Ashfords Solicitors - Employment Update

Dismissal or resignation

In the case of Sandhu v Jan de Rijk Transport Ltd, the Court of Appeal considered whether an employee was dismissed or whether he resigned in a case where he entered into a severance agreement during a meeting at which he was told that he would be dismissed.

Upholding the appeal, the Court of Appeal overruled the decision of the Employment Tribunal, and held that the employee had been dismissed.

Existing case law suggested that, in order for there to be a resignation, there should be discussion and negotiation, which shows that there was a genuine choice on the part of the employee.

In this case, the employee had not been told why he was being called to the meeting, he had not been given the opportunity to take advice or reflect on the proposals and the terms of the severance agreement were not particularly favourable to him. By agreeing terms for ending his employment, the Court of Appeal held that Mr Sandhu was doing no more than trying to "salvage what he could from the inevitable fact that he was going to be dismissed...the very antithesis of free, unpressurised negotiation".

The Court of Appeal remitted the case to a different tribunal to consider the claim of unfair dismissal on the grounds that the dismissal was procedurally unfair.

Tip for employers: Where you are seeking to negotiate a termination by mutual agreement and wish to avoid the tribunal finding that the employee was dismissed, you should ensure that there is some form of negotiation and discussion, leading to a result which is a genuine choice on the part of the employee. This should include:

Giving the employee warning of why you want a meeting.
Giving the employee the opportunity to take legal advice.
Giving the employee time to reflect.
Avoiding a severance agreement that is not particularly favourable to the employee.

If you are contemplating dismissal, you should also ensure that you comply with the statutory dismissal and disciplinary procedures.

Returning from maternity leave – what is the same job?

In Blundell v Governing Body of St Andrew's Catholic Primary School, the EAT considered for the first time what was meant by the woman's entitlement when returning from maternity leave to return to "the job in which she was employed before her absence".

The Claimant was a teacher in a primary school. When she left for maternity leave, she was teaching the reception class, but on her return was allocated to teach Year 2. She claimed that this was not a return to the same job.

The EAT upholding the tribunal decision, held that this was the same job. It was held that the purpose of the legislation was to "provide that a returnee comes back to a work situation as near as possible to that she left", and when comparing the "old" and "new" jobs it was necessary to consider three factors – nature, capacity and place. The Claimant was employed as a primary school teacher when she went on maternity leave, and when she returned, she was still employed as a primary school teacher. She could not insist on teaching the same class, particularly since the school typically rotated the classes every two years anyway.

However, the EAT also held that the Claimant had been subjected to a detriment amounting to discrimination under the Sex Discrimination Act 1975, because she was not consulted over which class she would like to teach on her return. Those teachers who had not been on maternity leave were asked their preference.

Continuing act of discrimination covered by single grievance letter

The EAT held in Smith v Network Infrastructure Ltd that a continuing failure to make reasonable adjustments under the Disability Discrimination Act 1995 could be covered by one grievance letter, where the complaint was "essentially the same", and gave the tribunal jurisdiction to consider acts and omissions of the employer after the date of the initial grievance letter.

Mr Smith was employed by Network Rail for a number of years. He suffered a series of strokes, which left him partially-sighted. It became apparent that Mr Smith would not be able to return to his job, and that the only type of work within the organisation to which he would be suited in future would be office-based work. Such roles would require some IT skills, of which Mr Smith had none.

Mr Smith's return to work prospects were discussed at a meeting in August 2005. A medical report in September 2005 suggested that he may be fit to return in an office-based capacity in December or January. In January 2006 Network Rail started to look for vacant posts for Mr Smith, although they did not keep him informed of progress, and so he wrote a grievance letter, dated 8 February 2006, complaining about the delay. He complained that, six months on from the meeting in August, he had not been offered any help to return to work. He indicated a willingness to retrain.

His letter went unanswered and he was not offered any training. On 21 March 2006 he was interviewed for a job as a works data clerk, but was rejected on account of his lack of IT skills. He complained to a tribunal of a failure to make reasonable adjustments under the DDA.

It was held on appeal that where an employee has a complaint about an ongoing discriminatory situation, it is sufficient to raise the matter once in a grievance letter. Where the situation still persists after the letter, the employee can rely on that ongoing situation in a subsequent tribunal claim, and is not restricted to complaining about the employer's actions or omissions prior to the date of the letter.

The EAT held that the duty to make reasonable adjustments arose as soon as Mr Smith became unable to perform his existing job, and not when the employee was certified fit to return to work.

The EAT further held that it was, arguably, unreasonable for Network Rail to only offer Mr Smith training once he had found a job; in reality he was unlikely to get jobs for which he was not trained, as demonstrated by his unsuccessful application for the post of data clerk.

How much information must an employer give prior to a Stage 2 meeting?

In Ingram v Bristol Street Parts the EAT confirmed the scope of information required for a stage 2 meeting to satisfy the requirements of the statutory dismissal and disciplinary procedures (SDDPs).

Miss Ingram was employed as an accounts' clerk for the Company. On 12 October 2005 Miss Ingram informed management that approximately £900 had gone missing from her drawer. At an investigatory meeting she acknowledged that cash had gone missing over a period of time, in sums of between £300 and £400 each time. Miss Ingram accepted that she had been covering up the thefts by adopting an improper accountancy practice known as "teeming and lading".

The Company concluded there was evidence of gross misconduct and wrote to Miss Ingram, inviting her to a disciplinary meeting on 14 October.

Miss Ingram attended the meeting with her representative. Invoices dating back to July 2005 were produced by the Company, allegedly demonstrating the extent of the false accounting. She became very upset and the meeting was adjourned until 17 October.

At the reconvened hearing on 17 October additional invoices were produced to demonstrate that the false accounting had begun before July, which Miss Ingram disputed. The Company wanted to pursue this further so the meeting was adjourned until 21 October. On 21 October, more bank cash sheets were produced by the Company. The meeting was adjourned for the Company to consider the position. When it was reconvened, Miss Ingram was informed that they considered her guilty of gross misconduct in respect of the accounting deceit and she was dismissed.

Miss Ingram complained to the tribunal that the SDDP had been breached by the Company and that she had been automatically unfairly dismissed. The Employment Tribunal held that the provision of additional material at the disciplinary meetings on 17 and 21 October without giving Miss Ingram the opportunity to consider it was a breach of step 2 of the statutory procedure and therefore the dismissal was automatically unfair.

The EAT held that the tribunal had incorrectly interpreted the statutory provisions and had set the requirement under stage 2 "far too high". The statutory requirements do not oblige employers to provide all the evidence on which they intend to rely in advance. The SDDP merely requires sufficient material to enable the employee to put her side of the story, which Miss Ingram had in this case. Accordingly, the EAT held that there had been no automatically unfair dismissal, so no compensation was payable.

Letter to Equal Pay claimants was victimisation

The House of Lords in St Helens Borough Council v Derbyshire and othersheld that the Council had victimised claimants when it sent letters to them warning that if they persisted in their equal pay claims, there would be job cuts and the Council would no longer be able to afford to provide school meals.

The facts in this case are that around 500 female school catering staff brought claims against St Helens Borough Council under the Equal Pay Act 1970 arguing for parity of pay and bonuses with male road sweepers. Most of the claims were settled, but 39 women (the claimants) proceeded with their claims on the advice of their Trade Unions.

About two months prior to the hearing, the Council sent a letter to the claimants and a separate letter to all catering staff stating that the Council could not bear the financial consequences of losing the equal pay claims and that, if it did, it would be forced to consider stopping the provision of school meals to all except those children who were legally entitled to it, as well as making consequential job losses. The letter to all catering staff said that "the continuance of the current claims and a ruling against the Council will have a severe impact on all staff". Both letters also referred to the fact that settlement options were still open to the claimants.

The claimants brought additional employment tribunal proceedings, complaining that the sending of the letter amounted to victimisation under the SDA. The Council argued that the letters were written in the normal course of litigation and simply contained a clear statement of the potentially harmful consequences of pursuing the claims.

The House of Lords held that the sending of the letters amounted to less favourable treatment of the claimants than those employees who had not brought and continued equal pay proceedings and that each of the claimants had suffered a detriment as a result.

The letter, which had been sent not only to the claimants but also to their colleagues, contained what was effectively a threat. It was an attempt to induce the claimants' acquiescence, was intimidating, and went further than was reasonable. It was unnecessary for the Council to have corresponded directly with the claimants (who had legal representation) or their colleagues (who had settled).

Age Discrimination in interviews

The Director of the Equality Tribunal in the Republic of Ireland has published a decision on age discrimination which is likely to be relevant in the UK.

The Complainant was asked questions about his age at an early stage in the interview process, including questions on the application form such as "living with parents/renting/mortgaged accommodation", "number of children", "age" and "date of birth".

The Complainant objected that these questions were not relevant and provided incorrect information. Despite being suitable, he was not given the job, and it was held that had he had been discriminated against on the grounds of his age. He was awarded 5,000 Euros.

No implied variation to make overtime contractual

In North Lanarkshire Council v McDonald and another¸ it was held that in the absence of an express agreement, there was no contractual right to 2.5 hours paid overtime a week. Although the overtime had been worked habitually for over a year, this did not imply a contractual right into the claimants' employment contracts. Neither was it sufficient that the parties would have agreed to a variation had an "officious bystander" suggested it.

Failure to extend sick pay provisions for disabled employees is not discrimination

The Court of Appeal in O'Hanlon v Commissioners for HM Revenue & Customs held that the employer's failure to continue to pay the claimant sick pay when her entitlement under the organisation's sick pay policy had been exhausted was neither disability-related discrimination or a failure to make reasonable adjustments. Although she had been substantially disadvantaged and treated less favourably by the sick pay policy, reasonable adjustments had been made and the employer's treatment of her had been justified.

DTI consultation on additional statutory paternity leave and pay

The DTI has issued a consultation paper on the implementation of statutory paternity leave and pay.

The proposed scheme would allow fathers to take some of the mother's statutory maternity leave (and pay) where the mother returns to work before the end of her ordinary or additional maternity leave.

The government proposes that the father and mother should self-certify to the father's employer that the father is eligible for additional paternity leave and pay (namely, that the mother is returning to work early and passing her maternity entitlements over to the father). There would be no need for the mother's employer or HMRC to be involved in the process. However HMRC would carry out occasional random checks to detect and prevent fraud.

These proposals are likely to prove very popular with families where the mother earns substantially more than the father.

Consultation closes on 3 August 2007 and it is currently planned that the changes will be introduced in two years at the same time as statutory maternity pay is extended to 52 weeks. If this timetable is followed, it will only be those employees whose baby is due after April 2009 who will be effected. However, the DTI have stressed that this timetable is subject to change.

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.

19th May 2007

Key Contacts

Employment Update - May 2007