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									Employment law bulletin
Issue 5 May




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                                                           MAY 2006 FIVE



Michael Duggan,

                                            EMPLOYMENT LAW
                                            BULLETIN NEWS AND
LITTLETON CHAMBERS                          CASE UPDATER
3 Kings Bench Walk North,
Temple EC4Y 7HR
                                            UJPDAGTEER
Michael Duggan’s Books include: Wrongful Dismissal; Unfair Dismissal;
Contracts of Employment and Family Friendly Policies


CLICK FOR EARLIER COPIES OF THE BULLETIN ON THE CHAMBERS
WEBSITE



NEWS ROUNDUP FOR MAY 2006
The TUC have launched a campaign for a Trade Union Freedom Bill to mark the
100th anniversary of the Trade Disputes Act 1906; see
http://www.tuc.org.uk/extras/freedombill.pdf

The DTI has produced a 56 page, Proposals to amend the Employment
Act 2002 to extend the jurisdictions affected by the statutory dispute
resolution procedure, DISPUTE RESOLUTION PROCEDURES,
CONSULTATION, DOCUMENT, MAY 2006

The DTI has just published eight 'age legislation factsheets which cover
No.1 - An Overview, No.2 - Objective Justification, No.3 - Transitional
Arrangements, No.4 - Vocational Training, No.5 - Service Related
Benefits, No.6 - Redundancy, No.7 - Retirement, No.8 - Occupational
Pensions: See http://www.dti.gov.uk/employment/discrimination/age-
discrimination/age-legislation/page29258.html




                                     1
Employment law bulletin
Issue 5 May



A-Z TOPICS -
CASE UPDATER                                        (b) If Question 2(a) should be answered in
                                                    the affirmative must both the negotiations
                                                    on      the   avoidance      of  collective
                                                    redundancies or the reduction of the
COLLECTIVE    CONSULTATION                          number of workers affected and the
REDUNDANCY.      TIMING OF                          negotiations on the mitigation of the
NOTICES OF DISMISSAL                                consequences have been concluded
                                                    before notification is issued?

                                                    The case will in due course be noted when
Collective consultation. Timing of notices
                                                    it is decided.
of dismissal.
Reference for a preliminary
ruling from the Arbeitsgericht
Berlin, lodged on 28 February                       COMPENSATION
2006 - Annette Radke v
Achterberg Service GmbH & Co.
KG (Case C-115/06)                                  SUMMARY Sex Discrimination – injury
The following questions have been                   to feelings
referred to the ECJ:                                Sex discrimination – refusal of job after
Questions referred                                  interview tainted by discrimination – award
                                      1
1. (a) Is Council Directive 98/59/EC of 20          for injury to feelings affected by Tribunal‟s
July 1998 on the approximation of the laws          indignation – size of Respondent company
of the Member States relating to collective         also wrongly taken into account – award
redundancies to be interpreted to the               reduced from £5,000 to £4,000.
effect that the consultation procedure              CORUS HOTELS PLC v 1) MS L
under Article 2 of the Directive is
                                                    WOODWARD 2) MR S RUSHTON
concluded as soon as direct negotiations
between the employer and the workers'               UKEAT/0536/05/LA
representatives have failed or, where the           Bean J, Mr Smith Miss Wilson
employer and/or workers' representatives            CBE
refer the matter to an establishment-level          Ms Woodward applied for a job with
arbitration committee provided for by               Corus Hotels plc as a receptionist.
national law, do the negotiations before            She was interviewed by a Mr Rushton
that committee also have to have been
                                                    and she did not get the job. She
concluded?
(b) If the second alternative part of the           brought a claim of sex discrimination
question should be answered in the                  against Corus Hotels and Mr Rushton
affirmative does the Directive require,             which came before an Employment
before the notices of dismissal are                 Tribunal sitting at Hull under the
announced, the conclusion of both the               Chairmanship of Mr Hildebrand on 19
negotiations     before     the   arbitration       and 20 May 2005. The Tribunal held
committee as to ways and means of                   that the complaint of sex discrimination
avoiding collective redundancies or                 succeeded. They ordered the first
reducing the number of workers affected             Respondent to pay to the Claimant
and the negotiations on ways and means
                                                    £5,000 compensation for injury to
of mitigating the consequences by
recourse     to     accompanying       social       feelings and £525 in respect of loss of
measures?                                           earnings with awards of interest on
2. (a) Is the Directive to be interpreted to        each of them.
the effect that notification may not be             The interview had been conducted in a
issued to the employment authority under            crassly sexist manner.        The first
Article 3 of the Directive until after the          question Mr Rushton asked was
consultation     procedure      has     been        whether the Claimant had any
concluded?



                                                2
Employment law bulletin
Issue 5 May

children. He went on in the course of               this Appeal Tribunal.”
it to tell her of past employees with               The Claimant‟s solicitors had lodged a
children who had left after 6 weeks                 schedule claiming that level of award
employment; later he ventured his                   for injury to feelings was £1,500 to
opinion that the hourly rate of pay of              £2,000. The EAT said:
£5 per hour could be a problem for the              “We think that the Tribunal were obliged
Claimant. There were a number of                    to, and did, have regard to the fact that
references      to     her      personal            that was the band of appropriate awards
circumstances.      She had candidly                suggested by the Claimant‟s solicitor; but
stated that she was a single parent                 they were certainly not bound by it. They
with a 12 year old son and there were               were entitled to take the view that the
                                                    injury to feelings figure suggested in the
frequent references to the age of the
                                                    Schedule was too modest. It was a
son in the course of the interview. The             decision for them, not for the Claimant‟s
Claimant‟s firm impression was that Mr              solicitor, and it was open to them to go
Rushton was seeking to dissuade her                 above £2,000 if they saw fit.”
from her interest in the post. At the               The EAT summarised the                  two
conclusion of the interview he told her             arguments of the Appellant:
that she ought to be realistic about the            “The first is that the Tribunal sought to
consequences the position would have                punish the Respondents rather than
on her personal life. He told the                   compensate the Claimant and that they
Claimant he would contact her and                   were motivated, at least in part, by
that she should not stop looking for                indignation at the employer‟s conduct.
jobs.     The Claimant received no                  They also wrongly took into account the
                                                    size of the Respondent‟s organization.
subsequent indication that she had
                                                    Secondly, he complains that the Tribunal
been unsuccessful and no indication of              did not take the general level of award in
a reason for her lack of success until              personal injury claims into account and the
the Respondent entered a response to                resulting figure of £5,000 was one which
the Claimant‟s claim                                the hypothetical man or woman in the
The EAT dealt with the issue of                     street would think was too high,
whether the Respondent could make                   particularly by reference to awards in
submission on the level of damages                  personal injury cases.”
for injury to feelings when it had not              As to the first, it stated that the “appeal
been specifically disputed at the                   in Vento made clear the obligation is of a
hearing and stated:                                 Tribunal is to take into account the broad
“It is quite common in our experience for           level of awards in personal injury cases as
the level of award for injury to feelings not       a whole rather than specific supposed
to be the subject of what might be                  comparators in awards at this level by
described as a bidding war between the              District Judges in the County Court… In
parties. Sometimes the parties suggest a            our view the personal injury analogy or the
figure; sometimes the parties make                  appeal to the views of the man in the
reference to the three bands set out in the         street does not assist the Appellants in this
guidelines of Mummery LJ in Vento v                 case. The award was pitched at the
Chief Constable of West Yorkshire                   borderline between the lowest band and
Police (No 2) [2003] ICR 318, saying                the middle band identified in paragraph 65
which band they submit the case should              of Vento. ”
be in and whether the case should be at             On the second point, the Tribunal said
the top or the bottom or in the middle of           that while the refusal of a post to the
the band; sometimes they make no                    Claimant might be termed a “one-off
submissions on questions at all. It cannot          incident” in strict terms, in a sense it
be the law that if the party, or the party‟s        was different from other one-off
representative says, (in effect) “you have          incidents of discrimination because the
heard the evidence, you are an                      refusal of appointment of a well
experienced Tribunal, we leave it to you,”
                                                    qualified candidate for a post for
and the Tribunal gets the level of award
                                                    discriminatory reasons is an action
wrong, the party then has no recourse to



                                                3
Employment law bulletin
Issue 5 May

which has a permanent implication in               early pension payments. They are not
respect of that candidate‟s aspirations            analogous to incapacity benefit or Job
to enter or return to the job market.              Seeker's Allowance which are to be
However, the Claimant had obtained                 brought into account.
another job a fortnight later and did not          R M KNAPTON & Ors v ECC
appear to have lost confidence as a                CARD CLOTHING LTD
result of the interview. The EAT stated:           UKEAT/0664/05/MAA
“We therefore conclude that contrary to            HHJ McMullen QC, Mr Norman,
the judgment of this Appeal Tribunal               Mr Ezekiel
delivered by Smith J, as she then was, in          The Tribunal ruled that early pension
HM Prison Service v Johnson [1997]
                                                   payments should be set off against
ICR 275 the Tribunal appear to some
extent to have allowed their feelings of           compensation awarded for unfair
indignation at the tortfeasers‟ conduct to         dismissal under section 123, ERA
inflate the award by way of punishment.            1996 and that compensation for life
Nevertheless, as we have said the                  assurance before the date of the
Tribunal were well entitled to take the view       hearing could not be recovered. The
that, within the lowest band of damages            Employer ran a final salary scheme
identified in paragraph 65 of Vento, this          which included life cover. The
was a bad case.”                                   employees had been in the pension
The EAT varied the award stating:                  scheme for many years and took early
“We consider that it should be towards             pension payments when they were
though not at the top end of the lowest
                                                   dismissed. The Tribunal calculated
Vento band. We set aside the award of
£5,000 for injury to feelings and substitute       forward loss by reducing liability by the
an award of £4,000 for injury to feelings.”        amount of the pension that was due
                                                   and did not make any award for loss of
SUMMARY                                            life cover.
Unfair Dismissal: Compensation                     Upon appeal the EAT held that the
Reversing the Employment Tribunal, in the          Tribunal erred in its analysis of the
assessment of compensation for unfair              authorities by applying, by analogy,
dismissal under Employment Rights Act              the occupational pension cases to the
1996 s123, an employee who took early              incapacity and sickness benefit cases
receipt of his occupational pension (to
                                                   (Smoker v London Fire and Civil
which he to a small degree contributed),
from a pension pot whose value was                 Defence Authority (1991) ICR 449
unaffected by early payment, was not               applied, Morgans v Alpha Plus
required to bring it into account, the             Security Ltd (2005) 4 All ER 655,
pension being deferred wages for work              distinguished). Pension money should
done before the dismissal and its payment          not be deducted from compensation
was      analogous      to   a    collateral       for unfair dismissal. The EAT stated:
arrangement. The rules in contract and             “Applying those authorities to this appeal,
tort were of no practical difference to the        we prefer the arguments of the Claimants
rules for assessing the loss which it was          on the early pension point and those of the
just and equitable to recover under s123.          Respondent on the life assurance point.
Upholding the Employment Tribunal,                 We give the following summary
compensation was not recoverable for loss          1.       pension monies received by a
of life assurance when at the time of the          Claimant, should not be deducted from
hearing the employee had not taken out a           their compensation, whether the claim is
replacement policy and the risk covered            made either in contract or in tort,
(death)     had     not    occurred.    The        2.       the principle is applicable whether
Employment Tribunal correctly awarded              the    relevant     pension     scheme    is
compensation only for future loss of this          contributory or non-contributory;
benefit.                                           3.       the principle is applicable whether
The rules in contract and tort are well            the scheme is occupational or private;
established on HL and CA authority,                4.       these principles are also relevant
although there is no direct authority on           in the application of section 123 of the




                                               4
Employment law bulletin
Issue 5 May

Employment Rights Act 1996.”                       UKEAT/0710/05/ZT
The loss of life assurance was loss of             HHJ McMullen QC, Mr Manners,
peace of mind. It would be a windfall if           Mr Mohanty
such sum were awarded after 70                     The Claimant had worked for the
weeks. The EAT noted:                              Respondent from 1990. In August 1996
“Having survived for 70 weeks without the
                                                   she was offered the post of Mobile
insured event occurring, they have
suffered no financial loss and if they were        Library Manager - a post she accepted
to be paid the sum which has been                  on the 1 August 1996.            She was
calculated as due to them, ..they would            described as Mobile Library Manager
receive a windfall. This would be in               Apart from managerial accountabi1ities,
respect of their being covered after the           she drove the 7.5 ton vehicle on the
event for an event which never occurred            prescribed route and was responsible for
and therefore they have not been required          checking books in and out, replacing
to go out and pay for it. It simply is not         books on the shelves and exchanging
possible to restore these Claimants to the         and renewing the stock of books from
position they would have been in had they
                                                   time to time. Apart from the driving, the
had insurance cover. It would only be
possible to do that if they died and a claim       job entailed some physical work lifting
was made against the Respondent for                and carrying books. She also worked at
what would otherwise have been the                 the relevant time on Saturdays. The
payments made by insurers to the                   Respondent is a local authority. The
dependents. We regard this claim as                Claimant‟s work was described in a job
over-ambitious and as being properly met           profile which involved driving a lorry,
by the Tribunal and the Respondent in this         carrying books on and off a vehicle,
case by making payments to cover the               wheeling books in a trolley, getting in
cost of life insurance after the date of the       and out of the cab, standing at the desk
Employment Tribunal hearing.”
                                                   to issue books to customers and
                                                   replacing books on shelves that were 9”
DISCRIMINATION: DISABILITY                         from the floor of the vehicle to a height of
                                                   6‟. The Claimant also visited sheltered
                                                   housing (when she had an assistant) on
SUMMARY                                            two or three days of the week but, for the
Disability Discrimination: Reasonable              rest of the time, she was on her own.
Adjustments & Justification                        The assistant was needed to operate the
In finding that the Respondent local
                                                   lift to enable elderly people to gain
authority did not make reasonable
adjustments to accommodate the Claimant            access to the vehicle.
mobile library manager's disability, the           It operates a library service which
Employment        Tribunal   reached     a         consists of both static and mobile
conclusion which was perverse and it               libraries. At the relevant time there were
failed to explain why the responses given          six vehicles equipped as mobile libraries.
by the Respondent to the suggestions of            These vehicles had designated routes
adjustments were inadequate. The                   and stopping places or locations. One of
Employment Tribunal wrongly dismissed              the vehicles was larger and known as
the assessment of the risk to the Claimant         the urban mobile library. One was a
of the working environment which came
                                                   smaller vehicle that visited residential'
from two occupational health physicians
and the Claimant's two orthopaedic                 homes. The vehicle assigned to the
surgeons. There is no requirement to carry         Claimant at the relevant time had a
out a "formal risk assessment" but an              manual gearbox (as did all the other
assessment must be made which meets                vehicles). The Claimant had an assistant
the facts of the situation: Mid-                   for 2 or 3 days a week.
Staffordshire v Cambridge applied.                 Following knee surgery in 2003,
SURREY COUNTY COUNCIL v                            surgery in 2003, nine separate medical
MS SYLVIA HAY                                      reports relating to the Claimant‟s
                                                   condition and her ability to work at her


                                               5
Employment law bulletin
Issue 5 May

job were obtained.       The Claimant          the Respondent to find her a suitable
attended a number of meetings with             alternative job. She then stated that
the Respondent‟s officers to discuss           she could do her old job. Her conduct
the outcome of these reports.                  throughout         is      demonstrably
The position by the time of the events         opportunistic      and,      as      such,
relevant to the discrimination and the         unattractive.”
dismissal claims was that the Claimant         However, the Tribunal held that
should not do physical manual work             Respondent was under a duty to
and should not work in a library. The          consider making adjustments to take
issue of driving was never completely          account of her condition and it listed the
resolved. It was common ground that            activities that the Claimant could not
driving a vehicle with a heavy clutch          carry out. It stated that “It was incumbent
would aggravate the joint and should           upon the Respondent to carry out a formal risk
not be done. The vehicle which she             assessment in order to determine what
                                               adjustments might be appropriate and reasonable.
drove, on a scale of 1 to 10 for               The Consultants did not have the necessary,
difficulty of management with the left         information before them to determine whether the
leg, was placed at 5.5 to 6, where an          Claimant was able to undertake all her duties as a
ordinary car is 5. The Claimant was            mobile librarian. The purpose of a formal risk
                                               assessment was to establish, in consultation with
driving her own car to work and other          the Claimant, precisely what her job entailed
places, so it was not in dispute that          (including reviewing the working environment and
she was able to drive, notwithstanding         the work duties) and to assess the extent of the
the difficulty in her knee. Once the           risk to the Claimant in relation to such duties and
Claimant presented post-operatively            how that risk might be obviated.          The risk
                                               assessment had to be carried out with the
with the condition described, efforts          involvement of the Claimant because she and she
were made to redeploy employer. She            alone was in a position to provide the necessary
was sent to Redhill on another library         information about her daily activities and to
project, but this turned out to be             comment upon what activities she considered she
                                               could do without risk. Informed medical opinion
unconducive to her. She did not like it.       could then be given -even though the opinion
Further steps were taken to see                might not necessarily accord with that of the
whether or not she could do other              Claimant”.
duties and this was the subject of a           The Tribunal held that:
series of meetings at various levels           “The Tribunal was unanimous in its view that,
within the Respondent council.                 ignoring the question of whether the mobile
                                               library vehicle's clutch was in good working
In particular, a meeting was convened          order, a risk assessment would have
where the Claimant was assisted by             recommended adjustments to her work and/or
her union representative on 22                 her working environment. The adjustments
September 2003 and a further series            would be designed to eliminate the risk of further
                                               Injury to her knee as a consequence of handling
of meetings followed at which                  books in and around the mobile library. There
opportunities, we hold, were available         are three likely proposed adjustments: first to
to her for her to raise and for                engage an assistant to work every day (in effect
management to respond to (and,                 extending the hours of the part time assistant
indeed, for management to activate)            from the 2/3 days he or she was working with the
                                               Claimant); secondly to make adaptations to the
any suggestions there might be.                vehicle and the Claimant's pattern of work to
These       included   possibilities of        ensure that she did not place any strain on her
redeployment and swapping duties               knee when handling books nor undertake any
with another mobile library employee,          manual work that might be a risk to her condition
                                               (for example by redesigning the shelving); or
Mr Collingwood, whose vehicle was              thirdly by swapping her duties with Mr
more amenable and who operated                 Collingwood (who had a full time assistant) or in
with an assistant. The ET noted the            some way merging the two jobs so that the
inconsistent approach and attitude of          Claimant always had an assistant – either her
the Claimant who “claimed that she             own in the mobile library vehicle - or Mr
                                               Collingwood's when doing his job. While it is not
should retire on medical grounds. She          possible to say which of the three alternatives
also complained about the failure of           would have been recommended by the risk



                                           6
Employment law bulletin
Issue 5 May

assessment the Tribunal is unanimous in its view          of course, the combination of an
that one or more would have been proposed.                examination of the medical condition and
Indeed there might have been others, such as              of the way in which the Claimant would
counterpoising the lower shelving”.                       work or could work in her job if suitably
The ET then went on to consider the                       adapted and that invokes the intervention
important issue of cost:                                  of, for example, an occupational health
“The Tribunal is unanimous in its view that it was        physician. .. the Tribunal has elevated
reasonable that the Respondent make                       beyond what is required in the law to a
adjustments in order to enable the Claimant to
carry on her work as a mobile librarian. The
                                                          formal risk assessment. In our judgment,
Respondent was not justified in failing or refusing       nothing more could be done in this case to
to make adjustments. In the course of a risk              take the assessment of the risk onto
assessment exercise the Respondent would be               another level requiring so that it might
expected to consider the proposed adjustments             qualify as a formal risk assessment. As a
and carry out a cost analysis and a cost                  matter of substance, the Respondent here
effectiveness exercise -both of which it failed to        conducted such an assessment of the
do on a forma! basis. The absence of a risk               risks as was necessary in order for it to
assessment exercise is fundamental to this case.          discharge its duty under s6(1) and to
But the Tribunal is bound in any event to
consider the adjustments referred to above In
                                                          consider the steps in s6(3). It is, of
relation to cost 2nd cost effectiveness. The              course, axiomatic that before making any
Tribunal is of the view that the annual cost of a         decision about what steps it is reasonable
part time assistant (£10000) is, in the context of        to take to avoid the substantial adverse
the turnover of the Respondent, a relatively small        effect on a disabled person of a particular
cost for which there might have been sources of           working environment, an assessment
external funding. The Tribunal does not know if           should be undertaken, but there is no
reallocating duties between Mr Collingwood and            formal model or prescription for that. ..
the Claimant could have been undertaken but it            Thus, what the Tribunal regarded as
is likely that Mr Collingwood's contract would not
prevent his being transferred to another vehicle.
                                                          fundamental to this case involves an error
Such a change would have had no or no                     of law. We accept that the judgment of the
significant financial consequences. Making minor          Tribunal was perverse in holding that the
changes to the inside of the mobile library vehicle       steps taken here did not constitute a
to avoid books being kept on low shelves and              proper risk assessment and we use the
similar adaptations would have involved a                 term “proper” as it emerges from the Mid-
relatively small expenditure”.                            Staffordshire case.        The conclusion
The Tribunal held that the employer                       therefore is that there was a risk
had failed to carry out reasonable                        assessment.
adjustments and that the dismissal was                    In relation to whether there could be
fair. On appeal, the EAT referred to                      an assistant - what has been
Mid-Staffordshire General Hospitals                       described as double staffing – was a
NHS Trust v Cambridge [2003] IRLR                         matter considered and rejected by the
566, the EU Framework Directive on                        Council and its reason was not shown
Health and Safety and               the                   to be unjustified. The other grounds for
Management of Health and Safety at                        a reasonable adjustment had also be
Work Regulations 1999 paragraph 3. It                     considered and rejected and the
held that:                                                Claimant had been involved at every
“The Tribunal first elevated the concept of               state. The appeal was allowed.
a risk assessment so as to provide a novel
formula      called     a     formal     risk
assessment….There is no obligation in
law for there to be a formal risk
assessment. What, however, must occur
prior to the discharge of the duty under
s6(1) of the DDA is an examination of the
risks. It should include the kind of material
which the EAT considered in the Mid-
Staffordshire case; not every one of
them, but those which are fact sensitive to               DISCRIMINATION: RACE
the particular circumstances. It involves,




                                                      7
Employment law bulletin
Issue 5 May

                                                         language why its provisions should not cover
Meaning of racial grounds.                               the case where the colour or race of the
                                                         claimant and the respondent are the same, so
SERCO LIMITED v ARTHUR                                   that it is possible for a white person to
REDFEARN                                                 discriminate against another white person on
[2006] EWCA Civ 659                                      racial grounds where the difference in race is
                                                         that between the discriminator and a third
Mummery, Dyson LJJ, Sir Martin                           person, not between the discriminator and the
Nourse                                                   person discriminated against.”
The Claimant had been employed by                        Mummery LJ stated the position to be
Serco as a driver. When he was                           as follows:
elected as a BNP Councillor, UNISON                      “The essence of Showboat is that an
and GMB wrote to his employer to                         employee who refuses to implement his
                                                         employer's racially discriminatory policy is
object to his employment as a large                      entitled to be protected from less favourable
number of service users and                              treatment under the 1976 Act. The use of the
employees were Asian. He was                             employee to implement the employer's racially
dismissed as Serco considered that                       discriminatory policy means that "racial
continued employment posed a risk of                     grounds" operate directly in the less favourable
                                                         treatment of the employee, whether the race or
safety to customers. He brought a                        colour in question be that of the employee or
claim of discrimination which was                        that of a third party. Mr Bowers' proposition
rejected in the ET but the EAT held                      goes far wider so as to embrace cases in which
that the Tribunal should have asked                      the employer, far from seeking to implement a
                                                         racially discriminatory policy contrary to the
whether racial grounds, broadly                          policy of the 1976 Act, is acting to eliminate
defined, had a significant impact on                     race discrimination in accordance with the
the decision to dismiss. The case was                    policy of the 1976 Act. According to Mr Bowers
remitted.                                                (subject to his points on causation and remedy)
The CA overturned the EAT decision.                      the employee would be entitled to receive the
                                                         same protection under the 1976 Act from
Mummery LJ stated:                                       unfavourable treatment, such as dismissal,
“The answer depends, first, on the construction          however racially discriminatory he was towards
of the 1976 Act and, secondly, on its                    third parties contrary to his employer's
application to the facts found by the tribunal.          instructions.
Regard must be had to the anti-discrimination            Mr Bowers's proposition turns the ratio of
purposes for which the legislation was enacted,          Showboat and the policy of the race relations
the context of the direct discrimination                 legislation upside down. It would mean that any
provisions, the language in which those                  less favourable treatment brought about
provisions were drafted and the consequences             because of concern about the racist views or
of adopting one possible interpretation of the           conduct of a person in a multi-ethnic workplace
expression "on racial grounds" rather than               would constitute race discrimination. The ratio
another possible interpretation. As the tribunals        of Showboat is that the racially discriminatory
below appreciated, the decision of the EAT               employer is liable "on racial grounds" for the
(Browne–Wilkinson J presiding) in Showboat               less favourable treatment of those who refuse
and the later authorities which have followed it,        to implement his policy or are affected by his
are very much in point: see Weathersfield t/a            policy. It does not apply so as to make the
Van and Truck Rentals v. Sargent [1999] ICR              employer, who is not pursuing a policy of race
425 at pages 429H and 434B ; Carter v.                   discrimination or who is pursuing a policy of
Ahsan (UKEAT 0907/03 21 June 2004, [2004]                anti-race discrimination, liable for race
UKEAT 0907_03_2106) at paragraphs 69-75.                 discrimination.
The cases demonstrate that discrimination "on            46.       In this case it is true that the
racial grounds" is not confined to less                  circumstances in which the decision to dismiss
favourable treatment on the ground of the                Mr Redfearn was taken included racial
colour or race of the claimant. It is accepted           considerations, namely the fact that Serco's
that A can be liable for discriminating against B        customers were mainly Asian and that a
on the ground of C's colour or race. In other            significant percentage of the workforce was
words the racial characteristic of C, rather than        Asian. Racial considerations were relevant to
that of B, the victim of the less favourable             Serco's decision to dismiss Mr Redfearn, but
treatment, may be a racial ground of the less            that does not mean that it is right to
favourable treatment of B by A and therefore             characterise Serco's dismissal of Mr Redfearn
direct discrimination by A against B. If that were       as being "on racial grounds." It is a non-
not so, cases plainly within the purposes of the         sequitur to argue that he was dismissed "on
1976 Act would fall outside its scope. There is          racial grounds" because the circumstances
no reason in the policy of the 1976 Act or in its



                                                     8
Employment law bulletin
Issue 5 May

leading up to his dismissal included a relevant        contracts which would commence in
racial consideration, such as the race of fellow       September and end in or about June or
employees and customers and the policies of
the BNP on racial matters. Mr Redfearn was no          July. For the purposes of continuous
more dismissed "on racial grounds" than an             employment it is likely that each
employee who is dismissed for racially abusing         Claimant       did    have     continuous
his employer, a fellow employee or a valued            employment for the purposes of various
customer. Any other result would be
incompatible with the purpose of the 1976 Act
                                                       employment rights including unfair
to promote equal treatment of persons                  dismissal but not claims under the
irrespective of race by making it unlawful to          Equal Pay Act 1970. Each of the
discriminate against a person on the grounds of        contracts were separate and despite
race.                                                  the intention of the parties to renew the
In my judgment, the employment tribunal was
correct in law in deciding that Mr Redfearn was        contracts each September they were
not dismissed "on racial grounds." The grounds         nevertheless new contracts and were
of dismissal were not racial. They did not             couched with a caveat that was
become racial grounds because Serco                    understood that the contracts so far as
dismissed him in circumstances in which it
wished to avoid the perceived detrimental
                                                       detail of hours and sessions were
effects of Mr Redfearn's membership of, and            concerned and also the discretion to
election to office representing, the BNP, which        issue or not was dependent upon the
propagated racially discriminatory policies            numbers of students. All the Claimants
concerning non-white races who formed part of          were eventually entitled under the
Serco's workforce and customer base.”
                                                       short-term contracts to membership of
Mummery LJ set out why an indirect
                                                       the employer's pension scheme. Each
discrimination claim would fail though
                                                       Claimant entered into a permanent
it was not necessary to express a
                                                       contract from their temporary contracts
concluded view as a case of indirect
                                                       on specific dates. The Tribunal found
discrimination against Serco was
                                                       that was a radical change in the terms
never properly put to the tribunal or
                                                       of the contract on those dates by
made out. The CA also refused to
                                                       reason of the change from a temporary
express a view on the Human Rights
                                                       contract to permanent status and that
Act as the ET had not considered it.
                                                       each date took them outside the
                                                       limitation period.
EQUAL PAY                                              The EAT referred to S2(4) of the Equal
                                                       Pay       Act      1970,    Preston      v
                                                       Wolverhampton Health Care NHS Trust
SUMMARY                                                [1998] ICR 227; Preston No.2 [2001]
Equal Pay Act                                          IRLR 237 and Preston No. 3 [2004]
Appellants to have membership of the
                                                       IRLR 96. In the latter case the EAT had
employer‟s pension scheme backdated to
include earlier periods of part-time                   considered       whether     the    stable
employment.      Chairman held that the                employment relationship could continue
applications were out of time. Was this an             in certain circumstances where the
error of law?      Observations on what                succession of short term contracts was
constitutes    a    stable     employment              superseded by a permanent contract.
relationship.                                          “In ordinary language any permanent job
RS J JEFFERY & OTHERS v                                can be described as a stable employment
SECRETARY OF STATE FOR                                 relationship. But in the context in which it is
                                                       coined by the ECJ, it is there to rescue
EDUCATION   &  BRIDGEND                                employees who do not have a permanent
COLLEGE                                                job. The rescue operation is limited to cases
UKEAT/0677/05/MAA-                                     satisfying the conditions defined by the ECJ
UKEAT/0681/05/MAA                                      and adopted by the House of Lords.”
Elias P                                                The test in Preston No.2 [2001] IRLR
All the Claimant were employed under a                 237, Lord Slynn was (paragraph 33).
series of separate contracts. They were                “Accordingly it is clear that where there are
termly or academic yearly or similar                   intermittent contracts of service without a



                                                   9
Employment law bulletin
Issue 5 May

stable employment relationship, the period           with a particular employer, however many
of six months runs from the end of each              separate contracts there may have been
contract of service, but where such                  during the course of those relationships,
contracts are concluded at regular                   and whether they were short term, long
intervals in respect of the same                     term or, indeed, whatever form they took.
employment regularly in a stable                     That would involve a fundamental change in
employment relationship, the period runs             the law which is plainly not the effect of the
from the end of the last contract forming            decision of the European Court.”
part of that relationship”.                          On the second point, the Chairman:
Before Elias P it was submitted, first,              “was fully entitled to say that where one
that even if there was a new contract                moves from a temporary relationship
which came into existence when these                 under a particular contract to a permanent
employees entered into a permanent                   relationship    which    may     carry  on
relationship, nonetheless the stable                 indefinitely, that that is a fundamental
                                                     change in the nature of the relationship
employment relationship continued
                                                     between the parties and their obligations
throughout the temporary contracts and               such as to amount to a new contract as a
embraced the permanent contract also.                matter of law. If that is right, then of
Secondly, the Tribunal Chairman erred                course the new contract was a permanent
in concluding, as he did in terms at                 contract and the stable employment
paragraph 34.6, that there was a radical             relationship thereby came to an end once
change in the terms of the contract by               that relationship was entered into. That
reason of a change from a temporary                  meant that the Chairman found that each
contract to permanent status.                        of these claims was therefore brought
On the first point, Elias P held that;               outside the time limit.”
“the decision of HHJ McMullen QC in
Preston No. 3 is decisive of the point.
Although, in layman‟s terms, it may                  Legality of long service increases where
understandably be said that entry into a             long service employees mainly male.
permanent job does not destroy a stable              B.F. CADMAN V HEALTH &
employment relationship, that concept in the         SAFETY EXECUTIVE
context of this jurisprudence is a very much         INTERVENER: EQUAL
more precise one. As HHJ McMullen QC                 OPPORTUNITIES COMMISSION
pointed out: “It is not apt to describe the
succession of short terms contracts and a
                                                     OPINION OF ADVOCATE
permanent contract as a succession of                GENERAL Poiares Maduro
short term contracts…it cannot be said that          delivered on 18 May 2006
there is a continuation of the stable                Mrs Cadman was employed by the
employment relationship into a new                   HSE from June 1990. The pay scheme
permanent contract. To put it in my own              model had changed several times,
words, the concept of a stable employment            from annual pay increments to annual
relationship has the effect of requiring a
                                                     pay increments with a performance
series of intermittent contracts or temporary
contracts to be treated as if they were a            related element. Mrs Cadman‟s pay
single contract terminating at the conclusion        was lower in 2000/1 than for male
of the last of those sequential contracts.           comparators, stemming from the fact
But this only modifies the basic principle           that they all had longer service with
that time runs from the end of each contract         the HSE. Mrs Cadman alleged that the
in the very precise circumstances identified         pay scheme had a disproportionately
by the European Court of Justice. It does            effect on women. The Court of Appeal
not permit an employee to treat a                    considered the discrepancy between
succession of contracts not falling within           Danfoss and more recent cases,
those criteria as amounting to a single
                                                     notably Case C-184/89 Nimz, Case C-
stable employment relationship. If that were
right, it would mean that, in practice, in           243/95 Hill and Stapleton and Case C-
almost all cases employees would be able             1/95 Gerster, and        referred the
to bring claims within six months of the             following questions for a preliminary
termination of the employment relationship           ruling:



                                                10
Employment law bulletin
Issue 5 May

“(1)     Where the use by an employer of                order to support claims concerning indirect
the criterion of length of service as a                 discrimination arising prior to the date of
determinant of pay has a disparate impact               judgment in this case as a result of a pay
as between relevant male and female                     system based on seniority, except as
employees, does Article 141 EC require                  regards those workers who have before
the     employer      to   provide      special         that date brought legal proceedings or
justification for recourse to that criterion? If        made an equivalent claim.”
the      answer       depends       on      the         The nature of the justification which
circumstances,         what       are       the         has to be provided by an employer in
circumstances?                                          order to rebut the presumption of
(2)      Would the answer to the preceding              indirect discrimination resulting from
question be different if the employer
                                                        the fact that a pay system works to the
applies the criterion of length of service on
an individual basis to employees so that                disadvantage of women must be
an assessment is made as to the extent to               assessed in the light of Directive 97/80
which the greater length of service justifies           and of the case-law on indirect
a greater level of pay?                                 discrimination. This issue is central,
(3)     Is there any relevant distinction to            since the standard of proof required of
be drawn between the use of the criterion               an employer will allow there to be
of length of service in the case of part-time           judicial scrutiny of a pay system which
workers and the use of that criterion in the            is challenged in the light of the
case of full-time workers?”                             principle of equal pay. It is necessary
The Advocate General               gave     the         to     determine      whether    general
following answers:                                      justification for the use of a length-
(1)     Where the use by an employer of
                                                        of-service criterion in a pay system
the criterion of length of service as a
determinant of pay has a disparate impact               can suffice or whether, by contrast, the
as between relevant female and male                     justification to be provided must centre
employees, Article 141 EC, together with                on the situation of each specific
Article 2(2) and Article 4 of Council                   employee. In practice, employers and
Directive 97/80/EC of 15 December 1997                  the legislature have advanced a
on the burden of proof in cases of                      variety of possible justifications for
discrimination based on sex, require the                measures which work to the
employer to demonstrate that the way in                 disadvantage of women. It will often
which the criterion is used as a pay                    be left to the national court to
determinant in respect of the post
                                                        determine whether the measures
concerned takes into account the business
needs of the undertaking and that the                   adopted for the purpose of pursuing a
criterion is applied proportionately so as to           legitimate aim are proportionate in
minimise the disadvantageous impact it                  view of the justification advanced by
has on women. If the employer is unable                 the employer
to provide justification for the structure of           Contrary to the contention of the
the pay system, it will have to provide                 French Government and Ireland, it is
specific justification for the difference in            beyond question that Danfoss cannot
pay levels as between the employee who                  be read as conferring a blanket
has complained and other employees                      justification on all pay systems based
performing the same job.
                                                        on length of service. But, contrary to
(2)      In view of the answer to the first
question, it is not necessary to answer the             what Mrs Cadman and the EOC
second question.                                        appear to be arguing, a complaint of
(3)       No distinction should be made                 indirect discrimination by an employee
between the use of the criterion of length              cannot trigger a requirement for the
of service in the case of part-time workers             employer to justify the pay awarded to
and the use of that criterion in the case of            one employee as compared with
full-time workers.                                      others. Acceptance of that argument
(4)     This interpretation of Article 141 EC,          would entail a risk of an intolerable
read together with Article 2(2) and Article 4           burden being imposed on employers
of Directive 97/80, cannot be relied on in
                                                        and the argument itself fails to take


                                                   11
Employment law bulletin
Issue 5 May

account of the fact that under Article            excludes periods of maternity or
2(2) the justification can be centred on          paternity leave, although it is prima
the criterion itself and not necessarily          facie neutral, would result in indirect
on each instance of differential                  discrimination against women.
treatment as between employees. In
other words, the burden of proof borne            INFORMATION                          AND
by the employer can be satisfied if the           CONSULTATION
criterion adopted for its pay system is
justified and it will not always be
necessary to provide justification for a          SUMMARY
difference in treatment between                   This appeal raises questions about the
specific workers which may arise as a             proper construction of regulation 8 of the
result of that criterion. The standard of         Information      and    Consultation     of
proof which the employer must                     Employees Regulations 2004.              In
discharge in order to show that                   particular, the judgment considers how, in
recourse      to    a    length-of-service        a situation where the employees consist of
criterion does not lead to indirect               both trade unionists and non-unionists, the
discrimination can be summarised as               CAC should approach the questions
                                                  whether a pre-existing agreement or
follows. First, a degree of transparency
                                                  agreements cover all the employees within
as to how the length-of-service                   the meaning of regulation 8(1)(b); whether
criterion is applied in the pay system is         they have the approval of the employees
necessary, so that judicial scrutiny can          within the meaning of regulation 8(1) (c);
take place. In particular, it should be           and whether they provide the details
clear how much weight is placed, in               required by regulation 8(1)(d).
the determination of pay, on length of            Agreements negotiated with trade unions.
service – conceived either as a way of            Whether pre-existing agreements.
measuring experience or as a means                MR J STEWART AND THE
of rewarding loyalty – as compared                MORAY COUNCIL
with other criteria such as merit and             UKEAT/0143/06/LA &
qualifications.     In    addition,    the        KEAT/0144/06/LA
employer       should      explain    why         Elias P, Miss Gaskell,              Miss
experience will be valuable for a                 Lenaghan
specific job, and why it is rewarded              Mr Stewart complained that a
proportionally. In this respect, while an         requirement had not been satisfied to
analysis will have to be carried out by           enable the Employer to hold a ballot
the national court, there can be no               under Reg 8 of the ICE Regs. On 3rd
doubt, for example, that experience               August 2005 a petition had been
will be more valuable – and therefore             lodged with the Council in which over
legitimately rewarded – in the case of            500 employees requested the Council
posts involving responsibility and                to initiate negotiations to each an
management tasks than in the case of              agreement under the Regs. The
repetitive tasks, in respect of which the         Council accepted these numbers were
length-of-service criterion can account           between 10-40% of he workforce. The
for only a small proportion of pay. This          Council asserted that there was a pre-
criterion may be of particular relevance          existing agreement covering all the
in the training phase but become less             Council‟s employees so that a ballot
relevant once the employee has                    would be held under reg 8(2) to seek
acquired sufficient command of his or             endorsement of the employee‟s
her job. Finally, the way length of               request. The agreements which it
service is accounted for must also                was contended were pre-existing
minimise the negative impact of the               agreements were the a) Framework
criterion on women. It seems to me,               Local Recognition and Procedure
for example, that a system which                  Agreement (dated 2 July 2003); b)


                                             12
Employment law bulletin
Issue 5 May

The Moray Council Officer Trade                      represent groups of staff. Additionally, at the
Union Group Constitution and           c)            present time the majority of employees are
                                                     trade union members and the Panel was given
Protocol for Consultation with Trade                 no evidence that that position was any different
Unions.                                              at the time the agreements were entered into.
Under regulation 8(1), pre-existing                  Whether or not individual employees choose to
agreements are agreements which:                     join a trade union does not alter the fact that,
                                                     firstly, trade union representatives represent all
“a) are in writing; b) cover all the                 employees and, secondly, a majority of the
employees of the undertaking; c) have                workforce belongs to one of the recognised
been approved by the employees; and                  unions. For those reasons, the Panel‟s view is
d) set out how the employer is to give               that the agreements have been “approved by
information to the employees or their                the employees.”
representatives and seek their views                 The final issue was whether the
                                                     agreements set out how the employer
on such information.”
                                                     is to give information to the employees
Mr Stewart contended that the
                                                     or their representatives and seek their
agreements        did  not    have     a
                                                     views on such information. Whereas
mechanism for consultation with those
                                                     the       Constitution and Protocol
who were not members of a
                                                     contained detailed provision as to
recognised trade union. The Council
                                                     consultation with the unions the
were of the view that the agreements
                                                     Framework Agreement did not:
were long established and that joint                 “…set out how the employer is to give
trade union/employee forums would                    information to the employees or their
be difficult to develop given the                    representatives and seek their views on such
disruption it would cause to collective              information” as the Regulations stipulate.
bargaining and that the agreements                   Paragraph 20 of the Agreement states that the
                                                     Joint Negotiating Committee “…will be a forum
covered all employees.                               for discussion and/or consultation on a range of
The Panel noted that its responsibility              matters not subject to national bargaining” but
under Reg 10 was to determine                        the Panel regards that as an insufficiently
whether the requirements had been                    detailed description of the way the Council
                                                     should inform and consult teaching staff. It is in
satisfied to allow the Council to hold a             stark contrast to the very detailed provisions of
ballot under Reg 8(2) and, specifically,             the Officer Trade Union Group Constitution and
whether Reg 8(1) had been satisfied.                 the    Protocol;    the    latter   includes     a
The agreements were in writing so                    comprehensive “Consultation Checklist” which
that the first question was whether                  specifies the way in which managers should
                                                     prepare for, conduct and conclude a
they covered all of the employees in                 consultation process. The Panel‟s conclusion
the undertaking. The Panel was of the                is therefore that the Framework Agreement
view that the agreements did not                     does not fulfil the requirement of regulation
differentiate between union and non                  8(1)(d).”
union members. The Council asserted                  The complaint was upheld so that the
that the agreements had been                         Council had to initiate negotiations
approved         by     trade      union             under Regulation 7.
representatives, which the panel                     The Regs are at:
accepted, so that the issue was                      http://www.opsi.gov.uk/si/si2004/2004
whether this approval constituted                    3426.htm       and     Guidance        at
approval by the employees. The Panel                 http://www.dti.gov.uk/er/consultation/i_
stated:                                              c_regs_guidance.pdf.
“The Panel accepts Mr Stewart‟s argument that        The EAT, on the Regulation 8
employees cannot indicate retrospective              issue, decided as follows:
approval by entering into a contract of              “In our judgment the CAC did not err in law. It
employment with the Council; being covered by        is true that Regulation 8(1) is not as clearly
a collective agreement is merely one                 formulated as it might be. For example, if one
consequence of entering into a contract of           says that each of the requirements of
employment. However, the situation at Moray          Regulation 8(1) must be met by each
Council is that all employees are covered by         agreement then, on a literal interpretation, in
one or more of the agreements and trade union        the case of multiple agreements each would
representatives are appointed or elected to



                                                13
Employment law bulletin
Issue 5 May

have to cover all the employees. Plainly that              enough that it is in fact supported by a
cannot be right.          The point of multiple            majority of the relevant employees. He
agreements is that cumulatively they cover all             observes that the Regulations provide that
employees but different agreements will cover              it is for the CAC to determine whether that
different groups of employees.
27. However, whilst recognising that no
                                                           majority approval exists.       It is not
construction is wholly without difficulty, in our          necessary that each employee should
opinion it is tolerably clear that whereas                 have had the right to express an opinion
Regulation 8(1)(b) has to be met by the                    on the matter, whether in a ballot or some
agreements read together, each of the other                other way. The CAC must consider all the
requirements has to be met by each individual              evidence before it and determine whether
agreement. It is not good enough for merely                there is the requisite support for the
one of the agreements to do so even if it covers           agreement. If there is a proper evidential
the majority of the employees or a substantial             basis for the CAC‟s conclusion, the EAT
proportion of them. In our judgment this is
supported by the following considerations.
                                                           cannot interfere.”
First, regulation 8 refers to “each of the                 The EAT further noted that:
agreements” where there is more than one pre               “The CAC is a highly experienced body
existing agreement; they are not treated as                and it will be for it to decide, in the light of
merely parts of one overall pre-existing                   all the evidence, whether it is proper to
agreement. Regulation 2 then in turn defines a             infer the requisite support or not. If,
pre-existing agreement as one where each of                therefore, union members constitute a
the conditions of regulation 8(1)(a) to (d) are            majority of the employees covered by the
satisfied. It follows, in our view, that each must
satisfy each of those conditions (subject to the
                                                           agreement, then generally the approval of
point we have made about paragraph (b)).                   the employees will be established.
28. Second, there is no justification in the               Whatever the opinion of the non-unionists,
language of the regulation itself to suggest that          the support of the trade unionists will carry
it is sufficient for the conditions to be met only         the day. If, by contrast, union membership
by agreements covering the majority of the                 were in a minority, then it would not be
employees or a substantial proportion of them.             appropriate to infer the necessary
It is not a legitimate reading of this Regulation          approval and it would be necessary for the
to read in any such limitation, and the definition         employer to be able to establish the
of a pre-existing agreement in regulation 2 tells
against it.
                                                           relevant approval in some other way, such
29. Third, the purpose of the provision seems              as by seeking formal approval in a ballot of
to us to be consistent with it being construed so          the relevant employees. This would have
as to enable the employer to test whether or               to be done prior to the request being
not the employees support the request for an               made.”
information and consultation arrangement only              The consequence of the appeal failing
when all the employees are subject to                      was that the Council had to initiate
agreements which meet the conditions. After
all, the effect of the ballot may be to defeat the         negotiations to reach an information
right to have the statutory procedures at all and          and consultation agreement pursuant
to     leave      the     voluntary    pre-existing        to regulation 7.
arrangements in place. In those circumstances
one might expect that if the existing
arrangements are to be given priority, the
minimum standards set down in regulation 8
(whatever they might require) should at least
apply to all employees.
30. It follows that the appeal itself fails. The
CAC were right to find that Regulation 8(1)(d)
was not satisfied with respect to one of the pre-
existing agreements.”
On the issue whether approval by the
trade union representatives constituted
approval by the employees, the EAT
preferred the Council‟s submission
that:
“It is not necessary in all cases that each                PREGNANCY AND BONUSES
employee should expressly have had the
opportunity to approve the agreement; it is



                                                      14
Employment law bulletin
Issue 5 May

Maternity leave. Bonus.                            further in as much that he submitted that
HOYLAND V ASDA STORES                              discrimination based on pregnancy was in
LIMITED                                            itself discrimination against a woman and
                                                   in this respect he drew our attention to
[2006] CSIH 21                                     Webb v Emo Air Cargo UK Limited, a
Lord Abernethy                                     decision of the European Court in 1994
Lord Johnston                                      I.C.R. 770. Given, he submitted, that the
Lord Drummond Young                                entitlement to bonus was entirely
                                                   discretionary in terms of a proper
During 2002 Ms Hoyland was absent                  construction of the contract, section 6(6)
for 183 days, of which 18 weeks were               could not apply in any event.”
OML and 8 weeks were AML. In 2002
                                                   This was rejected, as it had been in
ASDA introduced an annual bonus
                                                   the EAT. Lord Johnston stated:
based upon profits. Employees who
were employed on 21st February 2003                “[14]    In seeking to resolve this matter
with at least 6 months service on 31st             we consider that the important word in
                                                   section 6(6) is "regulated". While we
December 2002 were entitled to a                   recognise that the word "discretionary" is
bonus. This was pro-rated to reflect               used by the employer in referring to the
part time employment and absences of               bonus scheme, that can be construed as
8 consecutive weeks or more during                 relating only to the amount being paid in
the year. Maternity leave was treated              any one year and we recognise that the
as absence. Ms Hoyland expected to                 Tribunal found, as a matter of fact, that
receive £189.47 but she was paid                   every employee received a bonus. We
£94.48 to reflect the 183 days of                  have no doubt that that entitlement, if it be
absence.                                           such in law, arose out of the contract of
                                                   employment and is regulated by it in the
An ET found that she had been                      sense that but for the existence of the
subjected to a detriment under ERA s               contract of employment the bonus would
47C but only for the compulsory                    not be paid and it is therefore being paid
maternity period of two weeks and she              as a consequence of its very existence. It
was awarded £5.20. The ET found that               does not seem to us to be necessary for
the bonus was „wages or salary‟ within             section 6(6) to have any application in a
reg 9 of the Maternity Regulations                 given situation that the entitlement in
1999 and was thus regulated by her                 question should be part of the formal
                                                   contract of employment. This conclusion
contract of employment so that section
                                                   reflects the dichotomy between equal pay
6(6) of the SDA 1975 applied. On                   and equal treatment, and avoids an
appeal it was argued that Ms Hoyland               employer being exposed to double
had suffered a detriment and/or that               jeopardy.
there was a breach of Article 141.                 [15]     We are therefore in no doubt that
The EAT and Court of Session upheld                the Employment Tribunal and the
the Tribunal. In the Court of Session it           Employment Appeal Tribunal reached the
                                                   correct decision in construing the
was stated:
                                                   arrangements for bonus payments in
“Counsel submitted that the issue of bonus         respect of the appellant as falling within
entitlement was entirely separate from any         the terms of section 6(6) and thus
contractual provision in the employee's            excluding any claim for sex discrimination
contract and as such did not therefore fall        under the 1975 Act.
within the exclusion created by section            [16]     We confess to be surprised that
6(6) of the Act. He referred us to GUS             the issue of whether there was any
Home Shopping Limited v Green and                  discrimination at all was not taken before
McLaughlin 2001 I.R.L.R. 75 and Farrell            the lower Tribunals having regard to the
Matthews and Weir v Hansen 2005                    fact that it appears that a man claiming
I.R.L.R. 160. Both cases, he submitted,            paternity leave is in precisely the same
were illustrative of a situation where a           position as a woman claiming maternity
bonus could be payable outwith the                 leave. It may be that some distinction is
confines of the contract in a particular           sought to be drawn because in the
contract of employment. Counsel went               female's case pregnancy requires her to



                                              15
Employment law bulletin
Issue 5 May

leave her employment temporarily, while a                   judgment or order –
father, or potential father, has an option.                 ….. (c) striking out any claim … on the
[17]     Be that as it may, we recognise                    grounds that the manner in which the
that we cannot determine this matter and if                 proceedings have been conducted by
                                                            or on behalf of the applicant … has
we had been in favour of the appellant's                    been scandalous, unreasonable or
position we would have remitted the                         vexatious.”
matter back for a further hearing before an        The Tribunal set out the history of
Employment Tribunal on the issue of
                                                   failure to comply with Orders and
discrimination in principle.
[18]     However, in the circumstances, for        stated:
the reasons we have given the appeal will          “That there was in this case wilful and
be dismissed and the order of the                  deliberate disobedience by the Claimant of the
                                                   orders which were made for disclosure of
Employment Appeal Tribunal, itself                 documents. The lengthy period over which the
supporting the order of the Employment             Claimant was in breach of those Orders and his
Tribunal, will be endorsed.”                       failure to show any degree of co-operation with
                                                   those Orders and with the Respondent in order
                                                   to avoid the problem of arriving at a merits
                                                   hearing with large quantities of material which
                                                   had not been disclosed to the Respondent
                                                   make it plain to us that the Claimant has at all
                                                   stages deliberately sought to withhold
                                                   disclosure in an attempt not to co-operate with
PROCEDURE                                          the Respondent or the Tribunal and for some
                                                   tactical advantage to himself sought to keep up
                                                   his sleeve his documents and the audio tape
                                                   until the very day of the Hearing itself.
Strike out for failure to comply with              Equally, we are satisfied that the failures with
Orders. When appropriate.                          regard to the Orders, for disclosure are but one
BLOCKBUSTER                                        example of the unreasonable conduct of the
                                                   proceedings by the Claimant, otherwise
ENTERTAINMENT LIMITED v                            evidenced by (a) his failure to comply with the
JAMES                                              Order for particulars made by Ms Lewzey, (b)
[2006] EWCA Civ 684                                his failure to effect proper exchange of witness
                                                   statements by providing a signed copy of his
Brooke, Sedley, Wilson LJJ                         witness statement, and (c) his appearance at
The Claimant alleged                racial         the Hearing with an amended witness
harassment,        victimisation      and          statement which he had made no attempt
discrimination. On 24 January 2005 an              whatsoever to serve upon the Respondent. We
                                                   are satisfied that at all stages the Claimant has
employment tribunal          struck both           pursued a course of brinkmanship. He
claims out on the grounds that Mr                  undoubtedly has strong views about the
James had not complied with                        behaviour of the Respondent and considers the
procedural orders made by the tribunal             Respondent's legal representatives' actions on
                                                   their behalf to be merely "legal wrangling". But
and in doing so had conducted his                  we are satisfied that there has been wilful and
proceedings        unreasonably.        In         persistent disobedience of the Tribunal's
consequence of this decision Mr                    Orders and a real failure on the part of the
James was ordered at a later date to               Claimant to comply with his obligation to assist
pay £11,000 in costs. On 6 October                 the Tribunal in furthering the Tribunal's
                                                   overriding objective of achieving justice
2005 the Employment Appeal Tribunal                between the parties”
(Elias J, Dr Mohanty and Mr                        It was of the view that “an Order striking
Worthington) allowed Mr James'                     out the Claimant's claims in the first two
appeal against the striking out of his             Originating Applications, draconian Order
two applications and remitted the issue            that it be, is the only proportionate and fair
to a differently constituted employment            course to take in this case given that we
tribunal. Rule 18(7) in Schedule 1 to the          do not consider that a fair trial is currently
Employment Tribunals (Constitution and             possible and, furthermore, having regard
Rules etc) Regulations 2004 provides:              in particular to our finding that the
        “Subject to paragraph (6) [which           Claimant has wilfully and deliberately on
        requires notice to be given], a            more than one occasion flouted the Orders
        chairman or tribunal may make a            of the Tribunal.”



                                              16
Employment law bulletin
Issue 5 May

The EAT reversed the decision and, on                  fair and orderly hearing is when they have
appeal to the CA, it was contended that                reached the point of no return. It may be
the findings of the employment tribunal                disproportionate to strike out a claim on an
were such that they were still bound to                application, albeit an otherwise well-
strike out both Mr James' applications –               founded one, made on the eve or the
'bound' both in the figurative sense that              morning of the hearing.
they would inevitably have reached the                 20. It is common ground that, in addition to
same conclusion and in the legal sense                 fulfilling the requirements outlined in §5
that their other, unassailable, findings               above, striking out must be a proportionate
obliged them to strike out the claims. He              measure. The employment tribunal in the
also submits that, insofar as the further              present case held no more than that, in
and better particulars matter, it is plain that        the light of their findings and conclusions,
they were neither adequate nor in time                 striking out was "the only proportionate
and that no concession, supposed or real,              and fair course to take". This aspect of
could have made them timeous or                        their determination played no part in Mr
relevant. Sedley LJ stated:                            James's       grounds      of    appeal    and
“17. In my judgment, therefore, the EAT                accordingly plays no part in this court's
was right to intervene as it did. I would              decision. But if it arises again at the
accordingly dismiss Blockbuster's appeal.              remitted hearing, the tribunal will need to
But in the light of some helpful discussion            take a less laconic and more structured
which has taken place before us, I would               approach to it than is apparent in the
wish to mention some additional matters of             determination before us.
law and practice which may well arise on               21. It is not only by reason of the
the remitted application to strike out the             Convention right to a fair hearing
claims.                                                vouchsafed by article 6 that striking out,
18. The first object of any system of justice          even if otherwise warranted, must be a
is to get triable cases tried. There can be            proportionate response. The common law,
no doubt that among the allegations made               as Mr James has reminded us, has for a
by Mr James are things which, if true,                 long time taken a similar stance: see Re
merit concern and adjudication. There can              Jokai Tea Holdings [1992] 1 WLR 1196,
be no doubt, either, that Mr James has                 especially at 1202E-H. What the
been        difficult,   querulous         and         jurisprudence of the European Court of
uncooperative in many respects. Some of                Human Rights has contributed to the
this may be attributable to the heavy                  principle is the need for a structured
artillery that has been deployed against               examination. The particular question in a
him - though I hope that for the future he             case such as the present is whether there
will be able to show the moderation and                is a less drastic means to the end for
respect for others which he displayed in               which the strike-out power exists. The
his oral submissions to this court. But the            answer has to take into account the fact –
courts and tribunals of this country are               if it is a fact – that the tribunal is ready to
open to the difficult as well as to the                try the claims; or – as the case may be –
compliant, so long as they do not conduct              that there is still time in which orderly
their case unreasonably. It will be for the            preparation can be made. It must not, of
new tribunal to decide whether that has                course, ignore either the duration or the
happened here.                                         character of the unreasonable conduct
19. In deciding this, the tribunal needs to            without       which      the    question     of
have in mind that the application before it            proportionality would not have arisen; but
is one that was made, in effect, on the                it must even so keep in mind the purpose
opening day of the six days that had been              for which it and its procedures exist. If a
set aside for trying the substantive case.             straightforward refusal to admit late
The reasons why this happened are on                   material or applications will enable the
record and can be recanvassed; but it                  hearing to go ahead, or if, albeit late, they
takes something very unusual indeed to                 can be accommodated without unfairness,
justify the striking out, on procedural                it can only be in a wholly exceptional case
grounds, of a claim which has arrived at               that a history of unreasonable conduct
the point of trial. The time to deal with              which has not until that point caused the
persistent or deliberate failures to comply            claim to be struck out will now justify its
with rules or orders designed to secure a              summary termination. Proportionality, in



                                                  17
Employment law bulletin
Issue 5 May

other words, is not simply a corollary or           of the 2002 Act. An application was
function of the existence of the other              applied for a review on the basis that
conditions for striking out. It is an               the employers, had received the claim
important check, in the overall interests of        from the Tribunal and had posted a
justice, upon their consequences.“
                                                    Response but then heard nothing
SUMMARY                                             more from the Tribunal until they
Practice       and       Procedure         –        received the Tribunal‟s remedies
appearance/response; costs                          judgment and had not received either
The employers put in no response to the             a notice of the hearing or of the default
employees‟ various claims. The Tribunal             judgment. The application for an
awarded the employee a sum of £14,000               extension of time to apply for a review
and £5,500 costs. At a review hearing the           of the default judgment was rejected
Tribunal revoked the costs order; the               by the Tribunal on 18 August; and
employee appealed. Held that the Tribunal           there was no appeal against that
had correctly applied Rule 38(4) of the 2004
                                                    rejection; but the application for a
Rules; an order for costs could only be
made against a Respondent who had not               review of the remedies judgment was
put in a response and had, therefore, not           granted; and the Chairman indicated
had a response accepted in relation to any          of his own motion that he proposed to
part he had taken in the proceedings; and           review the costs order made at the
the employers had not taken any part in the         remedies hearing. The Respondent
proceedings within Rule 9. Failure to put in        did not attend a hearing so that the
a response cannot be taking any point in            review failed.
proceedings. Appeal dismissed.                      The costs order was revoked save that
MS C SUTTON v THE RANCH LTD                         the Chairman made an order for the
UKEAT/0072/06/ZT                                    costs of the hearing. On appeal, the
HHJ Burke QC sitting alone                          EAT referred to Rule 38(4) which
The Claimant presented her claim to                 provides:
the Tribunal on 25 February 2005.                   “A costs order may be made against or in
The employers did not file any                      favour of a respondent who has not had a
Response. Accordingly, pursuant to                  response accepted in the proceedings in
Rule 9 of the Rules set out in                      relation to the conduct of any part which
                                                    he has taken in the proceedings.”
Schedule 1 of the Employment
                                                    The Chairman had ruled:
Tribunals (Constitution and Rules                   “The Employment Tribunal is constrained by the
of Procedure) Regulations 2004 the                  Rules under which it must operate. Rule 9
employers were not entitled to take                 makes it clear that, except in defined
any part in the proceedings except as               circumstances, the Respondent is not entitled to
set out in that rule; and on 21 April               take part in the proceedings if it has not
                                                    presented a Response. Although Rule 38(4)
2005, pursuant to rule 8(1) and (2A) of             enables the Employment Tribunal to make a
the Rules, the Tribunal issued a                    Costs Order either against or in favour of a
default judgment in favour of Ms                    Respondent who had not had a Response
Sutton against the employers. On 27                 accepted in the proceedings. However, in this
                                                    case the Respondent had not presented a
May the Tribunal, consisting again of               Response and by operation of Rule 9 has taken
Mr Craft sitting alone, held a remedies             no part in the proceedings except in respect of
hearing. The Tribunal awarded (i) for               Review applications.
unfair dismissal, a basic award of £270             The terms of Rule 38(4) determine that the
and a compensatory award of                         Employment Tribunal cannot make a Costs
                                                    Order against the Respondent in respect of the
£2,179.63; (ii) £5,000 for injury to                costs incurred by the Claimant up to and
feelings arising from the sex                       including the hearing in respect of remedy.
discrimination, (iii) £902.80 for breach            The Employment Tribunal therefore has no
of contract, i.e. for unpaid maternity              option but to revoke the Order for costs which it
                                                    made at the hearing on 27th May 2005.”
pay and (iv) holiday pay. The Tribunal
                                                    HHJ Burke QC stated that:
then made a 50 per cent increase in
                                                    “Rule 38(4) is intended to include both the
their award, pursuant to section 31(3)              case of the Respondent who puts in a



                                               18
Employment law bulletin
Issue 5 May

Response which is not accepted and the               circumstances in which the jurisdiction
case of the Respondent who does not put              under rule 40(3) can be exercised.”
in any Response at all… In both cases the
Respondent is automatically barred, by               TRANSFER OF UNDERTAKINGS
Rule 9, from taking part in the proceedings
other than under one or more of the four
exceptions set out in Rule 9. As the
parties agree and as the Employment                  Transfer of Undertakings: Continuity of
Appeal Tribunal has already decided in the           Employment
case of Butlins Skyline Ltd v Beynon                 Employment Tribunal Judgment on a
[2006] EAT 0042-45/06, the application of            preliminary point that employee did not
Rule 9 is automatic once no Response                 transfer overturned as it did not consider
has put in within the prescribed time or a           and apply the European Court of Justice
Response which has been put in has not               Judgment in Botzen [1986] 2 CMLR 50.
been accepted. In both cases a default               Claimant was assigned exclusively to the
judgment may be issued under Rule 8,                 Respondent‟s predecessor‟s café and her
which judgment may, pursuant to Rule                 contract of employment was transferred.
8(3), determine issues of liability only or          She had continuous employment.
determine issues of liability and remedy. In         MRS CELIA NICHOLAS v MRS
both cases the Respondent can play no                TINA GRANT T/A SANDANCERS
further part in the proceedings.                     CAFÉ
Rule 38(4), in my judgment, has the effect           UKEAT/0198/06/LA
of providing that, in both cases, an order
for costs can only be made against or in
                                                     HHJ McMULLEN QC, MR Gibbs,
favour of a Respondent in relation to his            Mrs McArthur
conduct of a part which he has played in             The EAT stated that on the central
the proceedings, which part must fall                parade in the North Kent seaside
within one or more of the exceptions to              resort of Herne Bay is a popular café
Rule 9.”                                             known as Sandancers where the
The Judge stated “I have no doubt that               Claimant worked as a griddle cook.
the effect of Rule 38(4) is to allow the             The case was about the application of
Tribunal to make an order for costs                  the TUPE regulations and the
against or in favour of a Respondent who
                                                     Employment Rights Act 1996 when
has not put in a Response or whose
Response has not been accepted only in               the café was transferred from one
relation to the conduct of any part which            licensee to another. The central issue,
he has taken in the proceedings such part            decided by the ET against the
being restricted to a part which he is               Claimant was whether the Claimant
permitted to take in the proceedings by              was employed immediately before the
Rule 9.”                                             transfer.     The EAT referred to
Costs can, however, be awarded in                    Regulation 5 of TUPE 1981 and
relation to omissions:                               Employment Rights Act 1996, s218.
“It surely is the case that, in some                 The Claimant started working as a
respects, an omission to do something                griddle chef at the Sandancers Cafe in
required by the Rules or required by an              April 2004. Her employer was a Mr
Order of the Tribunal can attract an order
                                                     Farrow. The cafe is in an amusement
for costs. The obvious example of a
party‟s refusal or neglect to obey a specific        arcade owned and operated by a Miss
Order will occur to anybody who considers            Ashley. She granted licences to
the situation which I am addressing; but             operate the cafe as a concession. The
that does not mean that an omission such             property and equipment belonged to
as an omission to put in a Response can              Miss Ashley and the operator paid a
give rise to an order for costs against a            licence fee for their use. It was the
Respondent who makes that omission                   practice of Miss Ashley to grant
within the terms of rule 38(4). Rule 38(4)           concessions for 12 months at a time.
must be construed as cutting down the                In April 2004, Mr Farrow had the
width of or at least explaining, in the
                                                     concession. In February 2005 he
context to which it applies, the



                                                19
Employment law bulletin
Issue 5 May

indicated that he wanted to give up the        General Hospital NHS Trust [1994]
concession. Mrs Grant had worked for           IRLR 292 applied and the ET did not
Mr Farrow and had expressed an                 seem to have considered whether the
interest in taking over the concession         Claimant was assigned to carry out her
should it ever become available. She           duties at the café or was assigned
negotiated a new agreement with Miss           elsewhere.
Ashley and took over the concession            “When Mr Farrow turned in the licence to
on 14 February 2005. Mr Farrow                 the owner of the Arcade, it was immediately
brought is licence agreement to an             handed by her to the Respondent and the
end on 13 February 2005.                       Respondent took over the café, its
                                               customers, its stock and everything else the
The ET thought that there was a stable
                                               next day. So, there can be no doubt that
economic entity. This undertaking              the Claimant was engaged as part of the
transferred from Mr Farrow to Mrs              human stock of the café on the day
Grant on 14 February 2005. The                 immediately before the transfer and, as it
Claimant had spoken to Mr Farrow. He           happened, continued working there for
continued to operate other premises            three months afterwards. Thus, she meets
and was willing to continue the                the terms both of TUPE regulation 5 and
Claimant's employment with him at              Employment Rights Act 1996 s218.”
those premises. The Claimant did not           The appeal was therefore allowed.
want to work anywhere else than
Sandancers Cafe and wanted to stay             UNFAIR DISMISSAL
there. She had a meeting with the
Respondent at the Respondent‟s home
and discussed future employment at             Dismissal for refusing to sign restrictive
the cafe. The Claimant agreed new              covenant. SOSR
terms at the same hourly wage but              WILLOW OAK DEVELOPMENTS
reducing her hours from the 40 per             LTD        t/a     WINDSOR
week she had worked for Mr Farrow to           RECRUITMENT v SILVERWOOD
35 per week. The Claimant wrote to Mr          & OTHERS
Farrow on 7 February 2005 saying:              [2006] EWCA 660
‘Please accept one week's notice to            Buxton LJ, Neuberger LJ, Sir
terminate my employment with you at
                                               Martin Nourse
the above address.’
                                               The Respondents dismissed the
The letter was written to coincide with
                                               Claimants because they refused to
the end of Mr Farrow's licence to
                                               sign fresh contracts of employment
operate the cafe which ceased at close
                                               containing a number of restrictive
of business on 13 February 2005.
                                               covenants, which were dedicated
The EAT held that the Claimant was
                                               towards seeking to protect the
not, therefore, employed in the
                                               Respondents from what had already
undertaking immediately before the
                                               been a substantial number of efforts,
transfer within the meaning of the
                                               many successful, by competitors, to
Regulations. She could either be an
                                               poach staff and business from them,
employee of Mr Farrow, in which case
                                               and at a time when the Respondents
Mr Farrow would have required her to
                                               planned to expand its business from 8
work at his other location, or she had
                                               branches, with a turnover of £14m per
resigned from that employment, in
                                               annum, to 100 branches across the
which case she was free to take up
                                               country, with a turnover of up to
employment with the new operator of
                                               £164m per annum. The ET held that
the cafe under the new terms that had
                                               the employees had been unfairly
been agreed. The Claimant chose the
                                               dismissed on the basis that the
latter course.
                                               covenants which the Respondents
On appeal, the EAT held that Botzen
                                               were requiring the Claimants to sign,
[1986] 2 CMLR 50 and Gale v Northern



                                          20
Employment law bulletin
Issue 5 May

were in unreasonable restraint of trade             proposed by the employer for the
or, as the Tribunal put it in paragraph             protection of his legitimate interests, is one
19 of its Judgment under Conclusions,               that can in law form a ground for
were not “themselves fair and                       dismissal, then it is necessary to proceed
                                                    to the second stage of considering
reasonable from the employer’s point
                                                    whether the employer has, under section
of view” or were (paragraph 23)                     98(4)(a),      acted      reasonably        or
“unreasonably wide”.              The ET            unreasonably in treating that reason as a
concluded that the employer could not               sufficient reason for dismissing the
rely on the SOSR ground for                         employee.”
dismissal. The ET adopted a similar                 On the issue of fairness, the CA
approach to Forshaw v Archcraft                     upheld the EAT that the dismissal was
Ltd, [2005] IRLR 600 though it was not              unfair. It stated that the aggressively
referred to as the parties were not                 insulting way in which the employer
aware of it. The EAT however, upheld                chose to conduct the negotiations, and
the fairness of the dismissal on the                the failure to give any warning as to
particular facts (See October 2005                  imminent      dismissal,   make    that
Bulletin).                                          conclusion also inevitable.
An appeal to the Court of Appeal was
dismissed. The CA was not satisfied                 Appeals. Review or rehearing. Review
that the clause was reasonable or that              capable of remedying earlier hearings.
it was reasonable to insist at such                 Inability to understand because of
short notice that the claimants should              deafness may have contributed to
accept that term. The CA noted that                 dismissal but no discrimination where
                                                    employer did not have a disability related
the ET had          considered that the
                                                    reason in mind.
covenants were so unreasonable that
                                                    TAYLOR v OCS GROUP LIMITED
the employee could not be expected to
agree with them, and thus could not be              CA [2006] EWCA 702
dismissed for not signing them. The                 Brooke, Dyson, Smith LJJ
ET had held that there was no reason                Claimant claimed unfair dismissal and
for dismissal under section 98 ERA                  discrimination under the DDA. The
1996 (as in Forshaw v Archcraft [2006]              Claimant is profoundly death though
ICR 70). The CA agreed with the EAT                 he had acquired an understanding of
that this approach was wrong. Buxton                English and had learnt lip reading and
LJ stated:                                          sign language. He was employed as a
“The clue to this issue is that the question        payroll programmer analyst and was
asked by section 98(1) is whether the               redeployed by OCS in January 2003
employer's reason is of a kind such as to           as a database developer/analyst after
justify the dismissal. That language clearly        his earlier position became redundant.
indicates that the question is whether the          He was asked by a Ms Campbell to
reason falls within a category of reason            assist with the database system and
that is not excluded by law as a ground for         emailed several emails from Ms
dismissal; or, as Burton P put it slightly          Campbell‟s terminal to his own which
differently in     Scott     v   Richardson
                                                    were found not to be relevant to the
[EATS/0074/04,         26     April   2005,
unreported], whether the reason for which           work he was doing for Ms Campbell .
the dismissal took place could be a                 He was suspended for unauthorised
substantial other reason. Accordingly, if           access to the account and an
the reason is whimsical or capricious or            investigatory meeting took place with a
dishonest (see per Lord McDonald in                 Ms Hellens, who the Claimant wrongly
Harper v NCB [1980] IRLR 260[8]), or is             thought was acting for him. A
based on an inadmissible ground such as             disciplinary meeting took place later
race or sex, then it will be excluded by            the same day with Mr Baccolini. The
section 98(1). But if, as in our case, the          Claimant found him particularly hard to
category into which the reason falls, an
                                                    lip read and he did not fully understand
employee's refusal to accept covenants



                                               21
Employment law bulletin
Issue 5 May

what was happening. Nothing was                     been invited to do, and its evaluation of
written to explain before or at the                 the circumstances cannot The second
commencement of the hearing to                      and third grounds were               also
explain it was a disciplinary hearing               dismissed. On the cross appeal, the
and the ET found that he did not                    EAT considered Chief Constable of
effectively participate or understand               West Yorkshire Police v Khan [2001]
what was happening. The hearing                     IRLR 830 at para 29 and Claydon
lasted 15-30 minutes. He was                        House. It held that there was no
dismissed. An appeal took place, at                 inconsistency between a finding of
which an interpreter was provided by                dismissal for misconduct and that the
OCS but for only 2 hours. The hearing               dismissal was for a reason which
continued for 1 ½ hours after the                   related to Claimant‟s disability.
interpreter had left. It was by way of a            Upon appeal to the CA it was held that
review and the decision to dismiss was              there was no rule of law that only an
confirmed. The ET held that the                     appeal by way of a rehearing was
dismissal was by way of misconduct                  capable of curing earlier defects. The
and was unfair as the Claimant was                  CA considered that the errors in
not able to properly participate but that           approach       arose     out      of    a
there was not a breach of s 5 DDA as                misapprehension of Whitbread plc v Hall
the material reason for the dismissal               [2001] ICR 699. Smith LJ stated:
was his conduct and was not related to              “Although, as we have said, both
disability. It found, however, that OCS             Whitbread and Adivihalli [Adivihalli v
had failed to make reasonable                       Exports Credits Guarantee Department
                                                    (unreported, EAT/917/97)]          contain a
adjustments contrary to section 6
                                                    correct statement of the law, it would be
DDA. Upon Appeal the Respondent                     advisable for Whitbread not to be cited in
contended that (i) the appeal corrected             future. The use of the words 'rehearing'
any defect of the disciplinary hearing              and 'review', albeit only intended by way of
(ii) the ET improperly construed certain            illustration, does create a risk that ET's will
documents and (iii) the ET failed to                fall into the trap of deciding whether the
establish what the understanding was                dismissal procedure was fair or unfair by
by the Respondent of the Claimant‟s                 reference to their view of whether an
difficulties and whether that was                   appeal hearing was a rehearing or a mere
unreasonable.          The      Claimant            review. This error is avoided if ET's realise
                                                    that their task is to apply the statutory test.
contended that the ET properly applied
                                                    In doing that, they should consider the
itself to whether the whole process of              fairness of the whole of the disciplinary
dismissal was fair. The Claimant cross              process. If they find that an early stage of
appealed alleging that the ET was                   the process was defective and unfair in
wrong is deciding that he was not                   some way, they will want to examine any
dismissed for a reason which related                subsequent proceeding with particular
to his disability.        His failure to            care. But their purpose in so doing will not
participate in the disciplinary hearing             be to determine whether it amounted to a
contributed in a significant was to the             rehearing or a review but to determine
decision to dismiss on the grounds of               whether, due to the fairness or unfairness
                                                    of     the     procedures     adopted,     the
misconduct. Having considered the
                                                    thoroughness or lack of it of the process
cases relating to the distinction                   and the open-mindedness (or not) of the
between review and rehearings, the                  decision-maker, the overall process was
EAT held “the Tribunal cannot be faulted            fair, notwithstanding any deficiencies at
in its depiction of the circumstances as            the early stage.”
being a mere review falling short of the            The Tribunal had been right to dismiss
thorough re-examination required for the            the claim under the DDA that the
correction of the earlier procedural defect.
                                                    Claimant had been dismissed or a
We therefore hold that the Tribunal
correctly adapted the approach in                   reason relating to his disability. The
Whitbread v Mills to its task, as it had            contributory conduct relied upon could



                                               22
Employment law bulletin
Issue 5 May

not be said to have affected the                     productivity than other employees. The
employer‟s mind. The issue was                       employer might decide to dismiss the
whether the employer had a disability                employee for those combined reasons. In
related reason in its mind when it                   such a case, we would say that, if the
                                                     disability-related reason had a significant
dismissed the employer.
                                                     influence on the employer's decision that
The CA considered procedural                         would be enough to found the conclusion
fairness:                                            that the dismissal was for a reason related
“In saying this, it may appear that we are           to the employee's disability. We would add
suggesting that ET's should consider                 that it would be open to an ET to find that
procedural fairness separately from other            the employer's decision had been affected
issues arising. We are not; indeed, it is            by the disability-related reason even
trite law that section 98(4) requires the ET         though the employer had not consciously
to approach their task broadly as an                 allowed that reason to affect his thinking.
industrial jury. That means that they                We would certainly accept that an
should consider the procedural issues                employer could have an innate prejudice
together with the reason for the dismissal,          against disabled people just as some are
as they have found it to be. The two                 prejudiced on the grounds of race or
impact upon each other and the ET's task             gender. What is important is that the
is to decide whether, in all the                     disability-related reason must affect the
circumstances of the case, the employer              employer's mind, whether consciously or
acted reasonably in treating the reason              subconsciously. Unless that reason has
they have found as a sufficient reason to            affected his mind, he cannot discriminate.”
dismiss. So for example, where the                   The case was remitted to another
misconduct which founds the reason for               Tribunal.
the dismissal is serious, an ET might well
decide (after considering equity and the
substantial merits of the case) that,                WAGES
notwithstanding         some      procedural
imperfections,      the   employer      acted
reasonably in treating the reason as a               Calculation of holiday pay for shift
sufficient reason to dismiss the employee.           workers. Application of multiplier when
Where the misconduct was of a less                   shift work.
serious nature, so that the decision to              BRITISH    AIRWAYS    PLC  v
dismiss was nearer to the borderline, the            ANDREW NOBLE & MARGARET
ET might well conclude that a procedural
deficiency had such impact that the
                                                     FORDE
employer did not act reasonably in                   [2006] EWCA Civ 537
dismissing the employee.”                            LORD     JUSTICE    MUMMERY,
On the disability issue, the CA stated:              LORD JUSTICE SCOTT BAKER
“These provisions of the DDA are                     and SIR CHARLES MANTELL
concerned with discrimination by an                  The weekly pay of shift workers
employer. Discrimination requires that the           employed by BA were evened out
employer should have a certain state of
                                                     instead of flucuating in line with the
mind. In the context of the DDA, an
employer cannot discriminate against the             work that was carried out on the work
employee unless he treats the disabled               pattern for the week. Under the
employee differently for a reason (present           agreement an average weekly figure
in his, the employer's mind) which is                was calculated and an agreed
related to the employee's disability. It may         multiplier of 48/52 was adopted. The
be that in some cases an employer might              workers      complained     that   the
have more than one reason for dismissing             application of the multiplier was
an employee; one reason might be                     unlawful under the WTR 1998 and EC
misconduct and there might also be                   Working Time Directive.
present in the employer's mind another
                                                     The Tribunal and EAT found in favour
reason which does relate to his disability
such as the fact that the employee took a            of the employees. On appeal to the CA
lot of time off work or had a lower                  it was held that the application of an



                                                23
Employment law bulletin
Issue 5 May

effective 4/52 discount was a means of              of pay for work spread over the year to
smoothing out the variations in weekly              reflect and compensate for holiday pay.
pay.                                                The question is whether there is, in such
Mummery LJ referred to the example                  circumstances, a "true addition" to the
                                                    contractual rate of pay and whether it is
that was given of how the system
                                                    possible to identify a specific and
worked:                                             additional element in the pay package of
“At the request of the court for a very             the employee which actually relates to
simple hypothetical worked example Mr               holiday.
Hogarth illustrated his argument on                 The approach of the Employment Appeal
liability, as summarised in paragraphs 33           Tribunal was to assimilate this case to the
below, by taking the case of an employee,           "rolled up holiday pay" cases, to hold that
who works a variety of shifts, for which the        the burden was on BA to show a "true
shift pay averages out at £75 a week.               addition" and to conclude that it was not
Mr Hogarth then says that when the shift            satisfied, as the effect of the 4/52
pay is annualised by multiplying £75 by 52          reduction was to spread over 52 weeks
the result is the figure of £3,900 for shift        shift pay that would otherwise have been
payments. In calculating holiday pay BA             payable only in respect of 48 weeks.
multiplies £3.900 by 48/52 (ie omitting 4           In my judgment, the "rolled up holiday pay"
weeks holiday in the calculation). The use          arrangements are not in point. BA has
of the multiplier reduces the annualised            simply paid the same amount in respect of
figure to £3,600. Averaged out over a year          shift pay both for specific identified
that produces a reduced weekly sum of               holidays and for work. That complies with
£69.23. That is the sum wrongly used by             the requirements of the Regulations. What
BA for calculating the shift element of             the Claimants are seeking is enhanced
holiday pay.                                        shift pay for the holiday period, as
Mr Hogarth submits that in his hypothetical         compared with the shift pay for work. That
example the correct weekly sum, which               is not required by the Regulations. The
should be reflected in the shift element of         spreading of shift pay to produce a
holiday pay, is the sum of £75 that was             Consolidated Rate is produced by the
earned. BA would not pay that sum as the            correct application of the shift pay
holiday pay. It would only pay the reduced          provisions in the collective agreement, not
figure of £69.23 in respect of the holiday          by a misapplication of the Regulations
period. The effect of the reduction in the          contrary to the health and safety purpose
case of the Claimants (and others in a              of the directive.”
similar position) is that BA is forcing its
                                                    In the present case:
employees to fund at their own expense
                                                    “In my judgment, BA's submissions on
BA's statutory obligation to comply with
                                                    liability should be accepted. The
the Regulations.”
                                                    "reduction" or discount in shift pay relied
The CA rejected the argument that                   on by the Claimants is not the result of BA
there was an analogy with the rolled                misapplying the Regulations or the
up holiday pay cases such as                        collective agreements. The multiplier
Robinson Steele v. RD Retails                       which results in the payments earned for
Services Ltd C-131/04 and C-257/04.                 shift work in 48 weeks being spread over
Mummery LJ commented:                               the 52 weeks of the year is built into the
“In the "rolled up holiday pay" cases,              agreed Consolidated Rate formula for the
although employees are entitled to paid             calculation of shift pay contained in the
holiday pay and a specific part of the              collective agreements and incorporated
wages represents holiday pay, the                   into individual contracts of employment.
contractual scheme does not identify pay            The real cause of complaint by the
in respect of any specific period of                Claimants is the agreed method for
statutory holiday. It is not possible to            calculating the Consolidated Rate rather
distinguish holiday periods at all. The             than BA's use of that method in the
issue is then whether holiday pay has               application of the Regulations.
been paid to the employees at all.                  A disaffected employee might regard the
Employees are paid for the hours or days            continued application of the Consolidated
that they are at work in a year. The                Rate to a situation in which there are
employer has enhanced the ordinary rate             longer periods of paid holidays and a wide



                                               24
Employment law bulletin
Issue 5 May

range of changes in the terms of                    porter and he became a general
employment as a disincentive from doing             assistant with Guest Care Manager
shift work or from working for BA, but he           responsibilities. He remained in the
could not regard it as a disincentive from          employment of the respondents until
taking    the    statutory paid      holiday
                                                    1 January 2004. During the period of
entitlement. BA's employees are paid the
same rate for shift pay, whether they are           almost nine months that the claimant
at work or are on holiday. They are no              worked as Guest Care Manager at the
worse off as a result of taking paid                Learmonth Hotel in Edinburgh, he was
holidays. BA accordingly complies with the          regularly required to sleep-over in the
policy of the directive that employees              hotel. The reason for that requirement
should be encouraged to take their holiday          was primarily to deal with emergencies
entitlement. BA uses an agreed method               such as fire and flood.         On one
for calculating shift pay which ensures that        occasion, he was called out by the
they are paid the same when they are on             night porter to deal with rowdy guests.
holiday as when they are at work.”
                                                    On November 20th 2003, the claimant
SUMMARY                                             was disciplined for having left the hotel
The claimant was a Guest Care Manager               between 3.30am and 4.01am during
in the employment of a hotel company                one such sleep-over period. He was
who was required to “sleep-over” in the             called to a disciplinary interview as a
hotel several nights each week. The                 result and received a verbal warning.
primary reason for him being required to            A sleep-over requirement was made of
do so was to cover emergencies, such as             the claimant notwithstanding the fact
fire or flood. The Tribunal found that he           that he lived only 10 or 15 minutes
was not at the respondents‟ disposal                walk away from the hotel.
during periods of sleep-over, and was not
                                                    The EAT referred to the cases of
entitled to be paid therefore unless he
carried out any work. The Employment                Scottbridge Construction Ltd v
Appeal Tribunal reversed the decision of            Wright [2002] SLT 1356, Sindicato
the Tribunal. It was plainly wrong to say           de Medicos de Asistencia Publica
that the claimant was not at the                    (SIMAP) v Constelleria De Sandidad
respondents‟ disposal during sleep-overs            Y Consumo De La Generalidad
given that the respondents required him to          Valenciana       [2000]    IRLR     845,
be in their premises during those periods           Landeschauptstadt Kiel v Jaeger
for a stated purpose. He was, clearly,              [2003] IRLR 804, Dellas and Others
working.                                            v Premier Ministre and Another
WILLIAM CHARLES ANDERSON                            Case-14/04 (ECJ) [2006] IRLR 225
v                                                   and Mrs E MacCartney v Oversley
JARVIS HOTELS PLC                                   House           Management           UK
UKEATS/0062/05/RN                                   EAT/0500/05, 31 January 2006.
THE      HONOURABLE             LADY                The EAT held that it is:
SMITH (sitting alone)                               “plain from a review of the authorities is
The claimant‟s contract of employment               that the employee can be regarded as
                                                    working even although he is asleep and
was one which entitled him to be paid               will be so regarded if the place that he is
on an hourly rate basis. It was agreed              sleeping is his employer‟s premises and
between parties that he had not been                the reason he is sleeping there is that his
paid for periods that he had been                   employer requires him to be in those
required to sleep-over in the                       premises for the employer‟s purposes. In
respondents‟ hotel. The claim was,                  those circumstances the employee cannot
accordingly, a contractual one. In                  properly be regarded as enjoying a rest
particular, his claim was not advanced              period, that being a concept which,
as a claim under either the Working                 properly interpreted, involves a break from
                                                    being subject to employer requirement
Time Regulations 1998 or the National
                                                    during which the employee is able to lead
Minimum Wage Regulations 1999. On                   his normal life. Questions can, of course,
11 April 2003, he ceased being a night


                                               25
Employment law bulletin
Issue 5 May

arise as to whether the ability of an                   simply misses the point.”
employer to interrupt such a break period               The appeal was allowed.
and recall his employee from that state of
freedom is such as to render the entire
period working time. Mr Fairley, in the
course of his submissions, referred to
                                                        WHISTLEBLOWING
such circumstances as “grey area” cases
and that is probably a fair characterisation.
The present case does not, however, fall                SUMMARY
into that category.”                                    Qualifying    disclosure?       Claim    for
The Tribunal had erred in that it gave:                 constructive unfair dismissal under Section
“no consideration to the principles which               103A ERA struck out at PHR on ground that
can be deduced from those authorities to                it was misconceived. Chairman entitled to
which I have already referred.               In         conclude that no reasonable belief shown in
particular, no consideration has been                   criminal offence under Section 18 Public
given to the significance attributed to the             Order Act 1986, nor breach of a legal
fact that an employee is required to be                 obligation (under contract of employment).
physically present on his employer‟s                    Appeal dismissed.
premises or to the conclusion that                      MR M W BABULA v WALTHAM
emerges from a consideration of the                     FOREST COLLEGE
authorities to the effect that the fact that an         UKEAT/0635/05/SM
employee was allowed to sleep during an
                                                        HHJ Peter Clark
on     call   period     is     irrelevant    in
circumstances where the place where he                  The Claimant was appointed a full-
is required to sleep his employer‟s                     time lecturer and on 18 May he was
premises so as to be available if required,             assigned to teach the remainder of
for his employer‟s purposes.                            part of the GNVQ Access to business
In the present case, the claimant was                   course. He set an assignment for his
clearly subject to employer requirement                 students but by 25 May none of the
throughout the sleep-over periods. The                  students produced the work as
reason that he slept over in the hotel was              directed by the Claimant. Asked why
that the respondents were under an                      not the students responded that Mr
obligation to have at least two employees
                                                        Jalil, the previous lecturer, had not
present there overnight for health and
safety and fire regulation purposes. The                taught them the course curriculum
requirement that the claimant remain in                 from September 2003 until January
the respondents‟ hotel premises during                  2004; instead he had divided the class
sleep-over      periods     was       of   such         into Islamic and non-Islamic groups,
significance that he was liable to and                  teaching religious studies to the former
indeed had been disciplined in the event of             and ignoring the latter. When students
his leaving the hotel at any time during                asked about their work he told them to
such a period. That was in circumstances                „make it up‟. He also told the Islamic
where the claimant‟s own home was not                   group that he wished that a September
far away. It was, however, clearly not
                                                        11 incident would occur in London and
sufficient for the respondents‟ purposes
that the claimant be at home and on call.               indicated his happiness with the
He had to be in the hotel. The fact that he             events in New York on 11 September
was there met a need of the respondents.                2001. A student had raised these
He met that need throughout each sleep-                 issues with her personal tutor, the
over period.        Being present in the                Head of School and the Vice-Principal
premises was, primarily, what he was                    but no action had been taken. The
employed to do during sleep-over periods.               Claimant reported the students‟
That was, accordingly, his “work”. I am                 allegations to Mr Jalil‟s previous tutor,
readily satisfied that the Tribunal were in             Mr Hassan Ahmed for advice, in the
error in taking the view, as they did, that
                                                        presence of Mrs Lambert.             The
he could only be regarded as working if he
was carrying out some specific activity                 Claimant was concerned that she had
during a sleep-over period. That approach               been aware of the allegations for some



                                                   26
Employment law bulletin
Issue 5 May

time and had taken no action and that                         obligation is required before an employee can
Mr Jalil‟s observations regarding a                           establish that he reasonably believed that the
                                                              information tended to show that a breach of a
„9/11‟ incident in London amounted to                         legal obligation was likely. But it would undermine
a threat to national security and a                           the protection of this valuable legislation if
possible criminal offence of incitement                       employees were expected to anticipate and
to racial hatred.                                             evaluate all potential defences, whether within the
                                                              scope of their own knowledge or not, when
On 26 May the Claimant reported the                           deciding whether or not to make that disclosure.”
matter to the American CIA and FBI by                         He stated:
e-mail. He was advised to report his                          “The question, following the approach of
concerns to the local police, which he                        Elias P in Evans is not whether Mr Jalil
did on 2 June. Following what the                             may have some defence to a criminal
Claimant contended were a number of                           charge under Section 18 which may not
detrimental acts against him by the                           have occurred to this Claimant, but
Respondent on the ground that he had                          whether the set of facts which he
made the disclosures he resigned on                           reasonably believed existed could possibly
one month‟s notice, ending his                                constitute the offence. Only if there is no
                                                              reasonable prospect of his establishing
employment on 29 August 2004.
                                                              that the facts could constitute the offence
The Tribunal held that the Claimant had                       can this part of his claim properly be struck
not had not made a qualifying                                 out as misconceived under Rule 18(7)(b)...
disclosure. On appeal the EAT                                 It is here, in my judgment that the
considered Section 43B ERA, Section                           Claimant‟s pleaded case falls down. The
103A ERA, Section 18 of the Public                            racial group against whom the 9/11 remark
Order Act 1986, Parkins v Sodexho Ltd                         was directed is simply not identified. It is
[2002] IRLR 109 and Kraus v Penna                             not British citizens, but the group of
[2004] IRLR 260, Cox J in the latter                          students consisting of Jews and white
case stating that “In other words if the                      Europeans. However, that group emerges
                                                              from the division of the class into Islamic
employees are under no legal
                                                              and non-Islamic students, a division based
obligation, as a matter of law, a worker                      on religion, not race.
cannot claim the protection of this                           29.      In short, I have concluded that the
legislation by claiming that he                               Chairman was entitled to find that the
reasonably believed that they were.”                          words relied on were, on the Claimant‟s
Considering the Section 43B(1)(a)                             pleaded case, not directed to any racial
claim, HHJ Clark noted that the                               group so as to found a reasonable belief
apparently absolute requirement, that                         that a Section 18 offence had been, was
the Claimant must show a legal                                or was likely to be committed. The claim
obligation as a matter of law, has to                         based on a Section 43B(1)(a) qualifying
                                                              disclosure had no reasonable prospect of
some extent been explained and
                                                              success.”
softened by the Judgement of Elias P in
                                                              Any     section     43B(1)(b)     claim
Bolton        School       v      Evans
                                                              “foundered on the distinction between
(UKEAT/0648/05/SM.          7 February
                                                              racial and religious discrimination, as
2006) where the President said, in
                                                              the Chairman found.” Further “a
considering Kraus, at paragraphs 51-
                                                              Section 43B(1)(f) qualifying disclosure
52:
“51.    We do not think that the protection is lost
                                                              can only arise where information
merely because the employer may be able to                    tending to show a matter falling within
show that, for reasons not immediately apparent               (a) or (b) is within the Claimant‟s
to the employee, the duty will not apply or that he           reasonable belief. It was not.”
has some defence to it. The information will still, it
seems to us, tend to show the likelihood of
breach. It is potentially powerful and material
evidence pointing in that direction even although
there may be other factors which ultimately would
demonstrate that no breach is likely to occur. 52.
There may indeed be cases where a relatively
detailed appreciation of the relevant legal




                                                         27

								
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