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How important are occupational health reports?

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In Gallop v Newport City Council, the Court of Appeal found that employers cannot necessarily say they did not know that an employee was disabled even though Occupational Health had diagnosed the employee as not disabled.

Mr Gallop worked for the Council, and over the course of a few years was signed off work for stress. He was referred to Occupational Health on several occasions, who concluded that although Mr Gallop had stress related symptoms, he had no signs of clinical depression. Mr Gallop lodged a grievance that the Council had not taken sufficient steps to ensure his health and safety at work, which was rejected by the council on the basis that they had removed some of his duties and arranged a phased return to work. Mr Gallop was later dismissed for bullying and brought a claim for failure to make reasonable adjustments for his disability. The council argued that it had not failed in its duty to provide reasonable adjustments because Occupational Health had advised that Mr Gallop was not disabled.

The Court of Appeal found that the council could not deny knowledge of Mr Gallop’s disability by unquestioningly adopting OH’s advice. The case has been remitted back to the Tribunal to determine whether the council had actual or constructive knowledge of Mr Gallop’s disability.

While employers may find determining disability tricky and want to rely on an Occupational Health medical report, they must remember they cannot outsource its responsibilities.

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Agency workers loophole

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The Employment Appeal Tribunal has said that agency workers on open ended contracts with companies are not covered by the Agency Workers Regulations 2010 because they are not ‘temporary’.

Under the regulations, organisations are obliged to provide agency workers with the same basic working and employments rights as permanent employees once they have met the qualifying period of 12 weeks’ service. However, the case of Morgan v Ideal Cleaning Services Ltd has now opened a loophole for employers in that only agency workers with contracts of a definite duration (whether short term or not) are covered. Any agency workers who have contracts with no fixed end dates will not qualify for protection on the basis that they are quasi-permanent, not temporary.

Whilst this is good news for employers facing challenges over agency worker status, pay and conditions or who want flexible staff with no risk attached, there is some uncertainty in that there will be instances where agency workers assignments blur the lines between temporary and permanent/open ended. To manage this problem, employers should ensure that assignments are not formally time limited. Although, Tribunals will likely look at the reality of the situation rather than what the contractual documents say, this safeguard will hopefully add credibility to an employer’s case and help resolve the matter without going to Tribunal. In any event, it is likely Parliament will step in to fill this loophole as it leaves some agency workers unprotected.

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Proposed TUPE amendments

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Parliament has amended the TUPE regulations, which are in force in respect of transfers occurring on or after 31 January 2014.

In brief, the changes include:

1.  A new employer (with the old employer’s agreement) can elect to consult about large scale redundancies pre-transfer of the work force;
2. For a service provision change (e.g. outsourcing) to be covered by TUPE, the activities carried out by a new organisation must now be ‘fundamentally the same’ as those carried out by the old organisation;
3. Any purported variation of a contract of employment that is transferred under TUPE or the dismissal of an employee will still be automatically unfair if the ‘sole or principal reason’ for the variation or dismissal is the transfer. However if the sole or principal reason for the variation or dismissal is an economic, technical or organisational reason entailing changes in the workforce which expressly includes redundancies caused by relocations, then this is not unfair and a variation of terms may be valid;
4. Where a transferring employee’s contract of employment includes a collective agreement clause (i.e. where contract terms are updated as a result of negotiations between an employer and a trade union); any changes to collective terms agreed post-transfer without the new organisation’s approval will not automatically transfer;
5. The outgoing employer now has to provide “employee liability information” at least 28 days (rather than 14) before the transfer from and including 1 May 2014; and
6. Small businesses with less than 10 employers will be able to consult directly with employees (instead of representatives) affected by a TUPE transfer occurring on or after 31 July 2014.

These changes are intended to benefit employers. For example, the effect of (4) means that employers who inherit staff under TUPE from the public sector will have certainty over transferring employees salary costs when tendering for service contracts.

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An employer cannot pay lower redundancy payments to older staff because they are getting a pension as well

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The Employment Appeal Tribunal found that a council could not rely on a statutory defence to justify an age discrimination claim. Sefton Council paid redundancy payments in accordance with the Civil Service Scheme.  This scheme reduced redundancy payments if employees were eligible to draw a pension as it was thought unnecessary to compensate people drawing a pension for loss of a job to the same extent as if they were still in work.

Some no-doubt pension age or close to pension age judges ruled that in the current climate, individuals over 60 remain in the workforce and require income from their earnings and pension to maintain a standard of living, so the reduction in redundancy payment was not justified and Ms Heron got her full redundancy payment.

Detail

Ms Heron TUPE transferred from the civil service to Sefton council. Her entitlement to the Civil Service Compensation Scheme (which was derived from statute) was incorporated into her new contract with the council. At the age of 61, the council made her redundant and awarded her a redundancy package in accordance with the scheme. However, whilst her younger colleagues under 60 received redundancy packages based on their length of service, Ms Heron’s package was capped because of her age. She subsequently brought an age discrimination claim.

The council argued it had not discriminated against Ms Heron because it had awarded her redundancy package in accordance with statute. The EAT disagreed and said that:

1.  whilst the scheme is derived from statute, it does not require different treatment of employees over 60 in terms of redundancy payments (it merely provides for it); and
2. when Ms Heron TUPE transferred to the council, the scheme rules ceased to be statutory and became contractual. This meant that the scheme could not be justified using the statutory defence.

The council also argued that if it was age discrimination, their decision to pay Ms Heron a lower redundancy package than her younger colleagues was a proportionate means of achieving a legitimate aim, because someone who has reached pension age will be better provided for as they can draw their pension. The EAT disagreed and said that in the current climate, individuals over 60 remain in the workforce and require income from their earnings to maintain a standard of living, so the fact that Ms Heron can draw a pension will not justify age discrimination. Accordingly, Ms Heron was entitled to the balance of the redundancy payment.

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John McCririck loses age discrimination claim

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It was widely publicised before Christmas that John McCririck, horse-racing pundit, lost his age discrimination claim against Channel 4. The Tribunal appears to have found that the decision to dismiss Mr McCririck was not age-related but due to his sexist views, unpalatable presenting style and controversial appearances on reality TV shows. That said, the Tribunal judgment stands up poorly under legal scrutiny and the factual basis for the decision is not entirely clear.

In 2012, Channel 4 secured the exclusive rights to broadcast horse racing ‘crown jewel’ events on terrestrial TV. This was a real coup and the broadcaster decided to use this opportunity to ‘to grow new audiences’.

As part of a shake-up of its presenting team designed to achieve this growth, Mr McCririck, aged 72, was dismissed. He claimed that he lost his job to younger rival, Clare Balding, because of his age and sought £3m in damages.

In age discrimination cases, the legal analysis is as follows:

• Stage 1 – the employee must show evidence from which discrimination can be inferred in the absence of an adequate explanation;
• Stage 2 – if the employee is successful at (1), the burden of proof shifts to the employer to prove that discrimination did not occur i.e. to provide a non-discriminatory explanation for its actions; and
• Stage 3 – if discrimination did occur (i.e. the employer cannot provide a non-discriminatory explanation), it has a second bite of the cherry as it has a chance to argue that its actions are justified in any case.

Mr McCririck satisfied Stage 1 as he convinced the Tribunal that there was sufficient evidence to infer that discrimination had taken place. That evidence included: (1) that Mr McCririck’s co-presenter, Ms Tanya Stevenson, aged 42, was retained as a presenter on Channel 4 racing; and (2) all of the presenters whose contracts were terminated as part of Channel 4’s ‘revamping’ were over 50.

The Tribunal then went straight on to Stage 3 and considered whether the decision to dismiss Mr McCririck could be justified. That suggests that either Channel 4 was unable to provide a non-discriminatory explanation or the Tribunal got confused as to the legal test to be applied.

At the very end of its judgment, the Tribunal suggests that McCririck was “dismissed because of his persona emanating from his appearances on celebrity television shows….together with his appearances as a broadcaster on Channel 4 Racing where, as he accepted, his style of dress, attitudes, opinions and tic tac gestures were not in keeping with the new aims’. That appears to be a non discriminatory explanation for the dismissal but if that is the case, why did the Tribunal go on to consider justification at all?

In terms of justification, the Tribunal found that Channel 4’s aim of attracting a wider audience to horse racing was legitimate and the means used to achieve it were proportionate. Unfortunately, no explanation is provided of why the Tribunal decided the means used were proportionate and there is no discussion of what alternatives Channel 4 might have implemented in order to achieve the same aim.

Is Mr McCririck’s case really so different to that of presenter Miriam O’Reilly who successfully won her age discrimination case against her BBC bosses after being culled from the long-running ‘Countryfile’ series to be replaced by a younger presenting team? In that case, the wish to appeal to a primetime audience, including younger viewers, was found to be a legitimate aim but it was not proportionate “to do away with older presenters simply to pander to the assumed prejudice of some younger viewers”. It is unclear why the same does not apply in the present case.

Bearing in mind the flaws in the judgment, it seems likely we have not seen the last of Mr McCririck.

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6 month restriction on approaching clients did not need to be limited to customers with whom the employee had contact

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In Coppage and another v. Safetynet Security Limited a post-termination restriction purporting to prevent an employee for six months after his employment ended from soliciting all customers of the business during his employment was reasonable, and therefore enforceable, despite not being limited to those who were customers for a limited period of time before termination and with whom he had contact.

Failure to limit restrictions in this way is often a “killer blow” rendering the restriction too wide and therefore unenforceable.  Not so in this case.  The Court of Appeal, considering the facts, felt that the relatively short restriction (six months) was reasonable and proportionate and the employee was ordered to pay damages of £50,000 as a result of his breach.

Detail

Mr Coppage commenced employment with Safetynet Security Limited in 2009.  In 2010, he was promoted to director and entered into a new contract of employment.  That contract included a post-termination restriction which sought to prevent Mr Coppage from soliciting customers of Safetynet (where the term “customer” included all customers of Safetynet during Mr Coppage’s employment and not just those who had been customers shortly before termination and with whom he had dealt).

Two years after his promotion, Mr Coppage resigned from his employment and appeared to induce a colleague to do the same.  Mr Coppage’s colleague set up a competitive business with Mr Coppage apparently, but not officially, at the helm.

Mr Coppage made 135 calls and sent 175 texts to customers following his resignation allegedly enticing them to transfer their business to the new company.  Five customers did so.  The Court held that this was in breach of his non-solicitation clause and Mr Coppage’s fiduciary duties, and awarded damages of £50,000.

Mr Coppage appealed to the Court of Appeal, arguing that the failure to limit his restriction to customers with whom he had dealt during a limited period of time before his termination rendered the restriction unreasonable and unenforceable.  The Court of Appeal dismissed this argument.  It was satisfied that the restriction was reasonable and necessary to protect Safetynet’s legitimate interests. The fact that Mr Coppage’s restriction was, in the Court’s view, short (six months) was particularly relevant.

We suspect the fact that Mr Coppage had launched such a ferocious attack on his former employer’s business would also have weighed heavily in the Court’s mind.  It is still safer to limit the customers that an employee should not approach to those with whom the employee has had recent material contact but this case shows that if that is not done, all is far from necessarily lost.

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12 month garden leave clause valid

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In JM Finn & Co v Holliday, the High Court granted an injunction to keep an employee on garden leave for his 12 month notice period.  They rejected the suggestion that not sending an employee market information whilst on garden leave was a breach of contract.  Whilst 12 months is a long period, the fact that the employee had received a three fold salary increase when agreeing to a 12 month notice period was relevant.

Detail

Mr Holliday joined JM Finn in 1999 as an investment adviser. In 2008, Mr Holliday signed revised contract terms including a triple salary increase, a 12 month notice period, a garden leave clause and restrictive covenants. In 2013, Mr Holliday got a new job with another stockbroking firm and resigned. When JM Finn instigated his garden leave clause for his notice period, he claimed that JM Finn had committed a repudiatory breach of his contract (by not sending him market knowledge briefing notes) and therefore the garden leave/restrictive covenants were invalid and his employment was terminated with immediate effect.

JM Finn successfully applied for an injunction to enforce the restrictions in Mr Holliday’s contract. The High Court said:

1.  Mr Holliday’s repudiatory breach argument was deployed only to avoid his notice period and garden leave obligations; and
2. In deciding whether to grant the injunction to keep Mr Holliday on garden leave for his 12 month notice period, the judge said that: (i) Mr Holliday agreed to 12 months in 2008; (ii) he had sought legal advice on it and did not argue for a shorter notice period; (iii) it was accompanied by a tripling of his salary; and (iv) a contractor Mr Holliday worked closely with was also on a 12 month notice period.

The Court held that 12 months garden leave was reasonable because JM Finn needed the time to protect its legitimate business interest, which was maintaining a connection with a client base that Mr Holliday had built up over 14 years. The court found that there was a strong risk that Mr Holliday would be able to ‘woo’ his former clients if he were allowed earlier contact with them.

In addition, it rejected Mr Holliday’s argument that his skills would atrophy whilst on garden leave as he would still be able to maintain his market knowledge.

It also rejected his argument that being placed on garden leave would harm his reputation as this was a common practice.

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Paying older workers larger redundancy payments is discriminatory but justified

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In order to establish discrimination, a Claimant must establish that they have been treated differently to a comparator whose circumstances are materially the same to their own (with the only difference being a protected characteristic such as age, race, disability etc). In Lockwood v. DWP, an age discrimination case, the Court of Appeal gave short shrift to the suggestion that there was a material difference between groups of workers (and therefore no comparator) on the basis of circumstances intrinsically linked to age.

The employer argued that the circumstances of employees under the age of 35 (being that they were less likely to have family and financial commitments) were materially different to the circumstances of staff over the age of 35.  The Court disagreed because the characteristics were intrinsically linked to age and therefore had to be disregarded.  Accordingly, the two groups of employees were comparable and the decision to pay enhanced redundancy payments to employees over the age of 35 was an act of direct age discrimination.

However, in any event, the policy was justifiable on policy grounds and the claim failed on that basis.

Detail

The DWP had a policy whereby employees aged 35 or over benefited from more favourable redundancy payments than employees under the age of 35.

Ms Lockwood was made redundant and paid a redundancy payment of £10,894.04. Had she been 35 or older, she would have received an additional sum of £17,690.  She claimed that the DWP’s redundancy policy amounted to less favourable treatment on grounds of age and was therefore direct age discrimination.

The ET and EAT dismissed the claim on the basis that:

• there was a material difference between the two groups of staff and therefore no comparator (being that the employees under the age of 35 were less likely to have family and financial commitments justifying the generous redundancy package); and, in any event:
• the different treatment was objectively justified on policy grounds and therefore the discrimination claim would fail (as the enhanced redundancy payment to older staff addressees the fact that older workers are likely to experience more difficulty securing alternative work).

The Court of Appeal dismissed the comparator argument.  The DWP could not rely on circumstances intrinsically linked to age to justify a difference between the two groups.

However, it upheld the EAT’s justification argument and was satisfied that the EAT had properly addressed the issue of whether the policy was appropriate and necessary to achieve the policy aim of cushioning the blow of redundancy to older workers.

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Paying for an employee’s private counselling can be a reasonable adjustment

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In Croft Vets Ltd v Butcher, the Employer Appeal Tribunal found that an employer should have agreed to pay for private psychiatric counselling for an employee who was suffering from work-related stress to help her return to work.

Detail

Mrs Butcher worked as a manager at a veterinary practice. In 2007, the practice decided to expand and, as a result, her responsibilities increased, which negatively affected her performance levels. Three years later, Mrs Butcher was signed off work with depression following performance issues. The practice  referred her to a psychiatrist who said that she had suffered from work related stress for two years and recommended that the practice pay for her to have private psychiatric sessions. However, the psychiatrist stated that even with the treatment, there was only a 50/50 chance that Mrs Butcher’s health would improve enough to enable her to return to work. The practice asked some further questions which the psychiatrist was slow to respond to and in the end Mrs Butcher resigned and brought a claim for disability discrimination.

The EAT found that the employer’s failure to arrange and pay for the private counselling amounted to a failure to make reasonable adjustments. Despite the odds, there were reasonable prospects that the psychiatric treatment would be successful and facilitate a return to work and an improvement in Mrs Butcher’s health; therefore it was a reasonable job-related adjustment.

Whilst employers may be surprised and worried by this decision, they should note that this decision is not about funding private medical treatment for employees in general but a specific adjustment designed to allow one employee to return to work and manage her work-related stress. It was clear in this case that Mrs Butcher’s health problems were caused to a large extent by her work.

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Christian wins case against employer over gay marriage remarks

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“In Smith v Trafford Housing Trust, Mr Smith posted a link on his Facebook wall to a BBC news article entitled “Gay church marriages set to get the go-ahead” and commented that it was “an equality too far”. In response, his colleague posted a comment on his wall, “Does this mean you don’t approve?”. Mr Smith replied “no, not really, I don’t understand why people who have no faith and don’t believe in Christ would want to get hitched in church. The bible is quite specific that marriage is for men and women. If the state wants to offer civil marriage to same sex then that is up to the state; but the state shouldn’t impose its rules on places of faith and conscience”.

As a result of his comments, Mr Smith was suspended on full pay and subjected to a disciplinary investigation. At the disciplinary hearing, he was found guilty of gross misconduct for breaching the Trust’s Code of Conduct and Equal Opportunities Policy.

Mr Smith sued the Trust for breach of contract.

The Court held Mr Smith was not guilty of gross misconduct for the following reasons:

1. His conduct did not bring the Trust into disrepute. Although Mr Smith’s wall identified him as an employee of the Trust, a reasonable Facebook reader would not conclude that Mr Smith’s views about gay marriage reflected the views of the Trust.
2. The obligation not to promote religious or political views under the Trust’s Code of Conduct did not extend to Mr Smith’s Facebook wall, irrespective of the fact that Mr Smith had 45 work colleagues as Facebook friends. This was because the wall was inherently non-work related and, most importantly, Mr Smith’s colleagues had chosen to make him a Facebook friend and therefore it was their decision whether or not to acknowledge his views.
3. He had not failed to treat his colleagues with dignity, respect or acted in a manner which was liable to cause offence. Mr Smith’s posting about gay marriage was a widely espoused view. Neither was the manner in which he delivered his opinion disrespectful or judgmental. The court said that “the frank but lawful expression of religious or political views may frequently cause a degree of upset, and even offence, to those with deeply held contrary views, even where none is intended by the speaker. This is a necessary price to be paid for freedom of speech”.

This case demonstrates that while workplace rules can restrict the use of social media outside work, freedom of expression is paramount and will take precedence where the comments are clearly not intended to be work related.

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Can you be fairly dismissed for theft when you have been acquitted in a criminal trial?

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Yes, according to the Court of Appeal in Stuart v London City Airport. Mr Stuart worked at London City Airport until he was dismissed for attempting to steal goods from a duty free shop. He brought an unfair dismissal claim arguing that LCA had not carried out an adequate investigation, in particular that they had not reviewed the CCTV footage in response to the duty free shop manager’s accusation that he was concealing items under his coat.

The Court of Appeal disagreed and said that LCA had carried out a reasonable investigation based on Mr Stuart’s main defence that he had not left the ‘duty free’ area or he had a genuine belief that he had not done so. LCA inspected the site where the alleged theft occurred and found that the shop boundaries were clearly demarcated thus undermining Mr Stuart’s credibility. Based on the fact that LCA had concluded that he had been dishonest, it was reasonable for them not to consider CCTV footage in relation to the alleged concealment of goods. Furthermore, at no point during the disciplinary proceedings did Mr Stuart suggest that LCA should carry out the investigations whose omission he now said rendered the dismissal unfair.

This case is good news for employers. One word of warning however…should an employee request evidence to be taken into account as part of the disciplinary process, it would be wise to include it otherwise it may impact on the fairness of the investigation.

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When can an employee refuse suitable alternative employment?

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In Devon PCT v Readman, Mrs Readman was a community matron at Devon Primary Care Trust. Her role was focused on managing community and district nursing in a small community hospital which had only 12 beds.

In 2007, she was placed at risk of redundancy and was offered the role of modern matron, which involved 10% managerial duties, 45% hospital matron duties and 45% as team leader. She rejected this position on the basis that her qualifications were in community nursing and she had chosen not to work in a hospital since 1985 and had no desire to go back. She also wished to emigrate to Canada.

The question which the Tribunal had to consider was: (a) whether Mrs Readman had unreasonablyrefused the offer; and (b) was she entitled to a statutory redundancy payment?

This case went up to the Court of Appeal who held that the Tribunal had failed to address Mrs Readman’s point that she did not want to work in a hospital because her career path was community nursing and the Tribunal needed to look at the relevance of Mrs Readman’s emigration plans. This amounted to an error of law and the case was remitted to the Tribunal for a decision.

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