March 2010
Authors:
Welcome to the Latest Edition of On Notice
Noel Deans
noel.deans@klgates.com
+44..(0)20.7360.8187
Paul Callegari
paul.callegari@klgates.com
+44.(0)20.7360.8194
Daniel J. Wise
In this edition of On Notice we report on the Court of Appeal decision in Eweida v
BA plc (discrimination on grounds of religious beliefs) and the EAT decision in
Bateman v ASDA Stores Limited (on the right to vary a contract unilaterally). We
also summarise two recent decisions in relation to agency workers which deal with
an employer's liability for a worker s racist acts (May & Baker Ltd v Okerago) and
the application of discrimination legislation to this category of worker (Muschett v
HM Prison Service). Further issues and case law developments are discussed in the
in brief section.
daniel.wise@klgates.com
+44.(0)20.7360.8271
K&L Gates includes lawyers practicing out
of 36 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,
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sector entities. For more information,
visit www.klgates.com.
________________________________________________
The Need to Identify a Group of Disadvantaged Persons
Eweida v British Airways plc is the latest Court of Appeal decision in a series of
cases addressing discrimination on grounds of religion. In recent months, the EAT
and Court of Appeal respectively have given related judgments in McFarlane v
Avon Relate and Ladele v Islington LBC. This line of cases restricts the application
of the regulations for employees claiming discrimination on this basis.
Ms Eweida worked part-time as check-in staff for BA. She was required to wear a
staff uniform which forbade the wearing of visible neck adornments. The employee
complained that this requirement was indirectly discriminatory against her on
grounds of religious belief because she was prevented from wearing a cross
pendant around her neck as a symbol of her Christianity. Having originally agreed
to remove the cross pendant, the employee subsequently refused to do so and was
sent home on leave.
At first instance the employment tribunal dismissed a claim of direct discrimination
and harassment and these findings were not appealed. The only issue before the
Court of Appeal was whether by imposing the uniform requirement, the employer
had indirectly discriminated against the employee. The employee argued that it was
sufficient that one person was disadvantaged by reason of her religious belief and
that the tribunal and EAT had erred in looking for a material group of
disadvantaged persons.
The Court of Appeal rejected the appeal holding that to succeed in a claim for
indirect discrimination it was necessary to identify a group of persons
disadvantaged by the criterion. The group could be a small one but it had to
comprise more than the single claimant.
The Court of Appeal decision makes it more difficult for employees to establish
indirect discrimination on grounds of religious belief by emphasising the need to
identify affected persons other than the claimant. Employers should note that this is
in contrast to indirect discrimination falling within the Disability Discrimination
Act which requires only that the particular employee is disadvantaged.
________________________________________________
On Notice
EAT Decision on the Right to Vary a
Contract Unilaterally
In Bateman v ASDA Stores Limited, a welcome
decision for employers, the EAT re-visited the
enforceability of an express right for employers
to vary contracts of employment without
employee consent.
Six employees at Asda brought a test case after
the supermarket imposed a new work and pay
regime on employees following a lengthy
consultation process. In its defence, Asda relied
on the contractual term in its staff handbook that
Asda reserved the right to review, revise, amend
or replace the content of this handbook, and
introduce new policies from time to time
reflecting the changing needs of the business... .
The EAT held that an employer could reserve the
right to vary any and all aspects of the
employment contract unilaterally. However,
attempts to do so would be scrutinised carefully
to check that the specific variation contemplated
fell within the contractual right to vary. In this
case Asda was permitted to rely on its contractual
right to vary.
This is welcome news for employers who would
now be well-advised to revisit their standard
contractual documentation with a view to
inserting a right to vary the contract unilaterally.
Some caution is still necessary as the right to vary
must be clearly defined and employers should
still comply with ordinary consultation and notice
requirements insofar as possible.
____________________________
Employers Liability for the Racist
Acts of Agency Workers
In May & Baker Ltd v Okerago the EAT
considered when an employer could be liable for
the discriminatory acts of its agency workers.
Given there are currently 1.3 million agency
workers in the UK, this issue will be closely
monitored by many UK based companies.
The employee complained that a colleague had
made racist comments to her and that the
company was vicariously liable for the actions of
the colleague and was therefore in breach of the
Race Relations Act 1976. The colleague was an
agency worker who had been supplied by a
recruitment agency to the end user company.
The ET upheld a complaint of race
discrimination made against the company for
alleged racist comments made by the agency
worker. The company appealed, arguing that it
could only be vicariously liable for acts of a
worker done in the course of [their]
employment . Hence, liability could not be
established for an agency worker. The EAT
agreed with the company's analysis but in the
judgment added that the company could be
vicariously liable for the acts of an agency
worker if the worker had acted with the
company s authority.
This case was a victory for the company on
appeal. However, the door is left open to
establish potential vicarious liability for the
discriminatory acts of an agency worker. Care
should be taken in this area both in formulating
discrimination policies and in terms of how
companies deal with equal opportunities issues
in practice.
____________________________
Discrimination Protection for
Agency Workers
In the second decision this month in this area the
Court of Appeal in Muschett v HM Prison
Service has determined whether agency workers
can rely upon discrimination legislation when
making claims against the end-user company
and/or agency.
Mr Muschett (who has been involved in a
number of reported decisions recently) had a
contract with an agency, Brook Street Bureau,
for a temporary position in The HM Prison
Service. However, no contract existed between
him and the Prison Service. Claims were brought
by Mr Muschett under both the Employment
Rights Act and the Race Relations Act. In a
decision that rejected all of his claims, both the
EAT and Court of Appeal clarified the
application of discrimination legislation in the
context of agency workers.
Mr Muschett's arguments based on an implied
contract of employment with either agency or
end user for the purposes of the Employment
Rights Act were given short shrift on the facts in
line with clear EAT guidance in this area.
Section 78 of the RRA did not offer Mr Muschett
protection because he had no contract with the
Prison Service and there was no necessity to
imply a contract of employment. Whilst he had
March 2010
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On Notice
a contract with Brook Street, it was not a contract
to personally execute any work for the agency, so
he could not bring his claim against the agency
either. Section 7 of the RRA (which is intended
to offer protection to contract workers) did not
apply to Mr Muschett because he was not
employed by the agency.
In this surprise decision race discrimination
protection (as well as all other forms of
discrimination protection, given the drafting is
the same across the different Acts) is clearly
demonstrated not to apply to agency workers in
the majority of commercial arrangements.
____________________________
In Brief
In line with recent ECJ decisions relating to an
employee's right to paid holiday leave and/or
payment in lieu of this entitlement, the ET has
held in Shah v First West Yorkshire, that whilst
holiday leave must in general be taken within the
relevant holiday period, an employee who is on
sick leave and does not have the opportunity to
take holiday leave within the relevant period is
entitled to take that leave in another holiday
period.
In Devon & Somerset Fire and Rescue Service v
Tilke, the EAT has reiterated the need for
employees to act swiftly in resigning in response
to a breach of the implied term of trust and
confidence. Mr Tilke raised a grievance which
he subsequently withdrew, but waited 18 months
after the relevant acts and 12 months after
withdrawing the grievance to resign.
In dismissing his appeal, the EAT stated that for
a constructive dismissal claim to succeed the
employee must take action soon after the conduct
of which he complains otherwise he or she will
lose the right to treat him or herself as
discharged.
Introduction of a new fit note
On 19th February 2010, the Department for
Work and Pensions published guidance on a new
fit note to replace the traditional sick note.
Doctors will be invited to advise employers
whether a patient is fit for work and on the
impact their ill health may have on their work.
The aim is to give employers an opportunity to
implement changes to accommodate the
employee and to cut the cost to employers of sick
leave. If the changes receive parliamentary
approval, they are due to take effect from 6th
April 2010.
Update on the Pregnant Workers Directive
On 23rd February 2010, a European
Parliamentary Committee proposed amending
the Pregnant Workers Directive to increase the
minimum maternity leave entitlement of working
mothers from 14 to 20 weeks with a correlative
right to full pay during this period. British
employers are already obliged by statute to allow
new mothers 52 weeks of maternity leave.
However, employers are obliged to pay only
90% of full pay to the employee for the first 6
weeks and £123.06 per week for up to 33 further
weeks. It has yet to be considered by the
European Parliament but it has already rejected a
similar proposal in May 2009.
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