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Michael Rubenstein
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Title: "Key cases for 2003"
Lecture to the Industrial Law Society.
22 January 2003, London and 4 February 2003, Leeds
1. I would like to thank friends and colleagues for their help in compiling information that forms the basis for this lecture. This continues to be an exciting time to be involved in employment law. Case law is coming thick and fast. In this talk, what I propose to do is to flag up my predictions for some of the key cases you will be hearing about in 2003. These cases fall into three categories. Decisions which were issued towards the end of 2002 or so far in 2003, but which have yet to be reported. Cases which were argued during 2002 or so far in 2003, but in which a judgment has yet to be issued. And cases which will be argued during 2003. An edited version of this talk will shortly be available on the ILS web site http://www.industriallawsociety.org.uk/.
2. Let’s start with transfer of undertakings. When does a transaction amount to a TUPE transfer? I began my lecture in 2002 by saying that "sometime this year we will have new legislation on TUPE. This will set out a new definition of a relevant transfer." Let me repeat what I said last year, with the caveat, don’t hold your breath. In any event, even if consultative proposals for new legislation are issued soon, its highly unlikely that they will come into force any earlier than very late in 2003. That means that interpretation of existing legislation continues to be of great importance. So far as the vexed issue of what amounts to a TUPE transfer, the most striking feature is the divergence of the UK courts in the case of a change of service contractor from the approach of the European Court of Justice in the Suzen decision. Those of you who follow the case law in this area will know that the Court of Appeal has had three opportunities to bring UK law into line with the ECJ jurisprudence. On each occasion, to the surprise of some, they have held that there can be a TUPE transfer where there is a change in service contractor, notwithstanding that there was no transfer of significant assets and none of the relevant employees were taken on by the new employers. The House of Lords will have its first opportunity to consider this issue when it hears the appeal in RCO Support Services v Unisonlater this year.
3. The two determinant factors identified in Suzen are transfer of employees or transfer of assets. Sanrest Grobkuchen v Sodexho MM Catering is the only change of contractor case currently before the European Court of Justice. The issue in this Austrian reference 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.
4. Oy Likkenne, the Helsinki bus route case, was one of the most troubling ECJ decisions as to what is a transfer. That held that in an asset-reliant sector, an economic entity cannot be regarded as having maintained its identity after it has been transferred so as to come within the scope of the Directive if there is no transfer of significant assets, even where the new employer takes over a major part of the employees of the old contractor. A recent EAT decision, P & O Trans European Ltd v Initial Transport Services Ltd and others, which will be reported in the March IRLR, gives a restricted interpretation to Oy Likkenne. This is a case where the putative transferee took on the transferor’s tanker drivers but did not purchase the vehicles. Upholding a finding that there was nevertheless a TUPE transfer, the EAT emphasises the "multifactorial" approach and says that the ECJ "was not laying down a principle that in all cases of asset intensive industries the absence of a transfer, to a significant extent, of such assets would always lead to the conclusion that no transfer had taken place." According to the EAT: "The relative significance of assets in relation to manpower and how each contributes to the performance of the particular activity will vary according to the facts of the particular case."
5. Another extremely difficult and largely unresolved TUPE issue concerns the obligations of the new employer where the old employer provided a profit sharing or share option scheme. This was considered last year by the EAT in MITIE Managed Services Ltd v French, in connection with employees who had a contractual entitlement to participate in the Sainsbury’s profit sharing scheme. The EAT ruled that "the entitlement of the transferred employees in a case such as this...is to participation in a scheme of substantial equivalence but one which is free from unjust, absurd or impossible features." This judgment of Solomon raised more questions than it answered: what is the measure of "substantial equivalence"? Does the transferred employee’s entitlement relate to the profits of the transferee or to the transferor? The Court of Appeal will be hearing the case in the first half of 2003.
6. Martin v South Bank University is a European Court reference which deals with the scope of the exclusion of terms relating to old age, invalidity or survivors’ benefit from the Acquired Rights Directive and TUPE. In the Beckmann decision, the ECJ adopted a strict construction of the exclusion. The interesting feature of the Martin reference is that it asks the European Court to give guidance on the correct test of causation for determining whether the transfer is the reason for a particular change. In Ralton v Havering College of Further & Higher Education, the EAT held that it is only where the variation to the contract of employment of employees transferred was "solely" by reason of the transfer that the change is impermissible.
7. Alamo Group Ltd v Tucker revisits whether liability for a transferor’s failure to consult pursuant to reg.10 of TUPE transfers to the transferee, an issue on which there is currently conflicting case law. It was argued before the EAT in December.
8. A TUPE-related case being heard in the High Court in February is a blast from the past. It is called Alderson v Department of Employment, and it is a Francovich claim against the Government brought by former council refuse workers whose jobs were contracted out as part of a CCT exercise in around 1990, when TUPE excluded services which were not in the nature of a commercial venture.
9. Do the provisions of the Spanish Workers’ Statute relating to the treatment of "salarios de tramitacion" in the case of insolvent employers comply with the EC Insolvency Protection Directive? This was recently considered by the European Court of Justice in Rodriguez Caballero v Fondo de Garantia Salarial and is reported in the February IRLR comes out. "Salarios de tramitacion" are loss of earnings awarded under Spanish law to employees who are unfairly dismissed. The issue was whether the Directive was infringed because the guarantee institution pays these arrears of pay to former employees of insolvent employers only where the sum is awarded as part of judicial proceedings and not where it is subject to a conciliated settlement. The European Court holds that this is contrary to the Insolvency Protection Directive, but it is their reasoning that is important. According to the Court, a difference in treatment as regards entitlement to unfair dismissal compensation as between workers whose employer has become insolvent and other workers is in contravention of the fundamental principle of equality and non-discrimination, unless objectively justified. No objective justification was shown in this case. Consider now the Employment Rights Act. The insolvency provisions only provide a guarantee for the basic award of unfair dismissal compensation. That discriminates against former employees of insolvent employers as compared with those whose employers who are not insolvent. Caballero suggests that the inability of an unfairly dismissed employee to recover the full award of compensation from the National Insurance Fund is likely to be contrary to EU law.
10. The House of Lords heard the appeal in P v NASUWT in November, and reserved judgment. The case was heard with another school exclusion case and raises the issue of whether a refusal to teach or supervise a pupil amounts to a trade dispute, in the sense of relating wholly or mainly to terms or conditions of teachers’ employment, or the physical conditions in which teachers are expected to work, or the allocation of work or duties of employment between teachers? There was a separate issue which arose from the union’s inadvertent failure to send ballot papers to two of its members who taught at the school and were called upon to take industrial action. This asks the House of Lords to decide whether this meant that the industrial action lacked the support of a ballot within the meaning of the Trade Union and Labour Relations (Consolidation) Act.
11. Nicholson and others v Long Products Ltd is an interesting case before the EAT which concerns whether tribunals should apply the same or a similar level of scrutiny to the reasons put forward by the employer in a case of alleged dismissal for trade union reasons as they would in a discrimination case, that is to say, should the tribunal be prepared to drawn inferences of trade union discrimination?
12. 2002 saw conflicting decisions on the controversial question of whether a common law claim for damages resulting from breach of the implied term of mutual trust and confidence is precluded if the employee is dismissed. The latest twist is McCabe v Cornwall County Council, reported in the February IRLR. The case concerned a teacher who was suspended for four months after allegations of inappropriate sexual conduct, but without being told details. In the event, he was dismissed some 10 months later, and that dismissal was found to have been unfair. Meanwhile, he sought to claim damages for psychiatric injury arising out of an alleged breach of trust and confidence in respect of his suspension, and in respect of the employers’ failure to inform him of the allegations or to carry out a proper investigation. But the claim was struck out on grounds that the activities complained of were part and parcel of the events leading up to dismissal and therefore precluded by the decision of the House of Lords in Johnson v Unisys, as elaborated last year by the Court of Appeal in Eastwood v Magnox Electric. However, according to the Court of Appeal in McCabe, Johnson does not exclude a claim for damages for psychiatric injury arising from an alleged breach of the trust and confidence term whenever a dismissal eventuates. Instead, McCabe says that the correct test is the factual one of whether the wrongful conduct by the employer formed part of the process of dismissal. If it did, the employee’s remedy is confined to unfair dismissal compensation, with its statutory maximum. If it did not, damages at common law may be available. The House of Lords has recently granted leave to appeal in Eastwood v Magnox, and it is to be hoped that when the case is heard later this year they will take the opportunity of thoroughly reviewing the principles of law that should govern this area.
13. The particular cause of action in both Eastwood and McCabe was a claim for damages for psychiatric injury. Workplace stress is, of course, one of the real growth areas for litigation, so much so that the Court of Appeal laid down important guidelines for determining employer liability for psychiatric illness caused by workplace stress in Sutherland v Hatton last year. The Court of Appeal ruled that unless the employer knows of some particular problem or vulnerability, the employer is usually entitled to assume that the employee can withstand the normal pressures of the job. Thus, an employee who returns to work after being off for stress-related sickness is usually implying that he believes himself fit to return to his previous work, and the employer is usually entitled to take that at its face value. It is by no means easy to reconcile this emphasis on the employee taking the initiative with the duty on employers to carry out risk assessments, derived from EU health and safety law. This will be one of the main grounds for appeal when the House of Lords hears the case, now under the name of Barber v Somerset County Council, later in the year.
14. The Court of Appeal will hear Cantor Fitzgerald International v Bird this year. This was the case in which allegations of breach of restrictive covenants by three inter-dealer brokers were countered by claims of constructive dismissal arising out of the unedifying manner in which the employers sought make a change in remuneration methods. Two points of general interest will be argued on appeal. The first is whether the judge was right to find that the employees did not affirm the contract by waiting more than two months before resigning. The judge said that: "Affirmation is essentially the legal embodiment of the everyday concept of ‘letting bygones be bygones’." Is that correct? Secondly, was the judge right in drawing a distinction between an employee’s loss of confidence in management and conduct by the employer calculated to seriously damage trust and confidence within the meaning of the implied term, and ruling that the latter does not include the former.
15. Jowitt v Pioneer Technology (UK) Ltd will be heard by the Court of Appeal in March. This appeal from an EAT decision reported in IRLR last year raises the now-familiar issue of whether, in order to be entitled to long-term disability benefit, an employee had to be disabled from their own work or whether they had to be disabled from "any" work.
16. Turning now to unfair dismissal, Stanley Cole (Wainfleet) Ltd v Sheridan is the first case to hold that the unjustified imposition of a final written warning can amount to a repudiatory breach of contract by the employer entitling the employee to resign and claim constructive dismissal. The applicant was given the warning after she left work without permission for about half an hour following an altercation with another employee. The EAT (Mr Recorder Langstaff QC presiding) upholds a finding that the imposition of such a disproportionate penalty for a "relatively minor incident" amounted to a repudiatory breach by the employer. The case is reported in the February IRLR.
17. One specific area of unfair dismissal law in which there have been some interesting recent cases is whistleblowing. The March IRLR reports Darnton v University of Surrey. This is an EAT decision which interprets the concept of a "reasonable belief" for the purposes of a qualifying disclosure. The statute defines a qualifying disclosure as meaning any disclosure of information which in the reasonable belief of the worker making the disclosure tends to show a relevant failure. According to the EAT, in order for there to be a qualifying disclosure, it must have been reasonable for the worker to believe that the factual basis of what was disclosed was true and that it tends to show a relevant failure, even if the worker was wrong, so long as he or she is reasonably mistaken.
18. Sterlite Industries v Bhatia is an appeal to the EAT against a record award of over £800,000 in a whistleblowing case. The appeal, which will be heard in March, raises a number of procedural issues including the status of written representations. As a matter of substance, the appeal raises the issue as to whether there was a contractual obligation to pay a bonus, which represented a significant part of the award.
19. A number of cases are going through the tribunals and courts arising out of the repeal of s.196 of the Employment Rights Act which excluded claims from employees ordinarily employed outside Great Britain. These include Jackson v Ghost Ltd, which is currently due to be heard by the EAT as a category A case, and may be treated as an opportunity to set out guidelines for determining whether individuals who work abroad have rights under the ERA. It will be argued by the former employee that the only limitation upon the jurisdiction of the tribunal is that contained in reg.11(5) of the 2001 Regulations: that the respondent or one of the respondents resides or carries on business in England and Wales.
20. Lawson v Serco has already been argued in the EAT and judgment was reserved. This is a case of a UK-born and domiciled resident working in Ascension Island for a UK-registered company. Nevertheless, the employment tribunal said that it did not have jurisdiction under the ERA.
21. What is the legal position of a woman who does not return from maternity leave on the notified date? It used to be that she would lose her right not be unfairly dismissed. It is widely thought that the changes brought in at the end of 1999 by the Employment Relations Act changes this, and that a woman who is treated as no longer being employed because she failed to return on the specified date is deemed to be dismissed for unfair dismissal purposes, even though she loses her right to claim that her dismissal was automatically unfair. However, an employment tribunal in the case of Morse v Goldenberg Hehmeyer apparently thought that the position remains unchanged, and that there is no dismissal in such circumstances. The point is to be heard by the EAT.
22. In 2003, we might see some indications from the Government as to what it plans to do about employment status. Many of the new EU Directives, of course, adopt an extended definition of employment. One of these is the Part-time Workers Directive, which covers "part-time workers who have an employment contract or employment relationship as defined by the law, collective agreement or practice in force in each Member State." The new Austrian reference, Wippel v Peek & Cloppenberg, raises interesting questions as to whether the Directive – as well as Article 141 and the Equal Pay Directive – extends to cover those with a "casual" employment relationships, such as in this case where the applicant entered into an agreement to carry out work on approximately three days a week and two Saturdays in each month, but without any binding commitment to do so. Under UK law, such a lack of mutual obligation might negate the existence of a contract of employment or a contract for services, so as to fall outside the protection of employment legislation. It will be interesting to see how the ECJ approaches the issue as a matter of European law.
23. Franks v Reuters Ltd is a case of an agency worker who worked for a long period with Reuters and then on termination claimed employee status and brought a case for unfair dismissal and/or redundancy against the company where he worked. At ET and EAT level, the claim was lost on grounds that there was no mutuality of obligation as between Reuters and the agency worker. The Court of Appeal is hearing an appeal on 11 March, and is expected to be looking at some of the policy issues surrounding the employment of workers via an agency.
24. The Working Time Directive and Regulations provide for minimum paid annual leave of four weeks. Merino Gomezis a Spanish reference to the European Court of Justice. It asks whether a woman on maternity leave is entitled to minimum annual holiday, or holiday in lieu when she returns from leave. This is an issue not specifically referred to in the Working Time Regulations or the DTI Guidance.
25. During 2002, the Court of Appeal confirmed that the national minimum wage applies to employees operating an emergency telephone booking service during night time hours from their home. The Court of Appeal 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. A German case before the European Court, Jaeger, asks a similar question in respect of on-call time under the Working Time Directive. In particular, it requires the European Court to deal with the controversial question of whether an employee should be treated as "working" during a time when they are on-call but sleeping.
26. Walton v Independent Living Organisation Ltd is a National Minimum Wage case, heard in the Court of Appeal on 30 January. It concerns the question of for how many hours a live-in carer should be paid under the minimum wage regulations. The ET and EAT held that she was doing ‘unmeasured work’ and that the 6 hours 20 minutes of work identified in a detailed daily average agreement was correct in taking account only of time when she was actively working. The employee argues that she is employed on ‘time work’ for 24 hours a day or, if her work is unmeasured, that the daily average is unrealistic since she is working 24 hours a day. She argues that she is on permanent standby. The employer argues that whether or not standby time is working time is a matter of fact and degree to be determined by the Tribunal –and that the regulations contemplate that at least some standby time is not "working time". The appeal has major potential consequences for the pay of live-in carers as well as the cost of live-in care.
27. Last year, I mentioned Home Office v Mold and I now understand that this appeal will be heard by the EAT. It 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.
28. Connolly v HSBC plc is an important test case currently in the Stratford employment tribunal, which deals with a long-running unresolved issue in interpreting the statutory maternity leave provisions: whether a bonus should be regarded as "wages or salary" and therefore treated as "remuneration" and excluded from payments during ordinary maternity leave in accordance with reg.9 of the Maternity and Parental Leave Regulations.
29. In the area of equal pay, one of the key issues this year, as last year, will be the scope of permissible comparisons under Article 141. The hearing in Allonby v Accrington & Rossendale College took place on 28 January. Like Lawrence v Regent Office Care, this case raises issues as to the circumstances in which Article 141 permits a comparator who is not in the same direct employment. However, there are some important factual differences between the two cases. For example, in Allonby, unlike Lawrence, it is conceded that the applicant, a part-time college lecturer now employed by an agency, worked in the same establishment as her comparator, who remained employed by her former employer.
30. Morton v South Ayrshire Council was a Court of Session decision last year which established that a female primary school head teacher employed by South Ayrshire Council, could have a male secondary school head teacher who worked in for the Highland Council as an equal pay comparator on the basis that both were in the same branch of public service and were subject to a uniform system of national pay and conditions, so that they were engaged in the same "service" for the purposes of Article 141 as interpreted by the ECJ in Defrenne No.2. Milligan v South Ayrshire Council is a spin-off of that decision. All the secondary school head teachers are men, so there is no direct comparator for a male primary school head teacher. But the Court of Session holds that he is entitled to make a contingent claim comparing himself to a female primary school head teacher and to have his claim stayed until resolution of his comparator’s equal pay claim against a male secondary school head teacher. The decision is reported in the March IRLR.
31. Nelson v Carillion Services is an equal pay case which will be heard by the Court of Appeal on 3 April. It raises the point of principle as to the proper allocation of the burden of proof under s.1(3) of the Equal Pay Act in a case where the material factor is said to have a disproportionate adverse impact on women.
32. The part-time workers pension cases continue to wend their way. There is an employment tribunal hearing in March of the lead cases on remedies issues, such as revaluation of contributions. Cases are now being listed on previously untried issues such as objective justification, and there are EAT appeals pending on substantive issues such as the effect of TUPE on the time limit for bringing claims.
33. A six week hearing has been scheduled in the employment tribunal from mid-September in Farr and others v Liverpool Women’s Hospital Trust. This is the long-running equal value cases concerning midwives at six hospital trusts claiming equal pay with junior doctors and with estates officers.
34. Health and Safety Executive v Cadman and orsis before the EAT. This is an important case on seniority as a genuine material factor "justification" for pay differentials in civil service – a major equal pay issue in the public sector and with important implications across Government departments.
35. The EAT has also agreed to hear the appeal in Barton v Investec Henderson Crosthwaite Securities, in which Louise Barton, a stock analyst, is challenging an employment tribunal’s finding that the employers had legitimate reasons for paying more than £1 million more per year to her male comparator. The tribunal controversially accepted that it was "a vital component of the City bonus culture that bonuses are discretionary, scheme rules are unwritten and individuals’ bonuses are not revealed." The EOC is supporting the appeal.
36. The Court of Appeal has consistently taken a restrictive view of the right to complain about post-employment discrimination or victimisation, giving a narrow reading to the European Court’s decision in the Coote case. The House of Lords heard consecutive arguments in November in three cases concerning this issue: D’Souza v London Borough of Lambeth dealing with race discrimination, Jones v 3M Healthcare Ltd, a disability decision decision, and Rhys-Harper v Relaxion Group, a sex discrimination case concerned with post-employment discrimination not connected with victimisation. Judgment is awaited, but to a large extent the House of Lords decision has been pre-empted by the Government. The consultative draft regulations on implementing the Race Discrimination and Framework Employment Directives provide in respect of all the strands that it will be unlawful for an employer to discriminate against a former employee where "the discrimination arises out of and is closely connected to" the employment relationship.
37. All the discrimination statutes extend the time limit for bringing complaints where there is an act of discrimination "extending over a period". In Hendricks v Commissioner of Police for the Metropolis, which is reported in the February IRLR, the Court of Appeal gave a liberal construction to this concept of a "continuing act", holding that the key issue is not whether the applicant can identify a "policy, rule, scheme, regime or practice", in accordance with which decisions affecting the treatment of workers are taken. Instead, the focus of inquiry should be on whether there is an "ongoing situation" or a "continuing state of affairs" in which incidents of discrimination were linked to one another, as distinct from a succession of unconnected or isolated specific acts. I understand the Metropolitan Police are petitioning the House of Lords for leave to appeal against this decision.
38. Many will have already seen a summary of the guidelines on awarding compensation in discrimination cases for non-pecuniary loss, including injury to feelings, which were set out by the Court of Appeal in Vento v Chief Constable of West Yorkshire Police (No.2). This decision is reported in the February IRLR. According to the Court of Appeal, an award of compensation for injury to feelings should fall within one of three bands: The top band, covering the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment, should normally be between £15,000 and £25,000. Only in the most exceptional case should an award of compensation for injury to feelings exceed £25,000. A middle band of between £5,000 and £15,000 should be used for serious cases, which do not merit an award in the highest band. Awards of between £500 and £5,000 are appropriate for less serious cases, such as where the act of discrimination is an isolated or one off occurrence, but awards of less than £500 are to be avoided altogether, as they risk being regarded as so low as not to be a proper recognition of injury to feelings. The main thrust of the decision is an attempt to limit the size of awards for non-pecuniary loss. The Court of Appeal seems especially perturbed by some well-publicised very high awards in recent years. Virdi v Commissioner of Police of the Metropolis, in which £100,000 for injury to feelings and £25,000 aggravated damages was awarded, is singled out as a source of "concern". In truth, cases like Virdi are very rare indeed. The most recent annual survey of compensation awards carried out by Equal Opportunities Review, covering 2001, reveals that the highest award for injury to feelings (including aggravated damages) in a sex discrimination case was £40,000 and the median award was £2,500. In race discrimination, the highest award was £17,500 and the median award was £3,000. In disability discrimination, the highest award was £24,000 and the median award was also £3,000. In all three jurisdictions, there were more awards for injury to feelings under £600 than there were over £20,000.
39. The second largest discrimination compensation award ever was in Chaudhary v British Medical Association, where the total awarded was £761,867, although that only included £22,500 for injury to feelings in respect of two separate acts of race discrimination and £5,000 aggravated damages. The appeal against this has leapfrogged the EAT and will be heard by the Court of Appeal in February. The case may well see principles being set out for awarding compensation for loss of a career through discrimination.
40. Woodrup v London Borough of Southwark, which is reported in the February IRLR, is the first Court of Appeal decision to consider the deduced effects provisions of the DDA, which provide that "an impairment 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, is to be treated as having that effect." The point behind these provisions is that the underlying impairment remains, even where it is being controlled or corrected. Obvious examples are insulin-controlled diabetes and use of a hearing aid. People with such impairments are treated by the Act as disabled. This can be regarded as justified both because they may well experience discrimination by reason of their disability even if it is controlled and because the overall statutory scheme aims to avoid the confusion that would result from someone falling inside or outside the scope of the Act according to the effects of their impairment – or its treatment - at any given time. Nevertheless, the deduced effects provisions are counterintuitive, to the extent that they treat someone as disabled whose impairment may have little effect at all on their ability to carry out normal day-to-day activities. In Woodrup,
the Court of Appeal regards these provisions with barely-concealed hostility. It dismisses an appeal by a woman who failed to provide medical evidence supporting her claim to be disabled on the basis that if her psychotherapy treatment for anxiety neurosis had been discontinued, her impairment would have had a substantial adverse effect on her ability to carry out normal day-to-day activities. In the leading judgment, Lord Justice Simon Brown says that: "Those seeking to invoke this peculiarly benign doctrine under para.6 of the Schedule should not readily expect to be indulged by the tribunal of fact" and that an employment tribunal should not have to "pretend that the claimant is in fact disabled when it knows that he or she is not."
41. Most of you will remember Kirton v Tetrosyl, a decision construing the "progressive condition" limb of the definition of disability. The DDA deems someone with a progressive condition to be disabled so long as the condition has some effect on their normal day-to-day activities and the effect of the condition on their normal day-to-day activities is expected to be a substantial adverse effect at some point in the future. Cancer is one of the progressive conditions specifically mentioned in the statute. Mr Kirton had prostate cancer and as a result of an operation for his cancer was left with some incontinence. Did he qualify as disabled under the progressive conditions clause? In a highly-literal interpretation of the Act, the EAT ruled that he did not because his incontinence was not caused by the progressive condition itself, the prostate cancer, but by the treatment for it. On April 10, the Court of Appeal will have an opportunity to decide whether this is what was intended by the Act’s drafters.
42. The Meaning of Disability Regulations provide that addiction (including a dependency) to "alcohol, nicotine or any other substance" is to be treated as not amounting to an impairment for the purposes of the Act. In Power v Panasonic, the applicant lost her claim to fall within the definition of disability despite providing psychiatric evidence that she was depressed. The employment tribunal dismissed the claim on grounds that the depression was a symptom or manifestation of alcohol addiction and abuse. The EAT has allowed an appeal against that decision, confirming that the DDA distinguishes between excluded conditions such as alcohol dependency and impairments which result from that excluded condition, such as depression in this case. If a person has an impairment within the meaning of the Act, it is not necessary to consider how the impairment was caused. This case is reported in the March IRLR.
43. There is no counterpart in the DDA, or in the Race Relations Act, to the extended definition of dismissal in the Sex Discrimination Act, which was amended so as to include constructive dismissal. This has led to conflicting EAT case law. Commissioner of Police of the Metropolis v Harley held that s.4(2)(d) of the DDA does not apply to constructive dismissal, whereas Derby Specialist Fabrication v Burton held that the identical provision in s.4(2)(c) of the Race Relations Act can include constructive dismissal. There have been several cases recently argued on this point. Catherall v Michelin Tyre plc, which was decided at the end of October, is in the February IRLR. It holds that there is no reason why the term "dismissal" should be narrowly construed so as to exclude constructive dismissal.
44. Murray v Newham CAB is a DDA case which I mentioned last year, and which was eventually argued in the EAT in January of this year. 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 found that discrimination was justified, even though the CAB had carried out no inquiries before rejecting Mr Murray. It was 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 directly raises the issue of how far the decision in Jones v Post Office obliges a prospective employer to carry out a risk assessment, and whether a failure to make inquiries disentitles the employer from relying on the justification defence.
45. Law v Micro Technology is also concerned with interpretation of the Jones decision. This appeal to the EAT highlights one of the problems with Jones: that there are major differences in approach between Lord Justice Pill’s judgment and that of Lady Justice Arden which are often glossed over by tribunals. This appeal will also raise the key issue of whether, in applying Jones, it is an error for the tribunal to apply a band of reasonableness test as a test of justification, as this tribunal did. It will be argued that Lord Justice Pill did not equate the test of materiality and substantiality under the DDA with the reasonable band of responses, but merely stated that they are similar.
46. Several noteworthy cases involving discrimination complaints by transsexual people are in the courts. KB v National Health Service Pensions Agency is a UK reference 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.
47. Croft v Consignia is an EAT decision which held that a pre-operative male to female transsexual was not discriminated against on grounds of sex when she was denied use of female toilet and changing facilities. The EAT applied the decision of the European Court of Human Rights in Goodwin v UK to draw a sharp distinction between the position of pre-operative and post-operative transsexuals. This was also the view taken by the Court of Appeal in Chief Constable of West Yorkshire Police v A (the Chief Constable has asked for leave to appeal to the House of Lords in that case). In Croft, the EAT reasons that a pre-operative male to female transsexual person is still legally a man and therefore cannot be allowed to use female toilets because of health and safety law. Whether a surgical procedure is the appropriate test, and whether it accords with the principles laid down by the European Court of Justice in P v S will be considered by the Court of Appeal on 9 June.
48. In November, the House of Lords heard Shamoon v Chief Constable of the Royal Ulster Constabulary, an appeal against a sex discrimination decision of the Northern Ireland Court of Appeal which 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. Decision in that case is awaited.
49. Meanwhile, the Court of Appeal in England has just issued its decision on a similar issue. Jiad v Byford was decided on 30 January. The case is about what is a "detriment" and the circumstances in which a discrimination case can be struck out on grounds of disclosing no cause of action. The EAT ruled that an unjustified sense of grievance could not amount to a detriment, and that there had to have been some substantial physical or economic consequence. The Court of Appeal has now allowed an appeal against that decision. The full transcript is not yet available, but I understand that the Court of Appeal holds that enduring psychological injury can amount to a detriment.
50. At the end of January, the House of Lords consecutively heard the appeals in MacDonald v Ministry of Defence and Pearce v Governing Body of Mayfield School. Both appeals raise the issue of whether discrimination against someone because of their sexual orientation is capable of being regarded as discrimination on grounds of sex for the purposes of the Sex Discrimination Act, and how the answer to this question is affected, if at all, by the Human Rights Act. The Pearce case raises an important further issue: whether, and in what circumstances a school can be held liable under the SDA for acts of discrimination by its pupils. This will lead to consideration by the House of Lords of the principles laid down by Burton v De Rhule – the Bernard Manning case – that an employer subjects an employee to the detriment of harassment if he causes or permits harassment serious enough to amount to a detriment to occur in circumstances in which he can control whether it happens or not. I understand that the parties, including the Government, have been asked to provide submissions on the correct scope of that principle.
51. The Burden of Proof Regulations have been in force since 12 October 2001 and apply to any sex discrimination case which had not been heard by that date, but I don’t think I have seen a single mention of the effect of the Regulations in any EAT decision. The wake-up call should come in University of Huddersfield v Woolf, which has past the preliminary hearing stage in the EAT. This is an appeal from a finding that the university discriminated in their promotion procedure against Dr Woolf on grounds of her sex. The tribunal found that there was less favourable treatment in that Dr Woolf had been the first nomination of her school for promotion and her comparator second, but the Deans’ committee had reversed the order. It was not satisfied with the explanation given for this in evidence. The tribunal did not expressly infer that the less favourable treatment was on grounds of sex but applied new s.63A of the SDA to hold that as the employers had not proved to its satisfaction that they had not discriminated against Dr Woolf, they were deemed to have unlawfully discriminated. On appeal, the employers are arguing that the principles laid down in King v Great Britain China Clay still apply and that the tribunal must infer sex discrimination.
52. 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 four children. The ET said she could comply as she was highly paid; she simply did not want to comply. The EAT dismissed an appeal, and the case is due to be heard by the Court of Appeal in April, where one of the issues will be that of who is the appropriate comparator where there is a stereotypical assumption about the commitment of women with children.
53. Harrison v LFCDA will be heard by the EAT on the issue of whether working in an environment polluted by pornography is sex discrimination. A London North tribunal thought not.
54. In my talk last year, I said that "2002 should see the appeal to the EAT in the case of Kamlesh Bahl v The Law Society and others." Change that to 2003 and add a question mark. 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 key issue is whether there was any evidence to support the finding that a hypothetical white man would have been more favourably treated, so the case could raise some interesting points about drawing inferences of discrimination. However, the EAT has had to postpone a hearing because Kamlesh has hospitalised. The hearing is now due on 28 February.
55. The EU Treaty has been tweaked to allow positive action in favour of women on several occasions. EFTA countries are members of the European Economic Area and follow EU social law. Infraction proceedings were brought against the Kingdom of Norway by the EFTA Surveillance Authority, which is the EFTA equivalent of the European Commission. Norway reserves a number of academic posts exclusively for women. In a decision given at the end of January, the EFTA Court ruled that such a quota system goes beyond the bounds of permissible positive action under EU law and amounted to unlawful discrimination against men.
56. The Rutherford case challenging the statutory exclusion of men over age 65 from the right to claim unfair dismissal and a redundancy payment will be heard on appeal by the EAT on 22 May. The Government will argue that the employment tribunal was wrong to find that the upper age limit has a disparate impact upon men. It will also contend that the tribunal erred in dismissing the Government’s arguments justifying the upper age limit because the exclusion is "tainted" by sex discrimination, in that men dismissed between age 60 and 65 can get statutory compensation but not a state pension, whereas a woman of the same age not only can get compensation, but also a state pension. We suggested in our commentaries on the case that this reasoning was open to challenge in that any "tainting" only related to the position of men and women under age 65, whereas this case is about those over 65, where the pension position is the same. On the other hand, the justifications the Government wanted to put forward were not very compelling either. So this case looks set to run and run.
@ Michael Rubenstein 2003. All rights reserved.