PREVIOUS SPEAKERS:
Michael Rubenstein
Editor, Industrial Relations Law Reports and Co-Editor, Equal Opportunities
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to list of speakers Title: "Key cases for 2006"
Edited text of a lecture by Michael Rubenstein to the Industrial
Law Society
17 January 2006, 2 February 2006, 9 February 2006
1. I am going to tell you very briefly about 51 impending decisions. They include 19 cases currently before the Court of Appeal, 10 cases before the House of Lords and 12 cases pending before the European Court of Justice. I would like to thank all of my sources for their assistance in compiling this talk.
2. Can a transfer of an undertaking take place over a period of time, or must there be a particular point in time at which the undertaking is transferred? Last year, in Celtec Ltd v Astley, the European Court of Justice went against the opinion of both the English Court of Appeal and the Advocate General and ruled that the "date of a transfer" is a particular point in time: it is the date on which responsibility as employer for carrying on the business of the unit transferred moves from the transferor to the transferee. How that works out in a case like Celtec v Astley will be considered by the House of Lords when the case returns there on 4 April.
3. TUPE anoraks will know all about the Cartledge line of cases. This is about the transfer of contractual liabilities. In particular, it is about a TUPE transferee inheriting terms from a collective agreement to which they may not be party, but which covers transferred employees because the terms of the collective agreement are incorporated into the contracts of employment of employees who transfer. In Whent v Cartledge itself, it was held that a private sector transferee was bound by changes in terms and conditions of employment which had been negotiated after the transfer by the local government collective bargaining machinery, where the contracts of employment expressly incorporated the relevant collective agreement 'as amended from time to time'. A parallel issue is the subject of a German reference to the ECJ, Werhof v Freeway Traffic Systems. The employee was employed in a unit of Siemens and covered by the regional agreement negotiated by IG Metall. The undertaking was transferred to Freeway, who were not a member of the employer’s federation. Did Freeway have to apply changes to the terms negotiated after the transfer? The Advocate General’s view is that the Directive does not require a transferee who is not a member of the employers’ federation to apply changes which replace the agreement which was in force at the time of the transfer of the undertaking. Interestingly, he describes this is a right of "non-association" for the person acquiring the undertaking, an aspect of freedom of association.
4. Cross v British Airways is the case arising out of differences in retiring ages for BA cabin crew and crew formerly employed by British Caledonian prior to its takeover by BA. The EAT’s views in this case on whether budgetary factors can justify indirect discrimination received most of the attention when the case was reported last year. That has not gone to the Court of Appeal, but in January 2006 the Court of Appeal considered whether the former BCal claimants retained their original retiring age as a result of TUPE.
5. There are a number of TUPE cases around at the moment about assignment. Roberts & Partners Consulting v Roberts will be heard by the EAT later this year. An employment tribunal found that even if a client director was employed by the company which transferred, he did not transfer to the purchaser because he was "assigned" to work in a different group company. This is sort of Botzen backwards.
6. Last year, I previewed the European Court’s decision in Junk v Kűhnel. This turned out to be a landmark decision about the timing of redundancy consultation. Leicestershire County Council v Unison was the first EAT case to consider the implications for UK law. The EAT held that consultation with employee representatives “in good time”, as required by the Directive, means consultation must begin before employees have been given notice of dismissal. This issue will be considered by the Court of Appeal in May, although the Government has now announced that it is to change the legislation to comply with the ECJ decision.
7. The trigger point for redundancy consultation under both the Directive and UK law depends on the number of employees to be made redundant at one “establishment”. There is very little guidance on the meaning for the purposes of Community law of “establishment”, and this is the question which has been posed for the European Court of Justice by the Greek reference, Athinaiki Khartopiia v Panagiotidis.
8. The ECJ will also be considering Viking Line v International Transport Workers’ Federation. This is the reference from the Court of Appeal reported in the January 2006 IRLR, which asks whether the right that commercial organisations have under EU law to freedom of establishment precludes an international trade union from taking industrial action to prevent the relocation of work.
9. There is already a case before the ECJ, Laval un Partneri Ltd v Svenska Byggnadsarbetareforbundet, which raises somewhat similar issues. The question asks whether it is compatible with EC rules on freedom to provide services and the posted workers Directive for “trade unions to attempt, by means of industrial action in the form of a blockade, to force a foreign temporary provider of services in the host country to sign a collective agreement in respect of terms and conditions of employment”.
10. Trade union rights will also be considered by the European Court of Human Rights when it hears the reference in ASLEF v United Kingdom. This is the application which arises out of Lee v ASLEF and challenges the limitation on the right of trade unions to expel members of the British National Party. After the amendment to s. 174 of TULR(C)A made by the Employment Relations Act 2004, the law now precludes a union from excluding or expelling an individual by reason merely because of their membership of a political party, in contrast to their conduct as a member of the party. It will be argued in Strasbourg that s.174 infringes the right to freedom of association of ASLEF members, in that Article 11 gives associations and their members the right to choose with whom to associate, or not to associate. The application was drafted amongst others by John Hendy QC and those of you who read the notes from his excellent talk given to the Industrial Law Society last year in London will know the general structure of the argument.
11. The UK is also the subject of several infraction proceedings brought by the European Commission. One of these – Commission v United Kingdom C-127/05 - relates to health and safety law. The well-known formulation under s.2(1) of the Health and Safety at Work Act states that it is the duty of every employer to ensure the health, safety and welfare of all his employees at work “so far as is reasonably practicable”. The European Commission is contending that this is inconsistent with the European Framework health and safety Directive 89/391, which imposes responsibility on the employer for all events. The only exception allowed by Article 5(4) is “where occurrences are due to unusual and unforeseeable circumstances, beyond the employers' control, or to exceptional events, the consequences of which could not have been avoided despite the exercise of all due care unless there are very special circumstance.” The Commission submits that the way UK legislation has been interpreted “permits an employer to escape responsibility if he can prove that the sacrifice involved in taking further measures, whether in money, time or trouble, would be greatly disproportionate to the risk”. This “balancing test” applies not just in very exceptional situations allowed by Article 5(4) and, according to the Commission, allowing consideration of the financial cost to the employer is contrary to the Directive.
12. The Working Time Directive was, of course, adopted as a health and safety measure. There are a number of major working time issues before the courts this year. The European Court of Justice will be ruling on rolled-up holiday pay when it decides the joined references Robinson-Steele v R D Retail Services Ltd and Clarke v Frank Staddon Ltd. The Advocate General has taken the view that the element of holiday pay in the remuneration must be shown clearly in order to comply with the requirements of the Directive, and that rolled-up holiday pay will only be lawful if there is a mechanism which ensures that the workers concerned take the minimum annual leave to which they are entitled in circumstances where their holiday pay is spread over the entire period of their employment. She was sceptical of the UK Government’s argument that workers are able to handle their finances in such a way as to use that money at the time of taking leave. If the Court agrees with the Advocate General’s view, it remains to be seen what mechanism can be devised to ensure that temporary workers, such as those in the building industry, do actually take their annual leave. The Court will be giving its decision on16 March.
13. British Airways v Noble also concerns holiday pay and the Working Time Regulations. The EAT held that a contractual shift pay clause which discounted 4/52nds from the total and then paid it proportionately throughout the year was in breach of the Working Time Regulations because the payment throughout the year resulted in an underpayment in that it was deducted from a normal week’s pay rather than added on to it, and therefore the deduction from normal pay in effect funded the holiday pay. An appeal from this decision will be heard by the Court of Appeal on 8/9 March.
14. The House of Lords will be hearing the appeal in Commissioners of Inland Revenue v Ainsworth. This raises two main issues: first, whether a worker who is absent from work on sick leave and who gives notice that he or she wishes to take annual leave is entitled to be paid for that annual leave under the Working Time Regulations. The Court of Appeal held that a worker cannot take annual leave under the Working Time Regulations during a period in which they are absent through ill health and consequently not under an obligation to work. Secondly, whether claims for payment in respect of periods of annual leave and claims for payment in lieu of leave on termination of employment are claims for “holiday pay” within the deduction from wages provisions of the Employment Rights Act. The Court of Appeal held that claims to enforce entitlement to holiday pay can only be brought under the Working Time Regulations. The effect of this is to limit a claim for backdated holiday entitlement to the most recent holiday year.
15. Our general understanding of the Working Time Directive is that leave cannot be carried over from one year to the next. However, a Dutch reference to the ECJ, FNV v Dutch State, asks whether it is compatible with the Directive for legislation to provide for “the possibility of a written agreement during a contract of employment to the effect that an employee who has, for one year, not taken his minimum annual leave, or has not taken that minimum leave in full, may receive financial compensation in respect of that leave in a subsequent year?”
16. Cook v C2C Rail Ltd is a case coming before the EAT shortly. This is about holiday pay under annual hours contracts. The particular issue in this case is whether if the employees worked all the stipulated annual hours in their contract, that meant that they did not get any paid annual holidays.
17. The Working Time Directive allows Member States to derogate from the 48-hour week, night work limits and daily and weekly rest breaks where the duration of working time is not measured or predetermined or can be determined by the workers themselves. The UK Regulations were amended in 1999 to add an additional exemption where a worker’s working time is partly measured, predetermined or determined by the worker and partly not. In such cases, the limitations only apply in relation to that part of the work which is not measured etc. The European Commission takes the view that the Directive only allows a derogation where the worker’s working time as a whole is not measured or predetermined or can be determined by the workers themselves. It has brought infraction proceedings against the UK Government on this issue: Commission v United Kingdom C-127/05. The Government has now conceded the point. The new Working Time (Amendment) Regulations 2006 revoke the “partly unmeasured” exemption as of 6 April 2006. The European Commission is also concerned about the UK’s implementation of the Directive’s provisions relating to rest periods. The DTI guidelines on the Regulations state: “Employers must make sure that workers can take their rest but are not required to make sure that they do take their rest.” According to the European Commission, this means that “employers are instructed that they are not required to ensure that workers are actually invoking and benefiting from the rest periods to which they are entitled, but merely that there is no obstacle impeding the worker who decides that he wishes to do so. In the Commission’s view, the guidelines thus clearly endorse and encourage a practice of non-compliance with the requirements of the Directive.” The Advocate General will be giving his Opinion on 9 March.
18. Majrowski v Guy’s and St Thomas’s NHS Trust was one of the most interesting cases of 2005, with the Court of Appeal holding that employers can be held vicariously liable under the Protection from Harassment Act for their employees’ acts of harassment of third parties. Since then, there have been several other cases under this jurisdiction, which some see as a new remedy for bullying at work. In May, the House of Lords will be hearing an appeal on whether this Act can be interpreted as allowing vicarious liability.
19. The House of Lords will also be hearing an appeal in Mainstream Properties v Young, an important judgment in relation to various economic torts and in particular the tort of interference with contractual relations. The case concerned a businessman who provided finance to two of the claimants’ employees, which they used to develop a property site in breach of their contracts of employment.
The Court of Appeal held that in order to establish the tort it was not sufficient to show that the action was deliberate in the sense that it was not accidental. It is necessary to show a specific subjective intention to interfere with the contract of employment. The appeal will be heard together with that in Douglas v Hello!
20. We are currently awaiting the Court of Appeal’s judgment in Cable & Wireless plc v Muscat, which was heard on 29 and 30 November 2005. This is a major test case on the employment status of agency workers, in which the Court of Appeal has been asked to look again at the issues raised by Dacas v Brook Street Bureau. Are tribunals bound to look for an implied contract of employment between the worker and the end user in agency cases, even where the express contractual arrangements are between the worker and the agency, and the agency and the end user and there is no express contract between the worker and the end user? One of the main points of interest is how the dicta in Dacas suggesting that tribunals should look for an implied contract of employment can be reconciled with the traditional test for implying a contract or a contractual term, which is one of necessity. It was submitted for the appellants that “the desire on social policy grounds to confer statutory employment protection rights on agency workers, without waiting for Parliament to legislate, does not constitute necessity at common law.”
21. In January 2006, the Court of Appeal reserved its judgment in Cornwall County Council v Prater. This is a case about continuity of employment of a teacher who was employed as a home tutor on a succession of short-term special teaching assignments. She was part of a bank of tutors, and was offered work when it was available. The EAT held that she was continuously employed, even though the employer was not obliged to offer further assignments and the teacher was not obliged to accept them. According to the EAT, any gaps between the assignments were to be disregarded because the teacher was only absent on account of a temporary cessation of work. The lack of mutuality of obligation before and after the completion of the assignments did not of itself prevent the assignments from constituting contracts of employment.
22. In Flett v Matheson the EAT held that a modern apprenticeship training scheme is not a contract of apprenticeship in the traditional sense and that a modern apprentice whose contract was terminated prior to the end of its term could not claim damages for breach of contract based both on loss of earnings during the balance of the agreement and diminution of future prospects. The Court of Appeal’s decision came out on 7 February, right before the last talk in this series. The Court of Appeal has overruled the EAT and the case has been remitted for reconsideration.
23. Turning now to unfair dismissal, we now have judgment from the House of Lords in the territorial jurisdiction cases, Lawson v Serco Ltd, Veta Ltd v Crofts and Botham v Foreign and Commonwealth Office. All these cases concern the rights under the Employment Rights Act of employees with some foreign element to their employment. The House of Lords has now held that the correct test, in most cases, will be whether the employee is employed in Great Britain at the time of their dismissal, not over the contract as a whole. In the case of peripatetic employees, the House of Lords holds that a base test should be applied. Expatriate employees will only qualify if they are posted abroad by a British employer for the purposes of a business carried out in Great Britain, or if they are working in an extra-territorial British enclave in a foreign country, as was the case in Lawson v Serco, where the employee was working in an RAF base on Ascension Island. This decision will be reported in the April IRLR.
24. Pudney v Network Rail Infrastructure Ltd may be the first case to consider the new s.98A(2) of the Employment Rights Act. This, to remind you, is the Polkey reversal section. It provides that so long as the statutory dismissals procedure has been followed, a failure by an employer to follow its own procedures “shall not be regarded…as by itself making the employer’s action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure.” The EAT will be hearing an appeal on 22 March as to how s.98A(2) is meant to operate. Is it simply a “no difference” test, or is more involved? What do the words not be regarded as “by itself” making the employer’s action unreasonable mean?
25. Whistle blowing is the issue in Trustees of Mama East African Women’s Group v Dobson. Mrs Dobson reported a child abuse allegation. Her manager investigated but found no abuse and Mrs Dobson was dismissed for acting unprofessionally and making false allegations. The EAT held that the employee had been dismissed for making the allegation and that this was a protected disclosure.
The appeal to the Court of Appeal may look at the correct test for deciding whether an employee has been dismissed for making a protected disclosure.
26. In January 2006, the House of Lords heard Matthews v Kent & Medway Towns Fire Authority. This 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.
27. The fixed-term work Directive is the subject of a Greek reference to the ECJ, Adeneler. Advocate General Kokott gave his Opinion on 27 October. The facts of the case are not of particular relevance to us, but the first question and the answer to it is. This asks: “Must a national court – as far as possible – interpret its domestic law in accordance with a directive…from (a) the time when the directive entered into force, or (b) the time when the time limit for transposing it into national law passed….or (c) the time when the national measure implementing it entered into force?” The answer is (a) and the reason why this is so interesting is that this is the same answer that has now been given by the full court sitting as a Grand Chamber in the case of Mangold v Helm [2006] IRLR 143, in which the ECJ has ruled that national courts must set aside any provision of national law which conflicts with the Directive even before the period for implementation of the Directive has expired. According to the judgment: “observance of the principle of equal treatment in respect of age cannot as such be conditional upon the expiry of the period allowed the Member States for the transposition of a directive intended to lay down a general framework for combating discrimination on the grounds of age, in particular so far as the organisation of appropriate legal remedies, the burden of proof, protection against victimisation, social dialogue, affirmative action and other specific measures to implement such a directive are concerned.” The Court adds that: “it is the responsibility of the national court, hearing a dispute involving the principle of non-discrimination in respect of age, to provide… the legal protection which individuals derive from the rules of Community law and to ensure that those rules are fully effective, setting aside any provision of national law which may conflict with that law…even where the period prescribed for transposition of that Directive has not yet expired.” The rationale for this novel interpretation can best be seen in the Advocate General’s Opinion in Adeneler. He reasons that directives have legal effect immediately upon their entry into force – ie when they are adopted. He says: “The fact that Member States are given a period within which to transpose a directive and are therefore not obliged to adopt the laws, regulations or administrative procedures necessary for its transposition before the end of that period does not…mean that there is no obligation to interpret national law in conformity with the directive concerned from its entry into force. The fact that a directive allows the national rule-making bodies a period for its transposition by no means signifies that the courts may also avail themselves of that transposition period. On the contrary, the transposition period is introduced solely to take account of the technical difficulties involved in the rule-making process which can arise, for example, in the parliamentary legislative procedure or in negotiations between management and labour.”
28. Next, pregnancy and maternity. The European Court is currently considering a Spanish reference that raises an interesting point on maternity discrimination. Sarkatsis Herrero v Instituto Madridleño asks whether Community law means that “a woman on maternity leave who while in that situation obtains a post in the public service must enjoy the same rights as other applicants who have been successful”. In particular, the Court is asked to rule on whether a woman who had a temporary position and obtained her permanent position when she was on maternity leave is entitled to have her seniority rights run from the time she obtained the post even though under national law the exercise of those rights is suspended until she actually commences work? The Advocate General’s Opinion issued on 10 November is not yet available in English, but appears to suggest that a woman on maternity leave who obtains a permanent position must not be treated less favourably than other successful candidates who are not on leave. Under UK law, a woman on additional maternity leave would not be entitled to have her contractual service accrue during that time, even though service would continue to accrue for statutory purposes. So if the Court agrees with the Advocate General, this might require a change in UK law. We will know on 16 February, when the Court gives its decision.
29. On 22 and 23 February, the Court of Appeal will hear Madarassy v Nomura International plc. This is an EOC-supported case, which raises a range of issues about the burden of proof, the level of evidence required in a pregnancy case, and probably most interestingly, risk assessments. The EAT held that there is no obligation to carry out a risk assessment in respect of new or expectant mothers unless it is proven as a matter of fact that the work is of a kind which could involve risk and/or that there is some evidence that the work is of a kind which could involve risk. This is a different approach than was taken in the earlier case of Hardman v Mallon. It will be argued that the purpose of the risk assessment provisions is to determine whether such risk exists. It is not for the pregnant employee to identify risk; it is the purpose of the risk assessment to do so.
30. On 27 and 28 March, the Court of Appeal will be hearing Fletcher v Blackpool Fylde & Wyre Hospitals NHS Trust. This is the case involving trainee midwives, who are regarded as vocational trainees for the purposes of the Sex Discrimination Act rather than employees entitled to statutory maternity pay. Under the rules, the trainee midwives were not paid their bursaries when they were absent from the training course due to maternity leave, because any long-term absences (apart from sickness) were dealt with in the same way. The EAT held that this discriminated against the women on grounds of sex. According to the EAT, treating someone who is pregnant or on maternity leave in the same way as others, in circumstances in which they are disadvantaged because of their pregnancy or maternity, is applying the same treatment to different situations and is therefore discrimination. Since the EAT’s judgment, the Government has changed the bursary scheme but the Department is continuing with the appeal on the basis that it wishes to challenge the ruling in view of its potential impact on other trainees.
31. There are some similarities between Fletcher and Hoyland v Asda Stores Ltd, which concerns entitlement to bonus during maternity leave. The company’s annual bonus scheme was pro-rated to reflect part-time employment and long-term absences. Maternity leave was treated as absence for this purpose. Mrs Hoyland unsuccessfully claimed that the pro rata reduction of her bonus was unlawful sex discrimination. The EAT reasoned that this conclusion followed from the Gillespie decision, which rejected the submission that a woman must be paid for the period of the maternity leave as if she had never been on leave. The Court of Session will be hearing an appeal in Hoyland on 16 and 17 March.
32. Turning now to sex discrimination, the House of Lords will be hearing Secretary of State for Trade and Industry v Rutherford (No.2) on 6-8 March, and is expected to give guidance on the proper approach to claims of indirect discrimination. Rutherford, of course, is the case about whether the exclusion of workers age 65 and over from the right to claim unfair dismissal is indirectly sex discriminatory. It seems to me that there are two complicating factors: first, the definition of adverse impact has changed twice since the alleged act of indirect discrimination and the wording of the latest version of the Sex Discrimination Act arguably suggests that the focus should be on the disadvantaged rather than the advantaged group. Secondly, it will be intriguing to see whether the House of Lords take on board the Mangold decision, which I referred to earlier. The substantive holding in Mangold is that a blanket exclusion under German legislation of all employees age 52 and over from protection as regards fixed-term contracts was age discriminatory contrary to EU law because it infringed the principle of proportionality. The legislation took the age of the worker concerned as the only criterion “regardless of any other consideration linked to the structure of the labour market in question or the personal situation of the person concerned”. This went beyond “what is appropriate and necessary in order to attain the objective pursued.”
33. The Court of Appeal has been staying sex discrimination appeals raising questions of disproportionate impact pending the Rutherford decision. The EAT gave the claimants permission to appeal in Grundy v British Airways plc, a case in which cabin crew claimed indirect sex discrimination in the operation of BA’s seniority scheme. This case also contains an interesting point on the anti-overlap provisions between the Equal Pay Act and the Sex Discrimination Act. The EAT appeared to hold that the exclusion from the Sex Discrimination Act covers any contractual facilities and services, or terms, whether or not they are related to money. The employers are seeking to cross-appeal this interpretation.
34. An application for leave to appeal in Starmer v British Airways plc has also been stayed pending Rutherford. As well as an issue relating to the disparate impact of a policy requiring pilots to work at 75% of full-time, BA are seeking to argue that a one-off decision is not the application of a “provision, criterion or practice” within the meaning of the indirect discrimination definition.
35. B v BA was heard in the Court of Appeal on 6 February. This is expected to explore the burden of proof in a gender reassignment case.
36. Turning to victimisation, last year at this lecture, I related the facts of Derbyshire v St Helens Council: a local authority writes 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 Court of Appeal, ruled that trying to persuade employees who have brought equal pay proceedings to settle those proceedings cannot, by itself, take the conduct outside the scope of the freedom permitted to the employer to conduct its defence in an “honest and reasonable manner”. The House of Lords has now given permission to appeal, and all three statutory equality commissions will be jointly intervening to argue that the Court of Appeal’s ruling, if undisturbed, will permit action by employers facing discrimination claims which will deter victims of discrimination from bringing and maintaining their claims before the courts.
37. Victimisation will also be one of the two main issues when Villalba v Merrill Lynch & Co reaches the EAT on 14 February. This will challenge the tribunal’s finding that Merrill Lynch satisfied the burden of proof with regard to victimisation in circumstances in which four employees were found to have given inaccurate evidence denying that an internal complaint of discrimination had been made. The other issue in Villalba is whether the decision of the European Court of Justice in the Brunnhofer case always requires objective justification by the employer of differences in terms and conditions between a claimant and a comparator employed on equal work, or whether objective justification is not required if there is no prima facie evidence of indirect discrimination. As noted below, this is the subject of conflicting decisions and it seems quite possible that a reference to the European Court of Justice will be sought in at least one of the relevant cases.
38. Since leave to appeal to the EAT was given in Villalba, there have been two other decisions on that point, so let me now turn to equal pay. Leave to appeal to the Court of Appeal was given in Sharp v Caledonia Group Services, in which the EAT held that in light of the Brunnhofer decision, employers are obliged to have an objectively justified reason for a pay difference in all cases between a woman and a man employed on equal work, and that it is not sufficient for the employer to show that the difference is neither directly nor indirectly based on sex.
39. At the other extreme so far as the standard of proof is concerned is the Court of Appeal’s recent decision in Armstrong v Newcastle upon Tyne NHS Hospital Trust. In this case, Lord Justice Buxton explains the legal principle as follows: “Once disparate adverse impact has been established, the burden passes to the employer in respect of two issues. First, that the difference between the man's and the woman's contract is not discriminatory, in the sense of being attributable to a difference of gender. Second, if the employer cannot show that the difference in treatment was not attributable to a difference of gender he must then demonstrate that there was nonetheless an objective justification for the difference between the woman's and the man's contract.” This appears to confuse direct and indirect pay discrimination. Leave to appeal to the House of Lords has been applied for.
40. Equal pay heated up during 2005 and will continue to be one of the most important areas of employment law activity during 2006. A lot of this is due to the activities of Stefan Cross, the solicitor in the north east who was recently characterised to me by a well-known EAT judge as “the face that launched 1000 claims”. Mr Cross has been bringing equal pay proceedings on behalf of women employed by various local authorities in north east England, and more recently, Scotland, based on a failure by the councils to implement the local government single status agreement. Claims against the City of Newcastle and Redcar council have already been in the EAT and Court of Appeal. A claim was also brought against a local authority on grounds that it unlawfully aided the recognised trade unions to discriminate against women by failing to represent them properly contrary to s.12 of the Sex Discrimination Act. This was struck out by an employment tribunal chairman as having no reasonable prospect of success, and the EAT has now dismissed an appeal. The case is Shepherd v North Yorkshire County Council and it is reported in the March 2006 IRLR.
41. The latest move has been for proceedings to have been brought against the three big public service unions – Unison, GMB and TGWU – themselves, alleging that they unlawfully discriminated against both their members and non-members in the way in which they have negotiated over the implementation of single status since 1997! The cases are called: Allen v GMB, Allen v Unison, and Dabb v Transport & General Workers’ Union. Three hearings of a month each have been listed (one for each union) lasting up to June of this year. I am told that the cases will call into question the whole basis on which unions negotiate, and that some local authorities have indicated that if it is held to be unlawful to enter into a collective agreement that may have the effect of prolonging pay inequality, they may simply refuse to deal with the unions. Whatever the outcome of the employment tribunal hearings, there are bound to be appeals later in the year.
42. Meanwhile, there are similar large-scale claims on behalf of hospital workers. Wilson v North Cumbria Acute Hospitals NHS Trust, I am told, is the largest equal pay claim in Europe, whether measured in financial terms or by numbers of claimants (approximately 2,500). The claims are brought in respect of a number of categories – mainly nurses and nursing assistants. Their comparators are men performing non-clinical roles. Some of the issues raised by the claims include the proper construction of the new equal value rules and, in particular, the role of the independent expert under the new rules; the familiar one of who is an appropriate comparator under UK and EU law; the effect of “Agenda for Change”, which was the government initiative to modernise NHS job duties and payscales; and the appropriate case management of a case of this size. Stage 2 and substantive hearings in the claims have been listed for 2006, and there are related multiple claims against other NHS Trusts in the north east.
43. The Prison Service equal pay claims, known under the general name of Bailey and others v Home Office, featured when this lecture was originally written, but they have now been settled. This means that the interesting legal points which were before the various courts now will have to await different litigation to be resolved.
44. Red circling is one of the issues that would have been considered by the Court of Appeal in Bailey. It is also the issue in the equal pay case of SITA (UK) Ltd v Hope. Ms Hope was earning £40,000 but was effectively replaced by a man who was paid £70,000. The employers claimed that they were red circling the man’s pay. An employment tribunal held that the appointment of the man was sex discriminatory, that Ms Hope should have been appointed, and that the sex discrimination irrevocably tainted the decision to red-circle the man’s pay. The EAT agreed. The case is listed for hearing in the Court of Appeal on 1 and 2 March.
45. This year, we can also expect the European Court of Justice’s decision in Cadman v Health and Safety Executive, which asks the ECJ whether its ruling in the Danfoss case, that an employer seeking to defend a difference in pay between women and men employed on equal work “does not have to provide special justification for recourse to the criterion of length of service”, has been overtaken by subsequent decisions, or whether Danfoss applies in a case where a pay system indirectly discriminates against female staff in rewarding past service. I understand that the European Commission, in its observations to the Court, are suggesting that Danfoss was decided on its facts and that an employer who includes the criterion of length of service must provide objective justification. The hearing in this case has been scheduled for 8 March.
46. On 15 and 16 February, the House of Lords will hear the final stage of Preston v Wolverhampton Health Care, now called Powerhouse Retail Ltd v Burroughs. Where there has been a relevant transfer under the Transfer of Undertakings Regulations, was the Court of Appeal correct in holding that time begins to run under the Equal Pay Act, for the purposes of an equal pay claim against a transferor, from the date of the relevant TUPE transfer, or was the EAT correct in holding that time does not begin to run until the end of an employee’s employment with the transferee?
47. The high-profile race discrimination case of 2006 is expected to be Serco Ltd v Redfearn. This is the appeal against the EAT’s finding that dismissal of a BNP activist in Bradford because of concerns about the reaction of a largely Asian workforce and customer base could be regarded as being “on racial grounds”. It will be argued that “racial grounds” does not provide protection for a person’s racist views, and that the EAT’s decision means that a person who expressed racist views can successfully claim that they are being discriminated against on grounds of race if the employer takes action against them because of expressing those views. The case is listed for the Court of Appeal on 28-29 March. The CRE is expected to intervene to argue that any discrimination against a BNP member because of their views was not within the terms of the Race Relations Act at all, but should have been brought under the Religion or Belief Regulations.
48. R (Elias) v Secretary of State for Defence was a successful Administrative Court challenge under the Race Relations Act to the Government’s non-statutory compensation scheme for those who were interned by the Japanese during World War II. For a civilian internee to qualify, they either had to have been born in the UK or have a parent or grandparent born in the UK. This was held to unlawfully indirectly discriminate on grounds of national origin against a British subject born in Hong Kong of non-British parents who has lived in the UK since 1945. It was held that if the criteria being challenged consists of factors which in practice are closely related to the forbidden grounds, then the indirect discrimination cannot be shown to be “irrespective” of the unlawful grounds. This suggests that it will not be possible to justify provisions, criteria or practices that of their nature screen out almost everyone in a protected group. The Court of Appeal will hear an appeal in April.
49. Barracks v Metropolitan Police Commissioner is expected to be heard by the Court of Appeal in June. This case concerns a black police officer who applied for a posting within the force and was told she could not be given the reasons why her application was refused. It appears that this was based on the Regulation of Investigatory Powers Act 2000, but that Act prohibits an employer from indicating that the legal provision they relied on was RIPA, since that might suggest that there had been a telephone intercept. It will be argued that this is inconsistent with human rights law and EU race discrimination law.
50. 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 case, £814,000. In 2004, there was an unsuccessful appeal by the BMA to the EAT and the case is expected to be heard this year by the Court of Appeal. One of the issues to be considered 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?
51. Mohmed v West Coast Trains Ltd is likely to be the first religious discrimination case to get before the EAT. Mr Mohmed is a Muslim who claims he was dismissed by Virgin Trains from his job as a customer care assistant for refusing to shave off his beard, which he wore for religious reasons and was 8 inches long. Virgin’s dress code was that a beard had to be kept tidy and kept to one fist’s length.
Mr Mohmed was dismissed shortly after the Regulations came into force when his probationary period came to an end. An employment tribunal dismissed his claim of direct religious discrimination, finding that a prima facie case had not been made out. The EAT has now agreed to hear an appeal, which is likely to look at the burden of proof in a case of discrimination on grounds of religion or belief, and the correct approach to claims where both a claim of race discrimination and religious discrimination are made.
52. Finally, disability discrimination. Navas is the first disability discrimination case to reach the European Court of Justice. It asks whether the provisions of the Framework Employment Directive prohibiting discrimination on grounds of disability “include within its protective scope an employee who has been dismissed by her employer solely because she is sick?” Bearing in mind that the Directive is framed in absolute terms, whereas the DDA definition of disability requires a long-term and substantial impairment, the answer to this question might have implications for UK law. The Advocate General will be giving his Opinion on 16 March.
53. The Court of Appeal will be hearing OCS Group v Taylor later this year. This case concerns a deaf employee who was not provided with a British Sign Language interpreter at the disciplinary hearing leading to his dismissal. The employment tribunal held that the dismissal was on grounds of conduct, although it was procedurally unfair because the employee had not understood what was happening. The EAT took the view that the dismissal was related to the employee’s disability, reasoning that it was because of the disability that the employer had not fully understood what the employee had wanted to say and he had not been able to put his case across.
54. Lastly, a major point of interpretation under the new tribunal regime was considered by the EAT on 31 January in the joined cases BUPA Care Homes (BNH) Ltd v Cann and Spillett v Tesco plc. This is whether a discrimination claimant whose claim is out of time under the Employment Act 2002 because they have failed to comply with the statutory grievance procedure is barred as a result from bringing a discrimination claim, or whether the limitation imposed by the 2002 Act is trumped by a tribunal’s discretion under the DDA (and the other discrimination statutes) to extend the time limit for presenting a complaint where it is “just and equitable” to do so.
55. All in all then, 2006 promises to be a very exciting year for employment law.
@Michael Rubenstein
February 2006
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