August 2008  

This quarter we have two important disability cases to report. Both involve significant changes to the application of the legislation. The first case, Borough of Lewisham v Malcolm, whilst not an employment case – it actually comes under the ‘goods and services’ provisions – must be applied by tribunals in the employment context and will be a welcome decision for employers. The House of Lords (HoL) have reviewed who the appropriate comparator should be in a disability discrimination claim and have made it considerably easier to terminate employees who are absent due to long-term sickness. Readers should note, however, that the duty to make reasonable adjustments still applies and failure to fulfil this obligation would still result in a successful disability discrimination claim.

The second, Coleman v Attridge Law, comes from the European Court of Justice (ECJ) where a ruling has been made that the Equal Treatment Framework Directive does cover ‘associative’ discrimination. Previously it had been trite law that an individual had to be disabled to be protected by the law. The ECJ have ruled that the Directive covers, for example in this case, the carer of a disabled child.

The repeal of the SDP has given the Government an opportunity in the new Employment Bill to consider further amendments to dealing with workplace disputes. One interesting development may be CIPD members being empowered to sign-off compromise agreements. There are some important tweaks to tribunal procedures that will hopefully see simplification to processes and shorter timescales to resolving some of the basic disputes. Continuing the SDP theme we have Acas issuing draft Guidance to sit alongside the new draft Code of Practice.

Finally, this is the last newsletter before October and so we will just take this opportunity to remind you that the NMW increases on 1 October. The new rates will be as followed:

Key ECJ decision likely to be delayed

Here at klc we have noticed a large number of reports in various publications – so it is most unlikely that is has escaped your attention – about the Heyday case heard at the ECJ on 2 July, where the Government’s decision to have a statutory retirement age was challenged. There is no speedy resolution in sight as the indications are that there will be no decision until early 2009. This means all challenges to ‘forced’ retirement in UK Employment Tribunals (ET) remain stayed until the ECJ judgement is produced. The stay to proceedings made by the President of the Employment Appeal Tribunal (EAT) has been confirmed by the Court of Appeal (CoA).

New EAT Practice Direction on lodging appeals

The EAT has issued a new Practice Direction, Employment Appeal Tribunal – Procedure (2008), which covers EAT procedure including the process and timescales for lodging appeals. The Practice Direction came into force on 22 May and replaces all previous directions. Click here to read the new Practice Direction.

As well as appearing at the ET for clients klc can also prepare appeals to the EAT. To find out more about the klc tribunal service please call Piers Chadwick, Partner, on 01483 415276. Alternatively visit the website to see our complete range services.

CIPD factsheet on corporate manslaughter

The CIPD has published a guide to the Corporate Manslaughter and Corporate Homicide Act 2007, which came into force on 6 April this year. The factsheet, available to CIPD members only, covers the following topics:

Members of the CIPD should click here to read the guide.

The klc employment law November 2007 newsletter, which can be accessed from the 'news' section of the klc website, contains a link to a Ministry of Justice guide to the Act.

Acas produce guide to draft Code of Practice

In May Acas produced a new draft Code of Practice designed to reflect the changes to discipline, dismissal and grievance brought about by the anticipated repeal of the statutory dispute resolution procedures in April next year. Acas have now produced draft guidance to accompany the Code. The Discipline and grievance at work: Draft Acas guide contains more detail than the Code and includes some practical guidance. Consultation on the guidance will close on 25 July 2008. Click here to read the draft Code 4 and click here to read the draft guidance.

There was an item on the draft Code in the May 2008 newsletter, follow the ‘news’ link above to access klc’s archived newsletters.

New data protection guidance for TUPE situations

The Information Commissioner has published new guidance on providing employee information in TUPE transfer situations. The 2006 TUPE Regulations oblige the transferor (old employer) to provide specified employee information to the transferee (new employer). The Information Commissioner has made clear that the legal requirement to provide the information takes primacy over any restrictions that may normally be imposed by the Data Protection Act (DPA). The guidance makes clear that both parties must comply with the DPA in the handling of the employee data. Click here to read the guidance.

Europe agrees on agency temps and working hours

Ministers have finally reached agreement in Europe on working time and agency workers. The agreement on working time will give the UK the right to maintain its 'opt-out' arrangements from the 48-hour working week and also addresses long standing issues of 'on-call' time. The Department for Business and Regulatory Reform describe the agreement on agency workers as giving flexibility that businesses require as well as giving a fair deal to agency workers. The European agreement follows agreement by the social partners (the Government, the TUC and the CBI) on agency working in the UK. The key points are as follows:

Working Time Directive

Temporary Agency Workers Directive

The proposals must now go to the European Parliament where they may be passed by majority voting rather than unanimous agreement of all 27 Member States. Based on the European timescales this suggests that UK regulations will be in place no earlier than April 2010. Click here to view the European Commission press release.

Employers of illegal workers ‘named and shamed’

In February the Home Office announced new civil penalties for employers of illegal workers. As well as issuing fines to over 200 companies amounting to a total of £2.35m the Home Office have now started to ‘name and shame’ employers. Currently 35 firms have been named on the UK Border Agency website. These companies were found to have 56 illegal workers and have been subjected to fines totalling £303,000. The majority of employers have been restaurants and fast-food outlets but the Home Office are hoping to identify the criminal organisations actually conducting the people-smuggling operations. The number of prosecutions is 10 times higher than for the total of 2007. Click here to visit the UK Border Agency website for information on the firms and on employers’ obligations to prevent illegal working.

If you visit the klc website and go to the 'news' page and read the February 2008 newsletter there is an item on the new penalties – whilst you are there why not register to receive our Hot News items and quarterly newsletters.  Hot News is sent out on an ad-hoc basis as and when important employment news, including new legislation and key case law developments, is announced. 

Employment Bill could give CIPD members power to sign compromise agreements

The Government has launched further consultation on dispute resolution and other employment law matters as it considers the Employment Bill. The consultation, Dispute Resolution – Secondary legislation consultation, document gives a very strong indication that the Employment Bill will come into force on 6 April 2009. The current consultation considers the following issues:

Currently qualified lawyers, legal executives, certified trade union members and certified advice centre workers are able to sign-off compromise agreements. The suggestion is that as many HR professionals become involved with compromise agreements they should have the authority to sign them off. Should there be such an extension, CIPD members will have to comply with the general requirements in relation to compromise agreements, that they are:

 

a) competent,

b) have insurance or professional indemnity cover, and

c) are independent (for example an HR professional at a firm could not advise one of their employees who the organisation is seeking to compromise).

At present if an ET award has not been paid, interest becomes payable at a rate of 8%. The suggestion is that interest rates should reflect the actual cost of borrowing and so could be 1.5% or 2% over the base rate. The aim is to compensate the successful Claimant who has not received their award, and may as a result suffer financial constraints, rather than punish the Respondent.

Currently, where the ET finds that discrimination has occurred it may make recommendations that would benefit the Claimant. However in many cases the Claimant, as a result of the discrimination suffered, no longer wishes to be employed by the Respondent. Under the new arrangements the ET would be able to make recommendations, regardless of whether they benefit the actual Claimant, that improve the situation for remaining employees of the employer. Although there would be no financial penalty for non-compliance, an ET may take this into account if there are further discrimination claims against the Company.

The suggestion would be that where the parties consent ( they must have seen both the ET1 and ET3) it would be possible for the Employment Judge to make a decision – having reviewed the papers – without a hearing. The claims where this would be possible are::

• Unlawful deductions from wages
• Breach of contract
• Redundancy pay
• Holiday pay
• NMW.
  

 

Cases where one of the above claims was part of a claim covering other issues would proceed to a full hearing as normal.

If a Claimant withdraws their case the Respondent must write to the ET asking for the case to be dismissed to prevent the Claimant resurrecting the claim based on the same facts. The proposal is to tidy up the Rules so the Claimant and Respondent better appreciate the impact of claims being withdrawn and/or dismissed.

The Government want to ensure that the new procedures come into force as quickly as possible without either Claimants or Respondents being disadvantaged where an act takes place before the 6 April 2009 but the case would not be heard until after the Employment Bill (by then Act) comes into force.

The consultation closes on 26 September 2008. Click here to read the consultation document.

Cases

Automatically unfair dismissal – dismissal of employee who had brought ET proceedings

Perry’s Motor Sales Ltd (1) Perry’s Burnley Ltd (2) v Mrs K Lindley – L worked for PMS Ltd for just over two years until she resigned and claimed constructive unfair dismissal. PMS Ltd settled the case by paying L £6,000. L then joined Vantage Garages (Burnley) Ltd. PMS Ltd then purchased the shares in VG(B) Ltd and subsequently changed the name to P(B) Ltd. PMS Ltd told P(B) Ltd to dismiss L. A month later PMS Ltd took over P(B) Ltd as a relevant TUPE transfer. L argued that she had been automatically unfairly dismissed because she had asserted a statutory right (she had brought proceedings in an ET against PMS Ltd). The tribunal held that L was dismissed in relation to a transfer by P(B) Ltd (the transferor – the old employer) at the instruction of PMS Ltd (the transferee – the new employer) because she had previously brought a claim against the transferee. The EAT have upheld the decision that the dismissal was automatically unfair (L did not need a year’s service) because the dismissal was because of her earlier claim to the tribunal.

‘Holiday pay’ should be same as pay when at work

British Airways plc v Williams and ors – Aviation workers are excluded from the Working Time Regulations. BA plc pay supplements to pilots when flying – £10 per hour flying pay and £2.73 per hour for ‘time away from base’ in addition to their basic pay. When pilots are on holiday they receive only basic pay. A group of pilots, including W, decided to challenge this as they believed that holiday pay should be comparable to the pay whilst working. BA plc argued that flying pay and ‘time away from base’ were not paid because the pilots were neither flying nor away from base. The tribunal agreed with the pilots. Before the EAT BA plc argued that as aviation workers are excluded from the WTR that Parliament had not intended to provide rules but to leave it to local agreement to resolve how holiday pay would be calculated. The EAT reviewed the decision of the ECJ in Robinson-Steele v RD Retail Services Ltd where the ECJ held that workers should not be discouraged from taking leave and so they should have the same pay when on leave as when working. Having accepted the pilots should not be disadvantaged when taking leave they decided that the calculation (employments with no normal working hours) from the Employment Rights Act 1996 (section 224) should be used.

Part-time workers – correct test ‘but for’ not ‘reason why’

Miss R Sharma & others v Manchester City Council – A group of part-time college lecturers had a clause in their contracts allowing the college to reduce their hours to no less than one-third of the hours they had worked in the previous year. There was no similar or equivalent clause in the contracts of full-time staff. Following reductions to funding the college sought to reduce costs without making any compulsory redundancies. The college decided to reduce the hours of the part-time lecturers as a way of reducing costs without making any redundancies. The part-timers argued that they had been discriminated against on the basis of their part-time status. The ET held that no discrimination had occurred because the reason why part-timers had their hours reduced was not ‘solely’ because they were part-time. The EAT allowed the appeal arguing the treatment did not need to be solely because the lecturers were part-time, although in this case the EAT held that the reason for the treatment was solely because of their part-time status. The EAT in so deciding criticised the Scottish EAT for their 2004 decision in Gibson v The Scottish Ambulance Service. The EAT held the correct test is not the ‘reason why’ but rather the ‘but for’. In this case, ‘but for’ the fact the staff were part-time they would not have had their hours reduced.

HoL reviews comparator for disability claims

Borough of Lewisham v Malcolm – the HoL have, potentially, made it harder for claimants to win disability discrimination cases. The case was heard in relation to the provision of ‘goods and services’ rather than in the area of employment but must be followed by tribunals in the employment context.

The HoL held that the long-standing comparator test laid down in Clark v Novacold was incorrect. In the Novacold case the CoA held that the comparator does not have to be ‘in the same or similar circumstances’ as the disabled claimant. The ramifications from this decision were that, for example, an employee dismissed for sickness absence, arising from a disability, should be compared with an employee who has not been absent and therefore not dismissed, rather than an employee who was not disabled but has also been absent. The decision in Novacold was based on the interpretation of the phrase in the Disability Discrimination Act ‘a person discriminates against a disabled person if (a) for a reason which relates to the disabled person’s disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply’. The HoL interpretation is:

In the Novacold example this would mean that a disabled employee who is dismissed for a long-term absence would be deemed dismissed for the absence from work and not for the disability.

Contrary to the EAT decision is H J Heinz Co Ltd v Kenrick the HoL also held that a person could only be liable for discrimination if they know that the individual is disabled.

ECJ rules associative discrimination unlawful

Coleman v Attridge Law and Steve Law – C had claimed in an ET that she had been unfairly constructively dismissed and treated less favourably than other employees because she was the mother and primary carer of a disabled child. The ET referred the case to the ECJ which ruled that the Equal Treatment Framework Directive prohibits direct discrimination and harassment by association.

This means that, under the Directive, the person bringing the claim does not have to be disabled as is currently required by the Disability Discrimination Act (DDA) 1995. As C was employed in the private sector she does not benefit from direct protection from the Directive. The next stage, therefore, is for the ET to decide whether the DDA can be read so as to implement the true intent of the Directive (i.e. to offer her protection from discrimination). This decision will also have implications for the Age Regulations which currently do not offer protection for discrimination by association.

TUPE transfer – continuing to work means no objection

Capita Health Solutions v (1) British Broadcasting Corporation (2) Mrs A McLean – the EAT have held that an employee cannot object to a transfer and continue to work beyond the date of transfer. M was employed by the BBC as an occupational health nurse. BBC proposed to transfer the entire department to CHS. M raised a grievance and objected to the proposed transfer. However M agreed with the BBC that she would continue to work for six weeks (working half her contractual notice period) after the transfer to provide a handover. Both the BBC and CHS made it clear that they were happy for M to stay working for CHS after the transfer. Following the transfer the BBC retained no occupational health service and M continued working as she had done previously. The BBC referred to the six-week period as a secondment and paid her wages, accrued holiday and long service bonus at the end of the six weeks, when her employment terminated. The tribunal and EAT held that M could not continue to work, after the date of transfer, and claim that she has objected to transfer – by continuing to work M was clearly not objecting. The transfer occurs on a set date and this cannot be varied by agreement of the parties.

Whilst the above case was heard under the 1981 TUPE Regulations the outcome would have been the same under the 2006 Regulations.

Breaches of ‘natural justice’ make dismissal unfair

Stephen Boyd v Renfrewshire Council – the Court of Session, Scotland (CoS) (equivalent to the CoA for England & Wales) has held that a dismissal was unfair because B did not know the full nature of the allegations against him and the possible worst-case outcome of hearing. B, the driver of a bin lorry, was coerced into disrupting the collection service by his crew. The crew jumped from the lorry and one turned to him and in a threatening manner told him not to say anything about they were doing. At midnight on the same day he received a drunken and threatening telephone call from one of his crewmates and at a later date his car was maliciously damaged. The union official who accompanied B to the disciplinary hearing had told him to keep his answers brief and that he would do a deal with RC so that B would receive no more than a warning. B did not tell the full story of the incident as he feared further intimidation and was not expecting anything worse than a final written warning. B was dismissed and provided with written reasons for dismissal that did not reflect the original allegations set out in the letter of invitation to the hearing. B argued on appeal that had he known the full extent of the allegations and the possible outcome of the hearing he would have provided more information in his defence. The ET held the dismissal to be unfair because it was a clear failure of natural justice not to set out the full allegations and warn him of the potential consequences. The EAT overturned the decision as they felt he should have appreciated how serious the allegations were in spite of the fact that he had never been given a copy of RC’s disciplinary rules. The CoS restored the decision of the ET.