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Dividing up hearings
It is common practice for tribunals to rule on liability first and then to determine remedy later. In my experience, this can often be more trouble than it is worth, especially in short unfair dismissal cases, particularly where the issues of a Polkey reduction or of contributory fault are likely to come into play. This was even more true during the ill-fated period of the statutory disciplinary and dismissal procedure in which a procedurally unfair dismissal could be rendered fair by the effect of section 98A(2) of the Employment Rights Act. The section required the consideration of exactly the same issues as Polkey but was, strictly speaking, a matter of liability rather than of remedy, with the highly unattractive result that tribunals would often have to conduct the same exercise twice in different hearings. In the case of London Waste v Scrivens, the tribunal apparently did not think that it was necessary to consider section 98A(2) or Polkey at all but, in any event, it was criticised by the Employment Appeal Tribunal for not having dealt with these matters at the liability hearing. Somewhat surprisingly, Judge Serota then went on to reach the conclusion that contributory fault should also have been considered at the same stage.
In practice, there are advantages in tribunals giving an indication of any likely deductions after the first hearing. This is when most of the relevant evidence will have just been heard and it can also focus the minds of the parties towards settlement. The problem is that, to the non-legally trained eye, it can look as though there has been a prejudgement of what is to come and, in any event, there is so little left to determine that it barely seems worth coming back just to deal with the issue of mitigation of loss. It is hard to avoid thinking that it would have been easier to have resolved the entire case in the first place.
Reasons for less favourable treatment
If the burden of proof reverses in a discrimination case, the employer has to show a non-discriminatory reason for the treatment about which the complaint has been made. Sometimes this is straightforward but the decision of the Employment Appeal Tribunal in Arhin v Enfield Primary Care Trust provides an example of a situation where it can be more difficult. It was found that the respondent had simply made a mistake in not allowing the claimant, who was redundant, to compete for a job that was offered to her comparator. However, the tribunal had failed to adequately explain how it had reached this conclusion in circumstances in which it admitted that there was insufficient evidence of the scope of the new role.
In his judgment, Justice Langstaff also makes some general observations about cases in which mistake is argued as the reason for less favourable treatment. While, of course, it will occasionally be true that a mistake has been made, and this will always be a satisfactory reason which discharges the burden of proof, tribunals are entitled to be suspicious of such an explanation, especially where it has not been pleaded and emerges for the first time in oral evidence. It is easy to allege and so must be submitted to close scrutiny. This necessarily requires a tribunal to make detailed findings about how it happened.
Buckland judgment
The decision of the Court of Appeal can be found here. The reasoning on the ‘curing the breach’ point is pretty much as argued in the appeal, which is set out in my previous post. On the ‘reasonable range of responses’ point, the approach of the Employment Appeal Tribunal has largely been upheld, but with a caveat, per Lord Justice Sedley, that, “It is nevertheless arguable, I would accept, that reasonableness is one of the tools in the employment tribunal’s factual analysis kit for deciding whether there has been a fundamental breach. There are likely to be cases in which it is useful.” It seems to follow that, while a tribunal does not have to direct itself to the reasonable range of responses, it equally does not err if it takes this into account in finding that there is no fundamental breach, as in Claridge v Daler Rowney.
Nor can a dismissal that arises from such a situation ever be fair, at least if one applies the reasoning in paragraph 47 that an employer cannot possibly justify an act which it denies has occurred. As I have never known an employer to admit to a breach of the implied term of trust and confidence, this means that there is little scope for defending a case once a breach of the term has been found. I think that this is entirely right both as a matter of legal certainty and of industrial reality but it does demonstrate the importance of having an approach to testing for a breach which is both consistent and open to scrutiny.
The problem is that whether or not there is a constructive dismissal is a matter of fact and is difficult to overturn on appeal. The aim of Abbey National v Fairbrother was to prevent such findings on whimsical grounds and, now Fairbrother has been overturned, it is unclear how a similarly questionable decision could be challenged. I would argue that this can be done by allowing the range of reasonable responses test to be be used as part of the ‘toolkit’ of the appellate courts. Even if a tribunal has directed itself correctly, an analysis based on reasonableness may lead to a conclusion that its decision is perverse.
Buckland update
I went to the Court of Appeal on Monday and I heard some fascinating arguments. It seems that the question of whether trust and confidence can be restored after being destroyed could become moot as, according to Robin White, for Professor Buckland, there is no authority for the more general proposition that a repudiatory breach of contract can be cured by the wrongdoer, as opposed to being affirmed by the wronged party. The authorities cited by Employment Appeal Tribunal apparently say no more than that an anticipatory breach can be remedied. Also, while an employee is entitled to give an employer a chance to make amends, without affirming the contract, there is no obligation to accept what is done.
There is also a problem with the finding that the Tribunal wrongly applied a subjective test in deciding whether the breach had been cured. It is difficult to comment without having seen the judgment but the submission by Robin White was that the Tribunal repeatedly said that Professor Buckland was “entitled” to be dissatisfied with the handling of his complaint, and so they had applied an objective test after all.
In an earlier post, I questioned whether it was possible for a dismissal brought about by a breach of the implied term to ever be fair but Lord Carnwath floated an interesting possibility in his discussions with counsel. If a repudiatory breach is incapable of being cured then it follows that events after the breach, but before the breach is accepted, cannot be considered in deciding whether an employee is entitled to resign. This means that, if these events can be taken into account in deciding whether the dismissal is fair, as permitted according to Savoia v Chiltern Herb Farms, then the two questions may well produce quite different answers. However the parties agreed that the decision in Berriman v Delabole Slate, in which the reason for the dismissal is defined as the reason for the repudiatory conduct, is regarded as being more orthodox, and it will be interesting to see if this idea makes its way into the final judgment.
Countdown to Buckland - 1 day to go
I can confirm that Buckland will be heard at the Court of Appeal tomorrow. Interestingly, there is also a permissions hearing for a cross-appeal by the university so it looks as though the range of reasonable responses point willhave to be considered to some extent although, it has to be said, Fairbrother does not appear to be particularly helpful on the facts of this case. There is an enormous difference between remedying a flawed process with an appeal and trying to remedy a breach of trust with a grievance. It is for this reason that I strongly believe that the appeal by Professor Buckland also ought to succeed.
In a sense, it could be argued that the ameliorative effect of an appeal is an example of a breach of the implied term being fixed and it is, I have to accept, the most plausible contender. Disciplinary action short of dismissal following a shoddy process could give rise to a breach (though many tribunals would find that it does not) which could then be remedied on appeal. This has the unfortunate effect that an employee has an incentive not to appeal but it appears to be a correct statement of the law. However, it is a relatively rare exception which reflects the fact that procedural breaches of trust and confidence are minor. There will also be cases where, if the problems with the process are severe, and are tainted by discrimination for example, they will be impossible to repair. The Employment Appeal Tribunal in this case was wrong to conclude it could decide the matter for itself without remitting it to a tribunal of fact.
Furthermore, a grievance does not work in the same way. Consider a case of sexual harassment where it is clear that a grievance finding that the acts took place, or even the dismissal of the offender, would not be sufficient to restore trust. If it were, it would have deleterious effect on our discrimination law. Now it might be said that, in Buckland, the breach was less serious than this but, if so, it is much more likely that there was no breach at all than that it was cured, and any challenge to the findings of the tribunal ought to have been mounted on that basis, applying Fairbrother if necessary (and if possible). The question of whether or not there is a breach of the implied term is a matter of fact and so, if the Fairbrother challenge fails, there is absolutely no reason to interfere with the findings of the tribunal.
In performing the analysis, unfair dismissal law is undoubtedly helpful, and even Judge Peter Clark is willing to rely upon Roberts v West Coast Trains, in which a dismissal disappeared when an appeal was upheld, as a useful analogy. However, more pertinent is the case of Taylor v OCS Group which warns against legalism and states that the overall effect of a procedure should be considered. Rather than asking whether there is a breach and then asking whether it has been fixed, the question is whether the process is adequate when considered as a whole. This is essentially the approach taken in Fairbrother. It is important to remember that, in several cases, it will be impossible for trust to be restored, at least not until years later. The alarming statement of the Employment Appeal Tribunal that the breach must have been fixed because there is nothing else that the employer could have done must be wrong.
Countdown to Buckland - 5 days to go
It is now time to talk about the range of reasonable responses, a frequently misunderstood concept. As the Court of Appeal made extremely clear in HSBC v Madden, ”there will be cases where there is room for reasonable disagreement among reasonable employers as to whether dismissal for the particular misconduct is a reasonable or an unreasonable response.” To put it another way, the word ’reasonable’ means the same as within the range of reasonable responses, which is not a gloss on the literal reading of the statute. It is simply a reflection of the reality that there is frequently more than one reasonable solution. It would be a gloss on the statute to say that there is always only one solution in every case.
It might be objected that the word ‘reasonable’ appears elsewhere in employment legislation, such as in discrimination law, where reasonable adjustments must be made for disabled people and, previously, justification for indirect discrimination was required to be reasonable. There is no reasonable range in these cases but this is because an employer is expected to keep disadvantage to a minimum. Because there is just one factor to weigh in the balance, it is feasible to expect an employer to adopt the best solution. In an unfair dismissal situation, there are many considerations and it is less clear which rights of the employee are to be given the most weight. As a result, there will be multiple reasonable options.
I now want to return to Sharp. Having suggested in an earlier post that the second part of the test does not apply in the same way when the implied term is engaged, I nevertheless think that it is helpful to examine what it says about reasonableness. It states that whether there is a constructive dismissal depends upon whether there has been a fundamental breach of contract, not whether an employer has behaved unreasonably. In the case of an express breach, it follows that there can be a constructive dismissal even where an employer is found to have acted reasonably (Tapere is an example of this).
This is all very well but Sharp prefers the contract test because, otherwise, it suggests, constructive dismissal can be found on whimsical grounds. Therefore, in most cases, the test is higher than that of a reasonableness test. I would suggest that this will always be so for a breach of the implied term, not properly considered in Sharp. As ‘reasonable’ means within the range of reasonable responses and the action of an employer must be worse than unreasonable to make out a breach of trust and confidence, it is correct that a finding of such a breach arising from an action in the range of reasonable responses would necessarily be perverse. This is important because it is difficult to overturn findings on perversity grounds but it is necessary to establish a basis for challenging them to ensure consistency in the law.
The Church and the Equality Bill
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.
Countdown to Buckland - 15 days to go
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.
Continuing acts
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.
Countdown to Buckland - 23 days to go
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.
Damages-Based Agreement Regulations
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.
Countdown to Buckland - 32 days to go
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.
Claim forms
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.
Unreported Case of the Year 2009
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.
Dark Law - The Reason Why Part 2
In my last dark law post, I discussed the scepticism of tribunals regarding discrimination claims about acts which do not appear to be discriminatory on their face. It might be thought that the situation would have changed since it has become possible for the burden of proof to be reversed but, in fact, this has not really happened at all, for largely the same reasons as those that were outlined in the earlier post.
A reluctance to apply the reverse burden of proof strictly is understandable, particularly in cases where there is no jurisdiction to consider unfair dismissal. An employer who has dismissed an employee with less than a year of service for an entirely arbitrary reason is unlikely to want to go into detail about the thought processes involved, but it would be entirely unjust to make a finding of discrimination in these circumstances. In practice, this means that tribunals will often accept dubious reasons, or find entirely unpleaded reasons of their own, for dismissal in order to ensure that the burden is discharged where it is fair to do so. This tendency is only increased by the very unfortunate tactic of pleading discrimination where a complaint is really one of unfair dismissal, as a way of trying to evade the lack of jurisdiction.
However, employers should still remain wary of cases like these. They are rarely won by the claimants but are sometimes lost by the respondents who are afraid of scare stories about tribunals who find in favour of employees for obscure reasons, and therefore decide that it is wise to lie about embarrassing but non-discriminatory motives. Such scare stories are completely unfounded but tribunals have been known to allow the reverse burden of proof to operate when told such lies, even if there is no direct evidence of any discrimination. This seems harsh but actually makes a great deal of sense. If a person is lying about the basis for a decision, it is clearly possible that discrimination is part of the reason and, if this did not result in an adverse finding, the practice of lying to cover up unlawful acts will no doubt be encouraged. Parties without legal experience tend to underestimate the ability of tribunals to work out whether a witness is telling the truth and the advice to them is simple. Tell the truth, however silly it will make you feel and, if there has not been any discrimination, you will win. Lie and you will lose.
Territorial jurisdiction
The Court of Appeal dealt with some complicated issues of European law in Duncombe v Department for Children, Schools and Families. It was not a good week for the Department, which also intervened unsuccessfully in JFS. Mr. Duncombe was employed to teach at a European School in Germany but was dismissed when his fixed-term contract came to an end after nine years, contrary to the Fixed-Term Workers Directive. He did not bring a claim in Germany, because he knew that the Department would rely upon state immunity to defeat the claim, and so he had no choice but to bring his claim in the UK.
He was allowed to pursue wrongful dismissal by the Employment Appeal Tribunal, following the earlier decision by President Elias in Bleuse v MBT Transport. It was held that a claim under the Working Time Directive, concerning work carried out in Austria, could be pursued in an Employment Tribunal because the Directive is directly effective and, otherwise, there would be no effective remedy for a breach by a UK-based employer. In the appeal, Lord Justice Mummery notes that Bleuse is not necessary for the wrongful dismissal claim. The contract was agreed to be subject to the jurisdiction of the English courts and, although the conversion of a contract from a fixed-term one to an permanent one depends on the operation of European law, it operates upon the contract itself and so no jurisdictional issue will arise.
However, the unfair dismissal claim is a different matter. Jurisdiction is governed by the case of Lawson v Serco which depends, subject to certain very limited exceptions, on the employment being based in the UK. None of the exceptions apply to this particular case. While the Fixed-Term Workers Directive is found by the Court of Appeal to be directly effective, there is not a legally-binding right in European law to be protected against unfair dismissal itself. Nevertheless, Lord Justice Mummery concludes that it is necessary to extend Lawson v Serco so that there is an effective remedy for a breach of the Directive.
It is difficult to argue with this result on the facts but the decision can hardly be said to clarify the law. The problem is that, in Bleuse, it is far from clear that the case could not have been brought in Austria and so there is no obvious reason why an English tribunal had to accept jurisdiction in order to provide an effective remedy. The argument that this is the case in Duncombe is much more compelling but this has the result that the correctness of the wider ratio in Bleuse is not considered. Perhaps the strongest conclusion to be drawn from it all is that there is a difficulty with Lawson v Serco, which really ought to give jurisdiction in a case of unfair dismissal where the UK government is the employer and can rely upon state immunity. Doubtless the Department will appeal and this will allow the point to be explored.
JFS
The judgment of the Supreme Court in this case has been all over the newspapers. I went to see it being handed down yesterday and I was pleased both that the carpet looks much better in real life than in photographs and with the decision itself, in which thirty years of direct discrimination law narrowly avoided being overturned, by a wafer-thin majority of 5 to 4. As noted in this post, it was the authority of James v Eastleigh Borough Council that was at stake and, although at least one of them purported to follow it, the Justices in the minority effectively suggested that the principle had been watered down by Nagarajan. The position of the majority is the orthodox one (in a non-religious sense) and is supported by recent decisions of the Employment Appeal Tribunal, including this one. None of them were actually cited in the speeches, which is surprising because I cannot believe they were not cited in submissions.
A less settled area of law, which gave rise to some ingenious arguments by Lord Pannick, on behalf of the school, concerns the case of Mandla v Lee, which provides the legal definition of an ethnic group. The Court of Appeal had suggested that an ethnic group had to be defined on biological grounds alone and, therefore, a convert to Sikhism (or Judaism) could not claim race discrimination. The House of Lords overturned this decision, stating that there can be a cultural element to an ethnic group. The test is uncontroversially an objective one and, as Lord Pannick pointed out, the effect is that M, the boy in the case, is Jewish like his comparator, who would have been given a place. As Orthodox Jews were not found to constitute a separate ethnic group, it was suggested that there was no race discrimination.
This approach initially appears to be compelling and is not an easy one to rebut but the Justices found a number of problems with it. The first issue is identified by Lord Kerr and Baroness Hale and concerns the fact that, although M and his mother are both Jewish, according to the Mandla test, they are not exclusively Jewish and are also part Italian. The reason for the less favourable treatment was the part that is not Jewish. This is persuasive because, otherwise, people of mixed race would not be protected.
However, it is Lord Mance, in the most detailed judgment, who really gets to grips with the issue. He points out that the intention of Mandla was to widen the definition of an ethnic group, rather than to narrow it, which means that biology is still part of the test, as well as culture. Although the boy and his comparator are members of the same ethnic group culturally, they are members of different groups defined in biological terms. Furthermore, following the case of English v Thomas Sanderson, people can be discriminated against on the grounds of their perceived membership of an ethnic group, even if the perception is objectively incorrect. The school cannot rely on Mandla to say that M is Jewish so there is no discrimination if the reason for treating him less favourably is that they do not accept him as Jewish.
Compromise agreements
An employment tribunal does not have the jurisdiction to hear a claim if it has been subject to an agreement which complies with section 203 of the Employment Rights Act, or with a similar provision in another statute. It does have the power to determine whether an agreement properly complies with the terms of the section but it had not been clear if it could rule on the question of whether an agreement is void for some other reason, such as misrepresentation, or whether this would have to be decided by a court. In Industrious v Vincent, the Employment Appeal Tribunal conducted a comprehensive review of the case law and determined that it could, disapproving several of its own previous decisions, including Byrnell v British Telecommunications. Justice Silber notes that the judgment in Byrnell does not refer to the two most relevant authorities, one of which had been expressly approved by the Court of Appeal.
This result could have much wider significance because Byrnell had also been the only authority for the proposition that a tribunal cannot reject an agreement where there has been a repudiatory breach of contract, such as the fact that a settlement has not been paid. Indeed, it is difficult to see a distinction between a rescission of a contract because of misrepresentation and one resulting from a repudiation. It would therefore seem to follow that precisely such an argument would now be expected to succeed.
In Byrnell, Judge Ansell makes a brief reference to authorities, apparently relied upon by the tribunal, which state that a compromise agreement must be enforced by a court unless it was agreed before the termination of employment, because otherwise it would not fall within the scope of the Extension of Jurisdiction Order. This is correct but, in the above situation, the claimant is not seeking to enforce the agreement in order to obtain damages for breach of contract. She is seeking to set it aside so that she can bring a straightforward tribunal claim for, say, unfair dismissal. These cases are simply irrelevant.
The consequence of all this is that employers should now be particularly wary of failing to comply with the terms of compromise agreements as they may find themselves in the tribunal rather than merely facing enforcement proceedings. On the other hand, in contrast to settlements where a claim is stayed on agreed terms, a new claim must be issued and normal time limits will apply. Therefore, employees will need to keep an eye on the deadline if they want to retain the option to elect for the tribunal route.
Dark Law - The Reason Why Part 1
The single most common mistake made by inexperienced advocates and litigants in person in the Employment Tribunal is to assume that it is easy to demonstrate that an negative act by an employer was done on discriminatory grounds. For example, many think that evidence of having been bullied is sufficient even where there is no basis for suggesting that the bullying had anything to do with being a member of one of the protected groups. There is a similar problem in constructive dismissal cases where it is sometimes believed that a resignation as a result of stress is enough and that it does not matter which act of the employer, if any, actually caused the stress. However, (most) tribunals are very strict about not exceeding their jurisdiction and they will not allow what really amount to personal injury cases to succeed merely because they disapprove of a respondent or feel sorry for a claimant.
When, as often occurs, there is a discrimination claim concerning numerous incidents, the tribunal will want to isolate those for which there is a discriminatory motive from those for which there is not. This can sometimes be fatal to the case. For example, to make out harassment, an employee is required to show either a violation of his dignity or the creation of an adverse environment, and one or two minor incidents may well not have this effect. Even where such an environment is created, if it is largely the result of events for which there is no jurisdiction, it will not assist if off-colour comments contributed to it if they would be insufficient on their own. Similarly, tribunals will rarely find constructive dismissal in cases of overwork and a claim of this nature will not be strengthened by a few mildly aggressive acts by an employer. Regrettably, although this reasoning is entirely justified, tribunals are reluctant to spell it out explicitly for fear of an appeal. Instead, they have a tendency to make adverse findings of fact which can be distressing for claimants and means that they often fail to understand why they have lost.
There are some more experienced representatives who understand the above problems and realise that it is necessary to selectively plead those points that will most assist the case. This is very sensible but it will not prevent tribunals from considering whether there are some unpleaded issues which may have actually been the cause of the stress felt by the claimant. It is even possible that tribunals have become more sceptical to counter the development of more sophisticated litigation tactics and that this could be as detrimental to strong claims as to weak ones. Therefore, it is important to be able to lead evidence to show which particular acts were the most upsetting for the claimant. It goes without saying that it will help a great deal if there are documents to prove they were complained about at the time.
Stereotypes
Consider the followings two scenarios: a black person claims race discrimination on the grounds that she has wrongly been assumed to be mentally ill; and a white person claims race discrimination on the grounds that she has wrongly been assumed to be mentally ill. Even without knowing any of the facts, the first case seems immediately more plausible than the second and the reason for this is that there is a well-known and widespread tendency to overrefer and overdiagnose black people with mental illness.
The next question is whether this stereotype is a sufficent to found a tribunal claim. In the case of Johnson v Coopers Lane Primary School, the Employment Appeal Tribunal concludes that it is not, for the persuasive reason that it is unjust to make a finding of discrimination against an employer without some evidence relating specifically to the behaviour of that particular employer, rather than just people in general. This echoes some very similar reasoning by Justice Underhill in the decision of B and C v A.
However, Judge Ansell appears to go further than this. He agrees, in paragraph 40, with a submission of the respondent that tribunals should not take judicial notice of the existence of stereotypes, even in cases where (unlike this one) there is statistical evidence to support them. It is true that such evidence is never determinative on its own but surely it must be right that it can be used to bolster a case where other reasons to suspect discrimination exist. A fundamental rule of evidence is that the more unlikely an event, the stronger evidence is required to show that it took place. A corollary of this is that events which can be shown to be more likely than others will require less compelling evidence in their support.
I am not even certain that statistical evidence would be strictly necessary in a case like this. There is a convention that a tribunal panel hearing a race discrimination case should include at least one member with special experience of race relations. Such a person would undoubtedly be aware of the stereotype explored here, and also numerous others, and would therefore be in a position to be alive to their use.