EMPLOYMENT LAW TRAINING AND EMPLOYMENT LAW CONSULTANCY
Section Three |
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Case Law Update - Significant decisions from the Courts |
This section includes important cases on:
Holiday Pay and long term sickness absence
Sickness absence during annual leave
Length of service criterion in redundancy selection
Legal representation at Internal discipline hearings
Compromise agreement "irrationally generous"
Discrimination - victimisation over non-payment of tribunal award
Discrimination on grounds of "philosophical belief"
Religious discrimination - Registrar loses on appeal
Council claims damages from ex Chief Exec.
"Sleeping on the job allowance" counts towards Minimum Wage
Case Summaries
Holiday Pay and long-term sickness absence.
This case has been around for a while now and we have been expecting the decision of the European Court. In a decision sure to disappoint Employers, the ECJ decided that an employee continues to accrue statutory holiday when they are on long-term sick leave and can roll over that leave to the next year. The ECJ did not rule on whether an employee can take holiday while they are off sick, saying that was a matter for national courts. What is surprising is that the ECJ state that untaken holiday entitlement during a leave year when an employee has been off sick can be carried forward to a subsequent leave year - at present the UK's Working Time Regulations bar untaken statutory leave from being taken over to the next leave year.
The case has now been heard by the House of Lords. They decided that there is nothing to prevent holiday being taken while off sick. Employers will now face the prospect of accruing additional costs whilst the employee remains on long term sick, and it may prompt businesses to review their policies on long-term absence with a view to earlier termination perhaps. What is clear is that on termination of employment, the employee will be entitled to a payment of accrued and untaken holiday pay. Furthermore the Lords decided that claims could be brought under the Wages Act (now Employment Rights Act), which opens up the possibility of holiday pay claims going back several years if the absence has persisted long enough.
Note that this ruling only applies to the Working Time element of holiday, currently 4 weeks. Any additional (statutory or contractual) holidays can be dealt with differently by the Employer.
Another unknown factor in all this is the impact on holiday entitlement of long-term sickness, which is less than 12 months duration. If an employee is off sick for nearly 11 months, are they entitled to a month off as soon as deemed "fit for work"?
Sadly this decision has left more questions than answers!
(Case; Stringer and others v HM Revenue & Customs. ECJ)
Sickness absence during annual leave.
In another case likely to anger Employers, the ECJ has handed down its decision in the "Pereda" case - which suggests that a period of illness whilst on holiday does not count towards the minimum period of 4 weeks paid annual leave under the Working Time Directive (WTD).
Mr. Pereda, a specialist driver, suffered an accident at work around 14 days before the commencement of his allocated period of 4 weeks annual leave. The injury put him out of action for 6 weeks. His sick leave therefore almost entirely overlapped with his planned holiday but his request for an additional period of annual leave was refused. Under the ECJs ruling his period of sick leave should not have counted towards his holiday time.
The ruling emphasises that there can be no exceptions from the entitlement to paid annual leave, the purpose of which is to enable a worker to rest and enjoy a period of relaxation and leisure. By contrast the purpose of entitlement to sick leave is to ensure that he can recover from being ill. Consequently, if a worker decides not to take annual leave during a period of illness, he must be granted a replacement holiday period to ensure that he is not deprived of his entitlement to rest, relaxation and leisure. This principle is likely to apply whether the employee falls sick before or during the actual period of leave.
Note again though that this will only apply to the 4 weeks holiday required under the WTD.
(Case: Francisco Vicente Pereda v Madrid Movilidad S.A. ECJ 2009)
Disciplinary investigations
Admission does not remove the need to investigate
A case decided by the EAT in August is a timely reminder of the importance of carrying out a proper investigation in a disciplinary case. This can apply even where an employee admits guilt. However case law also tells us that where the Employee does admit the offence, the amount of investigation can be less. (In fact in another recent EAT decision, Manor Oak v Kelly, the Court overturned a tribunal finding of unfair dismissal, saying that once the Employee had admitted a mistake, no further investigation was required).
Nena Okoro was employed as an assistant catering manager, with 17 years of unblemished service. When the company was presented with an iPod Nano as a corporate gift, Ms Okoro asked her line manager, Mr Cannon, if she could take it home. He refused, but Ms Okoro took it anyway.
Mr Cannon discovered that the iPod was missing and asked about it, but Ms Okoro would only say that she knew where it was and that she knew who had taken it. Two weeks later, she admitted that she had taken the gift as a joke and returned it unopened. (So she was fired by a Mr. Cannon??)
Compass considered that her behaviour constituted gross misconduct and Ms Okoro was suspended on full pay. An investigatory meeting was arranged but later cancelled. Ms Okoro was invited to attend a disciplinary meeting, as a result of which she was summarily dismissed. She complained that her dismissal was unfair.
Agreeing with Ms Okoro, the court pointed out that although there will be some cases in which an employee admits misconduct where no further investigation would be needed, in most cases an investigation should be carried out to determine if there are any mitigating factors, and to assess the gravity of the misconduct itself.
Ms Okoro had defended her actions by explaining that she and her line manager had a working relationship which included practical jokes. Taking the iPod was one such joke, although perhaps a misjudged one. If Compass had properly carried out an investigation into the incident and the circumstances surrounding it, the nature of their working relationship would have been discovered, and Ms Okoro's behaviour would have been seen in its proper context. By failing to carry out the investigation, the employer was at fault and the dismissal was unfair.
(Case: Compass Group v Okoro EAT 2009)
Length of service criterion in redundancy selection scheme lawful
In an unusual case, the union wanted to include service as a selection factor, but the Employer (perhaps concerned about Age Dicrimination) was reluctant to.
The High Court ruled that a redundancy selection policy that took into account length of service was indirectly age discriminatory against younger workers but could be objectively justified on the basis that it pursued the legitimate aim of achieving a fair and peaceful selection procedure. In any event, giving credit for length of service in a redundancy selection policy could be considered a ‘benefit' under the Age Regulations and, as such, potentially fell within the service-related benefits exemption from the general prohibition on age discrimination.
The case was appealed, and the Court of Appeal has made a declaration that the use of length of service as one of the selection criteria in a redundancy selection process does not contravene the age discrimination regulations. It would not be advisable to rely on length of service as a sole factor, or to place too much weight on it in redundancy selection.
(Case; Rolls Royce plc v Unite the Union, High Court (QBD); CA)
Legal representation at Internal hearing
The High Court has recently held that in certain circumstances, an employee has the right to be represented by a lawyer - and not just a workplace colleague or union official - at internal disciplinary hearings.
In this case the Claimant was employed as a music assistant at X School. The School commenced disciplinary procedures against him for breach of trust as a result of him having kissed a 15year old boy. The Claimant was dismissed.
The School had a duty to report the Claimant to the Secretary of State for Children, Schools and Families to determine whether he should be entered on the register or those who are unsuitable to work with children.
The Claimant sought to be represented by his legal representative at the internal disciplinary hearings. The School refused.
The Claimant alleged that the refusal to permit legal representation at the internal hearings constituted a breach of his Human Rights - the right to a fair trial.
The Court held that:
- the school was required to have regard to Article 6 of the ECHR
- the internal disciplinary and appeal procedures must be viewed as part of the same procedure as the Secretary of State's procedures relating to entry onto the register of those unsuitable to work with children.
- In view of the consequences of a dismissal for the reasons given by the School, the Claimant should have been entitled to be represented by his legal representatives, and not just a trade union representative or fellow worker
- the potential to claim unfair dismissal in the employment tribunal would not be an adequate alternative remedy
Note; this is a pretty rare situation. Most forms of discipline do not attract the right to bring a representative from outside the organisation, other than a Union officer. This is the position in the new ACAS Code. However if a dismissal would result in some other sanctions coming in, such as being placed on a register of offenders, affecting the right to work in some way - legal representation would appear to be appropriate.
(Case; R v Governors of XX School. High Court 2009)
This decision has also had an effect on a different case. Dr Kulkarni was subject to disciplinary proceedings following an allegation by a patient that he had placed a stethoscope under her underwear without her consent. He claimed that the refusal of his request to bring a lawyer to his disciplinary hearing was a breach of his right to a fair trial. The High Court initially held that he was not entitled to legal representation. The potential professional ramifications for Kulkarni if the allegations were upheld were not enough to persuade the court otherwise.
The later High Court decision in R (on the application of G) v Governors of X School (which did not mention this case) seemed difficult to reconcile with this. G was a music assistant accused of having an inappropriate relationship with a 15-year-old boy. He was found to have a right to legal representation, on account of the gravity of the likely consequences (including a potential lifetime ban on working with children) should the disciplinary charges be upheld.
The Court of Appeal has now overturned the High Court decision and has held that Kulkarni has a right to legal representation. The finding was based on a specific contractual entitlement to legal representation in a Department of Health document applicable to doctors and dentists in England. However, the Court of Appeal's comments on the human rights issue broaden the potential implications of the case well beyond this population.
This is not just a concern for public sector employers, whose employees can bring a freestanding claim for breach of their human rights. Tribunals are required to interpret unfair dismissal legislation so far as possible to comply with human rights law. When considering whether an employer has fairly dismissed an employee (whether in the public or private sector), any alleged breaches of human rights may be taken into account.
Employers in regulated sectors - for example, the finance, education and medical sectors - should still give careful consideration to requests for legal representation, where the disciplinary charges may be relied or on referred to by a professional or regulatory body. Note, however, that leave to appeal has been granted in both cases and further debate is likely.
Key points for employers
- Consider whether there is a contractual right to legal representation.
- Even if there is no contractual right, requests should not be systematically refused where the disciplinary hearing is likely to have implications beyond the employee's immediate employment.
- If the employee could be deprived of their right to practise their profession, it may be appropriate to permit legal representation. This will be particularly important where the facts upon which a decision is based is complex or technical.
Compromise agreement "irrationally generous"
Mrs. Gibb was the Chief Executive of Maidstone NHS Trust at the time of an outbreak of a "superbug". After an investigation, a report was very critical of the leadership and management of the Trust in that difficult period. The Trust decided to terminate her employment, with a generous compromise deal attached (approx £250,000 it is alleged). All parties agreed the deal in the usual way for a compromise deal to be binding. However, before payment was made, the Healthcare Commission final report into the outbreak was published; this prompted the Dept of Health to instruct the Trust to withold the payment. Subsequently some of it has been paid, but Mrs Gibb sued in the High Court for the unpaid element.
The Judge decided that the amount had been "irrationally generous" , and refused to order further payment.
The case has been referred to the Court of Appeal.
It would now appear that Compromise deals are open to challenge, at least in the Public Sector; so the amounts paid need to be justifiable and based around some analysis of potential claims and compensation levels. If need be these can then be defended in court.
(Case; Gibb v Maidstone and Tunbridge Wells NHS Trust High Court 09)
Discrimination - victimisation over non-payment of tribunal award
As reported in the News (Section One), a surprising number of claimants never receive the compensation awarded by a tribunal. A recent case dealt with just that issue, and came up with an interesting solution.
An IT specialist was awarded £72,000 for race discrimination, but the employer refused to pay anything, even after the claimant obtained a County Court Judgement. In a further claim, he then alleged that the failure to pay amounted to an act of Victimisation - less favourable treatment in connection with an earlier complaint of discrimination. The Tribunal said they could not hear the claim as it was to do with "enforcement" - ie a dispute over non-payment and outside the tribunals powers.
The case went to the EAT , then Court of Appeal. They ruled that the case could be heard in tribunal, in part to establish why the Employer had not paid the compensation awarded.
As a result of this case, Employers need to be aware that a failure to pay the compensation in discrimination cases could lead to further claims, including victimisation, for which compensation is uncapped.
(Case; Rank Nemo Ltd v Coutinho Court of Appeal 09)
Discrimination on grounds of "philosophical belief"
Belief in climate change can be a ‘philosophical belief' leading to a claim under discrimination laws.
Under the Employment Equality (Religion or Belief) Regulations 2003 it is now unlawful to discriminate against a person on the ground of his or her religion or belief. ‘Belief', for this purpose, is not confined to a religious belief but expressly covers any ‘philosophical belief. The original requirement was that the "belief" was similar to a religious belief - this is no longer the case. This has opened up the prospect of claims for a range of reasons. However, few discrimination cases have been brought under the Regulations on this basis, which makes this case of particular interest.
An employment tribunal found that the claimant's belief that carbon emissions must be cut to avoid the catastrophic consequences of climate change could amount to a philosophical belief for the purposes of the Employment Equality (Religion or Belief) Regulations 2003. The belief affected most aspects of the claimant's life - such as his choice of home and method of travel - and was sufficiently cogent, serious, cohesive and important, as well as worthy of respect in a democratic society, to qualify as a philosophical belief. The Claimant alleges that he was unfairly selected for redundancy due to his "environmental" beliefs, which he regularly expressed to his employers.
This was a preliminary hearing to decide whether the claim could proceed under the Religion and Belief Regulations. Having confirmed that it can, it was returned to a tribunal for further consideration.
On a similar basis (belief), several Police Authorities have reportedly given special leave rights to Police Officers who are practicing Pagans - another genuine philosophical belief.
(Case; Nicholson v Grainger plc and ors. London Central Employment Tribunal, 09)
Data Protection court ruling
A private investigator who compiled a list of "troublemakers" in the construction industry has been fined £5000 for breaching the Data Protection Act. The list was built partly on the basis that the employees were allegedly trade union activists, shop stewards or had been involved in instigating industrial action. The Information Commissioner has also stated that enforcement notices will be served on 17 businesses in the construction sector, including some "big names". They apparently paid to use the "service" when they were recruiting.
Because making selection decisions on the basis of trade union membership or activity is unlawful, it also opens up the possibility that unsuccessful job applicants, who can point to the list as a reason for rejection, may seek compensation from the firms involved. As this is a form of discrimination, compensation is not subject to the usual "capping". There could be an issue over whether these claims to tribunal would be "in time" - ie within 3 months normally. Tribunals do have powers to extend the time period.
Disability Discrimination
The definition of a disability involves meeting a four-stage test, as set down in the DDA of 1995. Two elements of this require the claimant to establish whether the persons "impairment" has a substantial impact on "normal" day to day activities. Occasionally cases help to shed some light on what this actually means!
Mr. Adams, a police officer, had health problems, which meant he found it hard to do his night shift duties. His employer made a number of adjustments, transferring him to a new area and allowing him to finish his night shift early, at 4.00 am on occasions. Unfortunately his problems persisted and he was dismissed. He claimed disability discrimination and the employer argued that working nights was not a "normal" day-to-day activity. (Skip to jokes about how night work can be a "day-to-day" activity!).
The EAT decided that sufficient numbers of employees work nights in a wide range of occupations, so held that working nights was a normal activity, and allowed his claim to proceed.
This decision follows the same logic as another Police case a short while ago, (Paterson v Metropolitan Police EAT 07) when an officer with Dyslexia claimed that taking part in examinations for promotion was "normal day to day" activity. The EAT in this case also said that they considered this to be a normal part of business life for many workers, so ruled that Paterson was protected by the DDA.
(Case; Chief Constable Of Dumfries and Galloway v Adams EAT 09)
Religious discrimination - Registrar loses on appeal
The EAT have recently overturned a decision of an Employment Tribunal - finding that the employment tribunal committed fundamental errors of law when it found that a Christian registrar suffered religious discrimination when she was threatened with dismissal for refusing to carry out civil partnership services (which give rights to same-sex couples akin to marriage.) The Council had committed itself to the non-discriminatory provision of its services, and it could not therefore constitute direct discrimination contrary to the Religion or Belief Regulations when it sought to discipline the claimant for refusing to abide by this policy - even though her reason for refusing was her religious belief. Nor had it harassed the claimant on account of her religious belief. Furthermore, the tribunal's finding of indirect discrimination could not stand as the Council had been fully entitled to insist that she carry out the functions of her job in a non-discriminatory way.
In another similar case, a counsellor for Relate lost his claim for religious discrimination after being dismissed for refusing, on religious grounds, to counsel same sex couples.
(Case; London Borough of Islington v Ladele, EAT 2009)
Entitlement to rest breaks
The EAT has held that the Working Time Regulations 1998 entitle a worker to one rest break during the course of the working day where the daily working time exceeds six hours, and not one break for each and every six hours worked. While certain workers, such as those involved in security or surveillance, are excluded from the general right to a rest break, if it is possible to grant the worker an equivalent period of compensatory rest then that period must be given. If this is not possible for objective reasons, the employer must afford the worker such protection as may be appropriate to safeguard his or her health and safety. The EAT also holds that compensatory rest must be taken during working time.
Thus, Mr. Hughes, who worked 12 hour shifts was only entitled to one 20 minute break in that shift.
( Case; Corps of Commissionaires Management Ltd v Hughes. EAT 2009)
Council sues ex Chief Executive for damages
It is most unusual for an Employer to take legal action for damages against ex-employees. In this case the Employer felt that the Employee had mislead them during recruitment, by not revealing her true state of (mental) health.
The Employer's claim for substantial damages against its former employee, alleged that she made fraudulent and negligent misrepresentations in the pre-employment medical questionnaire by failing to disclose her history of recurrent depressive illnesses. She was subsequently offered the position of Chief Executive, but soon had relationship problems, went off sick and never returned. The Council sued her for nearly £1 million, largely made up of the ill health pension costs incurred.
The Council were unsuccessful. The Court was critical of the pre-employment questionnaire - which contained vague questions about health, but nothing specific enough. Although Ms. Laird failed to disclose the full picture of her state of health, the Court felt that she had answered the questions on the form in an honest manner. Although she was still taking anti depressants at the time of her application this was not disclosed. (A question asking if she was currently taking any medication would have required her to disclose this.)
Given the pressures to be found in senior positions such as this, Employers need to ensure that their pre-employment questionnaires are robust enough.
If you do not ask for specific information, the applicant is under no duty to disclose it voluntarily.
(Case; Cheltenham Borough Council v Laird. High Court 09)
Sleeping on the job allowance counts towards NMW
Hours where an employee is required to be at work, even if allowed to sleep during an on-call period, are deemed to be working hours under the Working Time Directive.
Recently the EAT considered whether a ‘sleeping in allowance' should be included for the purposes of calculating the National Minimum Wage.
Mr Smith was contracted to work 15 hours per week at a residential care home. He was occasionally required to sleep there and be on call for night duty. When he did so, he received a ‘sleeping-in allowance' of £25 per night. He did not receive any further payments under his contract in respect of the overnight duty, as he was never woken up while he was on call. Both parties agreed that the time Mr Smith spent sleeping at the care home amounted to working time for the purposes of calculating his average hourly pay for NMW purposes.
The EAT held that the ‘sleeping-in allowance' amounted to a payment for performing a sleep-in duty. It was not an ‘allowance' and could be taken into account for the purposes of calculating whether Mr Smith was paid the NMW.
(Case; Smith v Oxeter Learning Disability NHS Trust )
Strike ballot did not comply
Unite, the trade union, failed to meet its obligations under legislation (TULR(C) A); as figures in the ballot notice were inaccurate and there were unreasonable delays in notifying the Employer. The High Court therefore granted the Employer an injunction preventing strike action. The union appealed to the Court of Appeal, but the decision was upheld.
(Case; Metrobus v Unite EWCA 09)