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Morrison v ODS Business Services Ltd and others
Employment – Employee – Controlling shareholder of company – Company’s majority shareholder having contract of employment with company – Company becoming insolvent – Administrator effecting sale of company to first respondent – Shareholder presenting various financial claims arising from sale of company – Employment tribunal holding that shareholder not an employee of company – Whether tribunal erring – Employment Rights Act 1996, ss 166, 167, 182, 230 – Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794.
The appeal would be dismissed.
In the instant case, the tribunal had properly applied the relevant law in determining the issue of whether the claimant had been an employee of the second respondent. It had made findings of primary fact which had been properly open to it on the evidence, and those findings had been capable of supporting the conclusions which it had reached.
Transport & General Workers Union v Safeway Stores Ltd
Employment tribunal – Procedure – Pleading – Application for permission to amend – Claim for breach of statutory consultation obligations not included in original claim form – Primary time limits expiring prior to lodging of amended pleading – Exercise of discretion – Whether permission to amend should be granted.
The appeal would be allowed.
It was settled law that an employment tribunal had a discretion to allow an amendment which introduced a new claim out of time.
The chairman had erred in law. The reasoning in the judgment was deficient. Specifically, there was no review of all the circumstances including the relative balance of justice. It was likely that the chairman had thought the only issue to be decided was whether the claim for breach of the statutory consultation obligations was more than a ‘re-labelling’ of a claim based on facts already pleaded.
Using the power conferred by s 35(1)(a) of the Employment Tribunals Act 1996 the appeal tribunal would substitute its own decision and allow the proposed amendment. Although the claim for breach of the statutory consultation obligations was unquestionably a new claim, it was very closely related to the claim originally pleaded. Both claims depended centrally on the allegation of defective consultation and all, or almost all, the facts which would be material to the new claim would already have been in play in the old.
Cocking v Sandhurst (Stationers) Ltd  ICR 650, British Newspaper Printing Corporation (North) Ltd v Kelly  IRLR 223, Selkent Bus Co Ltd v Moore  IRLR 661 and Harvey v Port of London (Tilbury) Ltd  IRLR 693 considered.
Onwuka v Spherion Technology (UK) Ltd and others
Employment – Transfer of trade, business or undertaking – Continuity – Employee employed by first respondent – First respondent transferring part of business to third respondent – Employee subsequently presenting claim before employment tribunal – Tribunal dismissing employee’s claim that his employment transferred to third respondent – Whether tribunal erring – Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794.
The appeal tribunal ruled:
In the instant case, it appeared that the tribunal had dismissed the relevant claim on the basis that an employee who would otherwise have been treated as belonging to the assigned undertaking could, nevertheless, be treated as not having been so assigned only because, for some particular reason, there had been no actual work for him at the moment of transfer. Moreover, the tribunal had indicated that the views of the transferor and transferee as to whether the employee should be transferred were relevant. In those circumstances, it was arguable that the tribunal had erred in its approach to the question of whether the employee had been transferred to the third respondent pursuant to the regulations. Accordingly, there was an issue that required consideration at a full hearing.
Millam v Print Factory (London) 1991 Ltd
Employment – Continuity – Transfer of trade, business or undertaking – Transfer of shares in one company to another – Employee dismissed – Whether employment transferred to company to which shares transferred – Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794.
The legal structure was important but it could not be conclusive in deciding the issue of whether, within that legal structure, control of the business had been transferred as a matter of fact.
The appeal tribunal had misdirected itself. An issue of piercing the corporate veil only arose when it was established that activity x was carried on by company A, but for policy reasons it was sought to show that in reality the activity was the responsibility of the owner of company A, company B. In the instant case, the tribunal did not find that the activity was being carried on by FP, and then pierced the veil to attribute that activity as a matter of law to M. What it found was that, as a matter of fact, the activity was being carried on by M, not by FP. That concentration on the issue of corporate structure led the appeal tribunal not to give proper weight and respect to the findings of the tribunal. Furthermore, although the appeal tribunal was correct to say that a subsidiary’s lack of independence did not demonstrate that the holding company owned the business, that observation did not give weight to the fact that the tribunal found that the arrangements in the instant case were not typical, to the extent that the business was that of M.
The findings of the tribunal that there was a TUPE transfer of FP to M would be restored.
Brookes v Borough Care Services  IRLR 636 applied.
Wain and others v Guernsey Ship Management Ltd
Employment – Continuity – Transfer of trade, business or undertaking – Employment tribunal finding employees not forming part of an identifiable economic entity – Whether tribunal in error – Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794.
The appeal would be dismissed.
Although, on the one hand, the claimants could be said to belong to a group which could be identified because all members had short term contracts and fulfilled a specific role in WGL’s business, on the other hand they all did different work, on different vessels. Neither factor was conclusive and the tribunal was entitled to hold that, taking both factors into account, the group was not an economic entity.
Cheesman v R Brewer Contracts Ltd  IRLR 144 applied.
Decision of the Employment Appeal Tribunal  All ER (D) 58 (Feb) affirmed.
R (on the application of the Equal Opportunities Commission) v Secretary of State for Trade and Industry
Employment – Discrimination – Discrimination against a woman – Pregnancy – Exclusions of claims arising during periods of maternity leave – Harassment – Definition of harassment – Whether Community law properly transposed – Sex Discrimination Act 1975, ss 3A, 4A(1)(a), 6A(1), 6A(4), 6A(7) – Parliament and Council Directive (EEC) 76/2007, arts 1.2.2, 1.8(e)(2).
Section 4A of the Sex Discrimination Act 1975, so far as material, provides: ‘(1) For the purposes of this Act, a person subjects a woman to harassment if (a) on the ground of her sex, he engages in unwanted conduct that has the unwanted effect … ‘
Section 6A of the Act, so far as material, provides: ‘(1) Subject to subsections (2) and (5), section 6(1)(b) and (2) does not make it unlawful to deprive a woman who is on ordinary maternity leave of any benefit from the terms and conditions of her employment relating to remuneration … (7) … ‘on ordinary maternity leave’ means absent from work in exercise of the right conferred by section 71(1) of that Act (ordinary maternity leave) or in consequence of the prohibition in section 72(1) of that Act (compulsory maternity leave); … ‘
Article 1.2.2 of Parliament and Council Directive (EEC) 76/2007 defines harassment as: ‘where unwanted conduct related to the sex of a person occurs with the purpose or effect of violating the dignity of a person, and of creating an intimidating, hostile, degrading, humiliating or offensive environment.’
The Sex Discrimination Act 1975 was amended in order to implement Parliament and Council Directive (EEC) 76/2007 by the introduction of, inter alia, ss 3A, 4A and 6A. The claimant was concerned that the Directive had not been properly transposed and brought proceedings.
Issues arose, inter alia, as to whether s 4A(1)(a) of the Act correctly defined harassment by reference to the Directive, whether the introduction of the requirement for a non-pregnant female comparator in s 3A and the exceptions and exclusions from discrimination claims during maternity leave in s 6A constituted regression, contrary to art 1.8(e)(2) of the Directive, and whether, if any provisions were unlawful, they could be read-down so as to be construed in compliance with the Directive.
The Secretary of State submitted, inter alia, that the words ‘on the ground of her sex’ in s 4A(1)(a) could be construed broadly and purposively so as to exclude the need for causation by reading the section as: ‘he engages in unwanted conduct that has the purpose or effect on the ground of her sex of violating … ‘ The claimant replied that there was a limit to the amount of reading-down that could be carried out in order to render the legislation compliant and that, in any event, such a construction would not assist: if, for example, an employee produced a weapon at work, it might be asserted that on the grounds of her sex a female employee was more frightened than a man, which would not be conduct related to sex within the meaning of the Directive. Similarly, although it was conceded that conduct directed towards a third party in the presence of the complainant which had the effect of creating a humiliating or offensive environment for her should amount to harassment, that plainly was not harassment of the complainant on the grounds of her sex. Further, the claimant argued that although a fact sheet issued by the Secretary of State asserted that there might be harassment where an employer knowingly failed to protect an employee from repetitive harassment by a customer, it was impossible to see how such a result could be achieved on the face of s 4(a)(1)(a) as it presently stood because it would be difficult to say that such knowing failure would amount to unwanted conduct by the employers ‘on the ground of her sex’. In relation to the exclusions from discrimination claims, the claimant submitted that claims to discretionary bonuses, which had been upheld by previous authority, would be excluded as a term or condition of her employment relating to remuneration by s 6A(1) of the Act, and that the extra restrictions on claims arising out of the period of ‘additional leave’ in s 6A(4) offended a decision of the First Chamber of the European Court of Justice. The Secretary of State replied that s 6A(1) was limited to contractual benefits and whereas ‘ordinary maternity leave’ was defined by s 6A(7) to include ‘compulsory maternity leave’, where those words were used in s 6A(1), they should be construed so as to exclude compulsory maternity leave so as to permit claims to discretionary bonuses. He also argued that the court should follow a Grand Chamber decision of the European Court of Justice rather than the authority relied on by the claimant.
The application would be allowed.
(1) It was not possible to restrict the less favourable treatment of a pregnant woman to a comparator test. Section 6A(1) was not limited to excluding benefits from contractual terms and conditions, and to deprive a claimant of the opportunity to claim discrimination in respect of the matters excluded by s 6A(4) would be regressive.
The less favourable aspect was simply that she was receiving less favourable treatment by reason of her pregnancy, i.e. the treatment could be treatment that had to be special because she was pregnant, when, if she was not pregnant, the same treatment would not be unfavourable treatment. Further, contractual terms and conditions relating to remuneration would by subject to the Equal Pay Act 1970,and thus not subject to the 1975 Act by the operation of s 8(5) thereof, and, in any event, it was likely that s 6A(1) would be construed in a similar fashion to the provisions relating to maternity leave itself, i.e. ‘matters connected with an employee’s employment whether or not they arse under her contract of employment’ (s 71(5)(a) of the Employment Rights Act 1996). Applying ordinary principles of English jurisdiction, it could not be said that the European authority relied on by the claimant had been decided per incuriam as it carefully distinguished the Grand Chamber authority relied on by the Secretary of State. In any event, the court was as bound by s 3(2) of the European Communities Act 1972 to follow the decision of the First Chamber as that of the Grand Chamber.
Land Brandenburg v Sass  All ER (D) 310 (Nov) applied; Webb v EMO Air Cargo (UK) Ltd  4 All ER 115, Gillespie v Northern Health Board  All ER (EC) 284, Boyle v Equal Opportunities Commission  All ER (D) 500, Lewen v Denda  All ER (D) 1143 and Madarassy v Nomura International plc  All ER (D) 226 (Jan) considered.
(2) Section 4A(1)(a) of the Act should be recast so as to eliminate the issue of causation, s 3A should be recast so as to eliminate the statutory requirement for a comparator who was not pregnant or who was not on maternity leave, and s 6A should be recast so as to provide that there was no difference between the ordinary and additional periods of maternity leave and so as to permit claims for non-contractual benefits.
Although the national court was obliged to set out to construe statutes and regulations passed by a member state so as to render them compliant with the relevant Directive, to do so would not be appropriate, possible or effective in the instant case. The extent of the reading down that would be required to be considered rendered a complaint construction inappropriate, such an extreme interpretation would, in any event, not be effective, and the need for clarity, certainty and comprehensibility by employees and employers alike meant that it would not be sensible to apply a compliant construction. Furthermore, it was not a sensible approach to leave the relevant provisions in place to be construed in the light of the present judgment when three separate sections had to be addressed, quite apart from the apparent knock-on effect on other discrimination legislation of statutorily adopting a correct definition of harassment.
R (Amicus) v Secretary of State for Trade and Industry  All ER (D) 238 (Apr) applied; Marleasing SA v La Comercial Internacional de Alimentacion SA  ECR-I 4135, Nagarajan v London Regional Transport  4 All ER 65, Webb v EMO Air Cargo (UK) Ltd (No 2)  4 All ER 577 and Shamoon v chief Constable of the RUC  2 All ER 26 considered.
Fairclough and others v John Reilly Civil Engineering Ltd
Employment Tribunal – Procedure – Decision – Tribunal dismissing claimants’ claims on ground that they had failed to attend hearing – Claimants being represented by solicitor representing other employees before tribunal – Whether tribunal erring – Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, SI 2004/1861, r 27(5).
The appeal would be allowed.
The power to dismiss which had been purportedly exercised by the tribunal had to have been that contained within r 27(5) of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2004, SI 2004/1861, notwithstanding the fact that no specific reference to that provision was made in the tribunal’s reasoning. It was a necessary precondition of fact for the exercise of that power of dismissal that the claimants had to have been unrepresented before the tribunal. In the instant case, on the face of the documents before the tribunal, the claimants had been represented by the same solicitor who had represented those employees who had not taken up employment with the respondent. In those circumstances the necessary precondition for the exercise of the dismissal power had not been fulfilled.
Accordingly, the claimants’ claims would be remitted to the tribunal for fresh consideration.
Jackson v Computershare Investor Services plc
Employment – Continuity – Transfer of trade, business or undertaking – Employee starting work with company in 1999 – New company taking over employee contract – Employee being made redundant – Employment tribunal deeming employee to have joined new company in 1999 – Tribunal finding breach of contract – Whether tribunal erring – Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794, reg 5(1).
The appeal would be allowed.
The tribunal’s reliance upon Transfer of Undertakings (Protection of Employment) Regulations 1981, SI 1981/1794, (TUPE) to treat the employee as a pre-2002 joiner under the scheme was impermissible. There was no logical connection between the fact that the employee was, by TUPE, deemed to be employed by the employer from the date of her employment by its predecessor in 1999 and her ability to pick up all subsequent changes made by the employer. Provided it had no connection to the relevant transfer, a variation of the employee’s contract could be effected.
Foreningen af Arbejdsledere i Danmark v. Daddy’s Dance Hall A/S  IRLR 315, Bork (P) International A/S v Foreningen af Arbejdsledere i Danmark  IRLR 41 and Viggosdottir v Islandspostur HF  IRLR 425 applied.