Section Three

As you probably know the Age Regulations allow employers to retire employees lawfully at the age of 65 (the default age set by Government). The Employer just needs to follow the procedures carefully, including holding meetings with the employee if they request staying on.

It is not widely known however that this only applies to Employees - so does not cover others such as workers, agency staff, equity partners, and office holders such as judges. Requiring people in these categories to go at 65 needs to be "objectively justified". These two cases involved precisely that point - one was a law firm retiring a partner; the other case that of a judge.

The law firm satisfied a tribunal that it needed compulsory retirement at 65 for succession planning and to give junior staff the opportunity to progress. However the Government failed to convince a tribunal that judges should go at 65! Again they used the succession argument as one defence, but the tribunal thought that there were other, less discriminatory ways of achieving it's aim.
This demonstrates how tricky it is to convince a tribunal that compulsory retirement was justified.

(Cases: Seldon v Clarkson, Wright and Jakes; Hampton v Lord Chancellor)

Age Discrimination - claims "stayed"

On 8 November the President of Employment tribunals directed that all claims concerning the compulsory retirement of employees at 65 or over, be "stayed" or suspended, pending the outcome of the Heyday challenge to the European Court. This could result in a large number of claims being left in limbo, to the frustration of employees and businesses alike. The Heyday case is challenging whether the Governments decision to bring in a default retirement age at 65 is compliant with the Equal Treatment Directive. A decision is not expected until next year.

Other age based claims, for example discrimination on recruitment, can proceed - it is only the retirement conditions that are being challenged.

Age Discrimination in recruitment

A Northern Ireland Tribunal has held that an employer discriminated against a job applicant on the ground of his age when it decided not to offer him employment. Under all discrimination laws, job seekers are protected against unfair treatment.

A 58 year old man applied for an advertised position for sales staff. Amongst other things the advert asked for "youthful enthusiasm". The candidate had 30 years experience but was rejected in favour of younger applicants after interview. At the interviews, the older man was asked a number of questions related to age and motivation, which the younger candidates admitted had not been put to them. The Tribunal was influenced by this, and by the advert wording.

Employers should be careful over the wording of adverts as words and phrases that were ok not too long ago can now cause problems.

(Case; McCoy v James McGregor and Sons. NIIT)

Appearance - Rastafarians and Religious Belief

Regulations prohibiting discrimination on the ground of religious or philosophical beliefs have been in force since 2003, but there have been relatively few cases arising from them. One recent case on the rules concerned a Rastafarian who alleged that he was dismissed from his job because of his dreadlocks. His employer claimed that he was dismissed for being abrasive, flouting dress rules (quite apart from his hair) and making himself unavailable for work.

The employer conceded that Rastafarianism was a "religious belief" and this
concession was accepted by the Employment Tribunal and the Employment
Appeal Tribunal. Before this case there had been some debate amongst academics about whether Rastafarianism qualified as a religious belief.

Previous case law indicates that Rastafarians are not protected under race discrimination legislation because they do not qualify as an "ethnic group".
The Employment Appeal Tribunal has dismissed his claim. It found that it was legitimate in this case for the employer to have rules requiring tidy hair (whether or not it was worn in dreadlocks) and that Mr Harris was not discriminated against on the ground of his religious beliefs.
However, care should be taken by employers to make sure they have appropriate
and objectively justifiable grounds for requiring employees to dress in a
particular way at work.

(Case; Harris v NKL Automotive EAT)

Religious Discrimination - Dress Code

Despite much press criticism at the time, British Airways has just successfully defended its dress code against a claim of religious discrimination. The case involved a lady who wore a cross on a chain around her neck. BA's policy was that only items worn because of a mandatory religious requirement would be allowed on staff in customer facing jobs. The Tribunal ruled that as a Christian she had not been any less favourably treated than of a person of another faith, so her claims of Religious discrimination were all turned down. (It has been reported that BA has since modified its dress code allowing staff to wear a faith "symbol".)

(Case; Eweide v British Airways. EAT)

Expired Disciplinary Warnings

Following the case of Diosynth Ltd v Thomson at the Court of Session in Scotland, there have been a number of cases confirming that once a disciplinary warning has expired it can't be used for "totting up" purposes. This can be very frustrating for an employer where an employee seems to be playing the system. While the decision in Diosynth remains the general rule, a recent Court of Appeal decision shows that - in some cases at least - expired warnings can be taken into consideration in reaching a conclusion.

Mr Webb worked for Airbus. In July 2004, he was discovered washing his car when he should have been working. This was deemed to be an offence of gross misconduct (misuse of company premises and equipment and fraudulent misuse of company time) and Mr Webb was dismissed. On appeal the dismissal was reduced to a final written warning. Mr Webb received a letter confirming that the warning would be placed on his personal file for 12 months and subsequently removed provided his conduct reached certain standards. It concluded that the likely consequence of further misconduct was dismissal. The warning expired in August 2005.

About three weeks after the warning had expired, Mr Webb and four colleagues were found watching TV in the locker room when they should have been working. Airbus regarded this as gross misconduct. Mr Webb was dismissed and his colleagues, all of whom had good disciplinary records, were given written warnings.

Mr Webb complained of unfair dismissal, arguing that Airbus had relied on the expired final warning to dismiss him. Both the tribunal and Employment Appeal Tribunal agreed that, following the decision in Diosynth v Thomson, an expired final warning should be disregarded for all purposes.

Overturning the EAT's decision, the Court of Appeal said that the facts in Diosynth were different, because in that case the employee would not have been dismissed had the expired warning not been given. In this case Mr Webb had committed an act of gross misconduct for which dismissal was a reasonable response, irrespective of the expired warning. The misconduct was the principal reason for dismissal, not the expired warning. Airbus only considered the earlier misconduct and expired warning when deciding the appropriate sanction. Unlike his colleagues, Mr Webb did not have the advantage of a clean disciplinary record and therefore the dismissal was fair. He had already been given the "benefit of the doubt" once, his colleagues had not.

This decision is good news for employers, but proceed with caution. Webb doesn't mean that employers can rely on expired warnings as a matter of course. It so happened here that a similar offence was committed very shortly after expiry of a final warning.

Actions for employers

If you have a reason to dismiss, you may take into account past misconduct which was the subject of an expired warning, particularly if it is the same type of misconduct.
When making dismissal decisions and drafting dismissal letters avoid any suggestion that an expired warning formed part of the reason for dismissal. If you are referring to an expired warning, only do so in terms of mitigation, i.e that the employee's previous disciplinary record does not warrant a lesser penalty than dismissal.
Tailor warnings to the particular circumstances. Make it clear how long warnings will last and what happens when they expire so employees know what to expect.
It is open to you to issue longer warnings in some cases, but make provision for this in your disciplinary procedure. In serious cases, particularly where the warning is an act of leniency when dismissal is an option, consider issuing a longer warning.

(Case Airbus UK Ltd v Webb CA)

Employment Status

The Court of Appeal has now confirmed that an agency worker does not have employee status purely through the passage of time with an end client of the Agency. Earlier cases had suggested that employment status might be implied where the worker stayed for any length of time. This is not so, as a contract of employment should only be implied where it is necessary to do so.

But still take care that you do not treat the Agency worker like one of your employees, as this might still give rise to an implied employment contract over a period of time, bringing rights like unfair dismissal and redundancy pay.

It is not how long the Agency worker stays that is important, it is how they are treated whilst working with you that counts.

(Case James v London Borough of Greenwich CA)

Voluntary Redundancies

The EAT has confirmed that voluntary redundancies are still classed as a dismissal and have to be taken into consideration in establishing whether collective consultation is triggered.

If an employer is proposing to dismiss 20 or more employees in a 90-day period, this requires consultation with either a recognised trade union, or elected employee representatives. Unions are very keen to see that this is done. The employer in this case had 3 volunteers and selected 17 others for redundancy, but did not consult. The Trade Union took a case to tribunal and the EAT has confirmed that in total 20 employees were involved, so consultation should have taken place. This can prove to be an expensive oversight for any employer, as the sanction is up to 3 months pay for each affected employee.

(Case; Optare Group v TGW Union. EAT)

"Rolled up" Holiday Pay

The Working Time regs provide for workers to receive holiday with pay (recently increased from 20 to 24 days per annum). After a decision in the European Court some 18 months ago, it was widely felt that the principle of paying a rolled up amount for holiday was unlawful. It was described as being incompatible with the Working Time rules as payment for the holiday should be made when the holiday is taken, not "rolled up" into regular wage payments. The European Court did however rule that any such payments made could still be offset against the obligation to pay - providing the arrangement was "transparent and comprehensible".
The EAT has recently followed this principal in ruling that "rolled up" holiday payments made to a bricklayer were sufficient to cover the employers obligations under the Working Time rules. He worked on a day rate basis which he was told included his holiday pay entitlements. Importantly this holiday element was shown separately on his pay slips.

This was perhaps a surprising decision, but does confirm that rolled up holiday pay arrangements can still be justified by the employer, so carry on doing it if it suits your business - at least for the time being!

(Case: Lyddon v Englefield Brickwork Ltd. EAT)

Return from Maternity Leave

It is well established that a woman returning from Maternity Leave has the right to go back to the same job. Perhaps surprisingly there has been very little case law on what exactly "same job" means - although it sounds pretty clear!

A schoolteacher raised a number of (mainly unsuccessful) tribunal claims against her school over her maternity rights. Of particular interest was the claim that she wished to return to the "reception" class she was teaching prior to going on maternity leave. The school had a policy of rotating teachers anyway, and the head felt it was too disruptive so offered a different class on her return, and she objected to this.

Summarising the outcome considerably, the EAT concluded that she was employed as a teacher, not just a reception class teacher. It also decided that the "place of work" was the School and not a particular classroom. As such the job was the same and her claim on this point failed.

Remember that a woman's rights to return to the same job are stronger if she has only taken Ordinary maternity Leave. If the woman takes Additional Maternity Leave the Employer can offer a suitable alternative where it is not practicable to offer the old job back.
(Case: Blundell v St Andrews Catholic Primary School EAT)

Tips and Minimum Wage

Following recent case law HM Revenue and Customs has accepted that at the moment "tips" added to customer payments by credit cards and subsequently paid to employees, count towards the minimum wage. Some Employers in the hospitality industry are known to pay a rate below the minimum wage, safe in the knowledge that customer tips make up the shortfall.

If you want to reward good service in a restaurant it is better to leave a cash tip as this cannot be used towards the minimum wage.

Harassment by Third Parties

Case law has created some uncertainty about the employers liability for remarks made by "third parties" to staff. A white female employed by Bexley Council alleged that she was told to ignore racist comments from customers, and not challenge such behaviour. During her employment she had to listen to racist comments from customers which she found to be offensive, but felt unable to challenge. She eventually complained of harassment under the Race Relations Act. The EAT has said that this could amount to harassment, overturning the Tribunal decision (which itself was based on previous case law).

It is important to take all possible steps to protect your staff from harassment, irrespective of where the harassment originates from, even customers or members of the public.

(Case; Gravell v London Borough of Bexley EAT)

Long term sickness and Annual leave

The issue of whether annual leave accrues during long term sickness absence has been concerning employers recently. Originally it was decided (at the EAT) that holiday pay did accrue during sickness absence that extended over a year, but the outcome was unsatisfactory and was overturned later by the Court of Appeal. As the problems are created by the Working Time rules, the matter has been referred to the European Court. A preliminary decision by the Advocate General has now been delivered - although it is not binding and the full Court does not always follow this (makes you wonder why they have this stage then!).

The opinion was that holiday entitlement does accumulate during long-term sickness absence. As the main Court does not have to follow this, further guidance will follow the full decision later this year. Do note that whatever the outcome it will only apply to Statutory Holiday rights, not any additional contractual holiday days. In the meantime, any employees dismissed after a long absence may try to claim holiday entitlement. If this results in a tribunal claim being made it will be put on hold until the outcome of this case is known.

(Case; Stringer v HMRC)

Disability Discrimination "by association"

This is another "non binding" opinion from the Advocate General of the ECJ, but if upheld will have significant implications for UK employers.

Ms. Coleman looked after her disabled son, and this led her to having time off work. She alleged unfair treatment, saying she had been harassed, and called "lazy". The employer apparently suggested she was using her child's disability to her advantage, causing a hostile atmosphere at work.

The Disability Discrimination Act (DDA) does not cover her, as she is not disabled. However it is felt that the DDA should provide such protection as other forms of discrimination such as Race and Sexual Orientation do protect people who suffer harassment "by association". The case was therefore referred to the ECJ.

If upheld this will provide significant protection for staff who have responsibility for looking after a disabled relative. It will require the employer to "make reasonable adjustments" when dealing with the matter.
(Case; Coleman v Attridge Law)

Dismissal or Early retirement?

The case of First Leeds v Haigh dealt with capability dismissals and ill-health
retirement benefits.
Mr Haigh was signed off as unfit for work in June 2005 having suffered a
suspected stroke. His PSV licence was suspended. It was unlikely that he
would be able to regain his licence before he turned 60 in October 2006.

Mr Haigh was entitled to amaximum of 26 weeks' full pay and 26 weeks' half pay under the Company's sick pay scheme. The Company was not bound to allow an employee to take all available sick pay before dismissing him.
The Company's pension scheme provided for retirement on the grounds
of permanent incapacity. An employee would qualify if a doctor signed a
medical certificate confirming that the employee was permanently incapable
of discharging efficiently their duties or the duties of any other comparable
employment with their employer. Retirement on an ill-health pension would
have been a benefit to the employee.

The EAT upheld the Employment Tribunal's earlier judgment that where
an employee is long-term absent on grounds of ill health, and his pension scheme contains provisions entitling him to an ill health pension on grounds
of permanent incapacity, an employer will generally be expected to give
consideration to ill health retirement before dismissing for incapacity.
This decision extends the implied obligation not to unreasonably deprive an
employee of ill-health benefits into the field of unfair dismissal.

(Case First Leeds v Haigh EAT)

Statutory Dismissal Procedures

Step One Letters

There has been confusion about whether an employer must put in the Step One letter to an employee, the fact that the Employer was "contemplating dismissal". Some Tribunal decisions have gone against Employers who have not done this. This makes the dismissal automatically unfair as it is a breach of the Statutory Procedures and can attract an increase in compensation of up to 50%.

In a more recent case the EAT has stated that the Employer does not have to expressly include this statement. In the case in question it was clear that the employee had committed a very serious offence (using a Company vehicle and tools for "moonlighting" work) and this was set out in the letter inviting the employee to a formal hearing. The letter did say that the offence was a "breach of contractual obligations", so the court felt that it was implicit that dismissal was being contemplated.

Best advice is to ensure that if you are "contemplating" dismissal, it should be clearly expressed in the letter sent to the employee. This is likely to be very important where the employee is facing dismissal following previous warnings rather than for gross misconduct.

Female workers protected from dismissal related to in vitro fertilization

The European Court has given a decision about the rights of a woman undergoing IVF treatment.
In an Austrian case, the ECJ has held that women undergoing in vitro fertilization treatment, who have had their ova fertilized but not yet implanted, are not 'pregnant', and thus are not protected from dismissal by the EC Pregnant Workers Directive

However, the dismissal of a woman, if related to her in vitro fertilization treatment, amounts to discrimination on the ground of sex contrary to the EC Equal Treatment Directive, since only women receive such treatment.

This is not a surprising decision as it was always likely to be indirect sex discrimination to treat a woman unfairly over IVF treatment. Employers do need to note this and ensure that time off and sick pay rights are not withheld for IVF treatment.

(Case; Mayr v Bäckerei und Konditorei Gerhard Flöckner OHG ECJ - Austria)