Employment Law Briefing April 2019

ICTS (UK) Limited -v – Visram: Employee entitled to benefits until the employee could return to the same job with the employer based on the interpretation and proper construction of the employee’s employment contract.

Mr Visram worked for ICTS (UK) Limited and, under his terms of employment, was entitled to long-term disability benefits (LTDB) under a disability plan. The policy provided that an employee would continue to receive benefits until the earlier of an employee’s return to work, death or retirement. Mr Visram received benefits for one year. After a lengthy absence from work work-related stress and depression, he was dismissed, and he claimed disability discrimination and unfair dismissal. ET upheld his claim and concluded that his compensation for loss based on the LTDB to which he was entitled should continue until death or retirement as the other terminating provision return to work meant return to the job he was performing when he went sick and the evidence was that he would never again be able to perform those duties. As there was no prospect of him ever being able to do that, the ET concluded that he was entitled to be compensated for loss of benefits until death or retirement.

ICTS (UK) Limited appealed. The EAT had to consider his entitlement to long term disability benefit under the disability policy scheme. The EAT held that the Tribunal had not erred. EAT held found on a proper construction of the provisions that he was contractually entitled to benefits under the scheme until he could return to the role he carried out prior going on sick leave had he not been dismissed as opposed to when he was able to carry out any role. As he could not return to the same work he had been doing when he went on sick leave he was entitled to benefits until death or retirement.

Radia – v – Jefferies International Limited: Manager dismissed without holding an investigation meeting as he had been found not to be a credible witness in an Employment Tribunal matter. Was this fair?

Mr Radia was the MD of Jefferies International an FCA regulated financial services company. He had brought tribunal claims against the company. The Tribunal had found, his evidence not to be credible in several areas and to be evasive. When judgment was received, his employer suspended him pending a disciplinary, without holding an investigation meeting. Relying on the ET Judgment on his credibility, he was dismissed after a disciplinary. At the disciplinary he had disputed the ET’s findings rather than the allegations against him. Mr Radia issued a further claim for automatic unfair dismissal, victimisation, detriments arising from a protected disclosure and unfair dismissal. The ET dismissed his claim. The ET found: (1) it was reasonable for the employer to rely on the findings of the ET on his credibility and there was no need to carry out an investigation and, (2) he failure to hold an appeal did not make the dismissal unfair.

He appealed to the EAT. The EAT held that it was open to the ET to find that there was no need for a further investigation to be conducted; the question was whether the decision was within the range of reasonable responses. It noted that the two stages of investigation and meeting were not required by statute or the ACAS code and so the first ground of appeal was dismissed; however, it held that the ET had erred in law in holding that the failure by the employer to hold an internal appeal did not make the dismissal unfair and had not made sufficient findings to justify the decision that having no appeal would have made no difference. Therefore, Mr Radia’s appeal on this ground succeeded.

Graysons Restaurant Limited -v – Jones & Ors: Arrears of Pay not quantified when employer becomes insolvent is still payable.

The question raised in this appeal is whether a claim for equal pay which has not been determined when the employer becomes insolvent can constitute “arrears of pay” payable by the Secretary of State. The Court of Appeal has held that even though arrears of pay had not been quantified when the employer becomes insolvent, they can constitute “arrears of pay” payable by the Secretary of State. Where an employer becomes insolvent, employees are able to recover certain outstanding payments from the Secretary of State by making an application to the Insolvency Service. These payments include the following:

  1. Any arrears of pay of up to 8 weeks (currently capped at £525 per week);
  2. Statutory notice pay (currently capped at £525 per week);
  3. Holiday pay of up to 6 weeks (currently capped at £525 per week); and
  4. Basic award for unfair

Ms Jones was one of 86 catering assistants who in 2007 brought equal pay claims against their employer at the time, Liverpool City Council. Their employment transferred twice, the second employer becoming insolvent before being bought by Graysons Restaurants in these proceedings. 

Under The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), although liability for unpaid sums owed to employees would usually be passed to the transferee, this would not be the case where the transferor was insolvent and the sums owed could be recovered from the Secretary of State.

Mr V Mbuisa – v – Cygnet Healthcare Limited: was it appropriate to strike out a claim for constructive unfair dismissal for health and safety reasons where the Claimant had not pleaded the reasons for the alleged breaches of contract?

Mr Mbuisa had brought complaints of breach of contract, unauthorised deductions from wages and for holiday pay, of detriment and constructive unfair dismissal on the ground of public interest disclosures, and of constructive unfair dismissal for health and safety reasons. The Claimant was acting in person. He had not asserted the reasons for the breaches of contract. The ET concluded that the constructive unfair dismissal claim had no reasonable prospect of success and would be struck out. Mr Mbuisa appealed.

The EAT allowed the appeal. The EAT noted that they appreciated the difficulties faced by Tribunals in dealing with individuals acting without legal representation but went on to say that striking out a claim was a draconian step that should only be taken in exceptional cases and that it was wrong to make an order where there is a dispute on the facts to be determined at trial. In this particular case, Mr Mbuisa was a litigant in person and particular caution was needed. The proper course would have been to ensure it was properly pleaded. If it still had little prospect of success the ET would then need to consider whether to make a deposit order.

Frudd and another– v – Partington Group: Does being “on-call” constitute working hours?

Mr and Mrs Frudd were husband and wife. They were employed as a warden/receptionist team at a caravan site owned and run by the Partington Group. They worked shifts and were required to be "on call" after their shifts (which finished about 4.30pm and 8.00pm) until 8am the following morning, two or three days a week. The on-call periods were effectively divided into three – evening, night and early morning – and different arrangements applied in the closed season. They sought a finding that whilst on-call they were working and so entitled to be paid the National Minimum Wage (“NMW”).

The ET found that from the end of their shift up to 10.00pm they were working because they would show prospective customers the site and welcomed late arrivals and were entitled to the NMW for that period. However, they were not expected to carry out work after 10.00pm and therefore were not working unless called out. They were therefore not entitled to pay for this period.

Govdata Limited -v- Denton: will the late provision of written Statement of Terms before the claim was issued lead to an increased award?

Mr Denton was employed by Govdata and was not given written statement of terms until 6 months after his employment commenced. A written Statement of Terms should be provided within two months of employment starting. If an employer fails to provide terms, then the employee can bring a claim under Section 38 Employment Act 2002. This claim will only succeed if the employee is successful in another claim, such as unfair dismissal, and, the contract had not been issued before the claim was commenced.

He was dismissed for gross misconduct. He successfully claimed arrears of pay, holiday pay and other payments and succeeded in his application to the ET to increase the award for failing to provide written Statement of Terms within two months. The ET granted two weeks’ pay (£938.00) under Section 38 Employment Act 2002.

Govdata appealed against the increased award on the grounds that the Et had erred as it had complied with its duty and provided the written terms before the proceedings had commenced. The EAT concluded that Govdata had met the requirement albeit late and therefore Mr Denton’s award could not be increased.

Ravisy -v – Simmons & Simmons: Can an individual living and working in another member state be sued in the ET in UK?

Ms Ravisy was a French qualified, French domiciled lawyer working in the Simmons & Simmons Paris office as head of private equity. She brought claims of equal ay and discrimination against the firm and for the same discrimination against a partner. Both sets of facts alleged the acts amounting to discrimination took place in France.

The hearings to date have dealt solely with the jurisdiction issue but both Simmons & Simmons and Mr Taylor dispute the claims.

The EAT held that Ms Ravisy did not have a strong enough connection with the UK for it to have jurisdiction. Her role was almost entirely based in France. Her visits to London were “ad hoc, brief and intermittent.” It was also accepted that she would have an effective remedy available to her in France. The Brussels Recast Regulations required the individual partner to be sued in France. The claims were therefore dismissed.

Bluestones Medical Recruitment Limited – v- Swinnerton: can payment of a discretionary bonus become contractual?

Mr Swinnerton’s contract of employment provided for payment of a non-contractual discretionary bonus. He was promoted to General Manager position. It was intended he be paid a monthly bonus, based on the company's profits and that he would become a shareholder. The bonus payments were made as loans, which he would later repay from his dividends.

He was initially suspended and subsequently summarily dismissed by for gross misconduct before becoming a shareholder. During his suspension his employer stopped paying him his bonuses. He brought a claim for unfair dismissal and for payment of unpaid bonuses. The ET rejected his complaint of unfair dismissal but upheld his unauthorised deductions claim on the basis that the non-payment of bonuses was an unlawful deduction of wages.

Bluestones appealed on the basis that the decision was perverse and that any bonus to which the Claimant might be entitled was discretionary and non-contractual. The EAT found the tribunal had not engaged with a range of issues to make relevant findings of fact: in particular had not adequately identified the legal mechanism through which the contract was changed or what the new contract required. In the absence of this, the decision on the unauthorised deductions claim could not stand.

Antuzis -v – D J Houghton: can directors of a limited company be personally liable for its breaches of an employment contract?

The Claimants (nationals of Lithuania) were employed by Houghton in an exploitative manner, commonly working extremely long hours and being paid less than the statutory minimum and often not paid sums due recorded as being due to them on their payslips which in any event had been calculated on a fictional basis. Unlawful deductions were also made, and payments withheld for overtime and holidays.

As a general principle, a director will not be personally liable for inducing a breach of contract by their company if they act bona fide within the scope of their authority. If, however, the breach of contract has a statutory element, that may suggest a failure on the part of the director to comply with their duties to the company, potentially making them liable to a third party (here their employees) for inducing the breach of contract. The issue was whether Houghton’s sole shareholder and director, and the company secretary, could be personally liable for inducing the company to breach the claimants’ employment contracts.

The High Court held they could. The court concluded that the director and company secretary were not acting bona fides vis-à-vis the company because they did not honestly believe that they were paying the minimum wage, overtime and holiday pay nor that they were entitled to withhold payments. They were therefore personally liable for the breaches of contract that they had induced.

Uwalaka – v – Southern Health Foundation NHS Trust: was the employees ’s protected disclosure and race discrimination play a part in his lengthy suspension?

Mr Uwalaka worked for Southern Health as an agency worker provided and employed by NHS Professionals Limited. At the time he made a protected disclosure to the Care quality Commission, he was suspended following an allegation of misconduct and was placed in a state of limbo as NHS Professionals limited failed to carry out any proper investigation. The investigation into his suspension had still not been completed some 3 years later (when the matter came to the EAT) and he claimed he was unable to work for anyone else without disclosing his suspension and was unable to work for Southern Health due to the suspension. Mr Uwalaka contended that he had been subject to detriments arising from his having made a protected disclosure and/or discriminated against on grounds of race. The ET dismissed his claims but were highly critical of NHS Professionals and Southern Health and said his treatment was “appalling.” The EAT upheld the ET’s finding that the actions taken were for other reasons and not because of the making of the protected disclosure. They suggested to Mr Uwalaka to disclose the circumstances and EAT judgment to any prospective employer.

Shelbourne – v – Cancer Research UK: Employer not vicariously liable for injury at Christmas party.

Ms Shelbourne brought a claim against her employer Cancer Research after she sustained an injury to her back at a work Christmas party. A fellow partygoer (Mr Beilik a visiting scientist) had attempted to lift her on the dance floor who dropped her when he lost his balance.

She lost her case in the county Court and appealed to the High Court. When considering the appeal, the Judge considered a number of factors which included: attendance at the party was not compulsory; Mr Beilik’s presence at the party had nothing to do with the work he undertook for Cancer Research; he had lifted three other women prior to lifting Ms Shelbourne; there had been no previous incidents of inappropriate behaviour caused or contributed to by alcohol.

The courts concluded that Cancer Research had undertaken sufficient preparations and risk assessments and there was insufficient connection between the incident and the nature of Mr Beilik’s work.

Atholl House Productions Limited – v – HMRC IR35 – No employment relationship

The First Tier Tribunal (FTT) found that there no employment relationship existed between a presenter providing services to the BBC through a personal service company. The HMRC sought £81000 in PAYE and £43000 in NICs from Kaye Adams. HMRC alleged that even though she was engaged through her personal service company, Atholl House Productions Limited, her role meant that she should have been taxed as a member of the Corporation’s staff. Applying previous caselaw on the status of a worker, the tribunal identified the actual legal obligations of both the BBC and the service company and considering all relevant evidence. It noted how she had not been entitled to any “holiday or sick pay, maternity leave or a pension entitlement.” The BBC had no first call on the presenter's time or extensive control over her other engagements, despite these being contractual terms, as the parties were unaware of them. Similarly, the express right of substitution was impractical and so was discounted. As a result, it concluded that each of the one-year contracts which Ms Adams had signed was, therefore, “contract for services and not an employment contract.”

A v X: When deciding to make a Restricted Reporting Order (RRO) on a sexual misconduct case, a Tribunal can take into account the need to protect the alleged perpetrator.

The EAT has given useful guidance on relevant factors to be taken into account when considering the making of an RRO and deciding whether it’s necessary in the interests of justice. A Tribunal must consider not only the effect on the administration of justice but also the need to protect rights under Article 8 of the European Convention on Human Rights (the right to respect for private and family life) including honour and reputation and Article 10 (freedom of expression). The accused’s protection may this be relevant. A Tribunal should ignore the social status or public profile of the accused.



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