Ashfords Solicitors - Employment Update

Regulations prohibiting age discrimination do not have retrospective effect.

In the case of Standard Life Bank Ltd v Wilson, the Scottish Employment Appeals Tribunal has upheld an appeal by an employer, against a Tribunal decision that the Employment Equality (Age) Regulations 2006 ("the Regulations") had the retrospective effect of making acts of age discrimination unlawful, even though at the time the acts were committed, the acts were lawful because the Regulations had not yet come into effect.

The EAT held that the tribunal had erred and that Regulation 24 (3) was intended to cover post-termination discrimination, not discrimination during employment that occurred prior to 1 October 2006 the date when the legislation came into effect.

The Regulations state that a person suffers unlawful discrimination if they are treated less favourably on the grounds on their age. The Regulations also apply where an employer applies a provision, criterion or practice, which is equally applicable to people of a different age group to the employee but which puts people of the same age group as that employee at a particular disadvantage.

The Regulations came into force on 1 October 2006 making age discrimination unlawful in employment practices. However, the regulations only apply to pension rights and benefits that came into effect after 1 December 2006.

TUPE: Grievance addressed to transferor but later copied to transferee complied with step 1 of the Standard Grievance Procedure

The EAT has overturned a Tribunal finding that a claimants' letter did not comply with step 1 of the standard grievance procedure. The claimants' former employer was a local authority. The claimants' solicitor had submitted statutory equal pay questionnaires and written grievances to the Council complaining that the claimants were not receiving equal pay compared to a number of comparators. The claimants were then transferred to the respondent's employment under TUPE. The solicitors forwarded copies of the earlier grievances to the respondent with a covering letter before bringing claims under the Equal Pay Act 1970.

The tribunal hearing the case held that this was not a valid step 1 grievance on the basis that it could not reasonably have been interpreted as having been directed at the respondent or requiring any action by it. The decision was overturned by the EAT who held that the employees in this case had clearly set out their complaint in writing and sent it to the respondent in accordance with the SGP.

This should serve as a reminder to employers that the requirements of a step 1 grievance are minimal.

A grievance is defined as a "complaint by an employee about action which his employer has taken or is contemplating taking in relation to him". There are two statutory grievance procedures set down in the Employment Act 2002: the standard grievance procedure ('SGP') and the modified grievance procedure ('MGP').

Step 1 of the SGP requires an employee to "set out the grievance in writing and send the statement or a copy of it to the employer". Legislation does not provide guidance on how much detail the employee must include in the written statement. This is a matter of fact for the tribunals to determine although it has been established that the requirements are minimal and merely require an employee to set out their complaint in writing.

In order to bring a claim under s. 2 of the Equal Pay Act 1970, a claimant would first be required to submit a written grievance to their employer in accordance with step 1 of the SGP and wait 28 days before filing their claim.

Facts

In Bottomley v Wakefield District Housing the claimants were initially employed by the Council until their employment was transferred under TUPE to Wakefield District Housing ("Wakefield"), a housing association. The claimants' solicitors had originally written to the Council, serving them with questionnaires relating to equal pay and also with written grievances relating to unequal pay including details of male comparators who did not transfer from the Council to Wakefield. A copy of the correspondence was sent to the Chief Executive of Wakefield who took the view that the correspondence did not comply with step 1 of the SGP.

The claimants subsequently lodged claims for equal pay in the tribunal. Their claims were struck out on the basis that the ET found that their letters to the Council which had been copied to Wakefield did not comply with step 1 of the SGP on the basis that it could not reasonably have been interpreted as being directed at Wakefield or requiring any action by it.

Decision

The claimants appealed, and the EAT upheld their appeal.

Wakefield accepted that there had been a statement in writing and, to the extent that it was directed to the Council, it was a grievance. However, it argued that, since the grievance was primarily directed to the Council, Wakefield was the wrong recipient. However, the EAT disagreed and preferred the claimants' argument that the requirements for step 1 of the SGP are minimal and were satisfied in this case.

Whilst the grievance was initially sent to the Council, it was copied to Wakefield and read by their Chief Executive. At the very least a response from Wakefield was required even if it was just to say that the claims had nothing to do with it. The EAT held that the grievances however did relate to action taken by Wakefield in that it concerned payment of wages, which were controlled by Wakefield, and therefore in any case, they should have dealt with the grievance under the SGP

Right of review for employees excluded from protective award

The EAT has held that employees excluded from the scope of a protective award against an employer for failure to consult on a collective redundancy can apply to be joined as parties to the proceedings, even after the judgment has been delivered. The employees would then be able to seek a review of the judgment.

A collective redundancy is where an employer is proposing to make 20 or more employees at an establishment redundant in a period of 90 days or less. In collective redundancy situations, there employer has a duty to inform and consult with appointed representatives of the affected employees. If an independent trade union has been recognised for collective bargaining purposes in respect of any of the affected employees, then representatives of that union will become the appropriate representatives.

If an employee has failed to comply with its consultation obligations, the appropriate representatives can complain to a tribunal and seek a protective award. An individual employee can only bring a claim for failure to consult if the employer has failed to arrange the election of appropriate representatives. The EAT has previously held that trades unions can only make a claim for employees on whose behalf the union is the appropriate representatives. Consequently, where a protective award is made, it would only benefit those specific employees who are members of that union.

In Harford v Secretary of State for Trade and Industry, the EAT was asked to consider what would happen where a number of employees, who were not within the narrowly-worded protective award, sought to have the award widened to include them.

The EAT held that the claimants could apply, even at that late stage, to be joined as parties to the original proceedings as they had an interest in the outcome. Having been joined, they could then apply for a Review of the scope of the protective award.

Dismissals not TUPE related

The Court of Appeal has upheld a Tribunal's finding that dismissals made by an administrator were not transfer-related and not therefore automatically unfair. The Court of Appeal found that there was no collusion between the administrator and the director of the insolvent company who ultimately bought the business.

The Court of Appeal found that the Employment Tribunal had addressed the principle issue of the case in taking into the account the employer's principal reason for dismissing when deciding whether the dismissal was for a reason connected to the transfer and therefore automatically unfair.

The employer at the time of dismissal was the administrator and his reasons for the dismissals were economic and not transfer-related.

In Dynamex Friction Ltd and another v Amicus and others the Court of Appeal overturned the decision of the EAT that a tribunal had failed to make full findings on all relevant matters in relation to whether the administrator was the "unwitting tool" of the Director who had "stage managed" the placing of his company in administration, knowing that dismissals were inevitable and the expecting to re-acquire the assets free from TUPE obligations.

Facts

"S", the sole director of FD Ltd presented a petition that resulted in the company being declared insolvent. Following that declaration, control of the company was handed to administrators. The administrator dismissed all the employees on the ground of compulsory redundancy on the same day.

The administrator informed the dismissed employees by letter that the company had no money to pay them unpaid wages or redundancy payments, and that any claims for such sums should be made to the Secretary of State, to be paid out of the National Insurance fund.

On 12 August, the administrator distributed financial information about FD Ltd, seeking best offers for the company's assets and business. It was announced on 15 August that FD's plant and machinery had been sold to FR Ltd, a company owned by S; assets including FD Ltd's production line were bought by DF Ltd, a new company in which S later acquired a 60% shareholding. FR Ltd then leased the parts and machinery to DF Ltd and 60 of the dismissed employees were taken on by DF Ltd under new contracts of employment.

The other employees dismissed by the administrator brought proceedings in an employment tribunal, arguing that the Transfer of Undertakings (Protection of Employment) Regulations 1981 ("TUPE") (since replaced by the Transfer of Undertakings (Protection of Employment) Regulations 2006) made their dismissals automatically unfair as they had been dismissed for a reason connected with the transfer.

The Decision

The tribunal found that there was a 'relevant transfer' for the purpose of Reg 5. However, the dismissals were not by reason of the transfer or for a reason connected with it (which would have made them automatically unfair under Reg 8(1)). There was no evidence of collusion between S and the administrator that would require the tribunal to find a connection between the dismissals and the eventual transfer. Instead, the dismissals were for genuine economic reasons – that there was no money in the business to pay the employees at that time – and so potentially fair under Reg 8(2).

The decision was overturned by the EAT on appeal, who held that the tribunal had failed to make full findings of fact. In particular, that the tribunal had failed to properly consider whether S had 'stage-managed' the administration, knowing that the dismissals were inevitable and expecting to take over FD Ltd's assets and business free from the obligations of TUPE.

The Court of Appeal found that the EAT's reference to the 'stage-managing' allegation was irrelevant – the reason for dismissal under Reg 8(1) has to be decided by reference to the motivation of the employer who, at the material time, was the Administrator, not S. The tribunal had made a clear and unambiguous finding that the Administrator had acted professionally at all times, and that there was no collusion between him and S. On that basis, it could have come to no other conclusion than that the dismissals were not transfer-related.

And finally......

Wolf whistles banned by Wimpey

This month saw George Wimpey Bristol taking the decision to ban their builders from wolf-whistling women passing their sites.

George Wimpey say that the reason for this decision was as a result of fears that professional women were being discouraged from buying their properties because they first have to run the gauntlet of catcalling builders. Since more women than ever are buying homes, coupled with the threat of an economic slowdown looming, they stated they could not afford to miss any chances.

The move by George Wimpey coincides with the introduction of the Sex Discrimination Act 1975 (Amendment) Regulations 2008 ("the Regulations") which amend the Sex Discrimination Act and that strengthen the law prohibiting sexual harassment in the workplace. The Regulations, which came into force on 6 April 2008, allow an employee to claim that she (or he) has been sexually harassed at work by someone other than her employer or a fellow employee (such as a customer).

The Regulations also widen the definition of harassment, so that an employee can personally claim harassment as a result of acts directed against someone else. For more information see our March Update.

These new rules will have the effect of amplifying the rights of employees to be protected against any unwanted harassment related not just to their sex, but to that of another person, whoever the harassment comes from. This means that if an employer becomes aware of any behaviour that could amount to harassment, whether it comes from employees, customers, clients or the general public, they should take immediate steps to protect their employees.

Whether there will be a sudden rush of harassment complaints in light of the new regulations remains to be seen. Watch this space for further developments.

Employment Update - April 2008