Heyday questions for ECJ
now finalised
Since October 2006,
we have reported on the progress of the Heyday
challenge to the default retirement age under the
Employment Equality (Age) Regulations 2006.
After sending Heyday's case to the European Court
of Justice (ECJ) in December last year, the High
Court has now finalised the questions to be
referred.
Relating to the Equal
Treatment Framework Directive, the questions cover
the scope of the Directive and national retirement
ages, and the test for justification of direct and
indirect age discrimination. It is unlikely that
the ECJ will hear the case before next year but
watch this space...
Stress arising from
conduct of investigation
The Court of Appeal
has provided further guidance on stress at work
claims, identifying the limits of such claims in
relation to the conduct of an employer's
procedures.
In Deadman v
Bristol City Council, Mr Deadman claimed that
the Council had mishandled its investigation into
allegations of harassment made against him by
another employee. The Council had failed to follow
its own procedures correctly, in particular, the
panel convened to hear the complaints made against
Mr Deadman comprised only two, rather than three,
members. Although the panel found against Mr
Deadman, he challenged the decision and was
successful in having that decision set aside. The
question of a fresh investigation then arose and
it was decided that since the complaint was still
unresolved, a new panel should be convened to deal
with it. This decision was communicated to Mr
Deadman in a letter which was left on his desk for
him to find out when he next came in to work. Mr
Deadman found the investigation very worrying,
consulted his doctors twice complaining of stress
and was prescribed medication.
The High Court stated
that the manner in which the Council had conducted
the investigation and the manner in which it had
informed Mr Deadman about the fresh investigation
had involved breaches of his contract of
employment and that those breaches were the cause
of his illness.
However, the Court of
Appeal overturned the High Court's decision,
confirming that it was not a term of Mr Deadman's
contract of employment that the Council would
investigate complaints of harassment sensitively:
the contractual term was that the Council would
follow its published procedure in the
investigation of any complaints of harassment.
Whilst this was breached by the investigation
panel having two, rather than three, members, it
was not reasonably foreseeable that this would
cause Mr Deadman sufficient stress to lead to
psychiatric harm. Any damage flowing from this
breach of contract was too remote to be
recoverable.
Employer can fairly
dismiss for ill-health capability even where it
contributes to illness
The Court of Appeal
has confirmed that an employer can fairly dismiss
an employee for ill-health capability despite the
fact that the employee's stress-related illness
can be attributed to the conduct of the
employer.
In McAdie v Royal
Bank of Scotland, the Court of Appeal said it
was in complete agreement with the judgment of the
Employment Appeal Tribunal (EAT) in this case.
Summarising previous case law on this issue, the
EAT had confirmed that there must be cases where
the fact that the employer is responsible for an
employee's incapacity is, as a matter of common
sense and common fairness, relevant to whether it
is reasonable to dismiss that employee for
incapacity. It may, for example, be necessary in
such cases to "go the extra mile" in finding
alternative employment for such an employee, or to
put up with a longer period of sickness absence
than would otherwise be reasonable. However, it
was also right that the fact an employer has
caused the incapacity cannot preclude him forever
from effecting a fair dismissal. If it were
otherwise, an employer would be obliged to retain
such employees on their books indefinitely.
It was therefore
emphasised in this case that, whilst the cause of
the employee's incapability is a relevant factor
for the tribunal to consider when determining
whether or not a dismissal is fair, the key issue
is whether the employer acted reasonably in all
the circumstances, which include the fact that the
employer was responsible for the ill-health.
In this case, the
employee had made it completely clear that, no
matter what anybody said or did, she would not be
returning to work and this was supported by
medical evidence. There was therefore no
alternative to dismissal. The situation may have
been different if she had been willing to try
again but she was not, leaving the employer with
no alternative but to dismiss. Although the
employer was responsible for the employee's
ill-health, this was not a basis upon which it
could be said that her dismissal was unfair.
Employers regularly
struggle with the approach to adopt when dealing
with such ill-health issues in the workplace,
particularly where it can be said the employer
caused the incapability. The case therefore
provides welcome guidance, and the Court of Appeal
has stated that the EAT's analysis of the case law
in this area should be followed by both Employment
Tribunals and the EAT itself.
Sex discrimination -
justification for difference in
treatment
The EAT has
overturned a controversial tribunal decision that
the GMB had subjected some of its female members
to indirect sex discrimination when it reached a
low back pay settlement in order to prioritise
future pay protection for other staff, and had
victimised them by failing to support their equal
pay claims against their employer.
In GMB v Allen
and others, the EAT held that the GMB's
decision was justified as a proportionate means of
achieving a legitimate aim, and therefore there
had been no indirect sex discrimination. In
addition, there was no evidential basis for the
tribunal's finding that the GMB had victimised its
female members by failing to provide them with
support in their claims, particularly as, after
the members had instructed solicitors, the GMB was
not in a position to act for them in the same
matter.
Compromise agreements and
pension schemes
In late July, the
High Court ruled that a clause in a compromise
agreement committing an employer to use its best
endeavours to pay pension benefits to an
ex-employee must apply to all of the ex-employee's
pension arrangements so, in this instance, to
arrangements in both Iran and the UK.
In Tahmassebi v
Persia International Bank plc, the claimant
was employed by the defendant bank for over thirty
years first in Tehran and then in its London
branch. His employment was terminated
on the grounds of retirement and Mr Tahmassebi
brought an unfair dismissal claim to the then
Industrial Tribunal. On the day of the
scheduled hearing, the parties signed a
hand-written compromise agreement to draw a line
under Mr Tahmassebi's claim. One clause of
the agreement (clause 4) obliged the bank "to use
its best endeavours to secure payment to Mr
Tahmassebi of his lump sum pension payment and
continuing pension payments" and it was around the
interpretation of this clause that the later High
Court proceedings revolved.
Mr Tahmassebi had, in
fact, two pension arrangements. One was an
Iranian pension plan, which he had forgotten
about. The other was an English plan which
was connected to the latter part of Mr
Tahmassebi's employment with the bank at its
London branch. Mr Tahmassebi signed an
English employment contract after his initial
secondment to London under which his arrangements
changed so that he was paid a salary in sterling
and he became a member of the bank's English
pension plan. He later signed an amendment
to his contract so that it became "subject to the
current banking employment rules of (the) Islamic
Republic of Iran .."
The court accepted
evidence that it is compulsory for employees to
have a pension in Iran and full pension benefits
are granted to those with thirty years of
service. Both employer and employee must
make pension contributions and, in addition, the
employer must pay a lump sum to an employee on
retirement. However, during the last fifteen
years of his employment in London, Mr Tahmassebi
made no pension contributions to his Iranian plan
and none were payable to the English plan, but the
bank continued employer contributions in respect
of both.
When Mr Tahmassebi
had difficulty paying his mortgage instalments,
which were also addressed in the compromise
agreement, he issued proceedings in the High
Court. He alleged that the bank had failed
to observe clause 4 of the compromise agreement
and had not endeavoured to secure payment to him
of the part of the lump sum and continuing monthly
pension instalments relating to his Iranian
pension, of which he had by now been
reminded. Questions also arose on whether or
not Iranian pension law applied to the payments Mr
Tahmassebi sought and if his Iranian pension
entitlement could be calculated by reference to
his English salary, as he asserted, which would
increase its value. Although it was held
that Mr Tahmassebi's sterling salary could not be
substituted for Iranian rials in the calculation
of his Iranian pension, the judge found that
clause 4 encompassed not only Mr Tahmassebi's
English pension, but also his Iranian one. There
was nothing in the compromise agreement that
restricted it just to the English pension.
(The victory on this legal point meant very
little, though, as the pension had retained its
value and no compensation was ordered.)
The case demonstrates
that care must be taken over drafting compromise
agreements. What would appear to be a
straightforward clause dealing, in this instance,
with the ex-employee's pension arrangements in
fact extended to all such arrangements of the
ex-employee. It is important to be clear as
to the exact rights or benefits that the
compromise agreement is to cover, and ensure that
they are clearly and unambiguously set out in the
agreement.
Employers failing to
address diversity in the
workplace
Sixty per cent of
employers do not have a diverse workforce or do
not know if they do, according to reports of the
recent poll by Monster, the recruitment
company.
Despite the array of
equality legislation in the UK, only four in ten
of the 660 employers questioned said diversity was
a "big priority" with almost the same number (36
per cent) saying it was not a priority at
all. A further 15 per cent were unsure.
Recent changes to
maternity legislation prompts employers to think
twice
The recent changes to
maternity legislation, introduced from 1 April
2007 (which included the extension of paid
statutory maternity pay from six to nine months
and the removal of the qualifying length of
service for additional maternity leave), are
resulting in an increased reluctance to employ
women, particularly among small and medium-sized
businesses, according to independent research,
commissioned by Citrix Online.
The research reveals
that over half of employers believe the changes
are making some managers think twice about
recruiting women. Thirty per cent of employers in
the survey thought it would be harder to retain
talented women in the workforce and a further 26
per cent believed the latest changes would have a
commercially negative impact. The survey
also uncovered widespread ignorance about the new
maternity legislation, with 34 per cent of small
and medium-sized businesses unaware of the recent
changes.
Management struggling with
remote working
Managers are
struggling to reinvent their working patterns to
get the best from the growing number of remote
workers, according to a new report commissioned by
City & Guilds and the Institute of Leadership
& Management.
Nearly three quarters
(73 per cent) of managers say flexible working is
common in their organisation, and 37 per cent of
all managers now look after teams who are either
entirely or predominantly based away from the
office.
However, although the
majority of managers are working with teams that
include remote workers, nearly half of managers
say they are unprepared for the supervision of
remote teams, and only a quarter had received any
training on how to manage such a team.