Business and employment Law
jhh19970724
Notes.pdf
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Lecturer and Unit Co-ordinator TB2 – Matt Atkins ([email protected])
Lecture Notes
2017/2018
Business and Employment Law
TB2 – Employment Law
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Important Dates:
Easter break: Friday 30th March 2018 – Friday 20th April 2018
Consolidation and Assessment Period – Monday 23rd April 2018 to Friday 1st June 2018
(Within this period the formal examination weeks run from Tuesday 8th May 2018 to Friday 1st
June 2018)
Second Attempt Final Coursework Submission Date: Monday 9th July 2018 to Friday 27th
July 2018
Recommended Reading
The custom made Business and Employment Law Text book is essential for this unit.
You may want to borrow other books from the library. If you do so I recommend you read
Gwyneth Pitt; (2016) Pitt’s Employment Law, 10th edition. You might also find these other
texts helpful:-
Smith, I & Baker, A; (2017) Employment Law, 13th ed. OUP
Hepple,B; (2014) Equality, The Legal Framework. 2nd Edition Hart Publishing
Kidner, Blackstone's Employment Law Statutes 2017–2018 OUP (or regular and keen use of
Westlaw).
Cabrelli, D; (2016) Employment Law in Context, 2nd ed. UOP
NB. You will be expected to consult and read primary sources, journals and digests.
The two main series of law reports are the Industrial Case Reports (ICR) and the Industrial
Relations Law Reports (IRLR). The leading academic journal is the Industrial Law Journal
(ILJ). You will probably access these through online databases such as Westlaw and
LexisNexis which also provide digests of cases.
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Course Outline
Week Week
beginning
Lecture Seminar
1 January 8th Sources of Employment Law and
Institutions
Introduction to Employment Law
2 January 15th Barriers to Employment Rights Sources of Employment Law and
Institutions
3 January 22rd Contractual Employment Rights Barriers to Employment Rights
4 January 29th Implied Terms Contractual Employment Rights
5 February 5th Atypical Workers Express and Implied Terms
6 February 12th Wrongful and Constructive
Dismissal
Atypical Workers
7 February 19th Unfair Dismissal – Reasons and
Remedies
Wrongful and Constructive
Dismissal
8 February 26th Unfair Dismissal –
Reasonableness
Unfair Dismissal – Reasons and
Remedies
9 March 5th Introduction to Discrimination Law Unfair Dismissal –
Reasonableness
10 March 12th Protected Characteristics –
Equality Act 2010
Introduction to Discrimination Law
11 March 19th
Employment Policies and Practice Protected Characteristics –
Equality Act 2010
12 March 26th Non Standard Teaching Week. Details NSTW coursework
Assessment 2 Hand in date: Wednesday 25th April 2018
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COURSEWORK II
BUSINESS & EMPLOYMENT LAW
(U21764 & U24401 )
Before beginning your answer please read the following
instructions:-
HAND IN DATE This coursework must be submitted via Turnitin
before 23:55, 25TH April 2018. You will find the
dropbox called April 2018 Coursework
Dropbox by clicking on Coursework in the
menu at the top of this Unit’s Moodle site.
It is crucial you include your student ID
number in the file name
Before submission students are
encouraged to submit draft work through
the Turnitin student checkpoints to check
for plagarism
There are mark penalties for late submission
see page 34 in the Unit handbook
FONT + LINE SPACING Coursework should be word processed. Font
size should be between 11 and 14 and
‘easy to read’ e.g. calibri, arial, times new
roman. Line spacing should be between 1.5
and 2 with (approx.) 4 cm margins all
round. The Header must include the
student number and the Footer must
include a page number
WORD LIMIT 2000 words excluding footnotes and bibliography. The word count should be clearly stated on the first page of your answer. Failure to state a word count will result in a penalty of 5% of the original mark awarded. A falsely stated word-count is an assessment offence which may result in a penalty, including the reduction of the mark to 0%. Note, that
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footnotes should be used to reference sources only. Markers are free to disregard footnotes that contain inappropriate information or information that should belong in the main text. Coursework that is over the stated word limit will result in a penalty of 10% of the original mark awarded. For the avoidance of doubt, the penalty will be applied to any work that exceeds the stated word limit of 1500 words excluding footnotes and bibliography. Students are NOT permitted to exceed the word limit by 10% or any other amount.
MARKS University Regulations stipulate marking be done 20 working days after 12th January 2018. Marks will be released to you on 9th February.
FEEDBACK Personal feedback for guidance on progress
and understanding will be given on each
marked script. Additionally an outline answer to
the coursework questions and generic feedback
will be on Moodle at the end of May 2018.
Informal feedback will also be given in seminars
once marks have been released
Learning Outcomes This coursework covers the following learning
outcomes:
1.Demonstrate a detailed knowledge of the law
and practice in key area of employment law and
2.Recognise, understand and apply appropriate
case law and legislation to realistic business
problem scenarios;
3.Critically evaluate the law of employment.
FOOTNOTES Should be used to reference sources.
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REFERENCING Referencing is required to give intellectual credit
to your source, helps the marker recover your
source easily and avoids you being accused of
plagiarism.
Students must reference sources using the
Oxford Standard for the Citation of Legal
Authorities (OSCOLA). Details of this can be
found on pages 23 – 25 of the handbook on
moodle.
Students should ensure all sources are
fully cited in footnotes and in their
bibliography in accordance with OSCOLA and
that indentation or quotation marks (as
appropriate) are used when quoting.
Students who fail to include a bibliography
will be penalised likewise poor citation of
sources will result in a loss of marks.
Guidance on referencing maybe found at
Reference should be made to the primary
source, except when the primary source can no
longer be obtained.
PLAGIARISM Students are reminded of the need to avoid
plagiarism. The University Regulations
describe plagiarism as:-
“The incorporation by a student in work for
assessment of material which is not their own,
in the sense that all or a substantial part of the
work has been copied without any adequate
attempt at attribution, or has been incorporated
as if it were the student’s own when in fact
it is wholly or substantially the work of another
person or persons.”
Any student suspected of plagiarism will be
referred to the Student Assessment &
Assessment Regulations Lead and an
Academic Misconduct Hearing will be arranged
with all appropriate penalties applied if
misconduct is found.
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Students are reminded that the University will
not tolerate academic dishonesty in any form.
This is cheating. For further guidance see
Student Handbook pages 8 and 9:
http://www.port.ac.uk/accesstoinformation/policies/teachingandlearning/filetodownload,7345
2,en.pdf
If any student has a query about any of the
above points and wishes to obtain clarification
or further information please contact the unit co-
ordinator or your seminar tutor
Electronic Copy of Work Students should retain an electronic copy of
their coursework including all drafts, so that any
draft or the submitted answer may be check by
a member of staff should a member of staff feel
the need to do so. Failure to send an electronic
copy of the coursework to a member of staff
who has asked for a copy may result in a
penalty.
ASSESSMENT CRITERIA - Please see page 32 -33 in the Handbook on
moodle.
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Please read the case study below and answer the 2 questions at the end
Case Study – Trouble at the Milldam Brewery
The Milldam Brewery (MB) is a small craft beer company in Portsmouth that
produces a limited range of bottled beer and similar alcohol products. The head brewer,
Olaf, is 40 years old and has been working for the company as an employee for 15 years.
He is an expert in making beer but is not so good at running a business. The company also
employs four local men to do manual work moving stock and ingredients and assist in the
brewing process. Recently the company has been trying to expand and in June 2017 the
owners hired a new manager, Preeti, to make some changes that will make the business
more competitive. Preeti becomes Olaf’s new line manager.
Straight away Olaf and Preeti begin to have personality clashes and arguments.
Preeti wants to introduce new cost saving measures to the brewing process. Olaf feels this is
micromanagement and an interference with his ability to do his job. They have several
heated discussions but ultimately Olaf reluctantly follows the instructions he is given. Three
months after Preeti began working for MB she and Olaf have a loud argument in the middle
of the brewery warehouse after Preeti decides that the brewery should switch its hops
supplier to a cheaper alternative. Olaf believes the new hops will be inferior and harm the
quality of the beer. He swore at her and said she “was an idiot who doesn’t know anything
about beer”.
Preeti responds by saying he is too angry and insubordinate to work for her and
sends him home for the rest of the day. As he is getting ready to leave she informs him orally
that he must attend a disciplinary meeting at 9am the next morning to discuss his behaviour,
in particular the fact he swore at his line manager. She tells him that he is entitled to bring a
trade union representative or a work colleague to the meeting. As a final comment before
Olaf walks out the door Preeti says to him, “You better come in ready to apologise in the
morning or you are going to get the sack.”
At the meeting the next morning another manager is present but Preeti leads the
discussion. She sets out Olaf’s behaviour over the previous 3 months which she says was
“argumentative and insubordinate”, and tells Olaf that swearing at her the day before is a
serious disciplinary offence. Olaf is given a chance to respond and sticks to the line that
Preeti pushed him too far and was interfering in his job. At the end of the meeting Preeti tells
Olaf that he is being dismissed effective immediately for gross misconduct.
The staff handbook at MB states that:
“Disciplinary action will be taken in accordance with the practices and procedures
found in the ACAS Code of Practice on Disciplinary and Grievance Procedures.”
Over the next month Preeti finds that the atmosphere towards her at work among the
4 other young men who work in the brewery is very hostile. They are angry at the treatment
of Olaf and although they continue to do their work and follow instructions, it is clear to Preeti
she is not welcome. One day she overhears the men making racist jokes about her ethnic
background and the colour of her skin. Preeti is British but has South East Asian heritage.
On another occasion she finds the words, “Get the bitch out!” written in chalk on the brewery
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wall near her car. She complains about the situation to the other senior employees and the
owners of the brewery but she is told that she is their manager and she should “sort it out
herself”. Preeti does not feel she is able to address the problem without making the
atmosphere worse.
When the job of replacement head brewer at MB is advertised, 3 candidates apply.
Dave is a candidate with a degree in business management and 7 years of experience of
making beer for another small brewery. Steve also applies but he has only secondary school
education and 3 years of experience in a large industrial brewery. James has a technical
qualification from a college in beer making and also has 3 years of experience working for a
large brewery. At interview all candidates perform well. Preeti tells the other directors that
she wants to employ James because he is black and she “is fed up of working in a company
with only white men.”
Answer the two following Questions – each equally weighted. Please read the
assessment criteria and consider the feedback you received on the January
coursework carefully before you submit your work. In particular note how higher
grades can be achieved.
Question 1. - Advise MB of their potential liability to Olaf in Unfair Dismissal.
60 marks
Question 2. - Advise MB about the possible claims that could be made against them by
Preeti and Dave and Steve under the Equality Act 2010 and the potential remedies.
40 marks
Ignore any other claims that could arise from the facts.
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Lecture 1: Week Beginning 9th January 2017
Sources of Employment Law and Institutions
The English Legal System
Please revise the material on the general sources of law and the court system in English
Law from TB1 – This is all also relevant to employment law.
Sources of Employment Law
The main sources of employment law are as follows:
Contract Law and the Common Law
Employment Law Statutes
EU Law
Human Rights Law, especially the ECHR and the Human Rights Act 1998
Employment law in Britain is governed by a combination of common law of contract and
considerable bulk of statute law largely designed to provide minimum standards for
employee.
Contract and Common Law
An agreement to offer work in exchange for pay is a contract. Therefore the basis of
employment law is a form of applied contract law.
Take a look back at the way a contract is formed from TB1. What are the necessary
elements?
Contracts are composed of:
Express Terms – Terms actually negotiated and agreed by the parties.
Implied Terms – Additional terms which the court finds are necessarily implied by the
agreement of the parties.
Employment Law Statutes
The legislature (Parliament) has also intervened in the area of employment law by passing
statutes – especially in relation to employees. We will discuss this in more detail later.
Revise the process by which Parliament makes law from TB1.
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Some of the most important employment law statutes are as follows:
The Employment Rights Act 1996
The National Minimum Wage Act 1998
The Trade Union and Labour Relations (Consolidation) Act 1992
The Equality Act 2010
plus many more…
Legislation is required in the employment relationship to impose minimum standards into
the contracts between employers and employees. If parties were left to negotiate their
agreements on any terms then the relationship could be open to abuse by employers due to
inequality of bargaining power.
EU law
European law currently also plays a large part in employment law. For example The Equal
Pay Act 1970 was introduced to equalise the pay between men and women however its
protection was limited until EU legislation broadened the scope. Article 141 EC (now Art
157 TFEU) now expressly confers a right to equal pay for work of equal value: ‘Each MS
shall ensure that the principle of equal pay for male and female workers for equal work or
work of equal value is applied.’ The original UK 1975 Sex Discrimination Act did not
contain any provision for the protection of those who were proposing to change their sex or
who were in process of gender reassignment. The protection was purely available to
heterosexuals who were able to compare their treatment to someone of the opposite sex.
Look back at the process by which the EU makes law from TB1, as well as how this law is
implemented in the UK.
Human Rights Law
Another source of law in the UK is the Human Rights Act 1998. This Act incorporates the
European Convention on Human Rights into UK law. The European Court of Human
Rights hears cases when there is a complaint that the Member State (nothing to do with EU
membership but those who are members of the ECHR) is in breach of one of the Articles of
the Convention. This is an important source of law in relation to discrimination and
employment rights.
Pay v Lancashire Probation Service [2004] IRLR 129
Pay v UK [2009] IRLR 139
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Trade Unions
Traditionally trade unions had a large role in the negotiation of contracts in workplaces, but
this has declined with the proportion of manufacturing and the reduction in heavy industries
such as shipbuilding and mining. Unions still play a part as is evident from the recent action
relating to Southern Rail and Junior Doctors.
The Employment Tribunal System
Claims based on employment law statutes are heard by specialist tribunals call
Employment Tribunals. These tribunals are intended to be less formal and less costly than
taking a claim to court.
Jurisdiction, composition, procedure etc. are regulated by The Employment Tribunals Act
1996 and The Employment Tribunals (Constitution and Rules of Procedure)
Regulations 2013.
Lay members sit with a qualified lawyer to hear cases, BUT the legally qualified person will
normally sit alone in a wide range of specified categories of cases, or in any case where the
parties so agree. These include claims for breach of contract, unauthorised deductions from
wages, redundancy payments, interim relief applications, written statements of employment
particulars, itemised pay statements, certain complaints under the National Minimum Wage
Act, stage 1 hearings under the equal value provisions and holiday pay and unfair dismissal
cases. Thus there has been a significant drop in the number of cases in which lay members
are involved.
The jurisdiction was only to hear statutory claims (such as unfair dismissal, sex
discrimination, redundancy etc.) but tribunals now have a jurisdiction over certain claims in
contract which arise from the termination of the employee's contract of employment. Subject
to certain financial limit proceedings may be brought before an employment tribunal in
respect of a claim of an employee for the recovery of damages (but not for personal injuries)
if the claim arises or is outstanding on the termination of the employees employment.
Injunction proceedings must still be brought before County Court. Claims for non-payment of
wages may also be resolved before an Employment Tribunal under Part II of the
Employment Rights Act.
Procedural rules have been introduced to prevent the bringing of weak cases before
employment tribunals by employees:
(i) s13 of the Employment Tribunals Act 1996 is amended to allow an ET to make
an award of costs against either a litigant or their representative where time is
wasted because of the way they conduct their case.
(ii) s13 is amended to allow an award of costs, where the losing side had
behaved unreasonably, to reflect the time spent by the winning side in preparing
their case. This may reduce the number of so called “nuisance value”
settlements.
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Some Statistics on ETs
According to research for the Department of Business Innovation and Skills released in
December 2013 (IFF Research, Payment of Tribunal Awards (London: BIS, 2013) the
median financial award was only £2900.
Most claimants earned less than £40,000 per annum; only 5% of claimants earned over this
amount.
Almost a third of employers refused to pay when tribunals made awards. Businesses were
more likely to refuse to pay awards below £5,000 than above.
59% of employers in the private sector are small to medium-sized businesses, BUT 68% of
claims were made against this SMEs.
33% of claimants made claims against employers with 1-9 employees;
35% against employers employing between 10 and 49 workers;
11% against undertakings with 50–249 workers.
This suggests that compliance with Employment law by smaller employers is problematic.
Employment tribunals are bound by decisions of the Employment Appeal Tribunal, the Court
of Appeal and the Supreme Court.
Employment Appeal Tribunal
This is the tribunal to which either applicant or respondent may appeal as of right. The
tribunal will only interfere with the decision of the tribunal if it considers it is perverse ie. no
reasonable tribunal could have come to that decision, or if the Employment Tribunal has
made a mistake in its interpretation or application of the law.
British Telecommunications v. Sheridan [1990] IRLR 27, 30
Piggott Bros v. Jackson [1991] IRLR 309
Appeals to Court of Appeal
s37 Employment Rights Act 1996 permits appeal with leave of the EAT or CA.
However there has been a policy shift away from dispute resolution in court hearings to
conflict management balanced in favour of employers to promote a flexible labour market.
(Employer can hire knowing they can fire without fear of costly repercussions).
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ACAS, Arbitration and ADR
Arbitration is the process by which parties refer their disputes to a third party. This saves the
cost of taking the dispute to Court. Firstly the parties must agree that they will be bound by
the decision of the third party(ies) and the third party (arbitrator) decides the dispute
according to the law but outside of the Court system. The system is cheaper and quicker
than going through the Court system and is used for both individual complaints and by
multinational organisations.
The Arbitration Act 1996 sets out three general principles on arbitration.
The object of arbitration is to obtain the fair resolution of disputes by an impartial
tribunal without unnecessary delay or expense
The parties should be free to agree how their disputes are resolved, subject only to
such safeguards as are necessary in the public interest
In matters governed by the Arbitration Act, the court should not intervene except as
provided by the Act
ACAS offers an independent and trusted service for dealing with disputes (collective
conciliation) between groups of workers and their employers (collective disputes). ACAS has
a legal duty to offer free conciliation where a complaint about employment rights has been
made to an employment tribunal.
Under s.18A of the Employment Tribunals Act 1996 the normal requirement will be that a
claimant must send certain prescribed information about their claim to ACAS before
presenting a claim to an ET. An ACAS Conciliation Officer is then appointed who will, during
the “prescribed period”, (likely to be one month) endeavour to promote a settlement in the
case. Time limits for presenting claims to ETs will be modified to accommodate the time
spent in pursuing possible conciliation. In other words, time spent complying with the pre-
claim conciliation obligations will be disregarded when calculating the time periods for
bringing a claim.
Central Arbitration Committee - its role is to promote fair and efficient arrangements in the
workplace, by resolving collective disputes (in England, Scotland and Wales) either by
voluntary agreement or, if necessary, through adjudication. The areas of dispute with which
the CAC currently deals are:
i. applications for the statutory recognition and de-recognition of trade unions;
ii. applications for the disclosure of information for collective bargaining;
iii. applications and complaints under the Information and Consultation Regulations;
iv. disputes over the establishment and operation of European Works Councils;
v. complaints under the employee involvement provisions of Regulations enacting legislation
relating to European companies, cooperative societies and cross-border mergers
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Lecture 2: Week Beginning 15th January 2018
Barriers to Employment Rights
UK employment law does not give equal protection to everyone ‘in work’.
A number of things depend upon employment status, most importantly:
What minimum statutory rights are available?
What implied obligations apply to the contract?
How tax is deducted?
The liability of the employer to pay for wrongs committed in the course of
employment.
Identifying the status of workers
There are four categories of legal arrangement under which persons supply their labour to
the market.
Employee
Statutory Worker
Employee Shareholder
Self-employed
Because the majority of statutory rights are given only to employees, personnel strategies
often try to limit "employed" status to "core" workers. (The structuring of the workforce
between full-time and part-time and atypical workers is sometimes referred to as the "flexible
firm"). The question here is: who is an employee as opposed to (say) an independent
contractor or a casual worker.
Accordingly, there has been a growth in non-core workers such as part-timers, casual
workers, outworkers, temporary workers and also such mechanisms as "zero hours
contracts".
Employee
The statutory definition is s.230 Employment Rights Act 1996 as follows:
(1) In this Act “employee” means an individual who has entered into or works under (or,
where the employment has ceased, worked under) a contract of employment.
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(2)In this Act “contract of employment” means a contract of service or apprenticeship,
whether express or implied, and (if it is express) whether oral or in writing.
(3) In this Act “worker” ….means an individual who has entered into or works under (or,
where the employment has ceased, worked under)—
(a) a contract of employment, or
(b) any other contract, whether express or implied and (if it is express) whether oral or in
writing, whereby the individual undertakes to do or perform personally any work or services
for another party to the contract whose status is not by virtue of the contract that of a client
or customer of any profession or business undertaking carried on by the individual.
Employees as defined in the Employment Rights Act 1996 are entitled to, amongst other
rights, the right not to be unfairly dismissed, the right to receive written particulars of
employment, the right to receive a statutory redundancy payment, the right to receive
minimum periods of notice, the right to maternity and parental leave and time off for
dependents, the right to protection of wages in the event of an employer’s insolvency
and the right to request to work flexibly.
The employee:
Does work personally, has mutuality of obligations, is ‘at employer’s disposal’
Often enjoys significant ‘perks’ over and above minimum rights
Enjoys all available statutory rights subject to length of service, in particular;
all family friendly rights; unfair dismissal protection; redundancy payment.
Tax is paid at source
Employer is vicariously liable for all wrongs.
Statutory Workers
'statutory workers' who are often employed on a casual basis or on a zero hours
contract, qualify for a slightly wider group of rights than the self-employed. These
include working time rights, paid annual leave, the national minimum wage and
statutory recognition rights.
The worker:
Does work personally, has no job security
Typically casual/temporary/seasonal staff
Tax is paid at source
Employer is vicariously liable for all wrongs.
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Employees and workers have the following rights:
Equal pay for equal work
Non discrimination
Right not to have unauthorised deductions from pay
statutory health and safety rights
Minimum wage
Working time regulations
Data protection rights
Time off to care for dependants
Part-time workers are protected
Self Employed
The paradigm of someone who is genuinely self-employed is in business on their own
account. They might have clients and employees. There are a number of key questions the
court will ask to determine if someone is self-employed: (See Mixed/Multiple Test below)
Levels of control?
Mutuality?
More than one client?
Intermittent work rather than continuous?
Provision of tools and equipment?
Possibility of substitution?
Who provides training?
Does person get paid even if there is no work to do?
Does the person negotiate for his or her fee?
The tax authorities have long been suspicious of the ‘self-employed contractor’ who sets up
a limited company (usually known as a ‘service company’) which consists of one director and
one employee ie him/herself, and who then provides his services to a single client
exclusively. This device has often been used by both employer and employee to avoid the
higher taxes payable in respect of employees as opposed to self-employed people.
MBF Design Services Ltd v HMRC [2011]
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Employee Shareholders
Employers have long provided share-ownership schemes for employees. But this scheme is
different because it allows employees to “sell” their employment rights in exchange for
shares.
See generally Jeremias Prassl, ‘Employee shareholder "status": dismantling the
contract of employment’ (2013) 42 ILJ 307
s.31 of the Growth and Enterprise Act 2013 (in force April 2013) inserts a new section
205A into the Employment Rights Act 1996. This allows employees, in return for shares to
contract out of unfair dismissal and redundancy provided the employer allots them shares
valued at not less than £2000 on the day of issue (and no more than £50,000).
In exchange for the shares the employee shareholder will give up the right to:
Request to undertake study or training;
Request flexible working;
Not be unfairly dismissed*; and
A redundancy payment.
Increased notice of intention to return from adoption or maternity leave.
The agreement is not valid unless the employee has received prior independent legal
advice.
*NB The right not to be automatically unfairly dismissed however remains.
Establishing a Contract of Employment under s230 Employment Rights Act
The question is who is an employee and who is an independent contractor or a casual
worker and how do we decide who is who? The courts have developed tests to decide who
is and who is not an employee.
The control test
A contract of service describes one who serves and that implies submission to the “will” or
control of another person. An important test, historically, and still of some relevance is the
control test - ie an employer tells an employee both what to do and how to do it. Why is this
not appropriate in many modern employment relationships?
Integration or Organisation Test
Subordination no longer asks merely whether workers are “controlled” in the traditional
sense but also whether they are integrated into an organisational scheme of work designed
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for them by others. Integration is however a useful test for professional person exercising
own skill and labour otherwise too ambiguous to resolve borderline cases.
Davis v New England College of Arundel [1977] ICR 6
The problem with this test is that it seems to identify as “integrated” only employees who are
permanent or core
Mixed/Multiple Test
More recent tests include the integration test and the multiple test. The multiple test
considers all the relevant factors from the circumstances of the contract to decide whether
they are consistent with a contract of employment.
Ready Mixed Concrete Ltd v. Minister of Pensions [1968] 2 QB 497
Market Investigations Ltd v Minister for Social Services [1969] 2 QB 173
As essential factor in distinguishing between a contract of employment and a contract for
services is whether individuals engaged to do work are in business on their own account.
Contrast employees with professional and/or managerial expertise with consultants and
company directors.
Also of relevance is the concept of mutuality of obligations.
O’Kelly v. Trusthouse Forte Ltd. [1983] ICR 728
Carmichael & Leese v National Power plc [2000] IRLR 43
Bunce v Potsworth Ltd t/a Skyblue [2005] IRLR 557
Stringfellow v Quashie [2012] EWCA Civ 1735
The tax status of the worker is by no means decisive.
Ferguson v. Dawson Ltd [1976] IRLR 346
However, those in business on their own account will be neither employees nor workers.
Ready Mixed Concrete SE Ltd v Ministry of Pensions [1968] 2QB 497
Stringfellow v Quashie [2012] EWCA Civ 1735
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Economic Reality Test
The economic reality test asks whether the worker is independent of the business and
therefore self-employed. It investigates such questions as profit and loss – Ready Mix
Concrete above.
The Privy Council in Lee v Chung and Shun Shing Construction and Engineering Co Ltd
[1990] IRLR 236, [1990] ICR 409, PC
“The fundamental test to be applied is this: ‘Is the person who has engaged himself to
perform these services performing them as a person in business on his own account?”
......The most that can be said is that control will no doubt always have to be considered,
although it can no longer be regarded as the sole determining factor; and that factors which
may be of importance are such matters as whether the man performing the services
provides his own equipment, whether he hires his own helpers, what degree of financial risk
he takes, what degree of responsibility for investment and management he has, and whether
and how far he has an opportunity of profiting from sound management in the performance
of his task’.
Contract as a strategic device – common clauses
Probation – a management tool.
This is an example of a common express term of an employment contract. Employers will
provide a period of time during which the new employee is ‘on probation’. During this time
s/he will normally be on one week’s notice of termination on either side and is likely not to be
entitled to any ‘perks’ such as sick pay or pension. Often, but not always, the employer will
increase the notice period once the probationary period has been successfully completed.
The legal position
Probationary periods have little legal significance in terms of statutory rights – each of the
rights we will discuss later such as unfair dismissal, etc depends on a particular length of
service for each right.
The case of Przybylska v Modus Telecom Ltd 2007 made it clear that if the employer fails to
hold a probation meeting, the employee can assume that s/he has ‘passed’ their probation.
In this case, this meant that Ms P was entitled to one month’s notice not one week, since
that is what the contract provided.
Agency Workers
Agency workers are people supplied by employment agencies. They are often known as
‘temps’ and tend to be used to fill in gaps where there is a spike in demand or where the
employer is short of staff due to sickness or holidays etc.
They have traditionally had a raw deal in terms of employment rights. They have at times
been classified as employees (employed by the agency), or been classified as workers and
therefore entitled to some basic rights such as minimum wage and paid holidays, but have
few other rights and no job security and sometimes described as employees of the ‘end
21
user’. The Agency Workers Directive was introduced by the EU and has resulted in a change
to the law as laid out below.
Reform of agency workers’ rights
The Agency Workers Regulations 2010 took effect in October 2011. The basic principle is
that of equal treatment between agency workers as compared to employees and workers of
the hirer. The worker is entitled to the same basic working and employment conditions s/he
would be entitled to for doing the same job had s/he been recruited on a permanent basis by
the hirer. It also gives some rights from day one.
Rights from day one
These are the responsibility of the end user to provide.
Access to collective facilities and amenities.
An agency worker will have the right to be treated no less favourably than a comparable
employee or worker in relation to access to end user client site facilities and amenities, such
as the staff canteen, childcare facilities and transport services, from day one of an
assignment.
Right to be informed of vacancies
From day one of an assignment an agency worker has the right to be informed by the end
user client of any relevant job vacancies with the end user client that would be available to a
comparable employee or worker. This would apply if the employer publicises vacancies via
the internet, an intranet or on a notice board in a communal area. The key point is that
agency workers know where and how to access this information.
Rights from 12 weeks...
On completion of 12 weeks continuous assignment, the agency worker is entitled to the
same’ basic working and employment conditions’ as the agency worker would be entitled to
for doing the same job had s/he been recruited directly by the end user. There is no need to
look for a comparator as it is ‘as if’.
The agency worker is entitled to:
The same basic pay as though they were permanent
The same holiday rights as they would have if permanent
The same bonuses and commission, but only if paid on the basis of personal performance
eg sale commission, not profit related bonuses
Paid time off for ante natal care.
22
Lecture 3: Contractual Employment Rights
Week Beginning 23rd January 2017
As explained last week an ‘employee’ is the only individual who will have the full protection
from the Employment rights Act 1996. Provided the ‘tests’ are satisfied, a contract exists
even if there is no paper document. An employment contract is like any other contract in that
there must be:-
An unconditional offer
An unconditional acceptance
An intention to form a legally binding agreement
Consideration
Certainty
Although it is not necessary for there to be a written ‘contract’, all employees are entitled to a
statement of particulars (s1 ERA 1996). This provides the employee with a written statement
of the main terms of the employment and must be given within two calendar months of starting
work. The mandatory terms that must be covered in this statement are:
The names of the parties
The date that employment started
If the employee is already employed, and the contract relates to a new position,
on what date continuous employment with the employer started
A job title, and/or brief description of the role
Hours of work
Scale or rate of remuneration
Intervals of payment
Hours
Overtime
Holidays
Sick pay
Grievance procedure*
Disciplinary procedure*
Pension*
23
Place of work
Notice period
*these need not be laid out in full in the statement, but can be in a separate document
to which the statement refers. This is important because putting these documents
outside of the statement allows the employer to change their terms.
Where the employer gives or has given the employee a contract of employment covering all
these matters, it does not also have to provide a statement. There is no need to provide such
a statement for an employee who works for less than one month.
What happens if the employer does not provide a statement or a contract?
There is no freestanding right for an employee to obtain damages if the employer fails to
provide either a compliant contract or statement, but if the employee takes an employment
tribunal case against his employer relating to another aspect of employment and is successful,
and a statement has not been provided, an additional award of 2-4 weeks’ pay may be made
against the employer.
What is the difference between a contract and a statement?
There is a legal difference between a contract and a statement. The statement of particulars
is not a contract. Acceptance of the terms will be implied by the fact that the employee has
acted in accordance with the terms of the statement. It is therefore of evidential value, but not
conclusive as to the content of the contract.
Systems Floors v Daniel [1981] IRLR 475
Many employers who have jobs of low status and therefore low paid staff will try to avoid
their obligations to the worker by ‘dressing up’ their contract as self-employment. These are
known as ‘sham’ contracts.
Sham Contracts
A ‘Sham’ Contract is where the ‘employer’ purposely sets out to deceive the ‘employee’. In
this case, the court will intervene to decide whether the relationship is one of self-employed
or whether the individual(s) concerned are actually employees, despite written evidence to
the contrary,
Autoclenz v Belcher [2011] UKSC 41
24
Variation of Contract
The terms of the employment contract are binding on both parties and cannot be vaired
except as follows:
By mutual agreement.
The contract allows for unilateral variation by the employer.
The contract ends and a new one begins.
Where the change involves a mutually agreed term of the contract, if there is no scope for
variation in the contract, the employer will have to get the employee’s consent to any
change. If the employer imposes the change on an individual, it may well amount to an
effective dismissal (so called ‘constructive dismissal’ dealt with later in course) if the
employee leaves in disgust. Alternatively the employee may stay employed and make a
claim for breach of contract eg for back pay.
Miller v Hamworthy Engineering [1986]
Rigby v Ferodo [1987]
But note an employee can agree to a change by conduct.
Henry v London General Transport Services Ltd [2000]
The employer may have allowed scope for variation e.g. ‘and any other duties reasonably
incidental to the post’ or clause requiring the employee to be ‘reasonably flexible’ in relation
to his place of work. Where this is the case, the employee will usually have to agree to
changes, unless the request is inherently unreasonable.
Where the change requested is just to the ‘works rules’ or conditions of employment e.g. a
no-smoking rule, dress code etc, the employer can enforce this unilaterally with reasonable
notice.
What needs to be established is whether the change is a ‘mere change in custom and
practice’ or a fundamental change.
Cresswell et al v Inland Revenue [1984]
Land Secutirites Trillium Ltd v Thornley [2005]
Even where the change required is a fundamental one, it is sometimes possible for the
employer to enforce it where it is part of a ‘genuine economic reorganisation’ – is shown to
be necessary and applicable to the whole workforce or the whole of a department and for
good business reasons. This happens a great deal in the current economic climate – for
example JCB negotiated with their workforce to reduce their basic hours and pay to 36 hours
per week from 40 hours, which the workforce chose to accept rather than sustain
redundancies. In 2009, BA negotiated for all of their staff to work in August for free – a
reduction of 1/12 in their pay that year, again in order to try to stave off redundancies.
Generally employees who have not agreed have been found to have been fairly dismissed
Catamaran Cruisers v Williams 1994.
25
Incorporation of Collective Bargains
In general the terms of agreement with unions, known as ‘collective bargains’ are not part
of the contract of individual employees unless they have been directly incorporated either by
an express term or an implied term.
Alexander v Standard Telephones and Cables No. 2 [1991] IRLR 286
Malone v British Airways [2011] ICR 125
George v Ministry of Justice [2013] EWCA Civ 324
Incorporation of Staff Handbooks
Some of the practices and procedures of the employer will not be found in the contract but in
the staff handbook. As with collective bargains these documents are not automatically
incorporated into the contract.
This gives the employer considerable freedom to vary these practices and procedures
outside of the control of their employees.
Bateman v Asda Stores [2010] IRLR 370
However if the handbook sets out a clear promise on a matter which is incorporated into the
contract then those provisions may become part of the contract.
Deadman v Bristol City Council [2007] IRLR 888
26
Lecture 4: 30th January 2017
Express and Implied Terms
As discussed, a contract of employment (s230 ERA 1996) is a legally binding agreement
between an employee and an employer, which is formed when the employee agrees to work
for pay. The contract, which need not be in writing (although it ought to be) is normally made
up of both oral and written agreements. The contract is made up of both express terms and
implied terms.
The terms that are agreed when the contract is formed are known as Express terms. These
are terms to which both parties have agreed, and may include those negotiated during the
recruitment process as well as those in a formal written contract or at the interview.
Implied terms are not written and not explicitly agreed to.
Implied terms
(i) terms that are too obvious too mention (eg that the employee will not steal from
the employer);
(ii) those necessary to make the contract workable (eg that an employee whose
contractual duties require driving must have a current driving licence)
(iii) those that are the custom and practice of the industry;
(iv) terms imposed by law (eg the right not to be discriminated against because of, for
example sex/race).
In addition, there may be terms incorporated into individual contracts by reference to
promises made (eg at the interview) or "non-contractual" documents, such as the letter of
appointment, company handbooks, or collective agreements with trade unions.
You will remember that ‘incorporation’ is important and you should be aware of that not all
the contents of handbooks or collective agreements will be contractual, but some may be.
Petrie v. Macfisheries [1940] KB 93
Deadman v Bristol City Council [2007] IRLR 888
Implied terms have become an increasingly important and controversial means of regulating
employment standards. There is, however, no judicial consensus about the extent to which
(if at all) this is appropriate. The traditional view, however, is that the parties are free to make
their own agreement without interference from the law. This expresses laissez-faire, but
such a philosophy is not neutral and tends to allow the stronger party to dominate. Under
what circumstances is a term implied?
27
The classic tests have been the “business efficacy test” and the “officious bystander test”.
The first of these was proposed by LJ Bowen in The Moorcock (1889) 14 PD 64. A term can
only be implied if it is necessary to give business efficacy to the contract to avoid a result
that the parties cannot as reasonable businessmen have intended. However, it means that
only the most limited term should then be implied – the bare minimum to achieve this goal.
The officious bystander test originates in the judgment of Mackinnon LJ in Shirlaw v.
Southern Foundries (1926) Ltd [1939] 2 KB 206. This test is that a term can only be implied
in fact if it is such a term that had an “officious bystander” listening to the contract
negotiations suggested that they should include this term the parties would “dismiss him with
a common ‘Oh of course!’”.
Mears v Safecar Security Ltd [1982] IRLR 183
Societe Generale London Branch v Geys [2012] UKSC 63
Johnstone v Bloomsbury Health Authority [1991] ICR 269 CA
Implied Duties of the Employer
The Work/ Wage Bargain
To pay him/her as agreed. Failure to pay an employee’s full salary will amount to a breach of
contract, which will entitle the employee to leave and claim constructive dismissal, or to stay
and claim breach of contract. This is only the case where it is a deliberate refusal, rather
than an administrative error.
Although the courts have sometimes insisted that the employee must actually do work in
order to be entitled to their pay it seems now to be settled that the employee is entitled to be
paid wages if ready and willing‘ to work; it does not matter that no work is actually done:
Beverage v. KLM (UK) Ltd [2000] IRLR 765. Thus, as in this case, if the employer closes the
business over Christmas the employees are entitled to be paid unless the contract states
otherwise.
This is consistent with well-established authorities, such as Asquith J in Collier v. Sunday
Referee Publishing Co. [1940] 2 KB 647 at 650:
"Provided I pay my cook her wages she cannot complain if I choose to take any or all of my
meals out."
To Notify Employee of Contractual Benefits
Scally v. Southern Health and Social Services Board [1992] 1 AC 294
The duty applies where employees have not negotiated their own contracts and the courts
seem unwilling to extend it - see University of Nottingham v. Eyett [1999] IRLR 87
28
To provide a grievance procedure and deal promptly and effectively with grievances
Goold (Pearmark) Ltd v. McConnell [1995] IRLR 516
It is an implied term in a contract of employment that they employer will reasonably and
promptly afford a reasonable opportunity to their employees to obtain redress of any
grievances they may have. Reference to the procedure by which this is to be done should be
included in the s.1 statement.
To provide work?
Piece work or commission?
Turner v. Goldsmith [1891] 1 QB 544
Devonald v. Rosser [1906] 2 KB 728
Giving no work but offering pay is now known as “Garden leave”.
Although generally there is no right to work an employee cannot be placed on garden leave
(unless there is an express teem in the contract) if they are able to earn more by being at
work (bonus/commission) or if their reputation may be damaged as a result of not being
given any work or if, because of their skills, they need to be in a situation where they can
keep their skills up to date.
William-Hill Organisation Ltd. v. Tucker [1998] IRLR 313 CA
Symbian Ltd v Christensen [2001] IRLR 77 CA
Senior executives who give in their notice can cause all kinds of problems if they choose to
go to work for another company or business within the sector. Most employers will keep their
options open in the employment contract with a view to deciding what is the best course of
action in this situation? The employee will have a certain period of notice to serve and most
employers will include what is known as a PILON clause in all their employment contracts.
‘...we reserve the right to make a payment in lieu of any period of notice or part of it whether
given by either party. Such a payment shall be limited to your basic salary at the rate
payable at the date the notice is given and shall not include...any other benefits or any kind
whatsoever’.
This means that the employer reserves the option to pay the employee their full notice, with
or without benefits (depends on contract), and terminate the contract immediately. The
employee will not then remain on site where they may be able to pick up confidential
information or cause problems.
For senior executives or those engaged in sales it is normal to have a garden leave clause
which enables the employer to keep the contract in place during the whole period of the
notice, while not requiring the employee come to work (hence the name).
29
Job Flexibility
There is a general expectation nowadays that an employee can be expected to perform
whatever duties are necessary to achieve the tasks that are his or her responsibility.
However, most employers make that clear as a matter of contract.
A term may also be implied by custom – although this is increasingly rare.
Sagar v. Ridehalgh [1931] 1 Ch 310. The problem for the employer in Sagar was that they
had failed to gain authority to make the deductions by way of an express term. The issue is
now regulated by Part II of the Employment Act 1996.
Repeated ‘custom and practice’ by the employer can lead to a term being implied into an
employee’s contract of employment. This only works where employees are well aware of the
policy or practice is clear and where it is followed most if not all of the time over a lengthy
period.
To cover the employee for reasonable work related expenses.
To take reasonable care for the safety of his/her employee, providing:
Competent fellow employees.
Adequate plant and equipment.
Safe place of work and system of work.
There is no obligation to give a job reference, except in limited circumstances covered by the
Financial Services Act, but where one is provided, it must be prepared with reasonable skill
and care to ensure that the information contained within it is accurate AND with reasonable
skill and care to ensure that the information does not give an unfair impression of the former
employee.
Mutual Trust and Confidence – Please read Pages 189 – 193 carefully
The most important implied term is the implied term of Mutual Trust and Confidence.
Although this is expressed as ‘mutual’ it is really an employer term meaning that the
employer must not conduct himself in such a way as to undermine the relationship of trust
and confidence between the employer and the employee. This is a question of showing the
employee respect. Most significantly this duty requires employers to treat employees with
respect.
Woods v WM Car Services Ltd [1981] IRLR 347
Lewis v Motorworld Garages Ltd [1986] ICR 157
30
A breach of mutual trust and confidence can occur in any number of situations for example
by unjustified increase in workload/unreasonable extension to working hours/lack of empathy
with employees/lack of trust between the employer and employee for no specific reason.
Page 488 of the text gives a number of examples
Stress
One such example is stress. These are cases where the employee claims that the employer
has broken its duty to take reasonable care of his/her health and safety and that the failure
has caused a ‘breach of mutual trust and confidence’. The allegation will be that ‘psychiatric
injury’ has been caused by the employer. In other words what has happened at work has
been so devastating that it has caused the employee some mental anguish which means
he/she can no longer perform their role at work.
The employer is usually entitled to assume that the employee can stand the normal
pressures of work, unless he knew of some particular problem or vulnerability. The test is
always the same, there are no occupations considered intrinsically harmful to mental health.
The employer is generally entitled to take what he is told by his employee at face value,
unless he had good reason to think to the contrary – if the employee says s/he is ‘OK’ then
that can be taken at face value.
The employer will only be liable for stress related illness where he could or should have
been able to foresee the illness i.e. he knew or ought to have been aware of the ‘warning
signs’ or his employee expressly brought them to his attention, warning signs may include
employee actually complaining, absences accompanied by medical notes or self-certs
stating ‘depression’ or ‘stress’ or behavioural change.
Barber v Somerset County Council [2004] UKHL 13
Abusive or bullying conduct from the employer.
Generalised unfair treatment of an employee, including depriving them of some benefit for
no good reason, or leaving them out of a generalised pay rise arbitrarily.
Applying inappropriate and disproportionate disciplinary measures.
Refusing, or simply failing to deal with grievances or problems promptly when asked to do so
by the employee.
Breaking promises made to the employee, upon which the employee has relied.
All the cases in this area tend to involve the employee leaving employment in response to
such behaviour by the employer and seeking to claim constructive dismissal.
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The Employee’s Implied Terms
To obey lawful and reasonable orders - This includes adaption to new techniques and
skills, as long as proper training is given, and there is a basic understanding that the
employee should be reasonably flexible, especially in small businesses.
To exercise reasonable care and skill in the performance of his/her employment - This
is not an obligation to be ‘perfect’ but to be reasonably competent in the context of the skills
and experience the employee has. The employee is also responsible for carrying out the
training they receive.
Not to delegate his/her duties – the essence of a contract of employment is that it is
performed personally, and the employee cannot substitute someone else even if that person
is able to perform the role.
To co-operate – the employee must not stand in the way of progress – eg he must take on
new equipment/new ways of working – Creswell v Inland Revenue
To give faithful service - this includes things like not leaking confidential information, taking
bribes, working for a competitor or setting up in competition.
NB: This usually only operates during the currency of the employment. If an employer wants
to restrain an ex-employee from competing etc., a restraint of trade clause may be
necessary, and that will have to be reasonable in order to be enforced by the courts.
Not to undermine the employer’s trust and confidence in him/her - This is rarely
invoked in practice as a standalone allegation. However it may become more prevalent since
the rise of social media. There have been a number of recent cases where the employee
has posted matters online which have had an adverse impact on the employer’s reputation
and this implied term might well be relevant in cases such as that.
To take reasonable care for his own safety and that of colleagues.
Relationship with Express Terms
Implied terms which "limit" the application of unfair express terms
In Johnstone v. Bloomsbury Health Authority [1991] ICR 269 CA Leggatt LJ (dissenting,
although with the support of Stuart-Smith LJ on this point) appeared to reject the idea of
overriding implied terms: "In my judgment as a matter of law reliance on an express term
cannot involve breach of an implied term."
Scally v. Southern Health and Services Board [1991] 4 All ER 563
United Bank Ltd v. Akhtar [1989] IRLR 507
Was the clause permitting the bank to relocate Akhtar in its discretion and to pay re-location
expenses in its discretion actually "limited" or overridden?
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Week Beginning: February 5th 2018
Lecture 5: Atypical Workers
In recent years with changing social attitudes there has been a substantial increase in
flexible working. Flexibility has advantages and disadvantages for both employers and
employees however prior to changes in legislation workers/employees who did not conform
to the usual 9am - 5pm Monday to Friday pattern of working faced severe discrimination.
Part Time Workers
There is no specific number of hours which constitute part time; it is simply when someone in
the organisation works less than those employed on full time contracts. An employer must
be able to objectively justify any less favourable treatment of part time employees and
demonstrate that the difference in treatment is because of a genuine business need.
Advantages for an employer of job share can be significant in that he is better placed to
cover absences and perhaps having two people sharing a role means that additional skills
are brought to the job, however there are also disadvantages in that there will be additional
costs and if one person leaves it might be difficult for the employer to be able to cover those
specific hours. Employees may benefit from more flexible working hours and more time out
of work.
Legal Protection
Under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations
2000 part time workers must be treated no less favourably than full-time employees in
employment conditions unless the difference can be objectively justified.
Part-time workers are entitled to equal treatment in respect of:
- Rates of pay.
- Pension benefits.
- Training and career development.
- Holidays.
- Other contractual benefits such as sick pay and maternity pay.
- Treatment in selection criteria for promotion, transfer or redundancy.
As with equal pay claims, part time workers have to compare themselves with someone
doing the same or broadly similar work. However, that worker must also be someone who is
employed full time under the same type of contract whether on a permanent or fixed term
basis.
The issue of comparators was considered in the leading 2004 case of Matthews v Kent &
Medway Towns Fire Authority in which part time fire fighters claimed they were treated less
33
favourably because they were denied access to the pension scheme. The House of Lords
held that, when considering whether the comparators were engaged in the same or broadly
similar work, tribunals should focus on the similarities of the work being done as well as the
importance of the work to the employer as a whole rather than the differences between the
two groups.
Pro rata principle
Less favourable treatment is subject to two tests – the pro rata principle and objective
justification.
The pro rata principle allows employers to claim that, although the part time worker was
treated less favourably, it was in proportion to the terms on which they offered pay and/or
benefits to other workers. Eg, regarding holidays – these should be pro-rated for a part timer
in line with the number of holidays for a full timer, based on the number of part time hours
they work.
The same principle does not, however, apply to overtime, with the result that part time
workers cannot claim less favourable treatment when they are not paid overtime until they
have worked the same hours as a full timer.
In some cases, the pro rata principle will be difficult to apply, particularly where the benefit is of a type that cannot easily be divided up. In those circumstances employers may need to consider other options available or whether they can justify the less favourable treatment. For example employers may choose to: - provide the same benefit to the part-time worker as they provide to the full-time worker - provide a pro-rata monetary allowance to compensate for not providing the benefit - choose not to provide the benefit (but this must be objectively justified). The fact that part-time workers could be treated more favourably than full-time workers if certain benefits are not proportionately reduced is not unlawful because full-time workers cannot claim less favourable treatment by comparison with part-time workers. In relation to part-time workers, it is not appropriate to justify treatment by looking at the whole package and considering if the value of the contractual package overall is as favourable. Instead employers must adopt a 'term by term approach' and consider the difference and potential justification in relation to each term.
Once less favourable treatment of a part-time worker on the basis of his or her part-time
status has been identified, employers must consider if that treatment is objectively justified,
in other words, if it is designed to achieve a legitimate aim or business objective and the
treatment is a necessary and appropriate way to achieve this objective.
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Objective justification
Employers can also justify less favourable treatment of a part time worker if they can show
that the treatment was necessary and appropriate to achieve a legitimate aim, such as a
genuine business objective.
However, The ECJ in 2006 in Adeneler v Ellinikos Oranismos Galaklos and the 2007 case of
Del Cerro Alonso v Osakidetza-Servicio Vasco de Salud stated that reliance on a general
law or collective agreement will not amount to objective justification. The ECJ stated that, to
establish objective justification, courts have to look at the “precise and concrete factors
characterising the employment condition to which it relates, in the specific context in which it
occurs and on the basis of objective and transparent criteria in order to ensure that the
unequal treatment in fact responds to a genuine need, is appropriate for achieving the
objective pursued and is necessary for that purpose”.
It is worth noting that cost, in and of itself, is generally not a good enough reason under the
Equality Act to amount to objective justification and a justification defence on the grounds of
limited funding is arguably cost by another name.
Fixed Term Employees
The Fixed Term Employees (Prevention of Less Favourable) Treatment Regulations
2002 introduce the principle of non-discrimination between those working on fixed term
contracts and comparators who are permanent employees of the organisation.
An employee is said to have a fixed term contract if he has an employment contract (orally or
in writing) and that contract ends on a specific date or on the completion of a specific task.
Wiltshire County Council v National Association of Teachers in Further and Higher Education
and Guy [1978]. The employee may also be fixed term if they are seasonal employees or
casual employees taken on for a specific time during a busy period or covering maternity
leave.
However, they will not be considered as a fixed term employee if they have a contract with
an agency rather than the company where they are working – agency workers are discussed
later in the lecture.
Those who benefit most from the regulations are those who are employed to cover periods
of absence for such things at maternity or parental leave, and those employed at times of
peak demand eg. teachers in higher education.
Employers must not treat fixed term employees less favourably than permanent staff doing
the same or largely similar work unless they can provide ‘objective justification’ for doing so.
Fixed term employees are entitled to receive the same benefits as permanent members of
staff, for example in relation:-
Terms of the contract
35
Opportunity to receive training
Pay and conditions
Equivalent benefit packages
Information about permanent vacancies
Protection against redundancy
These benefits are only available if the fixed term employee works in the same organisation
(not associate organisation) and fixed term employees have the same access to discipline
and grievance procedures as permanent staff.
Objective Justification
The issue of limited funding as justification for retaining a contract researcher on a fixed term
contract was considered by a Scottish tribunal recently in the case of Dr Ball v the University
of Aberdeen. It accepted that the tests in Adeneler and Del Cerro were similar to the tests
applied in other discrimination legislation and as such the correct approach was to consider
whether there was a genuine business need to be addressed and whether the use of a fixed
term contract amounted to “means” that were necessary and appropriate to meet that need.
In applying this test, the tribunal decided that the business need for the university was how
to cope with the fact that the research funding from grant-giving institutions was short term. It
therefore had to consider the disadvantages to the employee (uncertainty of future
employment, disadvantage in terms of career prospects and potential difficulties in obtaining
credit) against the advantages to the employer.
It rejected the employer’s argument that it would be too expensive to retain Dr Ball beyond
the end of the fixed term contract as a red herring, and said that, in attempting to match up
future labour needs with future revenue, the University was really in no different a position to
many other employers.
The choice for the employer was to employ Dr Ball on a fixed term contract or an indefinite
contract with the possibility of his being made redundant.
Ending a Fixed Term Contract
In general terms a fixed term contract will come to an end automatically when the agreed
date is reached. No notice is required. However a contract may still be considered as fixed
term if it contains a provision enabling either side to terminate it on giving notice before the
term expires – Allen v National Australia Group Europe Ltd [2004] other than this situation, a
fixed term contract can only be terminated before its expiry date if the employee has
committed an act of gross misconduct or if it terminated by mutual consent – Lyritzis v
Inmarsat (unreported). If the contract is not renewed, the employer must be able to provide a
36
‘fair’ reason why the contract is not renewed – eg that the work has come to an end or that
the project has been achieved. If the contract continued for 1 year (if employed prior to 6th
April 2012), the fixed term employee has the right not to be unfairly dismissed as would any
other employee having been employed continuously for the same period. If the fixed term
employee has been employed continuously for 1 year he has a right to a written statement of
reasons for the employer’s decision not to renew the contract. If the employment ends
unexpectedly, the fixed term employee may be entitled to a statutory redundancy payment if
he has worked continuously for 2 years. The ability of the employer to end the contract early
depends on the construction of the contract. If the contract says nothing about ended early,
the employer may be in breach of contract. If the contract states that it can be ended early
and the employer has given proper notice, the contract may be ended with no action
available to the employee.
Notice Periods
If the contract can be ended early, minimum notice periods apply. The minimum notice
periods required for a fixed term contract are:-
After 1 month’s continuous service, but less that 2 years – 1 week
After 2 years’ continuous service – 1 week for each year worked
But these periods are the minimum, the contract may state otherwise. If the employer ends a
contract without giving the proper notice, the employee may be able to claim breach of
contract.
The Limit on Renewing Fixed Term Contracts
If an employee has a fixed term contract for four years he will automatically become a
permanent employee when the contract is renewed or when the employee is given a new
contract. However, an employer and union (or staff association) may come to a collective
agreement which removes the automatic right to become a permanent employee in these
circumstances. The employee may be able to negotiate terms with the employer. If an
employee on a fixed term contract wants to end the contract early and they have worked for
the employer for one month or more, they must give a minimum of one week’s notice – the
contract may stipulate more. Non-renewal of a fixed term contract does not, in itself, amount
to less favourable treatment – Department for Work and Pensions v Webby [2004].
Challenging objective justification – relates to both part time and fixed term
employees
• Is the employer’s stated business need a legitimate aim? A blanket policy or collective
agreement that has not taken a fixed term or part time employee’s particular circumstances
into account will not of itself amount to a legitimate aim.
• Is it necessary to achieve that aim? A blanket policy of putting all employees who have
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short term funding on fixed term contracts may not be the only way of achieving that aim,
particularly if there is a possibility of further funding.
• Is it appropriate? This will be a question of fact balancing the disadvantages to the
employee such as uncertainty of future employment, adverse impact on career
progression/professional development and credit worthiness versus advantages to the
employer.
Agency Workers
After an agency worker has worked in the same role for at least 12 weeks then they are
protected by the Agency Worker Regulations 2010. The Regulations state that the worker
is entitled to the same basic terms and conditions as he would have been had he been
recruited directly by the employer.
Rehabilitation of Offenders
The Rehabilitation of Offenders Act 1974
This Act applies to England, Scotland and Wales, and is aimed at helping people who have
been convicted of a criminal offence and who have not re-offended since.
Anyone who has been convicted of a criminal offence, and received a sentence of not more
than two and a half years in prison, benefits as a result of the Act, if he or she is not
convicted again during a specified period otherwise known as the 'rehabilitation period’. After
the rehabilitation period a conviction becomes spent and the offender has two basic rights in
seeking employment:
1. The right not to reveal the spent conviction on an application.
2. The right not to be dismissed due to the spent conviction.
The aim of the rehabilitation of Offender Act 1974 (ROA) is to ensure that if an individual has
made a genuine effort to be rehabilitated into society after the conviction of a criminal
offence, he will be protected from having to disclose his criminal past. Provided the individual
does not commit a serious offence within the rehabilitation period, he is to be regarded at the
end of that time as a rehabilitated person and his conviction will be treated as if it had never
happened. The general rule is that the length of the rehabilitation period will depend on the
age of the offender at the time of the conviction and the sentence given for that particular
offence.
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Rehabilitation periods
Sentence length Rehabilitation period
Community order (& Youth Rehabilitation
Order) 1 year
Fine 1 year (from date of conviction)
Absolute discharge None
Conditional discharge Period of order
0 - 6 months 2 years
6 - 30 months 4 years
30 months - 4 years 7 years
Over 4 years Never spent
The above periods are halved for persons under 18 at the date of conviction (except for
custodial sentences of up to 6 months where the buffer period will be 18 months for persons
under 18 at the date of conviction).
Once the person becomes rehabilitated he cannot be asked questions about the offence and, if
he wishes, can deny any knowledge of it. He cannot be treated any less favourably because of
any ‘spent’ conviction.
S4(3(b) of the Act states that an employee cannot be dismissed if he has a ‘spent’ conviction or
for his failure to disclose that he has a previous conviction – neither can he be excluded from
training, holding any offence, profession, occupation or for treating him in any way less
favourably than the employer treats or would treat others. In Hendry v Scottish Liberal Club
[1997] one of the reasons why the claimant was dismissed was connected to the discovery that
he had been convicted many years previously of possessing cannabis. This conviction was
spent and therefore this was not a fair reason for dismissal. In Property Guards Ltd v Taylor
and Kershaw it was held to be unfair dismissal after two security guards signed a document
stating that they had never been guilty of a criminal offence but were later dismissed when the
employer discovered that they had spent convictions for minor offences.
See also Brooks v Ladbroke Lucky Seven Entertainment [1977] IRLIB
A number of occupations are excluded from the provisions of the Act and for these
professions, the candidate must tell the truth about his past. All cautions and convictions
must be declared if the employment involves:-
working with children or vulnerable adults
health, pharmaceutical or legal industries
Banking and financial roles
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Any roles related to national security
If an exemption exists, the employer is obliged to note this in the job advertisement.
Wood v Coverage Care Ltd [1996] IRLR 264, EAT
Changes were made in 2015 which altered the details prospective employees are required
to disclose to potential employers about their past convictions.
Firstly, changes were made to the Data Protection Act 1998 so that job seekers who have
committed less serious crimes will now have a better chance of finding work. Under s56 it is
now a criminal offence for a person to require someone else to produce information about
their convictions or cautions as a condition of their employment, except where the relevant
records are required by law or where disclosure is justified in the public interest, for example
where a person is applying for a role involving interaction with vulnerable members of
society – eg children/elderly those with mental health issues.
The Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment)
(England and Wales) Order 2015
Also in 2015, the Ministry of Justice’s changes to the Rehabilitation of Offenders Act came
into force. As a result, people applying for jobs in any way connected to regulated activity
regarding children, vulnerable adults or NHS security management can now be asked by
prospective employers about spent convictions and cautions (except where they are
‘protected’* convictions and cautions). Regulated activity covers any role, either paid or
voluntary, involving interaction with children or vulnerable members of society, for example
patients or the elderly. Convictions/cautions for sexual and violent offences are likely never
to be protected and, in principle, will always need to be disclosed to potential employers.
On 22 January 2016 the High Court ruled that excessive disclosure of minor historical
criminal convictions in England and Wales is unlawful under Article 8 of the Human Rights
Act, the right to a private and family life.
There is no evidence that minor historic convictions link to current offending behaviour but
there is significant evidence to show that minor historical convictions are linked with low pay
and unemployment in the long term and this s is particularly true for women with convictions,
where their median income is less than half the median income of a 24 year old, eight years
after their conviction. This is excessive in comparison to the gender pay gap. When
convictions combine with protected characteristics it could be argued that the historical
convictions allow employers to reinforce or justify stereotyping and it has a multiplying effect
of disadvantage.
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Lecture 6: 12th February 2018
Wrongful and Constructive Dismissal
You will remember that employment protection is provided by the Employment Rights Act
1996. Here we consider how a contract can come to an end.
Employment may be terminated in a number of ways:
Resignation – notice given by the employee.
Consensual Termination – the employer and employee may reach an agreement about the
employment ending, for example in relation to an early retirement scheme that the employer
offers on certain terms.
Death - employment ends automatically on the death of the employee.
Dismissal - the employer ends the employment by dismissing the employee with or without
notice – this includes a failure to renew a fixed term contract. The employee may also be
constructively dismissed where s/he resigns in response to a breach of contract by the
employer (see below).
Resignation
The employee may hand in his or her notice indicating the date s/he intends to leave. This
should be done in writing, but is effective whether it is done orally or in writing. An employer
cannot presume that an employee has resigned if s/he fails to turn up at work, and in this
situation, an employer should contact the employee and try to get them to return for
investigation and possibly a disciplinary for unauthorised absence. If s/he fails to attend for
work and/or contact the employer then the employer should send a letter dismissing the
employee enclosing their P45.
Zulhayir v JJ Food Services 2011
Retirement
Since October 2011 it has not been lawful for employers to terminate their employees’
contracts because of age ie for retirement. Therefore it is only employees who are entitled to
make the decision that they wish to retire. If an employer wishes to terminate the
employment of an older member of staff, they will have to do it on the normal grounds of
competence, health or misconduct and treat this employee exactly as they would have done
a younger employee. This is discussed in the lecture relating to fair reasons for dismissal.
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DISMISSAL
There are only two types of unlawful dismissal
Wrongful dismissal – breach of contract
Unfair Dismissal – breach of statutory right
Constructive dismissal is either constructive wrongful dismissal or constructive unfair
dismissal – discussed below
Wrongful Dismissal (s95 ERA 1996)
Remember, this is dismissal in breach of the employee’s contract and has nothing to do with
whether the employer acted reasonably.
1. Termination by dismissal
a) Dismissal by Notice. The employer has a contractual right to dismiss for any
reason (or no reason whatsoever) providing the employee receives due notice. The
period of notice will normally be expressly stated otherwise there will be an implied
term of reasonable notice.
Minimum periods see s.86 ERA 1996.
b) Summary Dismissal. Summary dismissal (i.e. without notice) will, prima facie,
constitute a breach of contract – as will termination of a fixed-term contract prior to its
expiry. Dismissal in breach of contract is termed wrongful dismissal. However, an
employee who commits gross misconduct can be summarily dismissed (as the
employee will have breached a condition of the contract). N.B. the misconduct must
go the root of the contract and thus constitute a repudiatory act by the employee.
See: Laws v London Chronicle Ltd [1959] 2 ALL ER 285.Cf. Pepper v Webb [1969] 2
ALL ER 216 and Wilson v Racher [1974] ICR 428; IRLR 114
c) Constructive Dismissal. A constructive dismissal occurs where an employee
resigns in response to the conduct of the employer. For there to be a constructive
dismissal, it is not enough that the employer has treated the employee unreasonably,
the employer's conduct must amount to a repudiatory breach of an express or
implied term of the employment contract. See: Western Excavating Ltd v Sharp
[1978] ICR 221; IRLR 27.
Note that it was subsequently made clear that the employer does not owe a general
duty to act REASONABLY: White v Reflecting Roadstuds Ltd [1991] IRLR 331
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Examples of breaches of express terms may include imposition of a pay cut, unilateral
changes to contractual hours and demotions. However, remember the employer’s breach
must go to the root of the contract (i.e. be a breach of a condition) and the employee may be
deemed to have affirmed the breach if he/she does not act reasonably promptly. The implied
duty on the employer not to destroy mutual trust and confidence is of primary importance
with respect to constructive dismissal. Duty to maintain Mutual Trust and Confidence (or
trust and respect). Most significantly this duty requires employers to treat employees with
respect. See lecture notes on express and implied terms.
Who can bring a claim for Wrongful Dismissal?
Wrongful dismissal and unfair dismissal are quite different however, in some circumstances
an employee can bring a claim for both (and as we will see, can also bring a claim for
discrimination at the same time).
The important thing to remember is that to bring a claim for unfair dismissal, (generally) an
employee must have worked for the firm for two years therefore it might be the case that
bringing a claim for wrongful dismissal is his only option. The introduction of unfair dismissal
was largely as a result of the realisation that wrongful dismissal protection failed to
adequately protect employees. Groups of employees who do not quality for unfair dismissal
or who are seeking higher levels of compensation than can be paid under unfair dismissal
may bring a claim for wrongful dismissal
For example:
Where the employee is highly paid and is dismissed without their full contractual
notice or without use of a contractual disciplinary procedure
Where the employee does not qualify for unfair dismissal because he is employed in
an employment area which is not covered by the Act – Police/Armed Forces etc.
Where the employee’s compensation under unfair dismissal (which is capped) is
considerably less because the remedy under unfair dismissal takes into account
contributory negligence (the employee is dismissed without the correct procedure but
has heavily responsible because of his own conduct).
Where the employee is ‘out of time’ to bring a claim of unfair dismissal to an
employment tribunal – a claim for wrongful dismissal can be brought to the County
Court up to six years after the incident.
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Remedies
As wrongful dismissal is dismissal in breach of contract – it follows the normal rules for
calculating contractual damages apply (see e.g. Addis v. Gramaphone Co Ltd [1909] AC
488; reaffirmed in Bliss v. South East Thames Regional Health Authority [1987] ICR 700).
Contractual damages aim to put the injured party in the position they would have been had
the contract been properly performed.
In contracts of indefinite duration (as opposed to fixed-term ones) there inevitably is a term
that the contract can be brought to an end by giving notice. Accordingly, damages for
wrongful dismissal are often restricted to the pay during the period of lawful notice which
should have been given (whereas in the case of fixed-term contracts this could be until the
end of the term). If there is a contractual disciplinary procedure, the award may also include
damages for the time that would have been taken for that disciplinary procedure to be
completed (as that is a term of the contract).
In very rare situations it is possible to recover damages for loss of reputation or future
prospects on the labour market where the employer is in breach of the duty of trust and
confidence – the so-called 'stigma damages' in Malik v Bank of Credit and Commerce
International SA [1997] ICR 606. However, it should be noted that this is very rare.
While contractual damages are not strictly limited to pecuniary loss, damages for wrongful
dismissal are limited to pecuniary loss. The manner of the dismissal, even if causing
emotional distress or consequential unemployment, cannot be the basis of a claim for
damages (See Johnson v Unisys Ltd [2001] IRLR 279 (HL). Nor can damages be granted to
compensate for the loss of opportunity to claim unfair dismissal (Virgin Net v Harper Ltd
[2004] IRLR 390, CA).
As is the norm with contractual damages, the employee is under a duty to mitigate, i.e. take
reasonable steps to minimise or reduce the loss resulting from the wrongful dismissal.
Pay In Lieu of Notice
Pay in lieu of notice (or PILON), if there is a contractual provision allowing it, it would prevent
a dismissal from being wrongful. If there is no contractual provision then making a payment
in lieu of notice does not stop the dismissal from being wrongful but does provide the
employee in effect with damages upfront (but it may render any post-employment restrictive
covenant – e.g. not working in the same field and in the same area for a set period of time –
ineffective as the contract was ended wrongfully). Whether bonuses are to be taken into
account would depend on the terms of the contract (in Locke v Candy and Candy Ltd [2010]
EWCA Civ 1350 the PILON clause was silent as to the matter of bonuses while the bonus
clause held that bonuses were for employees leading a majority of the CA to hold that as he
was no longer an employee on the due date he was not entitled to a bonus element).
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Injunctions etc.
In certain circumstances, an injunction may be granted (e.g. keeping the contract alive long
enough to allow for a contractual procedure to be completed, Irani v Southampton and SW
Hants Health Authority [1985] ICR 590, Robb v Hammersmith & Fulham LBS [1991] IRLR
72).
However, injunctions play a minor role, not least because of the nature of the contract: Fry
LJ in De Francesco v Barnum (1890) stated ‘I think the courts are bound to be jealous lest
they should turn contracts of service into contracts of slavery’ – and this has been given
statutory force by s.236 Trade Union and Labour Relations (Consolidation) Act 1992 which
holds that no court may make an order compelling an employee to work (a principle which is
interpreted as being reciprocal, i.e. an employer cannot, either rightly or easily, be made to
employ someone).
As wrongful dismissal is a claim for breach of contract, claims can be – and in the past had
to be – made in the ordinary civil courts. Claimants can now go to an employment tribunal
(designed to be swifter, cheaper, less formal) so long as the sum sought is under £25,000.
Remember, where the claim is brought in an Employment Tribunal a failure to follow the
principles in the new ACAS code may lead to compensation for wrongful dismissal being
reduced or increased by up to 25% depending on whether the failure is attributable to the
employee or the employer and the severity of the failure. Where the claim is brought to the
County Court (or High Court), the potential uplift/reduction does not apply.
Consider the size of ‘normal’ wrongful dismissal damages. See also Cantor Fitzgerald
International v Horkulak [2004] EWCA Civ 1287 re discretionary bonuses.
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Lecture 7: Week Beginning 19th February 2018
Unfair Dismissal – Reasons and Remedies
Unfair Dismissal – Every employee has the right not to be unfairly dismissed (s94) ERA
1996
This is where the employee is arguing that:-
The reason given for the dismissal is unjustified in the circumstances, or dismissal is a
disproportionate response to what has occurred and/or, the procedure that the employer has
followed is defective.
Please ensure you read the terminology regarding dismissal on page 526 of the
textbook.
In order to make a claim for unfair dismissal the following must be proved.
For the person is qualified to make a claim – they must be:-
An employee
Working or based in the UK
Have completed the minimum required continuous service ( 1 year if the
employee started work before 6/4/12, or 2 years if s/he commenced service on
or after 6/4/12)
There has been a dismissal.
The Employment Rights Act 1996 defines three categories of reasons for dismissal.
Fairness in relation to dismissal is dealt with under s98 ERA 1996
Automatically fair reasons
Automatically unfair reasons
Potentially fair reasons
There are only two categories of automatically fair reasons why an employer can dismiss
someone.
Firstly for national security reasons
Secondly for unofficial industrial action - that is to say when employees organise unofficial
industrial action outside the sanctions of the recognised trade union.
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Automatic Unfair Dismissal
There are a set of underlying reasons for dismissal which are deemed to be automatically
unfair. In some cases, the employer will have attempted to hide the real reason for dismissal
by using some other excuse, such as poor performance.
Because this protection is deemed particularly important in that it protects employees from
employers who seek to take away their most basic rights, it does not require a one year’s
qualifying service and several of the grounds provide for a higher level of compensation.
There is no single source of law which sets out these rights – eg some may be found in the
ERA 1996 while others will be stated in the Equality Act 2010 – and the list is growing!
Dismissal for a reason relating to pregnancy or maternity
Dismissal for a health and safety reason – eg refusing to work in an unsafe location
or with unsafe materials
Dismissal because of a spent conviction – note 2 years continuous service is still
required.
Dismissal for refusing to work on a Sunday (retail and betting shop only and subject
to individual contracts)
Dismissal for a reason related to trade union activity (or non-trade union activity)
Dismissal for taking part in official industrial action (during the first twelve weeks of
the action)
Dismissal in contravention of the part time workers or fixed term workers regulations
Dismissal for undertaking any duties related to an occupational pension fund
trustee/employee representative/member of European Works Council
Dismissal for attending as a jury member
Dismissal for asserting statutory right - eg national minimum wage/Public Interest
Disclosure Act/right maternity leave/right to paternity leave etc.
Dismissal by reason of a transfer of undertakings. This occurs when one firm is
transferred by sale to another and, as a result, the employee is dismissed – note 2
years continuous service is still required.
Remember that it is only employees who can claim unfair dismissal but this does not mean
that workers do not have rights. For example if a pregnant worker is dismissed because she
is pregnant, she may be able to bring a claim under the Equality Act but she will not be able
to claim unfair dismissal.
Ajayi v Aitch Care Homes 2012
Evans v Open Sight 2012 – a probationary part-time employee was moved to a full time role
within her probation period and then agreed to accompany two colleagues, including her
boss, at disciplinary proceedings against them. Her new boss, who had initiated those
proceedings, dismissed her for poor performance at the end of her probation. The court
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concluded that there was no evidence that her performance was poor, in fact it was quite the
opposite, and the real reason for her dismissal was her support for her old boss and
colleague.
Potentially fair reasons
Assuming that there has been a dismissal, it is for the employer to establish the reason for
the dismissal and that the reason falls into one of the potentially fair categories in s98 ERA
1996:-
Capability and qualifications (covers competence and sickness, also whether the
employee satisfies the qualifications required to continue in the job eg passing
accountancy exams)
Conduct- must be gross misconduct to justify dismissal
Illegality (statutory bar)
Redundancy
Some other substantial reason
Competence and Capability
Competence Issues caused by Sickness
If an employee has a long term sickness problem, or is consistently absent for sickness on a
short term basis, the employer will have to consider its position.
If the employee is suffering from a disability, the employer will need full medical information
before considering dismissal and will only be able to do this if all reasonable adjustments
have been tried to endeavour to get the employee back to work.
With intermittent absences, the employee will have to examine the medical position but, if
any adjustments that are tried do not work, and there is no improvement in the employee’s
attendance, it may well be reasonable to dismiss.
Managing Performance - Competence
Why do we manage performance?
Managing performance is about recognising good performers and motivating them to stay
and grow the business.
Managing performance is also about addressing poor performance and helping people to
improve, but if managers do not then they are liable to spend longer on managing poor staff,
and lose good performers who become disillusioned, also there are likely to be morale
issues within a team
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Where the allegation is of general poor performance, critical aspects are:
The setting of standards – the expectations of the employer should be clearly documented
as far as possible in terms of performance and objectives – see process below
Communication with the employee – the employee should not be in any doubt as to where
s/he is failing to meet these objectives and this should be clearly explained. Although any
initial meeting is informal in tone and is not part of any formal disciplinary, the whole
conversation should be documented and actions to be taken should be recorded. The
employee should always have an opportunity to state his case – this might include issues
around sickness, home related or work related difficulties which are affecting performance.
Outcome of the meeting - this might include:-
Training to be planned – whether formal or ‘on the job’ – if the latter, then who is to
do it and when?
Addressing particular issues which have been raised e.g. relationships at work,
sickness of the employee etc.
Mentoring or coaching – where this is appropriate, what arrangements have been/will
be made?
Where are the goalposts? What is the employee expected to have achieved
realistically by the time of the next meeting, or what other action should have been
taken by each side?
Feedback – when is the next meeting, and where should the employee go if s/he has
problems or issues to raise before this?
Once this process has been commenced, a continuing failure to meet objectives and to
perform can result in the employee being dismissed (s98 ERA 1996).
Other reasons for poor performance
It may be that during this informal preliminary meeting, or later in the process, the employee
discloses that s/he has another problem which is leading, or contributing, to the problems of
poor performance.
Illness or disability – the employee may indicate that he has a medical condition or health
concerns. It will be inadvisable for the employer to take any further action until the extent and
effect of this has been determined. Once it has, if the condition is a disability, the employer
will have to consider what reasonable adjustments can be made to accommodate this
disability
Stress - the employee may state that s/he is under stress for personal reasons or because of
work-related issues. Again the employer will need information about the nature and extent of
the stressor. If it is a home related issue, such as a divorce, debt or serious illness in the
family, most employers would give the employee some latitude. A tribunal would almost
certainly take a dim view of a dismissal for poor performance in the teeth of serious personal
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problems. If a work related issue is cited, such as excessive workload or bullying, then the
employer should carefully investigate the allegations in order to decide whether they are
justified, taking appropriate action eg reduction of workload, disciplinary action against bully,
where appropriate.
Formal performance management procedure
When concerns about performance arise it is necessary to carry out a formal procedure.
Once the informal stage has taken place, if there has been no improvement, or insufficient
progress towards the objectives, the employer should move into a more formal process.
Many employers have a performance management procedure, but if there is no such written
procedure, it is acceptable to follow the pattern of the standard disciplinary procedure. The
employee is effectively taken through three stages similar to the three warnings, but the
meetings are different in that there is no issue of conduct or wilful behaviour; it is a question
of competence. The employer will set objectives, discuss with the employee how they may
be achieved and what training and support might be required. If, despite this, the employee
does not reach a satisfactory standard, then the employer moves to the next stage.
Ultimately, the employee may be dismissed at the final meeting, with notice. It is critical, as
always, that these meetings are carefully documented and backed up by letter to the
employee confirming the outcome of the discussions. The dismissal procedure should
conform with the ACAS Code of Practice, otherwise there is a danger that the dismissal
could be seen to be unfair.
Misconduct
The allegation here is that the employee has been guilty of wilful misbehaviour.
Investigation
Before taking any disciplinary action for misconduct, the employer will need to be sure of its
grounds. Other than in exceptional cases, the employer will normally launch an investigation
into the misconduct. In cases where the allegation is of gross misconduct, it would normally
be appropriate to suspend the employee, normally on full pay, pending the outcome of the
investigation.
Any investigation will normally be conducted by the employee’s line manager or some other
suitable person. They will seek to interview witnesses, review any documents and try to
establish exactly what has happened. They will then recommend whether disciplinary action
should be taken.
A more senior manager will normally review the investigation, and then decide whether to
accept the recommendation. If they do, a disciplinary panel or disciplinary officer will be
appointed to hear the internal disciplinary. That person or person(s) must be unbiased as far
as possible.
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This person(s) will then hear the evidence, including that given by the investigating officer
who will present his/her report, any other witnesses on either side, and very importantly, the
employee him/herself. They will then make a decision.
Misconduct tends to be divided between -
Gross misconduct – examples are dishonesty, violence, harassment or bullying of other
employees and this kind of conduct, if found to be proved, will tend to lead to instant or
summary dismissal.
Serious misconduct – this is also very serious, but tends to matters that might constitute
gross misconduct where the employee is able to show that there are mitigating
circumstances and persuades the employer to give him/her a last chance by issuing a formal
final written warning.
Minor misconduct – this is misconduct which will not lead to dismissal, but leads to a
warning, whether a written warning or a formal verbal warning – it is up the employer which
to issue and is a matter of judgment.
All warnings will last for a specific period of time – tendency is for verbal warnings to last 6
months and written warnings to last 12 months. If the misconduct is repeated within this
period, the employer will move to the next warning stage or to dismissal.
A key question relating to misconduct is whether particular behaviour amounts to gross
misconduct or is merely an instance of serious misconduct. This matters because a
dismissal will only be fair if a reasonable employer could conclude it was gross misconduct.
Here are some cases on the difference between gross misconduct which can lead to
dismissal and serious or ordinary misconduct which should not:
Weston Recovery Services v Fisher (2010)
Look Ahead Housing & Care Ltd v Rudder (2011)
Quadrant Catering v Smith (2011)
Pepper v Webb [1969] 2 All ER 216
Wilson v Racher [1974] ICR 428
Misconduct outside work
Where the employee has been guilty of misconduct at work, the employer will need to carry
out the procedure above and a decision will be taken as to whether to take disciplinary
action. It is more complicated if the misconduct has taken place outside work.
It has generally been held that where the employee has committed some offence of
dishonesty, the employer will generally be justified in dismissing him or her. It will generally
be necessary to show that there is a real impact on the employee performing his or her role,
or some reputational issue.
Leach v Office of Communications 2012
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Gosden v Lifeline Project Ltd [2012]
In Gosden a tribunal held that an employer had fairly dismissed an employee who had sent
an offensive chain e-mail, outside working hours and from his home computer, to the home
computer of a friend who worked for the employer’s client. The e-mail eventually entered the
client’s computer system and caused the employer’s reputation with that client to be
damaged. The decision to dismiss the employee was reasonable. The e-mail had been a
‘chain’ type mail which had at the bottom ‘it is your duty to pass this on’, and it was clearly
intended for the friend to pass on.
Illegality
This is a legitimate reason for dismissal and is confined to situations where it is no longer
legal for the employee to be employed in that role eg s/he is a professional who has lost their
licence to practice, a company director who has been disqualified by the court or a driver
who has lost their licence.
Redundancy
There are cases where an employee has been deemed to be ‘redundant’ – the job no longer
exists, when the reality is that the employer has used this as a tool to dismiss an employee.
There are strict rules regarding redundancy and it is up to the employer to demonstrate that
the job does not exist or that the reason for employment does not exist – eg a factory has
closed (s139 ERA 1996)
Some other substantial reason
This is confined to reasons which do not fit neatly into one of the other categories but which
the tribunal still considers mean that the employer can legitimately claim that there is a
sufficient reason for a lawful dismissal.
Examples include
A refusal to accept a reduction in pay or benefits which has been imposed by the employer
on the workforce for good economic reasons and which the overwhelming majority of his or
her colleagues have accepted.
Reputational issues where the employee is involved in lawful conduct which may impact eg
in Pay v Lancaster Probation Authority , Pay was dismissed because his employer
discovered that he was a leading person in the UK branch of a French sado-masochistic
society and was involved in a local club which promoted these activities. The employer felt
that his employment as a senior probation officer assisting young offenders who had been
guilty of sex offences was prejudiced by his activities as would the authority’s reputation if
his activities became general knowledge.
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Remedies
There are 4 potential remedies for unfair dismissal in the ERA 1996:
Reinstatement – s114
Re-engagement – s115
Compensation – s112 and s118-127B This is the main and most common remedy.
Declaration of unfair dismissal.
Reinstatement and Re-engagement
If the tribunal finds a dismissal unfair, it must explain to the complainant that these orders
are available, and ask if the employee wants the tribunal to make such an order.
Reinstatement is taking the employee back to his/her job, treating him/her as if s/he were
never dismissed, inclusive of benefits such as increments/promotion etc. S/he will get their
old job back on the same terms and conditions.
This will not be ordered if the claimant does not want it, or where it is not practicable.
Re-engagement is where the employee is taken back by the employer or by a successor or
associated employer, in an employment comparable to that from which s/he was dismissed
or other suitable employment. Here the tribunal specifies the identity of the engaging
employer, the nature of the employment and the rate of remuneration. In either case,
continuity is preserved.
These orders are extremely rare, as it is unusual for the claimant to want anything other than
compensation – they are awarded in less than 1% of cases.
Compensation
Compensation is the main remedy and is divided up into various 'heads'. The employee is
eligible for a 'basic award' calculated in the same way as redundancy payment and a
'compensatory' award, which seeks to put a figure on the employee's actual loss. Both
heads are subject to a maximum and tribunals are now permitted to award interest on their
awards.
Basic Award
Dependent upon the employee's length of service and his/her pay, the award can be
reduced by the amount of any redundancy pay received, and may also be reduced for
contributory fault, where the employee has refused an offer of reinstatement, refused to
attend any disciplinary proceedings or where the employer has made some ex gratia
payment meant to offset legal rights. An uplift may also apply because of the procedure/lack
of procedure by the employer.
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The basic aware is calculated by multiplying a weekly pay amount up to a maximum limit
(see below) by the number of years of service (up to 20 years).
The employee receives 1 week of pay for each year he worked between the ages of 22 and
41. He receives 1.5 week’s pay for each year he worked over the age of 41, and 0.5 week’s
pay for each year between the ages of 18 and 22.
The Polkey Rule
The case of Polkey v AE Dayton Services Ltd [1988] AC 344 ruled that any award of
compensation may be reduced (by up to 100%) to reflect the employee’s responsibility for
his dismissal – if an employee caused his dismissal by serious misconduct then he may not
be awarded compensation.
The Compensatory Award
The objective of this award is to compensate the employee to some extent for the loss of his
job, subject to a maximum. The onus is on the employee to produce evidence of his/her loss.
It should be the amount the tribunal considers to be just and equitable having regard to the
loss sustained by the complainant.
There may easily be a nil compensatory award where there has been no loss, or where
there has been a procedural defect, which would have made no difference to the decision to
dismiss.
Also this may be the case where the original dismissal was on weak grounds, but later a cast
iron case against the employee emerged.
The major headings are: -
(i) Loss up to the date of the hearing i.e. actual loss of income including loss of other
benefits e.g. car.
(ii) Future loss - actual likely loss times a multiplier, taking into account matters such as
local conditions, likely future occurrences in the complainant's life e.g. redundancy.
(iii) Loss of accrued rights - loss of statutory rights which depend on continuous service
(iv) Loss due to manner of dismissal - loss of dignity, 'name' in the industry etc.
(v) Loss of pension rights.
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Compensation limits
Limit on weekly pay for calculation of basic award – £489 (After 6th April 2017)
Maximum basic award - £14,670 (£489 x 1.5 week’s pay x 20 years’ service)
Maximum Compensatory award - £80,451 (After 6th April 2017)
Dismissal for making a protected disclosure (whistleblowing) - No limit
Discrimination – race, sex, disability, sexual orientation, religion or belief, age - No limit
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Lecture 8: Week Beginning: February 25th 2018
Unfair Dismissal – Reasonableness
Please read s98 ERA 1996
There are three stages to a claim of unfair dismissal
Stage 1
For the person is qualified to make a claim – they must:-
1 Be an employee
2 Working or based in the UK
3 Have completed the minimum required continuous service ( 1 year if the employee
started work before 6/4/12, or 2 years if s/he commenced service on or after 6/4/12)
4 Have been dismissed.
Continuous service is not interrupted by:-
Sick or injured
On leave for under any of the family friendly rights
On annual leave
What is the termination date? (s97)
This is important for calculating how long the employment has been for continuous service
purposes.
The employee must put in the claim no more than 3 months from the date of termination.
Vasella Ltd v Eyre 2012
E wished to resign from her job as an operations manager of an hotel in Glasgow and went
into work on Sunday 21 November 2010 and hand delivered a sealed envelope containing
her resignation for the attention of P, the hotel’s general manager. P did not work on
Sundays and she knew this – she asked the duty manager to put it in his pigeon hole but M
told her that P was on leave and would not be back until Wednesday. She accepted this and
left the envelope for him. Later that evening she e-mailed her letter to B, an executive PA at
the company, B. B did not work on Sundays but read the e-mail and circulated the
information to others in the company that evening. The letter of resignation was dated
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Monday 22 November and stated that she wished to resign’ with immediate effect’. On
Monday, B replied to her e-mail accepting her resignation and stating that her last day of
work would be Monday 22nd November. When she later put in a claim for unfair dismissal,
there was a question of whether she was within the 3 months time limit for unfair dismissal
and this depended on when her resignation took effect.
Held
A resignation does not have to be in any particular form as long as the employee clearly
communicates to the employer that s/he is treating the employment as being at an end.
Even though her letter was delivered to the hotel, it stated clearly that she was resigning on
the following day and their response to her made it clear that that is what they believed. E
had no reason to think that her decision to resign would have been communicated before the
following day. E’s resignation date was 22nd November and her claim was in time.
The effective date of termination is usually the date upon which notice expires, if it is given,
or the date upon which an instant or summary dismissal takes place or the date upon which
a fixed term contract that is not renewed expires.
The employee must have been dismissed
In order to make a claim of unfair dismissal, the employee must be able to show that s/he
has been dismissed.
Futty v Brekkes
The employee does not have to prove anything other than these four elements.
Stage 2
It is for the employer to demonstrate the reason for the dismissal (‘I dismissed Mrs Smith
because I found evidence that she stole money from the till’) and that the reason falls within
s98 ERA 1996. (I dismissed Mrs Smith under the heading of misconduct – I found her
conduct to be gross misconduct which entitled me to dismiss her’)
Stage 3
It is then for the tribunal to establish whether the employer acted reasonably when
dismissing the employee. Please ensure you read British Homes Stores Ltd v Burchell
1980 which will help to explain reasonableness
Reasonableness is divided into two.
Substantive reasonableness and Procedural reasonableness.
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Substantive reasonableness - Was the action taken by the employer a reasonable
response to what has occurred? What is meant is, for example, if the employee is late for
work on two consecutive days, does this give the employer to right to dismiss? Was the
employee guilty of misconduct or gross misconduct? Is there sufficient evidence? The
employer can only dismiss if the employee is found guilty of gross misconduct following a full
investigation – Burchell v BHS is the leading case on this issue. What is being asked is
whether the sanction (dismissal) was the correct action for the employer to take or would a
warning have been more appropriate? The test established in this case is the ’range or
reasonable responses’ – Is the decision one that a reasonable employer could make?
This test represents wide discretion on the part of the employer – the employment tribunal is
not willing to substitute its own decision for that of the employer, the question is whether or
not a reasonable employer could decide in the way the employer in question did.
This test has arguably been modified in its effect by the case of Newbound v Thames Water
Utilities Ltd (2015) EWCA Civ 677 (please read) in which the Court of Appeal seems to be
more willing to investigate the substantive merits of the employer’s decision in finding no
reasonable employer would reach the same decision.
Procedural Reasonableness - Whether or not the reason for the dismissal has been
established and whether dismissal is a proportionate response to what has happened is one
thing; the other is whether or not the employer has carried out a fair (reasonable) procedure.
If this has not been done, then the dismissal will be unfair.
The issue is s98(4)(a) ‘whether in the circumstances (including the size and administrative
resources of the employer’s undertaking), the employer acted reasonably or unreasonably in
treating the reason as a sufficient reason for dismissing the employee’ and whether he
followed a reasonable procedure.
It is quite clear that the tribunal should hold the dismissal fair, even if in its opinion the
employer was being harsh, provided the dismissal fell within the ‘range of reasonable
responses’ within which one employer might decide to dismiss, whereas another might not.
The tribunal will have to be satisfied that dismissal is a proportionate response – it does this
by applying the ‘range of reasonable responses test.’
The employer will have to follow the proper procedure. This should be set out in the
employee handbook. The handbook should explain to the employee exactly what will
happen if he/she takes action at work.
For example, the handbook may say that if the employee is late for three consecutive days,
he/she will be subject to disciplinary action. When deciding any action to take, the employer
MUST follow the procedure he has laid down in the handbook – he must act reasonably.
A failure to follow a reasonable procedure may render an otherwise fair dismissal, unfair.
Polkey v AE Dayton Services Ltd [1988] AC 344
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Dismissal Procedure
REMEMBER, unfair procedure can make what would otherwise have been a fair dismissal,
unfair. It is absolutely crucial that the proper procedure is followed.
With misconduct, competence and incapability dismissals, the standard is set by the ACAS
Code of Practice on Disciplinary and Grievance Procedures 2015 (can be found on
www.acas.org.uk.). A failure to follow the recommendations therein will often count against
an employer in judging the fairness of the dismissal. The standard procedures of most large
employers conform to this.
Important points are:
It is crucial that any individual employee should be aware that s/he is to attend a disciplinary
hearing. Employees must have notice of the charge against them.
Under s.13(4) of the Employment Relations Act 1999, the right to be accompanied applies to
only those disciplinary hearings that could result in: the administration of a formal warning;
the taking of some other action (for example dismissal or other disciplinary sanctions); or the
confirmation of a warning or other action already issued or taken (ie an appeal hearing).
Although the statutory right does not apply to an investigatory meeting, an employee may
have the right to be accompanied under the employer’s own disciplinary procedure.
Employers should try to ensure that the decision to dismiss is not taken by the person who
has initiated the complaint or someone whose dealings with the employee might have
already tainted his/her view of the case.
The employee should have an opportunity to put his/her side of the story - this is of vital
importance.
The employer should talk to any witnesses and gather relevant documentation; there is no
general principle that the employee must be shown the witness statements, as long as they
are told the substance of the accusations.
The employee should be able to present evidence and/or cross-examine witnesses if s/he
wishes.
It is not generally acceptable to dismiss an employee for a ‘first offence’ unless it is gross
misconduct. He should normally be subject to a series of warnings before dismissal is an
option. It will not be fair to take into account expired warnings in taking the decision to
dismiss.
Reasons for the decision should be given and the panel should consider a full range of
actions it might take, not just dismissal.
There should be a right of appeal against any disciplinary decision.
In order to justify a dismissal for misconduct, the employer will have to show that s/he
honestly believed on reasonable grounds that the employee was guilty, and this belief must
exist at the time that the employer took the decision to dismiss.
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In order to back this up, the employer must show that s/he has carried out as much
investigation into the matter as is reasonable in all the circumstances and this will depend, to
some extent on the size and administrative resources of the employer.
The employer may not rely on after-acquired information to justify a previous dismissal, but
where this was discovered during the appeal process, they may so rely.
With illness, the tenor of the procedure is different, but the principles are the same. Tribunals
consistently stress that to warn a genuinely ill person is inappropriate - what is important is
consultation and the gaining of medical evidence as to future prospects of the employee.
The ACAS Code
The general rules that employers should follow are:
The Code concentrates on disciplinary situations, which include misconduct or poor
performance. It is legitimate to use a separate procedure to deal with performance issues,
but the basic principles of fairness must be followed.
Principles
Disciplinary and grievance policies should be laid out in writing.
Where possible, employees should be involved in the development of policies.
Managers should be made aware of them.
Often formal action is necessary, but what is reasonable or justified will depend on size and
resources of employer.
However, disciplinary matters should be dealt with fairly:
Employers and employees should deal with matters promptly eg meetings and decisions
under the procedure.
Employers and employees should act consistently.
Employers should carry out any necessary investigations, to establish the facts.
Employers should inform employees of basis of the problems and given them an opportunity
to put their case before decisions are made.
Employers should allow employees to be accompanied.
Appeal against any disciplinary sanction should always be allowed.
Disciplining Staff
Establish the Facts
Investigate without delay
Either
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Hold an investigatory meeting without unreasonable delay, or
Collate evidence
If a disciplinary meeting results, a different person should investigate and conduct
disciplinary if possible.
There is no statutory right to be accompanied at investigatory meeting, but employer
procedure might allow it if employer is suspending with pay, should be as short as possible,
kept under review and the suspension itself is not disciplinary action.
Inform the employee
If a disciplinary meeting is to be held, inform the employee in writing with enough information
to be able to defend himself, and possible consequences, and copies of any written
evidence, including statements to be included, and notify employee of time and date and
venue, and advise employee of right to be accompanied.
Hold the Meeting
This must be done without unreasonable delay, but give enough time for the employee to
prepare his or her case. Employers and employees should make ‘every effort’ to attend
meeting.
The employer
explains the complaint; listens to employee’s response; gives employee the opportunity to
ask questions, present evidence and call witnesses; gives employee opportunity to
challenge employer’s witnesses; where either party intends to call witnesses, they should
give notice to the other side.
Right to be accompanied
There is a statutory right to be accompanied where meeting could result in:
formal warning being issued; or
taking of some other disciplinary action or
the confirmation of such (ie appeal hearings)
The companion can be a workmate, TU Rep or official employed by TU (if a TU rep, they
must be certified by Union as competent to accompany worker).
The companion can
address the hearing to sum up the employee’s case; respond on behalf of the worker to any
views expressed at the meeting; confer with the employee during the hearing.
The companion cannot
answer questions on the worker’s behalf; address the hearing if the worker does not want
this, or prevent the employer from explaining its case.
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Decide on Appropriate Action
Inform employee in writing. The usual sanction is written warning, first or final. This should
set out in writing the nature of misconduct/poor performance and what is required to
improve.
The timescale for this
How long the warning will last and the consequences of any repetition.
If it is a dismissal, the employee should be informed
Reasons
Date of termination of contract
Period of notice
Right of appeal
If gross misconduct has taken place
Only an employee with the appropriate authority can take that decision
There must still be a fair process
Generally what constitutes gross misconduct should be set out by the employer.
Where an employee is persistently unable to attend a disciplinary hearing without
reasonable cause, the employer should take a decision on the evidence available.
Opportunity to appeal
Should be heard without unreasonable time and delay
Ideally at an agreed time and place
Employees should set out grounds for appeal in writing
Where possible should be held by someone not previously involved in case
Workers have statutory right to be accompanied
Result should be conveyed to employee in writing.
Grievance Procedures
It is important that the employee is able to bring a grievance against anyone within the
organisation, it fact, it is an implied term that a grievance and discipline procedure is in
place. There is no set format for this, but the system must be robust and must provide the
employee with an opportunity of raising issues within a confidential framework. The
employee is entitled to raise any issue and his grievance must be heard in a timely manner.
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The employee must also be satisfied that action is taken/or that his issue with dealt with/or
that he has received a full explanation as to why this situation has occurred.
For example in organisation in A it has been decided that all grievance letters should be
addressed to the HR Manager and that he/she will decide who is the most appropriate
person to hear the grievance. If the grievance is in relation to the HR Manager him/herself,
then the grievance letter is to be sent to a Senior Manager within the firm. In this scenario:-
Jo feels aggrieved because he feels that his Manager is not allowing him to take holiday to
which Jo is entitled. Jo writes a simple grievance letter, the format of which has previously
been set out by the HR Department. In the letter Jo states that he feels that he is being
‘picked on’ by his Manger because others in the department are able to take heir holidays
when they choose. The grievance letter is sent to the HR Department who decide that they
will write back to Jo and explain to him that they will speak to his Manager on his behalf and
find out why holiday time is not being given. The HR Manager then arranges a meeting with
Jo’s Manager who states that the work Jo is involved in is critical for a major contract and
that once the work is completed, Jo will be free to take holiday. The HR Manager points out
to Jo’s Manager that this bad feeling could have been avoided and that it is his responsibility
to explain his decision to Jo and not to merely refuse his request for holiday. Jo’s Manager
then holds a meeting with Jo and explains the position, apologising for not explaining the
situation more clearly in the first place. As a gesture of good will, the HR Department
decides to award Jo (and other involved in this contract) an extra day’s holiday for helping
the organisation with this very important contract.
If a letter of grievance does not resolve the issue, the procedure becomes more formalised,
again there is no set format for this.
In essence:-
The employer holds a meeting; formal meetings should be held without unreasonable delay.
Employers/employees and companions of the employee should make every effort to attend;
employees should be allowed to explain their grievance and how they think it should be
resolved, adjournment may be necessary if investigation is needed.
At all times, the employer must allow the employee to be accompanied, this also applies
where the employee is complaining about the employer breaching a duty which is owed to
the employee, which will be most usual cases.
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The employer must decide on appropriate action and must then communicate this to the
employee, and where appropriate, set out the action that the employer intends to take.
The employee should be informed that they have a right to appeal and the grounds of the
appeal should be set out in writing without reasonable delay. The appeal meeting should be
set without unreasonable delay and at a time and place which should be notified to the
employee in advance. The appeal meeting should be heard without unreasonable delay by
someone not previously involved in the case if possible. There is a statutory right to be
accompanied and the outcome should be communicated to the employee in writing without
unreasonable delay.
Overlapping grievance and disciplinary cases
Where an employee raises a grievance during the disciplinary process, the disciplinary
process may be temporarily suspended in order to deal with the grievance.
Where the two are related it may be appropriate to deal with them concurrently.
Collective grievances
What is said above is not appropriate for grievance raised by 2+ people to a trade union –
they should be dealt with by the organisation’s process.
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Lecture 9: Week Beginning March 5th 2018
Introduction to Discrimination Law
The law recognises the right of an individual worker to be treated equally with others
regardless of factors which should be irrelevant in decision making.
The Equality Act 2010 provides protected related to protected characteristics as discussed
below.
The word ‘discrimination’ simply means to decide between one thing and another. As a
matter of course, employers will often have to ‘discriminate’ or make choices at work. The
fact that an employer decides to employ one candidate rather than another, or decides to
promote one member of staff rather than another is itself a form of discrimination. The
important thing is that the employer does not make the decision, or appear to do so on an
unlawful basis; so the issue to be determined is the reason for the decision that was made.
Why do we have a law about equality of opportunity?
It has an important role in protecting the dignity of the individual worker
It tries to correct the disadvantages which are suffered by certain groups (perhaps in
introducing some element of ‘affirmative action or positive discrimination’)
It tries to overcome the failure of the market by bringing down barriers against certain
excluded groups.
General Principles
Anti-discrimination legislation has a number of features which make it different from standard
employment protection, which we discuss later:
There is no qualifying period of employment required before the worker can take
advantage of the protection (unlike, eg unfair dismissal)
All forms of discrimination allow for unlimited damages, and the legal costs involved
in defending claims is high because they tend to be complicated
There is a reversed burden of proof once the applicant shows that there is a genuine
question mark over the decision and prima facie evidence of discrimination is found
i.e. the employer has to show that in taking the decision or action in question there
was not unlawful discrimination – (EqAct 2010 s136)
A discrimination action is often interesting enough to generate unwelcome publicity
The law applies to all persons who work for the organisation, whether employees,
workers or contractors and also to ex-employees, for example, where a failure to give
a reference is claimed to be victimisation, and also to job applicants.
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The Equality Act 2010 (EqAct 2010) was passed to place all anti-discrimination provisions
under a single consolidated statute. The Act also reformed the law in the number of areas,
and reference is made to this in the relevant sections.
‘Protected Characteristics’ (s4)
Just because a decision seems unfair, does not necessarily mean that it is unlawful. In order
to be so, the less favourable treatment needs to because of certain protected characteristics.
Less favourable treatment will be unlawful if it is because a person has the following
characteristics
Age (s5)
Disability (s6)
Gender reassignment (s7)
Marriage and Civil Partnership (s8)
Pregnancy and Maternity (s18)
Race (which includes colour, nationality or ethnic or national origin) (s9)
Religion or Belief (s10)
Sex (s11)
Sexual Orientation (s12)
There is also separate provision which prevents discrimination against part-time workers,
and those on fixed term contracts. Part Time workers are protected by the Part Time
Workers (Prevention of Less Favourable Treatment) Regulations 2000 and Fixed term
workers are protected by the Fixed Term Employees (Prevention of Less Favourable
Treatment) Regulations 2002. Part-timers’ treatment and terms and conditions should be
equalised with full timers and the same applies to fixed term employees (other than the fact
that their contract is set to run for a specific period, rather than being permanent).
Discrimination Generally
What kind of act is discriminatory?
In all cases, the legislation provides for four main kinds of discrimination, and a fifth more
restricted type.
1. Direct Discrimination (s13) – less favourable treatment specifically because of
one of the protected characteristics, for example, the person’s sex, race, colour, nationality
or ethnic or national origin, disability, gender reassignment or sexual orientation. This might
be, for example, a refusal to employ, a denial of promotion or training, a dismissal or
redundancy or undermining someone because of a protected characteristic. Except for Age,
direct discrimination cannot be justified
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2. Indirect Discrimination (s19) – where the employer uses a provision, criterion or
practice which disadvantages one or more of these protected groups and which cannot be
objectively justified. For example, a required level of English to qualify for a job might
discriminate against persons who have not been born in the UK, may have had to learn the
language late and may not have such a good command of English. A minimum height
requirement will discriminate against women, as will a strength requirement; a dexterity
requirement may discriminate indirectly against men. The question in all cases will be; can
that requirement or criterion be justified in the context of the genuine requirements of the
job?
3. Harassment (s26) - unwanted conduct violating the dignity of men and women in the
workplace and causing a hostile and intimidating atmosphere for them, and which takes
place because of a protected characteristic The key is that the actions or comments are
viewed as demeaning and unacceptable to the recipient, and it is reasonable for them to
have that effect.
4. Victimisation (s27) - less favourable treatment meted out to any person related to
the use of this legislation, e.g. because a person has brought unlawful discrimination
proceedings, or assisted another person to do so.
5. Discrimination based on association or perception or because someone is deterred
from doing something (the definition in s13 is wide enough to cover this type of
discrimination and this type of discrimination also comes under the heading of direct
discrimination)
It is also unlawful for an individual to ‘instruct’ someone to discriminate. If, for example senior
management require a manager to discriminate, senior management will also be responsible
for the discrimination (s111). Employers (management) also have a responsible to ensure
that discrimination in the workplace does not occur. Employers are liable for the acts of their
employees (s109) and anything done in employment must be treated as also done by the
employer. The only defence the employer will have is if he can demonstrate that he took all
reasonable steps to prevent the discrimination from occurring (s109(4).
Please note that on page 592 of the text dual discrimination is identified. This has not
been brought into legislation.
Where less favourable treatment of the worker is not based on his or her own particular
protected characteristic eg disability or age or race, but is because of his or her association
with another person who does have those particular characteristics, that treatment will be
unlawful. An example might be that a worker is treated less favourably by the employer
because of the time s/he is spending away from work caring for an elderly relative, or a
disabled child. This will be a form of direct discrimination (s13) because of the worker’s
association with someone who is disabled or someone who is aged. The perception
discrimination provisions make it unlawful to treat someone less favourably because it is
perceived that they are eg gay, or a Muslim, even though, in fact, they are not, but the less
favourable treatment takes place ‘as if’ they were gay. An example might be that a worker is
subjected to homophobic abuse on the basis that he is gay, when in fact he is heterosexual
or an application from a prospective employee which is rejected because her name makes
her ‘sound’ like she is from an Africa.
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How does this apply in employment? (s39)
An employer must not unlawfully discriminate against someone:
in the arrangements he or she makes for the purpose of determining who should be
offered that employment, or
in the terms on which he or she offers the person that employment, or
by refusing or deliberately omitting to offer that employment.
in the way it affords access to that person to opportunities for promotion, transfer or
training, or to any other benefits, facilities or services, or by refusing or deliberately
omitting to afford access to them, or
by dismissing him/ her, or subjecting him/her to any other detriment.
In relation to direct discrimination, the motive of the person discriminating is irrelevant – even
if he means well, it will still be discriminatory. Please see James v Eastleigh Borough Council
[1990]/Amnesty International v Ahmed [2009]/Nagarajan v London Regiosnal Transport
[1999]
Positive action (s158)
Employers have been able to take ‘positive action’ for many years to reduce the effect of
discrimination on the make-up of the workforce. Where an employer has a particularly low
proportion of a particular group, in practice this is most likely to be in relation to one sex or a
racial group:
in one department or part of the business compared with the rest of the organisation,
or
in the business compared with the proportion of that group in the wider community.
The employer is entitled to attempt to redress that balance by:
placing job advertisements in particular parts of the press
by using employment agencies where such groups are concentrated
by aiming recruitment or training schemes at school leavers from particular groups
by encouraging these employees to apply for promotion or training opportunities
by providing special training for promotion or skills to this group.
These provisions are aimed at encouraging participation and up-skilling members of
unrepresented groups. Ultimately, however, the actual decision making around recruitment,
promotion or training must be fair and not unlawful discrimination.
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Positive Discrimination
This is very different from Positive Action. From April 2011, the Equality Act 2010 s159
introduced a very limited ability for employers to discriminate positively. This is specifically
in the area of recruitment and promotion. The employer is entitled to take a protected
characteristic into account when deciding who to recruit or promote where people having
one of the protected characteristics are at a disadvantage or are underrepresented in its
workforce. This is quite limited, as it only applies where the candidates are otherwise
equally qualified, and it is not lawful to have some kind of blanket rule of treating
candidates with a particular characteristic more favourably than others.
Harassment (s26)
It is unlawful to harass a worker at work on the basis of any of the protected characteristics.
This means that the employer has an obligation to take all reasonable steps to ensure that
such harassment does not take place and to support the worker if it does. If this is not done,
the liability for the harassment may shift to the employer.
The potential damages can be extremely high – even in an isolated example of severe
harassment, the employer will have to demonstrate that it has a well enforced and well
understood harassment policy and that it takes such matters very seriously.
The vicarious liability of an employer for acts of harassment by an employee towards a
fellow employee usually extends to work related social activities, but not purely private social
engagements (s109).
Recent changes to law on harassment
There is a new approach to the definition of sexual harassment, which has the effect of
simplifying it and widening it. The general harassment provisions apply to age, disability,
gender reassignment, race, religion or belief, sex and sexual orientation. They make it
unlawful for A to harass B by engaging in conduct ‘related to’ one of these protected
characteristics where the conduct has the purpose or effect of violating B’s dignity, or
creating an intimidating, hostile, degrading, humiliating or offensive environment for B. Thus
it would obviously cover a situation where B was being harassed because he was gay, but it
also covers any situation where the conduct is ‘related’ to that characteristic and so it would
cover a situation where offensive remarks were made to C about eg his son’s disability, or D
about his daughter’s sexual orientation, or indeed remarks made about one worker in the
hearing of another, who is upset about the treatment of his colleague. This means that
someone has a perfect right to sue based on upset they are suffering because of conduct
which relates to another person’s sexuality or race.
An employer will only be able to protect himself from a liability if he can demonstrate
that he has taken ‘all reasonable steps’ to prevent the harassment (s109).
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Occupational requirements
Under the previous law, exceptions where discrimination was allowed applied in different
ways to different strands of discrimination. The Equality Act applies a general occupational
requirement defence to all protected characteristics. What this means that if a person is able
to show that, having regard to the nature or context of the work, it is an occupational
requirement to have a particular characteristic and that applying that requirement is a
proportionate means of achieving a legitimate aim, then it will be lawful. For example, female
staff may be required where the job involves close personal contact with women, or the
authenticity of a dramatic performance may require a black actor. In both cases the recruiter
will argue an occupational requirement, and will reject candidates who do not have that
characteristic. There is also provision to deal with organised religions and organisations
which have a religious ethos. This is a strict provision and does not allow generalised
discrimination by those bodies. They will have to show that the post in question is either for a
minister of religion or is one of the small number of lay posts which exist to promote and
represent religion. It certainly would not apply to support posts, administrators etc, but only
to those positions where the religious ethos was fundamental to the work.
Burden of Proof
In English Courts the defendant is ‘innocent until proven guilty’ in other words we must
assume that he has done nothing wrong until it can be proved otherwise. In relation to
discrimination, the opposite is true. S136(2) explains that if the court looks at the facts and
there is no convincing explanation for why the alleged discrimination has occurred, the court
is entitled to assume that the employer has discriminated. We call this a ‘reversal of the
burden of proof’.
s136 EqAct 2010
(1) This section applies to any proceedings relating to a contravention of this Act
(2) If there are facts from which the court could decide, in the absence of any other
explanation, that a person (A) has contravened the provision concerned, the court
must hold that the contravention occurred.
One of the biggest obstacles in relation to direct discrimination cases is proving that
discrimination has taken place. The common law has long accepted that applicants rarely
have direct evidence of discrimination, so any evidence of discrimination normally consists of
inferences drawn from primary facts.
If the primary facts indicate there has been discrimination of some kind, the employer must
give an explanation and, if it does not provide a clear and specific explanation that satisfies
the tribunal the complaint will succeed.
On numerous occasions, Courts have set out guidelines as to how to approach the drawing
of inference that discrimination has taken place, usually avoiding the concept of shifting the
evidential burden of proof.
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Guidance as to how tribunals and courts should approach the issue of the burden of proof in
direct discrimination cases was given by the EAT in:
Barton v Investec Henderson Crosthwaite Securities Ltd. [2003] IRLR 332 and refined by
the Court of Appeal in Igen Ltd v Wong [2005] ICR 931 CA.
In Brown v London Borough of Croydon [2007] EWCA Civ 32 the Court of Appeal clarified
the fact that a tribunal is entitled to move directly to considering whether or not the
employer’s explanation provides non-discriminatory evidence. The guidelines, although not
binding, should end the ‘lousy/bastard employer defence’ as was categorised in Zafar v
Glasgow City Council [1998] IRLR 36, HL. In this case, an employee who had been
dismissed for sexual harassment claimed that he had been the victim of race discrimination.
The tribunal stated that the Council’s conduct in relation to the disciplinary and dismissal
proceedings did not achieve the standard of a reasonable employer. The tribunal concluded
that there was an unreasonable delay in dealing with the matter and that some allegations
were not properly investigated. The House of Lords held that the fact that the employer had
acted unreasonably in relation to this employee did not mean that he had been treated less
favourably than anyone else would have been. The employer might have acted just as
unreasonably with other employees.
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Lecture 10: Week Beginning: 12th march 2018
Protected Characteristics – Equality Act 2010
‘Protected Characteristics’ (s4)
You will remember from last week that just because a decision seems unfair, does not
necessarily mean that it is unlawful. In order to be so, the less favourable treatment needs to
because of certain protected characteristics. There are nine in total.
Less favourable treatment will be unlawful if it is because a person has one or more of the
following protected characteristics
Age (s5)
Disability (s6)
Gender reassignment (s7)
Marriage and Civil Partnership (s8)
Pregnancy and Maternity (s18)
Race (which includes colour, nationality or ethnic or national origin) (s9)
Religion or Belief (s10)
Sex (s11)
Sexual Orientation (s12)
Age
Direct Discrimination as previously explained usually cannot be justified however if it relates
to age, it can be justified.
s13 Equality Act 2010
A person (A) discriminates another (B) if because of a protected characteristic, A treats B
less favourably than A treats or would treat others.
‘Age’ in this context refers not only B’s age but also to persons in a particular age group.
Associative, perceived and deterredi discrimination also apply, therefore it will be unlawful if
an employer treats an employee less favourably because he/she cares for an elderly
relative.
However there will be no discrimination if it can be shown that the treatment
complained of is a proportionate means of achieving a legitimate aim. (s13(2)) this is a
major change from the other protected characteristics. So far this has been used in relation
to enhanced redundancy payments but this will be a key issue in the development of this
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area of the Act. In Rolls Royce plc v Unite the Union [2009], the CA upheld as justified the
use of length of service as a ‘tie breaker’ in a redundancy selection scheme.
In Reynolds v Secretary of State for Work & Pensions [2006] the claimant argued that paying
her less on job seekers allowance because she was in the 18-24 age range caused her a
detriment. The House of Lord stated that people under the age of 25 could legitimately be
expected to have lower earnings expectations and lower living costs than those over 25
therefore justifying them being treated differently as a group. This decision was reached
despite the fact that the claimant herself was a single mother who, it was accepted, had
higher needs. Categorising people into groups in this way are called ‘bright line’ policies.
In relation to age, indirect discrimination is aimed at outlawing disguised age barriers, but not
barriers that exist because of retirement. See Homer v Chief Constable of West Yorkshire
Police [2010]. Within the Police force, in order for staff to gain promotion a law degree was
required. The claimant who was 61 could not comply with this before he retired and he
claimed that the requirement was indirectly discriminatory because of his age. His claimed
however failed because although he clearly suffered a disadvantage, that disadvantage was
linked to the fact that his working life would have come to an end prior to him gaining the
degree – therefore an inevitable result of age and not of discrimination.
Disability
It is unlawful to discriminate against a person who qualifies as disabled. Every employer has
an additional obligation to make reasonable adjustments to ‘level the playing field’ for
disabled workers or job applicants.
This area of law applies to employees and to workers. However, in practice the major issues
in relation to absence tend to concern employees as they are required to provide continuous
service. Most employees on long term sick leave, and some who are frequently absent for
short periods, may qualify as ‘disabled’. This imposes extra duties on the employer.
It is unlawful for an employer to discriminate against a disabled employee or job applicant by
treating that person less favourably than s/he treats, or would treat, others for a reason
relating to his or her disability - that treatment is defined below.
The duty placed on an employer is twofold:
not to discriminate against a disabled person, and
to make reasonable adjustments to accommodate the disabled person.
Who qualifies as disabled?
This definition goes far beyond the traditional perception of disability.
A disabled person is someone who has: (s6)
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‘A physical or mental impairment which has a substantial and long-term adverse effect on
his/her ability to carry out normal day-to-day activities’.
It covers any normal physically related illness which has a substantial effect on the person,
e.g. heart conditions, angina, epilepsy, diabetes type 1, and medical evidence of the
condition will need to be produced
It also covers mental conditions ranging from schizophrenia or manic depression to anxiety
disorders; reactive and clinical depression can also be regarded as a disability. The law used
to require that the mental illness was clinically recognised, this is no longer necessary but it
is particularly important here that the employee produces clear medical evidence of his/her
condition.
It can cover disorders which recur, although the person may not suffer any symptoms in
between attacks, such as serious asthma and epilepsy.
Learning disorders such as dyslexia are now recognised as a disability.
There are some conditions which are automatically regarded as disabilities, even though the
employee may not currently be suffering any or many symptoms; these are HIV AIDS,
multiple sclerosis and cancer.
Some conditions are expressly excluded, including alcoholism and drug addiction unless
they cause other problems – eg liver disease.
In order for the disability to be seen to be substantial, it must have lasted or be predicted to
last at least one year, or for the rest of the person’s life.
What activities must be affected?
It is not necessarily activities at work that must be affected. It is essential in order to satisfy
the definition that the employee should have substantial difficulties in his or her everyday life,
but it is not necessary that the disability has to affect any particular function.
The first duty - do not discriminate. (s39)
In an employment context, it is unlawful to discriminate against a disabled person i.e. treat
them unfavourably, in
Making the arrangements for deciding who to employ.
The terms on which you offer that person employment.
Refusing to offer that person employment.
The terms which you give the employee, compared with employees already working for you.
The employment opportunities afforded to the disabled person, namely promotion, transfer,
training or the receipt of any other benefit e.g. facilities and services, which plainly includes
fringe benefits - this also applies where the employer refuses to afford these opportunities.
Dismissing him/her or by subjecting him/her to some other detriment.
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The second duty - to make reasonable adjustments (s20)
The Act places a specific duty upon the employer to make reasonable adjustments to work
arrangements and the working environment so as to accommodate disabled persons. Where
any employer is faced with a disabled employee then there will be a fundamental duty to
make a full and proper assessment to enable it to decide what steps it would be reasonable
to take to prevent a disabled person from being at a disadvantage. This will apply with a
disabled job applicant, but also where an existing employee is, or becomes, disabled. This
may involve an employee who has been absent long term coming back on reduced hours or
duties until s/he is able to fully perform the role.
The duty arises where the arrangements made for the work or the way the work is done, or
the physical features of the premises or the equipment place the disabled employee at a
significant disadvantage compared to persons without that disability.
Examples of reasonable adjustments include altering premises, allocating some of the
disabled person’s duties to another member of staff, altering the disabled person’s working
hours, transferring the disabled person to fill an existing vacancy etc However, the employer
is only required to make reasonable adjustments, bearing in mind its size and its resources.
The third duty - An employer has an additional duty in relation to disabled people and that
is not to discriminate because of something arising from the disability (s15). For example
and employer cannot discriminate by refusing to allow a guide dog on to the premises. They
are not discriminating against the blind person but against the dog, therefore this is ‘arising
from the disability’.
The defence
It is never lawful to directly discriminate on grounds of disabilty e.g. to have a rule not to
employ epileptics. However, less favourable treatment for disability related reasons can be
justified where the employer can justify it. The net effect is that if the employer can explain
his/her treatment of the employee eg a decision to dismiss the person, by reference to
economic imperatives, health and safety of the employee or fellow employees, or general
impracticality, it may be possible to defend the action. If the employer can show that either
there are no possible adjustments or, despite any adjustments that it might reasonably be
expected to make, the disabled employee cannot be taken on or retained without significant
difficulties, it may be justified in refusing to employ or in dismissing the employee.
Gender reassignment
Transgender is a generic (but not legal term) term applied to a number of ‘trans people’ it
can be described as:-
A very broad term to include all sorts of trans people. It includes cross dressers,
people who wear a mix of clothing, people with dual or no gender identity and
transsexual people. It is also used to define a political and social community which is
inclusive of transsexual people. Transgender people, cross dressers (transvestites)
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and other groups of ‘gender-variant’ people.1 But not all these gain legal protection
under the Equality Act.
Transgender protection is available to those who are about to undergo are undergoing or
who have undergone gender reassignment surgery the legal definition is contained in s7
EqAct 2010 – note that transvestites or someone who cross dresses are not protected under
the Equality Act 2010.
Discrimination on the grounds that someone has been, or will be, in the process of gender
reassignment/undergoing a sex change is unlawful. Most of these cases tend to be either
about harassment or washroom facilities, and the employer must be careful to ensure that a
hostile working environment does not grow up around a transsexual and that it permits use
of the assigned sex facilities once any operative procedures are complete. On sick leave,
treatment of a GA case will be compared with those who are absent because of sickness or
injury in order to determine whether there has been less favourable treatment.
The Gender Recognition Act 2004 was passed to give transsexual people legal recognition
in their acquired gender. Legal recognition follows the issue of a full gender recognition
certificate by a Gender Recognition panel. The panel has to be satisfied that the applicant:
Has, or has had, gender dysphoria,
Has lived in the acquired gender throughout the preceding two years, and
Intends to continue to live in the acquired gender until death.
On the issue of one of these certificates, the person will be entitled to a new birth certificate
reflecting the acquired gender, and will be able to legally marry someone of the opposite
sex. For all purposes they will be legally regarded as being of their acquired gender.
Marriage and Civil Partnership
There is no protection for people who co-habit regardless of however long they have been
together neither is there any protection for single people or those who are divorced or
widowed. It is possible that the fact that these groups are not protected may be challenged
as being incompatible with European Convention of Human Rights Article 8 (private and
family life). Where protection does exist it is very limited and is generally limited to direct and
indirect discrimination in employment and related fields and does not extend to harassment
nor is there any protection for discrimination by association. The government’s rationale for
such limited protection is that there is no evidence to suggest that discrimination occurs
outside of the areas currently protected. It could be argued that the limited protection
undermines the principle of equality and that it may be incompatible with the ECHR.
Therefore it would appear that it is the fact of being married or in a civil partnership that is
important. For example:-
1 Whittle et al. 2007
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Hawkins v Atex Group Ltd [2012] IRLR 807. The female was dismissed because she was
married to the CEO of the company – this was prohibited by the company policy. The EAT
held however that she was not dismissed because she was married
(remember, being married is a PC) but because she was married to the CEO and the
employer successfully argued that she would have been dismissed even if they had been in
a ‘common law relationship’. Without digging any deeper into this case however it does beg
the question as to why she was dismissed and not the CEO?? The legislation however is
clear; the protection is available based on the fact of marriage rather than being based on
being married to any particular person. This view contrasts with:-
Dunn v Institute of Cemetery and Crematorium Management [2012] All ER (D)173
There have also been cases related to married women being treated less favourably than
married men sometimes based on outdated assumptions about the roles of men and
women. In Coleman v Sky Oceanic Ltd [1981] two competing travel firms employed one
member each of what became a married couple. There was concern about confidentiality -
whether ‘pillow talk’ would result in one giving the other information about the rival company.
The two companies consulted and decided to dismiss the female worker because the man
was assumed to be the breadwinner. In Chief Constable of Bedfordshire v Graham [2002]
IRLR 239, Inspector Margaret Graham had her promotion rescinded by the Chief Constable
because she was married to the Chief Superintendent in the same division. It was
considered that there would be difficulties arising from having the couple working together at
these levels. The EAT upheld the ET’s decision that the complainant was treated less
favourably than a single person would have been for reasons connected to her marital
status.
Pregnancy and maternity discrimination: Work related cases
Under the Equality Act the dismissal of a female worker related to her pregnancy l is likely to
constitute direct sex discrimination. This is due to the fact that only women can become
pregnant therefore the discrimination is related to her sex. Article 10(1) of the Pregnant
Workers Directive (Directive 92/85/EEC) provides that dismissal should be prohibited during
the period from the beginning of the pregnancy to the end of maternity leave. While most of
the protected characteristics share a common framework to forbid discrimination in situations
of discrimination because the claimant has one or more of the protected characteristics,
pregnancy and maternity has its own singular protection which protects the woman from
being treated unfavourably during a defined maternity period or arising from the pregnancy.
A woman is protected from discrimination from the time that she becomes pregnant until the
end of what is known as the ‘protected period’ which is the period of the pregnancy and any
statutory maternity leave to which she is entitled. The protection is only if the employer
knows or ought to have known that she is pregnant – Ramdoolar v Bycity [2005]. Outside of
the protected period, a woman can claim sex discrimination. Although sex discrimination
applies to both men and women, a man cannot complain of any special treatment given to
women in relation to pregnancy or childbirth.
In Case C-394/96 Brown v Rentokil Ltd [1998] IRLR 445 The Court of Justice considered the
dismissal of a female employee who was absent through most of her pregnancy and was
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dismissed under a provision of the contract of employment which allowed for dismissal after
26 weeks’ of continuous absence through sickness. The Court held that Articles 2(1) and
5(1) of the Equal Treatment Directive ‘preclude dismissal of a female worker at any time
during her pregnancy for absences due to incapacity for work caused by an illness resulting
from that pregnancy’.
In P & O Ferries Ltd v Iverson [1999] ICR 1088, a female was prevented from going to sea
once she had reached the 28th week of her pregnancy. Pregnancy was a lawful reason for
preventing an employee from going to sea but unlike the other lawful reasons (including
sickness) pay continued.
In employment the woman receives two periods of protection. The first is the compulsory
maternity leave at which time she is not allowed to work (EqAct s18(3) – this is no less than
2 weeks. The second is from the time that the pregnancy begins and ends. This will be 26
weeks if the woman is only entitled to ordinary maternity leave and 52 weeks if she is also
entitled to additional maternity leave.
Race
The EqAct defines Race using the following headings:-
Colour
Race
Nationality
National Origin
Ethnic Origin (this is the most problematic area)
Colour
E.g. London Borough of Lambeth v CRE [1990] ICR 768, CA
A racial group may be defined by colour, incorporating people of different ethnic origins.
In Redfearn v Serco Ltd [2006] IRLR 623
Redfearn (a white man) was employed as a bus driver for children and adults with special
needs – the majority of whom were from the Asian community. Redfearn was elected as a
councillor for the BNP and the Union (UNISON) wrote to the council expressing concern.
Redfearn was dismissed on the grounds of health and safety as the employer feared that
allowing him to continue might put the lives of his passengers in danger as there was
concern that stones/bottles etc might be thrown at the bus when Redfearn’s political
allegiance was discovered. As he had been employed for less than a year and therefore
unable to bring a claim of unfair dismissal, Redfearn brought a claim for both direct and
indirect race discrimination claiming that he had been dismissed because he was white. His
claim was ultimately rejected by the Court of Appeal, which held that discrimination law
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should not be used to protect employees from unfavourable treatment for acting in a way
that is racially discriminatory. Mr Redfearn's argument that he was dismissed because he
was white, and that this was therefore "on racial grounds", was flawed because the dismissal
was motivated by his membership of the BNP, rather than the fact that he was white. His
complaint was in fact one of discrimination on political grounds, which fell outside anti-
discrimination law. Redfearn took his claim to the ECHR claiming that the UK was not
protecting his human rights.
In Redfearn v United Kingdom [2012] ECHR 1878, the European Court of Human Rights
considered whether UK law, which does not extend any specific protection to employees
dismissed on the grounds of their political beliefs, was incompatible with the
European Convention on Human Rights.
The European Court of Human Rights has held that UK law was in violation of the European
Convention on Human Rights because it did not extend specific protection to employees
dismissed on the grounds of their political beliefs or affiliation. European Court of Human
Rights held that UK law was in violation of the European Convention on Human Rights
because it did not extend specific protection to employees dismissed on the grounds of their
political beliefs or affiliation. The UK government then had to decide how to afford protection
in such cases. It did so by creating an exception to the requirement for a qualifying period for
unfair dismissal if it was claimed that the dismissal was as a result of political affiliation.
Race
Seide v Gillette Industries Ltd [1980] IRLR 427, EAT
Someone may be of the Jewish race and/or of the Jewish faith – it is a question of fact.
Nationality
Nationality refers to citizenship. According to the Code of Conduct on Employment (EHRC
2011a), the term nationality describes the legal relationship between a person and the state
resulting from birth or naturalisation and it is evidenced by a passport.
National Origins
National Origin refers to historical and/or geographical features that would at some point in
time reveal the existence of a nation. Thus, following the Act of Union 1707, the English and
the Scots lost their separate nationalities but retained their separate national origins – …… ‘a
historic and geographical connection to a nation that existed at some point in time’.
Northern Joint Police Board v Power [1997] IRLR 610, EAT
The claimant, an Englishman, was rejected for a post of Chief Constable in Scotland.
Tribunal held that there was no discrimination on the ground of nationality (as they were all
British); but held that discrimination against an English person or a Scot (or the Welsh or
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Northern Irish) constituted discrimination on the grounds of national origin as the home
countries had distinct historical and geographical identities.
Confirmed by the Court of Session in BBC Scotland v Souster [2001] IRLR 150: the Scots and
the English are separate racial groups defined by reference to national origin but not by
reference to ethnic origin (e.g. Celt Saxon Dane mix).
See also Gwynedd County Council v Jones [1986] ICR 833 EAT (Welsh-speaking, as opposed
to Welsh, not a separate racial group).
Ethnic Origins – Ethnic Minority Group
This term is not defined in the EqAct 2010
Mandla v Dowell Lee & anor [1983] 2 AC 548, HL (per Lord Fraser) adopted a flexible
approach, concluding that there are 2 essential conditions for an ethnic group:
a) A long shared history of which the group is conscious as a distinguishing factor, the
memory of which it keeps alive; and
b) It must have a cultural tradition of its own, which is often, though not necessarily,
associated with religious observance.
Other characteristics, which could be expected to be displayed, are:
c) Either a common geographical origin or descent from a smaller number of common
ancestors;
d) A common language not necessarily peculiar to the group;
e) A common literature peculiar to the group;
f) A common religion different from that of neighbouring groups, or the community
surrounding it; and
g) Being a minority, a repressed or dominant group, for instance, the Saxons and
Normans, after the conquest.
R. (on the application of E) v JFS Governing Body v Office of the Schools Adjudicator,
Supreme Court - 16 December 2009.
The Governing Body of JFS appealed against a decision that its admissions policy had
directly racially discriminated against a child by refusing him entry to the school.
The father of the child was Jewish by descent and the child’s mother had converted to
Judaism through a non-orthodox synagogue. The school’s admissions policy was to give
preference to children whose status as Jews was recognised by the Office of the Chief
Rabbi (OCR), which represented orthodox Jews. The OCR required that the child's mother
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be Jewish either by matrilineal descent (describes the line of genealogical relationship or
descent that follows the female side of a family) or by conversion under orthodox auspices,
or that the child had converted. As the mother’s conversion was not recognised by the OCR
and the child had not undertaken to convert to orthodox Judaism, the school refused his
admission.
The governing body of the school argued that (1) the matrilineal test was based on religious
law and the discrimination the school had applied religious discrimination (which could be
justified) not racial discrimination under RR Act. (2) Although there was a Jewish ethnic
group as defined by the criteria set out in Mandla, the matrilineal test described a group that
overlapped with, but was not identical to, the ethnic group.
Appeal dismissed. (1) The argument that the matrilineal test derived from religious law, and
what had motivated the school was compliance with that law, was invalid. (2) The motive of
the discriminator for applying the discriminatory criteria was irrelevant. A person who
discriminated on the ground of race, as defined by the Act, could not argue that the ground
of discrimination was one mandated by religion.
The Court contended that although there was a difficulty in distinguishing between ethnic
and religious status, a woman converting to Judaism acquired both Jewish religious status
and Jewish ethnic status within the Mandla definition.
See Commission for Racial Equality v Dutton [1989] QB 783, CA (with regard to gypsies).
Caste
The government has yet to decide whether it will implement s9(5) EqAct which relates to
Caste. Government research (Government Equalities Office 2010) indicates that the term
‘caste’ is used to identify a number of different systems used to label those perceived as
more or less worthy in a particular racial (ethnic group). Varna is a Hindu religious caste, Jati
is an occupational caste system and Biraderi is often referred to as a clan system. The
research appears to indicate evidence of workplace bullying discrimination in the supply of
goods and services and pupil/pupil bullying in education. It is anticipated that caste will
appear as an aspect of race by 2015 however in Tirkey v Chandok (unreported case number
3400174/2013) it was held that caste was included in the definition of race.
See also Begraj v Heer Manak Solicitors [2015]
Religion or Belief
It is unlawful to discriminate against workers because of religion or similar belief. The law
applies, as do all the discrimination rules, to recruitment, terms and conditions, promotions,
transfers, dismissals and training, and therefore both to current, prospective and former
workers.
The employer must not discriminate directly by, for example, refusing to recruit or dismissing
anyone on the grounds of their religion or belief, apply some rule or procedure to them which
is indirectly discriminatory unless it can be justified. Workers must not be harassed or
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victimised because of their religion. Any recognised religion, religious belief or philosophical
beliefs are protected. Atheists, spiritualism, environmentalism and beliefs about animal rights
are also potentially covered.
Williams v South Central Ltd is an Employment Tribunal case (ET case 2306989/03) which
assists in deciding what values constitute a religion. In this case, tribunal rejected Williams’
claim that his loyalty as a US citizen required him to wear a badge of the US flag and that
this amounted to a religious belief.
The tribunal in Hussain v BB Supersave (ET case 1806638/04) examined the boundary
between religious beliefs themselves and the cultural practices associated with a religion. In
this case, Hussain, a Muslim, had requested time off work to fulfil his duties following the
death of his grandmother. The tribunal decided to adopt a broad definition of religion: to
avoid ‘unnecessary complications and endless debate’. It was held that if someone
genuinely believes that their faith requires certain behaviour, this is sufficient to make it part
of their religion. However, his claim failed only because he was unable to show that his
employer would have treated a non-Muslim any differently. Remember though that these are
tribunal cases and cannot be relied on.
What about special requests which are related to religion?
Where a worker makes a request based on some religious observance e.g. prayer room,
time off to go to mosque, Friday afternoons off, particular holidays or extended holidays the
employer should listen carefully, consider the consequences for the business and grant them
if practicable. If it is not possible, then s/he should explain carefully to the employee why, on
good business grounds, his/her request cannot be granted, and this should always be
documented. An employer is not under a specific obligation to make changes to
accommodate an employee’s religion.
Sex
S11(a) of the EqAct 2010 makes it clear that the section applies equally to men as it does to
women. This is important as most cases relate to the discrimination of women.
Eversheds v DeBelin [2011] IRLR 448 – the employer was in the process of making
redundancies and identified two employees whose positions were liable to be made
redundant. One employee was male and the other was female who, at the time of the
decision was absent on maternity leave. The employer adopted a points scheme to identify
which post was to be made redundant and as the male was in employment, based his score
on work actually done whereas as the female was absent on maternity leave, he based her
score on the maximum available. The result was that the male scored less than the female
and as a result was made redundant. The mail claimed sex discrimination and unfair
dismissal. Given the protection available for pregnant women and women on maternity leave
(discussed below), the employer argued that he had fulfilled his responsibility to the female
employee. The EAT held that despite the fact that legislation gave pregnant women and
women on maternity leave special protection, any action taken must be a proportionate
means of achieving a legitimate aim and that in this case the treatment given to the absent
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female employee was disproportionate and amounted to direct sex discrimination against the
male employee.
In Nelson v Newry and Mourne DC [2009] IRLR 548, the male claimed direct sex
discrimination when two council employees, one male and one female, were investigated for
misusing council property. The disciplinary process was conducted in a different manner for
each and the male was given a much more severe sanction than the female.
Chief Constable of Bedfordshire Police v Graham [2002] IRLR 239
Ms Graham was an inspector in Bedfordshire Police and married a Chief Inspector in the
same force. Ms Graham applied for and was given a post as Area Inspection within the
same division as her husband however the Chief Constable blocked the promotion
because he said that it would be inappropriate as her husband worked in the same
division. Once reason given was that if criminal proceedings were ever to be started
against her husband, as his wife should could not be forced to give evidence against her
husband. The second reason given was that the Chief Constable thought that other staff
might find it difficult to raise any negative issues concerning the husband to Ms Graham.
The ET considered whether this was discrimination because of marital status. The EAT
agreed with the ET that the employer’s concerns were speculative and many other forces
employed married couples. She had been treated less favourably than a non-married female
applicant.
Sexual orientation
Discrimination on the grounds of sexual orientation is unlawful ie less favourable treatment
on the grounds of homosexuality, lesbianism and bi-sexuality.
The cases have largely been on the subject of homophobic abuse and the extent to which
the employers have been responsible for encouraging it or permitting it, or failing to have a
policy dealing with it. The main issue for employers to be aware of here is ‘banter’ of a
homophobic nature. It is critical that employers take action to tackle any such issue within
their workforce, or there that they may be liable to the affected worker.
As with other areas of sex discrimination, discrimination is prohibited in the recruitment
process, in arrangements to offer employment, in terms offered for employment and terms
not being offered employment. Also in respect to access to opportunities, transfer or training
or receiving any other benefits or by dismissing or by subjecting to any other detriment
s39.EqAct 2010 applies. Direct discrimination is protected in the same way as with other
characteristics as is indirect discrimination. In relation to direct discrimination however,
protection also covers less overt treatment and there have been a number of cases before
tribunals where assumptions about an individual’s sexual orientation have been made and
have been held to be discriminatory.
In McCarthy v The Secretary of State for Work and Pensions (Job Centre Plus 13th July
2009: ET 2406308/7)
Following an allegation of a possible inappropriate relationship between the claimant and a
young client by a third party, the tribunal found that the investigation process ‘was
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intrinsically affected by the respondent’s knowledge of the claimant’s sexual orientation and
by assumptions made by mangers, arising from their knowledge about the claimant’s
conduct’. The tribunal came to the conclusion that the investigating officer was clearly aware
that the claimant discussed his sexual orientation and his sex life openly at the office. The
tribunal decided that the decision to conduct the investigation contrary to the respondent’s
established procedure, against advice and contrary to the rules of natural justice, together
with the investigating officer’s ‘misinterpretation of the initial concern’, were evidence of less
favourable treatment on grounds of sexual orientation.
Burden of Proof
Remember all that an employee has to establish is that there is a prima facie (on the face of
it) case of discrimination. In the absence of any alternative explanation s136(2) explains that
the court is entitled to assume that the employer has discriminated against the employee.
We call this a ‘reversal of the burden of proof’.
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Lecture 11: Week Beginning March 19th 2017
Employment Policies and Practice
Family Friendly Statutes
There has been an increasing focus on ‘work-life balance’ and entitlement to take time off
from work to deal with family issues has been extended
It is now possible to:-
Paternity leave for fathers straight after the birth of a child
Shared parental leave immediately after the birth of a child
Paternity leave for both parents of children up to the age of 18
Emergency time off for dependants
Adoption leave
Request flexible working for all those in employment.
Ante-Natal Care
When a woman become pregnant. She is entitled to take time off, not only to care for the
baby but to attend ante natal clinics during the pregnancy. (s55-57 ERA 1996). The woman
is entitled to be paid while attending ante-natal appointments. Note that this entitlement does
not extend to workers.
Health and Safety Related to Pregnancy
Employers are expected to undertake risk assessments at work for all employees and in
doing so, pay particular attention to the risks to pregnant women. The assessments are a
continuing process and should be carried out regardless of the fact that a woman may or
may not be pregnant.
See Day v T Pickles Farm [1999]
While Pregnancy and Maternity is protected under the Equality Act, the right to leave and
pay during this time is governed under the Employment Rights Act 1996.
Maternity Leave
There are three types of maternity leave
Compulsory Maternity Leave
Ordinary Maternity Leave
Additional Maternity Leave
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CML is two weeks after the birth of the baby unless the employee works in a factory and
then it is four weeks. During this time the woman is prevented from returning to work.
OML is twenty six weeks and starts on the day that the employee tells the employer that she
wishes her ordinary maternity leave to start unless she is ill during the four weeks before she
wishes her leave to start. If she is ill during this time the OML will be triggered – unless there
is agreement by both parties to waive this right.
AML is the right of all women to take an additional twenty six weeks leave. The main
difference between OML and AML is that the AML is paid at a reduced rate and the
employee is not guaranteed to return to her old job however if she cannot return to her old
job another on terms and conditions must be found.
Paternity Leave
All new fathers are entitled to two weeks paternity leave following the birth of their
child.
The employee must:-
Have or expect to have responsibility for the child’s upbringing
Be the biological father of the child or the mother’s husband or partner
Have worked continuously for the employer for twenty six weeks ending with the
fifteenth week before the baby is due
Inform his employer of his intentions to take leave by the end of the fifteenth week
prior to the expected date of delivery.
Shared Parental Leave
The scheme is designed to be flexible. Under the scheme employed mothers will be entitled
to take fifty two weeks (OML and AML) of maternity leave and fathers/partners will still be
entitled to two weeks paternity leave if they are eligible.
Adoption Leave
This leave mirrors that of maternity leave. Where a couple adopt a child only one of them is
entitled to take adoption leave and it is up to the couple to decide which parent take the
leave and then they can opt into shared parental leave. The other parent may be entitled to
take time off equivalent to paternity leave and SPL if he or she meets the relevant statutory
criteria.
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Parental Leave
Parental leave is unpaid and applies to all employees. The employee needs to be
continuously employed for one year and must have caring responsibilities.
Time off for Dependants
This right is available to all employees. It is a right to take a ‘reasonable’ amount of time off
to care of dependants. (s57a ERA 1996)
This could be to:-
Provide assistance when a dependant is ill, gives birt, is injured or assaulted
To make arrangements for the care of a dependant
In consequence of the death of a dependant
Because of an unexpected disruption of the care of a dependant
To deal with an incident which involved the child of an employee and which occurs
unexpected during school hours – eg the child is sent home ill.
Flexible Working
Flexible working can mean a number of things:-
Job share
Compressed working hours
Annual hours working
Term time working
Homeworking
Part time working
Extended leave
Etc etc.
An employee has the right to request flexible working however there is no right for the
employer to agree.
The employer may be able to argue that:-
The additional costs are too high
Specific tasks can only be done in specific hours
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Detrimental effect on customers/clients
Inability to reorganise workforce
Inability to recruit additional staff
Detrimental impact on quality
Detrimental impact on performance – eg meeting targets/deadlines
Detrimental effect on production
Insufficiency of skilled staff to accommodate absence
Insufficiency of work during period in which the employee wishes to be employed
Incompatible with planned changes to the structure of the organisation
Wages and Benefits
Wages have recently been controversial. The adequacy of the minimum wages, a living wage,
a dual standard between “top” pay and others’ wages have each been prominent in public
discourse. Paying workers a living wage the Treasury argues will reap more than £2bn through
higher income tax receipts and reduced welfare spending. This so because, when employers
do not pay a living wage, the State is compelled to make up the difference via tax credits. Thus
there is a taxpayer -funded subsidy to businesses and a transfer of wealth from tax-paying
workers to shareholders, who receive higher dividends than they would if wages were higher.
It could be argued that one solution would be to strengthen trade unions and collective
bargaining which would, it is argued, have little adverse impact on economic efficiency but go
some way to alleviating the problem of wages declining as a share of GDP and lifting reliance
on public budgets.
Another possibility is for local and central government to use its contracting power to promote
and pay a living wage. Using competitive bidding, public authorities buy goods and services
from private contractors. The competitive nature of bidding encourages private sector
suppliers to compete on price, which means reducing costs and this produces a further
downward pressure on wages.
English law on wages
Implied Duties of the Employer- to pay wages according to the contract
The Work/ Wage Bargain
Although the courts have sometimes insisted that the employee must actually do work in order
to be entitled to their pay it seems now to be settled that the employee is entitled to be paid
wages if ‘ready and willing’ to work; it does not matter that no work is actually done: Beverage
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v. KLM (UK) Ltd [2000] IRLR 765. Thus, as in this case, if the employer closes the business
over Christmas the employees are entitled to be paid unless the contract states otherwise.
This is consistent with well-established authorities, such as Asquith J in Collier v. Sunday
Referee Publishing Co. [1940] 2 KB 647 at 650:
"Provided I pay my cook her wages she cannot complain if I choose to take any or all of my
meals out."
Employees taking industrial action are not ‘ready and willing to work’. The employer has a
power to withhold wages during industrial action:
Miles v. Wakefield [1987] AC 539
Wiluszynski v. LB of Tower Hamlets [1989] ICR 493
B.T. v. Ticehurst [1992] IRLR 219
The duty to pay wages according to the contract is a fundamental term, which the employer
must respect even if commercially inconvenient:
Rigby v. Ferodo [1988] ICR 29 HL
The Working Poor: the National Minimum Wage:
There is evidence that minimum wage is becoming the “default” wage for millions of workers
with 1 in every 10 workers paid within 50 pence of the legal minimum. Its aim at the time of its
introduction was meant to boost the wages of the lowest paid workers; there is a suggestion
that it could be a drag on wages and there may need to be reform: such as “sectoral wages”
where rates are set at a higher level in sectors that can afford to pay more.
The Minimum Wage Act 1998.
The rates that apply from 1st April 2017 are as follows:
for workers aged 25 years or over: £7.50 per hour (£7.83 from 1st April 2018)
for workers 21 – 24: £7.05 per hour (£7.38 from 1st April 2018)
for workers aged 18 to 20 inclusive: £5.60 per hour (£5.90 from 1st April 2018)
for workers aged under 18: £4.05 per hour (£4.20 from 1st April 2018)
for apprentices: £3.50 per hour (£3.70 from 1st April 2018)
Note that legislation discriminates on the grounds of age since workers with similar experience
and performing the same function can be paid differently simply on the grounds of age.
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Employers who dismiss a person just short of the birthday anniversary which will trigger
entitlement to higher pay will generally be liable for age discrimination: Greer v. Coulter t/a
Alphreso Café [2011] unreported.
Working hours that count for pay purposes include:
Hours worked (or ready to work eg on standby or where machines breakdown)
including, for example a care worker’s travel between clients: Whittlestone v BJP Home
Support Ltd (National Minimum Wage) [2013] UKEAT
Travel time on business but not travel to and from home
Time spent in training
Time travelling to and from the place of training except when training takes place at
work
BUT NOT
Sickness absence
Holidays
Rest breaks
Industrial action
Employers have a statutory duty to keep records in the prescribed form establishing total hours
worked and the amount of pay received by each worker. Officers appointed under the Act will
have power to enter premises to inspect records. Keeping false records is a criminal offence.
It is an offence not to pay the minimum wage. Other offences include a failure to keep or
preserve records or to obstruct an officer. The maximum penalty on conviction will be a fine of
£5,000. There have only been 9 prosecutions since 1998.
Bonuses and discretionary pay
Courts can enforce a promise to pay a bonus even if the amount of the bonus has not been
agreed: Powell v Braun [1954] 1 WLR 401, and see most recently Attrill v Dresdner Kleinwort
Ltd [2013] EWCA Civ 394-at [58] “ I see no reason why a promise of a guaranteed minimum
bonus pool cannot be contractually binding even though individual employees cannot at that
time point to an entitlement to a specific bonus payable out of it. At the very least each of them
would be entitled to nominal damages for breach.”
Small v Boots Co plc [2009] IRLR 348 EAT a bonus scheme in a staff handbook stated to be
“discretionary” and “not intended to be contractual” could nonetheless have contractual
content. According to Mrs Justice Slade, “the use of the term discretionary in a bonus scheme
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may be attached to the decision whether to pay a bonus at all, its calculation or its amount.”
So in this case, the employment judge erred in failing to decide “to what aspect of the scheme
the term discretionary was attached. In the context of this case, the possible interpretations
include discretion attached to the provision of an overarching bonus scheme, to a decision
each year to operate a bonus scheme, to the method of calculation of bonus or to the threshold
which triggers a bonus or to whether and if so what percentage of salary will be paid.” The
obvious implication is that an employer who wishes to retain absolute discretion will need to
make this very clear in the drafting. A discretionary pay element (such as a discretionary
bonus) must not be determined capriciously or without reasonable or sufficient
grounds.
Horkulak v Cantor Fitzgerald [2005] ICR 402
Keen v Commerzbank AG [2006] EWCA Civ 1536
Deductions from Wages: Part II Employment Rights Act 1996
s.13 - right not to suffer unauthorised deductions
s.14 - exceptions to right
s.15 right not to have to make payments to the employer.
s.19 Deductions for stock shortages are also regulated
s.7 Meaning of wages
Deduction includes a reduction in pay: Bruce v. Wiggins Teape [1994] IRLR 536. A reduction
implies a continuing effect; a deduction is usually a one-off.
But not wages in lieu of notice: Delaney v. Staples [1992] IRLR 191
Deduction has to be a quantifiable sum, so when an employer wrongly graded a worker as a
result of a job evaluation scheme the difference in wages could not be recovered as a
deduction since the sum was not quantifiable and a quantifiable sum was necessary to fall
within s.13. Kingston upon Hull City Council v Schofield [2012] (unreported)
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Lecture and Seminar for Week Beginning 26th March 2018
This is a Non Standard Teaching week. This means that there are no formal sessions this
week and that you must follow the instructions given to you on moodle.
I hope you have enjoyed this part of the unit. If you have any problems please speak initially
to your seminar tutor. If the matter cannot be resolved, please contact me
Regards Matt
