Business Legal News from Blackadders Solicitors

The employment tribunal system is currently free to those who use it at a cost to the taxpayer of approximately £84m per annum.  Following the conclusion of a Government consultation proposing the introduction of a fee structure to employment tribunals, draft regulations were placed before Parliament on 25 April 2013.

The Employment Tribunals and Employment Appeal Tribunal Fees Order 2013 is set for implementation in July 2013.  From July this year, financial responsibility for tribunal claims will be placed on claimants.  Under the fee structure, prospective claimants will have to pay an issue fee of £250 and a hearing fee of £950 for “type A” claims (most claims including unfair dismissal and discrimination).  There are lower fees for “type B” claims (simpler claims such as notice pay, redundancy pay and unlawful deductions from wages) where the issue fee is £160 and the hearing fee is £230.  The issue fee will be payable when the claim is lodged and the hearing fee payable at a time specified by the tribunal when they issue the notice of hearing date.

If the fee levels are not paid the claim will not be allowed to commence or continue at the tribunal.  The Order makes mention of strike out in relation to multiple claims which is an indication that strike out will be the penalty for non-payment.  This is to be confirmed.

The fees are not insignificant, particularly for an individual who has just become unemployed.  Are they expected to pay the full amount?  Well, the Government is currently consulting on a proposed remission system.  This consultation will end on 16 May 2013.

At Schedule 3 of the Order, the proposed remission system is detailed (this is presumably subject to amendment following the consultation).  Employees who are in receipt of “qualifying benefits” will receive full remission.  The “qualifying benefits” are: Income-related Employment and Support Allowance; Income Support; Income-based Jobseekers’ Allowance; Working tax credit (so long as no child tax credit is being received by the claimant); and Guarantee Credit.  If a claimant is not in receipt of any of these benefits, remission will be dependent on their gross annual income or monthly disposable income (linked to the number of children they have).  Income of a spouse/partner will be included within the calculation although a spouse in receipt of a qualifying benefit will not be sufficient to allow the claimant automatic remission.  An application must be made for remission before the applicable fee is payable (supporting documentation will be required, similar to the current requirements for a Legal Aid application).

It remains to be seen how the new system will work in practice but one can speculate that it will reduce the number of claims entering the tribunal system.

Earlier this year, the European Court of Human Rights (ECHR) ruled on various cases relating to the ability of employees to express their religious beliefs within the workplace.  In Eweida and others v UK, the ECHR held that Ms  Eweida had been discriminated against on grounds of religion and belief because her employer had asked her to remove a small cross which she wore.  Article 9 of the European Convention on Human Rights confers a right to freedom of thought, conscience and religion.  The ECHR found that the UK courts (who had previously rejected Ms Eweida’s claims) had placed too much emphasis on her employer’s desire to project a certain corporate image and had not correctly balanced this against Ms Eweida’s right to manifest her religious beliefs.

The three other cases which were heard along with Ms Eweida’s claim were rejected.  For example, in the case of Ms Chaplin, a nurse who had been asked to remove a cross necklace, the ECHR held that the employer had not been guilty of unlawful discrimination because their decision was necessary to protect the health and safety of other nurses and patients.

Given the uncertainty that these decisions has created for employers, the Equality and Human Rights Commission rather helpfully produced some guidance on managing religion and belief in the workplace.  The guidance is available at:  http://www.equalityhumanrights.com/advice-and-guidance/guidance-for-employers/religion-or-belief-new-guidance-february-2013/

In addition to including an explanation of the Eweida judgment, the guidance also offers suggestions as to how employers might handle relevant requests.  Employers should take all requests seriously.  Requests might include employees seeking time off on religious grounds or for variations to uniform policies to allow religious dress/jewellery to be worn.  Employers must consider various factors in deciding whether or not allow a request.  These include: the cost and possible disruption to the business; the health and safety implications; the disadvantage to the employee if the request is refused; the impact of any change on customers; and whether workplace policies to ensure uniformity are justifiable.

Employers must be cautious and deal with all requests in relation to religious beliefs consistently.  If an employer prevents an employee from manifesting their religious belief, they must have objective justification for doing so (going beyond a mere protection of their corporate image).

The Employment Appeal Tribunal (EAT) recently gave some further guidance as to how obesity should be treated for the purposes of disability discrimination.  In Walker v Sita Information Networking Computing Limited, the EAT held that an employment tribunal had erred in finding that a 21-stone employee was not disabled for the purposes of discrimination legislation.

What guidance was given by the EAT?

When considering the issue of whether obesity can amount to a qualifying disability, the first question which should be asked is whether or not the individual has an impairment.  The second question which should be asked is whether or not the condition is a physical or mental impairment.  The EAT stated that the question of “cause” of the disability should only be relevant when a tribunal considers that a disability has no “recognised cause”.  Importantly, despite finding that this employee suffered from a qualifying disability, the EAT refused to find that obesity is a qualifying disability in its own right.

What does this mean for employees?

If, as an employee, your ability to carry out your duties and responsibilities is affected as a result of your weight, then your employer may be required to make reasonable adjustments to your job or work place to accommodate your condition.  Such adjustments could include providing you with an auxiliary aid.

Additionally, if your condition is so serious that it amounts to a disability, you will also be protected from being subject to any unwanted conduct related to your weight which has the purpose or effect of violating your dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for you.

What does this mean for employers?

If an employee’s weight is so significant that it has an effect on that employee’s ability to do their job, you should consider whether it is possible to make reasonable adjustments to that role.  Employers should remember that it is lawful for them to refuse to make such adjustments and an employer is entitled to take into account such factors as the practicability of the step, the extent of the employer’s financial or other resources and the extent of any disruption caused when reaching this decision to refuse to make adjustments.

An employer should also ensure that, if it becomes aware of any unwanted conduct which is related to an employee’s weight, such conduct is dealt with by way of the disciplinary procedures and any employees who are involved in such behaviour should be dealt with accordingly on the grounds of misconduct.

In a decision that has come as a relief to charities, the Supreme Court upheld the decision of the Court of Appeal that an unpaid volunteer was not covered by UK or EU discrimination law.

The volunteer had a written volunteer’s agreement with Mid-Sussex Citizens Advice Bureau but was asked to stop volunteering after continuously not turning up.  The volunteer alleged however that she had been asked to stop as a result of a disability (she was HIV positive) and brought a discrimination claim.

The Supreme Court agreed with the Court of Appeal and Tribunal decisions that the volunteer was not an employee and the legislation did not apply.  The Supreme Court held that the legislation could not be read to cover volunteers and nothing in the process leading up to its adoption suggested it had been intended to cover unpaid workers.

It is good news for charities who can now be certain that volunteers are excluded from discrimination protection (which would cover on the grounds of sex, race, age, sexual orientation and religion as well as disability which featured in the Mid-Sussex case).

However, whilst the exclusion of volunteers from discrimination protection is now clear, the question of whether an individual is a volunteer without worker or employment status is often not a matter of clarity, as it is determined not by a person’s job title but by the facts of each case.

Employment law recognises three types of status dependent on the nature of the relationship between the ‘master’ and the ‘servant’.  Those are: employee, worker and self-employed contractor.  The law provides for varying rights applicable to each category of individual.  Suffice to say that employees have the widest spectrum of rights (including the ability to claim for unfair dismissal which is not available to workers or self-employed persons).

An employee is defined under the Employment Rights Act 1996 as “an individual who has entered into or works under… a contract of employment”.  A contract of employment is defined as a “contract of service or apprenticeship”.  The main legal tests can be summarised as follows: (1) the employee agrees, in consideration of a wage or other remuneration, to provide his or her own work and skill in the performance of some service for the employer (known as mutuality of obligation); (2) the employee agrees, expressly or impliedly, that he or she will be subject to the employer’s control in the performance of that service (the control test); and (3) that the other provisions of the contract are consistent with a contract of service.  There are other aspects to these legal tests.  HMRC provides a useful checklist which can be used as guidance on the issue of employment status.  For details see:

http://www.hmrc.gov.uk/calcs/esi.htm

The Court of Appeal was recently faced with a case (Stringfellow Restaurants Ltd v Quashie) concerning the employment status of a lap dancer who was paid by customers in vouchers which were exchanged for cash at the end of the night (less certain deductions made by the club).  She negotiated her own fees with clients and ultimately carried the financial risk in that she could be out of pocket on any given night.  The dancer was required to attend weekly meetings at which rotas would be set and she was required to work on certain nights of the week.

The Employment Appeal Tribunal decided that Ms Quashie was an employee and that there was a contract of employment in place because she was required to perform the work personally and the club was obliged to provide her with work.  It was also noted that she was subject to a system of fines for disciplinary matters.  Stringfellow had maintained all along that she was self-employed.  The Court of Appeal agreed and overturned the EAT decision finding that she was not an employee.  The Court of Appeal held that although there was a contract, it was not a contract of employment because the way in which Ms Quashie was paid made it clear that Stringellow were not obliged to pay her at all.

In a similar vein, the Court of Session recently ruled on the ability of a golf caddie to claim for Jobseekers’ Allowance (Saunderson v The Secretary of State for Work and Pensions).  The caddie worked during the spring and summer months but was not engaged from October onwards.  His application for Jobseekers’ Allowance was refused because it was argued that he failed the test of not being in remunerative work.  A tribunal held that he was not entitled to the benefit because he was a self-employed seasonal worker who had a “recognisable cycle of work” and “was in remunerative employment”.

The Secretary of State suggested that being without any other employment during the winter months was a normal feature of self-employment as a golf caddie.  The Court of Session recognised that some activities of self-employment can be described as continuous despite periods of idleness.  However, it held that categorising the seasonal work as self-employment was not sufficient to get away from the proper question: when the seasonal activity came to an end, can the caddie be said to be ‘in work’.  The case was remitted to tribunal to address that question.

You may recall the landmark decision in Seldon v Clarkson Wright and Jakes issued by the Supreme Court last year where it was decided that a law firm which required one of its partners to retire at age 65 had not acted unlawfully.  For a summary of the decision see my colleague Sarah Winter’s report:

http://blackaddersbusinesslegalnews.com/2012/04/26/employment-compulsory-retirement-at-65-and-other-landmark-ruling/

Following the abolition of the default retirement age in April 2011, it remains possible for employers to insist on a fixed retirement age.  However, to avoid age discrimination claims, employers would need to demonstrate that imposing a mandatory retirement age (which is form of direct age discrimination) is a “proportionate means of achieving a legitimate aim”.  Importantly, in the landmark case reported above, the Supreme Court decided that the law firm’s objective of allowing promotion opportunities for younger solicitors by succession planning was legitimate.  That case was remitted to an employment tribunal to determine whether insisting upon retirement at the age of 65 (as opposed to a different age) was a proportionate means of achieving the legitimate aim of succession planning within the workforce.

This area of law looks set to be further tested by employment tribunals south of the border.  Five police forces have been served with employment tribunal claims from over 250 former officers who were forced to retire under “Regulation A19”.   Regulation A19 is no longer relied upon by police forces but previously it allowed officers who had served more than 30 years to be compulsorily retired.  Police forces used Regulation A19 as a means of removing officers due to funding cuts (crown servants such as police officers cannot be made redundant).

As these cases progress it will be interesting to see what unfolds.  It is not clear at this stage what the claims relate to.  However, it is likely that the claims will involve some form of age discrimination angle (either direct or indirect age discrimination).  It is also likely that further legal arguments will be heard on the employers’ justification defence.  The forces in question are set to oppose the claims vigorously.

In the earlier Supreme Court case it was decided that the justification defence is different depending on whether the allegation relates to direct discrimination or indirect discrimination.  In direct discrimination cases, justification must relate to employment policy and labour market whereas matters particular to an employer’s own situation (such as funding cuts) are generally not legitimate.  Justification in indirect discrimination claims focuses more on whether the employer can justify their own practices which means that funding cuts may be more relevant than in direct discrimination claims.

Watch this space for further developments with these topical cases.