UK: Employment Briefing - December, 2011

Last Updated: 9 January 2012
Article by Brian Gegg and Jesper Christensen

Whistleblowing confusion

The question of to what extent a detriment is caused by a protected disclosure in the context of the whistleblowing legislation has been the subject of conflicting EAT decisions. The Court of Appeal in NHS Manchester v Fecitt has now ruled that section 47B of the Employment Rights Act 1996 (which protects a worker against suffering a detriment on the grounds of his having made a protected disclosure) is infringed if a protected disclosure materially (ie more than trivially) influences the detrimental treatment.

This case concerned three nurses who had raised concerns about the qualifications of a colleague. The matter was investigated and dismissed but the nurses continued to raise the issue, causing dissension amongst their colleagues, some who sided with the nurses, some with the accused colleague and some who wished to remain out of the dispute. Working relationships deteriorated so badly that managers decided to strip one nurse of her managerial responsibilities, to redeploy the second and to give no further work to the third, a bank nurse. They all brought whistleblowing claims claiming detrimental treatment as a result of having made a protected disclosure. The Court of Appeal overturned the EAT's decision that once a detriment had been shown to have occurred following a protected act the employer had to show that the protected act played no more than a trivial part in the application of the detriment.

The Court of Appeal disagreed. It noted that the original tribunal had been satisfied that NHS Manchester's reasons for acting as it did were to deal with the dysfunctional working conditions. The disclosures played no part in Manchester's decision making. The Court of Appeal held that 'once an employer satisfies the tribunal that he has acted for a particular reason – here, to remedy a dysfunctional situation – that necessarily discharges the burden of showing that the proscribed reason played no part in it'. The correct test should be that there is an infringement of section 47B if a protected disclosure materially influences (in the sense of being more than a trivial influence) the employer's treatment of the whistleblower.

This decision has displeased the whistleblowing charity Public Concern At Work which had made an intervention in this case and which is now calling on the Government to tighten the protection for whistleblowers.

This decision was made at a time when the NHS has announced changes to its constitution (to come into effect early 2012) aimed at providing greater protection to its staff who raise concerns about patient care.

Disability discrimination: reasonable adjustments

We reported in an earlier E-briefing on the case of Ms Cordell, the deaf diplomat who was not considered for an overseas posting because of the prohibitive costs involved in providing her with a lip speaker.

The tribunal decision has now been upheld by the EAT on appeal in Cordell v Foreign & Commonwealth Office. To recap, Ms Cordell was a highly regarded senior employee with the Foreign & Commonwealth Office (FCO). She is also profoundly deaf. Whilst working in London and Warsaw she had been provided with lip speakers to enable her to do her job. She was invited to work in Kazakhstan subject to formal procedures including a disability assessment. The FCO applied its 'Reasonable Adjustments Policy' and found that the cost of the required support would be in the region of £250,000 a year, more than 5 times Ms Cordell's salary and more than the entire annual cost of employing local staff at the Kazakhstan embassy. Applying the policy, the FCO concluded that the costs made it unfeasible to employ Ms Cordell and her job offer was withdrawn.

Ms Cordell brought a claim for disability discrimination stating that the FCO had failed to make reasonable adjustments. The EAT agreed with the tribunal that the adjustments were not reasonable and that there had been no discrimination. Whilst the EAT was sympathetic to Ms Cordell, it noted that the Disability Discrimination Act (now replaced by the Equality Act 2010 which replicates the provisions on reasonable adjustments) requires tribunals to 'make a judgment on the basis of what they might consider right and just'. The judgment of what level of cost is reasonable should be informed by many considerations including:

  • The Code of Practice
  • The degree to which the employee would benefit from the adjustment
  • The size of any budget assigned to reasonable adjustments
  • What the employer has chosen to spend in comparable situations
  • What other employers are prepared to spend
  • Any collective agreement or other indication of what level of expenditure is regarded as appropriate by representative organisations.

As the EAT noted 'the law does not require it to compensate [...] misfortune at whatever cost'.

This is a useful decision for employers as it sets out guidelines when determining whether cost can be a factor when deciding whether to make particular adjustments to facilitate a disabled worker to carry out his job. Each case will of course turn on its facts and not many adjustments will be quite as costly as those in Ms Cordell's case, particularly given the disparity between the cost of the adjustment and local salaries.

TUPE and changes to terms after transfer

Two recent EAT decisions have clarified when it may be possible to make changes to the terms of transferring staff and not fall foul of Regulation 4(4) of TUPE 2006. Regulation 4(4) provides that any variation is void if the sole or principal reason is the transfer itself or a reason connected with the transfer that is not an economic, technical or organizational reason.

In Smith & others v Brooklands College, teaching assistants at Spelthorne College were paid in an unusual way, which did not accord with union guidance or industry norms. When Spelthorne transferred to Brooklands under a TUPE transfer the HR director of the merged colleges noted the discrepancy in pay arrangements of the Spelthorne staff and assumed their pay had been mistakenly calculated. After negotiation she agreed with the staff to reduce their pay to the same level as other staff. They brought claims stating that the purported variation was void.

The EAT agreed with the tribunal judge that the reason for the variation was the mistaken belief that the method of calculating pay was incorrect and that was not in connection with the transfer. Although the HR manager was wrong in her belief, her reason for making the change did not fall within Regulation 4(4).

In Enterprise Managed Services Ltd v Dance, a similar issue arose in the context of a re-tendering exercise.

Mr Dance had been employed by Williams which, together with another contractor, Enterprise, provided services to MHS. In October 2008 MHS alerted all its contractors that in the future they would have to provide their services at lower cost but maintaining high standards. Enterprise accordingly reviewed its staff's terms and conditions to streamline the service delivery and make it more cost effective. Enterprise won the MHS contract from Williams and inherited Mr Dance and the other Williams staff.

Enterprise consulted with the inherited staff over changes they proposed to make to their terms and conditions. Mr Dance refused to accept the new terms and was dismissed.

In line with the decision in Brooklands, the EAT looked at whether the dismissal was in connection with the transfer. It held that the reason for the change was the need for productivity, which had arisen before and independent of the transfer. The need for harmonization arose out of these productivity changes that pre-dated the transfer.

These two cases underline how important it is to consider carefully the wording of the legislation. Simply because a transfer facilitates or prompts a change in terms and conditions does not mean that the reason for the intended change is the transfer itself or a reason connected with it. However, the cases turn on the facts and it will be dangerous to hunt for a reason which is not connected to the transfer as a means of circumventing the legislation.

Tribunal rules that all statutory holiday can be carried over

In Adams and another v Harwich International Port Ltd, a tribunal has held that where an employee is unable to take his holiday during the leave year because of sickness, he should be entitled to carry forward all 5.6 weeks statutory leave to the next leave year, not just the core 4 statutory weeks. This, the tribunal asserted, could be achieved by reading words into regulation 13(9) of the Working Time Regulations.

At present the government proposes to amend the Working Time Regulations to allow for carry forward but only in relation to 4 weeks, not the additional 1.6 weeks. Although this is only a tribunal decision, it will be interesting to see if the government takes note of the position taken by the tribunal judge and amends its position.

Reason for dismissal

The EAT in Screene v Seatwave Ltd had to consider whether a dismissal which purported to be misconduct could be a fair dismissal if the tribunal finds it to have been for capability and misconduct.

Mr Screene worked as financial controller for Seatwave which fell victim to a large scale fraud. Mr Screene failed to detect the fraudulent transactions and was called to a disciplinary hearing to consider allegations against him concerning his financial laxity. He was summarily dismissed by letter for gross misconduct: 'you have been negligent in the completion of your duties [...] an absolute failure to complete non UK bank reconciliations leading to significant financial losses for the company'. The letter concluded: 'your serious negligence in the performance of your duties [...] clearly justifies summary dismissal'.

Mr Screene claimed unfair dismissal and Seatwave stated in its defence that the dismissal was fair 'on grounds of capability'. A tribunal found that the dismissal was fair, but by reason of both capability and conduct. Mr Screene argued that as Seatwave had stated the reason for dismissal to be capability the dismissal could not be fair for reason of misconduct.

The EAT rejected Mr Screene's argument and held that where the decision to dismiss was grounded on the same set of facts the label which was attached to the dismissal did not matter. In this case, Seatwave had made clear to Mr Screene the reasons for his dismissal and he had had adequate opportunity to answer those charges. Mr Screene had suffered no prejudice. He had known of the case against him in respect of the main allegation and the possible consequences.

Whilst this is of course a helpful decision for employers, it remains good counsel to cover both options of capability and conduct in dismissal proceedings and tribunal pleadings where both are conceivable routes to follow.

Where to litigate?

Litigants are often able to bring claims in more than one forum in relation to the same issues. The problem that will arise is that findings of fact will bind another court which will then be constrained by those findings. Earlier case law has established that where there is sufficient overlap between tribunal and court proceedings, the tribunal proceedings should be stayed.

In Paymentshield Group Holdings Ltd v Halstead, proceedings were issued in tribunal by Mr Halstead for unfair dismissal and breach of the Working Time Regulations. Before the hearing, Mr Halstead sent a letter before action with draft particulars of claim to his ex employer, Paymentshield. Paymentshield then sought a stay of the tribunal proceedings, which Mr Halstead opposed.

The EAT ruled that where a claim had not been lodged in the High Court but a letter before action had been issued in accordance with a CPR Practice Direction, the principle that tribunal proceedings should be stayed where they overlapped with High Court proceedings should be applied.

The EAT were concerned that when balancing the issue of prejudice it was necessary to pay attention to the effect of a decision by one court upon another.

Where, as in this case, a litigant intends to fund litigation in the High Court from the hoped for compensation from tribunal proceedings, it would be wise not to show formal intent to commence proceedings. Better to wait until the tribunal proceedings are done and dusted and then proceed to the High Court with the outstanding issues.

And finally...

Guidance: agency workers

New guidance has been issued for local authorities on the Agency Workers regulations by Local Government Employers, an organization which works with local authorities on pay, pensions and employment contracts.

Guidance: ICO

The Information Commissioner's Office has published guidance on access to information held in complaint files. The guidance is aimed at helping organisations decide if information in a complaint file is personal data and what data can be accessed when two or more people's data is included in a complaint file and one person makes a subject access request. (ICO: Access to information held on complaint files).

And yet more guidance: public sector equality duties...

The government has published a short guidance (''Public sector: quick start guide to the specific duties') to help public sector organisations understand the duties imposed by the public sector equality duty in the Equality Act 2010.

Bribery Act prosecution

The first prosecution under the Bribery Act 2010 has been of a court clerk who was filmed accepting a bribe not to enter details of a road traffic offence onto the court's database.

Employers may be pleased that so far the CPS has not shown an appetite for rooting out any perceived breaches in relation to excessive corporate hospitality or overseas transactions.

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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