Employment Law Bulletin – Issue 127 – 29 May 2012

Wednesday 30 May 2012

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Employment news

Draft bill published
The government's Enterprise and Regulatory Reform Bill has now had its first reading in Parliament. Part 2 of the Bill would make a number of changes to Tribunal practice and procedure, including a mandatory period of Acas conciliation before instituting tribunal proceedings, a power for the Secretary of State to limit unfair dismissal compensatory award to either one year or between one and three years' median earnings, and the power for a tribunal where there are aggravating features to impose a penalty on employers of 50% of any financial award. The Bill would not introduce issuing fees for Tribunals, which it is understood the government still intends to introduce, albeit probably by separate legislation. The Bill can be read here.

Equality law: consultations now underway
The Home Office has in addition announced two consultations (i) on the government's intended abolition of the rules on third-party harassment, and (ii) on the tribunals' wider power under the same Act to make recommendations in discrimination cases, and to abolish the questionnaire procedure for obtaining information in discrimination cases. Both of these consultations close on 7 August 2012 and can be accessed here and here.

Equality and Human Rights Commission
The Home Office has also set out its proposals for the future of the Equality and Human Rights Commission, including the removal of its present mandate to promote good relations between communities, which can be accessed here.

Beecroft report
The text of the controversial Beecroft report into the future of employment litigation has been made available by the Telegraph newspaper here.

Compensated no-fault dismissals
While there has been considerable press discussion of which parts of Beecroft will be introduced, the government's call for evidence on the signature Beecroft proposal, compensated no-fault dismissals, remains open until 8 June 2012.

Employment Case Law

Court of Appeal


Hounga v Allen & Anor [2012] EWCA Civ 609
A Claimant may not sue on an illegal contract. Where the illegality is done in the knowledge of and with the participation of a Claimant, any claim should not be allowed to proceed (and will normally be struck out at a PHR). But this rule should not be used to exclude a contractual claim where the source of the illegality was the Respondent. Similar but subtly different considerations may apply where the claim is in a statutory tort (such as discrimination). Here the focus is on whether the illegality of the Claimant is so bound up with the tortious conduct of the Respondent that the claim is not allowed to proceed (Hall v Woolston Hall Leisure Ltd [2001] ICR 99, Vakante v Governing Body of Addey and Stanhope School [2005] ICR 231). In the instant case, the Claimant was party to dishonesty in obtaining a visa to come to England, and she falsely represented her name, age and motives for travel to the immigration authorities. After the expiry of a tourist visa, she remained in the country illegally working for the Respondents looking after their children. The Claimant was beaten and abused during her employment and dismissed after being thrown out the house. The EAT dismissed her wages and unfair dismissal claims on the basis that the contract was unlawful but allowed the claim for discrimination to proceed, on the basis that the illegality was not bound up with the employer's subsequent unlawful eviction and dismissal of her. On appeal, the Court of Appeal held that the EAT had misdirected itself in law. The Claimant's discrimination case was linked to an image of her as a vulnerable migrant. The problem with it was the Claimant's participation in the original immigration fraud. In light of that, no claim for race discrimination could succeed. For the full judgment, click here.

Article 6

Mattu v The University Hospitals of Coventry and Warwickshire NHS Trust [2012] EWCA Civ 641
Article 6 of the European Convention on Human Rights protects the rights of citizens to a fair hearing in the determination of their civil rights. The right to carry on one's profession is a civil right. Hence a decision that may result in a legal prohibition on the carrying on of a profession engages Article 6. In Le Compte, Van Leuven and De Meyere v Belgium (Application 6878/75) (1982) 4 EHRR1 the European Court of Human Rights has held that applicants' suspensions from practising medicine engaged Article 6. However, the UK Courts have sought to limit the Le Compte principle: for fear of subjecting the ordinary disciplinary procedures of public employers to a much higher standard of procedural fairness than ordinary business practices allow. The Court of Appeal has now had to consider these issues in a case concerning a consultant doctor in the NHS who his employer described as "unmanageable", and was dismissed, but complained that the process was unfair for reasons including that his employer refused to allow him to be represented by a solicitor. The three judges in the Court of Appeal agreed in refusing the consultant's appeal but disagreed as to the basis on which it was rejected. The pithiest explanation was provided by Sedley LJ who held that an employer who dismisses an employee, without or with the benefit of a formal hearing, is not determining the employee's civil rights. The employer is exercising a contractual power. Article 6 binds a tribunal concerned with the practice of an individual's profession, but an ordinary employer, public or private, is not such a body. For the full judgment, click here.

Gross Misconduct

Cavenagh v William Evans Ltd [2012] EWCA Civ 697
While an employee is ordinarily entitled to notice, or wages in lieu of notice, to cover the period between notice of dismissal and termination; a worker dismissed for actual gross misconduct is not entitled to notice or pay. The dismissal may be justified by reliance on facts not known to the employer at the time of the dismissal, but only discovered subsequently, even after the proceedings began. (Boston Deep Sea Fishing and Ice Company v. Ansell (1888) 39 Ch D 339). What happens, however, where a worker is expressly dismissed under a contractual provision providing for summary termination with pay in lieu of notice? In those circumstances does a company have a defence to the claim for pay in lieu? Where a senior employee had not told his employer at the time of dismissal that he had taken £10,000 of the company's finance and paid it into his private pension, the Court of Appeal held that the answers depended on the strict wording of the employment contract. In the present case, there was a restrictive notice clause giving rise to a debt in favour of the employee, save that the debt was limited to a relatively short period. And the clause made no provision for the employer to pay no notice pay in the event of after-discovered gross misconduct. In these circumstances, the Court held, the contract obliged the employer to pay a debt, and this obligation was not extinguished by the subsequently-discovered gross misconduct. For the full judgment, click here.

High Court

B, R (on the application of) v The Nursing and Midwifery Council [2012] EWHC 1264
The NMC's proceedings are governed by the Nursing and Midwifery Order 2001 ('the Order') and the Nursing and Midwifery Council (Fitness to Practise) Rules 2004 ('the Rules'). Where an Investigating Committee has considered an allegation that a registrant's fitness to practise is impaired, and decided that there is no case to answer, the only power available to reopen the investigation is where there is a fresh investigation (rule 7 of the Rules). Where a nurse who was accused of assaulting hospital patients, and subject to an Investigating Committee which found that the employer's system rather than the nurse were at fault, and there was an administrative decision of the NMC to open a new investigation on the same facts (the NMC stating that its original Investigating Committee had made errors of law), the High Court held that the NMC departed from its published procedures by reopening the investigation. In so doing, it breached the Claimant's procedural legitimate expectation, and acted unfairly and unlawfully. For the full judgment, click here.

Notices & coming events

Human Rights in the Employment Context
Thursday 31 May 2012 from 18:30 to 20:00

A Garden Court Chambers seminar providing practical guidance on the use of articles 8, 9 and 11 of the Convention in employment law cases. Click here for more information.

The Justice Equality 2012 Conference
Tuesday 26 June

Takes place at The Hatton, 51-53 Hatton Garden, London EC1N 8HN with speakers including Robin Allen QC and the Hon. Mrs. Justice Cox. More details here.


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