The case concerned the finance director and the managing director of AAH Ltd, who were dismissed summarily (i.e. without notice) for failing to notify the German parent company (Celesio) of an issue that had arisen with one of their suppliers.They had become aware that there was a significant risk that the supplier, introduced by an ex-employee of a sibling company, was perpetrating a fraud that exposed them to around £10.9 million.

LS Newsnotes Issue 48 Spring 2010  (PDF) is an occasional publication by Lewis Silkin covering recent UK employment law developments in an accessible, succinct and entertaining way.  The latest issue includes articles on:

•  The potential implications of a Conservative government for employment law
•  Bullying and harassment in the workplace
•  Tribunal and court decisions rewriting UK employment legislation to comply with EU law
•  A successful age discrimination claim by a middle-aged employee
•  Severe weather: employment law issues
•  Serial litigants in employment tribunals
•  Employment of children
• Scope of the right to claim discrimination on grounds of 'philosophical belief'

The current UK maternity regime is already more generous than most of the minimum standards proposed by the Commission. The Government launched a consultation (PDF) on the proposals in March 2009 and its response is expected this spring.  It assumed that that the proposal concerning full pay would have no impact in the UK, where the current rate of statutory maternity pay is more generous than sick pay.

The Commission's proposals are subject to negotiation with member states and the co-decision process with the European Council and the European Parliament. At the first reading by the Parliament, the EU Women's Rights Committee voted in favour of amendments to the proposals. Specifically, these included an extension of paid maternity leave to 20 weeks and a proposal that full pay during maternity leave should mean 100% of a woman's last monthly or average salary.

These new proposals have led to outcry in the UK, with claims that the requirement for 20 weeks' full pay will cost the UK up to £2 billion a year. However, there is still some way to go before these proposals become law. The Council still has to agree the proposed amendments - with any further changes having to go back through Parliament - and the member states will be lobbying to put their business cases.

In the March 2009 consultation paper, the Government indicated that any regulations required to implement the amended Directive in the UK would not be implemented until at least 2011. If the additional proposals from the European Parliament lead to protracted negotiations at European level, this timescale is likely to be put back even further.

This entry was written by Hannah Vertigen

Under the Regulations, it is unlawful to compile, use, sell or supply 'prohibited lists', subject to certain exemptions. Workers have the right not to be subjected to detriment or dismissal for a reason connected to a prohibited list. Individuals and trade unions can bring claims in the Employment Tribunal or County Court if they have suffered loss or are threatened with potential loss as a result of unlawful activities.

This entry was written by Richard Lister

Ms Eweida has worked for British Airways (BA) since 1999.  In 2004, the company introduced a new uniform with an open neck and a uniform policy that prohibited employees from wearing any visible adornment around their neck.  Ms Eweida came into work on three occasions wearing a small cross on a chain, but concealed it when asked to do so.  On a fourth occasion she refused to conceal it and was sent home.

Ms Eweida brought proceedings for direct and indirect religious discrimination and harassment.  An employment tribunal rejected all her claims but added that, if there had been indirect discrimination, it would not have been justified.  Ms Eweida appealed on the single issue of whether she had suffered indirect discrimination and BA cross-appealed against the tribunal's finding on justification.

The Employment Appeal Tribunal upheld the tribunal's finding that there was no indirect discrimination because Christians had not been placed at a disadvantage by the policy.  It was not a requirement of the Christian religion that followers visibly display the cross.  Further, nobody else (out of a uniformed workforce of 30,000) had ever complained about the policy.  Therefore, there was no provision, criterion or practice which put or would put 'persons' of the same religion or belief as the claimant at a particular disadvantage, as required by the Employment Equality (Religion or Belief) Regulations 2003.

Ms Eweida argued before the Court of Appeal that no evidence of group disadvantage was necessary and 'persons' could mean a single individual.  The use of the conditional ('would put persons... at a particular disadvantage') required the tribunal to aggregate the claimant with a hypothetical peer group who would all suffer the same disadvantage.   

The Court of Appeal rejected this contention, finding that use of the word 'would' is simply to include in the disadvantaged group those to whom the condition potentially applies as well as those to whom it actually applies.  In this case, there was no evidence that there were any others in society at large who shared Ms Eweida's beliefs and would suffer a potential disadvantage were they to be BA employees. 

Ms Eweida also cited the European Convention on Human Rights in support of her claim, without any joy.  The Court relied on case law which showed that the Convention does not protect every act motivated by religion or belief.

Having held that there was no indirect discrimination, the Court did not need to reach a decision on the issue of justification.  However, two of the three judges said they would have upheld BA's claim that its policy was in any event a proportionate means of achieving a legitimate aim.

Further appeal likely

Ms Eweida's appeal was backed by the UK human rights organisation Liberty, which has expressed disappointment at the outcome, adding that this was "just the sort of case that a Supreme Court is for".  This strongly suggests that Liberty will support an application by Ms Eweida for leave to appeal to the UK's highest court.

Irrespective of the legal niceties explored in this case, the main message for employers is to consider their uniform policies carefully and treat employees' requests to circumvent a rule for religious reasons sensitively and respectfully.

This entry was written by Richard Lister

Employees can only apply if they have worked for their employer for at least six months and have not made a request in the past 12 months.  To apply they must submit a written request, which meets specified criteria.  The employer must meet with the employee within 28 days to discuss the request.

The employer must send the employee a written, dated notice of its decision within 14 days of the meeting.  Employers do not have to grant the request, but the grounds(s) for rejecting it must fall within ten business reasons set out in the relevant legislation (s.63F of the Employment Rights Act 1996, as amended) - for example, detrimental effect on ability to meet customer demand; burden of additional costs.

If employers grant a request, they are not legally required to fund the training or allow the employee paid time off.  If a request is turned down, the employee has 14 days to appeal.  Again, strict timetable provisions apply in respect of making and dealing with any appeal.  Employees can bring an Employment Tribunal claim if their appeal fails, but only on limited grounds.

The right appears to be quite feeble because employers have a wide ability to refuse requests and limited sanctions apply for breaching the rules.  The main pitfall for employers is likely to be falling foul of the strict timetabling provisions.  Employers who receive a request should ensure they familiarise themselves with the procedure and deal with the request promptly and correctly.

This entry was written by Richard Lister

The key aspects of the Regulations are as follows:

Scope:  The definition of 'agency worker' includes both those taking up temporary work through an employment agency and those employed via umbrella companies or other intermediaries.  It excludes those who are genuinely in business on their own account (i.e. self-employed or working through a corporate vehicle).

Equal Treatment:  The right is to the same basic working and employment conditions as if the agency worker had been recruited directly by the hirer.  This includes entitlement in respect of working hours, night work, rest periods and breaks, overtime and annual leave.

Pay:  The principle is 'equal pay for work done' - i.e. basic pay plus other contractual entitlements that are directly linked to the work undertaken by the agency worker (for example, overtime, shift allowances, unsocial hours premiums).  It excludes aspects of remuneration provided in recognition of the long-term relationship between employer and permanent employee (for example, profit-sharing schemes, occupational pension contributions, occupational sick pay, maternity pay and redundancy pay).

Qualifying period:  The qualifying period for the right to equal treatment will be 12 calendar weeks in a particular job.  A new qualifying period will only begin if the new assignment with the same hirer is 'substantively different' or if there is a break of more than six weeks between assignments in the same role.  The Regulations include anti-avoidance provisions.

The comparison:  In most cases this will be to a 'comparable employee' doing the same or similar work.  However, as the agency worker is entitled to be treated as if they had been recruited directly, a 'flesh and blood' employee comparison may not always be necessary.  Draft guidance on this issue has been published.

Liability:  Primary liability will rest with the agency.  However, where it is reliant on information provided by the hirer, and has taken 'reasonable steps' to obtain information and acted 'reasonably' in determining basic working and employment conditions, the hirer may be liable.

Dispute resolution:  Claims may be brought in an employment tribunal subject to a three-month time limit.  There is a minimum award of two weeks' pay, no upper limit on compensation and an additional award of up to £5,000 for breach of the anti-avoidance provisions. 

The Government has stated that guidance to accompany the Regulations will be published at least 12 weeks before they come into force.

This entry was written by Hannah Vertigen

Only those claims accepted by the employment tribunals where PIDA is identified as a jurisdiction (by the claimant ticking the relevant box and the tribunal identifying the protected disclosure) would be subject to this process.

BIS has issued draft Employment Tribunals (Constitution and Rules of Procedure) (Amendment) Regulations 2010 (annexed to the response document) which will be laid before Parliament shortly and are intended to come into effect on 6 April 2010. A list of regulators to whom disclosure may be made by the tribunal is included in the draft Regulations.

Implications

Concerns were raised in the course of consultation that allowing details of PIDA claims to be passed on to the relevant regulator would lead to additional litigation and that the claimant would have additional and improper bargaining power. The Government has countered this suggestion by pointing out that this situation can already arise where the claimant sends information directly to the regulator.  However, it did accept that regulators were likely to receive more referrals once this process is in place.
 
The Government did not consider that concerns that spurious allegations might be forwarded to the regulator were significant. However, this will surely be an issue for employers who may now have to face the additional administrative burden of dealing with a tribunal claim alongside a regulatory investigation.

This entry was written by Hannah Vertigen

This entry was written by Richard Lister

An employment tribunal found that Ms Ladele had suffered unlawful direct and indirect discrimination under the Employment Equality (Religion or Belief) Regulations 2003.  The Employment Appeal Tribunal allowed the Council's appeal against each of these findings and the Court of Appeal has now upheld its approach.

Whilst the Court had some sympathy for the claimant and agreed that she had been treated unfairly in some respects, it considered that only on a 'pedantically literal' interpretation of some of the Council's comments could it be inferred that she had been treated less favourably because of her religion.  The reason for her treatment was not her religious belief but rather her conduct in refusing to carry out a legitimate duty.  Any employee similarly refusing would have been treated in the same way, so there was no direct discrimination.

In relation to indirect discrimination, the Court held that the Council had a legitimate aim in seeking to provide non-discriminatory services with regard to civil partnerships and promoting equal opportunities.  The requirement for registrars to carry out the full range of civil partnership duties was a proportionate means of achieving the aim and was therefore justified. 

In broad terms, this judgment confirms that employers are expected to promote equal treatment in the services they provide and they cannot be expected to do so if they are required to accommodate discrimination on the part of their staff.

We understand that Ms Ladele will be seeking to challenge the Court of Appeal's ruling.  However, permission to appeal to the Supreme Court (the UK's highest court - formerly the House of Lords) has so far been refused.

This entry was written by Richard Lister

Meanwhile, in a statement to Parliament, the Secretary of State for Work and Pensions has announced the rates of statutory maternity pay, adoption pay and paternity pay that will apply from April 2010.  Each of these payments will rise from £123.06 to £124.08 per week.  However, statutory sick pay will remain unchanged at £79.15 per week.  The weekly earnings threshold for all these payments will rise from £95.00 to £97.00.

This entry was written by Richard Lister

• Extending the role of banks' remuneration committees to cover firm-wide remuneration policy and direct responsibility for the pay of all high earners.
• At least half of variable pay or bonuses should be paid in the form of a long-term incentive scheme, with half vesting after three years and the rest after five years.
• Two-thirds of cash bonuses should also be deferred.

The Government has indicated that it will move to implement Sir David's proposals.  Specifically, the recommendations on pay disclosure will be added to the Financial Services Bill which was introduced in Parliament on 19 November 2009.  The Bill contains a requirement for the Financial Services Authority (FSA) to regulate financial sector remuneration to promote effective risk management and compliance with international standards.  It includes powers under which the FSA could make rules to: prohibit specified types of remuneration; make contractual terms void if they breach such a prohibition; and provide for the clawback of payments made under void terms.

This entry was written by Richard Lister

• UK legislation has no clear ban on 'instruction to discriminate' and no clear appeals procedure in the case of disabled people.
• The exceptions to the principle of non-discrimination on the basis of sexual orientation for religious employers are broader than those permitted by the Directive.

• The definition of indirect discrimination in the Sex Discrimination Act 1975 is too narrow as it does not cover potential discrimination.
• The exceptions to the principle of non-discrimination on the basis of sex for certain jobs ('genuine occupational qualifications') are too wide.

The Government has two months to reply to the reasoned opinions.  If the Commission is not satisfied with its response, it can refer the matter to the European Court of Justice.  That outcome is, however, unlikely because various measures contained in the Equality Bill currently before Parliament would appear to rectify most of the defects alleged by the Commission.

This entry was written by Richard Lister

The proposal is nonetheless attracting fierce opposition from both the public and MPs (particularly Labour).  More than 60,000 people have signed a petition on the Downing Street website protesting about the prime minister's decision and urging him to reconsider, whilst over 80 MPs have signed a parliamentary motion criticising the move.

This entry was written by Richard Lister

This entry was written by Richard Lister

The case then returned to the tribunal, which found that the DDA could be read in such a way as to give effect to the Directive (as interpreted by the ECJ) without distorting the words of the statute.  The EAT has now rejected the employer's appeal, although its judgment adopts a slightly different approach to the tribunal with regard to the precise way in which the relevant provisions of the DDA should be re-drafted so as to allow for claims of 'associative' discrimination.  Unless there is a further appeal, Ms Coleman's claim will now go ahead to be heard by the employment tribunal on its substantive merits.

The EAT's judgment is important because it clarifies the position under the DDA pending the Equality Bill currently going through the UK parliament.  The Bill is drafted so as to make explicit that direct discrimination or harassment based on an association with someone of a particular disability, age or sex is prohibited.  (Associative discrimination based on race, religion or belief or sexual orientation is already clearly outlawed under current legislation.)

This entry was written by Richard Lister

Earlier this year, the Government carried out an initial consultation on how to implement the Directive, which requires that temporary agency workers be given equal treatment with permanent workers as regards basic working conditions such as pay, working hours and holidays.  In the UK, the equal treatment rule will only apply after an agency worker has been in the same job for at least 12 weeks.

A second consultation document has now been published which sets out further details about the way in which the Government intends to proceed and contains a set of draft regulations on which comments are invited.

The delay is intended to give employers and employment agencies time to prepare for the impact of the legislation on their business and to avoid changing requirements until the economic recovery is more firmly established.

This entry was written by Richard Lister

Meanwhile, the Financial Times reports on a survey by financial recruitment specialists Morgan McKinley which suggests that four-fifths of workers in the City of London expect their bonuses this year to be higher or similar to those last year, despite public concern over the role the payouts played in the banking crisis.

• Lower band (for the least serious cases, e.g. a one-off or isolated occurrence of discrimination): up to £6,000 (formerly £5,000)
• Middle band (appropriate for the majority of injury to feelings awards): £6,000 to £18,000 (formerly £15,000)
• Top band (for the most serious cases, e.g. a lengthy campaign of discriminatory harassment): £18,000 to £30,000 (formerly £25,000).

The transcript of Da'Bell v NSPCC is not yet available but will be published soon on the EAT website.  The above figures nonetheless have immediate effect and should be taken into account when preparing or responding to schedules of loss in discrimination cases.

This entry was written by Richard Lister.

The ECJ said that the key question was whether the compulsory retirement age of 65 was "objectively and reasonably justified". It was for the UK government to show that it had a legitimate social policy aim and that the means chosen to achieve it were appropriate, necessary and proportionate.  The case then returned to the High Court for it to resolve whether the DRA complied with the Directive.

The Court decided as follows:

• The Government had shown that, in principle, a DRA was a proportionate means of achieving legitimate social policy objectives, such as securing the integrity of the labour market and its competitiveness.
• Whilst there were powerful reasons for adopting a DRA higher than 65, it had to be judged as at the date it was introduced.  The adoption of a DRA of 65 in 2009 would not have been a proportionate measure, but on balance it was within the Government's margin of discretion when implementing the Directive in 2006.
• The Government's commitment to keeping the DRA under review was a significant factor. However, the result may have been different had the Government not recently brought forward the review from 2011 to 2010.  The Court said it could not presently see how 65 could continue to be justified as a DRA after the review.

What happens next? Despite the outcome being a close-run thing, it appears Age Concern will not be appealing.  Rather, it and the Equality and Human Rights Commission (EHRC) will be pressing for the DRA to be immediately changed using the Equality Bill currently before Parliament (see the EHRC's press release).  A more likely outcome is that the Government's review will take place next year as planned, leading to a decision to raise or abolish the DRA taking effect some time in late 2010 or 2011.

In the meantime, employers who wish to continue operating the DRA - or a higher compulsory retirement age of their own - may continue to do so.  Forcing workers to retire may still trigger fresh claims for unfair dismissal and age discrimination which employers will have to defend - but such claims are unlikely to succeed. Employers can argue they are merely applying legislation that has expressly been upheld as lawful and consistent with EU law.

In the longer term, employers will need to start thinking about the implications of the DRA being raised or repealed altogether. For example, they may need to change their performance management procedures for older employees so as to be in a position to justify retirement decisions on their individual merits.

This entry was written by Richard Lister.