. 

- Establishing a Detriment

Olasehinde v Panther Securities Plc 2008 UKEAT 0554/07

Mr Olasehinde, a caretaker was called into a meeting by his employer to be told that a tenant had complained that he was “harassing him”.  Panther accepted his denial of the allegations but told him not to speak to the tenant about them.  Mr Olasehinde claimed race discrimination against Panther. 

The Tribunal found that Panther had seriously exaggerated and distorted the tenant’s complaint and would not have done so if Mr Olasehinde, who was black, had been white and therefore found discrimination of him on the grounds of race. 

However, it rejected the claim on the basis that Mr Olasehinde had not suffered any detriment.  Panther had made no adverse finding against him and had accepted his denial.  Mr Olasehinde appealed against the finding and the EAT upheld his appeal. 

It could not see how being confronted with an allegation that had no reasonable basis could be anything other than a detriment.  Any reasonable worker would take the view that they had been disadvantaged in circumstances in which thereafter they had to work.  The situation was bound to cause real difficulty with and constraints on Mr Olasehinde’s relationship with the tenant.  The case was therefore remitted to the original Tribunal to consider the question of remedy.  

11. “No show” clause

Tullett Prebon Group Limited v Ghaleb El-Hajjali 2008 EWHC 1924

The employer Tullett brought a claim for liquidated damages for breach of contract against an individual who changed his mind after accepting an offer of employment with them.  The claim was based on a clause in the contract which required him to pay a specified amount if he did not start work – a “no show” clause. 

The High Court held that it was a liquidated damages clause rather than a penalty clause and that Mr El-Hajjali was therefore liable to pay the amount due under the clause.  The liquidated damages clause was for loss of anticipated revenue generation under the agreement if he failed to commence employment with Tullett.  Mr El-Hajjali contended the clause was an entirely standard term applicable to all employees and could not therefore have been intended to be a pre-estimate of loss.  It required him to pay a sum which bore no relationship to any loss which the company would suffer and was therefore a penalty to deter him from breach. 

The Court held that where this bargain had been struck by two parties of equal bargaining power with each party legally represented, the Court should consider long and hard before permitting one of the parties to resile that from that agreement.  It was only when this sum was extravagant or unconscionable in amount compared to the loss or range of losses that could conceivably prove to follow the breach that the clause would be held to be a penalty. 

There was no proper reason in this case to hold that the clause was a penalty clause.  With the benefit of legal advice, Mr El-Hajjali had entered into the employment contract which included this clause.  He was fully aware of its terms and had agreed to them when he signed a contract.  He agreed that the liquidated and ascertained damages set out in the clause constituted a genuine pre-estimate of the employer’s loss of anticipated revenue generation.  Accordingly he was liable. 

Key point: Careful drafting is required when including a “no-show” clause in any employment contract to ensure it is not a penalty clause.   

12. Statistics

ACAS has published its annual report for 2007/2008.  There has been a rise in the number of Tribunal claims received by ACAS for conciliation with the number of claims by main grounds of complaint rising from 105,177 to 151,249.  Including all grounds of complaint, the total number of claims received were 227,782, a rise of 26%.  The rise may be attributable to an increase in the number of equal pay complaints, more than double last year’s.  Equal pay was the most cited ground of complaint, with unfair dismissal second. 

At the same time, the Tribunal service have issued their annual report showing that the number of ET applications received were 189,300.  79% of Employment Tribunal cases were heard within 6 months of receipt with 88% of written decisions issued within 4 weeks of the hearing. 

13. Suspension – Under a Compromise

Radecki v Kirklees Metropolitan Borough Council UKEAT 0114/08/DA

Mr Radecki was suspended from duty as a teacher and entered into negotiations with Kirklees for a Compromise Agreement whereby he would be compensated for the termination of his employment.  It was anticipated that the parties would agree a termination date of 31 October 2006.  In the expectation that the agreement would be executed Mr Radecki was removed from the payroll effective 31 October 2006. 

However, the agreement was never finalised.  On 22 February 2007, Mr Radecki informed Kirklees that he was unhappy with the terms of the Compromise.  Kirklees then wrote him a letter on 5 March asserting that his employment had terminated on the date he was removed from the payroll system, as was mutually agreed.  He lodged a claim on 7 March 2007 and the issue arose whether or the claim was in time or out of time if the effective termination date was the date he was removed from the payroll on 31 October 2006.  The Employment Tribunal found that as he was not being paid and his place of work had not transferred, his employment had terminated. 

The Employment Appeal Tribunal overturned this decision on the basis that it was clear that the Agreement was subject to contract and could not be relied on, nor was there any freestanding agreement that his employment ended when he was removed from the payroll.  His non-attendance at work and failure to have a disciplinary meeting and non-receipt of pay were all consistent with his being suspended and in the course of negotiating a settlement.  The letter of 5 March was the first unequivocal statement that could be regarded as terminating the relationship and therefore his claim was presented in time. 

Key point: Although the case concerned whether or not his application could be heard by the Tribunal, the case provides some useful pointers as to what an employer should do where a Compromise Agreement is to be entered into at the time of the proposed termination date.  If the employee will not enter into a Compromise Agreement on terms which are acceptable, then he should be terminated in accordance with the statutory dismissal procedures, or he should return to work. 

- SDDP applicable

Wilf Gilbert (Staffs) Limited v Bunn 2008 UKEAT/0547/07

An employee brought a claim for unlawful deduction from wages after he was suspended without pay pending a disciplinary hearing.  The employer argued that unpaid suspension was permitted by the contract.  The EAT upheld the Tribunal’s finding that suspending an employee without pay is a relevant disciplinary action for the purposes of statutory disciplinary procedures.  However it held that the Tribunal had erred in holding that it was necessary to both send a Step 1 letter and hold a Step 2 meeting before suspending the employee.  Where a disciplinary action consists of a suspension it can take place before the meeting.  However, the EAT held that an employer must send a Step 1 letter if it is contemplating suspending an employee but before it does so, thereby giving the employee a chance to put their case before the suspension takes effect. 

14. Grievance

Procek v Oakford Farms Ltd 2008 All ER 225

Mr Procek had a complaint of race discrimination against Oakford Farms.  On 12 January 2007 he sent a letter setting out his complaint suggesting it be dealt with informally.  The letter stated that if his complaint was not resolved within 14 days he would lodge a formal Step 1 grievance letter within the standard grievance procedure.  Oakford Farms rejected his grievance but did not notify him with his right of appeal which it was required to do under the standard grievance procedure, as it did not consider that the statutory procedure had been activated.  It assumed that Mr Procek would go on to submit a formal grievance if he was not satisfied with the outcome.  He did not do so.  Instead on 5 June he resigned and subsequently submitted a Tribunal claim for race discrimination. 

The Tribunal held that it had no jurisdiction to hear his claim because he had not initiated the statutory grievance procedure.  The grievance submitted on 12 January was expressly stated to be an informal complaint and a precursor to a statutory grievance.  Therefore, Oakford Farms was entitled to conclude that it was not a grievance for the purpose of Step 1 of the standard procedure. 

Mr Procek appealed and was successful.  The EAT held that as long as he had set out his grievance in writing and sent it to an employer that was sufficient to commence the statutory grievance procedure.  There was no requirement that it should be stated to be a statutory grievance. 

Key point: Employers should not be confused or misled by the label an employee attaches to any workplace concern he or she may have.  Once the concern is raised by the employee, an employer should proceed on the basis that the minimum procedural steps under the statutory grievance procedure should be followed. 

15. Secondment

Fitton v City of Edinburgh Council EAT

Miss Fitton was employed as an International Unit Manager in the Council’s education department.  In February 2003 she was seconded to ELLP, a corporate body constituting a number of parties including the Council which was involved in the provision of education.  At that time, it was intended that the secondment would last about 12 months.  However, it was later agreed at Miss Fitton’s request that her secondment to ELLP would become open ended and on 6 August 2003 the Council wrote to her confirming this arrangement and requesting that she accordingly relinquish her post as Unit Manager.  The Council informed her that in the event her secondment came to an end she would be guaranteed a comparable post with the council with her salary and conditions unchanged. 

On 1 June 2005 she resigned and subsequently brought claims for unfair constructive dismissal, sex discrimination and sexual harassment against the Council.  At a pre-hearing review the Tribunal addressed the issue of whether Miss Fitton was employed by the Council at the date of her resignation and at the time the events complained of took place. 

The Tribunal concluded that there was no subsisting contract of employment between Miss Fitton and the Council during the relevant period and therefore her claims could not proceed.  She appealed on the basis that the Council had agreed that she had an open ended secondment but the EAT upheld the Tribunal’s finding that she was employed by ELLP and not the Council at the date of her resignation and at the time that the events that she complained of took place.

Key point: The label the parties attach to any working arrangement may not be determinative.  

16. Pregnancy/Maternity Discrimination

Sethi v Greentech International Limited

Miss Sethi was married to the son of her employers who were Mr and Mrs Sethi senior, the owners and directors of Greentech.  Mrs Sethi was due to return to work after additional maternity leave on 1 March 2007.  In the meantime her marriage broke down.  In January 2007 she wrote asking for information about her return to work.  Despite three subsequent letters she received no reply from Mr Sethi senior.  He stated at that the Tribunal that he did not reply as she was divorced from his son it was inappropriate for her to return.  He believed that she did not want to return and had resigned. 

The Employment Tribunal found it was clear from the correspondence that Mrs Sethi did not intend to resign and by refusing to answer her letters there had been a breach of the implied term of trust and confidence which resulted in Mrs Sethi’s dismissal.  The dismissal related to her pregnancy, maternity leave and intention to return and therefore amounted to direct sex discrimination.  She was awarded £6,000 for injury to feelings. 

17. Apprenticeships Bill

The Department for Innovation Universities and Skills has published a draft Apprenticeships Bill. 

The draft Bill proposes:-

• Approved apprenticeship frameworks
• Prescribed model apprenticeship agreements
• A national service to link potential apprentices with potential employers

The proposal is that an apprenticeship agreement would, under the Bill, be a contract of service rather than a contract of apprenticeship.  Those employed under a contract of apprenticeship have additional rights.  An apprentice usually cannot be dismissed in the same way as an employee can and any damages awarded to the apprentice for breach of contract may take into account loss of future employment prospects. 

Re-classifying apprenticeship agreements under the Bill as contracts of service may therefore make the scheme more attractive to employers.  There will be a 12 week consultation process about the Bill ending in the Autumn. 

18. Whistleblowing

Public Concern at Work, the independent authority on public interest whistleblowing has produced a new Code of Practice, “Whistleblowing Arrangements” in collaboration with the BSI.  The Code sets out good practice for the introduction, revision, operation and review of effective whistleblowing arrangements and this has been developed to assist organisations across the public, private and voluntary sectors. 

Complimentary copies of the Code are available on request.