Michael Rubenstein

PREVIOUS SPEAKERS:

Michael Rubenstein

Title: "Key cases for 2005"

Edited text of a lecture by Michael Rubenstein to the Industrial Law Society

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. So much so that I have been able to make this year’s talk even more forward looking than in previous years. Whereas previously, I included decisions which had been issued but yet reported, this year all the cases I am covering had yet to be decided when this lecture was written.

2. On to the cases. Let’s start with transfer of undertakings. The recent case law of the European Court of Justice on whether the Transfers of Undertakings Directive applies where work is contracted-out draws a sharp distinction between activities which are “asset-reliant” and activities which are “labour-intensive”. Güney-Görres v Securicor Aviation Ltd is a German change of contractor case referred in June 2004, which asks for guidance on the ingredients of when there is a transfer of assets within the meaning of the Directive. A key question is whether the transferee contractor must make independent commercial use of the assets of the original contractor.

3. Later this year, we can expect the decision of the European Court of Justice in Celtec v Astley. This is the British case about the time of transfer. The Court of Appeal overruled the EAT and held that the wording of the Directive is sufficiently wide in its terms to embrace a transfer of an undertaking which takes place over a period – three years in this case - and that the Directive does not imply that the transfer must take place at a particular moment in time. The House of Lords referred the question to the ECJ. On 27 January, the Advocate General gave his Opinion. He suggests that the date of transfer “does not require there to be a particular point in time at which all the aspects of the undertaking....are simultaneously transferred.”

4. The Collective Redundancies Directive requires consultation with worker’s representatives “in good time”. The Trade Union and Labour Relations (Consolidation) Act, which implements the Directive, lays down that consultations in advance of large-scale redundancies must begin at least 90 days before the first of the dismissals takes effect. Interesting questions of interpretation under the parallel legislation in Germany have been considered by the ECJ in Junk v Kuhnel. The key issue is whether the consultation period runs from the beginning of consultation to when the notice of dismissal expires, or whether EU law requires that no dismissal notices can be issued until the consultation period has ended. The Court’s decision came out on 27 January, after the first two of my lectures. It is extremely interesting. The ECJ points out: “With regard to the consultation procedure, this is provided for, within the terms of Article 2(1) of the Directive, ‘with a view to reaching an agreement’. According to Article 2(2), this procedure must, ‘at least cover ways and means of avoiding collective redundancies or reducing the number of workers affected, and of mitigating the consequences by recourse to accompanying social measures.’ “It thus appears”, the ECJ says, “that Article 2 of the Directive imposes an obligation to negotiate.” Commentators have hitherto suggested that this obligation to consult with a view to reaching agreement was tantamount to negotiation, but here we have the European Court of Justice saying so in terms. The ECJ goes on to say: “The effectiveness of such an obligation would be compromised if an employer was entitled to terminate contracts of employment during the course of the procedure or even at the beginning thereof. It would be significantly more difficult for workers’ representatives to achieve the withdrawal of a decision that has been taken than to secure the abandonment of a decision that is being contemplated. A contract of employment may therefore be terminated only after the conclusion of the consultation procedure, that is to say, after the employer has complied with the obligations set out in Article 2 of the Directive.” This decision will be reported in the April IRLR.

5. Several cases on trade union recognition to mention. On 27 January, the Administrative Court heard R (on the application of Ultraframe) v Central Arbitration Committee. This concerns a recognition claim by the GMB. A ballot was held, which resulted in the union securing a majority of the votes cast, but failing by four votes to achieve the required threshold of 40% of workers in the bargaining unit voting in favour of recognition. However, before the results were announced, the GMB had complained that some members of the bargaining unit had not received ballot papers. The CAC found that there was a group who had not received ballots. The employers contended that the CAC nevertheless had no choice under the Act but to declare the union not to be recognised on the basis of the results which were communicated by the Qualified Independent Person because there is no express provision in the Act allowing the CAC to order a ballot to be re-run. However, the CAC panel (chaired by Professor Paul Davies) concluded that it had the power to order a re-run of the ballot. The CAC took the view that any reference in the Schedule to a “ballot” means a ballot conducted in accordance with the statutory standards.

6. The NUJ has applied to the Court of Appeal for leave to appeal against the High Court’s decision in R (on the application of National Union of Journalists) v Central Arbitration Committee dismissing their claim for judicial review of the CAC’s decision that it could not entertain their application for recognition in respect of journalists employed in Mirror Group Newspapers’ sports division because the employers had entered into a voluntary recognition agreement with the British Association of Journalists, even though the BAJ had at most one member in the bargaining unit. The High Court judge acknowledged that this was a “lacuna” in the legislation.

7. Let me turn now to health and safety issues. The House of Lords will be hearing Yorkshire Traction Co v Searby this year. This is a case in which a bus driver was punched by a passenger. It is said that assaults like these are a national problem. The judge upheld the driver’s contention that it was a breach of the Provision and Use of Work Equipment Regulations not to provide a screen to separate the driver from passengers. The Court of Appeal overruled that, noting that screens were not generally supported by bus drivers. It held that the standard of reasonable care is to be judged as at the date of the accident, and that the absence of complaint from the workforce is a “substantial factor” to be taken into account. The House of Lords will decide whether that is the correct approach.

8. Hartman v South Essex Mental Health and Community Care NHS Trust is the lead case in six stress at work cases that were heard at the end of last year, with the aim of producing one comprehensive judgment on where the law now stands after the decision of the House of Lords in Barber v Somerset County Council. The Court of Appeal’s decision was issued on 19 January, as you may have seen. It will be reported in the April IRLR. One of the most interesting issues explored from the standpoint of employment law is the Court of Appeal’s holding that it was not right to attribute to the employer, knowledge of confidential medical information disclosed by an employee to the employer’s occupational health department. This may prove significant for DDA cases.

9. Majrowski v Guy’s and St Thomas NHS Trust is an interesting case in the Court of Appeal in which the Protection from Harassment Act is being tested in the context of harassment at work. An audit co-ordinator claims that he was bullied and harassed by his female line manager, in part because of his sexual orientation. He brought an internal complaint of harassment, which was upheld, but by then he had suffered psychiatric consequences. He is complaining of a breach by the manager of the Protection from Harassment Act, for which he says Guys & St. Thomas's are vicariously liable. The claim was struck out at first instance on grounds that this statute does not permit vicarious liability. An appeal to the Court of Appeal raises the issue of principle of whether an employer can be liable for its employee's breach of statutory duty where the duty is imposed on the employee, but not upon the employer directly. If the appeal is upheld it would provide an alternative potential remedy against the employer for employees who claim to have been bullied at the workplace. Judgment is awaited.

10. Next, working time. Rolled-up holiday pay has proved to be one of the most controversial issues under the Working Time Regulations. This refers to a contractual term which provides for a worker’s holiday pay entitlement to be paid as part of their rate of pay. Various questions as to whether this is compatible with the Working Time Directive were referred to the European Court of Justice in Marshalls Clay Products Ltd v Caulfield. The ECJ has apparently agreed to give the case an expedited hearing, but “expedited” in ECJ terms is a relative concept. The reference was registered at the Court on 16 June 2004, but so far as I am aware, no date has yet been set for a hearing, or for the earlier reference on the same issue in Robinson-Steele v R F Retail Services Ltd. Presumably,. however, both cases will be heard in 2005.

11. The other key area of controversy under the Working Time Regulations relates to annual holidays. Commissioners of Inland Revenue v Gray and Ainsworth is due to be heard by the Court of Appeal in March. This case challenges two existing authorities: Kigass Aero Components v Brown, which held that a worker on long-term sick leave can claim four weeks’ holiday pay under the Working Time Regulations for a period when they have been off work sick; and List Design Group Ltd v Douglas, which held that the right to receive a payment in lieu of annual leave can be claimed as wages under s.13 of the Employment Rights Act, and thus be linked back to previous years to form a series of deductions within s.23 of the Employment Rights Act. The Inland Revenue is arguing that the only remedy in such a case is a claim under the Working Time Regulations, which does not have the linking series provision. The EAT has been staying appeals on these points pending the Court of Appeal’s decision.

12. There will be several important decisions in 2005 on the vexed question of “who is an employee”?. In Bunce v Postworth Ltd t/a Skyblue, the applicant was a welder who entered into an “associate” agreement with Skyblue, an employment business, and was then assigned to Carillion Rail. The agreement with Skyblue provided expressly that: “the failure by the employment business to obtain suitable assignments for the associate shall not give rise to any liability on the part of the employment business and the associate recognises that there may be periods between assignments when no work is available.” It also provided that “the associate shall not be obliged to accept an assignment offered by the employment business.” Mr Bunce sought to bring an unfair dismissal complaint, but the EAT held that there was insufficient mutuality of obligations for there to be a contract of service. The case is going to the Court of Appeal.

13. The EAT has reserved judgment in Muscat v Cable & Wireless plc. This is a test case on the employment status of agency workers post-Dacas. One of the points of interest is how the dicta in Dacas suggesting that tribunals should look for an implied contract of employment in agency cases can be reconciled with the traditional test of necessity for the implication of a contract.

14. Royal National Lifeboat Institution v. Bushaway is a “who is an employee” case to be heard by the EAT. The novel point here is that the relevant documents, all of which stated that the claimant was not an employee, contained an “entire agreement clause”. The question for the EAT is whether the existence of such a clause prevents an individual from relying on the Dacas principle that a contractual relationship can be implied.

15. The House of Lords is due to hear Percy v Church of Scotland Board of National Mission. This a claim by an ordained associate minister in the Angus glens who was suspended from duty following allegations that she had a sexual affair with a married elder. She sought to bring a claim under the Sex Discrimination Act on grounds that similar actions had not been taken against male ministers who had been known to have extra-marital sexual relationships. The tribunal and courts below have all held that the applicant was appointed to an office of a spiritual nature, and that there was no contract of employment giving rise to rights enforceable under civil law.

16. Kitchen v Highways Agency is a test case about the status of temporary agency workers in the civil service which is being heard this month in the Leeds employment tribunal.

17. Leave to appeal to the Court of Appeal has been given in Aziz v. Embassy of the Republic of Yemen. This concerns state immunity and raises two main questions: first, are the EAT decisions in Gamal-Eldin and Abdelghafar correct insofar as they suggest that respondents who are held by tribunals to have submitted to the jurisdiction are not bound by normal rules of procedure in seeking to overturn the tribunals' rulings? Secondly, in practical terms, how is a foreign state to be regarded as taking steps in proceedings, ie who has to authorise the taking of the step? Is it only the ambassador or his deputy, or is the potential cast list wider?

18. If an employee is dismissed in breach of contract with less than one year’s service, can she claim damages for wrongful dismissal on the basis that she lost the chance of recovering unfair dismissal compensation that she would have received if she had been given her contractual notice of termination? This has been a long-running debate amongst employment lawyers. A strong argument can be made that such damages accord with the general principle that an employee who sustains a loss by reason of the employer’s breach of contract is to be placed, so far as possible, in the same position as if the contract had been performed and they had been given the notice provided for in the contract. In Harper v Virgin Net Ltd, however, the Court of Appeal ruled that such a claim cannot be brought. The main reason given was a policy one: the statutory unfair dismissal scheme ever since 1975 has provided for the effective date of termination to be extended until the end of the statutory minimum notice rather than any longer contractual period of notice. The House of Lords has now given leave to appeal and the case will be heard on 31 October.

19. The dispute over the territorial jurisdiction of employment tribunals will continue to be prominent this year. The House of Lords will hear Lawson v Serco Ltd on 14 and 15 November. This is an unfair dismissal case, in which the Court of Appeal took a relatively strict line and held that the test under the Employment Rights Act, where an employee works overseas, is whether the employment was in Great Britain. In Lawson, where a British employee worked on Ascension Island for a British company, this criterion produced a straightforward answer: the tribunal did not have jurisdiction to hear the complaint.

20. Crofts v Cathay Pacific and Botham v Ministry of Defence will be heard together in the Court of Appeal on 14 and 15 March. These cases concern the territorial scope of an employment tribunal’s jurisdiction to hear claims of breach of contract, and also the availability of plea of “forum non conveniens” in employment tribunals. In the Cathay Pacific case, the EAT held that the breach of contract jurisdiction is the same as the jurisdiction in the ordinary courts, and is different from the jurisdiction under statute. The EAT also upheld the tribunal’s power to find that Hong Kong was the proper forum for hearing claims by airline pilots who were based in Hong Kong under contracts governed by Hong Kong law. In Botham, the appellant was employed as a UK-based youth worker by the MoD at various locations in Germany. His letter of appointment and contract of employment incorporated references to UK employment protection legislation. Following his dismissal, a tribunal dismissed his claim for unfair and wrongful dismissal on the basis that it was bound by Lawson. However, the applicant is now contending in the Court of Appeal that the Lawson decision was given per incuriam.

22. Holodny v Norimet Ltd and Prokhorov is a claim of religious discrimination and also whistleblowing unfair dismissal. The first respondent is an English company, which is part of the Norlisk Nickel group of businesses based in Russia. In January there was a preliminary hearing in the employment tribunal on the novel point of whether the discrimination legislation allows an individual domiciled and resident in Russia to be joined as an individual respondent to an English tribunal claim. I understand the tribunal has now decided that it does have jurisdiction.

23. The EAT over the past year or so has taken a more relaxed attitude as to time limits for presenting complaints. Marks & Spencer plc v Williams-Ryan illustrates this in an unfair dismissal context. The applicant, who was summarily dismissed prior to 1 October 2004, was advised by a CAB to exhaust the employer’s internal appeal procedure before presenting a complaint. Marks & Spencer told her she had a separate right to claim unfair dismissal and before the time limit expired, a former colleague gave her an originating application and a brochure which set out the time limits, which she did not read. The EAT, however, held that it was not reasonably practicable for the complaint to be brought in time because she believed, as a result of the CAB advice, that she had to await the outcome of the internal appeal before making a complaint to the tribunal. This decision is being challenged in the Court of Appeal on grounds that it marks a significant shift away from previous authority which held that where an employee has knowledge of the right to claim unfair dismissal, then she is obliged to find out about the time limit. It also is said to be inconsistent with the principle that, for unfair dismissal purposes, the failure of skilled advisers to give proper legal advice does not provide just cause for extending time.

24. One of the controversial issues that is bound to arise under the 2003 Regulations prohibiting discrimination on grounds of religion or belief is the position of employees who, for religious reasons, do not want to work on Sundays. So far I am not aware of any decisions on this point, but some employees who were dismissed for refusing to work Sundays on religious grounds have attempted to use unfair dismissal law, buttressed more recently by human rights principles. Copsey v WBB Devon Clays is a case brought by an evangelical Christian with the support of the Keep Sunday Special Campaign. Mr Copsey refused to work a seven-day shift system which had been introduced following consultation with the unions and with the support of a majority of the employees. He was dismissed after he rejected offers of alternative employment which did not have a working pattern requiring Sunday work. His unfair dismissal claim was unsuccessful at both the ET and the EAT. In the EAT, it was argued that whether the employers acted reasonably in dismissing now had to be interpreted in light of the right to freedom of religion under Article 9 of the European Convention on Human Rights. The EAT said that even if that was the case, account had to be taken of the 1987 decision of the European Commission on Human Rights in Stedman v United Kingdom. In that case, in which a Sunday working requirement was challenged, the European Commission on Human Rights took the narrow view that the employee’s rights under the Convention were not infringed because she could seek alternative employment elsewhere which would allow her to observe the Sabbath. In Copsey, Mr Justice Rimer said that “we regard [that decision] as sound in principle [and] directly in point..... If the employee takes the view that his employer’s work requirements are incompatible with the due exercise and manifestation of his religious beliefs, he is entitled to resign.... As he had that choice, nothing that Devon Clays did or proposed amounted to an infringement of his Article 9 rights.” Mr Copsey will try to persuade the Court of Appeal that Stedman should not be followed. The Court of Appeal will also have the opportunity, should it choose to, of revisiting its decision in X v Y on how Convention rights are to be taken into account in deciding whether a dismissal is unfair. The case is likely to be heard in the first half of this year.

25. The Court of Appeal will be hearing Awotona v South Tyneside NHS Trust in April. This case will consider the law relating failure to comply with an order for reinstatement. It is being argued that s.114 of the Employment Rights Act creates a debt, not a compensatory award, and if a reinstatement order is not complied with, compensation should be paid as from the date of dismissal rather than from the date of the tribunal hearing.

26. Bangs v Connex South Eastern is one of the four cases in which Mr Justice Burton gave guidance on the effect of delay by an employment tribunal in promulgating its decision. The cases were reported under the lead name of Kwamin v Abbey National. In Bangs, extended reasons finding that the applicant had been discriminated against on grounds of race were promulgated over a year after the parties exchanged submissions following the hearing. The EAT allowed the employer’s appeal. The Court of Appeal gave its judgment on 27 January. It takes the view that unreasonable delay is not a question of law and not in itself an independent ground of appeal. However, serious delay can amount to a procedural error where there is a real risk that failure to promulgate the decision within a reasonable time gave rise to a real risk that the party was deprived of the right to a fair trial under Article 6 of the Human Rights Act. This decision will also be reported in the April IRLR.

27. Matthews v Kent & Medway Towns Fire Authority is the test case on the Part-time Workers Regulations 2000, brought by retained fire fighters alleging that they have been less favourably treated than whole-time fire fighters, especially as regards their exclusion from the Firemen’s Pension Scheme. The Court of Appeal held that retained and full-time firefighters are employed under the same type of contract for the purposes of the Regulations, but they dismissed the complaint on grounds that they do not do the “same or broadly similar work”, in that, in addition to the fighting of fires and responding to other emergencies, there are other job functions carried out by full-time but not retained firefighters, including educational, preventive and administrative tasks. The House of Lords will be hearing an appeal later in the year. A cross-appeal by the employers on the “same type of contract” issue is also anticipated.

28. Budden and others v Bedford NHS Trust is an interesting test case scheduled for 6 weeks in an employment tribunal in April/May. It concerns the application of the Part-time Worker Regulations to hospital consultants who, by virtue of the level of private work undertaken, are placed on contracts styled “maximum part-time contracts” at 10/11ths of normal salary, but are subject to an obligation to devote all their working time to the NHS.

29. Pregnancy-related illness and sick pay is the issue currently before the European Court of Justice in North-Western Health Board v McKenna. This Irish reference concerns an employee who had to have sick leave for nearly the whole term of pregnancy because of a pregnancy-related illness. The employer’s sick pay scheme provided for six months on full pay and six months on half pay in any period of four years. Pregnancy-related illness was treated like any other illness. As a result of her pregnancy-related illness, Ms McKenna’s pay was reduced to half-pay during her pregnancy. She brought a claim that to treat pregnancy-related illness in the same way as any other illness was discrimination on grounds of sex contrary to the Equal Treatment Directive. She argued that there should be separate sick leave provisions to deal with pregnancy-related illnesses. The Equality Officer upheld the claim and ruled that Ms McKenna should be paid what she would have received if her pregnancy-related illness had not been treated as sick pay. The Labour Court referred the issue to the ECJ. Both the Irish Government and the UK Government have intervened in the case and argued that there was no discrimination because pregnancy-related illnesses and other illnesses were treated the same way, and that any other conclusion would have very damaging financial consequences. The Advocate General gave his Opinion on 2 December 2004. He considers that the provisions are discriminatory. He sees the operative principle as being that “any unfavourable treatment of a pregnant woman which is the consequence of her being pregnant constitutes discrimination on grounds of sex because pregnancy, of its nature, affects women workers alone.” On that basis, setting pregnancy-related absences against sick pay affects women alone and thus is directly discriminatory. If the Court itself agrees, it would mean that if an employer provided sickness benefit, a woman off work because of a pregnancy-related illness seemingly would be entitled to unlimited sick leave at the relevant rate of sickness benefit during her pregnancy, at least until her maternity leave started.

30. Hoyland v Asda is a Scottish case regarding failure to pay a bonus to an employee who was absent because of a pregnancy-related illness. It will be heard by the EAT on 21 and 22 February.

31. Last year, in Alabaster v Woolwich plc and Secretary of State for Social Security, the European Court of Justice held that UK statutory maternity pay legislation does not comply with EU law in that a woman who receives a pay increase before the start of her maternity leave is entitled to have the increase taken into consideration in the calculation by her employer of the earnings-related element of her statutory maternity pay, even though the pay rise was not backdated to the relevant reference period for calculating her entitlement under the Statutory Maternity Pay (General) Regulations. Under the current rules, a pay increase during maternity leave is only taken into account in the SMP calculation if it is backdated. The case is going back to the Court of Appeal in February on the issue of whether there is jurisdiction to hear the claim under the Equal Pay Act, or directly under Article 141, in circumstances where there is no male comparator because only women get pregnant.

32. In Rodway v South Central Trains, the EAT overruled an employment tribunal and held that an employee cannot take one day’s parental leave to look after his child because the minimum period of leave is a week. The Court of Appeal will consider whether that is correct in March.

33. Where an employee who has been unlawfully discriminated against is unfairly dismissed, does the dismissal breaks the chain of causation so that any further loss results from the dismissal and is to be assessed as part of unfair dismissal compensation, subject to the statutory upper limit? That is the issue in Prison Service v Beart (No.2). The EAT held that a wrongdoer should not benefit from his second wrong, and that the applicant was entitled to full compensation for disability discrimination. This case, which is in the March IRLR, raises interesting points of principle on causation in discrimination cases and the hearing has been expedited. I understand it is likely to be heard by the Court of Appeal in the next few months.

34. The Court of Appeal on 25 and 26 January heard the appeal in Murphy v Slough Borough Council and Governing Body of Langley Wood School. The EAT held that a DDA claim by a teacher employed by a local education authority at a school with a delegated budget must be brought against the governors of the school at which the teacher works, rather than against the local authority responsible for the school. This is because of the Education (Modifications of Enactments Relating to Employment) Order 1999. This provides that in a school in which the governing bodies have a delegated budget, the governing body is to be treated as if they were an employer in respect of any application to an employment tribunal. The practical effect of this ruling in a DDA context is that the employment tribunal will look at the resources of the school rather than the LEA when considering the question of reasonable adjustments. It will be argued that the 1999 Order does not exempt the LEA from duties under the DDA and that the LEA may be under a duty to make reasonable adjustments even though the staff powers are conferred on the governing body.

35. Equal pay cases will be prominent in 2005, especially as regards public sector claims. Cadman v Health & Safety Executive is the controversial equal pay decision on the use of service-based pay scales. The EAT held that because of the European Court’s decision in the Danfoss case in 1989, use of the factor of length of service does not need to be specifically justified in a case where the employer is distinguishing between full-time workers. The Court of Appeal has now made a reference to the European Court of Justice on whether the principle set out in Danfoss has been overtaken by subsequent decisions.

36. Robertson v DEFRA held that an equal pay claim cannot be brought under Article 141 by civil servants in one Government department using comparators in a different Government department. The EAT said that the fact that the Crown is the employer for both departments is not sufficient for the purposes of Article 141 to make them part of the same “service” and thus a single employer. Instead, the EAT held that each individual department is the “service” for the purposes of Article 141. The case was heard in the Court of Appeal on 14-15 October, and the decision is awaited.

37. Equal pay cases brought in respect of the prison services are continuing to generate considerable appellate litigation. Last year in IRLR we reported Bailey v Home Office, which raises the issue of the circumstances in which an employer has to objectively justify a difference in pay between two groups employed on work of equal value if the difference has arisen because of a history of different arrangements for collective bargaining. The case concerns a series of claims by white collar workers in the prison service, who are claiming equal pay with various grades of predominantly male posts rated as equivalent. The Home Office accepted that where the applicants were in grades which are predominantly female, they would have to objectively justify any variation in pay or less favourable terms. However, in this part of the group of claimants, the applicants are higher executive officers, a grade which is composed of approximately half men and half women. Did that amount to evidence of prima facie discrimination, so as to require the employers to justify the difference in pay? The EAT has ruled that it did not. It said that in considering whether a disparity of pay which has arisen as between two work groups by reason of a history of different arrangements for collective bargaining evidences sex discrimination, a prima facie case will be established if the advantaged group is predominantly male and the disadvantaged group is predominantly female. But, according to the EAT: “Where...the advantaged group is predominantly male and the composition of the disadvantaged group is neutral in gender terms, then the situation may not be fair, but it is not prima facie discriminatory on grounds of sex.” An appeal is scheduled for 10 and 11 March under the name of Clements and Pollak v Home Office.

38. The EAT will be hearing an appeal on 15-17 March against the substantive decision of the employment tribunal in the prison service equal pay cases. Somewhat confusingly, this is currently called Home Office v Bailey and others. The Home Office is appealing several issues. These include whether there is an “area of tolerance” for whether work can be regarded as rated equivalent under a job evaluation scheme, so as to encompass where the work of the comparators have been given slightly higher scores than that of the applicant. There are also appeals against the tribunal’s rejection of various material factor defences put forward by the Home Office, including the role of length of service and whether the genuine material factor of unsocial working hours was capable of justifying only a proportion of the difference in basic pay between the applicants and their comparators.

39. In Preston No.3, reported under the name Powerhouse Retail v Burroughs, the Court of Appeal ruled that where there has been a relevant transfer under the Transfer of Undertakings Regulations, time begins to run under s.2(4) of the Equal Pay Act, for the purposes of an equal pay claim against a transferor, from the date of the relevant TUPE transfer. It overruled the EAT, which had held that time does not begin to run until the end of an employee’s employment with the transferee. The claimants have applied to the House of Lords for permission to appeal on that point.

40. Equal pay claims have been brought against various councils in North East England by cleaners and home helps claiming bonuses, attendance allowances and other enhancements earned by men alleged to be employed on work of equal value as gardeners, refuse workers and road workers. One of these cases, from Newcastle, has already reached the EAT under the name Redcar and Cleveland Borough Council v Degnan, and is to be reported in March IRLR. The claimants wanted to compare themselves to refuse workers for the purpose of the attendance allowance and to the gardeners for the purpose of the bonus, in effect to “cherry pick”. That would have given the women higher pay overall than their comparators. This evidently troubled the EAT, which found a solution by controversially holding that these allowances were not separate terms for the purpose of equal pay claims and had to be aggregated together with the basic rate in order to calculate an hourly rate for comparison purposes. That point will go to the Court of Appeal in April. Meanwhile, hearings in Newcastle and Thornaby on various dates are scheduled, as is another appeal before the EAT. One of the other issues raised by these cases is whether injury to feelings awards can be made in equal pay cases.

41. One of my hobby horses has been the failure of the appellate courts to come to terms with the changes made to the burden of proof in discrimination cases. During 2004, this issue featured in several reported cases, and there will be continuing litigation in 2005. Two decisions of His Honour Judge McMullen QC on this point have been appealed and will be heard together on 7 and 8 February. They are Wong v Igen Ltd and the reported case of Emokpae v Chamberlin Solicitors. Both cases raise points about the evidence needed to justify a shift in the burden of proof. A third case has now been joined to this and they will all be heard together. The case is Webster v Brunel University, a decision of Mr Justice Burton in December, which focused on what is a prima facie case sufficient to shift the burden. All three statutory commissions are jointly intervening in the case to address the relevant principles relating to the burden of proof, such as the level of evidence needed to establish a prima facie case.

42. Another EAT decision on the burden of proof which is expected to go to the Court of Appeal that is not on your handout is Madarassy v Nomura International, a City trader case which received quite a lot of publicity. This is a decision of Mr Justice Nelson of 16 December 2004, in which the EAT reviews the case law and decides to rely on the comments of Lord Justice Simon Brown (as he then was) several years ago in Nelson v Carillion that the change in the burden of proof did no more than codify the pre-existing position. The EOC is supporting an appeal, which will focus on the level of evidence required to shift the burden. The appeal will also consider the employer’s duty to carry out risk assessments of pregnant women.

43. Meanwhile, Mrs Justice Cox has reserved judgment in the EAT in Adebayo v Dresdner Kleinwort Wasserstein, a case which also looks at the burden of proof provisions.

44. Frater v Ministry of Defence concerns the issue of whether it is sufficient to call as a witness one member of a recruitment panel to discharge the onus of proof under s.63A of the Sex Discrimination Act where each member of the recruitment panel scored candidates individually and no one was nominated as a spokesman for the panel as a whole. The EAT will hear the case on 17 March.

45. Hardy & Hansons plc v Lax will be heard by the Court of Appeal in April or May. An employment tribunal found that the employers indirectly discriminated against Ms Lax by not allowing her to job share her post as a retail recruitment manager after she became pregnant. Permission to appeal has been given on the basis that the test of justification for indirect discrimination, correctly construed, is similar to the band of reasonable responses test for unfair dismissal. It is argued that the tribunal must allow the employer a measure of discretion and cannot substitute its own view for that of the employer. Lord Justice Peter Gibson thought that this raised a point of “some general importance”, as indeed it would should the appeal succeed. There is also a cross-appeal in this case of interest. After she went on maternity leave, Ms Lax was made redundant. The tribunal dismissed her claim under reg.10 of the Maternity and Parental Leave Regulations that she should have been offered a job share as an alternative to redundancy on the basis that the new contract would have been substantially less favourable to her in terms of hours and pay. It will be argued that the wishes of the employee have to be taken into account in deciding whether the alternative vacancy was suitable, and that an employee who wishes to work reduced hours, and thus receive less pay, is entitled to regard the terms as not substantially less favourable to her.

46. Saggar v Ministry of Defence is a Court of Appeal case to be heard on 8 and 9 February, which considers the extent to which the Race Relations Act applies overseas. The case was brought under the Act before its scope was broadened by the 2003 amendments, but some of the issues of principle raised may continue to be relevant, such as when do you assess whether a person is employed in Great Britain: at the start of the contract, at the time of the discrimination, or retrospectively?

47. St Helens Metropolitan Borough Council v Derbyshire is the case in which the local authority wrote to catering staff who had brought an equal pay claim warning them that if they were successful, free school meals might have to be abolished and there could be large-scale redundancies. The EAT held that this amounted to unlawful victimisation. It rejected an argument that the letters were no more than routine letters written by parties to litigation and that in order to amount to victimisation, the letters would have had to contain threats directly against the individual applicants, such as that they would be dismissed or demoted if they continued with the claims. An appeal against this will be heard by the Court of Appeal in May.

48. BMA v Chaudhary is the long-running race discrimination case about alleged discrimination by the BMA in not supporting Dr Chaudhary’s allegations of discrimination against various professional and regulatory bodies. It led to the highest-ever award in a race discrimination case, £814,000. In 2004, there was an unsuccessful appeal by the BMA to the EAT and the case is now going to the Court of Appeal. Amongst the issues to be considered are whether there is indirect discrimination when the respondent fails to offer a benefit which particular ethnic groups would make use of more frequently than others. Another issue relates to the award of compensation for indirect discrimination. The statute provides that no compensation should be awarded where indirect discrimination was not “intentional”, but what is meant by “intentional” in this context?

49. The House of Lords was asked some months ago to give leave to appeal in Rutherford v Secretary of State for Trade and Industry No.2 but has yet to decide whether to hear the case.

50. On 8 March, however, the EAT will be hearing the appeal in Chanin v British Airways. This is the test case alleging that BA’s retirement age of 55 for cabin crews is indirectly discriminatory against women. The employment tribunal found that there was adverse impact, but that the indirect discrimination was justified by reason of the employer’s economic and organisational interests, and in particular the cost implications of changing the retirement age, given that pay was service-linked. This case can also be seen in part as a precursor to the kinds of cases that will arise under age discrimination legislation, where retirement ages under 65 will have to be justified on their merits.

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