Employment Law Bulletin – Issue 148 – 16 May 2013

Thursday 16 May 2013

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Employment news

Queen's speech: the rate of change slackens - temporarily

Certain employment-related measures were announced in the Queen's Speech. In particular, a Deregulation Bill will repeal the Tribunal's power to make recommendations in discrimination claims, and Immigration Bill will increase penalties for employers who employ workers lacking immigration status. After a period when the Coalition has been introducing repeated changes to employment law, these changes appear to represent a modest slackening of the Coalition's pace of reform. There are still of course other changes pending (including fees, new rules of procedure and the introduction of protected conversation) for which key details remain to be published.

Employment case law

Court of Justice of The European Union

Language requirement

Anton Las v PSA Antwerp NV, case C-202/11
Article 45 of the Lisbon Treaty protects freedom of movement for workers within the European Union. The scope of this provision was relevant to a case brought in the Dutch-speaking region of Belgium, where a worker's employment contract had been drafted in English, in breach of local legislation requiring all such contracts to be in Dutch. The law went on to provide that contracts drafted in the wrong language were null. A term of the contract limited the employee's compensation on severance, and the worker sought to have the contract declared null, in order to be entitled to a higher payment. The employer resisted; arguing that the local law was in breach of European law. The CJEU agreed with the employer, holding that the legislation was incompatible with the Lisbon Treaty and unlawful. For the full text of the judgment, click here.

Court of Appeal

Unilateral variation

Dresdner Kleinwort Ltd & Anor v Attrill & Ors [2013] EWCA Civ 394
As a matter of common law, any variation to a contract can usually only operate by consent. The parties may agree that either party will have a power to make unilateral variations. But even where this power is expressly reserved, it will in any event be read restrictively. These familiar principles of contractual interpretation were applied to the case of a bank which attempted to forestall a mass exodus of staff during the recent global financial crisis by unilaterally guaranteeing them significant bonuses, before withdrawing the scheme as their revenue declined. Elias LJ held that the original variation to introduce the bonus had been effective, and that the employer's subsequent withdrawal had been in breach of the term of trust and confidence. For the full text of the judgment, click here.

High Court

Contractual unfairness

Yapp v Foreign & Commonwealth Office [2013] EWHC 1098
The nearest employment law comes to a general duty to treat employees fairly is the protection against unfair dismissal contained in section 98 of the Employment Rights Act 1996. This protection is not an implied contractual term but a statutory tort, the determination of which can only be heard by the Employment Tribunal. What happens when a contract of employment expressly provides that an employee will be treated fairly, i.e. so that unfair treatment results in a breach of contract? In a case concerning a senior diplomat who was contractually "entitled to fair treatment accompanied by the same principles of effective performance management that we expect to be applied elsewhere in the organisation", but was subject to allegations of sexual misconduct, and withdrawn from his post until natural retirement. Cranston J found that the employer acted in breach of contract and in breach of its duty of care in withdrawing the employee from his post without affording him fair treatment. Damages were left to be determined if not agreed. For the full text of the judgment, click here.

Employment Appeal Tribunal


Koenig v The Mind Gym Ltd [2013] EAT 0201/12
Section 211 of the Employment Rights Act 1996 provides that "an employee's period of continuous employment begins with the day on which the employee starts work." The work cannot be under a contract of employment if it is contrary to the terms of that contract of employment, unless the contract is varied or unless it represents a separate contract. In a case where an employee had been dismissed immediately prior to the acquisition of sufficient service, the Tribunal focussed on the Claimant's attendance at meetings with clients of her employer. The attendance was unpaid and the Claimant was instructed not to refer to herself as an employee of the Respondent. In these circumstances the EAT did not interfere with the Tribunal's findings that this was not work under the contract. For the full text of the judgment, click here.


Ladrick Lemonious v Church Commissioners [2013] EAT 0253/12
Rule 40 of the Employment Tribunal's Constitution and Rules of Procedure empowers a Tribunal to make a costs order where the paying party has in bringing the proceeding acted vexatiously, abusively, disruptively or otherwise unreasonably, or the bringing or conducting of the proceedings by the paying party has been misconceived. There is no principle that an award of costs must follow when a party fails to establish a central allegation in their case. In these circumstances, the award of costs is at the discretion of the Tribunal (Arrowsmith v Nottingham Trent University [2011] EWCA Civ 797, [2012] ICR 159). In a case where a Tribunal found on the balance of probabilities that an employee had sent anonymous emails, but did not award costs, the Appeal Tribunal upheld the Tribunal's decision. The Claimant's case overall had not been unreasonable; despite the finding that he had lied, he had in fact won a finding of unfair dismissal, the Tribunal ruling that the dismissal had been procedurally unfair. For the full text of the judgment, click here.

Continuity of service

Lund v St Edmund's School, Canterbury [2013] EAT 0514/12
Section 207A of the Trade Union and Labour Relations (Consolidation) Act 1992 empowers Tribunals to increase the amount of a Tribunal award where there has been a breach of a Code of Practice. The Code of Practice issued by ACAS in 2009 on disciplinary and grievance procedures expressly provides that it covers misconduct and poor performance cases but not redundancy dismissals or the non-renewal of fixed term contracts on their expiry. What happens to other dismissals covered by disciplinary and grievance procedures? In a case where the Tribunal ultimately found that the reason for dismissal was a reason other than conduct, capability, redundancy or retirement, the EAT held that there was no reason of principle why such dismissals should fall outside the Code. Keith J held that it is not the ultimate outcome of the process which determines whether the Code applies. It is the initiation of the process which matters. The Code applies where disciplinary proceedings are, or ought to be, invoked against an employee. For the full text of the judgment, click here.

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