Employment Update - May 2009
Friday 29th May 2009
CASE LAW
Belief in climate change may be a "belief" under Religion or Belief Regulations
A tribunal has held in the case of Nicholson v Grainger PLC and others ET 2203367/08 that an individual's beliefs about climate change are capable of being a "belief" for the purposes of the Employment Equality (Religion or Belief) Regulations 2003. The tribunal concluded that the Claimant's belief in climate change and the need to cut carbon emissions fell within the definition of a "philosophical belief" under the Regulations, although he still needed to show that he had suffered discrimination on the basis of that belief.
Background
The Employment Equality (Religion or Belief) Regulations 2003 prohibit direct discrimination, indirect discrimination, discrimination by way of victimisation or harassment in the workplace by reason of any religion or belief. "belief" is defined as "any religious or philosophical belief".
Facts
The claimant had been made redundant and brought a number of claims, one of which was for discrimination on the grounds of religion or belief on the grounds of his "strongly held philosophical belief about climate change and the environment". A pre-hearing review considered a number of issues, including whether his belief was protected under the Religion or Belief Regulations.
Decision
The Claimant argued that his belief was "not merely an opinion but a philosophical belief which affects the way I live my life. . . ". The tribunal identified its job as deciding whether the belief fell within the definition of a "philosophical belief". In McClintock Department of Constitutional Affairs [2008] IRLR 29 the EAT approved a test of whether the belief has sufficient cogency, seriousness, cohesion and importance and whether it is worthy of respect in a democratic society.
The tribunal held that the Claimant's beliefs gave rise to a moral order similar to most religions. Accordingly, it would be difficult to argue that a belief about climate change did not fall within the definition of "philosophical belief". The McClintock case, in which the EAT held that a view relating to adoption by same-sex couples did not fall within the definition, was distinguished, as the Claimant's views went beyond 'mere opinion'.
Comment
Originally the Regulations referred to "religious belief or similar philosophical belief". This meant that the belief had to 'occupy a place in the person's life similar to that filled by the god or gods of those holding a particular religious belief. The word "similar" was later removed, although the government specifically stated that there was no intention to widen the ambit of the Regulations. This nevertheless led to cases whereby Claimants attempted (unsuccessfully) to argue discrimination on the grounds of political belief.
Nicolson appears to be the first case in which a Claimant has successfully argued that a belief which is not similar to a religious belief falls within the definition.
Compromise agreement void because trust acts outside its powers
In Rose Gibb v Maidstone and Tunbridge Wells NHS Trust EWHC 862 the High Court held that a compromise agreement entered into by the Trust and its then Chief Executive was unenforceable. It held that the Trust acted outside the remit of its powers in agreeing "an irrationally generous" compensation payment. This decision should be noted in particular by public sector employers and those who advise them.
Background
Following the landmark case Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1947] EWCA Civ 1 public bodies can only act within their powers, or as they are required to act by statute, in the public interest and in a way that is reasonable. Any decision which include irrelevant considerations may be found ultra vires, meaning the body has acted beyond its power and the decision is therefore void.
Facts
The Claimant's employment as Chief Executive of the Trust was terminated following outbreaks of a 'superbug' at hospitals managed by the Trust. The Trust entered a compromise agreement with the Claimant in October 2007, providing for a severance payment of £250,000, of which £75,000 was payment in lieu of notice and the remainder was compensation for loss of office. The Trust agreed to pay the initial £75,000, but asserted it was not obliged to pay the remainder which was "irrationally generous".
The Claimant brought a claim for the outstanding £175,000 arguing that she was entitled to the sum under the terms of the agreement.
Decision
The claim failed. The judge considered the reasonableness of the Trust's decision and concluded that it could reasonably have assessed its liabilities at approximately £145,000; her contractual notice period and a sum equivalent to the then maximum unfair dismissal award. There was no proper financial analysis carried out to justify the additional £105,000 awarded.
The judge found that in assessing the level of compensation to be paid to the Claimant the non-executive directors of the Trust were affected by their personal views of her and their desire to be generous in light of her previous good service. He concluded that the agreement was "irrationally generous" and therefore void.
Guidance laid out for Employment Tribunals in harassment claims
In the recent case of Richmond Pharmacology v Dhaliwal [2009] UKEAT/458/08 the EAT gave specific guidance for employment tribunals to follow when considering claims of harassment. It warned against encouraging hypersensitivity among employees, setting out clearly the necessary elements of a successful claim.
The case should nevertheless serve as a reminder to employers that noform of harassment or offensive comments should be tolerated within their organisation.
Facts
The case involved a female claimant of Indian ethnic origin who had recently given notice of her intention to resign. Referring to her forthcoming departure from the Company, the Claimant's supervisor made a comment that their paths were likely to cross again unless she was "married off in India".
Decision
The Tribunal found that this comment had the effect of 'violating the Claimant's dignity' by reference to forced marriage, and amounted to harassment. The Respondent appealed and in its decision, the EAT chose to set out guidelines for dealing with harassment claims. It warned against "encouraging hypersensitivity or the imposition of legal liability in respect of every unfortunate phrase". The appeal was dismissed and the decision of the Tribunal was upheld.
The EAT laid down four matters which Tribunals should look at when considering those three elements of liability:
- Case law in relation to harassment is unlikely to be helpful, and it is also doubtful whether the Protection from Harassment Act 1997 will be of assistance.
- When considering the 'purpose or effect' of conduct, there were two stages. Firstly, a Respondent may not intend the consequences of his conduct, but it may nevertheless have had such an 'effect'. Secondly, a Respondent may have acted with the 'purpose' of upsetting the Claimant, but the conduct many not have had that effect. In both cases, the Respondent could be liable.
- Where a Respondent's conduct does have an effect on the Claimant, the Respondent should only be liable if it was reasonable for that conduct to have had that effect on the Claimant. The Tribunal should therefore consider objectively whether it was reasonable for the Claimant to experience the feelings he or she did.
- Finally, the Tribunal should consider whether the conduct was on the grounds of the prescribed form of discrimination. For example, in this case the Respondent may have intended to violate the Claimant's dignity, but for a reason other than her ethnic origin.
Akavan Erityisalojen Keskuslitto AEK ry and others v Fujitsu Siemens Computers Oy (C-44/08) is a Finnish case concerning the EC Collective Redundancies Directive which was referred to the Advocate General to give opinion on a number of issues. In his view the duty to consult arises where the employer intends to make collective redundancies, or at least foresees the possibility of doing so. Where a parent company contemplates redundancies, the employer's duty to consult only arises once the parent company identifies the subsidiary to be affected.
Background
Article 2(1) of the Collective Redundancies Directive (98/59/EC) states; "Where an employer is contemplating collective redundancies, he shall begin consultation with the workers' representatives in good time with a view to reaching agreement".
This requirement is implemented in England and Wales by s.188 Trade Union and Labour Relations (Consolidation) Act 1992 and suggests that consultation does not need to begin until the employer is "proposing to dismiss" rather than merely "contemplating redundancies".
Facts
The employer (Fujitsu Siemens Computoer Oy) ran a factory in Finland and was a subsidiary company of Fujitsu Siemens Computer (Holdings) BV. In December 1999 the parent company directors agreed to propose that the employers factory be 'disengaged'. The parent company board supported the proposal, although no specific decision was made. The employer then undertook redundancy consultations and in February 2000 the parent company closed the factory and the employer began to dismiss employees.
Some of the dismissed employees argued that the employer had been in breach of the collective consultation legislation on the grounds that the parent company had made the decision before consultation had taken place. The Helsinki Court of Appeal rejected these claims.
On appeal to the Finnish Supreme Court a number of questions were referred to the ECJ. These concerned the meaning of "contemplating collective redundancies" and how these requirements are affected when the decision-maker is the employer's parent company.
Advocate General's Opinion
The Advocate General delivered his opinion at the end of April this year and proposed that the ECJ reach the following conclusions;
- The expression "contemplating collective redundancies" must be understood as referring to the moment at which it is apparent that the employer intends to make collective redundancies or at least foresees the possibility of doing so as a consequence of the measures planned.
- In the case of a group of undertakings, the duty to consult arises when either an employer or its parent company plans or foresees collective redundancies. Where they are foreseen by the parent company the obligation to consult only arises when the subsidiary to be affected has been identified.
- In the case of a group of undertakings the consultation procedure must be concluded by the employer before the decision on collective redundancies is taken by the parent company.
In the recent case of Daleside Nursing Home Limited v Matthew UKEAT/0519/08 a tribunal had found that the allegation at the heart of the Claimant's claim had been fabricated. The claim, for direct race discrimination, centred around the Claimant's claim that she had been called a "black bitch" by her manager.
The Tribunal held that since this was such an offensive comment it was unlikely the Claimant would have waited three weeks before raising it, and doing so only when facing disciplinary proceedings. A costs order was not made however, on the basis that she had felt, albeit incorrectly, that she had a claim.
The EAT overturned the decision and remitted the question of awarding costs against the Claimant back to the Tribunal. It stated; "where there is a clear-cut finding that the central allegation [...] was a lie, it is perverse for the tribunal to fail to conclude that the making of such a false allegation at the heart of the claim does not constitute a person acting unreasonably".
Less favourable treatment of Part Time Workers
The EAT has handed down its decision in Carl v The University of Sheffield confirming that the Tribunal had been entitled to find that the alleged comparable full-time worker in the case was not properly regarded as a true comparator.
A Claimant seeking to establish unlawful less favourable treatment under Part Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 must be able to point to a real comparator who amounts to a "comparable full-time worker" under Reg.2(4). It is not necessary that the treatment was only on the ground of part time status however; the part time working must be the effective and predominant cause of the less favourable treatment complained of but need not be the only cause.
LEGISLATION
Equality Bill: Second Reading in House of Commons
The Equality Bill 2008-2009 has received its Second Reading in the House of Commons and will now progress to a clause-by-clause consideration in a Public Bill Committee. Although the vote on Second Reading resulted in a comfortable majority of more than 2:1 for the Government, it does suggest that there is considerable opposition to some aspects of the Bill as drafted, and there is likely to be some fierce debate in Committee.
One of the provisions that attracted a lot of debate was the proposal to make employers with over 250 employees publish average gender pay gap figures. One of the Conservatives' proposed amendments would require employers to carry out a "gender pay audit" (which would presumably go further than the Government's current proposal of merely publishing average pay rates for men and women). While this would apply to employers of all sizes, it would be restricted to those who had lost an equal pay case in tribunal.
Further details of the Bill were covered in our April 2009 Employment Update.
Using tips to make up minimum wage
In November 2008 the government published a consultation paper on its proposal to prohibit service charges, tips and gratuities put through the payroll from counting towards the employer's payment of National Minimum Wage. Consultation on the paper closed on 16 February 2009.
Following the publication of the Government's response to the consultation the Department for Business, Enterprise & Regulatory Reform (BERR) has announced that this practice will be made unlawful from 1 October 2009. There have also been suggestions that a new industry code of best practice will be produced at this time.
New National Minimum Wage rates announced
New rates of the National Minimum Wage (NMW) have been announced by the BERR which will apply from October 2009. Business groups had pushed for the NMW to remain at current levels in light of the current economic climate, but the Low Pay Commission (LPC) who recommended the increase to the government, argues that the rise has been maintained at a minimum level in comparison to previous years.
The new rates which willapply from October 2009 are as follows;
- For workers aged 22 and over: £5.80 (currently £5.73)
- For workers aged 18 to 21: £4.83 (currently £4.77)
- For workers aged 16 and 17: £3.57 (currently £3.53)
OTHER NEWS
UK wins Working Time Directive opt-out
Under the existing system workers in the UK can chose to opt-out of the 48 hour maximum working week stipulated by law. MEP's have been trying since November 2008 to limit the amount of hours an employee can work. Talks on the European legislation, which would have scrapped the opt-out currently in place in the UK, have collapsed, marking the end of the proposal.
More than one in ten employees work over the 48 hour week according to government figures. It was feared that a cap on working hours could have led to staff demanding pay rises to make up the money they would have made under the opt-out. David Yandle, head of employment policy at manufacturers' body EEF, said "Retaining the opt-out will help employers to manage working time so that they can respond quickly and efficiently to changing customer demands and enable employees to chose to earn more by working longer hours".
The opt-out dossier will be formally axed when the conciliation timetable reaches its official conclusion later in the month.
Petition against dismissal of NHS whistleblower
A nurse who secretly filmed patients for the BBC television show Panorama, to demonstrate the neglect and ill treatment of elderly patients, has been struck off by the Nursing and Midwifery Council (NMC). The decision has sparked outrage among the profession and a Royal College of Nursing (RCN) petition has attracted over 40,000 signatures in protest against it.
The NMC did acknowledge that the information provided pointed towards issues of 'an exceptionally serious nature'. Despite this no action appears to have been taken against those responsible for the neglect. Peter Carter, Chief Executive of the RCN stated that "laws protecting whistleblowers are not worth the paper they are written on".
The case highlights problems faced by whistleblowers in having their complaints taken seriously. A similar scandal involving Stafford hospital, which exposed appalling standards of emergency care, also brought to light incident reports that had been completed by nurses, but which had been ignored.
Swine flu - Is your business prepared?
At this stage authorities are saying that there is no immediate cause for alarm following the recent outbreaks of swine flu. However, the situation could quickly change. Companies need to ensure they understand how a more serious outbreak could affect their legal rights and responsibilities towards their staff.
The main practical issue for most organisations will be business continuity planning, focusing in particular on coping with significant levels of employee absence and reducing the risks of flu coming into and spreading within the workplace itself. Employers should focus on three main areas:
- the duty to protect the health and safety of employees;
- dealing with staff absence; and
- the possible suspension of "normal" working practices and the impact that this may have on contracts of employment.
Health and safety
With regard to health and safety, the government has prepared some basic advice to staff which businesses may adapt and circulate. Employers need to ensure that employees are kept informed about health risks, and steps are taken to ensure there is good hygiene in the workplace. A Department of Health leaflet "Pandemic Influenza, Health and Safety Executive" contains useful advice on hygiene and risk control for workplace cleaning staff.
Contact details of staff should be updated and emergency contact details of staff should be circulated. Furthermore, a risk assessment should be carried out which considers factors which could make organisations vulnerable to infection, and consideration given to alternative ways of working. The following steps are key to the promotion of health and safety:
- disseminating up-to-date information about the health risks;
- ensuring hygiene practices in the workplace are good;
- asking employees to report to HR if they have flu-like symptoms or feel unwell and have travelled to Mexico or other high-risk area;
- asking any unwell employees to stay at home and consult their doctor; and
- if there is a confirmed case of pandemic flu in the workplace, or if a wider pandemic occurs, considering imposing home-working or travel bans.
Staff absence is likely to be high and employers always face a conflict between the need to keep genuinely sick employees away from the workplace and the desire to prevent unauthorised absence.
Workplaces which have a culture of encouraging employees to "struggle in" despite not feeling well will need to change their approach. Failure to do so may expose them to claims for breach of contract. Employers may well benefit from insisting that those who are unwell stay away from work. This should limit the spread within the workplace, and also reassure staff that the workplace is safe.
Possible suspension of normal working practices
The normal practices around return to work, sick pay or dependant leave may have to be temporarily suspended. Employers may need to be more generous about giving time off to employees caring for dependants. In the normal course of events taking more than their entitlement could lead to employees facing disciplinary action, but this may become less important if a crisis develops.
If a pandemic develops, it is likely that some employees will be required to work from home or to refrain from work for a period. Unless this is provided for in the employment contract imposing those changes will constitute a unilateral variation, potentially giving rise to a claim for constructive dismissal. By drawing employee attention to the possibility of these changes being imposed in the future, the scope for conflict could be avoided.
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