Employment Law Bulletin - Issue 154 - 18 September 2013

Wednesday 18 September 2013

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Employment Law News

Low Pay Britain

A report published by the Resolution Foundation entitled, "Low Pay Britain 2013" shows that 4.8 million Britons (20 per cent of all employees) earn below the Living Wage - a leap from 3.4 million (14 per cent) in 2009 - at the height of the recession. It is believed that this increase in those earning below the living wage has led to an increased reliance on food banks. For further on this topic click here and here.

Agency workers not paid equally

The Trade Union Congress (TUC) argues that agency workers who have been with a company for more than 12 weeks should be entitled to the same pay as permanent staff. The TUC further argues that an exemption in the Temporary Agency Workers Directive means that if a worker is directly employed by an agency, the company does not have to pay that worker the same rate of pay as a permanent member of staff - although they do get paid for at least four weeks between assignments. To read more, click here.

Employment Case Law

Court of Justice of the European Union

Anton Schlecker v Melitta Josefa Boedeker [2013] EUECJ C-64/12 (12 September 2013)

Jurisdiction | Article 6 Rome Convention

Article 6, entitled 'Individual employment contracts', provides:

'1. Notwithstanding the provisions of Article 3, in a contract of employment a choice of law made by the parties shall not have the result of depriving the employee of the protection afforded to him by the mandatory rules of the law which would be applicable under paragraph 2 in the absence of choice.

2. Notwithstanding the provisions of Article 4, a contract of employment shall, in the absence of choice in accordance with Article 3, be governed:

(a) by the law of the country in which the employee habitually carries out his work in performance of the contract, even if he is temporarily employed in another country; or

(b) if the employee does not habitually carry out his work in any one country, by the law of the country in which the place of business through which he was engaged is situated, unless it appears from the circumstances as a whole that the contract is more closely connected with another country, in which case the contract shall be governed by the law of that country.'

Ms Boedeker was employed by Schlecker, a German undertaking with branches in a number of Member States. Schlecker is engaged in the retailing of cosmetics, healthcare and household products. After working in Germany from 1 December 1979 until 1 January 1994, Ms Boedeker entered into a new employment contract, under which she was appointed as Schlecker's manager in the Netherlands. In that capacity, she managed Schlecker's business in the Netherlands, overseeing approximately 300 branches and some 1250 employees. By letter, on 19 June 2006, Schlecker informed Ms Boedeker, that her position as manager for the Netherlands was to be abolished with effect from 30 June 2006 and invited her to take up, under the same contractual conditions, the post of Head of Accounts in Dortmund (Germany) with effect from 1 July 2006.

Ms Boedeker duly presented herself in Dortmund but eventually made a claim against Shlecker complaining of the change in her contractual terms. Ms Boedeker asserted that Netherlands law should be applicable to the agreement signed by the parties and that Schlecker should be ordered to reinstate her as 'manager for the Netherlands'. Schlecker argued that German law was applicable because, from the circumstances as a whole, the contract is more closely connected with Germany.

The proceedings before the domestic court were stayed and referred to the Court for a preliminary ruling on the following questions:

'(1) Is Article 6 (2) of the Rome Convention on the law applicable to contractual obligations to be interpreted in such a way that, if an employee carries out the work in performance of the employment contract not only habitually but also for a lengthy period and without interruption in the same country, the law of that country should be applied in all cases, even if all other circumstances point to a close connection between the employment contract and another country?

(2) Does an affirmative answer to the first question require that, when concluding the contract of employment, or at least at the commencement of the work, the employer and the employee intended - or were at least aware of the fact - that the work would be carried out over a long period and without interruption in the same country?'

The Court held that Article 6 (2) of the Rome Convention must be interpreted as meaning that, even where an employee carries out the work in performance of the contract habitually, for a lengthy period and without interruption in the same country, the national court may, under the concluding part of that provision, disregard the law applicable in that country, if it appears from the circumstances as a whole that the contract is more closely connected with another country. Given its answer to the first referred question the Court found there is no need to answer the second question referred for a preliminary ruling. To read the judgment, click here.

Court of Appeal

East Midlands Trains Ltd v National Union of Rail, Maritime and Transport Workers [2013] EWCA Civ 1072 15 August 2013

Collective agreements | strike action

East Midlands Trains (EMT) wanted to bring about changes in the roster arrangements for its senior conductors, train managers and other staff employed to work on trains, excluding the drivers. The changes were a change in the start and finish times of a shift, but there was to be no increase in the length of a shift. A dispute arose as to whether EMT could require the on-train staff to work rosters with these changes, involving as they do, different starting times for some of the shifts. The National Union of Rail, Maritime and Transport Workers (RMT) opposed the making of those changes without agreement and following a ballot of its members proposed industrial action short of a strike.

EMT applied unsuccessfully for an injunction against RMT. EMT appealed this refusal to the Court of Appeal. The Court held that the power of cancellation in collective agreements, read as a whole, must reasonably be understood to mean that if, without breaching its obligation of co-operation to its employees, EMT took the view that existing work patterns had become unworkable in the light of the Engineering Blockade, it was able to cancel turns of duty and rostered work so far as it considered it necessary to do so. That decision must logically be a function of management and not of the on board staff. To read the judgment, click here.

Stuart v London City Airport Ltd [2013] EWCA Civ 973, 31 July 2013

Conduct Dismissal | reasonableness of investigation

In the early evening of 21 December 2009, during an official break, Mr Stuart went into the airport departure lounge and visited the duty free shop, which is called "Nuance". He was suspected by a member of staff there of having taken some goods without paying for them. The police were called and he was apprehended at the cold drinks cabinet in the W H Smith concession, which was next door to Nuance. He was found to have in his possession a bottle of perfume and two lipsticks for which he had not paid. He was suspended, and the disciplinary procedure was put in motion. Statements were obtained from two Nuance employees, a Ms Adenekan and a Mr Gilani, and Mr Stuart himself submitted a statement.

A disciplinary hearing took place on 19 January 2010 before a Mr Dodds. A minute of the meeting was before the Tribunal, and Mr Dodds also gave evidence about it. Mr Dodds had the three statements. Neither Mr Gilani nor Ms Adenekan was present, but Mr Dodds had previously spoken to Mr Gilani, who had told him essentially what appears in his statement. Mr Stuart was accompanied by a trade union representative. Mr Stuart asserted during the internal disciplinary hearing that he did not leave the shop. Mr Dodds regarded it as important to understand whether the boundaries of the duty free shop were clear, so he adjourned the meeting and went to see the area for himself. At the end of the disciplinary procedure Mr Stuart was dismissed.

Mr Stuart appealed. His appeal letter asserted that he had every intention of paying for the goods and similar points were made to those made during the disciplinary procedure.Mr Shields, who chaired the appeal hearing, wanted to see the area for himself. He accordingly adjourned to do so. In the course of inspecting the area he also spoke to Mr Gilani. He concluded that it was impossible that Mr Stuart could have believed that he had never left the area of the duty-free shop. He made essentially the same points as Mr Dodds, but in more detail. He took account not only of the fact that W H Smith was a completely different unit, and obviously recognisable as such, but also of the fact that, in order to get to the area where he had been seen by Mr Gilani in conversation with the "colleague", Mr Stuart had had to cross the central seating area of the lounge and had been a significant distance away. Taking those facts together with the statements that Mr Stuart had been concealing the items, he decided that the appeal must be dismissed.

On 16 April 2010 Mr Stuart commenced proceedings for unfair dismissal in the Employment Tribunal (ET). In the interval between the commencement of the Employment Tribunal proceedings and the hearing Mr Stuart was tried for theft in relation to this incident and was acquitted. The ET announced at the end of the hearing that the claim was dismissed and gave oral reasons.

The EAT, on a perversity appeal, reversed the decision of the ET and submitted the claim for re-hearing. The Respondents appealed to the Court of Appeal. The appeal was allowed and the decision of the ET that Mr Stuart was not unfairly dismissed was restored. The Court observed that the question for the ET was whether the Appellant had, in summary, acted reasonably in dismissing him. To read the judgment, click here.

Employment Appeal Tribunal

Cumbria County Council & Anor v Bates [2013] UKEAT 0398/11

Compensation | relevance of post dismissal events

The Claimant was employed by the First Respondent as a teacher at Dowdales School. He was found to have been unfairly dismissed. Post dismissal he was convicted of common assault on a 16-year-old girl who was his former pupil and sentenced to six weeks' imprisonment. The issue was whether the Employment Tribunal should have had regard to evidence relating to that conviction when assessing the compensatory award, in particular his pension loss. The ET considered the decision in Soros v Davison [1994] ICR 590 prevented it from doing so.

The EAT allowed the appeal. The Claimant's conviction and sentence may have substantially reduced his pension loss and the ET determining the compensatory award would be entitled to take into account that evidence, and should have done so in the present case. To read the judgement, click here.

Audere Medical Services Ltd v Mr F T Sanderson UKEAT 0409/12

Automatic Unfair Dismissal | Polkey Reductions

The Employment Tribunal did not order a Polkey reduction for contributory behaviour because they found the dismissal was automatically unfair and considered such a finding precluded a Polkey reduction. The EAT held that such reductions were permissible depending on facts of the case. The case was remitted to the same ET. To download the judgment, click here.

X v Y UKEAT 0322/12

Race Discrimination

The Employment Tribunal found that the Claimant had been unfairly dismissed on the basis of 10 or so breaches of the implied term of trust and confidence. Although in the circumstances the Employment Tribunal on the same findings 'could' have concluded that the Claimant had established a prima facie case of discrimination on the grounds of race, it dismissed that claim finding instead that Y was guilty of poor management of X.

In upholding the appeal the EAT (HHJ Serota QC) had this, among other things to say at paragraph 60 of the judgment:

"Discrimination cannot be inferred simply on the basis of differential treatment and difference in ethnicity, something more is required; that it is why concentration on individual issues is unhelpful. If one looks at each complaint in isolation the findings of an Employment Tribunal may be unchallengeable. It is important to take a holistic view of all the relevant facts. In the present case we are not persuaded that the Employment Tribunal did take that approach, the Employment Tribunal should have said so explicitly and explained why the Claimant's ethnicity in circumstances where there had been a significant number of substantial breaches of contracts was not the reason for the less favourable treatment. Simply finding that there had been poor management was insufficient. Poor management itself might be a symptom of discriminatory conduct."

To read the full judgment, click here.

Ms A Ghosh v Nokia Siemens Networks UK Ltd UKEAT 0125/12

Discrimination Claims Dismissed | Reasonableness of cost order

The Employment Tribunal's exercise of its discretion in ordering the Claimant to pay costs of £5,000 to the Respondent on the basis of what it found to be her unreasonable conduct of the proceedings could not be faulted.

The exercise of the costs jurisdiction is discretionary once the threshold of unreasonable conduct is crossed. The EAT found that in this case the Employment Tribunal was well entitled to find that the Claimant's conduct was unreasonable. There were a large number of allegations of discriminatory conduct - serious allegations, which were rejected. Some were rejected on the basis that what the Claimant asserted had happened had not in fact happened. The Claimant's conduct in the proceedings and making these unsustained allegations was undoubtedly capable of amounting to unreasonable conduct. To download the decision, click here.

Other interesting recent decisions

Albert Thomas & Others v Taylors of St James Ltd UKEAT 0117/13
National Minimum Wage. To download the decision, click here.

Mr A Akinosun v The Certification Officer UKEAT 0180/13
Definition of a "Union". To download the decision, click here.

Mr G Elliot v The Joseph Whitworth Centre Ltd UKEAT 0030/13/MC
Inordinate Delay. To download the decision, click here.

Employment Law Events

"Settlement Agreements"
Monday 23 September 2013, 13:15 - 17:00.
2.5 CPD Hours
Royal College of Obstetricians and Gynaecologists, 27 Sussex Place, Regent's Park, London, NW1 4RG.
This half-day seminar is being held by the Employment Lawyers Association. For more information, click here.

"Key Employment and Discrimination Cases for 2013-2014: A Preview"
Tuesday 15 October, 18:30 - 20:00
1.5 CPD Hours
The Royal College of Surgeons, 35-43 Lincoln's Inn Fields, London, WC2A 3PE
The Industrial Law Society (ILS) will be hosting a lecture by Michael Rubenstein. For more information, click here.

The Discrimination Law Association's Annual Conference
Monday 21 October
The London office of Baker & McKenzie.
The theme of this year's conference will be "Equality 2015: Setting the Agenda". For further details, please keep checking the keep checking the Discrimination Law Assocation (DLA) website. To visit the website, click here.

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