Wright, Johnston & Mackenzie Solicitors

The Bonfire of Bad Law – what will be the impact on Employment Laws?

As part of its drive to reduce red tape and regulation and create a freer environment for businesses and individuals the new Government has, via a series of websites, asked us to suggest unworkable, bad and misjudged laws that we would like to see repealed. Unsurprisingly the sites have been flooded with suggestions ranging from the sensible to the downright deranged.

It is expected that the outcomes from this unprecedented mammoth public consultation exercise will have an impact on Employment Law in the future and we will of course keep you abreast of developments.

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Statutory Uplifts – The EAT can, and does, award larger uplifts

In Lawless v Print Plus, the Employment Appeal Tribunal (EAT) said that when deciding the size of any uplift for a failure to follow proper disciplinary procedure, the relevant factors to be considered by a Tribunal should include:

• Whether the procedures were ignored altogether or applied to some extent
• Whether the failure to comply with the procedures was deliberate or inadvertent
• Whether there are circumstances that may mitigate the blameworthiness of the failure.

The size and resources of the employer are also, in principle, capable of being relevant.

In this case, the employer had failed to properly consult with the employee over his redundancy and did not consider the employee’s request for an appeal of the redundancy decision.

The EAT held that the Employment Tribunal had erred in awarding only the minimum uplift of 10% for failure to follow statutory disciplinary procedures. Given the wholesale failure to apply the procedures, aggravated by a deliberate and offensively phrased refusal to conduct an appeal, the award should have been nearer the top of the scale. The factors upon which the Tribunal relied were not capable of justifying its refusal to award more than 10%. A figure of 40% was substituted.

The ACAS code has replaced the Dispute Resolution Regulations, in terms of which the maximum uplift is now 25%, but the same principles will apply.

Practical Implications: This case reiterates the importance of properly consulting with employees over their redundancy and ensuring that the correct procedures are followed in the process.

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Definition of Disability: Is the claimant’s GP’s knowledge enough?

In J v DLA Piper UK LLP the EAT had to consider the definition of ‘disability’ in relation to mental impairments within the meaning of the Disability Discrimination Act.

J applied for a job at DLA Piper and was offered the job subject to passing a medical. J mentioned her history of depression to a HR Manager at DLA. DLA subsequently withdrew J’s job offer, saying the withdrawal was a consequence of a ‘hiring freeze’.

J brought a claim for disability discrimination. The Tribunal held that, at the material time, J was not suffering from clinical depression amounting to a disability under the DDA. The Tribunal had considered medical evidence in making their decision but had not considered evidence from J’s GP.
J appealed to the EAT and won.

The EAT said that a GP is fully qualified to express an opinion on whether a patient is suffering from depression. The EAT also said that it remains good practice, in every case, for the Tribunal to state its conclusions separately on the questions of impairment and adverse effect (and, in the case of adverse effect, the questions of substantially and long-term effect arising under it). The Tribunal should not proceed by rigid consecutive stages. If there is a dispute about the existence of an impairment, it will make sense to start with the question of whether a claimant’s ability to carry out normal day-to-day activities is adversely affected.

The EAT added that there is a technical difference between ‘depression’ and a reaction to adverse life events. In practice little turns on the distinction because Tribunals are concerned with the impact of any symptoms on day-to-day activities, and the clinical label applied (if any) was of little relevance under the statutory test.

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Conditional Resignation Date is NOT effective date of termination

The EAT recently confirmed that the date of a ‘conditional resignation’ letter, where the resignation was conditional on the claimant receiving an assurance that he would be paid a month’s salary in lieu of notice and be given a good reference, was not the effective date of termination.

In this case, Heaven v Whitbread Group, even though Mr Heaven had later stated that his resignation should be effective from the date of his letter, the statutory date of termination still ran from when, several days later, he confirmed his intention to resign.

Practical Implications: The “effective date of termination” is a statutory concept and depends on what actually happened between the parties and not what they have agreed to treat as having happened. The effective date of termination is the date the unequivocal resignation is given and cannot be altered either unilaterally or by agreement.

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Disability Discrimination – Mistaken perceptions can cause trouble

A police officer with obsessive-compulsive disorder often behaved aggressively and became threatening and intimidating to his colleagues. He was frequently absent from work and was referred to psychiatrists, where he received cognitive-behaviour therapy and counselling. His employer, the Metropolitan Police, decided to retire him on medical grounds.

Mr Aitken brought claims of direct disability discrimination, disability-related discrimination and failure to make reasonable adjustments. He lost each of his claims. Mr Aitken appealed to the EAT.

Mr Aitken contended that, following the reasoning in Attridge Law LLP v Coleman, S3 of the Disability Discrimination Act should be interpreted so as to include discrimination on the grounds of perceived disability. The EAT disagreed and made a number of important observations. They dismissed Mr Aitken’s appeal and held that:

• The case was not one in which the employer had acted on the basis of an assumption that the claimant had a dangerous mental illness; rather the employer had acted on the basis of how Mr Aitken presented himself.
• In any event, the words of Section 3 of the DDA are distinguishable from those used in other discrimination statutes which do not relate the relevant characteristic to the complainant.
• The DDA requires an actual disability, However, since the Coleman case, the DDA will also apply where the complainant is a carer for a person (spouse, child, parent, etc) who has an actual disability.

Practical Implications: Treatment on the basis of a mistaken perception that an employee is suffering from a particular disability does not fall within the definition of direct disability or disability-related discrimination.

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British workers . . . or are they?

With employment being increasingly international, the definition of where an employee “ordinarily works” can be challenging.

The case of Serco v Lawson defined the three categories of employment that an employee must fall into to be defined as “ordinarily work in GB”. It highlighted the complexities involved in determining the territorial scope of an employee’s right not to be unfairly dismissed. 

In his judgment in Serco v Lawson, Lord Hoffman looked at two different kinds of employee. The first being the peripatetic employee (i.e. one who travels from place to place) and the other being the expatriate employee (i.e. one who does not live in their own country).

At the time Lord Hoffman pointed out that these two different kinds of employees could not be looked at in the same way. Although he thought that an employee’s base will normally determine whether or not a peripatetic employee is covered by UK unfair dismissal rules, he said that in order for an expatriate employee to be covered, they would need to demonstrate evidence of another connection, such as an employee who is posted abroad by a British employer for the purposes of a business carried on in Great Britain.

It is clear that from this decision that the Courts are happy to continue to interpret the legislation based on the facts of each case. The problem for overseas employers and employees alike is that there is no definitive way of determining whether or not the right not to be unfairly dismissed will include them.

A second key case shows just how difficult it can be to decide where an employee is based.

Mr Ravat worked in the oil business for US company Halliburton’s UK subsidiary from 1990. From 2003 however, he worked in Libya on operations being carried out by a Halliburton company headquartered in Germany. He reported to African managers, his salary was paid via Germany and a company in Malta arranged his travel. Halliburton had, nonetheless, told him that UK law applied to him. In 2006 he was made redundant and claimed unfair dismissal. The Aberdeen Employment Tribunal concluded that it had jurisdiction to hear the claim. Halliburton appealed that finding.

The EAT found that the Tribunal had erred in their decision. It had applied a test of “substantial connection” with Great Britain, which is not appropriate. It also took account of Halliburton’s assurances to Mr Ravat, which were irrelevant. In fact, Mr Ravat was clearly working to further the interests of the German company, not the British one. The EAT dismissed the claim as being outwith the jurisdiction of the UK Employment Tribunal.

Mr Ravat appealed to the Court of Session where he won by a majority view.  However, all three judges in the Court of Session had considerably different views on how the jurisdictional question should be approached. Lord Osbourne said that it must be an exercise in balancing characteristics and that the Tribunal were correct to conclude that, in the circumstances of the case, so many aspects of Mr Ravat’s employment “cling to Britain and British law” as to give the tribunal jurisdiction. In Lord Carloway’s view, Mr Ravat should be seen as falling into the category of “peripatetic”, and although the Tribunal had used the wrong category, it rightly concluded that it had jurisdiction. The third judge, Lord Brodie, disagreed with the others and advocated a more general, balanced approach to the question based on a “strong connection with Great Britain”. He felt that there were no exceptional circumstances to connect the employee with Great Britain, and so the employment tribunal had no jurisdiction to consider Mr Ravat’s unfair dismissal claim. It should be noted that the Court agreed with the EAT’s approach, albeit disagreed with the EAT’s conclusions on its application to the facts of the case.

The appeal was allowed, and the case was remitted to the Employment Tribunal on the basis that it did have jurisdiction to consider it.

Practical Implications: This case goes some way to deciding whether or not a UK Employment Tribunal can consider cases where employees work overseas. Employers who have employees working outside of UK jurisdictions should seek to clarify the jurisdiction which will apply to those workers.

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After much deliberation, courts decide that gender at retirement is key to pension entitlement

Ms Timbrell was born a male in 1941. She undertook gender re-assignment at the age of 59 following a long-held desire to do so. At the age of 61 she applied for a retirement pension and requested that it be back-dated to her 60th birthday. Her application was refused by the Department of Work and Pensions.

Prior to Ms Timbrell bringing her case, the case of Richards v Secretary of State for Work and Pensions in the European Court of Justice (ECJ) had ruled that EU directives prohibit refusal of a State retirement pension to a male-to-female transsexual until the age of 65, if that person would have been entitled to such a pension at the age of 60 once she had been held to be a woman as a matter of national law.

Given this ruling, Ms Timbrell repeated her claim, eventually taking her case, nominally against the Secretary of State (SSWP), to the Upper Tribunal. She lost in 2009 as the Upper Tribunal ruled that, as Ms Timbrell was still married to a woman, she was not entitled to a State retirement pension before her 65th birthday.

Ms Timbrell appealed to the Court of Appeal, where she won. The Court of Appeal based its decision on the case of Goodwin v UK where it was held to be a breach of Convention Rights for the UK to deny a male-to-female transsexual a retirement pension at 60 and to hold back the entitlement until she reached age 65. The Court of Appeal also held that the Directive does not make a distinction between a married and an unmarried person’s rights, so Ms Timbrell had a right, by virtue of her acquired gender, to a retirement pension from her 60th birthday.

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