The case of Gisda Cyf v Barratt concerns the thorny issue which arises when a dismissal letter is sent to an employee but is not read until several days later. A well-established principle was set down by the Employment Appeal Tribunal in Brown v Southall & Knight, as long ago as 1980, but it came under challenge for the first time in the Court of Appeal. The majority upheld its ratio that, so long as there is no deliberate avoidance of reading a dismissal letter, it will not come into force until it is actually read.

This result differs from the common law position in the case of The Brimnes, well-known to first year law students, in which a contract was brought to an end by a fax sent within office hours, even though it had apparently not been seen. This discrepancy is the basis of a persuasive dissent by Lord Justice Lloyd. However, Lord Justice Mummery, giving the leading judgment for the majority, emphasises the policy issue which arises from the three-month limitation period. An employee who does not find out about being dismissed until some time afterwards will have even less time to decide to bring a claim.

An intriguing point arises from the unreported constructive dismissal case of Potter v RJ Temple, in which a resignation letter faxed to an employer late in the evening was deemed to have taken effect immediately, causing the time for bringing a claim to start to run. The Court of Appeal does not deal with this contradiction entirely satisfactorily but it is clear that policy weighs in a different direction when somebody resigns, because the crucial issue is when the person bringing the claim becomes aware of a right to do so. The knowledge of the employer is, in this context, irrelevant. Lord Justice Lloyd suggests that this inconsistency undermines Brown but, as Lord Justice Mummery notes, Potter is not consistent with The Brimnes either because a termination communicated out of hours is ineffective in contract law.

The approach of tribunals towards amendments is increasingly liberal, especially if no new facts are pleaded. However, a difficulty remains in situations where an amendment is requested at the hearing itself. It is particularly prejudicial for a respondent to be faced with an allegation for which it has not prepared but, conversely, justice demands that a claim should not be defeated by the technicality of pleadings, in what is supposed to be a jurisdiction accessible to all. The overriding objective provides the possibility of granting a short postponement to allow a respondent to take further instructions. As a result, the amendment can be granted while keeping any prejudice to the respondent to a minimum.

Given the range of options that are available to a tribunal, it should not be surprising that there is so much variation in practice, particularly when it comes to the granting of last minute amendments. The guidelines from the famous case of Selkent Buses v Moore do not always make it possible to predict the outcome because there is always prejudice to a respondent in such a situation. The only question is whether it is sufficient to defeat the amendment and, on the face of it, Selkent does not answer this.

However, there is a lesser-known passage in Selkent which states that an amendment can be rejected if it is hopeless on its face, regardless of the other factors. If it is arguable then all the circumstances must be considered but the non-exhaustive list of relevant factors does not include the merits of the amendment, once the threshold of arguability has been reached. This seems inconsistent. If a case is only barely arguable then the degree of prejudice should surely have a greater weight than if is very straightforward and my experience suggests that this is indeed the case, although not always stated explicitly by tribunals. This is a classic example of dark law where a sensible gloss to the authorities is adopted by tribunals but has never been supported by a higher court, in part because the tribunals themselves are unwilling to allow it to be tested. Ironically, an appeal-proofing mentality results in the law being less clear so that parties are less likely to understand why they have lost. I am not convinced that this approach always reduces the number of appeals and, quite often, it has the opposite effect.

I am delighted to announce something of an exclusive for the Employment Law Advocates blog. Please click here to read the written reasons of the most famous (or rather infamous for Abercrombie & Fitch) employment tribunal case of the year. I would like to thank May Dean for providing me with a copy.

There is one finding of fact which is not strictly relevant to the case but nevertheless reveals a lot about the culture of the American store. One of the terms of a settlement with ethnic minority employees was to increase the level of diversity in its promotional material. However, the judgment notes that training slides shown to new staff have only been changed in order to increase the racial diversity of shoplifters.

Moving onto the law, I am most intrigued by the claim that Riam Dean lost, that of direct discrimination. The tribunal finds, at paragraph 49, that she was sent to the stock room by a manager who knew that she had a prosthetic arm, in circumstances in which an employee who did not have a prosthetic arm would have simply been asked to remove the cardigan she was wearing in breach of the look policy. However narrowly direct discrimination is defined in disability discrimination, this must surely qualify.

Apparently not, according to the tribunal. Their logic  is, firstly, that the comparator must be someone who would be believed to be reluctant to remove the cardigan and would therefore also have been sent to the stock room. The problem is that the tribunal does not make a finding as to how such a person would have been treated but instead considers the entirely different scenario of a person who refuses to remove it and is disciplined. There is no evidence that Riam Dean would have refused and she often wears no more than a band around her elbow. The tribunal completely ignores the crucial question of whether she would even have been allowed to work on the shop floor if she had not worn a cardigan.

Secondly, the tribunal says that being sent to the stock room is not necessarily a detriment because it might have been more upsetting for Riam Dean to remove her cardigan. This is an error of law as a detriment should be asssessed primarily from the point of view of the claimant. If she would prefer not to be sent to the stock room, and this is a reasonable preference, then a detriment is established. What this case shows is a marked reluctance by tribunals to make findings of direct disability discrimination, for fear of an appeal, even where there is a good chance of them being made out. However, I do not want to be too critical of the tribunal as they largely got it right and the overall outcome is a good one.

As promised, a summary of my recent appearance at the Employment Appeal Tribunal appears below.

The case of Tapere v South London and Maudsley NHS Trust concerns the scope of Regulation 4(9) of the TUPE Regulations 2006, which allows a person to resign and treat her contract of employment as having been terminated if there is a substantial change in working conditions to her material detriment. It also makes some observations about the scope of mobility clauses and the effect of TUPE upon them.

Ms. Tapere had been employed by the Lewisham Primary Care Trust for more than nine years and was based exclusively at one of their properties in Burgess Park, although a mobility clause allowed her to be moved to any property within the Trust. Following a transfer to the neighbouring South London and Maudsley NHS Trust, she continued to work at Burgess Park but was informed that she would shortly be moving to Bethlem Hospital, a property owned by her new employer. A few months later, she returned from holiday to discover that the move had taken place in her absence and she resigned and claimed that she had been constructively dismissed. The tribunal found that she had not been entitled to resign because the scope of her mobility clause had changed following the transfer to reflect the area covered by her new employer or, alternatively, because the Trust had acted reasonably in proposing the move.

The Employment Appeal Tribunal, chaired by Judge Hand QC, overturned this decision and substituted a finding that there was a constructive dismissal. The case is authority for the following propositions:

1) The geographical range of a mobility clause is not altered by a TUPE transfer and cannot be replaced by one of substantial equivalence in the same way as, for example, an employee profit share scheme.

2) A tribunal may not find an implied mobility clause which differs from an express clause if there is no implied qualification as to reasonableness. There was no evidence of such an implied term in this case.

3) In Regulation 4(9), a material detriment is defined in the same way as a detriment in discrimination law, in the case of Shamoon v Royal Ulster Constabulary. The word ‘material’, which does not appear in the Acquired Rights Directive, adds nothing. Therefore, the tribunal erred by applying an objective test.

An intriguing but under-analysed problem is how to deal with a situation in which some symptoms of a medical condition would be able to qualify as a disability but others, in themselves, would not, such as a psychological condition resulting in impaired understanding but also a tendency to steal. If the tendency to steal were the only symptom, it would be an excluded condition that is deemed not to qualify as a disability and, as the education case of X Endowed Primary School v SENDIST confirms, the excluded condition can be severed from the other symptoms. The High Court states that the word “condition” can refer to either the condition as a whole or merely to some of the manifestations that result from it, echoing the similar reasoning concerning the word “impairment” in the case of McNicol v Balfour Beatty, rather than the words having distinct meanings as a literal reading of the statute would seem to imply.

But X Endowed School does not deal with the situation in which the non-disability is not an excluded condition. For example, there are some people with cerebral palsy who have substantially impaired speech, and mobility which is impaired but not to a substantial extent. However, the wide test in McNicol would appear to suggest that the cerebral palsy can itself be considered to be the impairment, with the effect that reasonable adjustments must be made for a mobility problem which would not amount to a disability on its own. This seems strange. Clearly the McNicol decision was intended to prevent tribunals from being confused by unnecessarily elaborate arguments on such a point, but there are side effects.

This is not just an academic criticism. The McNicol formulation can result in extremely difficult cases of the most bad-law-generating kind. The obvious and unavoidable example is Malcolm in which a decision to sublet a property was supposedly caused by schizophrenia. Far from producing insuperable problems of causation, an analysis based on separating disabilities from non-disabilities would have made it much easier to resolve. If the House of Lords had disapproved McNicol rather than Clark v Novacold then Mr. Malcolm would have failed on the straightforward ground that resisting the temptation to sublet is not an everyday activity. In my opinion, this would have had a much less damaging effect upon the law.

The case of Bowers v William Hill is interesting, not because it is likely to be reported but because the situation is unusual. The respondent made a concession that the claimant was disabled but the tribunal nevertheless found that her case failed, seemingly on the basis that the Respondent could not have known that her condition was going to last for twelve months at the time that it carried out the alleged discrimination. This bizarre conclusion appears to be an extrapolation of the subjective element of the test for disability which was introduced by the Court of Appeal in Richmond Adult College v McDougall. (At least, that would be my interpretation of McDougall. If you are going to say that disability depends upon whether an employer can predict what is likely to happen, a subjective element is introduced.)

The Employment Appeal Tribunal tried to understand the decision in two ways, firstly by asking whether the real issue was whether the respondent had knowledge of the disability, but this was unsustainable because the tribunal had found that it had. Judge McMullen confirmed what the Law Lords had indicated in Malcolm that knowledge that a particular condition amounts to a disability is not required. Secondly, it was suggested that the concession might relate only to the time at which the report of the joint expert was produced. However, a legal concession can only relate to something which is at issue in the case and the only dates which were relevant for these purposes were the dates of the acts about which the complaints had been made. In any event, the tribunal had also made clear findings about the scope of the concession. No application was made to withdraw the concession so the decision could not stand.

This case is reported, among other places, in the Industrial Relations Law Reports at [2008] IRLR 302. When it appeared, it frustrated many commentators because it appeared not to resolve a conflict in the authorities between those cases in which a contract of employment was implied between an agency worker and an end user, such as Dacas v Brook Street Bureau, and those in which it was not, such as James itself. It contained an intriguing comment from Lord Justice Mummery that, “as an appeal from the decision of an ET only lies on a question of law, my view is that, in general, it would be very unusual for an appeal to the EAT or to this court to have a real prospect of success if the ET’s conclusion that a contract of employment with the end user should, or should not, be implied, has been reached by applying the correct test of necessity.” This suggested that it continued to be within the discretion of tribunals to imply such contracts and Dacas could still be followed in many circumstances.

I would be interested to know whether anyone else has had a different experience but I have not seen tribunals ever imply an employment contract in this way since the James decision and I am sceptical that an appeal against such a decision would not in fact succeed. Dacas has been heavily criticised and it must be remembered that the Court of Appeal was not in a position to overturn it because it was one of its own decisions. However, the comment by Lord Justice Sedley, in a minority in Dacas, to the effect that a contract would be implied if the arrangement subsisted for a sufficiently long time, was expressly disapproved by the Employment Appeal Tribunal in James. The Court of Appeal more politely denied that this was what he meant. Therefore, Dacas was expressly restricted in the scope of its application.

Even more tellingly, Lord Justice Thomas noted that “employment tribunals must continue to apply the principles of the law of contract” and Lord Justice Mummery also reminded them that, ”They are not architects of economic and social policy.” These rather unnecessary observations were clearly veiled criticisms of Dacas and the tribunals who sought to follow it. Although it did not, and could not, explicitly say so, the decision in James had, to all intents and purposes, the effect of a total rejection of Dacas.

The managing director of Employment Law Advocates is Rad Kohanzad, who was involved in a dramatic case at the Court of Appeal last week. The principle from the case of Norton Tool is that compensation for an unfair summary dismissal can include the equivalent of a payment in lieu of notice, even where the dismissed employee has found another job during what would have been the notice period, and consequently recovers more than the amount lost. The reason for this is that it is deemed to be good industrial practice to make a payment in lieu of notice in this situation. The Employment Appeal Tribunal in Stuart Peters v Bell had rejected the arguments made by Rad that there is no equivalent principle for a constructive dismissal, but this decision was overturned by a panel that included Lord Justice Elias.

The judgment has not yet been produced and will appear on this blog as soon as it does. However, the primary reason for the decision is that it is not, as a rule, good industrial practice to pay in lieu of notice when an employee resigns. It does not follow from Norton Tool that an employee who has been unfairly dismissed is always entitled to receive notice pay, which would amount to a bonus, and there must be an asssessment of what is actually good industrial practice in the circumstances of a particular case.

Further to my discussion about Daleside Nursing Home v Mathew here, it was inevitable that the issue of costs would rear its head again. In Dunedin Canmore Housing Association v Donaldson, the Scottish Employment Appeal Tribunal followed Mathew if, that is, it is possible to follow a decision that purports to establish no principle of law. In this case, the claimant tried to enforce a compromise agreement in circumstances in which she was in breach of its terms relating to confidentiality. There was, rightly, no attempt to suggest that false denials are any less serious than positive lies with the consequence that respondents who falsely deny allegations against them are now likely to face an award of costs as well.

On its facts, the judgment is much less troubling than that in Mathew because the claimant was clearly ‘caught out’ under cross-examination and then tried to change her story. Therefore, the evidence that she had lied was unusually strong. However, it was disappointing to see no acknowledgement of the importance of this fact in the judgment. There was no discussion of the standard of proof required, or even of where the burden of proof lies, no mention of the need to put allegations of lying squarely to a witness, and no discussion of the extent to which, if at all, a tribunal would be permitted to apply the discretion that it has not to award costs in such a situation and, if it can, what factors should be taken into account. It is not acceptable to deal with these cases under the rubric of perversity, where it should surely be possible to set out unambiguous principles of law which can be applied in a consistent way.