Employment Law Bulletin – Issue 102 – 7 June 2011

Monday 6 June 2011

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Employment News

The latest figures from Incomes Data Services show that pay rises in the private sector are running at an average of 3% per annum, in contrast to public sector pay settlements which are averaging 0%. For further details, click here.

A report published by the Resolution Foundation predicts that real wages in the UK will be no higher in 2015 than they were in 2001. For further details, click here.

New data from the High Education Statistics Agency suggests that of 14,000 university professors in the United Kingdom, only 50 are black. For further details, click here.

The government consultation on the Equality and Human Rights Commission remains open until 15 June 2011. For further details, click here.

The government consultation on flexible parental leave, changes to the Working Time Regulations, and on pay audits remains open until 8 August 2011. For further details, click here.

Employment Case Law

Court of Appeal

Disability discrimination

JP Morgan Europe Ltd v Chweidan [2011] EWCA Civ 648

Direct disability discrimination occurs where a person is treated less favourably on grounds of disability than an otherwise similar non-disabled person (s3A(5) DDA 1995). Disability-related discrimination occurs when a person suffers discrimination for a reason related to their disability (s3A(1) DDA 1995). Following the House of Lords decision in London Borough of Lewisham v Malcolm [2008] IRLR 700, an employer is not liable for disability-related discrimination if they would have treated a non-disabled person in the same way as they treated the disabled claimant. In practice, this has had the result that where a claimant does not succeed in a claim of direct discrimination, she will not succeed in a claim of disability-related discrimination. The Court of Appeal therefore overturned a Tribunal decision that where a disabled banker was dismissed for not putting in the hours necessary to extend his client base, this dismissal was direct disability discrimination. The Tribunal had erred in confusing direct and disability-related discrimination. Moreover, following the decision in Malcolm, the facts could not give rise to disability-related discrimination. (Although the decision in Malcolm has effectively been reversed for new claims brought under the Equality Act 2010 (s15 EA 2010), that change in the law came too late for the claimant in this case). For the full judgment, click here.

Fair procedure in dismissal

R (on the application of Shoesmith) v OFSTED & Ors [2011] EWCA Civ 642

In an application for Judicial Review of an employment decision; the decision of the employer will be subject to a common law test of procedural fairness. While this is not the same test as would apply if the claimant brought a claim of unfair dismissal in the Employment Tribunal, the court has the power to quash a decision which was procedurally unfair. A claimant is not stopped from bringing an application for Judicial Review merely because she has the potential alternative protection of an unfair dismissal claim. If the case is one which primarily concerns public law, the claim would be more appropriately heard in the administrative court rather than in the Employment Tribunal. Equally, if the damages in the public law case are likely to be more than would be available in the Employment Tribunal, the civil courts, rather than the Tribunal, will be the appropriate forum. The Court of Appeal therefore found that the decision of Haringey council to dismiss its former Director of Children Services Sharon Shoesmith was unlawful, and the decision was quashed. In circumstances where the claimant did not seek a return to work, she was entitled to her contractual pay and other benefits for a period of time to be determined by the High Court, if it could not be agreed. For the full judgment, click here.

Settlement agreements

Insurance Company Plc v Hayward [2011] EWCA Civ 641

Where a settlement agreement is reached, in the form of a Tomlin order or otherwise, the need for finality in litigation dictates the general rule that neither party may subsequently seek to have that agreement set aside. Where the grounds on which a party seeks to challenge a settlement agreement is that the agreement was made on the basis of fraud, the party alleging fraud cannot do so if the facts of the fraud were known to it at the time of the original litigation but not raised in that forum. Moreover, the party alleging fraud is also not protected if the fraud was raised by it in the original litigation, and formed a part of the eventual settlement. In this case, concerning an injury at work, the Court of Appeal allowed an insurer's application to set aside a settlement agreement, in circumstances where the insurer had defended the case prior to settlement on the basis that the claimant's account of his injury was exaggerated; and then, after a settlement had been agreed, the insurer had been given new information suggesting that the claimant's account of the extent of his injury was almost entirely untrue. The Court of Appeal disposed of the matter by finding the settlement agreement was void, and requiring the claimant to proceed afresh with his original injury claim. While the case was a personal injury claim in the civil court system, it is a reminder to all lawyers in whichever court we practise of the need to play an open hand in settlement discussions. For the full judgment, click here.

Employment Appeal Tribunal

Religion or belief

Cherfi v G4S Security Services Ltd [2011] EAT case 0379/10

Where a provision, criterion or practice indirectly discriminates against a claimant, the employer must show both that the aim of the practice was legitimate and that the means adopted were proportionate (s19(2)(d) EA 2010). In this case, the Employment Appeal Tribunal upheld a decision of the Employment Tribunal that a ban on a Muslim worker from leaving work on Friday lunchtimes was both justifiable on grounds of business efficiency and proportionate. Although the reasons provided by the Tribunal were brief, the EAT found that the Tribunal had considered the matter from the perspective of the claimant, and had not relied solely on the employer's cost considerations, and in any event the facts of the case were such that there was no reasonable alternative to dismissal. For the full judgment, click here.


Vivian v Bournemouth Borough Council [2011] EAT case 0254/10

The time limit for bringing a claim of detriment for reason of making a protected disclosure runs from the date of the last act done on the grounds of the protected disclosure (s48(3) ERA 1996), not from the last of the chain of events linked to but not on grounds of that disclosure. The Employment Appeal Tribunal considered a case where an employee had made a complaint of bullying, and her relationship with her employer subsequently broke down in its entirety, and the claimant was dismissed, but the dismissing manager was not motivated to punish the employee for making a disclosure, and the claimant's disclosure did not cause the dismissal. In these circumstances, the EAT held that time could run only from the last act done on the grounds of the protected disclosure. It followed that the claim itself had not been brought in time. For the full judgment, click here.

Liability between respondents

London Borough Of Hackney v Sivanandan & Ors [2011] UKEAT 0075/10

The claims brought to the Tribunal, including discrimination claims, are statutory torts. Where an employer is liable for discrimination claims, it may be joint and severally liable with other parties. Where two respondents are found liable, as in any other tort case, the claimant has the choice from which of the respondents to seek damages (Section 2 (1) of the Civil Liability (Contribution) Act 1978). While it has been the practice of many Tribunals to apportion liability between the respondents, this should only be done where the respondents differ as to the extent to which they are responsible for the damage in question. In particular it is wrong in law for the Tribunal to apportion damages to an employer, on the sole grounds that the employer has deeper pockets. In this case, liability was established against two respondents, the first of which was the local authority, and the second was a charity, now defunct. The local authority appealed on the basis that it could not be severally liable for the whole amount of the award. The Employment Appeal Tribunal rejected this appeal in forthright terms, insisting that it was within the discretion of the claimant to seek her damages from the authority, should she so wish. For the full judgment, click here.

Wasted Costs

Wilsons Solicitors v Johnson & Ors [2011] EAT case 0515/10

Under the Employment Tribunal Rules, costs may be award against a party (rules 38-40) or wasted costs against their representative (rule 48). Where a representative's preparation for a Case Management Discussion is so defective that the discussion has to be aborted, wasted costs may be awarded against the representative. Where a telephone CMD was wasted and had to be relisted for an oral hearing the EAT upheld a wasted costs order. The EAT considered authorities to the effect that wasted costs should not be ordered where a lawyer would be made liable for costs without being able to tell the whole story. However, in circumstance where the representative had not raised this defence with the Judge, but had defended his conduct on the basis that his pleadings had been satisfactory and the case clarified, the EAT determined that a costs order could be made. For the full judgment, click here.



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