There have been a number of important developments since Stephen Roberts’s update (which you can still download from our website).
The last quarter has seen signi f icant legislat ive change. Amongst the most significant, family friendly rights were extended on 1st April 2007 with the coming into force of the rights of female employees to additional maternity leave (if they qualified for ordinary maternity leave), an increased SMP and MA allowance from 26 to 39 weeks and the introduction of stay in touch days.
The Information and Consultation of Employees Regulations 2004 are becoming more prominent. These regulations give employees the rights to be informed about the state of their employer’s business, and informed and consulted upon employment prospects and potential substantial changes to terms and conditions. On 6th April 2007, the required employee threshold decreased from 150 to 100 employees.
Next year, the threshold will be 50 employees, thus increasing the importance of employers considering whether or not to hold a ballot to appoint employee representat ives under Regulation 19.
In addition to these legislative amendments, there have been developments in the case law, the most interesting of which, in my view, being highlighted within this update newsletter.
Whistle blowing—protected disclosure?
The EAT decision of Kraus v Penna [2004] IRLR 260 controversially required the whistleblower, who relied upon a breach of criminal law or another legal obligation as the basis of his or her protected public interest disclosure, to prove that the employer was actually subject to that obligation. The Court of Appeal in the case of Babula v Waltham Forest College [2007] IRLR 346 has overruled this requirement. Relaxing the burden on Claimants, it is now sufficient that the employee has the subjective reasonable belief in the criminality of the act or the breach of the relevant legal obligation that is relied upon. Whilst this decision brings this area of employment law back in line with the intendment behind the Public Interest Disclosure Act, it remains to be seen if it will have an impact on the number of meritorious whistleblowing claims making it past the PHR stage.
Statutory Dismissal and Disciplinary Procedures
Time is ticking away for practitioners to file their responses to the DTI’s consultation on the repeal of the Statutory Dismissal and Disciplinary Procedures which can be found at www.dti.gov.uk/files/file39477.doc. At the present time, the Government’s preferred option is to repeal section 98A and revert to a position governed by Polkey v AE Dayton Services Ltd but provision would be made for a tribunal to make “alternative findings reflecting the balance of procedural and substantive unfairness in the dismissal”. In the meantime, it is of paramount importance that the application of an employer’s internal procedures do not conflict with or otherwise restrict the minimum rights of the employee under the Statutory Dismissal and Disciplinary Procedures. This was illustrated most recently in the EAT decision of Master Foods v Wilson [2007] ICR 370. Mr. Wilson was dismissed for fraudulently taking sick leave. As is usual, he was told that he had the right to appeal against his dismissal, but that in accordance with the employer’s internal procedures, this had to be done in writing within 5 days. He lodged his appeal after this time and the employers refused to hear it. The employer’s stance in relation to the appeal was found to be incompatible with the statutory minimum requirements and thus automatically unfair.
Discrimination update
In the case of Madarassy v Nomura International Plc [2007] IRLR 246 (the lead case of three in relation to this issue) the Court of Appeal clarified the Igen v Wong guidelines applicable to the statutory reversal of the burden of proof which is applicable in all cases of direct discrimination.
The Court of Appeal made it clear that the burden of proof does not shift from the employee to the employer simply on the basis of the employee establishing a difference in status and a difference in treatment. A nexus between these concepts is required, namely the reason for the differential treatment from which the Tribunal could properly conclude that direct discrimination has taken place in theabsence of a reasonable (non discriminatory) explanation from the employer– and at that initial stage, take into account evidence given by the employer.
Mummery LJ also helpfully set out the type of employer evidence that can assist at this threshold stage, namely evidence as to whether the act complained of occurred at all; evidence as to the actual comparators relied upon by the employee to prove less favourable treatment; evidence as to whether the comparisons being made by the employee were of like with like and available evidence of the reasons for the differential treatment. However, it should be noted that the absence of an adequate explanation for differential treatment of the employee is not relevant to whether there is a threshold case of discrimination by the employer.
The absence of an adequate explanation only becomes relevant if a threshold case is proved by the employee, in which case the employer must discharge the burden of proving a reasonable nondiscriminatory reason for the treatment, failing which a finding of discrimination will be made.
“A nexus between these concepts is required, namely the reason for the differential treatment...“
Agency Workers
James v London Borough of Greenwich [2007] IRLR 168 answered the vexed question of whether a long serving agency worker could be an employee of the end user as a result of the implication of a contract of employment, by requiring it to be necessary to imply a contract with the end user, thus confining Cable & Wireless v Muscat [2006] IRLR 354 to its particular facts. This approach has been readily applied in two recent EAT decisions.
In Astbury v Gist Ltd [2007] UKEAT 619/06, the express terms of the Claimant’s contract with his agency (which limited its authority to enter into a contact of service between the Claimant and the Respondent) were inconsistent with the implication of a contract of service with the Respondent, this was fatal to his claim.
In Heatherwood & Wexham Port Hospitals NHS Trust v Kulubowila (and others) [2007] UKEAT/633/06, HHJ Clark reversed the finding of the ET that the Claimant was the employee of the end user NHS Trust and stated:
“it is not enough to form the view...that because James v London Borough of Greenwich [2007] IRLR 168 answered the vexed question of whether a long serving agency worker could be an employee of the end user as a result of the implication of a contract of employment, by requiring it to be necessary to imply a contract with the end user, thus confining Cable & Wireless v Muscat [2006] IRLR 354 to its particular facts. This approach has been readily applied in two recent EAT decisions. In Astbury v Gist Ltd [2007] UKEAT 619/06, the express terms of the Claimant’s contract with the Claimant looked like an employee of the Trust, acted like an employee and was treated like an employee, the business reality is that he was an employee and the ET must therefore imply a contract of employment.”
It will be a rare agency worker who succeeds in persuading a Tribunal that a contract of service exists with the end user.
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DISCLAIMER:
Every care is taken to ensure the accuracy of the contents of this newsletter. However, the reader is reminded that the information in this letter should not be preferred as a substitute to specific legal advice and as such liability is disclaimed.
