bonus payments: beware what you say

Posted on May 21, 2012 by Martin Malone

Managers at Germany’s second largest bank, Commerzbank, are facing the prospect of having to find £42million after Mr Justice Owen, sitting in the High Court in London, held that 104 former City bankers at Dresdner Kleinwort are each entitled to bonus payments of up to £1.3million each.

The Bank claimed to be entitled to withhold payments when it faced massive financial pressure as part of the general turmoil in 2009. In 2008 the business was struggling and in May it was put on the FSA’s "watch list" as a result of the apparent fragility of its business. With a view to avoiding mass defections resulting from the instability this caused CEO Dr Stefan Jentzsch promised at a meeting that there would be a 400 million euros’ guaranteed bonus pot. This was a verbal representation to the employees concerning what was described as a discretionary bonus scheme.

In early 2009 the Bank decided to reduce the resulting allocated bonuses by 90%. Continue reading →

is a lap dancer an employee?

Posted on May 21, 2012 by Martin Malone

The Employment Appeal Tribunal has considered the employment status of a lap dancer, Nadine Quashie, who worked at a Stringfellows club. She had made a claim for unfair dismissal, which had been rejected by an employment tribunal on the ground that she was not an employee and therefore not entitled to claim. Overturning this decision, the EAT looked at the three essential elements of an employment contract – the obligation to carry out work personally, the element of control over work by the employer, and mutuality of obligation and found all of these were present.

Continue reading →

guidance on costs orders

Posted on May 21, 2012 by Martin Malone

Two cases this month look at the question of costs orders. Rogers v Dorothy Barley School was an unsuccessful breach of contract claim brought by a school caretaker. Representing himself, he alleged that the school were in breach of contract when he received a water bill, in error, in respect of the house he occupied at the school. Although he did not have to pay the bill, he felt that it was a breach of contract that he had received it at all. He was unsuccessful on the grounds that the tribunal had no jurisdiction to hear the claim, because it can only deal with breach of contact claims where the contract has ended.

He appealed the tribunal decision, again without success, and the school made an application that he should pay its costs. Continue reading →

resignation “with immediate effect” takes immediate effect

Posted on May 18, 2012 by Martin Malone

Horwood v Lincoln County Council is a useful reminder that although the parties to a contract can, between them, agree to change the end date of a contract, bringing it forward and or putting it back, that cannot displace the effective date of termination as defined in the Employment Rights Act 1996 s. 97, which is crucial for calculating time limits for bringing employment claims.

Ms Horwood wrote a letter of resignation to her employer in response to what she said were defects in a disciplinary process applied to her and her subsequent demotion, claiming that these amounted to constructive dismissal. Her letter stated that she wished her resignation to have "immediate effect". Continue reading →

when is the reversal of burden of proof triggered?

Posted on May 18, 2012 by Martin Malone

The provision of the Equality Act 2010 reversing the burden of proof in discrimination claims (section 136) means that if a claimant can show facts which could amount to discrimination, then a tribunal must find for him or her, unless the employer can show that there was another explanation for those facts.

In Dziedziak v Future Electronics Ltd an employee selected for redundancy sought to rely on this reversal of the burden of proof, claiming, amongst other things, that the use of attendance as part of the selection criteria was indirectly discriminatory, because her attendance record as a single parent with responsibility for a sick child was poor. She failed in this part of her claim, because the tribunal found as a matter of fact that her lateness had not had an impact on her selection. Because she had not established that fact, the reversal of the burden of proof was not triggered, and her claim failed.

Although unsuccessful in this part of her claim, Ms Dziedziak did succeed in an unfair dismissal claim Continue reading →

tribunals have no power to allocate liability between joint respondents

Posted on May 18, 2012 by Martin Malone

Brennan & Others v (1) Sunderland City Council (2) GMB (3) Unison is a case arising from somewhat unusual circumstances, but the decision is one of relevance in many more situations. It is part of the long running equal pay saga arising from changes in NHS terms and conditions. Briefly, the claimants are alleging that the preservation of certain bonuses for male staff in a collective agreement perpetuated unequal pay. As well as making equal pay claims against their employers, some claimants also named their trade unions as respondents to the claims, because they were parties to a discriminatory collective agreement. This decision of the Employment Appeal Tribunal deals with whether employment tribunals have jurisdiction to apportion liability between the respondents to a discrimination claim.

The answer to this question requires a little legal history. It depends on the interpretation of the Civil Liability (Contribution) Act 1978, which updated and extended the Law Reform (Married Women and Tortfeasors) Act 1935 to breach of contract cases. Continue reading →

rejected applicants have no right to disclosure of the successful candidate’s details

Posted on May 18, 2012 by Martin Malone

Do rejected applicants have the right to disclosure of documents relating to the successful candidate if they consider they have suffered unlawful discrimination the the recruitment process? No, said the European Court of Justice (ECJ) in Meister v Speech Design Carrier Systems GmbH which was a claim by an applicant for a job as an experienced software developer, who made a complaint that she had been discriminated against on the ground of her sex, age, and ethnic origin when she was not short-listed for interview. The questions considered by the ECJ were:

1 – does the principle of equal treatment under EU law mean that unsuccessful applicants are entitled to information about the successful applicant; and
2 – does refusal of that information give rise to any presumption of discrimination?

Having answered the first question in the negative, the ECJ went on to say that the second question was one for the national courts of each country to decide.

On the face of it, this decision is a relief: the possibility of routine disclosure of details of successful candidates to unsuccessful ones doesn’t bear thinking of from all sorts of angles: preserving confidentiality; the administrative burden and the sheer nuisance value. But what approach will UK courts take to deciding whether a refusal to disclose details suggests that there may have been discrimination, given that:

it cannot be ruled out that a defendant’s refusal to grant any access to information may be one of the factors to take into account in the context of establishing facts from which it may be presumed that there has been direct or indirect discrimination

Continue reading →

indirect discrimination related to retirement is unlawful age discrimination

Posted on May 18, 2012 by Martin Malone

Another important age discrimination and retirement case this month is Homer v West Yorks Police, which concerned a senior police officer who became a legal adviser at the Police National Legal Database after retiring from the police aged 51. At the time he joined, there was no requirement for advisers to have a law degree, but the PNLD later introduced a new grading structure, which required a degree for promotion to the top grade, with the intention of improving recruitment and retention. At this point, at the age of 62, Mr Homer was allocated to the second highest grade. He made a complaint of indirect discrimination because he would be unable to complete a law degree before his planned retirement age of 65, and so could not get promotion. He failed in both the Employment Appeal Tribunal and in the Court of Appeal, because it was considered that the reason for the discrimination was not his age, but his impending retirement.

The Supreme Court rejected this approach: it did not make sense to compare those approaching retirement with those leaving for other reasons, over which they had a choice, with those faced with a compulsory retirement age, nor was it realistic to treat retirement as unrelated to age. Continue reading →

justification for direct age discrimination must be related to the general public interest

Posted on May 18, 2012 by Martin Malone

This month’s biggest employment law news stories have to be the Supreme Court’s two decisions on age discrimination in Seldon v Clarkson Wright & Jakes and Homer v West Yorks Police. Both give useful guidance about how cases on age discrimination will be considered from now on – but both leave questions to be considered further.

Seldon is a case relating to membership of a professional partnership, but the principles discussed will apply equally in employment cases. Put briefly, Mr Seldon, senior partner in a law firm, challenged a rule in in the partnership deed providing for compulsory retirement at age 65 as direct age discrimination. The partnership defended the rule on the basis that it was justified, that is, that the rule was a proportionate means of achieving a legitimate aim. Three of the reasons put forward as legitimate aims were accepted by the employment tribunal:

1 – retention of associates by ensuring that they have a chance to become partners within a reasonable time;
2 – facilitating workforce planning; and
3 – promoting a supportive culture by minimising the need to use performance procedures to expel partners.

At both Employment Appeal Tribunal and Court of Appeal levels it was considered that the mandatory retirement age was justified. Mr Seldon appealed to the Supreme Court, whose judgment surveyed the relevant European case law and drew out some general principles from it.

Continue reading →