Employment Articles

COMPENSATION— BREACH OF EXPRESS CONTRACT TERM

COMPENSATION- BREACH OF EXPRESS CONTRACT TERM

The Court of Appeal case of Edwards v Chesterfield Royal Hospital NHS Trust is interesting because it deals with the breach of an express term of contract and whether or not a Claimant can pursue damages beyond the limited scope of damages under a contractual notice period.

Facts of the case

The Claimant, Mr Edwards, was employed by the Respondent NHS Trust as a surgeon. Either party could terminate the contract of employment with three months' notice. The contract also provided that in matters of personal and professional misconduct, the Claimant would be subject to particular procedures.

Following allegations of gross personal and professional misconduct, the Claimant was summarily dismissed. Although he was subsequently able to secure locum work, he was unable to find a permanent position which he claimed was because of the Respondent's actions against him.

The Claimant therefore brought a claim against the Respondent on the basis that the Respondent failed to adhere to the correct contractual disciplinary procedures and in doing so committed the following breaches:

failed to ensure a member of the panel was an appointed clinician of the same medical discipline as the Claimant;

failed to appoint a legally qualified person to chair the disciplinary panel; and

failed to allow the Claimant to be legally represented at the hearing.

The Claimant argued that had those breaches not occurred, he would not have been found guilty of the alleged misconduct.  Accordingly, he claimed damages to include future loss of earnings (up to retirement of £3.8 million) and future loss of pension.  In contrast, the Respondent argued that he was limited to claim damages for his notice period only.

The findings at both first instance and on Appeal were unsatisfactory to the Claimant so he appealed to the Court of Appeal.  The Court had to consider whether the Claimant firstly had any real prospects of recovering damages in excess of his contractual notice period and secondly, the period of the contractual disciplinary process.

After considering the facts and various case law decisions, the Court held that an employee could, in principle, recover damages for loss of future employment prospects.  This included when, as a breach of express contractual terms as to the conduct of disciplinary proceedings, findings of misconduct were made (which would not have been made if the correct disciplinary procedure been followed) resulting in dismissal.

Comment

This case is perhaps only useful to demonstrate that Claimants do have a cause of action where there has been a breach of an express contractual provision in respect of disciplinary procedures.  Where there has been such a breach, all losses flowing from that breach can be sought although naturally, Claimants will still have to fully justify why the damages sought are actual losses flowing from the breach i.e. they must demonstrate that they are not too remote. 

For further information please contact Steven Meyerhoff on 01254 828300 or
e-mail steven.meyerhoff@backhouses.co.uk

UNFAIR DISMISSAL CLAIMS CAN BE BROUGHT UNDER UK LAW BY EMPLOYEES WORKING ABROAD

In Ravat v Halliburton Manufacturing and Services Ltd, the Inner House of the Court of Session had to consider the principles set out in the House of Lords decision in Lawson v Serco relating to territorial scope of unfair dismissal protection.   

The Court held in Lawson that employees were protected if, at the time of their dismissal, they: work in Britain; move between jurisdictions but are based in Britain (peripatetic employees); or have been posted abroad by a British employer and provide services to the British business (expatriates).

In contrast, although Mr Ravat lived in Great Britain he worked in Libya on a "one month on, one month off" rotational basis.  He was however employed by a British subsidiary (HMS) of Halliburton Inc and was amongst other things paid in pounds sterling and subject to UK tax.

The Claimant was subsequently made redundant and brought an Employment Tribunal claim of unfair dismissal.

The Court considered the case of Lawson and considered by a majority that the Claimant could proceed with his claim although different approaches were used.

Lord Osborne found that the Lawson criterion were not exhaustive and because the Claimant had established he had "strong connections with Britain and British employment law", he should be allowed to proceed with his claim.

Lords Carloway and Brodie held that the Lawson criterion were actually exhaustive, however, Lord Carloway held that the Claimant fell within the "peripatetic" category and accordingly could proceed with his unfair dismissal claim.

Comment
This case demonstrates that Lawson is not necessarily the final word in respect of the territorial jurisdiction for unfair dismissal claims. Therefore, drivers who work abroad and are based abroad but paid in sterling may be entitled to rely on British employment legislation.

For further information please contact Steven Meyerhoff on 01254 828300 or
e-mail steven.meyerhoff@backhouses.co.uk

REDUNDANCY: BEWARE "SPECIAL TREATMENT" OF PREGNANT EMPLOYEES

The case of De Belin v Eversheds Legal Services Ltd concerned a sex discrimination claim brought by a male employee.

Facts of the case

The Claimant (a lawyer) had been selected for redundancy and placed in a selection pool together with a female colleague currently on maternity leave.

One of the selection criteria related to financial performance ("lock-up"), which focused on the time period between undertaking legal work and being paid for it.

The Claimant was awarded a score of 0.5 whilst the female employee was awarded a notional score of 2.0 as there was no actual figure to use for that period as she was on maternity leave. 

Accordingly, the Claimant argued that the redundancy selection scoring process was unfair as was his dismissal.  The Employment Tribunal agreed and found that the discriminatory application of the selection process did indeed render his dismissal unfair.

Comment

Employers must ensure that all redundancy selection processes are fair but this case highlights how easy it is for an employer to unwittingly discriminate against male employees when trying not to discriminate against female employees on maternity leave.

For further information please contact Steven Meyerhoff on 01254 828300 or
e-mail steven.meyerhoff@backhouses.co.uk

DISMISSALS: EMPLOYERS CANNOT SUBSEQUENTLY RETRACT

The Employment Appeal Tribunal held in Willoughby v C F Capital plc that only in exceptional cases could an employer retract a dismissal letter.

The employer in this case canvassed the idea of moving its employees to self-employed status with the Claimant.  During these discussions, the Claimant had indicated that she was interested in the proposal although she did not give her consent to make such a change.  The employer subsequently sent her a letter terminating her employment (but enclosed the new service agreement for self-employed work) as they thought she had agreed to the change.

The Claimant complained she had been unfairly dismissed and so the employer offered to withdraw the termination.  However, as the Claimant had already sought legal advice, she decided to pursue her claim for unfair dismissal and breach of contract and the Appeal has been allowed.

It is worth noting that where the dismissal wording is unambiguous, Claimants are entitled to take it at face value.  Also, in this case there was a delayed response from the employer which again gave weight to allowing the Claimant's claim to proceed.

For further information please contact Steven Meyerhoff on 01254 828300 or
e-mail steven.meyerhoff@backhouses.co.uk

Record number of part-time workers as unemployment falls

Although the level of unemployment fell slightly between the period March-May 2010, the number of people working part-time is at a record high according to the latest figures published by the Office for National Statistics on 14 July 2010.

The Labour Market Statistics bulletin states that the figures for the three months to May 2010 show that "The number of people in part-time employment was 7.82 million in the three months to May 2010, up 148,000 from the three months to February 2010. Of this total, 1.94 million were men and 5.87 million were women."

The statistics also showed that there is only one job vacancy for every five jobless people. 

Experts predict that with public sector job cuts looming, unemployment levels will soon rise again as will the number of part-time workers.  Employers should therefore be aware of the relevant legislation and provisions that impact upon the employment relationship with part-time workers.

Part-time working often raises a number of issues for employers. For example: The rights of full-time workers who wish to change to part-time work; the treatment of part-time workers compared to full-time workers; and the treatment of workers that have changed from full-time  to part-time.

The Part-time Workers Regulations (PTW) provides the following definitions:

A part-time worker is a person who is paid wholly or in part by reference to the time they work, and who is not identifiable as a full-time worker having regard to the employer's custom and practice in relation to workers employed under the same type of contract (regulation 2(2), PTW Regulations).

A full-time worker is a person who is paid wholly or in part by reference to the time they work, and who is identifiable as a full-time worker having regard to the employer's custom and practice (regulation 2(1), PTW Regulations).

A "worker" includes a person who works under a contract of employment or under any other contract for the personal performance of work or services. However, services provided for a client or customer on a professional basis or by a business undertaking are not covered (regulation 1(2), PTW Regulations).

Under the PTW Regulations, a part-time worker must be able to identify an appropriate full-time worker as a comparator in order to establish less favourable treatment.

Identified comparators must be:

1. Employed by the same employer

2. Employed under the same type of contract.

3. Engaged in the same or broadly similar work having regard, where relevant, to whether they have a similar level of qualification, skills and experience.

4. Working or based at the same establishment as the part-time worker or, where there is no such worker who satisfies the three requirements listed immediately above, working or based at a different establishment and satisfying those requirements (regulation 2(4), PTW Regulations).

Comparators must also be actual and not hypothetical.

Changing hours of work

Under the PTW Regulations there is no right for a worker to alter their hours of work e.g. from full-time to part-time.  However, failure to accept a request to change hours of work could amount to indirect sex discrimination if, for example, a woman needs to alter her hours of work in order to meet childcare requirements.  Alternatively, a male employee could claim direct sex discrimination if his request to alter his hours of work was refused and yet a female in the same position would have had her request granted.  (For further details on flexible working, please see our December 2009 Legislation Update.)

There are many other ways for part-time employees faced with discrimination to challenge their treatment. For example, using the Equal Pay Act 1970.  Again, they would need to identify a valid comparator of the opposite sex and the employer would need to justify the variation in pay.

For further information about part-time workers, please contact Steven Meyerhoff on 01254 828300 or by email: steven.meyerhoff@backhouses.co.uk.

EQUALITY FOR AGENCY WORKERS ON HOLD?

The effect of the implementation of the European Directive (via the UK Agency Worker Regulations) was discussed in our August 2009 Employment Law Update.

Since that article was published, the Conservative Party stated that they would review the proposed Regulations should they be elected. 

On 5 July, Business Minister Edward Davey (on behalf of the Secretary of State for Business, Innovation and Skills) confirmed in the House of Commons that a review of the Agency Workers Regulations 2010 was now underway.  He said "The Government are aware of the different points of view expressed by the business community about certain aspects of the agency workers regulations and is currently considering the way forward."

This review will be warmly welcomed by employers especially as the 12 weeks qualifying period for agency workers to acquire equal rights is so highly contentious.  We will publish any further developments in this area in future Employment Law Updates.

EMPLOYERS URGED TO ALLOW STAFF TO WORK FROM HOME

Transport Minister, Normal Baker, has launched an initiative to reduce travel in order to "benefit the economy, the environment, and the individual." 

Key items on the agenda include increased working from home e.g. 1 day each fortnight and greater use of video conferencing.

Incentives could also be introduced in relation to rail travel.  For example, rail companies would sell carnets as well as season tickets, enabling travellers to pay for journeys in batches while enjoying the discounts available to season ticket holders.

Whatever changes are implemented, Mr Baker believes that traditional travel patterns should evolve to a 21st century world especially as changes need to be made if the Coalition is to secure the low-carbon economy it promised.

Although Mr Baker's plans seem well-intentioned, they will obviously not be feasible for implementation in all industry sectors.  We will therefore have to wait and see whether any further plans with wider application are canvassed. (See http://www.normanbaker.org.uk/pr/2010/100712_travel.htm for further details).