The case of Eagle Place Services v Rudd had an unusual outcome in that the tribunal found direct disability discrimination but not disability-related discrimination. Both sides were not happy with the outcome, with the employer challenging the former finding and the employee challenging the latter. It was the cross-appeal which succeeded, with the effect that the claimant received a six-figure award.

The reasoning of Judge Serota is throrough and sheds a great deal of light on Malcolm and the relationship between the two forms of disability discrimination being considered. At paragraph 76, he expresses the orthodox view that, “There is no issue that as a result of Malcolm the comparator in cases of both direct and disability related discrimination are likely to be the same.” This is cause for worry in the light of the very narrow interpretation given to direct disability discrimination in the only two reported cases, High Quality Lifestyles v Watts and Stockton-on-Tees Borough Council v Aylott.

This case provides fewer grounds for pessimism. Unlike in Aylott, it was considered permissible for a tribunal to find that a stereotypical view of disability consitituted direct discrimination. In particular, an unreasonable belief that a disabled employee is a commercial liability is not a relevant circumstance that must be attributed to a comparator. Furthermore, where the reason for treatment is clear, it is not always necessary to identify a comparator, following the case of London Borough of Islington v Ladele.

The analysis of disability-related discrimination is also encouraging. The tribunal had found that the case was not made out because the disability was not in the mind of the employer at the time of the dismissal. Its reasoning was that, because it did not have a basis for believing that the employee was a commercial liability, it cannot have held such a belief for a reason related to his disability. This is sensibly rejected. What matters is why the belief is held rather than whether the belief is accurate.

Further to this post, I can report that the judgment of the Court of Appeal in this case is now available.

Barack Obama appeared US television this week on the Late Show with David Letterman. This followed accusations by his predecessor Jimmy Carter that criticism of his policies about healthcare reform were motivated by racism. When asked about this, Obama observed that, “I was black before the election.”

A simiar problem can arise in employment tribunal cases, especially where it is alleged that a dismissal is discriminatory. If an employer really wants to avoid having employees from, say, a particular ethnic group, the best way to acheive this is surely not to employ anybody from that group in the first place, rather than employing someone only to be dismissed at a later date. Tribunals often specifically ask claimants to explain why their employers recruited them if they are as racist as they are alleged to be.

The problem is not insoluable and there are situations in which there is a straightforward answer, such as when companies are taken over by new managers who are less enlightened than their predecessors and decide to undo their good work. A more complex variation of this situation can happen in public bodies, and other large centralised institutions, where there is a strong desire from managment to promote diverse recruitment but this culture is not always supported by less senior staff. Finally, the saddest cases are those in which employers mean well and strive to avoid discrimination but are hamstrung by stereotypical assumptions, which means they are perfectly happy, for example, to select black job applicants for jobs, but will be more likely to dismiss them for perceived agression than their white colleagues, sometimes without even being aware of it. In any event, anyone wishing to argue that a dismissal is discriminatory should expect to provide an explanation and evidence to support it.

By contrast, dismissals based on pregnancy discrimination and victimisation are much easier to prove, precisely because the employee in question usually was not pregnant and usually had not made any complaints of discrimination when first employed. If the dismissal occurs immediately after a change of status, the employer has a lot of explaining to do. The same can also be true of disability discrimination where the employer was initially unaware of the disability, either because of a failure to ask about it or because of a failure to spot the obvious, such as that a person being interviewed has a prosthetic arm.

There has already been a great deal of discussion about the decision of the European Court of Justice in Pereda v Madrid Movilidad, in which it was held that workers who become sick while on holiday can reclaim their supposedly lost annual leave to be taken at a later date. Not surprisingly, much of the commentary has focused on the fact that this may allow some people to abuse the system, especially given the well-known sickness-inducing properties of sangria. In the past, I have largely been willing to defend Luxembourg on the holiday pay issue, and I had nothing to say in criticism of the controversial decision in Stringer v HMRC earlier in the year. However, I do agree that it has gone too far this time.

What is frustrating is that the court ruled on an issue that was not before it to be decided, in saying that not only can holiday be taken at a later date, but also that it can be rolled over if it is not practicable to take it in the same leave year. This upset the delicate balance established in Stringer, which appeared to give member states a choice between allowing employees to take holiday while off sick, and allowing untaken holiday to roll over from one year to the next. The former choice suited the United Kingdom rather well because the Working Time Regulations expressly forbid leave from being carried over from year to year and, in retrospect, it is even more unfortunate that the House of Lords did not expressly endorse this option when it had the chance to do so. Pereda has now thrown a spanner into the works.

Because of the minor possibility that a worker might become sick while on holiday, it appears that it is no longer lawful for member states to have a blanket ban on carrying leave over, with the result that the Working Time Regulations are incompatible with European law. This must have been contemplated by the ECJ who, in Stringer, appeared to be so sensitive to differences between member states in the implementation of the Working Time Directive. It is entirely disproportionate that the government will have to draft new regulations in order to deal with this piece of trivia. In recent posts, I have discussed the importance of tribunals making careful decisions on remedy when a lot of money is at stake but this case will do the opposite and introduce an unnecessary level of complexity into small value claims. I have already had a one-hour hearing relisted for a whole day and this will now inevitably be repeated.

Today, I am travelling in my DeLorean back to the year 1985, when Mikhail Gorbachev became leader of the Soviet Union, Boris Becker won Wimbledon as an unseeded 17-year-old, and the mobile phone was introduced into the UK by a tiny company called Racal-Vodaphone. Number one singles included ‘Nineteen’ by Paul Hardcastle, ‘The Power of Love’ by Jennifer Rush, and ‘Dancing in the Street’, from the Live Aid concert, by David Bowie and Mick Jagger. In employment law, it was a crucial year in the fight over the correct test for constructive dismissal, one which some say is still being fought in 2009.

The modern orthodoxy was represented by the case of Lewis v Motorworld Garages in the Court of Appeal, which approved the formulation by President Browne-Wilkinson in Woods v W M Car Services, that conduct without reasonable or proper cause, which is calculated or likely to destroy or seriously damage trust and confidence between employer and employee, constitutes a repudiatory breach of contract. There would later be further approval from the House of Lords in Malik v BCCI. The radical alternative, which everyone (?) agrees is now heretical, was expressed in the case of Dutton & Clark v Daly, in which it was suggested that an act by an employer within the reasonable range of responses can never be a repudiatory breach but, more controversially, an act outside the reasonable range of response will always be so. The latter formulation would certainly seem to place the bar too low and makes the test too close to a reasonableness test, whether or not you believe the reasonable range of responses test is just a reasonableness test, and this is inconsistent with Western Excavating v Sharp.

However, the contemporary debate is about whether or not the first part of Daly is correct and, if so, whether or not it is useful. In my view, it must be correct because, if Daly is setting the bar too low, anything that does not even pass the Daly test cannot be sufficient. I think it is useful because the Woods definition of a trust and confidence breach is far from precise and is apt to lead to inconsistent application. If this means that a gloss is being placed on the test, this is no great disaster. Constructive dismissal is a common law principle rather than a statutory one and, moreover, the ordinary English meaning of the word ‘trust’ clearly evokes concepts such as fairness and reasonableness. If I say that a friend has not acted unreasonably but I no longer trust him, he is likely to find this hard to accept.

For me, the biggest question about the trust and confidence test is where reasonableness comes in, if not in establishing a breach, and this is where cases like Buckland run into trouble. Buckland cites the 1985 case of Delabole Slate v Berriman, in which it is confirmed that a constructive dismissal can be fair. This is fine but trust and confidence was not breached in that case. In another case from the same year, Cawley v South Wales Electricity Board, it was held to be perverse to find that a disproportionate disciplinary sanction breached trust and confidence and yet gave rise to a fair dismissal, and it is hard to see how it could be otherwise. It was also said that considerations of fairness and the considerations affecting constructive dismissal are two sides of the same coin. Given the importance of fairness and reasonableness to unfair dismissal law, they must be key in deciding whether a breach is established.

While I am on the subject of decisions on remedy which are upheld by the Employment Appeal Tribunal but overturned by the Court of Appeal, another example was first mentioned in this post. I am pleased to report that the judgment of the Court of Appeal in Stuart Peters v Bell has now been produced. Lord Justice Elais gave the leading judgment, in which he confirms that the narrow Norton Tool principle, as defined in the case of Burlo v Langley, does not apply to constructive dismissal because it is simply not the case that it is good industrial practice to make a payment in lieu of notice in such a situation. As Burlo also confirms that the narrow Norton Tool principle is not to be extended, the appeal was allowed.

There was an interesting decision by the Court of Appeal a few weeks ago, concerning compensation for unfair dismissal. Unfortunately, the judgment has yet to appear but the key background reading in any event is the Employment Appeal Tribunal judgment in Aegon v Roberts, earlier in the year, which it overturned. The facts are unremarkable but the same cannot be said of the approach taken to the law.

The original tribunal noted that the pension scheme of the dismissing employer was far more generous than that of the job which was subsequently taken by the claimant. Accordingly, she was able to claim the difference as part of her loss. This would have been uncontroversial were it not for the fact that the second job also provided a larger salary and so it would be expected that any loss of pension would be offset by this additional income. The tribunal took another view, reasoning that there had been a break in the chain of causation with respect to the loss of salary but not with respect to the loss of pension.

The Employment Appeal Tribunal upheld the decision but this is no longer surprising. It once described the approach of tribunals to compensation as “rough and ready” and it continues to be very reluctant to interfere with such assessments. The problem is that this is an area in which there is a great deal of case law, which cannot readily be ignored. There is no point in tribunals making referemce to a break in the chain of causation if they are going to conclude that there can be a partial break or that it can be broken more than once, which is not unknown. Therefore, there is an increasingly common sequence of events in which a tribunal makes a rough and ready assessment of compensation which is upheld by the Employment Appeal Tribunal and then overturned by the Court of Appeal, as happened in this case.

In many ways, the approach of the Employment Appeal Tribunal is understandable. It wants to prevent tribunal litigation from becoming complicated by technical points of law and it wants to avoid endless appeals concerning small sums of money. However, I agree with the Court of Appeal on this issue. The overriding objective requires proceedings to be conducted in a manner proportionate to the amount of money at stake. Therefore, it is right that one-hour wage claims worth a few hundred pounds do not get bogged down in technicalities but, conversely, when tens of thousands of pounds are being claimed, as in this case, tribunals surely ought to take the time and care to produce a more thorough analysis of the losses of a successful party. It should also go without saying that, however badly an employer has acted, compensation should reflect actual loss and should not be a punishment for these actions or for failing to settle, or a reward for a claimant whose successful mitigation means the case has little value.

There have been very few new decisions recently but there was another case on time limits that caught my eye, McFadyen v PB Recovery, which is a reminder that employment tribunals in Scotland are a separate jurisdiction from those in England and Wales. Usually this makes no difference because the law is identical to the point that decisions of the Scottish Employment Appeal Tribunal are binding in England and Wales and vice versa. However, it affects the issue of where claims should be submitted.

When claims are made online, they go to a central server and are then forwarded to the tribunal office local to the place of work of the claimant. If the claimant did not work at the main address of the respondent, there is a separate part of the ET1 form in which the actual place of work can be indicated. In this case, the employees worked in Scotland for a company based in Bristol but they did not put their place of work on the form and so the claim was received in Bristol. When the error was spotted, the Glasgow office was able to process the claims but they were now out of time and were struck out.

When a claim is sent to the wrong office within the same jurisdiction, no problem arises because it can simply be transferred to the correct office. The problem in this case was that the Bristol tribunal said that it could not transfer the claims to Glasgow as it did not have jurisdiction to deal with the claims in the first place. In fact, this was wrong. Tribunals can deal with claims against employers based within the jurisdiction, even those brought by employees who worked elsewhere. This does not mean that there would necessarily be jurisdiction to deal with a case of unfair dismissal but there would at least be sufficient jurisdiction to transfer the claim to the correct office. The problem in this case is that the appeal was brought against the decision of the Glasgow office rather than the one of the Bristol office.