Employment Law Bulletin - Issue 108 - 24 August 2011

Wednesday 24 August 2011

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Employment news

Pensions: beware offers to transfer out

A report by KMPG shows that more than 90,000 people have been offered incentives to transfer out of final salary pension schemes. The report predicts that a further 750,000 workers may transfer out over the next 5-10 years. The government has warned that transfers carry a risk of mis-selling. For more details, click here.

Disabled workers protest against possible Remploy closure

Workers have held protests in South Wales and Yorkshire amid worries over the closure of up to 54 Remploy factories across the UK. A specialist company offering sheltered work for people with disabilities, Remploy's future is doubt following the publication of the Sayce Report, which recommended ending Remploy's subsidy and requiring it to compete on the open market with private businesses on a contract-by-contract basis. For more details, click here.

Claim of caste discrimination

An Indian couple have brought a claim to the Tribunal arguing that they encountered discrimination on grounds of caste from their employer, a solicitor's firm in Coventry. Amardeep Begraj, 33, was from a higher caste than her husband Vijay, 32. She claimed that following their marriage, her workload was increased and her secretarial support was reduced, and she was paid less than colleagues. For more details, click here.

Employment Case Law

Privy Council

Variation of contract

Adamas Ltd v Cheung (Mauritius) [2011] UKPC 32
As a matter of common law, an employment contract may not be varied save with the consent of both employer and employee. If the variation of the employment contract is not a repudiatory breach, giving the employee the opportunity of resignation, the employee's failure to resign will not constitute assent to variation. So the Privy Council has held, in a case concerning a sales person in Trinidad, who sued her employer in that country's Industrial Court for unjustified dismissal. The employee was transferred by her employer from a post as a manager of a thriving jewellery store to a new post at a much more modest location, and then ordered to carry out deliveries, a duty which she initially agreed to do only under protest and later refused to do. The employer argued unsuccessfully that by consenting initially, she should be deemed to have accepted variation. The Privy Council disagreed. For the full judgment, click here.

Supreme Court


Duncombe & Ors v Secretary of State for Children, Schools and Families (No. 2) [2011] UKSC 36
Section 94(1) of the Employment Rights Act 1996, which protects employees from unfair dismissal, has no express geographical limitation. In Lawson v Serco Ltd [2006] ICR 250, it was held that the right to protection is limited to employees working in Great Britain, peripatetic employees with a base in Britain, and (only exceptionally) to employees working outside Great Britain but with a closer connection to Britain than the country in which they were based. In Lawson v Serco, examples of such workers included employees posted abroad by a British business, and employees in an extra-territorial British enclave. In a case concerning teachers recruited by the Secretary of State to work in an international enclave, the Supreme Court has agreed that they too should be deemed to be protected. For the full judgment, click here.

Court of Appeal

Fiduciary duty

Towers v Premier Waste Management Ltd [2011] EWCA Civ 923
A director is subject to more onerous duties in relationship to his employer, than an ordinary employee. He may only to use his position in the company to protect its interests. He must not profit from a relationship which puts his interests in conflict with his duty to the company. The duties originate in common law and have now been codified in Chapter 2 of the Companies Act 2006. In a case concerning the law prior to codification, the Court of Appeal held that an employer acted in breach of his fiduciary duty by accepting equipment for his personal use by way of a free, undisclosed and unapproved loan from one of the company's customers. For the full judgment, click here.

Employment Appeal Tribunal

Discrimination in the employment field

London Borough Of Waltham Forest v Martin [2011] EAT 0069/11
Part II of the Race Relations Act applies to discrimination in the employment field only; other claims have to be brought in a County Court under part III of the Act. Where a Claimant was prosecuted and gave him a final written warning for housing and council tax benefit fraud, by his employer, who is also a prosecuting authority charged with investigating such fraud, the EAT held that prosecutions were not employment matters but were governed by part III of the Race Relations Act and the Tribunal had no jurisdiction to consider the Claimant complaint. For the full judgment, click here.

Constructive dismissal

Hira Company Ltd v Daly [2011] EAT 0135/10
The leading case on constructive dismissal is Western Excavating v Sharp [1978] ICR 221 in which it was held that for the employer's conduct to amount to dismissal there must be a fundamental breach of contract by the employer that causes the employee to resign. The employer need not have intended the breach to be repudiatory. The test is whether there is no reasonable cause for the employer's behaviour, and whether the conduct is calculated to destroy or seriously damage the relationship of trust and confidence (Malik and Mahmud v Bank of Credit and Commerce International SA [1997] ICR 606). In a case concerning an importer of office equipment, who had contracts taken away from him by his managers, the EAT has held that the Tribunal correctly applied the Malik test in finding that there was no requirement for the breach to be intentionally repudiatory. For the full judgment, click here.

Sood v Christ The King School & Ors [2011] EAT 0449/10
Rule 18(7)(c) of the Employment Tribunal Rules authorises a Judge to strike out a claim on the basis that the claim has been pursued unreasonably. As a matter of policy, however, the upper court have repeatedly held that that discrimination cases should only be struck out in the most plain and obvious of circumstances. The EAT has held that a Judge exercised his powers in appropriately in striking out a case of victimisation for the reason that the same facts were pleaded as acts of ordinary direct discrimination; and in striking out without hearing evidence a claim of disability discrimination on the basis that it was also pleaded as race. For the full judgment, click here.

Forthcoming events

Industrial Law Society

The Industrial Law Society's annual Oxford conference will be held from Friday 16 to Sunday 18 September 2011 in Oxford. For more details, click here.

The Discrimination Law Association

The Discrimination Law Association will hold a Practitioner Group Meeting on 21st September 2011 at the London offices of Russell Jones and Walker. The speaker will be David Stephenson and the topic will be harassment. Please note meetings of the DLA are open to members only. For more details, click here.


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