What a year 2012 was for employment law. We saw the unfair dismissal qualifying period double, the start of automatic pension scheme enrolment, heftier costs penalties, judges sitting alone and a lot more besides.
We already knew that this year would have more than its fair share of employment legislation, and the government has started as it clearly means to go on, with a number of announcements in the past week or so. These include the proposal to limit the compensatory award for unfair dismissal to one year’s pay (the current cap of £72,300 will remain in place, with successful claimants being awarded the lower of the two amounts) and a batch of consultation on changes to TUPE. Although only at the consultation stage, the prospect of the repeal of the “service provision change of TUPE” provisions, along with a number of smaller changes will be of great interest to those who have to grapple with TUPE regularly. For those of you who like reading through lengthy papers from the Department of Business Innovation & Skills, the full details can be found here:
Other exciting developments that we have to look forward to in 2013 include: the shortening of the collective redundancy consultation period, the introduction of fees in the Employment Tribunals, mandatory ACAS conciliation and, unless sense prevails in the meantime, the highly controversial introduction of employee shareholder status. As ever, the MH Employment Team will be here to help with any queries you may have on this wealth of new law.
In the meantime, the courts have been busy…
Religious Discrimination and Humans Rights
Eweida and ors v the United Kingdom
In a decision which received a lot of publicity in the mainstream press, the European Court of Human Rights (ECHR) has upheld a claim by Mrs Eweida that the United Kingdom failed to ensure that her rights under Article 9 of the European Convention on Human Rights (freedom of religion) were protected. Mrs Eweida worked for British Airways (BA) on their check-in section. She brought an indirect religious discrimination claim when BA refused, in accordance with its uniform policy, to allow her to wear a visible cross. BA’s refusal to allow Mrs Eweida visibly to wear a cross, which she viewed as a manifestation of her religious beliefs, amounted, the ECHR found, to an interference with her right to manifest her religion.
In a complex judgment, the ECHR sought to strike a balance between Mrs Eweida’s right to manifest her religion with BA’s legitimate interests, including the desire to project a certain corporate image. It found that the English Courts had given too much weight to the latter, and found for Mrs Eweida, awarding Euros 2,000 for anxiety, frustration and stress, as well as significant costs. It did not assist BA’s case that shortly after Mrs Eweida left, it had amended the uniform policy to allow the wearing of crosses such as the one in dispute. The difficulties in this area of law are illustrated by the fact that all the claimants in the three other conjoined cases (other Christians complaining of breaches of Article 9) lost their claims.
Since findings of the ECHR are not directly binding on private employers in the UK, it is difficult to predict accurately what the outcome of the case will be for UK employers but it is clear that it is important to review existing uniform policies, if applicable, particularly given the publicity surrounding this decision…
The Partners of Haxby Practice v Collen
Ms Collen applied for a job as a practice nurse. The salary wasn’t revealed in the advert or during interview. She was offered the job by telephone and told that her pay would be £22,427. A letter confirming the terms would follow.
The offer letter set out a salary of £30,762. Ms Collen didn’t query it, later explaining that in her excitement the original figure hadn’t registered with her. When she started the job she was told that there had been a mistake and the salary was in fact £22,427. There were unsuccessful attempts at reaching a compromise and her employment terminated one month into the job. She brought a claim based on the higher salary…
The tribunal found in her favour and held that the employer was bound by the higher annual salary. This decision was upheld on appeal. The parties had agreed during the initial telephone call that they would only be bound once the written offer had been sent and accepted. And even if the offer made by telephone was effective, it had been superseded by the written offer and Ms Collen’s acceptance of that.
Before you start frantically checking those recent offer letters for a misplaced decimal point, it is worth noting that, had Ms Collen accepted the written offer knowing that the figure it contained was a mistake, the outcome would have been different. This case is nonetheless a salutary reminder of the need to take care in setting out offers.
Imam-Sadeque v BlueBay
Mr Imam-Sadeque (‘Mr I-S’) was a senior investment manager at BlueBay. He decided to leave and join a start-up asset management company (‘Goodridge’), so resigned and began working his six months’ notice. The resignation was significant; as Mr I-S had chosen to leave he would normally be classed as a ‘Bad Leaver’ and would not be entitled to the value of his shares – a healthy £1.7m…
He was put on garden leave and a compromise agreement was negotiated. It provided that, as long as Mr I-S complied with the terms of the compromise agreement and his employment contract, he would be classed as a ‘Good Leaver’ and could benefit from £1.7m.
BlueBay then discovered that Mr I-S (while still a BlueBay employee) had been helping to set up Goodridge as a competitor, had disclosed information, and had poached a BlueBay employee. BlueBay withheld the £1.7m, relying on a repudiatory breach of contract. Mr I-S brought a High Court claim for breach of contract by BlueBay in refusing to pay out.
The Court found for BlueBay. Mr I-S had broken his side of the deal and had breached his duty of fidelity. Unsurprisingly, therefore, it found that Mr I-S had forfeited his chance of achieving ‘Good Leaver’ status. Interestingly, the Court also rejected the argument that the condition in the compromise agreement relating to the forfeiture of rights was a penalty clause. Rather, it held that the clause offered Mr I-S access to rights to which he would not otherwise be entitled. The Court also noted that the agreement had been struck between parties with similar bargaining positions who had had the benefit of legal advice.
Rider v Leeds City Council
This case highlights again the need to be thorough in considering reasonable adjustments where an employee is disabled and is prevented from working. Ms Rider was a nursery officer at a children’s centre. She suffered from severe asthma and a painful and debilitating spinal condition which affected her mobility…
She complained to her employer that her working environment made her condition worse and was seconded to another job where she worked for two years without any difficulty. The Council told her many times that at the end of the secondment she would have to go back to her original job. Ms Rider claimed that that requirement put her at a substantial disadvantage compared with colleagues who didn’t have her disability. She was eventually dismissed for capability, never having returned to the original post. She was not offered a different role, nor were reasonable adjustments considered.
Ms Rider’s claim hinged on whether the Council had failed in its duty to make reasonable adjustments to enable her to return to work after the secondment ended. For that duty to have arisen, the employer had to have applied a provision, criterion or practice (PCP) which put her at a substantial disadvantage.
A little surprisingly, the tribunal held that the employer had not applied a PCP because Ms Rider had not actually gone back to her original job. That decision was overturned on appeal. The Employment Appeal Tribunal held that where an employer tells an employee that they must return to a post, without reasonable adjustments or alternative roles being accounted for, the employer is applying a PCP. If that PCP places the disabled employee at a substantial disadvantage compared with a person who is not disabled, there is a duty to make reasonable adjustments.
Legal Representation at Internal Appeal
Ministry of Justice v Parry
Ms Parry was an office-holder, employed as a District Probate Registrar. She was dismissed for gross misconduct. Before her appeal hearing, she asked to be represented by her solicitor. This request was declined and her solicitor sent detailed submissions in support of Ms Parry’s case which were considered by the employer. The appeal officer upheld the dismissal decision and an unfair dismissal case was launched…
The tribunal found in Ms Parry’s favour. Part of the reason was that she had been denied legal representation – a point which the Employment Appeal Tribunal (EAT) went on to look at in some depth. It is not automatically unfair for an employer to refuse to allow an employee to have their solicitor present at an internal appeal hearing, the EAT said.
However, in exceptional cases where dismissal would prevent a person from working in their chosen profession (as in the case of a Registrar) then Article 6 of the European Convention on Human Rights – the right to a fair trial – kicks in to guarantee a right of legal representation at a disciplinary hearing. There is a contractual right to dismiss, the EAT acknowledged, but it must be recognised that this could affect an employee’s broader civil rights.
In Ms Parry’s case, there wasn’t enough evidence to show whether or not Article 6 applied and so the case was sent to a fresh tribunal for a complete rehearing.
Note, however that this “right” to legal representation only applies in exceptional cases – there is normally no right for employees to bring their lawyer to hearings as part of a disciplinary process.
Facebook Dismissals and Gay Marriage
Smith v Trafford Housing Trust
Mr Smith was a housing manager employed by the Trust. He posted comments on his Facebook page setting out his objections to gay marriage in church. The Trust suspended him, eventually finding him guilty of gross misconduct. The sanction would have been dismissal but because of his service record he was demoted to a non-managerial role at a much reduced salary. He brought a tribunal claim, arguing that the demotion and pay cut breached his contract….
Mr Smith won, in principle at least. The High Court held that the demotion amounted to dismissal. Mr Smith’s original contract had come to an end and he had agreed to work under a new, lesser paid, contract with the Trust. The Court held that he should be awarded damages for wrongful dismissal, calculated as the difference between his earnings in the two jobs for the three month notice period. That was despite Mr Smith having argued for a more substantial sum based on longer-term performance of his contract. Had he chosen to resign and claim unfair dismissal, rather than work on under protest and opt for wrongful dismissal, his damages would have been higher again.
In its judgment, the court made some important points about Facebook cases. Employers should ask themselves whether a reasonable reader of an employee’s Facebook page would rationally conclude that postings were made on the employer’s behalf. In Mr Smith’s case, views were also expressed on sport, food and cars – clearly not for work purposes. The Court also emphasised the importance of free speech and of the need to look carefully at the views that are expressed and the manner in which they are conveyed before embarking on disciplinary action.
On the subject of the damages award, the Judge said that it leaves ‘an uncomfortable feeling that justice has not been done to [Mr Smith] in the circumstances’.
An unusual case, perhaps, but a useful reminder that care should also be taken when considering an employee’s social media activities in the context of disciplinary proceedings.