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Employment Law Update |
1st August 2006 |
edited by
Suzanne Palmer |
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| Editorial |
| Back to normal service this month after the combined May/June 2006 update. We hope that you are all enjoying the summer. |
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. |
| 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. |
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| Sources |
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| Case Reports covered |
Industrial Relations Law Reports (IRLR) Part 7, August 2006
Industrial Cases Reports (ICR) Parts 7 & 8, July & August 2006
Weekly Law Reports (WLR) Parts 25 to 28, July 2006
All England Law Reports (All ER) July 2006
The Law Reports (AC, ChD, QBD) July 2006
The Times 1st to 30th June 2006
The Independent 1st to 30th June 2006
The Daily Telegraph 1st to 30th June 2006 |
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| Journals covered |
IDS Employment Law Brief issues 808 to 809, July 2006
Equal Opportunities Review issue 154, July 2006
Current Law Monthly Digest issues 6 & 7, June & July 2006 |
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| Reported Cases |
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| Discrimination |
Brocklebank v. Silveira; 11/01/06 (EAT/0571/05); IDS Brief 809 p.11; EAT
Sex discrimination – pregnancy – failure to make risk assessment – agency – liability
S was a Portuguese national. She entered into an agreement with SP, an employment agency, under which she would come to the UK and SP would find her employment. She travelled to the UK and arrangements were made by SP to place her in P’s chicken factory. S disclosed to SP when filling in a form that she was pregnant. SP disclosed this to P, who said that it would take no further steps to employ her until SP had completed a risk assessment form on her behalf. SP failed to do so and S did not get the place with P. S claimed that the failure of SP and its joint owners and managers (B & M) to conduct the risk assessment was unlawful discrimination under s15 SDA (unlawful for agencies to discriminate by refusing or deliberately omitting to provide its services). A risk assessment was a “service” provided by the agency and the failure to conduct it was a deliberate omission. The EAT dismissed B’s appeal. The ET had heard all the evidence and concluded that the omission was deliberate. There was nothing in its approach, conclusion or decision as a whole to reveal an error of law.
Cheshire and Wirral Partnership NHS Trust v. Abbott & others; The Times 10/05/06; [2006] IRLR 546; CL July para 180; CA
Sex discrimination – indirect discrimination – comparators – appropriate pool
See reported in the June 2006 update. Now also reported at [2006] IRLR 546 and CL July para 180.
Clarke & Others v. Redcar & Cleveland Borough Council; Wilson & Others v. Stockton-on-Tees Borough Council; [2006] IRLR 324; CL July para 175; [2006] ICR 897; EAT
ET Procedure - Conciliated settlements & compromise agreements – Sex Discrimination – Equal Pay
See reported in the June 2006 update. Now also reported at CL July para 175 and [2006] ICR 897.
Deman v. University of Bradford; 01/06/06 (EAT/80/06); [2006] ICR Part 8 “Recent points” p.xxii; EAT
ET procedure – written decisions – administrative error – review – possibility of bias
D claimed race discrimination. At the end of evidence the ET ordered written closing submissions and submissions in response. The parties sent these in by the stated date but due to administrative error they did not reach the tribunal before it met in chambers to discuss the case. The claim was dismissed on the ground that it was out of time and it was not just and equitable to extend time. Only U’s reply was considered, not D’s submissions. When the error came to light the ET conducted a review at which it reconsidered its initial reasoning in the light of the submissions and concluded that no new argument was made to alter the original decision. The ET directed itself to consider whether a fair minded and informed observer would conclude that there was a real possibility that it was so influenced by its earlier decision that it was unable to conduct a fair review. D’s appeal was dismissed. The ET applied the correct test. The EAT had regard to the case of Stanley Cole (Wainfleet) Ltd v. Sheridan. The hearing would not be unfair if it caused no substantial prejudice to the aggrieved party. It had to be shown that a material injustice resulted. There was no doubt that there had been an administrative failure, but to succeed D needed to show that this led to him suffering something seriously irregular and unfair. D’s submissions could not possibly have affected the original decision for the reasons set out in the review judgment. There was no procedural breach which was “seriously irregular and unfair”.
EB v. BA; [2006] EWCA Civ 132; [2006] IRLR 471; CL July para 184; [2006] ICR Part 8 “Recent points” p.xxi; CA
Sex discrimination – transsexuals – shifting burden of proof – evidence
See reported in the June 2006 update. Now also reported at CL July para 184 and [2006] ICR Part 8 “Recent points” p.xxi.
Miles v. Gilbank; [2006] EWCA Civ 543; IDS Brief 806 p.7; [2006] IRLR 538; Times 27/06/06; CA
Sex discrimination – fostering and encouraging discriminatory culture – manager’s liability
See reported in the June 2006 update. Now also reported at [2006] IRLR 538 and Times 27/06/06.
National Probation Service for England & Wales (Cumbria Area) v. Kirby; [2006] IRLR 508; EAT
Race discrimination – victimisation – protected act
N had a probation and bail hostel in Carlisle at which the employees were L, deputy manager, 4 assistant wardens including H, and 3 hostel support workers including K. H is of Asian origin and all other employees are white. H and L did not get on well – soon after H’s appointment to a full-time post L said “now we have an ethnic minority on the staff team”. Relations between them deteriorated and the assistant wardens divided into two factions. H complained of bullying by L before going off on sick leave. She told the assistant chief officer that she considered that race was an underlying reason for her treatment by L. She suggested that K be interviewed as a witness in the investigation. K was interviewed and said that she had not noticed issues of race and considered that there was a personality clash between L and H. Soon after her interview, K was involved in an incident at the hostel involving a resident. Colleagues failed to come to her aid. K alleged victimisation in respect of her colleagues’ failure to help her. The ET found that her interview was a protected act and she had been treated less favourably by colleagues by reason of that protected act. At the same hearing, the ET upheld H’s allegation of race discrimination. It rejected constructive dismissal claims by both. The EAT dismissed N’s appeal. Participation by K in the interview concerning H’s allegation of race discrimination amounted to a protected act. Section 2(1)(c), the “catch-all” category, was necessarily wider than the more restricted circumstances in s2(1)(a), (b) and (d). K had given information in connection with a complaint of race discrimination raised in an internal grievance. That was “otherwise doing something by reference to the Act in relation to another person”.
Sarkatzis Herrero v. Instituto Madrileno de la Salud; C-294/04; [2006] IRLR 296; [2006] 2 CMLR 30; CL July para 181; ECJ
Sex discrimination – maternity leave – date for calculation of seniority
See reported in the March update. Now also reported at CL July para 181.
Secretary of State for Trade & Industry v. Rutherford (No 2), Same v. Bentley; [2006] UKHL 19; [2006] ICR 785; The Times 08/05/06; IDS Brief 805 p.3; [2006] IRLR 551; CL July para 178; HL
Unfair dismissal – Upper age limit – Sex discrimination – indirect discrimination
See reported in the June 2006 update.
Serco Ltd v. Redfearn; [2006] EWCA Civ 659; IDS Brief 807 p.5; Times 27/06/06; Independent 08/06/06; CA
Race discrimination – elected BNP councillor working with people of Asian origin – dismissal – whether decision to dismiss was racial discrimination – racial considerations
See reported in the June 2006 update. Now also reported at Times 27/06/06.
Shepherd v. North Yorkshire County Council; [2006] IRLR 190; CL July para 182; EAT
Sex discrimination – aiding unlawful acts – discrimination by others than employers
Reported in the February update. Now also reported at CL July para 182.
Taylor v. OCS Group Ltd; Telegraph 08/06/06; IDS Brief 808 p.3; CA
Unfair dismissal – fairness of proceedings – appeal – review – disability discrimination
See reported in the June 2006 update.
XY v. AB Bank; 12/04/06 (3200440/05); IDS Brief 809 p.11; ET
Sexual orientation discrimination – dismissal for lewd sexual act – misconduct
X was the Global Head of Equity Trading for A. When he started working for A in 2004, although he made no secret of the fact that he was gay, he did not take steps to advertise it. He visited the gym on work premises 3 times on one day. Later that day another male employee reported an incident of lewd sexual conduct: a man had stared at him so as to make him feel uncomfortable and had then masturbated in front of him in the shower. The man had given him a false name not recognised by gym staff. A colleague of the complainant had noticed the same man staring at him oddly in the steam room. On scrutiny of the gym’s CCTV footage, the culprit was identified as X. He was summoned to a meeting by a human resources manager to discuss the allegation. He denied it, saying that he had been harassed at the gym by someone demanding his name and had given a false name because as a gay man he did not wish to place himself in a vulnerable position. The manager concluded that there were flaws in X’s account and recommended suspension pending a full investigation and disciplinary hearing. Following the hearing A concluded that X was guilty of sexual harassment and dismissed him for gross misconduct. His appeal was rejected. He claimed sexual orientation discrimination by the decision to investigate, conduct disciplinary proceedings and dismiss. The ET agreed that he had received less favourable treatment on grounds of sexual orientation during the investigation. The human resources manager had a closed mind on the subject of X’s guilt, there was a disparity in the way X and the complainant were treated, and the human resources manager had embellished findings in the report so that it was misleading. The suspension was discriminatory. However, the formal investigation, hearing, dismissal and appeal decision were not discriminatory. The person conducting them did not appear to be influenced by the HR manager’s views and conducted a thorough re-appraisal. The dismissal was wholly attributable to A’s genuine and legitimate conclusion that X was guilty of the gross misconduct alleged. The appeal findings reflected a fair and proper consideration of the evidence and there were no facts from which it was possible to draw an inference of sexual orientation discrimination. |
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| Tribunal and EAT procedure |
Blockbuster Entertainment Ltd v. James; [2006] EWCA Civ 684; IDS Brief 809 p.12; CA
ET procedure – striking out – order on day of hearing
J brought 2 claims against E, alleging race discrimination, harassment and victimisation. The first claim was lodged in December 2003. In February 2004 he was ordered to comply with B’s request for further and better particulars. Following an unsatisfactory response, in June he was ordered to “particularise his claim in such a way that the respondent understands the claim against it”. He provided further particulars but B still regarded them as inadequate. In July 2004 he lodged his second claim. At a CMD in October the claims were consolidated and directions given for discovery and the exchange of witness statements. J failed to comply with the disclosure order and, shortly before exchange of witness statements was due, wrote to the ET seeking an extension for exchange of statements because he was too distressed to meet the deadline. His request was granted and he exchanged an unsigned statement on the extended date. He failed to provide a list or copies of documents. He failed to attend a meeting at J’s solicitors’ offices for disclosure. He eventually attended with the documents at a later date but refused to allow copies, later saying that this was because he was ill. He failed to attend a subsequent appointment at the solicitors’ offices (again later citing illness). B sought orders for disclosure and striking out the claim for non-compliance. An order for discovery was made and J again failed to comply. On the day of the hearing J turned up with 50-60 pages of documents on which he wanted to rely but which had not been disclosed to B, and an amended but unserved version of his witness statement and an undisclosed audio tape which he proposed to play. As a preliminary issue, the ET found that he had wilfully and deliberately disobeyed the orders for disclosure and that this was only one example of unreasonable conduct, others including the failure to comply with the order for particulars, failure to effect proper exchange of witness statements and appearance with an amended statement which he had made no attempt to serve. The ET ordered that his claims be struck out under rule 18(7)(c) for scandalous, unreasonable or vexatious conduct. The ET acknowledged that this was draconian but decided that it was a proportionate and fair course of action. The EAT overturned this decision, finding that the ET had misapprehended the extent of J’s failure to comply with orders, in particular in thinking that he failed altogether to provide particulars when in fact he served detailed particulars, and thinking that he failed to undertake proper exchange of witness statements when the lack of a signature was of marginal importance. It referred the matter back to a differently constituted tribunal for reconsideration. The CA dismissed B’s appeal. The ET was clearly mistaken when it held that J never provided the particulars required. The CA accepted that the changes to the witness statement were “not major”. Serving a statement that was substantially the same as before would be most unlikely to require a response so drastic as striking out. Only in extreme cases would the last-minute production or demand for documents justify or even contribute to striking out. Further, the ET should have in mind, when reconsidering the matter, that the striking-out order was made on the opening day of the trial before the substantive hearing, and it would take something very unusual indeed to justify striking out a claim that had arrived at the point of trial.
Canary Wharf Management Ltd v. Edebi; [2006] IRLR 416; [2006] ICR 719; CL July para 177; EAT
ET Procedure – Statutory Grievance Procedures – What constitutes grievance – letter – Unfair dismissal – Disability Discrimination
See reported in the June 2006 update. Now also reported at CL July para 177.
Clarke & Others v. Redcar & Cleveland Borough Council; Wilson & Others v. Stockton-on-Tees Borough Council; [2006] IRLR 324; CL July para 175; [2006] ICR 897; EAT
ET Procedure - Conciliated settlements & compromise agreements – Sex Discrimination – Equal Pay
See reported in the June 2006 update. Now also reported at CL July para 175 and [2006] ICR 897.
CMC Group plc & others v. Zhang; IDS Brief 808 p.8; CA
Contract – clause requiring repayment in event of breach – whether penalty clause
See below (pay and other terms and conditions of contract of employment).
Fraser v. HLMAD Ltd; [2006] EWCA Civ 738; IDS Brief 809 p.3; Independent 20/06/06; CA
Wrongful dismissal – damages – statutory cap – whether balance recoverable in civil courts
F was dismissed by H and brought ET proceedings claiming unfair and wrongful dismissal. In his ET1, he expressly reserved the right to bring a High Court claim “in so far as my claim for damages for wrongful dismissal exceeds the tribunal’s jurisdiction of £25,000”. Before the ET determined his claims, he issued the same wrongful dismissal claim in the High Court to recover his damages over £25,000. He did not withdraw the tribunal proceedings and the ET concluded that he had been unfairly and wrongfully dismissed. His breach of contract damages were assessed at over £80,000, but by virtue of the statutory cap he was awarded just £25,000 of that sum. H then applied to have F’s High Court claim struck out on grounds of abuse of process and res judicata. F cross-applied for summary judgment against H on the basis of the ET’s wrongful dismissal finding. Alternatively, F argued that H’s defence should be struck out on the basis that liability and quantum in respect of the wrongful dismissal had already been decided and it would be an abuse of process for H to defend the civil proceedings. The High Court had regard to the case of Sajid v. Sussex Muslim Society. It held that it was not sufficient for a claimant merely to reserve a right to bring a claim in another forum: he or she had to ensure that the tribunal did not rule on the cause of action. F failed to take that precaution. Whilst the High Court acknowledged that he was only seeking to recover the excess over the ET’s award, it held that it would be “incongruous and contrary to principle” to permit him to litigate the same cause of action a second time. His claim was therefore struck out. Before the CA, H relied on a different argument of merger of causes of action: following a determination by a competent court (the ET), the cause of action merges into the judgment and ceases to exist, so F no longer had any cause of action for wrongful dismissal capable of pursuit in the High Court. Whilst the CA expressed sympathy with F’s position, the case law made it plain that a claimant was required to withdraw the ET claim in order to bring the same cause of action in the High Court. F did not do this. His wrongful dismissal claim had clearly merged into the ET’s judgment in respect of wrongful dismissal and it was therefore extinguished as a cause of action. His express reservation in the ET1 did not prevent the merger from taking place. It was not possible to split the cause of action for wrongful dismissal into two separate causes of action (one for damages up to £25,000 and one for the balance). F had no cause of action any longer to pursue in the High Court. The CA noted that claimants should not bring wrongful dismissal claims in the ET unless they were certain that they wished to limit compensation to £25,000. If they sought more, the claim should only be made in the High Court. The ETS should review its literature to make this clear.
Gover & others v. Propertycare Ltd; [2006] EWCA Civ 286; [2006] ICR 1073; CA
Unfair dismissal – compensation – reduction – EAT procedure – grounds not in appeal
See below (unfair dismissal).
Khan v. Heywood & Middleton Primary Care Trust; [2006] IRLR 345; [2006] ICR 543; CL June para 160; EAT
ET procedure – costs – withdrawal of claims
See reported in the June 2006 update. Now also reported at CL June para 160.
Verdin v. Harrods Ltd; [2006] ICR 396; [2006] IRLR 339; CL June para 156; CA
ET procedure – withdrawal of claim to pursue civil proceedings – dismissal – abuse of process
See reported in the April 2006 update. Also reported in the June 2006 update. Now also reported at CL June para 156. |
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| Unfair Dismissal & Wrongful Dismissal |
Alexander v. Bridgen Enterprises Ltd; [2006] IRLR 422; CL July para 174; EAT
Unfair dismissal – statutory disciplinary procedures – failure to follow – automatically unfair dismissal – redundancy – fairness – consultation and selection – remedy
See reported in the June 2006 update. Now also reported at CL July para 174.
Baron v. Bliss Mediation Services; 21/02/06 (EAT/454/05); [2006] ICR Part 8 “Recent points” p.xxiii; EAT
Unfair dismissal – flawed disciplinary hearing – extent to which appeal could remedy
BM is a mediation and dispute resolution service. B, an employee, informed her line manager that her husband was setting up his own mediation service. She was suspended pending “an investigation into a conflict of interest”. She was invited to a disciplinary hearing but given no information as to the charges. At the hearing, which BM later conceded failed to adhere to basic standards, 3 charges were made of allegedly taking files relating to funding and preparing a database of mediators. She was found guilty of “gross misconduct and improper practice” and dismissed. At her internal appeal she was told that the panel was there to consider any new points she wished to bring to their attention and consider whether there was any new evidence. The panel upheld the dismissal decision. The ET found that on the basis of the information before the disciplinary panel it was entitled to reach its conclusions, and dismissed her unfair dismissal claim. The EAT allowed her appeal. The ET’s expressed view that B was given every opportunity to state her case but failed to do so was unsustainable. Reference was made to Byrne v. BOC. Where the first stage of the disciplinary hearing is seriously flawed, it is essential, if the appellate process is to establish fairness overall, that it should be able to stand on its own merits as conferring the rights which should have been conferred at the initial stage, including proper notice of the complaint and a full opportunity to state a case. The original hearing was seriously flawed, so the appeal hearing needed to be able to stand on its own merits as conferring all her rights, but she was told at the outset of the hearing that the panel was considering only new points. It was not a permissible conclusion for the ET on the evidence to hold that the appeal hearing made good the grave deficiencies in the original hearing. A finding of unfair dismissal would be substituted.
Cross & another v. British Airways plc; [2006] EWCA Civ; Independent 18/05/06; IDS Brief 807 p.3; Times 05/06/06; CA
Transfer of Undertakings – provisions about retirement age – unfair dismissal
See below (transfer of undertakings).
Bolton School v. Evans; 07/02/06 (EAT/0648/05); IDS Brief 807 p.7; [2006] IRLR 500; EAT
Unfair dismissal – conduct – whistleblowing – reason for dismissal
See below (Detriments).
Fraser v. HLMAD Ltd; [2006] EWCA Civ 738; IDS Brief 809 p.3; Independent 20/06/06; CA
Wrongful dismissal – damages – statutory cap – whether balance recoverable in County Court
See above (ET procedure).
Gover & others v. Propertycare Ltd; [2006] EWCA Civ 286; [2006] ICR 1073; CA
Unfair dismissal – compensation – reduction – EAT procedure – grounds not in appeal
G and others were sales agents for P. P unilaterally introduced changes to their rate of commission. They resigned and claimed unfair dismissal. The ET found that there was a repudiatory breach and they were unfairly dismissed. In assessing compensation, the ET held that even if P had properly consulted G and proposed reasonable (in the sense of non-repudiatory) terms, G would not have accepted them. Loss was therefore limited to the period of 4 months plus 2 weeks’ notice which the ET found that process would have taken. The EAT dismissed G’s appeal. G appealed further to the CA, and sought at the appeal hearing to introduce a new ground (namely that it was not open to the ET to consider whether P could fairly have dismissed for a reason different from that of the actual dismissal) which was not in the notice of appeal and was not pursued in the EAT. The CA refused to allow G to pursue the new ground. Under the ETA the jurisdiction of the CA was to hear an appeal “from” the EAT. It could not realistically do so if it concerned itself only with whether the ET decision was right. It was relevant that the new ground had not been taken before the EAT. In any event, the CA’s jurisdiction was constrained by what was in the grounds of appeal and in the grant of permission to appeal. This point was not in issue at either stage and no permission had been sought to amend. The substantive appeal was also dismissed. The ET had to decide whether the unfair departure from what should have happened was of a kind that made it possible to say that the failure made no difference. An appellate court should tread very warily when asked to substitute its own impression for that of the ET. As the EAT found, the ET approached its task correctly and made findings based on careful analysis of the material before it. It was noted that the Polkey principle is not so narrowly limited that a reduction is only open to an ET where the employer had a valid reason for dismissal but acted unfairly in his mode of reliance on that reason and the hypothetical fair future dismissal would have been for the same reason. The principle is merely an example of the general application of the requirements of s123 ERA.
Knapton and others v. ECC Card Clothing Ltd; 07/03/06 (EAT/0664/05); IDS Brief 806 p.9; [2006] ICR 1084; EAT
Unfair dismissal – compensatory award – deduction to reflect receipt of early pension payments – failure to award for lost life assurance – whether correct
See reported in the June 2006 update. Now also reported at [2006] ICR 1084.
Langley v. Burlo; [2006] IRLR 460; [2006] 2 All ER 1104; Times 03/04/06; CL July para 187; [2006] ICR 850; EAT
Wrongful dismissal – unfair dismissal – compensation – pay during notice period – statutory sick pay – approach
See reported in the June 2006 update. Now also reported at CL July para 187 and [2006] ICR 850.
Mason v. Governing Body of Ward End Primary School; [2006] IRLR 432; CL July para 188; [2006] ICR 1128; EAT
Unfair dismissal – statutory disciplinary procedures – failure to follow – automatically unfair dismissal – redundancy – fairness – consultation and selection – remedy
See reported in the June 2006 update. Now also reported at CL July para 188 and [2006] ICR 1128.
Secretary of State for Trade & Industry v. Rutherford (No 2), Same v. Bentley; [2006] UKHL 19; [2006] ICR 785; The Times 08/05/06; IDS Brief 805 p.3; [2006] IRLR 551; CL July para 178; HL
Unfair dismissal – Upper age limit – Sex discrimination – indirect discrimination
See reported in the June 2006 update. Now also reported at [2006] IRLR 551 and CL July para 178.
Sweetin v. Coral Racing; [2006] IRLR 252; CL July para 171; EAT
Transfer of Undertakings – Consultation – redundancy – protective awards – Constructive dismissal – breach of duty of trust & confidence – failure to deal with grievance
See reported in the March update. Now also reported at CL July para 171.
Taylor v. OCS Group Ltd; Telegraph 08/06/06; IDS Brief 808 p.3; CA
Unfair dismissal – fairness of proceedings – appeal – review – disability discrimination
See reported in the June 2006 update. Now also reported at IDS Brief 808 p.3
Willow Oak Developments Ltd (trading as Windsor Recruitment) v. Silverwood & others; IDS Brief 808 p.6; CA
Unfair dismissal – reasons for dismissal – refusal to sign new contract containing restrictive covenant – SOSR – whether reasonableness of covenant relevant
NB EAT decision reported in January, February and June 2006 updates.
CA upholds EAT decision. W is a recruitment company. It was experiencing loss of staff and confidential information to competitors, so sought to introduce new employment contracts for all staff containing wide restrictive covenants prohibiting poaching employees and ex-employees for 12 months after termination and working for a wholly or partly competing business for 6 months after termination. The employees had little or no opportunity to consider the clauses or seek professional advice. W warned them that if they rejected the new terms they would be dismissed. S and others refused to sign and were dismissed, claiming unfair dismissal. The ET held that the refusal to accept the terms could not amount to SOSR so as to justify dismissal because at least one of the clauses was unreasonably wide. The dismissals were therefore unfair. Alternatively, they were procedurally unfair because of the manner in which W sought to impose the terms. The EAT held that the clauses were capable of amounting to SOSR, and that the reasonableness of the covenants only became relevant when considering the reasonableness of the dismissal for s98(4) purposes. However, the EAT upheld the alternative finding that the dismissals were unfair in any event owing to the unfair procedure followed in seeking to impose the terms. The CA upheld the EAT decision that refusal by an employee to sign covenants designed to protect the employer’s legitimate business interests was capable of amounting to SOSR, justifying consideration under s98(4) of reasonableness of dismissal. Fairness to both parties is best achieved by looking at the terms of the proposed contract in all the circumstances of the dismissal at that second stage of considering reasonableness of dismissal. However, the CA also upheld the tribunal’s decision that the dismissal was unfair because of the procedure adopted. It was therefore not necessary to take into account the balance of interests between employer and employee that the covenants created.
XY v. AB Bank; 12/04/06 (3200440/05); IDS Brief 809 p.11; ET
Sexual orientation discrimination – dismissal for lewd sexual act – misconduct
See above (Discrimination). |
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| Apprenticeships & Trainees |
Flett v. Matheson; [2006] EWCA Civ 53; [2006] IRLR 277; IDS Brief 800 p5; [2006] ICR 673; CL June para 154; CA
Whether contract of employment exists – Apprenticeship
See reported in the March update. See reported in the June 2006 update. Now also reported at CL June para 154.
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| Civil Proceedings |
Barker v. Corus UK Ltd; [2006] UKHL 20; [2006] ICR 809; HL
Tort – negligence – asbestos exposure – causation – uncertainty as to period – joint and several liability of employers
See below (Employer’s liability)
CMC Group plc & others v. Zhang; IDS Brief 808 p.8; CA
Contract – clause requiring repayment in event of breach – whether penalty clause
See below (pay and other terms and conditions of contract of employment).
Daw v. Intel Corporation Ltd; [2006] EWHC 1097; IDS Brief 809 p.5; HC
Tort – negligence – work-related stress – failure to take appropriate steps – employer’s liability
See below (Employer’s Liability).
Freer v. Glover & another; [2005] EWHC 3341 (QB); [2006] IRLR 521; HC
Tort – defamation/malicious falsehood – employment-related torts – ACAS letters
F worked for M, a company, as a consultant. His employment was terminated and he commenced tribunal proceedings for unfair dismissal and sex and race discrimination. M disputed the claims and instructed G, the sole principal of a firm of solicitors. An ACAS officer wrote to the parties with a view to facilitating settlement. M passed this letter to its solicitors who replied, saying “whilst we would normally find the services of ACAS helpful, this is not a case where any sort of settlement is envisaged as the claims are not genuine and are made in bad faith. Our client’s position is that the claims should be withdrawn because they are an abuse of process”. They enclosed a copy of a letter sent direct to F which said, inter alia, “our client takes extremely seriously the false allegations you have made and will be making application to have all your claim struck out. It will pursue all and any costs orders against you. We are well aware of the means by which you extracted ‘compensation’ from your former employer … by similar means in the past. Please be clear that our client has no intention of making any ‘nuisance’ offers and will not be blackmailed by you and your friends”. F claimed that the statement in the letter to him was defamatory and sought damages for libel against G. G contended that the publication of the words was protected by “absolute privilege” and applied to strike out F’s claim. The issue of absolute privilege was tried as a preliminary issue. The High Court held that absolute privilege applied. The letter was sent to the ACAS conciliator in response to ACAS’ offer to assist in settlement. Publication to ACAS on such an occasion falls within the third category of absolute privilege defined in Lincoln v. Daniels, i.e. matters outside proceedings where it is “strictly necessary … in order to protect those who are to participate in the proceedings from a flank attack”. It was strictly necessary in order to protect the solicitors from a flank attack such as they faced here. It was also practically necessary to enable the solicitors to make clear to ACAS why their client was not willing to conciliate. Absolute privilege covered the publication to the ACAS conciliator and other staff or employees of ACAS who may have read the letter in the course of their employment by ACAS. Publication to subordinate staff in the reasonable and ordinary course of running a business or office is to be treated as incidental to the occasion and comes within the privilege. Publication to M, G’s client, would also be covered by absolute privilege as it was practically necessary to enable G to carry out the professional duty to the client and was also “strictly necessary” to protect G from a flank attack. Publication to M’s staff and employees, if reasonable and in the ordinary course of M’s business, would also be covered as being merely incidental to publication to M.
Majrowski v. Guy’s & St. Thomas’s NHS Trust; [2006] UKHL 34; [2006] 3 WLR 125; HL
Employer’s liability – vicarious liability – harassment in workplace
See below (employer’s liability) |
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| Contract of Employment |
Cable & Wireless plc v. Muscat; [2006] EWCA Civ 220; IDS Brief 802 p5; The Independent 15/03/06; [2006] IRLR 354; Times 10/04/06; CL June para 155; CA
Whether contract of employment exists – agency worker – implied contract
See reported in the April 2006 update. See reported in the June 2006 update. Now also reported at CL June para 155 and [2006] ICR 975.
Cotswold Developments Construction Ltd v. Williams; [2006] IRLR 181; CL July para 172; EAT
Whether or not contract of employment exists – worker – applicable tests
See reported in the February 2006 updated. Now also reported at CL July para 172.
Percy v. Church of Scotland Board of National Mission; Times 16/12/05; Independent 20/12/05; IDS Brief 798 p.9; [2006] IRLR 195; [2006] ICR 134; [2006] 2 WLR 353; [2005] UKHL 73; [2006] 2 AC 28; HL(Sc)
Whether or not contract of employment exists – Church minister
Reported in the February and March 2006 updates. Now also reported at [2006] 2 AC 28. |
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| Detriments (fixed-term & part-time work, whistleblowing etc.) |
Bolton School v. Evans; 07/02/06 (EAT/0648/05); IDS Brief 807 p.7; [2006] IRLR 500; EAT
Unfair dismissal – conduct – whistleblowing – reason for dismissal
See reported in the June 2006 update. Now also reported at [2006] IRLR 500.
NB E has been given leave to appeal to the Court of Appeal in this case.
Woodward v. Abbey National plc; Independent 27/06/06; CA
Whistleblowing – protected disclosure – detriment after termination of employment – jurisdiction
W could bring a PIDA claim under s47B ERA in respect of detriment suffered after the employment came to an end. W’s appeal allowed. W brought a claim of sex discrimination against A, which was settled without admission of liability in 1996. In 2003 she brought a further complaint of victimisation, the details of which related largely to allegations of sex discrimination. However, the claim included an allegation that she was subjected to a detriment on the grounds that she had made a protected disclosure. This detriment arose long after termination and related, inter alia, to failure to provide a reference and her failure to progress with job applications. The ET concluded that it had no jurisdiction because the acts complained of occurred after employment came to an end. The EAT dismissed W’s appeal. Both relied on the case of Fadipe v Reed Nursing Personnel, and held that it was not overruled by the HL decision in Relaxion Group plc v. Rhys-Harper. The CA said that despite the different statutes involved, the reasoning which the CA relied on in Fadipe was inconsistent with that which the HL relied on in Relaxion. Accordingly, the court could depart from Fadipe if it concluded that it was right so to do. The statutes dealt with the same concept, that is protection of the employee from detriment in retaliation for sex, race, disability or whistleblowing. Parliament could not have intended to afford the whistleblower protection only in respect of acts done while the contract subsisted and not after termination. The public interest to protect individuals who made protected disclosures in the public interest would be sold short if former employees could be victimised with impunity. It made no sense to protect current but not former employees, especially since the frequent response of the employer might well be dismissal and thereafter a determination to make life impossible for the employee for as long as possible.
EAT decision reported in the December 2005 update. See also reported in the June 2006 update. |
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| |
| European Community law |
Collins v. Secretary of State for Work and Pensions; [2006] EWCA Civ 376; [2006] ICR 1033; CA
EC – free movement of workers – Jobseeker’s Allowance – entitlement dependent on “habitual residence” in UK – whether discriminatory effect justified
See below (Pensions, Tax and Benefits).
Federatie Nederlandse Vakbeweging v. Staat der Nederlanden; 06/04/06; C-124/05; IDS Brief 804 p.10; [2006] IRLR 561; [2006] ICR 962; ECJ
Working Time – payment in lieu of annual leave – whether permissible – EC law
See reported in the June 2006 update.
Lonsdale v. Howard & Hallam Ltd; [2006] EWCA Civ 63; [2006] IRLR 481; [2006] ICR 584; [2006] 1 WLR 1281; CA
Self-employed commercial agents – EC Commercial Agents Directive – EC law
See reported in the June 2006 update. NB Leave to appeal has now been granted by the House of Lords ([2006] 1 WLR 1846; [2006] ICR 1032).
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; [2006] IRLR 386; [2006] ICR 932; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
See reported in the April 2006 update. See reported also in the June 2006 update. Now also reported at [2006] ICR 932. |
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| |
| Employer's Insolvency |
R (Steele) v. Birmingham City Council & another; [2005] EWCA Civ 1824; [2006] ICR 869; CA
Claimant’s bankruptcy – overpayment of Jobseeker’s Allowance – recoverability
S was awarded JSA in 1999. In 2001 he was adjudged bankrupt on his own petition. In 2002 the Secretary of State determined that he had been overpaid JSA between those 2 dates and began to recover the overpayment by weekly deduction from incapacity benefit. When S informed the Secretary of State of the bankruptcy, repayments were suspended until the bankruptcy was discharged in 2003, at which point the Secretary of State gave notice of an intention to continue to recover the overpayment. S sought JR of that decision. He contended that the liability was a contingent liability and was therefore a bankruptcy debt from which he was released following the discharge of his bankruptcy. The judge allowed his application for JR. The Secretary of State’s appeal was allowed. Until the determination was made S was under no liability to repay. A person who was liable to a determination but was not actually subject to a determination at the date of bankruptcy was not subject to a contingent liability for Insolvency Act purposes. Thus the overpayment was not a bankruptcy debt for the purposes of release on discharge. |
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| |
| Employer’s Liability |
Barker v. Corus UK Ltd; [2006] UKHL 20; [2006] ICR 809; HL
Tort – negligence – asbestos exposure – causation – uncertainty as to period – joint and several liability of employers
B’s husband died of mesothelioma. He had been exposed to asbestos for 3 periods in his working life. The first employer company had since become insolvent. The second was C. During the third period he was self-employed. On the negligence claim the judge decided that C was jointly and severally liable with the insolvent company but that damages should be reduced by 20% to reflect contributory negligence while self-employed. The CA upheld this decision. The employer’s appeal was allowed by the HL. Under the exception to the normal rules on liability in negligence, whereby any relevant employer could be liable in relation to mesothelioma caused by wrongful exposure to asbestos, liability was imposed where a defendant had, by breach of duty, materially increased the risk of contracting mesothelioma. In fairness, where more than one person was in breach of duty and might have been responsible, liability should be attributed according to that defendant’s relative degree of contribution to the risk, probably measured by duration and intensity of exposure. Therefore C’s liability was several only and the award of damages would be set aside and remitted for redetermination. Where not all of the exposures which could have caused the mesothelioma involved breach of duty by the employer, the exception could nevertheless apply. It was irrelevant whether the other exposures were tortious, non-tortious, by natural causes or by the employee himself. Given that a tortious defendant was only liable in proportion to his own contribution, the balance of fairness applied in favour of applying the exception even if the employee was himself responsible for a material exposure.
Daw v. Intel Corporation Ltd; [2006] EWHC 1097; IDS Brief 809 p.5; HC
Tort – negligence – work-related stress – foreseeability – failure to take appropriate steps – employer’s liability
D worked for I in a financial role from September 1988. She had two children and suffered post-natal depression after the birth of each child, leading to absences from work. In May 2000, just over a year after the second episode, she was promoted to a role which required her to report to 3 managers, all with different priorities, and her workload increased significantly. She started working long hours to carry out all her duties. From November 2000 to March 2001 she was involved in a number of discussions about her department’s workload and, at the request of one of her managers, produced two “resource shortfall analysis” reports which revealed that there were insufficient staff to do all the work expected of the department. There was a recruitment exercise leading to 2 additional members of staff, but they were unable to do much of the work required. By March 2001 D’s health deteriorated and her behaviour became erratic. One of her managers found her in tears and asked her for a written account of the problems she was experiencing. She responded with an e-mail stating, inter alia, that she was “stressed out” and “demoralised” and referring to her history of post-natal depression. There was no reduction to her workload and her performance review in April 2001 referred expressly to the fact that she was working excessive hours. In June 2001 she was signed off work with depression and the following day attempted suicide. She brought a claim against I, alleging that I’s negligence caused her to suffer a mental breakdown and depression and that I ought to have taken account of her previous medical condition and foreseen that her excessive workload created a real risk of breakdown. Had I taken appropriate action, she contended that she would probably not have suffered the breakdown or not such a severe one. The court considered whether, given her history of post-natal depression, I should have taken into account that she was vulnerable to work-related stress. It noted that after each discrete episode of post-natal depression D appeared, following treatment, to have made a full recovery. Moreover, far from being considered susceptible to work-related depression, D was considered to be capable and resilient. A reasonable employer in the circumstances could not be expected to equate 2 bouts of post-natal depression with increased susceptibility to depression brought on by stress. Neither should I have foreseen from her communications and complaints up to March 2001 that there was a real risk to hear health: the cumulative effect of those complaints would not lead a reasonable employer to foresee a real risk to health: they were complaints by someone who appeared to be able to do her job. However, by the beginning of March 2001 it should have been clear to I that the excessive hours were affecting D’s mental health. Despite her earlier complaints about workload, adequate help had not been provided. In addition, having found her in tears and received her document, if her manager had read the document carefully he would have realised that there was a connection between the way she felt then and the way she had felt during those post-natal periods of depression, or would have been on reasonable notice to enquire what this reference meant. I should have taken urgent and immediate action to reduce D’s workload and ensure that she saw a doctor. It had the resources to ameliorate her position immediately: indeed, when she finally had her breakdown it acted very swiftly to ensure that the work was done. The failure to take those steps amounted to negligence. The fact that I had a counselling service was insufficient to discharge the duty of care. The service had limitations as it addressed only short-term or minor issues and could not have alleviated D’s problem by reducing her workload: it could only have advised her to see a doctor, and D could not be criticised for not using it. Having found that I’s action by early March 2001 would have alleviated the severity of D’s depression, the claim of negligence was upheld. However, the general damages were reduced by a third to reflect the probability that D would have suffered depression in any event.
Majrowski v. Guy’s & St. Thomas’s NHS Trust; [2006] UKHL 34; [2006] 3 WLR 125; HL
Employer’s liability – vicarious liability – harassment in workplace
M claimed that he had been unlawfully harassed by his departmental manager contrary to the Harassment Act. He brought proceedings for breach of statutory duty against his employer and also claimed that G was vicariously liable for the harassment. The judge at first instance struck out the claim as disclosing no reasonable cause of action, on the grounds that the Harassment Act did not create a statutory tort for which an employer could be vicariously liable. The CA allowed the appeal on the ground that there was no clear basis for holding that the Act was not intended to import vicarious liability for the conduct of employees in the course of their employment. The HL dismissed G’s appeal. Unless a statute expressly or impliedly indicated otherwise, the principle of vicarious liability applied where an employee, acting in the course of his employment, committed a breach of a statutory obligation sounding in damages. S3 of the Act created such a civil wrong with remedies including damages. Parliament had indicated by s10(1) that an employer in Scotland could be vicariously liable for an employee’s conduct in the course of employment and could not have intended the jurisdiction to be different in substance in England and Wales as to the scope of the civil remedy. M was entitled to rely on the principle of vicarious liability in his claim against G. It was noted by Lord Nicholls of Birkenhead that when the conduct said to amount to harassment is being examined, courts will have in mind that irritations, annoyances, even a measure of upset, arise at times in everybody’s day-to-day dealings with other people. Courts are well able to recognise the boundary between unattractive, even unreasonable, conduct on the one hand, and oppressive and unacceptable conduct on the other. To cross the boundary, the gravity of the misconduct must be of an order which would sustain criminal liability under s2. |
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| Harassment |
Majrowski v. Guy’s & St. Thomas’s NHS Trust; [2006] UKHL 34; [2006] 3 WLR 125; HL
Employer’s liability – vicarious liability – harassment in workplace
See above (employer’s liability). |
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| Health & Safety |
No new reported cases this month. |
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| Human Rights |
R (Malik) v. Waltham Forest Primary Care Trust & Secretary of State for Health; [2006] EWHC 487 (Admin); [2006] IRLR 526; [2006] ICR 1111; HC
Human rights – fair hearing – judicial review – regulatory bodies
M is a GP. To work as a GP within the NHS (in accordance with the NHS (Performers List) Regulations 2004) he had to be included in a “medical performers list” prepared by a Primary Care Trust (PCT). Once on the list, he had to enter into a contract with the PCT. M entered into a contract with the Waltham Forest PCT in March 2004. In January 2005, following a monitoring visit, the PCT notified M that he was suspended “to protect the interests of patients while a more detailed investigation into the issues of concern tak place”. The Regulations confer powers on the PCT of removal of a GP from the list and of “contingent removal”, and of suspension, where necessary for the protection of members of the public or otherwise in the public interest, while the PCT decides whether or not to exercise its powers of removal or contingent removal. The regulations require any period of suspension to be for no more than 6 months unless longer is ordered on application to the Family Health Services Appeal Authority. They also require that when suspension is being considered, the individual is notified of the allegations against him, what action is being considered and on what grounds, and given the opportunity to put his case at an oral hearing. While suspended, a GP is prevented from engaging in NHS practice but will generally receive 90% of their net income. At the time of his suspension, M was not told of the allegations against him or given the opportunity to deal with them. The allegations subsequently alleged comprised: inadequate disease registers, inadequate patient records, lack of clinical knowledge in relation to bi-polar disorder, emergency contraception and cessation of smoking, inadequate maternity services, lack of proper sterilisation equipment, inadequate arrangements for out of hours cover and opening hours, and the discovery of a bottle of orange juice in a fridge containing flu vaccine. In March 2005 the PCT accepted that there were procedural irregularities, revoked the decision to suspend, and ordered a new hearing to decide whether suspension should take place. At that hearing, the presenting officer relied on matters against M which had not been put to him, and said that the hearing was to “review” the decision to suspend. The outcome was a decision to suspend M for 9 months. M brought JR proceedings challenging the lawfulness of his suspension. In June 2005 the PCT offered a fresh hearing and served a new statement of case. M’s JR application was adjourned pending the fresh hearing but permission was given to amend his claim to allege breaches of Article 6 and to claim damages. At the fresh hearing in August 2005, pending which the suspension had not been revoked, a decision was made to suspend M for 2 months. In his JR claim, M alleged that he had been denied the right to a fair hearing contrary to Article 6 and that there was interference with the peaceful enjoyment of his right to practice contrary to Article 1 of the First Protocol. His application was allowed by the High Court. The PCT acted unlawfully in purporting to suspend him. It is a public body and its function in protecting the public from inefficient practitioners is subject to judicial control by JR notwithstanding the existence of a contract between M and the PCT. There were serious flaws at the hearing leading to suspension. In any event, suspension could not be for more than 6 months and the hearing in August which led to further suspension after he had already been suspended for over 6 months was clearly unlawful. His unlawful suspension also amounted to an interference to the right to peaceful enjoyment of possessions. The right to practise a profession can be regarded as a possession (Van Marle v. Netherlands). Inclusion in the medical performers list was akin to the possession of a licence. It has intrinsic value, albeit that goodwill of the practice is not marketable, in that it enables the doctor to practise. Suspension may well affect the economic value of the practice, in that the amount of remuneration will be affected by patient numbers. Inclusion in the list therefore has a present value apart from the right to future income, and therefore amounts to a possession. If he could establish that he had suffered recoverable damage, he might be entitled to some compensation. His Article 6 claim, however, could not be upheld. Generally, interim measures do not engage Article 6 because they do not determine civil rights. The suspension was an interim measure and there was no financial penalty because pay continued. Article 6 did not apply. Even if it did, the procedure as a whole (including the right to claim JR) was Article 6-compliant. The interim suspension was akin to an administrative act to hold matters pending final determination, and JR suffices to make that procedure Article 6-compliant. |
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| Information and Consultation Regulations |
No new reported cases this month. |
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| Pay & Other Terms & Conditions of Contract of Employment (including Equal Pay) |
Arora v. Rockwell Automation Ltd; 21/04/06 (EAT/97/06); [2006] ICR Part 8 “Recent points” p.xxiii
Wages – unlawful deductions – time limits – when time starts to run – ET procedure
Following his dismissal on 4th March, A wrote to R seeking payment for overtime. On 15th April R paid him a sum which he considered insufficient. On 16th June he raised a grievance. The ET dismissed his claim for unlawful deductions on the ground that the original 3 month time limit expired on 3rd June and, since the grievance was raised after that, time had not been extended. The EAT allowed A’s appeal. Where a claim was made for an unauthorised deduction it might be one of 3 types: (a) a straightforward deduction, expressed to be so, (b) a shortfall in payment made, or (c) no payment whatsoever. The only time limit provided for was in s23 ERA, which did not state that time was to run from the date the wages were payable. In Delaney v. Staples, the statute was broadened to include “non-payment” as a deduction, and reliance was placed on s13 ERA albeit that it appeared that consideration was not given to the impact on the actual time within the time limit provisions. The payment made on 15th April fell squarely within s13, so the deduction was made on that date and time ran from then. Accordingly the grievance was in time and time was extended. Where there is complete non-payment, rather than shortfall, then the cause of action arises at the contractual time for payment. It would be wrong to apply that construction to the present situation, and it did not detract from the statutory wording which, where the issue was one of shortfall, made it clear that time would start to run from the date of the deduction, i.e. the date of tendering of the payment from which the deduction was made. A finding that the claim was in time would be substituted for the ET’s decision.
Clarke & Others v. Redcar & Cleveland Borough Council; Wilson & Others v. Stockton-on-Tees Borough Council; [2006] IRLR 324; CL July para 175; [2006] ICR 897; EAT
ET Procedure - Conciliated settlements & compromise agreements – Sex Discrimination – Equal Pay
See above (ET procedure) and see reported in the June 2006 update.
CMC Group plc & others v. Zhang; IDS Brief 808 p.8; CA
Contract – clause requiring repayment in event of breach – whether penalty clause
Z was a customer of C’s business, placing sums of money with C for the purpose of carrying out foreign exchange transactions. As a result of an error in C’s systems, three transactions took place instead of two. This caused Z loss. C and Z entered into a settlement agreement in full and final settlement of Z’s claims. In return, Z promised to keep the terms of the agreement confidential, to cease his harassment of C’s employees and to desist from making derogatory remarks about C. The agreement also provided that if Z breached any of these terms he would be liable for the sum of £40,000 together with a claim for reimbursement of C’s legal costs against him and a claim for damages in relation to C’s loss of business. Z continued to insist that C owed him more than £40,000. C claimed breach of contract and obtained interim injunctions against C. Z failed to file a defence and C obtained judgment in default for £40,000 plus damages for harassment of its employees and costs. Z appealed. The main issue before the CA was whether the term in the settlement requiring payment of £40,000 in the event of breach amounted to an unenforceable penalty clause. The CA had regard to the case of Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co Ltd. The CA held that if the proper construction of the agreement was that £40,000 was payable to Z on condition of his observance of the agreement, repayment did not amount to a penalty. However, the language of the contract indicated that the parties’ intention was that £40,000 was repayable as part of the compensation due to C in the event of breach by Z of the agreement. It therefore fell to the court to decide whether this amounted to a penalty clause or liquidated damages. The court unanimously held that it was the former and was therefore not enforceable. The purpose of the term was clearly to deter Z from breaching the contract. There was no attempt by C to tailor the sum to different kinds of breach and the agreement provided for a substantial sum to payable for any breach, no matter how trivial. Further, as established in Dunlop, an agreement which provides for the payment of a lump sum on breach gives rise to a presumption that the requirement is a penalty. C had not rebutted this presumption. Finally, the fact that the agreement was a settlement and not a commercial agreement made no difference to the applicable principles and was not a reason to distinguish Dunlop. This case clearly has implications for compromise agreements which provide for repayment of compensation in the event of breach.
Commissioners of Revenue & Customs v. Leisure Employment Services Ltd; Times 17/05/06; CL July para 179; [2006] ICR 1094; EAT
Minimum wage – deductions for living expenses – seasonal leisure workers
See reported in the June 2006 update. Now also reported at CL July para 179 and [2006] ICR 1094.
Jeffery & others v. Secretary of State for Employment & another; [2006] ICR 1062; EAT
Equal pay – pension scheme – part-time contracts – whether continuity for Equal Pay Act
J and others were lecturers initially employed by a college under a series of hourly paid part-time contracts for each academic year. They then moved onto temporary and then permanent full-time contracts and became entitled to membership of the college’s pension scheme. They brought Equal Pay Act claims seeking to have their membership of the pension scheme back-dated to include the period of employment under the part-time contracts. An ET chairman decided that the change from temporary to permanent status was radical in the terms of the contract. Since it occurred more than 6 months before they brought proceedings, they had not been employed in the relevant employment in the 6 months preceding their claims as required by the EqPA. The EAT dismissed J’s appeal. Where there was a stable employment relationship resulting from a succession of short-term contracts at regular intervals in respect of the same employment to which the same pension scheme applied, the limitation period in the Equal Pay Act ran from the end of the last contract forming part of that stable relationship. Although it might be said that entry into a permanent job did not destroy a stable relationship, it was not appropriate to describe a series of short-term contracts and a permanent contract as a succession of short-term contracts. It could not be said that there was continuity of a stable relationship into the permanent contract. Further, the chairman was entitled to conclude that where J moved from a temporary relationship under a particular contract to a permanent one, there was a fundamental change in the nature and obligations of the relationship so as to amount to a new contract. The stable employment relationship therefore ended when the new permanent contracts were entered into. The claims were therefore out of time.
Lewald-Jezierska v. Solicitors in Law Ltd; 16/06/06 (EAT/165/06); [2006] ICR Part 8 “Recent points” p.xxii; EAT
Written particulars – failure to provide – remedy
L was dismissed in October 2003. She made various claims including one of failure to provide written particulars of terms and conditions of employment. That claim was upheld by the ET. At the remedies hearing, the award made was simply of compensation in respect of an unnotified deduction of pay arising out of the failure to provide the statement. L appealed, contending that s38 ERA required the ET to award at least 2 and up to 4 weeks’ pay. The appeal was allowed. S contended that the dismissal took place before s38 came into effect on 1st October 2004 and the only remedy prior to that was a declaration. However, nothing in the commencement order disapplied s38 in the case of a dismissal prior to that date. On its face, s38 required tribunals to make a financial award when making a decision after the commencement date of s38. If Parliament intended that s38 should not have effect in relation to proceedings commenced or dismissals occurring before that date, it could have said so and had the opportunity to exclude such cases when making the commencement order. There was no injustice in not doing so. S38 created a new remedy for an existing obligation, and had itself been in force for 2 years before it was brought into effect. If an employer chose to ignore the possible liability, he had only himself to blame.
Powerhouse Retail Ltd v. Burroughs; [2006] UKHL 13; [2006] IRLR 381; [2006] ICR 606; [2006] 3 All ER 193; CL July para 176; HL
Equal pay – TUPE – Occupational pension schemes – pension provisions
NB This case has previously been reported as Preston v. Wolverhampton Healthcare NHS Trust.
See reported in the June 2006 update. Now also reported at [2006] 3 All ER 193 and CL July para 176.
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; [2006] IRLR 386; [2006] ICR 932; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
See reported in the April 2006 update. Also reported in the June 2006 update. Now also reported at [2006] ICR 932.
Villalba v. Merrill Lynch & Co Inc and others; [2006] IRLR 437; IDS Brief 804 p.3; CL July para 183; EAT
Equal pay – comparators – defence – sex discrimination
See reported in the June 2006 update. Now also reported at CL July para 183.
NB Leave given to appeal to the CA on the equal pay issue. |
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| Pensions, Tax and Benefits |
Collins v. Secretary of State for Work and Pensions; [2006] EWCA Civ 376; [2006] ICR 1033; CA
EC – free movement of workers – Jobseeker’s Allowance – entitlement dependent on “habitual residence” in UK – whether discriminatory effect justified
C was born in the USA and had dual US and Irish nationality. He had a 10-month period of casual employment in the UK in 1980-1, returned to the US and subsequently worked there and in Africa. In 1998 he returned to the UK and began to seek work. He applied for JSA. The JSA Regs require that an applicant who is a “person from abroad”, defined as someone neither “habitually resident” in the UK nor deemed to be so by reason of being a “worker” for the purposes of the EC directive for free movement of workers, receives a nil amount. C appealed to a Social Security Commissioner. The Commissioner sought a preliminary ruling from the ECJ on whether someone in C’s position was a “worker” or had a right to reside in the UK under the Directive or whether any other provision of EC law required payment of JSA to him. The ECJ held that he did not have a right to reside. At the resumed hearing, the Commissioner held that C was not a worker and the habitual test was justified and not met by C. He dismissed C’s appeal. C appealed to the CA. His appeal was dismissed. The requirement for a genuine link, between an applicant for a benefit in the nature of a social advantage and the geographic market in question, was not synonymous with a requirement that C be actively seeking work in that market at the material time. An additional genuine link requirement could legitimately be imposed subject to justification and proportionality. C did not establish the genuine link merely by making a genuine application. The test of habitual residence was both legitimate and justified and was, as a means of establishing the genuine link requirement, fully compatible with EC law. There was no basis for introducing any proviso whereby that genuine link could be satisfied in some other way.
Customs and Excise Commissioners v. Elm Milk Ltd; [2006] EWCA Civ 164; [2006] ICR 880; CA
VAT – input tax – credit for input tax on cars – company car for director’s business use – whether intended to be made available for private use
E purchased a car for business use by its sole director who needed to travel extensively in the course of his employment. The car was kept in a car park near the office and within 50 yards of his home, and the keys were kept in the office. The insurance was not restricted to business use but the director did his private motoring in another vehicle and a resolution of E’s board held that the car was to be used for business purposes only and was not to be made available for private use. E sought to deduct input tax on the purchase of the car. C disallowed this on the basis that the requirement that the car be exclusively for the purposes of the business was not satisfied as E had shown an intention to make it available for private use. E’s appeal was allowed by the VAT and Duties Tribunal. A judge dismissed C’s appeal. The CA dismissed C’s further appeal. A purposive approach should be adopted in interpreting Art 7 of the VAT (Input Tax) Order 1992 and consideration should be given expressly to the overall scheme of the legislation. That legislation sought to exclude the right to claim a deduction from VAT for the purchase of a motor car and to create an exception with a high threshold, namely that it not be the taxpayer’s intention to make the vehicle available for private use. Claims had to be scrutinised carefully where there was a close connection between the use of the car and the taxpayer. However, the purpose of the provisions could be achieved if the availability of the car was not restricted to its physical availability but also to unavailability brought about by legal restraints (e.g. resolution of the board or term of the contract of employment). It was a question of fact for the tribunal whether in all the circumstances the taxpayer intended not to make the car available for private use, by whatever means that intention was carried out including contractual restraint. The prohibition on private use, backed up by the term of the contract of employment and the arrangement as to the keys, was sufficient evidence to conclude that E satisfied the condition.
Knapton and others v. ECC Card Clothing Ltd; 07/03/06 (EAT/0664/05); IDS Brief 806 p.9; [2006] ICR 1084; EAT
Unfair dismissal – compensatory award – deduction to reflect receipt of early pension payments – whether correct
See reported in the June 2006 update
Powerhouse Retail Ltd v. Burroughs; [2006] UKHL 13; [2006] IRLR 381; [2006] ICR 606; [2006] 3 All ER 193; CL July para 176; HL
Equal pay – TUPE – Occupational pension schemes – pension provisions
See reported in the June 2006 update. |
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| Professional Regulatory Bodies and Other Tribunals |
R (Malik) v. Waltham Forest Primary Care Trust & Secretary of State for Health; [2006] EWHC 487 (Admin); [2006] IRLR 526; [2006] ICR 1111; HC
Human rights – fair hearing – judicial review – regulatory bodies
See above (Human Rights). |
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| Redundancy |
No new reported cases this month. |
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| Restrictive Covenants |
Willow Oak Developments Ltd (trading as Windsor Recruitment) v. Silverwood & others; IDS Brief 808 p.6; CA
Unfair dismissal – reasons for dismissal – refusal to sign new contract containing restrictive covenant – SOSR – whether reasonableness of covenant relevant
NB EAT decision reported in January update. Also see reported in the February 2006 update. See also reported in the June 2006 update.
See above (Unfair dismissal). |
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| Temporary and Agency Workers |
Brocklebank v. Silveira; 11/01/06 (EAT/0571/05); IDS Brief 809 p.11; EAT
Sex discrimination – pregnancy – failure to make risk assessment – agency – liability
See above (Discrimination).
Cable & Wireless plc v. Muscat; [2006] EWCA Civ 220; IDS Brief 802 p5; The Independent 15/03/06; [2006] IRLR 354; Times 10/04/06; CL June para 155; [2006] ICR 975; CA
Whether contract of employment exists – agency worker – implied contract
See reported in the April 2006 update. Now also reported at CL June para 155 and [2006] ICR 975. |
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| Trade Unions |
No new reported cases this month. |
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| Transfer of Undertakings |
Balfour Beatty Power Networks Ltd v. Wilcox; [2006] IRLR 258; CL July para 185; EAT
TUPE Regulations – whether there was “economic entity” – whether labour was “labour intensive”
See reported in the March 2006 update. Now also reported at CL July para 185.
Cross & another v. British Airways plc; [2006] EWCA Civ; Independent 18/05/06; IDS Brief 807 p.3; Times 05/06/06; CA
Transfer of Undertakings – provisions about retirement age – unfair dismissal
See reported in the June 2006 update. Now also reported at Times 05/06/06.
Guney-Gorres v. Securicor Aviation; C-232/04 & C-233/04; [2006] IRLR 305; CL July para 186; ECJ
EC Business Transfers Directive – Transfer of Undertakings – EC Law
See reported in the March 2006 update. Now also reported at CL July para 186.
North Wales Training and Enterprise Council (t/a Celtec) v. Astley & others; [2006] UKHL 29; IDS Brief 809 p.7; Times 23/06/06; Telegraph 29/06/06; [2006] ICR 992; HL
Transfer of undertakings – date of transfer – voluntary agreement – effect – continuity of employment
A and others were initially employed as civil servants by the Department of Employment. When the DoE set up TECs from 1989 to take over its training and enterprise responsibilities, to assist in the transition, there was an agreement by virtue of which A and others volunteered to be seconded to the TECs, initially for 3 years, during which time they would continue to be civil servants employed by the DoE. They were doing the same work as before, from the same desks in the same building. It was decided that secondments would be phased out at the end of each TEC’s 5th year of operation, following which the seconded civil servants would be free to choose whether to take up any offer of employment with the TEC or return to the civil service for redeployment. In 1993, A and others resigned from the civil service to take up employment with N. Later, when N sought to make redundancies, an issue arose as to their periods of continuous service for the purpose of redundancy payments. Their statement of terms and conditions from N gave their date of commencement of continuous employment as 1993. They argued that it should be continuous with their previous long service with the DoE and brought claims before the ET for a declaration. They argued that when they became N’s employees, there was a transfer of the undertaking in which they had worked for the DoE, so that their original contracts with the civil service transferred and their service was unbroken. The ET found that there was a transfer of undertaking, but there was an issue as to when it occurred. The ET found that the transfer took place over several years from the time the first secondment began to the time the last one ended, and that each time a secondee became directly employed by N it was one of a series of transactions by which the transfer was effected. Thus the employees had been employed by the DoE immediately before the transaction that brought about their direct employment by the TEC, and continuity of service was preserved. The EAT overturned that decision, holding that a transfer is complete when the new employer takes over actual occupation and control of the old business. This took place long before the secondees resigned and became directly employed, so continuity was not preserved. The CA restored the ET decision, holding that the wording of the Acquired Rights Directive (which applied directly because N was a public body) was wide enough to embrace a transfer taking place over a period of time. The House of Lords referred the issue to the ECJ. The ECJ ruled that the date of transfer is that on which responsibility as employer for the carrying on of the business moves from transferor to transferee. It also ruled that contracts of employment existing at the date of transfer are deemed to transfer, regardless of what the parties have agreed. When the matter returned to the House of Lords, the HL applied the ECJ reasoning so as to dismiss N’s appeal by a majority of 4 to 1 and adopting differing reasoning to reach the same conclusion. The claimants’ employment with N was continuous with their previous employment with the DoE. Their contracts of employment were capable of being transferred on the date on which the TEC was set up and the responsibility of the business passed, even though at the time they thought they were still employed by the DoE and merely on secondment to N. Thus their contracts must be deemed to have been handed over to N on that date and their continuity of employment was unbroken from the time they joined the civil service. The fact that they had freely chosen to remain as civil servants at that time made no difference: it was not open to parties to derogate from the general rule that contracts are automatically transferred on the date of the transfer. It could not be said that their voluntary agreement amounted to an implicit refusal to have their contracts transferred to N. They were not offered (and therefore did not turn down) the option of direct employment with N at that stage: they were only offered the choice of whether or not to volunteer for a secondment. Therefore the secondment arrangement did not affect their right to continuity of employment under the directive.
Powerhouse Retail Ltd v. Burroughs; [2006] UKHL 13; [2006] IRLR 381; [2006] ICR 606; [2006] 3 All ER 193; CL July para 176; HL
Equal pay – TUPE – Occupational pension schemes – pension provisions
See above (Pay) and see reported in the June 2006 update.
Sweetin v. Coral Racing; [2006] IRLR 252; CL July para 171; EAT
Transfer of Undertakings – Consultation – redundancy – protective awards – Constructive dismissal – breach of duty of trust & confidence – failure to deal with grievance
See reported in the March 2006 update. Now also reported at CL July para 171. |
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| Working Time Regulations |
British Airways plc v. Noble; Telegraph 08/06/06; [2006] IRLR 533; CA
Working Time – Shift workers – holiday entitlement – payment
See reported in the June 2006 update. Now also reported at [2006] IRLR 533.
Cotswold Developments Construction Ltd v. Williams; [2006] IRLR 181; CL July para 172; EAT
Whether or not contract of employment exists – worker – applicable tests
See reported in the February 2006 update. Now also reported at CL July para 172.
Dellas & others v. Prime Minister & another; C-14/04, 01/12/05; IDS Brief 798 p.5; [2006] IRLR 225; CL July para 190; ECJ
Working Time – hours spent on call at employer’s premises – whether counts for working time requirements – Article 2 of the Working Time Directive
See reported in the February 2006 update. Now also reported at CL July para 190.
Federatie Nederlandse Vakbeweging v. Staat der Nederlanden; 06/04/06; C-124/05; IDS Brief 804 p.10; [2006] IRLR 561; [2006] ICR 962; ECJ
Working Time – payment in lieu of annual leave – whether permissible – EC law
See reported in the June 2006 update. Now also reported at [2006] IRLR 561 and [2006] ICR 962.
MacCartney v. Oversley House Management; 31/03/06 (EAT/0500/05); IDS Brief 801 p6; [2006] ICR 510; [2006] IRLR 514; CL June para 159; EAT
Working Time – National Minimum Wage – time spent by care worker on call
See reported in the March 2006 update. Also reported in the June 2006 update. Now also reported at [2006] IRLR 514 and CL June para 159.
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; [2006] IRLR 386; [2006] ICR 932; ECJ
Working Time – EC Law – Rolled-up holiday pay – Whether contrary to Directive
See reported in the April 2006 update. Now also reported at [2006] ICR 932 |
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| Other |
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| Pending and Refused Appeals |
Lonsdale v. Howard & Hallam Ltd; [2006] EWCA Civ 63; [2006] IRLR 481; [2006] ICR 584; [2006] 1 WLR 1281; CA
Self-employed commercial agents – EC Commercial Agents Directive – EC law
See reported in the June 2006 update. NB Leave to appeal has now been granted by the House of Lords ([2006] 1 WLR 1846; [2006] ICR 1032).
Please keep us posted if you are involved in a case which is subject to appeal to the CA or HL. |
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| Legislative Changes, Codes of Practice, Practice Directions etc. |
Guidance, Codes of Practice etc:
Discrimination
The DTI has published factsheets on the impact of the new Age Discrimination legislation in the workplace. These are available from the Department of Trade & Industry.
Health & Safety
The Department for Communities and Local Government has published new guidance notes for employers on compliance with fir
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