October 2010
Authors:
Noel Deans
noel.deans@klgates.com
+44.(0)20.7360.8187
Paul Callegari
This October edition of On Notice covers the commencement of the Equality Act
2010, the proposal to extend flexible working requests, the relevance of
background events to the decision to dismiss (London Borough of Brent v Fuller),
the latest decision of the EAT on victimisation (Bullimore v Pothecary Witham
Weld), the need for transparent and objective redundancy criteria (Watkins v
Crouch) and more in the In Brief section.
paul.callegari@klgates.com
+44.(0)20.7360.8194
Daniel J Wise
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,
capital market participants and public
sector entities. For more information,
visit www.klgates.com.
The first wave of provisions in the long awaited Equality Act 2010 came into
force on 1st October. As previous editions of On Notice have reported, there had
been great uncertainty over the Coalition government’s commitment to the
Equality Act which was a flagship policy of the previous Labour government. It
seems, however, that the Equality Act is here to stay.
Key changes in the first wave include:
1. The definition of direct discrimination has been extended to cover associative
and perceptive discrimination. Associative discrimination derives from the
case of Coleman v Attridge Law where a mother was permitted to bring a
claim against her employer for discrimination in connection with caring for her
disabled son. The Equality Act extends discrimination by association to all
“protected characteristics” (race, sex, age etc). Discrimination by perception
(i.e thinking someone has a certain protected characteristic and treating them
less favourably because of it) likewise now applies to all protected
characteristics.
2. The Act introduces a new concept of “indirect disability discrimination”. This
brings disability discrimination into line with other forms of unlawful
discrimination.
3. A new category of discrimination “arising from” disability has also been
introduced to replace “disability related discrimination” under the DDA, which
many commentators previously criticised as constituting an overly narrow test
following the case of London Borough of Lewisham v Malcolm.
4. Provisions are now included to expand the use of “positive discrimination”.
Employers are permitted (but not required) to take into account underrepresentation of particular groups when selecting from two equally qualified
candidates, provided there is no general policy for automatic selection of
under-represented groups. The selection of a less-well qualified candidate will
not be permitted and the Act prohibits employment quotas.
These are significant legislative changes and employers should ensure that their
human resources practices and contractual documentation reflect the new law.
Another core measure floated by the Coalition government is an extension to the
right to request flexible working. An impact assessment has been published this
month on extending this right to parents of children aged 17 years old and the
government will also be consulting on its intention to extend the right to request
flexible working to all employees later this year. If made law, this could have a
significant impact on businesses in managing staffing levels at a time when,
following recent redundancy programmes, many staff members are already
stretched in terms of work levels.
On Notice
The EAT decision in London Borough of Brent
v Fuller has offered a welcome reminder to
Tribunals that employers should be given
reasonable discretion in making decisions around
dismissals in the context of a disciplinary
process.
Mrs Fuller was a teacher at a community special
school which taught children with emotional and
social difficulties. Following an incident in
October in which Mrs Fuller interfered with the
behavioural management of a pupil, she was
dismissed for gross misconduct. The employer
took into account a previous similar incident in
May for which Mrs Fuller had received a verbal
warning.
The EAT, disagreeing with the employment
tribunal, found for the employer. In passing
judgment, the EAT stated that it was wrong to
criticise the employer for relying on the May
incident. Whilst Mrs Fuller had not been formally
reprimanded for that incident, it was part of the
background to the current disciplinary issue
because it caused Mrs Fuller to be as aware that
she was wrong to interfere with behavioural
restraint. The May incident was relevant to the
October incident and the employer had rightly
considered it as part of its reason to dismiss.
This case is a timely reminder that an employer’s
decision to dismiss can only be impugned if it
falls outside the range of reasonable responses.
The decision also protects the employer’s right to
have regard to previous informal incidents when
considering whether to dismiss for a disciplinary
offence.
In the May edition of On Notice we reported on
the EAT decision of Bullimore v Pothecary
Witham Weld Solicitors and another which
confirmed that the burden of proof was reversed
in cases of victimisation on grounds of sex in the
same way as in sex discrimination cases. In
September the EAT ruled on the separate issue
whether Mrs Bullimore could recover loss of
earnings from her former employers for the
victimisation suffered. The EAT's judgment on
this point highlights the risks involved in
providing an unfavourable reference.
To recap, Miss Bullimore claimed that she had
been victimised by PWW (her initial employer)
who had sent an unfavourable reference to her
new employers, an action allegedly motivated by
her bringing her original sex discrimination
claim. The new employers subsequently
withdrew her job offer and Miss Bullimore
presented a claim in the employment tribunal for
the earnings she would have received, had the
offer not been withdrawn.
The tribunal refused Mrs Bullimore’s claim for
loss of earnings against PWW on the grounds
that the loss was too remote. The EAT disagreed
and remitted the case to a tribunal. It
recommended that damages for loss of earnings
should be apportioned between PWW and the
new employer. The EAT also observed that it
was foreseeable that the job offer would be
withdrawn because the essence of a reference is
that it is to be a factor in the decision whether to
make a job offer or not. As a matter of policy if a
claim did not lie with the future employer for this
cause of action it would be undesirable if Mrs
Bullimore could not claim loss of earnings
against her former employers.
Employers should always exercise due care
when drafting references for former employees.
This case highlights the need for extra caution
where that former employee has brought a
tribunal claim against the former employer in the
past.
Watkins v Jeannette Crouch t/a
Temple Bird Solicitors
The EAT decision in this case provides helpful
guidance to employers in how to use criteria
scoring in redundancy exercises.
Mrs Watkins was a conveyancing secretary for a
high street solicitors’ firm. The firm underwent
financial difficulties and sought to make 4
positions redundant. In doing so it dismissed Mrs
Watkins who, although scoring higher than some
of her contemporaries in applying the firm
criteria selected for the redundancy scheme, was
now not deemed as valuable when considering
the "overall business requirements" of the
Company.
The EAT upheld Mrs Watkins’ complaint and
remitted the case to a fresh tribunal to reconsider.
The EAT observed that when employers make
determinations on the basis of unspecified
"overall business requirements" they will be
criticised for being too subjective, allowing for
unfair decisions to be made as a result.
This decision is a useful reminder that
redundancy criteria should be objective,
transparent and comprehensive. Employers
should avoid general criteria which are not
October 2010
2
On Notice
clearly defined and choose instead specific
criteria to apply consistently to all employees.
In Brief
In West Hertfordshire Hospitals NHS Trust v
Evans the EAT has limited Tribunal power in
awarding percentage uplifts for procedural
failures in dismissal processes.
In this case the tribunal awarded a 30% uplift on
the claimant’s damages because she had not been
warned that dismissal was a possible
consequence of her disciplinary meeting. The
EAT found this percentage uplift to be excessive,
particularly given that the failure to inform Mrs
Evans had been a mistake, rather than a deliberate
omission, and the employer had attempted to
rectify its mistake soon afterwards. Any more
than a 10% uplift would be perverse in these
circumstances.
This case is helpful to employers in that it limits
the level of such uplifts being awarded for
procedural weaknesses. However, in order to
avoid any uplift being awarded when faced with
these circumstances employers should restart the
process with a carefully drafted letter warning of
the possibility of dismissal before moving to the
dismissal stage.
In Newcastle upon Tyne NHS Hospitals Trust
v Armstrong & Others Mrs Armstrong and
other cleaners accused their employer of indirect
sex discrimination. Whilst the Trust still paid
bonuses to porters at the hospital, it had ceased
to pay bonuses to the cleaners. The porters were
nearly all male whereas the cleaners were almost
all female. The Trust sought to argue that the
difference was not due to sex but governed by
market rates for cleaners. The Court of Appeal
rejected this approach. The labour market itself
was sexually discriminatory because it was
dominated by women who were paid less than
men who did jobs of equivalent value. It was up
to the Trust to objectively justify the
discrimination and they had failed to do so.
Accordingly the finding was upheld.
Anchorage Austin Beijing Berlin Boston Charlotte Chicago Dallas Dubai Fort Worth Frankfurt Harrisburg Hong Kong London
Los Angeles Miami Moscow 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 Tokyo Warsaw Washington, D.C.
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, capital market
participants and public sector entities. For more information, visit www.klgates.com.
K&L Gates is comprised of multiple affiliated entities: a limited liability partnership with the full name K&L Gates LLP qualified in Delaware and
maintaining offices throughout the United States, 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), in Tokyo, and in Singapore; 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; a Hong Kong general partnership (K&L Gates, Solicitors) maintaining an office in Hong Kong; a Polish limited
partnership (K&L Gates Jamka sp.k.) maintaining an office in Warsaw; and a Delaware limited liability company (K&L Gates Holdings, LLC)
maintaining an office in Moscow. K&L Gates maintains appropriate registrations in the jurisdictions in which its offices are located. A list of the
partners or members 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.
©2010 K&L Gates LLP. All Rights Reserved.
October 2010
3