From The Times October 8, 2009

From The Times October 8, 2009

Workers entitled to time off for illness on holiday Court of Justice of the European Communities Published October 8, 2009 Vicente Pereda v Madrid Movilidad SA Case C-277/08 National provisions or collective agreements which provided that a worker who was sick during a period of scheduled annual leave did not have the right, after his recovery, to take his annual leave at another time were unlawful. The First Chamber of the Court of Justice of the European Communities so ruled, on September 10, 2009, when giving a preliminary ruling on a request under article 234 EC from the Juzgado de lo Social No 23 de Madrid, Spain. Article 7 of the European Parliament and Council Directive 2003/88/EC of November 4, 2003 concerning certain aspects of the organisation of working time (OJ 2003 L299/9) provides: “(1) Member states shall take the measures necessary to ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice.” The Court said that it had already been held that the right to paid annual leave was not extinguished at the end of the reference period laid down by national law where the worker was on sick leave for the whole or part of the leave year and had not actually had the opportunity to exercise that right: see Stringer v Revenue and Customs Commissioners; Schultz-Hoff v Deutsche Rentenversicherung Bund (Joined Cases C-520/06 and C-350/06 (The Times January 28, 2009; \ ICR 932, paragraphs 43 and 55). Further, the purpose of the entitlement to paid annual leave was to enable the worker to rest and enjoy a period of relaxation and leisure; the purpose of the entitlement to sick leave being different, namely, to enable the worker to recover from being ill. It followed that a worker who was on sick leave during a period of previously scheduled annual leave had the right, on his request and in order that he could actually use his annual leave, to take that leave, if necessary outside the relevant reference period, during a period which did not coincide with the period of sick leave.

From The Times October 8, 2009

Employers’ retirement age discrimination justified Queen’s Bench Division Published October 8, 2009 Regina (Age UK) v Secretary of State for Business, Innovation and Skills, Equality and Human Rights Commission and Another intervening) Before Mr Justice Blake Judgment September 25, 2009 Provisions permitting an employer to require retirement at the age of 65 were justified where he could show that the treatment was a proportionate means of achieving a legitimate aim since the government had a legitimate social policy aim: protecting the integrity and confidence in the United Kingdom labour market. Mr Justice Blake so held in the Administrative Court of the Queen’s Bench Division when dismissing a claim for judicial review by Age UK, a charity for the promotion of the welfare of older people, which challenged the legality of regulations 3(1) and 30 of the of the Employment Equality (Age) Regulations (SI 2006 No 1031) on the ground, inter alia, that they were over-broad in what they permitted by way of derogation from the European Union principle of non-discrimination and, as such, they failed to give effect to the terms of Council Directive 2000/78/EC (OJ 2000 L303/16) and were invalid. The charity, then called Age Concern England, commenced judicial review proceedings against the then Secretary of State for Business, Enterprise and Regulatory Reform in the Administrative Court which referred a number of questions to the Court of Justice of the European Communities for a preliminary ruling. That Court held that member states could lawfully provide for certain kinds of differences in employment treatment on the ground of age if those differences were objectively and reasonably justified by a legitimate aim, but that the member states had the burden of establishing the legitimacy of that aim to a high standard of proof: see R (Incorporated Trustees of the National Council on Ageing (Age Concern England) v Secretary of State for Business, Enterprise and Regulatory Reform (Case C-388/7) (The Times March 9, 2009; \ ICR 1080; \ All ER (EC) 619), The European Court of Justice remitted the case to the Administrative Court, which gave permission to the Equality and Human Rights Commission and the Attorney-General to intervene. Mr Robin Allen, QC and Mr Declan O’Dempsey for Age UK; Ms Dinah Rose, QC and Ms Emma Dixon for the secretary of state; Lord Lester of Herne Hill, QC and Ms Diya Sen Gupta for the equality commission; Mr Jason Coppel, by written submissions, for the Attorney-General. MR JUSTICE BLAKE said that, in relation to regulation 3(1), the Government had proved to the requisite high standard that it did have legitimate social policy concerns in protecting the integrity of the labour market. Any defect in regulation 3 when drafted could, to some extent, be remedied by the national court reading down what the emerging Court of Justice jurisprudence required to be read in order to achieve compatibility and the concept of ultra vires would only apply to radical cases. There was, however, a limit to what a national court could do by way of reading down Directives that were inconsistent with Community law on the grounds of vagueness or uncertainty.

But having concluded that sufficient policy aims were identified, the future application of the 2006 Regulations could be determined in accordance with the purposes and principle of Directive 2000/78/EC and the criteria in the Court of Justice’s judgment. Whereas the individual employer justifying particular practices or treatment in reliance upon the social aim of the integrity of the labour market had a more rigorous task, the social aims that the government relied on were ones in which the state enjoyed a wide margin of appreciation. Moreover, the Government had also proved to the requisite high standard that the promotion of regulation 30 and the concept of a designated retirement age was based upon the social policy aim of maintaining confidence in the labour market and its short-term competitiveness. Accordingly, the decision to adopt a designated retirement age was legitimate and proportionate. However, if regulation 30 had been adopted for the first time in 2009, or there had been no indication of an imminent review, the selection of age 65 would not have been proportionate. It created greater discriminatory effect than was necessary on a class of people who both were able to and wanted to continue in their employment. A higher age would not have had any detrimental labour market consequences or block access to high level jobs by future generations. If the selection of age 65 was not necessary, it could not therefore be justified. However, since the government had indicated that it would review the designated retirement age in 2010, regulation 30, as adopted in 2006, was not beyond its competence in applying the Directive or outside the discretionary area of judgment available. Solicitors: Irwin Mitchell LLP, Sheffield; Treasury Solicitor; Mr Keith Ashcroft, Manchester; Treasury Solicitor. From The Times October 6, 2009

Safety concern irrelevant in race discrimination Employment Appeal Tribunal Published October 6, 2009 Amnesty International v Ahmed Before Mr Justice Underhill, President, Ms P. Tatlow and Mr S. Yeboah Judgment August 13, 2009 A North Sudanese claimant who was refused promotion to the role of Sudanese researcher for Amnesty International because it believed that the appointment of a person of her ethnic origin would compromise its perceived impartiality and would expose her to a safety risk when visiting Sudan and Eastern Chad, was discriminated against on the ground of her race and ethnic origin. The Employment Appeal Tribunal so stated when dismissing an appeal by the claimant, Miss B. Ahmed, from a decision of a central London employment tribunal in July 2008 upholding her claim of race discrimination against her employer, Amnesty International, contrary to section 1(1)(a) and 4(2) (b) of the Race Relations Act 1976. The tribunal had also rejected the defence raised by Amnesty under section 41(1) of the 1976 Act, that appointing the claimant would have put it in breach of the Health and Safety at Work Act 1974.

Mr Paul Epstein QC for Amnesty; Mr Darius A’Zami, representative, assigned by the Free Representation Unit, for the claimant. THE PRESIDENT said that it was argued that the tribunal was wrong to have treated the only question as being whether “but for” the claimant’s ethnic origins she would have been promoted and that it should have asked the further “reason why” question which involved an examination of the mental processes of the putative discriminator. Had it done so it would have concluded that the reason was not race but that the appointment would give rise to a risk that Amnesty would not be perceived as impartial and a risk to the claimant’s safety. The basic question in a direct discrimination case was what the grounds for the treatment complained of were. In some cases the ground or reason was inherent in the act itself. James v Eastleigh Borough Council ([1990] 2 AC 751) was a case of that kind and what was going on in the head of the putative discriminator was irrelevant. In other cases of which Nagarajan v London Regional Transport (The Times July 19, 1999; [2000] 1 AC 501), was an example, the act itself was not discriminatory but was rendered so by a discriminatory motivation. Even in such a case the subject of the inquiry was the ground of or reason for the discriminator’s action not his motive. There was no difficulty in reconciling the two cases; the ultimate question was what was the reason for the treatment complained of. The difference between them merely reflected the different ways in which conduct might be discriminatory. There was no two-stage approach; the only question was whether the reason for Amnesty’s decision not to appoint the claimant was her ethnic origin. The fact that its reason was its concern about impartiality and safety was irrelevant. The tribunal’s decision that the claimant had been discriminated against on the ground of her ethnic origins was right. The tribunal was wrong to hold that an employer could only rely on section 41 where the statute relied on created an obligation to do the very act complained of. However, it had also considered the position applying the correct test, whether the act complained of was reasonably necessary in order to comply with any conditional requirement of the statute: see General Medical Council v Goba ([1988] ICR 885). The tribunal had decided it was not reasonably necessary not to appoint the claimant in order to comply with section 2(1) of the 1974 Act since, if there was a risk in sending the claimant to Eastern Chad, Amnesty could avoid it by not sending her there. That finding was open to the tribunal. Accordingly Amnesty’s failure to offer the claimant the job of Sudan researcher constituted unlawful discrimination on racial grounds. The appeal tribunal felt some unease at being required to reach such a conclusion which might have implications for other employers whose employees were required to work abroad in situations of acute political or ethnic tension. No doubt such cases would be rare but where they did occur employers would be in a highly invidious position. Solicitors: Bindmans LLP.

From The Times October 6, 2009

Employee has no greater right after transfer than before Court of Appeal Published October 6, 2009 Gutridge and Others v Sodexo Ltd and Another Before Lord Justice Pill, Lady Justice Smith and Lord Justice Wall Judgment July 14, 2009 An employee whose employment contract had been transferred under contracting-out arrangements to another employer could not have any greater rights against the transferee than she had against the transferor and although the right to bring proceedings was against the transferee, the right was timelimited to six months after the termination of the the employment with the transferor, which was six months after the date of the transfer. The Court of Appeal so held by a majority, Lady Justice Smith dissenting, when dismissing the appeal of the claimant employees, Ms E. A. Gutridge and others, from the Employment Appeal Tribunal (Mr Justice Elias, President) ([2008] ICR 70) who allowed the appeal by the employer, Sodexo Ltd, and the previous employer, North Trustees and Hartlepool NHS Trust from the decision of an Employment Tribunal (Mr T. M. Garnon) of October 9, 2007, that the six-month time limit within which proceedings had to be instituted under sections 2(4) and 2ZA (as inserted by the Equal Pay Amendment Regulations (SI 1983 No 1794) and the Equal Pay Act 1970 (Amendment) Regulations (SI 2003 No 1656) of the Equal Pay Act 1970 would not start to run until the termination of the claimants’ employment with Sodexo, the new employer, so that they were entitled to bring their claims.The claimants sought equal pay for a period of six years prior to the date on which they had lodged their claims, a period which spanned the date of transfer of their employment contracts. Ms Jane McNeill, QC and Mr Ben Cooper for the claimants; Mr John Bowers, QC and Mr Jeremy Lewis for both employers. LORD JUSTICE WALL said that under the Transfer of Undertakings (Protection of Employment) Regulations (SI 1981 No 1794) a claimant had rights against the transferor in relation to the period when she was employed by the transferor, albeit in the instant case exerciseable against the transferee: she would also have rights against the transferee for any discrimination which occurred during the course of her transferred employment. The proposition identified by Lord Hope of Craighead in Preston v Wolverhampton Healthcare NHS Trust (No 3) (The Times March 13, 2006; [2006] ICR 606) that the expression “the employment” in section 2(4) of the 1970 Act meant “the employment to which the claim relates”, was not restricted in its application to occupational pension cases. The 1981 Regulations did not alter the construction of section 2(4) of 1970 Act and they did not affect the nature of the liability; they merely shifted the burden of the party which ultimately had to bear the cost. Lord Justice Pill gave a concurring judgment and Lady Justice Smith gave a dissenting judgment. Solicitors: Thompsons; Beachcroft LLP,Manchester and Eversheds LLP, Newcastle upon Tyne.

From The Times October 6, 2009

Employee to give credit Court of Appeal Published October 7, 2009 Stuart Peters Ltd v Bell Before Lord Justice Scott Baker, Lord Justice Maurice Kay and Lord Justice Elias Judgment July 30, 2009 An employee seeking compensation for constructive unfair dismissal who found alternative paid employment during her notice period had to give credit for those earnings. The Court of Appeal so held, allowing an appeal by the employer, Stuart Peters Ltd, against the decision of the Employment Appeal Tribunal on October 22, 2008, upholding the award of the employment tribunal, that the employee, Ms Elizabeth Bell, was entitled in her compensatory award to payment in lieu of notice with no deduction for three months of earnings she received from a different employer during her notice period. Mr Rad Kohanzad, representative, for the employer; Mr Ayoade Elesinnla, directly instructed by the Employment Law Appeal Advice Scheme, for the employee. LORD JUSTICE ELIAS said that the employment tribunal found that the employee had been unfairly dismissed. She had been constructively dismissed, resigning because she regarded the conduct of her employer as having undermined the relationship of trust and confidence between employer and employee. She was entitled to a six-month notice period and during that time she found temprary work for three months from a different employer. In assessing the compensatory award under section 123(1) of the Employment Rights Act 1996, the tribunal declined to offset the earnings she received from temporary employment against the award for earnings unpaid by the employers in the six-month notice period, regarding themselves as bound to take that approach by Norton Tool Co Ltd v Tewson (\ ICR 501), confirmed by Langley v Burlo (\ ICR 390). The question was whether Norton Tool applied to a case of constructive dismissal as opposed to dismissal by an employer. What did good industrial practice require? In Norton Tool it was held that it was good industrial practice for an employer to offer a payment in lieu of notice to a dismissed employee, and for the employee to give no credit for any wages earned from a different employer during the notice period. It was not the same in constructive dismissal cases where the dismissal was brought about by the employee regarding the employer as in repudiatory breach of contract. It was not the case that in a large proportion of constructive dismissal cases payment in lieu would have been made. The employer might have been trying to keep the employment alive and to pay wages. The employee might sue for damages. It was not good practice for the employer to make payment in lieu in the case of repudiatory breach. The employer might dispute the breach.

It was very different from dismissal by an employer. It was not a different rule but the relevant practice was different. The Norton principle was an expectation of good industrial practice where an employer dismissed an employee. In Langley it was held that the Norton principle should not be extended. The two decisions in the instant case did extend it. The award should not exceed the employee’s loss. It was not just and equitable to apply the Norton principle. The employee had to give credit for sums earned during the notice period. Lord Justice Maurice Kay and Lord Justice Scott Baker agreed.