UK: Employment Update - Summer 2009

Last Updated: 10 August 2009
Article by Jon Heuvel

This update keeps you informed of new developments in employment law and focuses particularly on an extension to the scope of disability discrimination legislation and a Court of Appeal ruling concerning an employer reserving its position in relation to facts which it later attempts to rely on as grounds for summary dismissal.

A Costly Mistake

A tribunal has ruled that an employer is obliged to continue paying a part time bank worker her full time salary, despite a mistake.

The claimant had worked for a bank for a number of years in a part time role and in 2006 there was a TUPE transfer. Prior to the transfer there was an expectation amongst employees that rates of pay would increase. Miss Keenan was on a salary of £9,500 prior to the transfer; afterwards she received a statement that her basic salary was £17,000, which she regarded as a substantial and overdue pay rise. Barclays never queried the discrepancy; the bank even provided a reference confirming her salary when she applied for a loan in 2008. The bank also gave her regular pay rises - including a £3,000 performance-related bonus - without spotting the error.

The tribunal found that the term relating to salary did not have to be substituted by the 'correct' term as the employee had no actual knowledge of the mistake.

She therefore won the right to remain on the higher wage and was not required to repay the £20,000 in extra pay she had so far received as it was entirely due to the bank's error.

Extension Of The Scope Of Disability Discrimination Legislation

The House of Lords has made an important ruling in a recent case which means that employees are now more likely to be able to demonstrate that they have a disability and are, as such, entitled to the protection of the Disability Discrimination Act 1995 (the DDA).

In SCA Packaging Limited v Boyle [2009] UKHL 37, it was held that where an impairment 'could well' have a substantial adverse effect on an employee's ability to carry out normal day-to-day activities, were it not for the fact that measures were being taken to treat or control it, impairment could constitute a disability. Previously, employees were required to pass the more difficult test of showing that it was 'more probable than not' that they would suffer such a substantial effect, were it not for any treatment they may be receiving. Employers therefore need to ensure that the provisions of the DDA are always carefully considered, even where an employee may not appear to have a 'disability'.

Section 1(1) DDA states that: 'a person has a disability for the purposes of this act if he has a physical or mental impairment which has a substantial and long-term effect on his ability to carry out normal day-to-day activities'.

This definition is key to employers, since all employees who are considered to have a disability for the purposes of the DDA are protected against discrimination, victimisation and harassment before, during and after their employment. In addition, employers are expected to make 'reasonable adjustments' to accommodate such employees. The DDA sets out a non-exhaustive list of steps which may be taken by the employer in this regard, including making adjustments to premises, allocating some of the disabled employee's duties to another employee and altering the disabled employee's hours of work or training. Whether or not there is a duty in each particular case is very much fact and context-sensitive.

Schedule 1 of the DDA expands upon the definition of 'disability'. Section 6(1) states that a substantial impairment includes one which 'would be likely to have a substantial adverse effect on the ability of the person concerned to carry out normal day-to-day activities, but for the fact that measures are being taken to treat or correct it'. In other words, impairments that do not have a substantial adverse effect on an employee's normal day-to-day activities due to corrective measures or treatment may still constitute a disability and therefore be subject to protection under the DDA if the substantial adverse effect would be 'likely' to materialise were those measures or treatment to be removed.

In the case of SCA Packaging Limited v Boyle, the House of Lords considered the meaning of the word 'likely' in this context.

Mrs Boyle had a history of problems with hoarseness caused by vocal nodules. She had been instructed by her medical advisers to adhere to a strict management regime with regard to her condition which included maintaining her hydration levels by sipping water throughout the day, refraining from raising her voice and singing, moving away from background noise, avoiding passive smoking and exercising regularly.

In September 2000 SCA Packaging Limited, Mrs Boyle's employer, decided to remove a partition separating her work space from a larger, noisier area. She complained, with the support of her ear, nose and throat surgeon, that the increased noise levels would adversely affect her health. The company declined to change its decision and Mrs Boyle later brought a claim that her employer had failed to comply with its duties under the DDA. Mrs Boyle was in fact later made redundant and she brought further claims in this regard.

In order to ascertain whether Mrs Boyle was able to proceed with her case, the tribunal initially had to determine whether her condition constituted a 'disability' for the purposes of the DDA.

The tribunal concluded that without the treatment Mrs Boyle was undergoing, she would 'more likely than not' have suffered from ongoing hoarseness and vocal nodules which would have had a substantial adverse effect on her day-to-day activities. The tribunal went on to find that she did have a disability. SCA Packaging Limited appealed this decision unsuccessfully to the Northern Ireland Court of Appeal. The company then appealed to the House of Lords.

The House of Lords upheld the Court of Appeal's decision and stated that, in addressing the degree of likelihood required under the DDA, the tribunal should have asked whether the substantial adverse effect 'could well happen', were it not for the treatment Mrs Boyle was undergoing.

Previously, it had been generally understood that 'likely' meant 'more probable than not'. The case of SCA Packaging Limited v Boyle is therefore particularly important since the House of Lords has broadened this definition to include any situation where an employee can demonstrate that his or her condition 'could well' have a substantial effect, were it not for the fact that he or she was taking measures to control it. Claimants will, as such, have less difficulty in showing that they have a disability in the future and employers will need to ensure that they are conscious of the protection afforded to employees under the DDA in all situations, particularly given that, as in this instance, an employee's impairment may be concealed because of the measures being taken to control it.

Sympathy Affirms Contract

In a recent case the Court of Appeal has held that where an employer has knowledge of facts which it later attempts to rely on as grounds for summary dismissal, it should reserve its position in relation to these facts. By failing to do this, the employer had affirmed the contract and could not seek to justify the employee's dismissal on this basis.

This case concerned a senior employee who resigned from his role with his employer to join a competitor. Whilst his employment contract did not contain a non-compete clause, it did contain a post termination restriction preventing him from amongst other things, soliciting key artists, suppliers or customers. The employee stated in his resignation meeting that he would not be undertaking any activities in his new role that competed with the business carried out by his employer. He confirmed that he would instead be working on a new record label. The employee had a six month notice period and during this time a dispute arose between the parties which centred on whether the employee had been honest about whether he would be competing in his new role. The employee went off sick with stress after being shouted at during a heated confrontation and alleged that he had been treated poorly following his resignation.

Approximately, 3 weeks later, the employee returned to work and disciplinary proceedings were commenced against him. Following the disciplinary hearing, the employee was dismissed summarily for reason of gross misconduct. One of the reasons given for his dismissal related to the fact that he had lied in his resignation meeting in saying that his new employment would not be competitive.

The Court of Appeal held that his employer could not seek to rely on his failure to inform them of his intention to compete whilst in his new employment as a reason for justifying his dismissal. At no stage had the employer reserved its position in relation to this matter and had given no indication, for a significant period, that it was inclined to bring disciplinary proceedings against the employee about his perceived dishonesty. In fact, the employer had attempted to 'smooth things over' with the employee in the hope that he would soon be able to return to work and reminding him of his duties of confidentiality during his notice period.

In stark contrast, the employer had clearly reserved its position in relation to other allegations faced by the employee on which it was entitled to rely as its basis for dismissal.

It is important for employers to note that whilst the employer attempted to smooth things over (in an attempt to avoid a constructive dismissal claim or to exacerbate the condition that the employee was suffering) this could go too far as it may result in a position where an employer has affirmed the contract and then cannot later rely on certain repudiatory breaches of contract by the employee.

In these situations, an employer should reserve its position in relation to alleged breaches if it does not act immediately upon learning of those breaches. However, the judgment in this case leaves unresolved the question of how precisely the employer has to reserve its position although it does appear in this case that the employer simply had to state that 'it was reserving its position in this regard'.

Swine Flu

It has been reported that the government is currently considering allowing workers suffering from swine flu to remain off work for 14 days before being required to obtain a sick note from their GP. Currently, the period after which a certificate must be obtained is seven days.

The government has indicated that this measure could be taken with a view to minimising the risk of the flu spreading and avoiding further unnecessary burden on GPs. It has been noted that this is open to abuse by employees and it remains to be seen how the government will proceed.

Motherhood 'Devastates' Women's Pay

The Fawcett Society has published a new report which finds that although men and women have equal employment opportunities before becoming parents, the birth of a child is the start of a substantial and long lasting divide between mothers and fathers.

The report finds that over 57% of mothers with children under the age of 5 are employed compared to 90% of fathers. It also finds significant pay gaps between the earnings of women with children and those without. In view of its report 'Not having it all; How Motherhood Reduces Women's Pay and Employment Prospects', The Fawcett Society has requested new policies to tackle these issues which may include providing mothers with support when returning to jobs (even part time) at their previous skills levels.

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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