It has been reported that the House of Lords has defeated several government amendments narrowing the exemption from sexual orientation discrimination currently allowed to religious organisations. This is slightly misleading because one form of the wording rejected appears in the original draft of the bill and the only amendment since was at the request of church leaders, to remove any doubt that ministers will be covered by the exemption. This followed a legal opinion by John Bowers QC for the Christian Institute. What is particularly unfortunate is the suggestion in some media sources that the rejection of the government proposals reflects a concern based on this opinion, even though the danger of the bill applying to ministers had been removed. In fact, it is opposed because the churches (no other religions have pushed the issue) want the right to be able to discriminate against lay staff who are homosexual.

For many people, this raises all sorts of issues including, unsurprisingly, the presence of the Lords Spiritual, who undoubtedly swung the result. Fortunately, however, for those who believe in equality, democracy and secularism, the intervention will prove to be entirely futile. The approved amendment restores the wording of the Sexual Orientation Regulations, which have been declared by the European Commission, in a recent reasoned opinion, to be inconsistent with the Employment Equality Framework Directive. This leads to the threat of action against the United Kingdom in the European Court of Justice and, therefore, the likelihood that the Parliament Act will used. It is also probable that, as it is a matter of compliance with European law, the government can make secondary legislation to force it through.

Even if the amendment were to survive, it would not last long against a challenge in a higher court. The government has stated that its proposed wording does not change the legal position and this is basically correct. The Sexual Orientation Regulations would have to be interpreted consistently with the Directive and the same will apply equally to the Equality Bill. The fact that the amendment is clearly intended to evade the Directive will not help and, if anything, it will be counter-productive. Churches may be afraid that they will be subjected to a few months of tricky litigation at a local employment tribunal but they are now faced with the possibility of dragging it out for several years, including a visit to Luxembourg.

In Buckland, Judge Clark sets out a four stage test. Firstly, is there a breach of trust and confidence? Secondly, does acceptance of that breach entitle an employee to resign, using the authority of Sharp v Western Excavating? Thirdly, is the dismissal for a potentially fair reason? Fourthly, is the dismissal fair? I want to concentrate on the second stage and it is necessary to go straight to the case of Woods.

My first observation is that Woods expresses some reservations about Sharp, which it is said has led employers to act totally unreasonably while stopping just short of a breach of contract. Justice Browne-Wilkinson feels that the implied term of trust and confidence can be used to fill this gap. More strikingly, in Malik, the House of Lords does not cite Sharp at all, which suggests that, if the two tests come into conflict, then Woods should prevail, notwithstanding the fact that Sharp is the decision of a higher court.

And there may be a conflict. Whereas Sharp emphasises that, once a breach is found, a tribunal must go on to consider whether an employee is entitled to resign, Woods says that a breach of the implied term is necessarily repudiatory, a point which has been followed in Morrow v Safeway Stores. However, “the Tribunals’ function is to look at the employer’s conduct as a whole and determine whether it is such that its effect, judged reasonably and sensibly, is such that the employee cannot be expected to put up with it”. In other words, it is a requirement of the test to consider whether an employee is entitled to resign but this is part of the test of whether there is a breach in the first place, not whether the breach is repudiatory. Buckland is wrong to divide this into two stages. Woods, as followed in Malik, creates an entirely new kind of constructive dismissal, to which principles different from those in Sharp will apply.

The reason is obvious. It is utterly artificial to say that an act breaches trust and confidence but does not entitle an employee to resign. If an employee is not entitled to resign then trust and confidence has not been breached. A stage-like approach is appropriate for a contractual analysis based on the breach of an express term but not for a breach of the implied term. I would go further and say that stages three and four become equally nonsensical when the implied term has been breached. Clearly it is hard to see how a common law concept can incorporate the statutory test of fairness but, fortunately, it is unnecessary to suggest that it does. This is because, as I will go on to argue, the bar for breaching the implied term is higher than for failing the statutory test so, it the latter is met, there can be no breach.

Where disciplinary proceedings could ultimately terminate an employee’s career, it is highly likely that s/he should be entitled to legal representation at the disciplinary hearing. In the case of The Governors of School X v G [2010] EWCA Civ 1, the Court of Appeal found that the employee in question was entitled to legal representation.
 M, a 24 year old teaching assistant, was accused of having kissed and had sexual contact with a 15 year old student, which tended to show an offence under s.16 of the Sexual Offences Act 2003. Charges were not brought by the police; however, the Governors of School X brought disciplinary proceedings against M and dismissed him for a breach of trust. The Governors were obliged to report M to the Independent Safeguarding Authority (“ISA”) who have the power to prohibit M from teaching or working with children. M was told that he was entitled to bring a colleague or a trade union representative. He was not entitled to bring a lawyer to the disciplinary hearing.
The question before the Court of Appeal was whether M was entitled to legal representation at his disciplinary hearing, given that the general rule is that an employee is only entitled to bring a colleague or a trade union representative. 

Article 6 of the European Convention on Human Rights provides that:

“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law”

But goes on to say that anyone charged with a criminal offence is, amongst other things, entitled to legal representation.
Here, the Court of Appeal held that there was every likelihood that the outcome of the disciplinary process, where there has been a finding of abuse of trust by virtue of sexual misconduct, will have a profound influence on the decision-making procedures of the ISA relating to the barred list. And, therefore, the disciplinary proceedings are a determinant of the claimant’s right to practise his profession, and covered by Article 6.
The Court of Appeal held that the jurisprudence was clear that Article 6 “civil” does not necessarily entail a right of representation, but may do so. It goes on to quote the case of International Transport Roth GmbH:
“As I see it, there must be something in the nature of a sliding scale, at the bottom of which are civil wrongs of a relatively trivial nature, and at the top of which are serious crimes meriting substantial punishment. Broadly speaking, the more serious the allegation or charge, the more astute should the courts be to ensure that the trial process is a fair one.”

The Court upheld the High Court’s view that in this case, Article 6 “civil” required that the Claimant should be afforded the opportunity to arrange for legal representation in those proceedings should he so choose, and therefore it was irrelevant whether the disciplinary proceedings brought by the governors amounted to being charged with a criminal offence. “The jurisprudence is increasingly to the effect that what matters is the gravity of the issue in the case, rather than the case’s classification as civil or criminal. That is the primary driver of the reach of the rights which Article 6 confers.”

The decision of the Employment Appeal Tribunal in Allen v Jobcentre Plus raises an interesting question. It is common practice for tribunals, when dealing with a point of whether there is a continuing act which brings claims that would otherwise be out of time within their jurisdiction, to reserve the matter to the final hearing without a pre-hearing review. The reason is that claimants have to do no more than show a prima facie case at the preliminary stage, with the effect that much of the evidence is likely to be heard at the pre-hearing review, without disposing of any issues. It must then be heard all over again.

In this instance, unusually, it had been possible to conclude that no prima facie case had been made out, because the acts in question had been carried out by different colleagues and were of a completely different character from one another. This decision demonstrates that an application by a respondent for a pre-hearing review may not always be entirely futile, at least if the facts are equally favourable. Judge Birtles quite rightly rejects a submission that a tribunal is always obliged to defer the matter to a full hearing. The purpose of doing so is to avoid wasting time, not to prevent injustice to claimants.

To start my review of constructive dismissal law, I must deal with a point of which, in my opinion, far too much has been made. In the only House of Lords decision in this area, Malik v BCCI, Lord Steyn appears to state that the test of whether there is a breach of the implied term of trust and confidence is whether an employer has, without reasonable or proper cause, conducted itself in a manner “calculated and likely” to destroy or seriously damage the relationship of confidence and trust between employer and employee. This is different from that formulated by Justice Browne-Wilkinson (as he then was) in the authoritative case of Woods v W M Car Services, which says “calculated or likely”. It would be all too easy to get the impression that there is a major conflict in the authorities that needs to be resolved.

However, there is not. So that people do not get the impression that I am giving Judge Peter Clark too much of a hard time about Buckland, I wish to make it clear that I consider his judgment in Baldwin v Brighton & Hove Council to be an example of judicial reasoning at its best. He shows that the test in Woods had been cited in numerous cases before Malik, always with the word ‘or’. Further, the passage in which Lord Steyn uses the word ‘and’ purports to be a direct citation from Woods, which suggests that it is a transcription error. Judge Clark could also have mentioned that Lord Steyn asserts that he is stating the test again, having used ‘or’ previously. There is clearly no intention to amend the legal test.

Unfortunately, this is not quite the end of the story. One consequence of Baldwin is that, by describing the test as disjunctive, it could be understood as saying that an intention for an act to destroy trust and confidence could be sufficient, even if it is not likely to do so. Reading the decision in context, it is doubtful that this is what it means but the point is an arguable one. More worryingly, the reasonable range of responses cases, Abbey National v Fairbrother and Claridge v Daler Rowney, both adopt the formulation “calculated” with no mention of “likely”. A brilliant solution is to be found in a location which makes it less than obiter, so I shall leave readers to search for it for themselves. It relies on the case of Norweb v Dixon which states that ‘calculated’ means the same thing as ’likely’ and it does not mean ‘intended’. Therefore, “calculated or likely”, “calculated and likely” and “calculated” all mean exactly the same thing - likely - which, by the way, is how Lord Nicholls formulates the test in Malik. Case closed.

Although intention is not required to breach trust and confidence, it does not follow that the bar is low. Despite the word games that have gone on over the years, there has been no real analysis of the word ‘trust’. In everyday use, it can be broken unintentionally but it is hard to break and even harder to fix.

The government recently published draft regulations aimed at restricting the use of damages-based contingency fee agreements in which the representative receives a proportion of the damages awarded to the client. They are unlawful in the United Kingdom (although not in the United States of America) for court proceedings but are quite common in Employment Tribunal proceedings, as a reflection the fact that awards are usually relatively small and clients rarely recover their legal costs. Few people question that some regulation of the terms of such agreements is necessary but there has been criticism in the Law Gazette of the cap of 25% that is planned to be imposed upon the proportion that can be agreed.

At Employment Law Advocates, we largely support the concerns which are expressed in that article. Although, regrettably, we did not take part in the original government consultation, we have recently submitted comments about the draft regulations to the Ministry of Justice. They can be uploaded here.

I made quite a number of posts last year about the case of Bournemouth University v Buckland at the Employment Appeal Tribunal. I am not a fan of the decision which, among other things, says that it is wrong to introduce a range of reasonable responses test into the question of whether there has been a breach of the implied term of trust and confidence. This conclusion has found favour in some quarters but Judge Peter Clark also makes two more controversial claims, firstly, that constructive dismissals founded upon a breach of the implied term can sometimes be fair, and, secondly, that such a breach can be remedied fairly easily by, for example, a favourable finding in a grievance investigation. It is these two issues that are the subject of an appeal to the Court of Appeal, which is due to be heard on 8th or 9th February, and it is possible that the Court of Appeal will not have to deal with the range of reasonable responses point at all. However, in my view, it is now time for constructive dismissal to be re-examined in order to try to create a coherent whole and so, in reality, the contentions in Buckland cannot be divorced from one another. In the coming weeks, I shall outline my position on the subject.

I want to start by setting out the scope of the discussion. Judge Clark says of the range of reasonable responses that either, “it adds nothing, in which case it is superfluous; or it alters the House of Lords test” in Malik v BCCI. I wish to make clear from the outset that I have no problem with the suggestion that it adds nothing or very little to the Malik test. Indeed, I would go so far as to say that it follows logically from Malik that an act that is within the range of reasonable responses of an employer cannot possibly breach the implied term. I also note the position taken by the Employment Appeal Tribunal in several of its decisions, which are largely in agreement with the rejection of the range of reasonable responses test in Buckland but state that cases in which a reasonable act breaches the implied term will be exceptional. The latest example is the judgment of Judge Serota in NSPCC v Dear, handed down today. I cannot personally conceive of a real situation in which such an exception would ever apply but the importance of these authorities is their confirmation that there is a high bar for a claimant to reach.

Therefore, the focus on my criticism of Buckland is that I am far from convinced that it does accept the existence of quite such a high bar. The strongest evidence of this emerges from those conclusions that have led Professor Buckland to take the case to the Court of Appeal. By suggesting that a breach of the implied term of trust and confidence can often be fair and by suggesting that it is easy to cure, it is treating such a breach as a trifle and trivialising the importance of trust between an employer and an employee. That is the issue which is going to be at the core of my argument over the next four weeks.

The decision of the Scottish Employment Appeal Tribunal in Young v Hexion Speciality Chemicals deals with a short but important point. A claim for unfair dismissal had been submitted in which the date of termination of the employment had been provided but not the start date. It was rejected on the basis that it could not be determined whether the claimant had sufficient service to bring a claim. He applied for a review, supplying his start date, but it was not allowed. As the Lady Smith notes, this was wrong because the Employment Tribunal Rules specify that a claim can only be rejected if it is clear that there is no jurisdiction, not if it is unclear that there is. It could not have been rejected on the basis that “details of the claim” had not been provided, as included in Rule 1(4)(e), because this requires no more than specifying sufficient information as to whether the claim is of a type for which there is jurisdiction (Grimmer v KLM Cityhopper). Tribunals can hear some unfair dismissal claims and so that is enough.

In my experience, tribunals vary wildly in the approach they take to rejecting claims or parts of claims. A particular issue is money claims that can be pleaded as unauthorised deductions of wages or breach of contract. Parties are not asked to specify which and yet claims are sometimes rejected on the basis that there is no jurisdiction to hear a wages claim. The rationale for taking a hard line is presumably a desire to cut down on the number of claims but, in practice, there are so often appeals or applications to review that this is a false economy of time. I note in passing that those tribunals with a more liberal policy seem to be currently experiencing less backlog than those taking a more draconian approach.

Happy New Year everyone. For my first post of 2010, I would like to make my selection for the most important unreported case of last year. There are always significant cases that slip under the radar of the law reporters, especially if their practical usefulness outweighs their academic interest or where novel points arise about an issue peripheral to the main case. Chondol v Liverpool City Council qualifies on both counts. It generated a frisson of excitement in the media because it is yet another case that distinguishes between treatment on the grounds of a religious belief and treatment on the grounds of acts related to that belief. There was no need to report it for that reason but what is really interesting is what it says about unfair dismissal where a person is dismissed after multiple charges of misconduct.

Such cases are surprisingly common, often because evidence of earlier acts of misconduct will emerge during the investigation of another charge, but also because some employers will reopen issues which had been resolved or overlooked in order to try to justify a dismissal, especially where the evidence about the main charge is rather shaky. It may have been concerns about the latter which led the House of Lords in to conclude, in Smith v Glasgow District Council, that a dismissal is necessarily unfair if an employer has failed to establish the truth of any one of the charges that forms an important part of the reason for dismissal. This harsh conclusion can only be avoided by an express finding that the charge is not central to the dismissal. Of course, Polkey and contributory fault could reduce the compensation.

Chondol ameliorates the effect of Smith somewhat by stating that a failure to establish the truth of even a key allegation is not always fatal, on the basis that the overall reasonableness of the procedure is the issue, rather than the reasonableness of any individual element. This is established from cases such as Taylor v OCS Group although this was not cited by Justice Underhill in his decision. Indeed, it might be said that the result in Chondol follows so clearly from the decision in Taylor that there was no need to report it at all. I disagree. The problem with Taylor is that it leaves unclear which procedural flaws will be forgiven and which will not and, in the light of Smith in particular, it might be assumed that a failure to establish the truth of a charge still would not be. Chondol provides welcome clarification.