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HomeSpring Summer 2016 NewslettersSpring Summer 2016 Newsletters Three

Spring Summer 2016 Newsletters Three

  • April 4, 2016
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Section Three

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Case Law Update – Significant decisions from the Courts

This section includes important cases on:

  • Dismissed for “pulling a sickie”!
  • Maternity pay and salary sacrifice
  • Disability and reasonable adjustments
  • Minor offences rules.
  • HR Influence affected disciplinary outcome
  • Redundancy – failure to consult
  • Travel time
  • Challenge to tribunal fees
  • Disability and pension reduction
  • Holiday Pay calculations (2)
  • Sickness absence and holiday carry over
  • Indirect Age Discrimination
  • Work related stress claim
  • Consultation and redundancy
  • Dismissal after admission in discipline meeting
  • Diabetes and disability
  • Obesity and disability
  • Court Shorts!

After these important cases we have also added – Court Shorts – one line comments on recent cases.

Case Summaries

Dismissed for “pulling a sickie”!

The EAT has held that ‘pulling a sickie’ is dishonest and a fundamental breach of contract.

Mr Ajaj was a bus driver. He wrongly claimed to be sicker than he was, and surveillance evidence proved him to be exaggerating. The employment tribunal held that fairness of dismissal should be assessed based on traditional ‘capability’ considerations, ie when could the employee reasonably be expected to return to work based on his real (rather than exaggerated) symptoms.

The EAT disagreed. It held that an employee who ‘pulls a sickie’ is dishonest and in fundamental breach of contract. The principal reason for dismissal of a malingering employee is conduct, not capability.

[Case; Metroline West v Ajaj EAT 2016]

Maternity pay and salary sacrifice

Is it discriminatory to discontinue childcare vouchers during maternity leave?

No, held the EAT in a recent case

Women on maternity leave are entitled to non-pay benefits under the Maternity and Parental Leave Regulations 1999. Following HMRC guidance that contractual non-cash benefits provided under a salary sacrifice scheme must continue to be provided during ordinary maternity leave, an employment tribunal held that it must be discriminatory for an employee to lose childcare vouchers during maternity. The Employer appealed.

The EAT allowed the appeal and substituted a decision that the claim should be dismissed. No legislative basis had been found to support the HMRC guidance. The key question was: did the vouchers constitute remuneration? If they did the Regulations did not require this to continue during maternity leave. The EAT held that the vouchers did represent part of salary since pay had been substituted with vouchers under a salary sacrifice scheme. On this basis they were to be regarded as remuneration and could be discontinued during maternity leave.

[Case; Peninsula Business Services v Donaldson. EAT 2016]

Disability and reasonable adjustments

An important decision at the Court of Appeal, which has resolved the confusion surrounding reasonable adjustments and absence management.

The court ruled that it IS a reasonable adjustment to adjust absence management trigger points when dealing with the absence of a person with a disability. However, It was not a reasonable adjustment (on the facts of this case) to “write off” 62 days of absence altogether and rescind the formal disciplinary warning issued for absence.

[Case; Griffiths v DWP CA 2015]

Minor offences rules.

On 22 January 2016, the High Court decided that there should be a judicial review of the matter of spent convictions being disclosable where there was more than one offence.

The applicants in this case each had two very minor offences on their records, dating back decades from when they were youths. Neither applicant had offended after that. The application for judicial review was made because the applicants were now worried that, because two past offences must be disclosed (whereas only one past offence is not disclosable and can be filtered out), this would in P’s case, prevent her from working in a teaching capacity, and in A’s case, that the information might be used against him in some capacity, as he was an accountant and company director and needed to maintain his professional image.

Lord Justice McCombe said minor offences should not have to be disclosed indefinitely, from many years ago merely because there is more than one minor offence.

The Home Office said that it would appeal the decision of the High Court.

[Case; R (in the application of P and A) v Secretary of State for Justice and Chief Constable of Thames Valley Police HC 2015]

HR Influence affected disciplinary outcome

The EAT has ruled that the influence of HR over an investigating officers decisions made the subsequent dismissal unfair. The case was referred back to Tribunal to review the decision. The Court reminded HR professionals that their role in disciplinary procedures should not include recommending or changing the sanction to be applied. The HR professional role  should only involve advice on matters of law, process and procedure and avoid apportioning any blame.

The Court did suggest that HR could look at the potential sanction being recommended by the disciplinary officer  to ensure the decision was consistent within the organisation. The case was subsequently settled by the parties.

[Case; Rampaul v Department for Transport EAT 2015]

Redundancy – failure to consult and notify leads to prosecution

Under the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRA), whenever an employer proposes to make 20 or more people redundant within a period of 90 days or less at one establishment, it must inform and consult with employee representatives and notify the Secretary of State for Business, Innovation and Skills (BIS) using form HR1.

An employer who fails to file a completed form HR1 commits a criminal offence. There is also personal criminal liability for any director, manager, secretary or other officer where the offence has been committed with their consent or connivance or is attributable to their neglect. Such an offence is punishable on conviction by an unlimited fine and disqualification from acting as a director for up to 15 years. In practice, proceedings are hardly ever commenced – but this week saw an exception.

The criminal investigation and subsequent charges against David Forsey, the Chief Executive of Sports Direct (who is since reported to have resigned), have been widely reported in the media. The charge against Mr Forsey apparently follows an employment tribunal ruling against West Coast Capital (USC), a wholly owned subsidiary of Sports Direct, for failing to consult with employee representatives. USC was criticised by the tribunal for its “disgraceful and unlawful employment practices” – according to press reports USC relied on its administrator to give warehouse workers just 15 minutes’ notice that they were losing their jobs. The employees were awarded a protective award of 90 days’ pay by the tribunal although, as the Company had entered administration, the Government’s Insolvency Service will need to foot the bill. Reports suggest the taxpayer has lost around £700,000 in the administration of USC because of unpaid tax bills and redundancy payments.
Another similar case has also been taken against Directors of City Link; a parcels delivery business in Coventry that closed without notice just before Christmas 2014.

The Insolvency Service’s decisions to press charges for a failure to file form HR1 may indicate an increased willingness on the part of the Government to press charges against individuals for breach of TULRA obligations if it considers the circumstances warrant it. Given the potentially serious consequences for both individuals and companies, it is a reminder of the importance of taking steps to make the notification within the required time frame – 30 days before the first dismissal takes effect where between 20-99 redundancies are proposed, and 45 days for 100 or more proposed redundancies.

Travel time under the Working Time rules

Back in June, the European Court Advocate General gave a preliminary opinion (not binding) that Employers should treat all journeys between clients and customers as working time; including the first and last trips of the day. Currently in the UK, employers may have a workplace agreement that the first and last journeys of each day are not included as working time for those who work from home.
In September the full Court agreed with this opinion and ruled on the facts of the case. This means that in the UK,  for workers who do not have a fixed or habitual place of work, time spent travelling  between their homes and the premises of the first and last customers designated by their employer constitutes ‘working time’ within the meaning of the EU Working Time Directive. This will have implications for working hours and entitlement to breaks, so Employers are encouraged to review their policies, and may need to arrange for more staff to “opt out” of the 48 hour weekly limit.

The National Minimum Wage rules are currently adopting a different approach, ruling out travel time – but this is likely to be open to challenge at some point in view of this EC decision that the travel is effectively “work”.

[Case; Tyco Integrated Security SL, ECJ 2015]

Challenge to tribunal fees

When Employment Tribunal fees were first being introduced, the trade union, Unison, endeavoured to challenge their legality but this was rejected as being premature due to lack of evidence. That legal challenge was re-presented by Unison when the dramatic reduction in the number of Employment Tribunal claims, which had followed the introduction in fees, became evident. These challenges have all now been considered together by the Court of Appeal. In summary Unison’s arguments were that: the fee regime stopped European-based rights (such as discrimination) being effectively enforced; and the fees charged for complex claims, such as those for discrimination, indirectly discriminated against those with protected characteristics (such as women who are statistically more likely to purse a discrimination claim). The Court of Appeal has rejected all of the union’s arguments.

This means that fees are here to stay for the time being, although the Government is now undertaking its own review of the scheme, and the Scottish Parliament has announced that it intends to scrap the fee system.

[Case; R (on the application of Unison) v the Lord Chancellor CA 2015]

Disability and pension reduction

The EAT has overturned an employment tribunal’s finding that a disabled employee suffered discrimination when he received an ill-health retirement pension based on his final salary, rather than the salary he had received before his working hours were reduced in a series of reasonable adjustments.

When Williams retired through ill-health at the age of 38 because of his disabilities, the rules of the University’s pension scheme entitled him to immediately receive a pension, without actuarial reduction, based on his final salary.

In the year leading up to his retirement, he had requested, and been granted, a number of reasonable adjustments to his working hours, with the end result that he was working half of his previous hours by the time he retired. His salary had been adjusted to the new hours, so the pension which he received was half what it would have been had he taken ill-health retirement when still working full-time.

The tribunal accepted his argument that he had been treated unfavourably by the rules of the scheme, since his disability had ‘caused him to have a lower pension than he would have done had his disability not caused him to work part-time’.
The University appealed.

Mr Justice Langstaff, President of the EAT, considered that the tribunal’s conclusion that Williams had suffered unfavourable treatment was ‘manifestly perverse’ – the tribunal’s conclusion could not stand – the matter would be remitted to a fresh tribunal for a complete rehearing.

[Case; Trustees of Swansea University Pension Scheme and anor v Williams, EAT 2015]

Holiday Pay calculations 1

Since the decision of the EAT in the case of Bear Scotland in late 2014, there has been uncertainty about the inclusion of purely voluntary overtime in holiday pay calculations. Most assumed that whilst compulsory overtime (guaranteed and non-guaranteed) would have to be reflected in holiday pay after this decision, voluntary overtime was exempt.

The Northern Ireland Court of Appeal (July 2015), has ruled that there is “nothing in principle” to prevent purely voluntary overtime counting towards holiday pay entitlement.
The Court overturned the Tribunal decision and sent it back to be reheard  and to take account of the Employee’s evidence on his precise overtime arrangements.

So still a case of wait and see!

[Case; Patterson v Castlereagh Borough Council NICA 2015]

Holiday Pay calculations 2

If a part-time worker increases her hours, is her employer obliged to recalculate her entitlement to annual leave retrospectively, even taking into account annual leave already accrued and taken?

No, held the ECJ in a recent case.

The Claimant’s working hours and days varied from week to week. She took 7 days’ paid leave at a time when she was working one day a week (the equivalent of 7 weeks’ leave). Her employer said this exhausted her entitlement. She then increased her hours to 12 days on, 2 days off each fortnight. After her employment ended, she claimed a payment for accrued but untaken annual leave.

The employment tribunal upheld her claim, but following an appeal and application for reconsideration, referred the matter to the European Court of Justice (ECJ).

The ECJ held that annual leave must be calculated in accordance with a worker’s contractual working pattern, and the hours, days (and fractions thereof) actually worked. However, the taking of leave accumulated in one period has no connection to the working hours in the later period when leave is actually taken.

There was already authority from 2010 that a reduction from full-time to part-time working should lead to no reduction in the amount of leave a worker has already accumulated. An employer must therefore distinguish between different periods of different working patterns and calculate the leave that accumulates in each period separately, taking the same approach whether this is during employment, or after it has ended.

In this particular case, the excess leave taken whilst working part time can be offset  against, or deducted from, the newly accumulated ( and higher in this case) holiday accumulation.

[Case; Greenfield v The Care Bureau Ltd. ECJ 2015]

Sickness absence and holiday carry over

The Employment Appeal Tribunal has clarified two issues affecting the rights of workers on long-term sick leave to carry forward untaken annual leave under the Working Time Regulations 1998 (WTR).

Firstly, the EAT has confirmed that a worker on sick leave can carry forward untaken leave into a new holiday year under the WTR even if the worker was capable of taking annual leave. It follows that the principle set out by the Court of Appeal in the case of NHS Leeds v Larner.  This applies to those who are unwilling to take annual leave during sickness absence as much as those who are unable to do so. Note, however, that the case before the EAT only concerned the four weeks’ leave granted by the WTR, and not the additional leave of 8 days granted in the UK.
Secondly, the EAT says that such untaken leave cannot be carried forward indefinitely. European law only requires, at most, that employees on sick leave are able to take annual leave within a period of 18 months of the end of the leave year in respect of which the annual leave arose. Consequently, the WTR are to be read as permitting a worker to take annual leave within 18 months of the end of the leave year in which it is accrued where the worker was unable or unwilling to take annual leave because he was on sick leave and, as a consequence, did not exercise his right to annual leave.

Facts of the case

The case came about when the claimant claimed a payment in lieu of untaken leave when his employment came to an end after a long period of sickness absence. His leave year ran from 1 February to 31 January each year. His sickness absence began on 26 April 2010 and ended with the termination of his employment on 10 February 2014. During that period he did not take any annual leave.
The EAT ruled that the claimant was entitled to a payment in lieu of leave that accrued in the 2012/13, 2013/14 and 2014/15 leave years but not the leave that accrued in the 2010/11 and 2011/12 leave years.

Interestingly the EAT gave both parties permission to appeal to the Court of Appeal (although not in respect of the decision concerning the 2013/14 and 2014/15 leave years).

[Case; Plumb v Duncan Print Group Ltd, EAT, July 2015]

Indirect Age Discrimination

Is it indirectly discriminatory on the grounds of age to retire police officers entitled to receive a pension, in order to cut costs?

No, held the EAT when they overturned a tribunal decision that the Police Forces could not justify their decision.

Police officers are not employees, and their office will only terminate (unless found guilty of misconduct or capability) upon retirement.

Regulation A19 of the Police Pensions Regulations 1987 allows for retirement of officers who meet certain criteria, if doing so is in the general interest of efficiency.

Following the Government’s Comprehensive Spending Review in 2010, police forces were required to make 20% cuts in their budgets over four years. Since 80% of their costs related to staffing Forces across the country looked to reduce staff numbers.

Using A19 clearly disadvantaged officers over the age of 48 and those affected argued indirect age discrimination. Indirect age discrimination is not unlawful if justified as being a proportionate way of achieving a legitimate aim.

Overturning the employment tribunal’s judgment, the EAT found the only way the forces could be certain of a reduction in officer numbers was by use of A19, since there was no power to make a police officer redundant, and their actions were therefore justified.

[Case; West Midlands Police v Harrod & Ors.EAT 2015]

Work related stress claim.

Not a new or surprising decision; more confirmation of the previous case law, which is always good for consistency! Stress claims continue to be made against Employers; with reports suggesting that the recession and constant budget cuts are creating more pressurised workplaces.
Mr. Easton was a well respected store manager for B&Q. He had absences for depression and agreed a phased return (always good for the Employer to demonstrate reasonable treatment). However the phased return was not a success and Mr. Easton was again signed off work with depression. He then claimed damages alleging that the depression was work related and B&Q had been negligent.
The Judge referred to the principles established in the leading stress case of Hatton v Sutherland, including that the Employer is entitled to take the employees’ actions and representations at face value without the need to make searching background enquiries. The initial absence had not been foreseeable; the Manager had maintained a 10 year career managing large retail outlets; he had no history of mental illness and neither he nor other managers in similar roles had issues with work related stress. By returning to work on a phased basis, the manager had indicated he felt he was fit for work, and although the Employer knew of his condition and the fact that he was taking medication, there was no negligence in the way it was handled.

[Case; Easton v B&Q High Court 2015]

Consultation and redundancy

Can the obligation to consult over collective redundancies be triggered when an employer makes a provisional decision to close a workplace?

Yes, held the EAT, in dismissing a school’s appeal against a protective award of 90 days pay per employee in respect of a failure to consult over the closure of a school.

The school decided in February 2013 that it would have to close at year’s end if pupil numbers had not increased by April. Ultimately, the school decided to close in April 2013 and there was never any collective consultation over the decision, in breach of Section 188 of TULR(C)A.

The EAT considered an unresolved question [from the case of United States of America v Nolan] on the different tests as to what triggers the duty to consult, whether it is an employer proposing a strategic decision that will foreseeably or inevitably lead to redundancies, or when that decision has been made and redundancies are a consequence.

The EAT noted that the decision (February 2013) to close the School, unless numbers increased ‘was either a fixed, clear albeit provisional intention to close the School or amounted to a strategic decision on changes compelling the employer to contemplate or plan for collective redundancies. On either analysis, the duty to consult arose on that date’. The EAT did not find it necessary to decide which test applied.

The EAT also rejected a ground of appeal that special circumstances excused a failure to consult because of the need to keep the closure plans secret for fear of confidence in the school being lost. That an employer which had not thought about consultation might, with hindsight, give consideration to the practicalities of consultation, is not a special circumstance excusing the duty to consult.

Employers need to commence meaningful consultation as soon as possible, when redundancies  are being contemplated and not just after the decision has been made.

[Case; E Ivor Hughes Educational Foundation v Morris, EAT 2015]

Dismissal after admission in discipline meeting

Mr. Wiltshire was a supervisor overseeing work that involved heavy lifting. He was dismissed after a container of which he was in charge fell 20 feet to the ground when being lifted. He accepted full responsibility for the incident and admitted that the procedure he had carried out for securing the container was dangerous.

Nonetheless the Tribunal upheld Mr. Wiltshire’s claim for unfair dismissal. The Tribunal said that if the employer had conducted a wider investigation it would have uncovered facts which put Mr Wiltshire’s admissions into a wider context. The employer should have looked at the level of pressure its employees were working under and taken into account that Mr Wiltshire’s dangerous actions had been impacted by that pressure.
The EAT at the Appeal concluded that the Tribunal had misapplied the law and had substituted its own judgment for that of the employer rather than considering whether the employer’s decision was within “the range of reasonable responses”; the EAT remitted the case to a different Tribunal to be considered afresh.

In its decision the EAT emphasised that, even where an employee confesses, employers must still consider whether there is any conflict in the evidence. This case is a reminder to employers that it may not always be enough to close the file once a confession has been recorded.

[Case; CRO Ports London Ltd v Wiltshire EAT 2015]

Diabetes and Disability

The EAT has overturned an employment tribunal’s decision that an employee’s type 2 diabetes amounted to a disability under the Equality Act 2010. The condition, which was controlled by abstaining from sugary drinks, did not have a substantial adverse effect on the employee’s ability to carry out day-to-day activities.

S was employed as a bus driver. Following his dismissal for gross misconduct he sought to bring claims of disability discrimination, among other things. An employment tribunal decided at a preliminary hearing that S was disabled on the basis of his type 2 diabetes. It referred to the fact that S took medication to reduce his blood sugar levels and avoided sugary drinks. MT Ltd lodged an appeal against this decision.

The EAT, allowed the appeal against the finding of disability. The Court could not accept that abstention from sugary drinks constituted a substantial adverse effect on day-to-day activities, within the meaning of ‘disability’ in the Equality Act 2010. Nor was it the case that type 2 diabetes amounts to a disability per se. While a particular diet may be a ‘treatment or correction’ that must be ignored when assessing the effect of an impairment, he did not consider that abstaining from sugary drinks was sufficient to amount to a treatment or correction for this purpose.
The EAT then went on to order that S should reimburse the £1600 in appeal fees paid by MT Ltd.

[Case; Metroline Travel Ltd v Stoute, EAT]

Obesity and disability

In Kaltoft v Billund in Denmark, the European Court of Justice ruled that obesity can constitute a disability under the Equality Act 2010 – see above.  The first obesity case in the UK following this ruling has been heard. In Bickerstaff v Butcher, Mr. Bickerstaff said he has been harassed by his colleague Mr. Butcher because of his weight. Mr. Butcher had made the following comments about the claimant stating he was “so fat he could hardly walk” and that he was “so fat he would hardly feel a knife being stuck into him”. With a body mass index of 48.5 Mr. Bickerstaff is classed as morbidly obese. Referring to the Kaltoft case, the judge confirmed that Mr. Bickerstaff had been harassed for a reason which related to his disability, namely his morbidly obese condition. The employment judge said it was satisfied that Mr Butcher had been “harassed for a reason which related to his disability, namely his morbid obesity condition”. It heard evidence of the claimant’s excessive body mass index (48.5), sleep apnoea and gout.

The tribunal panel referred to December’s ruling in the European Court of Justice (ECJ).  The ECJ said that if obesity hinders “full and effective participation” at work, it could count as a disability.
It appeared to make no difference to the tribunal that Mr. Bickerstaff’s condition was self-inflicted and his health would have improved if he had lost weight: the important issue for the tribunal was the impact of the condition on him, not its cause.
Employers need to be aware that inappropriate comments from colleagues about an individual’s obesity (whether verbal or through social media) may constitute disability harassment.  Employers can be vicariously liable for such comments, which can lead to tribunal claims and compensation for injury to feelings.

[Case; Bickerstaffe v Butcher NIIT 2015]

Court Shorts!

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(Very brief case summaries, most recent first.)

Part timer needs full time comparator

A part time worker cannot make a claim using another part timer (who worked longer hours) as the comparator. The comparator has to work full time.  Advocate General for Scotland v Barton

Verbal reference

Nothing new in this one, but a useful reminder about telephone references being dangerous!

After an offer of employment was made, and the “formal” references were taken up; the potential employer rang for more information. In a telephone conversation lasting around 15 minutes; information on absences and time off were discussed. The applicant had had a number of lengthy absences from work due to a disability. Following the telephone discussion, the offer of employment was withdrawn. The EAT said that this was disability discrimination. Pnaiser v NHS England EAT 2015.

Speak in English please.

The EAT has agreed with the tribunal that it was not race discrimination or harassment to instruct an employee to refrain from speaking in Russian during work related conversations. The Employer had a reasonable explanation for its actions (the employee had been acting suspiciously and was having long conversations on her mobile in Russian!) which were not related to the employee’s nationality. Kelly v Covance Laboratories EAT 2015.

Animal rights??

A London Zoo meerkat handler got into a fight at the Christmas Party with a monkey keeper – they were fighting over the affections of the llama keeper!! One of the fighters was dismissed, the other received a final warning. London Tribunal decided that without clear evidence as to who started the fight, no reasonable employer would have apportioned blame by awarding different outcomes – so the dismissal was unfair.

Agency Workers.

The right to be informed of vacancies does not then give any preferential treatment to an Agency worker – when applying for a post he already held. Coles v Ministry of Defence EAT 2015

Associative Disability Discrimination
An employee was dismissed shortly after informing his employer that he would need to take a greater role in caring for a disabled daughter. Lacked the service to claim unfair dismissal but was successful in claiming direct disability discrimination by association. (Truman v Bibby Distribution Liverpool ET 2015)

Zero hours worker wins harassment claim
A young lady with mental health problems has won £19,500 for injury to feelings following her complaint of sex related harassment. She felt that if she complained about the managers behaviour she would not be given further shifts as she was on a zero hours contract. The high award reflects her vulnerable situation, the abuse of power by a manager and the employers failure to investigate properly. (Southern v Britannia Hotels Leeds ET)

Health and Safety requirement not discriminatory
A health and safety requirement that clothing does not represent a trip hazard was not discriminatory on the ground of religion. A potential nursery worker was spoken to at interview about the need for her jilbab (clothing) to be off the ground slightly and decided not to take the position before claiming discrimination. The EAT agreed with the Tribunal that the Employer had not unfairly discriminated against her.
(Begum v Pedagogy Auras UK Ltd (t/a Barley Lane Montessori Day Nursery. EAT 2015)

Deductions from wages after striking.
A teacher went on one day of strike action (not Jeremy Clarkson style striking then!). The employer then made a deduction from pay and there was a dispute about the amount withheld. The Court of Appeal has decided that the employer was entitled to withhold 1/260th of pay rather than 1/365th of pay as suggested by the teacher.  ( Hartley v King Edward VI College. CA 2015)