Thursday, July 21, 2011

Age Discrimination Must Be Taken Seriously!

The Employment Appeal Tribunal (EAT) has upheld a controversial Employment Tribunal finding of unfair dismiss in an age discrimination case where the employer rejected a request to work beyond retirement age.

Mr Ayodele was approaching retirement age and asked his employer, Compass Group plc, to allow him to continue to work beyond 65. The Employment Equality (Age) Regulations 2006 provide for a procedure which the parties have to follow in these circumstances.

If the employee is dismissed following a failure by the employer to follow the statutory procedure will mean that the dismissal is unfair.

The procedure requires the employer to meet with the employee and consider the request and to give the employee a right of appeal if they are unhappy with the decision. The appeal must then be considered at a further meeting after which the decision is final.

The legislation does not require the employer to give a reason for rejection of the request.

Compass Group had given Mr Ayodele the necessary written notice informing him of his rights and had allowed him to put his case at both an initial meeting and at an appeal. They rejected his request and retired him at 65.

Mr Ayodele brought a claim in the Employment Tribunal alleging unfair dismissal and age discrimination. On the face of it, the claims did not look promising - after all, the employer appeared to have done all that it was required to do under the statutory procedure.

However the evidence before the Tribunal showed that in fact the Respondent's managers who considered the request considered themselves to be bound by the company policy to refuse all such applications. The Tribunal took the view that for the Respondent to have complied with its obligation to consider the request it had to be properly looked at with an open mind and with there being some possibility of it affecting the outcome.

They therefore found the dismissal unfair. The age discrimination claimed failed because they found that retirement was the reason for dismissal.

The decision was controversial because employers had always thought that provided they met with the employee they could refuse a request without having to give a reason. The legislation does not require the employer to justify a refusal or use words like "consider in good faith." Some commentators therefore felt that the Tribunal was reading matters into the Regulations which were not there.

Compass appealed to the EAT who disagreed with the critics of the decision and upheld the original Judgment.

They said a duty to "consider" something connoted an obligation to do so in good faith, such that a blanket rule of refusing to contemplate any exception was unfair.

The practical effect of this Judgment may be somewhat limited with the forthcoming demise of the default retirement age but any employer who between now and the early part of October when the concept of forced retirement will disappear (the exact date is currently a "moot point" which I shall not go into here) would be well advised to not reject a request to work beyond 65 without at least appearing to consider the alternative and giving a reason so as to show that the request has not been rejected out of hand.

Bearing in mind that Mr Ayodele was awarded nearly £16,000 in lost earnings Compass Group learned an expensive lesson (they unsuccessfully appealed against the figure.) Make sure your business does not do likewise!

The case is reported here.

Tuesday, July 05, 2011

Pay Cuts - Not Always Unfair

The Employment Appeal Tribunal (EAT) has ruled that an Employment Tribunal in Manchester was wrong to find that a Company unfairly dismissed an employee who refused to accept a 5% pay cut.

In 2009 Garside and Laycock, a building and maintenance service company, were experiencing tough financial times. They proposed a pay reduction of 5% to all employees. All but 2 of the employees agreed (apart from 2 others who were dismissed for unrelated gross misconduct anyway.)

Mr Booth was one of the exceptions. After a number of meetings and after various compromise proposals were rejected he was dismissed with effect from Christmas Day 2009 after 7 years' service.

He claimed unfair dismissal.

The Tribunal found that his dismissal was for "some other substantial reason" which is one of the potentially fair reasons for dismissal permitted by the rules about Unfair Dismissal in the Employment Rights Act 1996 - this is a category which covers cases where there is not, for example, a redundancy or misconduct but there is a potentially good reason for dismissal.

Once the employer has established a potentially fair reason the Tribunal then has to decide whether the dismissal was fair or unfair in substance "having regard to equity and the substantial merits of the case."

This Tribunal decided that Mr Booth's dismissal was unfair. It held that a previous case (Catamaran Cruisers Limited v Williams and Others) required them to consider whether the employer's situation was so dire that they had no choice but to make the pay cut and concluded that the employer had not shown that its position was sufficiently desperate.

The Tribunal also criticised the consultation process and the voting system.

The EAT held that the Tribunal's decision could not stand. Catamaran Cruisers did not require the employer to show that it was desperate - all they had to show was a sound good business reason as opposed to imposing a pay cut on a whim.

The Tribunal had also erred by focusing on whether it was reasonable of Mr Booth to reject the pay cut when it should have focused on whether the Employer acted reasonably by deciding to impose the pay cut. Whilst a reasonable employer may well have to consider the effect on the employee in order for a dismissal to be fair, it is not the sole or necessarily the paramount consideration.

The appeal was therefore allowed. The EAT decided that it was not a case where they could make a clear cut finding that the dismissal was fair and they therefore sent the case back to the Tribunal, to be heard by a new panel applying the correct test.

The decision does not mean that Mr Booth will definitely lose. Still less does it mean that dismissing someone for refusing to accept a pay cut will always be fair. If such a change is introduced without good reasons, without proper contractual notice and without proper consultation and weighing up the alternatives then the dismissal might well be unfair.

It is certainly the case that any employer contemplating making a pay cut, or any employee being asked to take one, would be as well to take legal advice as to exactly where they stand.

The case is reported here.

Monday, July 04, 2011

"Outing" of Employee Was Not Unlawful, Says Court of Appeal

The Court of Appeal has upheld an Employment Appeal Tribunal's decision to overturn a finding of sexual orientation harrassment in favour of an employee of the Land Registry.

Mr Grant is gay. He worked for the Land Registry at Lytham St Annes and whilst employed there he had chosen to be open about his sexuality.

In due course he moved to the Coventry office and did not mention his sexual orientation straight away as he wanted to do so in his own time once he felt comfortable in the new workplace.

He subsequently discovered that his line manager had told one of his colleagues that he was gay without his prior knowledge or permission (she had made reference to it being pointless for the female colleague in question to "flutter her eyelids" at him.) He also felt uncomfortable at a dinner party when she asked in front of colleagues how his partner was, laying stress on the phrase "How is he?"

There were a number of other allegations including one that his line manager had made a "limp wrist gesture" towards him.

He brought proceedings for direct discrimination and harassment and 6 of the allegations, including the ones mentioned above, were upheld as amounting to direct discrimination.

The Land Registry appealed to the EAT. The central complaint in respect of the "eyelids" and "dinner party" allegations was that the Tribunal had failed to take into account that the Claimant had been openly gay whilst at Lytham St Annes and his line manager had known this.

The EAT upheld the appeal in what was seen in some circles as being quite a controversial decision. It held that the Tribunal should have considered whether the Claimant having been "out" previously was relevant to whether "outing" him at Coventry could be considered a "detriment." Some commentators expressed concern that this implied that once someone had been open about their sexuality in one workplace they would never be able to complain about being "outed" elsewhere against their will.

Mr Grant took his case to the Court of Appeal asking them to set aside the EAT's decision to require the Tribunal to reconsider the case, and therefore upholding the original Judgment in his favour.

The Court of Appeal said that the mere fact that the Claimant had "come out" before did not mean that remarks or references to his sexuality could never amount to discrimination. Everything depended on the context. Clearly "vituperative or offensive" remarks could be discriminatory.

However, they agreed with the EAT that the fact that the Claimant had "come out" was highly relevant to whether or not comments about his sexuality could be regarded as a detriment and therefore as actionable. It had to be remembered that this was a discrimination claim and not a claim for breach of privacy.

They said that any one of the employees at Lytham could quite innocently have mentioned Mr Grant's sexuality to someone at Coventry assuming that he was as open about it as he had been before and that whilst he might be upset about this such innocent disclosure would not have amounted in itself to harrassment.

Furthermore in the absence of any "ill intent" disclosing his sexuality in a particular workplace when he had been open about it before could not have the effect of violating his dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for him (as the legal definition of harrassment requires.) "Tribunals must not cheapen the significance of those words. They are an important control to prevent trivial acts causing minor upsets being caught by the concept of harrassment."

The Court of Appeal also doubted whether the mere fact that the comments were about his sexuality meant that they were on the grounds of it and therefore unlawful.

They therefore decided that the first 2 allegations failed all together and that the other 4 should be sent back to the Tribunal for further consideration taking into account the Claimant previously being "out."

With respect to the Court of Appeal, this still seems a controversial decision. Whilst it might be fair for a Tribunal to conclude that on the facts someone has not been subject to a humiliating environment by disclosure of something that they had revealed to other people it seems to be rather a leap to suggest that it can never amount to harrassment. Someone who was openly gay in one employment might not feel happy about this being disclosed in their new job in, say, a Catholic School where homosexuality was frowned upon.

One suspects this may not be the final word on this particular case.

The case is reported here.