Canter Levin & Berg Employment Solutions Canter Levin & Berg Employment Solutions
May 2013

Welcome to our June round up of significant employment law decisions and related news.

While recent newsletters have largely covered significant changes in legislation, this month we are mainly back to case reports with a significant Supreme Court decision concerning equal pay, the importance of applying the ACAS Code of Practice in all appropriate cases, the risks attaching to compulsory retirement, the importance of consultation, a very odd case concerning spies and the importance of contractual terms and how they can be varied. I have also reported the case of Woodhouse which provides a salutary tale for those employers who think that they can get rid of "troublemakers" who bring numerous grievances and tribunal claims.

Finally, I could not let the month's reports pass without commenting on the remarkable case of Rachida Sobhi who forgot about her criminal conviction when applying to be a police constable. Her appeal against dismissal of her disability discrimination claim succeeded since her dissociative amnesia was a protected disability which accounted for the failure to make the disclosure. It is fair to say that the Daily Mail is pretty sceptical about the both the decision and the claim!

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This month's news round-up:

1. Equal Pay Audits: reducing inequality or simply heralding a rise in settlements?


The Government Equalities Office's publication of a consultation on the scope of proposed regulations to bring in equal pay audits where a tribunal finds that an employer has breached equal pay legislation has re-opened the debate on whether these proposed regulations will promote a culture change with regard to the equal treatment of women or simply promote a rise in spurious tribunal claims (Equal Pay Audits: a further consultation). The regulations will be brought in by section 98 Enterprise and Regulatory Reform Act 2013 which inserts a new section into the Equality Act 2010 giving the government the power to make them.

The fear is this. The estimated cost, calculated in a regulatory impact assessment, of a mandatory equal pay audit is around £12,800. Add that to the legal costs (an estimated average of £6,556 per case) of defending a claim and the cost of any compensation (average compensation for breach of equal pay between 2000/1 and 2010/11 was around £18,500) and it begins to look more attractive to employers to settle cases than to fight them. With this in mind, employees will be more encouraged to bring spurious claims in the expectation that their employers will strike a deal before the claim gets to court.

What about publication of the audit? The government has indicated that it will not require the results of the audits to be made public yet it encourages employers to do so if they wish (whilst issuing a warning about data protection issues) but the audit results would have to be disclosed to employees covered by the audit, trade unions and the tribunal that ordered the audit.

Some commentators have sought to reassure employers that they need not be concerned about the Government's proposed regulations since a tribunal could only make an equal pay audit order following a successful claim for unequal pay. With respect, this rather seems to be missing the point that the critics are making.

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2. take your 'clean record' with you


Welcome to most readers and seen by many as long overdue is the Disclosure and Barring Service's new Update Service which is stated to be one of the Government's top priorities and came into force on 17 June 2013. As stated on the website: 'it will put individuals in greater control of their own information; allow DBS certificates to be reused when applying for similar jobs; and reduce bureaucracy'. The new initiative is intended to enable individuals, for an annual fee of £13, to subscribe to the DBS Update Service which provides them with DBS certificates which will be kept up to date and be transferable from job to job (a problem that dogged the last scheme where employees had to apply for a new certificate for each new job).

The benefits are clear. The recruitment process should hopefully be much quicker since employees that work at different workplaces (e.g. locum or music teachers working at different schools) do not have to reapply for a certificate each time, which used to slow up the process of employment. Employers are able to make free online status checks, with the employee's consent, and employees are able to challenge the contents of their certificates before they are released to third parties. The DBS will no longer automatically issue a copy of the applicant's DBS certificate to the registered body who countersigned the application form and employers will need to ask the applicant for sight of the DBS certificate.

Employers will doubtless be greatly relieved that that they can now make instant online checks and will have no more DBS application forms to fill in. The reduction of bureaucracy in this case will be very welcome. Detailed guidance for employers and employees is available on the website, including a facility to register online.

Separately - but on a related theme - employers should note that under the Rehabilitation of Offenders Act 1974 (Exceptions) Order 1975 (Amendment) (England and Wales) Order 2013, from 29 May 2013 most protected convictions and protected cautions do not need to be disclosed in a DBS certificate and employers will not be able to ask questions about such minor or old convictions or to rely on them to refuse employment or to dismiss an employee.

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3. ACAS Code can also apply to "some other substantial reason" dismissals


The Employment Appeal Tribunal has usefully confirmed for us in Lund v St Edmund's School, Canterbury that in cases where an employee is dismissed for some other substantial reason (SOSR) which has some overlap with conduct then the Acas Code of Practice on Disciplinary and Grievance Procedures should be adhered to. In this instance the EAT believed that the disciplinary procedure should have been invoked in the first place (rather than going down the SOSR route) and that, in itself, meant that the Code should apply. Of course, this does not mean that the Code should apply in all SOSR dismissals. We are talking about cases where there is a live issue about conduct and where a disciplinary process should really have been invoked.

On the facts in this case, there was a breakdown in the relationship between Mr Lund, his colleagues and his employer. The employer was concerned that his behaviour had alienated him from his teaching colleagues. As a teacher of graphics and design he was unhappy with the computer equipment which he was required to use. Even when the equipment was replaced he regarded the new computers as still unsatisfactory. He dismantled the system and refused to allow a consultant who was engaged to report on his teaching to observe his class. He went off with stress and a consultant psychiatrist concluded that his stress was a consequence of his frustration with the computer system. However he was deemed fit to return to work. His suspension was not lifted and at a meeting in October 2010 he was handed a letter notifying him of his dismissal.

His unfair dismissal claim succeeded.

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4. Employment Tribunal rules on Seldon and compulsory retirement


In May 2012 I reported the important decisions of the Supreme Court in Seldon v Clarkson Wright & Jakes and Homer v West Yorks Police.

It has taken a while but an Employment Tribunal has now ruled in Seldon, on its remission from the Supreme Court, that a compulsory retirement age set out in the retirement provisions in the law firm's partnership deed was a proportionate means of justifying legitimate aims, namely succession planning and the retention of staff. No surprises there. The key guidance remains that given by the Supreme Court which set out pointers for determining the justification of direct age discrimination. Applying those guidelines, the Employment Tribunal noted that a mandatory retirement age has to be a balance of the interests of the practice, the partners and of associates who aspire to partnership. Any determination had to weigh up the needs of the partnership against the harm caused by the discriminatory treatment. The age of 65 was within the narrow range of aims to achieve the two stated aims and the partners had consented to the mandatory retirement age. Moreover the default retirement age at the time was 65. In these circumstances, the retirement age was proportionate.

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5. to consult or not to consult...


It has been a busy month in terms of collective consultation disputes, serving to underline how tricky these obligations can sometimes be. First up is the reminder, in Shields Automotive Ltd v (1) Langdon (2) Brolly and AEI Cables Ltd v (1) GMB (2) Unite (3) Individual Claimants, that awards for breaches of the collective consultation obligations are intended to be punitive and not to compensate the employee for any loss or damage suffered. However, in AEI Cables the Employment Appeal Tribunal noted that failure to consult was because the Company would have otherwise unlawfully traded while insolvent yet only reduced the protective award from 90 days to 60 days. Given that the employer was between a rock and a hard place, this might be viewed as rather harshly 'punitive'; although the Court did note that the employer could and should have ensured that at least some consultation took place in the limited time available. In Shields (an award for breach of the TUPE collective consultation duties) the 'technical' breaches included the scheduling of a meeting to vote in employee representatives at a time when an employee could not attend, and the unilateral selection of one employee representative over another where there was a tied vote.

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6. Justice and Security Act 2013 and spooks


It is worth noting that the Justice and Security Act 2013 which received Royal Assent on 25 April 2013 will extend the used of closed material procedures (already allowed in employment tribunals) to other civil proceedings, where a party may be required to disclose "sensitive material" and it is in the interests of the 'fair and effective administration of justice'.

The Act follows a security Green Paper presented by former Justice Minister Kenneth Clarke in 2011. As well as dealing with the extension of the closed material procedures the Act also provides a statutory footing for oversight of MI5, MI6 and GCHQ. It also contains a right for the government to prevent court orders being made for the disclosure of what it considers to be "sensitive information".

It is a central tenet of our justice system that parties are able to see and challenge an opponent's evidence as part of advancing one's own case and The Crime and Courts Act 2013, which received Royal Assent on the same day, will permit the filming of court proceedings, save that filming may be prohibited in the interests of justice or where it may cause unfair prejudice to a party.

Although not proceeding in an employment tribunal, a case currently in the Southwark Crown Court is providing a fascinating insight into what is alleged to go in within the confines of MI5. A woman under the codename 2363 is the former girlfriend of a spy who was her superior, given the pseudonym Mark Barton. The witnesses are giving evidence behind tall blue screens. He is alleged to have harassed her at work over a period of four months.

However it is alleged that they were watching Andy Murray playing at Wimbledon on an outdoor screen in Sloane Street and he became angry when Murray played badly. He is said to have abused her, saying that she "was nothing" and she was "lucky to be with him". The prosecution claim that he used MI5's email system to send her a series of desperate messages, including references to his "top secret work".

The trial continues.

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7. interpretation of contractual rights


Employment law is underpinned by contract law, the bedrock of the relationship between employer and employee. It is therefore not surprising that in the last few months there have been a number of cases turning on the construction of contractual documents. In Hay & others v Gilgrove Ltd the construction of a 1974 collective agreement was at issue. Whilst the agreement had been terminated, the relevant terms relating to the share of 'porterage' (a charge made for the movement of goods at New Covent Garden Market) had been incorporated into the terms of employment of registered porters. They tried to argue that this entitled them to share porterage only between themselves and not with unregistered porters who were now entitled to work in the market. The Court of Appeal held that it was unrealistic to believe that the drafters of the agreement had intended to exclude porters who were legitimately intended to work in the Market and that the terms should be construed accordingly, entitling unregistered porters to share porterage.

The issue in O'Brien v London Borough of Haringey was whether Ms O'Brien's visit to Gambia, where she contracted a contagious disease, was 'in the course of the teacher's employment'. If it was, then she was entitled to full sick pay under the terms of a collective agreement between teaching unions and employers. The circumstances surrounding her trip were unclear and the School argued that as she had not been expressly requested or authorised to go she was not entitled to sick pay. The Employment Appeal Tribunal's approach was to examine surrounding clauses in the collective agreement. An earlier provision set out a wide range of activities perceived to be 'in the course of employment' and the Court saw no reason why the same criteria should not apply here, entitling Ms O'Brien to full sick pay. Had the employer intended for the criteria to be stricter in this instance, it should have spelled this out in the applicable clause.

In Dresdner Kleinwort Ltd v Commerzbank AG v Attrill the Court of Appeal ruled that an announcement and subsequent statements by an investment bank about a guaranteed bonus pool unilaterally varied the terms of employment. An announcement to all the workforce can in principle give rise to contractual obligations, provided it is couched in sufficiently certain terms and there is an intention to create legal relations. The fact that circumstances within the Bank had thereafter changed did not mean that the Bank could no longer honour its contractual promise of a guaranteed minimum bonus pool. The employees had given consideration by remaining with the Bank and not seeking employment elsewhere. As I highlighted when reporting the High Court decision in May 2012 it is an expensive outcome for the Bank since the bonuses payable to 104 former City bankers amount to £42m!

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8. is there a point at which an employer can say "no more" and dismiss?

pile of papers

The decision of the Employment Appeal Tribunal in Woodhouse v West North West Homes Leeds Ltd addresses the tricky question of whether there comes a point at which an employer can attempt to draw a line whan an employee raises a number of grievances and brings numerous claims.

In his introduction HHJ Hand QC points out that the scale of the task faced by the Leeds Employment Tribunal in this case should not be underestimated, with over 4000 pages of documents and oral evidence from twenty five witnesses. What led to such a great deal of evidence being considered? For once, it was not a plethora of irrelevant statements and other documents files by the lawyers "to be on the safe side". Mr Woodhouse, in the course of his four years in employment with West North West raised no fewer than ten internal grievances, all alleging race discrimination. He also brought seven employment tribunal claims against his employer

In 2011 the employer decided to suspend and subsequently to dismiss Mr Woodhouse on the basis that, by his actions, he had demonstrated a loss of trust and confidence in the Company, so that there could not be a sustainable employment relationship going forward.

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9. Police applicant who forgot her conviction for theft


Rachida Sobhi is employed as a police community support officer (PCSO) with the Metropolitan Police. In 2008 she applied to become a police constable. In the course of her application she had her fingerprints taken and this led to the discovery that she has a conviction for theft from a former employer dating back to 1991. Her application consequently failed and she received a disciplinary reprimand (to remain on her record for five years) for failing to disclose the conviction in connection with both her applications to be a PCSO and a PC.

In 2009 she made a further application to become a PC. Her application was again rejected, this time because of the reprimand on file. The probability is that her previous conviction (now known) would have resulted in her application being unsuccessful in any event.

In 2010 Ms Sobhi brought an employment tribunal claim alleging discrimination on the grounds of sex, sexual orientation, religion or beliefs, age and disability. It is the claim of disability discrimination that was recently considered by the Employment Appeal Tribunal and that has caused something of a furore in the national press. The primary question for the EAT was whether Ms Sobhi was at the relevant time a disabled person. According to the Disability Discrimination Act (subsequently replaced by the Equality Act 2010 but relevant in this case) a disability in respect of which protection is available must constitute "a physical or mental impairment which has a substantial and log-term adverse effect on...ability to carry out normal day-to-day activities". In this case Ms Sobhi claimed, with supporting medical evidence, to suffer from dissociative amnesia. This was claimed to have caused her to have gaps in her memory of events which occurred in 1991 so that she might not have recalled her conviction. The appointed expert, Professor Michael Kopelman, took the view that the "traumatic circumstances" of her life made her amnesia in respect of specific events likely to be genuine. However this "relatively small gap" in her "past remote memory" was unlikely to affect her day-to-day functions or her ability to perform well as a police constable now, when she is much more settled in her life".

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