Bulletin by suchenfz


									Employment law bulletin
Issue 3 March


                                                       MARCH 2006 THREE

Michael Duggan,

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


Data protection
The EU Article 29 Working Party on Data Protection recently produced a
number of Opinions: see Work Programme 2006-2007 05.04.2006 WP 120

Opinion 3/2006 on the Directive 2006/24/EC of the European Parliament and
of the Council on the retention of data generated or processed in connection
with the provision of publicly available electronic communications services or
of public communications networks and amending Directive 2002/58/EC
25.03.2006 WP 119

Working Party 29 Opinion 2/2006 on privacy issues related to the provision of
email screening services
21.02.2006 WP 118

Opinion 1/2006 on the application of EU data protection rules to internal

Employment law bulletin
Issue 3 March

whistleblowing schemes in the fields of accounting, internal accounting
controls, auditing matters, fight against bribery, banking and financial crime
01.02.2006 WP 117

The Disability Discrimination (Premises) Regulations 2006 were laid before
Parliament on 28th March and come into force on 4th December. They flash
out sections 22 to 24M of the Disability Discrimination Act 1995, as amended
by the Disability Discrimination Act 2005.

Equality Act 2006
On 13th March the DTI produced a Consultation Paper:
Getting Equal: Proposals to Outlaw Sexual Orientation Discrimination in
the Provision of Goods & Services with responses due by 5th June 2006.

Government Review of Employment Rights
The Government announced the results of its review under section 23 of the
EA 1999 on 29th March 2006. It is remarkably limited in its scope. See

Paternity leave
The DTI has produced a Consultation paper on additional paternity leave and
its relationship with maternity leave: see Additional Paternity Leave and Pay - DTI
Consultation 8.3.06

The DTI is proposing an amendment to the law on collective redundancies, to bring
UK legislation in line with the ECJ decision in Junk Kuhnel. See the Consultation

CASE UPDATER                                   took over Global Centre Limited in
                                               March 2001 and he was employed as
                                               Senior Telecommunications Officer of
                                               Global. In September 2001 Muscat was
                                               told that there was a potential buy out of
                                               EIL and if he wished to continue
A worker whose services were supplied by       working he would have to become a
an employment business to a client was         designated contractor by setting up a
employed by the client under an implied
                                               limited company. The ET found that he
                                               remained an employee of EIL though
                                               EIL regarded him as a contractor from
MUSCAT                                         October 2001. He was made redundant
[2006] EWCA Civ 220                            on 15th October 2001 but continued to
Smith LJ                                       work as before save that he received
Mr Muscat was employed by EIL which            sums to cover his tax and NI. Payments

Employment law bulletin
Issue 3 March

were made to the service company,              been expressly set out (Stevedoring
(Called E-Nuff ltd) which had been             and Haulage Services Ltd v Fuller
incorporated on 17th October 2001 at           [2001] EWCA 651 (2) Dacas [2004] ICR
the expense of EIL. Muscat submitted           1437 was per incuriam, wrongly
a draft agreement entitled „Independent        decided or could be distinguished (3)
Contractor Agreement‟ though there             the ET had failed to consider the
was no written agreement between E-            principle that a contract could only be
Nuff and EIL, though the terms of the          implied in cases of necessity. On
agreement became terms and between             appeal to the EAT it was held that in
E-Nuff and EIL as well as if the name of       Dacas Mummery LJ made clear that
E-Nuff had been substituted. On 19th           the Court of Appeal intended its
February 2002 the Respondent took              judgement to offer guidance to
over EIL. The terms of the Agreement           Employment Tribunals in cases such
continued to apply with amount of work         as the present. The ET was correct to
at the Respondent‟s offices increasing         follow the guidance of the Dacas case
and that at EIL and Global deceasing           which was binding and it was for the
until these sites were eventually closed       Court of Appeal to determine whether
down. The ET found that Muscat‟s               in was decided per incuriam
employment transferred from EIL to             The fact that in the present case Mr.
Cable under TUPE. The take over was            Muscat did not contract directly with
completed on 24th April 2002 and               Abraxas, but E-Nuff, his service
Muscat was told that he would have to          company did, is a distinction without
provide his services through an agency         any difference. Just as in Dacas, the
as Cable would not pay E-Nuff direct.          employment agency Abraxas is
An agreement was entered into on 26th          interposed between the Applicant and
July 2002 between Cable and Abraxas            the End-User, the Respondent,
PLC for Abraxas to supply contract             although the service company E-Nuff
personnel to Cable. E-Nuff entered into        is interposed between the Applicant
an agreement on 13th August 2002 with          and Abraxas. The Respondent is the
Abraxas entitled „Contract for Services‟       real and immediate recipient of the
whereby E-Nuff agreed to provide               work done by Mr Muscat, and
services to Abraxas‟ client, Cable.            Abraxas, the Agency is made
However, Muscat continued to work as           responsible for paying remuneration to
before under the director of Cable, he         E-Nuff for the benefit of Mr Muscat. If
was labelled as an employee within             there were no interposed employment
Cable‟s department structure, al               agency there would be no doubt that,
equipment was paid for by Cable, his           even in the absence of an express
leave was arranged to suit Cable and,          contract, Mr Muscat worked under a
though there was a power to provide a          contract     of   service    with   the
substitute under the agreement with            Respondent.       This was expressly
Abraxas, no substitute was provided..          found to be the case by the
IN November 2002 he was asked if he            Employment Tribunal for the period
would become an employee of Cable              after the TUPE transfer took effect.
but in December his contract was               The Respondent thereafter continued
terminated. The ET decided that there          to manage and control the work done
had been an implied contract between           by Mr Muscat in the mutual
Cable and Muscat which was not                 expectation that he would be paid for
destroyed by the imposition of E-Nuff.         what he was told to do and had in fact
On appeal it was argued that (1) the ET        done. The commercial reality of the
had been wrong to imply a contract             case was that to all intents and
where the contractual relations had            purposes Mr Muscat was working for

Employment law bulletin
Issue 3 March

Cable & Wireless, not Abraxas and not                   entered into an agreement, the
E-Nuff. The word „working‟ was used                     express terms of which were wholly
in a neutral and non-legal sense. Mr                    inconsistent with there being such an
Muscat‟s     position could not      be                 implied contract was distinguishable
distinguished in any material way from                  since in that case the workers had
that of Mrs Dacas vis a vis Brook                       sought to imply a contract of
Street and the London Borough of                        employment with the stevedoring
Wandsworth.       The Claimant was                      company despite the fact that the
therefore employed by Cable.                            parties had signed an agreement
On appeal to the Court of Appeal, it                    stipulating that the workers would
was stated that the judgment in Dacas                   provide their services on 'an ad hoc
was correct:                                            and casual basis' with no obligation on
“In our opinion, the view of the majority in            the part of the company to provide
Dacas was correct. The essentials of a contract         work or on the worker to accept any
of employment are the obligation to provide
work for remuneration and the obligation to             work offered. Moreover the agreement
perform it, coupled with control. It does not, in       spelt out that the workers were not to
our view, matter whether the arrangements for           be the employees of the company.
payment are made directly or indirectly. The            The CA concluded that there “does not
point can be illustrated by the following simple        appear to be any essential inconsistency
facts. Mrs A employs a domestic cleaner W for
several years during her marriage to Mr A and
                                                        between Mr Muscat's position in promising
always pays W herself. There is no doubt that           Abraxas that he would undertake an
Mrs A is W's employer in a contract of                  assignment at the premises of C&W and
employment. Following the divorce of Mr and             an implied contract of employment with
Mrs A, W continues to work for Mrs A but, as            C&W when that assignment began. We
part of the maintenance arrangements between            accept, of course, that because there is no
Mr and Mrs A, Mr A agrees with Mrs A that he            essential inconsistency, its does not follow
will pay W's wages. Mr A then agrees with W             that there was an implied contract of
that, for as long as she continues to clean Mrs         employment between Mr Muscat and
A's house, he will pay her wages. Mrs A
continues to control the way in which the work
                                                        Abraxas; it only means that the possibility
is done. Can it really be said that there is now        of such a contract is not ruled out.”
no longer a contract of employment between
Mrs A and W just because it is Mr A who pays
the wages, by arrangement with Mrs A? We
find the suggestion surprising. The position
would be the same if, when Mrs A took W on
as a cleaner, she arranged that the wages
would be paid by the trustees of a family trust
or by the company that she worked for. It
                                                        Application of Polkey.
seems to us that it cannot make any difference          T GOVER & ORS v
how the wages are paid. In any of the                   PROPERTYCARE LIMITED
arrangements we have envisaged, Mrs A, who              [2006] EWCA 286
had the benefit of the work done, would remain          Buxton LJ, Lloyd LJ, Richards LJ
liable to pay the wages if the arrangement
broke down.”                                            The Employer sought to impose
The EAT had correctly recognised that                   changes to the Claimants‟ commission
Dacas provided guidance. The                            rates which were repudiatory of the
contract between the company and the                    Claimants‟ contracts in a number of
agency did not preclude an implied                      ways. The ET stated that the changes
contract between the Claimant and                       had sought to be imposed without
end user. Stevedoring and Haulage                       even paying lip service to any
Services v Fuller [2001] IRLR 62, in                    established concept of consultation
which the Court of Appeal held that it                  and that the whole process leading up
was not possible to imply a contract of                 to termination was based upon
employment where the parties had                        erroneous employment law principles.

Employment law bulletin
Issue 3 March

The ET found that the employees                          stage of considering the fairness of the
would not have accepted the terms if                     dismissal, Buxton LJ referred to the
there had been proper consultation so                    judgment of Lord Prosser in King v
that the employees had only lost the                     Eaton(No 2) [1998] IRLR 686[19],
period of consultation so that only four                 cited with approval by this court in
months had been lost with an added                       Lambe v 186K [2005] ICR 307[58]:
period of two weeks notice.                              "the matter will be one of impression and
In the Court of Appeal the Appellant                     judgment, so that a tribunal will have to decide
                                                         whether the unfair departure from what should
was not permitted to advance an issue                    have happened was of a kind which makes it
that had not been earlier raised but                     possible to say, with more or less confidence,
Buxton LJ made observations about                        that the failure made no difference, or whether
Polkey because the Court had                             the failure was such that one cannot sensibly
                                                         reconstruct the world as it might have been"
examined the issue. He noted that
“The ET's ruling on dismissal…was that the               The Court of Appeal stated that it
original "package" had been so unreasonable              should tread very warily and that the
that it would not have been possible to dismiss          ET had not gone outside the ambit
the claimants for refusing to accept it whatever         permitted by the cases.
procedure had been adopted. And the
hypothesised eventual fair dismissal would not
have been for the same reason as the actual              SUMMARY
dismissal, failure to accept the original                Unfair dismissal of employee whilst she was
package, but for a different reason, failure to          sick. The Tribunal held that she was
accept a different package. “                            contractually entitled to full pay for the
This was rejected as a proposition of                    notice period.       That conclusion was
law. Buxton LJ stated:                                   overturned on appeal. The Respondent
“First, it was said that the case is taken outside       cross appealed on the grounds that in any
Polkey because the ET had found that the                 event she was entitled to unfair dismissal
original dismissal could never have been fair:           compensation which should have included
unlike, for instance, a genuine redundancy               full pay for the notice period, following the
situation that was however unfairly managed. It          principle enunciated by Sir John Donaldson
is true that some parts of the ET's exposition           in Norton Tool v Tewson [1972] ICR 501.
give credence to that view. But the more
realistic analysis of what they said is that the
                                                         EAT held, by a majority, that this principle
whole process was unfair because the nature              was no longer applicable following the
of the terms originally proposed demanded                decision of the House of Lords in
extensive consultation. That is quite different          Dunnachie v Kingston Upon Hull City
from a discrete finding of an unacceptable               Council [2004] UKHL 36; [2005]1 AC 226;
reason for dismissal divorced from any                   [2004] ICR 1052
question of procedural fairness, such as was             MR D E LANGLEY and MS C J
made for instance in O'Donoghue. Second, it
was said that the hypothesised dismissal would           CARTER v MS A M BURSO
have been for a different reason from the actual         Elias P, Mr Parker CBE, Mr Smith
dismissal. But both cases envisaged refusal to           The Claimant succeeded in her unfair
accept terms during a legitimate reorganisation.
It is hard to see that there was a difference
                                                         dismissal and wrongful dismissal
between them at a level of generality sufficient         claim. The Claimant had been
to found the appellants' argument.”                      dismissed after an argument about a
As to the argument that the ET had                       pay rise. She was absent for sickness
made findings as to what would have                      and would have been absent during
happened after proper consultation                       her notice period. The Tribunal
and advice hat were not open to it,                      awarded compensation for wrongful
this complaint being based on lack of                    dismissal on the basis that she would
evidence on which the findings could                     have been entitled to 8 weeks‟ notice
be based; and that the exercise                          and her loss was calculated on the
launched the ET on a sea of unreliable                   basis of her full salary. No sums were
speculation and that it,      indeed,                    awarded for the notice period in
contradicted findings made at the                        relation to the unfair dismissal

Employment law bulletin
Issue 3 March

compensatory award. The Appellants              The EAT set out the two issues as
argued that the Claimant had only               follows:
been entitled to SSP of £440. It was            The first is whether it is in fact good
argued on the cross appeal that , even          industrial practice for an employer to
if the Appellants were right that the           make a full payment in lieu of notice to
contractual entitlement was merely to           an employee who, during that period
statutory sick pay for that period,             of notice, will be absent sick.
nonetheless under the unfair dismissal          The second question is whether,
provisions,     case     law      clearly       assuming that it is good industrial
established that Ms Burso should have           relations practice to make the payment
been awarded full pay for the notice            in lieu, the principle established in
period based upon the principle first           Norton Tool remains good law.
enunciated in Norton Tool v Tewson              The EAT stated:
[1972] ICR 501, that it was good                We bear in mind that the loss need not be loss
industrial relations practice for an            dictated by the contract alone and can include
                                                the loss of benefits which the employee might
employer who dismisses without                  reasonably expect to receive: see section
notice to make a payment in lieu of             123(2) reproduced in paragraph 16 above. No
notice. Where such sums are paid, no            doubt it may be said that an employee had a
credit has to be given by the employee          reasonable expectation of being treated in
                                                accordance with good industrial relations‟
for monies earned by the employee               practice.     But we do not think that this
from other employers in the notice              subsection could be relied upon as a basis for
period. Upon appeal it was held that            the Norton Tool principle (and no-one has
there was no basis for holding that the         sought to suggest that it could) for two reasons
Claimant was entitled to full pay for the       in particular. First, subsection (2) is plainly, in
                                                our view, directed at how one assesses what
period when she was absent for                  the employee would in fact have received,
sickness as the contractual term was            whatever his contractual rights, had the
clear. The EAT applied in Scott’s               contract been performed. It is not dealing with
Company (U.K.) Ltd. v Budd [2003]               an expectation he might have had about how
                                                the employer would conduct himself in the very
IRLR 145 holding that that the only             act of dismissal. It is focussing upon benefits
entitlement was to SS as the notice             which the employee might reasonably expected
period was over one week longer than            to have had but for the dismissal, not benefits
the statutory minimum. However, on              arising out of the dismissal itself. The concern
the cross appeal it was argued that if          is with the quantification of loss not the nature
                                                of the loss itself. Second, section 123(4) would
the Tribunal were wrong to award full           in any event require that the duty to mitigate
pay for the period of notice in the             would have to apply to such losses.”
wrongful dismissal action, nonetheless          The majority in the EAT therefore
it should have awarded precisely the            concluded:
same sum when calculating the                   “We recognise that in reaching its decision in
compensation for unfair dismissal.              Dunnachie the House of Lords did not focus
                                                on this aspect of the Norton Tool case. There
The EAT referred to section 123                 was no reference to the duty to mitigate. But in
Employment Rights Act 1996 and the              the majority view it is simply not consistent with
argument that Norton Tool was no                the analysis of Section 123 to allow
longer good law after Dunnachie v               compensation for failure to comply with good
Kingston Upon Hull City Council                 industrial relations practice. If the requirement
                                                is that the assessment should be of loss
[2004] UKHL 36; [2005]1 AC 226;                 flowing from the dismissal, it involves having to
[2004] ICR 1052. Elias J carried out a          adopt a concept of a “deemed loss” as well as
detailed review of the cases, including         giving no effect to the duty to mitigate during
Morgans v Alpha Plus Security                   the notice period. If on the other hand it rests
                                                on the just and equitable principle, their
Limited [2005] ICR 525, Hardy v Polk            Lordships have clearly established that this
(Leeds) Ltd. [2005] ICR 557 and                 cannot be used to extend the scope of loss
Voith Turbo v Stowe [2005] ICR 453.             beyond the loss flowing from the dismissal

Employment law bulletin
Issue 3 March

itself. Dunnachie was concerned with non                required emergency admission to
economic loss, but there is no principled basis,        hospital by ambulance. Following that
it seems to us, for treating economic loss, but
not flowing from the dismissal, any differently.        advice, the patient‟s GP made a formal
So we see no warrant for either approach.”              complaint to the Respondent. The
Thus there was no legitimate basis for                  Claimant was suspended and an
assessing the compensatory award so                     investigatory meeting took place on 26
as to provide a bonus over and above                    August. On 25th September he was
the loss in fact flowing from the                       advised in writing that a formal
dismissal itself. The EAT departed                      disciplinary hearing would take place
from Babcock FATA Ltd v Addison                         but did not hear until 25th October that
[1987] ICR 805. The EAT concluded:                      he was advised a hearing would take
“We are put in the invidious position of being          place on 4th November. The charge
bound by a Court of Appeal decision which               was found proven. He was summarily
seems to the majority to conflict with a later
analysis of the relevant statutory provision by
                                                        dismissed with pay in lieu of notice.
the House of Lords. We think that in these              An internal appeal against that
circumstances we are justified in not following         decision was dismissed by a letter
the decision of the Court of Appeal. We are             dated 16 February 2005 from the
influenced in particular by the fact that in            chairman     of    the    Respondent‟s
Babcock itself the Master of the Rolls put the
justification for the principle in Norton Tool on       Disciplinary Appeals Panel. On 3 May
the just and equitable concept in the statute.          2005 the Claimant lodged his form
The majority see no room for that approach in           ET1 with the Tribunal.
the light of Dunnachie. It seems to us that we          In the EAT, the critical issue for the
are entitled not to follow Babcock, even
although the case has been undermined rather
                                                        Chairman to determine was whether
than overruled.”                                        the     Respondent     employer     first
                                                        contemplated dismissing the Claimant
DISCIPLINARY PROCEDURES                                 before or after 1 October 2004. If the
                                                        former, the unfair dismissal claim was
                                                        out of time; if the latter, it was just
                                                        within time. The ET held that it was
Practice & Procedure: 2002 Act and Pre-                 the former. Regulation 18(a) provides:
Action Requirements                                     “These regulations shall apply in relation to
Regulation   18(a)   2002     EA    (DR)                dismissal…where the employer first
Regulations.     Transitional Provisions.               contemplates dismissing…the employee
Meaning of employer first contemplating                 after these regulations come into force”.
dismissal. Who is the employer? Test                    HHJ Clark noted:
subjective or objective.      Need for                  “The test as to when dismissal is first
                                                        contemplated by the employer under
communication to Claimant. Perversity.                  Regulation 18(a) must be an objective one. It
Appeal dismissed                                        cannot be wholly subjective on the part of the
MR C MADHEWOO                        v    NHS           employer. I disagree. What is contemplated
DIRECT                                                  by the employer is what is in his mind. just as
                                                        the reason for dismissal for the purposes of s98
UKEAT/0030/06/LA                                        ERA is the set of facts in an employer‟s mind
HHJ Peter Clark                                         which leads him to dismiss. Equally, I am not
The Claimant worked for the Respondent                  persuaded that an element of communication
as a nurse adviser and had had a total of               to the employee, whether actual or
                                                        constructive, is to be imported into the plain
some 37 years‟ service in the National                  wording of Regulation 18(a) as to when the
Health Service prior to his summary                     employer first contemplated dismissal.“
dismissal on 4 November 2004. On 22                     The letter of 24th September written by
June 2004 he gave advice to a caller                    an employee with authority was the
to seek a general practitioner‟s visit at               first date when dismissal was
home when her stated symptoms                           contemplated. The burden lay on the
(indicating  a    perforated     bowel)                 Respondent within whose exclusive

Employment law bulletin
Issue 3 March

knowledge      the   fact   of   first                  work at 9.00am, when he was rostered
contemplation lay to establish the                      to do so and did not make contact to
relevant date. The Judge concluded:                     state that he would not be coming in.
“Like the Chairman, I reach my conclusion in            He alleged that he had later come in
this case without enthusiasm. It is that this           on 12th but had stayed in his car doing
appeal fails and is dismissed. I would not draft
Regulation 18(a) in the terms in which it               paperwork.      The     Claimant     was
appears. That is not my task. Rather, it is to          suspended,      four    fellow   officers
give effect to the will of Parliament or, in this       provided statements and a hearing
case, the relevant minister responsible for             took place which the found to be an
tabling the Regulations.”
                                                        investigatory and disciplinary hearing.
                                                        The Claimant was given a full
                                                        opportunity to present his account of
                                                        relevant matters and to provide
Unfair        Dismissal:        Procedural
Fairness/Automatically               Unfair             explanations for his conduct. They
Dismissal &                                             noted that he had no satisfactory
Practice       &      Procedure:      Case              explanation for leaving a gap in the
Management                                              logbook, if he was on site and able to
 Unfair dismissal.       EAT rejected a                 contact his fellow officers. He simply
submission that the Employment Tribunal                 said it was a matter of individual taste.
ought to have found the dismissal to be                 The ET thought that, overall, the
automatically unfair for failure to comply              conduct of the hearing was not unfair.
with the statutory disciplinary procedures.             The hearing was reconvened to 12th
Issue arose as to when, in the course of a
                                                        November. He was dismissed on 19th
disciplinary hearing, new allegations arose
so as to trigger the statutory procedures               November on the ground that he had
                                                        failed to devote the whole of his time
                                                        to work and should not have spent the
MR M SILMAN v ICTS (UK)                                 time in his car which he had not
LIMITED                                                 substantiated in any event.          The
UKEAT/0630/05/LA                                        manner in which the log books had
Elias J, Mr Harris, Mrs Matthias                        been filled in led to an inference that
The Claimant worked as a security                       the Claimant had attempted to conceal
officer from 21 January 2000 until his                  his movements.           The Claimant
dismissal on 19 November 2004. The                      appealed but did not attend the appeal
employers provided targeted security                    which was heard and dismissed in his
services at a number of sites within the                absence.
UK and, with particular reference to                    Before the ET it was contended that
this case, for Thames Valley                            the dismissal was unfair under section
University. It was an express term that                 98A ERA 1996 on the ground that
the Claimant had to inform his                          Schedule 2 of the EA 2002 had not
manager or subordinate on or shortly                    been followed, alternatively that there
after his arrival on site. He also had to               had been an unfair dismissal under
seek permission if he wished to leave                   section 98. The ET took the view that
the site early and that he be                           section 98A was met. The dismissal
contactable via his mobile phone                        was unfair as there were a number of
during working hours. On 11th October                   defects in the way that the process
the Claimant told his manager he                        had been conducted but the ET found
would not be coming to work because                     that there was an 80% chance of
he had had a disturbed night and, in                    dismissal if a fair procedure had been
any event, did not have any money to                    followed.     It then applied section
obtain the required public transport.                   98A(2) and the light of the finding that
On 12 October he did not arrive for                     there was an 80% chance that the

Employment law bulletin
Issue 3 March

Claimant would have been dismissed,                    and misuse of company time which stemmed
the Tribunal concluded that the result                 from the Appellant sitting in his car and not
                                                       effectively carrying out work for the benefit of
of applying that subsection was that                   the company. In both cases, the essence of the
they had to conclude that the dismissal                complaint is that no work is being done for the
was not unfair. The EAT summarised                     company.       Whether that is because the
the position as follows:                               employee is at home or sitting in his car is of no
“It was first held that there was no automatic         real materiality, so it seems to us. Shifts in the
dismissal. There would, nonetheless, under             focus of the case will not lead to an obligation
the old Polkey principle have been an unfair           for the employer to write fresh missives on
dismissal with 80% contributory fault.                 each occasion. Of course, there will be cases
However, they accepted that Section 98A(2)             where the employer wishes to deal with a quite
reverses Polkey where there is no breach to            distinct act of misconduct which has emerged
the statutory procedures. It has the effect that       at some stage as a result of the disciplinary or
if the employer is able to satisfy the Tribunal,       investigative process for earlier alleged acts of
then it was more likely than not that the              misconduct. In those circumstances, it would
employee would have been dismissed, even if            be necessary to comply with the procedures,
the contractual procedures had been properly           so that the employee knows in advance
complied with, then there was no unfair                precisely what case he has to meet, to send a
dismissal. Both parties accepted before the            fresh statement in writing.”
Employment Tribunal that this was the proper           A third ground of appeal (which does
construction of Section 98A(2).          On a          not raise a point of principle) was also
provisional reading of the subsection, that            dismissed.
seems to be right, but we should emphasise
that we have heard no argument about the
matter.”                                               DISCRIMINATION RACE
On appeal it was argued that the
employer failed to comply with the
Schedule because they ought to have                    SUMMARY
                                                       Unlawful Deduction From Wages & Race
set out in writing the conduct of the                  Discrimination: Post-Employment
employee which led to the employer                     The Employment Tribunal erred in construing
determining to dismiss. One of the                     "full salary" payable on the suspension of the
grounds specified in the letter had                    Claimant as fettering the employee‟s right to
been misuse of company time which                      end a short term temporary placement and
                                                       restore him to his substantive grade which
had not been in the original letter. The               represented his "full salary".
second ground of appeal based upon                     The Employment Tribunal was directed on
Strouthos v London Underground                         remission of one ground of appeal to
[2004] IRLR 402 was that a failure to                  reconsider its finding of race discrimination in
                                                       the light of there being no breach of contract.
identify the alleged misconduct with                   There was no error in the Employment
specificity is an important failure.                   Tribunal's finding of direct race discrimination
These submissions were rejected. The                   under Race Relations Act 1976 s l(2) while
EAT stated:                                            dismissing his claim of victimisation under s2
“The purpose of these procedures is to ensure          arising out of the same facts. This was as the
that there is a proper and fair opportunity for        Employment Tribunal found the result of the
the parties to seek to address any disciplinary        burden of proof shifting for race discrimination
issues and other matters which may lead to             but not for victimisation claims, and the
dismissal prior to the matter ending up in             different grounds upon which liability would be
litigation before the Employment Tribunal. It is       founded i.e. race discrimination and having
not to create unnecessary technical hurdles for        made an allegation of race discrimination
either employer or employee. It will frequently        respectively. Madden [2005] IRLR 46 CA
happen in the course of a disciplinary hearing         applied.
that the evidence emerging will identify               Although the Claimant's representative did not
potentially disciplinary conduct which, although       respond one by one to the criticism of lack of
closely related to the original alleged                reasons, any was insufficient to undermine the
misconduct, is a variation of it. That, it seems       discharge of the Employment Tribunal's duty to
to us, is precisely the position here. There is        give reasons.
very little difference between the original            SERCO LTD T/A EDUCATION
complaint, which was unauthorised absence,             BRADFORD & ORS v MR R

Employment law bulletin
Issue 3 March

QUARSHIE                                          R1 had gone.
HHJ McMullen QC, Mr Harris, Mr                    The ET found that there had been a
Haywood                                           breach of contract when there had
An ET held that the Claimant was                  been a „pay cut‟ when on 6th January
racially discriminated against by                 2003 the suspension was continued at
various individuals by having pay cut             the substantive post salary rather than
imposed on him whilst he was                      the temporary upgrade as „full salary‟
suspended, by allowing a suspension               was the salary at the time of
to continue for an excessive period, by           suspension. Applying the burden of
refusing an appeal on his grievance               proof it decided that the pay cut was
and by the length of time it took to              discrimination and that the suspension
process      the    grievance.     Other          had continued too long so that there
complaints of race discrimination and             was discrimination and that there had
victimisation were dismissed. A                   been discrimination in relation to the
complaint of unlawful deduction from              right of appeal on the grievance. Other
wages succeeded. The Respondents                  claims were dismissed. The ET
appealed. During the appeal hearing               expressly rejected the contention that
an application was made to amend the              an all of nothing approach was called
Notice of Appeal on the ground that               for so that it was inconsistent to find
the juridicial basis for pinning liability        that there had been racism in relation
on the individuals (s32, 33 RRA 1976)             to some complaints but not others.
had not been made out but rejected.               The individuals were also criticised for
The Claimant had worked in Bradford               bad management, incompetence, drift
Council‟s Department of Education                 and inattention.
since 1988. His racial and ethnic                 In relation to the „pay cut‟ the EAT
origins were black African. Serco took            noted:
                                                  “First on the pay cut point, the use of the words
over the functions in 2001. The                   “full salary” means what is contractually due:
contract provided for payment of full             see the combined effect of Railway Clearing v
salary during periods of disciplinary             Druce [1926] 135 LT 417 HL, Adams v The
suspension. The Claimant was                      Liverpool Corporation [1927] 137 LT 396 CA
allocated work by R2, the Director of             and Sutton v Attorney General [1923] xxxix
                                                  TLR 294 HL . Generally speaking, evidence of
Education.      The     Claimant    was           a practice in relation to any particular
appointed on a temporary basis in a               employment matter will not be admissible
position with a higher salary. Relations          unless the terms requiring, for example,
with R1 deteriorated and there was an             incorporation or implication as a result of
                                                  custom and practice are met: see Young v The
angry meeting on 9th December 2002                Canadian Railway Company [1931] AC 83
where the Claimant expressed a                    HL. Although s27 of the Employment Rights
number of concerns. He was                        Act 1996 admits of matters which are not
suspended the next day and sought to              strictly contractual, the impact is that there
activate the grievance procedures. On             must be some entitlement to the pay claimed.”
23rd December 2002 he was told that               On discrimination the EAT referred to
his temporary appointment had come                The Chief Constable of West
to an end so that from 6th January                Yorkshire Police v Khan [2001] IRLR
2003 he would revert to his original              830 at paragraph 29, Bahl v the Law
job. Over an 18 month period steps                Society & Ors [2004] IRLR 799,
were taken to resolve the grievances              Glasgow City Council v Zafar [1998]
and the concerns of the Respondent                ICR 128 and in Igen Limited v Wong
Company. The Claimant complained                  [2005] IRLR 258. It stated that “subject,
to an ET on 28th October 2004, though             of course, to the burden of proof shifting in
                                                  certain cases, the indication of unfairness such
he remained employed on sick leave.               as is relevant to unfair dismissal does not

Employment law bulletin
Issue 3 March

illuminate a discussion of race discrimination            the employer argued that these
(see, for example, Lord Browne-Wilkinson at               findings were inconsistent. The EAT
paragraph 3, Zafar). To establish discrimination
it has to be shown that the complainant had               noted that the “the Tribunal‟s approach
been treated by the person against whom                   in acquitting the Respondents of
discrimination was alleged less favourably than           victimisation is, as we can see from
that person treated or would have treated                 the above passage, directly related to
another on racial grounds. The conduct of a
hypothetical reasonable employer or the fact
                                                          its decision not to draw an inference.
that the respondent employer had acted                    It was open to it to do so. That is
unreasonably is irrelevant.”                              consistent with the guidance in King
The EAT held on „full salary:                             and the more generous approach
“In our judgment, the existence of the                    therefore in s2 claims.” The EAT
disciplinary code does not trump the                      stated that there was a distinction
contractual right of this employer to enter into a
temporary      arrangement       for   upgrading          between        the     approach      to
(reviewable at the end of a certain period), as a         discrimination and victimisation:
matter of contract. Life must go on during a              “The different finding is entirely explicable on
suspension and the other powers which                     the basis that there is different forensic
management have by reason of this contract                treatment under these two sections, driven by
are not affected by the indication to the                 the application of s54A, and on the basis that
Claimant that full salary will be paid. The               the question is different.            For race
correct approach is that disciplinary suspension          discrimination, the Tribunal is looking to see
will be imposed usually on terms that the                 whether the treatment has been on the grounds
Claimant‟s contractual full salary will be paid.          of race. For victimisation, it is whether it is on
If, for one reason or another, the Claimant‟s             the grounds that the Claimant had done a
contractual salary changes, that will go with it;         protected act, as the Tribunal put it in its
for example, if he were subject to a service or           paragraph 75 above, whether the Respondents
age related increment, that would be regarded             were victimising, punishing or taking less
as a change in his full salary and he would get           favourable treatment against him because of
the benefit of it when suspended.             The         an allegation of racism. Thus, as a matter of
converse is also true. If, for some reason                logic and statutory application, it is perfectly
found in the contract, the rate of pay may be             permissible to have different results under the
reduced, then there is no breach. Thus, the               two sections.”
reduction in pay from what had been                        The case was remitted for further
temporarily paid until it was reviewed, was not           submissions in relation to the pay cut
a breach of contract when it occurred on 6
January 2006.“
                                                          issue and its effect on the allegation of
The claim had also been out of time.                      discrimination.
The issue of breach of contract had
meant that the race discrimination
                                                          Race       Discrimination       –     direct;
issue was seriously affected as “The                      interfering discrimination
introduction to the discussion of                         Claim of race discrimination.        Claimant
whether or not there was race                             alleged that the Tribunal were obliged to
discrimination taking the form of a                       identify less favourable treatment and then
reduction in pay is prefaced…with the                     go on to the second stage, if necessary of
assumption that there has been a                          analysing the reasons why. Respondent
breach      of    the    Respondent‟s                     contended that in fact this had been done.
disciplinary policy”    These issues                      EAT held not always necessary to deal with
therefore needed to be considered                         the two issues of less favourable treatment
                                                          and reason why sequentially, relying upon
again on the basis that there had not
                                                          dictum of Lord Nicholls in Shamoon. Other
been a breach of contract.                                grounds, turning on the facts, rejected.
In relation to the findings that there                    MR E BROWN       (1) LONDON
had been discrimination because of
                                                          BOROUGH OF CROYDON (2) MR
the length of the suspension and lack
of an appeal against the grievance but                    D JOHNSTON
that there had not been victimisation,                    UKEAT/0672/05/DA
                                                          Elias  P,   Mr    Clancy, Mr

Employment law bulletin
Issue 3 March

Worthington                                            extending the probationary period
The ET held the Claimant had not                       because of the problems and so far as
suffered any discrimination on grounds                 the third was concerned, the manager
of his race or any victimisation                       had quite properly raised the question
discrimination, as a consequence of                    of childminding activities and mileage
certain complaints he made. The                        expenses with the Claimant. The
Appellant was black and of West                        allegations were dismissed. On appeal
Indian parentage. He started work for                  it was argued that the Tribunal erred in
the Respondent, on 2 June 2003, as a                   law, in failing specifically to identify
Business Advisor, formally titled                      where it had found less favourable
Business and Finance Officer. It was                   treatment, and distinguishing that from
a newly created post in the Early                      the reason why the employer might
Years in Child Care Department of the                  have caused that less favourable
council. He worked within a team                       treatment.    The EAT noted the two
whose members included a number of                     stage process in Igen v Wong [2005]
women, including, as the Tribunal                      ICR 931 and stated:
found, two female members who were                     “It is not necessary for a Tribunal, in each and
                                                       every case, specifically to identify the two-stage
black. The Appellant was initially on                  process. In many circumstances an employee
probation for 6 months. There were                     making a claim of this kind will identify a
some difficulties with work colleagues,                specific, actual comparator who has been
though no formal complaints, and                       treated     less   favourably.         In    those
there was a meeting at which this was                  circumstances it is easy then to see that the
                                                       burden must switch to the employer.”
discussed.     There        were      further
                                                       In  relation    to  a    hypothetical
problems      and       the      Claimant‟s
                                                       comparator, the EAT stated:
probationary period was extended.                      “In other circumstances, where there is no
The Claimant made three allegations                    actual comparator, the employee must rely
of discrimination. “First, it was alleged that         upon a hypothetical comparator. Again, in
Mr Johnston had acted in a discriminatory              some cases it may be relatively plain to a
manner by telling the Claimant that two                Tribunal that the burden switches to the
members of the staff felt vulnerable when left         employer. That is likely to occur, for example,
alone with him and, it was said, that he, Mr           where the employer acts in a way which would
Johnston,    should    have     clarified   and        be quite atypical for employers. Conversely, if
investigated these allegations before raising          the employer acts in a way which would appear
them with the Claimant. Second, it was alleged         perfectly sensible, and does the kind of thing
that there was a discriminatory act by Mr              which most employers would do, then the
Johnston in seeking to extend the probationary         burden is unlikely to transfer. For example, if
period and also in not providing a written             an employer warns an employee for
probationary report. Third, it was said that Mr        drunkenness at work, and it is not disputed by
Johnston had discriminated by falsely accusing         the employee that he was drunk, it is not likely
the Claimant of working on his own account in          in those circumstances, in the absence of
the childminding business and further, by              particular evidence demonstrating otherwise,
falsely accusing the Claimant of dishonesty in         that that would create an inference of less
the mileage claim on expenses.”                        favourable treatment so as to require some
 In relation to the first allegation, the              explanation for the employer.
                                                       But often particularly when dealing with the
Tribunal concluded that Mr Johnston                    question of hypothetical comparators, it is both
was      seeking    to    manage       his             difficult, and artificial, to separate out the two
department properly and that if other                  limbs of less favourable treatment and the
staff were having similar difficulties, he             reason why.”
would have raised the issue with them,                 Elias J referred to Shamoon v Chief
irrespective of their race or colour. It               Constable of the RUC [2003] ICR
was a proper management decision, in                   337. He stated that, based on the
effect, to seek to ensure good working                 analysis by Lord Nicholls “there will be
relations. The ET concluded that the                   cases where the two issues are so
manager had been entitled to consider                  intertwined    that   adopting       the

Employment law bulletin
Issue 3 March

sequential analysis can give rise to              employees of the company within the
needless problems. We think that is               office a joke e-mail. Annexed to the e-
the case here. The Tribunal were fully            mail was a picture showing the
entitled, in circumstances where the              genitalia of two naked women. For
facts themselves were not in dispute in           reasons which were specific to the
any fundamental way, to focus on the              claimant she was very upset by the e-
reason why. “       The appeal was                mail. The ET decided that the claim of
therefore dismissed.                              sex discrimination failed; it stated
                                                  “The e-mail was circulated to all members of
                                                  the         office          whether         male
DISCRIMINATION SEX                                or female. It follows that she was again treated
                                                  precisely     the     same     as   the     male
                                                  members of the office and not discriminated
Sex Discrimination - comparison                   against on the ground of her sex. To put the
Appellant was employed in an office in            matter another way, there cannot be
which sexual remarks relating to women            discrimination were the action of the alleged
were made. She (and all others in the             discriminator is "indiscriminate.”
office) were sent by her manager an email         The EAT stated that:
showing female genitalia. She alleged sex         “In our view the respondent is correct in
                                                  submitting that the complainant had to satisfy
discrimination. The ET held that since the        the Tribunal that she was treated less
remarks were made indiscriminately and the        favourably than the comparator with whom she
email sent to all staff, there was no             was compared and that she had to show that
discrimination. Had the ET approached the         she had been so treated on the grounds of her
facts on a correct basis?                         sex. However so far as the first element is
MISS    E  J  SPENCER     v                       concerned (the question is “Who is the proper
                                                  comparator?”) the Tribunal does not seem to
PRIMETIME RECRUITMENT LTD                         have addressed that question at all. It merely
HHJ Reid QC, Ms Bilgan, Ms                        found that all members of staff (both male and
Pitcher                                           female) were treated in the same way by the
                                                  distribution of the e-mail and the inappropriate
The claimant        worked for the                sexual comments, and concluded that therefore
respondent from 28 June to 18 August              there was no discrimination.
2004.      She       terminated     her           The Tribunal stopped at the point at which it
employment,      on     the   Tribunal‟s          held that the offending acts had been directed
findings, because her hours of work               indiscriminately at the entire office staff (both
                                                  male and female), but it did not follow from that
could not be changed to accommodate               fact that the conduct could not be
her. The Tribunal, which was critical of          discriminatory. It was the sex of the claimant
the claimant‟s evidence and rejected              (as in Driskel) and the sex specific nature of
much of it, made two findings upon                the offending matter which potentially added
                                                  the material discriminatory element. In this
which she placed reliance, on appeal,             respect the case differed from Brumfit in which
as founding a claim for sex                       the offensive and obscene abuse was
discrimination. The ET found that                 indiscriminate rather than relating to one sex
during her employment inappropriate               only.”
remarks were made by certain of the               The correct approach should have
claimant‟s male colleagues about                  been as follows:
women‟s outfits and breasts and that              “The Tribunal did not, as in our view it should
                                                  have done, ask itself whether a male member
these      remarks       were     made            of staff would have been treated in the same
indiscriminately in the presence of all           way by comments of a sexual nature about
the employees of the respondent                   men and by distribution of pictures of male
working within the office. The ET                 genitalia. If it had done so, it might have found
                                                  that men would not have been so treated and
accepted the claimant‟s evidence that             the conduct was discriminatory. On the other
she was upset by those comments.                  hand it might have found that men might
The ET also found that on 11 August               equally have been subjected to (mutatis
2004 her manager circulated to all the            mutandis) identical treatment and that the
                                                  claimant was not treated less favourably than

Employment law bulletin
Issue 3 March

any male in the office would have been. It          years) on 26 April, in the figure of €8
might have held that (as in Brumfitt) the           million or £5 million (approximately), at
treatment was not on the grounds of her sex,
but simply because she was in the office.”          the end of the year by which time the
The case was remitted to the same                   actual sales figures achieved by Mr
Tribunal.                                           Hawes were well-known to be
                                                    substantially less.       The Claimant
                                                    issued proceedings in the Employment
                                                    Tribunal, claiming that by failing to fix
                                                    the target in the course of the financial
SUMMARY                                             year to which it related, and in fixing
Contract of Employment: Damages for                 the target retrospectively at a figure
Breach of Contract                                  which was out of line with any
In assessing how much was due to the                reasonable assessment, Marconi had
employee for breach of contract the ET              acted in breach of contract.
had to evaluate what bonus the employee             The Tribunal rejected Marconi‟s
would have received absent the breach.              defences that the time for fixing targets
That evaluation required a decision as to           and the procedure for assessing
what the employee‟s target would have
                                                    targets were discretionary and not
been – which itself depended on the
viability of a large projects which the             contractual     and      also    rejected
employees said was non – viable and                 Marconi‟s defence that, in any event,
should not have been included in the                the     terms    of     the   Claimant‟s
targets. The ET failed to make findings in          acceptance of voluntary redundancy
the central issue of viability and gave             were such that he had agreed to waive
inadequate reasons for their decision as to         any outstanding entitlement under the
target.                                             bonus scheme. The Tribunal held that
HAWES v MARCONI MOBILE                              Marconi were in breach of contract by
UKEAT/0674/05/SM                                    failing to set a target early in the
HHJ Burke QC, sitting alone                         relevant year. At the remedies hearing,
The Claimant was employed by                        the ET found Tribunal found that, if
Marconi as a regional sales manager                 Marconi had set the sales target when
until, in May 2002, he took voluntary               they should have done, the reasonable
redundancy. During the course of his                target figure would have been £5
employment, he became a member of                   million; and therefore compensation
Marconi‟s Order Intake Incentive                    was assessed at £2,226.00.           The
Scheme. It provided for incentive                   central argument on appeal was
payments to be made, the size of                    whether or not it was reasonable to
which was based on the relationship                 include a large project within the target
between the sales target set for each               and the EAT held that there were
individual   and    that    individual‟s            insufficient reasons in the ET decision
performance in the relevant year. In                to know why it had reached the
the year 1999-2000, Mr Hawes‟ target                conclusion it did. The EAT stated:
was £3.5 million. He achieved sales of              “There is no other reasoning and, in my
                                                    judgment, the reasons which the Tribunal have
£0.5 million and was paid bonus on                  given for their ultimate conclusion are simply
that basis. In the next year his sales              not sufficient or appropriate to show what the
target was £2 million. He achieved                  Tribunal‟s resolution, if any, on the central
sales of £0.25 million and was paid                 viability issue was and how they came to the
                                                    conclusion that it was reasonable to include the
accordingly. However, in 2001-2, no                 Malaysian project within the target.”
sales target was fixed within the year.
Such a target was only proposed by
Marconi (without any negotiations with
Mr Hawes in contrast to previous

Employment law bulletin
Issue 3 March

                                                           This is achieved if the period of six months
                                                           within which the claim relating to the operation
                                                           of an equality clause with regard to an
EQUAL PAY                                                  occupational pension scheme provided by the
                                                           transferor must be brought runs from the end of
                                                           the claimant's employment with the transferor,
Where there was a transfer of an                           to whom the liability belongs, rather than the
                                                           end of her employment with the transferee. The
undertaking time under Section 2(4)                        fact that, where disputes arise, it is the link
Eq Pay Act ran from the ate of the                         between the employee and the employer
transfer not termination of employment                     whose rights and obligations are in issue that
with the transferee.                                       matters is demonstrated by section 2(1A) of the
                                                           1970 Act, which enables an employer to apply
Preston     and     others     v.                          to an employment tribunal for an order
Wolverhampton Healthcare NHS                               declaring the rights of the employer and the
Trust and others (No 3) formerly                           employee where a dispute arises in relation to
                                                           the effect of the operation of an equality clause.
Powerhouse Retail Limited and                              There is an element of symmetry here which
others v. Burroughs and others                             supports the meaning that is conveyed by the
[2006] UKHL 13                                             words of the subsection. It is reassuring too
                                                           that it was this interpretation of the subsection
The Appellants appealed from a                             that the European Court of Justice had in mind
decision that where there had been a                       when it ruled that the limitation period was
transfer of an undertaking, time under                     compatible with the fundamental principle of
the Equal Pay Act started to run from                      legal certainty and did not make the exercise of
the date of the transfer not the date of                   rights conferred by Community law virtually
                                                           impossible or excessively difficult.”
termination of employment. The claims
arose from denial of access of part
time workers to occupational pension                       GRIEVANCE PROCEDURES
schemes. On 1st April 1988 access
had been permitted to the scheme and
subsequently, when the electricity                         SUMMARY Claim for unfair (constructive)
industry was privatised, the Claimant‟s                    dismissal, breach of contract and failure to
                                                           inform and consult contrary to TUPE
employment transferred under TUPE.
                                                           Regulations. Prior to instituting the tribunal
The claims were brought more than six                      claim, the claimant‟s solicitor had sent a
months after the transfer. The contract                    letter to the respondents detailing the ways
containing the equality clause was                         in which it was alleged that they had
treated as separate from the post                          breached the claimant‟s contract of
transfer contract so that the Court of                     employment and failed to comply with the
Appeal held that time began to run                         relevant TUPE Regulations requirements
from the date that contract terminated                     and what the claimant sought by way of
under the transfer. The House of Lords                     compensation in respect thereof. The letter
upheld the CA. The contract in respect                     was marked „Without Prejudice‟ and
                                                           finished by intimating that if the respondents
of which the claim was made was the
                                                           did not confirm their acceptance of the
relevant contract and the rule in                          claimant‟s proposals within fourteen days,
section 2(4) applied. Where the claim                      they would recommend that he should
was in relation to the operation of an                     proceed to make appropriate claims in the
equality clause relating to an                             Employment Tribunal without further
occupational pension scheme before                         intimation. The Employment Tribunal held
the date of transfer it related to the                     that the sending of the letter, though not
employment with the transferor. Lord                       expressly stated to be a grievance letter,
Hope stated:                                               amounted to compliance with the
“there is much more force in Mr Jeans' point               requirements of s.32 of the Employment Act
that the best way of achieving the purpose of              2002. The Employment Appeal Tribunal
the time limit is to link it as closely as possible        agreed. It did not matter that the details of
to the liability which is the subject of the claim.        the claimant‟s grievance was set out in a

Employment law bulletin
Issue 3 March

letter of claim or that it was marked „Without        amicably resolved in early course, our client
prejudice‟.                                           intends to pursue appropriate claims in the
ARNOLD CLARK AUTOMOBILES                              Employment Tribunal or courts as
LTD v (1) RICHARD G STEWART (2)                       appropriate. The particular matters in
BARNETTS MOTOR GROUP LTD                              relation to which our client intends to pursue
UKEATS/0052/05/RN                                     the Tribunal proceedings can be detailed as
THE HONOURABLE LADY SMITH.                            follows…” and set out a list of claims.
MR P PAGLIARI, MR P M HUNTER                          The letter claimed a bonus and set out
The       Claimant     alleged    unfair              a total claim stating “If we do not hear
                                                      from them within 14 days of confirmation
(constructive) dismissal, breach of
                                                      that the foregoing proposals are acceptable,
contract and failure to inform and                    we shall recommend to our client to
consult with him contrary to the                      proceed without further warning with
provisions of the Transfer of                         appropriate claims in the Employment
Undertakings         (Protection      of              Tribunal. Without prejudice”
Employment)        Regulations    1981                The claims were refuted and on 7th
(“TUPE”). The first respondents were                  February,      2005        the    Claimant
the transferor and the second                         presented a claim to the Employment
respondents the transferee; the appeal                Tribunal. It was contended that the
being by the second respondent. The                   letter was not a grievance since the
ET decided that the Claimant had                      whole tone and thrust of the letter was
complied with the requirements of s.32                that it was adversarial rather than
of the Employment Act 2002 and that                   conciliatory with a view to extra –
the    tribunal    could,   accordingly,              judicial resolution of the parties‟
consider his complaint of unfair                      differences. The intention behind the
dismissal. This was the sole issue on                 letter    was      to     claim    financial
appeal. The EAT referred to in s.32(1),               compensation, not to invoke a
(2), (3) and (6), and Schedule 2                      grievance procedure.
paragraphs 6 and 7 of the                             There were two questions in the case,
Employment Act 2002 („the 2002 Act‟)                  the first being - if the claimant‟s solicitor
together with the definition of „                     intimates a grievance, is that sufficient
grievance‟ contained in paragraph 2 of                for compliance or are the statutory
the Employment Act 2002 (Dispute                      provisions to be interpreted as requiring
Resolution) Regulations 2004 and                      the claimant to effect the written
paragraph 6(1).                                       intimation himself? The EAT stated:
The claimant was the General                          “We see no good reason why the normal
Manager of the first respondents which                rules of agency should not apply here.
sold their business to the second                     That means that a grievance can be set
respondents with effect from 22                       out and sent to an employer by a solicitor
October 2004. The Claimant alleged                    instructed by the claimant to do so.”
that the transferee proposed to appoint               The second question was: if the written
a different employee to the post of                   intimation is a letter of claim that
General Manager, in place of the                      includes an ultimatum in respect that it
claimant and there was no discussion                  threatens the institution of proceedings
or consultation with him regarding the                within 14 days if settlement on the
proposal and he considered that he                    terms proposed is not reached, finishing
was left with no option but to resign                 with the words „ without prejudice‟, can
and did so, on 22 October 2004.                       it properly be regarded as the intimation
The Claimant‟s solicitor wrote on 28th                of a grievance within the meaning of
November 2004. The letter was written                 the statute? As to that:
                                                      “neither the primary legislation, the 2002
„without prejudice‟ and stated “As a
                                                      Act, nor the subsequent statutory
consequence,     unless   matters   can    be
                                                      instrument , the 2004 regulations, require

Employment law bulletin
Issue 3 March

that, to start the ball that is the new              seeks to invoke the relevant grievance
grievance procedure rolling, the employee            procedure;
need do anything more than write down                5.       there is no requirement that an
his complaint and send it to his employer.           employee must also comply with any
There is no requirement for the use of any           contractual grievance procedure that
particular form or style nor any                     exists;
requirement that the grievance be the only           6.       the question of whether or not the
thing that is written in whatever document           employer had an opportunity to respond is
is sent. It does not even need to be                 not relevant to the question of whether or
signed. It does not need to contain a                not the grievance was intimated in writing
request for discussion or a meeting. All             to him.”
that is, it would seem, required is that the         In relation to the fact the letter was
employer is put on notice, in writing, that          stated to be „without prejudice‟:
the employee is complaining about his                “We have given careful consideration to
actual or apprehended conduct in relation            the question of whether or not the
to that employee. It does not have to be by          inclusion of the phrase „Without prejudice‟
way of invitation to discuss or meet. It             ought to lead to a different conclusion. The
does not have to be in a tone which                  argument seemed, at first blush, to be
suggests any willingness to consider                 persuasive. How could it be said that a
conciliation or amicable resolution at all,          claimant was intimating a statement of
however laudable and desirable such an               grievance if, at the same time, he was
objective may be and however much it                 reserving his right to say something
may have been the intention of the                   different at a later date? However, the
government that this legislation would               message did not change. The claim put
achieve that objective. There is, it would           before the tribunal was in respect of the
seem, nothing to prevent the intimation of           matter complained of in his solicitor‟s
grievance being aggressive and nothing to            letter.   Given that the statement of
prevent it being contained in a letter which         grievance requires to relate to the subject
threatens tribunal proceedings if the                matter of any subsequent claim, he would
employee‟s demands are not met. Again,               have been in difficulty if the claim
that may not be what was envisaged by                presented to the tribunal was different in
those who planned and devised this                   substance but it was not. On reflection, it
legislation but its terms are such as to             seems to us that the use of the „Without
make an aggressive and threatening letter            prejudice‟ formula did not prevent the letter
from a solicitor on behalf of an employee            being viewed as a statement of grievance
as capable of qualifying for the                     for the purposes of s.32 of the 2002 Act.”
requirements of s.32 of the 2002 Act as a
polite and understated letter from an
                                                     Whether section 32(4) EA 2002 –
employee provided it contains within it a
statement of his grievance.”                         original time limit – restricts time for
The EAT stated:                                      bringing a DDA claim to the primary 3
“It is, accordingly, not at all difficult to         months period, or whether the just and
agree with the criteria identified by the            equitable discretion under            DDA
President in the Shergold case between               Schedule 3 Part 3 may be exercised. It
paragraphs 30 and 38, namely that:                   is the latter. Discretion to permit/refuse
1.        the statutory requirements are             amendment.
minimal and are simply that the grievance            MRS SAMANTHA SPILLETT v
must be in writing;                                  TESCO STORES LIMITED, BUPA
2.        the grievance in question must
relate to the subsequent claim;
                                                     CARE HOMES (BNH) Limited v
3.        the fact that the grievance is             CANN
contained in a letter of resignation, would          UKEAT/0475/05            &
make no difference at all;                           UKEAT/0554/05
4.        it is not necessary to spell out in        HHJ Peter Clark
the writing that intimates the grievance
                                                     The EAT heard two cases together,
that it is a grievance or that the employee

Employment law bulletin
Issue 3 March

which both raised the issue of the               complaint to Tesco about this outcome
interrelationship between section 32             until an exit interview, following her
Employment Act 2002 onto the pre-                resignation, on 8 October 2004. On
existing limitation provisions to be             20 November she wrote to Tesco
found, in these cases, in the                    complaining      about     her    non-
Employment Rights Act 1996 and                   appointment in May 2004. Having
Disability Discrimination Act 1995, as           presented her claim on 5 January
amended.                                         2005 that claim was accepted by the
Mrs Cann commenced work on 24th                  Tribunal and served on Tesco, which
May 2001 as a care worker and gave               denied that she was disabled or that
notice of resignation on 24 November             there had been discrimination. At a
2004 which took effect on 22nd                   resumed PHR on 27th April 2005 the
December. On 19th March 2005 she                 Chairman ruled her claim under the
issued an ET1 and on 22nd March a                DDA out to time and refused her
Chairman ordered the return because              permission to amend her claim to
it contained insufficient details. It was        include claims of constructive Unfair
returned to her on 24 March and on 7             Dismissal and Disability Discrimination
April she wrote a letter to the Tribunal,        by reason of her constructive
accompanying her original Claim form.            dismissal.
On 11 April the Claim form was                   HHJ Clark noted that “The question
accepted by the Tribunal and served              raised directly in the Cann case is whether
on BUPA. On 5 May BUPA presented                 the expression „original time limit‟
their response. A Pre-Hearing Review             contained in section 32(4) EA, itself not
(PHR) took place before Mr Milton on             defined in the Act, refers to the primary 3
                                                 month limitation period or to the primary
24 June. The appeal was against his
                                                 period as extended by the Tribunal where
ruling that the Tribunal has jurisdiction        either it was not reasonably practicable to
to entertain the Claimant, Mrs Cann‟s            present a complaint of Unfair Dismissal in
claim of disability discrimination and a         time (ERA section 111(2)(b)) or it is just
cross-appeal by the Claimant against             and equitable to extend time in a DDA
the Chairman‟s order that her claim of           claim, applying Schedule 3 paragraph 3 to
(constructive) Unfair Dismissal is               the Act.”
dismissed by reason of section 32 EA             The provision in the Regulations,
and/or section 111(2) ERA.                       following section 33 EA, dealing with
Mrs      Spillett    commenced        her        extension of time limits, is Regulation
employment with Tesco in 1996 as a               15. The starting point is the „normal
general assistant in a petrol filling            time limit‟, defined in regulation 15(5)
station. In May 2004 she applied                 as the primary 3 month period without
internally for an advertised position as         extension under the reasonable
a wages clerk and on 15 May she was              practicability or just and equitable
interviewed by Ms Kennell, a                     escape       clauses.         In   certain
personnel manager for a wages clerk              circumstances the normal time limit is
position in Tesco‟s Sheerness store.             extended for a period of 3 months
The Claimant has a stammer; it was               (regulation 15(1)). This then leads to
her case, as set out in her ET1 claim            the question; does the expression
form presented to the Tribunal on 5              „original time limit‟ in section 32(4) EA
January 2005, that a few days after              mean the same as „normal time limit‟
interview Ms Kennell telephoned her at           in Regulation 15 of the Regulations?
home to say that her job application             It was argued that the discretion to
was unsuccessful because of her                  extend time is displaced by section
stammer and because she had low                  32(4)       EA;     Consequently       the
confidence. The Claimant made no                 requirement to comply with the SGP,

Employment law bulletin
Issue 3 March

step1, expires 4 months (3 months                   IRLR 201, was entitled to conclude that
plus 1 month) after the act of                      these substantial amendments, made late
discrimination complained of. Once                  in the day were not foreshadowed in the
that period has expired there is no                 original Form ET1, which expressly stated
                                                    that the claim was not about dismissal.
scope to extend time; nor can the
                                                    There are no grounds in law for interfering
requirement of section 32(4) be                     with that exercise of discretion.”
disapplied, since no Regulations,                   Thus, the important point of law did not
envisaged by section 32(5), have yet                in fact arise (though HHJ Clark ruled
been passed. This argument was                      on it as above).
rejected by HHJ Clark who stated:
“In my judgment the „original time limit for        SUMMARY
making the complaint‟ is the time limit             Practice and Procedure – striking-
provided for in the relevant legislation,           out/dismissal
here the DDA. That includes giving a                Grievance procedures. Were they complied
tribunal the power to consider a complaint          with? Held not to be in the circumstances of
made outside the primary limitation period          this case. Observations on what counts as
where it is just and equitable to do so. In         compliance and how Employment Tribunal
those circumstances the claim is not time-          should approach the question whether a
barred. If Parliament wished to restrict            grievance has been made about a relevant
that discretion to extend time it would have        complaint.
said so in the principal Act (EA). Instead,         CANARY WHARF MANAGEMENT
by the Regulations made under that Act, it
                                                    LIMITED v MR T EDEBI
has provided for time to be extended in
certain circumstances. That extension of            UKEAT/0708/05/DA
time is expressed to run, by regulation 15,         Mr Justice Elias, sitting alone
from the end of the primary limitation              The issue for the EAT was whether the
period only.       No such restriction is           Tribunal was correct in holding that the
expressed in the Act.                               Claimant had raised a grievance in
In my view this construction is entirely            relation to a claim under the DDA
consistent       with     the      European         1995. The Claimant had had in fact
jurisprudence relied upon by Mr Tayler. It          raised certain grievances with the
is also consistent with the Guidance                employer in June 2004. He advised
issued by the DTI. It also reflects the
                                                    the company that he was suffering
different wording in section 32(4) (original
time limit) and the defined normal time             from asthma and he said that the
limit in Regulation 15(5).”                         current bout resulted from exposure to
1. In relation to the Cann case: the                traffic fumes. The second letter he
letter of resignation constituted a Step            wrote in July stated that the company
1 grievance so that there was no                    had refused reasonable adjustments
reason why the claim should not be                  to his job and he advised the company
accepted and the appeal of the                      that they should take action under the
Claimant succeeded so it was                        Disability Discrimination Act. The
unnecessary to decide the employer‟s                company apparently took the view that
appeal. In relation to Mrs Spillett, the            the asthma was improving with the use
real issue, raised by the appeal, was               of an inhaler. In March 2005 the
whether the Chairman‟s refusal to                   Claimant wrote a lengthy letter under
permit the proposed amendment to the                which there were various headings
original claim form revealed any error              each of which identified in very
of law. The EAT stated:                             summary terms a specific complaint.
“In my judgment the Chairman, exercising            The headings were prior information,
her discretion in accordance with the               working conditions, heaters, chairs,
guidance in Selkent v Moore [1996] IRLR             canteen facilities, rosters, breaks and
661, approved by the Court of Appeal in             remuneration. The Claimant had
Ali v Office of National Statistics [2005]

Employment law bulletin
Issue 3 March

complaints about all those matters and                      must bear in mind that the employers also
suggestions for improvement in                              suffer an adverse consequence if one does not
                                                            read the letter fairly and assess whether in all
relation to them.      There was not                        the circumstances it can properly and
challenge to the ET finding that it was                     reasonably be said to have raised the
not justified to link the letter of 25                      complaint which has subsequently been put
March 2005 with the earlier letters in                      before the Employment Tribunal. This was in
                                                            my view a generalised complaint about the
the previous summer. On this point,                         adverse consequences to health, both
Elias J stated:
                                                            generally and to this particular employee, of the
“I would agree that it would be unreasonable to
                                                            conduct of the employer. But I do not think that
anticipate that the employer would have the
                                                            it did raise an issue under the Disability
detail of the earlier letters in mind, although the
                                                            Discrimination Act.”
fact of an earlier complaint may properly be
considered to be part of the wider context in               The case also considers the earlier
which the statement must be understood. That                authorities and affirms the approach
is not to say that earlier communications are               taken in Shergold.
always to be ignored; they will sometime be                 On timing, Elias J stated:
part of the context in which a later statement              “There is no maximum time limit prior to the
has been written. Indeed that was the position              lodging of the claim to the Tribunal in which the
in Shergold itself. In certain circumstance one             grievance must have been raised. There is the
can only fairly understand the content of the               minimum period of 28 days which must be
later    letter    by     reference     to   earlier        allowed for the employer to deal with it and go
correspondence particularly, for example,                   through the relevant procedures, but no
where         shorthand        terms,      perfectly        maximum period. That is not to say, however,
understandable to the parties, may have been                that the act of raising a complaint months or
used. But here the timescale was extensive                  years prior to lodging the Tribunal claim will
and the later letter made no specific reference             necessarily constitute the appropriate raising of
to the detail of the earlier ones, save that Mr             the grievance. The grievance must be extant.
Edebi pointed out that he had raised issues of              If it can no longer properly be said to be an
his health going back to June 2004, and I think             outstanding grievance, perhaps because it was
the Tribunal was justified in focusing solely on            apparently satisfactorily dealt with or because
this March letter.”                                         the employee has not pursued it in
The President held that there had not                       circumstances where it may properly be
been a grievance under the DDA,                             inferred that he no longer wishes to have it
                                                            determined, then it will be necessary for the
stating:                                                    employee to raise the complaint again in
“There is no doubt that the Claimant was
                                                            written form.”
contending that working conditions had had an
adverse effect on his health and that was                   On the form of the grievance he
plainly an important element in his general                 stated:
claim for constructive dismissal. But I do not              “Second, the form of the grievance. There is
think that it would be just to these employers,             considerable flexibility about that. It may be
on a fair reading of the letter, to say that his            raised in a resignation letter (as here). It may
references to his health problems fairly raised,            even be raised after a dismissal has taken
even in a non-technical and unsophisticated                 effect (indeed that is one of the conditions for
way, an issue which the employer could                      the application of the modified procedures). It
reasonably understand had arisen under the                  may be raised by a solicitor in a communication
Disability Discrimination Act. He has not                   to the employer‟s solicitor (as in the Mark
identified any failures specifically to make                Warner case.) It matters not that other issues
adjustments in this case, nor has he alleged                are raised at the same time as the complaint,
that he was treated less favourably than other              whether additional complaints or otherwise.
security officers in the same situation. On the             (See regulation 2(2).)”
contrary, his complaint is that all have been               On the content he stated:
subject to unacceptable conditions although he              “The contrast between the standard and the
does indeed identify the specific health                    modified procedure highlights an important
problems that have been caused to him as a                  feature of the way in which the complaint must
consequence of that. I should say that I have               be made under the former. As we have noted,
great sympathy with the employee. These                     there is no obligation to set out the basis of the
regulations can operate in a harsh way and it               claim.    It is enough, therefore) that the
gives me no pleasure to say that I find that the            employee identifies the complaint. The need to
Tribunal lacked jurisdiction to deal with this              substantiate that with some evidence to justify
matter in this case. But as I have said, we                 it arises under the standard procedure at the

Employment law bulletin
Issue 3 March

second stage where the employee has to                   worker in relation to a part-time worker if, at the
inform the employer what is the basis of the             time when the treatment that is alleged to be
grievance. The only requirement, as section              less favourable to the part-time worker takes
32(2) makes plain, is that the complaint to the          place-
employer must be essentially the same                    (a) both workers are-
complaint that is subsequently advanced                           (i) employed by the same employer
before the Tribunal. As Burton J succinctly put                   under the same type of contract, and
it in the Shergold case:                                          (ii) engaged in the same or broadly
           “the grievance must relate to the                      similar work having regard, where
           subsequent claim, and the claim must                   relevant, to whether they have a
           relate to the earlier grievance”                       similar level of qualification, skills and
PART TIME WORKERS                                        Regulation 2(3) provides:
                                                         "(3) For the purposes of paragraphs (1) (2) and
                                                         (4), the following shall be regarded as being
                                                         employed under different types of contract-
Retained fire fighters claiming less                     (a) employees employed under a contract that
                                                         is neither for a fixed term nor a contract of
favourable treatment than fill time fire                 apprenticeship;
fighters.  Whether engaged in the                        (b) employees employed under a contract for a
same or broadly similar work. Part                       fixed term that is not a contract of
Time Workers (Prevention of Less                         apprenticeship;
Favourable Treatment) Regulations                        (c) employees employed under a contract of
2000, Directive 97/81/EC.                                (d) workers who are neither employees nor
MATTHEWS      v  KENT                     AND            employed under a contract for a fixed term;
MEDWAY        TOWNS                       FIRE           (e) workers who are not employees but are
                                                         employed under a contract for a fixed term;
AUTHORITY                                                (f) any other description of worker that it is
[2006] UKHL 8                                            reasonable for the employer to treat differently
The Appellant Claimants appealed                         from other workers on the ground that workers
against the decision of the CA ((2004)                   of that description have a different type of
EWCA Civ 844) that although they
                                                          As the whole purpose of the PTWR is
were employed under the same type
                                                         to prohibit unjustified discrimination in
of contract as full time firefighters for
                                                         the    terms      and     conditions    of
the purposes of the Part-time Workers
                                                         employment,          this        threshold
(Prevention of Less Favourable
                                                         requirement is clearly looking for
Treatment) Regulations 2000 they
                                                         comparable types of employment
were not engaged in the same or
                                                         relationship rather than for comparable
broadly similar work. The Claimants
                                                         terms and conditions of employment.
claimed unlawful discrimination in
                                                         As the Employment Tribunal put it, "It
relation to the terms and conditions of
                                                         is self evident . . . that a 'part-time
their employment compared with full
                                                         contract' is probably almost certainly 'a
time workers. The question was
                                                         different' contract from a whole time
whether         the Claimants were
                                                         contract. Our problem was how to
employed under the same type of
                                                         assess and identify the existence of 'a
contracts as whole-time fire fighters
                                                         different type of contract'”
within the meaning of regulations 2(3)
                                                         Baroness Hale stated:
and 2(4)(a)(i) and, if so, whether they                  “The appellants argue that each item in the list
were engaged on the same or broadly                      in regulation 2(3) is exclusive of the others.
similar work within reg 2(4)(a)(ii).                     Once the relationship falls within one
Unless this definition is satisfied it is                paragraph it cannot fall within another. Here
                                                         both retained and whole-time fire-fighters fall
not possible to make the comparison                      within paragraph (a): they are 'employees
referred to in regulation 5(1).                          employed under a contract that is neither for a
Regulation 2(4) provides:                                fixed term nor a contract of apprenticeship.'
"(4) A full-time worker is a comparable full-time        Paragraph (f) was a residual category, included

Employment law bulletin
Issue 3 March

by the draftsman out of an abundance of                  to them then, as essentially similar to
caution, in case there was some type of                  that called for under the Equal Pay
employment relationship not covered by
paragraphs (a) to (e), although no convincing            Act.” However, “although they directed
example has yet been imagined.”                          themselves (in para 150) that the
This   argument     was             accepted,            PTWR test did not contain the Equal
Baroness Hale stating:                                   Pay Act reference to differences of
“Regulation 2(3)(f) cannot be designed to allow          practical importance, they did not, after
employers to single out particular kinds of part-        pointing out the differences (in paras
time working arrangements and treat them
differently from the rest. The list in regulation
                                                         152-153), come back to the "same or
2(3) is clearly designed to define different             broadly similar" test when reaching
categories of working relationship, within which         their conclusions. Instead, they
part-time and full-time workers are to be                reverted      to  the    language      of
regarded as comparable but between which                 comparability and in doing so failed to
they are not. Each category therefore
contemplates the possibility of both full-time           evaluate the differences against the
and part-time workers in that category. Thus             similarities.”
the categories are designed to be mutually               “. However, while there are similarities
exclusive.”                                              between the two types of comparison,
Therefore, retained and whole-time                       they are not the same. The sole
fire-fighters are employed under the                     question for the Tribunal at this stage
same type of contract for the purpose                    of the inquiry is whether the work on
of regulation 2(4)(a).                                   which the full-time and part-time
In relation to the issue of the same or                  workers are engaged is "the same or
broadly similar work, the Tribunal                       broadly similar".”     Baroness Hale
concluded that "there are measurable                     noted:
additional job functions which are                       “In making that assessment, the extent to
carried out by the whole-time fire                       which the work that they do is exactly the same
fighter . . . and on that ground alone                   must be of great importance. If a large
                                                         component of their work is exactly the same,
we would find that it is a fuller wider                  the question is whether any differences are of
job than that of the retained fire                       such importance as to prevent their work being
fighter." (para 152) They also found                     regarded overall as "the same or broadly
that because of differing entry                          similar". It is easy to imagine workplaces where
standards, probationary standards,                       both full and part-timers do the same work, but
                                                         the full-timers have extra activities with which to
probationary training and ongoing                        fill their time. This should not prevent their work
training, "there are material differences                being regarded as the same or broadly similar
in the 'level of qualification and skills'"              overall. Also of great importance in this
between retained and whole time fire-                    assessment is the importance of the same
                                                         work which they do to the work of the
fighters (para 153). Putting together                    enterprise as a whole. It is easy to imagine
the "fuller wider role" and the "higher                  workplaces where the full-timers do the more
level of qualification and skills" they                  important work and the part-timers are brought
concluded that the two were not                          in to do the more peripheral tasks: the fact that
"engaged in the same or broadly                          they both do some of the same work would not
                                                         mean that their work was the same or broadly
similar work having regard, where                        similar. It is equally easy to imagine workplaces
relevant, to whether they have a                         where the full-timers and part-timers spend
similar level of qualification, skills and               much of their time on the core activity of the
experience" for the purpose of                           enterprise: judging in the courts or complaints-
                                                         handling in an ombudsman's office spring to
regulation 2(4)(a)(ii) (para 154).                       mind. The fact that the full-timers do some
The Tribunal had carried out a similar                   extra tasks would not prevent their work being
task to that under section 19(4) of the                  the same or broadly similar. In other words, in
Equal Pay Act 1970 and there were                        answering that question particular weight
“indications that the Tribunal saw their                 should be given to the extent to which their
                                                         work is in fact the same and to the importance
task under the PTWR, which was new                       of that work to the enterprise as a whole.

Employment law bulletin
Issue 3 March

Otherwise one runs the risk of giving too much           employment agency and carried out
weight to differences which are the almost               an investigation which discovered that
inevitable result of one worker working full-time
and another working less than full-time.”                there        were          discrepancies,
There was a “a further factor which                      procurement cards had been used to
cannot be ignored, at least in a test                    pay bills which was discouraged and
case concerning a very large                             there were inconsistencies in the
nationwide workforce. This is the                        records. The Claimant was interviewed
extent to which the job description and                  and found to be the company
terms of the part-timer's contract                       secretary of the agency and his wife a
means that he can in fact be required                    director. The Tribunal found that the
to engage in the same range of tasks                     Claimant had been extremely evasive
as the full-timer, even if in practice he                when interviewed. His dismissal had
is only rarely called upon to do them.”                  been confirmed upon appeal and the
The case had to be remitted to the                       Tribunal decided that the appeal cured
Tribunal for reconsideration of whether                  any of the earlier defects which had
the retained and whole-time fire-                        existed. The Tribunal had heard the
fighters are engaged in the same or                      Claimant‟s case with that of the depot
broadly similar work. A majority held                    manager, who was in a different
that the case should be remitted on                      position, particularly as regards invoice
the issue of whether the work was the                    and account access.
same or broadly similar.                                 The ET found that the Claimant had
                                                         been guilty of misconduct and that the
PROCEDURE                                                employer had a genuine belief in the
                                                         misconduct and had carried out a
                                                         reasonable investigation. The Tribunal
                                                         concluded that the dismissal fell within
SUMMARY Unfair Dismissal: Reason                         the range of reasonable responses.
for Dismissal including Substantial                      Upon appeal the EAT was concerned
Other Reason;                                            that the ET had not set out the
Practice & Procedure: Appellate                          misconduct which it had found. The
Jurisdiction/Reasons/Burns-Barke                         reason it should do this was for three
ET did not state what acts or                            essential reasons:
omissions constituted the misconduct                     “First, it must indicate to the parties why
in which they held the employer to                       they have won and why they have lost.
have had a genuine belief based on                       That has both a practical purpose and a
reasonable grounds after a reasonable                    general purpose in ensuring justice.
investigation. In the absence of this,                   Secondly, it is necessary because it acts
the EAT could not know what the ET                       as a form of discipline to the Tribunal itself
were evaluating, and the matter had to                   so that the Tribunal is focusing upon the
be remitted. An ET should always                         matters which are truly central to its
                                                         decision and is not sidetracked by some
indicate the substance of that which
                                                         irrelevant consideration. It reminds itself
the employer believed.                                   of the important matters to which it must
MR M KRELLE v MR RANSOM &                                have regard. Thirdly, and importantly for
TRADETEAM LTD                                            us, it enables an Appellate Tribunal to see
UKEAT/0568/05/SM                                         and to understand how the Tribunal
Langstaff J, Mr Gammon, Mr                               reached its decision.”
Beynon                                                   The EAT illustrated why this was
The Claimant was a drayman at the
                                                         “Where a Tribunal is dealing with an issue
Respondent‟s Lancing depot. The                          of misconduct which the employer has
Respondent was concerned about                           accepted as a sufficient reason for
excess payments made to an

Employment law bulletin
Issue 3 March

dismissal, there may possibly be                     employer to suggest that he pocketed
circumstances in which the Tribunal need             money, arising out of the mismatch
say no more about it than that there was             between documents coming from the
misconduct.       We consider that such              employer and documents from Lion, and
circumstances must be very rare. The                 the employer dismissed for that reason,
allegation of misconduct, dishonesty and             one could well imagine that any dismissal
fraud calls out for some understanding of            would be thoroughly justified. But the
what, as a matter of fact, the employee is           enquiry as to what were reasonable
said to have done. Although the Tribunal             grounds for believing that and the extent of
cannot be expected to set out in clear and           any reasonable investigation would be
absolute detail what the employer                    entirely different and it would be a matter
considered the employee to have done, it             of importance for this Tribunal, on appeal,
is necessary for a Tribunal at least                 to be able to see and understand how the
sufficiently to indicate in its decision what        Employment Tribunal had applied the law
particular acts the employer focused upon            to what the employer had decided so that
as constituting the misconduct for which             we could be satisfied that there was no
the employer then dismissed the                      error of law in its approach. “
employee. Unless the Tribunal has this               The EAT considered the manner in
focus, there is no point from which the              which the two Claimants had been
consideration of whether a belief in that            treated and commented that “the
misconduct was genuine can proceed, let              Tribunal dealt with the Claimants as
alone whether it was based on reasonable             though they were indistinguishable expect
grounds: instead, the question would be:             where they made specific reference to
reasonable grounds for believing what?               points of evidence raised on behalf of one
Still less would there be grounds for                or the other; that the Tribunal had not
holding that that belief followed from a             clearly identified the role played by each in
reasonable investigation because the                 the short-fall which occurred and which
reasonableness of an investigation must              prompted the investigation in the first
integrally depend upon what is being                 place. Identification of that role and the
investigated. Nor is it sufficient, as the           different roles which might have been
case of Tran v The Greenwich Vietnam                 played by Mr Krelle and Mr Ransom was
Community [2002] IRLR 735, C.A. shows                thus a matter of importance for the
us for a Tribunal simply to assume that the          Tribunal to consider.”
parties will know what the misconduct is             This was a mistake of law since
about from the debate which is raging
                                                     though “the Tribunal may very well have
before it.”
                                                     simply assumed that anyone with
In this case it was “insufficient for the            knowledge of the background material
Tribunal simply to have said, as it did, that        leading to the Tribunal, anyone seeing the
Mr Krelle had been guilty of misconduct or           documents before the Tribunal and
fraud or dishonesty without knowing quite            anyone looking at the witness statements
what the Tribunal had in mind. If, for               to the Tribunal would have known full well
instance, the dishonesty had been simply
                                                     what the Tribunal had in mind.” That “…is
the evasive responses to being questioned
                                                     not good enough because it does not
about Mr Krelle‟s involvement with Lion,
                                                     enable us or the parties nor does it assist
one could understand the Tribunal coming
                                                     the Tribunal in its self-discipline to know
to the conclusion that the employer had a
                                                     and to appreciate quite how the process of
belief in the evasive response, that there
                                                     reasoning     has    gone      from    those
were reasonable grounds for it and
                                                     background facts to the conclusions which
because the response was to the
                                                     the Tribunal has finally delivered.”
employer‟s own question, it would require
no further investigation. But to dismiss for         This was enough to dispose of the
it might very well be said not to be within          appeal but the EAT dealt with a further
the range of reasonable responses for an             point that the ET had not allowed Mrs
employer, without more. Again, if Mr                 Krelle to give evidence in support of
Krelle had himself pocketed money and                Mr Krelle‟s case and to produce and
there was cogent evidence before the                 explain a number of documents.

Employment law bulletin
Issue 3 March

“The EAT noted that the overriding                    Claimant appealed on the ground that
objective now applies and that “. It may              the ET awarded costs “on the basis that
well be that by consideration of the                  „the respondent is entitled to lay down a
overriding objective, a Tribunal might                marker‟ in paragraph 6 of the reasons. At
indeed wish to exclude evidence which                 the costs hearing the chairman refused to
technically would be admissible, though               allow the claimant‟s representative to raise
perhaps of only peripheral relevance. One             questions about the respondents‟ schedule
can think that proportionality for instance           of costs, so that the claimant‟s submission
may play a part in this and it is difficult to        that these costs were excessive for the work
see how case management powers such                   necessary to defend the claim was not
as time-tabling a hearing can properly be             heard. Announcing judgement at the costs
exercised if a party is simply entitled to            hearing, the chairman said that the award
insist that evidence is relevant and is               was being made as „a warning to others‟. “
entitled to parade it before the Tribunal             1.     The Tribunal had found that the
even though the relevance of it is not                claim was misconceived and in some
central but peripheral.”
                                                      areas conducted unreasonably within
The EAT was therefore “therefore
                                                      the meaning of Rule 40 of the
inclined to think that there is no
indefeasible right of a party appearing               Employment Tribunal (Constitution
before an Employment Tribunal to require              and Rules of Procedure) Regulations
the Tribunal to listen to and to examine              2004. Under 40(3) costs may be
evidence which is of relevance, but that              ordered where (3) the paying party
there may well be a discretion to exclude             has in bringing the proceedings, or he
it.” The EAT acknowledged that its                    or his representative has in conducting
decision was obiter on this point. The                the proceedings, acted vexatiously,
case was remitted to another Tribunal                 abusively, disruptively or otherwise
after consideration of the Sinclair                   unreasonably, or the bringing or
Roche principles.                                     conducting of the proceedings by the
                                                      paying party has been misconceived.
SUMMARY                                               The EAT referred to make a costs
Costs                                                 order in the case. This was helpfully
 In awarding costs for unreasonable                   expressed in the recent case of
conduct before the hearing and for the
                                                      Criddle v Epcot Leisure Ltd UKEAT
raising of misconceived issues during the
hearing under Rule 40 of Schedule 1 of                0275/05 in which HH Judge Peter
Employment Tribunal (Constitution and                 Clark at paragraph 20 said: “an award of
Rules of Procedure) Regulations 2004 it is            costs under Rule 14 involves a 2-stage
not enough to identify the context                    process, first a finding of unreasonable
complained of: the Employment Tribunal                conduct and secondly and separately the
must then stand back and balance that with            exercise of discretion in making an order for
other aspects of case so as to ensure an              costs…”. The costs in the action had
award is proportionate. Here the second               been in the region of £23,000 but the
stage was omitted and costs therefore were            application was limited to £10,000
wrongly    awarded,    not    as    proper            under the summary procedure. The ET
compensation.                                         stated:
MRS R V BEAT v DEVON COUNTY                           “The fact that that order has been made [that is,
COUNCIL & WEST AND EAST                               the costs] is not necessarily an indication that the
PUTFORD PRIMARY SCHOOL                                respondent will enforce it to that level but it is an
                                                      award that has been made on the principles of
UKEAT/0534/05/LA                                      misconception and unreasonable conduct of
HHJ Altman, Dr Fitzgerald, Mr                         proceedings. The respondent in the view of the
Jenkins                                               Tribunal in the particular circumstances of this
The Claimant was ordered by the ET                    case is entitled to lay down a marker given the
                                                      number of its employees that it will not shrink
to pay £10,000 in relation to                         from an application in appropriate circumstances.
applications which had failed. The                    The tribunal hopes the respondents will take in to

Employment law bulletin
Issue 3 March

account the evidence given by Mrs Beat as to               UKEAT/0059/06/ZT
her financial situation which in broad terms the
tribunal accepts namely that she survives by the           HHJ Clark
operation of the small holding and self sufficiency        The Respondent appealed against a
and that the amount generated from that and her            decision of a Chairman dated 20
very occasional work and craft fairs and the               December 2005, rejecting what was
selling of plants certainly does not amount to an
income of more than £75 to £100 per week
                                                           treated as an application by the
which would be considerably below the national             Respondent for a review of a direction
wages average. Accordingly there will be an                by the Tribunal dated 5 December
order for £10,000 …”                                       2005, that since no response had
The EAT, however stated that:                              been received; the Respondent could
“However, it is certainly the experience of this           take no part in the proceedings. The
Tribunal that £10,000 as an award against a
former employee is exceptional and virtually
                                                           Respondent failed to lodge a
unique and much higher than the general band               Response form so that it was ordered
of awards made in cases where comparable                   it could take no further part in
findings of misconception or unreasonableness              proceedings. It wrote to state that it
are made; and awards are more normally                     had been subject to a takeover, could
associated with the means of the former
employee… Having found the areas of                        not trace the claim form and asked
unreasonableness and misconception, a                      that it be resent. The letter was treated
Tribunal, it seems to us, is bound to pause; to            as a review and the ET found that the
stand back and to look at all the factors that are         Respondent must have been aware of
to be taken into account when assessing the
appropriate level of compensation.            This
                                                           the claim from correspondence both
involves balancing the amount of costs incurred            with the Claimant‟s representative and
by the unreasonableness, or the misconceived               from the Tribunal. The Respondent
part of the claim against other parts of the claim         knowingly shut its eyes to the obvious
and by taking account of the need, if the                  so that it would not be in the interest of
Tribunal considers there is a need for some
compensation and costs.”                                   justice to allow further time for a
The case was not remitted to the ET                        response to be entered. The point was
as the EAT stated “we are impressed by                     made that made that having deemed
the detail in that Judgment in paragraph 5 of              the letter as an application for a
very wide-ranging criticism of the conduct of              review, whilst the Chairman quite
the case by the Claimant. We would, it seems               properly obtained the comments of the
to us, be causing a great injustice to the
findings of the Employment Tribunal if we were
                                                           Claimant‟s side, the Tribunal did not
to quash the order for costs entirely, simply              then go back to the Respondent for a
because the Employment Tribunal had failed to              reply and this was a legitimate
ask itself about the exercise of discretion and to         criticism. Further, the Chairman had
weigh the factors.”                                        not followed the guidance given by
The award was reduced to £5,000.
                                                           Burton P in Moroak v Cromie [2005]
                                                           IRLR 535, applying the earlier
Practice        and      Procedure         –               guidance of Mummery P in Kwik Save
appearance/response; review; costs                         v Swain [1997] ICR 49. HHJ Clark
 No response entered – review application                  stated:
dismissed summarily under R.35(3) ET                       “It is a feature of this case that no defence on
Rules of Procedure. Factors for exercise of                the merits of the claim was advanced Ms Airey
                                                           in her letter of 15 December, although a
discretion not considered. Case remitted for               proposed form ET3 was lodged with the
full review hearing.                                       second application for review which, as Mr
 Cost in appeal to be paid by Appellant.                   Midgley accepts, gives rise to an arguable
Appeal unnecessary, failure to enter                       defence. Again, an opportunity to reply, it
response caused by default of Appellant                    seems to me, was essential as a matter of
and its advisers.                                          fairness. Additionally, Mr Fodder invokes the
BRITISH SCHOOL OF MOTORING                                 judgment of Rimer J in Maresco v Motor
                                                           Insurance Repair Research Centre [2005]
v FOWLER                                                   ICR 197. In particular, at paragraph 30, Rimer

Employment law bulletin
Issue 3 March

J referred to Rule 3.9 of the civil procedure            ECJ
rules which is headed „Relief from Sanctions‟
and sets out at letters (a) to (i), the factors
                                                         The Claimant was taken on by
which the Court ought to take into account on            DUEWAG AG on 1 April 1985. Under
an application for relief from sanction. Rimer J         his contract of employment, the
took the view, and I respectfully agree, that            employment relationship was to be
those principles applicable to the civil courts          governed by the framework collective
apply equally to an application for relief from
sanction in the Employment Tribunal. Again,              agreement, and by the wage
the importance of weighing the prejudice to the          agreement in force for the North
respective parties is highlighted.”                      Rhine-Westphalia iron and steel, metal
The EAT considered that a full review                    and electrical industry. That collective
hearing before a Tribunal was                            agreement had been concluded
necessary. However, it did state that:                   between the North Rhine-Westphalia
“In arriving at that conclusion, I have been very        Metal      and      Electrical   Industry
conscious of the prejudice suffered by the
Claimant in having to defend these appeal
                                                         Federation („the AGV‟) and the Trade
proceedings. Rule 34(A) of the EAT Rules                 Union for the Metal Industry („IG
provides that:                                           Metall‟). When the claimant was taken
“where it appears to the Appeal Tribunal that any        on, DUEWAG AG was a member of
proceedings brought by the paying party were             the AGV. On 1 April 1999 that
unnecessary… the Appeal Tribunal may make a
costs order against the paying party.”                   company was converted into Siemens
 I have formed a very clear view that these              DUEWAG GmbH. On 1 October 1999
appeal proceedings were unnecessarily                    Siemens DUEWAG GmbH transferred
caused by the errors on the part of the                  to the defendant part of its business, in
Respondent or its advisers. Had this case
been dealt with properly in the first instance
                                                         which the claimant was employed. The
when the proceedings were served and sent in             defendant is not a member of any
good time to the Respondents‟ representatives;           employers‟        association      which
none of this would have happened.                        concludes collective agreements. By
The Claimant‟s solicitors have put before me a           works agreement concluded on 2
schedule of costs totalling £5,509.08.         Mr
Fodder, in the course of his submissions,                August 2001, the defendant agreed
realistically acknowledged that it would not be          with the works council a grid for the
right to resist an application for costs in that         grading of employees on the basis of
amount, and I shall so order.”                           the provisions of the abovementioned
                                                         collective agreement. On 13 August
TRANSFER OF UNDERTAKINGS                                 2001 the defendant concluded a
                                                         further works agreement providing for
                                                         a one-off wage payment. By letter of
Article    3(1)    of   Council     Directive            the same date, the claimant declared
77/187/EEC of 14 February 1977 on the                    that, in return for the one-off payment,
approximation of the laws of the Member                  he irrevocably waived as against the
States relating to the safeguarding of
                                                         defendant all individual rights that he
employees‟ rights in the event of transfers
of undertakings, businesses or parts of                  might be able to claim to wage
businesses must be interpreted as not                    increases pursuant to a collective
precluding, in a situation where the                     agreement applicable to the period
contract of employment refers to a                       before the works agreement came into
collective    agreement       binding     the            force. On 29 August 2001, the
transferor, that the transferee, who is not              defendant concluded with the claimant
party to such an agreement, is not bound                 a supplement to the contract of
by collective agreements subsequent to                   employment according to which the
the one which was in force at the time of                claimant was to receive basic pay
the transfer of the business.
                                                         under salary bracket 8 and a
Hans Werhof v Freeway Traffic                            performance bonus. IG Metall and the
Systems GmbH & Co. KG                                    AGV concluded a new collective

Employment law bulletin
Issue 3 March

agreement for the North Rhine-                     appearances/response; review
Westphalia metal and electrical                    The Tribunal rejected the employer‟s
industry on 23 May 2002, which                     response under Rule 6(1) as not in the
provided for an increase in the wage               correct form; but it was in fact rejected
                                                   because, and only because, the boxes had
rate of 2.6% and an additional
                                                   been filled-in in such a way that allegedly
payment from 1 June 2003. The                      the response could not be scanned into the
claimant brought an action before the              ETS computer – although I could see
Arbeitsgericht      Wuppertal      (Labour         nothing wrong at all with the completion of
Court, Wuppertal) claiming, with effect            the form. In absence of a response, Rule 9
from 1 June 2003, payment by the                   applied; and the employers were barred
defendant of the difference between                from taking part in the proceedings. A
his basic salary and the sum provided              Chairman refused a review on the basis that
for under the collective agreement of              the application of Rule 9 involved no
23 May 2002, and the additional                    decision.
                                                   Held after consideration of Rules 1 to 6, 8, 9
payment provided for by that
                                                   and 34:
agreement.                                         1) the coming into effect of Rule 9 did not
 The German Court referred the                     involve a decision; but
following questions to the Court for a             2) the rejection of the response was
preliminary ruling:                                reviewable under Rule 34(1)(a) and was
 „(1)    Is it compatible with Article 3(1)        also appeallable;
of … Directive 98/50 … amending                    3) the Chairman ought to have granted a
Directive 77/187 … if a transferee of a            review and to have allowed the response to
business – who is not subject to a                 stand;
collective agreement – is bound by an              4) the EAT should itself grant the review
                                                   and, as the only possible just result of a
agreement between the transferor of
                                                   review, allow the response to stand.
the business – who is subject to a                 5) where a review and an appeal on a
collective agreement – and the                     procedural matter are both available, the
employee, under which the collective               review option should be pursued.
wage agreements in force binding the               (1) BUTLINS SKYLINE LTD (2)
transferor of the business are to apply,           MR M SMITH v MISS C A
in such a way that the collective wage
agreement in force at the time of the
transfer of the business applies but               UKEAT/0042-0045/06/DA
collective wage agreements entering                HHJ Burke QC
into force subsequently do not?                    The Claimant claimed that she had
 (2)    If that is to be answered in the           been the victim of discrimination and
negative:                                          harassment on the grounds of her sex
 Is it compatible with Article 3(1) of             and that she had been unfairly
Directive 98/50 if the transferee of the           dismissed, her employment having
business – who is not subject to a                 come to an end on 1 July 2005. Her
collective agreement – is bound by                 claim form was presented in time, as it
collective wage agreements which                   seems to me, by one day, at least in
have entered into force after the                  terms of her unfair dismissal claim. On
transfer of the business only so long              28 October 2005 Butlins submitted a
as the transferor of the business is so            response. The substantive parts of the
bound?‟                                            response sets out an account of events
 The ECJ answered the questions as                 which plainly put in issue all the claims.
set out above.                                     The Tribunal was unable to accept the
                                                   response because it was not presented
SUMMARY                                            in the prescribed form, as required by
Practice      and       Procedure        –         rule 4(2) of Schedule 1 to the

Employment law bulletin
Issue 3 March

Employment Tribunal‟s (Constitution                        Butlins were not entitled to take any part in the
and Rules of Procedure) Regulations                        proceedings except for the very limited
                                                           purposes set out in rule 9; and it was open to a
2004.     Clicking „download‟ on the                       Chairman, if he considered it appropriate to do
prescribed form from the net had meant                     so, to enter a default judgment under rule 8.
the form which was then downloaded                         Strangely, if he had taken the step of entering a
was incorrect because boxes 1.5 to 1.8                     default judgment under rule 8, that judgment
                                                           would have been reviewable; and one is
were missing. A second form which                          entitled perhaps to hope that, had that
was then sent was rejected because it                      happened, a review would have been held and
was said the form could not have been                      the sequence of events which I have described
scanned. A review under rule 30(4) was                     would have been unravelled and corrected.
rejected on the basis that “there was no                   But there has been no default judgment; and
                                                           there is no requirement there should be a
decision that the respondent could take                    default judgment; yet pursuant to rule 9 the
no further part in the proceedings. Rule                   Respondents were barred from taking any
9 of The Employment Tribunals                              further part in the proceedings, even though
(Constitution and Rules of Procedure)                      there had been no default judgment.
                                                           In these circumstances I ask myself the
Regulations 2004 makes this clear. If a                    question, is the error of law plainly made, in my
response is not presented the                              judgment, by the member of staff who rejected
respondent cannot take part. The Rule                      the second response capable of being
does not call for any decision on the                      corrected in some way other than through a
part of a Chairman.             It flows                   review under rule 6(6) or a review under rule
                                                           8(5), neither of which is available?”
automatically from the rejection of the
                                                           The EAT concluded that the first
response.        That is an entirely
                                                           appeal, against the decision under rule
administrative decision and not one
                                                           6(1), is allowed. It is allowed because
which is able to be reviewed under our
                                                           I can see no warrant in law for the
                                                           rejection of the response on the sole
On       11       November,       Butlins‟
                                                           grounds which were put forward. That
representatives replied, saying that their
                                                           response ought to have been
application for review was not made
                                                           accepted.       Further, although the
under rule 9 but under rule 30(4), and
                                                           Chairman was wholly entitled to say
renewing their review application. The
                                                           and was correct to say that no
Tribunal rejected the second request for
                                                           decision had been made by a
a review on the basis that there had
                                                           Chairman either under rule 6, or under
been no decision which could be the
                                                           rule 9, nonetheless the decision made
subject of a review. Upon appeal the
                                                           by the member of staff to reject the
EAT stated that:
“However regrettable it is that the problem in
                                                           second response was reviewable and
this case originated from a fault on the ETS               ought to have been the subject of a
website, the Tribunal‟s administrative staff were          review.      The EAT reviewed the
not permitted to depart from the Rules for that            decision and decided that “This is a
reason. Whether an administrative error was                case in which the original member of staff
made or not in the case of the rejection of the            made an administrative error; it is a case
first response does not arise in any event
because there is no appeal against the
                                                           in which the interests of justice require that
rejection of the first response; and I need say            the refusal to accept the response be set
no more about it.”                                         aside and that the response be accepted.
However, the second form contained all                     The response itself was not out of time.
the information necessary and the EAT                      No application to extend time needs to be
                                                           made. It was, just, in time and ought to
“this is not a case of a rule 6(2) rejection but of
                                                           have been accepted as presented.”
a rule 6(1) rejection which does not involve any
decision by a Chairman or any compulsory
reference to a Chairman. Thus, rule 6(6) is not
relevant to this case; yet the rejection of the
response had the effect that, pursuant to rule 9,

Employment law bulletin
Issue 3 March

                                                     was accepted by the Respondent, to
                                                     take effect on 31 December. The ET
UNFAIR DISMISSAL                                     held that the case has no reasonable
                                                     prospect of success and struck it out.
                                                     The ET stated that:
SUMMARY                                              “In our view no reasonable Tribunal would
Practice and Procedure – bias,                       find that reporting suspicion of criminal
misconduct and procedural irregularity;              activity to the police constituted breach of
striking-out/dismissal                               any fundamental term by the employer.”
ET strike out order – no reasonable                  The EAT held            that   this   was     a
prospect of success. Misdirection as to test         misdirection:
for constructive Unfair Dismissal. Strike-out        “In  our judgment that was a material
inappropriate. Appeal allowed.                       misdirection in law. Applying the test for
READ      v   MEMBERS     OF                         breach of the implied term, endorsed by the
                                                     House of Lords in Mahmud v BCCI [1977] ICR
LLANYRAFON        COMMUNITY                          606, did this employer, without reasonable and
ASSOCIATION                                          proper cause, conduct itself in a manner
UKEAT/0530/05/CK                                     calculated and likely to destroy or seriously
                                                     damage the relationship of confidence and trust
HHJ Peter Clark, Mr Chadwick,                        between employer and employee?
Ms Tatlow                                            Looking at the rival contentions in the present
The Claimant was employed by the                     case it comes to this. Did the Respondent,
                                                     through Mr Phillips, report the alleged
Respondent as steward of its club                    discrepancies to the police out of a genuine
premises from 1997 until his                         concern that they existed and were the
resignation effective on 31 December                 responsibility of the Claimant, such that he had
2004. relied on a sequence of events                 acted honestly, in which case reasonable and
involving    Mr     Phillips,  said    to            proper cause for their conduct may well be
                                                     made out; or was the matter reported to police
undermine the necessary mutual trust                 as part of an alleged campaign of false
and confidence to be implied into                    accusations against the Claimant, designed to
every     contract    of     employment,             cause him anxiety and stress, as he would
culminating in an incident in early                  have it? That the making of a false accusation
                                                     of theft to police against an employee may
September 2004 which resulted in the                 amount to breach of the implied term is clear
Claimant being arrested by police                    from the old case cited to us by Mr Brockley of
following a report by Mr Phillips. The               Robinson v Crompton Parkinson Ltd [1978]
allegation related to what was said to               IRLR 61 (EAT). ”
be cash deficiencies in stocktaking at               The issue had not been addressed by
the club and that was said by the                    the Tribunal so that the case had to be
Claimant to be the final straw. He                   tried on the evidence. The strike out
went off sick following his arrest, never            order was set aside.
to return to work. On 25 October 2004
he wrote to the committee a letter                   SUMMARY
which the Tribunal was prepared to                   Unfair Dismissal: Contributory Fault &
                                                     Practice and Procedure: Appellate
treat as a grievance letter for the
purpose of the statutory grievance                   Quantum of compensation – employee
procedure about the action taken                     said illness was aggravated in part from
against him, and raising three specific              dismissal. Tribunal found dismissal unfair
questions. He asked for a formal                     but employee would have been dismissed
response within 14 days. None was                    13 months later for sickness absence.
received, the Respondent says                        Tribunal did not address in its reasons
because the officer of the committee                 employee‟s contention that illness was in
tasked to respond resigned, and on 25                part a consequence of dismissal, even
November the Claimant gave written                   after being invited to give further reasons.
                                                     Matter remitted to fresh Tribunal
notice of resignation. That resignation

Employment law bulletin
Issue 3 March

(Chairman having retired a year ago).           further, further that the Tribunal had
MR S O'HARA     JACKSTONE                       simply not dealt with a fundamental
FROSTER LTD                                     argument advanced by the Appellant
UKEAT/0350/05/MAA                               at the hearing. He had submitted that
Elias P, Mr Parker OBE, Ms                      his illness was, in part, contributed to
Tatlow                                          or aggravated by, the very fact that he
The Respondent conceded that the                had been dismissed summarily by the
Claimant had been unfairly dismissed.           employers in the way that he had. The
The Appellant was employed as an                EAT stated:
                                                “It seems to us that if a Tribunal were to come
engineer     with   the    Respondent           to the conclusion that the employee‟s illness
company from 8 October 2001 until his           (absent any aggravation to that illness caused
dismissal on 23 January 2004. He                by the dismissal itself) would have led to a
had been instructed on 13 January               dismissal at some later stage after the unfair
                                                dismissal had occurred, then compensation
2004 to fly to Holland on 15 January            should be limited to the period from the original
but he says he became ill in the early          dismissal until the new dismissal would have
hours of that day. His mother phoned            taken effect. If, on the other hand, the Tribunal
the employers on that day and told              is satisfied that illness (absent the aggravation
them that her son was suffering from            caused by the dismissal itself) would not have
                                                led to a dismissal at a later stage, then it should
“a nervous breakdown”.         He was           not set any limit to the compensatory award by
signed off work by his doctor on 16             fixing a later date of dismissal. On that latter
January as a result of what the doctor          premise, there would not have been a later
described as a depressive illness. The          dismissal by reason of ill-health but for the
                                                original unfair dismissal. It may be that if a
employers then terminated his contract          Tribunal considers it cannot be satisfied of
for gross misconduct by a letter dated          either of these premises, then it would be
19 January which was received by the            legitimate for it to assess the extent to which
employee on 23 January. It purported            the dismissal had contributed to the depressive
to state that the dismissal took effect         state and assess compensation by reference to
                                                the relevant percentage. “
on 15 January.         The employers
                                                However, the ET had not dealt with the
contended that this was the “last
                                                argument that the dismissal itself that
straw” of unacceptable conduct by the
                                                was, at least, a significant cause of the
Claimant. The ET found that there
                                                subsequent depressive illness which
were certain failings by the Appellant
                                                led him being away from work for such
which amounted to blameworthy
                                                a lengthy period after the termination
conduct and justified a reduction of the
                                                of his contract. The case was remitted
compensation by 25%.             These
                                                to a fresh tribunal.
included failures to comply with the
procedures and being lax generally in
attendance and time-keeping.
The second finding of the Tribunal was
although unfairly dismissed, the
Appellant would have been dismissed             SUMMARY
                                                Public Interest Disclosure
13 weeks after the date of termination
                                                 Protected     Disclosure.        Employer
in any event. The employee appealed             deliberately broke into computer system to
on the ground that the ET did not               show that his concerns that information
properly make the assessment that               might be obtained in breach of the Data
dismissal would occur in any event 13           Protection      Act     was     reasonable.
weeks after the unfair dismissal, and           Disciplined for that reason and resigned in
that they had given insufficient                protest and being disciplined. Was it a
reasons for that conclusion and,                protected disclosure?       Was there a
                                                constructive dismissal?       If so, was

Employment law bulletin
Issue 3 March

automatically or unfair or in any event                 factors which ultimately would demonstrate that
unfair under general unfair dismissal                   no breach is likely to occur.
principles?                                              There may indeed be cases where a relatively
                                                        detailed appreciation of the relevant legal
BOLTON SCHOOL v MR M                                    obligation is required before an employee can
EVANS                                                   establish that he reasonably believed that the
Elias P, Sir William Morris, M                          information tended to show that a breach of a
                                                        legal obligation was likely.     But it would
Yeboah                                                  undermine the protection of this valuable
The Claimant was a technology                           legislation if employees were expected to
teacher at Bolton School. He told the                   anticipate and evaluate all potential defences,
school that the computer system was                     whether within the scope of their own
                                                        knowledge or not, when deciding whether or
insufficiently secure and allowed the                   not to make that disclosure.”
pupils to hack into confidential                        However, the EAT stated that the
information about other pupils. His                     employee must be subjected to a
concerns were not taken seriously so                    detriment “on the grounds that” he has
he hacked into the system himself and                   made a protected disclosure, which
disabled some of the accounts. He told                  requires an examination of the mental
the school what he had done but the                     processes which caused the employer
IT department was shut down which                       to act as he did. The School had
led to about £1000 loss in recovery                     genuinely believed that he had hacked
time. He was given a written warning                    into the computer system without
and resigned. He claimed that he had                    authority and that he had been
suffered a detriment and unfair                         disciplined for that reason. It followed
constructive dismissal on the ground                    that the School believed that the
that he had made a protected                            Claimant had committed an act of
disclosure leading to the warning and                   misconduct. The ET had held that this
to his resignation. The ET upheld his                   fell within the principle of protected
claim. Although the Tribunal accepted                   disclosure, reasoning that on policy
that the warning had been given                         grounds it was wrong to treat the
because of his having hacked into the                   Claimant‟s conduct in hacking into the
computer that amounted in the                           system as distinct from the disclosure
Tribunal‟s view to a protected                          of information itself. The EAT held
disclosure. The employers had acted                     that the ET had fallen into error as the
in breach of the duty of trust and                      “statute protects disclosure but not
confidence by acting as they did; the                   other conduct by the employee even if
subsequent       resignation     of     the             connected in some way to that
Claimant, therefore, amounted to a                      disclosure”. The EAT expressed the
dismissal. The dismissal was also                       principle:
unfair under general principles.                        “An employee cannot be entitled to break into
In the EAT it was held that the                         his employer‟s filing cabinet in the hope of
Claimant had had a reasonable belief                    finding papers which will demonstrate some
that the employer had failed or was                     relevant wrongdoing which he can then
                                                        disclose to the appropriate person. He is liable
likely to fail to comply with a legal                   to be disciplined for such conduct, and that is
obligation. The EAT noted on this that:                 so whether he turns up such papers or not.
“We do not think that the protection is lost            Provided that his misconduct is genuinely the
merely because the employer may be able to              reason for the disciplinary action, the employee
show that, for reasons not immediately                  will not be protected even if he does in fact
apparent to the employee, the duty will not             discover incriminating papers. Success does
apply or that he has some defence to it. The            not retrospectively provide a cloak of immunity
information will still, it seems to us, tend to         for his actions, although he will then of course
show the likelihood of breach. It is potentially        be protected with respect to the subsequent
powerful and material evidence pointing in that         disclosure of the information itself. “
direction even although there may be other              It commented on another case in

Employment law bulletin
Issue 3 March

which a, perhaps, more common                         by the worker.
occurrence occurred:                                  ROBINSON-STEELE v RD RETAIL
“…in reaching this conclusion, we are                 SERVICES LTD, CLARKE v
expressing views consistent with some
observations of this Tribunal in the case of          FRANK STADDON LTD
Aspinell v Mech Forge Ltd EAT/891/01 in               European Court of Justice
which this Tribunal, HHJ Reid QC presiding,           Mr Robinson-Steele worked either day
noted that it had reservations about a                shifts of 12 hours each over five days
concession in that case that the making of a
video was a protected disclosure because it           or night shifts also of 12 hours each
was linked to the subsequent disclosure of the        over      four   days,     continuously
information to the employer. “                        throughout that period of employment
The case on „ordinary‟ unfair dismissal               except for one week of leave over the
was remitted.                                         Christmas period in 2002, for which he
                                                      was not separately paid. The relevant
WORKING TIME                                          term of the contract provides: -
                                                      “Entitlement to payment for leave
                                                      accrues in proportion to the amount of
1. Article 7(1) of Council Directive                  time worked continuously by the
93/104/EC of 23 November 1993                         Temporary Worker on Assignment
concerning certain aspects of the                     during the leave year. The Temporary
organisation of working time precludes                Worker agrees that payment in respect
part of the remuneration payable to a                 of the entitlement to paid leave shall
worker for work done from being                       be made together with and in addition
attributed to payment for annual leave                to the Temporary Worker‟s hourly rate
without the worker receiving, in that                 at 8.33% of his hourly rate.”
respect, a payment additional to that                 The position was similar in Staddon,
for work done. There can be no                        so that the rate was - Rate of pay-
derogation from that entitlement by                   Basic 8.689 Holiday 0.756 = £85 per
contractual arrangement. 2. Article 7                 day.
of Directive 93/104 precludes the                     The ECJ stated the referring courts
payment for minimum annual leave                      by its questions asked, in essence,
within the meaning of that provision                  whether Article 7 of the directive
from being made in the form of part                   precluded payment for minimum
payments       staggered    over    the               annual leave within the meaning of
corresponding annual period of work                   that provision from being made in
and      paid    together   with    the               the form of part payments
remuneration for work done, rather
                                                      staggered over the corresponding
than in the form of a payment in
respect of a specific period during                   annual period of work and paid
which the worker actually takes leave.                together with the remuneration for
3. Article 7 of Directive 93/104 does                 work done, rather than in the form
not preclude, as a rule, sums paid,                   of a payment in respect of a
transparently and comprehensibly, in                  specific period during which the
respect of minimum annual leave,                      worker actually takes leave In that
within the meaning of that provision, in              regard, the ECJ stated that there is
the form of part payments staggered                   no provision in the directive which
over the corresponding annual period                  lays down expressly the point at
of work and paid together with the                    which the payment for annual leave
remuneration for work done, from
                                                      must be made. The ECJ stated that
being set off against the payment for
specific leave which is actually taken                the point at which the payment for
                                                      annual leave is made must be fixed

Employment law bulletin
Issue 3 March

in such a way that, during that                      with which employers must merely make
leave, the worker is, as regards                     sure that workers can take their daily and
                                                     weekly rest, but are not required to make
remuneration, put in a position                      sure that they do take their rest.
comparable to periods of work. It                    Commission of the European
was noted that “under Article 7(2)                   Communities v
of the directive, the minimum                        United Kingdom of Great Britain
period of paid annual leave may                      and Northern Ireland
not be replaced by an allowance in                   OPINION OF ADVOCATE
lieu, except where the employment                    GENERAL KOKOTT
relationship is terminated. That                     delivered on 9 March 2006
prohibition is intended to ensure                    The Commission complained that
that a worker is normally entitled to                some provisions of the national law of
actual rest, with a view to ensuring                 the United Kingdom on the working
effective protection of his health                   time of workers, or the guidance on
and safety (see, to that effect,                     those provisions, infringe Community
BECTU, cited above, paragraph                        law; namely that Regulation 20(2) of
44, and Case C-342/01 Merino                         the WTR extended unduly the
Gómez       [2004]    ECR    I-2605,                 derogation allowed by Article 17(1) of
paragraph 30.” Article 7 of the                      the Directive and that the application
directive was not       one of the                   of the law recommended by the DTI
                                                     guidelines was contrary to the
provisions from which the directive                  objectives of the Directive. The AG
expressly allows derogations so                      stated that in “accordance with the
that it did not matter whether such                  objective of that directive to ensure the
a regime of paid annual leave was                    protection of the health and safety of
or was not based on a contractual                    all workers covered by it, the
arrangement. The ECJ therefore                       derogations in Article 17(1) must
answered the questions as set out                    remain limited to those cases in which,
above.                                               on     account      of    the     specific
The AG held that the ECJ should -declare             characteristics     of     the     activity
that the United Kingdom of Great Britain             concerned, working time as a whole
and Northern Ireland has failed to fulfil its        and not just part of it is not measured
obligations under the third paragraph of             and/or predetermined or can be
Article 249 EC to implement Council                  determined by the workers in question
Directive 93/104/EC of 13 November 1993              themselves. The AG noted that:
concerning certain aspects of the                    “ If the derogation under Article 17(1) of the
organisation of working time,                        Directive were also applied to cases in which
–      by adopting, contrary to Article 17(1)        only part of the working time is measured,
of the Directive, Regulation 20(2) of the            predetermined or can be determined by the
Working Time Regulations in the version              workers themselves, there would be a risk that
of 17 December 1999, under which, in                 the maximum weekly and night working time
circumstances in which only part of the              laid down by Community law would be
working       time    is     measured      or        circumvented. In such cases, the maximum
                                                     permissible weekly and night working time
predetermined or cannot be determined by             could already be completely or largely used up
the worker himself, the maximum limits of            by that part of the activity of the worker
weekly and night working time apply only             concerned the duration of which is measured,
to that part of the working time, and                predetermined or cannot be determined by the
–      by maintaining, contrary to the               worker himself. In order to carry out his other
objective defined in Articles 3 and 5 of the         tasks which, on account of their specific
Directive, official guidelines on the                characteristics,   are    not    suitable    for
Working Time Regulations in accordance               measurement of length of working time or
                                                     determination in advance or for which the

Employment law bulletin
Issue 3 March

worker concerned can himself determine
working time, the worker might then have to
exceed the maximum limits of weekly and night
working time.
33. In light of the above considerations, it
must be stated that the scope of Regulation
20(2) of the WTR goes beyond the derogation
provided for in Article 17(1) of the Directive and
therefore infringes that provision of Community
The   questions     were              therefore
answered as set out above.

Please address any queries (or
send unreported cases) to:

Michael Duggan

3 Kings Bench Walk North, London,
Temple EC4 Y7HR.
mduggan@littletonchambers.co.uk or
Telephone: 02077978600. Facsimile:


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