Qualifying for rights


Rutherford & another v Secretary of State for Trade & Industry (No. 2) 2004 (IRLR) 892



This decision on the upper age limit for claimants qualifying for the right to claim unfair dismissal or a redundancy payment has attracted much publicity.


A tribunal found that the statutory bar preventing an employee who has reached 65 years of age from claiming unfair dismissal or a redundancy payment has a disparate impact on men. The Employment Appeals Tribunal (EAT) allowed an appeal: (2003) IRLR 858; and the Court of Appeal confirmed that the tribunal was in error.


The tribunal failed to apply the correct approach to disparate impact. It should have defined the relevant pool by reference to the entire workforce to which the requirement of being younger than 65 applied, rather than by referring only to those who were disadvantaged by the upper age limit. It should then have primarily compared the respective proportions of men and women who could satisfy that requirement rather than referring only to those who were disadvantaged by the upper age limit.


If the tribunal had chosen the right pool, it would have found that the difference in the working population between the proportion of men aged younger than 65 who can comply and the proportion of women aged younger than 65 who can comply is very small. The burden of proof directive does not require the focus to be on the disadvantaged rather than the advantaged group.



Victimisation



St Helens Metropolitan Borough Council v Derbyshire & others (2004) IRLR 851



An employer faced equal pay claims from a large number of its female catering employees.



Prior to the tribunal hearing, the employers wrote two letters directly to catering staff. One went to all staff and said that if the claim was successful, the cost of a school meal would rise so as to 'make provision of the service wholly unviable' and indicated that this might lead to large-scale redundancies. The other letter was addressed to each applicant and said, among other things: 'The original offer of settlement remains open to you and I would urge you to consider this... I cannot overstate the impact that the current course of action will have on the service and everyone employed within it.'


The applicants not only won their equal pay claims, but were also found to have been unlawfully victimised by those letters. The EAT rejected the employers' appeal, even though there had been no direct threat, for example, of a disciplinary or other sanction, to the applicants.


The employers had attempted to persuade the applicants 'to accept the settlement terms and discontinue valid claims, in circumstances where reproach and vilification by their workplace colleagues was almost inevitable'.


This conduct was clearly capable of amounting to 'treatment' for the purpose of section 4 of the Discrimination Act 1975. The employers' argument that the letters were no more than 'routine letters' written by parties to litigation failed to sway the EAT.


This thought-provoking decision illustrates how careful employers must be to avoid exposure to risk of a successful victimisation claim.



Compensation



Orthet Ltd v Vince-Cain (2004) IRLR 857



The EAT held that a tribunal was right to make an award of compensation for injury to feelings for sex discrimination without regard to the tax implications of its award. There was no need to gross up the award. There is no authority which holds that tax is payable on an award for injury to feelings.


Furthermore, the tribunal did not err in awarding compensation for loss of earnings during the four years when the claimant was, or was to be, a university student retraining. The tribunal did not err in finding that the claimant had not failed to mitigate her loss. It was entitled to find that the decision by the claimant to change careers was a reasonable step, in circumstances in which the employers were unable to prove that there was suitable work that she could and should have taken, given that the tribunal found that if such work became available, she would abandon her course.


However, the tribunal was wrong to award a sum in respect of lost pension rights covering a period of four years, on the basis that the employers were about to introduce a pension scheme at the time of the claimant's dismissal. The tribunal failed to investigate the nature of any pension scheme that would be available to the claimant in new employment when she had retrained, and the effect that would have on the pension loss that she would have suffered.


It also erred in failing to take account of the fact that the payment of compensation to her ought to reflect early receipt. In a case where the period of loss is likely to be more than two years, the correct method of calculating future pension loss is the 'substantial loss approach' as suggested in the guidelines to employment tribunal chairmen on compensation for loss of pension rights.



Fixed-term contracts



Allen v National Australia Group Europe Ltd (2004) IRLR 847



The EAT has confirmed that the scope of the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002, extends to a contract that contains the provision allowing it to be terminated by notice during the currency of the fixed term.


What is envisaged by the regulations is the position relating to the termination of the relationship 'in the normal course'. Provision for earlier notices does not destroy the original intention of such a contract that the parties would see through the fixed term, unless and until some event which was not in the normal course occurred.



Tribunal procedure



Cooke v Glenrose Fish Company (2004) IRLR 866



The EAT held that in every case where a party fails to attend a scheduled hearing, the tribunal must consider whether to telephone that party to find out if he intends to appear, before exercising its discretion to proceed with the hearing in his absence.


The tribunal must enquire, particularly of a representative of a party, what news there is or was of the absent party, and as to whether in those circumstances it is possible that the absent party is delayed or has forgotten about the matter but was, so far as can be understood, intending to come.


Although the tribunal does not have to telephone in every case where there is an absent party, that course should always be considered, and, in a case where solicitors are on record as representing the applicant and have been involved in preparing a bundle, there would have to be a very good reason why a telephone call was not made.


Where a tribunal takes a stringent attitude to a party's absence, there should be a less stringent attitude on a review if that party comes forward with a genuine and full explanation and shows that the original hearing was not one from which he deliberately absented himself.



Terms of employment



Kaur v M G Rover Group Limited (2005) IRLR 40



The question for the Court of Appeal in this case was whether a provision in the collective agreements stating that 'there will be no compulsory redundancy' was incorporated into an employer's contractual terms of employment.


A High Court judge ruled that it was: (2004) IRLR 279. The Court of Appeal overturned his decision that the provision was incorporated into the contract in accordance with an express term that employment was in accordance with and, where appropriate, subject to collective agreements made from time to time. This had led the judge to the conclusion that the employee had a contractual right not to be made compulsorily redundant.



The Court of Appeal referred to the legal principles applicable to the incorporation of another document or part thereof into a contract of employment as summarised in Alexander v Standard Telephones and Cables Limited (No 2) (1991) IRLR 286. Where a document is expressly incorporated by general words, it is still necessary to consider, in conjunction with those words, whether any particular part of that document is apt to be a term of the contract. When dealing with collective agreements, there may well be some provisions that are clearly not intended to give to legally enforceable contractual rights between the employer and the individual employee. Therefore, one must consider the contents and character of the relevant parts of the collective agreement when deciding if they are apt to be a term of the individual contract.



On the facts, the commitment that 'there will be no compulsory redundancy' was, in context, an aspiration rather than a binding contractual term. However, the Court of Appeal did make it clear that there is no general principle of law that notice clauses in employment contracts must prevail over other express terms concerned with termination. In this case, if a term providing for no compulsory redundancy had been effectively incorporated into the individual contracts, it would have bound the employer.



Sexual harassment



Brumfitt v Ministry of Defence and another (2005) IRLR 4



A female acting corporal in the RAF attended a training course at which the trainer made numerous offensive and obscene remarks directed at both the male and female personnel attending.


She claimed to have suffered sex discrimination, but a tribunal decided that although she found the language to which she had been exposed 'offensive and humiliating to her as a woman', she had not been exposed to it because of her sex, but rather because, like others of both sexes, she had been required to attend the training course.


The EAT dismissed her appeal. In all cases of sex discrimination, including sexual harassment, a comparator of the opposite sex, whether actual or hypothetical, is required. The fact that a man uses offensive words of a sexual nature in conversation with a woman does not constitute discrimination unless it can be shown or inferred that this was less favourable treatment than the man would have meted out to another man in a comparable situation. The tribunal did not err by failing to interpret the Sex Discrimination Act 1975 so as to protect the woman under articles 3, 8 and 14 of the European Convention of Human Rights.



Finally, the employers' inadequate investigation into the woman's complaint did not amount to sex discrimination in the light of the ruling in Home Office v Coyne, (2000) IRLR 838.



Moonsar v Fiveways Express Transport Limited (2005) IRLR 9



The EAT overturned a tribunal's finding that a woman was not subjected to sex discrimination when, on three occasions, male colleagues in the same room downloaded pornographic images onto a computer.


Assessed objectively, such behaviour had the potential to affront a female employee working in a close environment. It was potentially less favourable treatment and a detriment followed from the nature of the behaviour. There was no evidence that the woman found the behaviour acceptable and the fact that she did not complain at the time did not afford a defence where the behaviour was so obvious.


The burden then shifted to the employers to show that there was not less favourable treatment - 'for instance that she was a party to or enjoyed what was going on'. This did not happen, since the employers had played no part in the proceedings.


As the editor of the IRLR suggests, the authority of this decision may be open to question, yet some will regard it 'as more closely attuned to industrial reality' than the decision in Kaur.



Proof of discrimination



Madden v Preferred Technical Group CHA Ltd and another (2005) IRLR 46



An Irish employee was criticised by a manager at a meeting and responded by tearing up his appraisal form and leaving the meeting. He was dismissed for gross misconduct.


A tribunal dismissed his claim of race discrimination, but upheld complaints of unfair and wrongful dismissal. The tribunal found he had been less favourably treated than a hypothetical comparator of similar status from a different nationality or ethnic origin. There was no satisfactory explanation of the employers' behaviour. But the tribunal declined to draw an inference that the less favourable treatment was on the ground of the employee's race, because there were no facts to form the basis for such an inference.


The Court of Appeal took the same view. Tribunals are not required to draw inferences. If they think that there is no evidence from which inferences can properly be drawn, or if they think the evidence does not warrant the drawing of inferences, they should say so.


The tribunal was entitled to find that the true reason for the less favourable treatment was a long-standing personality clash between the employee and his manager, which had nothing to do with the fact that the employee was Irish.



Tupe



Astle and others v Cheshire County Council and another (2005) IRLR 12



Architectural services provided by a contractor to a local authority were taken back by the council until various consultants were appointed to provide the services on a project basis. None of the employees who worked for the contractor was taken on by the council.


A tribunal decided that there was no transfer of an undertaking within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations (Tupe). The EAT ruled that the tribunal was entitled to find that there was no relevant transfer. The provision of architectural services following the transfer did not retain its identity, since it was carried out in a substantially different way.


The employees were not employed because the council had no work for them to do - although it was also the case that the Council wished to avoid a Tupe transfer. The tribunal was entitled to conclude that the principal reason for entering into the new structure, which had no need for a workforce, was not to thwart Tupe but rather to implement a market economy as the best method of delivering architectural services. The situation was not one in which the structure that the council put in place had no commercial or economic justification.



The editor of the Industrial Relations Law Reports opines that this ruling appears to narrow the reach of the principles set out in ECM (Vehicle Delivery) Services Ltd v Cox (1999) IRLR 559, which indicates that the transferee's motives for not taking on the transferor's workforce is relevant when deciding whether a transfer under Tupe has taken place.



Tribunal procedure



Atos Origin IT Services UK Ltd v Haddock (2005) IRLR 20



The EAT held that an employer's failure to enter a defence to a disability discrimination claim did not preclude it from appealing to the EAT against the tribunal's assessment of compensation.


Furthermore, the tribunal had erred in holding that the employee's lump sum compensation for future loss should be calculated by reference to the entirety of his loss of salary, making no allowance for payments which might be made under the employer's permanent health insurance scheme. In principle, it makes no difference that the payments under a permanent health insurance scheme will be made in the future, as in the case of any assessment of future loss, contingencies and chances must be allowed for.


By Martin Edwards, Mace & Jones, Liverpool