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Unison’s judicial review

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UNISON, one of the UK’s largest trade unions, has successfully applied (on the second attempt) to the High Court for a judicial review into whether employment tribunal fees are legal. The hearing will take place in October…

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Bank Holidays do not have to be carried over for sick employees

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Under EU law workers are entitled to 4 weeks holiday per year (including bank holidays).  UK law requires employees to be given a further 1.6 weeks holiday per year which amounts to 5.6 weeks a year including bank holidays to equate to the previous UK norm of employers paying for 4 weeks holiday per year plus bank holidays.

In Sood Enterprises v Healy, the Employment Appeal Tribunal has ruled that employees cannot carry over the additional 1.6 weeks workers are entitled to under UK leave into the next year where they have been off sick and unable to take their leave. This is in contrast to EU minimum leave (4 weeks holiday) which can be carried over. However, in practice, most employers do not distinguish between the types of holiday.

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B&B owner discriminated when refused to allow homosexual couple to share a room

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[post_tags] In Black v Wilkinson, Mrs Wilkinson, a Christian, ran a B&B from her family home. Her policy provided that only heterosexual married couples were allowed to share a room and so in March 2010, she refused to accommodate a homosexual couple. The Court of Appeal found that Mrs Wilkinson’s decision was direct discrimination as she had not allowed the couple to share a room because they were homosexual. As direct discrimination cannot be justified in law, that was the end of the matter. However, the court went on to consider that Mrs Wilkinson had also indirectly discriminated against the homosexual couple because she applied a ‘provision, criterion or practice’ (i.e. only married couples can share a room) that applies to all couples but which puts homosexual couples at a disadvantage because heterosexual couples can marry whilst homosexual couples cannot [Note: with the introduction of the Marriage (Same Sex Couples) Act 2013, this is no longer the case]. Mrs Wilkinson tried to justify this policy on the grounds that it was a proportionate means of fulfilling her legitimate aim, namely exercising her right to manifest her religious beliefs under human rights law. However, the Court disagreed and said that neither religious belief nor sexual orientation trumps the other but what does trump both is the fact that Mrs Wilkinson’s policy is contrary to the Regulations, i.e. that B&B’s are not exempt from the law against discrimination when providing goods, facilities and services. This balanced with the fact that Mrs Wilkinson had failed to show that her business would suffer economic harm if she offered double bedrooms to homosexual couples led the Court to rule that she could not justify her policy on the grounds of religious belief. Following the logic of this case through to an employment context, employers who offer benefits to spouses but not registered civil partners would be guilty of direct discrimination.  However, where benefits are offered to spouses they are routinely offered to registered civil partners these days so the situation is unlikely to arise. Even then, it may be argued that in practice a far smaller proportion of gay couples are registered civil partners or married as compared with heterosexual couples so the rule would still be indirectly discriminatory. This case does not cast light on that question but one suspects the argument would fail because it is probably reasonable and proportionate to require legal commitment towards a partner before a scheme (such as a pension or private medical care) permits that person to benefit. [/et_pb_text][/et_pb_column][et_pb_column type=”1_4″][et_pb_sidebar admin_label=”Sidebar” orientation=”right” area=”sidebar-1″ background_layout=”light” remove_border=”off”] [/et_pb_sidebar][/et_pb_column][/et_pb_row][/et_pb_section]

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Knowledge of disability is essential

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In Patel v Lloyds Pharmacy Ltd, the Employment Appeal Tribunal struck out Mr Patel’s claim for direct disability discrimination because there was no evidence that the manager accused of discrimination was aware of his disability.

Mr Patel had previously worked on a locum basis for Lloyds Pharmacy and when interviewing for that role back in 2008, he informed the interviewer that he suffered from bipolar disorder.  In 2011, he applied for a permanent position with Lloyds and was interviewed by a different manager. His application was unsuccessful and he brought a claim for discrimination.

During the litigation, emails were disclosed which showed that the second interviewer had exchanged emails with the original interviewer which were critical of Mr Patel’s performance. However, therefore was no mention of disability in those emails and there was no evidence that the second interviewer had any knowledge of Mr Patel’s disability.

The Employment Appeal Tribunal said that it would be wrong to allow an apparently hopeless case to proceed on the grounds that something might turn up in cross examination showing that the interviewer was in fact aware of Mr Patel’s disability.

This is a rare example of a Tribunal taking a robust approach to an unmeritorious discrimination claim.  Given that the Tribunal Rules have recently been changed to encourage Tribunal Judges to weed out weak cases at an early stage, it is likely that we will see more of this over the coming months. When faced with spurious claims, employers should certainly consider going for a strike out and this case will be a useful weapon to deploy.

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Shareholder’s homophobic comment gave rise to a discrimination claim

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A shareholder of a Romanian football club commented to a journalist that he would prefer to close the football club than hire a homosexual player, in response to the suggestion that a player who was due to transfer to the club was homosexual.

Despite not being the victim of the alleged discrimination, ACCEPT (an organisation which promotes and protects gay rights) complained that the club had discriminated on the grounds of sexual orientation.  The claim was referred to the European Court of Justice to decide whether or not it could proceed.

The European Court held that the comments could give rise to a claim for discrimination. The shareholder gave the impression to the public and the media that he played a leading role in the club and therefore it didn’t matter that he had no power to make policy or recruitment decisions. The fact that the club failed to distance itself from the comments was a factor which the European Court took into account.

Employers’ should ensure that they act swiftly to distance themselves from any discriminatory comments made by individuals associated with them as well as having a well-drafted equal opportunities recruitment policy.

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Dismissal for bringing discrimination claim against former employer is victimisation

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In Bouabdillah v Commerzbank AG, an Employment Tribunal found that Commerzbank had victimised one of its employees when it dismissed her for bringing a claim against her former employer, Deutsche Bank.

Ms Bouabdillah lodged a claim against Deutsche Bank for sex discrimination and equal pay before joining Commerzbank. In her interview with Commerzbank, she did not mention the lawsuit and she was offered a job. When her claim was reported in the newspapers, she alerted Commerzbank but she was dismissed on the grounds of a breakdown of trust and confidence. Commerzbank said that they dismissed Ms Bouabdillah because she had failed to disclose the proceedings despite ample opportunity and not because she had brought the proceedings.

The Employment Tribunal upheld Ms Bouabdillah’s claim for victimisation for the following reasons:

• While she had not provided full answers in her interview, she had not misled Commerzbank or been dishonest;
• She had tried to inform Commerzbank of the proceedings as soon as the article had been published;
• Commerzbank had suffered no reputational damage (as they had alleged) by virtue of the fact that they were mentioned in the article as Ms Bouabdillah’s current employer; and
• Commerzbank had made a ‘knee jerk’ reaction to the article and had not investigated sufficiently to conclude that there was a breakdown in trust and confidence.

A rather unusual set of facts but a reminder for employers to take a deep breath and investigate before dismissing – whatever the circumstances.

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How far do you have to go to prove ‘reasonable adjustments’?

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Mrs Wade worked for Sheffield Hallam University. Mrs Wade suffered from allergies which, for the purpose of disability discrimination legislation, amounted to a disability.

During a period of absence from the business her role was made redundant.  As part of the redundancy consultation process, Mrs Wade applied for an alternative post. The university advised that she would be required to attend a competitive interview but that if she met the criteria (and adjustments could reasonably be made to accommodate her disability) she would be appointed to the post.

The university interviewed Mrs Wade but she was unsuccessful.  The university said that Mrs Wade did not demonstrate that she could fulfil the core competencies required for the role.

Mrs Wade brought various disability discrimination claims.  In particular, she alleged that the university had failed in its duty to make reasonable adjustments by requiring her to participate in a competitive interview process.

In this case, the Employment Appeal Tribunal held that whilst the competitive interview process was a provision, criterion or practice that put Mrs Wade at a disadvantage (as a disabled person), the university had not failed in its duty to make reasonable adjustments by removing the need for a competitive interview.  This would have meant the university appointing someone who was genuinely unsuitable for the role.  The adjustment was not therefore reasonable.

Although employers should always consider making reasonable adjustments for disabled candidates when assessing their suitability for roles, this case confirms that they do not need to go above and beyond that. Employers need to strike a balance between reconciling the considerations of a disabled employee against the commercial value of obtaining the right candidate for the role.

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Legislation

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As of 25 June 2013, the following reforms came into force:

•  The qualifying period (2 years) for unfair dismissal will no longer apply where the main reason for dismissal is the employee’s political opinions or affiliations.

•  Changes to whistleblowing law:

•  For an employee to be protected as a whistle blower, what they raise an issue about must now be in the public interest meaning that employees will largely now be prevented from claiming they are blowing the whistle about breaches of their own employment contract.

•  Disclosures no longer need to be made in ‘good faith’. Until now, if whistleblowers were motivated by financial gain or vengeance, they were not protected by the law. Bad faith is only relevant now in relation to what compensation is awarded to the whistle-blower.

•  Whistleblowers will be protected from being victimised by fellow employees. Before now, employees who made protected disclosures were only protected from their employer’s activities. Employers should update their whistleblowing policies/handbook to make it clear that employees should not mistreat whistleblowers.

From 29 July 2013

•  The maximum compensatory award for unfair dismissal will be £74,200 or one year’s gross pay, whichever is the lowest.

•  Settlement Agreements come into force. These are the new ‘Compromise Agreements’ whereby employers can approach staff with a view to terminating their employment in exchange for money. These negotiations will not be admissible as evidence in most unfair dismissal claims.

•  Fees will be introduced in the Employment Tribunal and Employment Appeal Tribunal. There will be two levels of claim:

•  Level 1 claims – the issue fee is £160 and the hearing fee is £230

•  Level 2 claims – the issue fee is £250 and the hearing fee is £950

•  Appeals – the issue fee is £400 and the hearing fee is £1,200

Level 1 claims include unlawful deduction of wages, holiday pay and redundancy payment claims. Level 2 claims include discrimination and unfair dismissal claims.

Employees can apply for fees to be “remitted” (i.e. reduced or eliminated) if their financial circumstances are such that they cannot afford to pay the fees.

If an employer loses a case the tribunal may require the employer to reimburse these fees but this is not automatic.

This is likely to cause a substantial reduction in the number of smaller claims brought by employees and may encourage employers to be more robust about not paying sums to staff which they do not think are due and which it will now be un-commercial for employees to contest.

From 1 September 2013

•  The employee-shareholder provisions come into force. As a reminder, this scheme will see employees forfeiting employment rights (like unfair dismissal) in exchange for £2,000 worth of shares (or more) in their employer.

1 October 2013

•  The new national minimum wage for workers will increase as set out:

•  the adult rate will increase to £6.31 an hour;

•  the rate for 18-20 year olds will increase to £5.03 an hour;

•  the rate for 16-17 year olds will increase to £3.72 an hour; and

•  the apprentice rate will increase to £2.68 an hour.

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Settlement sums payable net

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In Barden v Commodities Research Unit, Mr Barden was the former CEO of Commodities Research Unit. On his retirement, he was paid a sum under a settlement agreement. The agreement simply stated that Commodities Research were to ‘pay £1,350,000’ to Mr Barden. It fell silent on whether the sum would be paid net or gross. The High Court ruled that the sum should be paid net of tax (that is, after deduction of tax). To do so otherwise would be commercially absurd.

Although, in this case, the employer avoided the cost of their (or their advisers) complacency, other businesses might not be so lucky. Care should be taken to ensure that the tax status of any payment made under a settlement agreement is clear.

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TUPE and ‘organised groupings’

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In Ceva Freight (UK) v Seawell, Mr Moffat was employed by Ceva Freight, a logistics and freight company, and worked in the “outbound team”.  Although the team worked for a variety of clients, unlike his colleagues, Mr Moffat spent 100% of his time working on the account of one client, Seawell.  In fact, Mr Moffat’s contract specifically said that he had been employed for the purpose of enabling the contract with Seawell to be performed.

When Seawell decided to transfer the work in-house, Ceva asserted that Mr Moffat’s employment transferred to Seawell under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”).  This was disputed by Seawell and Mr Moffat’s employment was terminated.  He brought claims against both Ceva and Seawell for unfair dismissal and breach of the TUPE information and consultation obligations.

TUPE applies in two scenarios.  First, where there is a “business transfer” and second, in the event of a “service provision change” (which, generally speaking, captures outsourcing and insourcing arrangements).  In order for there to be a service provision change, there must be an ‘organised grouping’ of employees whose principal purpose is carrying out the work which is transferring.  For these purposes, an “organised grouping” can consist of one employee but the group must be specifically and consciously organised by the employer for the purpose of the activities in question.

In this case, the Employment Appeal Tribunal and Court of Session (Scotland) held that although Mr Moffat spent all of his time working for Seawell, he was ultimately part of a team whose principal purpose was outbound work, not Seawell’s work.  Ceva had specifically and consciously grouped Mr Moffat within the “outbound team”.  Although Mr Moffat worked solely on the Seawell account, Ceva had not “organised” him in a group for this purpose.  Therefore, there was no service provision change and no TUPE Transfer.

This case disproves most employers’ assumptions that an employee who spends all of his time on one contract must transfer in an outsourcing/insourcing arrangement and follows a line of cases narrowing the circumstances in which TUPE will apply.  This is expected to be reflected in the new TUPE Regulations (expected later this year).  For now, employers should bear in the mind that the fact that an employee spends 100% of his time working for one client is not sufficient on its own to establish a TUPE transfer.

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Woolworths spurs landmark decision

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Under UK law, a duty to inform and consult employees as a group is triggered when an employer is proposing to make 20 or more redundancies at ‘one establishment’ in a 90 day period. If the duty is breached, a ‘protective award’ can be claimed of up to 90 days’ gross pay per employee.  This appears to be at odds with the European Directive (on which the UK legislation was based) which does not refer to the need for employees being at “one establishment” in order for the consultation obligations to apply.

In 2009, Woolworths went into liquidation making thousands of employees redundant. On behalf of the employees, two unions brought claims for ‘protective awards’ on the grounds that the liquidators had failed to consult with employee representatives ahead of the redundancies.

This case turned upon whether each Woolworths shop was an establishment in its own right. If each shop was not an establishment, then the duty to consult was not engaged in respect of stores with less than 20 proposed redundancies. The Employment Appeal Tribunal ruled that the UK provisions should be interpreted consistently with the Directive and the words “at one establishment” should be disregarded.

Therefore, where an employer proposes 20 or more redundancies across its organisation within a 90 day period, it will have collective consultation obligations even if the number of employees proposed for redundancy at each of its sites is fewer than 20. For example, if an employer was proposing to make 20 employees redundant within a 90 day period, the consultation obligations would be triggered whether all 20 employees are employed at one site or across various sites.

This decision brings about a substantial change with significant consequences for employers with multiple sites.  In order to avoid the risk of expensive collective claims, employers need to ensure that redundancies across the business are monitored centrally and, where necessary, that the collective consultation redundancy obligations are met.

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Tribunals more willing to make costs orders against employees

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In employment tribunal litigation, both parties usually bear their own costs. However tribunals do have the discretion to award costs orders against parties who have ‘acted vexatiously, abusively, disruptively or otherwise unreasonably’. Historically, this power has been exercised rarely but a couple of recent cases suggest that the tide is beginning to turn.

In Vaughan v London Borough of Lewisham, Ms Vaughan brought nine unsuccessful claims against her employer. At the end of the hearing, the Tribunal ordered her to pay £87,000 towards Lewisham’s costs despite the fact that:

1. She was unrepresented, unemployed and of limited means;
2. No costs warnings had been provided to her;
3. No deposit order was sought against her; and
4. A settlement offer of £95,000 was made to her.

The Employment Appeal Tribunal defended the costs order on the grounds that Ms Vaughan had advanced a case of ‘mass conspiracy’ unsupported by evidence. The absence of a deposit order or costs warning did not suggest the claims had merit and whilst the settlement offer might seem extraordinary, it simply reflected the commercial reality arising from the fact that the employer was facing the expense of a 20 day hearing. As for Ms Vaughan’s limited means, there was a realistic prospect that she would work in due course and it was for the county court to agree a repayment plan.

In Howman v Queen Elizabeth Hospital NHS Foundation Trust, Mr Howman was dismissed for uploading a fake letter from the Trust’s CEO onto the Trust’s intranet. Following an unsuccessful claim for unfair dismissal, the Tribunal ordered that he pay the Trust’s costs of £43,000. The Tribunal said he was aware that an application for costs would be made against him if he lost and was advised by a judge in an interim hearing that he should carefully consider his position in light of the strong evidence against his case.

However, on appeal, it was held that the Tribunal had not considered whether it was appropriate to make an order that would wipe out Mr Howman’s life savings and force him to sell his family home. The case has been sent back to the Tribunal for them to consider whether to modify the amount of the award.

These cases are difficult to reconcile but it seems clear that Tribunals are becoming more willing prepared to make stringent costs orders against individuals bringing dubious claims even if they have limited means. This is particularly the case when claims are brought against public sector bodies funded by the taxpayer. Whether a similar order would be made against an individual bringing a claim against a private sector employer remains to be seen.

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