Employment Law Update - September 2009

This update keeps you informed of new developments in employment law and focuses particularly on a recent Employment Appeal Tribunal decision concerning Amnesty International

Motive irrelevant in establishing race discrimination

In the recent case of Amnesty International v Ahmed (UKEAT/0447/08/ZT), the Employment Appeal Tribunal (EAT) held an employee was subjected to direct discrimination when her employer, Amnesty International, did not offer her a promotion because her ethnicity meant  it would be dangerous for her to perform the role. Further, Amnesty International was concerned that offering the promotion could compromise its impartiality and, therefore, effectiveness.


Facts


The employee is of northern Sudanese origin and applied for the role of 'researcher' for Sudan. She was, at the time, performing the role of 'campaigner' in respect of Sudan. Amnesty International was of the view that her ethnic origin would not only compromise its impartiality, but would also expose her and those travelling with her, to increased safety risks when visiting Sudan or the camps in Eastern Chad. On this basis, her application was refused and, as a result, the claimant resigned and claimed race discrimination and constructive unfair dismissal.


Amnesty International has always been concerned about the problems that may arise if staff of a particular nationality or national or ethnic origin undertake work in, or related to, the country of which they are a national. This is because the impartiality, or perceived impartiality, of the staff in question may be prejudiced by their connections with the country. This would not only reduce effectiveness but could also have implications for Amnesty's own reputation for neutrality. Further, staff who have to visit a country of which they are nationals, are considered to be at significantly greater risk of ill treatment or violence than others.


Finding


The EAT held that the employer's motive is irrelevant in establishing whether an individual has been discriminated against on the grounds of race. The employee's non-appointment to the new role constituted direct discrimination contrary to the Race Relations Act 1976, notwithstanding any potentially justifiable reasons for the decision. Amnesty International was unable to successfully defend its actions on the grounds that sending the employee to Sudan would have meant it breached its duty as her employer under the Health and Safety at Work etc. Act 1974.


However, the EAT concluded that Amnesty International's conduct was not sufficient to breach the mutual term of trust and confidence, entitling the employee to claim constructive dismissal. In this regard, the employer's motive was relevant in that Amnesty International had reached its decision following a thorough and reasoned process, which was not influenced by racial prejudice.

Workplace parking levy schemes

The Workplace Parking Levy (England) Regulations 2009 will come into force on 1 October 2009. Under these regulations, local authorities in England (excluding Greater London) will be able to introduce a workplace parking levy scheme. Details of how each scheme will operate will be the responsibility of each local authority. It is hoped that by imposing a levy on the amount of workplace car parking provided by employers, car-commuting will reduce in favour of alternative means of transport.


The Regulations do not specify charging levels, exemptions and discounts which will be decided by the Local Authority in light of local circumstances. Guidance will be issued to Local Authorities by the Department of Transport as to which issues should be taken into account in workplace parking levy schemes. No workplace parking levy scheme will come into operation until 2011, and no levy is expected to commence before April 2012. 


Employers may have to consider the parking offered to their staff following the introduction of any workplace parking levy schemes and will have to have regard to any implied contractual right to parking.

Review of the default retirement age

Under the Employment Equality (Age) Regulations 2006, the statutory default retirement age is 65. It was originally intended that this would be reviewed in 2011. However, due to the change in economic circumstances, the government has announced in its strategy 'Building a Society for All Ages' that this review will be brought forward to 2010.


Currently, the government is gathering evidence to inform the review. If, as a result of the review, it is found that the default retirement age is no longer necessary, any changes would not be implemented until 2011. This will give employees and employers sufficient time to prepare for any changes, and allow employees additional time to consider their retirement plans. Employers will be encouraged to give employees more choice over their retirement as part of the Age Positive initiative. This government initiative will also work with employers to promote the recruitment and retention of older workers.

Employment claims in decline?

In July, Acas published its annual report for the year ending March 2009. Interestingly, the report revealed that the total number of employment claims actually declined by 8 per cent despite the widely reported issues faced in the job market. In addition, Acas noted a 13 per cent fall in the number of equal pay claims.


Despite the overall decline in the number of claims reaching employment tribunals in 2008/09, closer analysis of the figures revealed an increase in Acas' conciliation and mediation services and a significant shift in the nature of claims pursued. Acas' report highlighted a 29 per cent rise in unfair dismissal claims and a 36 per cent rise in redundancy claims. The shift in the type of claims has been largely attributed to the current recession which has required many employers either to reduce headcount or restructure their workforce.


In addition to recording the annual number of claims, the report revealed that Acas received 78,670 cases for conciliation from the employment tribunals representing a rise of 18 per cent from last year. Unsurprisingly, Acas confirmed that the economic downturn led to a rapid and sustained increase in the number of cases passed to them for conciliation in the second half of 2008/09. In addition, Acas' mediation service saw a 24 per cent increase in demand over the preceding year with resolution rates remaining very high at just over 90 per cent.


Therefore, despite the fact that fewer claims are reaching employment tribunals, there is little doubt that the economic downturn has prompted a sharp rise in workplace disputes. 


The Acas helpline, which has long acted as a barometer for the state of the workplace, predictably showed a dramatic increase in calls for advice on redundancy and lay-offs, from employers and workers alike. With commentators predicting that unemployment is likely to continue to rise in the coming months and into 2010, employers are well advised to seek specialist advice to minimise their exposure to employment claims.

HMRC threatens to get tough with dodgy recruitment agents

The Revenue has recently published a brief announcing that it is going to get tough with recruitment agencies and umbrella organisations which breach tax and national insurance legislation when offering temporary workers. HMRC will be working with the Department for Business Innovation & Skills, and the Gangmasters Licensing Authority to identify businesses acting in contravention of legislation and will penalise breaches of the law as they are identified. Businesses which use temporary workers need to make sure that the supplier is operating within the law to avoid the risk of putting their own reputations and businesses at risk

Employment Law update

This update  focuses particularly on :

• An extension to the scope of disability discrimination legislation,
• A Court of Appeal ruling concerning an employer reserving its position in relation to facts which it later attempts to rely on as grounds for summary dismissal.

A Costly Mistake

A tribunal has ruled that an employer is obliged to continue paying a part time bank worker her full time salary, despite a mistake.

The claimant had worked for a bank for a number of years in a part time role and in 2006 there was a TUPE transfer. Prior to the transfer there was an expectation amongst employees that rates of pay would increase. Miss Keenan was on a salary of £9,500 prior to the transfer; afterwards she received a statement that her basic salary was £17,000, which she regarded as a substantial and overdue pay rise. Barclays never queried the discrepancy; the bank even provided a reference confirming her salary when she applied for a loan in 2008. The bank also gave her regular pay rises - including a £3,000 performance-related bonus - without spotting the error.

The tribunal found that the term relating to salary did not have to be substituted by the 'correct' term as the employee had no actual knowledge of the mistake.

She therefore won the right to remain on the higher wage and was not required to repay the £20,000 in extra pay she had so far received as it was entirely due to the bank's error.

Extension Of The Scope Of Disability Discrimination Legislation

The House of Lords has made an important ruling in a recent case which means that employees are now more likely to be able to demonstrate that they have a disability and are, as such, entitled to the protection of the Disability Discrimination Act 1995 (the DDA).

In SCA Packaging Limited v Boyle [2009] UKHL 37, it was held that where an impairment 'could well' have a substantial adverse effect on an employee's ability to carry out normal day-to-day activities, were it not for the fact that measures were being taken to treat or control it, impairment could constitute a disability. Previously, employees were required to pass the more difficult test of showing that it was 'more probable than not' that they would suffer such a substantial effect, were it not for any treatment they may be receiving.

Employers need to ensure that the provisions of the DDA are always carefully considered, even where an employee may not appear to have a 'disability'.

Section 1(1) DDA states that: 'a person has a disability for the purposes of this act if he has a physical or mental impairment which has a substantial and long-term effect on his ability to carry out normal day-to-day activities'.

This definition is key to employers, since all employees who are considered to have a disability for the purposes of the DDA are protected against discrimination, victimisation and harassment before, during and after their employment. In addition, employers are expected to make 'reasonable adjustments' to accommodate such employees.

The DDA sets out a non-exhaustive list of steps which may be taken by the employer in this regard, including making adjustments to premises, allocating some of the disabled employee's duties to another employee and altering the disabled employee's hours of work or training. Whether or not there is a duty in each particular case is very much fact and context-sensitive.

Schedule 1 of the DDA expands upon the definition of 'disability'.

Section 6(1) states that a substantial impairment includes one which 'would be likely to have a substantial adverse effect on the ability of the person concerned to carry out normal day-to-day activities, but for the fact that measures are being taken to treat or correct it'. In other words, impairments not having a substantial adverse effect on an employee's normal day-to-day activities due to corrective measures or treatment may still constitute a disability and be protected under the DDA if the substantial adverse effect would be 'likely' to materialise were those measures or treatment to be removed.

In the case of SCA Packaging Limited v Boyle, the House of Lords considered the meaning of the word 'likely' in this context.

Mrs Boyle had a history of problems with hoarseness caused by vocal nodules. She had been instructed by her medical advisers to adhere to a strict management regime with regard to her condition which included maintaining her hydration levels by sipping water throughout the day, refraining from raising her voice and singing, moving away from background noise, avoiding passive smoking and exercising regularly.

In September 2000 SCA Packaging Limited, Mrs Boyle's employer, decided to remove a partition separating her work space from a larger, noisier area. She complained, with the support of her ear, nose and throat surgeon, that the increased noise levels would adversely affect her health. The company declined to change its decision and Mrs Boyle later brought a claim that her employer had failed to comply with its duties under the DDA. Mrs Boyle was in fact later made redundant brought further claims in this regard.

In order to ascertain whether Mrs Boyle was able to proceed with her case, the tribunal initially had to determine whether her condition constituted a 'disability' for the purposes of the DDA.

The tribunal concluded that without the treatment Mrs Boyle was undergoing, she would 'more likely than not' have suffered from ongoing hoarseness and vocal nodules which would have had a substantial adverse effect on her day-to-day activities.

The tribunal went on to find that she did have a disability.

SCA Packaging Limited appealed against this decision unsuccessfully to the Northern Ireland Court of Appeal. The company then appealed to the House of Lords.

The House of Lords upheld the Court of Appeal's decision and stated that, in addressing the degree of likelihood required under the DDA, the tribunal should have asked whether the substantial adverse effect 'could well happen', were it not for the treatment Mrs Boyle was undergoing.

Previously, it had been generally understood that 'likely' meant 'more probable than not'. The case of SCA Packaging Limited v Boyle is therefore particularly important since the House of Lords has broadened this definition to include any situation where an employee can demonstrate that his or her condition 'could well' have a substantial effect, were it not for the fact that he or she was taking measures to control it. Claimants will, as such, have less difficulty in showing that they have a disability in the future and employers will need to ensure that they are conscious of the protection afforded to employees under the DDA in all situations, particularly given that, as in this instance, an employee's impairment may be concealed because of the measures being taken to control it.

Sympathy Affirms Contract

In a recent case the Court of Appeal has held that where an employer has knowledge of facts which it later attempts to rely on as grounds for summary dismissal, it should reserve its position in relation to these facts. By failing to do this, the employer had affirmed the contract and could not seek to justify the employee's dismissal on this basis.

This case concerned a senior employee who resigned from his role with his employer to join a competitor.

 Whilst his employment contract did not contain a non-compete clause, it did contain a post termination restriction preventing him from amongst other things, soliciting key artists, suppliers or customers.

The employee stated in his resignation meeting that he would not be undertaking any activities in his new role that competed with the business carried out by his employer. He confirmed that he would instead be working on a new record label.

The employee had a six month notice period and during this time a dispute arose between the parties which centred on whether the employee had been honest about whether he would be competing in his new role.

The employee went off sick with stress after being shouted at during a heated confrontation and alleged that he had been treated poorly following his resignation.

Approximately, 3 weeks later, the employee returned to work and disciplinary proceedings were commenced against him. Following the disciplinary hearing, the employee was dismissed summarily for reason of gross misconduct. One of the reasons given for his dismissal related to the fact that he had lied in his resignation meeting in saying that his new employment would not be competitive.

The Court of Appeal held that his employer could not seek to rely on his failure to inform them of his intention to compete whilst in his new employment as a reason for justifying his dismissal. At no stage had the employer reserved its position in relation to this matter and had given no indication, for a significant period, that it was inclined to bring disciplinary proceedings against the employee about his perceived dishonesty. In fact, the employer had attempted to 'smooth things over' with the employee in the hope that he would soon be able to return to work and reminding him of his duties of confidentiality during his notice period.

In stark contrast, the employer had clearly reserved its position in relation to other allegations faced by the employee on which it was entitled to rely as its basis for dismissal.

It is important for employers to note that whilst the employer attempted to smooth things over (in an attempt to avoid a constructive dismissal claim or to exacerbate the condition that the employee was suffering) this could go too far as it may result in a position where an employer has affirmed the contract and then cannot later rely on certain repudiatory breaches of contract by the employee.

In these situations, an employer should reserve its position in relation to alleged breaches if it does not act immediately upon learning of those breaches. However, the judgment in this case leaves unresolved the question of how precisely the employer has to reserve its position although it does appear in this case that the employer simply had to state that 'it was reserving its position in this regard'.

Swine Flu

It has been reported that the government is currently considering allowing workers suffering from swine flu to remain off work for 14 days before being required to obtain a sick note from their GP. Currently, the period after which a certificate must be obtained is seven days.

The government has indicated that this measure could be taken with a view to minimising the risk of the flu spreading and avoiding further unnecessary burden on GPs. It has been noted that this is open to abuse by employees and it remains to be seen how the government will proceed.

Motherhood 'Devastates' Women's Pay

The Fawcett Society has published a new report which finds that although men and women have equal employment opportunities before becoming parents, the birth of a child is the start of a substantial and long lasting divide between mothers and fathers.

The report finds that over 57% of mothers with children under the age of 5 are employed compared to 90% of fathers. It also finds significant pay gaps between the earnings of women with children and those without. In view of its report 'Not having it all; How Motherhood Reduces Women's Pay and Employment Prospects', The Fawcett Society has requested new policies to tackle these issues which may include providing mothers with support when returning to jobs (even part time) at their previous skills levels.