On Notice
July 2009
Authors:
Noel Deans
noel.deans@klgates.com
+44.(0)20.7360.8187
Paul Callegari
paul.callegari@klgates.com
+44.(0)20.7360.8194
Daniel Wise
daniel.wise@klgates.com
+44.(0)20.7360.8271
Jackie Cuneen
jackie.cuneen@klgates.com
In this month’s edition of On Notice, we consider the Employment
Tribunal decision in Nicholson v Grainger PLC (on how an
individual’s views on climate change were capable of being a
"belief"), the Employment Appeal Tribunal decisions in Wishaw
and District Housing Association v Moncrieff (on when an
employer’s conduct will amount to a “last straw”), and Daleside
Nursing Home Limited v Mathew (on when costs orders will be
enforced against a Claimant) and, last but not least, the well
publicised House of Lords decision in Stringer v HMRC regarding
holiday rights during sickness absence. We also comment on the
retention of the UK’s opt-out from the full effect of the Working
Time Directive. On Notice will be exercising its right to annual
leave during August and we hope all readers enjoy a relaxing
summer.
+44.(0)20.7360.8184
K&L Gates is a global law firm with
lawyers in 33 offices located in North
America, Europe, Asia and the Middle
East, and represents numerous
GLOBAL 500, FORTUNE 100, and
FTSE 100 corporations, in addition to
growth and middle market companies,
entrepreneurs, capital market
participants and public sector entities.
For more information, visit
www.klgates.com.
Views on climate change may be capable of protection under
the Religion or Belief Regulations
In Nicholson v Grainger PLC (ET 2203367/08) the employment tribunal (“ET”)
held, in a pre-hearing review of the main issues of the case, that an individual's
beliefs about climate change were capable of being a "belief" for the purposes of
the Employment Equality (Religion or Belief) Regulations 2003 (the
“Regulations”) and therefore the employee should not be discriminated against by
reason of those “beliefs”. Although this is only an ET decision it is an interesting
case as it is the first example where someone has argued successfully that a nonreligious belief should be protected under the Regulations.
The Regulations state that direct discrimination, indirect discrimination,
victimisation or harassment in the workplace by reason of any religion or belief is
prohibited. Crucially the term “belief” is defined as "any religious or
philosophical belief".
In this case the employee was made redundant by his employer. He brought a
variety of claims including a claim that he had been discriminated against on the
ground of his strongly held “philosophical belief about climate change and
the environment”.
The ET ruled, in a pre-hearing review, that the employee’s beliefs about climate
change and the environment were capable of being a “belief” for the purposes of
the Regulations and were therefore capable of being protected. It was important
that the employee viewed his beliefs as not mere opinion but a philosophical belief
that influenced all the choices he made in his life, such as his choice of home, how
he travelled to work, what he ate and so on.
The ET decided that the employee’s belief gave rise to the same kind of moral
order that was found in religious beliefs. In the ET’s opinion, the employee’s views
went beyond "mere opinion" as they affected the way he lead his life. The ET did,
however, stress that although the beliefs were capable of being protected under the
Regulations the employee still had to show that he had been discriminated against
on the grounds of those beliefs.
On Notice
The employer has confirmed that it will be
appealing the pre-hearing review and it will be
interesting to see what the Employment Appeal
Tribunal (“EAT”) decides. If the EAT agrees
with the ET’s findings it could open the
floodgates for discrimination claims against
employers relating to all kinds of beliefs. It is
also interesting that in the Explanatory Notes to
the draft Equality Bill, released earlier this year,
in relation to the protected characteristic of
“Religion or Belief” the Government specifically
states that “political beliefs and beliefs in
scientific theories are not religious or
philosophical beliefs”. This is very similar to the
argument raised by the employer at the prehearing review and is also very similar to the
initial guidance given in the BIS Explanatory
Guide on the Regulations. Any appeal decision
will, of course, be reported in On Notice.
had previously been offered external mediation.
He resigned in January 2007 and brought a claim
for constructive unfair dismissal contending that
his grievance had not been fairly investigated
and that he had been intimidated and harassed by
his employer.
.
His claim succeeded before the ET. The
employer appealed to the EAT on the basis that
the ET had not identified any conduct by the
employer that could amount to a “last straw”.
The appeal succeeded. The EAT decided that an
ET must:
•
first, identify the “last straw” act;
•
secondly, consider whether objectively
that act is capable of contributing to a
series of earlier acts so as to amount
cumulatively to a breach of the implied
term of trust and confidence by the
employer; and
•
thirdly, if it does, consider the other acts
in the series of acts and whether looked
at together they amount to a breach of
the implied term.
For more information on this case please contact
Paul Callegari.
EAT decision on when employer’s
conduct is a “last straw” for
constructive unfair dismissal
In Wishaw and District Housing Association v
Moncrieff (UKEATS/0066/08/B1) the EAT has
given useful guidance on what kind of conduct
can constitute a “last straw” in a constructive
unfair dismissal case. An employee can resign
and claim constructive dismissal if there is a
fundamental breach of his or her contract of
employment by the employer (most commonly an
employee cites a breach of the implied term of
trust and confidence). This fundamental breach
can be caused by the cumulative effect of a series
of actions, culminating in an act alleged to be the
“last straw”.
In this case, the employee (who worked as a
property inspector) was called to a meeting by his
employer in May 2006 where 13 areas of concern
about his performance where identified. He then
went on sick leave with depression and never
returned to work. He had also suffered personal
difficulties in the previous year. There was a
great deal of correspondence between the
employee and the employer. The employer was
also sceptical about the validity of his
sickness absence.
In late 2006 the employee received 2 letters from
his employer. One threatened that the employer
might consider his possible dismissal because of
his long term absence. The other offered to deal
internally with a grievance he had raised when he
The test is objective.
In this case, the ET had failed to clearly identify
which act was the “last straw”. Moreover, there
was no evidence of any act which could amount
to a “last straw”. The letters sent in late 2006
were the only possible candidates. Viewed
objectively, neither was objectionable. The EAT
thought that the letter threatening to consider
possible dismissal was perfectly legitimate (the
letter did not present dismissal as a fait
accompli). Similarly, the letter suggesting
dealing with the grievance internally was merely
a proposal and could not be considered to
amount to a “last straw”.
The decision provides useful guidance in this
area and clarifies that not all conduct is capable
of amounting to a “last straw”. Employers should
not feel hindered from taking even robust steps
in the course of a dispute, provided they are
justifiable, for fear that this will trigger a
constructive unfair dismissal claim.
For more information on this case please contact
Noel Deans.
July 2009
2
On Notice
Costs order enforced against a
claimant acting unreasonably in
bringing the claim
Daleside Nursing Home Limited v Mathew
(UKEAT/0519/08) is a decision of the EAT
which will be welcomed by employers. It relates
to the question of whether the ET should make a
costs order against an employee who is found to
have lied.
(www.practicallaw.com/resource.do?item=:5566
7623)
In this case the ET decided that the allegation at
the heart of the employee's claim for direct race
discrimination, that she had been subjected to
explicit and offensive racial abuse (being called a
"black bitch" by her manager), had not occurred.
Even though the ET found that the “allegation of
explicit and offensive racial abuse” was false, it
refused to order the employee to pay costs as “she
did have a genuine belief that the claim had
some merit”.
The EAT overturned this decision. It noted that
the ET’s rejection of the claim had necessarily
involved a finding that the employee's case
involved "a deliberate and, to an extent cynical,
lie". In the EAT's view, where there is a "clearcut finding that the central allegation ... was a lie,
it is perverse for the ET to fail to conclude that
the making of such a false allegation at the heart
of the claim does not constitute a person acting
unreasonably". If an ET’s decision is “perverse”
it means that it can be overturned by the EAT, so
here the EAT referred the matter back to the ET
with an instruction to make a costs order against
the employee. According to the EAT report, the
costs may be as much as £20,000.
This case provides some good news for
employers in that it should make employees think
twice before making wholly fictitious and
unreasonable claims against them.
For more information on this case please contact
Daniel Wise.
House of Lords decision in Stringer
v HMRC
In February’s On Notice we summarised the
important ECJ decision in Stringer v HMRC
which decided that a worker does not lose the
right to paid annual leave which has not been
taken due to sickness. In summary, the
ECJ concluded:
•
That a worker is entitled to his annual
statutory holiday entitlement if prevented
from taking it during the last year because he
is on sick leave.
•
The right to paid annual leave is not
extinguished at the end of a leave year if the
worker was on sick leave for the whole of
that year, or if he was absent on sick leave
for part of the year and was still on sickleave when his employment terminated.
•
It is up to the national courts to decide
whether paid leave can be taken during a
period of sick leave, or whether it should be
carried over to another year.
Many had hoped that the House of Lords'
decision would give answers to the difficult
issues which have arisen about the accrual and
payment of annual leave during sick leave and
whether it is carried over to subsequent years in
long term ill health cases. HMRC, however,
declined to pursue a number of its main
arguments in the light of the ECJ decision and so
the House of Lords did not make a decision on
the difficult question of when this leave can be
taken or whether the leave can be carried
forward to the next year (something which is
prohibited by the Working Time
Regulations 1998).
There is still some ambiguity about whether
workers on sick leave are allowed to carry over
their holiday or whether they can take it whilst
off sick. Employers will, therefore, still face
difficult questions from employees on these
issues and employers should think carefully
about new policies adopted in this area to ensure
the commercial needs of the business
are best served.
Some commentators have argued that these
issues are limited to "only" the European
minimum annual leave (4 weeks) rather than the
“new” minimum under the Working Time
Regulations (now 5.6 weeks). Until there have
been further decisions on this issue it is unclear
what the correct position is. There are also
potential headaches for employers with PHI
schemes. An employee may be on PHI for years
and then come back to work. This employee will
now accrue large amounts of holiday which he or
she may be entitled to upon their return to work.
The PHI insurers are unlikely to cover these
additional payments and they may be
costly to employers.
July 2009
3
On Notice
The financial implications for employers of the
decision are clear, notwithstanding the
uncertainty about the technicalities. Significant
claims for holiday pay and leave are now likely to
accrue while employees are off sick. This will
lead to additional costs for employers, as workers
on long-term sick leave who have used up their
sick pay entitlement will be entitled to be paid in
respect of their statutory holiday entitlement.
Working Time Directive opt-out
retained for time being
There is further bad news for employers. The
House of Lords has held that a claim for unpaid
holiday under the Working Time Regulations (or
a payment in lieu on termination) can be pursued
as an unauthorised deduction from wages claim
under the Employment Rights Act 1996 as well
as under the Working Time Regulations. This
means that employees can take advantage of the
more generous time limits which apply and
potentially a claim which goes back many months
can be pursued if the underpayments form part of
a series of deductions from salary.
The important point for employers is that the
countries involved will retain, at least for the
time being, the right for individuals to opt out of
the maximum 48-hour working week laid down
by the Working Time Directive legislation. The
UK was the first Member State to secure an optout (14 other Member States have since acquired
similar opt-outs for certain sectors). Any further
developments will be reported in On Notice.
In an important development, negotiations
between a number of European governments
(including the UK) and MEPs over changes to
the rules governing the 48 hour working week
broke down over the course of April and May
this year.
For more information on this please contact
Paul Callegari.
For more information on this case please contact
Jackie Cuneen.
Anchorage Austin Beijing Berlin Boston Charlotte Chicago Dallas Dubai Fort Worth Frankfurt Harrisburg Hong Kong London
Los Angeles Miami Newark New York Orange County Palo Alto Paris Pittsburgh Portland Raleigh Research Triangle Park
San Diego San Francisco Seattle Shanghai Singapore Spokane/Coeur d’Alene Taipei Washington, D.C.
K&L Gates is a global law firm with lawyers in 33 offices located in North America, Europe, Asia and the Middle East, and represents
numerous GLOBAL 500, FORTUNE 100, and FTSE 100 corporations, in addition to growth and middle market companies, entrepreneurs,
capital market participants and public sector entities. For more information, visit www.klgates.com.
K&L Gates comprises multiple affiliated partnerships: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and
maintaining offices throughout the U.S., in Berlin and Frankfurt, Germany, in Beijing (K&L Gates LLP Beijing Representative Office), in Dubai,
U.A.E., in Shanghai (K&L Gates LLP Shanghai Representative Office), and in Singapore (K&L Gates LLP Singapore Representative Office); a
limited liability partnership (also named K&L Gates LLP) incorporated in England and maintaining offices in London and Paris; a Taiwan
general partnership (K&L Gates) maintaining an office in Taipei; and a Hong Kong general partnership (K&L Gates, Solicitors) maintaining an
office in Hong Kong. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the partners in
each entity is available for inspection at any K&L Gates office.
This publication is for informational purposes and does not contain or convey legal advice. The information herein should not be used or relied
upon in regard to any particular facts or circumstances without first consulting a lawyer.
©2009 K&L Gates LLP. All Rights Reserved.
July 2009
4