2 Gray's Inn Square Chambers
Employment Law Update - 28th April 2006

Home Contact Find Us Members Practice Groups Direct Public Access Clerks & Admin Seminars Publications Recruitment Pupillage About Links

Suzanne Palmer   2 Gray's Inn Square Chambers' Logo
 
Employment Law Update
28th April 2006
edited by
Suzanne Palmer
 
 
 
Editorial
The “big news” this month is of course that the new TUPE regulations came into force on 6th April. For those of you who have not already spotted it on our website, 2 Gray’s Inn Square Chambers will be holding a seminar entitled “New TUPE – So what’s different?” on Wednesday 24th May. Places are still available. For a registration form click here..
We are grateful to one of our readers who e-mailed to let us know about a forthcoming CA decision (Woodward v. Abbey National) – if any other readers are aware of pending appeals, we are always glad to hear so that we can include the information in the update.
If any regular recipients of the update would like further information about the Employment Practice Group at 2 Gray's Inn Square Chambers please visit the Chambers' website or contact the Clerks. To make any queries about the update or request a brochure please e mail Suzanne Palmer.
E mail Suzanne Palmer
Thank you to those who have given us positive comments about the update. We are always glad to receive feedback, and regularly receive new requests to join the mailing list to receive the update. If you know of others who might like to receive it, please forward it to them and ask them to contact Suzanne Palmer by e mail.
 
 
     
 
Index
 
 
(click on a link to jump to section)
 
     
·   Case Reports and Journals covered
1
       
  Reported cases:  
·   Employer’s Liability
2
·   Unfair Dismissal & Wrongful Dismissal
3
·   Discrimination
4
·   Pay & Other Terms & Conditions of Contract of Employment (including Equal Pay)
5
·   Tribunal and EAT Procedure
6
·   Detriments (fixed-term & part-time work, whistleblowing etc.)
7
·   Health & Safety
8
·   Trade Unions
9
·   Employer's Insolvency
10
·   Redundancy
11
·   Working Time Regulations
12
·   Transfer of Undertakings
13
     
  Miscellaneous:  
  ·   Apprenticeships & Trainees
14
  ·   Restrictive Covenants
15
  ·   Harassment
16
  ·   Temporary Workers
17
  ·   Contract of Employment
18
  ·   Civil Proceedings
19
  ·   Human Rights
20
  ·   Professional Regulatory Bodies and Other Tribunals
21
  ·   Information and Consultation Regulations
22
  ·   Pensions
23
  ·   EC law
24
       
·   Pending and Refused Appeals
25
·   Legislative Changes, Codes of Practice, Practice Directions etc.
26
 
 
Case Reports covered

Industrial Relations Law Reports (IRLR) Part 5 not yet available
Industrial Cases Reports (ICR) Part 4, April 2006
Industrial Cases Express (online service)
Weekly Law Reports (WLR) February 2006, Parts 12 to 14, April 2006
All England Law Reports (All ER) April 2006
The Law Reports (AC, ChD, QBD) April 2006
The Times 1st March to 31st March 2006
The Independent 1st to 31st March 2006
The Daily Telegraph 1st to 31st March 2006

 
Journals covered
IDS Employment Law Brief issues 802 to 803, April 2006
Equal Opportunities Review issue 151, April 2006
Current Law Monthly Digest issue 4, April 2006
 
 

 

Reported Cases
 
Employers’ Liability

French & others v. Chief Constable of Sussex; Daily Telegraph 28/03/06; CA
Employer’s liability – psychiatric injury – causation and remoteness – stress – disciplinary procedures – employer’s knowledge
F and four other police officers were involved in events leading up to an armed raid which resulted in a fatal shooting (which was not witnessed by any of the 5 officers). The incident was referred to the Police Complaints Authority. F was serviced with disciplinary notices and suspended. He brought proceedings in negligence against C, asserting that there were serious and systematic shortcomings in his training in relation to the conduct of operations of this sort. He relied on medical reports which confirmed that his symptoms of stress began in the aftermath of the shooting and were referable to the disciplinary and criminal investigations and their consequences. The decision to strike out the claim was upheld on appeal. This was not a stress at work case nor was it analogous to one. The claim was that F had suffered psychiatric injury as a remote consequence of an untoward event caused by C’s failure to give proper training to employees as to how they should carry out their duties. The chain of causation was that this untoward event resulted in criminal and disciplinary charges against F which subjected him to stress, in turn causing psychiatric injury. F had no real prospect of establishing that it was reasonably foreseeable that the corporate failings would cause psychiatric injury by that chain of causation. If officers who witnessed the shooting would have no claim as secondary victims (because they did not witness the death of a loved one), then it necessarily followed that F (who was more remotely affected) could have no claim either. Further, an employer could only be liable where he knew or ought to have known that a particular employee was at risk of psychiatric injury by reason of stress.

 
 
Unfair Dismissal & Wrongful Dismissal

Collins v. National Trust; 17/01/06 (2507255/05); IDS Brief 803 p11; ET
Unfair dismissal – automatically unfair dismissal – whistleblowing
ET decision that it was automatically unfair under the whistleblowing provisions in ERA to dismiss an employee who leaked to a newspaper a confidential report detailing potential hazards to the public of a contaminated landfill site.

Elizabeth Claire Care Management Ltd v. Francis; [2005] IRLR 858; IDS Brief 794 p9; [2006] 4 CL 71 para 131; EAT
Unfair dismissal – reason for dismissal – assertion of statutory right – unlawful deductions
Reported in the November and January updates. Now also reported at [2006] 4 CL 71 para 131.

Secor Consulting Ltd v. Meffen; 02/12/05 (EAT/180/05); [2006] ICR Part 4 p.xvi; EAT
Unfair dismissal – lack of consultation – compensatory award – approach – reduction
M was an employee earning £100,000 a year who was dismissed by reason of redundancy. The ET found that he had not been generating sufficient revenue to justify his salary but that he was unfairly dismissed due to lack of consultation. It made no reduction in the compensatory award to reflect the lack of chance of M remaining in his post following a fair consultation process. The EAT allowed S’s appeal by a majority. It was never part of M’s case that he would have remained in that job, but he said that consultation might have opened up alternatives such as reduced pay or a sabbatical. There was always an area of speculation and artificiality in redundancy cases. However, with regard to the unreported case of Lionel Leventhal Ltd v. North, this was a matter of assessment (of the possibility that a scrupulously fair procedure would have made no difference) rather than speculation. The majority of the EAT considered that the issue of whether M would have accepted alternative employment or a lower salary was raised before the ET and relative salaries of alternative employment were considered. The consequence of the ET’s failure to make any reduction against that possibility was a default finding that, with consultation, M would have remained in his job at his existing salary. This resulted in a somewhat inconsistent decision from the ET that S needed to cut the payroll bill and M was not justifying his salary and S took an acceptable course in making him redundant, on the one hand, and that consultation would have resulted in M retaining his job and salary, on the other. The ET was obliged, difficult though it was, to consider on the evidence the issue of alternative employment, and the percentage chance that consultation would have led to M accepting employment at a lower level. The decision would be remitted to the same tribunal for reconsideration of the issue.

 
 
Discrimination

Bradford v. HM Prison Service; 09/09/05 (2100746/05); EOR 151 p30; ET
Disability discrimination – sick pay policy
ET decision that disabled people are not more likely to have lengthy periods of sick leave than the non-disabled, so B’s claim that a sick pay policy placed him at a substantial disadvantage compared with others was dismissed. B suffered an accident at work in 2002 and another in 2003. He remained on sick leave until dismissal in January 2005. He was disabled owing to degenerative osteoarthritis affecting his knee. H’s sick policy allows for full pay for up to 6 months in any 12, and thereafter half pay subject to a maximum of 12 months in any 3 years. H’s policy also provides for sick leave excusal where absence is caused by an accident at work: in such a caseabsence is paid at full pay initially for six months and does not count towards sick pay entitlement. B was granted this sick leave excusal. He applied in June 2004 for further excusal. An OH report said that the ongoing incapacity was no longer attributable to the original accidents but to the degenerative changes to the knee. H refused further sick leave excusal. The ET refused to find that H should have made reasonable adjustments by not counting the period of disability-related sick leave for the purposes of sick pay entitlement, rejecting the argument that disabled people are more likely than others to have lengthy periods of sick leave: there was no evidence, statistical or otherwise, to support such a contention and the tribunal was unable to make stereotypical assumptions about the propensity of disabled persons to take lengthy sick leave. Nottinghamshire County Council v. Meikle distinguished.

Hodgkins v. Peugeot Citroen Automobiles Ltd; 18/10/05 (13000057/05); EOR 151 p31; ET
Disability discrimination – sickness absence – warnings – reasonable adjustments
ET decision that P failed to make a reasonable adjustments by not discounting disability-related sickness absences for the purposes of issuing warnings for absence. H was a warehouse operative who suffered a disability. He was summoned to a disciplinary hearing for an unsatisfactory absence record. He and his representative raised the issue of whether he was disabled. The hearing was adjourned and, before it was resumed, H wrote challenging the requirement to attend the hearing, pointing out that 2 of his 4 absences over the previous year related to his disability. At the resumed hearing he was issued a first level warning. His appeal was rejected. He made a further appeal, asking P to investigate his disability. He obtained a report confirming that he had a disability which might be relevant under the DDA and suggesting possible adjustments. The report said that future absence was difficult to predict but might be at a similar level to the previous 12 months. That appeal was also dismissed. The ET found that 2 of the absences were disability related. P conceded that if those 2 absences were discounted the warning would not have been issued. The warning was a detriment, and an appropriate comparator was someone who had no absence during the period and would not have been warned. The ET concluded that P failed to make the reasonable adjustment of discounting the 2 disability-related absences. They did not cause P any material difficulty and as P would not be able to justify issuing the warning on the basis of only 2 absences, the warning amounted to unjustified direct discrimination, as did the decision to uphold it on appeal. H remained off sick until dismissed in 2005. OH evidence suggested that he was fit to return to work by the beginning of 2005. His failure to return to work was likely to be an issue in proceedings to be commenced following the termination of his employment, so the ET was not prepared to conclude on the evidence before it that the absence subsequent to January 2005 was caused by the issue of the warning. £5,000 was awarded for injury to feelings and £4,000 for personal injury (stress and anxiety). There would also be an award for loss of earnings up to January 2005.

Millar v. Inland Revenue Commissioners; [2005] CSIH 71; [2006] IRLR 112; IDS Brief 803 p3; CS
Disability discrimination – Whether disabled – mental impairment – physical impairment
Reported in the February update. Now also reported at IDS Brief 803 p3.

North Western Health Board v. McKenna; C-191/03; [2006] ICR 477; [2006] 1 CMLR 6; [2006] 4 CL 69 para 128; ECJ
Sex discrimination – pregnancy – sick leave scheme – pregnancy-related illness
N was a public health board in Ireland which operated a scheme whereby staff were entitled to a maximum of 365 days of paid sick leave over any four-year period, with full pay for a maximum of 183 days in any 12 months and half-pay for additional days. There was no distinction between pregnancy-related and other illness. M was on sick leave for most of her pregnancy due to a pregnancy-related condition. She received full pay and then, pursuant to the sick pay scheme, went onto half pay until maternity leave, and again after the end of it. She claimed sex discrimination. The court referred the matter to the ECJ for a preliminary ruling. The ECJ held that a sick pay scheme which treated identically female workers suffering from a pregnancy-related illness and other workers suffering from other conditions came within the scope of Article 141 and the Equal Pay Directive. It did not constitute sex discrimination contrary to the Article 141 or the Equal Pay Directive provided that the female worker was treated in the same way as the male worker and that the pay was not so low as to undermine the objective of protecting pregnant workers. Similarly, a rule providing for the offsetting of sick-leave absences against a maximum total of days of paid sick leave over a specified period (whether or not preganancy-related) did not constitute sex discrimination, provided that, where the illness was pregnancy-related, the offsetting did not mean that, during the absence affected by the offsetting after the maternity leave, the female worker received pay lower than the minimum amount to which she was entitled during the illness which arose while she was pregnant.

Pritchard v. Style Guard Ltd; 12/10/05 (1303659/04); EOR 151 p29; ET
Disability discrimination – dismissal without risk assessment – reasonable adjustments
ET decision that when S dismissed P because of fears for her health, without a risk assessment, she was subjected to disability discrimination and failure to make reasonable adjustments. P was a supervisor in an assembly department of a company with 25 employees. Her operations involved a process using hot glue, which would not present a health risk for a healthy employee, but P had respiratory difficulties and a lung disease which was exacerbated. She was sent on paid leave and a managing director spoke to her. No alternative work was proposed and without further discussion P was dismissed as S was not prepared to take the risk of her working in the area again. No consideration was given to adjustments, the obtaining of independent medical advice or the carrying out of a risk assessment. With hindsight, the gluing could have been segregated from other parts of the assembly process, but this was not considered at the time. The ET considered that the dismissal was disability-related discrimination for which there was no justification. No risk assessment was carried out. The burden of proof shifted to S and it failed to provide an adequate explanation for the treatment. S had further failed without justification to make reasonable adjustments. If a proper risk assessment had been carried out, P could well have carried on working.

South East Essex College v. Abegaze; [2006] ICR 468; EAT
Race discrimination – ET procedure – just and equitable extension – discrimination after the employment relationship has ended
S was A’s former employer. They wrote a letter to S’s current employer in 2001, giving information about him which he alleged was incorrect and detrimental to him. This letter did not come to his attention until 13th October 2003. On 12th January 2004 he brought a complaint of discrimination and victimisation against S. At a preliminary hearing, the ET held that the claim was not misconceived and the letter could amount to less favourable treatment and victimisation in respect of the employment relationship between S and A. It also held that it would be just and equitable to hear the complaint as A had presented it within 3 months of becoming aware that he had a potential claim. S’s appeal was allowed. The ET erred in law in failing to consider prejudice to the college when exercising its discretion to admit the claim out of time. Further, s27A (former employment relationships) of the RRA could not be applied retrospectively to an alleged act of discrimination taking place before that section came into effect. The letter was therefore not unlawful when written and could not form the basis of a complaint. Moreover, it was not a benefit arising from the employment relationship in respect of which he could claim protection against S as his employer, because it was a letter provided in confidence to assist his current employer. There was therefore no jurisdiction.

Southampton City College v. Randall; [2006] IRLR 18; IDS Brief 800 p7; [2006] ICR Part 4 “Recent points” p.xiv; EAT
Disability discrimination – reasonable adjustments – creation of new post – whether reasonable adjustment – necessity of assessment of what adjustments are required
Reported in the January and March updates. Now also reported at [2006] ICR Part 4 “Recent points” p.xiv.

Wilson v. Airbus UK Ltd; 18/11/05 (2901838/04); EOR 151 p29; ET
Disability discrimination – reasonable adjustment – headcounts
ET decision that A’s rule that headcount should not be increased should have been adjusted to allow the retention of an employee who was off sick and costing the company nothing, until such time as the result of further medical treatment was known. W had had an accident in work in 2003. He had physical injuries and developed a psychiatric condition of post-traumatic stress or anxiety. Disability was conceded and liability was admitted in civil proceedings. W did not return to work prior to his dismissal in August 2004. His sick pay ceased in June 2004. A obtained a medical opinion which advised that there was no prospect of a return in the foreseeable future. However, it was advised that a report be sought from his GP. The GP agreed but said that he was arranging an appointment with a psychologist. W later told A that he had found this appointment beneficial and hoped for improvement. Shortly afterwards he was dismissed. A had a rule that the headcount of staff could not be increased, so no-one could be replaced until they had left. This meant that W could not be replaced by agency or permanent staff. The ET found that the timing of the dismissal was due to an urgent need to get someone into the plant to cover the work, and the rigidity of the headcount rule prevented this. A failed to make a reasonable adjustment by not relaxing the rule, which would have permitted W to remain nominally on the books, at least until the result of the further medical treatment was known. There was no justification for the failure. The dismissal was also direct discrimination which was not justified, both by reason of the failure to make the reasonable adjustment, and because it was not justifiable to dismiss when the further medical evidence had not been obtained. £1,500 was awarded in respect of injury to feelings, although W’s evidence was that a weight was lifted from his shoulders when he was dismissed, because the ET was not prepared to say that the discriminatory dismissal caused no additional worry or injury to feelings.

 
 
 
Pay & Other Terms & Conditions of Contract of Employment (including Equal Pay)

North Western Health Board v. McKenna; C-191/03; [2006] ICR 477; [2006] 1 CMLR 6; [2006] 4 CL 69 para 128; ECJ
Sex discrimination – pregnancy – sick leave scheme – pregnancy-related illness
See above (Sex discrimination).

Preston & others v. Wolverhampton Healthcare NHS Trust & others (No. 3); [2006] UKHL 13; IDS Brief 802 p9; HL
Equal pay – time limits for bringing claims – TUPE – occupational pensions
HL decision that equal pay claims concerning occupational pensions, brought by employees against a transferor employer more than 6 months after the TUPE transfer which marked the end of the relevant “employment”, were time-barred. P and others were transferred to a new employer and brought equal pay claims against the transferor (rather than the transferee) in respect of occupational pension rights, because TUPE specifically excludes the transfer of rights relating to occupational pension schemes. The Equal Pay Act provides that claims must be brought within 6 months of the last date on which the person is employed in the employment. The specific question for the HL was whether the time limit started to run from the date of transfer or from the termination of employment with the transferee. The ET held that the relevant date was that of transfer. The EAT overturned that decision, holding that the “employment” under which the alleged breach occurred was still continuing because of the “fiction” created under TUPE that employment with the transferor is deemed always to have been with the transferee. The CA restored the ET decision because Reg 7 specifically excluded pension rights from being treated in the same way as other rights. The House of Lords upheld the CA decision. The plain and natural meaning of s2 Equal Pay Act was that the claim had to be brought within 6 months of the end of the employment to which the claim relates. Where there has been a TUPE transfer and the claim concerns the denial of pension rights before the date of transfer, the claim relates to the employment with the transferor, so it followed that time ran from the end of that employment, i.e. the date of transfer.
The case (below HL level) has previously been reported as Powerhouse Retail Ltd v. Burroughs.

Robinson-Steele v. RD Retail Services Ltd; Clarke v. Frank Staddon Ltd; Caulfield & Ors v. Hanson Clay Products Ltd; C-131/04 & C-257/04; The Times 22.03.06; IDS Brief 802 p3; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
See below (Working Time)

 
 
 
Tribunal and EAT Procedure

Beat v. Devon County Council; 06/12/05 (EAT/534/05); [2006] ICR Part 4 “Recent points” p.xiii
ET procedure - Costs – misconceived claim – unreasonable conduct – basis for assessing
The ET awarded costs of £10,000 against B on the basis that her claim was misconceived and, in some areas, conducted unreasonably. The EAT allowed her appeal. Rule 40 of the ET rules required a 2-stage process: first, the formation of an opinion as to whether the circumstances in r40(3) applied, and second, where those circumstances did apply, whether it was appropriate to make a costs order. The ET concluded that the proceedings were unreasonably conducted in relation to disclosure and pre-hearing correspondence and that very substantial parts of the claim were misconceived and wholly unrealistic. It went on to say “The tribunal therefore makes an order for costs in the full sum of £10,000 sought by the respondent”. D calculated its costs in defending the claim to be in the region of £23,000. In order to avoid the need for further assessment, and no doubt with regard to B’s means, D limited its application to £10,000. B argued that the tribunal had taken a global non-compensatory view, and that the award of the maximum summary award was so unusual as to indicate that it was made on a punitive or deterrent basis, and that there was no reference to the exercise of discretion or the reasons for the award. The EAT said that the ET had accepted D’s assertion as to the true costs and formed a judgment about it, no doubt with the chairman’s experience of ET costs. However, in the EAT’s experience the award of £10,000 was exceptional and much higher than the general band of awards in comparable cases involving misconception and unreasonableness, and awards were normally associated with the employee’s means. There was an inference to be drawn from the ET’s decision to adopt the figure of £10,000 without further investigation. Having found unreasonableness and misconception, an ET is bound to pause, stand back and look at all the relevant factors when assessing the appropriate level of compensation. That involved balancing the amount of the costs incurred by the unreasonableness, or the misconceived part of the claim, against other parts of the claim, and taking account of the need, if the ET felt there was one, for some compensation and costs. In this case the ET did not go through that process and did not exercise a discretion in assessing the compensation that was appropriate. The EAT had enough information to review the approach to costs and substitute an alternative figure of £5,000.

BUPA Care Homes (BNH) Ltd v. Cann; Spillett v. Tesco Stores Ltd; [2006] IRLR 248; IDS Brief 802 p8; EAT
ET Procedure – Statutory Grievance procedure – relationship with “just & equitable” extensions
Reported in the March update. Now also reported at IDS Brief 802 p8.

Commotion Ltd v. Rutty; 13/10/05 (EAT/0418/05); IDS Brief 797 p12; [2006] IRLR 171; [2006] ICR 290; [2006] 4 CL 67 para 126; EAT
ET procedure – Statutory Grievance procedure – what constitutes a grievance
Reported in the January and February updates. Now also reported at [2006] ICR 290.

Holc-Gale v. Makers UK Ltd; 21/12/05 (EAT/0625/05); IDS Brief 797 p13; [2006] IRLR 178; [2006] 4 CL 70 para 129; [2006] ICR 462; EAT
ET procedure – statutory grievance procedures – what constitutes grievance
Reported in the January and February updates. Now also reported at [2006] 4 CL 70 para 129 and [2006] ICR 462.

Kredenza Ltd v. Jovicevic; 10/11/05 (EAT/605/05); [2006] ICR Part 4 “Recent points” p.xv
ET procedure – response – extension of time – review – approach
K was granted a 1-month extension of time to enter a response to J’s claims of unfair dismissal and unpaid wages. 3 days after that time expired K applied for a further extension. That was refused on the grounds that it was itself out of time and was lacking in merit. K applied for a review of that decision. The proposed response accompanied the application and both were presented 9 days after the expiry of the time limit. The chairman refused. K’s appeal was allowed by the EAT. K’s defence was that J procured his work permit and employment by false and misleading documents and that he was therefore disentitled to claim on grounds of illegality. The chairman in this case correctly directed himself to Moroak v. Cromie and no doubt had the correct principles in mind. He was entitled to take the view he did of K’s explanation for the delay. However, he left relevant matters out of his consideration with regard to the merits. Further, the chairman’s balancing exercise was vitiated by the failure to consider other aspects in which the response had potentially more merit than he considered the illegality point to have. If a defence did have reasonable prospects of success and was important, it would not generally be a sufficient reason for barring it merely that one important element of the proposed grounds had no reasonable prospects. Also, it would always be important to consider the length of the delay, which was relatively short in this case. Taking into account all the potential lines of defence and the length of the delay, unsatisfactory though the explanation for the delay might have been, the case was sufficiently plain that the EAT found that the response should have been accepted. Decision substituted.

 

NSM Music Ltd v. Leefe; [2006] ICR 450; EAT
ET procedure – response presented out of time – effect – right to reasons
N failed to enter a response in time. A substantial response was faxed 3 to 4 days late but was rejected. There was no judgment in default but a chairman ordered that N could play no further part in the proceedings. An application for a review was refused. The ET upheld L’s complaint and awarded compensation of some £48,000. N wished to appeal against the award and requested written reasons. The chairman refused, on the basis that N was not entitled to take any part in proceedings, including requesting written reasons. N’s appeal was dismissed by the EAT. A request for reasons, in itself or with a view to considering appeal, by a respondent barred from participating in proceedings did not come within any of the exceptions in rule 9. Therefore the ET decision could nto be challenged. However, the EAT had power to request written reasons from the ET under rule 30(3)(b). Given that it was a very substantial judgment and issues had been raised as to whether an appropriate period of loss was taken, whether mitigation was considered and how the sums were arrived at. It could not therefore be said that there was no possible appeal on quantum. The appropriate course was therefore for the EAT to stay the matter and request reasons from the tribunal. The EAT expressed the hope that in future a tribunal will consider very carefully adopting the rule 9 rather than rule 8 route, because the rule 9 route prevents the respondent (whatever the nature of its default) from contesting both liability and remedy, including quantum. The EAT further noted that a request for reasons which indicates that those reasons are required for the purposes of making a review application falls within the exceptions in rule 9(b), and serious consideration should be given to amending rule 9 so as to include requests with a view to an appeal. The EAT further observed that the ET decision on whether to grant a review of the rule 9 decision did not consider the merits, and the absence of a good reason was not of itself determinative of the issue. A sensible course for N would have been to appeal against the order refusing a review. The EAT further observed that it was not persuaded that it had, or should have, power to make it a condition of the stay of the appeal that a sum should be paid to L or his solicitor under rule 25 of the EAT rules.

Spillett v. Tesco Stores Ltd; BUPA Care Homes (BNH) Ltd v. Cann; [2006] IRLR 248; IDS Brief 802 p8; EAT
ET Procedure – Statutory Grievance procedure – relationship with “just & equitable” extensions
See above (BUPA Care Homes).

Tenby v. Smee’s Advertising Ltd; 09/01/06 (2202595/05); IDS Brief 803 p11; ET
ET procedure – statutory disciplinary procedures – time limits
ET decision that T, who reasonably believed that a dismissal process was ongoing after writing to S querying the circumstances of her dismissal, was entitled to an extension of time under the dispute resolution regs and EA 2002.

The Pestle & Mortar v. Turner; 09/12/05 (EAT/652/05); [2006] ICR Part 4 “Recent points” p.xiii; EAT
ET procedure – default judgment – review – approach
P applied under rule 33 for review of a default judgment issued when their response was 2 days out of time. The chairman refused on the ground that, although on the face of it P had a reasonable prospect of successfully responding to the claim, there was no good reason for the delay. The EAT allowed P’s appeal. Reference was made to Pendragon v. Copus. In exercising the discretion to review a default judgment, the ET should take account of all relevant factors, including the explanation (or lack of) for the delay and the merits of the defence, weighing and balancing them, and reaching a conclusion which is objectively justified on the grounds of reason and justice, and taking account of the balance of prejudice to each party. The chairman was entitled to find that there was no good reason for the delay. However he erred in his approach to the construction of rules 33(5) and (6), in that he should not have elevated the word “must” in r33(6) into a significant factor, i.e. one weighing more heavily in the balance than the other factors. He also erred in considering the balance of prejudice, in that he took account of the effect of delay on T but not of the draconian effect on P of refusing to review, in that it would prevent P from defending not only as to liability but also as to remedy in a claim which involved unlimited damages. The judgment was set aside and the review application would succeed.

Verdin v. Harrods Ltd; [2006] ICR 396; CA
ET procedure – withdrawal of claim to pursue civil proceedings – dismissal – abuse of process
V was a director of H earning over £200,000 per annum. She was dismissed and claimed unfair dismissal, sex discrimination, breach of contract and victimisation in relation to pay in lieu of notice (alleging that the refusal to pay this was due to her serving a sex discrimination questionnaire). She subsequently sought to withdraw her breach of contract claim from the tribunal (because of the £25,000 limit), intending to pursue it in the High Court if her victimisation claim failed. The chairman refused to allow the withdrawal without the claim also being dismissed, and ordered that unless V indicated her intention to proceed within 14 days, the breach of contract claim would be dismissed on withdrawal. V appealed. The EAT allowed the appeal. It was implicit in rule 25(3) of the ET rules of procedure that, where part of a claim was withdrawn, proceedings in respect of that part of the claim were automatically brought to an end without any provision for a court order, though the respondent had the right to apply to have that part of the claim dismissed under rule 25(4). Such an application would enable the ET to consider at an early stage whether the claimant’s intention was to abandon that part of the claim or to resurrect it in fresh proceedings, and if the latter, whether it would be an abuse of process to allow that to occur. If the chairman had focused on those questions she would have concluded that it would not be an abuse of process to bring the claim elsewhere. Therefore V was entitled to withdraw the breach of contract claim and any order dismissing that claim would be set aside.

X H Diem (known as Anita Ho) v. Crystal Services plc; Daily Telegraph 23.02.06; IDS Brief 801 p9; EAT
Race discrimination – ET procedure – fair hearing – appearance of bias
Reported in the February update. Now also reported at IDS Brief 801 p9.

 
 
 
Detriments (fixed-term & part-time work, whistleblowing etc)

Matthews v. Kent & Medway Towns Fire Authority; [2006] UKHL 8; IDS Brief 801 p3; The Times 02/03/06; [2006] 2 All ER 171; The Independent 03/03/06; [2006] ICR 365; [2006] 4 CL 68 para 127; HL
Less favourable treatment on basis of part-time status – comparator – test
See reported in the March update. Now also reported at The Times 02/03/06, [2006] 2 All ER 171, The Independent 03/03/06, [2006] ICR 365 and [2006] 4 CL 68 para 127.

Melia v. Magna Kansei Ltd; The Times 14/11/05; IDS Brief 797 p7; [2006] IRLR 117; [2006] ICR 410; CA
Whistleblowing – detriment – constructive dismissal – injury to feelings – award
Reported in the December, January and February updates. Now also reported at [2006] ICR 410.

R (Manson) v. Ministry of Defence; [2005] EWCA Civ 1678; [2006] ICR 355; CA
Part-time worker – discrimination – Reserve forces
M is a major in the TA. He claimed that the denial of his right to a pension infringed the PTW regulations. The ET found that his claim was excluded by reg 13(2) because in so far as his service as a member of the TA exceeded the 16 days’ annual training required of him, it was undertaken with his consent or on a voluntary basis. It refused to consider his submission that the regs were ultra vires because they excluded members of the reserve forces, on the basis that the issue was raised too late. M claimed JR, contending that the regs were incompatible with the PTW Directive. The claim was dismissed on the basis that M was seeking to assert a private law claim against his employer and the ET was the appropriate forum. M appealed, contending that the ET had no jurisdiction because of reg 13, so was unable to consider whether there was a conflict with EC law. . The CA held that reg 13 did not purport to disapply the PTW entirely in the case of service as a TA member, but only in so far as that service consisted of certain types of training obligations. Under reg 8 the ET had jurisdiction over M’s complaint, including the jurisdiction to disapply a restriction on the right in domestic law if that restriction was incompatible with EC law. M’s case was based not on a freestanding EC law right but on a right recognised in domestic law but subject to a restriction embodied in that domestic law. It was therefore open to the ET to decide whether the restriction should be disapplied because of EC law.

 
 
 
Health & Safety
 
 
Trade Unions
 
 
Employer's Insolvency
 
 
Redundancy
 
 
 
 
Working Time Regulations

Bacica v. Muir; [2006] IRLR 35; IDS Brief 802 p11; EAT
Working Time Regulations – whether or not self-employed decorator was a “worker”
Reported in the January update. Now also reported at IDS Brief 802 p11.

Robinson-Steele v. RD Retail Services Ltd; Clarke v. Frank Staddon Ltd; Caulfield & Ors v. Hanson Clay Products Ltd; C-131/04 & C-257/04; The Times 22.03.06; IDS Brief 802 p3; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
ECJ decision that rolled-up holiday pay was contrary to the EC Working Time Directive (because the directive requires specific payment for the particular period during which the worker takes the leave), but that payments already made under a rolled-up system could be set off against specific payment provided that they were made transparently and comprehensibly. A rolled-up system is one whereby holiday pay is incorporated into the hourly rate of pay, so there is no accumulation of holiday pay. However, the purpose of the directive is to ensure that workers are actually able to take the leave, so they should receive their normal remuneration during that period of rest rather than being paid a daily rate when working which incorporates rolled-up holiday pay. To allow otherwise could result, in effect, to the replacement of the minimum period of leave with an allowance in lieu. This would be contrary to the directive.

 
 
Transfer of Undertakings

Werhof v. Freeway Traffic Systems GmbH & Co KG; C-499/04; IDS Brief 803 p5; ECJ
Transfer of undertakings – collective agreements – non-parties
ECJ decision that where a transfer has taken place and an employee’s contract of employment contains a clause referring to a collective agreement binding the transferor, a transferee who is not party to that agreement is obliged to observe its terms and conditions by virtue of the Acquired Rights Directive. However, this obligation does not extend to new collective agreements entered into after the transfer.

 
 

Miscellaneous

 
Apprenticeships & Trainees
 
 
Restrictive Covenants
 
 
Harassment
 
 
Temporary AND AGENCY Workers

Cable & Wireless plc v. Muscat; [2006] EWCA Civ 220; IDS Brief 802 p5; The Independent 15/03/06; CA
Whether contract of employment exists – agency worker – implied contract
M was employed by EI Ltd as a telecommunications expert. He was advised that if he wished to continue working for EI he would have to become a “designated contractor”. In order to do so, he set up a purpose-built company at EI’s expense and that company provided his services to EI, with M being responsible for his own tax and NI contributions. EI was then purchased by C. C was not prepared to pay M or his company directly and insisted that M’s services be provided via an employment business (A) with which C already had contractual relations. M’s business therefore entered into an agreement with A in order to provide M’s services to C. The contract expressly stated that M would not be regarded as C’s employee and that it constituted the entire agreement between A and M’s company. C then stopped using M’s services and he claimed unfair dismissal. The ET held that M was an employee of EI and that his employment transferred to C under TUPE. Looking at the reality of the relationship between M and C, and taking account of the guidance in Dacas v. Brook Street Bureau, the ET found that there was an implied contract of employment between M and C. The EAT and then the CA upheld that decision. Dacas was correctly decided and the guidance in that case was not obiter. That guidance required tribunals to consider the possibility that an implied contract might exist. The “entire agreement” clause in the contract between M’s company and A did not mean that there could not be a contract between C and M. The Dacas judgment took into account the fact that there had to be necessity before a contract could be implied, and by implication the ET also took this into account (having referred expressly to the relevant paragraph of the Dacas judgment). In the present case, it had been necessary to infer a contract of employment in order to give business reality to the relationship and because there was no other possible explanation for what the parties were doing. It was also necessary in order to establish the enforceable obligations that one would expect to see continuing between M and C in these circumstances. The key to identifying a worker’s employment status rested with the facts of the individual case.

 
 
Contract of Employment

Bacica v. Muir: [2006] IRLR 35; IDS Brief 802 p11; EAT
Working Time Regulations – whether or not self-employed decorator was a “worker”
See above (Working Time)

Cable & Wireless plc v. Muscat; [2006] EWCA Civ 220; IDS Brief 802 p5; The Independent 15/03/06; CA
Whether contract of employment exists – agency worker – implied contract
See above (temporary and agency workers)

Gryf-Lowczowski v. Hinchingbrooke Healthcare NHS Trust; [2005] EWHC 2407; IDS Brief 795 p8; [2006] IRLR 100; [2006] ICR 425; High Court (QB)
Contract of employment – contract terms – frustration – requirement of re-skilling programme – injunction to compel performance of employment contract
Reported in the January and February updates. Now also reported at [2006] ICR 425.

Cornwall County Council v Prater; [2006] EWCA Civ 102; Independent 28/02/06; Daily Telegraph 02/03/06; IDS Brief 802 p11; CA
Whether or not contract of employment exists – teacher engaged regularly as home tutor by local education authority
Reported in the March update. Now also reported at IDS Brief 802 p11.

Wilson v. Circular Distributors Ltd; [2006] IRLR 38; IDS Brief 802 p11; EAT
Whether or not contract of employment exists – terms of employment – unfair dismissal – jurisdiction
Reported in the January update. Now also reported at IDS Brief 802 p11.

 
 
 
Civil Proceedings

Gryf-Lowczowski v. Hinchingbrooke Healthcare NHS Trust; [2005] EWHC 2407; IDS Brief 795 p8; [2006] IRLR 100; [2006] ICR 425; High Court (QB)
Contract of employment – contract terms – frustration – requirement of re-skilling programme – injunction to compel performance of employment contract
Reported in the January and February updates. Now also reported at [2006] ICR 425.

 
 
Human Rights
 
 
Professional Regulatory Bodies and other tribunals

Gillies v. Secretary of State for Work and Pensions; [2006] UKHL 2; [2006] ICR 267; [2006] 1 All ER 731; [2006] 1 WLR 781; HL
Disability appeal tribunal – procedure – bias
Reported in the March update. Now also reported at [2006] 1 WLR 781.

 
 
Information and Consultation Regulations
 
 
Pensions
 
 
EC LAW

Mangold v. Helm; C-144/04; [2006] IRLR 143; IDS Brief 803 p7; ECJ
Fixed-term employees – EC law – Age discrimination
Reported in the February update. Now also reported at IDS Brief 803 p7.

Robinson-Steele v. RD Retail Services Ltd; Clarke v. Frank Staddon Ltd; Caulfield & Ors v. Hanson Clay Products Ltd; C-131/04 & C-257/04; The Times 22.03.06; IDS Brief 802 p3; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
See above (Working Time)
 
 
 
Pending and Refused Appeals

St Helens Metropolitan Borough Council v. Derbyshire & others; [2005] EWCA Civ 977; [2005] IRLR 801; The Times 26/08/05; The Telegraph 01/09/05; IDS Brief 788 p5; [2006] ICR 90; CA
Sex discrimination – Equal pay – victimisation
Case reported in the October and January updates.
The House of Lords has now granted leave to the applicant to appeal from the CA decision ([2006] ICR 424).

Carter & others v. Ahsan; [2005] EWCA Civ 990; [2005] ICR 1817; CA
Industrial relations – race discrimination – qualifying body – jurisdiction
Case reported in the December update.
The House of Lords has now granted leave to the applicant to appeal from the CA decision ([2006] ICR 424).

Aon Trust Corporation v. KPMG (a firm) & others; [2005] EWCA Civ 1004; [2006] ICR 18; [2006] 1 All ER 238; CA
Pension scheme – underprovision – trustees’ power to adjust benefits by reference to actuarial valuation of fund – basis for calculation
Case reported in the January update.
The House of Lords has refused leave to the first defendant to appeal from the CA decision ([2006] ICR 424).

Woodward v. Abbey National plc; [2005] ICR 1750; EAT
Whistleblowers – detriments occasioned after the termination of employment
The CA has now heard this case (on 20th March 2006). Judgment has been reserved.
[With thanks to Russell Cooke, Solicitors, for the update on this case.]

Villalba v. Merrill Lynch & Co
EAT judgment expected soon – concerns equal pay and victimisation

Gover & others v. Propertycare Ltd [2006] EWCA Civ 286
Concerns Polkey deductions

Federatie Nederlandse Vakbeweging v. Staat der Nederlanden
ECJ ruling expected soon – concerns compensation in lieu of annual leave

 
 
Legislative Changes, Codes of Practice, Practice Directions etc.
 
Equality
The Equality Act 2006 received royal assent on 16th February 2006.
 
Statutory Instruments
The Working Time (Amendment) Regulations 2006 (S.I. 2006/99) came into force on 6th April.
The Information and Consultation of Employees (Amendment) Regulations 2006 (S.I. 2006/514) came into force on 6th April 2006.
The Race Relations Code of Practice relating to Employment (Appointed Day) Order 2006 (S.I. 2006/630) brought the new Code of Practice into force on 6th April 2006.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (S.I. 2006/246) came into force on 6th April 2006
 
 
Employment Law Update is produced by Suzanne Palmer, who is a member of the Employment Practice Group at 2 Gray’s Inn Square Chambers.  The editor, Suzanne Palmer, asserts copyright but permits the update to be copied and/or redistributed by any recipient on condition that authorship is acknowledged.

Whilst, obviously, care has been taken in producing the update, we cannot accept any liability for any errors or omissions.  We intend the update to be no more than an aid to research, not a substitute for it or in any way authoritative. We would welcome comments or suggestions about the update.  If you know of anyone else who would like to receive the update, please send an e-mail to Suzanne Palmer.  

2 Gray’s Inn Square’s Employment Practice Group undertakes all forms of employment law and related litigation, acting both for employers and employees. 
 
Index Top of the Page E mail Suzanne Palmer
 
Home Contact Find Us Members Practice Groups Direct Public Access Clerks & Admin Seminars Publications Recruitment Pupillage About Links