So we're working longer and retiring later. These latest figures from the Office for National Statistics won't come as any great surprise to employers, many of whom are now in tune with an increasingly diverse workforce.

But one significant aspect of this latest ONS report on the labour market and retirement is the distinction it highlights between the roles of men and women in later life.

Around two thirds of men who have passed their statutory pension age are said to be employed in high-skilled jobs; they are managers, directors, senior officials. Around the same proportion of women are estimated to be working in lower-skilled jobs like cleaning and administration.

It will be interesting to see how these statistics develop as the reality of later-life working sinks deeper into the psyche of British workers.

Post-employment Whistleblowing - Onyango v Berkeley Solicitors

Mr Onyango made a protected disclosure (often known as 'whistleblowing disclosure') after leaving his job at a firm of solicitors. When he was then investigated by the Solicitors Regulation Authority following allegations of forgery and dishonesty, he claimed that the allegations had been made because of his protected disclosure.

The employment tribunal held that because he had made the disclosure after his employment had ended, and not during it, he was not covered by whistleblowing laws and his claim could not be heard.

The Employment Appeal Tribunal (EAT) overturned that decision. Whistleblowing protection is not limited to disclosures made during the relevant employment, the EAT said. So tribunals can hear claims that relate to alleged detriments suffered because of protected disclosures made after employment ends.

Government Takes Another Look at Bill

As the Enterprise and Regulatory Reform Bill continues to travel through Parliament, the Government is reshaping some of the provisions.

Unfair dismissal qualifying period
The unfair dismissal qualifying period has been amended to reflect the European Court of Human Rights' decision in Redfearn v UK. Where the principal reason for dismissal is, or relates to, the employee's political opinions or affiliation, the two-year qualifying period will not apply.

Whistleblowing protection
The government will remove the requirement for a disclosure to be made in 'good faith' in order to attract whistleblowing protection, although compensation can be reduced by up to a quarter if the disclosure is in bad faith. Also, an employer will become vicariously liable for a detriment caused by one worker to another who had made a protected disclosure - but employers who have taken all reasonable steps to prevent the detriment would have a defence.

Ability to pay
The Bill now says that where tribunals impose financial penalties on employers they must have regard to an employer's ability to pay.

Enhanced Redundancy for Older Workers - Lockwood v DWP

Ms Lockwood took voluntary redundancy from her administrator's role at the Department for Work and Pensions.

She received £10,900 after nearly 8 years' service. She was 26. Had she been over 35 with the same level of service she would have received £17,700 more. This, she claimed, was discriminatory.

The tribunal found against her. On appeal, the DWP argued that it was not right to compare Ms Lockwood's age group with over 35s. Older workers find it more difficult to get a new job, and the enhanced redundancy terms reflected this.

The Employment Appeal Tribunal accepted that argument. It held that even if it were right to compare the two age groups and if Ms Lockwood had been treated less favourably, the treatment was objectively justified. The DWP was giving older workers a financial cushion and it was in the public interest to do so. The enhanced voluntary redundancy pay for that age group was a proportionate means of achieving a legitimate aim.

A reminder that when it comes to treating staff of different ages differently, objective justification is everything.

Discrimination Guidance

While the decision in Eweida & Others did much to clarify religion and belief discrimination, there's always room for some easily-digestible guidance on applying the law in the workplace.

The Equality & Human Rights Commission has delivered just that.

http://www.equalityhumanrights.com/advice-and-guidance/guidance-for-employers/religion-or-belief-new-guidance-february-2013/

We'd recommend a read. It features lots of different scenarios and practical guidance to help deal with requests to accommodate religion and belief in the workplace.

Judicial Proceedings Immunity - Singh v Reading Borough Council

Ms Singh was a head teacher employed by the Council. While still working at her school, she brought a claim alleging that parents, staff and governors had pursued a campaign of race discrimination, harassment and victimisation against her.

In the lead-up to the tribunal hearing, the Council served a witness statement from the Clerk to the Governing Body. This sparked a new element to Ms Singh's claim; she believed that the statement contained lies and that improper pressure had been put on the Clerk to make it. This was all part of the race discrimination campaign, she argued, and was the last straw. Ms Singh resigned and added constructive dismissal to her claim.

The question for the Employment Appeal Tribunal (EAT) was whether or not documents produced while preparing a case for hearing are protected by judicial proceedings immunity. If the Clerk's witness statement were privileged then Ms Singh could not use it in support of her constructive dismissal claim.

The EAT held that immunity applied. This protects not only witnesses who are giving evidence, but also the parties preparing their case, the EAT said. So even if undue pressure is put on a witness to produce a statement, or to give false evidence, that action cannot be used to found another claim.

Question Mark Over Representative's Capacity - Drysdale v Department of Transport

Mr Drysdale was represented by his wife at his two-day unfair dismissal hearing.

During the second day it became clear that more time was needed.  When Mrs Drysdale discovered that it would be four months before the case would be listed again, she became upset. She said that she wanted to withdraw the claim, which she confirmed when asked by the judge.

The case was dismissed and an order for costs made against Mr Drysdale. He later appealed, arguing that his wife did not have capacity to withdraw his claim. The tribunal, he said, should have checked that Mrs Drysdale was in a good state of health and was authorised to withdraw the claim. He also argued that he should have been given the chance to make submissions before the tribunal made a costs order.

The Employment Appeal Tribunal dismissed the appeal. There was no duty to enquire into Mrs Drysdale's health or into her authority. There didn't need to be a written application to withdraw the claim. And on the question of costs, as Mr and Mrs Drysdale had chosen to leave the hearing while the application for costs was being made, the tribunal did not have a duty to give them a further opportunity to put their points across.

And Finally... Heafield v Times Newspapers

It's not often that we're forced to reduce expletives to black and white. But this case report just wouldn't be the same without it.

Mr Heafield was a sub-editor at the Times. He was also a practising Roman Catholic, although his colleagues didn't know this. In 2010 the paper was running stories about alleged child abuse in the Catholic Church. It seemed that things were getting pretty tense in the newsroom. A print deadline loomed and Mr Heafield's manager, chasing a delayed article (known to those in the newsroom as 'the Pope'), shouted, "What's happened to the f***** Pope?".

Three days later, Mr Heafield complained that he was offended by the comment. He resigned and brought various claims including harassment against the Times based on the comment.

The tribunal held that the conduct was unwanted, but it was unreasonable of Mr Heafield to have experienced the environment as adverse. The comment had not been made in order to violate Mr Heafield's dignity, nor to create a hostile or offensive environment. In the context of the newsroom environment at that time, it was 'trivial or transitory'. The manager was asking where the story was and, under pressure, he swore. It was unreasonable to interpret this as insulting a religion.

The decision was upheld on appeal.

The planned changes to employment law are gathering pace with some fresh announcements from the Department for Business, Innovation and Skills: 

• from this summer the compensatory award for unfair dismissal will be capped at one year’s pay, or the current limit of £74,200 (whichever is lower);
• TUPE will be amended, perhaps most significantly to remove service provision changes from the definition of a transfer.  This will lead to fewer contracting out situations being TUPE transfers, but with the unwelcome side effect of increased litigation to decide when TUPE applies;
• Acas early conciliation will be introduced from April 2014;
• a new Health and Work Assessment and Advisory Service will be introduced in 2014. Its role will include providing state-funded occupational health testing for employees who are off sick for more than four weeks.

As busy employment law years go, we think this could be up there. So stay tuned. 

Absent Employer Still in Control - White & Todd v Troutbeck SA

Mr White and Ms Todd worked as caretakers/managers of a house and small farm estate part-owned, but rarely visited, by Troutbeck. 

Their contract had no fixed hours, although it contained several references to ‘employment’.  When the company terminated the arrangement Mr White and Ms Todd claimed unfair dismissal, relying on an employment contract.  The question was: were they employees (and so entitled to claim) or workers? 

The company argued that it did not have day-to-day control over Mr White and Ms Todd and so that went against there being an employer-employee relationship.  The original tribunal agreed, finding in Troutbeck’s favour. 

But that decision was overturned on appeal.  The Employment Appeal Tribunal decided that a lack of day-to-day control is not conclusive.  The test of whether or not someone is an employee is about the entire relationship, starting with the written agreement.  The key question is whether the ‘employer’ had a contractual right of control?  It is not simply about who is in charge of the daily work. 

A useful reminder to all businesses using self-employed contractors to make their written agreements clear on workers’ status. 

New Unfair Dismissal and Redundancy Limits

It’s time to get used to a new set of figures.  The annual rise in the unfair dismissal basic award and statutory redundancy payment took effect from the beginning of this month. 

So dismissals that happen(ed) on or after 1^st February 2013 could attract these maximum amounts: 

A week’s pay                                                 - £450

Statutory redundancy/basic award           - £13,500

Unfair dismissal compensatory award     - £74,200

Combined unfair dismissal award            - £87,700 

But remember that the government is introducing an overall cap on the compensatory award for unfair dismissal of one year’s pay.  No firm date has been announced, but it is likely to take effect from the summer. 

Handbook Terms Contractual - Allen v TRW Systems

The redundancy policy in TRW’s employee handbook provided for enhanced payments.  The terms had been agreed with TRW’s works council and were repeated several times in letters issued to the workforce. 

The issue was whether the enhanced redundancy terms were contractual, binding TRW and forcing it to pay these more favourable settlements. 

The tribunal held not.  The terms had not been incorporated into employment contracts because they were not referred to in the written statement of terms.  But the Employment Tribunal (EAT) thought otherwise and overturned that decision.  The tribunal should have taken account of the works council agreement, the express promise in the employee handbook and the assurances repeated in letters to employees.  It was fair for the employees to have had a reasonable expectation of receiving the enhanced terms, the EAT said. 

The case has been sent to a different tribunal to decide again. 

Dismissal Wiped Out By Lesser Sanction? - Piper v Maidstone & Tunbridge NHS Trust 

The Reverend Piper (RP) was an employee of the trust where he worked as a chaplain.  He was dismissed for gross misconduct but, on appeal, the sanction was reduced to a final warning, demotion and a transfer to a different hospital. 

RP wrote to the Trust rejecting its offer of re-engagement because of the ‘severe financial and psychological penalties’ he felt it would impose on him.  He brought a claim for unfair dismissal which the Trust defended on the basis that there was no dismissal. 

The tribunal found for the Trust.  No dismissal meant no unfair dismissal claim.  But the Employment Appeal Tribunal took a different view.  The Trust’s internal appeal procedure required an employee’s consent to a lesser penalty.  As RP had not agreed to his dismissal being replaced by the warning, demotion and transfer, his dismissal stood and his unfair dismissal claim could now proceed. 

ECHR Rules on Religious Discrimination - Eweida & Others v UK

This much anticipated decision of the European Court of Human Rights has made it clear that religious views can be held in the workplace, but do not automatically rank above the rights of others. 

Up for consideration was a selection of discrimination cases which questioned whether UK law goes far enough to protect employees who express their religious beliefs at work. 

Ms Eweida worked for British Airways and wanted to wear a visible cross necklace to work, in breach of British Airway's uniform policy.  Ms Chaplin was a nurse who, too, wanted to wear a cross to work.  Then there was Ms Ladele, a registrar who refused to perform civil partnership ceremonies.  And Mr McFarlane, a Relate counsellor who said that he might object to providing sexual counselling for same-sex couples. 

Eweida

The ECHR held that the UK courts had placed too much weight on British Airway’s desire to project a certain image.  The cross worn by Ms Eweida was discreet, and there was no evidence that other clothing such as turbans and hijabs had a negative effect on BA’s brand.  So the UK had breached its obligations under Article 9 of the European Convention on Human Rights (the right to freedom of thought, conscious and religion).  BA’s need to protect its image gave way to Ms Eweida’s right to the reasonable expression of her religious belief. 

Ms Chaplin

In Ms Chaplin’s case the health and safety reasons for asking her to remove her cross outweighed the religious rights.  There was no breach of Article 9. 

Ms Ladele and Mr McFarlane

The ECHR found against these two.  The rights of the registrar and the counsellor did not trump the rights of others not to be discriminated against on grounds of sexual orientation.  An employee who tries to opt-out of duties that do not align with their religious beliefs can not expect their employer to compromise equal opportunities policies by going along with this. 

On the back of Ms Eweida’s success, employers should now look closely at their dress codes and related image considerations and ask whether these could discriminate against religious groups?  If the answer is yes, are they justified? 

Defining Disability - Aderemi v London & South East Railway

Mr Aderemi was an assistant at a railway station in London.  His job required him to stand for long periods – about nine hours - at a time.  This affected his back.  He was assessed by an occupational health doctor who concluded that his mobility was significantly restricted, he was in a lot of discomfort and was unlikely to be able to return to his job in the foreseeable future. 

Mr Aderemi was dismissed for capability and claimed unfair dismissal and disability discrimination. 

The question of whether or not Mr Aderemi was disabled reached the Employment Appeal Tribunal (EAT) after the original tribunal found against him on that point.  The tribunal had held that his impairment did not have a substantial, adverse effect on his ability to carry out normal day-to-day activities and so he wasn’t disabled.  In reaching that decision, the tribunal concentrated on the things Mr Aderemi could still do. 

The EAT held that the tribunal had looked at this the wrong way round.  Rather than taking into account what Mr Aderemi could do, it ought to have considered the things he couldn’t do.  These included bending, lifting and standing around for 30-minute periods, all of which may have brought him within the definition of disabled. 

The case was sent back to the tribunal to be re-heard. 

And Finally…. The Quashing of Ms Quashie’s Status - Stringfellows Restaurants v Quashie

Cast your mind back to last summer when Ms Quashie, a lapdancer at Stringfellows, was found by the Employment Appeal Tribunal to be an employee. 

The club exercised a sufficient degree of control over her, for instance by requiring her to work certain regular days every month, to comply with a dress code and to perform a number of free dances. 

Well, now that’s all changed.  The Court of Appeal has decided that Ms Quashie is not an employee after all.  Crucial to this decision was the way in which Ms Quashie was paid.  She negotiated her own fees with clients and the risk of being out of pocket on a particular night was hers alone. 

It would be unusual, the Court of Appeal said, for there to be an employment contract where the worker takes the economic risk and is paid exclusively by third parties.

Contact Details: For further information please contact Tim Lang

Disclaimer: The information contained in this bulletin is for general guidance only and is not intended to be complete coverage of the subjects referred to. George Green LLP cannot be held responsible for any action or inaction taken in reliance upon the contents. Professional advice should always be taken on the application of the law in any particular case.

What a year that was.  We saw the unfair dismissal qualifying period double, the start of automatic pension scheme enrolment, heftier costs penalties, shorter cases and judges sitting alone.  And a lot more besides. 

Now that the high jinx of the festive season has fizzled out, the stage is set for another twelve months of employment law developments to keep us on our toes.  Collective redundancy consultation will be shortened this spring and the summer will bring with it tribunal fees.  At some point we’ll have employee shareholders and mandatory Acas conciliation and - you’ve guessed it - much, much more. 

So let’s hit this year running with a round-up of some of the last cases of 2012.

Continuing Acts and Time Limits - Okoro & Okenwa v Taylor Woodrow

The two claimants were contract workers.  They had been banned from working on the principal’s sites and claimed race discrimination. 

But they issued their claims at tribunal more than three months after the last time on which they were refused entry to the site.  In ordinary terms that would be out of time - but they claimed that the discriminatory act was a continuing one and so time had not stopped running.  They lost at tribunal and appealed to the Employment Appeal Tribunal (EAT). 

The EAT upheld the tribunal’s decision.  There was no continuing act; the ban was a one-off decision.  At the Court of Appeal it was argued that, even though the relationship between the men and the party that imposed the ban had come to an end, there was a continuing regime.  That couldn’t be the case, the Court of Appeal held.  The ban was the equivalent of an employer dismissing an employee. It was a one-off act.

So the floodgates remain closed, for now at least, on these sorts of agency worker claims being brought long after the imposition of a ban. 

Employer Bound by Mistaken Job Offer - The Partners of Haxby Practice v Collen

Ms Collen applied for a job as a practice nurse.  The salary wasn’t revealed in the advert or during interview.  She was offered the job by telephone and told that her pay would be £22,427.  A letter confirming the terms would follow. 

The letter (the written offer) set out a salary of £30,762.  Ms Collen didn’t query it, later explaining that in her excitement the original figure hadn’t registered with her.  When she started the job she was told that there had been a mistake and the salary was in fact £22,427.  There were unsuccessful attempts at reaching a compromise and her employment terminated one month into the job.  She brought a claim based on the higher salary. 

The tribunal found in her favour and held that the employer was bound by the higher annual salary.  This decision was upheld on appeal.  The parties had agreed during the initial telephone call that they would only be bound once the written offer had been sent and accepted.  And even if the offer made by telephone was effective, it had been superseded by the written offer and Ms Collen’s acceptance of that.

It’s worth noting that, had she accepted the written offer knowing that the figure it contained was a mistake, the outcome would have been different.

Duty of Fidelity Turns Good Leaver Bad - Imam-Sadeque v BlueBay

Mr Imam-Sadeque (‘Mr I-S’) was a senior investment manager at BlueBay.  He decided to leave and join a start-up asset management company (‘Goodridge’), so resigned and began working his six months’ notice.  The resignation was significant; as Mr I-S had chosen to leave he would normally be classed as a ‘Bad Leaver’ and would not be entitled to the value of his shares – a healthy £1.7m. 

He was put on garden leave and a compromise agreement was negotiated.  It provided that, as long as Mr I-S complied with the terms of the compromise agreement and his employment contract, he would be classed as a ‘Good Leaver’ and could benefit from £1.7m. 

BlueBay then discovered that Mr I-S (while still a BlueBay employee) had been helping to set up Goodridge as a competitor, had disclosed information, and had poached a BlueBay employee.  BlueBay withheld the £1.7m, relying on a repudiatory breach of contract.  Mr I-S brought a High Court claim for breach of contract by BlueBay in refusing to pay out. 

The Court found for BlueBay.  Mr I-S had broken his side of the deal and had breached his duty of fidelity.  He had therefore forfeited his chance of achieving ‘Good Leaver’ status.  The Court rejected the argument that the condition in the compromise agreement relating to the forfeiture of rights was a penalty clause.  Rather, it offered Mr I-S access to rights to which he would not otherwise be entitled.  The Court also noted that the agreement had been struck between parties with similar bargaining positions who had had the benefit of legal advice. 

Reasonable Adjustments and the PCP - Rider v Leeds City Council

Ms Rider was a nursery officer at a children’s centre.  She suffered from severe asthma and a painful and debilitating spinal condition which affected her mobility. 

She complained to her employer that her working environment made her condition worse and was seconded to another job where she worked for two years without any difficulty.  The Council told her many times that at the end of the secondment she would have to go back to her original job.  Ms Rider claimed that that requirement put her at a substantial disadvantage compared with colleagues who didn’t have her disability.  She was eventually dismissed for capability, never having returned to the original post.  She was not offered a different role, nor were reasonable adjustments considered. 

Ms Rider’s claim hinged on whether the Council had failed in its duty to make reasonable adjustments to enable her to return to work after the secondment ended.  For that duty to have arisen, the employer had to have applied a provision, criterion or practice (‘PCP’) which put her at a substantial disadvantage. 

The tribunal held that the employer had not applied a PCP because Ms Rider had not actually gone back to her original job.  That decision was overturned on appeal.  The Employment Appeal Tribunal held that where an employer tells an employee that they must return to a post, without reasonable adjustments or alternative roles being accounted for, the employer is applying a PCP.  If that PCP places the disabled employee at a substantial disadvantage compared with a person who is not disabled, there is a duty to make reasonable adjustments. 

Accumulated Warnings and Dismissal - Wincanton Group v Stone

Mr Stone was a lorry driver whose employment record was tainted by a written warning for misconduct (refusing to obey a reasonable management instruction relating to a policy change).  He was in the process of challenging the basis on which that warning had been issued but, in the meantime, was dismissed after being involved in a serious driving accident.  That second act of misconduct, by itself, might not have led to dismissal but the employer said that the balance was tipped by the first warning. 

The tribunal found that his dismissal was unfair.  The first warning was for different sort of conduct to the second incident and so should not have been taken into account.  The tribunal was critical of the company for having issued the first warning at all; Mr Stone hadn’t been guilty of misconduct, it held. 

Wincanton appealed, arguing that the tribunal was wrong to have looked behind the first warning and to have substituted its view.  The Employment Appeal Tribunal upheld the appeal and set out guidance for tribunals to follow in these types of cases. 

The first step is to make sure that the earlier warning is valid.  If it is then the tribunal: 

• should take into account that fact that that warning has been issued;
• should take into account any proceedings that may affect the validity of that warning;
• must not go behind a warning by holding, for example, that it should not have been issued. It is acceptable to take into account the factual circumstances giving rise to the warning;
• may take into account the employer’s consistency of treatment of  employees.

Legal Representation at Internal Appeal - Ministry of Justice v Parry

Ms Parry was an office-holder, employed as a District Probate Registrar.  She was dismissed for gross misconduct.  Before her appeal hearing, she asked to be represented by her solicitor.  This request was declined and her solicitor sent detailed submissions in support of Ms Parry’s case which were considered by the employer.  The appeal officer upheld the dismissal decision and an unfair dismissal case was launched. 

The tribunal found in Ms Parry’s favour.  Part of the reason was that she had been denied legal representation – a point which the Employment Appeal Tribunal (EAT) went on to look at in some depth.  It is not automatically unfair for an employer to refuse to allow an employee to have their solicitor present at an internal appeal hearing, the EAT said. 

However, in exceptional cases where dismissal would prevent a person from working in their chosen profession (as in the case of a Registrar) then Article 6 of the European Convention on Human Rights – the right to a fair trial - kicks in to guarantee a right of legal representation at a disciplinary hearing.  There is a contractual right to dismiss, the EAT acknowledged, but it must be recognised that this could affect an employee’s broader civil rights. 

In Ms Parry’s case, there wasn’t enough evidence to show whether or not Article 6 applied and so the case was sent to a fresh tribunal for a complete rehearing. 

And Finally….Employer Escapes With £98 Liability - Smith v Trafford Housing Trust

Mr Smith was a housing manager employed by the Trust.  He posted comments on his Facebook page setting out his objections to gay marriage in church.  The Trust suspended him, eventually finding him guilty of gross misconduct.  The sanction would have been dismissal but because of his service recorded he was demoted to a non-managerial role at a much reduced salary.  He brought a tribunal claim, arguing that the demotion and pay cut breached his contract. 

Mr Smith won, in principle at least.  The High Court held that the demotion amounted to dismissal.  Mr Smith’s original contract had come to an end and he had agreed to work under a new, lesser paid, contract with the Trust.  The Court held that he should be awarded damages for wrongful dismissal, calculated as the difference between his earnings in the two jobs for the three month notice period.  That was despite Mr Smith having argued for a more substantial sum based on longer-term performance of his contract.  Had he chosen to resign and claim unfair dismissal, rather than work on under protest and opt for wrongful dismissal, his damages would have been higher again. 

In its judgment, the court made some important points about Facebook cases.  Employers should ask themselves whether a reasonable reader of an employee’s Facebook page would rationally conclude that postings were made on the employer’s behalf.  In Mr Smith’s case, views were also expressed on sport, food and cars - clearly not for work purposes.  The Court also emphasised the importance of free speech and of the need to look carefully at the views that are expressed and the manner in which they are conveyed before embarking on disciplinary action.

On the subject of the damages award, the Judge said that it leaves ‘an uncomfortable feeling that justice has not been done to [Mr Smith] in the circumstances’.

Contact Details: For further information please contact Tim Lang

Disclaimer: The information contained in this bulletin is for general guidance only and is not intended to be complete coverage of the subjects referred to. George Green LLP cannot be held responsible for any action or inaction taken in reliance upon the contents. Professional advice should always be taken on the application of the law in any particular case.

Step outside.  It may still be the tail end of Autumn but there’s no ignoring twinkly lights and jaunty jingles.  The season of giving and receiving is upon us. 

And perhaps it’s with that in mind that the Government announced its latest employment law-related proposal.  Neatly packaged as a £100m ‘employer-owner’ scheme, the idea is to allow employers to issue capital gains tax-exempt shares worth somewhere between £2,000 and £50,000 to employees in return for their giving up some employment law rights.  These include unfair (but not automatically unfair) dismissal, redundancy and the right to request flexible working and time off for training. 

Consultation on the Chancellor’s plan, which includes doubling the amount of notice a woman needs to give of her return from maternity leave, has been swift.  It’s anticipated by the government that these new owner-employee contracts will start being used from April 2013. 

In other, less festive, news… 

Ex-employee Bound by Unsigned Contract - FW Farnsworth Limited v Lacy

Mr Lacy started working for his employer in 2000 under a contract which he signed in 2003.  He was promoted in 2009 and given a new contract which he didn’t sign or return.  In 2012 he left to work for a competitor. 

This case was all about whether Mr Lacy was bound by the post-termination covenants in the 2009 contract which didn’t feature in the 2003 contract.  FW Farnsworth argued that he was, and so was prevented from joining the competitor.  Mr Lacy’s case was that he had skim-read the later contract, wasn’t happy with the restrictions and so had decided not to sign it. 

The High Court found against him, holding that he was bound by the restrictions.  He had taken advantage of the benefits of the 2009 contract, in particular private medical insurance which he had applied to take up. 

Even if there had been a mere skim-read of the contract, it’s probable that Mr Lacy would have been alerted to the new restraints in that contract, as well as its benefits, the Court held.  He must have been aware that the terms of his employment had been redefined, and he didn’t object.  He had accepted the contract and was bound by its terms – including the post-termination restrictions - from the date on which he took the step of applying for private medical insurance. 

Tribunal Should Hear Both Sides - Timbo v Greenwich Council for Racial Equality

The Claimant, an equalities officer, brought race and sex discrimination claims against her employer. 

During day three of the four-day hearing, once Ms Timbo had concluded her evidence, the employer applied for the claim to be struck out on the grounds that there was no case to answer.  The application succeeded.  Ms Timbo’s case depended to a large extent on her credibility and the tribunal found her credibility so flawed that her evidence could not be relied on at all. 

Ms Timbo appealed and won.  The Employment Appeal Tribunal (EAT) held that there was a core of disputed facts which could only be determined by hearing all of the evidence, and not just the Claimant’s. 

It is one thing, the EAT said, to take a ‘half-time’ view that one side’s evidence is unsatisfactory and is unlikely to be accepted unless there is evidence to the contrary.  It’s another thing to conclude that a witness’ evidence must inevitably be rejected completely even if there is no evidence to contradict it. 

The tribunal should have heard the case in full and determined the outcome in the light of all of the evidence. 

Claimant Wins Case Without Appearing - Duffy v George

Mr Duffy and Ms George were colleagues.  She won a claim against him for sexual harassment, despite not having been present at that hearing.  The tribunal had granted an order that she needn’t attend because she felt intimidated by Mr Duffy and was scared of being cross-examined by him in person. 

Mr Duffy appealed, arguing that the tribunal should not have made findings of fact that went against him when he had not had the opportunity of cross-examining the claimant. 

The Employment Appeal Tribunal found against him.  The tribunal was not bound to dismiss the case because of Ms George’s absence.  The tribunal rules are wide enough to allow the tribunal to take evidence, such as hearsay or second-hand evidence whether in witness statement form or another form.  It doesn’t require the maker to be available for cross-examination. 

Associated Employer and Continuous Service - Holt v EB Security Limited

Mr Holt was dismissed by his employer in March 2009 after nearly two years in the job.  Two weeks later he was taken on by an associated employer – EB Security - but was dismissed within a year. 

The question for the employment tribunal was, could Mr Holt bring an unfair dismissal claim against EB Security?  At that time he would have needed one year’s continuous service. 

The tribunal found against him.  It held that his period of continuous employment had been broken in March 2009 and so he didn’t have the necessary continuity of service.  The two-week gap in employment was not a temporary cessation because at the end of it Mr Holt did not go back to working for the first employer. 

That decision was overturned on appeal.  The Employment Appeal Tribunal held that there was a temporary cessation of work.  Subsequent work with an associated employer (with not necessarily the same operations as the first employer) would be enough to preserve continuity. 

The Illegal Contract - Sheibani v Elan & Co

Mr Sheibani was a chartered certified accountant at Elan & Co.  Half of his salary was paid through the payroll and the rest ‘off the books’ so that both he and the business could save money. 

Things turned sour and Mr Sheibani brought claims for unfair dismissal and breach of contract, among others, against the firm. 

During the course of the hearing, neither party raised the issue of illegality.  Despite this, and without allowing the parties to make submissions on the point, the tribunal concluded that the contract was illegal.  All claims, including the employer’s counterclaim for breach of contract, were dismissed. 

Both sides appealed and the Employment Appeal Tribunal (EAT) found that the tribunal had made the wrong decision.  The EAT held that the parties ought to have been made aware that the tribunal was considering the illegality issue; they would have conducted their respective cases differently.  Also, where criminal offences are concerned, it’s essential that parties are told by the tribunal about the right against self-incrimination. 

Here the tribunal’s decision didn’t just amount to an irregularity.  The parties had been denied justice, the EAT held.  The case was sent to a fresh tribunal to be reconsidered. 

Harmonisation of Terms Post-redundancy - Manchester College v Hazel

Ms Hazel and Ms Huggins transferred to a new employer - Manchester College – under TUPE.  Six months after the transfer the College embarked on a cost-savings process.  As part of that it asked for voluntary redundancies and wage cuts. 

Ms Hazel and Ms Huggins were told that their jobs were safe.  But they were then given new contracts which incorporated pay cuts of 18% and 13%.  They refused to accept this and were dismissed and then re-engaged on the new contracts. 

The tribunal held that the dismissals were unfair.  The employees had been dismissed for a reason connected with the transfer.  It wasn’t a valid economic, technical or organisational reason because it didn’t involve changes in the workforce.  The change was to do with harmonisation, and the time for reducing staff numbers had already passed by the date of their dismissal.  The tribunal ordered re-engagement on the old salary. 

The College appealed but lost.  The Employment Appeal Tribunal (EAT) held that the tribunal had been entitled to find that the redundancy issue had already been resolved before Ms Hazel and Ms Huggins had been told that their jobs were safe, and they had been entitled to rely on that assurance.  The tribunal was not wrong to have divided the issues between redundancies and harmonisation of terms and conditions. 

On the re-engagement point, the EAT rejected the argument that there would be worker discontent if these employees’ previous salaries were reinstated.  This was partly because the Council had given evidence that it would ‘handle it’. 

And Finally….A Collective Exhale by Council Workers

It’s been a long fight.  But now more than 170 workers at Birmingham City Council can press ahead with equal pay claims which would otherwise be too late to be heard at an employment tribunal. 

The Council has lost its appeal against the Court of Appeal’s decision last year which allowed the workers to proceed with their claims outside the usual six month tribunal time limit.  The result is that the Abdulla Group, as they’ve become known, could be entitled to £2m between them for unpaid bonuses. 

It’s a decision which is being heralded as a landmark, paving the way for workers to present equal claims at the High Court within six years of their employment ending. 

Will we see more equal pay claims because of this?  Perhaps.  But for employers the real significance could be the lingering threat of a claim long after an employee has left.  If an incentive to audit staff benefits were needed then this could be it.

Contact Details: For further information please contact Tim Lang

Disclaimer: The information contained in this bulletin is for general guidance only and is not intended to be complete coverage of the subjects referred to. George Green LLP cannot be held responsible for any action or inaction taken in reliance upon the contents. Professional advice should always be taken on the application of the law in any particular case.

The court’s approach to interpreting wills has developed dramatically over the years. The Administration of Justice Act 1982 allows the court to consider extrinsic evidence in order to establish the intentions of a testator (the person making the will) and the court has the power to rectify a will that does not reflect such intentions. 

In the case of Re Allsop [1968] Ch 39 the court stressed that the job of the court in interpreting a will is to discover the intention of the testator, which cannot always be established by simply looking at the will. If the literal interpretation of the will leads to an illogical result which could not have been intended by the testator, the court should seek to find a sensible interpretation that does accord with their intention (a purposive approach) 

The Court of Appeal recently decided in favour of the RSPCA in its appeal concerning the interpretation of a will. The High Court decision in RSPCA v Sharp [2010] EWCA 269 (Ch.) had been widely criticised not least because the court had made firm statements regarding the deceased’s intention without reference to any extrinsic evidence. 

The High Court decision 

The dispute concerned the will of George Mason who died in 2007. In Clause 3 of the will he gave a nil rate band gift in the following terms: 

“ the amount which at my death equals the maximum which I can give to Norman and Patricia Sharp by this will without any inheritance tax being payable in respect of this gift as to 78% to Norman and Patricia Sharp; and as to 22% to John Mason” 

The nil rate band is the amount that a person can give away without inheritance tax being payable above which Inheritance tax is payable at a rate of 40%. At the time of George Mason’s death the nil rate band was £300,000. In Clause 4 of the will he left his house to Mr and Mrs Sharpe and stated in the will that inheritance tax (if any) should come from the residue of the Estate. In Clause 6 of the will he left the residue of his estate to the RSPCA. 

When the deceased passed away, the estate comprised a house which was valued at £169,000 and approximately £784,000 in cash. 

The executors, Mr and Mrs Sharp, administered the estate in accordance with the literal construction of the will. This meant that John Mason and Mr and Mrs Sharp would take their respective share of the first £300,000 of the estate without any deduction for inheritance tax. Mr and Mrs Sharpe then took the house (again without any deduction for inheritance tax). The executors paid the inheritance tax out of the residue of the estate and the RSPCA received the balance of the residue which amounted to £370,153.

The RSPCA claimed that the literal construction of the will was wrong and argued that the nil rate band should have been applied firstly to the gift of the property with the balance of the nil rate band being allocated to the gift in Clause 3 of the will. This would have been a more tax efficient way for the estate to have been devolved because (as you will be aware) charities are exempt from paying inheritance tax on legacies that they receive. 

On this interpretation the RSPCA would have received £651,820 (rather than £370,153). Accordingly, the amount payable to Mr and Mrs Sharpe and John Mason under Clause 3 of the will would have been significantly reduced. 

The High Court Judge did not accept that the intention of the Deceased was to manage his affairs so that no inheritance tax would be payable on his estate. The judge contemplated the scenario as if the value of the property had exceeded the nil rate band, in which case nothing would have passed to the beneficiaries under Clause 3 of the will.  The judge went on make the following statement: 

 “I cannot believe that this is what the Deceased intended. It is so unlikely as to be incredible”.  

The High Court Judge rejected the RSPCA’s argument and found in favour of the executors’ literal interpretation. He also took the unusual step of ordering the RSPCA to pay the executors’ legal costs on the higher indemnity basis. 

The Court of Appeal Decision 

In December 2010, the Court of Appeal in RSPCA v Sharp [2010] EWCA Civ 1474 overturned the decision of the High Court. Whilst the decision in favour of the RSPCA was unanimous, the Court of Appeal said that the issue had not been an easy one to resolve. This was partly because there was no extrinsic evidence presented to the court regarding the testator’s intentions. 

The Court of Appeal had initially been persuaded by the executors’ interpretation of the will (because of the order of the clauses in the will), however it decided that the RSPCA’s interpretation made more sense given the context of the will. The court said it would have been odd for a testator to use the amount of the nil rate band to determine the size of a gift for reasons unconnected to the nil rate band, (which was normally to avoid paying inheritance tax). 

Conclusion 

The outcome of this case clearly has implications both for persons who are considering making provision for a charity in their will as well as charities themselves. The case highlights the importance of clarity within the terms of the will concerning the testator’s intention (in this case where liability for inheritance tax should fall). 

From a charities perspective, if they are contacted by a testator in connection with an intended bequest, they may take the opportunity to not only furnish the testator with suggested wording for a particular clause (as is commonly the case), but also to point out their inheritance tax exempt status. In this way, the testator may then clarify their intentions as to inheritance tax liability. 

For further information, contact James Coles

In the recent case of Ilott v Mitson [2011] EWCA Civ 346, an adult claimant won her case for financial provision from her mother’s estate even though she was not dependant on her mother and despite her mother’s clear intention to leave her entire estate to charity.

Inheritance Act claims

Where a qualifying individual has not benefited from a deceased’s estate or considers that inadequate provision has been made, they can make a claim under the Inheritance (Provisions for Family and Dependants) Act 1975 (“the Act”).

A qualifying individual (including an adult child of the deceased) must prove to the Court that the Deceased has not made reasonable provision for them under their will or under the intestacy rules.

When dealing with such claims, the Court must consider various factors including the financial needs and resources of the applicant, the size of the estate, the conduct of the applicant and the needs of any beneficiaries (“the Section 3 Factors”).

Background

Melita Jackson (the Deceased) who was a widow, died in 2004. At the time of her death the Deceased’s only daughter, Heather Ilott, was 44 years old.

There was a history of bad feeling between mother and daughter which started when Mrs Ilott eloped and left the family home at 17 years old which caused a rift between them. It appears that the Deceased hardly saw her estranged daughter from that point on.

In 2003, following a series of arguments with Mrs Ilott, the Deceased made a Will which made no provision for Mrs Ilott and left the entirety of her estate (which was worth approximately £486,000) to three animal charities. The three charities were the Blue Cross Animal Welfare Society, The Royal Society for the Protection of Birds and the Royal Society for the Protection of Cruelty to Animals. There was no evidence that the Deceased had any connection with the charities or any notable interest in animals or birds during her lifetime.

The Deceased also prepared a letter of wishes to accompany the Will which provided that she had hardly seen her daughter since she absconded from the family home and that she felt no moral or financial obligation to provide for her daughter.

In her letter of wishes the Deceased set out the reasons why she did not provide for Mrs Ilott in her will. In the letter of wishes the Deceased stated as follows:

“I have only seen my daughter twice since she left home, on my 60^th birthday and in May 2001. My daughter has been extremely deceitful to me and told a number of lies.

Because my daughter left me without any explanation and has made no effort to reconcile with me I feel as though I have no moral or financial obligation to provide for her…... If my daughter should bring a claim against my estate I instruct my Executors to defend such claim as I see no reason why my daughter should benefit in any way from my estate bearing in mind the stress and worry she has caused me over the years”

Mrs Ilott, who (now aged 50) is a married woman with five children living mainly on benefits in fairly modest circumstances, made a claim against the Deceased’s estate under the Act for a reasonable financial provision.

At first instance, the District Judge held that the Deceased had failed to make reasonable provision for Mrs Ilott and awarded her a lump sum of £50,000. In coming to its decision, the Court weighed up the Section 3 Factors. The District Judge considered that the factors such as Mrs Ilott’s financial circumstances, the size of the Estate and the absence of countervailing demands from the beneficiaries (the charities) carried more weight than other factors such as Mrs Ilot’s behaviour towards the Deceased in her lifetime.

Mrs Ilott appealed against the amount that she had been awarded demanding that she receive more. The charities cross appealed on the grounds that the District Judge had failed to apply the law correctly.

The High Court Decision (1^st Appeal)

Eleanor King J allowed the cross appeal of the charities and dismissed Mrs Ilott’s claim on the basis that the District Judge had been wrong to conclude that the Deceased had failed to make reasonable provision for Mrs Ilott.

The Court of Appeal Decision (2^nd Appeal)

Mrs Ilott (who had the benefit of a solicitor acting on a pro-bono basis) appealed. The Court of Appeal upheld her case stating that the District Judge had correctly balanced all of the Section 3 Factors.

The Court of Appeal confirmed that the correct approach in looking at claims by adult children under the Act is to look at whether the disposition (or lack of disposition) produced an unreasonable result in that it did not make sufficient provision for the applicant for their maintenance.

The Court of Appeal also confirmed that an adult child applicant (such as Mrs Ilott) is in the same position as any other applicant and that the court must consider all of the Section 3 Factors and carry out a balancing exercise working out the weight to be given to each factor.

The Court of Appeal considered that it was appropriate to give more weight to Mrs Ilott’s financial circumstances over and above other factors, such as Mrs Ilott’s behaviour towards the Deceased and the Deceased’s feelings as recorded in her letter of wishes.

Further Appeal

The charities’ application for permission to appeal the decision of the Court of Appeal was rejected by the Supreme Court on 27 June 2011. The case will now be referred back to the High Court to decide how much Mrs Ilott will be awarded from the Estate, which will bring this matter to a close.

Conclusions

Surprising as it may seem, this case does not represent a significant development in relation to claims under the Act but broadly restates the principles to be applied when determining if reasonable financial provision has been made.

The case emphasises the need to consider all of the Section 3 Factors in deciding whether the financial provision for an applicant is unreasonable. It also confirms that in adult children cases, the needs and financial resources of the claimant tends to be one of the most important factors.

The decision also reinforces that an adult child is in the same position as any other applicant and that the intention of parliament was to enable adult children to bring such claims even if they could subsist without making a claim against the estate.

For further information please contact James Coles or Laura Scott

Costs rules 

Determination of liability for costs is at the sole discretion of the court. The general rule applied by the courts when having to determine liability for costs between parties in any hostile litigation is costs follow the event: put another way, the successful party in the claim recovers their costs from the unsuccessful party. 

In probate actions, the courts have long since applied a different rule, displacing the general rule that costs follow the event. The two circumstances where this different rule may be applied are: 

• If the person making the will or those interested in the estate are the cause of the litigation, the costs may properly be paid out of the estate.
• If there existed reasonable and sufficient grounds to question the validity of the will, the costs may be borne by those who incur them. 

Costs in claims relating to mutual wills 

Mutual wills are wills made by two (or more) people who agree not to revoke them without the consent of the other(s). Mutual wills are usually made between two persons, normally being close relatives or spouses. When the first person dies (provided neither of them have revoked or amended their will), the other inherits the estate of the deceased and from thereon can no longer change their own will.  

Beneficiaries named in a mutual will that is subsequently revoked by a later will, in breach of a mutual wills agreement, are entitled to bring a claim for a constructive trust in relation to the estate assets. The question is who is liable for the costs of such a claim? That was exactly the question faced by the Court of Appeal in Shovelar and others –v- Lane and others [2011] EWCA Civ 802. 

In this case, the County Court found in favour of an agreement for mutual wills and granted a declaration that the estate be held on trust for the claimant beneficiaries. The County Court also ordered, amongst other things, that the defendants pay the claimants’ costs of the litigation, applying the general rule of costs follow the event. The defendants appealed the costs decision on the basis that the different rule in probate actions should apply (see above). 

The Court of Appeal dismissed the appeal and upheld that in these circumstances the general costs rule will apply. The decision turned on the finding that this claim was not a probate action and, therefore, could not attract the different costs rule that may apply to such claims; it was a Chancery action for a declaration of trust, albeit one arising out of the execution of mutual wills.  

Conclusions 

It is a common misconception that all costs incurred as a consequence of litigation concerning wills and estate disputes will automatically be met by the estate fund. That has never been the case; the court will only apply the different costs rule in probate actions where particular circumstances are apparent. Litigants should take early legal advice on the costs position at the outset of a dispute so as the commercial merits of pursuing or defending an action may be properly assessed. 

All too often it can be the level of costs incurred by the parties to a dispute which can get in the way of a successful settlement being reached. That is certainly true where the parties have embarked on litigation under the misapprehension that costs will be taken care of by the estate.   

Should you wish to have a free initial telephone consultation in order to discuss your particular matter relating to this area, please call us on 01384 410410 and ask to speak to James Coles or Laura Scott. Alternatively, you can email us your enquiry at contentiousprobate@georgegreen.co.uk providing a brief summary of the issues, along with your contact details, and we will contact you for an initial free telephone consultation.

Welcome

We take a month’s break from newsletter production and what happens?  Cases continue to pour through the tribunals, making our job of choosing a handful to report in this issue pretty tricky.

But the figures tell a tale of far fewer claims this year than last.  The annual employment tribunal statistics say that in 2011/2012 there were just over 186,000, a drop of 15% from the previous year.  This leaves open the question of whether charging fees for ET1s and hearings, raising the unfair dismissal qualifying period, and simplifying settlement agreements will bring the figures down even further next year.

We’ll see you here in 12 months’ time for the answer.

Subjectivity in Redundancy - Nicholls v Rockwell Automation Ltd

Mr Nicholls was made redundant.  The process had involved criteria scored by one manager, checked by another who managed the employees on a day-to-day basis.  Mr Nicholls had the lowest score.

At his unfair dismissal hearing the tribunal found that the redundancy was genuine and that the employer’s procedure had been reasonable and fair.  But the tribunal went on to conclude that the dismissal was unfair because Mr Nicholls’ scores during the selection process were lower than they should have been.  Some of the scores – ‘flexibility’, for example - had not been capable of objective assessment, the tribunal said.  Compensation was reduced by one third to reflect the chance that even if Mr Nicholls had been properly scored he would still have been dismissed.

On appeal, it was argued that the tribunal had substituted its view of Mr Nicholls’ capabilities for the company’s.  The Employment Appeal Tribunal agreed, overturning the unfair dismissal finding.  The tribunal had been wrong to carry out a detailed critique of the scoring in determining whether or not it was reasonable for the company to have dismissed.  It was also wrong for the tribunal to have substituted its view for the employer’s.

This case is a reminder that subjective criteria can be acceptable, despite the misconception in many companies that subjective criteria can never be used.  It’s all about acting reasonably and being able to justify the scores given to employees. 

Underpaid Wages and Fundamental Breach - Roberts v The Governing Body of Whitecross School 

Mr Roberts was a teacher.  Allegations were made against him at work and he went on sick leave with stress and depression.  A few months into this leave, the school decided to reduce his contractual sick pay by 50%, believing that full sick pay applied only to physical, and not mental, injuries.

Mr Roberts brought a claim for deduction of pay.  He won and the tribunal awarded him the additional 50%.  Importantly, the Employment Judge did not make a finding as to whether or not the employer had had an honest belief that only half pay had been due.

In the meantime, Mr Roberts had resigned because of the pay issue and brought a constructive dismissal claim before a second tribunal heard.  He lost.  The tribunal held that the breach of contract was not fundamental because the school had honestly, although mistakenly, believed that only 50% sick pay was due.  No fundamental breach meant no constructive dismissal.

Mr Roberts appealed to the Employment Appeal Tribunal (EAT) and won.  The breach was fundamental, the EAT said.  The second tribunal had erroneously relied on the first tribunal’s judgment which hadn’t made a finding on the honest belief point.

The EAT held that this wasn’t a case where there had been an error or mistake; in those cases it’s possible for the breach not to be fundamental.  Here the school had a settled intention to reduce sick pay by half.

A fresh tribunal will now decide whether Mr Roberts resigned because of the school’s fundamental breach and whether or not he waived that breach.

Preparing to Compete isn’t Gross Misconduct - Khan and Hemming v Landsker Child Care Ltd

Mr Khan and Mr Hemming were managers at two of the company’s care homes.

The company discovered that these employees had been preparing to set up in competition with it, using knowledge and expertise they’d picked up during their employment.  They had prepared a business plan and the costings used were very similar to those relevant to the company.  The document also indicated that the two had looked into acquiring properties for their new business and this, the employer believed, showed the seriousness of their intentions.

They were suspended and went on to be dismissed.  Planning to set up in competition and using the employer’s resources in doing so was gross misconduct, the company said.  The claimants, who had denied firm intentions to compete, brought unfair dismissal claims. 

The tribunal held that it was reasonable of the company to have concluded that the claimants were guilty of gross misconduct. Dismissal was within the band of reasonable responses. 

The Employment Tribunal Appeal overturned that decision, making it clear that not every case of preparing to compete is necessarily gross misconduct.  It’s not gross misconduct merely to make plans to set up in competition.  Nor is every piece of information the employer owns confidential information within its legal meaning.  Here, the tribunal had failed to address two questions: 

·                whether it was gross misconduct to draw up the business plan; and

·                whether the information the claimants had used in that business plan amounted to confidential information.

The case is now back with the same tribunal to reconsider the claim.

Compensation for Annual Leave - NHS Leeds v Larner 

Mrs Larner was on sick leave for the whole of the 2009/2010 pay year.  That meant that she couldn’t take her holiday leave entitlement over that period.  She was still on sick leave when her employer terminated her employment in the following leave year.

Was the employer obliged to pay her compensation for the holiday leave she had missed out on because she had been sick?  The employer argued that it wasn’t; she hadn’t asked to take the holiday leave or to carry it over.

The tribunal and Employment Appeal Tribunal found against the employer.  An employee who is on sick leave does not have the opportunity to rest and so has the right to have their annual leave carried over to the next year, irrespective of whether or not the employee asks for that to happen.

The employer appealed, arguing that as Mrs Larner hadn’t made a formal request to take her leave or to carry it over, her right to that annual leave had extinguished on dismissal.

The Court of Appeal dismissed the employer’s appeal.  It held that a worker who isn’t able to take annual leave because they are on sick leave must be allowed to take it later, in the next leave year if necessary.  The worker doesn’t have to request to take this leave or to carry it forward.

The upshot was that when Mrs Larner’s employment ended she was entitled to compensation for the paid annual leave she hadn’t been able to take.

Remedying a Potential Breach - Assamoi v Spirit Pub Company (Services) Ltd

Mr Assamoi was a head chef who had had a rocky relationship with his immediate manager. After a complaint about slow kitchen service, three staff members including Mr Assamoi were suspended.  He went on to be exonerated and brought a grievance against his manager for raising what he claimed were spurious and malicious disciplinary allegations against him.

Shortly after, Mr Assamoi was asked to sign a new standardised contract.  He believed that that contract meant a demotion, fewer working hours and therefore less pay.  He resigned and brought an unfair constructive dismissal claim.

The tribunal found against him; there hadn’t been a fundamental breach of contract.  Mr Assamoi appealed.

The Employment Appeal Tribunal (EAT) considered whether or not an employer can remedy a repudiatory breach of contract before an employee resigns.  The EAT held that it could and, in Mr Assamoi’s case, it did.  Here the employer had taken action to prevent the situation escalating into a breach of trust and confidence between the employee and employer.  That’s different from a situation where an employer is apologising in response to a fundamental breach that has already taken place; once that breach has happened, it can’t be cured.

Here, the manager’s behaviour was not serious enough to amount to a breach of trust and confidence.  The employer had properly investigated the situation and had taken steps to protect Mr Assamoi.

Breakdown of Trust Not Always Sufficient - Leach v OFCOM

Mr Leach was International Policy Advisor for OFCOM.  While he was going through the recruitment process for that job, but before he was appointed, he was arrested in Cambodia on suspicion of child abuse.  The case was dismissed because of insufficient evidence.

Mr Leach didn’t tell OFCOM about the Cambodia situation.  It only found out about it when SOCA alerted it to emails sent by Mr Leach to public bodies, complaining about the lack of support he had had from UK authorities. OFCOM issued him with a written warning for sending the emails and offered him counselling.

OFCOM was later told by the Metropolitan Police Child Abuse Investigation Command that Mr Leach posed a continuing threat or risk to children.  There was press interest in the case and that was potentially damaging to OFCOM.  The allegations were put to Mr Leach and he was dismissed without notice.  Dismissal was for ‘some other substantial reason’ – more specifically, breakdown of trust.

Mr Leach’s unfair and wrongful dismissal claims were dismissed by both the tribunal and the Employment Appeal Tribunal.  He went on to appeal to the Court of Appeal arguing that he should not have been dismissed from a job that didn’t involve children for alleged but unproven offences.  He also argued that nothing he could have said at the disciplinary hearing would have made a difference to OFCOM’s reputational risk.

The Court of Appeal found against him.  His dismissal was justified.  Perhaps the most salient point to emerge from this decision is the Court’s commentary on employers’ use of ‘breakdown in trust and confidence’ as a reason for dismissal.  It is not a convenient label to attach to any situation in which an employer feels let down by an employee, the Court of Appeal said.  There needs to be a reason which is substantial and sufficient to justify dismissing.

And Finally…

It isn’t the first and won’t be the last time that football has divided opinion in the workplace.  But one business in the North East is now almost £44,000 lighter after being held liable for the harassment of one of its employees who suffered ‘atrocious bullying’.  The headlines were grabbed by one particular aspect: sales rep branded ‘gay’ because he didn’t like football.

Diversity training, quick.

Contact Details: For further information please contact Tim Lang

Disclaimer: The information contained in this bulletin is for general guidance only and is not intended to be complete coverage of the subjects referred to. George Green LLP cannot be held responsible for any action or inaction taken in reliance upon the contents. Professional advice should always be taken on the application of the law in any particular case.

Welcome

A year in the planning and a trawl of 21,000 statutory instruments later, we’re finally here. 

Parts of the government’s Red Tape Challenge - the process of scrapping, merging, simplifying and improving regulations - are about to hit employment law.  Mooted for some time, the new measures aimed at helping business and boosting economic recovery came into force on Friday, 6th April:

• Unfair dismissal qualifying period increases from one to two years for those whose jobs start after 6th April 2012
• Maximum deposit order doubles to £1,000
• Maximum costs award rises to £20,000
• Witness statements to be pre-read by tribunal, not read aloud
• Parties can be ordered to pay witness expenses
• Judges to sit alone on unfair dismissal cases 

A review is scheduled for 12 months' time. Just how different will things look then we wonder?

Marital Status Not Quite Dunn and Dusted - Hawkins v Atex Group

In January we wrote about Dunn v Institute of Cemetery and Crematorium Management. The Employment Appeal Tribunal (EAT) had said that marital status protection covers situations where there has been discrimination based on marriage to a particular person, as opposed to just the fact of being married, or not. 

Waters have now been muddied by Hawkins v Atex Group, a case in which the EAT was again asked to consider the ‘particular person’ point. 

Ms Hawkins was employed by a company managed by her husband.  Less than a year into the job, she was dismissed because of a company policy against employing close relatives.  Ms Hawkins claimed unlawful discrimination. 

She lost at tribunal and on appeal.  The EAT said that the company had not applied a general rule or criterion against married women and the decision to dismiss was not motivated by Ms Hawkins being married to her husband.  The EAT doubted some of the reasoning in Dunn and said that for there to be discrimination on the grounds of marital status the reason for the less favourable treatment had to be marriage, rather than because of who the claimant was married to. 

This conflict with Dunn leaves the marital status provisions up in the air, for now at least. 

Subjectivity and Redundancy - Samsung v Monte-D'Cruz

The Claimant was a senior manager at Samsung.  As part of a company restructure, his role was one of four to be abolished and merged into a single Head of Sales position.  He applied for this role, but didn’t score highly enough on a core competencies test.  He then applied for a team leader role but was unsuccessful and Samsung appointed an external applicant to the role.  The Claimant was dismissed for redundancy and brought an unfair dismissal claim. 

The employment tribunal upheld the claim.  It said that there had been inadequate consultation and the criteria for selection for the new roles were too subjective. 

This was overturned on appeal, with the Employment Appeal Tribunal finding for Samsung.  Subjectivity can be allowed where the employer is interviewing for a vacancy, as opposed to selecting for redundancy from a pool of employees.  Some element of subjectivity is inevitable, it said. 

While this case favours employers in their search for the 'right' person, perhaps even enabling them to assess an individual's qualities as well as their qualifications and experience, treat it with some caution.  Appointing external candidates without first properly assessing employees who are at risk of redundancy is a dangerous strategy. 

Cost and Discrimination Justification - Woodcock v Cumbria Primary Care Trust

This case looked at the knotty issue of whether a discriminatory decision based on cost can be justified. 

As part of an NHS re-organisation, Mr Woodcock's role as Chief Executive was made redundant.  But he continued to work for the Trust while other suitable jobs were considered.

Mr Woodcock was 48 at the time.  If he were still employed by the Trust at 50 then he would be entitled to an enhanced early retirement package which could have cost the NHS an extra £500,000.  So the Trust served redundancy notice on Mr Woodcock which meant that he would be dismissed before reaching 50.  He claimed unfair dismissal and age discrimination. 

The employment tribunal and Employment Appeal Tribunal found for the Trust.  It’s the age discrimination point that provides real interest.  The timing of Mr Woodcock’s dismissal was potentially discriminatory but justified, it was held.  It was legitimate for the Trust to have tried to avoid additional costs and, anyway, had notice not been served when it was then Mr Woodcock would have received a windfall.  The Trust’s primary aim was to achieve a redundancy whilst avoiding unnecessary cost and a windfall benefit, which meant that its actions were not purely cost-related. 

Mr Woodcock appealed but lost at the Court of Appeal.  The dismissal for redundancy was a legitimate aim.  While timing a redundancy purely to save costs cannot by itself be justified (it’s not a legitimate aim), this case was about more than just cost.  The circumstances of the dismissal were genuine.

An important reminder that discrimination based on cost alone might land employers in hot water.  Other legitimate aims need to play a part. 

Absence of Full Facts on Dismissal - Southampton City Council v Burnett

Ms Burnett was a teacher at a school for children with behavioural problems.  She was suspended after an incident during which she made physical contact with a child, scratching them in the process.  She was dismissed after an investigation and brought an unfair dismissal claim. 

The tribunal found in her favour.  The Director of Children’s Services who had heard Ms Burnett’s appeal had not made any findings of fact about what Ms Burnett had actually done wrong.  It was not enough for the Director to have simply concluded that Ms Burnett was guilty of inappropriate behaviour which amounted to gross misconduct.  The Council had not established the potentially fair reason for dismissal, said the tribunal.

 The Council appealed and won.  It didn’t matter that the Council had failed to identify the specific facts of what had happened.  It was enough that the dismissing officer had a genuine belief that there had been misconduct. 

The Heavy Burden of Proving Stress - MacLennon v Hartford Europe

Ms MacLennon was an HR manager at Hartford, a financial services company.  Twelve months into her job she went home early with dizziness, saying that she felt unwell.  A few months later, while still off work, she was diagnosed with Chronic Fatigue Syndrome (CFS). 

She remained off work for three and a half years, paid through permanent health insurance, before the office at which she had been based closed.  She was made redundant and brought a personal injury claim for £1.25m based on her CFS having been caused by long working hours and challenging HR issues. 

She lost.  The High Court said that she had not proved that her CFS had been caused by workplace stress and her employer couldn’t have foreseen that she would suffer CFS – her working hours weren’t cause for alarm, she didn’t appear to have too much work to do, and the employer didn’t know that she was vulnerable to stress brought about by overwork.  One of the factors taken into account by the Court was that Ms MacLennon worked in HR and so knew about stress and the importance of making an employer aware of the facts and risks. 

Victimisation – Focus on the Reason for Treatment - Pasab v Woods

Ms Woods, a Muslim, was a pre-registration student at a pharmacy where both the pharmacist and managing director were Sikhs.

She was alleged to have made a comment that the pharmacy was effectively ‘a little Sikh club that only looked after Sikhs', but denied saying this.  She was then dismissed, supposedly for poor timekeeping and not following the company’s absence reporting procedure.  Her claims of discrimination and harassment failed, but she won on victimisation.

The employment tribunal made a number of findings, ultimately concluding that Ms Woods had been dismissed for making the ‘little Sikh club’ comment.  The comment, it said, amounted to an allegation of direct discrimination and so was a protected act.  (Discrimination legislation is clear that people must not be penalised for protected acts.) 

But the employer won on appeal.  The Employment Appeal Tribunal said that as the tribunal had found that Ms Woods had been dismissed for making the racist comment, the tribunal could not then conclude that the dismissal was because of the protected act of alleging discrimination.  These were two separate things. 

A reminder that for a claim to succeed, the less favourable treatment must have been because of the protected act and not another reason. 

And Finally….Thinking Outside the Cage

It’s been reported that employees at a zoo in Minnesota have beaten April Fools’ Day pranksters at their own game.  After receiving 300 calls last year from people asking to speak to the likes of Al E. Gator, Billy Goat and Anna Conda, staff decided that this year they’d play along.  So anyone asking for Mr Lion would be transferred to a line answered by a formidable roar (you get the picture).

A lesson in embracing the positive aspects of this dreaded day.  But let’s not kid ourselves that a fair few employers and employees didn’t breathe a sigh of relief on discovering that April Fools’ Day fell on a Sunday this year.

Contact Details: For further information please contact Tim Lang

Disclaimer: The information contained in this bulletin is for general guidance only and is not intended to be complete coverage of the subjects referred to. George Green LLP cannot be held responsible for any action or inaction taken in reliance upon the contents. Professional advice should always be taken on the application of the law in any particular case.