July 2008
Authors:
Noel Deans
+44 (0)20.7360.8187 noel.deans@klgates.com
Paul Callegari
+44 (0)20.7360.8194 paul.callegari@klgates.com
Jackie Cuneen
+44 (0)20.7360.8184 jackie.cuneen@klgates.com
Lisa Perelman
+44 (0)20.7360.8256 lisa.perelman@klgates.com
Susannah Jarvis
+44 (0)20.7360.8271 susannah.jarvis@klgates.com
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In July’s On Notice we report on a ground breaking House of Lords decision which has changed the law of disability discrimination in favour of employers. We also bring welcome news for employers regarding the working time opt out contained in the Working Time
Regulations 1998. Less welcome will be the Government’s proposal to allow employees the statutory right to request time off for training, which we have also covered. Finally, we summarise another decision relating to agency workers and an interesting case on the question of what constitutes a “service provision change” under TUPE.
Stop Press: House of Lords changes the law on disability discrimination
On 25 June the House of Lords gave its highly significant decision in the case of Mayor and Burgesses of the London Borough of Lewisham -v- Malcolm , a disability discrimination case relating to a dispute between a landlord and tenant. The House of Lords overruled a previous Court of Appeal case (called Clark -v- TSG Ltd t/a Novacold ) and changed the law very much in favour of employers. Next month’s edition of On Notice will deal solely with this decision, such is its importance, but in summary the practical effect of the decision is as follows:
• In a claim relating to long term absence, the correct comparator for the claimant
is not someone who has not been absent at all (as had been established by Clark ) but
someone who is absent for the same period of time, but not disabled;
• For the reason (for the treatment of the claimant) to relate to the claimant’s disability,
the disability has to have played some active part in the respondent’s decision making
process; and
• A respondent cannot be liable for discrimination unless it knows (or reasonably ought
to know) that the claimant is disabled, contrary to previous authority.
The decision will undoubtedly make it harder for employees to succeed in claims for disability discrimination and for that reason has been criticised in some quarters.
For more information on this case please see the August edition of On Notice or contact
Paul Callegari.
Working Time Opt Out preserved
As a “quid pro quo” for the agreement reached on extended rights for agency workers
(reported in last month’s On Notice ), the EU Council of Ministers has agreed to allow the
UK to retain the individual opt-out of the 48 hour limit on weekly working hours contained in the Working Time Regulations 1998. The agreement now has to work its way through the
European Parliament for ratification. Employers will no doubt welcome this development.
The opt-out is, however, to be reviewed again in 8 years’ time and will be subject to a new overall cap on working hours of 60 hours per week. It is also important to note that part of the agreement is that no opt-out can be agreed by an employee until he or she has been employed for one month.
For more information on this development please contact Noel Deans.

Time off for training
Following the Leitch Review of Skills, which recommended an urgent increase in skills at all levels, the Government has begun a consultation on new legislation granting employees the right to request time off for training. It is proposed that training can take the form of accredited or unaccredited programmes, with the only requirement that the training improves business performance or productivity. It is also proposed that the process would be similar to that which currently applies to requests for flexible working. The right would only be available to those employees with 26 weeks’ service and could be refused for good business reasons, including that the employer does not consider that the training would improve business performance.
The Government has also moved to allay employers’ concerns by confirming that the time off would be unpaid. The Government expects to implement this legislation in 2010.
For more information on this news please contact
Susannah Jarvis.
Agency workers as employees of end-users
- further guidance
The EAT has revisited the issue of whether an agency worker is an employee of the “end-user” (following
James v Greenwich ). In Cave v Portsmouth City
Council , the EAT decided that there are two distinct stages to answering this question. First, it had to be determined whether there was a contract (of any sort) between the worker and the end-user. Second, if there was a contract, whether it was a contract of employment or some other sort of contract.
In this case, Mr.. Cave carried out work for the Council having been supplied by an agency. He brought a claim against the Council for wrongful and unfair dismissal.
To succeed in these claims he had to show that he was an employee of the Council.
The Employment Tribunal concentrated on the criteria set out in the case of Ready Mixed Concrete v Minister of Pensions , which set out the criteria needed for an individual to show that he is an employee. The EAT criticised this approach. The Ready Mixed Concrete criteria went to the second question, whether the contract was one of employment, rather than the first question as to whether or not there was any contract.
On this basis the EAT decided to send the case back to a different Employment Tribunal to decide whether
Mr. Cave was an employee of the Council.
The significance of this decision was the apparent willingness of the EAT to find that Mr. Cave was an employee of the Council. The EAT referred to the fact that in James the contract between the worker and agency provided that the worker would not be an employee of the end user. The EAT also noted that there were various factors which would be relevant in this case: for instance, the fact that the end-user selected Mr. Cave personally. There were signs in its decision that the EAT may be willing to get over the high hurdle that James seems to place in front of any worker wanting to claim employee status as against an end user. It should also be noted that the EAT stated that if any contract is found to exist, then “generally
… it will be a contract of employment”.
For more information on this case, please contact
Lisa Perelman.
No service provision change under TUPE where transferee cannot be identified
In Thomas-James v Cornwall County Council and ors the Employment Tribunal considered the application of the service change provisions under TUPE. It is one of only a few cases to examine the effect of these since they came into force on 6 April 2006.
Cornwall County Council was one of 17 service providers contracted by the Legal Services Commission to provide a free legal helpline to the public. The claimants were part of the team of advisers. In 2006 the Legal Services Commission put the contracts out for tender. Cornwall County Council decided not to bid and accordingly its contract with the Legal
Services Commission was terminated on 31 March
2007. Cornwall County Council terminated the claimants’ employment with it on the same day. The
Legal Services Commission reduced the number of service providers to 9. The issue was whether, as the claimants and Cornwall County Council contended, their employment contracts had transferred to one of the 9 new service providers by way of the service provision change provisions of TUPE. The new service providers denied this.
The Tribunal held that the claimants were not protected by TUPE. While the Tribunal accepted that they had been part of an organised grouping of employees whose principal purpose was to carry out activities on behalf of the Legal Services Commission, it could not ascertain which new service provider had been allocated the activities originally performed by
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Cornwall County Council. TUPE may apply even if the identity of the activities changes or they are split up. However, one must be able to identify the activities performed by the outgoing service provider and for there to be a connection between those activities and those performed by the new service provider. It was not possible in the present case to identify to which of the
9 new service providers Cornwall County Council’s former activities had been transferred. There could therefore be no service provision change and TUPE did not apply.
The EAT decision in Hambley and ors v Leena
Homes Ltd on similar issues in another case is expected shortly.
For more information on this case please contact
Jackie Cuneen.
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