UK: Employment Briefing - February 2010

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

Originally published February 2010

FEBRUARY 2010 CASES

You will notice that this Employment Briefing is longer than usual. There have been a significant number of interesting employment cases recently, so we have included them in this edition: which we hope will be useful.

Age Discrimination: ECJ Rulings

The ECJ has made two rulings in relation to individuals claiming age discrimination in two German cases.

In Wolf v Stadt Frankfurt am Main the ECJ considered a claim from an applicant to join the operational division of the professional fire services. Under Hesse law, recruitment to career posts in the fire division is open to persons of not more than 30 years of age. Mr Wolf brought a claim seeking compensation when he was told his application could not be considered because he was older than 30. The German court stayed proceedings to refer questions to the ECJ. In particular, it asked whether aims such as the concern to ensure a long career for officials or to ensure a minimum period of service before retirement are legitimate aims and whether setting the maximum recruitment age at 30 is an appropriate and necessary means of achieving such aims.

The German Government argued that operational careers in the fire service require exceptionally high physical skills which only younger officials could meet. It argued that in view of the 'medically proven ageing process' officials over the age of 45 no longer possess those greater physical abilities. The ECJ held that the concern to ensure the operational capacity and proper functioning of the professional fire services was a legitimate objective within the Equal Treatment General Framework Directive (the Directive). It followed that the possession of exceptionally high physical capacities may be regarded as a genuine occupational requirement. Noting the scientific data produced by the German Government, the ECJ accepted that the need to possess full physical capacity is related to the age of persons in the fire service. Finally, the ECJ found that the national legislation restricting the recruitment age to 30 was appropriate to the objective of ensuring the operational capacity and proper functioning of the fire service and did not go beyond what was necessary to achieve that objective.

In Petersen v Berungsausschuss fur Zahnarzte fur den Bezirk Westfalen-Lippe the ECJ considered whether German law setting a maximum age of 68 for health service dentists breached the Directive. Around 90% of patients were covered by that scheme.

In this case, Ms Petersen was a health service 'panel' dentist who reached the age of 68 in 2007. She complained that the requirement to retire at 68 was contrary to the Directive. The domestic court asked the ECJ to rule on whether the statutory regulation of a maximum age limit to practise a profession (in this case, dentistry) was an objective and reasonable measure to protect a legitimate aim (in this case, the health of national health patients) and an appropriate and necessary means of achieving that aim if it is derived solely from an assumption, based on 'general experience', that a general drop in performance occurs from a certain age. The domestic court mentioned several objectives: the protection of patients' health; the distribution of employment opportunities among the generations; and the financial balance of the German health system.

The ECJ held that the latter two aims were potentially legitimate aims. With regard to the first aim, the retirement rule could not be considered proportionate since it only applied to dentists in the health service, not private dentists. However the ECJ did think that the age limit was capable of justification as a means of ensuring the health system remained financially viable.

It is interesting that in both cases the ECJ in principle accepted that a decline in performance linked to increased age could justify rules which were age discriminatory.

Use of Protection from Harassment Act in Employment Case

In Veakins v Keir Islington Ltd an employee was successfully able to pursue a claim under the Protection from Harassment Act 1997 (Harassment Act) in relation to matters which arose at work. The Court of Appeal gave useful guidance in this case as to when a claim under the Harassment Act might be appropriate.

Miss Veakins had been subjected to a course of consistent bullying behaviour from her superior, Mrs Lavy, which included embarrassing public telling-offs, petty disputes and the ripping up of a letter of complaint written by Miss Veakins. Mrs Lavy had also persistently asked other employees questions about Miss Veakins' private life.

Miss Veakins brought a claim under s1(1) of the Harassment Act which provides that a person must not pursue a course of conduct which amounts to harassment of another and which he knows or ought to know amounts to harassment. This prohibition is enforceable by a criminal offence and a civil remedy. The Recorder dismissed Miss Veakins's claim noting the criminal sanction under the Act and stating 'I cannot see that any sensible prosecuting authority would pursue these allegations criminally.[...] These extremely regrettable episodes, though made out factually, do not come anywhere near the line of criminality [to] bring them within section 1 of the Harassment Act'.

The Court of Appeal disagreed. It stated that since the case of Majrowski, courts have been enjoined to consider whether the conduct complained of is 'oppressive and unacceptable' and asked 'if the Recorder had considered the evidence by reference to the test of 'oppressive and unacceptable' would he inevitably have come to the same conclusion[...]?.... The Court found that he would not and that the account of victimisation, demoralisation and reduction of a robust woman to a state of clinical depression crossed the line into conduct which is 'oppressive and unreasonable'.

The court noted that since the case of Hatton v Sutherland it has been more difficult for employees to succeed in negligence claims based on stress at work and it may be that this has prompted more employees to seek redress by reference to harassment and the statutory tort. Whilst the court thought the facts in this case were 'extraordinary' and that not many workplace cases would give rise to this liability, it is likely that the decision will fuel more claims under the Harassment Act where there has been an oppressive course of conduct.

Haircuts and Discrimination

The EAT have ruled that a requirement for men to have their hair cut short whilst women could have long hair tied back in a bun was not sex discriminatory in the context of a gender neutral dress code.

In Dansie v Commissioner of Police for the Metropolis the Force's dress code stated 'standard of dress should be smart, fit for purpose and portray a favourable impression of the service'. Managers' separate guidance stated that hair should be neat and 'not allowed to cover the ears' whilst 'long hair must be neatly and securely fastened up'. Mr Dansie, a police constable, attended work with long hair tied up in a bun and was told to have his hair cut. He claimed sex discrimination as a woman would not have been told to have her hair cut. The EAT applied the principles in Smith v Safeway plc noting that a difference in treatment between the sexes on one particular aspect of the dress code is not necessarily more favourable treatment of the member of one sex compared with the other sex. It is necessary to consider the dress code as a whole, even though a single provision may upset the balance of treating the sexes equally. Looking at the code as a whole, neither sex must be treated less favourably as a result of its enforcement.

The EAT agreed with the tribunal that a female comparator who failed to comply with a gender neutral dress/appearance code would have been treated in the same way. The policy was equally balanced between the sexes.

High Court Grants Injunction On Grounds Of Inadequate Ballot Notice

In EDF Energy Powerlink Ltd v RMT the High Court had to consider whether a ballot concerning possible industrial action complied with the ballot requirements under section 226A of the Trade Union Law Reform (Consolidation) Act (TULRCA), namely whether the union had supplied sufficient information about the categories of employee to be balloted. EDF sought an injunction from the High Court restraining the union from relying on the ballot notice which, it claimed, did not adequately identify the categories of staff which were being balloted. This meant that EDF could not make any contingency planning and any industrial action which might result would cause severe disruption to passengers on the London Underground.

The High Court granted an injunction to EDF, rejecting the RMT's argument that upholding EDF's position would infringe the 'right to strike' principle under Article 11 of the European Convention of Human Rights. The Court agreed with the decision in Metrobus Ltd v UNITE that the notification and balloting requirements in TULRCA were not onerous or oppressive.

The High Court held that EDF was entitled to be told which trades were being balloted and which might later be called out on strike. EDF was not seeking a detailed job description but it would make a material difference to EDF if, for example, a trade room inspector withdrew his labour as opposed to a fitter. The RMT's breach was not technical or immaterial and the Court considered the prospects of a strike and the consequences of an unlawful strike to be sufficiently imminent to merit an injunction.

Territorial Jurisdiction

The Court of Appeal has handed down its decision in Diggins v Condor Marine finding that a Suffolk based employee who worked fortnightly shifts on a ship between the Channel Islands and Portsmouth could bring an unfair dismissal complaint even though the employer was based in Guernsey and the boat was registered in Nassau, Bahamas. The court applied the decision in Lawson v Serco, considering Mr Diggins as falling into the second category of case identified in that case, ie that of the peripatetic worker. The Court emphasised that the key question is not where the employer is based but where the employee is based. To that end, where Mr Diggins was concerned 'there can only be one sensible answer: it is where his duty begins and where it ends'. The Court did not accept that the considerations of where the company operated or where the ship was registered were likely to have any significant influence on the question where a particular employee was based.

This case firmly follows the line taken in Lawson v Serco filling the gap left in the legislation following the repeal of s106 of the Employment Rights Act which had provided that the right to claim unfair dismissal did not apply to employees who ordinarily worked outside Great Britain. The approach now taken by the courts is a pragmatic one, focusing on where the employee is actually based throughout the performance of his contract.

Fixed Term Workers Claim Right to Permanent Employment

Two teachers, Mr Fletcher and Mr Duncombe, working in a network of European schools under a series of fixed term contracts brought claims against their former employer, the Department for Children, Schools and Families, when, under the 'Nine Year Rule' their employment automatically terminated on expiry of the final fixed term contract on reaching nine years' employment. The Nine Year Rule was introduced by the European schools' Board of Governors and was embodied in the schools' regulations. Staff at the schools are multi-national and employed by Member states rather than by the schools themselves. Mr Fletcher worked throughout in the UK; Mr Duncombe taught in Germany.

The case, Duncombe v Secretary of State for Children, Schools and Families, considered not only the application of the Fixed Term Employees Regulations 2002 and Fixed Term Directive but also, in Mr Duncombe's case, the applicability of the unfair dismissal regime where his employment had been overseas throughout its duration. Both Mr Fletcher and Mr Duncombe had letters of appointment which stated 'this agreement shall be governed by English law and the English court shall have exclusive jurisdiction in all matters regarding it'.

The Fixed Term Regulations are silent as to territorial scope. With regard to unfair dismissal, the ERA 1996 is also silent as to territorial scope but the position is largely governed by the House of Lords' decision in Lawson v Serco (which also applies to the Fixed Term Regulations). Regulation 8 of the Fixed Term Regulations provides that employees continuously employed on fixed term contracts for a period of four or more years are deemed to be permanent employees.

Mr Fletcher claimed a declaration that his employment was permanent under Regulation 8. The EAT upheld the tribunal's decision that the Directive and the Regulations superseded the Staff Regulations and the use of successive fixed term contracts could not be objectively justified.

Mr Duncombe claimed wrongful and unfair dismissal. The Court of Appeal held that his contract fell squarely within the Fixed Term Regulations and that the Nine Year Rule would be contrary to the legislation unless it could be objectively justified. The Court then considered whether there was territorial scope for Regulation 8 to apply to Mr Duncombe's employment, given that he had worked wholly outside the UK.

The Court referred to the recently decided case of Bleuse v MBT in which the EAT had allowed a claim under the Working Time Regulations even though Mr Bleuse had worked mainly in Austria and Germany and could not satisfy the Lawson v Serco test. The EAT in that case had held that where English law was the proper law of the contract, the Working Time Regulations should be construed so as to give effect to the employee's directly effective holiday rights under EC law. Applying that reasoning to Mr Duncombe's case, the Court held that Mr Duncombe should be allowed to pursue his unfair dismissal claim in order to give effect to his rights derived from the Fixed Term Directive, even though his employment fell outside the scope of Lawson v Serco. The Court held that when the UK made its choice in enacting the Regulations, the UK's discretion was exhausted and the relevant parts of the Directive became directly effective for the purpose of engaging the principle of effectiveness. With regard to unfair dismissal, the statutory remedy is a claim for unfair dismissal. If he did not have that remedy (because he worked outside the UK) he would have no remedy anywhere for the denial of his EC derived right. It was necessary for him to have that remedy if the EC right is to have any effect.

This is an interesting decision which gives rise to questions as to other EC derived rights which UK employees working overseas might be able to enforce. Where this is the case, it appears that the rules governing jurisdiction under Lawson v Serco will be irrelevant.

EAT Uphold ET's Decision in McFarlane v Relate

The EAT has upheld the Tribunal's finding in McFarlane v Relate Avon Ltd (reported in Employment Briefing March 09) that a Christian counsellor who objected to offering sexual counselling to same sex couples was fairly dismissed. Following the decision in London Borough of Islington v Ladele the EAT held that Mr McFarlane was not dismissed for being a Christian but because a manifestation of his beliefs contradicted a legitimate aim of Relate, namely to offer counselling services to all sections of the community, regardless of their sexual orientation, among other things. Given Relate's strong commitment to providing such counselling to all, without discrimination, it could justify dismissing Mr McFarlane as a proportionate means of achieving that aim. The EAT also rejected Mr McFarlane's argument that he was assisted by Article 9 of the European Convention of Human Rights (right to freedom of thought, conscience and religion), noting that Kalac v Turkey made clear that an employee does not have 'an unqualified right to manifest their religion'.

In Ladele, the EAT held that a Christian registrar who was dismissed for refusing to perform civil partnership ceremonies had not been discriminated against on the ground of her religious belief. Ms Ladele has appealed the decision against her to the Court of Appeal and judgment is awaited.

JFS Loses in Supreme Court

The Supreme Court has dismissed the appeal by the governing body of the JFS against the Court of Appeal's decision that it had discriminated in its admissions policy for pupils.

A boy, M, had applied to JFS and was refused a school place on the ground that he was not recognised under the School's rules as Jewish (his mother had converted to Judaism under the auspices of a progressive Synagogue which was not recognised by the Office of the Chief Rabbi (OCR)). Both M and his father were practising Masorti Jews. M's father challenged the admissions policy (R on the application of E v the Governing Body of JFS) alleging that it directly discriminated against M on the grounds of his ethnic origins and was also indirectly discriminatory.

The Supreme Court by a majority 5:4 found in favour of M. It held that the test applied by JFS focused on the ethnicity of the women from whom M was descended. The only basis on which M would be deemed to satisfy the test for admission to JFS would be that he was descended in the matrilineal line from a woman recognised by the OCR as Jewish. The reason for the refusal to admit M to JFS was his lack of the requisite ethnic origins: the absence of a matrilineal connection to Orthodox Judaism. Whilst mothers could convert to Orthodox Judaism in a manner recognised by the OCR the conversion was a 'significant and onerous burden' that did not apply to those born with the requisite ethnic origins. In denying him admission JFS directly discriminated against him on grounds of his ethnic origins. Its motives in so doing were irrelevant. As the claim for direct discrimination succeeded it was unnecessary to consider the claim of indirect discrimination.

It should be noted that as the claim in direct discrimination succeeded, it was not open to JFS to argue justification (which it could have done for indirect discrimination). JFS has now published a new admissions policy applying a test of religious practice.

Gross Misconduct: Fact and Law

The EAT issued a reminder in Sandwell & West Birmingham NHS Trust v Westwood that simply stating what an employer considers to be gross misconduct in a list in a disciplinary policy will not suffice. The act complained of must in itself satisfy the test of gross misconduct, in other words it must be a repudiation of the contract of employment or amount to very considerable negligence. In this case, an inexperienced nurse who reluctantly assisted another nurse in wheeling a troublesome (but well) patient outside the hospital was held to have been unfairly dismissed. The EAT reiterated that what may amount to gross misconduct is a mixed question of fact and law, considering both the character of the conduct and whether, on the facts, it was reasonable for the employer to regard it as gross misconduct. Simply breaching the employer's policy which specified that such a breach would amount to gross misconduct would not be enough to satisfy that test.

Providing Information: TUPE

In Cable Realisations Ltd v GMB Northern the EAT upheld a Tribunal's decision that when providing information under Regulation 13(2) of the TUPE 2006 Regulations, where no duty to consult under Regulation 13(6) was triggered as no measures were envisaged, the transferor should have taken into account a period of annual shutdown when employees were absent from work. Regulation 13(2) provides that the employer must provide certain information long enough before a relevant transfer to enable the employer of any affected employees to consult appropriate representatives. Regulation 13(6) provides that where 'measures' are envisaged in relation to affected employees the employer must consult with appropriate representatives. In other words, the required duty to consult only comes into play where measures are intended. The consultation envisaged by Regulation 13(2) is voluntary.

Cable had insisted on a quick sale of its ailing cable business to Paramount. On 15 August 2007 Paramount provided Cable with the information required under Regulation 13(2) and on the same day the union was provided with the same information. In particular, Paramount stated that there were no measures envisaged in relation to the transfer. On 17 August the factory closed early for the annual shutdown between 20 and 31 August, during which period about 99% of union (GMB) employees were on holiday. The transfer was completed on 3 September, on which day there was a meeting between Cable, Paramount and GMB representatives. The GMB claimed breach of the duty to inform in that inadequate time was given between 15 August and 3 September given the annual shutdown.

The EAT held that the purpose behind the requirement to provide information under Regulation 13(2) is to allow the employees' representatives to engage in a consultation process with the employer on an informed basis. A responsible employer will not necessarily limit consultation to 'measures' and the purpose of providing information is therefore to assist voluntary as well as compulsory consultation. In deciding that the information had not been provided 'long enough' before the transfer to facilitate consultation, the EAT held that the tribunal were entitled to take into account the annual shutdown. When assessing the size of the protective award, the EAT awarded 3 weeks' pay per affected employee to reflect the 'justice of the case'.

TUPE: Who Are 'Affected Employees'?

In Unison v Somerset CC the EAT considered the scope of the duty to inform and consult 'affected employees' and held that the duty applied to employees who were transferring to a new joint venture company and those who had applications pending at the time of transfer. It did not extend to the whole of the workforce nor to everyone in the workforce who might apply for a vacancy in the part being transferred at some point in the future.

Suspension Clause Enforced to Stop Employees Competing

In Standard Life Health Care Limited v Gorman & others the Court of Appeal upheld an injunction restraining sales team managers from competitive activities during their notice periods. When the managers resigned, Standard Life had enforced their notice periods and suspended them under the suspension clause in their contracts. The managers, whilst still employed, had engaged in activities which were competitive with their employer and incompatible with the duty of good faith. The managers argued that applying the suspension clause was unfair in that it deprived them of an income as they were commission only salesmen and, further, that the suspension clause should only be allowed for the purposes of investigating wrongdoing and no longer. The Court of Appeal disagreed, stating that the obligation for an employer to give work depends on the employee's obligation to work loyally. Where the employee breaches that duty, the employer is released from the obligation to provide work. With regard to the suspension clause, it would make no sense to apply it to the period of investigation since, if the investigation uncovered serious breach, the employer would be left with no option other than to terminate the employment, reaffirm it or allow the employee back to work.

And Finally...

Compensatory Award Goes Down

For the first time, the maximum compensatory award has been reduced, from £66,200 to £65,300. The change will take effect from 1 February 2010.

A week's pay (to calculate the basic award and redundancy pay) remains at £380.

Equality Bill: Commons Report Stage

The Equality Bill completed its Commons Report Stage on 2 December 2009, had its first reading in the House of Lords on 3 December and is expected to receive Royal Assent in Spring 2010. The Bill will harmonise and in some cases extend existing discrimination law covering the protected characteristics. It will address recent case law which is generally seen as having weakened discrimination protection and harmonise provisions defining indirect discrimination.

At Commons Report Stage the most important new amendment was a clause passing the burden of proof to the employer to prove there has been no discrimination in a disability case where the applicant for a job has had to answer pre-employment health questions. The burden of proof will not pass if the employer has asked the questions for specified purposes or where the disabled applicant passes the first stage of the recruitment process.

Increase in Parental Leave

A new Framework Agreement concluded by the EU social partners will give each working parent the right to an increased four months leave after the birth or adoption of a child (up from the existing three months). At least one month of the leave cannot be transferred to the other parent. The European Commission will now submit a proposal to the Council of Ministers for the Framework Agreement to be implemented by way of an amendment to the Parental Leave Directive.

Right to Request Time Off for Training

The Government intends to introduce a right to request time off to undertake training relevant to the employee's job (to enable them to become more productive or effective at work) for all employees who have been continuously employed for 26 weeks. The right will be introduced for staff in organisations with 250 or more employees from April 2010 and extended to all employees from April 2011. Employers will have to seriously consider all such requests but can refuse requests where there is a good business reason for doing so. Employers are not expected to pay for the training.

The new right will be included in the Apprenticeships, Skills, Children and Learning Bill.

Government's Response to Outlawing Blacklists Consultation

The Government has published its response to the consultation on outlawing blacklisting workers for union membership or activities. The Government intends to amend the draft regulations and bring them into effect in early 2010.

EWC Directive Consultation

The Government has launched a consultation on implementation of the recast European Works Council Directive by means of the Transnational Information and Consultation Regulations 2010 which will amend the 1999 Regulations. Consultation will close on 12 February 2010.

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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