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Michael Rubenstein
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Title: Key cases for 2002
Edited text of a lecture by Michael Rubenstein to the Industrial Law Society
17 January 2002, London
5 February 2002, Leeds
1. I would like to thank friends and colleagues for their help in compiling the information that forms the basis for this lecture. I take responsibility, however, for any errors.
2. Let’s start with transfer of undertakings. When does a transaction amount to a TUPE transfer? It has been many years since this was a question of looking at the facts, looking at the Regulations and applying the statute to the facts. Whether or not TUPE applies is now almost entirely a question of case law. That is by no means a unique situation in the world of employment law. But what I think is unique in the case of TUPE is that the answer depends on which case law you are applying. This is especially so in respect of contracting-out of services. As you will know, the approach of the European Court of Justice and the approach of the UK courts to this issue is very different indeed. So far as the ECJ is concerned, it will have the opportunity to revisit the implications of a change of contractor in two cases. The first of these is in the Belgian reference, Temco Service Industries v Imzilyen, a change of cleaning contractor case. The Advocate General has said that this did not amount to a transfer within the meaning of the Directive. The Court’s decision is out on 24 January.
3. A new Austrian reference, Sodexho MM Catering (C-340/01), is also a change of contractor case. The issue here is whether there is a relevant transfer where the principal supplies most of the assets used by a catering contractor, so that very little directly transfers as between the outgoing and incoming contractor. Ever since the Dines decision, it has been generally accepted under UK law that a change of contractor can amount to a transfer of an undertaking. Sodexho may shed some further light on this, as may a test case coming up in the EAT involving catering assistants in East Sussex.
4. What has seemed to divide the UK courts from the ECJ is the Suzen decision and whether a new contractor can avoid TUPE by the simple expedient of not taking on the old contractor’s workforce. When Mr Justice Morison issued the anti-avoidance decision in the ECM case, this appeared characteristically bold, but most employment law specialists would not have bet on it having a long shelf life. But ECM was upheld by the Court of Appeal, and in ADI v Willer, the majority of the Court of Appeal took an even more radical anti-avoidance stance. Next month, they will have a third opportunity to consider the issue when they hear RCO Support Services v Unison. This was the case in which the EAT upheld a finding that there was a TUPE transfer when there was a change in hospitals providing in-patient care within the Aintree Hospitals NHS Trust area, and RCO took over the provision of cleaning and catering. The EAT directed itself in accordance with ECM, and Mr Justice Lindsay said that Suzen "can no longer be safely relied upon".
5. Celtec Ltd v Astley is a test case on identifying the time of transfer, where employees are seconded from a Government department to the transferred undertaking and then later take up employment with the undertaking concerned. The case will be heard by the Court of Appeal in May.
6. A number of other TUPE issues will be before the courts this year. These include what transfers? The House of Lords heard argument last year in Bernadone v Pall Mall Services Group and Martin v Lancashire County Council on whether the Court of Appeal was right to find that where there is a TUPE transfer, any liability in tort of the transferor to an employee transfers to the transferee. The Court of Appeal took the view that although such a tortious liability does not arise under the contract of employment, it arises "in connection with" the contract within the meaning of reg.5(2)(a).
7. The European Court will be deciding Beckmann v Dynamco Whicheloe Macfarlane Ltd, a British reference which asks whether the exclusion of terms relating to old age, invalidity or survivors’ benefit from the scope of the Acquired Rights Directive and TUPE covers the rights of public sector employees to enhanced benefits in the event of premature retirement on grounds of redundancy. Whether these benefits become an obligation of the new employer in the event of a transfer was considered by the EAT in Frankling v BPS Public Sector Ltd, where it was held that the benefits did not transfer because they "relate to" benefits for old age, even though they were triggered by the redundancy dismissal and not by the age of the employee. Mrs Beckmann, supported by the UK Government, argues that Frankling is wrong. The Advocate General has issued his Opinion and he reaches the opposite conclusion to that of the EAT. He thinks that the benefits are not to be classified as "old age benefits" within the meaning of the Directive. Instead, they are to be classified as benefits dependent on dismissal, so that they constitute obligations of the employer which must be paid by the transferee in the event of a transfer of the undertaking. Note that the UK Government, consistent with its position, in its consultative document on amending the TUPE Regulations, has stated its intention to amend the law so that entitlements such as at issue in this case are transferred, whichever way the Court rules in this case.
8. Like Beckmann, Martin v South Bank University also deals with scope of this exclusion. It goes on to ask, on the assumption that early retirement benefits are not covered by the occupational pension exclusion, a series of questions as to the consequences if the employees concerned become members of the transferee’s pension scheme. Question 8 is of particular interest, asking the Court to give guidance on the correct test of causation for determining whether the transfer is the reason for the change. In Ralton v Havering College of Further & Higher Education, the EAT held that the correct test under the Directive for considering whether any change to the contract of employment of employees transferred is impermissible is whether the variation was "solely" by reason of the transfer.
9. Does the concept of constructive dismissal have a wider meaning when it arises in a TUPE context than it normally does under the general law of unfair dismissal? Rossiter v Pendragon was an EAT decision reported last year which held that in the case of a transfer of an undertaking, an employee who suffers a substantial change in his working conditions to his detriment has a right to claim constructive dismissal, even if the employer’s actions complained of do not constitute a breach of contract. This case will be considered by the Court of Appeal in February.
10. EFTA countries are members of the European Economic Area and follow EU social law. Viggoddottir v Iceland Post Ltd is a reference to the EFTA Court which raises what we would call the Wilson issue: in what circumstances does the Directive allow the transferee to agree less favourable terms and conditions with an employee transferred? The case concerned an employee who was on civil service terms and conditions providing security of tenure until the Icelandic Post Office was made into a limited company. She was offered and accepted a new contract of employment allowing for termination with three months’ notice. After she was then dismissed, she brought a claim contending that this provision was unlawful under the Directive.
11. Recent months have seen a series of decisions developing the law in respect of liability for references. Legal & General Assurance Ltd v Kirk, which will be reported in the February IRLR, is an attempt to push the boundaries still further. Following termination of the applicant’s employment as a financial consultant, the employers issued a claim for repayment of what was alleged to be advance commission payments of some £7,500. Mr Kirk disputed that the sum was owing and counterclaimed damages for negligent misstatement on grounds that the employers were in breach of a duty of care in falsely asserting that he owed them money. He argued that an assertion by his former employers that he owed a debt of that amount would damage his prospects of obtaining new employment in the industry. Regulatory body rules provide that a person who owes an "industry debt" of more than £1,000 cannot be employed in certain capacities. The novel contention advanced in this case was that the doctrine of negligent misstatement applied, even though no reference had been sought by a prospective employer. The argument was that, in consequence of the employers’ assertion that he owed a debt, Mr Kirk had not applied for a reference in the knowledge that the contents of the reference would inevitably have led to his being rejected by the prospective employer. The Court of Appeal holds, however, that a case based on negligent misstatement must involve a statement, such as a reference, to a third party. It rules that the duty to take reasonable care in preparing references does not extend to cover a situation in which no negligent reference has in fact been given.
12. Cases on who is an employee or who is a worker, or both, seem to have become a regular feature in IRLR. This will continue in 2002. Hewlett Packard Ltd v O’Murphy was a widely publicised case brought by a computer specialist who set up his own company, which entered into a contract with an employment agency who, in turn, supplied his services to HP for some six years. He was paid through the employment agency and his personal service company, but the employment tribunal found that this was outweighed by the indicia more consistent with a contract of employment, including that he was under HP’s control in respect of performance and discipline, and was largely integrated into their workforce. In a decision reported in the January IRLR, the EAT allowed an appeal. It held that, as a matter of law, an individual contractor who hires himself out through an agency to a third party end-user cannot be an employee of the end-user unless there is a contract of some kind between the individual and the third party. In this case, there was "no contractual nexus" between the applicant and HP. That, according to Mr Justice Douglas Brown, "is an end of a claim based on an assertion that he had entered into or worked under a contract of employment." The Court of Appeal has now given leave to appeal, and the case is expected to be heard in the spring. It will be interesting to see whether they accept the principle set out by the EAT, which would allow end-users to avoid liability in respect of rights dependent on employee status so long as they used an employment agency or business to secure the person concerned, or whether the Court of Appeal will regard the interposition of the personal services company in this case as decisive.
13. Soterio v Ultrachem is an appeal to the EAT against a finding that an accountant could not pursue a claim of unfair dismissal due to the illegal nature of his contract of employment in that he was paid as self-employed when he was really an employee. Allowing the case to proceed after the preliminary hearing, the EAT suggested that this might raise a potentially important question as to whether an applicant should be debarred from relying upon a contract operated illegally when he might have thought that he really was self-employed.
14. Some of the most recent employment legislation uses the extended definition of "worker", defined as including those who work under a contract whereby the individual undertakes to "do or perform personally...work or services for another party to the contract" who is not a client or customer of "any profession or business undertaking" carried on by the individual. This too can be the subject of litigation.
The February IRLR includes Byrne Brothers (Formwork) Ltd v Baird, in which the EAT holds that self-employed labour-only sub-contractors in the building industry fall within this definition of "worker" for the purposes of the Working Time Regulations, notwithstanding that their contracts stipulate that, in certain circumstances, the services could be provided by someone other than the sub-contractor himself. The EAT distinguishes the contract in this case from that in Express & Echo Publications Ltd v Tanton, where the Court of Appeal held that a right to appoint a substitute was inconsistent with a contract of employment. The driver in Tanton had an unrestricted right to appoint a substitute when he was unable or "unwilling" to perform the services personally, whereas the contracts in this case allowed the sub-contractor to provide an alternative worker only where he was "unable" to provide the services and only "having first obtained the express approval of the contractor". Mr Recorder Underhill points out that this did not give the sub-contractor a "blanket licence to supply the contractual services through a substitute" and that "a limited power to appoint substitutes is not inconsistent with an obligation of personal service."
15. Hayward v Post Office is a test case on the status of subpostmasters under the minimum wage and working time regulations. It is due to be heard by the EAT in late 2002.
16. Mention of the national minimum wage and of working time takes me to these two pieces of legislation. British Nursing Association v Inland Revenue (National Minimum Wage Compliance Team) is a minimum wage case about employees working from home at night. The employees operated an emergency telephone booking service during night time hours from their home. The EAT upheld a finding that they were "working" throughout their shifts, notwithstanding that between telephone calls they could undertake other activities such as watching television or reading. Accordingly, the employees were entitled to be paid at the minimum wage for all the hours they were on duty. The EAT took the view that "to extract from the night time hours those few minutes or hours when each phone call takes place and say that that is work but that the rest is not is really only selecting one type of work in preference to another, by reference to the degree of concentration that is required upon it. There is...only a difference of degree between holding oneself ready and obliged to answer the telephone and actually doing so." The Court of Appeal will have the opportunity to decide whether it agrees at the end of March.
17. The Working Time Directive and Regulations provide for minimum paid annual leave of four weeks. Several cases currently before the courts probe the relationship between this entitlement and other statutory rights. Merino Gomez is a new Spanish reference to the European Court of Justice. It asks whether a woman on maternity leave is entitled to minimum annual holiday. This is an issue not specifically referred to in the Working Time Regulations or the DTI Guidance.
18. Brown v Kigass was heard by the EAT early in January. The issue is whether employees on long-term sick leave of more than one year can claim paid annual leave under the Working Time Regulations.
19. Gridquest Ltd v Blackburn is a recent EAT decision that is likely to be reported in IRLR. The case concerned engineering workers supplied by an employment agency to the Ford Motor Company. The issue was whether they had received holiday pay as required by the Working Time Regulations. The Regulations provide that any payments made by the employer go towards discharging their liability. The agency’s contention was that their hourly rate was a "rolled up" rate which included elements of pay for sickness absence and holidays. The EAT accepted the agency’s contention and dismissed the claim, even though the employment tribunal had found as a fact that the applicants did not know that their pay was a "rolled-up" rate. The Court of Appeal has given leave to appeal.
20. Let’s move on to other issues relating to the contract of employment. In Cerberus Software Ltd v Rowley, Lord Justice Sedley said that "one of the great unresolved questions of employment law" is "is it ever open to a wrongfully dismissed employee to affirm the contract and sue for wages?" This is a question which may be answered by Reda v Flag Ltd, a case from Bermuda which is expected to be heard by the Privy Council in April. This case, which involved share options, also raises the question of whether the Privy Council will approve and apply the controversial decision in Levett v Biotrace, in which the Court of Appeal applied the general rule of construction that a party to a contract cannot rely on its own wrong to hold that an option to purchase shares did not lapse in circumstances where the employment was terminated in breach of contract.
21. Turning to unfair dismissal, development of the implied term of trust and confidence has been one of the most interesting areas for employment law specialists.. One of the key cases in this line last year was BG plc v O’Brien. The case concerned an employee who was singled out by not being offered a revised contract of employment providing for an enhanced redundancy payment. A main issue on appeal to the EAT was whether the trust and confidence term is capable of imposing positive obligations upon the employer. The EAT said that it was and upheld a finding that the employers were in breach of trust and confidence by failing , without reasonable and proper cause, to offer the applicant the opportunity of a new contract. This, said the EAT, amounted to a breach of what Lord Steyn in Johnson v Unisys referred to as the "employer’s obligation of fair dealing", an obligation Mr Recorder Langstaff QC characterised as "the antithesis of that which is arbitrary and capricious." Our comment on BG v O’Brien was that it showed the law inching "ever closer to an implied duty of reasonableness". Whether it went too far will be decided by the Court of Appeal on 7 or 8 March.
22. One of the most striking aspects of Johnson v Unisys, of course, was Lord Hoffmann’s statement that unfair dismissal compensation can include compensation for injury to feelings. Whether this is binding on tribunals and, in effect, overrules Norton v Tewson, is a matter on which there are different opinions. I understand that at least some tribunals are now awarding damages for injury to feelings in unfair dismissal cases, and the issue is sure to come before the appellate courts before too long.
23. One specific area of unfair dismissal law in which there have been some interesting recent developments is in respect of whistleblowing. The Public Interest Disclosure Act came into force on 2 July 1999. It amended the Employment Rights Act to make it automatically unfair to dismiss (or otherwise subject to a detriment) an employee by reason of making a "protected disclosure". In Milkaszewicz v Stolt Offshore Ltd, the EAT held that a disclosure of information made prior to the legislation coming into force acquires the status of a protected disclosure, so that an employee can bring a claim if he or she is dismissed after 2 July 1999 for a disclosure made prior to 2 July 1999. This decision has now been upheld by the Court of Session and will probably be reported in the March IRLR.
24. Parkins v Sodexho Ltd is a PIDA decision in the February IRLR. The statutory definition of a qualifying disclosure includes "any disclosure of information which, in the reasonable belief of the worker making the disclosure, tends to show...that a person has failed...to comply with any legal obligation to which he is subject." A dismissal on grounds of a protected disclosure is automatically unfair and there is no continuous service requirement with the employer. Mr Parkins alleged that he was dismissed after complaining about a lack of adequate onsite supervision, which he maintained gave rise to a breach of the health and safety obligations which formed part of his contract of employment. He claimed that a breach of a contract of employment is a breach of "any legal obligation" within the meaning of the definition of a qualifying disclosure. The employment tribunal said that, "while everybody is obliged to comply with contracts of employment, we do not consider that an allegation of breach of an employment contract in relation to the performance of duties comes within the letter or spirit of the statutory provisions." The EAT did not agree. It said that there is no reason to distinguish a legal obligation which arises from a contract of employment from any other form of legal obligation. This is certainly a possible interpretation of the words "legal obligation", but it does seem to be rather removed from the main mischief which the whistle-blowing legislation aimed to address. The statute, after all, is the "Public Interest" Disclosure Act. It is hard to see any special public interest in an employee’s claim that they have been dismissed for complaining, for instance, that there has been a failure to pay the wages due under the contract, or any special reason why such a dismissal should circumvent the normal qualifying period and be deemed to be unfair.
25. A number of cases raising human rights issues are likely to feature in the law reports this year. Pride of place, in terms of longevity if nothing else, is the freedom of association case of Wilson and Palmer v United Kingdom. This is scheduled to be heard by the European Court of Human Rights on January 30. Article 11(1) of the Convention provides that "everyone has the right to...freedom of association with others, including the right to form and to join trade unions for the protection of his interests." The issue in Wilson and Palmer is whether the right to trade union membership under the Convention includes anything more than holding a membership card. The applicants contend that the Trade Union and Labour Relations (Consolidation) Act discriminates on grounds of union membership by allowing employers to pay higher wages or other benefits to employees who surrender their rights to union representation.
26. Following on from this case is Unison v United Kingdom, the application arising out of University College London Hospital NHS Trust v Unison, in which the Court of Appeal held that to fall within the definition of a "trade dispute", a dispute must be between existing employees and their current employer, so that strike action against a hospital trust because they refused to obtain a guarantee from a consortium, with whom they were contracting to run a new hospital, in respect of the terms and conditions of employees who were to be transferred and future employees, fell outside the protection the trade dispute definition.
27. Article 1 of the First Protocol to the Convention provides that every person "is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law." Nerva v United Kingdom was reported at [1996] IRLR 461 under the name Nerva v RL&G Ltd. The Court of Appeal held that tips included in cheque and credit card payments counted as remuneration for the purposes of the wages council regulations then in force. The case is currently before the ECHR. Although the National Minimum Wage Regulations treat tips differently, it will be of interest to see how the Strasbourg court situates an employment law issue such as wages in the context of the right to peaceful enjoyment of possessions.
28. The Convention right that seems to have had the most impact on employment law so far is the right to a fair hearing. The February IRLR includes the decision of the European Court of Human Rights in Fogarty v United Kingdom. This was a claim by a former employee of the US Embassy in London who had successfully brought a sex discrimination complaint. When she was then turned down for further posts, she sought to claim victimisation, but the United States claimed immunity from the tribunal under the UK’s State Immunity Act 1978. She complained that as a result, she had been denied access to court, contrary to Article 6(1), which provides that "everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law." The Court of Human Rights holds that the claim fell within Article 6(1). It acknowledged that it could not interpret Article 6(1) so as to create a substantive civil right which has no legal basis in the State concerned, but it regarded the grant of State immunity, instead, as a procedural bar preventing the applicant from bringing her claim before an employment tribunal. The Court noted that "the proceedings which the applicant intended to pursue were for damages for a cause of action well known to English law." The claim ultimately failed because the Court of Human Rights took the view that the grant of sovereign immunity to a State in civil proceedings, which reflected generally recognised rules of public international law, did not exceed the margin of appreciation allowed to States in limiting an individual’s access to court. But the distinction drawn between creating a substantive right and removing a procedural bar may have important implications for human rights challenges to other exclusions and qualifications from bringing an employment tribunal claim.
29. For example, on 7 February, the EAT will be hearing Whittaker v P&D Watson. This is a challenge under Article 6 to the small employer exclusion in the Disability Discrimination Act. Much the same argument could be made about this exclusion from rights as was put forward by the applicant in Fogarty.
30. Some other fair hearing cases worthy of mention. Devlin v United Kingdom, also reported in the February IRLR, concerned an applicant who was turned down for a post as an administrative assistant with the Northern Ireland civil service. His discrimination claim that this was because he was a Catholic was blocked from hearing on national security grounds, and he went to Strasbourg. The point of general interest in the decision is the narrow construction the ECHR gives to its decision in Pellegrin v France, which held that disputes concerning posts involving the exercise of State authority are excluded from the scope of Article 6(1) of the Convention. The Court explains that under the test laid down in Pellegrin, the only disputes excluded from Article 6(1) are those involving individuals in the public service sector who "wield a portion of the State’s sovereign power". That did not cover a post as an administrative assistant.
31. Photis v KMC International Search & Selection is the lead case in a group of cases decided by the EAT last month which has held that those applying for appointment as a statutory office holder, such as an employment tribunal chairman, cannot use Article 6 so as to circumvent the exclusions in respect of office holders from bringing a complaint of discrimination to an employment tribunal under the Race Relations Act or the Disability Discrimination Act. An appeal to the Court of Appeal has been lodged.
32. The Court of Appeal has recently upheld the application of Article 6 by the High Court in R v Securities and Futures Authority ex parte Fleurose to the disciplinary proceedings of self-regulating organisations. That was a case reported at first instance in IRLR last year.
33. On 15 January, the EAT issued its decision in Lawal v Northern Spirit Ltd. This is the test case which challenged the right of the "famous five" illustrious employment law silks to both sit as part-time judges in the EAT and practice in the same court before lay members with whom they have sat. In this case, Nicholas Underhill QC was instructed by the employers to appear at the EAT. At the beginning of the case, it emerged that he had sat as a judge with one of the lay members hearing the appeal. A different division of the EAT under the President has decided that this did not infringe the obligation under Article 6 that the tribunal must be "impartial". According to the EAT, it is far from the case that "any" form of association between the judge and counsel is sufficient to found bias. Moreover, a key factor in the appointment of lay members is their ability to demonstrate impartiality and independence. In light of that, the EAT concluded that it could not be said that a "fair minded and informed observer" would conclude that an Employment Appeal Tribunal was biased where either one or both of the lay members had previously sat with a part-time judge, who, as counsel, appeared for a party in that appeal. So we now have two decisions from Mr Justice Lindsay on lay members of tribunals and the appearance of bias. This decision and the Scanfutures case, where it was held the fact that lay members of employment tribunals were appointed by the Secretary of State for Trade and Industry, whose department also administered the Insolvency Fund, did give an appearance of bias in an insolvency protection case.
34. Albion Hotel (Freshwater) Ltd v Silva is a case where an employment tribunal had regard to three unreported cases in deciding what it is necessary for an employee to assert for a claim that the employer has infringed a statutory right. The authorities were not cited by either counsel and the tribunal did not draw the cases to the attention of the parties or their advocates before reaching their decision. The EAT holds that "where an employment tribunal considers that an authority is relevant, significant and material to its decision but has not been referred to by the parties, it should refer that authority to the parties and invite their submissions before concluding its decision. This is more than mere good practice. Failure to do so may amount to a breach of natural justice and the right to a fair hearing."
35. Home Office v Mold is an appeal currently before the EAT which, if it goes ahead, will look at the question of how far an ET can go, where only one side has legal representation, in ensuring "equality of arms" without undermining the fairness of the hearing for the represented party.
36. Another tribunal procedure case of note is Bennett v London Borough of Southwark, which was heard by the Court of Appeal on 14 January. The issue here is whether an applicant could be struck out because their adviser accused the employment tribunal of racial bias.
37. Little has been heard of the Part-Time Workers Regulations 2000. This is about to change. Mathews and others v Kent Fire Brigade and the Home Office is a test case involving 11,000 retained fire fighters who are claiming under the Regulations that their terms and conditions are less favourable than that of whole-time fire fighters in three respects: that they are not entitled to membership of the Firemen’s pension scheme, to sick pay and to increased pay for additional responsibilities. The case has been heard by the employment tribunal, but the decision has not yet been issued.
38. The last part of my talk deals with discrimination – disability discrimination, race discrimination, sex discrimination and equal pay. The Court of Appeal has consistently taken a restrictive view of the right to complain about post-employment discrimination or victimisation, upholding the decision in Adekeye No. 2 and giving a narrow reading to the European Court’s decision in the Coote case. The House of Lords will have the opportunity to look at this issue this year. D’Souza v London Borough of Lambeth dealing with race discrimination and Rhys-Harper v Relaxion Group, a sex discrimination case, are already scheduled to be heard together. Last month the EAT decided a group of DDA appeals on the same point under the heading Jones v 3M Healthcare Ltd, and I understand that these cases are likely to leapfrog the Court of Appeal so as to be heard together with D’Souza and Rhys-Harper.
39. 2001 was the year the DDA came fully into prominence, with 14 cases reported in IRLR. DDA cases will continue to be prominent in 2002. Several cases are down for the Court of Appeal. They include the controversial EAT decision in Rugamer v Sony Music Entertainment UK Ltd and McNicol v Balfour Beatty Rail Maintenance, which held that functional "overlay" was neither a physical nor a mental impairment within the meaning of the definition of disability. The case is scheduled for the Court of Appeal in June and I understand that the DRC has decided to seek to intervene in this case as an amicus.
40. Mr Justice Lindsay has set out his views on the definition of disability in two recent decisions that are likely to be reported. College of Ripon & York St John v Hobbs considers the meaning of a physical impairment. In contrast to Rugamer, the EAT holds that an impairment can be either a cause or an effect of a condition.
41. Morgan v Staffordshire University deals with the correct approach to proving a mental impairment consisting of a mental illness. The EAT emphasises in this case that it is insufficient for a claimant to provide evidence referring to "anxiety", "stress" or "depression" without backing that up with credible evidence of a diagnosis from a suitably qualified medical practitioner of a clinically well-recognised illness.
42. Murray v Newham CAB is an interesting case coming up in the EAT. Mr Murray was turned down for a volunteer’s post with the CAB because he was a schizophrenic who had one past episode of violence. The tribunal, however, found that he was not rejected for a reason related to his disability, as he was rejected because of the violence not the schizophrenia. On appeal, it will be argued that if the medical evidence establishes that the violence was caused by the schizophrenia, then the reason relating to disability test is made out. The tribunal also found in the alternative that any discrimination was justified, but the CAB had carried out no inquiries before rejecting Mr Murray. It will be argued that had they inquired, they would have discovered that his illness had been well controlled by medication for many years, and that any risk of relapse was minimal. So this case will directly raise the issue of how far the decision in Jones v Post Office obliges employers to carry out a risk assessment, and whether a failure to make inquiries disentitles the employer from relying on the justification defence.
43. Turning now to race discrimination, Ako v Rothschild Asset Management is the latest in a line of cases on cause of action estoppel. It will be heard by the Court of Appeal on 24 January.
44. Hendricks v Commissioner of Police of the Metropolis is an interesting time limit case on the meaning of continuing discrimination, both for the purposes of the Race Relations Act and the Sex Discrimination Act. The EAT held that an act extending over a period must relate to something concrete, so that what amounted to an allegation of institutional discrimination was not specific enough. This case will be heard by the Court of Appeal.
45. In Tyagi v BBC World Service, the Court of Appeal held that a discrimination complaint in respect of a policy of "continuing discrimination" extending over a period cannot be brought by a job applicant. According to the Court of Appeal, in the case of someone who is not an employee, a discrimination claim depends upon selection arrangements for a particular job or a refusal to offer that employment. These trigger one-off acts of discrimination, rather than continuing acts. An application has been made to the House of Lords for leave to appeal in this case.
46. A decision from the Court of Appeal is currently awaited in McDonagh v Ali. This is one of the cases concerning selection of Labour Party candidates, and the main issue is whether the Court of Appeal will agree with the EAT’s decision in the Ahsan case that an employment tribunal has jurisdiction to entertain a complaint of discrimination on racial grounds by a political party with regard to selection of candidates.
47. 2002 should also see the appeal in the case of Kamlesh Bahl v The Law Society and others. There are appeals by Robert Sayer and Jane Betts against the finding that they discriminated on grounds of race and sex, and a cross-appeal by Kamlesh against the finding that she was not victimised. The appeal could raise some interesting issues about drawing inferences of discrimination.
48. Chief Constable of Bedfordshire Police v Liversidge held that a Chief Constable was not liable under the Race Relations Act for an act of racial discrimination perpetrated by one of his constables upon another. This is because the special provisions in the legislation dealing with police only deemed a Chief Constable to be treated as a police officer’s employer so far as concerns the Chief Constable’s own acts. The Court of Appeal has now given leave to appeal and the case is listed for May. Although the position so far as the chief officers was changed by the Race Relations (Amendment) Act 2000, the Sex Discrimination Act has similar statutory language, which has yet to be amended. Liversidge casts doubt on whether a police force could be made liable for sexual harassment by one police officer against another, and I understand that a number of sex discrimination complaints against the police of that nature have been stayed pending the appeal.
49. Later in the year, the EAT is due to hear Hussain v Prison Service. This is a case of a prison officer racially abused by prisoners, raising the question of whether the Prison Service is legally liable for the racial abuse under the Burton v De Vere principle.
50. Also due to be heard by the EAT is Jaffrey v Department of Environment Transport and Regions. This is a case in which the applicant complained that performance appraisals of ethnic minority staff were both directly and indirectly racially discriminatory. DETR conceded direct discrimination, and the tribunal then struck out the indirect discrimination claim as being "frivolous", on grounds that "a claim of discrimination is established as unlawful race discrimination either as direct or as indirect and not both at the same time on the same facts." This proposition is being appealed.
51. There are expected to be at least two sex discrimination cases in the House of Lords this year. The Scottish case of MacDonald v Ministry of Defence is going to the Lords, giving them the opportunity of deciding definitively whether discrimination on grounds of sexual orientation is or is not covered by the Sex Discrimination Act, with or without regard to the Human Rights Act.
52. The Lords will also hear Shamoon v Chief Constable of the Royal Ulster Constabulary, in which the Northern Ireland Court of Appeal held that in order to suffer a "detriment" there has to be some physical or economic consequence which is material and substantial. This is certainly problematic, as in many cases of discrimination, for example harassment, it will be rare for there to be any physical or economic detriment.
53. Leave to appeal to the House of Lords is being sought in Coker v Lord Chancellor.
54. Sykes v JP Morgan was a well-publicised case in which a senior bank employee argued she couldn’t comply with a full-time working requirement because she had 4 children. The ET said she could comply as she was highly paid; she simply did not want to comply. The case is going to the EAT. Note that this case might be decided differently under the somewhat different wording of the definition of indirect discrimination which now applies as a result of the Burden of Proof Regulations. In my view, these Regulations are far more important than the Government has let on. There are bound to be cases in 2002 construing the new Regulations and highlighting the differences from the old law.
55. Several cases involving discrimination complaints by transsexuals will be before the courts. The EAT’s decision in Chief Constable of the West Yorkshire Police v A considers the operation of the Sex Discrimination Act’s genuine occupational qualification defence both before and after the Gender Reassignment Regulations, as it applies to a transsexual seeking employment as a police constable. This case is reported in the February IRLR and the Court of Appeal has now given leave to appeal.
56. Croft v Consignia was heard by the EAT on 17 January. The case concerns a claim by a pre-operative male to female transsexual that she was discriminated against when she was not allowed to use the ladies toilet because of objections from female employees. The tribunal held that a male to female transsexual does not change gender for the purposes of the SDA until the final operation to change the physical characteristics is performed. It said: "To put the change at the time when a person decides to change sex is too vague. To put it at the point at which a person starts taking hormone treatment or starts the real life test of living as a woman...is at a time when the position has not been finalised."
57. KB v National Health Service Pensions Agency is a UK reference currently before the European Court of Justice challenging the exclusion by the NHS pension scheme of a female nurse’s female-to-male transsexual partner from the right to a survivor’s pension because they are not legally married, although they went through a form of marriage ceremony. The nurse is arguing that this discriminates on grounds of sex, as well as violating her right to private and family life.
58. Hardman v Mallon t/a Orchard Nursing Home is an EOC-backed case that will be heard by the EAT on 25 March. The case is a follow-up to Day v T Pickles Farms, which held that failure to carry out a risk assessment in respect of a pregnant woman is sex discrimination. In this case, the tribunal upheld the employer’s "bastard" defence that they wouldn’t carry out a risk assessment in respect of a man either, so that there was no sex discrimination and no right to compensation for injury to feelings.
59. You will be hearing about a number of important cases concerning compensation for discrimination during 2002. A lot of publicity has been given to some extremely high awards over the past year. The £225,000 race discrimination award in Fasipe v London Fire and Civil Defence Authority by a London South tribunal has been appealed to the EAT. Judgment has been reserved. Schroder Securities have said they are considering an appeal against what is said to have been an award of £1.4 million for sex discrimination to Julie Bower by the Stratford tribunal.
60. Employers appealing against such high awards will take comfort from the EAT’s recent decision in Chief Constable of West Yorkshire Police v Vento (No.2). This has held that awards for injury to feelings should be parallel to the range of awards in personal injury cases, and reduced an award for injury to feelings of £65,000 to £30,000. The decision will be reported in IRLR in March .
61. In Wilding v British Telecom, the Court of Appeal will be looking at compensation for disability discrimination, and in particular issues relating to mitigation of loss.
62. The Kingsmill report and the Government’s response to it has put equal pay very much in the spotlight, and this is the final area I want to deal with tonight. Two British references to the European Court of Justice pose important questions on the scope of equal pay comparisons. Lawrence v Regent Office Care was argued earlier in January. This test case involves former employees of a county council, who are now employed by private contractors, and are seeking to bring an equal pay claim relying on comparing themselves with current employees of the council whose work had been rated as equivalent to their own. The Advocate General’s Opinion is expected on 14 March.
63. Allonby v Accrington & Rossendale College raises similar issues relating to the scope for equal pay comparisons by college lecturers.
64. Meanwhile, at domestic level, the Court of Session will be considering South Ayrshire Council v Morton on January 22. This is an appeal against the decision of the EAT allowing a teacher employed by one Scottish local education authority to rely on Article 141 and use a teacher employed by another Scottish local education authority as an equal pay comparator on the basis that they were employed in the same "service".
65. Decision is awaited from the Court of Appeal in Quirk v Burton Hospitals NHS Trust and Secretary of State for Health. This is an EOC-backed test case about the early retirement rules of the health service pension scheme for nurses. The rules allow a woman retiring before age 60 to receive benefits calculated by reference to all of her pensionable service, whereas the pension payable to men before age 60 is calculated only by reference to service from 17 May 1990, the date of the Barber decision. The EAT considered that this is a correct application of the temporal limitation laid down in the Barber case and in the Barber Protocol to the EU Treaty. The EAT regarded the case as a complaint about the level of benefit payable, rather than an access case which would not fall within the Barber limitation.
66. Decision from the Court of Appeal is also awaited in Alabaster v Woolwich plc. This is a complicated case challenging the way the Government purported to comply with the Gillespie decision by amending the Statutory Maternity Pay Regulations in respect of pay increases awarded during maternity leave. The EAT thought the amended Regulations do not comply with EU law, in part because they provide for an increase in the calculation of normal weekly earnings only where a pay increase is backdated, whereas the European Court’s decision drew no distinction between backdated and immediate pay increases. My sources tell me that the betting is on the Court of Appeal referring the case to the ECJ.
67. During 2002, the employment tribunals will be hearing a number of equal pay "class actions". The next phase of the Preston part-time workers pension cases has just been fixed in the tribunal for a month in June-July. This will raise a plethora of issues, including the effect of TUPE and statutory novation of contracts upon claims, and the question of what amounts to a stable employment relationship. In the National Health Service, midwives have brought equal pay claims against hospital estates officers and lab technicians.
68. The EAT currently has before it Home Office v Carpanini. These are appeals and cross-appeals in the prison service equal pay cases, involving over a thousand applicants – predominantly female clerical workers – seeking to compare to (predominantly male) prison officers. One of the issues to be determined is whether it is necessary to objectively justify a genuine material factor in a case where the tribunal made findings that a particular group of clerical workers was not "predominantly female". There is also a challenge to the ET’s findings relating to a job evaluation scheme, and whether each individual job has to be evaluated in order for work to be considered to have been rated as equivalent, or whether if sample benchmark jobs have been evaluated other applicants whose jobs are not materially different can rely upon the evaluation.
69. A similar point
relating to job evaluation also features in a group of equal pay claims
brought against ACAS following the tribunal decision in Crossley
v ACAS that ACAS’s seniority-based pay structure indirectly discriminated
against women. ACAS, it is said, are defending the proceedings by, amongst
other things, asserting that their job evaluation
system does not fall within the Equal Pay Act’s definition because it
does not evaluate each job. This might be thought somewhat surprising
since ACAS’s own publication on Job Evaluation emphasises that "once
the factor plan has been tested, all other jobs should be evaluated and
put in rank order."
@ Michael Rubenstein 2002. All rights reserved