EMPLOYMENT
LAW
UPDATE
FOR
EARLY MAY 2008
CONTENTS
1. IN THE NEWS .......................................................................................... 3
Health and Safety ......................................................................................... 3
Acas Issues New Advice to Employers on Spotting Depression ............................ 3
Sex Discrimination ....................................................................................... 3
The New Dangers of Office Banter ................................................................... 3
Sex Discrimination ....................................................................................... 3
Bonus/Contractual Entitlements During Maternity Leave ..................................... 3
Disability Discrimination .............................................................................. 4
Balding Schoolteacher Loses Disability Claim .................................................... 4
Race Discrimination ..................................................................................... 4
The Employment Gap Between the Races is Decreasing ..................................... 4
2. CASE LAW ............................................................................................... 5
Fixed Term Workers ..................................................................................... 5
Impact –v- Minister for Agriculture and Food, ECJ.............................................. 5
TUPE ............................................................................................................ 5
Dynamex Friction Ltd and another –v- Amicus and others, Court of Appeal ........... 5
Unfair Dismissal ........................................................................................... 6
Kuzel –v- Roche Products Limited, Court of Appeal ............................................ 6
Age Discrimination ....................................................................................... 6
Swann –v- GHL Insurance Services, Employment Tribunal .................................. 6
Employment Tribunal ................................................................................... 6
Chukwudebelu –v- Chubb Security, Court of Appeal ........................................... 6
Employment Status ...................................................................................... 7
Neufeld –v- A&N Communication in Print Limited, EAT ....................................... 7
Costs ............................................................................................................ 7
Mitchells –v- Funkwerk Information Technology, EAT ......................................... 7
Employment Tribunals.................................................................................. 7
Force One Utilities- v- Hatfield, EAT ................................................................. 7
3. NEW AND PROPOSED LEGISLATION ....................................................... 9
Minimum Wage ............................................................................................ 9
Government to Review the Law Relating to Tips ................................................ 9
Minimum Wage ............................................................................................ 9
Government Considering Changes to the National Minimum Wage ....................... 9
1. IN THE NEWS
Health and Safety
Acas Issues New Advice to Employers on Spotting Depression
Acas has issued new advice to employers on how to recognise depression in the
workplace. This coincides with the publication of Acas‟ new booklet on Health, Guide
and Wellbeing, which includes examples of checklists and policies and is available
through the Acas website at www.acas.org.uk
Sex Discrimination
The New Dangers of Office Banter
Employers are facing greater exposure to harassment claims as a result of changes
to the Sex Discrimination Act, which came into force on 6 April 2008. The legal
dangers of not outlawing “sexist” remarks in the workplace are greater than ever
before.
Employers are under a duty to protect their staff from harassment by customers and
the public, as well as from harassment from their fellow employees. Employers are
now expressly liable for failing to protect employees from harassment by third
parties, such as a customer or client. An employer who fails to take reasonably
practicable steps to protect employees from third-party harassment where such
harassment is known to have occurred on at least two other occasions, will be
vicariously liable for those acts. The biggest impact for the new rules is expected to
be in the catering, hotel and retail trades.
An employee can now bring a harassment claim based on sexist remarks which are
directed at no one in particular or at someone other than the employee (including
someone of the opposite gender). The Government has suggested that this could
include a man following a woman into the ladies' toilet or putting work equipment on
a high shelf that most women would be unable to reach.
Employers should review their dignity at work policies and ensure that all staff have
received appropriate training. Whilst employers may feel uncomfortable about
confronting clients about inappropriate behaviour, a failure to take action could result
in a claim for compensation, including damages for 'injury to feelings'.
Sex Discrimination
Bonus/Contractual Entitlements During Maternity Leave
Another significant change for employers brought about by amendments to the sex
discrimination legislation is the change to maternity rights during additional
maternity leave. There is no longer a distinction between ordinary maternity leave
and additional maternity leave in respect of the protection of non-pay benefits under
the contract of employment. This is likely to have cost implications for employers as
benefits such as the private use of a company car or BlackBerry, medical or other
insurance, gym membership or contractual holiday in excess of the statutory
entitlement, must continue for up to a further six months of additional maternity
leave.
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Additional maternity leave will also count when calculating length of service for
contractual benefits.
Employees can bring a claim for discrimination in respect of non-payment of a
discretionary bonus for the two weeks' compulsory maternity leave following
childbirth. However, these changes will apply only to women whose expected week
of childbirth falls on or after 5 October 2008. Therefore, employers have a few
months to update their maternity policies and budget for increased costs.
Disability Discrimination
Balding Schoolteacher Loses Disability Claim
James Campbell, a retired schoolteacher, has lost his claim that he was a victim of
disability discrimination because he is bald.
Campbell took Falkirk Council to an Employment Tribunal, claiming he had suffered
from harassment from his pupils because of his baldness.
The Tribunal judge, Robert Gall, ruled that baldness was "not an impairment" as this
would take the definition of impairment too far so that a physical feature, such as a
big nose, big ears or being small might be regarded as an impairment under the
Disability Discrimination Act. Although his baldness was used by others to taunt
him, it did not mean it was a disability.
Race Discrimination
The Employment Gap Between the Races is Decreasing
A report, to be made public at the TUC's black workers' conference in Eastbourne,
has shown that the gap in the rate of employment between racial groups has fallen
by 2.2% over the last ten years.
The most rapid growth area for black and ethnic minority workers has been part-time
work. The TUC claims that employers need to encourage its black and ethnic
minority workers to aim for senior roles to address the rise of in-work poverty.
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2. CASE LAW
Fixed Term Workers
Impact –v- Minister for Agriculture and Food, ECJ
The European Court of Justice has delivered judgment on how Claimants can protect
their EC law rights in national Employment Tribunals. This case was a reference by
the Irish Labour Court from the claims of civil servants employed on fixed term
contracts, who alleged that they had received less favourable treatment when
compared to their permanent counterparts in respect of pay and pension. It was
held that:
• Non-discrimination rules in the Fixed Term Workers Directive can be enforced
directly, irrespective of the national laws;
• Abuse by use of successive fixed term contract rules should be interpreted
consistently with the Directive, if possible;
• The principle of non-discrimination against fixed term workers extends to
pension entitlements. This could potentially cause problems for employers
who either treat fixed term employees differently for pension purposes or
exclude them altogether from their pension scheme; and
• Employees must be able to bring claims based on EC law in the Employment
Tribunal.
TUPE
Dynamex Friction Ltd and another –v- Amicus and others, Court of Appeal
The Court of Appeal has held that in TUPE cases, when determining whether the
reason for a dismissal was transfer related or for an economic reason, it has to be
the person who took the decision whose thought process must be analysed.
In this case, the company was in administration and the employer at the time of the
dismissals was the administrator. Therefore, it was the administrator‟s decision that
was under scrutiny. The Tribunal had found as a fact that the administrator had to
dismiss the employees because he had no money with which to pay them and the
decision was not transfer-related; therefore it had to be said that was an economic
reason. Although one week later a purchase of the business was identified, there
was nothing to suggest that the administrator dismissed the staff with the intention
of having a better prospect of selling the business. Accordingly, the employees were
not dismissed „immediately before‟ the TUPE transfer for the purpose of the 1981
Regulations.
The allegation that the eventual transferee may have "stage-managed" the
dismissals was immaterial, as this had not affected the administrator's decision. The
ET had found that there was no collusion between the MD and the administrator.
On deciding whether there was a transfer of undertakings, the Court of Appeal held
that only the employer‟s reasons must be taken into account when deciding if a
dismissal is automatically unfair or for an ETO reason. Having considered whether
the administrator‟s reasons for dismissal were true, it was held that the employer
was the administrator and his reasons were economic and not transfer-related.
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Unfair Dismissal
Kuzel –v- Roche Products Limited, Court of Appeal
The Court of Appeal has considered the approach to the burden of proof in claims for
automatically unfair dismissal for the reason of a protected disclosure. It held that it
is for the employer to prove that it has a (potentially fair) reason for dismissing an
employee.
In this case, the employer claimed that the employee was dismissed for “some other
substantial reason” whereas the employee asserted that the dismissal was due to the
fact that she had made a protected disclosure. It was held that the burden of proof
did not pass to the employee. The employee must produce some evidence
supporting their assertion but will not bear the burden of proving that the dismissal
was for that reason.
Age
Swann –v- GHL Insurance Services, Employment Tribunal
A Tribunal has held that the provision of a fund to staff with which to purchase items
from a flexible benefits package was not capable of amounting to less favourable
treatment on the grounds of age, notwithstanding the fact that the private health
insurance scheme premiums were calculated according to age and gender.
In this case, Mrs. Swann brought a claim for age discrimination on the basis that the
premiums for her benefits package were age-related and therefore more costly for
her than for a younger employee.
It was held that even if the benefits package had amounted to discrimination on the
grounds of age, they were satisfied that the employer had made out the justification
defence, having made all reasonable efforts to offer its employees an advantageous
benefits package and the package would have been likely to have the desired
beneficial effect on the recruitment and retention of staff.
Employment Tribunal
Chukwudebelu –v- Chubb Security, Court of Appeal
Prior to the Court of Appeal case of Marcan Shipping –v- Kefelas in 2007, it was
unclear whether a further application or Order was required to give effect to the
consequences of a failure to comply with an “Unless” Order. This case makes it clear
that the same principle applies in employment tribunals.
In Chukwudebelu –v- Chubb Security, the Appellant failed to comply with an Unless
Order to provide further documentation within 14 days. He argued that he had not
received a copy of the Order, and consequently should have been granted an
extension of time. He also argued that he had not been made aware of the “Unless”
element of the Order.
However, it was considered that the applicant knew of the requirement to provide
further information within a fixed timeframe and could not escape the consequences
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of the Order. It was held that Unless Orders take effect without further action from
the Tribunal so if a date passes under the “Unless” Order without the relevant party
complying, the consequences (usually that the case is struck out) take effect
automatically on that date. No further application or action is required by either the
Tribunal or the other party.
Employment Status
Neufeld –v- A&N Communication in Print Limited, EAT
A different division of the EAT has agreed with the analysis in Clark –v- Clark
Construction (referred to in the previous edition of GateWay) setting out guidance on
the circumstances where a controlling shareholder of a company is also its employee.
The EAT held that each case has to be looked at as a whole and on its own facts.
The fact that the individual is a controlling shareholder (in this case a 90%
shareholder) may raise doubts as to whether they are also an employee but does not
itself prevent them from being an employee.
The EAT held that the date at which the individual‟s status is to be considered is the
date of dismissal, not the date of any contract of employment which may be in place.
Furthermore, the fact that the individual has offered guarantees is not inconsistent
with employment status.
The EAT also held that in the case of company insolvency, that date when the
question of status had to be decided was the date when the company became
insolvent.
Costs
Mitchells –v- Funkwerk Information Technology, EAT
The EAT has discharged a wasted costs order made against a firm of solicitors,
holding that the pursuit of a hopeless case by a party's representative will not justify
a wasted costs order being made unless it amounted to an abuse of process and
actually caused the other party to waste costs.
After the Claimant‟s discrimination claim failed, the Respondent sought an order for a
wasted costs order against her solicitors for pursuing a hopeless case after the third
day by which time the hopelessness was obvious. The Tribunal made a wasted costs
order against the solicitors on the basis that they ought to have advised her that her
case was bound to fail but did not do so.
The EAT discharged the wasted costs Order, holding that the Tribunal had failed to
consider whether the solicitor had “failed in his duty to the Court”. It also noted that
the fundamental difficulty in wasted costs orders was that legal professional privilege
as to the advice given had to be waived. Finally, it noted that the Tribunal had failed
to consider causation, i.e. if the Solicitor had advised the Claimant to withdraw her
claim, would she have kept going regardless?
Employment Tribunal
Force One Utilities- v- Hatfield, EAT
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The EAT found that the Tribunal had correctly applied the principles in Bolch –v-
Chipman when deciding to strike out the employer's response and bar its further
participation in the proceedings. The employer‟s main witness made threats and
swore at the Claimant in a cark park near the Tribunal.
The EAT held the threatening conduct of the employer's witness towards the
Claimant (who was representing himself) made a fair trial impossible. The EAT said
that once intimidation of this type has occurred, unless there are exceptional
circumstances, it is not „perverse‟ to find that a fair trial is impossible. An example
of such exceptional circumstances could be where the intimidation happens late in
the trial and a fair hearing is still possible.
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3. NEW AND PROPOSED LEGISLATION
Minimum Wage
Government to Review the Law Relating to Tips
During a debate in the House of Lords, Minister Baroness Vadera has confirmed that
BERR is going to consider the treatment of tips given to waiting staff. It has been
reported that many employers (1) do not distribute tips to their employees or (2)
use tips to „top up‟ wages to ensure that employees receive the minimum wage. For
more information see:
http://www.publications.parliament.uk/pa/ld200708/ldhansrd/text/80422-0002.htm
Minimum Wage
Government Considering Changes to the National Minimum Wage
Following public misgivings about the effect of the repeal of the 10% tax band on low
paid workers, Alistair Darling has stated that the Government will implement
measures to assist those who are affected by the change. Such intended measures
include asking the Low Pay Commission to report on what changes could be made to
the minimum wage regime to support younger workers. Alistair Darling has also
confirmed that any measures that are taken will be backdated to the date that the
repeal took effect (6 April 2008). However, he has failed to address how this would
be implemented if the Government decides to make changes to the national
minimum wage.
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