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AUGUST 2009

 
 

Welcome to the latest edition of the Employment Law Update brought to you by the employment team at Russell-Cooke. The aim of this service is to keep you informed of recent developments in this fast moving field of law so that you are better prepared to deal with issues as they arise in your workplace and recognise when professional advice might be required.

Contact details for members of the team are provided at the end of the Update. If you have a query about the issues covered or about any employment law related matter please do not hesitate to get in touch.

In this update:

  • Advocate General’s Opinion on Setting Aside Age Discriminatory Law
  • Gutridge And Others V Sodexo Ltd And Another (2009) Ewca Civ 729
  • Gisda Cyf V Barratt (2009) Ewca Civ 648
  • Cook V Mshk Limited and Ministry of Sound Recordings Limited (2009) Ewca Civ 624
  • Fareham College Corporation V Walters Ukeat/0396/08; Ukeat/0076/09

 

Advocate General’s Opinion on Setting Aside Age Discriminatory Law

Advocate General’s opinion in the case of Kucukdeveci v Swedex Gmbh & Co KG brings potential for retirement challenges to succeed without any change to the Employment Equality (Age) Regulations 2006 (the “Regulations”).

Under German law, periods of service when a worker is under the age of 25 are not taken into account in redundancy situations. However, a redundant worker’s notice period is based on length of service. In this case, the claimant who was 28 years of age, was entitled to one month’s notice. She brought legal proceedings, and alleged that this rule was unlawful age discrimination and should not be given effect by the domestic court. The claimant was successful at first instance. However, on appeal, certain questions were referred to the European Court of Justice .

The Advocate General considered the German law and decided that it was clearly in breach of the EC Equal Treatment Framework Directive (No.2000/78) (the “Directive”). He found that reducing protection for younger workers could not be justified as part of a legitimate employment policy. The Advocate General also thought that even if it could be justified, there was no chance that the policy was proportionate to the aim.

The Advocate General recommended that the European Court of Justice hold that this German law was incompatible with the prohibition on age discrimination set out in the Directive. He also made the point that, given that the prohibition on age discrimination is a fundamental principle of EC law, any national law that conflicts with it should not be given effect by a domestic court. In reaching this conclusion it was immaterial that the present case involved two private individuals.

The Advocate General also looked at the national court’s options when faced with incompatible legislation and noted that it would be difficult to provide an adequate remedy. The correct course of action was for a national court to set aside an incompatible provision and that it was not necessary for them to request a preliminary hearing before taking such course of action. He emphasised that the prohibition on age discrimination is a fundamental principle of EC law, and that the directive is only the framework for giving effect to that principle rather than the source of the principle itself. This conclusion was consistent with the European Court of Justice previous rulings on articles concerning non-discrimination, which held that they have direct horizontal effect.

If the High Court in the Heyday challenge decides that the retirement provisions of the Regulations are incompatible with the Directive, then tribunals may choose to ignore them. They would then treat any claim brought by an employee forced to retire like any other claim of direct age discrimination.

On a related note, the UK government has announced that its review of the default retirement age of 65, which had originally been planned for 2011, will be brought forward to 2010.

 

Gutridge And Others V Sodexo Ltd And Another (2009) Ewca Civ 729

The Court of Appeal upholds the Employment Appeal Tribunals decision that an equal pay claim in respect of a period pre-dating a TUPE transfer had to be brought against the transferee within six months of the transfer date.

In December 2006, the claimants made claims for equal pay and sought to recover pay going back six years using comparators who had not been transferred under the TUPE regulations like themselves. Their claims for arrears covered periods of employment with the transferor before 1 July 2001 and with the transferee after 1 July 2001.

At first instance, the Tribunal found that the time limit for bringing a claim (for losses incurred whilst employed by transferor and transferee) ran from the termination of the claimant’s employment with the transferee Sodexo, and therefore the claims were in time.

Sodexo appealed to the Employment Appeal Tribunal and argued that for all equal pay claims which derive from the equality clause against a transferor, “the employment” meant the employment with the transferor. The six month time limit to bring an equal pay claim therefore ran from the date of the transfer.

The Employment Appeal Tribunal upheld the appeal on this point and followed the decision in Powerhouse Retail Limited v Burroughs [2006] UKHL 13. The claimant’s appealed to the Court of Appeal.

By a majority, the Court of Appeal upheld the Employment Appeal Tribunals decision. They also confirmed that, since liability in a TUPE transfer passes to the transferee, the case must be brought against the transferee and not the transferor. 

The practical effect of this decision is that claims for equal pay which have accumulated prior to a transfer under TUPE, must be bought against the transferee within six months of the date of the transfer, otherwise they will be out of time. The case arguably represents an exception to the general principle that employees’ rights should not be prejudiced following a TUPE transfer.

 

Gisda Cyf V Barratt (2009) Ewca Civ 648

The Court of Appeal confirmed that the effective date of termination was that on which the employee read the letter informing her of her summary dismissal.

The claimant had attended a disciplinary hearing on Tuesday 28 November where she was told that she could expect to receive a letter concerning possible dismissal that Thursday. The letter informing the claimant of her summary dismissal for gross misconduct arrived on the Thursday, however at this time the claimant was on holiday. The letter had been written and posted on 29th November, and was delivered the following day.

The claimant did not return from her holiday until the Sunday night, and did not open and read the letter until the next day. Determining when the effective date of termination of her employment had taken place was of crucial relevance to her case – if the termination date was determined to be when the letter was written, when it was posted or even when it was delivered, then there would be no jurisdiction to hear Ms Barratt’s claim as she would have been out of time.

The tribunal and Employment Appeal Tribunal had both ruled that the complaint had been made within the prescribed time limit and relied on the doctrine that the decision to terminate employment is effective when communicated. The employer appealed to the Court of Appeal. They argued that the termination of Ms Barratt’s contract of employment took place as soon as it accepted her repudiation of the contract. This occurred when they wrote and posted her the letter of dismissal or on dismissal. They also argued that alternatively, termination would have taken effect at the first opportunity Ms Barratt had to learn about her dismissal, which was when she telephoned home from her holiday. They argued that it was reasonable for Ms Barratt to have enquired about the letter over the telephone at this time.

The Court of Appeal ruled in accordance with the Employment Appeal Tribunal that: “Where a decision to dismiss is communicated by a letter sent to the employee at home, and the employee has neither gone away deliberately to avoid receiving the letter nor avoided opening and reading it, the effective date of termination is when the letter is read by the employee, not when it arrives in the post.”

The case confirms that it is the employer who bears the risk and the employee’s actual knowledge is required in order for the notice to be effective.

 

Cook V Mshk Limited and Ministry of Sound Recordings Limited (2009) Ewca Civ 624

Employer who had showed sympathy had affirmed contract

The claimant’s contract of employment contained a six month notice clause and a post-termination restrictive covenant which prevented him from soliciting various parties. It did not contain a non-compete clause.

The claimant, Mr Cook, handed in his resignation and informed his employer that he had accepted a role as Managing Director of Warner Music UK Limited (a competitor of the employer). According to the employer, the claimant stated in his resignation meeting that he would not be engaging in any competing activities in his new job. During his notice period an issue arose as to whether Mr Cook was being honest about his new role at Warner. The claimant went on sick leave suffering from stress and alleged that he had been treated unfairly following his resignation.

When the claimant returned to work disciplinary proceedings were brought against him and he was summarily dismissed following the disciplinary hearing. His employers alleged that his conduct amounted to a breach of the duty of trust and confidence and a breach of his fiduciary duties.

The employer issued proceedings against the claimant seeking damages and compensation for the breach of his fiduciary duties. They also sought a declaration of the lawfulness of the dismissal.

The allegation that the claimant failed to inform his employer of his intention to compete was allowed to proceed to full trial. The claimant appealed against this decision and argued that the contract of employment had been affirmed and the employer was therefore precluded from relying on the alleged breaches.

The appeal was allowed. The Court of Appeal reasoned that the employer had not reserved its position in relation to this matter. They had not given any indication that they intended to bring disciplinary proceedings about the claimant’s alleged dishonesty. They had in fact acted sympathetically and had told the claimant that they hoped he would be able to return to work soon.

As a result of this case, an employer should always ensure that they reserve their position in relation to alleged breaches if they do not act immediately on them. The judgement did not state how, precisely, an employer was expected to do this, but suggested it might be enough for them to simply state that they were “reserving their position”.

 

Fareham College Corporation V Walters Ukeat/0396/08; Ukeat/0076/09

Dismissing a disabled employee without first trying to avoid this by making reasonable adjustments is sufficient to render the dismissal itself an act of discrimination under the Disability Discrimination Act 1995.

The claimant went on long-term sick leave in February 2006. She attended a meeting with the College in July to discuss her absence and she confirmed that she would like a phased return to work. She attended a further more formal meeting at the beginning of September when she was still signed off sick. By this time she had been diagnosed with fibromyalgia and knew that she faced surgery in October. She therefore asked if she could return to work in January on a half-time basis. This request was rejected by the Principal and the College dismissed her with immediate effect.

The claimant brought proceedings against her employer and argued that they had committed an act of disability-related discrimination, and that they were guilty of failing to make reasonable adjustments.

The tribunal upheld the claimant’s claims and held that the College had failed to make reasonable adjustments to alleviate the disadvantage to the claimant and that they had not made any attempt to provide evidence as to why Ms Walters’ could not work part time. Also, in dismissing her because of her disability related sickness absence they had treated her less favourably than they would have treated others in the same position who were not disabled.

The Employment Appeal Tribunal rejected the college’s appeal. The Employment Appeal Tribunals view was that a reasonable adjustments claim only required a general comparative exercise involving a class or group of non-disabled comparators. This differs from the like for like comparison which is applied in disability-related discrimination claims. It was not necessary for the claimant to satisfy the tribunal that someone who did not have a disability, but whose circumstances were otherwise the same as hers would have been treated differently.

The Employment Appeal Tribunal also held that the dismissal was an unlawful act of discrimination owing to the College’s failure to make reasonable adjustments. They highlighted that as the reasonable adjustments provisions of the DDA are now unqualified, a dismissal can in itself be an unlawful act of discrimination by reason of the employer’s failure to make reasonable adjustments. 

The Employment Appeal Tribunals decision could now make it much easier for a disabled claimant to show that they have been dismissed in breach of the DDA. It also widens the scope of reasonable adjustments claims to include discrimination by reason of dismissal.

 

Events

OTHER EVENTS
Russell-Cooke have teamed up with the Directory of Social Change to run a series of seminars on Employment legal issues for Charities

The Employment Law Club
Keep in the loop with access to the latest expertise
The Employment Law Club (ELC): the only one of its kind. The ELC is a brand new service provided by Directory of Social Change together with Russell-Cooke LLP Solicitors. It is specially designed to provide up-to-date information for senior managers or HR professionals and anyone who is responsible for employment matters within their charity. The groups offers an annual subscription for members to meet five times a year for a half day workshop and networking lunch to obtain knowledge and discuss concerns around Employment Law issues together with a free initial telephone consultation with a specialist employment lawyer from Russell-Cooke.

For more information on the Employment Law Club, please follow this link http://www.dsc.org.uk/Training/Law

 

Contact us:

The Employment Team
Russell-Cooke Solicitors,
2 Putney Hill,
Putney,
London
SW15 6AB

Tel: 020 8789 9111
www.russell-cooke.co.uk

 

This material does not give a full statement of the law. It is intended for guidance only, and is not a substitute for professional advice. No responsibility for loss occasioned as a result of any person acting or refraining from acting can be accepted by Russell-Cooke.

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The Employment Team at Russell-Cooke
Anthony Sakrouge (Partner) – 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Alex Bearman (Partner) – 020 8394 6524  Alex.Bearman@russell-cooke.co.uk
Fudia Smartt (Solicitor) – 020 8394 6525 Fudia.Smartt@russell-cooke.co.uk
Emma O'Byrne (Solicitor) – 020 8394 6537 Emma.O'Byrne@russell-cooke.co.uk
 

Specialists in advising charities, not for profits and public bodies
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Deborah Nathan (Solicitor) – 020 8394 6437 Deborah.Nathan@russell-cooke.co.uk   

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