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Employment Law Bulletin - 2010 Issue 14

29 Mar 2010

Welcome to the latest Blandy & Blandy Employment Law Bulletin.

In this edition we look at:


Update of Key Recent Cases

Employment Law News

Legislative Developments

 

Recent Cases


 

Dress Codes and religious discrimination: Crucifix and the BA case

 

The Court of Appeal has ruled in Eweida v British Airways that by adopting a staff dress code which forbade the wearing of a visible neck adornment and so prevented the Appellant, Mrs Eweida, from wearing a small, visible cross with her uniform British Airways did NOT indirectly discriminate against Mrs Eweida on the grounds of her religion.  This was due, in part, to the fact that it was not a requirement of Christianity that adherents had to wear a public display of their faith and her complaint arose from a personal objection neither arising from any doctrine of faith, nor interfering with her observance of it and the point had never been raised by any other BA employee.

The Court of Appeal rejected the argument that one individual person could be the subject of indirect discrimination, and noted that if a solitary employee could be indirectly discriminated against, this could, on a wide view, place an impossible burden on employers to anticipate and provide for what may be facetious beliefs in society at large.  The Court upheld that, for a finding of indirect discrimination, some identifiable section of a workforce, quite possibly a small one, must be shown to suffer a particular disadvantage which the Claimant shares.

The Court also found that, on the argument on which the claim had been put forward, namely disadvantage to a single individual arising out of her wish to manifest her faith in a particular way, the employment tribunal's findings of fact had shown that BA's staff dress code and the ban on a visible neck adornment, was a proportionate means of achieving a legitimate aim.

This robust judgment gives some comfort to employers that discrimination laws do not necessarily require them to make allowances for each individual's personal preference when introducing a workforce-wide policy.  However, it does not amount to a licence to disregard the effects of a policy on a solitary individual. It may be relatively simple to aggregate a single employee with a real or hypothetical group of other employees to gauge adverse impact.  When formulating and drafting policies employers should therefore still be mindful of the possible effects on an increasingly diverse workforce.


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Disciplinary: No excuse is beyond being believable

In The City of Edinburgh Council v Dickson the EAT upheld a tribunal's finding that a diabetic employee's dismissal for gross misconduct was unfair because the decision-taker had refused to engage with, or properly investigate, the employee's defence that his conduct resulted from a hypoglycaemic episode.  The EAT in Edinburgh also upheld the tribunal's reinstatement order.

Dickson, a sufferer of type-one diabetes, had held an unblemished record of service with the council for nearly 30 years. It received a complaint that he had been seen viewing pornographic material on his computer, so it suspended him. At the disciplinary hearing, his explanation for his behaviour was that at the time of the incident his medication had been mis-prescribed, which had caused him to become hypoglycaemic.  He claimed that he had no memory of the incident as a result, and that any actions he had taken were beyond his control. The council rejected this, without properly investigating the medical issues, and dismissed him for gross misconduct. Dickson brought both unfair dismissal and disability discrimination claims and the tribunal upheld both claims. It also ordered Dickson’s reinstatement for the unfair dismissal and a compensation payment of £25,000 for disability discrimination.

The EAT agreed with the tribunal that the dismissal was unfair and that Dickson’s reinstatement was appropriate.  The main reason for this was that the council “failed to engage” in the explanation offered by Dickson at all.  In other words, the council decided that Dickson was lying without taking proper steps to understand the evidence that was available about his medical condition.  Both the tribunal and the EAT were less than impressed that the manager conducting the disciplinary meeting seemed to have relied on (incorrect) advice provided by the council’s HR adviser, second-hand from the adviser’s wife (who happened to be a pharmacist) that a hypoglycaemic episode could not result in out of character behaviour or memory loss.

However, it allowed the council’s appeal in relation to disability discrimination.  Applying the House of Lords decision in Lewisham v Malcolm, the EAT held that there was no practical difference between the tests for direct disability discrimination and disability-related discrimination.  Although the council had rejected Dickson’s disability-related explanation for his misconduct, it did not follow that the dismissal was on the grounds of his disability. Dickson’s diabetes did not influence the employer’s decision to dismiss him at all. This case highlights the fact that the unreasonable treatment of a disabled employee is not necessarily discriminatory.

The striking thing about this case is that, with a little more care, the employer could have reached exactly the same conclusion and not been liable for unfair dismissal. The reason why is explained in the EAT’s judgment, “[I]t was in principle plainly open to [the Council] to disbelieve [Mr Dickson's] explanation… Thus, if it were shown that [the Council] had engaged with the Claimant’s defence but had reached a considered view that it should be rejected, it is hard to see how that conclusion could be said not to have been open to it… [The Council] had simply not taken the defence seriously”. 

This case highlights that when an employer is faced with an explanation for misconduct that is related to disability, it must conduct a proper investigation, even if it considers the explanation unlikely or indeed unbelievable. Whilst ignoring a disability-related explanation does not necessarily mean that the dismissal is discriminatory, it is likely to make the dismissal unfair.  This case is also a rare example of where a tribunal has ordered the reinstatement of someone who has been unfairly dismissed.  It’s not usually practicable to reinstate dismissed employees where there has been a breakdown of trust and confidence, which is why it is such a relatively rare remedy.


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Constructive unfair dismissal: A worker cannot claim if he himself is in breach of the implied term of trust and confidence

The EAT has handed down its decision in Aberdeen City Council v McNeill, which found that if an employee is in breach of the implied duty of trust and confidence at the time of resignation, he/she is not entitled to terminate the contract on the basis that the employer has breached that term. This applies even where the employer was also in breach.

On the facts of the case, and in minimising the seriousness of the Claimant's misconduct, the EAT found that the Tribunal had reached a perverse conclusion.  The EAT found that once the various acts were considered together, i.e. breaching confidentiality, sexual harassment, intoxication at work and being uncooperative with other departments and colleagues, it became clear that Mr McNeill was himself already in material breach of the implied duty of trust and confidence at the time of his resignation.  In other words, Mr McNeill’s prior breach of this duty meant he was not entitled to terminate his contract on the basis that his employer had breached the same term. The EAT therefore revoked the judgment of the Tribunal and dismissed the Claimant's claim for constructive dismissal on the basis that the Claimant was himself in material breach of the implied duty of trust and confidence.

This case is a useful reminder that an employee cannot succeed with a constructive dismissal claim where they have already acted in breach of contract. This means that employers faced with such claims can successfully defend them if they can show a prior breach by the employee. However, employers can only rely on this defence if they did not know about the employees misconduct, otherwise a court is likely to find that they acquiesced in (and accepted) the breach. The decision in the above case, may well have been different had the Council known about the misconduct before the investigation into his conduct.

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Job applicants: If you wouldn't have accepted the role you cannot claim discrimination if your application is rejected

In Keane v Investigo and others, the EAT upheld a tribunal's decision to dismiss a number of claims by a 50-year-old experienced accountant who had applied for jobs advertised as suitable for newly qualified accountants and claimed age discrimination against the employment agencies in question when she was not invited to interview. It held that the applications were not genuine and so she did not suffer any disadvantage when they were not successful.

Ms Keane appealed to the EAT on a number of grounds, arguing in particular that there was no direct authority under the Age Regulations for the proposition that an application for a job must be genuine before any disadvantage can be suffered.  The EAT held that, while it might be true that there was no authority for the point, it was self-evidently correct: job applicants who would not be interested in accepting the role if they were offered it cannot claim discrimination if the application is not successful.


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Variation clauses in handbooks: Changing terms and conditions

In Bateman and Others v Asda Stores Ltd, the supermarket wanted to harmonise the employment terms and conditions across all its store staff, and conducted a full consultation exercise with its employees on the proposed changes. The majority of employees agreed to the new contracts of employment, but others did not. 

Where employees did not accept the new contracts, Asda tried to impose them unilaterally, relying on a provision in the staff handbook that said the employer: "reserved the right to review, revise, amend or replace the contents of this handbook, and introduce new policies from time to time reflecting the changing needs of the business...".  The handbook also provided details of pay and other conditions of employment. The conditions in the staff handbook were incorporated in individuals' contracts of employment and Asda sought to rely on the provision to vary terms without the need for express consent.

The tribunal held there was no reason in contract law to prevent an employer from reserving the right to amend any or all of the contract terms unilaterally, provided this power was not exercised unreasonably, arbitrarily, or capriciously or otherwise in breach of the implied term of mutual trust and confidence in every employment contract.

On appeal, the EAT upheld the tribunal’s decision, on the basis that the provision in the handbook was clear and unambiguous.  It rejected the argument that the employees, many of whom were not well educated, would not have understood the provision to mean their pay could be changed unilaterally.

This case is a welcome one for employers particularly as this is an issue which has become increasingly important in the current economic climate with many employers identifying changing terms and conditions as a way of avoiding redundancies.  However, it should be treated with caution given the facts of the case.  To begin with, Asda had tried to ensure that employees’ pay was not reduced as a result of the introduction of the new contracts.  The employees had also conceded the issue of mutual trust and confidence before the tribunal, because there had been consultation and several months' warning to employees. 

There is however a possibility that in a different situation, a breach of mutual trust and confidence might successfully be argued, particularly where there are reductions in pay, other benefits or indeed in the employee’s normal place of work.  Our advice is therefore still that before any proposed enforced contractual changes based on a variation clause, an employer should consult with staff and seek agreement to the change.   However, if the employer wants to change one part of the contract then provided it has a clear variation clause, has explained the change to employees and the rationale for it, has acted reasonably, given reasonable notice of it and consulted employees, an employer might seek to change it without consent.  However, an employer should also appreciate the risks if it goes ahead.


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Reasonable adjustments under the DDA: effectiveness of adjustment is of paramount importance

In Secretary of State for Work and Pensions (Job Centre Plus) and others v Wilson, the EAT held that the employment tribunal had adopted the wrong approach to section 18 of the Disability Discrimination Act 1995, on the question of reasonable adjustments.  The correct approach, as set out in Romec Ltd v Rudham (EAT), was first to consider whether making the adjustment would overcome the disadvantage suffered by the disabled person and then to consider the other factors set out in section 18, such as whether it was practicable for the employer to take such steps or the associated cost.

In this case, involving an agoraphobic employee who requested to work from home, the tribunal had been wrong to focus on the employer's failure to grant this request without first considering the fact that any such adjustment would have been futile in any event.  The evidence showed that the nature of the work, which involved face-to-face interviews with the public and handling confidential files that others in the office needed to have access to, could not be done effectively from home.  The employer considered six separate adjustments to enable her to work at a Jobcentre Plus location, including having a work colleague accompanying her to and from work.  Additionally, the employer had considered alternative work, at a more senior grade, which might not involve such responsibilities, but no such work was available.  Wilson rejected all the alternatives and claimed, unsuccessfully, disability discrimination.

This case reinforces the principle, as it was set out in Romec, that if there is no prospect of the adjustment proposed for removing the disadvantage, it will not be a reasonable adjustment.  In this case, Ms Wilson's refusal to work other than from home made any reasonable adjustment impracticable. 

When considering reasonable adjustments:

  1. The first step is determining whether the adjustment would overcome the disadvantage suffered by the disabled person.
  2. If it would overcome the disadvantage, the next step is to consider whether the adjustment is reasonably practicable.
  3. If it would not overcome the disadvantage, there is no need to consider the issue of practicality at all.

Of course, it is essential to document these considerations in detail.


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Holiday during sickness: Tribunal finds it can be carried over to next year

Another case concerning holidays and sickness! 

In Shah v First West Yorkshire Limited a tribunal held that an employee whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry over that leave entitlement to the following holiday year.  This is the first tribunal decision giving effect to the ECJ’s decision in Pereda, previously reported by us in Issues 9 and 10.

Mr Shah had booked 4 weeks’ holiday, but suffered a broken ankle shortly before the holiday began.  This resulted in over 3 months of sickness absence, including the time he had previously booked as holiday.  By the time Mr Shah returned to work from his sickness absence, the leave year during which his holiday had been booked had ended and a new leave year had begun.  When Mr Shah attempted to reclaim his holiday, his employer refused, stating that it related to the previous holiday year and had therefore been lost.

The tribunal upheld Mr Shah’s claim for loss of holiday under the Working Time Regulations 1998 (WTR), but in doing so acknowledged the incompatibility, which had been highlighted as a result of Pereda, between the WTR and the Working Time Directive (WTD).  The tribunal interpreted the WTR in line with the WTD by reading into regulation 13(9) (the provision preventing carrying over of statutory holiday) words to the effect that workers who are sick whilst on annual leave, but who then return to work with insufficient time to take that annual leave before the end of the leave year, can carry over the leave into the following leave year.

This decision is a decision of a tribunal - it is not therefore binding on other tribunals but we understand that it is not being appealed.  However, the decision does follow other decisions of the ECJ and it is therefore likely that the decision will be persuasive.  The conflict between UK and EU law on this issue is likely to be addressed with changes to the WTR expected in due course. 

In the meantime, if an employer wants to amend its policies now, a distinction should be drawn between WTR holiday entitlement (currently 28 days including Bank Holidays) and contractual holiday.  The decisions of Stringer, Pereda and now Shah only concern WTR holiday entitlement. Therefore, if an employer wants to allow for carry over of holiday, if an employee is prevented from taking it because of illness, it should do so in respect of WTR holiday entitlement only.

The difficulty for employers will be in policing the effects of this decision and there are still a number of questions to be answered.  For example, what evidence is required from an employee proving their sickness?  Does it only apply to sickness absence that has been certified by a GP?  Further case law will no doubt decide these issues but, for now, employers should continue to monitor and manage such situations carefully and our recommendation is always to ask for clear evidence of incapacity, including a sick certificate (now a Fitness for Work note – see below).


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Employment Law News

New Fit Notes: Guidance published

As we reported in a previous update, the Statement of Fitness for Work, or 'fit note', is a new Medical Statement that GPs will issue from 6 April 2010.  It replaces the old 'sick note' and aims to focus on what an employee may be able to do at work rather than what they cannot do. 

NB: One of the first aims of the new computerised fit note was that it was to be emailed directly to the employer. However, this is not now being put forward by the Government.

Guidance on the new Fit Notes is now available as follows:

  • Guidance for Employers - Department for Work and Pensions (DWP):

http://www.dwp.gov.uk/docs/fitnote-employer-guide.pdf

  • Guidance for Employees and patients- DWP (DirectGov):

http://www.direct.gov.uk/en/Nl1/Newsroom/DG_184645

  • Guidance for GPs - DWP:

http://www.dwp.gov.uk/docs/fitnote-gp-guide.pdf

  • Guidance for Trade Union representatives – TUC:

http://www.tuc.org.uk/extras/fitnote.pdf


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Government to decide on default retirement age this summer

It has been reported that the Government will make a decision on the default retirement age in the summer. Employment relations minister Lord Young, speaking at an Employers Forum on Age conference, stated that the decision would be made alongside the publication of Government evidence gathered as part of its review on the issue. This will be followed by a consultation on the proposed change, which will come into force sometime in 2011.


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Achieve equality

Business link has launched a new interactive tool to help employers "achieve gender equality in the work place by identifying where practices could be altered". According to the website, the interactive tool (which is completely confidential) can help employers to:

  • develop a more motivated and productive workforce
  • increase staff loyalty and reduce staff turnover
  • utilise the skills of their current workforce
  • reduce recruitment costs
  • reduce the likelihood of costly employment tribunal claims.

The link is available here:

http://www.businesslink.gov.uk/bdotg/action/layer?r.l1=1073858787&r.lc=en&r.l2=1073877851&topicId=1080834416&furlname=genderequality&furlparam=genderequality&ref=&domain=www.businesslink.gov.uk


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April 2011 changes to childcare vouchers: HMRC guidance

On 19 February 2010, HMRC published a technical note providing guidance for employers and employees on the April 2011 changes to the tax treatment of employer-supported childcare.

Broadly, the new rules mean that new joiners to certain childcare and childcare voucher schemes who join on or after 6 April 2011, will be entitled to a reduced amount of tax relief (reduced to the basic rate of income tax) if they are higher or additional rate taxpayer employees.

Taxpayers who already participate in such schemes, as at 5 April 2011, and basic rate new joiners, will continue to enjoy the existing levels of income tax and National Insurance contributions relief, both of which are currently on the first £55 per week.


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Legislative Developments


Tribunals' power to send details of whistleblowing claims to regulators: regulations laid before Parliament

The Government has published the Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2010 which give employment tribunals the power to send details of whistleblowing claims direct to a prescribed regulator where the claimant has given express consent.  The regulations will come into force on 6 April 2010 and apply to claims received by tribunals on or after that date.


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Right to request time off to train: regulations laid before Parliament

On 1 February 2010, the Employee Study and Training (Eligibility, Complaints and Remedies) Regulations 2010 and The Employee Study and Training (Procedural Requirements) Regulations 2010 were laid before Parliament. The regulations, which are due to come into force on 6 April 2010, set out the detail of the new right for employees to request time off to undertake study or training introduced by the Apprenticeships, Skills, Children and Learning Act 2009. The right to request will apply to employees of those employers with 250 or more employees from 6 April 2010 and is expected to be extended to all employees from April 2011.

Employees with 26 weeks' service will have the right to make a request for time off for training and to have that request taken seriously. The procedure is similar to that which applies to requests for flexible working.


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Equality Bill: Lords Committee stage completed

The Equality Bill 2009-2010 was debated in Committee in the House of Lords on 9 February 2010. This completes the Committee stage of the Bill in the House of Lords. The Report stage is scheduled for 2 March 2010.


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