Employment Review - July 2010
Introduction
In this month’s Review we look at a claim for substantial compensation arising from an employer’s failure to follow a contractual disciplinary procedure and a case dealing with the issue of whether an employee can complain of disability discrimination based on having a “perceived” disability.
We consider a sex discrimination claim brought by a man due to a woman being given inflated scores in a redundancy selection process where she was absent on maternity leave.
We also provide an update on the new Government’s intentions for employment law and report on the recently published Tribunal Annual Statistics for 2009/2010.
David Potter
0845 274 6819
david.potter@freethcartwright.co.uk
Aitken v Commissioner of Police
of the Metropolis
Edwards v Chesterfield Royal Hospital NHS Foundation Trust
De Belin v Eversheds Legal Services Ltd
Equality Act 2010: Update
And Finally . . .
Aitken v Commissioner of Police
of the Metropolis
A mistaken perception that an employee is suffering from a particular disability does not fall within the definition of disability for the purposes of direct discrimination, disability related discrimination or a failure to make reasonable adjustments.
Mr Aitken worked as a Metropolitan 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 during which time he was diagnosed with obsessive compulsive disorder (OCD). In December 2005 Mr Aitken attended a work social event and after drinking heavily his behaviour became extremely aggressive and threatening. As a result of this behaviour and his colleagues’ concern, Mr Aitken was put on special leave and underwent medical assessments after which he was allowed to return to work in a back office role, with limited public contact. Following this Mr Aitken continued to experience difficulty in controlling his anger and was eventually retired on ill health grounds. The Metropolitan Police (the “Met”) had considered reasonable adjustments prior to Mr Aitken’s retirement however it was decided that it would not be reasonable to find a role that did not involve any contact with the public.
At tribunal Mr Aitken brought various claims for disability discrimination. This included a claim that there had been direct discrimination on the grounds of him being perceived to have a dangerous mental illness and claimed that discrimination on grounds of “perceived” rather than actual disability was unlawful. The Employment Tribunal dismissed all of his claims and the case went to appeal.
At appeal the EAT rejected Mr Aitken’s argument and held that the Met did not act on the basis of assumptions concerning his mental illness but rather how Mr Aitken had actually appeared to others. It concluded that the Met’s actions did not therefore constitute disability discrimination and in any event found that the Disability Discrimination Act 1995 required an actual disability and could not be interpreted to protect an employee who was perceived by the employer to be disabled.
What does this mean for employers?
Employers should note that the test for disability under the legislation is a relatively low one and while in reality it is rare to mistakenly perceive an employee to be disabled when he or she is not, the upcoming Equality Act will prohibit direct discrimination and harassment based on association and perception in respect of race, sex, gender reassignment, disability, sexual orientation, religion/belief and age. For more information on when the Equality Act comes into force please see the Equality Act 2010: Update article in this month’s bulletin.
Edwards v Chesterfield Royal Hospital NHS Foundation Trust
In an unfair dismissal claim, the compensation that can be awarded is currently capped at £65,300. Increasingly, employees are looking to claim compensation for loss of employment for the remainder of their careers and, in this case, the Court of Appeal ruled that an employee dismissed for misconduct can recover damages for loss of future employment prospects, as a result of his employer’s failure to follow a contractual disciplinary procedure.
Mr Edwards, a consultant trauma and orthopaedic surgeon working for Chesterfield Royal Hospital Trust (the “Trust”), was dismissed for gross professional and personal misconduct. Following his dismissal Mr Edwards was not able to obtain permanent employment in the NHS.
Mr Edwards brought a claim for damages in the High Court and argued that the Trust conducted the disciplinary hearing in serious breach of its contractual procedures, which caused him to be dismissed. He maintained that had the contractual disciplinary procedures been correctly followed, he would have never been dismissed. As part of his claim Mr Edwards sought to recover damages for breach of his contract of employment which amounted to approximately £4.3 million and included a substantial loss of earnings claim to cover his loss of employment income from dismissal to retirement.
At the High Court it was successfully argued by the Trust, that any damages should be limited to loss of earnings in respect of the period during which Mr Edwards would have remained employed by the Trust had the contractual disciplinary procedures been followed, together with the amount he would have been paid during his notice period (in this case 3 months’ salary).
The Court of Appeal was asked to decide on this preliminary point and held that in principle, Mr Edwards was entitled to pursue damages in the normal way for the breach of contract, and recover damages in respect of any losses that he suffered, without limitation.
What does this mean for employers?
The case is of particular importance for employers who have a contractual disciplinary procedure and, if so, the case highlights the importance of following the relevant contractual disciplinary procedure, particularly in those cases where dismissal is likely to have a long term impact on the employee’s reputation and ability to obtain future employment. It is important to note that this was a ruling on a preliminary point only and it will be a matter for the evidence at trial to determine whether his long term career losses were caused by his employer’s failure to comply with the contractual disciplinary procedure.
Further, the case is perhaps unusual in that he was employed in an industry where there is in effect only one employer which meant that he found it extremely difficult to find permanent employment once his reputation had been damaged. Other employees may find it harder to show on the evidence that breach of any particular contractual disciplinary procedure would have resulted in them not being dismissed.
Most employers have disciplinary procedures but many have procedures which are not contractual which should avoid this particular situation arising.
Finally we understand that the Trust is seeking to appeal the decision to the Supreme Court, where we hope further clarification will be provided.
De Belin v Eversheds Legal Services Ltd
The Leeds Employment Tribunal has held that an employer discriminated against a male employee on the grounds of sex by inflating the redundancy score of a female colleague on maternity leave.
Facts
Mr de Belin (B) and Ms Reinholz (R) were both employed as solicitors in the Real Estate Department at Eversheds Legal Services Ltd (”Eversheds”). In 2008 the firm undertook a redundancy exercise in their department and B and R were pooled in a group and scored against five redundancy criteria. One of the selection criteria included a score for “lockup” which measured the time it took a solicitor to finish work and receive payment from the client. A reference period of 12 months was used to assess the two candidates’ lock-up times, with greater points being rewarded for faster turnaround times. Out of a maximum score of 2, B was awarded a score of 0.5. R however was on maternity leave during this chosen reference period and Eversheds decided therefore to award her a notional score of 2.
At the end of the redundancy exercise B’s total score was 27 and R’s score was 27.5. As a consequence B was put at risk of redundancy and was ultimately dismissed on 12 February 2009. Following this B took his case to the Employment Tribunal and brought claims for unfair dismissal and sex discrimination.
At tribunal Eversheds sought to argue that Section 2(2) of the Sex Discrimination Act 1975 (SDA), which provides for “special treatment” to be afforded to women in connection with pregnancy or childbirth, was intended to protect pregnant women or women on maternity leave and therefore justified the special treatment they had shown to R.
The Employment Tribunal rejected this argument and held that the section 2(2) SDA requirement of “special treatment” did not offer “blanket protection” and entitlement to more favourable treatment. It found that by artificially inflating R’s score for the lock-up criteria, Eversheds had effectively deprived B of his livelihood which was both unreasonable and constituted less favourable treatment on grounds of his sex.
What does it mean for employers?
While we understand that the decision is being appealed it is clear that the De Belin case emphasises the need for care to be taken when completing a redundancy scoring exercise, particularly where candidates include women on maternity leave. Employers must ensure that when scoring female employees on maternity leave as part of a redundancy exercise, they do not unfairly treat male employees in the same group by inflating the female employee’s score. While “special treatment” is afforded to women in connection with pregnancy or childbirth under statute, which includes first refusal on alternative roles in a redundancy situation, employers should always seek to assess individuals fairly and reasonably and consider removing or amending certain criteria when circumstances require it.
Tribunal Annual Statistics
The Tribunal Annual Statistics for 2009/10 have just been published. The key findings are as follows:
• There was a 56% increase from 2008/09 in the number of claims accepted by Employment Tribunals, which were at their highest ever level. This is mainly attributable to multiple claims.
• There was a 14% increase in the number of single claims accepted by Employment Tribunals.
• There was a 17% increase in the number of tribunal claims associated with unfair dismissal, breach of contract and redundancy. This is likely to be caused by the recession.
• There was a 22% increase in the number of disposals by Employment Tribunals. This did not keep pace with receipts with the result that more than 400,000 claims remained outstanding.
• There was a significant drop in the number of Employment Tribunal claims in which the first hearing took place within 26 weeks of the claim being received. It fell from 74% to just 65%.
Equality Act 2010: Update
The Government Equalities Office (GEO) has announced that the first wave of implementation of the Equality Act 2010 (the “Act”) will go ahead as planned, with core provisions of the Act coming into force in October 2010. While the Act received royal assent on 8 April 2010, it remains to be seen post-election, whether all of the provisions will ultimately be activated.
The Act described by the GEO as legislation intended to “protect the rights of individuals and advance equality of opportunity for all” has firmly divided legal opinion over the fundamental question of whether its implementation will make a difference to those outside politics. What is clear however is that sections of the Act have not been formally timetabled and further developments are expected.
Other recent government announcements:
• The government has announced that the default retirement age will be scrapped on 1st October 2011. The new proposals mean employers will no longer have the legal right to dismiss employees because they have reached the age of 65.
• The government has declared plans to push for the deregulation of employment laws with proposals for a “one-in, one-out” rule whereby no new regulation is brought in without other regulation being cut. Government departments have been advised to immediately start a review of employment laws in their area.
• The national minimum wage increases proposed by the previous government in March 2010 have been confirmed and will take effect as planned. With effect from 1 October 2010, the national minimum wage adult rate will rise from its current level of £5.80 per hour to £5.93 per hour, with the adult rate being extended to 21 year-old workers from October 2010.
• The vetting and barring registration scheme (VBS) for those working with vulnerable adults, has been put on hold to allow the scheme to be remodelled. The aim of the VBS is to protect children and vulnerable adults by preventing individuals who pose a known risk from working with them however following complaints that the system of registration was disproportionate and overly burdensome, the government has recently announced plans to amend the scheme to ensure vulnerable peoplewere protected in ways that were proportionate and sensible. The government is yet to announce if registration will commence later this year.
We are pleased to announce that Phil Pepper has recently joined our Employment Group as a Senior Associate.
Philip Pepper
0116 248 1103
philip.pepper@freethcartwright.co.uk
I joined Freeth Cartwright in June 2010 from Weightmans LLP having qualified as a solicitor in 2001. I have been an employment law specialist in both the public and private sectors for over eight years and have a particular interest in TUPE, all types of discrimination and Industrial action.
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Whilst every effort has been made to ensure the accuracy of this bulletin, it does not provide complete coverage of the subjects referred to, and it is not a substitute for professional legal advice and should not be relied upon as such.
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