Employment Law Bulletin – Issue 131 – 21 August 2012

Tuesday 21 August 2012

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Employment news

Job figures mask rise in part-time working and self-employment
Over the past 6 months, the claimant count shows that unemployment has fallen by 300,000. These figures conceal trends towards part-time as opposed full-time working, and towards a large increase in the proportion of workers who are self-employed, which now amounts to around 15% of the total UK workforce. More details here.

Employment case law

Court of Appeal

Construction of contractual term

Welsh National Opera Ltd v Johnston [2012] EWCA Civ 1046
In general, there is no rule that changes to an employee's terms and conditions that have been collective negotiated between an employer and a trade union will result in a variation of an employee's contract. Whether do or not, will depend on the certainty and significance of the term and the intention of the parties. Where the new form does form a term of the employee's contract; the variation is binding on the employer. Where an employer has negotiated a misconduct procedure with a trade union and this forms part of the employment contract, but the employer seeks to disapply the procedure, on the basis that it will cause undue distress to the employee concerned, is the employer entitled to do so, or must it comply with the contractual policy? The Court of Appeal (Kay LJ giving the judgment of the court) determined that the answer to the question depends on the narrow interpretation of the contractual provision. In a case concerning an oboist dismissed for capability, the collectively-agreed policy was very clearly intended to govern all instances of poor musicianship in the Orchestra, and the employer had no contractual power to disregard it. For the full judgment, click here.

High Court

Legality of workfare scheme

Reilly & Anor, R (on the application of) v Secretary of State for Work and Pensions [2012] EWHC 2292 (Admin)
Article 4 ECHR prohibits forced or compulsory labour, save for various exceptional categories including military service and civic obligations. In a case concerning the government's workfare scheme, which allows unemployed persons only a partial autonomy to refuse work placements, or their benefits will be stopped, the High Court (Foskett J) has found that article 4 was not intended to prohibit workfare-type schemes, but historic instances of colonial exploitation, to which workfare could not sensibly be compared. Foskett J also held that the scheme was not in fact compulsory, and on that basis, granted the relief of judicial review, where one of the two claimants had been falsely informed that the scheme was obligatory, and the other had been mis-informed as to the scale of the sanction he might face if he refused a work placement. For the full judgment, click here.

Employment Appeal Tribunal

Zero Hours contracts

Pulse Healthcare v Carewatch Care Services Ltd & Ors [2012] UKEAT 0123/12
In determining whether a person is an employee of an employer, for all groups of workers save agency workers (James v Greenwich Council [2007] ICR 577), there is no presumption that a written contract excluding employee status is determinative. The key consideration is rather what was the true relationship between the parties. The written contract can be disapplied even without a finding that it contains sham terms (Autoclenz v Belcher [2011] IRLR 820). The same principles apply, the Employment Appeal Tribunal has held, where the worker is employed on a written "zero hours" contract, a contract in other words, where the employer does not offer even a minimum of one hour's attendance at work per week. In a case concerning healthcare workers who had been employed on regular shifts amounting to 36 or 24 hours per week, HHJ Richardson dealt with the employer's purported zero hours contract by finding that the written document did not reflect the reality of the situation, and accordingly made a finding that the workers had been employees of the employer. For the full judgment, click here.

Constructive dismissal

Roberts v Whitecross School [2012] UKEAT 0070/12
In order to succeed in a claim of constructive dismissal, an employee must show, amongst other things, a breach of the contract amounting to a repudiation of the contract. But what if the breach arises from a genuine mistake by the employer? In a case concerning a teacher who resigned in response to his employer's reduction of his salary by 50% while he was absent sick, the EAT has held that it will not avail an employer facing a claim of fundamental breach of contract to show that the employer believed its view of the contract was right. The employer knew that there was a dispute about the interpretation of the sickness policy, and had a settled intention to reduce the employee's pay. For the full judgment, click here.


Commercial Motors (Wales) Ltd v Howley [2012] UKEAT 0636/11
Where an employee is unfairly dismissed, she is entitled to an award which contains two elements, a basic and a compensatory award. The compensatory award may be reduced if the employee has not taken all steps to mitigate her loss, but there is no rule that the chain is always broken whenever an employee has taken a new job after their main employment has ended (Dench v Flynn & Partners [1998] IRLR 653). In an appeal brought by an employer against a compensatory award, the EAT has reaffirmed the principle in Dench. In the same case Silber J also upheld, subject to recalculation of the correct amount, elements of a compensatory award that dealt with the losses of a work phone and a company car provided by the employer. For the full judgment, click here.

Stigma damages

Ur-Rehman v Doncaster Jahia Mosque [2012] UKEAT 0117/12
An employee may obtain stigma damages for unfair dismissal, if the Tribunal finds that the stigma of the dismissal will deprive the employee of a real chance of success on future applications for employment. Subtly different considerations find where the hearing takes place both after the dismissal and after a subsequent application for work or after a second dismissal. In these cases, the Tribunal is invited to find that the reason for the unsuccessful application, or second dismissal, was the stigma associated with the first dismissal. Here the question for the Tribunal is whether stigma was an effective cause of the application not succeeding or of the second dismissal. In a case concerning an imam who was unfairly dismissed by the Respondent, and maintained that he then lost a second job where his employer was advised to dismiss him before he brought a second claim, but the imam was not believed, the EAT (Langstaff J presiding) held that the Tribunal had not erred in determining that the evidence was insufficient to establish his claim. For the full judgment, click here.

Notices & coming events

The Institute of Employment Rights hold its conference "Employment Law Update" on 10 October 2012 with speakers from Thompsons, OH Parsons and Pattinson & Brewer among others. More details here.


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