Employment Law Update - January 2010
8 Jan 2010Contents
- EDITORIAL Andrew Wille
- CASE LAW UPDATE Changez Khan
- THE DELUGE OF EQUAL PAY CLAIMS AGAINST PUBLIC BODIES Shabbir Lakha
EDITORIAL
Happy New Year to all. 2010 ushers in a sobering hangover of deflation. The compensation limits, which are linked to the RPI, are set to fall, pursuant to the Employment Rights (Revision of Limits) Order 2009 SI 2009/3274. The changes take effect when the event that gives rise to the entitlement to compensation occurs on or after 1st February 2010. Thus the maximum compensatory award for unfair dismissal falls from £66,200 to £65,300.
This change does not affect the level of ‘a week’s pay’, for the purposes of redundancy payments and the unfair dismissal basic award, which remains suspended at £380 until February 2011 at the earliest.
In this month’s newsletter Shabbir Lakha surveys the deluge of equal pay claims being brought against public bodies from his vantage point as counsel representing a local authority in respect of over 500 such claims.
The Case Law Update was prepared by Changez Khan
topCASE LAW UPDATE
Chagger v Abbey National [2009] EWCA Civ 1202, 13/11/2009, reported at LTL 13/11/2009
Subject: assessment of compensation; stigma damages; C won in claims for unfair dismissal and discrimination against A; C now found it difficult to obtain work with other employers in the financial sector because of the stigma resulting from litigation; whether C entitled to compensation for such stigma loss from A.
Held: (i) As a matter of principle, an employer is liable to compensate an employee for the stigma which attaches to him by the unlawful way in which the employer has run his business; Malik v BCCI 1998 AC 20 (HL) considered. (ii) Normally, stigma will be a factor to take into account when assessing the award for loss of future earnings, in particular how long a claimant is likely to remain unemployed. (iii) However, it will be appropriate to compensate for stigma as a distinct head of loss where it is the only head of future loss (e.g. where is no loss of earnings because the claimant would have been dismissed in any event).
(1) EBR Attridge Law LLP (formerly Attridge Law) (2) S Law v S Coleman EAT 30/10/2009, reported at Times, November, 5 2009
Subject: disability discrimination; protective scope of the DDA 1995 and of EU Directive 2000/78; whether a carer for a disabled person is covered, even though the carer does not suffer from a disability personally.
Held: (i) In Coleman v Attridge Law (C-303/06) (2008) All ER (EC) 1105, the ECJ (Grand Chamber) had ruled that it was contrary to the objectives of the Directive to limit its protection to those who had a disability personally. In light of that ruling, it was appropriate to read extra words into ss.3A, 3B and 4 of the DDA 1995 to extend its protection to carers. (ii) Moreover, the policy justifications for prohibiting associative discrimination on other grounds (e.g. race) also applied to the field of disability discrimination; Weathersfield Ltd (t/a Van & Truck Rentals) v Sargent (1999) ICR 425 CA (Civ) considered.
X v (1) Mid-Sussex Citizens Advice Bureau (2) Lin Challis 30/10/2009 reported at LTL 2/11/2009
Subject: disability discrimination; protective scope of the DDA 1995 and of EU Directive 2000/78; whether a voluntary worker is covered.
Held: (i) The DDA did not prohibit, nor was it required by the Directive to prohibit, discrimination against volunteers. Voluntary work was not an "occupation". Nor was a volunteer a "worker", given the absence of any mutual rights/obligations and given the absence of remuneration. (ii) Application for preliminary reference to the ECJ refused.
T Orr v Milton Keynes Council EAT, 5/11/2009 reported at LTL 30/11/2009
Subject: overlapping allegations of direct race discrimination and unfair dismissal; MK proven to have directed a racist remark at O on one occasion; on a subsequent occasion, MK dismissed O for gross misconduct; whether the earlier racist remark tainted the fairness of the dismissal.
Held: (i) As a matter of causation, it was false simply to assume that the racist comment automatically rendered the dismissal unfair and turned it into a further act of race discrimination. (ii) Regarding fairness of the dismissal, the question was whether the dismissal itself was on grounds of O’s race. The Tribunal had to inquire into why MK had dismissed. On the facts, it had dismissed O for unrelated reasons.
Cavendish Munro v Geduld EAT 6/8/2009 reported at LTL 6/11/2009
Subject: whistleblowing; qualifying disclosure under s.43B(1) ERA 1996; need for "information" to be "disclosed".
Held: (i) A qualifying disclosure must contain factual "information", not simply an "allegation". Thus, a letter from the claimant’s solicitor that simply alleged a breach of legal obligations – without conveying any specific facts as such – did not contain any "information". (ii) "Disclosing" information means more than merely "communicating" it. On the facts, the letter from the claimant’s solicitors had been sent to the claimant’s co-directors in the context of a running dispute. All the letter did was summarise the claimant’s position. It could not be characterised as a "disclosure".
topTHE DELUGE OF EQUAL PAY CLAIMS AGAINST PUBLIC BODIES
The volume and complexity of Equal Pay claims (mostly bulk group actions on a "conveyor belt" process) against Local Authorities and various NHS trusts has created not only a logistical headache for the Employment Tribunals but has also posed a serious political conundrum for local and national politicians.
To appreciate the sheer scale of the increase in claims in a relatively short period, it is worth observing the statistics released by the Employment Tribunals Service. In the year 2003/4 the number of Equal Pay claims presented stood at 4,412 and by the year 2007/8 the figure rocketed to 62,706 (which also constituted about a third of all claims presented to the Employment Tribunals). As Lord Justice Mummery observed in Redcar & Cleveland Borough Council v Bainbridge and others [2008] IRLR 776 "at present there are thousands of equal pay claims pending in the employment tribunals".
Quite apart from the huge logistical challenge for the representatives in managing litigation on such a scale, the implications for the public bodies are quite profound. Just looking at the Local Authorities, it is estimated by the Local Government Association that the cost of dealing with Equal Pay issues is around £3 Billion (and rising). The legal consequence of this is that it compels them (and their legal advisers) to take as many points as possible in limiting the number of claims that go through rather than striking a settlement at a very early stage of the proceedings. Thus jurisdictional issues proliferate, relating to service, limitation, failure to bring a grievance etc. This contest in turn adds unwelcome levels of complexity to an already complex and fast changing area of the law. Therefore, the law remains in a state of flux thereby generating even more litigation as public bodies become reluctant to concede given the massive potential awards at stake. It is not uncommon for Pre-Hearing Reviews to be listed for a couple of months just to determine the myriad of jurisdictional and preliminary points.
The challenges faced by some Local Authorities is illustrated by a recent example of Leeds where there have been piles of uncollected rubbish in and around Leeds as a result of the strike by refuse collectors and street cleaners (among others) arising from the adjustments to pay that the Council had to make in the context of Equal Pay claims.
Potentially, another floodgate has just opened. The EAT has ruled that male workers employed on comparable work to that of women who have brought equal pay claims can bring contingent (‘piggyback’) claims comparing themselves to the women whose pay may be augmented - Hartlepool Borough Council v Llewellyn (24 June 2009, EAT). This decision is being challenged and the Court of Appeal will have to determine yet another important issue among the many that it has already determined.
It is widely felt in local government that urgent radical solutions will be required if the current Equal Pay issues are to be resolved. Unfortunately there is no consensus on any particular solution. There has been no shortage of proposals. Recent suggestions have included the following: empowering the Audit Commission to undertake an annual audit of Local Authorities in relation to the implementation of an effective Equal Pay policy or the implementation of the Single Status agreement in a fair manner; representative actions to enable hundreds of cases to be determined collectively; a moratorium on litigation whilst public bodies ring fence those group of employees who are likely to suffer a reduction in pay during the course of implementing the Single Status agreement; and of course comprehensively updating the Equal Pay Act.
The lack of collective political will in resolving this crucial problem confronting modern employment relations means that the deluge of Equal Pay claims will continue unabated whilst the root problems remain unresolved.
top