Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
January 2014

Welcome to our first newsletter of 2014. This month's newsletter includes a number of updates to recent items including cases being affected or even struck out as a result of procedural irregularities, the impact on cases of the direct application of EU law and tax changes for LLPs and other partnerships.

Among this month's more unusual cases are the "kidnapping" of an HR manager during an industrial dispute at a Goodyear factory in Amiens, France and a case in which an employee who was caught smoking on work premises was nonetheless found to have been unfairly dismissed, albeit with a finding of 50% contributory fault. The latter case is a good example of the need to apply disciplinary procedures fairly and consistently and, in particular, to give clear consideration to alternatives to dismissal.

Meanwhile, the arrest of an Indian diplomat on charges of visa fraud and underpaying her housemaid has caused a diplomatic incident between the US and India which led to the tit for tat removal of a US official from its Delhi embassy. The case sparked a national outrage in India when it emerged that Devyani Khobragade was strip-searched following her arrest. From an employment law perspective the case is interesting because there is a commonly held misconception that employment law rights in the US are more or less non-existent. In fact, federal and state minimum wages and restrictions on working hours have been in place for many years and what's more, as demonstrated in this case, failing to comply with them is a criminal offence punishable by up to five years' imprisonment. In this case the housemaid should have been paid a minimum of $9.75 per hour. Documents supporting her visa application confirmed this. However, shortly before she arrived in the US she was required to sign a different contract providing for her to be paid $1.42 per hour and to work more than 100 hours per week. The outcome has been rather unsatisfactory. The Indian diplomat had her status upgraded to include UN work, thereby increasing her level of immunity. She has subsequently returned to India and the housemaid has been required to sign a contract subject to Indian law and thereby losing her entitlement to minimum pay and working conditions. There is a motion to dismiss the indictment and the prosecution have until tomorrow (31 January) to file their opposition.

Tomorrow also sees the introduction of the TUPE changes which I outlined last month.

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This month's news round-up:

1. an insidious attack on civil justice


Last month I reported about the punitive approach being taken by judges to failure to comply with directions, as well demonstrated by the "plebgate" case. Andrew Mitchell, former Chief Whip, was restricted to recovering only his court fees because his lawyers had failed to submit a costs schedule on time. We now know that the Police Federation has apologised for their "politics of personal attack" (an interesting phrase) which had to happen after their key witness failed to substantiate his allegations (that's a generous assessment). Why is this relevant for employment law? The answer is that the rules that govern employment tribunal claims have been, for some years, subject to the so-called overriding objective. Judges appear to have got carried away with the power conferred on them by a sub-paragraph (1.4(g)) "fixing timetables or otherwise controlling the progress of the case". On the back of this apparently harmless and potentially beneficial objective Lord Jackson published a report which is overtly political in terms of access to justice and has been seized on, particularly by London based appellate judges who, frankly have, based on their recent performances, played a game which undermines the true purpose of appeals.

Is it the fault of claimants and respondents that their lawyers have been unable to comply with strict deadlines? Might that be because they're not properly funded? Might that be because employers (and employees) can't afford to pay their lawyers to provide proper representation?

The latest celebrity (and legal) news (courtesy of is that another case concerning Katie Price has been kicked out because of a failure to exchange witness statements on time. So, a case fails not on its merits but because a particular deadline hasn't been met. Don't get me wrong - I'm not saying that there should not be penalties, such as forfeiting costs for the procedural hearing, but is a proportionate response the loss of the case?

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2. "belief" in the Labour Party can be a protected characteristic


Regular readers know that one of my favourite areas of employment law is the extent to which case law is extending the definition of what is a religion or belief for the purpose of protection from discrimination. Earlier articles have covered not telling lies, conscientious objection to abortion, wearing a poppy at work, belief in climate change and even belief in the BBC!

The latest decision in this line concerns a belief in the Labour Party. Mr Olivier, who worked for the DWP, has been an active member of the Party for over 30 years. In May 2013 he was elected as a Labour councillor but he did not notify his line manager before taking up the post, as required by DWP procedures. He also breached the Department's policies by writing a letter to a local newspaper in which he criticised the government's policy on benefits. He was dismissed for gross misconduct and brought claims for unfair dismissal and direct discrimination.

A preliminary hearing was called to determine whether Mr Olivier's belief in democratic socialism constitutes a philosophical belief capable of protection under the Equality Act 2010. The tribunal applied the guidelines in Grainger v Nicholson (the climate change case referred to above). Mr Olivier asserted that the Labour Party encapsulates and enshrines a core set of beliefs that are recognised by the general public and has core values including democratic socialism, a strong welfare state, fiscal controls and the nationalisation of key services.

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3. a topical problems for schools - allegations of historical child abuse


What should a school do if its caretaker is accused of historical child abuse?

In Z v A the President of the Employment Appeals Tribunal considered whether dismissal of the employee for "some other substantial reason" was justified in light of the allegations. The Police reported to the school that historical allegations of sex abuse had been made against the caretaker. The allegations did not concern allegations during or in connection with his employment at the school. The Head did not believe the allegations but decided that it was appropriate to suspend the caretaker while investigations continued. After about a year nothing had emerged to support the allegations and the Police indicated that a decision to charge the caretaker would not be taken in the immediate future. However, the investigations remained open.

The Head decided that they had to act and recommended to the Governors that he should be dismissed. Dismissal duly followed and the decision to dismiss was upheld on appeal. Their main reasons were the risk to children and to the school's reputation. An employment tribunal found that the dismissal was unfair, primarily because the reason was not some other substantial reason of a kind justifying dismissal, and awarded compensation. However the Claimant was not entitled to damages in respect of that part of the claim based on his post-dismissal depression preventing him from obtaining work. As an aside, it might have been more relevant to consider how the school would have dealt with any requests for references from prospective employers.

In his judgment President Langstaff noted that the Employment judge had acknowledged that a school cannot reasonably ignore an allegation of historical child abuse.

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4. making homophobic comments concerning an openly gay employee who uses similar words is still discrimination


Does it matter by whom potentially discriminatory comments are made?

In the context of race discrimination, whether words are discriminatory has for some time involved consideration of who said them. In particular, self-referencing use of obviously abusive and discriminatory terms has become commonplace in the music industry and elsewhere. One argument put forward is that the use of such words by black people is a way for them to take control of them and thereby diminish their effect. It is an obviously difficult and controversial proposition. For example, it blurs the distinction between what "society as a whole" (if there is such a thing) regards as unacceptable abusive, discriminatory and derogatory words.

How does this apply in the case of homophobic taunts. There has been a good deal of recent coverage of problems in schools and in the field of sports. This month former Aston Villa and VfB Stuttgart footballer Thomas Hitzslperger came out and is one of the very few sports professionals to have done so. In doing so he said that it had not been easy to live with some of the comments dished out on the subject. Meanwhile, in schools, 99% of 1600 gay teenage pupils interviewed said they had heard homophobic language used regularly. In response Stonewall has launched a campaign fronted by Will Young to tackle the problem. Highlighted as a particular concern is the use of the phrases "you're so gay" and "that's so gay" in a disparaging context.

A workplace example of the misuse of homophobic terms was considered by the Employment Appeal Tribunal in Smith v Ideal Shopping Direct Ltd. Mr Smith joined Ideal Shopping Direct as a TV operations project manager in late 2009. He was dismissed in July 2010 following an altercation with a Ms Pearce. He was told by Ideal's most senior employee that Ms Pearce might raise a formal complaint and said that, if she did so, he would lodge a complaint about the employer's response to matters concerning his sexuality. Ms Pearce did complain and this led to disciplinary proceedings. On 14 July he was asked to attend a disciplinary hearing on 19 July. As he said he would Mr Smith said that he would be raising a grievance about having been bullied and subjected to homophobic behaviour by other staff in the workplace.

On 15 July he was summarily dismissed. The reasons given were those that had led to the commencement of the disciplinary proceedings.

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5. Justice Secretary Grayling to use EAT case as political challenge to EU law


Last October Joshua Rozenberg reported in The Guardian that a recent case concerning Moroccan workers in diplomatic missions in London resulted in failed claims for unfair dismissal, unpaid wages and breaches of the Working Time Regulations because the employers were able to claim state immunity. I commented about the case last November.

It has now emerged that the Justice Secretary, Chris Grayling, intends to use the case as a way of challenging "creeping" increases in the influence of EU law in British cases. It is part of the Tories' wider campaign to be seen to be taking a strong line on Europe in the run up to elections and in the face of what is regarded as a significant challenge from UKIP.

While much is made of the effect of the European Convention on Human Rights, particularly in the context of immigration cases, these decisions only have to be taken into account by courts in the UK. However legal practitioners, particularly in the field of employment law, have been dealing with the direct application of European law for decades. Cases are often referred to the European Court for guidance and decisions of the European Court can be directly applied in employment cases in England and Wales.

The crucial difference is that some claims can be brought based on the direct application of EU law. That happens with claims, such as these, based on the EU's Charter of Fundamental Rights, enshrined in UK law by virtue of the Lisbon Treaty in 2009. Significantly these rights would remain even if the UK withdraws from the European Convention on Human Rights.

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6. LLPs in full retreat in face of HMRC crackdown


Last month I reported on the plans by HMRC to remove self-employed status from fixed-share partners in limited liability partnerships or LLPs, a business structure frequently used by accountants and solicitors.

The issue has become very pressing for those affected since it now seems very likely that the rule changes will come into effect this April. That leaves very little time for organisations to conduct thorough overhauls of their business structures and, in many cases, to come to terms with renegotiating key terms with senior employees. Further, if self-employed status is to be maintained, fixed share members are facing up to the prospect of having to meet significant cash calls.

Accountants such as Baker Tilly have warned that the new rules "will be far harsher than originally expected". Even those contemplating hasty changes may be caught out since tax specialists have advised that sudden injections of capital may be seen by HMRC as tax avoidance.

Details are emerging of the steps being taken. Law firm Weightmans has confirmed that its fixed share partners are not currently required to make capital contributions and thereby to share the risk of ownership. As a result they have commenced consultations with those effected which are due to conclude at the end of January.

Trowers and Hamlins is another firm that has commenced consultations. Their senior partner has confirmed that one option under consideration is to ask for increased capital contributions by way of a cash call.

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7. whistleblowing protection for concerns about driving in snowy weather


In Norbrook Laboratories (UK) Ltd v Shaw Mrs Justice Slade DBE sitting in the Employment Appeal Tribunal was asked to consider whether a series of emails, taken together, could be treated as a protected disclosure for the purposes of section 43B(1) of the Employment Rights Act 1996 (whistleblowing protection).

Mr Shaw claimed automatic unfair dismissal and being subjected to a detriment, both on the grounds of having made a protected disclosure (he had insufficient qualifying service to claim "ordinary" unfair dismissal). His disclosure was communicated by two emails sent on 30 November 2010 and one on 6 December 2010. Taken in isolation each email did not constitute a protected disclosure.

Mr Shaw commenced employment with Norbrook as part of an on-the-road pharmaceutical sales team. His duties included visiting clients and prospective clients with a view to securing sales. As readers may recall the winter of 2010 was particularly severe with large snowfalls and motorways closed.

On 30 November he sent an email to Norbrook's health and safety manager, Mr Cuthbertson:

Could you please provide me with some advice on what my Territory Managers should do in terms of driving in the snow. Is there a company policy and has a risk assessment been done.

Taken in isolation this was an enquiry and not a protected disclosure. He was told that there was no applicable policy or risk assessment but he was given advice about driving in the snow. About two hours later he sent a further email to Mr Cuthbertson:

I was hoping for some formal guidance from the company. The team are under a lot of pressure to keep out on the roads at the moment and it is dangerous. Do I log this as the formal guidance?

Following enquiries from territory managers about whether they would be paid if they were snowed in Mr Shaw sent a further email on 6 December, this time to a member of staff in the human resources department. This email included the following:

I am only after a simply [sic] policy statement to increase transparency and help build morale and goodwill within the team. As their manager I also have a duty to care for their health and safety. Having spent most of Monday and Friday driving through snow I know how dangerous it can be. In addition the time spent battling through the snow is unproductive; they can gain more sales by phoning customers. If they are not going to be paid then I have to put in contingencies for diverting calls to those team members still on the road. In the absence of any formal guidance I take full responsibility for the directions given to my team.

The Employment Tribunal concluded that, taking the communications as a whole, they were capable of amounting to a qualifying disclosure with reference to section 43B(1)(d). On appeal it was submitted for Norbrook that this conclusion was perverse or erroneous, that he was merely expressing an opinion and that the disclosure (if that is what it was) could not be spread over a number of documents. Mr Shaw submitted that he made two qualifying disclosures: failure to comply with health and safety requirements and breaches of the Health and Safety at Work Act 1974.

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