Employment Review - March 2008
Welcome to this month’s Employment Review presented by our Manchester office. It’s been a busy month in employment law and for Freeth Cartwright. We have been voted one of the 100 Best Companies to Work for 2008 by the The Sunday Times. This follows the Legal 500 ranking Freeth Cartwright number one for employment law in the Midlands and one of just two firms regarded as “regional heavyweights”.
In this addition of the Review we look at equal pay litigation, a new age discrimination case, agency employment issues, time limits in employment tribunal claims and the difficulties associated with employers relying on expired written warnings.
Success in Equal Pay Claim
Agency Workers
Don’t Leave it to the Last Minute
Age Discrimination - Protection for All
Employers Relying on Expired Warnings
Increase in the minimum wage
Monthly Round Up
The principle of equal pay for work of equal value is enshrined in Article 141 of the EC Treaty (Article 141). An employee can claim equal pay with a colleague of the opposite sex if she is employed on broadly similar work, or work of equal value, as her chosen male comparator (Equal Pay Act 1970) (EPA).
In the last few years NHS employers and Local Authorities have faced a multitude of equal pay claims brought by employees represented by trade unions or private practice employment solicitors.
This month we have successfully defended an ambulance service NHS trust against equal pay claims. Thompsons solicitors acted for the claimants, a large group of trade union members. We considered that our client had a perfectly good reason for the difference in pay between two groups of employees that had nothing to do with their sex.
Towards the end of last year, rather than proceed down the employment tribunal’s laborious standard directions, we convinced the tribunal to hold an early pre hearing review to consider the merits of the claims. This action forced Thompsons to consider the claimants’ cases and, eventually, led to the withdrawal of all the claims.
By ensuring that the tribunal did not simply follow the standard directions, we saved our client the time and effort of having to carry out a job evaluation review for each of the claimants and each of the comparators. These evaluation exercises can take up to a day to complete for each employee. Our actions thus saved our client thousands of pounds in legal fees and hundreds of hours work.
In addition, we secured an order from the tribunal for Thompsons solicitors to pay our client’s costs in this matter. It is rare for such an order to be made. Michael Wright, a Senior Solicitor in our Manchester office, represented the ambulance trust. Last year he was seconded to the NHS Litigation Authority to assist with the NHS’s strategic response to equal pay claims. He has also represented local authorities, NHS organisations and private companies in equal pay litigation.
Michael has provided equal pay seminars to North West local authorities and Greater London public sector employers.
Freeth Cartwright’s equal pay experience has increased since Vanessa Di Cuffa joined the firm as a senior associate heading our employment service in Birmingham. She has extensive experience of equal pay claims specifically in the public sector. Vanessa led the NHS equal pay claims at her previous firm and has experience of local government equal pay claims. Vanessa has provided updates on this issue and delivered training to clients.
Employment solicitors and employers of agency workers have been eagerly awaiting the Court of Appeal’s decision in the case of James v London Borough of Greenwich [2008] EWCA Civ 35. It was hoped that this decision would clarify the complex issue of who employs agency workers: the agency supplying the workers or the end user of their services.
The Court of Appeal refused to accept that the relevant case law was conflicting. Instead they asserted that the case points in the same direction: whether an agency worker is employed by an end-user must be decided in accordance with common law principles of implied contract and, in some very extreme cases, by exposing sham arrangements.
In addition, just to confuse matters, the Court of Appeal held that it is legally possible for a worker to have one kind of contract with an agency and another kind with the end-user to whom they provide their services.
The Court of Appeal’s judgment provides that each situation must be considered on its own merits. Previous cases, such as Ready-Mixed Concrete (South East) Limited v the Minister of Pensions and National Insurance [1968] 2 QB 497, have held that the key questions to ask when considering whom employs an individual are:
• Did the individual undertake to provide his own skill and work?
• Did the individual undertake to the end user to provide his own skill and work in return for consideration; a wage or other remuneration?
• Was there a sufficient degree of control to enable the individual to be called a servant of the end user?
• Was the individual sufficiently integrated into the end user’s organisation?
• Was the individual not in business on his own account?
This case has not provided the clarification we were hoping for. The wide variety of potential situations highlighted by the many cases in this area of employment law demonstrates the need for careful consideration of the evidence in every case.
Don’t Leave it to the Last Minute
For employees, employers and solicitors alike, the employment tribunal can be a cruel mistress. It was reported last week in the case of Beasley v National Grid [2008] EWCA Civ 50 that an employee’s claim form was refused because it was received by the tribunal 88 seconds late.
This follows the decision in Miller v Community Links Trust Limited UKEAT/0486/07. In that case a representative sent an electronic ET1 to the employment tribunal at 1 second to midnight on the final day for presenting the ET1. It was received by the tribunal at eight seconds past midnight. Without hesitation, the employment tribunal ruled that the claim was presented out of time.
The claimant’s appeal of this decision was dismissed.
The time limit for an employee to present an unfair dismissal claim is three months from the effective date of termination. For example, if an employee’s employment ended on 1 January 2008, they must present a claim for unfair dismissal on or before midnight on 31 March 2008.
This deadline may only be extended when the tribunal is satisfied that it was “not reasonably practicable” for the employee to comply with the three month deadline. Similar rules apply to employers responding to claims. The response must be presented to the tribunal office within 28 days of the date on which the employer was sent a copy of the claim. Applications may be made to extend this time limit. However the application should be made within the original 28 day period.
Historically, employment tribunals do not consider ignorance of the law or electronic failure as reasonable reasons for failure to comply with these time limits. The Employment Appeals Tribunal held in Fishley v Working Men’s College UKEAT/0485/04, “it is a common experience of anyone who has tried to operate a computer, a printer, or a fax machine, that they are temperamental creatures and one cannot rely on success first time within a few minutes”.
We have been warned!
Age Discrimination - Protection for All
Since the introduction of the Employment (Equality) Age Regulations 2006 in October 2006 there has been a steady stream of age discrimination claims brought against employers. Between the introduction of the legislation and March 2007 nine hundred and seventy two claims were brought.
Many people assume that age discrimination regulations protect older employees from discrimination based on their age. This is true. However, it also protects all employees from age based discrimination, including younger employees.
An example of this is the recent employment tribunal decision in Wilkinson v Springwell Engineering Limited ET/2507420/07. In that case the tribunal held that the dismissal of an employee was not on grounds of capability, as the employer claimed, but on grounds of her age. She was 18 years old at the time of her dismissal.
In 16 March 2007 a conversation took place between Miss Wilkinson and her line manager. Miss Wilkinson alleged that she was informed that her employment was being terminated because she was too young to do her job. She was told to leave the premises immediately and was not informed of her right to appeal the decision.
The tribunal upheld Miss Wilkinson’s version of event. The employer had therefore discriminated against the employee in breach of the age discrimination regulations. The tribunal found that the employer had made a stereotypical assumption based on age to the detriment of the employee, who was 18 at the time of her dismissal. They had assumed a relationship between experience and age and capability.
The tribunal awarded the employee loss of earnings up to the tribunal hearing and future losses of 26 weeks, together with an award for £5,000 for injury to feelings. The tribunal also applied uplift to the compensation on the basis that the employer had failed to follow any procedure before dismissing her.
Employers Relying on Expired Warnings
The Court of Appeal in Airbus UK Limited v Webb [2008] EWCA Civ 49 overturned the decision of the tribunal (upheld by the EAT) that an employee was unfairly dismissed because the employer had taken into account an expired warning in its decision to dismiss.
In claims for unfair dismissal the employer has the burden of establishing that the dismissal was for a fair reason, for example redundancy or the employee’s conduct. In addition, the employer must act reasonably in dismissing the employee for that reason.
The tribunal has to decide whether, in the circumstances, the decision to dismiss the employee fell within the range of reasonable responses that a reasonable employer in those circumstances and in that line of business might have adopted.
It is clear that an active warning may be taken into account by an employer after an employee has been found guilty of a similar charge. However, warnings should not remain active indefinitely, unless the employee’s conduct is very serious and bordering on gross misconduct.
Previous case law, and both the decision of the employment tribunal and the Employment Appeals Tribunal in this case, suggested that expired warnings should always be ignored when considering what sanction to impose on (final written warning, demotion, dismissal, etc.) an employee following a disciplinary hearing.
The Court of Appeal clarified this area of employment law. It is still unreasonable for an employer to rely on an expired warning as the principal reason for dismissal. Such a dismissal will be unfair. However, this case states that it will not be unreasonable for an employer to take into account a previous expired warning and the underlying misconduct in circumstances where the expired warning is not the principal reason for the dismissal.
On 5 March 2008 the government announced the annual increase to the minimum wage. The adult rate increases from £5.52 to £5.73. The rate for 18-21 year olds rises from £4.60 to £4.77. The rate for 16-17 year olds rises from £3.40 to £3.53.
The new rates take effect on 1st October 2008.
In addition to equal pay litigation, this month the Manchester employment department has been busy representing various NHS organisations defend claims for race discrimination, trade union discrimination and unfair dismissal.
In our other offices, we have successfully defended a local authority in a multi day race discrimination claim, successfully defended a local authority in a constructive dismissal claim and presented an all day training session to clients on developments in employment law.
If you want to know more…
Speak to us today and find out what we can do for you. Please contact any of the following:
David Potter, Cumberland Court, 80 Mount Street, Nottingham NG1 6HH
Tel: 0115 936 9389
Fax: 0115 859 9617
david.potter@freethcartwright.co.uk
Joanne Kay, Floor 2, West Point, Cardinal Square, 10 Nottingham Road, Derby DE1 3QT
Tel: 0845 634 1724
Fax: 0115 859 9617
joanne.kay@freethcartwright.co.uk
Julian Middleton, One Colton Square, Leicester, LE1 1QH
Tel: 0116 248 1115
Fax: 0845 634 2590
julian.middleton@freethcartwright.co.uk
Pat Jones, First Floor, St James Building, 61-95 Oxford Street, Manchester M1 6FQ
Tel: 0845 634 2561
Fax: 0845 634 2541
pat.jones@freethcartwright.co.uk
Vanessa DiCuffa, One Victoria Square, Birmingham, B1 1BD
Tel: 0845 634 2584
Fax: 0845 634 2576
vanessa.dicuffa@freethcartwright.co.uk