HR Two Minute Monthly: ECJ decision on Woolworths collective consultation; unfair dismissal; harassment


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Summary: Our May update includes a summary of the ECJ's decision in the Woolworths collective redundancy consultation case; two cases on unfair dismissal and a decision which considers injury to feelings awards in gender harassment claims.

Collective redundancies: ECJ reverses EAT ‘Woolworths’ decision

The ECJ in the ‘Woolworths’ collective redundancy case has ruled that when determining whether the obligation to collectively consult on redundancies is triggered, the focus is on the proposed redundancies in the establishment in question, rather than across the organisation. This can significantly reduce an employer’s redundancy consultation liabilities where it makes large scale redundancies.

A full case report is available here.

Narrow meaning of “in the public interest” applies to whistleblowing cases

In the first appellate case to consider the meaning of “in the public interest” in a whistleblowing context, the EAT has set a very low hurdle for employees to overcome in order to demonstrate that they have made a protected whistleblowing disclosure. Since June 2013, employees have needed to show that their disclosure was made “in the public interest” in order to be protected.

In Chesterton Global Ltd and another v Nurmohamed the EAT held that a disclosure does not need to be of interest to the public as a whole and one which affects only a small section of the public can still be “in the public interest”. In this case, it was sufficient that at the time the disclosure was made the employee had in mind not only his own interests, but the interests of 100 other senior managers who were in a similar position to himself.

A full case report is available here.

Claimant’s vulnerability relevant to level of injury to feelings award

In Southern v Britannia Hotels Ltd and another, a tribunal has awarded a zero-hours worker a significant award of £19,500 for injury to feelings for harassment on grounds of gender which occurred over an eight-month period. The tribunal found that the harassment was not of the very worst kind, but held that there were factors which justified an award within the top Vento band (which spans £18,000 to £30,000). Specifically, the claimant's particular vulnerability due to her youth and mental health issues, the abuse of power by her manager who had committed the harassment, and the wholly inadequate investigation conducted by the company.

Although only a first instance decision, this case contains useful reminders for employers. First, in assessing the appropriate level of an injury to feelings award, the tribunal will focus on the effect of the unlawful treatment on the particular claimant in question and not just on the seriousness of the discriminatory conduct. This should be remembered when assessing the value of potential claims. Second, the employer sought to rely on the statutory defence (i.e. it argued that it took all reasonable steps to prevent the behaviour complained of). The decision makes it clear that an employer will not establish this defence simply by having policies in place if all it does is “pay lip service to them”.

A full case report is available here.

Factors to consider when granting a Restricted Reporting Order (RRO)

In EF and another v AB (Debarred) and others the EAT has provided guidance on the factors which should properly be considered when deciding whether to grant a Restricted Reporting Order (RRO) in proceedings. A RRO can be granted, either on application or by the tribunal itself, where it is necessary, for example to protect an individual’s right to privacy under The European Convention on Human Rights. They prevent any matter which would identify the protected person from being made public and, in certain circumstances, this anonymity can be granted on a permanent basis. When granting RROs, tribunals are required to balance the competing rights of (i) individual privacy and (ii) freedom of expression and also the interests of open justice which requires publication of tribunal decisions and party names.

This case confirms that where more than one individual is claiming a right to privacy (as was the case here), each individual’s rights should be considered separately and not grouped together. Other relevant factors can also be taken into account, and specifically in this case the EAT considered the claimant’s motivation for bringing the claim (found to be blackmail and revenge and therefore a factor which favoured retaining anonymity for the other parties). It also considered the interests of non-parties, including the child of one of the protected individuals, which the tribunal had failed to do. Overall, the EAT found no public interest in revealing the identity of either of EF or his wife, so the right to freedom of expression did not outweigh individual privacy. The EAT then balanced their individual rights to privacy against the interests of open justice and concluded that the permanent RRO should be granted.

Tribunal fees paid by trade union were recoverable by claimants

The EAT has held that a group of successful claimants were entitled to recover the tribunal issue and hearing fees which had been paid by their union (Legge and others v Prestige Homecare Ltd). On the face of it, this appears inconsistent with the earlier EAT decision of Goldwater v Sellafield Ltd in which it was held that a fee paid by a trade union was not recoverable. However, in Goldwater there was no obligation on the claimants to repay to the union the sums it had paid out in the event they won the case. In the present case, there was a clear repayment obligation if the claim was won. As such, the fees could properly be said to have been “paid by” the claimants and could be included in the costs order.

Costs award made against claimant currently unable to pay

In a case which usefully illustrates the broad discretion which tribunals have when it comes to making costs awards, the EAT has upheld an order made against an employee who had brought unfair dismissal proceedings, but had also unreasonably pursued race discrimination allegations. The tribunal awarded £10,000 costs to the employer, even though the employee did not have the means to pay at the time the award was made. However, the tribunal was satisfied that her financial position would likely improve in the future (taking into account her age (39) and future earning potential).

On appeal, the EAT held that the costs award was justified on the grounds of the employee's future earnings and confirmed that the tribunal was not restricted to considering the employee's financial position at the time of making the award (Chadburn v Doncaster & Bassetlaw Hospital NHS Foundation Trust).

Compensation reduced by 100% in SOSR dismissal

The EAT has upheld a tribunal’s decision that an employee was unfairly dismissed for some other substantial reason but that it was appropriate to reduce the level of compensation awarded. The facts of Anderson v Chesterfield High School are somewhat unusual, in that it concerned the employment of a local government politician by a publicly-funded local school. The individual was not undertaking any work for the school due to his local government duties, but was continuing to receive paid time-off from his employment. However, when he was elected Mayor of Liverpool, a full time, executive post, the school reassessed his position and he was dismissed.

The EAT (upholding the tribunal’s decision) found that although the governors had a fair reason to terminate the Mayor’s employment, they failed to follow any procedure in doing so. The dismissal was therefore unfair. However, the compensatory award was reduced by 100% on the basis that even if a fair procedure had been followed, he would have been dismissed in any event. Further, a 25% discount to the basic award was also justified on the grounds of contributory fault given the Mayor’s failure to keep the school informed about his running for office so they could consider its impact on his employment. Unusually, when reducing the compensatory award, no allowance was made for the time it would have taken to follow a fair dismissal procedure. This is likely to reflect the finding that the Mayor’s conduct in continuing to receive public money for the role despite providing no services was “blameworthy”.

Unreasonable to rely on warning given in bad faith when deciding to dismiss

The Court of Appeal in Way v Spectrum Property Care Ltd has overturned the EAT's finding that a final written warning given in bad faith could be relied upon to justify a later dismissal for unrelated misconduct. The tribunal had refused to hear evidence on whether the warning was given in bad faith. On appeal, the EAT found both that the warning had been given in bad faith, but also that the employer had been entitled to rely on it when reaching the decision to dismiss. The Court of Appeal overturned the EAT’s decision and the case will now be remitted back to a fresh tribunal.

In this case, the employee had not appealed against the warning at the time (his evidence being that he was told that if he appealed he would be dismissed). He did, however, allege that the warning had been issued in bad faith during the disciplinary process which led to his dismissal. The case is therefore a useful reminder to employers that it is dangerous to take an earlier warning at face value if the employee questions its validity in a subsequent disciplinary procedure. In those circumstances, the manager conducting the disciplinary should investigate the allegation about the warning as part of the disciplinary process. Failure to do so will render the dismissal unfair if it later transpires that the warning was given in bad faith.

No implied contract between agency worker and end user

In one of a number of cases stemming from blacklisting activity in the construction industry, the Court of Appeal has held that it was not necessary to imply a contract between an agency worker and the end-user client to whom he provided services (Smith v Carillion (JM) Ltd and another). As a result, Mr Smith failed at the first hurdle in his attempt to bring detriment claims for trade union and health & safety activities against the end-user client.

The case confirms that individuals who are placed for work through an agency will find it very difficult to establish that they are either a worker or an employee of the end-user client, as the courts will only imply a contract if it is necessary to do so. It is not sufficient that the conduct of the parties is consistent with the intention to enter into a contractual arrangement, nor does it matter that the absence of a contract appears to result in injustice for the individual, as was the case here.

Small Business, Enterprise and Employment Act 2015 in force

The Small Business, Enterprise and Employment Act 2015 has received Royal Assent. It is not known when the employment provisions, including the much-publicised ban on exclusivity clauses in zero-hours contracts, will be brought into force, so for now it is a question of ‘watch this space’.

Door opened to possibility of leap frog appeals to the Supreme Court

The Supreme Court has amended its rules to make it possible for employment appeals to go from the EAT to the Supreme Court, leap frogging the Court of Appeal stage. Once the new rules come into force, relevant cases including those involving a point of law of general public importance, such as the current holiday pay cases, will be able to be resolved by the highest court more swiftly than might otherwise have been the case, leading to earlier clarity of the issues.

Call for evidence – Collective Redundancy and Insolvency

The Insolvency Service has published a call for evidence on collective redundancy consultation for employers facing insolvency. It is seeking evidence on issues including the role of directors and insolvency practitioners and the factors which inhibit effective consultation. The closing date for submissions is 12 June 2015.

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