EMPLOYMENT LAW TRAINING AND EMPLOYMENT LAW CONSULTANCY

Section Three
 

Case Law Update - Significant decisions from the Courts

Case Law Update – Significant decisions from the Courts

This section includes important cases on:

Case Summaries

All change on Representation at Dismissal hearings.

The Supreme Court has recently overturned the Court of Appeals decision; saying that the Human Rights Act did not apply in this case (involving a teacher who was dismissed over an alleged relationship with a pupil at the school). The Court of Appeal felt that the teacher had a right to legal representation under the HRA, as dismissal meant a “loss of profession". The Supreme Court ruled (4 to 1) that there was no right to a legal representative where the “barring decision is sufficiently independent of the dismissal decision."

The School would have to report the teacher to the Independent Safeguarding Authority (ISA) who could decide to bar him. But the Court ruled that the Independent Safeguarding Authority, which conducts its own procedures to determine whether or not to put an individual on a 'barred list' of people banned from working in schools, was sufficiently independent. This meant that there was no requirement for the School's disciplinary proceedings to comply with Article 6 of the HRA.

[Case; R v Governors of X School Supreme Court 2011]

Age Discrimination at BBC

An employment tribunal has held that a female TV presenter, Miriam O "Reilly, suffered age discrimination after being dropped from BBC' Countryfile programme in favour of younger presenters when the programme moved to a primetime evening slot. Further, the decision was not justified because, while the BBC' wish to appeal to a primetime audience – including younger viewers – was a legitimate aim, choosing younger presenters was not required to appeal to such an audience and, even if it was, it would not be proportionate to do away with older presenters simply to pander to the assumed prejudice of younger viewers.

This is a complex case, involving claims of age and sex discrimination as well as victimisation. Influential in the decision to find BBC guilty of discrimination was the complete lack of any formal selection criteria for the “refreshed" Countryfile programme. There appeared to be only generalised discussions about preferred characteristics for the new presenters. Claims involving discrimination require the Employer to provide evidence to defend its decisions; a lack of any documentation surrounding the appointment process made this difficult for the BBC to do. Evidence also suggested that O "Reilly was offered little or no work by the BBC after her complaints were made.

Employers are reminded to carry our careful selection processes and document decisions.

[Case; O "Reilly v BBC London Central Tribunal 2011]

Holiday leave

Recent case law, particularly from the European Court, has appeared to give workers rights to carry holiday forward into the next holiday year in certain situations; particularly when illness prevents the worker from taking the holiday. A recent decision in the EAT has restored some balance it seems! A security worker lost his claim for holiday pay and the EAT held “that workers can lose untaken holiday at the end of a leave year, provided that an employer has not operated the notice requirements for requesting annual leave in an unreasonable, arbitrary or capricious way so as to effectively deny requests for leave." Mr. Lyons had a contract that stipulated that the holiday year ended 31 March and no carry over was allowed, so untaken holiday was lost. On 6 March he had 9 days holiday outstanding; and wanted to take them, but failed to use the correct procedures and forms for requesting the leave. The Employer did not pay him for the holiday which led to a grievance complaint before he resigned claiming constructive dismissal. His claim failed, which indicates that holiday rights can be lost at the end of the holiday year provided the employee has had a reasonable opportunity to exercise their rights to take leave.

[Case; Lyons v Mitie Security Ltd. EAT, 18.01.10]

And yet... more on Holidays!

In Shah v First West Yorkshire Ltd an employment tribunal has held that the Working Time Regulations can be interpreted in accordance with the European Court of Justice's decision in Pereda v Madrid Movilidad SA to allow annual leave ruined by sickness to be retaken in the following leave year. Thus, the employer's refusal to allow Shah to retake his holiday ruined by a broken ankle in a new leave year was a breach of the Regulations.
Shah booked four weeks of holiday from 22 February to 21 March 2009. Unfortunately, as a result of breaking his ankle in January, he was on sick leave until 18 April, during which he was paid holiday pay (a higher rate than contractual sick pay) for the days he had booked off. When Shah asked to reclaim his holiday entitlement, his Employer stated that the days were 'lost' as he returned to work after the new holiday year started on 31 March. Shah lodged a claim at a tribunal that under the Regulations he was entitled to take his accrued untaken leave -  he had been “paid" for them according to the Employer.

The tribunal found that the requirement that holiday entitlement under the Regulations must be exercised in the year of accrual, should be interpreted consistently with the Directive so far as possible. As a result of the ECJ's decision in Pereda, the Directive requires national law to permit an employee who falls sick during annual leave to take that annual leave at a different time, if necessary in the following leave year.

The Regulations aim to protect workers' health and safety by ensuring they have a period of leisure each year, rather than storing up holiday over several years. It is consistent with this purpose to allow workers who did not have a period of leisure due to ill health to take that leave in the following year if necessary.

[Case; Shah v First West Yorkshire. Leeds ET Feb 2010]

Holiday Pay and Long Term sickness

Employers can defeat claims for more than one year's holiday pay from sick employees by making a payment covering their most recent leave year, a tribunal has ruled.

Holiday issues are among the most common problems that employers deal with, and the legal position on how holidays and sick leave interrelate is still uncertain.

Ever since the outcome of the “Stringer" case - where the House of Lords ruled that failure to pay holiday pay, even after a long sickness absence, can be an unauthorised deduction from wages - employers have been faced with uncertainty.

Legal experts warned that one effect of the Stringer case was that an employee could bring a claim for payment in lieu of accrued holiday pay, going back over previous leave years, as a series of unauthorised deductions.

But in the case of Kahn v Martin McColl, the tribunal ruled that payment for a sick employee's final holiday year entitlement meant an unauthorised deductions claim for previous leave years' holiday pay was out of time.

The Working Time Regulations prevent employees from carrying over holiday to subsequent leave years, and this decision appears to be the first to consider whether or not an employer can break a chain of unauthorised deductions, and thereby defeat a claim for more than one year's holiday pay, by paying the employee for the most recent leave year. It is an interesting tactic, but not a binding decision at this point.

[Case; Kahn v Martin McColl ET  2010]

A recent decision at the EAT suggests that there is no need for the employee to make a formal request for holidays in order to preserve the entitlement. Mrs. Larner was dismissed after more than a year of sickness absence. Her Employer refused to pay for outstanding holiday entitlement on the grounds that no formal holiday requests had been made during her long absence. The EAT referred to the decision of the ECJ (in the Spanish case of Mr. Pereda) saying that Mrs. Larner retained her rights to holiday as she had been unable to take them in the year in question. She was therefore entitled to either payment in lieu or carried over the entitlement into the next holiday year.

[Case; NHS Leeds v Larner EAT 2011]

Part time and pro rata Holidays

A recent decision from the European Court on an Austrian case indicates that workers who are moving from a full time to a part time position should not have holiday already accumulated prorated. The Working Time Directive does not allow for the prorating to be applied retrospectively.

Vetting and Barring arrangements - a breach of human Rights?

The Safeguarding Vulnerable Groups Act 2006 introduced a vetting and barring scheme aimed at protecting children and “vulnerable adults". The Coalition Government announced that the scheme was too intrusive and halted its introduction. (Note however that some elements of the scheme were introduced under the previous Government and these remain in force).

The High Court has now ruled that the scheme infringed the rights of three nurses who were automatically placed on the system without any right of representation. They do have a right to a fair trial or hearing in such circumstances. The three claimants had automatically been placed on the register after being convicted or accepting a police caution for certain offences. They were eventually taken off the lists after a successful challenge, but in the meantime had been barred from all work in their chosen profession. They argued that this was a breach of their rights, and the High Court agreed.

This decision will prompt a further review of how to balance the various rights of the vulnerable and those working in that sector.

[Case: Royal College of Nursing v Secretary of State for the Home Department. High Court 2010]

Disability and Reasonable Adjustments

Generally (other than "heat of the moment" type resignations), a resignation, once given, cannot be retracted without the employer's agreement.

The duty to make reasonable adjustments applies to consideration of re-employment said the EAT in a recent decision. A Police Trainee, on 2 years probation, decided to leave the force training programme. Several attempts were made to change her mind, firstly by the Chief Constable, then at an exit interview by a member of the HR team. All attempts failed and she resigned, partly due to some performance issues, partly connected with personal reasons it was said. Her resignation was processed, and she left the force on 17 January. On 26 January, the lady was diagnosed as suffering from depression. On 31 January she rang to explain that she had been diagnosed with depression, and asked the employer if she could withdraw her resignation and resume her training contract. After consideration by a panel, the request was rejected and she bought a claim of Disability Discrimination.

The EAT overruled the tribunal and decided that it was a breach of the (then) DDA; it would have been a reasonable adjustment to take her back on without the need to reapply.

[Case: Hinsley v Chief Constable of West Mercia Constabulary EAT 2011]

Customer presses for dismissal

There are six fair reasons for dismissal (at least until Statutory retirement is removed in October 2011). One of the fair reasons is “some other substantial reason" (SOSR). One of the areas in which SOSR tends to be used is where a third party, such as a customer, puts pressure on an employer to dismiss.

A recent case dealt with this issue. Connect provided a minibus service for disabled children, under contract to the Council who had the absolute right to veto the employment of any individual to provide the service. Mr Henderson worked for Connect as a minibus driver. Initially he had a clear CRB check, but later allegations were made concerning his nieces. The police did not prosecute Mr Henderson and he protested his innocence. Nevertheless, the South Tyneside Safeguarding Children Board reviewed the case and decided that abuse could have taken place and that Mr Henderson should no longer work with children. Mr Henderson was suspended while Connect tried to persuade the Council to reconsider its decision. These attempts failed and, since it had no other roles available for Mr Henderson, Connect dismissed him. Mr Henderson complained of unfair dismissal. The employment tribunal concluded that the dismissal was fair and Mr Henderson appealed to the EAT.

The EAT upheld the original tribunal's ruling. It said that the customer or client is under no obligation to behave fairly towards the employee. In this case Mr Henderson may have been unfairly treated by being unable to put his case to the South Tyneside Safeguarding Children Board, but however unfortunate for him that did not make it unfair for the employer to dismiss him.

This type of case can be very uncomfortable to deal with and employers have to think matters through fully before taking a final step to dismiss.

Actions for employers

Follow a proper formal dismissal procedure, ensuring the employee is given all his statutory rights.

[Case; Henderson v Connect (South Tyneside) Ltd. EAT ]

Age and Redundancy payments

The EAT has handed down its decision in Kraft Foods and Hastie, that a cap on a (generous) contractual redundancy compensation scheme (which prevented employees from receiving a redundancy payment in excess of their wages up until retirement), did not amount to unlawful indirect age discrimination.

The cap had most impact on employees who were close to retirement - but for the cap, Mr Hastie's redundancy payment would have been around £14,000 higher. However the cap was justified, as it was a proportionate means of achieving a legitimate end. This in effect is the defence required to defeat an Indirect Discrimination claim.

The Court felt it was important to consider the fairness of the scheme as a whole, and the scheme was supposed to protect employees' incomes after redundancy. This is not the first case to demonstrate that Employers can defend Age Discrimination claims on Redundancy payments. Drawing on the observations of the EAT in Loxley v BAE Systems, the EAT decided it was not improper to have a rule which saved the company the expense of giving a windfall to a redundant employee.

[Case; Kraft Foods v Hastie EAT 2010]

Discipline/Dismissal

Dismissal when grievance is still outstanding

Employers no doubt feel that grievances must be dealt with before a disciplinary action proceeds. However in a recent case the EAT pointed out that this is not a requirement. The EAT overruled a tribunal and stated that it is potentially fair for an employer to dismiss before hearing the employees " appeal against a related grievance. The Tribunal had substituted its own view in this regard since only in the rarest of cases would a decision to go ahead with a disciplinary hearing be outside the range of responses of a reasonable employer. In this case the employees (a husband and wife) refused to attend the disciplinary hearings as they had a grievance appeal outstanding at the time. Their grievance had been heard at stage one but they had appealed it.

In an unfair dismissal claim, if the employer establishes that he dismissed the employee for a potentially fair reason under S.98 of the Employment Rights Act , the tribunal must then decide whether the employer acted reasonably in treating that reason as sufficient for dismissing the employee. In doing so, it must apply the "band of reasonable responses " test, i.e. consider objectively the standards of the hypothetical reasonable employer rather than impose its own view of what it would have done in the circumstances.

[Case; Samuel Smith Brewery (Tadcaster) v Marshall EAT 2010]

Redundancy selection

As well as collective consultation (when 20 or more redundancies are contemplated) Employers need to remember that declaring someone redundant is still a dismissal. As such it needs to satisfy the principles of fairness and reasonableness from the Employment Rights Act.

The EAT has recently held that an employment tribunal was entitled to find that an employee' dismissal for redundancy was unfair in circumstances where the employer failed to give him an explanation of why he received lower scores than the two other people in the selection pool. Fair consultation involves the provision of adequate information, especially in relation to subjective criteria scoring, which allows the employee to understand his or her scorings and therefore to have the opportunity to challenge them.

When using fairly subjective selection criteria such as “flexibility", as in the present case, it is vital for managers to have evidence to justify their scoring. Selection criteria such as attendance, punctuality, skills, experience and disciplinary record are less subjective and should be considered in preference to factors such as “attitude"; unless clear evidence is made available to justify scores given.

[Case; Pinewood Repro Ltd v Page EAT 2010]

Equal pay claims may be allowed in the civil courts

The usual route for equal pay claims is the employment tribunal. Claims must be lodged within a six month time limit (longer than most claims). A breach of contract claim in a civil court has a much longer limitation period of six years.

In Abdulla v Birmingham City Council, 174 former employees claimed that their employer' failure to provide equal pay in comparison to various predominantly male groups of staff is a breach of their contracts of employment. The Council argued unsuccessfully that the County or High Courts do not have or should not exercise jurisdiction in cases involving equal pay and the equality clause. At a hearing to determine the question of jurisdiction, the court decided that the High Court does have jurisdiction, and that the normal six year limitation period for breach of contract claims will apply. In a separate claim for Equal Pay, also involving Birmingham City Council (Ashby v BCC), the High Court also overturned a County Court decision to strike out the claims.

Misconduct and gross misconduct

There is sometimes confusion about the distinction between misconduct (which can justify dismissal) and gross misconduct (which justifies summary dismissal, i.e. a dismissal with no notice payments). An illustration of this can be found in the case of Weston Recovery Services v Fisher which considered the circumstances when dismissal for misconduct which doesn't amount to gross misconduct could be fair, even without prior warnings.

The employment tribunal had found the summary dismissal of an employee for returning a company vehicle in an unsafe condition to be unfair, because the relevant misconduct was not gross misconduct. The EAT accepted this, but thought that the employment tribunal had got things wrong and that the dismissal was fair: the employer had followed a fair procedure and imposed a sanction, dismissal, which fell within the range of reasonable responses to the misconduct which had occurred.

However, the misconduct did not justify dismissal without notice, so the employee was entitled to damages for wrongful dismissal (effectively notice pay and benefits for the notice period).

[Case: Weston Recovery Services v Fisher EAT 2010]

Redundancy and Maternity Rights

If an employee' job becomes redundant while she is on maternity leave, the law affords her special protection. The Maternity and Paternity Leave etc Regulations 1999 entitle her to be offered a "suitable available vacancy " – in preference to any employee not on maternity leave – under a new contract of employment. ".The Regs. provide that the work to be done under the new contract must be "both suitable in relation to the employee and appropriate for her to do in the circumstances ". A recent case had to look at this definition.

S was employed by EIS Ltd as an insurance consultant in London. In May 2008 she went on maternity leave. At around the same time, EIS Ltd announced a proposal to close 119 retail outlets and relocate the business to its call centres in Cheltenham, Burnley and Belfast. S was informed about vacancies in Cheltenham and invited to apply for them, but she showed no interest. Later, upon being declared redundant, she claimed that she should have been offered a position without having to apply – ie preferential treatment. The EAT agreed with the tribunal in finding that the jobs available in Cheltenham were not "suitable" alternatives in view of the change of location, so her claims failed. The tribunal also declared that it was for the Employer to decide what was reasonable; it was not the Employees " perspective.

[Case; Simpson v Endsleigh Insurance EAT]

On-call hours and the Minimum Wage

The EAT has recently given guidance on the issue of “on-call" time in a care environment. It is well established the being “on call" at an establishment is classed as working time under the Working Time Regulations, by virtue of the fact that the individuals are at their normal place of work and at the employers disposal. This applies even when the workers are sleeping in.

However the EAT has recently taken a different approach to the calculation of minimum wage rights. It ruled that time spent on call but sleeping would not count towards a minimum wage claim; only those hours awake/working.
Employers need to ensure that any “on call" policies clarify what is classed as working and exclude sleeping in from this (remember that such time will count for Working Time rules)

[Case; South Manchester Abbeyfield Society v Hopkins EAT]

Self inflicted injuries and SSP

Many employers reserve the right to withhold company sick pay, in certain circumstances. This might include company sick pay in respect of injuries sustained whilst undertaking extreme sports, elective surgery or other similar activities outside work.

Recently an employer tried to withhold statutory sick pay (SSP) from Mr Adams, an employee with a history of absences mostly as a result of football injuries. The employer had told Mr Adams that it would not pay SSP in respect of absences due to football injuries. Following his next absence, the company refused to pay SSP because his incapacity was self-inflicted. Mr Adams complained successfully to the tribunal.

Mr Adams met all of the qualifying conditions for SSP (he was unfit for work due to incapacity or illness, his employment was liable for NICs, and his average earnings exceeded the NICs lower earnings limit). There is no statutory basis for excluding 'self-inflicted' injuries. He was therefore entitled to SSP and his employer should make the payment.

[Case; Aber Roof Truss Ltd v HMRC]

Compensation in Discrimination cases

It is well established that compensation in unfair dismissal cases can be reduced for a number of reasons; one being contributory fault – where the employee was unfairly dismissed, perhaps through a procedural error, but contributed to the dismissal by poor conduct. The EAT has now indicated that this can be extended to discrimination compensation.

In a discrimination case, the EAT upheld a tribunal decision to reduce compensation for psychiatric injury by 60% to reflect the fact that a number of factors in the claimants personal life contributed to her ill health.

[Case; Thaine v London School of Economics EAT]

Volunteer not covered by Discrimination laws

In a decision which will be a relief to charities in particular, The Court of Appeal has ruled in a case involving a voluntary worker at Mid-Sussex Citizen' Advice Bureau. It held that as the woman was unpaid and had no contractual obligations, she could not claim disability discrimination when asked to leave her role.

Note that permission has just been granted for an appeal to the Supreme Court.

[Case; X v Mid Sussex CAB Court of Appeal 2011]

Statutory Maternity Pay

A Tax tribunal (not an ET) has ruled that an expectant mother can choose to start her statutory maternity pay at a later date than the date she stopped working.

[Case; Wade v North Yorkshire Police Authority]

Strike ballots

The Court of Appeal has handed down a judgement that will make it more difficult for employers to stop strikes by challenging the Union' balloting processes. After a number of employers, like British Airways, went to court to obtain injunctions to prevent strikes, largely based on technical “irregularities", this decision will probably result in fewer challenges in future. RMT overturned an injunction, with the Court of Appeal unanimously ruling in the Union' favour. The Court said that “genuine and immaterial errors in balloting processes will not make the proposed action unlawful. They added that the information about employees entitled to vote need only be “as accurate as reasonably practicable" and would have to be “positively misleading" before it breached the Statutory Requirements set out under TULRCA 1992.

[Case; National Union of Rail, Maritime and Transport Workers v Serco Ltd t/a Serco Docklands; Court of Appeal, 2011 EWCA Civ 226.]

Religion and Belief

Recent case law has emphasised that philosophical beliefs are capable of protection in the workplace (Equality Act 2010), in the same way as a Religious belief is protected. An anti-hunting activist has met with success in the Southampton Employment Tribunal. Represented by a Mr. Hare, (you could not make this up!) Mr. Hashman claimed that his fervent opposition to fox hunting and hare coursing amounted to a protected philosophical belief for the purposes of the Employment Equality (Religion or Belief) Regulations 2003. The tribunal held that Mr Hashman' views formed part of his belief in the sanctity of life, including the lives of animals.

[Case; Hashman v Milton Park (Dorset) Ltd t/a Orchard Park. Southampton ET]

Working time opt out

There are not too many reported cases involving the 48 hour week. But in a recent case the EAT decided that a bus driver denied the opportunity to work overtime due to his refusal to opt out of the 48-hour working week had not been subjected to an unlawful detriment. Tribunals are required to consider the reasonableness of the employer' policy, which in this particular case sought to avoid the risk of breaching the Regulations by refusing the driver overtime working on his rest days

[Case; Arriva London South Ltd v Nicolaou. EAT, 22.11.10]

Notice Period

The EAT has said that (unless clearly stated in the contract) notice begins on the day after it is given to the Employee. It does not matter whether the notice is given verbally or in writing. The notice period does not start until the following day, there is no notion of part days of notice. The case involved the 3 month time limit for claiming unfair dismissal.

[Case; Wang v University of Keele. EAT 2011]

Minister could claim unfair dismissal

The EAT holds that a Methodist minister appointed as superintendent minister to a group of congregations was employed under a contract of service, and was entitled to have her unfair dismissal claim heard by an employment tribunal. The decision of the House of Lords in Percy v Board of National Mission of the Church of Scotland should be interpreted to mean that the spiritual nature of a minister' role cannot, by itself, justify denying contractual effect to an arrangement which otherwise bears the hallmarks of a contract. The Court of Appeal in an earlier case (President of the Conference v Parfitt) came to the opposite conclusion, but the EAT in this ruling,now suggests that its reasoning was unsustainable.

[Case; Moore v President of the Methodist Conference, EAT]

Retirement and Age Discrimination

The removal of the Statutory Retirement Age of 65 from October 2011 leaves Employers with the prospect of discussing potential retirement options with many more staff. ACAS Guidance makes it clear that Employers can still raise this sensitive issue with employees. Businesses will still need to plan for the future, which involves trying to gauge future recruitment needs etc. Managers do need to take care how such discussions are held, as there is a very real prospect of an Age related claim if these are badly handled. Even the best Employers can get into difficulty, ask Sainsbury's!

Mr. Newey had been having performance discussions with his Managers for a while. He had worked for the Supermarket chain for 30 years and was in his mid fifties at the time. At one performance review meeting in 2008, a Manager said “Here we go again. When are you going to retire….?" The following year, in another formal setting another senior manager said “You are 54 years of age and if I was you I would be thinking of retiring."

Mr. Newey won his claim that he had suffered age discrimination. Sainsbury' argued that it was not based on age, but on his poor performance. However the ET stated that an under performing younger manager would not have had these remarks made as they were not eligible for early retirement.

The message is that Managers must be made aware that comments about retirement made to staff during performance and disciplinary discussions could be age discrimination. In the past it may have been acceptable to raise the issue of retirement as an alternative to disciplinary action; this case highlights the risks of doing so now.

[Case; Newey v Sainsbury' Supermarkets ET April 2011]

Dismissal for refusing pay cut

In recent years the recession has prompted Employers to make savings. Sometimes in an effort to avoid redundancies, organisations have instigated pay cuts. (Shropshire Council sent dismissal letters to all 6500 staff in July, with reengagement on new terms at 5.4% lower pay. This is an attempt to avoid 400+ redundancies). Where the employees agree to the proposals there are few reported cases. However if some employees object to the contract change, what does the Employer do? One option is to impose the pay cut through dismissal and re-engagement on new terms. If staff refuse the new terms they are dismissed. (For SOSR – some other substantial reason). This is what happened in this case.

The Employer needed to make savings and decided that, in order to avoid redundancies, it needed to cut its workforce's salary by five per cent. Booth refused to agree to a variation of his contractual terms relating to pay, and was dismissed for that refusal. Virtually all the other staff accepted. He brought a claim of unfair dismissal which was upheld by an employment tribunal. The EAT overturned this decision.

The EAT held that the tribunal had wrongly considered the reasonableness of the employee's decision to reject the pay cut, rather than whether the employer was reasonable to have dismissed Booth for not accepting the reduction.
It should not, however, be overlooked that that the Employment Rights Act also requires the tribunal to consider whether the dismissal was 'in accordance with equity'. The EAT considered that this may have particular force where, for example, management proposes a cut to workers' pay, but not to its own. Similarly, the process by which the pay cut was negotiated may be relevant where a tribunal considers that it runs counter to equity's implied sense of fair dealing.

[Case; Garside and Laycock v Booth. EAT July 2011 ]