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MAY 2008


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 indeed about any employment law related matter please do not hesitate to get in touch.


Statutory Dismissal, Disciplinary and Grievance Procedures

The Employment Act 2002, that was responsible for bringing into force the statutory dispute resolution procedures, has led to a raft of case law and a great deal of uncertainty for employers and employees alike. Tribunal claims have risen from around 86,000 in 2004/2005 to around 132,500 in 2006/2007 and the majority of such claims include allegations about a failure to follow the procedures. The Employment Bill, expected to be introduced in April 2009, will abolish the statutory procedures and, in its place, will allow any tribunal to increase or reduce any award made by up to 25 per cent if the employee or employer has unreasonably failed to comply with any provision in the ACAS Code on Discipline and Grievance.

ACAS has launched a consultation on a new Code which will close on 25 July 2008.

The Bill will also give extended powers to ACAS to be involved from the outset of disputes and to try to prevent them from reaching a full hearing at the tribunal.

In the meantime, the existing case law continues to apply. An interesting recent case concerned the requirements of the statutory dismissal procedure in the context of redundancy. A lecturer was informed by letter that he and two other staff members had been selected for redundancy. The selection criteria were outlined and he was invited to a meeting. During the meeting the employee was told that he had been selected for redundancy having achieved the lowest score of the three. The lecturer appealed and at the appeal hearing was given an opportunity to challenge the employer’s conclusion. The Employment Tribunal found that the lecturer had not been unfairly dismissed on the basis that although it was unfortunate that he was not given his assessment score until the appeal hearing, the employer had acted reasonably, had consulted and applied objective selection criteria. However the EAT held that there had been a breach of step two of the statutory procedure as the employer had failed to provide the lecturer with sufficient or any explanation of the basis of their decision to make him redundant before the meeting and, as a matter of law, held that any defect in the statutory dismissal procedure cannot be remedied on appeal and the dismissal was automatically unfair. The EAT made no award of compensation as, based on the scores, had he been given his score at the initial hearing there would have been no reasonable prospect of a different outcome. However the basic award was increased by 25% to reflect the breach of the statutory procedure.

G M Davies v Farnborough College of Technology (2007) UKEAT/0137/07/LA


Sex discrimination

The Sex Discrimination Act 1975 (Amendment) Regulations 2008 came into force on 6 April 2008. They make a number of amendments to the Sex Discrimination Act 1975 as follows:-

  • The definition of harassment changes from being where a person subjects a woman to harassment “on the ground of her sex” to “related to her sex or that of another person.” Therefore a complaint of harassment under the Act no longer has to be on the ground that the complainant is a woman (or man). The change of definition means the unwanted contact need not be directed at the complainant. The complainant could be a witness to another person being harassed.

  • The new definition of harassment applies to the SDA provisions on the exercise of public functions and the public sector duty to promote gender equality.

  • An employer who fails to take reasonably practicable steps to protect employees from third-party harassment related to sex will be treated as himself subjecting the employee to harassment where the employer knows that such harassment has occurred on at least two other occasions. Though three occasions of harassment are required, it need not be the same person causing harassment on each occasion.

  • The regulations remove the requirement of a non-pregnant comparator where a woman claims less favourable treatment on the ground of pregnancy or maternity leave.

  • The regulations introduce changes relating to terms and conditions during maternity leave namely:-

- non-payment of a discretionary bonus during compulsory maternity leave will be discriminatory;

- non-pay benefits must now continue to be provided during AML as well as OML. This does not only affect benefits such as health insurance but means that AML should be counted for the purposes of accruing contractual annual leave and continuity for benefits based on length of service.


Discrimination by Association - Disability Discrimination

At present, it is unlawful to discriminate against persons by association under the Religion or Belief Regulations and also the Sexual Orientation Regulations. This prohibition also exists under the race discrimination law in the UK. However, discrimination by association does not go further than this and therefore does not apply to sex, marital and civil partnership status, gender reassignment, age and disability and therefore, in these areas, the alleged discrimination must relate to the actual characteristics of a person and not to the characteristics of an individual associated with that person. This could be about to change following the recent opinion of the Advocate General handed down in the case of Coleman v Attridge.

Ms Coleman alleged that she had been discriminated against on the grounds of disability. Although Ms Coleman does not have a disability herself, she was the primary carer for her disabled son. When Ms Coleman returned to work for her employer, a law firm, she alleged that she suffered less favourable treatment in comparison with employees whose children were not disabled. The allegations ranged from threats of disciplinary action due to her lateness for work, harassing comments and a refusal to allow her to return to the post she previously worked in.

The Tribunal was required to determine whether Ms Coleman was able to bring a disability discrimination claim based upon her association with a disabled person, namely, her son. The Tribunal referred the question to the ECJ. The ECJ is likely to provide a decision later this year. However, the Advocate General delivered an opinion in which he concluded that non-disabled persons should receive such protection and, therefore, disability discrimination by association should be prohibited. It is expected that the ECJ will follow the Advocate General’s opinion and, therefore, discrimination by association on the grounds of disability will be unlawful. If this is the case, we can expect additional wording to be inserted into the Disability Discrimination Act to achieve this. This will give extra protection to the estimated 2.5 million carers of disabled persons in the UK. It remains to be seen whether changes to other grounds of discrimination, including sex, marital status and age, will come about following such changes to disability legislation.

Coleman v Attridge Law and Law C-303/06


IVF Treatment and Discrimination

A recent ECJ case has held that women undergoing in vitro fertilization treatment (IVF), that have had their ova fertilized but not yet implanted, are not pregnant and therefore are not protected from dismissal by the EC Pregnant Workers Directive. However, the ECJ held that if a woman is dismissed and the dismissal relates to her IVF treatment, the dismissal will amount to discrimination on the grounds of her sex and be contrary to the EC Equal Treatment Directive given that only women receive IVF treatment. The ECJ took this view taking into account existing ECJ case law that as only women become pregnant, the dismissal of a female worker for being pregnant, or for a reason based on their pregnancy, amounts to direct sex discrimination. The ECJ took the view that a similar logic applies with regard to IVF, which also "directly affects only women".

Following this case, employers must take care when dealing with employees undergoing IVF treatment. The decision emphasizes that workers undergoing IVF will be protected from less favourable treatment on the basis of their sex. Also, the ECJ’s decision that protection should commence "from the earliest possible date in a pregnancy" could cause further debate in cases of IVF treatment, as there is usually a period of time when a woman undergoing treatment is waiting to determine whether the implanted ova have "taken" and the woman is in fact pregnant.

Employers may wish to review their policies to set guidelines for allowing employees who are undergoing IVF treatment time off work. Such treatment can be lengthy and employers should aim to manage such employees consistently. Similarly, existing policies may not adequately cover requests for time off for IVF treatment.

Mayr v Bäckerei und Konditorei Gerhard Flöckner OHG C-506/06


Agency Workers

Are agency workers employees and if so, who are they employed by? This issue has been a live topic for the last few years and following a number of cases recently, it seemed that agency workers could be employees of the end user (for example, the charity that takes on agency workers) if an implied contract of employment is established between them. This was the Court of Appeal decision in Muscat following guidance in the case of Brook Street Bureau v Dacas..

However, since then, there have been a number of cases whereby the courts have not implied a contract of employment between the end user and the agency worker. In James v LB Greenwich the Court of Appeal held that a contract should only be implied out of necessity ie where no other analysis properly reflects how the work is being performed by the agency worker for the end user. The Court commented that the lack of protection for agency workers was a matter for parliament and not for the courts to decide upon. In the meantime, a discussion continues over an EU Temporary Agency Directive following a discussion by the Social Affairs Council at EU level. No doubt there will be some clarification on the matter in due course.

Cable & Wireless plc v Muscat [2006] IRLR 354
Brooke st. Bureau v Dacas [2004] IRLR 358
James v Greenwich Borough Council, Court of Appeal [2008] IRLR 302


Maternity Leave and Sick Pay

An employee who is on ordinary maternity leave (OML) is entitled to the same terms and conditions of employment that would have applied if she had not been absent, but excluding remuneration. Sums that are payable to an employee “by way of wages or salary” are treated as remuneration. In a recent case, the EAT held that an employee who was certified sick during her ordinary maternity leave (OML) was not entitled to be paid contractual sick pay during that period. This was because sick pay was deemed to be "remuneration" for the purposes of the Employment Rights Act 1996 and the Maternity and Parental Leave, etc Regulations 1999, and therefore it is excluded from the benefits available to women during their OML.

The case demonstrates the difference in the payment of sick pay to women who are absent with pregnancy-related sickness. During pregnancy (and prior to maternity leave) normal contractual sick pay rules will apply. During maternity leave the statutory maternity pay scheme replaces ordinary pay (including sick pay).

After maternity leave a woman who is off sick is once again entitled to any contractual sick pay in the normal way. It is not necessary for the female employee to physically return to work after the end of maternity leave in order to be entitled to her right to sick pay. At the end of her maternity leave the female employee has to inform her employer (as set out in the employer’s sickness policy) that she is off sick and she should then submit sickness certificates as necessary. A woman may however decide to terminate her maternity leave early by giving 8 weeks’ notice of her intention to return to work in order to be entitled to claim sick pay.

Department of Work and Pensions v Sutcliffe UKEAT/0319/07


Annual Leave and Sick Pay

The case now known as Stringer v HMRC concerning statutory holiday pay under the Working Time Regulations 1998 (implementing the Working Time Directive) is before the European Court. The Advocate-General whose opinion is normally but not always followed by the Court has published his opinion as follows:-

  • Entitlement to paid holiday accrues during sickness absence.

  • However workers may not take their holiday while on sick leave.

  • Workers are entitled to payment for accrued but untaken holiday leave on the termination of their contract even if they were on sick leave for the full leave year.

In a separate Opinion in a German case the Advocate General stated that the expiry of a worker’s right to annual leave following the end of a leave year during which the worker had remained absent due to sickness breached the Working Time Regulations and that untaken leave should have been available on the worker’s return to work. If the ECJ follows the Advocate General’s Opinion in this case then the absence of provision for carry-over of leave in the UK regulations would render them incompatible with European law and there would be pressure on the government to amend. Such amendment would mean that workers who have not been able to take their annual leave because they have been absent from work due to a prolonged period of illness, would have the right to take that leave when they do eventually return to work, which may be in a subsequent leave year. If the employee does not return to work and their employment is terminated, they would be entitled to a payment in lieu of any leave that they were not able to take due to illness in any previous leave years.

Commissioners for the Inland Revenue v Ainsworth [2005] EWCA Civ 441
Schultz-Hoff v Deutsche Rentenversicherung Bund C-350/06


Contact us:

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

Tel: 020 8789 9111


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.

© Copyright: Russell-Cooke,

The Employment Team at Russell-Cooke
Anthony Sakrouge (Partner) – 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Alex Bearman (Solicitor) – 020 8394 6524  Alex.Bearman@russell-cooke.co.uk
Dominic Tomkins (Solicitor) – 020 8394 6525  Dominic.Tomkins@russell-cooke.co.uk

Specialists in advising charities, not for profits and public bodies
Jane Klauber (Partner) – 020 8394 6483  Jane.Klauber@russell-cooke.co.uk
Dora Costas (Solicitor) – 020 8394 6498  Dora.Costas@russell-cooke.co.uk

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