As is well known, the law requires employers to consult with employee representatives when 20 or more employees are being made redundant at one establishment within a 90 day period. It has been traditionally accepted that this does not mean the employer has to consult about the reasons for the closure of a business even if it is going to lead to redundancies. The traditional view was that this might be required in continental Europe but not in Great Britain, a view supported by a High Court decision in 1993 (R v British Coal etc ex p Vardy) and generally accepted as correct.
Until October 2007, that is. The EAT has made it clear that this is no longer the case. The EAT ruled on 22nd October 2007 in UK Coal Mining Ltd v National Union of Mineworkers that in a business closure context "the obligation to consult over avoiding the proposed redundancies inevitably involves engaging with the reasons for the dismissals, and that in turn requires consultation over the reasons for the closure". In the case a coal mine with 300+ employees was closed suddenly after a flood. There was no consultation with employees. They complained. An employment tribunal ruled that there should have been consultation and awarded maximum compensation. The employer appealed, arguing that there was no duty to consult about the reason for the dismissals and therefore no liability. The EAT rejected this argument and dismissed the appeal.
In coming to its decision the EAT recognised that under the relevant law it is the proposed dismissals that must be the subject of consultation, not the closure itself. However if, as was the case here and indeed would normally be the case, closure of a business and dismissals of staff are inextricably interlinked then the duty to consult necessarily includes a duty to consult over the reasons for the closure.
The EAT accepted that there could be cases when this duty would not arise. If, for example, an employer planned a closure but believed that redundancies would nonetheless be avoided there would be no need to consult over the closure decision itself. However, as the EAT said, that "is likely to be a very exceptional case".
There have been some noteworthy developments in the field of age discrimination this month as the Employment Equality (Age) Regulations 2006 saw their first birthday. Both cases referred to here make plain that demonstrating detrimental treatment on grounds of age is only the first hurdle - whether such treatment is unlawful discrimination depends entirely on its context.
In a claim potentially worth millions, Peter Bloxham took his former firm, Freshfields Bruckhaus Deringer, to an employment tribunal. He alleged that revisions to the pension arrangements for partners discriminated against him on the grounds of age. He has lost his case. In its judgment the ET was with Mr Bloxham in finding that he suffered less favourable treatment compared with other partners, but went on to find the discrimination was justified. Freshfield's aim was the reform of a costly and unfair pension system - they wanted to try and reduce what the tribunal called "intergenerational unfairness" (para 117). This was a "wholly legitimate" aim, and Freshfields's approach was justified as being a proportionate means of achieving it.
The City has been watching this case carefully, and Mr Bloxham has stated that he is considering an appeal, so the matter may not yet be over.
Meanwhile Heyday, part of Age Concern, presses on with its challenge to the Government's default retirement age of 65 - but it faces an increasingly uphill struggle. The ECJ considered a very similar claim against Spain on 16th October. In the case of Palacios de la Villa v Cortefiel Servicios SA Señor de la Villa claimed that a Spanish law allowing compulsory retirement at age 65 was in breach of EU Directive 2000/78 (which is the European directive behind the UK's 2006 regulations). The ECJ disagreed with him. Such measures in national legislation could be justified if they seek to achieve a legitimate aim relating to employment policy and the labour market, and the means are neither inappropriate or unnecessary for the purpose. In a statement Heyday said it was "disappointed" but will "forge ahead". Clearly it will focus in its own claim on arguing that the UK has no such social justification policy - and seek to persuade the ECJ where Señor de la Villa failed.
The House of Lords has caused something of a storm, ending the hopes of many workers that they might be able to claim damages for the asbestos related condition, pleural plaques. The plaques are scars which form in the lung tissue as the result of inhaling asbestos. Although they can, in a very small number of cases, develop into serious illness they usually remain innocuous. Understandably Messrs Johnston, Rothwell and others, who knew they had developed such plaques, were extremely anxious about the thought that they might lead to some serious condition, and originally the High Court awarded them compensation. However, the House of Lords has now followed the Court of Appeal in overturning this decision.
From a purely legal point of view there should, perhaps, be no surprise that they have done so. In the case, Johnston v NEI International Combustion Ltd, Rothwell v Chemical & Insulating Co Ltd, Lord Hope considered that there was actually a "most basic principle" to apply here, namely that "no action lies for a wrong which has not resulted in some element of loss, injury or damage of a kind that was reasonably foreseeable and for which the claimant can sue". Lord Hoffman said that "symptomless plaques are not compensatable damage. Neither do the risk of future illness or anxiety about the possibility of that risk materialising amount to damage for the purpose of creating a cause of action...". In other words, if the plaques actually developed into something more serious there would be "damage" to sue over, but, as things stood, merely being worried that this might happen was not "damage".
However, equally unsurprising is the fact that the decision has met with a great deal of criticism. Unite, the trade union that supported the claims, feels "let down". In a press release their solicitors Thompsons are quoted as saying that the decision "is very disappointing for the thousands of people who are living with the worry of knowing that their lungs have been scarred by asbestos. They will be baffled and offended that the House of Lords has decided that pleural plaques is not worthy of any compensation."
They may find some reassurance, though, in the fact that in 2006 the government suggested that if the House of Lords did not overturn the Court of Appeal's judgment in this case then it would consider doing so by legislation (see Hansard col 49 on 17 July 2006). And in October 2007 the First Minister in the Scottish Parliament strongly hinted the same. The story may be far from over!
In October 2006 new rules came into force under which all women employees are entitled to 52 weeks maternity leave, regardless of length of service (previously new employees were entitled to only 26 weeks maternity leave - to have the right to 52 weeks a woman had to have completed a minimum of 6 months' employment with the employer).
Also in October 2006 the rules governing entitlement to statutory maternity pay were changed. The period for which SMP is payable was increased from 26 weeks to 39 weeks but there was also an express, stated, intention to increase this to 52 weeks by the end of the current Parliament. The government estimated that about 400,000 mothers per year would benefit from the extension.
After that, plans were made for the SMP period increase to 52 weeks to be implemented in respect of babies due on or after April 2009. However on 11th October 2007, a few days after the Prime Minister decided not to hold a general election this autumn, it was officially announced that "We will now start planning implementation for babies due on or after April 2010 ....... We will not be planning for implementation in October 2009". The announcement said that this delay is to give employers some clarity and further time to make their preparations so perhaps it would be over-cynical to think that it might also have something to do with saving government money - SMP is, of course, mainly a state funded benefit, although physically paid by employers.
A similar extension, to 52 weeks, is planned for the periods for payment of Maternity Allowance and Statutory Adoption Pay.
Following the pre-budget speech, the government published on 18th October the 2008-09 rates and allowances for Income Tax, National Insurance Contributions, Working and Child Tax Credits, Child Benefit/Guardian's Allowance and State Pension and Pension Credit. They will take effect from dates in April 2008.
A few of the more important proposals are:
It's taken more than 40 years, but a minister of religion has recently persuaded an employment tribunal, the EAT and now the Court of Appeal that he is eligible to claim unfair dismissal. Not that the minister in question had been working on it for that long but simply that the courts have consistently ruled that ministers of religion were not technically "employees", and so not eligible to claim unfair dismissal, ever since the idea of "unfair dismissal" became law in the early 1970's.
In 2006, in New Testament Church v Stewart, the EAT agreed with an employment tribunal that Sylvester Stewart, a former taxi driver who had for some years been a minister of the New Testament Church of God, was an "employee" of that church within the meaning of Employment Rights Act 1996 and thus could claim unfair dismissal. The Church appealed to the Court of Appeal. On 19th October 2007 the Court of Appeal unanimously upheld that ruling. However Pill LJ specifically warned that "......... upholding the Employment Tribunal's conclusions and decision in this case does not involve a general finding that ministers of religion are employees. Employment Tribunals should carefully analyse the particular facts, which will vary from church to church, and probably from religion to religion, before reaching a conclusion".
Afficionados of employment law may remember that in 2005 the House of Lords ruled in Percy v The Church of Scotland that a Church of Scotland Minister's relationship with her church constituted employment. That, however, was for the purposes of the sex discrimination rules which have a wider definition of employment than the unfair dismissal rules. The latest case takes this a stage further so that, subject to Pill LJ's comment noted above, the general rule is now likely to be that the relationship between a minister of religion and his or her church will be capable of being one of "employment" for all purposes.
Three years ago the government introduced well-intentioned but unsatisfactory rules requiring, as a pre-condition of bringing a case to an employment tribunal, that employees and employers should first have taken specified steps to try and settle their disagreements out of court. What's more, the dismissal is automatically unfair dismissal if the employer fails to follow the required statutory procedures and the employee has completed the normal 1 year period of employment required for unfair dismissal claims.
The DTI's Review of Dispute Resolution in Great Britain ("the Gibbons Review") published in Spring 2007 recommended scrapping these rules in their entirety. An aptly named "Employment Simplification Bill" which will do just that was introduced by the Prime Minister in July although what will replace the ill fated 2004 rules is not yet known - the government says its intention is to implement "a package of replacement measures to encourage early/informal resolution and changes to the employment tribunal system".
In the meantime, and indeed ever since the rules were introduced in October 2004, employment tribunals and the EAT have been leaning over backwards to interpret the Dispute Resolution Regulations in as flexible and sensible a way as possible. In a recent example of this common-sense approach the EAT has allowed an appeal by an employer. Homeserve Emergency Services Ltd. Homeserve had arguably not followed the precise requirements of the regulations before dismissing a Mr Dixon who had been caught "doing a foreigner" (in other words using his employer's materials to do a private job). They had written him a letter inviting him to a formal disciplinary meeting for ‘breach of contractual obligations’ but had failed to spell out that they were contemplating dismissal. On the basis that this was a breach of the required statutory dismissal procedures an employment tribunal found that Mr Dixon's dismissal was automatically unfair.
The employer appealed to the EAT and won. Mr Dixon was aware that the disciplinary procedures were being instituted as a result of the allegations made against him. The EAT agreed with the employer that in these circumstances it was implicit in the letter calling him to a formal disciplinary meeting that dismissal was a possibility and that this was enough to satisfy the relevant requirement of the statutory dispute resolution procedures.
Of course, to be safe, an employer should make sure that a "step 1" disciplinary procedure letter inviting an employee to a disciplinary meeting specifically confirms that dismissal is being contemplated if that is the case. Nevertheless, the case of Homeserve Emergency Services Ltd v Dixon is a good example of the fact that all is not necessarily lost if spirit of the procedures is followed even if there was a technical lapse.
A mother took time off work to look after her disabled son. She complained that her employers (a firm of solicitors) were acting unlawfully because they refused to allow her request for flexible working arrangements to look after her son. She complained that this refusal was a breach of Disability Discrimination law.
This claim faced a difficulty in that "associative discrimination" is not outlawed by the UK Disability Discrimination Act although it arguably is prohibited by the relevant EC Equal Treatment Directive. The UK Act envisages a claim being made by a disabled person but does not cover the position of a person who is discriminated against because of caring for a disabled person.
When the claim came before the London South employment tribunal, the chairman decided, at a preliminary hearing, to refer four relevant questions to the European Court. The most apposite of these was probably the one which reads as follows:
"Where an employer treats an employee less favourably than he treats or would treat other employees, and it is established that the ground for the treatment of the employee is that the employee has a disabled son for whom the employee cares, is that treatment direct discrimination in breach of the principle of equal treatment established by the Directive?"
In October 2007 the European Court has been considering the questions put to it. The answers are expected in the near future and are likely to have an important consequence for carers of disabled people. Watch this space!
As usual, up to date notes on all employment law related cases reported recently in the leading case report series (ICR and IRLR) are available on our website. These include summaries and/or headnotes of all the cases reported in ICR for October 2007 and IRLR for November 2007, the latest issues.