Wolferstans' Employment Law Newsletter
February 2004
Injury to Feelings in Unfair Dismissal
The Court of Appeal has just handed down its decision in the Dunnachie case. It has overturned the EAT and decided that unfair dismissal compensation is not limited to financial loss, thus overturning the last 30 years of law in this area. Applicants can now seek to recover damages for distress, humiliation, damage to reputation or family life, and psychiatric injury in appropriate cases.
Increase of Employment Limits
The annual increase of the Employment Law maximum figures took place on 1 February 2004. The maximum weekly wage for various purposes is now £270 and the maximum compensatory award for unfair dismissal is now £55,000.
Disability Changes in 2004
Most current exclusions under the Disability Discrimination Act will be removed from October 2004. This includes employers of fewer than fifteen employees, and most excluded occupations such as police and prison officers and fire fighters. Service providers will also be required to take reasonable steps to remove, alter or avoid physical features of the premises which make it impossible or unreasonably difficult for disabled people to access services.
Boardroom Coup and Hostile Takeover
There are five potentially fair reasons for dismissal and the fifth of these is “some other substantial reason”. The Court of Appeal has held that this reason applied to a Chief Executive who was dismissed from his post following a hostile takeover of his Company. The relevant contract of employment provided “in the event of the Executive ceasing to be a Director of the Company, his employment hereunder shall terminate automatically”. Following his failed management buyout and the success of a hostile takeover bid the Chief Executive was removed as a Director and his employment as Chief Executive was terminated as well. The Court held that his dismissal was for some other substantial reason and it was fair and reasonable for the new Shareholders to take the view that the Chief Executive could not remain in place following these circumstances.
Employee’s Duty of Good Faith
An employee Director owes a duty of fidelity to his employer by virtue of his status as an employee, and a fiduciary duty to his Company in his capacity as a Director. In a recent case an employee Director sought to divert a major contract to a rival Company for his own ends and failed to disclose this to his employer. The High Court held that he was in breach of both his duty of fidelity as an employee and his fiduciary duty as a Director.
Constructive Dismissal – Grievance
An Employment Tribunal recently rejected an employee’s constructive dismissal complaint and took into account the employee’s failure to invoke the relevant contractual grievance procedure. The EAT overruled the Employment Tribunal in this regard and said that the conduct to be assessed when determining whether a fundamental breach of contract has taken place so as to entitle an employee to resign and claim constructive dismissal is solely that of the employer. Any alleged failure by the employee is irrelevant.
Draft New Employment Tribunal Rules of Procedure
The DTI has issued a major consultation on new draft Rules of Procedure for the Employment Tribunals. The proposed changes include standard claim and response forms; tighter control over time limits and extensions of time; new pre-acceptance procedures to sift out claims and responses which ought not to go forward; confirmation that cases can be struck out at the pre-hearing review stage; changes to the cost rules to include preparation time and also to make it possible for some representatives to incur a costs award because of their misconduct. The Rules are likely to take effect from 1 October 2004.
Entitlement of Transsexual Partner to Survivor’s Pension
A woman who has worked for a long time for the NHS and is a member of the NHS Pension Scheme shares a long term relationship with a person born a woman but following surgical reassignment now a man. They have been unable to marry under UK law and the NHS Pensions Agency has informed the woman that because they are not married her partner would not be able to receiver a widower’s pension if she were to pre-decease her. The Court of Appeal stayed her proceedings and referred the matter to the European Court of Justice which has ruled that although a survivor’s pension is pay it is up to Member States to determine the conditions under which legal recognition is given to the change of gender of a person.
Dress Codes – Put your Tie on
A Tribunal held that a man working for Job Centre Plus was held to have been treated less favourably on the ground of his sex because he was required to wear a collar and tie at work. It held the employer had been imposing a higher level of smartness on men. 6,950 other male Job Centre workers then lodged similar complaints for sex discrimination. Unfortunately for all of them the EAT has just overruled the case and applied the earlier decision involving Safeway Stores. The EAT dentified the correct question the Employment Tribunal should have asked which is whether, applying contemporary standards of conventional dress wear, the level of smartness which the employer required of all its staff could only be achieved by men if they wore a collar and tie. If an appropriate level of smartness for men could be achieved by dressing otherwise than in a collar and tie, then the lack of flexibility in the dress code would suggest male members of staff were treated less favourably than female members. Otherwise, it was not discrimination if both sexes were required to conform to conventional standards of smartness.
If you have any questions on the above points or on employment law generally, please speak to Nick Roper, Partner on 01752 292357.