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• Employment Law Update - December 2006

Introduction

Compensation Limits for 2007 Announced

• A week's pay: £310.00 (this is currently £290.00)
• Maximum compensatory award for unfair dismissal: £60,600.00 (currently £58,400.00)
• Minimum basic award for defined dismissals (trade union, health and safety, etc): £4,200.00 (currently £4,000.00).

The new rise in limits are described in the Employment Rights (Increase of Limits) Order 2006 SI 2006/3045.

The new limits apply where the 'appropriate date' falls on or after 01 February 2007. The appropriate date may be calculated differently depending on the type of claim brought e.g. for unfair dismissal and most redundancy claims the appropriate date is the effective date of termination. Full details of how the appropriate date is determined are described in the Order.

Part-Time Workers and Pro-Rate Bank Holidays

The case of WJ McMenemy v Capita Business Services Ltd has explored a part-time workers' rights to Bank Holidays on a pro-rata basis.

This case confirms that, although pro-rata apportionment of bank holidays presents the least risky course of action, and is undoubtedly good practice, it is not necessarily the case that a policy of only paying for bank holidays that are normal working days will be unlawful. The "normal working days" approach will always result in a part-time worker who does not work Mondays being treated less favourably than a full-time comparator who does, but this is not sufficient in itself to establish liability.

Under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000, a part-time worker has the right not to be treated less favourably than the employer treats a comparable full-time worker as regards the terms of the contract; or by being subjected to any other detriment by any act, or deliberate failure to act, by his employer (Reg 5(1)).

In determining whether a part-time worker has been treated less favourably than a comparable full-time worker the pro rata principle shall be applied unless it is inappropriate (Reg 5(3)).

Therefore, in principle, where a comparable full-time worker receives or is entitled to receive pay or any other benefit, a part-time worker is to receive not less than the proportion of that pay or other benefit that the number of their weekly hours bears to the weekly hours of the full-time comparator.

The part-time worker must identify an actual full-time worker in the same employment as a comparator.

WJ McMenemy v Capita Business Services Ltd

In this case, McMenemy worked in a call centre in Glasgow, on a part-time basis Wednesdays, Thursdays and Fridays. All contracts for full-time and part-time stipulated that employees were only entitled to public holidays where they fell on a normal working day. Therefore, McMenemy was not allowed time off in lieu where the public holidays fell on a Monday.

He therefore brought a claim in the Tribunal, on the basis he was treated less favourably than comparable full time workers as he had suffered a detriment caused by the way Capita applied the provisions of his contract.

The tribunal considered 2 questions:

1. Did the contract term result in him receiving less favourable treatment than a full-time worker?

2. If so, was that treatment on the ground that he was part-time?

The Tribunal found that Mr McMenemy had suffered a detriment compared to the other members of his team. With respect to the second test, the Tribunal considered the nature of Capita's business, it's policy regarding holidays falling on Mondays and the position of any part-time worker who worked on Mondays. It also considered the fact that Capita had 11 months previously applied its policy to McMenemy's line manager, who at that time, worked full-time from Tuesday to Saturday, in the same way.

The Tribunal held that his treatment was not based on the fact he worked part-time but on the fact he did not work on Mondays. Had he worked full-time from Tuesday to Saturday he still would not have been entitled to the benefits.

The EAT upheld the decision of the Tribunal and dismissed McMenemy's appeal.

Conclusion

This case confirms that, although pro-rata apportionment of bank holidays presents the least risky course of action and is undoubtedly good practice, it is not necessarily the case that a policy of only paying for bank holidays that are normal working days will be unlawful.

The normal working days approach will always result in a part-time worker who does not work Mondays being treated less favourably than a full-time comparator who does, but this is not sufficient in itself to establish liability.

This case relied on Gibson v Scottish Ambulance Service, which stated that it is not sufficient for the worker's part-time status was one of the reasons for the treatment; it must be the sole reason.

The full impact of this case on the rights of part-time workers to pro rata paid bank holidays has yet to be determined. One possibility is that it will be confined to cases in which the employer's business is operational seven days a week with both full-time and part-time workers on a variety of patterns that may or may not include Mondays.

However, the door may also have been left open for any employer, not just those operating seven day weeks, to argue that the reason for the less favourable treatment is not (or at any rate, not solely) the part-time status of the affected workers, but the fact they do not work on Mondays.

Fair Dismissal for Ill-Health Capability Where Employer Shares Responsibility

The Employment Appeal Tribunal has held that an employer can fairly dismiss an employee lacked capability on the grounds of ill health even though the employee's stress-related illness was attributed to the conduct of the employer.

In Royal Bank of Scotland v McAdie the EAT also ruled that the employee's capability is a relevant factor for the Tribunal to consider when they determine whether or not the dismissal is fair.

Ms McAdie alleged that she had been treated badly by the Bank and her Manager, with regard to transfer to another branch when she did not wish to leave. Ms McAdie went off sick with symptoms that were subsequently diagnosed as work-related stress.

Various dialogue was entered into between the parties, but the allegation that Ms McAdie's manager had treated her badly was denied. Ms McAdie remained off-work and raised a grievance with respect to how she had been treated.

The investigation into the grievance found that the Manager had been at fault in delaying his response to her, but he had acted improperly. Ms McAdie went continued with the Bank's grievance procedure. She made it clear that the only suitable resolution that she could see was for her to leave the Bank with compensation. The Bank carried out a "desktop" review of her grievance and found that the Manager had not acted improperly but offered her a return to work at any branch of her choice.

The Bank then decided to activate its long-term sickness procedure. It was advised by an Occupational Health and Safety Consultant that the problem was primarily a management one, resulting in Ms McAdie's ill-health. If the problems could be resolved, Ms McAdie might recover. At a meeting, between the manager supervising the grievance and Ms McAdie, the Bank made it clear that it was keen for Ms McAdie to return to work. She, howver, wanted to pursue her grievance to the final stage.

The OH summary suggested that "the primary reason for not returning to work is one of failing to resolve an employment dispute, and not due to a primary medical problem. This lady appears unable or unwilling to accept the resolution that has been offered, but this is not a medical issue". The report concluded that further medical treatment was unlikely to resolve the situation and, in absence of a successful redeployment, Ms McAdie was likely to remain away from work for the foreseeable future.

Ms McAdie, after a final meeting with the Bank, was given 12 weeks' notice to terminate her employment on the grounds of ill-health.

Ms McAdie appealed the decision to terminate her employment saying that if she had received an apology or acknowledgment of the error at the outset she may have been able to return to work. She was of the view that there was no remedy, but for her to leave the Bank "with a clean reference and compensation".

A tribunal upheld Ms McAdie's unfair dismissal claim. It concluded that the Bank was responsible for her ill-health as a result of the manner in which it had dealt with her grievance. "The tribunal were satisfied that no reasonable employer would have dismissed in these circumstances because no reasonable employer would have found themselves in these circumstances".

The EAT allowed the Bank's appeal and dismissed Ms McAdie's claim.

It accepted that it was open to the tribunal to find that the Bank had been responsible for Ms McAdie's ill health. The EAT supported the views expressed in previous cases that whilst, on one hand, a tribunal should not ignore the fact that an employer caused the ill-health, on the other, the fact that an employer has caused the incapacity, however culpably, cannot prevent it from ever effecting a fair dismissal.

The EAT said that "there must be cases where the fact that the employer is in one sense or another responsible for an employee's incapacity is, as a matter of common sense and common fairness, relevant to whether, and if so when, it is reasonable to dismiss for that incapacity". They also suggested that it might be necessary to "go the extra mile" in finding alternative employment for the employee or putting up with a longer period of sickness absence than would otherwise be reasonable.

A Tribunal's main concern will be the reasonableness of the employer's conduct given what he reasonably knew or believed at the time of the dismissal, and for that purpose a definitive decision on culpability or causation may not be needed.

The Tribunal should have asked "was it reasonable for the Bank to dismiss Ms McAdie on 22 December 2004 in the circumstances as they then were, including the fact that their mishandling of the situation had led to her illness?" In this case the tribunal had failed to do this. It had focused on what had given rise to the situation, not what it was reasonable for the Bank to do in the situation.

If the Tribunal had asked this question, they could not have concluded that the decision to dismiss Ms McAdie was outside the range of reasonable responses. The medical evidence was clear that Ms McAdie was unfit for work and she would not recover. Ms McAdie agreed with this and wanted her employment terminated (albeit, with compensation). The Bank could have done nothing more to try to save Ms McAdie's employment. In this case there was no alternative to dismissal.

Muslim Classroom Assistant Dismissed for Wearing a Veil

Kirklees Council, in West Yorkshire, has confirmed that a Muslim classroom assistant suspended from her school job for wearing a veil (Niqab) in lessons has been dismissed.

This high profile case has brought discrimination on the grounds of religion or belief into the public eye. In November, an Employment Tribunal ruled that the school's requirement for her to remove her veil while teaching in class was not directly or indirectly discriminatory on the grounds of religion.

However, employers should note that the tribunal ordered that Aishah Azmi should receive £1,000 for victimisation (ie less fabourable treatment as a result of making a complaint), as well as a 10% uplift as the employer failed to follow the Statutory Dispute Resolution Procedures.

Challenge to Mandatory Retirement Age Referred to the European Court of Justice

Continuing from the introduction of the Employment Equality (Age) Regulations 2006 in October, the first substantial challenge to the Regulations has been made to the ECJ.

The High Court has permitted Heyday (an organisation campaigning on age-related issues) to refer a question to the ECJ regarding the Mandatory Retirement Age. The question that will be put to the ECJ will not be decided until January 2007. Once this is made, readers will be updated.

Employer not Vicariously Liable where Employee on "A Frolic of His Own"

In N v Chief Constable of Merseyside Police the High Court ruled that the Chief Constable was not vicariously liable for an assault by one of his officers. This was because it was clear that the policeman had used his position as an officer as an opportunity to commit the offence. The court decided the policeman was "on a frolic of his own", and that the offence was not closely enough related to his employment with Merseyside Police. While this case only concerns the police it does it will apply to common law on vicarious liability, and is relevant to all employment relationships.

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.