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Russell Cooke Solicitors - Employment Law Update


July 2013

 
 

Welcome to the latest edition of Employment Law Update. 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 Employment 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:

  • TUPE - dismissal of football club employees
  • Unfair dismissal - Baby P
  • Disability Discrimination Act - cause or effect?
  • Unfair dismissal exclusions including worker/jurisdiction

This material will shortly be available at our website together with an archive of past updates (there is also the facility to sign-up to receive the updates here).

 

TUPE

Carrying out redundancies for the purpose of selling a football club rather than keeping the club running is not an economic, technical and organisational reason entailing a change in the workforce. Redundancies were held to be automatically unfair as they have been carried out for reasons connected to a TUPE transfer.

Crystal Palace Football Club (‘the Club’) was owned by Crystal Palace FC Ltd, which purchased it in 2000. However Selhurst Park, the Club’s stadium, was at all material times owned by the Royal Bank of Scotland, which was part of the Lloyds Banking Group, (‘Lloyds’).

In 2010 Crystal Palace FC Ltd went into administration. A preferred bidder was soon found for the Club and negotiations proceeded. However the preferred bidder made it clear that the Club would not be purchased unless the purchaser could also buy Selhurst Park. Lloyds did not want to sell. A purchase agreement was signed in escrow on the sale of Selhurst Park and the administrator simply had to await the result of the preferred bidder’s negotiations with Lloyds.

The Club soon found that it was suffering from severe cash flow difficulties. The decision was made to “mothball” the Club, in the hope that it would remain financially viable and that the sale could take place at a later date. The Club announced that it would not trade after June and proposed making the majority of its administrative staff redundant. The Claimants, who were among the 29 staff made redundant, brought unfair dismissal claims.

Ultimately Lloyds relented under public pressure and agreed to sell Selhurst Park, so that the sale of the Club could proceed.

Under 7(1) of the TUPE Regulations a dismissal will be automatically unfair where the reason for that dismissal is connected with a transfer and is not for an economic, technical or organisational (‘ETO’) reason. Under Regulation 8 of the TUPE Reguations the Regulations do not apply where the transferor is the subject of bankruptcy proceedings, or analogous insolvency proceedings, which have been instituted with a view to the liquidation of the assets of the transferor, under the supervision of an insolvency practitioner.

The Tribunal at first instance held that the dismissals had been fair, on the basis that they had taken place for an ETO reason, entailing a change in the workforce.

The Employment Appeal Tribunal (‘EAT’) concluded that the Tribunal had erred in its reasoning that the dismissals had taken place for an ETO reason entailing a change in the workforce. The EAT noted that the case law made a clear distinction between two different types of situations where an administrator dismisses employees. Where the dismissals are for the purpose of continuing to conduct the business the dismissals will be for an ETO reason. Where the dismissals are part and parcel of a process to sell the business, then the dismissals are not for an ETO reason and are therefore automatically unfair in light of Regulation 7.

The EAT found that the administrator’s goal, from the outset, had been to sell the Club as a going concern, failing which it would be liquidated. There was no intention to continue the business. Therefore the dismissals were automatically unfair.

Kavanagh & Ors v Crystal Palace FC (2000) Ltd & Ors  [2012] UKEAT 0354_12_2011

 

Unfair dismissal

The Court of Appeal found that 2 social workers whose employment had been terminated in the aftermath of the tragic and high profile case of Baby P had not been unfairly dismissed, even though they had previously been subject to disciplinary proceedings under their employer’s shorter disciplinary procedure in respect of the same matter and had only received warnings.

Ms Ward was the social worker who had been personally assigned to the care protection plan of the toddler Baby P, who had died due to a chronic lack of care and through being subjected to abuse by his mother and two other men. In the aftermath of his death, there was widespread and violent criticism of Haringey Council’s handling of Baby P’s care and Mrs Ward was subject to disciplinary proceedings. Ms Christou was Mr Ward’s team leader and was also subject to disciplinary proceedings.

Haringey Council had two different disciplinary procedures. The first was the simplified disciplinary procedure (SDP) and the second was the full procedure. An employee could only be dismissed under the full procedure. Ms Christou and Ms Ward were initially disciplined under the SDP and received warnings.

Shortly afterwards, a new management team took over the running of the Council and decided to subject Ms Christou and Ms Ward to the full procedure.  Under the full procedure Ms Ward was charged with 4 allegations of misconduct, which were substantiated. These substantiated allegations amounted to gross misconduct and resulted in her instant dismissal. Ms Christou was subject to the same allegations. She was found to have shown poor professional judgement, which was also deemed to amount to gross misconduct. Consequently she was also instantly dismissed. 

Ms Christou and Ms Ward brought unfair dismissal claims in the Employment Tribunal, but were unsuccessful. The Tribunal found that the dismissals had been fair, because it was fair for the Claimants to have been subjected to disciplinary proceedings a second time. The Tribunal held that the Claimants’ misconduct was sufficient to warrant a dismissal and there was a clear risk to a member of the public. In these circumstances it considered that the employer had been entitled to carry out a second disciplinary procedure.

The Tribunal had been referred, by the Claimants’ representatives, to the case of Sakar v West London Mental Health NHS Trust (2010) in which it had been held that, although an employer was not prevented from following a subsequent disciplinary procedure, the fact that a different procedure had been considered more appropriate initially would be relevant when considering whether the dismissal had fallen in the range of reasonable responses. In that case the dismissal had been found to be unfair. The Tribunal in Christou and Ward distinguished their case from Sakar, noting that in their case, there had been a change in management between the first and the second procedure. It considered that this new management had been entitled to evaluate the seriousness of these allegations afresh and to take the view that they were more serious than they had originally been considered, therefore warranting examination under the full disciplinary procedure.

In their further appeal from the EAT’s decision to the Court of Appeal the Claimants argued that the fact that they had been subjected to two disciplinary proceedings in respect of the same matters violated the principle of res judicata, which states that a matter already judged cannot be raised again.

The Court of Appeal dismissed this argument, saying that this doctrine only applied to judicial decisions and that the decision initially reached under ths SDP had not been judicial in nature.The Court noted that, even if the res judicata principle did apply, the law of unfair dismissal still required the Tribunal to see if there was a fair reason to dismiss the Claimants and whether the decision to dismiss for this fair reason fell within the range of reasonable responses available to the Council.  The Court of Appeal concluded that the Claimants had not been unfairly dismissed and judged that the Tribunal had not acted perversely when concluding that new management were entitled to take a different view on the gravity of the conduct.

Nonetheless, the Court did note that the circumstances in which an employee can be disciplined twice for the same offence will be rare.

Christou & Anor v London Borough of Haringey (Rev. 1) [2013] EWCA Civ 178

 

Disability discrimination

The cause of an obese Claimant’s symptoms is only relevant as a matter of evidence when judging whether that Claimant has a disability under the Disability Discrimination Act 1995 (“DDA”). It is the effect of any symptoms that should be considered in greater detail when judging whether a person is disabled within the meaning of the DDA.

The Appellant, who weighed 137 kilograms, suffered from a variety of symptoms connected to obesity. These symptoms included pain, his  leg giving way, chronic fatigue, poor concentration and memory, bulging discs and various bowel symptoms.

The Appellant brought a disability discrimination claim against his employer under the Disability Discrimination Act 1995 (‘DDA’). The Tribunal at first instance judged that the Appellant did not suffer from a disability within the definition of the DDA, on the basis that the medical evidence did not reveal any physical or mental cause of the symptoms other than obesity. The Tribunal decided that Mr Walker was required to demonstrate that his symptoms had been caused by a physical or mental impairment, in order to be successful.

The EAT disagreed and found that the Claimant was suffering from a disability within the meaning of the DDA at the relevant time. In its judgement, the EAT made the following notable points.

Firstly the EAT found that, on the basis of the medical evidence, the Appellant was clearly physically and mentally impaired. In coming to this conclusion the EAT noted several physical and mental conditions that the Appellant was suffering from, including chronic fatigue syndrome and depression.

Secondly, the EAT found that the Tribunal had wrongly judged that, in order for someone to be considered physically or mentally impaired, there should be a clear physical or mental cause for the symptoms. This was incorrect. The DDA did not require the Tribunal to focus on the cause of the disability for these purposes. The EAT noted that the cause of the impairment was not completely irrelevant, but rather that this only had evidential, rather than legal, value. So, if there did not appear to be a cause of an individual’s condition, the Tribunal would be entitled to question the genuineness of any suffering . No such question had been levelled at the Appellant, whose genuine suffering the Tribunal had noted.

Finally, the EAT confirmed that obesity should not be considered a disability in itself, but that it might be a factor that was suggestive of disability. The extent to which this suggestion could be made would depend on the effects of the obesity on the individual’s day to day life and the length of time that he had suffered these effects, orcould be expected to. The EAT noted in particular that, if a person who had not already suffered these effects for 12 months was determined to lose weight, such that it could be confidently predicted that his weight would reduce to normal levels, the court might consider that the fact of suffering from the impairment for 12 months could not be established.

The EAT went so far as to say that:

“if the Judge had not been misled by the reference to McNichol and Rugamer, so as to be distracted from the effect of the condition into thinking it was necessary to establish with reasonable medical certainty the cause of those conditions, he would in this case have been bound to conclude that the Claimant was disabled.”

This case confirms, that when judging if a person is disabled, the effect of the condition is what matters, and the cause of the condition in only of very limited relevance.

Walker v Sita Information Networking Computing Ltd (Disability Discrimination [2013] UKEAT 0097_12_0802

 

Unfair dismissal

A German employee, who was married to a member of the British armed forces and worked at a children’s play centre on the Navy, Army and Air Force Institute, was held not to have been sufficiently connected to British employment law to bring a claim for unfair dismissal. 

The Appellant was a German national, who was married to a member of the British Armed Forces stationed in Germany. She was employed at a children’s play area called Jumping Jacks on the Navy, Army and Air Force Institute. She was employed under a German contract that was made orally with a company located in Germany. The nursery was on land which was not owned by the armed forces and she was paid in Euros. The Claimant was dismissed and sought to bring an unfair dismissal claim under English Law. The Tribunal rejected her claim in the first instance for jurisdictional reasons.

When judging that the Claimant did not have the right to bring an unfair dismissal claim in England, the Tribunal had applied the jurisdictional test set out in Duncome v Secretary of State for Children, Schools and Families [2011] UKSC 36.  Under this test it is only in an:

“exceptional case where employment has such an overwhelming closer connection with Britain and British employment law than with any other system of law that it is right to conclude that Parliament must have intended that the employees should enjoy protection from unfair dismissal”

The Tribunal did not consider that the facts in this case supported a finding that the Claimant’s employment situation was such that Parliament would have intended her to be protected by English unfair dismissal law.

The Appellant appealed to the EAT. In arguing that her employment was closely related to the Armed Forces she noted that the people using the Institute were likely to be members of the Armed Forces or their dependants, that she reported to a British Officer.  She also suggested that that the work she had done for Jumping Jacks had been work for the Armed Forces, on the basis that the Garrison Amenities Fund, which was an umbrella charity under which there were various restricted funds, provided funding for Jumping Jacks.

The Appellant also placed considerable reliance on the case of Ministry of Defence v Wallis & Anor UKEAT/0546/08/ZT in which the Tribunal had found there was a sufficiently close connection between the Appellants’ employment and England for a Tribunal in England to have jurisdiction. The Appellants in that case had been wives of British servicemen stationed in Belgium and the Netherlands. They were employed as teachers in NATO run international schools, and were only eligible for these posts by virtue of their status as dependants of British servicemen.

The EAT dismissed the Appeal. In doing so it said that the Tribunal had applied the correct test and that, when work is carried out abroad, only in exceptional circumstances should British Tribunals have jurisdiction. The EAT distinguished the Appellant’s case from that of Wallis, noting key attributes of the Claimants’ employment in Wallis which did not exist in this case. The Claimants in that case had been recruited by the Ministry of Defence, their contracts were governed by English Law and they were eligible for these posts by virtue of their status as dependants of members of the British Armed Forces.

This case highlights, in cases where the Claimant is working abroad, just how close the connection between the Claimant’s employment and British employment law must be, before an English Tribunal will consider that it has the jurisdiction to hear an unfair dismissal claim.

Rogers v Deputy Commander and another UKEAT/0455/12

 

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.

© Copyright: Russell-Cooke,

The Employment Team at Russell-Cooke

Anthony Sakrouge (Partner) - 020 8394  6504  Anthony.Sakrouge@russell-cooke.co.uk
Jane Klauber (Partner) - 020 8394 6483  Jane.Klauber@russell-cooke.co.uk
Alex Bearman (Partner) - 020 8394 6524  Alex.Bearman@russell-cooke.co.uk
Edward Wanambwa (Partner) - 020 8394 6445 Edward.Wanambwa@russell-cooke.co.uk
Fudia Smartt (Solicitor) - 020 8394 6525 Fudia.Smartt@russell-cooke.co.uk
Jane Pendry (Solicitor) - 020 8394 6478 Jane.Pendry@russell-cooke.co.uk


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