CLB Employment Solutionsprotecting your business


November 2009

Hello to all our subscribers and a warm welcome to this month's newsletter. It is at times like these when I really appreciate the benefits of an email newsletter, rather than the traditional paper version. If we had stuck to the old paper version this letter may not have reached you at all (see our first article on the Post Office) and if it did, chances are that it would be in January, illegally delivered and would be soggy and falling apart due to the somewhat inclement weather we have been enduring.

The Post Office is, according to some pretty respectable sources, Britain's worst run company.

They have been involved in some memorable employment cases down the years, mostly on the losing side when the dust clears, but one has to admire their stance on hiring workers to take on the "extra work" over Christmas. Given the highly dubious nature of their rebuttal to the suggestion that they had broken the law, it will be interesting if they maintain the stance in future strikes (that seem inevitable) when they can't hide behind the "Christmas rush" argument they wheeled out this time.

There was an interesting third party pressure dismissal case before the EAT this month. It is a timely reminder that, when an employee is posted on the site of a third party, an insistence that the employee is removed by the third party is usually grounds to dismiss for "some other substantial reason" under the Employment Rights Act. I remind all our subscribers that the process for such a dismissal is as follows:

  1. Write to the third party and ask if they will reconsider the removal of the employee;
  2. If they will not, invite the employee to a meeting to discuss the situation;
  3. Offer the employee any suitable alternative employment there is available;
  4. Consider all other options that are practical and cost effective;
  5. If you have completed 1 -4 but have no way of keeping the employee within the business then you are free to dismiss the employee subject to the normal considerations of fairness.

It is important to note that if the employee in question has committed acts that have led to him being removed from site by the third party then this may be a conduct dismissal as well as a “third party pressure dismissal”.

Finally, it is both with amusement and an understanding nod that I read the case of Ross v Micro Focus Ltd. Any experienced employment lawyer can tell you a few tales about the behaviour of judges and panel members that sometimes imply bias or just rank incompetence. My favourite experience was of a (now retired) Judge who shouted at me for 10 minutes for the crime of being “late” (I had walked in promptly behind the clerk of the court when summoned after being kept waiting myself by the Judge for two hours) and then proceeded to direct his foul mood to the Claimant (a burly lorry driver). When under cross examination from me, the claimant became evasive and blatantly untruthful, the Judge reacted by shouting at him for ten minutes; the result being he burst into tears and ran out of the court, never to return. Had he appealed, I sense the EAT would have had more sympathy for him than they did for Mrs Ross.

We'll keep you up to date with any important developments between newsletters on our blog and if you have enquiries about the items featured or require any further information then don't hesitate to contact us on 0151 239 1000, freephone 08000 320974 or by e-mail to enquiries@clbemployment.com.

Regards
Will Burrows


This month's news:

1. The law behind the Royal Mail strike

2. When can a customer complaint justify dismissing an employee?

3. Improved safeguarding arrangements go live

4. Springboard injunctions

5. Agency Workers Directive

6. Dressing up unfair dismissal as wrongful dismissal

7. Disability Discrimination, carers and interpretation of UK law in the light of EU law

8. Jewish School

9. ...and finally



Employment Solutions

november 2009


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October 2009
September 2009
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April 2009
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February 2009
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1. The law behind the Royal Mail strike

During the Royal Mail strike earlier this month the Communication Workers Union was widely reported as having plans to go to court to stop Royal Mail using agency staff to clear the backlog caused by the postal workers' strikes. There seemed to be some misunderstanding, at least in some parts of the press, as to what the law provides. For example, on 27 October 2009, the BBC reported that "The law states that firms cannot recruit workers to do the job of employees called out on a legitimate strike". Well, up to a point Lord Copper.

Presumably the law to which the BBC was referring, and which the CWU intended to ensure was enforced, is that set out in the Conduct of Employment Agencies and Employment Businesses Regulations 2003. This makes it a criminal offence for an employment business knowingly to provide work-seekers to perform duties normally performed by a worker who is taking part in an official strike or other official industrial action. Of course Royal Mail could have been guilty of aiding and abetting the offence if any were committed.

The key phrase in this law is "employment business". This is defined by the Employment Agencies Act 1973 to mean a business which provides its own employees on a contract basis to third parties. It is quite different from an "employment agency", which is also a defined term. An employment agency introduces staff to an employer for employment by that employer.

As noted above the law only applies to provision of staff by an employment business. The Royal Mail claimed the regulations were not being infringed because any extra workers hired through an employment business were solely being used for seasonal Christmas work and to reduce the backlog of post, not to replace strikers. As it turned out, the issue has not yet been tested as a result of the dispute being called off, at least until the New Year. Of course, by then the need for seasonal workers will have passed so it will be interesting to see whether, if necessary, Royal Mail still seeks to appoint "additional" workers.

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2. When can a customer complaint justify dismissing an employee?

If an employer can show that the reason for dismissing an employee was a "substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held" then, provided proper procedures were followed, the employee will not win an unfair dismissal claim.

There have been various cases over the years in which tribunals and courts have had to consider whether third party pressure justified dismissal on this basis. The outcome in any particular case will, of course, depend on the particular circumstances. A couple of recent examples, one of which led led to an EAT case and the other of which led to an employee jumping ship before being pushed, are instructive.

In the EAT case, a Mr Henderson was a minibus driver working with disabled children in South Tyneside. The minibus service was provided under contract to South Tyneside Metropolitan Borough Council by a charity for which Mr Henderson worked. Mr Henderson initially had a clear CRB check but then allegations were made concerning his nieces. Although the police did not prosecute and Mr Henderson protested his innocence, after reviewing the case the South Tyneside Safeguarding Children Board decided that abuse had taken place and that Mr Henderson could no longer work with children. Mr Henderson's employer suspended him while it tried to persuade the Council to reconsider. When this failed, since it had no other roles available for him, it decided that it had no choice but to dismiss him.

An employment tribunal concluded that the dismissal was fair - it was for a"substantial reason of a kind such as to justify the dismissal of an employee holding the position which that employee held" (namely third party pressure). Under the terms of its contract the Council had the absolute right to veto the employment of any individual to provide the service. The tribunal found that the employer had done all it reasonably could to support Mr Henderson but in the end had had no choice but to dismiss him. The tribunal held that dismissal was within the range of reasonable responses available to the employer. Mr Henderson appealed to the EAT.

The EAT has upheld the original tribunal's ruling, while noting that such cases are "very uncomfortable". The customer or client is under no obligation to behave fairly towards the employee. In this case Mr Henderson may have been unfairly treated by being unable to put his case to the South Tyneside Safeguarding Children Board but however unfortunate for him that did not make it unfair for the employer to dismiss him.

The other case was the much publicised case earlier in October of the London Underground employee who called a passenger "a jumped up little git" before apparently threatening to "sling him under the train". The employee, Ian Morbin, was caught on video by another passenger who published the story on his blog. The matter came to the attention of Boris Johnson, the Mayor of London who asked TfL (London Underground) to investigate urgently. TfL suspended Mr Morbin.

It is understood that Mr Morbin later apologised and resigned - no doubt a sensible move as he may have reckoned that dismissal was the likely alternative, which would not look good on his CV. If he took legal advice it would no doubt have been to the effect that, on the basis noted above, he would not win an unfair dismissal claim.

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3. Improved safeguarding arrangements go live

The first practical stage of a new "Vetting and Barring" scheme for protection of children and vulnerable adults in England and Wales, under the Safeguarding and Vulnerable Groups Act 2006, started on 12th October 2009.

After the murders in 2002 of Soham schoolgirls Holly Wells and Jessica Chapman by the convicted sex offender Ian Huntley, and the resulting Bichard Report, the government passed the Safeguarding Vulnerable Groups Act. This is intended to prevent, so far as possible, similar tragedies happening in future. The Act will not be fully in force before autumn 2010 but important parts have now been now implemented. As from 12th October 2009:

  • it is a criminal offence for a barred individual to seek or undertake work with vulnerable groups or for "Regulated Activity Providers" knowingly to employ such a person;
  • the previous barring lists (POVA, POCA and List 99) are replaced by two new barred lists, both administered by the Independent Safeguarding Authority rather than by different Government departments. Checks of the two lists can be made as part of an Enhanced CRB check;
  • employers, social services and professional regulators must refer to the ISA information about why they stopped or considered stopping an individual from working with vulnerable groups where they consider them to have caused harm or posed a risk.

The next stages will be:

  • July 2010 - new entrants and employees looking to work or volunteer with vulnerable groups can start to apply to become ISA registered;
  • November 2010 – new entrants must become ISA registered before starting work with vulnerable groups; and
  • April 2011 – existing workers must start to become ISA-registered.

There is a significant risk that the public outcry and backlash after the Soham murders, which led to the disclosure that 88 other sex offenders had been cleared to work in schools and the passing of the Safeguarding and Vulnerable Groups Act, could go too far. Fears have already been expressed that new Ofsted regulations designed to protect school children combined with a requirement for CRB checks in arguably inappropriate cases may lead to, for example, parents giving up normal volunteer work with school children.

However although it may take time for a proper balance to be achieved, the Courts are already giving sensible guidance. The issue is essentially one of proportionality. The law under which enhanced CRB certificates are provided is contained in the Police Act 1997 which specifically requires the police to consider what information "ought to be included in the certificate". In one of the first cases to be decided by the new Supreme Court (which from October 2009 has taken over what used to be the judicial functions of the House of Lords) the Court has suggested that not enough attention is being given to that requirement. The Court pointed out that "....the idea that priority must be given to the social need to protect the vulnerable as against the right to respect for private life of [a job applicant]" can lead to infringement of the job applicant's Human Rights and that "the correct approach .... is that neither consideration has precedence over the other" (R (on the application of L) v Commissioner of Police of the Metropolis [2009] UKSC 3 November 2009).

On this basis, the Supreme Court suggested that as a general rule, before the results of an enhanced CRB check on a job applicant are dislosed to the prospective employer the job applicant should have the opportunity of making appropriate representations.

No doubt it will be some while before a proper balance is struck. The issues involved are as sensitive as they are important and we expect that developing case law will play a significant role over the next few months and years in helping to achieve a proper balance.

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4. Springboard injunctions

Recently there has been an increase in interest in what are sometimes called "springboard" or "head start" injunctions. This is the catchy name given to an injunction which an employer can sometimes obtain to prevent an employee or former employee using information belonging to the employer (for example a customer list) as a springboard to launch a new business.

The name "springboard injunction" appears to have first been used in a case in 1967 (Terrapin Ltd. v. Builders’ Supply Co. (Hayes) Ltd) in which the High Court said:

".....the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a spring-board for activities detrimental to the person who made the confidential communication, and spring-board it remains even when all the features have been published or can be ascertained by actual inspection by any member of the public."

Following this judgement, it used to be thought that a springboard injuction could only been obtained where the ex-employee was in breach of a duty of confidence owed to his or her former employer. In other words, it used to be thought that a springboard injunction could be obtained only if information which was "confidential" had been misused. However in 2008 the High Court ruled that this was not an essential pre-condition and that in appropriate cases such an injunction should be "available to prevent any future or further serious economic loss to a previous employer caused by former staff members taking unfair advantage ..... of any serious breaches of their contract of employment (or if they are acting in concert with others, of any breach by any of those others)".

It would be going too far to suggest that this has opened any floodgates but it does mean that employers have a greater chance than previously of preventing former employees from making improper use of information obtained while in their employment. For example, just recently a Birmingham law firm won a springboard injunction to restrain a former employed solicitor from poaching clients. The solicitor's employment contract did not include a restrictive covenant which would prevent him from taking the firm's clients and his employers won the injunction on the basis of breach of the implied term of fidelity.

The message from this for employers who consider themselves to be at risk of unfair competition from ex-employees is that it may be appropriate to apply to the courts for an injunction to restrain the ex-employee from misusing information obtained while in their employment. Of course, the main source of protection is to ensure that appropriately drafted restrictions exist in the contract of employment or executive service contract. This is an area we specialise in and you should alsways contact us if you are concerned about protecting your business interests.

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5. Agency Workers Directive

The government has published draft Agency Workers Regulations 2010 to implement the EC Agency Workers Directive in Great Britain with effect from October 2011, together with draft consequential amendments to the Conduct of Employment Agencies and Employment Businesses Regulations 2003. Both sets of draft regulations are included as annexes to a consultation document. The consultation ends on 11 December 2009.

An accompanying press release of 15 October 2009 confirms that "the Government is committed to getting this legislation on the Statute Book by the end of this Parliament" and that "the law will come into force in the UK in October 2011". Confirmation was provided in the Queen's Speech on 18 November.

The main effect of the regulations will be to ensure that after 12 weeks in a given job agency workers will be entitled to equal treatment with other staff in so far as basic working and employment conditions are concerned, including pay and holidays, as if they had been recruited directly by the hirer.

In addition, from the first day of their assignment agency workers will be entitled to (i) information about vacancies the hirer may have to give them the same opportunity as other workers to find permanent employment; (ii) equal access to on-site facilities such as child care and transport services; (iii) additional rights for new and expectant mothers including right to reasonable time off to attend ante-natal appointments and adjustments to working conditions and working hours.

Employment tribunals will be given jurisdiction to hear complaints from agency workers who consider their rights under the regulations have been breached or that they have suffered a detriment for asserting their rights under the regulations. There will be a 3 month time limit from the date of alleged breach or detriment for making an application to a tribunal. In detriment cases, tribunals will be able to award compensation for injury to feelings.

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6. Dressing up unfair dismissal as wrongful dismissal

10 years ago the absolute maximum compensation for unfair dismissal was £18,600. Since then it has been increased very substantially so that the absolute maximum is currently £77,600. Even so, that can be relatively small beer for high fliers on huge salaries who are unfairly dismissed. In such cases it can be tempting for them to see if they can dress up their unfair dismissal claim as a breach of contract (otherwise called wrongful dismissal) claim. As such it could be brought in the ordinary courts where there is no statutory limit on the amount of damages which can be awarded.

A recent case has shown how difficult it can be for this tactic to work.

A Mr Edwards was employed by the Chesterfield Royal Hospital NHS Foundation Trust as a Consultant Trauma and Orthopaedic Surgeon. In late 2005 allegations were made that he had undertaken an internal vaginal examination of a woman patient in the Hospital's A&E Department and then denied that such an examination had taken place. A disciplinary hearing was held in February 2006, following which he was dismissed for gross professional and personal misconduct.

Mr Edwards brought an unfair dismissal claim to an employment tribunal but then withdrew it and instead filed a claim for breach of contract in the High Court. He claimed around £4m for loss of earnings on the basis that his career had been ruined

The alleged breach of contract was that the employer had failed to follow the disciplinary procedure which applied under the terms of his employment. Under that procedure he would have been entitled to a hearing before a panel which would have included a clinician in the same medical discipline as himself and been chaired by a legally qualified member. He would also have had the right to legal representation.

Mr Edwards pointed out that after his dismissal the allegations against him had been considered by the General Medical Council. The GMC had dismissed the allegations and decided that no further action needed to be taken. He argued that if the proper disciplinary procedure to which he was entitled under his contract had been followed the same conclusion would have been reached by his employers - in effect he would have been exonerated.

The High Court has dismissed the bulk of Mr Edwards' claim. It confirmed old case law to the effect that as a general rule damages for wrongful dismissal cannot exceed the income that a claimant would have received if he had been given proper notice under his contract. In this case Mr Edwards was entitled to a three month notice period, so three month's salary was the maximum he could receive - although he was also awarded an amount to compensate for the salary he would have earned during the period that the contractual disciplinary procedure would have taken if it had been followed.

The thinking underlying this is that at common law an employer is always entitled to dismiss an employee for any reason on giving him contractual notice. It follows, on this basis, that the employee's loss cannot be more than the amount which would have been payable to him if contractual notice had been given and therefore damages for breach of an employment contract will generally be limited to that amount.

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7. Disability Discrimination, carers and interpretation of UK law in the light of EU law

A senior employment judge (formerly, "chairman of an employment tribunal") ruled in November 2008 that an employment tribunal has jurisdiction to hear a disability discrimination claim by an employee on the basis that she was discriminated against by her employer because she took time off work to look after her disabled son. The tribunal refused to accept the employer's argument that the Disability Discrimination Act 1995 only outlaws discrimination against employees who suffer from a disability and that it does not apply where the alleged discrimination was against a fit employee who is caring for a disabled person.

The employment judge found that an employment tribunal had jurisdiction by, in effect, inserting new words into the Act. Employment tribunals only have jurisdiction in so far as they are given it by Act of Parliament so without taking this quite bold step the employment judge would have been obliged to hold that the tribunal could not hear the case. She held that effectively inserting words into the Act was necessary to comply with EU law.

The employer appealed and the matter went to the Employment Appeal Tribunal in July 2009. The President of the Employment Appeal Tribunal has now handed down his judgment. He has agreed with the employment judge that, on a proper interpretation of the Disability Discrimination Act 1995, employment tribunals do have jurisdiction in such a case (EBR Attridge Law (1) Law (2) v Coleman on 30th October 2009). The result is that Mrs Coleman's case can now go to an employment tribunal for a hearing on its merits.

This result follows a ruling by the European Court in July 2008 that the Equal Treatment Framework Directive (2000/78/EC) requires Member States to outlaw what is often referred to as "associative discrimination". On the face of it, the UK Disability Discrimination Act 1995 does not do so. In an employment context, the wording of the Act assists only employees who suffer from a disability and does not help fit employees who are carers of disable people. The EAT President's decision confirms that as a matter of law a broad, purposive, interpretation must be given to the UK Act to bring it into line with EC law even though this effectively means adding words which Parliament never included.

Apart from the obvious and considerable importance of establishing that so called "associative discrimination" can be unlawful under the Disability Discrimination Act, the rulings of the employment judge and of the EAT are of particular interest in that they confirm the lengths to which courts and tribunals will go to ensure that UK statute law is interpreted in line with EC requirements. They are prepared actually to insert ("interpolate" is the expression used by both the employment judge and the President of the EAT) wording into a UK statute if that is the only way to ensure conformity with EC law, provided the interpolated wording is not contrary to the wording actually used in the statute and is "compatible with the underlying thrust of the legislation". That is what has been done in this case - new wording, carefully specified, was effectively added into the Disability Discrimination Act by the EAT.

There is precedent for this. Notably in a 2004 case, referred to in the present case, the House of Lords interpreted the words “wife or husband” in the 1977 Rent Act as extending to same-sex partners. That was plainly not the intention of Parliament in 1977 and "nor does it correspond to the actual meaning of the words, however liberally construed". However the implication was necessary in order to give effect to European Convention rights and went “with the grain of the legislation”.

This is going much further than merely resolving ambiguities in a way which ensures conformity with EC law. It can, as recognised by the EAT President, result in changing the meaning of the statute concerned.

In a similar vein, on 24 November 2009 the European Commission sent the UK two Opinions in cases which assert that UK legislation has incorrectly applied EC law.

  1. The Framework Directive:
    • there is no clear ban on instructions to discriminate and no clear appeals procedure in disability discrimination matters; and
    • exceptions to the rules barring discrimination on the basis of sexual orientation are too broad
  2. The Equal Treatment Directive:
    • the definition of indirect discrimination needs to include potential discrimination;
    • exceptions to the bar on sex discrimination for certain jobs are too wide;
    • exceptions to the bar on discrimination for political office-holders are not adequately defined; and
    • the right of associations to support claimants alleging discrimination in court proceedings is not clearly established.

Evidently we can expect further revisions to the law concerning discrimination to address these issues.

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8. Jewish School

The JFS (formerly Jewish Free School) was established more than 250 years ago in Spitalfields and recently moved to high standard premises in Kenton, London. It has been ranked as the top mixed comprehensive school in the official DFES league tables and in 2009 was rated by the Times as the leading non selective secondary comprehensive school in England and Wales. As might be expected the school is popular and oversubscribed.

The JFS has its own special entrance criteria and, being popular, has to apply them selectively. One result is that, in general terms, priority is given to children who are recognised as Jewish by the orthodox Chief Rabbi because they are descended from a Jewish mother in preference to children of mothers who converted to Judaism in procedures not recognised by the Chief Rabbi.

The Equality Act 2006 s.50 exempts schools of a religious character from the full rigour of the normal rules prohibiting discrimination by educational establishments. However, this exemption covers religious discrimination only, not racial discrimination. A child whose mother was a convert to Judaism failed to get a place at the JFS in 2006. The Jewish father complained that this was because of the entrance criterion noted above and eventually took the matter to court. He claimed that membership of a religious group based on descent amounts to membership of the group by reason of ethnic origins within the meaning of the Race Relations Act. On that basis the "religious character" exemption could not apply and the JFS policy based on the criterion was a racially based policy which would therefore be unlawful.

The interest of the case in an employment law context is in the detailed examination being given to the various factors which may lead to a person being considered to be a Jew - a matter which can clearly be relevant in employment situations potentially involving religious and/or racial discrimination.

At first instance the High Court (in July 2008) considered that the entrance criterion noted above was lawful (i.e. religious based) but the Court of Appeal (in June 2009) concluded that it was race based and unlawful. The JFS appealed to the new Supreme Court (formerly the House of Lords) where at the end of October the case completed its hearing before nine judges. The Government has supported the JFS but both the Equality and Human Rights Commission and the British Humanist Association have backed the case against the school. The Supreme Court has reserved judgment. This is expected within the next two or three months and will finally determine the issue.

For those interested in understanding more of the detail the following extract from the judgment of Sedley LJ in the Court of Appeal is illuminating. He said (at paras 32 and 33 of his judgment):

".... it appears to us clear (a) that Jews constitute a racial group defined principally by ethnic origin and additionally by conversion, and (b) that to discriminate against a person on the ground that he or someone else either is or is not Jewish is therefore to discriminate against him on racial grounds. The motive for the discrimination, whether benign or malign, theological or supremacist, makes it no less and no more unlawful. Nor does the factuality of the ground. If for theological reasons a fully subscribed Christian faith school refused to admit a child on the ground that, albeit practising Christians, the child's family were of Jewish origin, it is hard to see what answer there could be to a claim for race discrimination.

"The refusal of JFS to admit M was accordingly, in our judgment, less favourable treatment of him on racial grounds. This does not mean, as [counsel for the school] suggested it would mean, that no Jewish faith school can ever give preference to Jewish children. It means that, as one would expect, eligibility must depend on faith, however defined, and not on ethnicity".

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9. ...and finally

bias based on body language?

In Ross -v- Micro Focus Limited Ms Ross appealed against a tribunal's rejection of her whistleblowing claim. In doing so, she referred to apparent bias on the part of a tribunal member, Mrs Watts-Davies who, it was alleged:

  • smiled openly at the respondent's barrister;
  • nodded at the respondent's questions;
  • muttered words of agreement or disagreement when Ms Ross gave her answers;
  • leaned back in her chair and looked disapprovingly down her glasses at Ms Ross; and
  • adopted an aggressive tone when questioning Ms Ross

Tribunal members up and down the country will be relieved to know that the appeal on these grounds failed. The EAT stated, "...we are not satisfied that a fair-minded, informed observer, watching the conduct of Mrs Watts-Davies which we have found to have occurred, and seeing the course of the proceedings as they developed, would have concluded that there was a real possibility that she was biased, or that she had closed her mind to [Ms Ross's] case".

more apparent misbehaviour in the City

Jordan Wimmer has brought discrimination proceedings against her former employer, Nomos Capital, claiming £4m and the claim is currently proceeding in the Central London Employment Tribunal. It is remarkable for some of the evidence which has been heard, including:

  • Ms Wimmer's claim that when she brought her claim her boss, multimillionaire financier Mark Lowe, hired a Russian hitman to kill her;
  • Mr Lowe's admission that he brought an Asian woman called Ling - who was wearing hotpants - to a business function (Mr Lowe maintains that she was an ex-girlfriend rather than a prostitute);
  • Mr Lowe's admission that his Company paid £12,000 to former exotic dancer Natalia Malyguina - and his assertion that she is an ex-girlfriend with an interest in hedge funds and that he was paying her expenses while she did "unpaid internships" in New York "in anticipation that she might one day work for us";
  • Ms Wimmer's assertion that, although she was paid £577,000 a year, Mr Lowe characterised her as a dumb blonde ;
  • Mr Lowe's response to the suggestion that it was apparent from his jokes that he thought of women as objects: "reductio ad absurdum through false syllogism"
  • Ms Wimmer's assertion that Mr Lowe tried to "pair her off" with a powerful hedge fund associate and that she was "served up like a piece of meat"; and
  • Mr Lowe's admission that he called Ms Wimmer and two female colleagues "Mark's Angels" because one was blonde, one oriental and one brunette!!

The tribunal continues.


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