UK: Employment Briefing - March 2010

Last Updated: 30 September 2010
Article by Brian Gegg, Jesper Christensen and Marc Meryon

Originally published March 2010

ECJ Rules that EU Law Takes Precedence over National Legislation

In Kucukdeveci v Swedex GmbH the ECJ ruled that the Equal Treatment Framework Directive (the Framework Directive) could be applied in a case between private individuals which were not emanations of the State. Directives are binding on member states but are not enforceable between private individuals. Further, where national law is unable to be interpreted consistently with a directive, domestic law prevails. However, in Kucukdeveci, the ECJ ruled that, following and taking further the finding in the landmark case of Mangold , the principle of non discrimination on age related grounds is a general principle of EU law which is expressed through a directive and national laws which conflict with it should be set aside.

Ms Kucukdevci brought a claim against her employer, Swedex, which had applied the German Civil Code when it dismissed her. The Code provided that notice to terminate employment increased on a service related basis, years before the age of 25 being disregarded. As Ms Kucukdeveci had joined Swedex when she was 18 she was only entitled to notice equivalent to 3 years' service despite having worked for Swedex for 10 years. She claimed that the disregarding of service before the age of 25 in the Code was a measure which discriminated on grounds of age and was contrary to European law. The German Court asked the ECJ to rule on whether the Code infringed Community law and whether the requirement could be justified on grounds of operational flexibility and whether, in legal proceedings between private individuals, a court must disapply a domestic law which is contrary to Community law.

The ECJ, in a dramatic ruling, stated that the principle of equal treatment is a 'general principle of EU law' that derives from several international instruments including the Charter of Fundamental Rights (which has now been given the same status as EU treaties). The Framework Directive was therefore not the source of the principle of non discrimination but, rather, gave expression to it. Therefore a national court must provide the full protection derived from EU law and disapply any domestic legislation contrary to that principle. The general principle of non discrimination is no wider than as defined in a directive but now it seems that employees can enforce their rights with regard to non compliance in domestic legislation with an EU directive (which falls within the 'general principle') against another private employer. An obvious question mark will hang over the possibility of justifying the statutory age bands for calculating statutory redundancy pay and the basic award for unfair dismissal. In Kucukdeveci, the ECJ ruled that it was possible to argue operational flexibility as a justification but that, on the facts, the domestic legislation could not be regarded as appropriate for achieving that aim.

Right to Statutory Holiday is not an Inalienable Right

The EAT in Lyons v Mitie Security considered a claim by Mr Lyons for holiday pay when he was refused a request to take holiday close to the end of the holiday year without complying with Mitie's holiday notice requirements. Mitie's rules provided that applications for holiday had to be made on their standard forms at least 4 weeks prior to commencement of the holiday. All holiday had to be taken in the holiday leave year (which ended on March 31) and could not be carried forward.

On 6 March Mr Lyons sent a fax requesting payment of 9 outstanding holiday days. Mitie referred to the requirement to give contractual notice and stated that they could not pay him while he was still working. Mr Lyons resigned and claimed that he had an inalienable right to holiday which could not be fettered by notice requirements. The EAT disagreed. Noting that the absence of case law suggested that employees had not been denied their reasonable requests for holiday entitlement, it held that the right to statutory leave is not inalienable in that it had been made subject to notice provisions. Article 7 of the Working Time Directive envisaged that there would be 'conditions for entitlement' whether statutory or contractual. Provided the mechanism for entitlement was not operated by an employer in an unreasonable, arbitrary or capricious way so as to deny entitlement lawfully requested, this could mean the loss of holiday at the end of the leave year in respect of leave not taken.

Fair Share Fee Schemes May be Unlawful

Fair Share Fee Schemes (FSFS, relatively common in the US but rarer in the UK) require every member of the workforce who benefits from union negotiated services to pay a fee by way of deduction from salary as a contribution towards the union's services. In Samuels v London Bus Services Limited, Mr Samuels challenged the legality of FSFS deductions claiming that they were in breach of section 146 Trade Union and Labour Relations (Consolidation) Act 1992. Section 146 provides that workers are protected against detriment on grounds related to union membership or activities, particularly where an employer's act or failure to act has the sole or main purpose of compelling them to become a union member or enforcing a requirement that, if not a union member, they must make payments.

Mr Samuels had ceased to be a member of Unite but his employer had continued to make deductions from his salary in line with the FSFS. The EAT agreed with him that these deductions were a detriment which could be attributed to his non-union membership and upheld his claim under section 146.

The tribunal also considered whether Mr Samuels could rely on the European Convention of Human Rights (ECHR) to say that section 146 should be interpreted in his favour. Section 1 of the Human Rights Act 1998 provides that primary and subordinate legislation should be interpreted in a way compatible with the ECHR. Article 1 ECHR provides that no person should be deprived of his possessions except in the public interest. European case law has already established that deductions for union inspection work deprived workers of their possessions. The tribunal held that Article 1 could be relevant and that there was a public interest in allowing such deductions to be made but that they must be proportionate and/or transparent. In this case, there was no clear link between the amount paid and the benefit received.

This claim was a test case and is likely to be appealed so this is unlikely to be the last word on the legality of FSFSs.

Jurisdiction in Race and Age Claims: 'Partly' Means More Than De Minimis

In BA v Mak the EAT were asked to consider whether an employee worked 'wholly or partly in Great Britain' for the purposes of the race and age discrimination protection legislation.

Ms Mak and her fellow claimants were of Chinese nationality, born and living in Hong Kong. They worked for BA airline whose principal place of business is GB. They were employed as cabin crew, based and ordinarily resident in Hong Kong, flying between HK and London and other destinations. Ms Mak completed around 28 flight cycles each year. A typical flight to London would involve the aircraft spending around 30 minutes in British airspace, a 45 minute debrief at the end of the flight and then a period of rest of about 58 hours in hotel accommodation. If any crew member wished to leave the hotel for more than 8 hours they required permission. Cabin crew were also required to attend compulsory training in London (a 6 week course on starting employment and annual 2 day courses in safety).

The EAT held that the employment tribunal were correct to find that the debriefing session, duties on landing, standby time, duties prior to take off and training constituted 'work'. In the EAT's view this was more than de minimis and it held that the tribunal was right to look at the nature of the job performed. What the claimants did was an integral part of each flight cycle and the training requirements were absolutely essential. The tribunal were correct to have found that the claimants worked 'partly' at an establishment in GB.

Linked Illnesses and DDA

The EAT in Patel v Oldham BC have held that the duration of effects of a condition which is likely to develop or has developed from a different condition may be aggregated with the duration of the effects of the original condition.

Ms Patel was a teacher who suffered from mild myelitis which, following an injury at work, developed into a secondary myofascial pain syndrome. It was accepted that at no point would a clinician say that the myofascial pain syndrome was likely to last more than 12 months.

The EAT held that the effect of an illness or condition likely to develop or which has developed from another illness or condition forms part of the assessment of whether the effect of the original impairment is likely to last or has lasted at least 12 months. The case was remitted to consider whether the effects of the myelitis were long term within the meaning of the DDA and whether the secondary myofascial pain syndrome had developed from the myelitis and if so whether the effects of the first impairment had lasted for at least 12 months.

And Finally...

Financial Penalties for Breaches of DPA

The Information Commissioner has been given new powers to impose fines of up to Ł500,000 on data controllers in serious breach of the Data Protection Act (DPA). The Information Commissioner must be satisfied that the DPA contravention was serious and likely to cause substantial damage or distress and that the data controller knew there was a contravention or should have known of such contravention and that it would be likely to cause substantial damage or distress and still failed to take reasonable steps to prevent it happening. Statutory guidance has been published by the Information Commissioner's Office on the issuing of fines. The new powers are expected to come into force on 6 April 2010. The potential to impose swingeing fines should serve as a warning to data controllers to ensure their systems are compliant with DPA requirements.

Blacklisting Regulations

The Employment Relations Act 1999 (Blacklists) Regulations 2010 are due to come into force between February and April 2010. BIS Guidance has been produced to explain how the regulations will work. The regulations will make it unlawful to compile, use, sell or supply 'prohibited lists' and workers will be entitled not to be subjected to a detriment or dismissal for a reason connected to a prohibited list. No qualifying period will be necessary to claim automatically unfair dismissal for this reason. A tribunal can also award just and equitable compensation. The holding of the list may also be in breach of the DPA (see above) and risk the imposing of a fine by the Information Commissioner using his new powers.

The list must contain details of union members or persons who have taken part in union activities and must be compiled with the purpose of being used by employers or employment agencies to discriminate against such workers. Prohibited lists may be mixed (ie contain the prohibited details and other non prohibited information) and can be held outside the UK. There are certain exemptions eg where the holding of such a list is in the public interest.

Whistleblowing

For claims arising on or after 6 April 2010 the tribunal claim form ET1 will be amended to include a box where the claimant in a whistleblowing claim can indicate a wish to refer allegations of a protected disclosure on to one or more relevant authorities on a prescribed list. Both parties will be notified when a relevant authority has been passed the details.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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