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• Employment Update - June 2008

CASES UPDATE

Major change for disability discrimination claims

In the case of Mayor and Burgesses of the London Borough of Lewisham v Malcolm, the House of Lords have overturned the Court of Appeal's decision in Clark v TDG Ltd t/a Novacold, making potentially major changes to the law on disability-related discrimination.

The case involved a claim under Part II of the Disability Discrimination Act 1995, concerning a housing authority's decision to evict a schizophrenic tenant who had unlawfully sublet his flat. However, the decision looks set to have far-reaching implications for employment cases.

The Lords looked at one of the key issues in disability discrimination cases which is a consideration of who the correct comparator should be.

The example discussed by the Lords related to a "no-dog" policy in a restaurant. If the restaurant bans dogs, is a blind person treated less favourably when they are refused access to the restaurant because of their guide dog?

The question asked by the Lords was whether the correct comparator was:

1. someone without a disability, but with a dog – in which case there is no less favourable treatment because everyone with a dog is banned; or

2. someone without a disability and also without a dog (because the dog only arises because the person is blind) – in which case there is less favourable treatment.

The Novacold case had established that it was the second broader test which should apply. Following the outcome of London Borough of Lewisham and Malcolm it seems likely that it will now be the first test which will apply.

For example, if an employer dismisses an employee for being off work sick for a year, then the reason for dismissal is the absence from work, and the correct comparator will now be someone who was absent for a year but was not disabled.

This judgement is good news for employers as it is likely to make it more difficult for claimants to succeed in disability discrimination claims. However, employers should still exercise caution when dismissing employees due to long term ill health as these employees will still have the right to claim unfair dismissal and reasonable adjustments will need to be considered. In addition, it is likely that employment tribunals will continue to take a sympathetic approach when dealing with such employees.

Compromise agreements

The Court of Appeal has rejected an appeal against a High Court decision where it was held that an employer would not have to make a payment due under a compromise agreement if an employee was in breach of a warranty given by him as part of the compromise agreement. The parties clearly intended that the warranty be a condition precedent to making the payment.

It is common practice for lawyers to include in a compromise agreement warranties from the employee that there are no circumstances of which the employee is aware, or ought to be aware that would entitle the employer to dismiss summarily.

The case of Collidge v Freeport PLC concerned a director and employee of a company who entered into a compromise agreement providing that he would receive certain sums, including £445,680 gross compensation and other benefits. All payment were "subject to and conditional upon the terms set out below" including a warranty from the employee which provided the following:

'there are no circumstances of which you are aware or of which you ought to be aware which would constitute a repudiatory breach on your part of your contract of employment which would entitle or have entitled the company to terminate your employment without notice.'

Before paying out the monies under the compromise agreement, the company discovered a number of matters which suggested that the employee was in breach of the warranty. Consequently, the company did not make payment and the employee issued legal proceedings.

The High Court held that clause 7 was a 'condition precedent' to the company's liability to perform its obligations under the agreement. The company was not obliged to pay under the agreement if the facts set out in the warranty were untrue. This was a result of the introductory words to the company's obligation to pay ("subject to and conditional upon the terms set out below") and the introductory words to the clause ("you warrant as a strict condition of this agreement").

The employee appealed to the Court of Appeal on a matter of construction, which the Court rejected. It has held that the agreement was structured in such a way to make the performance of the employer's obligations condition upon the employee's. The Court also noted that the clause did not simply require the warranty to be given but also contained promises that they were true at the date of the agreement.

Religious discrimination: 'genuine occupational requirement' exception

In the recent case of Sheridan v Prospect for People with Learning Disabilities, an employment tribunal has held that a manager was unlawfully discriminated against when his employer (a charity) required him only to employ Christians and not to promote its existing non-Christian employees. It was held that the charity could not rely on the religious organisation 'genuine occupational requirement' ("GOR") because it had not carried out a job evaluation for every post and it was not proportionate to require all employees to be Christians.

It was decided that if an organisation wants to rely on a GOR it must consider if the GOR can be justified in each case; it is not appropriate to seek to apply a blanket GOR.

Facts

A Christian charity, 'Prospect For People with Learning Disabilities' requires employees to commit to a specified "Basis of Faith" however, its employment policy allows non-Christians to be recruited for certain roles provided that they acknowledged sympathy with the Basis of Faith.

At the time of his employment being terminated, Mr Sheridan was the Service Manager who, although not committed to the Basis of Faith policy, was sympathetic to it. Originally the charity only employed and provided its services to Christians. Over time the charity's clients became predominately non-Christian and the workforce also ceased to be exclusively Christian.

With the implementation of the Employment Equality (Religion or Belief) Regulations 2003, the charity reviewed their employment policy and decided that, in order to justify a GOR, they would only employ Christians. The existing non-Christian employees would be kept on but not promoted (as any post would have a GOR).

Mr Sheridan was concerned as the policy affected development plans and he also became concerned that non-Christian staff could be made to feel devalued and unwelcome. A number of employees felt discriminated against as they could not apply for promotion and Mr Sheridan raised concern about this to his manager and to the Chief Executive. His suggestion was rejected and, pessimistic about his future with the charity, he subsequently resigned.

A claim was brought to constructive dismissal and discrimination on the grounds of religion or belief.

Decision

It was held that the charity had discriminated against Mr Sheridan by requiring him to adhere to the recruitment policy and/or dismissing him (having also found that he was constructively dismissed). There was no evidence that the charity had reviewed the appropriateness of the GOR and/or need for a Christian to carry out the work in question. It was not proportionate to require prospective employees to be Christians for the posts in question. The tribunal also held that the charity had not carried out a job evaluation for every vacant or available post and that it had decided that all posts should be filled by Christians. It was agreed with Mr Sheridan that this approach was "fundamentally flawed".

LEGISLATION UPDATE

Harriet Harman pushes for equality

On 26 June 2008 the Equality Minister Harriet Harman announced plans which would allow employers to positively discriminate in favour of women or ethnic minority employees.

The Equality Bill will bring together all previous pieces of discrimination legislation and will also force public sector employers to publish the pay gap within their organisations.

In a Commons statement, Ms Harman said the proposed Equalities Bill would "address the serious inequalities that still exist" in the UK.

John Cridland, deputy general secretary of the Confederation of British Industry, said Britain already had some of the strictest anti-discrimination laws in the world. "The government's plans rightly concentrate on non-legal means of moving forward on equality, such as better use of public procurement and promoting positive action, and the CBI welcomes this."

The Bill will be presented in the Queen's speech in December 2009. Watch this space for future developments.

Millions of workers are to be given the right to request time to train

Following the announcement last month of the draft legislative programme which includes the Education and Skills Bill, the Department of Innovations, Universities and Skills has published a consultation paper outlining in more detail the plans to allow 22 million workers in England to be able to request time off work to train. The consultation paper states that one third of employers do not train their staff and eight million employees receive no kind of training at all every year. Ministers believe a legal right to request time off to train will help ensure that training is taken seriously by all employers.

It is planned that the new entitlement will apply to all employees who have worked for their employer for 26 weeks. The right to request time to train would work by giving all employees a legal right to ask their employer to give them unpaid time off away from their mainstream duties to undertake relevant training, which employers would be required to seriously consider. The new right would closely follow the legal model of the current right to request flexible working, making it easier for employers to work with the new right using procedures they already have in place to manage flexible working requests.

OTHER NEWS

Potential "Heyday" for pensioners

The first hearing in the claim by Heyday (the membership arm of Age Concern) challenging UK age discrimination legislation in the European Court of Justice will take place on 2 July. The case could open the way for employees in Britain to insist on working past 65.

Heyday argue that the UK failed to implement the European directive on age discrimination properly, banning discrimination on the grounds of age but retaining 65 as a 'default' retirement age. If successful, the case could also allow hundreds of workers forced into retirement to claim compensation from their former employers.

In the related Court of Appeal case of Johns v Solent SD Limited, a claimant has won the right to have her claim stayed depending the outcome of the Heyday case. The claimant, Mrs Johns, was made to retire at the age of 70 in March 2007 and issued a claim arguing unfair dismissal and age discrimination. She requested that her claim be stayed pending the outcome of the Heyday case. Her employers argued that Mrs Johns has no chance of success because a Spanish worker who had challenged a similar retirement rule in his own country lost his case at the ECJ. The tribunal struck out the claim on the basis that the Heyday case was unlikely to succeed and therefore, Mrs Johns had no reasonable prospect of success.

On appeal, the EAT overturned the tribunal's decision, ruling that the case be stayed as the decision of the ECJ could not be predicted. The Court of Appeal agreed with the EAT and affirmed their decision when challenged by the employer.

The Heyday hearing date is months earlier than expected and indicates that a final decision on this issue could come before the end of the year.

...and finally, ever wanted to know what your employees have been up to?

An online database called the 'National Staff Dismissal Register' (NSDR) will allow employers to access details of workers who have been accused and dismissed as a result of theft, forgery, fraud, damaging company property or causing a loss to their employers and suppliers. The NSDR is due to go live later this month, and the organisers say that major organisations including Harrods, Selfridges and Reed Managed Services have already signed up to the scheme.

The register is an initiative of Action Against Business Crime (AABC), who claim that theft by members of staff cost the British economy billions of pounds each year. Employers will be able to search for potential workers by name, address, date of birth, national insurance number and previous employer.

In order to protect employees, the chief executive of AABC has said that access to the database will be limited to employers who can comply with the Information Commissioner's employment practices code. In addition, participating companies will have to abide by the Data Protection Act and that workers named on the database will have the right to change their entries if blacklisted.

The database has attracted controversy from trade unions and civil liberties groups who warn that the website leaves workers vulnerable to the threat of false accusations. The TUC argue that the Criminal Records Bureau already provides appropriate and properly regulated protection for employers whilst, under the new system, employees may not be aware that they have been blacklisted.

Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.