UK: Employment Newsletter - June 2012

Last Updated: 13 July 2012
Article by Brian Gegg

SUPREME COURT LOOKS AT INDIRECT AGE DISCRIMINATION

In Homer v Chief Constable of West Yorkshire Police, which was heard alongside Seldon v Clarkson Wright and Jakes, the Supreme Court considered the scope of indirect age discrimination.

Mr Homer retired from the police at age 51, and began work for the Police National Legal Database (PNLD) as a legal adviser. When he was appointed in 1995, a law degree was not essential if the post holder had exceptional experience in criminal law and a lesser qualification in law. Mr Homer did not have a law degree, but met the criteria because of his experience and exams passed in the police force. In 2005, a new career structure was introduced to improve retention, consisting of three thresholds with increasing pay levels. In order to reach the third threshold, an employee had to have a law degree. Mr Homer met the criteria for the first and second thresholds but was not accepted for the third threshold as he had no law degree. By that time, he was aged 62 and undertaking a law degree would have taken him beyond his normal retirement age of 65. He claimed indirect age discrimination in that he had been subject to a provision, criterion or practice which put employees of his age group at a particular disadvantage compared with younger employees who would be able to meet the requirements for the third threshold before their normal retirement age.

The Supreme Court agreed that it was indirectly discriminatory for Mr Homer to have to work beyond his normal retirement age in order to obtain the benefit of a law degree. However, it remitted the case to the employment tribunal to decide whether the PNLD's approach was justified. The tribunal will need to decide whether requiring existing staff to have a law degree before they can achieve the highest grade was appropriate to the aim of retention. This will be another interesting decision for employers seeking to justify policies and practices which are potentially age discriminatory.

CAN EMPLOYERS JUSTIFY A MANDATORY RETIREMENT AGE?

In Seldon v Clarkson Wright and Jakes, the Supreme Court has analysed the factors which can justify a compulsory retirement age. Unlike other forms of discrimination, age discrimination can be justified by certain public policy considerations, for example, objectives related to employment policy or vocational training.

However, the means of achieving those objectives must be appropriate and necessary. These public policy aims are distinguishable from individual factors relevant to a particular employer such as cost reduction and improving competitiveness.

Mr Seldon had been an equity partner in Clarkson Wright and Jakes since 1972. In 2006, his partnership was automatically terminated in accordance with a partnership deed which provided for mandatory retirement at the end of the year in which a partner reached 65. He claimed that his expulsion was direct age discrimination, and this was not in dispute. However, the firm claimed that the compulsory retirement age was justified in order to ensure staff retention, to facilitate long term staff planning, and to limit the need to expel partners by performance management. Having examined the UK and European case law in this area, the Supreme Court identified two different kinds of legitimate objective: 'inter-generational fairness' and more controversially, 'dignity', which would include, for example, avoiding the need to subject older workers to performance management. The Supreme Court concluded in this case that the firm's aims could potentially justify Mr Seldon's compulsory retirement. Staff retention and workforce planning were both related to intergenerational fairness. Avoiding the need to expel partners by way of performance management was related to the 'dignity' objective. However, the Supreme Court has sent the case back to the employment tribunal to decide whether the age of 65 was proportionate in these particular circumstances.

This decision has wider relevance now that there is no default retirement age, since employers need to be able to justify a compulsory retirement age by showing that it is a proportionate means of achieving a legitimate aim in relation to their particular business. Although the judgment provides a useful analysis of the issues, it does not provide employers with clear answers. A more detailed discussion on the practical implications can be found in our recent bulletin 'Seldon v Clarkson Wright and Jakes – A Cautionary Tale For Employers' (18 May 2012).

THE EMPLOYMENT STATUS OF STRINGFELLOWS LAP DANCER

In Quashie v Stringfellows Restaurants Ltd, the EAT held that a lap dancer was an employee, and that her employment continued under an umbrella contract during the gaps between her dancing engagements when she was not working. She was therefore entitled to claim unfair dismissal.

Stringfellows had argued that Miss Quashie could not claim unfair dismissal because she was self-employed, not an employee. Case law has established three main requirements for an employment relationship: an obligation on the employee to provide work personally; a degree of control exercised by the employer; and mutuality of obligation. Miss Quashie was obliged to provide work personally, not through a substitute. In addition, Stringfellows exercised control, for example, over dress code, and the conduct of dances. The first two factors therefore pointed to an employment relationship. However, there was considerable debate over the third factor, mutuality of obligation. The tribunal held that there was insufficient mutuality of obligation and therefore no employment relationship. However, the EAT disagreed, pointing to various factors indicating mutuality of obligation. For example, Miss Quashie was contractually committed to turn up for work according to the hours set by a rota, and was entitled to be given the opportunity to dance in order to earn money. The imposition of fines and deductions by Stringfellows was a form of discipline also consistent with a contract of employment. This mutuality of obligation subsisted whilst Miss Quashie was not working. For example, she was required to attend a meeting every Thursday night, gaps between engagements were short, and there was a clear expectation that work would continue. This 'umbrella contract' gave her continuity of employment for the purposes of claiming unfair dismissal.

The case was remitted to the employment tribunal to decide whether Miss Quashie was in fact unfairly dismissed and to decide a claim by Stringfellows that the contract was void for illegality due to tax irregularities.

This judgment provides a useful discussion of the factors relevant to assessing employment status, particularly as regards mutuality of obligation. Although the case is fact-specific, it is a reminder that tribunals are prepared to extend employment rights in circumstances where longstanding practice is to treat workers as self-employed.

FACEBOOK COMMENTS JUSTIFIED DISMISSAL FOR GROSS MISCONDUCT

In Teggart v TeleTech UK Ltd, a Northern Ireland industrial tribunal has held that an employee who posted vulgar comments about a female colleague on Facebook was fairly dismissed.

Mr Teggart had in his own time and on his home computer posted vulgar comments on Facebook about a colleague (A) which included reference to TeleTech. His Facebook friends included work colleagues as well as people unconnected with TeleTech. A was made aware of the comments and asked Mr Teggart's girlfriend to tell him to remove them. Mr Teggart regarded this as an attempt to manipulate him, and posted further crude comments about A. The company considered that Mr Teggart had breached its Dignity at Work Policy, Code of Conduct and Disciplinary Policy which stated that harassment and bullying, and bringing the company into serious disrepute, could constitute gross misconduct. Following disciplinary proceedings, he was dismissed for harassment and bringing the company into disrepute. Mr Teggart claimed unfair dismissal and argued that his rights to privacy and freedom of expression under the Human Rights Act had been breached.

The tribunal found that the decision to dismiss Mr Teggart for bringing the company into disrepute was flawed because there was no evidence to show that it had been, and it had not been shown to be 'serious' as required by the company's disciplinary policy. However, the tribunal concluded that dismissal for harassment was sufficient on its own to constitute gross misconduct. The definition of harassment covered harassment caused to A through comments made to others, rather than to A herself. It was also held that Mr Teggart had abandoned his right to privacy by publicising comments on Facebook, and that his right to freedom of expression did not entitle him to make comments which damaged A's reputation and infringed her rights.

This decision reflects the emerging case law on dismissals for abuse of social media which makes it clear that comments made outside work and on a personal computer can constitute gross misconduct. It also illustrates that employees are unlikely to be able to rely on their right to privacy or freedom of expression under the European Convention on Human Rights.

NO GENERAL DUTY TO ASSIST DISABLED EMPLOYEES

Employers are under a duty to make reasonable adjustments where they apply a provision, criterion or practice (PCP) which places a disabled person at a substantial disadvantage in comparison with persons who are not disabled. The case of Newcastle Upon Tyne Hospitals NHS Foundation Trust v Bagley illustrates the importance of applying the proper legal principles in reasonable adjustment cases, and highlights the fact that employers are not under a general duty to assist disabled employees.

Mrs Bagley suffered an accident at work which left her disabled. Following periods of sick leave, and attempts to return to work, she was eventually dismissed for incapacity. The employment tribunal was highly critical of the way she was treated by the Trust, holding that it had failed to make a number of reasonable adjustments including failing to pay her various allowances and benefits, failing to deal efficiently and helpfully with her claims for those benefits, and failing to allow certain changes to her hours and duties.

However, the EAT overturned the tribunal's decision. It found that the tribunal had failed to follow the proper analysis required in a reasonable adjustment case: firstly, to identify the relevant PCP, and then to identify whether the claimant is placed at a substantial disadvantage due to application of the PCP, in comparison with persons who are not disabled. If a non-disabled person would be affected by the PCP in the same way as a disabled person then there is no comparative substantial disadvantage to the disabled person and no duty to make reasonable adjustments arises. The EAT held that none of the PCPs identified by the tribunal were capable of being PCPs, and there had been no proper comparison between the claimant and someone who was not disabled. For example, non-disabled people would be equally affected by similar inefficiencies in the handling of their affairs by the HR department. There was in any event no substantial disadvantage caused to Mrs Bagley. The EAT considered that the tribunal had fallen into the trap of listing things it did not like about the way the Trust had dealt with the claimant and labelling them as failures to comply with the duty to make reasonable adjustments. It concluded that the tribunal 'must have allowed sentiment to cloud its judgement' and commented that the duty to make reasonable adjustments is not a general duty to assist disabled employees.

UNSUCCESSFUL JOB APPLICANTS ARE NOT ENTITLED TO RECRUITMENT INFORMATION

In our March bulletin we discussed the Advocate-General's opinion in the German case of Meister v Speech Design Carrier Systems GmbH, in which a job applicant was unable to prove race, sex and origin discrimination in a recruitment process because the company refused to provide her with any information on why her application had been rejected.

The ECJ's judgment has followed the Advocate-General's opinion, holding that an unsuccessful candidate who meets the requirements listed in a job advertisement is not entitled to information indicating whether the employer engaged another applicant at the end of the recruitment process. However, when deciding whether there has been direct or indirect discrimination, domestic courts may take into account the refusal to provide information as part of the wider factual context. For example, in Meister, the German court will need to take account of the fact that the applicant was refused any access to information (rather than redacted notes), and she was not invited for interview despite meeting all advertised criteria for the position.

COURT OF APPEAL RULES ON VALIDITY OF RETIREMENT NOTICE

The case of R & R Plant (Peterborough) Limited v Bailey concerns a notice issued under the statutory procedure set out in the Employment Equality (Age) Regulations 2006 for employers intending to retire an employee at normal retirement age.

Although this procedure was abolished in April 2011, some employers will still be facing the risk of unfair dismissal and / or age discrimination claims where defective notices of retirement were issued prior to this date. It was clear that an employer was required to notify the employee in writing of the employee's right to request not to be retired. However, the Court of Appeal has confirmed that employers should have expressly stated that the employee had a right to request not to retire 'pursuant to paragraph 5 of Schedule 6 of the Employment Equality (Age) Regulations 2006,' so that the employee was aware that he was invoking a statutory procedure. If the notice failed to do so, then it is invalid and the dismissal will be unfair, although in most cases compensation will be limited due to employers being able to show that retirement is a fair reason for dismissal.

And finally...

A Private Members Bill is seeking to give surrogate parents the same rights to pay, leave and benefits as natural and adoptive parents. Although there are only about 100 children born under surrogacy arrangements each year in the UK, numbers are increasing.

With effect from 11 May 2012, the Road Transport (Working Time) Regulations 2005 were extended to cover self-employed drivers. This brings the limits on their working time into line with employed drivers.

The Government has announced that the annual limit for employer sponsored migrants under Tier 2 (General) will remain at 20,700 for the next two years until April 2014. The skill levels required for Tier 2 migrants, including intra-company transferees, will also be increased from NQF 4 to NQF 6 from 14 June 2012, except for those on the Shortage Occupation List and some creative occupations.

A series of reforms to the European Court of Human Rights has been agreed by all countries in the Council of Europe in the 'Brighton Declaration'. These reforms include measures to ensure that the European Court of Human Rights only hears cases about very serious violations or important legal principles, and to reduce the time limit for claims from six months to four months. The Court currently has a backlog of 150,000 cases.

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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