unfair dismissal and misconduct

Posted on June 17, 2010 by Martin Malone

A couple of recent unfair dismissal cases have thrown new light on unfair dismissal law.

The first shows that an employer has a wide discretion as to whether to postpone internal disciplinary proceedings when there is an ongoing police investigation into the same allegations.

A prison officer (a Mr Mansfield) was accused of orchestrating violence among prisoners and planting drugs on them. An internal investigation was started in April 2006 and he was suspended on full pay. Eventually, after rather over a year, he was dismissed. He claimed unfair dismissal and won, essentially because the employment tribunal which heard his case considered that the delay in dismissing him was “lengthy and unacceptable”.

The employer, effectively the Prison Service, appealed to the EAT and has won.

What was crucial was the reason for the delay. This was that there was an ongoing police investigation into Mr Mansfield’s conduct. The EAT said “We consider that a decision maker forming a view on whether disciplinary proceedings should be continued alongside a criminal investigation has a wide discretion“. There was no basis for the Employment Tribunal to have held that the delay meant that Mr Mansfield’s dismissal was unfair.

The second case shows that the seriousness of the consequences for the employee of a finding of unfair dismissal can be taken into account in deciding whether an employer’s investigation into alleged misconduct was fair and adequate and therefore in deciding whether a dismissal was unfair.

A Filipino nurse, Ms Roldan, was employed by the Salford Royal NHS Foundation Trust from July 2003 until her summary dismissal for misconduct (mistreating a patient) in October 2007. She brought an unfair dismissal case. She won in the employment tribunal but the Trust appealed and the EAT ruled that the case should be sent back for rehearing. Ms Roldan appealed to the Court of Appeal and has won.

In coming to its conclusion the Court of Appeal pointed out that in deciding whether a ‘conduct’ dismissal is fair or unfair one of the important questions to be considered is whether the employer carried out as much investigation into the matter as was reasonable. In this case this would include taking into account that the employee had given service to the employers over four years, apparently without complaint and, significantly, that there would be a real risk that her career would be blighted by the dismissal if it was found to have been fair. A finding that the dismissal was fair would certainly lead to her deportation and destroy her opportunity for building a career in this country.

Accordingly the Court of Appeal restored the decision of the original tribunal that the dismissal was unfair. You can read more about this case in this blog post.

what happens if the authorities fail properly to apply EU law?

Posted on June 17, 2010 by Martin Malone

Some 15 years ago, as all law students should know (!), the European Court laid down the principle that an EU Member State could be required to pay damages to any individual who suffers loss as a result of that Member State’s failure properly to transpose a European Directive into domestic law.

This was established in 1995 in a case in which a Sr Francovich won the right to claim damages against the Italian government. The Italian government had failed properly to implement an EC Directive relating to the protection of employees in the event of insolvency of their employer. Sr Francovich lost out as a result and in due course the European Court ruled that he could sue the Italian government for loss he suffered as a result of its failure properly to implement EC law in Italy, subject to three conditions (which in his case were fulfilled) as follows:

the purpose of the Directive in question must be to grant rights to individuals;
it must be possible to identify the content of those rights on the basis of the provisions of the Directive;
there must be a causal link between the breach of the Member State’s obligation and the damage suffered.

In a later case in 2003, the European Court ruled that this Francovich principle should be extended to cover failure by a domestic court properly to apply EU law. The European Court ruled that if a court in a Member State fails properly to apply a Community law which is intended to confer rights on individuals, then provided the breach is sufficiently serious and there is a direct causal link between it and the loss or damage sustained by the injured parties, the Government of the Member State concerned can be required to compensate the individual.

In practice employees in the UK have only very rarely sought to exercise this type of right against the British government. This is no doubt mainly because the British government has tended to err on the side of “gold-plating” EC directives rather than failing to implement them properly. Also, as noted in the recent post “The ever widening reach of discrimination law” courts and tribunals are prepared in appropriate circumstances to re-write a defective part of an Act of Parliament to bring it into line with EU law

Recently there has been further clarification of the position. On 5 May 2010 the British Court of Appeal handed down its ruling in a case in which a Mr Cooper sued the British government, or more accurately sued the Attorney General representing the British Government. He complained that the British courts had failed to apply EU law correctly and that as a result of that failure the British Government should compensate him for loss he suffered. He has lost.

Dismissing his arguments, the Court of Appeal pointed out that in order to win such a case, the underlying breach of European Community law must be ‘sufficiently serious’. In the case in question the underlying breach of Community law was based on the fact that there had been a procedural defect in the way in which Hammersmith and Fulham Council had come to a town and country planning decision. The important point to note is that in coming to its decision the Court of Appeal suggested that as a general rule a ‘procedural defect’ is unlikely to be ‘sufficiently serious’.

While the case itself did not involve any employment law issue, it does show that it is not easy to succeed in a Francovich type of claim and is thus worth noting in an employment law context.

proposed cuts in civil servants’ redundancy pay ruled unlawful

Posted on June 17, 2010 by Martin Malone

Crown and civil servants are not eligible for statutory redundancy pay. However under the Civil Service Compensation Scheme (CSPS) they generally have equivalent or better rights.

In early 2010, after consultation, the government and five of the six public sector unions (FDA, Prospect, GMB, Unite and the Prison Officers Association) came to agreement on amendments to the CSPS to take effect from 1 April 2010. The sixth union, the PCS, which represents the largest number of civil servants, objected on the grounds that a significant number of its members would be detrimentally affected by them. The PCS took the government to court by way of judicial review.

On 10 May the High Court ruled in favour of the PCS Union. It held that the proposed amendments were unlawful through lack of members’ consent. The proposed amendments were therefore quashed.

The amendments concerned payments on redundancy and did not (according to government documentation) impact on rights under the Civil Service Pension Scheme. In more detail, the proposed amendments provided that from 1 April 2010, employees made compulsorily redundant would get one month’s pay per year of service for the first five years, and two months’ pay per year for subsequent service. Compensation would be subject to a maximum of three years’ pay where this led to a payment of no more than £60,000. In other cases, the payment would be limited to the higher of two years’ pay and £60,000.

Existing staff who were made compulsorily redundant would be allowed to leave under their current terms providing that their last day of service is on or before 31 March 2011 and other transitional arrangements provided for those aged 50 and over, and long-serving staff aged between 40 and 50, with compensation based on what was payable under the existing arrangements as at 31 March 2010.

The matter is worth noting here as it is likely to become one of increasing general interest and importance over the next few months as the new government grapples with the high cost of running Whitehall and the Civil Service generally.

the ever widening reach of discrimination law

Posted on June 17, 2010 by Martin Malone

A most important part of the Equality Act 2010 is section 13 which extends discrimination law to cover discrimination by ‘association’. Subject to the caveat that it may be delayed (see recent post on coalition government proposals) the main parts of the Act are likely to come into force in October 2010 and April 2011. In general the Act has the support of all the main political parties and therefore implementation of most of it, including this ‘discrimination by association’ provision, will not be affected by the recent change of government.

Traditionally, an employee could only succeed in a claim for unlawful discrimination if he or she had been discriminated against by reason of his or her sex, race, disability or age etc. When the new Act comes into force he or she will be able to succeed in a claim against his or her employer if the discrimination has been simply because of a ‘protected characteristic’ – which may be a third party’s sex, race, disability or age etc.

This change implements EU law as interpreted by the European Court in July 2008. The European Court stated that the EU Directive of November 2000 “establishing a general framework for equal treatment in employment and occupation…must be interpreted as meaning that the prohibition of direct discrimination laid down by those provisions is not limited only to people who are themselves disabled”.

Although this statement of the law by the European Court was in the context of a disability discrimination case it relates also to other forms of unlawful discrimination. This is because Article 1 of the Directive, to which the Court specifically referred, applies to “discrimination on the grounds of religion or belief, disability, age or sexual orientation as regards employment and occupation“.

The European Court’s ruling can already be relied on by civil servants because EC law is directly applicable to employees of public authorities if it is sufficiently clear and precise. The European Court’s ruling can also already be relied on by private sector employees in relation to Disability Discrimination because this was specifically stated to be so by the EAT in 2009. The EAT was giving its decision in a case in which a healthy employee suffered a detriment at work because she was caring for her disabled son. The EAT held that the employer had acted in breach of the Disability Discrimination Act even though to achieve this result, and therefore to achieve conformity with EU law, the EAT somewhat controversially rewrote the relevant part of the Act.

As from the date of coming into force of the Equality Act 2010 (whenever that may be) the new rule will expressly apply to all ‘protected characteristics’.

One consequence could be, for example, that an employee disciplined for consistently arriving late at work might have a claim for age discrimination if the reason for the late arrival was that they were caring for an elderly parent – although, at least in an age discrimination case, there is provision for the employer to escape liability if he can show that the discipline was justified and proportionate.

The Equality Act 2010 is not just a consolidation of existing statutes. Of course it is that, and thus will eventually simplify the law and is therefore ‘good news’. However, as the example above shows, the Act also makes some important changes to the law. It is clear that it would be prudent for anyone potentially affected to contact us for expert advice on the implications for them, preferably well before October 2010 or at any rate before April 2011, the dates on which most of the Act is due to come into force.

the coalition government and employment law

Posted on June 17, 2010 by Martin Malone

Our newsletter last month outlined employment law related proposals in the General Election manifestos of each of the three main political parties. Now of course these have no direct relevance. Instead the new Coalition Government Agreement states that there will be a review of “employment and workplace laws, for employers and employees, to ensure they maximise flexibility for both parties while protecting fairness and providing the competitive environment required for enterprise to thrive“.

What that means in practice is far from clear. However some key points are emerging:-

The Identity Cards scheme is to be scrapped by end August 2010. An “Identity Documents Bill” had its first reading in the House of Commons on 26 May. This will repeal the Identity Cards Act 2006 and end the ID cards scheme. It will remove ID cards’ status as travel documents or proof of ID and provide for scrapping the underlying databases as well as for cancellation of contracts with suppliers (notably Thales). Around 15,000 ID cards (at £30 each) have already been issued to select groups, including workers at Manchester and City of London airports, pending the previously intended nationwide roll-out in 2012. They will presumably become worthless save as museum pieces.
In line with a general policy of ending the gold-plating of EU Directives it is possible that parts of the 2006 TUPE Regulations (notably the “service provision change” part) and of the 2010 Agency Workers Regulations may be watered down.
A Pensions and Savings Bill is to provide for phasing out of the age 65 “default retiring age” (at which, subject to conditions, employees can currently be required to retire without unfair dismissal rights). The Bill is likely to include further provisions about increasing state pension age and for State Pensions to increase in line with earnings rather than inflation as from 2012 (it may not be over-cynical to note that the link to inflation was made when earnings were rising faster than inflation while now that position appears to have been reversed. Thus the Reed Job index recently reported a dip in salaries while inflation indicators are showing a sharp rise in both CPI and RPI ).
The right to request flexible working is to be extended to all employees.
Replacement of the Human Rights Act with a British Bill of Rights, proposed in the Tory manifesto, is not incuded in the coalition agreement (Justice Secretary Kenneth Clarke is reported as saying that repealing the Human Rights Act is not a high priority).
The Labour government’s proposed 1% rise in National Insurance contributions payable by employers from April 2011 is to be scrapped. However the 1% rise in employee NICs will go ahead, albeit offset for the lower paid by an increase in personal tax allowances.
There appears to be some uncertainty about the future of the Equality Act 2010 after the October 2010 implementation date was recently removed from the Government Equalities Office website.
The much derided Vetting and Barring Scheme has been stalled following a Government announcement on 15 June. Voluntary registration was due to start on 26 July with compulsory registration to be implemented by November 2010. The changes will affect 66,000 organisations including employers, voluntary groups and education authorities. New Home Secretary Theresa May commented:

“The safety of children and vulnerable adults is of paramount importance to the new government.

“However it is also vital that we take a measured approach in these matters. We’ve listened to the criticisms and will respond with a scheme that has been fundamentally remodelled.

“Vulnerable groups must be properly protected in a way that is proportionate and sensible. This redrawing of the vetting and barring scheme will ensure this happens.”
Theresa May is known to have opposed the scheme, describing it as “draconian”. She told the BBC: “You were assumed to be guilty until you were proven innocent, and told you were able to work with children”.

Other Coalition proposals include a clampdown on “unacceptable” bonuses within the banking sector; extension of proposals for social security benefits to be conditional on willingness to work; a cap on immigration from outside the European Union; some form of tax break for married couples and civil partners (Lib Dems able to abstain) and a review of the IR35 tax arrangements (which neuters tax advantages of individuals, notably IT consultants, who provide their services through wholly owned limited companies).