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Decisions:
Unfair dismissal: employer's ability to pay should not influence employment tribunal award
Case name: Tao Herbs & Acupuncture Ltd v Jin
Date added: 1 September 2010 Tribunal/court: EAT Status: appeal allowed
Topics: unfair dismissal | compensation | ability to pay
The Employment Appeal Tribunal has provided a reminder that employment tribunals should not take into account the employer's ability to pay when considering how much compensation to award an unfairly dismissed employee. 

EAT considers test in claims of less favourable treatment of fixed-term employees
Case name: Manchester College v Cocliff
Date added: 24 August 2010 Tribunal/court: EAT Status: appeal allowed
Topics: fixed-term contracts | less favourable treatment | objective justification
The Employment Appeal Tribunal has given a rare appellate judgment considering the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002. 

EAT provides guidance on remedies for discrimination claims
Case name: St Andrews Catholic Primary School and others v Blundell
Date added: 17 August 2010 Tribunal/court: EAT Status: appeal allowed
Topics: sex discrimination | compensation | injury to feelings
The Employment Appeal Tribunal has provided guidance on remedies for discrimination claims including injury to feelings, aggravated damages and recommendations issued by tribunals. 

Disability-related discrimination: Court of Appeal confirms that Malcolm test applies in employment cases
Case name: Aylott v Stockton-on-Tees Borough Council
Date added: 4 August 2010 Tribunal/court: Court of Appeal Status: appeal allowed
Topics: disability discrimination | disability-related discrimination | comparator
The Court of Appeal has confirmed that the House of Lords decision in the housing case of London Borough of Lewisham v Malcolm [2008] IRLR 700 HL on the appropriate comparator for disability-related discrimination applies to employment cases. 

Costs: pursuing claim purely for declaration of unfair dismissal is unreasonable behaviour
Case name: Nicolson Highlandwear Ltd v Nicolson
Date added: 22 July 2010 Tribunal/court: EAT Status: appeal allowed
Topics: unfair dismissal | costs applications | unreasonable behaviour
The Employment Appeal Tribunal has held that, in the context of costs applications, it is unreasonable behaviour for a claimant to pursue an unfair dismissal claim purely for the purpose of obtaining a declaration that he or she was unfairly dismissed.

Employer's unambiguous words of dismissal can rarely be retracted
Case name: Willoughby v CF Capital plc
Date added: 22 July 2010 Tribunal/court: EAT Status: appeal allowed
Topics: unfair dismissal | dismissal or resignation | special circumstances
The Employment Appeal Tribunal has held that an employer can retract unambiguous words of dismissal only in exceptional circumstances. 

EAT finds age-related cap on redundancy payments not discriminatory
Case name: Kraft Foods UK Ltd v Hastie
Date added: 15 July 2010 Tribunal/court: EAT Status: appeal allowed
Topics: redundancy schemes | cap | age discrimination
The Employment Appeal Tribunal has held that a redundancy scheme that incorporated an age-related cap on payments was a proportionate means of achieving the legitimate aim of preventing employees from receiving a "windfall" and was not age discriminatory. 

EAT provides guidance on size of penalty for breach of information and consultation Regulations
Case name: Brown v G4 Security (Cheltenham)
Date added: 7 July 2010 Tribunal/court: EAT Status: appeal allowed
Topics: employee relations | information and consultation Regulations | penalty for breach
The Employment Appeal Tribunal has held that the number of affected employees is not, by itself, particularly relevant in determining the gravity of an employer's breach under the Information and Consultation of Employees Regulations 2004. 

Disability: police force did not discriminate against police officer with violent tendencies
Case name: Aitken v Commissioner of Police of the Metropolis
Date added: 29 June 2010 Tribunal/court: EAT Status: appeal dismissed
Topics: disability discrimination | mental illness | perceived disability
The Employment Appeal Tribunal has held that a police force did not discriminate against a police officer who displayed violent tendencies at a Christmas party that led his colleagues to fear for their safety. 

CEO of NHS trust dismissed following superbug scandal entitled to compensation
Case name: Gibb v Maidstone & Tunbridge Wells NHS Trust
Date added: 29 June 2010 Tribunal/court: Court of Appeal Status: appeal allowed
Topics: unfair dismissal | compromise agreement | ultra vires
The Court of Appeal has held that an NHS trust was entitled to take into account a CEO's previous good record and negative prospects of obtaining future employment when making a severance payment. 

Court of Appeal publishes full judgment overturning British Airways strike injunction
Case name: British Airways plc v Unite the Union
Date added: 24 June 2010 Tribunal/court: Court of Appeal Status: appeal allowed
Topics: trade union | industrial action | injunction
The Court of Appeal has handed down its full judgment overturning an injunction preventing British Airways cabin crew from striking. 

Conditional resignation does not trigger effective date of termination
Case name: Heaven v Whitbread Group plc
Date added: 21 June 2010 Tribunal/court: EAT Status: appeal allowed
Topics: unfair dismissal | conditional resignation | effective date of termination
The Employment Appeal Tribunal has held that the date of a conditional resignation cannot constitute the effective date of termination regardless of any agreement between the employer and employee. 

Disability discrimination: EAT distinguishes between low mood caused by work and clinical depression
Case name: J v DLA Piper LLP
Date added: 18 June 2010 Tribunal/court: EAT Status: appeal allowed
Topics: disability discrimination | impairment | depression
The Employment Appeal Tribunal has said that there is a difference between “despondency, demotivation and anxiety” caused by problems at work and “clinical depression”, in a case where a lawyer claimed discrimination when a firm found out about her history of mental illness and withdrew a job offer. 

Employer's consolidation of old and new disciplinary allegations was fair
Case name: Pinto v Gloucestershire NHS Primary Care Trust
Date added: 16 June 2010 Tribunal/court: EAT Status: appeal dismissed
Topics: unfair dismissal | disciplinary proceedings
The Employment Appeal Tribunal has held that where, as a result of disciplinary proceedings that have been concluded, new allegations of misconduct come to light, it is not unfair for an employer to consolidate the old and new allegations and deal with them all at a further hearing, provided that the employee agrees.

Parties challenging tribunal decision with new evidence should seek review not appeal
Case name: Adegbuji v Meteor Parking Ltd
Date added: 10 June 2010 Tribunal/court: EAT Status: appeal dismissed
Topics: tribunal procedure | introducing new evidence | appeals
The Employment Appeal Tribunal has held that parties seeking to introduce fresh evidence when challenging an employment tribunal decision should apply for a review before the tribunal rather than appeal its decision.

Doctor not precluded from recovering damages for breach of contractual disciplinary proceedings
Case name: Edwards v Chesterfield Royal Hospital NHS Foundation Trust
Date added: 1 June 2010 Tribunal/court: Court of Appeal Status: appeal allowed
Topics: breach of contract | damages | loss of professional status
The Court of Appeal has held that the decision in Johnson v Unisys Ltd [2001] IRLR 279 HL did not preclude the claimant from recovering damages based on a breach of contractual disciplinary proceedings. 

Decisions

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Unfair dismissal: employer's ability to pay should not influence employment tribunal award

Tao Herbs & Acupuncture Ltd v Jin EAT/1477/09

unfair dismissal | compensation | ability to pay

The Employment Appeal Tribunal (EAT) has provided a reminder that employment tribunals should not take into account the employer's ability to pay when considering how much compensation to award an unfairly dismissed employee. 

Mrs Jin worked for Tao Herbs & Acupuncture Ltd, but her relationship with the company's owners was rocky from the start. An issue arose as to Mrs Jin's capability and her qualifications, as she had told her employer that she was a qualified traditional Chinese medicine doctor. When the employment relationship ended, she contended that she had been unfairly dismissed and had been paid below the national minimum wage. 

The employment tribunal upheld Mrs Jin's claims, preferring her evidence to that of the company's director, whom it found to be "not reliable" and "evasive". The tribunal found that Mrs Jin had been dismissed for asserting her statutory right to receive the national minimum wage. Therefore, her dismissal was automatically unfair and she was entitled to maintain a claim for unfair dismissal despite not having 12 months service. 

Mrs Jin was awarded compensation of £9,951.34 for unfair dismissal for having asserted a statutory right, with most of the award coming from her loss of earnings from the date of dismissal to the date on which the hearing concluded. The employer appealed against the amount of compensation awarded. 

The EAT rejected the employer's argument that the employment tribunal should have considered a deduction in compensation under the principle in Polkey v AE Dayton Services Ltd (formerly Edmund Walker (Holdings) Ltd) [1987] IRLR 503 HL. This allows tribunals to reduce unfair dismissal compensation where there are facts that suggest that the claimant would have been dismissed in any event. Here, the factor that might have led to a Polkey reduction was that the company was trading in a recession and had suffered a downturn in business that meant that Mrs Jin might have been dismissed anyway. Although the EAT saw force in the argument that the tribunal had been wrong not to consider this issue expressly, it found that it would have been well aware that there were difficult trading circumstances in 2009 and did say that the business was "on its last legs". In fact, this was what had caused Mrs Jin not to be paid. 

The employer also argued that the award was not just and equitable because it was substantial. The EAT pointed out that, when calculating loss for unfair dismissal, the prime consideration is the loss suffered by the claimant attributable to the action of the employer. The employer cannot argue that compensation should be reduced becuase the business will go into liquidation if it has to pay a large award. It is not correct to assess an award for unfair dismissal by reference to the employer's ability to pay. There are places in the employment protection canon where the ability to pay is a consideration (for example, when deciding whether or not one party should pay costs to the other), but this is not one of them. 

Additional resources

• Unfair dismissal awards 2008-09 The 2008-09 Annual Report and Accounts of the Employment Tribunals Service sets out the amount of compensation awarded for unfair dismissal in 2008-2009. 
• Warning to employers ordered to pay compensation The Ministry of Justice has introduced an employment tribunal “fast track” scheme that is designed to help employees recover tribunal awards from their employer where it has failed to pay up. From the XpertHR Employment Intelligence blog. 
• Get more answers to related questions in the XpertHR FAQs section:
  • How can an employee secure his or her wages if the employer becomes insolvent?
  • How much of the money he or she is owed does an employee receive from an insolvent employer?
  • In what circumstances can an employment tribunal order one of the parties to pay the legal costs of the other party?

Case transcript of Tao Herbs & Acupuncture Ltd v Jin (Microsoft Word format, 49K) (on the EAT website)

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EAT considers test in claims of less favourable treatment of fixed-term employees

Manchester College v Cocliff EAT/0035/10

fixed-term contracts | less favourable treatment | objective justification

The Employment Appeal Tribunal (EAT) has given a rare appellate judgment considering the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (SI 2002/2034). 

Mr Cocliff is an employee of Manchester College. He works as a part-time, sessional lecturer at Stoke Heath Young Offenders Institution. He had been employed on a succession of fixed-term contracts from 21 March 2005. Mr Cocliff brought a claim under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, arguing that his terms of employment are less favourable that his chosen comparator, a permanent grade B lecturer. 

Having decided that Mr Cocliff is employed on the same or broadly similar work to his comparator, the employment tribunal found that the employer had provided no evidence whatsoever for the objective justification of the less favourable treatment. It said that it had no alternative but to conclude that the only reason why Mr Cocliff is less favourably treated is because he is a fixed-term employee. 

The EAT highlighted that the employment tribunal considered the issues of the grounds for the less favourable treatment and the justification for any difference in the wrong order. It should have first considered whether or not the employee had established that his or her treatment is on the ground of being a fixed-term employee. It is only once that hurdle is passed that the employment tribunal should go on to consider whether or not the treatment is justified on objective grounds. 

According to the EAT, the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 require a three-step approach, with progression to the next step allowed only when the previous step has been satisfied. The steps are to consider whether or not:

• the claimant and the comparator are engaged on the same or broadly similar work;
• the less favourable treatment, which here was an alleged difference in six contractual terms, is on the ground that the claimant is a fixed-term employee; and
• the treatment is justified on objective grounds. 

Although not necessary to its decision, the EAT also held that the tribunal was wrong not to consider whether or not the difference in roles between Mr Cocliff and his comparator justified his less favourable terms. 

The case was remitted to a different employment tribunal to be reheard. 

Additional resources

• University researcher on three successive fixed-term contracts declared permanent employee An employment tribunal found an individual employed on three consecutive fixed-term contracts over almost a decade to be a permanent employee. 
• Fixed-term employees: model policies and documents The XpertHR policies and documents service provides a series of model documents relating to fixed-term contracts, including:
  • Policy on fixed-term working Use this model policy to set out the rules on the employment of fixed-term employees. It should be included in any managers' guidelines or staff handbook. 
  • Contract clause stating a contract is for a fixed duration Use this model contract clause when setting up a fixed-term contract with an employee that is to come to an end on a specified date. 
  • Letter informing an employee of the expiry of a fixed-term contract Use this model letter to dismiss an employee working under a fixed-term contract on the grounds that the term of the contract is about to expire. 
• Get more answers to questions on fixed-term employees in the XpertHR FAQs section:
  • How is a fixed-term employee defined?
  • Can an employer treat fixed-term employees less favourably than it treats permanent employees?
  • In ensuring no less favourable treatment between fixed-term and comparable permanent employees can an employer balance a less favourable condition against a more favourable one?

Case transcript of Manchester College v Cocliff (Microsoft Word format, 76K) (on the EAT website)

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EAT provides guidance on remedies for discrimination claims

St Andrews Catholic Primary School and others v Blundell EAT/0330/09

sex discrimination | compensation | injury to feelings

The Employment Appeal Tribunal (EAT) has provided guidance on remedies for discrimination claims including injury to feelings, aggravated damages and recommendations issued by tribunals. 

The claimant, 41-year-old Mrs Blundell, was employed as a teacher by St Andrews Catholic Primary School. In June 2003, Mrs Blundell notified the headmistress Mrs Assid that she intended to take maternity leave from December that year. Following difficulties between the two women, Mrs Blundell brought an employment tribunal claim for sex discrimination against the school and Mrs Assid, alleging that she had been treated less favourably because of her intention to take maternity leave. The tribunal dismissed the claim and in May 2006 Mrs Blundell appealed to the Employment Appeal Tribunal (EAT). The EAT subsequently dismissed most of Mrs Blundell's appeal. 

Mrs Blundell brought a second claim in the employment tribunal, again alleging sex discrimination (namely victimisation) arising out of the fact that she had been ostracised, bullied and harassed by Mrs Assid since the conclusion of her first tribunal claim. Mrs Blundell claimed that this treatment had culminated in a "feedback" meeting with Mrs Assid, following a classroom observation by Mrs Assid of her teaching. Mrs Assid said that what she had observed was inadequate, that she had very grave concerns and that Mrs Blundell's future as a nursery teacher was under review. Mrs Blundell subsequently went off sick with a stress-related illness. During her sickness absence, Mrs Blundell was approached by some parents whose children attended the school. She suffered a panic attack, broke down in tears and told the parents that she was being bullied by the management of the school. As a result of this episode, the school instigated disciplinary proceedings against Mrs Blundell and she was dismissed. In addition to sex discrimination, Mrs Blundell also brought claims for unfair dismissal and breach of contract. 

The employment tribunal rejected Mrs Blundell's claim that she had been ostracised or that Mrs Assid had set out to harass her following her appeal to the EAT in 2006. However, the tribunal did find that Mrs Assid's actions in repeatedly demanding details of a complaint between Mrs Blundell and two teacher governors was by reason of a protected act, namely Mrs Blundell's pursuance of appeal proceedings in relation to her first claim. It also held that Mrs Assid's comments at the feedback meeting constituted less favourable treatment by reason of one or more protected acts. It therefore upheld Mrs Blundell's claim for victimisation. 

In determining Mrs Blundell's compensation for injury to feelings, the tribunal referred to the guidance in Vento v Chief Constable of West Yorkshire Police [2002] All ER (D) 363 CA in which the Court of Appeal identified the three bands of damages for injury to feelings as: 

• a top band of £15,000 to £25,000 for the most serious cases where there has been a lengthy campaign of harassment on the grounds of sex or race;
• a middle band of £5,000 to £15,000 for less serious cases; and
• a lower band of £500 to £5,000 for one-off acts of discrimination. 

The tribunal decided that this was a very serious case within the top band and awarded Mrs Blundell £22,000 for injury to feelings. She was also awarded £5,000 for aggravated damages and five years' loss of future earnings. The total amount of compensation was over £290,000. The tribunal made a recommendation that the school send a letter to all parents and teachers stating that Mrs Assid accepted that all criticism of Mrs Blundell's teaching ability was unfounded. 

The school appealed the tribunal's findings on remedy to the EAT, arguing that the facts in Vento involved far more serious acts of victimisation than Mrs Blundell's case. The school also referred to HM Prison Service v Salmon [2001] IRLR 425 EAT in which the claimant was awarded £20,000 but had suffered substantially more severe treatment than Mrs Blundell. Finally, the school drew the EAT's attention to The Prison Service v Johnson [1997] ICR 275, in which the claimant had suffered a campaign of racial harassment by fellow prison officers over a period of 18 months. In that case, the EAT awarded £20,000 for injury to feelings. The school argued that, as the present case concerned a far shorter period of four months, the award of £22,000 was too generous. 

The EAT agreed with the school's submissions and held that, had the tribunal referred to the previous authorities of Salmon and Johnson to provide a benchmark against which to measure the appropriate level of compensation, it would have found that this case did not merit a top band award. It fell fairly and squarely within the middle band and on this basis, and having regard to Da'Bell v NSPCC [2010] IRLR 19 EAT (in which the EAT confirmed the increase of the Vento bands in line with inflation), the EAT reduced Mrs Blundell's award for injury to feelings to £14,000. 

The EAT upheld the aggravated damages award of £5,000, noting the acts of victimisation and the way in which the school had conducted itself in the proceedings at the remedy hearing by adducing evidence concerning Mrs Blundell's teaching abilities, which the tribunal viewed as "taking the gloves off" and causing further offence. 

With regard to the tribunal's recommendation for a letter of apology, the EAT decided that Mrs Assid should not be forced to make statements with which she does not agree, however wrongheaded she may be in disagreeing. The EAT therefore ordered that references to Mrs Assid be removed from the recommended letter. 

Additional resources

• XpertHR's FAQs section answers the following questions on compensation in discrimination claims: 
  • How is compensation for financial loss calculated by an employment tribunal in a discrimination case?
  • Can a claimant claim for "injury to feelings" when making a complaint of discrimination to an employment tribunal?
  • If an employee behaves in a way that results in another employee bringing a successful discrimination claim can the tribunal require the first employee to pay compensation?
• The Consequences of discrimination - remedies and penalties section of the XpertHR employment law manual explains the law on remedies in discrimination cases. 
• XpertHR's quick reference section includes the 2008-09 Annual Report and Accounts of the Employment Tribunals Service that details the amount of compensation awarded for sex discrimination in 2008-2009. 

Case transcript of St Andrews Catholic Primary School and others v Blundell (Microsoft Word format, 81.5K) (on the EAT website)

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No sex discrimination when administrative error meant woman on maternity leave not informed of internal vacancy

Johal v Equality and Human Rights Commission EAT/0541/09

sex discrimination | maternity leave | job vacancy

The Employment Appeal Tribunal (EAT) has held that, on the facts of the case, an employer did not commit sex discrimination against an employee on maternity leave when an administrative error meant that she was not informed of a job vacancy. 

Mrs Johal worked at the Commission for Racial Equality (CRE) and transferred to the new Equality and Human Rights Commission (EHRC) when the CRE, Equal Opportunities Commission (EOC) and Disability Rights Commission (DRC) were merged into one body on 1 October 2007. In a letter dated 23 July 2007, Mrs Johal was informed of the department to which she was transferring in the new organisation. 

On 3 December 2007, Mrs Johal informed the HR department that she wished to take maternity leave from 1 December 2007 to 5 January 2009. In her letter, she requested to "remain on the IT network" and to be "kept in the loop with regards to vacancies and training packages". 

Ms Wood, the Director of the Commissioner’s Office, was the senior manager, in the absence of a line manager for her at that time. The Director was considering creating the post of "Commissioner’s Office Manager", which was one grade above Mrs Johal’s position. Mrs Johal’s email account lapsed in December 2007 and in February 2008 she asked the IT department to reactivate it. She attended the workplace in March 2008 for a team meeting and had an individual meeting with Ms Wood, during which she was shown a new structure chart with the vacant management post positioned next to her own proposed post. Mrs Johal asked to be kept "inside the loop of developments and any job vacancies". 

The vacancy was approved and advertised in the summer. Mrs Johal did not access the website on which the vacancy was posted. Due to an administrative error, the employer did not notify her of that vacancy. Consequently, she did not apply for the post, which was eventually filled by another employee in the office. Another employee who was on maternity leave at the time was notified of the vacancy. 

Mrs Johal brought a claim that she had been less favourably treated because she was on maternity leave, contrary to s.3A of the Sex Discrimination Act 1975. 

The employment tribunal concluded that the employer genuinely intended to keep Mrs Johal notified of vacancies, but that there was a breakdown in the administrative system that it had put in place to keep those absent from work notified of job vacancies. Although she had suffered a detriment in not being notified of the vacancy, the predominant cause of her non-receipt of the information was an administrative error. Another person on maternity leave did receive the appropriate information. On the specific facts of the case, the causative link between maternity leave and the detriment suffered was not made out. 

The EAT agreed. The critical question to be asked is: why was the claimant treated in the manner complained of? If it is assumed that a case of maternity leave discrimination is initially made out and the employer is required to provide a non-discriminatory explanation, the employer has done so in this case. The employment tribunal was permitted to answer this question by deciding that Mrs Johal was treated in this way because of "the genuine reason of an administration system error". 

Additional resources

• Letter informing an employee on maternity leave of a job vacancy Use this model letter to inform an employee on maternity leave of a job vacancy. 
• How to stay in touch with employees on maternity leave The XpertHR "how to" service provides guidance on the issues to be taken into account when staying in touch with employees on maternity leave. 
• Where a suitably qualified employee who is about to go on maternity leave wishes to apply for an internal vacancy must she be considered for the position even though she may not be able to start the new job for a year? The XpertHR FAQ section answers this question. 

Case transcript of Johal v Equality and Human Rights Commission (Microsoft Word format, 57K) (on the EAT website)

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Disability-related discrimination: Court of Appeal confirms that Malcolm test applies in employment cases

Aylott v Stockton-on-Tees Borough Council [2010] EWCA Civ 910 CA

disability discrimination | disability-related discrimination | comparator

In Malcolm, the House of Lords overturned the Court of Appeal decision in Clark v TDG Ltd t/a Novacold [1999] IRLR 318 CA, which established that a disabled person does not have to compare him- or herself with an individual in the same, or not materially different, circumstances. The House of Lords, in a housing case relating to disability discrimination in goods and services, found that the comparator for a schizophrenic tenant who claimed that he was discriminated against by the London Borough of Lewisham when he was evicted for subletting his flat should be a person without a disability who has sublet a Lewisham flat. In Child Support Agency (Dudley) v Truman [2009] IRLR 277 EAT, the Employment Appeal Tribunal (EAT) held that Malcolm applies to employment cases. 

Mr Aylott suffers from bipolar affective disorder, which is a form of depression. He joined the council in 2003 and became a manager about a year later. Soon after he became a manager, problems began to emerge and he raised 17 grievances that he said he had with colleagues. He went on a paid leave of absence and his complaints were dealt with but rejected under the employer’s dignity at work procedure. 

Mr Aylott returned to work after about a year, but with a different team and no line manager responsibilities. However, there was soon a "total change" in working relationships, with Mr Aylott claiming that strict deadlines were set for him and he was closely monitored. He had a further two months’ sick leave and there was "shouting and ranting" during a return-to-work meeting. Mr Aylott was sent home. His manager, who believed that he was clearly not fit to return, said that his behaviour, which had been witnessed by other staff, was "unprofessional, intimidating and wholly inappropriate". 

The employer withdrew a planned suspension and disciplinary investigation when Mr Aylott was hospitalised. Following further medical advice, Mr Aylott was dismissed with two months’ notice on the ground of "capability (health)". 

Mr Aylott succeeded in his claims for, among other things, direct disability discrimination and disability-related discrimination. The employment tribunal held that the appropriate comparator is someone who has been off for a similar number of days but does not have the claimant's disability. It gave the example of someone who has a similar sickness record in respect of a complicated broken bone or other surgical problem, whom it said would not have been subjected to the same treatment. The tribunal also felt that the council had displayed a "stereotypical view of mental illness". 

However, the EAT found the employment tribunal’s decision to be "wholly flawed". In particular, the EAT said that the employment tribunal had not constructed a detailed enough comparator. It was not sufficient for it to select as a hypothetical comparator someone who has a similar sickness record returning to work and the tribunal had simply said that the council had a "stereotypical view of mental illness". 

The EAT also overturned the employment tribunal decision in relation to disability-related discrimination on the basis that it had relied on Novacold, which was overturned by Malcolm shortly after the tribunal made its ruling. 

The Court of Appeal restored the employment tribunal’s findings on direct discrimination. It could not be criticised for leaving Mr Aylott’s behavioural and performance difficulties, which were directly related to his disability, out of its formulation of the hypothetical comparator. In addition, the EAT had been wrong to overturn the employment tribunal’s decision on the employer stereotyping mental illness. Direct discrimination can occur when assumptions are made that a claimant has characteristics associated with a group to which he or she belongs, irrespective of whether or not the claimant or most members of the group have those characteristics. 

However, the Court of Appeal did acknowledge that the tribunal’s decision on disability-related discrimination could not stand. It stressed that the decision in Malcolm applies in employment cases and that Novacold is "deceased as a case". The proper comparator when disability-related discrimination is alleged is someone who has behaved in the same way as the person concerned, but does not suffer from that person's disability, rather than someone who had not acted in the way that caused the employer to treat the employee as it did. 

Additional resources

• Disability comparator test thrown into doubt Consultant editor Darren Newman looks at the housing case in which the House of Lords ruled that the approach to the comparator in disability-related discrimination cases established in Novacold is wrong. 
• Recent appeal decisions on disability discrimination involving individuals with mental health problems include:
  • Aitken v Commissioner of Police of the Metropolis EAT/0226/09; and
  • J v DLA Piper LLP EAT/0263/09. 
• Disability discrimination under the Equality Act 2010 Much of the media attention on the Equality Act 2010 has focused on controversial areas relating to socio-economic inequality, positive action and gender pay reporting. However, the Act's disability discrimination provisions are likely to have much more impact on day-to-day working life. 

Case transcript of Aylott v Stockton-on-Tees Borough Council (on the BAILII website)

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Compulsory retirement: Court of Appeal dismisses law firm partner's age discrimination appeal

Seldon v Clarkson Wright and Jakes [2010] EWCA Civ 899 CA

age discrimination | justification | partnership | compulsory retirement

The Court of Appeal has held that it could be legitimate for a law firm to have a cut-off age after which partners are required to retire to avoid forcing an assessment of their drop in performance, thus maintaining a confrontation-free workplace. 

Mr Seldon was a partner at a law firm that had a policy of retiring partners at 65. The firm required him to retire when he reached this age, in accordance with the terms of his partnership deed. He brought a claim under s.17 of the Employment Equality (Age) Regulations 2006 (SI 2006/1031), which prohibits discrimination on the ground of age against partners. 

The Employment Appeal Tribunal (EAT) overturned the employment tribunal decision that this policy is justified. The EAT said that the tribunal was correct to find that ensuring that associates have the opportunity to become a partner after a reasonable period and facilitating the planning of the partnership and workforce across individual departments (later referred to by the Court of Appeal as the "dead man's shoes" aims) are legitimate aims. However, the EAT found that a third aim put forward by the employer of maintaining the friendly culture of a law firm by avoiding confrontation with underperforming partners close to retirement (subsequently referred to by the Court of Appeal as the "collegiality" aim) could not be a legitimate aim. The suggestion that partners of or around the age of 65 are more likely to underperform involves a stereotypical assumption and the law firm produced no evidence that partners of that age have particular performance difficulties. 

Mr Seldon appealed on a number of grounds, including that the choice of 65 was not proportionate and that the EAT was right in condemning the assumption made in relation to the collegiality aim and was wrong not to take the same view in relation to the "dead men's shoes" aims. Mr Seldon also argued that "collegiality" could not possibly have the necessary element of public interest or social policy and the collegiality principle was applied in a discriminatory fashion because partners under 65 who were underperforming were negotiated out of the partnership. 

The Court of Appeal dismissed Mr Seldon's appeal. Drawing attention to the European Court of Justice (ECJ) decision in R (on the application of the Incorporated Trustees of the National Council on Ageing (Age Concern England)) v Secretary of State for Business, Enterprise and Regulatory Reform [2009] IRLR 373 ECJ and the subsequent application of that decision to UK law in R (on the application of Age UK) v Secretary of State for Business, Innovation and Skills [2009] EWHC 2336 HC, it said that it is the UK laws that have to be justified by reference to "social and employment" aims. This does not mean that a particular employer must justify its actions by those "social and employment" aims, only that it must act consistently with the social or labour policy aims that the UK used to justify the Regulations. The legislation can, as the ECJ said, give "some discretionary powers or a degree of flexibility" to employers. 

The Court of Appeal therefore found that Mr Seldon's argument in relation to the "dead men's shoes" aims clearly fails. An employer or partnership may have slightly mixed motives, but if its aim is to provide employment prospects for young people and encourage young people to seek employment by holding out good promotion prospects, that is at least consistent with social policy. It also found that the argument in relation to the "collegiality" aim fails. An aim intended to produce a happy work place has to be consistent with the social policy justification for the Regulations. It can be a legitimate aim to have a cut-off age after which individuals are required to retire to avoid forcing an assessment of a person’s falling-off in performance, thus maintaining a confrontation-free workplace.

The Court of Appeal made several other observations in relation to the justification of age discrimination:

• A directly or indirectly discriminatory measure may be justified by a legitimate aim other than that which was specified at the time when the measure was introduced. 
• When considering justification of a rule such as a compulsory retirement age, that the rule has been agreed by parties of equal bargaining power (in this case, partners) is a legitimate consideration. 
• The moment of time when the decision to enforce the compulsory retirement age had to be justified was at the moment of termination, with consideration being given to whether or not, firstly, the rule requiring retirement at 65 was justified and, secondly, the application of that rule was justified in Mr Seldon's case. 
• The mere fact that the firm might have chosen some other age to achieve its aims cannot automatically lead to the conclusion that the rule that provides for retirement at 65 is not justified. 

Additional resources

• FAQs on retirement The XpertHR frequently asked questions section provides answers to questions on retirement. 
• How to handle retirement dismissals The XpertHR "how to" service provides guidance on retiring employees in accordance with the requirements in the Employment Equality (Age) Regulations 2006. 
• Model documents on retirement procedure The XpertHR policies and documents service provides model documents relating to retirement. 

Case transcript of Seldon v Clarkson Wright and Jakes (on the BAILII website)

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Costs: pursuing claim purely for declaration of unfair dismissal is unreasonable behaviour

Nicolson Highlandwear Ltd v Nicolson EAT/0058/09

unfair dismissal | costs applications | unreasonable behaviour

The Employment Appeal Tribunal (EAT) has held that, in the context of costs applications, it is unreasonable behaviour for a claimant to pursue an unfair dismissal claim purely for the purpose of obtaining a declaration that he or she was unfairly dismissed. 

Mr Nicolson was employed as a retail manager by Nicolson Highlandwear Ltd, and operated the company’s outlet in Edinburgh. In 2008, a company director inspected the outlet and found that Mr Nicolson had been defrauding the company, and passing off his own retail operation as that of his employer. The company dismissed Mr Nicolson, who claimed unfair dismissal. Although the tribunal upheld Mr Nicolson’s claim, on the basis that the company had failed to follow the (then applicable) statutory dismissal procedures, it decided not to award him any compensation. The tribunal’s decision was based on the exceptional facts of the case: Mr Nicolson, who in the words of the tribunal, “at times seemed unable to distinguish between truth and fiction”, freely admitted much of the evidence against him. His misconduct, which included deliberately engineering financial irregularities to deprive his employer of money, led directly to his dismissal. 

The company applied for costs against Mr Nicolson, arguing that he had acted unreasonably in bringing and pursuing proceedings for unfair dismissal: he had been fully aware what he was doing and was unrepentant about his actions. The tribunal, however, refused the company’s costs application. The tribunal’s reasons included that Mr Nicolson had, after all, won his unfair dismissal claim, and that he had not been legally represented – if he had been, he might have been aware that it was very possible he would receive no compensation. Most notably, the tribunal said that claimants are entitled to seek “simply findings of unfair dismissal without the objective of obtaining money”. 

The company appealed the tribunal’s decision to refuse its costs application to the EAT, and relied on two previous EAT cases from 2009, Dunedin Canmore Housing Association Ltd v Donaldson EAT/0014/09 and Daleside Nursing Home Ltd v Mathew EAT/0519/09. These two cases are authority that, where a claimant is dishonest in relation to his or her claim, that will constitute unreasonable behaviour for costs purposes, and a costs award should be made. The company argued that the tribunal’s decision to refuse to award costs was perverse, given its explicit findings about Mr Nicolson’s fraudulent conduct. 

The EAT upheld the company’s appeal, holding that Mr Nicolson’s success in claiming unfair dismissal did not mean, by itself, that he had not acted unreasonably. The EAT also found that the tribunal was wrong to have speculated on what advice Mr Nicolson might have received had he been legally represented, and that he had in any event been put on notice that he might receive no compensation by the company’s ET3 form. Most importantly, the EAT held that an employee cannot reasonably pursue an unfair dismissal claim purely for the purpose of obtaining a declaration that he or she was unfairly dismissed; the Employment Rights Act 1996 provides for no such remedy. The EAT therefore found that Mr Nicolson had acted unreasonably in bringing his claim in the first place, and then by persisting with it. 

Additional resources

• Get more information on costs applications in the XpertHR FAQs section, which answers the following questions:
  • In what circumstances can an employment tribunal order one of the parties to pay the legal costs of the other party?
  • What is the maximum amount of costs that a tribunal may order an employer to pay if it loses the case?
• Keane v Investigo and others EAT/0389/09 In this case, the EAT upheld a costs order made against an employee who had made spurious tribunal claims. 

Case transcript of Nicolson Highlandwear Ltd v Nicolson (Microsoft Word format, 95K) (on the EAT website)

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Employer's unambiguous words of dismissal can rarely be retracted

Willoughby v CF Capital plc EAT/0503/09

unfair dismissal | dismissal or resignation | special circumstances

The Employment Appeal Tribunal (EAT) has held that an employer can retract unambiguous words of dismissal only in exceptional circumstances. 

Ms Willoughby had worked at CF Capital plc for 18 years, most recently as a sales manager, when the company began to struggle financially. On 2 December 2008, she had a meeting with her line manager Mr Keeley to discuss the possibility of avoiding redundancies by moving as many of the sales team from being direct employees to working on a self-employed basis. Under the proposed arrangement, the sales staff would be paid a monthly retainer together with commission at 50% of gross profit. 

Mr Keeley and Ms Willoughby later gave differing accounts of what happened at the meeting. Ms Willoughby admitted that she had expressed an interest in becoming self-employed, but did not believe that she had made any commitment to the new arrangement. However, Mr Keeley thought that Ms Willoughby had agreed to the switch. 

Ms Willoughby tried to get the paperwork from Mr Keeley that she said she needed to see before making a final decision. Three weeks after the initial meeting, Mr Keeley sent a letter to Ms Willoughby enclosing the agreement for self-employment. The contents of the letter assumed that Ms Willoughby had already agreed to the switch and it informed her that "termination of your existing employment contract will be effective from 31 December 2008". 

Ms Willoughby, who received the letter on the last day before the Christmas break, took legal advice and was told by her solicitor not to do any further work for the company. The business was closed until 5 January and, after the Christmas break, Mr Keeley telephoned her and expressed his surprise at what he saw as a change of heart. He sought to reassure Ms Willoughby that there had been a misunderstanding and that, if she did not wish to become self-employed, her employment would continue as before. Despite further correspondence, Ms Willoughby did not return to work. 

Ms Willoughby subsequently brought claims for unfair and wrongful dismissal. The employer disputed this on the basis that it believed that she had resigned. 

The employment tribunal said that, in isolation, the letter did amount to the termination of Ms Willoughby's dismissal. However, the employment tribunal examined the authorities on withdrawing notice of termination of employment (including Sothern v Franks Charlesly & Co [1981] IRLR 278 CA and Martin v Yeomen Aggregates Ltd [1983] IRLR 49 EAT) and found that there were "special circumstances" in this case that allowed the employer to withdraw the dismissal. The words of dismissal had been withdrawn as soon as practicable after the employee had alerted the employer to the mistake that it had made. 

The EAT disagreed. It recognised that, as a general rule, an employer that uses unambiguous words of dismissal to an employee will be dismissing him or her and terminating the contract of employment. The same principle applies where an employee uses unambiguous words of resignation to the employer: he or she will be resigning and terminating the contract of employment. The EAT went on to say that "this rule is of wide application; and exceptions are of a limited nature". 

According to the EAT, the fundamental question is whether or not the person to whom the words were addressed was entitled to assume that the decision expressed was a conscious, rational decision. This is why the only "special circumstances" that have been recognised in case law are words expressed in the heat of the moment that are soon retracted. The EAT also pointed out that the limitations to the "special circumstances" rule are also shown in Buckland v Bournemouth University Higher Education Corporation [2010] IRLR 445 CA, where the Court of Appeal decided that an employer that commits a repudiatory breach of contract has no right to an opportunity to cure the breach. 

Applying these observations to this situation, the EAT held that the words in the letter were an unambiguous termination of Ms Willoughby's employment. Given the extremely limited nature of "special circumstances", it is not enough to assert that Ms Willoughby ought to have concluded that something was seriously wrong when she received the letter and that the employer had made a mistake. Ms Willoughby and her advisers were entitled to take the view that her employment had been terminated. In any event, the dismissal was not retracted in time. A retraction would have to be made in "a day or two" and the intervention of a holiday period could not be an excuse for the employer. 

The EAT therefore concluded that Ms Willoughby had been dismissed and her claims could proceed. 

Additional resources

• How to deal with a heat of the moment resignation The XpertHR "how to" section provides guidance on dealing with heat of the moment resignations. 
• Resignations: employee notice We began a series of articles on resignations with an overview of employees' notice obligations and employers' rights in relation to employee notice. 
• Other cases involving withdrawal of notice of termination include:
  • Ali v Birmingham City Council EAT/0313/08;
  • Kwik-Fit (GB) Ltd v Lineham [1992] IRLR 156 EAT; and
  • J & J Stern v Simpson [1983] IRLR 52 EAT. 

Case transcript of Willoughby v CF Capital plc (Microsoft Word format, 79K) (on the EAT website)

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EAT finds age-related cap on redundancy payments not discriminatory

Kraft Foods UK Ltd v Hastie EAT/0024/10

redundancy schemes | cap | age discrimination

The Employment Appeal Tribunal (EAT) has held that a redundancy scheme that incorporated an age-related cap on payments was a proportionate means of achieving the legitimate aim of preventing employees from receiving a "windfall" and was not age discriminatory. 

The claimant, 62-year-old Mr Hastie, was employed by Kraft Foods UK Ltd for almost forty years when the company undertook a redundancy exercise in 2008. 

Kraft employees were able to volunteer for redundancy in accordance with an established scheme that entitled employees to receive three and a half weeks' pay for each year of service - a significantly more generous entitlement than the statutory minimum. Payments under the scheme were limited by a "cap", which meant that the maximum amount payable should not exceed the amount that the employee would have earned had he or she worked up until the normal retirement age of 65 at his or her current rate of pay. 

Mr Hastie applied for voluntary redundancy under the scheme and was dismissed with effect from 12 December 2008, at which point he was approximately two and a quarter years from his 65th birthday. Mr Hastie's redundancy payment was capped at £76,560 - this representing the amount that he would have received had he remained employed until the age of 65. If no cap had existed, Mr Hastie would have received around £90,100 so the cap had caused a reduction of just under £13,600. 

Mr Hastie subsequently brought a claim in the employment tribunal for age discrimination, arguing that the application of the cap amounted to a provision, criterion or practice that disproportionately applied to employees who were two or three years off their 65th birthday. 

Kraft argued that the cap was justified because it was necessary "to prevent employees from receiving a windfall" for the following reasons: 

• The main purpose of the scheme was to compensate redundant employees for the loss of earnings that, had they remained in employment, they were entitled to receive. 
• On turning 65, an employee would retire or would lose the legal right to continue in employment. 

The tribunal upheld Mr Hastie's age discrimination claim for the following reasons: 

• The tribunal rejected Kraft's argument that the cap encouraged employees who were approaching normal retirement age to volunteer for redundancy, rather than wait for the next round of redundancies when they may receive a smaller sum. There was no evidence to show that this was the intention or the effect of the cap. 
• While there were a number of legitimate aims in the scheme, the tribunal was not convinced that those aims made it legitimate to impose the cap and found that the scheme could have operated quite easily without the cap. 
• The issue of proportionality requires a balance to be struck between the effect of the measure (ie the loss to the claimant) and the needs of the undertaking (ie the cost saving to Kraft). The tribunal held that the loss of £13,000 was significant to Mr Hastie but, as a proportion of the redundancy "bill", not significant to Kraft. 

Kraft appealed the tribunal's decision to the EAT. The EAT noted that the question for the tribunal was whether or not the cap was justified. 

The EAT referred to the case of Loxley v BAE Systems (Munitions & Ordnance) Ltd [2008] IRLR 853 EAT, in which the EAT recognised that "provisions properly directed at the prevention of a windfall were likely to be justifiable". 

The EAT disagreed with the tribunal's rejection of the windfall justification and found that the purpose of the redundancy scheme was to compensate those employees who took voluntary redundancy for the loss of earnings that they had a legitimate expectation of receiving had their employment continued. The EAT went on to find that, had the scheme not incorporated a cap, the payments would exceed the figure necessary to achieve that object in cases where the employee was close to retirement age. 

The EAT decided that it was legitimate for a redundancy scheme to include a cap that, in this case, was a proportionate means of achieving a legitimate aim. The cap was justifiable regardless of the size of the windfall. 

Additional resources

• Voluntary redundancy policy Use this model policy to set out the company's voluntary redundancy scheme. 
• Agreement setting out terms for voluntary redundancy Use this model contract clause to agree the terms of an employee's voluntary redundancy following the employee’s application to do so. 
• Worked examples on enhanced redundancy payments These XpertHR worked examples on the calculation of enhanced redundancy payments set out various scenarios and the necessary action in the circumstances, together with concise explanations. 

Case transcript of Kraft Foods UK Ltd v Hastie (Microsoft Word format 96.5K) (on the EAT website)

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“Stable employment relationship” equal pay test turns on the nature of the work done

North Cumbria University Hospitals NHS Trust v Fox and others sub nom Potter and others v North Cumbria Acute Hospitals NHS Trust and others (No.2) [2010] IRLR 804 CA

equal pay | time limits | stable employment relationship cases

The Court of Appeal has reaffirmed that a "stable employment relationship" equal pay case can arise where there is a succession of consecutive contracts, and held that the word "employment" in that phrase refers to the nature of the work, rather than the terms under which it is carried out. 

This case relates to some of the hundreds of equal pay claims made by nurses employed by the North Cumbria University Hospitals NHS Trust (the trust). It is essentially a test case concerning one element of this lengthy saga of litigation. The issue was whether or not the claimants’ applications to add new comparators to their existing claims were out of time. 

The addition of a new comparator to an existing equal pay claim amounts to a new cause of action. The employment tribunal considered that Agenda for Change, which was introduced in 2004, fundamentally changed the claimants' terms and conditions and resulted in new contracts of employment. Because the time limit for a "standard case" equal pay claim (which is how the case was pleaded at this stage) is six months from the end of the employment to which it relates, the tribunal’s finding on the effect of Agenda for Change meant that the time limit ran from the end of the old contracts, and that the claimants’ applications to add new comparators were therefore out of time. 

The Employment Appeal Tribunal (EAT) also considered the issue on the standard case basis, but disagreed with the tribunal. It held that Agenda for Change did not result in fundamental changes to the claimants’ terms and conditions, and that the applications to add new comparators were not out of time. The trust appealed to the Court of Appeal, where the claimants argued, for the first time, that the equal pay claims could be classed as stable employment relationship cases, and that applications to add new comparators were in time on that basis. 

The "stable employment relationship" concept was introduced by the European Court of Justice (ECJ) in Preston and others v Wolverhampton Healthcare NHS Trust and others [2000] IRLR 506 ECJ, and in 2003 the Equal Pay Act 1970 was amended to reflect the ECJ decision. The effect is that, in a stable employment relationship case, the time limit for an equal pay claim is six months after that relationship ends. After Preston eventually returned to the EAT, the EAT sought to limit stable employment relationship cases to situations involving successive or intermittent employment contracts with gaps inbetween them. However, in Slack and others v Cumbria County Council and Equality and Human Rights Commission sub nom Cumbria County Council v Dow (No.2) [2009] IRLR 463 CA, the Court of Appeal held that a stable employment relationship case can also arise where there is a succession of consecutive employment contracts. 

The trust accepted that Slack had widened the scope of stable employment relationship cases, but argued that, in the present case, the changes made by Agenda for Change were sufficiently fundamental so as to disrupt any such relationship. The Court of Appeal, however, agreed with the claimants. It considered that the word “employment” in the phrase “stable employment relationship” referred to the nature of the work done, rather than the legal terms under which that work was carried out. Although the court stated it was bound by Slack, it noted that that decision “seems to have taken a little time to sink in”, and provided a clear explanation of the relevant principles. The court therefore upheld the EAT decision that the applications to add new comparators were in time, albeit on entirely different grounds. 

Additional resources

• Equal pay law is notoriously complex, as this case shows. Get clear answers on the following equal pay questions in the XpertHR FAQs section:
  • Can a woman compare her pay and conditions with those of any man?
  • How does the law interpret 'like work' between a man and a woman?
  • Can an employee claim equal pay if she does not work on like work with her comparator and her employer has not carried out a job evaluation scheme?
  • How can an employer defend an equal pay claim?

North Cumbria University Hospitals NHS Trust v Fox and others sub nom Potter and others v North Cumbria Acute Hospitals NHS Trust and others (No.2) (on the BAILII website)

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EAT provides guidance on size of penalty for breach of information and consultation Regulations

Brown v G4 Security (Cheltenham) EAT/0526/09

employee relations | information and consultation Regulations | penalty for breach

The Employment Appeal Tribunal (EAT) has held that the number of affected employees is not, by itself, particularly relevant in determining the gravity of an employer's breach under the Information and Consultation of Employees Regulations 2004. 

The Claimant, Mr Brown, is an employee of G4 Security (Cheltenham) (G4), which employs 350 employees. In January 2009, Mr Brown organised a petition requesting that the Information and Consultation of Employees Regulations 2004 (the Regulations) be engaged for the purposes of pay negotiations. The petition contained 85 signatories that represented over 20% of the affected employees. G4 received the petition on 30 January 2009, and was therefore required to comply with its obligations under the Regulations by 29 July 2009, but failed to take any necessary steps before this date. 

On 4 August 2009, Mr Brown submitted a complaint to the Central Arbitration Committee (CAC) that G4 had, in breach of the Regulations, failed to arrange for the holding of a ballot of its employees to elect the requisite number of information and consultation representatives for the purposes of the pay negotiations. 

The CAC decided that: 

• the petition in January 2009 was a valid request under the Regulations;
• there were no pre-existing arrangements that satisfied the Regulations;
• G4 had failed to take the necessary steps under the legislation to reach a negotiated agreement; and
• the standard information and consultation provisions applied from six months from the valid request and G4 was obliged to comply by 30 July 2009. 

Mr Brown's complaint was upheld and the CAC ordered G4 to arrange the holding of a ballot, which was subsequently held on 29 March 2010. Following the declaration by the CAC, Mr Brown applied to the EAT for a penalty notice to be issued against G4. 

The EAT referred to the case of Amicus v Macmillan Publishers Ltd [2007] IRLR 885 EAT in which the EAT held that Macmillan Publishers Ltd was in serious breach of the Regulations and imposed a penalty of £55,000. 

The EAT decided, in this case, that G4's breach was not as serious as that in Macmillan and imposed a penalty of £20,000 for the following reasons: 

• The breach had persisted over five months, which was a significant period. 
• G4's submission that its collective bargaining arrangements amounted to sufficient consultation arrangements under the Regulations was surprising, given its size and likely access to legal advice. 
• Although the number of employees affected was not as large as in Macmillan, in a small workforce where every member of that workforce is affected, the breach of the Regulations may be almost as significant as a breach affecting a small proportion of a much larger workforce. 
• G4 had not established any financial hardship for the EAT to take into account when deciding the amount of the penalty. 
• Following the CAC's determination, G4 had taken steps to comply with its obligations. 

Additional resources

• XpertHR's FAQs section answers the following questions on the information and consultation Regulations: 
  • What are the requirements of the Information and Consultation of Employees Regulations 2004?
  • To which organisations do the Information and Consultation of Employees Regulations 2004 apply?
  • Can a collective agreement with a trade union be a valid pre-existing agreement for the purposes of the Information and Consultation of Employees Regulations 2004?
• Worked examples on the application of information and consultation legislation These XpertHR worked examples on the application of information and consultation legislation set out various scenarios and the necessary action in the circumstances, together with concise explanations. 

Case transcript of Brown v G4 Security (Cheltenham) (Microsoft Word format 74.5K) (on the EAT website)

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Disability: police force did not discriminate against police officer with violent tendencies

Aitken v Commissioner of Police of the Metropolis EAT/0226/09

disability discrimination | mental illness | perceived disability

The Employment Appeal Tribunal (EAT) has held that a police force did not discriminate against a police officer who displayed violent tendencies at a Christmas party that led his colleagues to fear for their safety. 

PC Aitken worked as a police officer in the London Borough of Southwark. In 2005, he had a period of leave for depression and made a phased return to work. He received counselling and was diagnosed with obsessive compulsive disorder, which meant that, among other symptoms, he had a tendency to binge drink. In December 2005, PC Aitken attended a workplace Christmas party. After drinking heavily, his behaviour became aggressive and he:

• made a suggestive remark to a female colleague;
• told his colleagues that he had strange thoughts about "beating his girlfriend's head in with a baseball bat";
• stated when a female officer left that he wanted to punch her and break her nose; and
• squeezed the hand of one colleague and the arm of another, causing them both pain. 

PC Aitken's behaviour was reported by worried colleagues and he was offered help. He was put on special leave and, after seeing various doctors, was assessed as fit for restricted duties involving no contact with the public. On his return to work, he met with his manager but became agitated and was sent home. PC Aitken was later given formal "words of advice" about what had happened at the Christmas party, but the issue was not treated as a disciplinary one. It was decided that he should be moved to a department that dealt with CCTV-based investigations but that he would not have any contact with the public. The role would normally have involved such contact. Following a further period of sick leave, the police force decided that PC Aitken should be retired on the ground of ill health, but his appeal against this decision was upheld on the basis that the appeal panel felt that he could recover sufficiently to be able to carry out the normal duties of a police officer. 

PC Aitken brought various disability discrimination claims. In Aitken v Commissioner of Police of the Metropolis [2009] ET/2317823/07 & ET/2328817/08, the employment tribunal dismissed PC Aitken's claims for direct disability discrimination, disability-related discrimination and failure to make reasonable adjustments. The employment tribunal found that the employer acted because of how PC Aitken appeared to others, and did not act on the basis of assumptions about mental illness. The employer's actions did not therefore constitute disability discrimination. 

The EAT dismissed PC Aitken's appeal. It held that the employment tribunal had made a decision based on unchallenged findings of fact that the reasons for the employer's actions were the seriousness of the incident and the fear of repetition. The employment tribunal found that PC Aitken's behaviour was "appalling" and "constituted gross misconduct" and it was entitled to reject an argument that the employer's actions were motivated by a perception that he had a dangerous mental illness. 

In any event, the EAT found that the Disability Discrimination Act 1995 requires an actual disability and cannot, by analogy with the interpretation in EBR Attridge Law LLP and another v Coleman (No.2) [2010] IRLR 10 EAT (where the Act was construed to prohibit associative discrimination), be interpreted so as to protect individuals who are perceived by the alleged discriminator to be disabled. In Coleman, an individual still had a disability, albeit it was not the individual who was claiming discrimination. 

The EAT also found that PC Aitken could not argue that his behaviour was so closely connected with his disability that it should be considered "part and parcel" of that disability. Bad behaviour giving rise to a fear of violence cannot be regarded as a disability. The employment tribunal had been correct to include the bad behaviour as a relevant circumstance when making a comparison between how PC Aitken was treated and how a non-disabled comparator would have been treated. 

In addition, the EAT dismissed the appeal against the employment tribunal's decision on reasonable adjustments, concluding that, in assessing the reasonableness of the adjustments, the tribunal was entitled to have regard to the need that a police officer should not appear to present a danger to colleagues or the public. 

Additional resources

• Policy on work-related social events The trouble in this case came to a head when a PC drank too much at a work-related social event. Use this model policy to set out rules on such events and prevent problems arising. 
• Disability discrimination under the Equality Act 2010 In this article, we take a detailed look at how the Equality Act 2010 deals with disability discrimination and how the current disability discrimination regime will change when the new provisions come into force. 
• Other similar disability discrimination cases involving mental illness include:
  • Grylls v Guildford Timber Frame [2006] ET/2302105/05;
  • Alvares v London Borough of Hounslow [1998] ET/2300651/97;
  • Murray v Newham Citizens Advice Bureau Ltd [2003] IRLR 340 EAT; and
  • London Borough of Lewisham v Malcolm [2008] IRLR 700 HL.

Case transcript of Aitken v Commissioner of Police of the Metropolis (Microsoft Word format, 163K) (on the EAT website)

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CEO of NHS trust dismissed following superbug scandal entitled to compensation

Gibb v Maidstone & Tunbridge Wells NHS Trust [2010] IRLR 786 CA

unfair dismissal | compromise agreement | ultra vires

The Court of Appeal has held that an NHS trust was entitled to take into account a CEO's previous good record and negative prospects of obtaining future employment when making a severance payment. 

The claimant, Rose Gibb, was employed as CEO of Maidstone & Tunbridge Wells NHS Trust. Ms Gibb's contractual notice period was six months and her annual salary was around £150,000. In 2006, there was an outbreak of the "superbug" Clostridium difficile within the hospitals managed by the trust, which resulted in a large number of patient deaths, sparking public outrage. The Healthcare Commission launched an investigation into the matter and its subsequent report was highly critical of the trust's leadership, recommending that the trust review its leadership, given the significant failings. 

With prior knowledge of the Healthcare Commission's report, the trust decided to terminate Ms Gibb's employment by way of a severance arrangement, recorded in a compromise agreement. In 2007, Ms Gibb accepted the trust's offer of approximately £250,000, comprising a £75,427 payment in lieu of notice and a compensation payment of £174,573. In return, Ms Gibb undertook not to bring any legal claim against the trust. 

However, following the publication of the report, the trust was instructed by the Department of Health to withhold the severance payment, although the Department eventually authorised the payment in lieu of notice to Ms Gibb in 2008. Ms Gibb subsequently brought a civil claim in the High Court for the money due under the compromise agreement. The trust, which by this point was made up of a newly constituted board, argued that its decision to pay the specified amount was "ultra vires", or outside its powers and, as a result, the compromise agreement was unenforceable. Ms Gibb disagreed and responded that, in the alternative, if the compromise agreement was to be found "ultra vires", she should still be entitled to damages on the basis that the trust had been "unjustly enriched" by her foregoing her right to bring a claim for unfair dismissal. 

The High Court confirmed that the purpose of the ultra vires doctrine is to protect the interests of the public where a public body makes a decision that is outside its powers. The High Court also noted that to justify a severance payment exceeding an employee's contractual or statutory entitlements, the trust should have obtained treasury approval by submitting a business case detailing why the sum was value for money and that it would not be rewarding any failure by the employee. 

With this in mind, the High Court found that the trust had failed to justify the payment (which far exceeded the maximum compensation an employment tribunal could award Ms Gibb) and agreed that the compromise agreement was "irrationally generous", ultra vires and unenforceable. The High Court also rejected Ms Gibb's alternative claim that the Trust had been unjustly enriched. Ms Gibb appealed the decision to the Court of Appeal. 

The Court of Appeal overturned the decision by the High Court. It referred to the case of Newbold v Leicester City Council [1999] All ER (D) 772 CA, which is authority that, where a public authority seeks to rely on its own irrationality so as to avoid a private law claim, the public authority will have a "steep hill to climb". 

It found that the High Court could not be certain that, had Ms Gibb proceeded with her unfair dismissal claim in the employment tribunal, the trust would not have settled for an amount higher than the statutory maximum. The Court of Appeal also disagreed with the High Court's decision that Ms Gibb's previous good record and the likely difficulties she would encounter in obtaining future employment were irrelevant issues. For these reasons, the Court of Appeal found that the compromise agreement had not been made "ultra vires" and was enforceable. 

The Court of Appeal, although its finding on the ultra vires point meant that Ms Gibb's appeal had succeeded in full, also considered the matter of unjust enrichment. It agreed with Ms Gibb's submissions and noted that the breach of contract occurred when the trust "recklessly assured" her that all the necessary processes to effect the payment had been followed and such assurances caused Ms Gibb to enter into the compromise agreement. This was not an issue arising from the dismissal because it occurred before the employment ended, meaning that the High Court had jurisdiction to hear the claim as it was within the "Johnson exclusion area" (see Johnson v Unisys Ltd [2001] IRLR 279 HL). The trust was unjustly enriched by Ms Gibb's foregoing her right to bring an unfair dismissal claim. 

The Court of Appeal warned that the High Court should not have adopted the role of auditor and that the sum originally agreed with Ms Gibb was "not outlandish compensation for the arbitrary termination of a career which it was unlikely Ms Gibb would be able to resume or resurrect". 

Additional resources

• Compromise Agreement Use this model agreement to set out the terms on which the company has agreed to settle any claims with an employee. 
• Compromising employment disputes – a guide The XpertHR "how to" section provides practical step-by-step advice on how to compromise employment disputes. 

Case transcript of Gibb v Maidstone & Tunbridge Wells NHS Trust (on the BAILII website)

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Court of Appeal publishes full judgment overturning British Airways strike injunction

British Airways Plc v Unite the Union (No.2) [2010] IRLR 809 CA

trade union | industrial action | injunction

The Court of Appeal has handed down its full judgment overturning an injunction preventing British Airways cabin crew from striking. 

British Airways had sought and been granted a High Court injunction dated 17 May 2010 preventing the union Unite from taking industrial action starting on 18 May in reliance on a strike ballot conducted from 25 January to 22 February 2010. British Airways claimed that Unite had breached the requirements in s.231 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A) that, as soon as reasonably practicable after holding a ballot, the trade union should ensure that all individuals entitled to vote are informed of the number of:

• votes supporting the action;
• votes opposing the action; and
• spoilt ballot papers. 

The High Court had granted the injunction on the basis that, although all this information was posted on the internet and staff noticeboards and was made available to members, a press release, email and text message sent to some union members did not contain the total number of votes cast or the number of spoilt ballot papers. The High Court decided that s.231 of TULR(C)A had been interpreted in Network Rail Infrastructure Ltd v National Union of Rail, Maritime and Transport Workers [2010] EWHC 1084 HC to require unions to take active steps to provide the information to union members, rather than simply providing a place where they could go to get the information if they require it. 

The Court of Appeal disagreed, albeit by a majority of two to one.  It found that the High Court had come dangerously close to requiring Unite to prove that every member had been personally sent his or her own individual report of the full results of the ballot, which would have been unrealistic and placed a gloss on the statutory requirements. The important point is that the members should be informed of the result in the form required by s.231 of TULR(C)A and, in this day and age when the members of the union are highly computer literate and use modern technology on a daily basis, there is no reason why the fact that they have to take a few simple steps themselves at a keyboard could possibly mean that they are not being supplied with the required information. 

The Court of Appeal went on to point out that s.231 of TULR(C)A requires the union only to take such steps as a reasonable and prudent person would consider necessary to ensure that the information reaches those entitled to it. Minor and inconsequential infringements of the balloting requirements can be disregarded, as Parliament cannot have intended that small accidental infringements should have the effect of invalidating the ballot. 

Additional resources

• How to handle industrial action The XpertHR "how to" section provides practical step-by-step advice on how to manage industrial action. 
• Frequently asked questions on industrial action View questions we have answered on the topic of industrial action. 

Case transcript of British Airways plc v Unite the Union (on the BAILII website)

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Conditional resignation does not trigger effective date of termination

Heaven v Whitbread Group Plc EAT/0884/10

unfair dismissal | conditional resignation | effective date of termination

The Employment Appeal Tribunal (EAT) has held that the date of a conditional resignation cannot constitute the effective date of termination regardless of any agreement between the employer and employee. 

On 29 August 2008, the claimant, Mr Heaven, wrote a conditional resignation letter to his employer, Whitbread Group plc. The conditions that Mr Heaven attached to his resignation were: 

• a payment in lieu of one month's notice; and
• a "glowing" reference. 

The letter stated that the resignation would take effect from 29 August 2008. 

Mr Hawes, of Whitbread Group plc, subsequently wrote to Mr Heaven responding to the conditions stipulated in the letter and stated that he could not accept the conditional resignation until Mr Heaven provided confirmation of whether or not he was resigning. On 3 September 2008, Mr Heaven stated in an email that he was in fact resigning and that his resignation was effective from 29 August. On 4 September, Mr Hawes accepted Mr Heaven's resignation. 

Mr Heaven later submitted a claim to the employment tribunal for constructive dismissal. The preliminary issue for determination by the tribunal was whether the effective date of termination was 29 August 2008, in which case Mr Heaven's claim would have been outside the three-month time limit in which to bring an unfair dismissal claim, as argued by Whitbread Group plc, or 3 September 2008, which would mean that the claim was brought within the requisite three-month time limit. Mr Heaven submitted that the latter date was the effective date of termination. 

The employment tribunal decided that, as Mr Heaven had made it clear in his email of 3 September that he wished the resignation to take effect from 29 August, the effective date of termination was 29 August and his claim was therefore out of time. The employment tribunal dismissed Mr Heaven's claim and Mr Heaven appealed the decision to the EAT. 

The EAT found that the employment tribunal had failed to apply the case of Fitzgerald v University of Kent at Canterbury [2004] IRLR 300 CA, which is authority that the effective date of termination is a statutory construct and depends on what has happened between the parties and not on what they have agreed to treat as having happened. 

The EAT decided that the tribunal had been incorrect to hold that, when Mr Heaven confirmed his decision on 3 September 2008 and that his resignation was effective from 29 August, it was bound to find that the effective date of termination was 29 August. The EAT stated that, for these purposes, the tribunal should not have had any regard to the wishes of Mr Heaven or Whitbread Group plc. 

The EAT confirmed that a contract of employment cannot be terminated by an equivocal and conditional letter of resignation and, accordingly, Mr Heaven could not "backdate" his resignation, even with his employer's agreement. Mr Heaven's claim was therefore brought within the statutory time limit and the tribunal has jurisdiction to hear it. 

Mr Heaven's substantive claim is yet to be determined. 

Additional resources

• XpertHR "How to" section We provide practical step-by-step advice on how to manage common situations faced in the workplace, including: 
  • How to deal with situations where it is unclear whether a dismissal or resignation has taken place
  • How to deal with heat of the moment resignations
• XpertHR FAQ section Browse frequently asked questions and answers on key HR issues, including: 
  • Can an employee retract his or her resignation?
  • Can an employee claim unfair dismissal if he or she has resigned?

Case transcript of Heaven v Whitbread Group plc (on the BAILII website)

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Disability discrimination: EAT distinguishes between low mood caused by work and clinical depression

J v DLA Piper LLP EAT/0263/09

disability discrimination | impairment | depression

The Employment Appeal Tribunal has said that there is a difference between “despondency, demotivation and anxiety” caused by problems at work and “clinical depression”, in a case where a lawyer claimed discrimination when a firm found out about her history of mental illness and withdrew a job offer. 

J is a qualified barrister. From 2004 to 2006, she worked for a government department, where she suffered an episode of depression that led her to being off sick for four months. In May 2006, J joined a city law firm, but suffered another episode. In mid-2008, she was interviewed for a job with DLA Piper, another large firm of solicitors. She was offered the job subject to, among other things, completion of a medical questionnaire. Prior to completing the questionnaire, J told the firm's HR department about her history of depression and she was allegedly told that she was taking on a high-pressure job and ought to reconsider whether or not it was a suitable position for her. A few days later, DLA Piper withdrew the job offer, citing the reason as a recruitment freeze as a result of the recession. J, who believed that the real reason was her disclosure of her medical history, brought a disability discrimination claim. 

The employment tribunal first had to decide whether or not J was disabled when the discrimination allegedly took place. It found that, although J did in the past have a mental impairment that counted as a disability, by February 2008 most of her symptoms had gone and she was functioning at or close to her normal level. The tribunal said that J did see a doctor again in April 2008, but in June 2008 she was suffering merely from an adverse reaction to a negative appraisal that she had received at work. The tribunal was not convinced that J's symptoms of extreme tiredness and difficulty in getting up in the morning, anxiety because of work difficulty, and not wanting to socialise with large groups were enough to show that she had a sufficiently well-defined impairment to be protected under the Disability Discrimination Act 1995. 

The employment tribunal decided that, even if it was wrong about the nature of J's impairment, she had not established that there was a substantial, in other words more than minor or trivial, adverse effect on her ability to carry out normal day-to-day activities. In the absence of strong medical evidence that J's normal day-to-day activities would have been substantially affected but for treatment that she was receiving, the tribunal found that her ability, among other things, to concentrate and to do her work was not seriously hampered. 

The EAT held that the employment tribunal's approach was flawed and returned the issue of whether or not J was disabled to a new tribunal. The EAT said that it remains good practice for a tribunal to state conclusions separately on the questions of impairment and of adverse effect. However, the tribunal should not proceed in rigid consecutive stages. In cases where there may be a dispute about the existence of an impairment, it makes sense for the tribunal to start by making findings about whether or not the claimant’s ability to carry out normal day-to-day activities is adversely affected on a long-term basis. 

In addition, the EAT made some general points about depression as an impairment in disability discrimination cases. It compared two states of affairs that can produce broadly similar symptoms described as "low mood and anxiety". The first state of affairs is a mental illness that is generally referred to as “clinical depression”. This is unquestionably an impairment within the meaning of the Disability Discrimination Act 1995. The second is not characterised as a mental condition at all but is simply a reaction to adverse circumstances such as problems at work. The EAT accepted that the two states of affairs will often be blurred in practice, a confusion that is exacerbated by the looseness with which some medical professionals and most lay people use terms such as “depression”. However, it went on say that distinguishing the two states reflects a distinction that is routinely made by clinicians. In any event, the problem is avoided if the tribunal starts by considering the adverse effect issue. If the tribunal finds that the claimant’s ability to carry out normal day-to-day activities has been substantially impaired by symptoms characteristic of depression for 12 months or more, it would in most cases be likely to conclude that he or she was indeed suffering “clinical depression” rather than simply a reaction to adverse circumstances. 

The EAT criticised the employment tribunal for not making any reference to a report prepared for J by her GP, Dr Morris, which set out the medical notes on J's condition in May and June 2008. The EAT said that it is clear that Dr Morris intended to convey that J was indeed suffering from clinical depression in May and June 2008 and that her symptoms were a continuation or recurrence of the condition that had produced her symptoms during earlier episodes of depression. The tribunal was wrong not to see her evidence as “expert”. A GP is fully qualified to express an opinion on whether or not a patient is suffering from depression, which is a condition commonly encountered in general practice. 

The EAT also refused to accept J's assertion that her claim should be allowed to proceed on the basis that, even if she was not disabled at the relevant time, the Disability Discrimination Act 1995 should be interpreted to protect individuals who are perceived by the alleged discriminator to be disabled, by analogy with the interpretation in EBR Attridge Law LLP and another v Coleman (No.2) [2010] IRLR 10 EAT construing the Act so as to prohibit associative discrimination. The EAT said that it would be wrong for the matter to be referred to the ECJ before the employment tribunal has had a chance to consider whether or not the employer acted on the alleged ground. The issue becomes academic if the tribunal finds that the law firm acted in the way that it did for a reason entirely unrelated to J's condition. 

Additional resources

• Cheltenham Borough Council v Laird [2009] IRLR 621 HC The High Court rejected an employer’s claim for damages for fraudulent or negligent misrepresentation against a director who failed to disclose a history of depression when she applied for a job. 
• Question in a job offer letter asking an individual if he or she requires any reasonable adjustments to be made due to disability Use this model clause in letters offering employment to allow the successful applicant to request any adjustments to the workplace or arrangements that would help him or her to work safely and effectively. 
• Good practice: Disability The XpertHR good practice manual discusses the key actions and considerations for establishing disability-confident workplaces, so that disabled people are employed productively for their skills and expertise. It covers how to attract disabled people to the organisation, how to make the application and interview processes inclusive, and the ongoing considerations to ensure that disabled employees, once recruited, want to stay. 
• Managing the recruitment and absence of people with disabilities: the 2009 IRS survey This IRS survey of 107 employers investigates the ways in which their recruitment and absence management take account of individuals with disabilities, looking at compliance with the law as well as good practice. 

Case transcript of J v DLA Piper LLP (Microsoft Word format, 184K) (on the EAT website)

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Employer’s consolidation of old and new disciplinary allegations was fair

Pinto v Gloucestershire NHS Primary Care Trust EAT/0351/09

unfair dismissal | disciplinary proceedings

The Employment Appeal Tribunal (EAT) has held that where, as a result of disciplinary proceedings that have been concluded, new allegations of misconduct come to light, it is not unfair for an employer to consolidate the old and new allegations and deal with them all at a further hearing, provided that the employee agrees.

Mrs Pinto was employed by the trust as a health visitor, and part of her duties involved complying with a code that set out standards for record keeping and clinical practice. Following a review of Mrs Pinto’s patient records in 2007, the trust carried out an investigation and, after a disciplinary process, gave her a final written warning. Mrs Pinto sought to appeal that warning but, as a result of the disciplinary process, the trust uncovered further serious concerns about her work. The trust gave Mrs Pinto the opportunity of having both the old and new allegations dealt with together at a second disciplinary hearing, in exchange for setting aside her final written warning and planned appeal. Mrs Pinto agreed to this, but the second disciplinary panel dismissed her for gross misconduct, and she brought a claim for unfair dismissal.

The employment tribunal noted that Mrs Pinto had not challenged the evidence against her, which the second disciplinary panel had found compelling, at either of her disciplinary hearings. The tribunal found that the allegations against Mrs Pinto were serious, that the trust had carried out a fair process, and that the dismissal was fair. Mrs Pinto appealed to the EAT.

On appeal, Mrs Pinto argued that the trust had acted unfairly by failing to allow her a chance to improve following her final written warning, imposed for the first allegations, and by “rehashing” those first allegations at a second disciplinary hearing that resulted in her dismissal. Mrs Pinto relied on the decision of Sarkar v West London Mental Health NHS Trust [2010] IRLR 508 CA, in which the employer initially channelled disciplinary matters down a conciliatory route but then, when circumstances changed, unfairly treated those matters as grounds for dismissal. The EAT, however, held that Mrs Pinto’s case was not comparable to the facts in Sarkar, and that the trust had not acted unfairly. Mrs Pinto had, by agreeing to the trust’s proposal, waived her right to argue later that it was unfair, but in any event it was not unreasonable of the trust to go ahead with the second hearing after Mrs Pinto had given her consent. The EAT therefore dismissed Mrs Pinto’s appeal.

Additional resources

• Disciplinary proceedings can throw up a number of difficult questions for employers. Get answers on these in the XpertHR FAQ section:
  • Is an employer able to tape record a meeting with an employee to ensure that it has an accurate record of the meeting?
  • Can expired warnings be taken into account when deciding an appropriate penalty during subsequent disciplinary proceedings?
  • On what grounds can an employee appeal a disciplinary decision?

Case transcript of Pinto v Gloucestershire NHS Primary Care Trust (Microsoft Word format, 73K) (on the EAT website)

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Parties challenging tribunal decision with new evidence should seek review not appeal

Adegbuji v Meteor Parking Ltd EAT/1570/09

tribunal procedure | introducing new evidence | appeals

The Employment Appeal Tribunal (EAT) has held that parties seeking to introduce fresh evidence when challenging an employment tribunal decision should apply for a review by the tribunal rather than appeal its decision. 

Mr Adegbuji brought claims for, among other things, unfair dismissal, breach of contract, equal pay and race discrimination against Meteor Parking Ltd. In relation to some of his claims, the employer argued that Mr Adegbuji had not met the requirement (under s.32 of the Employment Act 2002, which has now been scrapped) that he raise a grievance before the tribunal could hear them. At a pre-hearing review, Mr Adegbuji claimed that he had raised the issues in a grievance letter that he had given to his supervisor, Mr Kesraoui, to be passed on to the senior manager, Mr Weir. However, Mr Weir gave evidence that he never received the letter. There was no evidence from Mr Kesraoui. Mr Adegbuji applied at the hearing for an order requiring Mr Kesraoui to attend, but the employment judge declined to make such an order. The employment tribunal found that no grievance had been made and refused to hear the case. 

Mr Adegbuji appealed, with his notice of appeal depending entirely on evidence from Mr Kesraoui. He sought permission to introduce a short witness statement from Mr Kesraoui confirming that the latter did indeed pass Mr Adegbuji's grievance letter on to Mr Weir. 

The EAT dismissed the appeal. It applied the test set out in Ladd v Marshall [1954] 3 All ER 745 CA for deciding whether or not any fresh evidence or new document can be admitted. To be admissible, the evidence:

• must not have been obtainable with reasonable diligence for use at the employment tribunal hearing;
• must be relevant and would probably have had an important influence on the hearing; and
• must be apparently credible. 

The EAT decided that Mr Adegbuji had not demonstrated that he could not have obtained Mr Kesraoui’s evidence sooner than he did. Mr Adegbuji knew from an early stage that Mr Kesraoui’s evidence was crucial to his case. Although Mr Kesraoui had been redeployed, Mr Adegbuji could have written to him care of the employer or written to the employer itself and asked to be put in touch with him. Mr Adegbuji argued that he had in fact written to the employer making such a request, but was unable to provide any documentary evidence to back this up. The EAT also pointed out that Mr Adegbuji could have applied for a witness order in advance of the tribunal hearing (he had waited until the hearing before doing this). Therefore, Mr Kesraoui's witness statement, which Mr Adegbuji had been able to attain after the hearing only because he happened to bump into him in a shopping centre, could not be adduced as new evidence. 

The EAT commented on the correct procedure for challenging an employment tribunal's decision on the basis of fresh evidence. It said that it will almost always be appropriate to apply to the original employment tribunal for a review under rules 34 to 36 of the Employment Tribunals Rules of Procedure, relying on rule 34(3)(d). The EAT's jurisdiction is limited to correcting errors of law on the part of an employment tribunal. It is hard to see how an employment tribunal that decides a case properly on the evidence before it can be said to have made an error of law simply because evidence is subsequently produced that suggests that its decision was wrong. The employment tribunal will normally be in the best position to decide whether or not the new evidence is relevant, would probably have had an important influence on the hearing, and is apparently credible, under the test set out in Ladd v Marshall. Although the time limits are tighter than when appealing to the EAT, the tribunal will generally be disposed to grant an extension because, if the evidence could genuinely not have been obtained earlier, it would not normally be just to refuse it. 

Additional resources

• XpertHR "how to" section We provide practical step-by-step advice on how to manage common situations faced in the workplace, including:
  • How to give witness evidence in employment tribunal proceedings
  • How to deal with disclosure in employment tribunal proceedings
• XpertHR FAQ section Browse frequently asked questions and answers on key HR issues, including:
  • Can an employee who is a witness to an incident be obliged to provide a witness statement?
  • How should a witness statement for use in employment tribunal proceedings be formatted?
  • On what grounds can the decision of an employment tribunal be appealed?

Case transcript of Adegbuji v Meteor Parking Ltd (Microsoft Word format, 55K) (on the EAT website)

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Doctor not precluded from recovering damages for breach of contractual disciplinary proceedings

Edwards v Chesterfield Royal Hospital NHS Foundation Trust IRLR 702 CA

breach of contract | damages | loss of professional status

The Court of Appeal has held that the decision in Johnson v Unisys Ltd [2001] IRLR 279 HL did not preclude the claimant from recovering damages based on a breach of contractual disciplinary proceedings. 

The claimant, Mr Edwards, was employed as a consultant trauma and orthopaedic surgeon by the Chesterfield Royal Hospital NHS Foundation Trust. In 2006, Mr Edwards was summarily dismissed for personal and professional misconduct, following a disciplinary hearing. He has subsequently been unable to obtain a permanent consultant post. 

In 2008, Mr Edwards brought proceedings against the trust in the civil courts for breach of contract. He argued that the trust had failed to comply with the contractually binding disciplinary procedure in that it: 

• had not appointed a person with legal qualifications to chair the disciplinary panel;
• had not appointed as a member of the disciplinary panel a clinician of the same medical expertise as himself; and
• refused to allow him to be legally represented at the disciplinary hearing. 

He argued that, had the trust followed the contractual disciplinary procedure, no finding of misconduct would have been made against him. Mr Edwards considered that his failure to secure a permanent job was caused by the trust's finding against him. 

Mr Edwards sought damages of just under £4.3 million on the basis that, if he had not been wrongfully dismissed for misconduct, he would have continued in the trust's employment until his retirement at the age of 65. 

The first instance judge found that, if Mr Edwards' claim succeeded, his damages would be limited to the loss of earnings for the three-month contractual notice period. Mr Edwards appealed this decision to the High Court. 

The High Court allowed the appeal but decided that Mr Edwards' damages would be limited to the loss of earnings for his three-month contractual notice period and for the period during which he would have remained in employment while the contractual disciplinary procedure was complied with. As the High Court's decision meant that his compensation would be substantially restricted, Mr Edwards submitted a further appeal to the Court of Appeal. 

The Court of Appeal noted that it was required to determine whether or not a person who suffers damage as a result of findings of personal or professional misconduct leading to dismissal and loss of professional status that were made in disciplinary proceedings conducted in breach of contract, but which would not otherwise have been made, can recover damages at large. 

The trust argued that the case of Johnson established a general principle that breaches of a disciplinary procedure prior to dismissal are not meant to sound in damages. The trust also referred to the subsequent cases of Eastwood and another v Magnox Electric plc; McCabe v Cornwall County Council [2004] IRLR 733 HL in which a distinction was drawn between complaints occurring prior to the dismissal and complaints relating to the manner of the dismissal. The latter became known as the "Johnson exclusion area" and the trust argued that Mr Edwards' case fell into this category so that his claim was limited to damages for contractual notice and unfair dismissal. 

The Court of Appeal rejected the trust's argument and found that Mr Edwards' claim for damages for failure to carry out proper disciplinary proceedings was not excluded by Johnson. In so doing, the Court of Appeal considered the decisions in Johnson and Eastwood and noted that those cases involved claims for damages arising out of breaches of the implied term of trust and confidence and the manner of dismissal. In Mr Edwards' case, however, the Court of Appeal decided that the disciplinary procedure was expressly incorporated into his contract of employment and the trust's failure to comply with it meant that Mr Edwards could claim for damages for breach of contract at large. The Court of Appeal held that such an express term "has legal effect and is capable of sounding in damages if broken". 

The trust is now seeking permission to appeal to the Supreme Court. It is important to note that the Court of Appeal decision relates only to the issue of damages and Mr Edwards' substantive claim is yet to be determined. 

Additional resources

• XpertHR FAQ section Browse frequently asked questions and answers on key HR issues, including:
  • What are the pros and cons of making a disciplinary procedure contractual?
  • To what extent are the terms of a contract binding?
  • What are incorporated terms and are they legally binding?
• Disciplinary procedure Use this model procedure to set out the company's disciplinary process. 

Case transcript of Edwards v Chesterfield Royal Hospital NHS Foundation Trust (on the BAILII website)

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Cases on appeal

Begum and others v Gate Gourmet London Ltd; Sehmi v Gate Gourmet London Ltd
Northwest London Hospitals NHS Trust v Bowater
Malone and others v British Airways plc
X v Mid Sussex Citizens Advice Bureau and another
Key2Law (Surrey) LLP v Woods
A v B and another
Craig and another v Transocean International Resources Ltd and others
Alstom Transport v Tilson
Greenland v GX Networks Ltd
Shrewsbury and Telford Hospitals NHS Trust v Lairikyengbam
Prowse-Piper v Anglian Windows Ltd and others
The United States of America v Nolan
Wooster v The Mayor and Burgesses of the London Borough of Tower Hamlets
British Airways plc v Williams

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Begum and others v Gate Gourmet London Ltd; Sehmi v Gate Gourmet London Ltd

unfair dismissal | industrial action | jurisdiction

These two cases concern six employees dismissed during industrial action whose claims of unfair dismissal were dismissed by a tribunal, on the basis either that the industrial action was unofficial (and therefore the tribunal had no jurisdiction), or that the dismissals were fair. The Employment Appeal Tribunal upheld the tribunal decision, and the employees are now seeking permission to appeal. The Court of Appeal will hear their application on 1 July 2010.

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Northwest London Hospitals NHS Trust v Bowater

unfair dismissal | reasonableness of dismissal

Ms Bowater was dismissed for inappropriate behaviour with a patient. The Employment Appeal Tribunal overturned a majority tribunal decision that her dismissal was unfair, unusually on the basis that it was perverse, and substituted the tribunal minority judgment. Ms Bowater is seeking permission to appeal to the Court of Appeal, which will hear her application on 2 July 2010.

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Malone and others v British Airways plc

breach of contract | incorporation of collective agreements | injunctions

In February 2010, British Airways cabin crew claimed breach of contract in respect of the company’s decision to change crew levels, and sought an injunction to prevent those changes taking place. The High Course held that provisions regarding minimum crew complements, contained in collective agreements, were not legally incorporated into the cabin crews’ contracts of employment. The High Court also held that an injunction to restrain British Airways from crewing planes other than in accordance with that collective agreement could not be justified. The cabin crew’s appeal against the High Court decision will be heard by the Court of Appeal in October 2010.

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X v Mid Sussex Citizens Advice Bureau and another

disability discrimination | volunteers

A tribunal and the Employment Appeal Tribunal held that X, a volunteer worker with the Citizens Advice Bureau, was not entitled by the Disability Discrimination Act 1995 (DDA) to claim disability discrimination. The tribunals also held that the UK Government was not in breach of the EU Framework Directive in this regard, and that the definition of “employment” in the DDA does not cover voluntary workers without a contract. The Court of Appeal will hear X’s appeal in October 2010.

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Key2Law (Surrey) LLP v Woods

TUPE | insolvency | administration

This is one of four joined cases before the Employment Appeal Tribunal (EAT). Under reg.8(7) of TUPE, the principle of automatic transfer of employees does not apply if the transferor is “the subject of bankruptcy proceedings or analogous insolvency proceedings that have been instituted with a view to the liquidation of the assets of the transferor.” The EAT will rule on whether that exception applies to a pre-packaged asset sale of a company in administration. The hearing, which has not yet been listed, will not take place until June at the earliest.

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A v B and another

striking-out order | unfair dismissal | sex discrimination

In a case subject to a restricted reporting order, A, an employee at a higher education institution (B), brought claims of unfair dismissal and sex discrimination against her employer, and also claimed discrimination against the principle of the institution (C). She had been dismissed summarily for alleged academic fraud. The tribunal dismissed her claims on the basis of having no reasonable prospect of success, but the Employment Appeal Tribunal overturned the tribunal’s decision, holding that the judge had erred in concluding that even if A gave evidence in support of her allegations, that could not make the case arguable. The Court of Appeal will hear B and C’s appeal in June 2010.

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Craig and another v Transocean International Resources Ltd and others

working time | annual leave | onshore field breaks

The Court of Session will consider an appeal against the Employment Appeal Tribunal decision that offshore oil rig workers were not entitled to annual leave in addition to their onshore breaks. The hearing is due to take place in June 2010.

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Alstom Transport v Tilson

employment status | agency workers

An employment tribunal found that Mr Tilson, an agency worker, actually had an implied contract of employment (which entitled him to claim unfair dismissal), and that a clause engineered to avoid an employment relationship was “bogus”. The Employment Appeal Tribunal overturned this decision, holding that a holistic approach was needed, and that the parties did not intend an employment relationship. Mr Tilson has appealed to the Court of Appeal, and the hearing is due to take place in early October 2010.

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Greenland v GX Networks Ltd

breach of contract | commission | exercise of discretion

The Court of Appeal is hearing GX Networks’ appeal against the High Court’s decision that the company, in capping the claimant’s commission, exercised its contractual discretion to do so irrationally. The High Court found that the decision was taken by the company to make up for its failure to set targets properly. The appeal is due to be heard in April 2010.

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Shrewsbury and Telford Hospitals NHS Trust v Lairikyengbam

illegality | employment status | unfair dismissal

Despite the claimant’s employment contract being null and void during the final two years of his appointment with the trust (which had acted beyond the scope of its legal power), the Employment Appeal Tribunal found that, because he had performed his duties and been treated as if he was an employee, he was entitled to bring a claim for unfair dismissal. The Court of Appeal is due to hear the trust’s appeal in early May.

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Prowse-Piper v Anglian Windows Ltd and others

sex discrimination | pregnancy | redundancy

The Employment Appeal Tribunal (EAT) held that the employment tribunal had failed to deal with the question of whether or not Anglian Windows’s failure to consider an alternative role for Ms Prowse-Piper (rather than make her redundant) was a further fact of discrimination. Anglian Windows’s appeal against the EAT decision will be heard by the Court of Appeal in March.

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The United States of America v Nolan

collective redundancies | consultation over reasons

The Court of Appeal is hearing the employer’s appeal against the tribunal and Employment Appeal Tribunal’s decisions that, by failing to consult on the reason for the closure of a US Army base, it was in breach of the collective redundancy legislation. The appeal is due to be heard at the end of March 2010.

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Wooster v The Mayor and Burgesses of the London Borough of Tower Hamlets

redundancy | age discrimination

The Employment Appeal Tribunal (EAT) held that Mr Wooster’s employer committed direct age discrimination when it made him redundant at the age of 49 to avoid paying an early retirement pension that he would be entitled to if he left employment when he was aged 50 or over. The Court of Appeal is hearing the employer’s appeal at the end of May 2010.

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British Airways plc v Williams

holiday pay | basic pay | flying allowances

The Supreme Court is hearing a challenge to the Court of Appeal decision that British Airways was not in breach of statutory holiday pay requirements when it calculated pilots' paid annual leave by reference to their basic salary rather than what they would expect to earn when flying allowances were added. It has now referred the question of what is meant by “paid annual leave” in the Civil Aviation Directive (2000/79/EC) and the Working Time Directive (93/104/EC) to the European Court of Justice.

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Note: Some of these case summaries are based on information provided by Claire Birkinshaw, Abbey Legal Services.