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This e-bulletin includes short summaries of the
following recent
developments. Please contact us if you would like more information.
Disability discrimination: House of Lords
restricts scope for employee claims
The House of Lords has severely restricted
employees' ability to claim disability-related discrimination where they
are treated less favourably for a reason connected with disability, eg,
long-term absence. A claim will now be defeated if the employer would
have treated a non-disabled employee's absence in the same way. The only
option for the employee will be to claim for failure to make reasonable
adjustments to a provision, criterion or practice.
Discrimination for a disability-related reason is prohibited in both
the employment and housing spheres. In both it is defined as treating
someone less favourably than others to whom the reason does not apply,
without justification. A 1999 Court of Appeal employment decision ruled
that the comparator was someone to whom both the disability and the
consequences of the disability (eg, long-term absence) did not apply.
This meant that there was almost always less favourable treatment and
the emphasis was on whether it was justified.
The scope for justifying less favourable treatment is far more limited
in the housing sphere than employment. This influenced the House of
Lords' majority decision in a housing case. It considered that a
landlord should be able to evict a tenant for breaching the terms of his
lease, even if the tenant only acted in that way because of his mental
disability.
As none of the limited justification defences applied, their Lordships
had to find there was no less favourable treatment. They did this by
ruling that the correct comparator for a disability-related
discrimination claim is someone who is not disabled but is otherwise in
the same position (ie, someone who has breached his lease, but not
because of any disability). Such a person would also have been evicted.
This makes disability-related discrimination almost identical to direct
discrimination, which is separately prohibited in the employment (but
not the housing) sphere.
A disabled employee unable to show less favourable treatment because of
the disability itself will now have to establish that the employer
failed to make reasonable adjustments to a provision, criterion or
practice. This may not be possible in all cases which previously would
have been disability-related discrimination.
Unfortunately there seems little scope for distinguishing employment
cases from housing ones, given the identical wording of the relevant
provisions. The Government hopefully will resolve the problem in the
Equality Bill, but in the meantime tribunals will be bound by this
decision.
The House of Lords also decided that conduct will only be unlawful if
the discriminator knew or ought to have known of the disability. There
must be a sufficient connection between the disability and the
discriminator's reason, although it remains uncertain how close the
connection must be. (LB Lewisham v Malcolm,
HL)
Employee status: long-term casual workers may have
overarching employment contract
An expectation that casual work will be offered
and accepted may crystallise into a legal obligation enabling a casual
employee to establish an overarching employment contract. This will
cover gaps between assignments and enable him to accrue sufficient
service to claim unfair dismissal.
Employers need to be aware of the risk of such a finding, which will be
difficult to challenge on appeal. Where feasible, they may wish to
minimise conduct which could support such a finding.
Casual workers accrue continuity of service even during periods when
no work is being performed if they can show mutuality of obligation
sufficient to establish an "umbrella" or overarching employment
contract.
In this case, it was undisputed that the casual was an employee during
assignments. She had no right to the provision of work and no obligation
to accept it, but there was an expectation that she would be offered and
would make herself available for a reasonable amount of work. The work
involved some skill, which casuals developed through experience and
which the employer valued. Workers who persistently declined work might
be removed from the bank of casuals.
It is a question of fact for a tribunal to decide whether the conduct is
explained simply by mutual convenience and goodwill, or whether the
expectations have crystallised over time into a legal obligation. In
this case the tribunal thought there was just enough to support the
latter conclusion, particularly in view of:
- the duration of the relationship
- the importance of the work to the employers
- the regularity of the work
- the fact that the employers felt obliged to distribute
the work fairly.
The fact that the employer had started disciplinary
proceedings against the worker, rather than simply remove her
from the bank of casuals, was not relevant. This simply
reflected the employer's laudable wish to treat her fairly in
accordance with natural justice.
A previous House of Lords decision held there was no umbrella
contract in similar circumstances. The outcome in any particular
situation will depend on the tribunal's view of the facts and
will be difficult to appeal. Employers wishing to minimise the
risk of such a finding should consider using a large bank of
casuals, not using any individual for more than 11 months, or
restricting the use of casuals to less important or non-skilled
work. Of course this may not be consistent with commercial
requirements. (St Ives v Haggerty, EAT)
Redundancy: witness evidence relevant to whether
intranet policy is part of contract
Where a redundancy policy is posted on a
company's intranet, witness evidence may be used to decide whether it is
potentially part of employees' contracts. In deciding whether the policy
confers a contractual entitlement to enhanced pay, employers will not be
able to rely on technical arguments about the nuance of language used.
Employers should avoid disputes by ensuring it is clear which policies
and payments are contractual and which are not.
An employee's contract expressly incorporated a staff handbook. This
hard copy document was later replaced by an intranet HR Policies and
Procedures file. The court used evidence from the employees' witnesses
to reject the employer's argument that only one of the sub-folders in
this file was the original staff handbook. None of the employer's
witnesses were employed at the relevant time. Although witness evidence
is not permitted to help interpret a contract, it is permitted to help
identify which documents potentially form part of the contract.
Given the potential turnover in HR staff, it is important to keep good
written records of what changes are made to staff handbooks/policies, to
ensure the employer has the relevant historic evidence available to
defend claims.
The policy contained a statement that employees are entitled to
statutory redundancy pay, whereas the employer will make an additional
payment. The court refused to draw any distinction based on such a
nuance of language in the context of HR policies, where the meaning
should be determined by how a lay person would read it in an informal
and common sense manner.
The employees were not deemed to have accepted any unilateral change to
the redundancy policy to make it ex gratia simply by continuing to work,
as redundancy terms do not affect an employee until he is made
redundant. (Harlow v Artemis, High Court)
Equal pay: employees cannot claim equal pay with a
successor
An employee cannot claim equal pay with a
successor, as it would involve too much speculation as to what that
person would have been paid had he been employed at the same time as the
claimant. Employers will welcome this restriction on potential claims,
which overturns previous caselaw.
Equal pay claims must be based on a comparison with someone employed
contemporaneously with the claimant. They can also be made with a
predecessor on the basis that he would have continued to receive the
same pay had his employment continued. No account can be taken of any
pay increases the predecessor would have been likely to receive;
likewise, an entirely hypothetical comparator cannot be used. (Walton
Centre v Bewley, EAT)
Less helpful to employers is a Scottish Court of Session decision that
employees will not necessarily be prevented from bringing an equal pay
claim using comparators not specified in their statutory grievance. The
test is whether the grievance in the tribunal claim is essentially the
same as the statutory grievance. (Cannop v Highland Council, CS)
Garden leave: no right to work during notice
where prior breach by employee
An employee who has seriously
breached his own duties can be put on garden leave, even if the
nature of his job gives him a right to work and there is no
express garden leave clause. Express clauses remain best
practice, but this decision may be of assistance where there is
none.
Where there is no express garden leave clause, employees may
have the right to do available work during notice eg if their
skills would deteriorate through lack of use or they receive
commission or performance-related bonus. An employee in this
situation could claim constructive dismissal if put on garden
leave, thereby releasing him from any restrictive covenants.
The High Court has clarified an exception to this principle,
where the employee is not ready or willing to do the work. Two
senior executives who had misused confidential information and
planned to poach business and employees had breached their
contractual and other duties and so demonstrated that they were
not ready or willing to work. (SG & R Valuation v Boudrais,
HC)
TUPE update: secondments, transfer to multiple
service-providers, dismissal liability, data protection and immigration
checks
- Employee seconded to transferee was TUPE-transferred
despite objection
Employees who object to a TUPE
transfer but are then seconded from the transferor to work
for the transferee may be found to have transferred.
Transferors wishing to use such arrangements should ensure a
new employment contract is signed covering the post-transfer
employment and secondment and may need to agree indemnities
to apportion the risk.
An employee has a right to object to a TUPE
transfer, with the result that his contract is terminated on
the transfer date.
The EAT here held that there was no genuine objection where
an employee told her employer she did not wish to transfer
under TUPE, but she agreed to work her period of six weeks'
notice on secondment to the transferee.
It is surprising that the objection was held to be invalid,
given that the employee clearly did not want to be employed
by the transferee albeit she was prepared to work in its
business for a short period. The EAT did recognise that a
transferor can employ an employee who has objected under a
new contract, but there was no new contract here. The EAT
appears to have been influenced by two factors:
- it was not a genuine secondment as the employee was
not going to return to the transferor
- the employment was simply while the notice period
under the old contract was running off.
Transferors wishing to use secondments should consider
entering into new, different contracts with the employee.
Even then there may be a risk that such arrangements will be
held invalid. Often the arrangement will be to the
employee's advantage so claims are unlikely, but transferees
may seek indemnities to cover the risk. (Capita v BBC and
McLean, EAT)
- Where employees are assigned determines liability on
transfer to multiple service-providers
On a service provision change, the original contractor's
service may be split between a number of contractors. Each
contractor will inherit liability for those employees who
were wholly or mainly assigned to the part of the
transferor's activities that new contractor has taken over.
(Kimberley v Hambley, EAT)
- Transfer of liability for dismissal for asserting a
statutory right
It is automatically unfair for an employer to dismiss an
employee for asserting a statutory right against it. A
transferee who requires the transferor to dismiss an
employee prior to a TUPE transfer because the employee had
previously brought a claim against the transferee will be
liable for automatically unfair dismissal.
Although at the time of dismissal by the transferor the
right had only been asserted against a previous employer, on
TUPE transfer the transferee is treated as if he had been
the employer all along, thereby crystallising the claim.
The facts of the case were unusual and unlikely to recur
often, but this decision does make clear that a transferee
cannot get round potential liability by asking the
transferor to do his dirty work. (Perry's Motor Sales v
Lindley, EAT)
- ICO good practice note on transfer of employee
information
New guidance from the Information Commissioner's Office
available
here sets out how companies can comply with data
protection law when transferring employee information prior
to a TUPE transfer.
- It will be lawful to give a potential purchaser the
information required by TUPE as long as it is accurate,
up to date and secure and only used for the purposes of
the potential transfer.
- Where information is provided beyond that required
by TUPE, this should be anonymised wherever possible.
The seller should get the employees' consent or
appropriate undertakings on use from the potential
purchaser.
- Records can be transferred after the transfer, but
unnecessary information should be pruned by the new
employer. The old employer can retain information where
necessary, eg to deal with any liabilities.
- Post-transfer immigration checks
Our
April e-bulletin reported new guidance from the Border
and Immigration Agency on immigration checks on employees
newly acquired under TUPE. The Home Office is reported to
have verbally conceded that the guidance is not sufficiently
detailed and that transferees do not need to make checks on
TUPE-acquired employees for the time being. However the
guidance has not been amended and transferees should check
with the Agency the current position at the time of
completing a transfer.
Age and disability discrimination: update
on key ECJ cases
- Several months earlier than expected, the ECJ has just
heard the Heyday judicial review application challenging the
UK default retirement age of 65 (see our
e-bulletin for further details). Judgment should
hopefully be given by the end of this year but the case will
have to return to the High Court for a final verdict. In the
meantime the Court of Appeal confirmed that retirement
claims should be stayed pending the outcome of the Heyday
challenge (Johns v Solent SD Limited, CA).
- The ECJ judgment on whether discrimination because of
association with a disabled person is unlawful is due out on
17 July 2008 (Coleman v Attridge Law, ECJ – see our
e-bulletin).
Legislative proposals: maternity rights,
Equality Bill, Acas non-statutory guidance, EU agency worker and
working time law
New resources: flexible work, criminal
record checks, diversity
- Flexible working website – new guidance from charity Working
Families on dealing with flexible work requests from senior grade
employees is available
here.
- Criminal record checks on volunteers – new guidance from the
Criminal Records Bureau on what checks should be done for volunteers
is available
here.
- Report on benefits of diversity – a joint report from the CBI
and TUC highlights the business benefits of a diverse workforce,
available
here.
following link in your web browser:
http://www.herbertsmith.com/publications/emp_July08.html
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The content of this article does not constitute legal advice and should
not be relied on as such. Specific advice should be sought about your
specific circumstances.
Herbert Smith LLP, Gleiss Lutz and Stibbe are three independent firms
which have a formal alliance.
© Herbert Smith LLP 2008
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