Issue 7 - April 11th 2006

Tuesday 11 April 2006

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Working time

Federatie Nederlandse Vakbeweging v Staat der Nederlanden ECJ C-124/05

Under Article 7(2) of the Working Time Directive the payment in lieu for untaken holidays is prohibited except where the employment relationship has ended. The ECJ held that this is because such payment would create an incentive, incompatible with the objectives of the directive, not to take leave or to encourage employees not to do so. While the Directive did not preclude the carrying over of minimum leave entitlement from one year to the next, provisions which allowed for such carried-over leave to be replaced by an allowance in lieu in the subsequent year would breach the Directive. For more info Click Here

Polkey deductions

T Gover & ors v Propertycare Ltd [2006] EWCA Civ 286

An Employment Tribunal found that unilateral imposition of changes in commission rates was a fundamental breach of contract entitling the employees to resign. However relying on its industrial relations experience it found that the even if there had been proper consultation and reasonable terms offered, resulting in no fundamental breach, the employees still would have rejected that offer and therefore they would have been fairly dismissed at a later date. Applying Polkey v AE Dayton Services Ltd (1988) AC 344, the ET found their loss was only the consultation period relating to the hypothetical fair offer. The employees appealed on the basis that, following King and Eaton (No 2) [1998] IRLR 689, the ET had engaged in impermissible speculation as to what would have happened. Further, the appellants tried to argue that Polkey did not apply when, as here, it was found that the reason for dismissal was unfair. The Court of Appeal dismissed the appeal. It agreed with the EAT that there was evidence on which the ET could construct what would have happened. Further it found that where there was an unfair reason for dismissal, it was open to the Tribunal, applying Polkey, to consider whether the employee would in any event have been fairly dismissed at some time for a fair reason and reduce compensation accordingly.
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Unfair dismissal

Pudney v Network Rail Infrastructure Ltd UKEAT/0707/05/DA

Section98A (2) Employment Rights Act 1996 provides, subject to the requirements of the statutory dismissal procedures, that the failure by an employer to follow a procedure in relation to the dismissal of an employee shall not be regarded for the purposes of section 98(4)(a) as by itself making the employer's action unreasonable if he shows that he would have decided to dismiss the employee if he had followed the procedure. The EAT held that the "procedure" referred to includes those incorporated in contracts, those set out in policy documents, whether or not contractual, and a procedure which is found in unwritten custom and practice. It does not however cover a lapse from standards of reasonableness or the ACAS Code.

Maternity leave

Hoyland v Asda Stores Ltd [2006] CSIH 21

The employer operated a discretionary annual bonus scheme. The bonus could be pro-rated for prolonged absence or disciplinary reasons. The employee was on maternity leave during the bonus year and therefore her bonus was reduced. Discrimination in employment under section 6(2) Sex Discrimination Act 1975 does not apply to payments made under the contract of employment (s6(6)). The employee argued the bonus was discretionary therefore was not excluded by s6(6). The Court of Session held that s6(6) applied. Complaints about pay related benefits must be brought under equal pay legislation.
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Rejection of applications/responses

Butlins Skyline Ltd v Benyon UKEAT/0042-0045/06/DA

Under Rule 6 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004 a response will be rejected by the Secretary to the Tribunal on certain grounds, including the failure to use the prescribed form. Unlike the other grounds, rejection for failure to use the prescribed form by the Secretary does not have to be subsequently considered by a Chairman, whose decision on the issue may then be reviewed. A similar provision in relation to the rejection of claims is at Rule 3. The EAT held that the member of staff's decision not to accept the Response as it was not on the prescribed form was a decision which fell under Rule 34(1)(a) relating to reviews, even though it was not the decision of a Chairman. It was also a decision which could be appealed.
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