Articles | Employment bulletin August 2015

This month: developments in discrimination, the “special circumstances” in which you don’t have to collectively consult and clarification on how holiday is carried over during sick leave

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Louise Smyth

Louise Smyth

Employer pays penalty for failing to collectively consult

Could it rely on “special circumstances” to avoid hefty protective award?

Employer pays penalty for failing to collectively consult.

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Where an employer proposes to make 20 or more employees redundant within a period of 90 days or less, a duty to collectively consult with the affected employees’ representatives is triggered.  Failure to collectively consult may result in a Tribunal making a “protected award” of up to 90 days’ pay; this award is intended to punish the employer and is not based on the loss suffered by the employees.  

In a recent Employment Appeal Tribunal (EAT) case, the EAT considered the limited circumstances in which employers may be able to rely on an exception to the duty to collectively consult i.e. if “special circumstances” mean it is not reasonably practicable to consult collectively.  The governors of a school had determined in February 2013 that the school would have to close if pupil numbers did not improve.  In April 2013 pupil numbers for the following year were confirmed and the governors took the decision to close the school at the end of the academic year.  The governors had not taken legal advice and were unaware of their obligations to collectively consult; employees were simply given one term's notice of dismissal, in accordance with their contractual entitlement.

The school foundation sought to rely on the special circumstances exemption to avoid a protective award.  They argued that it would not have been reasonably practicable to consult in February 2013, as the potential closure of the school would have been leaked as a result, resulting in parents removing their children.  Furthermore, once numbers were confirmed in April 2013, the school needed to give notice almost immediately to avoid triggering the requirement for a further term's notice to be paid.  

The EAT, upholding the Tribunal’s decision, did not accept these arguments.  These “special circumstances” were plainly hypothetical; they could not have been considerations at the relevant time as the governors had been entirely ignorant of their obligations.  For the exception to apply, said the EAT, there must be a contemporaneous assessment of whether or not it is practicable to consult.

The EAT further upheld the Tribunal’s decision to award the maximum 90 day protective award, agreeing that the school foundation could not rely on ignorance of its obligations as a mitigating factor because it had taken a “reckless decision” not to seek legal advice.   

 

Discrimination arising from disability

What is unfavourable treatment?

Discrimination arising from disability

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The Employment Appeal Tribunal (EAT) has overturned a Tribunal’s decision that a disabled employee was subjected to discrimination arising from a disability.  The Equality Act 2010 sets out that “discrimination arising from disability” occurs where A treats B unfavourably because of something arising in consequence of B’s disability (and A cannot show that this is a proportionate means of achieving a legitimate aim).  

In this case a disabled employee had worked full-time for a university for 10 years before reducing his hours by half having requested, and been granted, a number of reasonable adjustments to his working hours.  When he took ill health retirement at the age of 38, the rules of the scheme meant he was entitled to receive a pension based on his salary at retirement (i.e. taking into account his reduced hours).  The employee brought a claim, arguing that the failure to base his pension on his previous full-time salary amounted to discrimination arising from his disability.

The Tribunal had accepted the employee’s argument that “unfavourable treatment” could be equated with a detriment and found in his favour on the basis that he had clearly been disadvantaged by receiving a lower pension because his disability resulted in him working part-time.  

The EAT held that this decision was manifestly perverse.  The Tribunal had entirely overlooked the fact that the ill health retirement scheme was designed to benefit, and indeed only applied to, disabled people.  The term “unfavourable treatment” had been chosen deliberately and could not therefore be equated with the concepts of “detriment” or less favourable treatment, which requires a comparator.  In contrast, “unfavourable treatment” is to be measured against an objective sense of that which is adverse as compared with that which is beneficial.  The EAT considered that treatment which is advantageous cannot be said to be unfavourable merely because it could have been more advantageous.

Holidays and Sick Leave

Clarification on when the right to carry over holiday is triggered

Holidays and Sick Leave

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The Employment Appeal Tribunal (EAT) has provided useful clarification of the extent to which an individual on sick leave may be entitled to carry over holiday entitlement.  It is by now well established that workers are entitled to carry over holiday entitlement if they cannot take it due to sickness absence.  Following the European Court of Justice’s (ECJ) leading judgment on the issue, the UK Court of Appeal held that, in order to interpret the Working Time Regulations 1998 in accordance with European law, it should be read as follows (additions in bold):

“Leave to which a worker is entitled under this regulation may be taken in instalments but – (a) it may only be taken in the leave year in respect of which it is due, save where the worker was unable or unwilling to take it because he was on sick leave and as a consequence did not exercise his right to annual leave.

In the case before the EAT an employee had been on sick leave for over three years without requesting to take holiday.  He had continued to work at weekends and there was no medical evidence to suggest that he was too ill to exercise his right to take holiday.  On the termination of his employment he brought a claim in respect of his accrued but untaken holiday entitlement.  At first instance, the original Tribunal held that, as the employee had been physically well enough to take his holiday during sickness absence, he had not been entitled to carry his entitlement over.  The EAT overturned this, holding that there is no principle that requires employees to demonstrate that they are/were physically unable to take holiday during sick leave before being able to benefit from the carry over of holiday entitlement.  The EAT further reiterated that accrued leave cannot be carried over indefinitely and that, following the recommendation of the ECJ’s Advocate General in a recent European case, can be carried over for a maximum of 18 months.

Discrimination by Association

ECJ finds associative discrimination can exist in relation to indirect discrimination

Discrimination by Association

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Under UK law, direct discrimination claims based on association are permitted.  An individual may therefore bring a successful claim for direct discrimination if he is treated less favourably because of the race of another person with whom he associates.  By contrast, the Equality Act 2010 expressly provides that protection from indirect discrimination only applies to individuals who share the protected characteristic in question (in this example, race).

A recent European Court of Justice (ECJ) case relating to the provision of goods and services has potentially wide-reaching implications for UK employment law as a result of its finding that an individual may claim indirect discrimination on the basis of association with a racial group that was disadvantaged by a provision, criterion or practice, even though she was not of the same racial origin.

The Claimant in this case ran a shop in a predominantly Roma district of Bulgaria.  The electricity supplier to the district had fixed its electricity meters at a much higher level in this district due to concerns about meter tampering.  The result was that customers within the district could no longer read their electricity metres, whilst customers in other areas could.  The Claimant complained that she was unable to verify her electricity usage.  She considered that her electricity bills were disproportionately high and suspected she was being overcharged.  

Whilst not of Roma origin herself, the ECJ accepted that “Roma origin” was the basis on which the “particular disadvantage” had arisen i.e. the treatment complained of had stemmed from a practice based on the racial/ethnic origin of the district.  It went on to hold that protection from indirect discrimination under the EC Race Directive would therefore be engaged regardless of the race of the person suffering the particular disadvantage.  It was enough that the Claimant had identified with and “suffered alongside” those of Roma origin.  

Final Call for Poor Performance Seminar

Limited places available for September’s Breakfast Seminar - Book now to avoid disappointment

Final Call for Poor Performance Seminar

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Underperforming employees are a common problem for many employers.  Please join us at our next seminar as we focus on how to dismiss for poor performance and give practical guidance on handling difficult employees.

Click here for more information.