Wolferstans' Employment Law Newsletter
March 2005
Liability for non-contractual bonus
Ms Hansen, a Salaried Partner in a firm of Solicitors, sued her former Employers for non-payment of a discretionary bonus. The Employer had started to pay a bonus in equal monthly instalments but declined to give details of how the bonus was calculated because it was non-contractual and discretionary. Ms Hansen succeeded in a claim for unlawful deduction from wages even though there was no contractual right to the bonus. The EAT held that the statutory definition with regard to unlawful deductions had been met even though the non-contractual bonus would not have been recoverable under Contract Law. The important point is that once a payment of a bonus of this nature is commenced it cannot then be stopped.
Human Rights – privacy and family life
Mr McGowan was dismissed by Scottish Water when they found he had falsified his timesheets with regard to call out time. The Employer had undertaken covert video surveillance of his home. The EAT confirmed that this raised at least a strong presumption that the right to Mr McGowan’s private life had been invaded, but confirmed there was no infringement of Article 8 of the European Convention on Human Rights. They found that the video surveillance was not disproportionate because they were investigating a criminal activity and the surveillance went to the heart of the investigation.
Causation of loss
Mrs Beart was successful in a claim against the Prison Service for unfair dismissal and disability discrimination. She received a substantial award for disability discrimination but the Employer appealed on the basis that the unfair dismissal, which was subsequent to the disability discrimination, was a new cause of action with a statutory limit on compensation, and that that limit ought therefore to apply. The EAT disagreed, and confirmed that somebody who commits a tort should not be allowed to benefit from a second wrongful act.
Age Limit on Unfair Dismissal Claims
The Rutherford case concerning age limits for statutory claims has now been granted leave to proceed to the House of Lords later this year. The claim is one of indirect sex discrimination brought by two men aged over 65 arguing that the upper age limit for claiming unfair dismissal and redundancy payments is contrary to EC law. This case is of particular interest at a time when the Government is drawing up legislation to prevent age discrimination which must come into force before December 2006 to give full effect to the EC Equal Treatment Directive. In the meantime the Government has recently announced a national default retirement age of 65, which will be introduced as part of the age discrimination legislation. Employees will only be able to work beyond 65 if they make a request to do so and their Employer agrees. The Employer will be able to refuse if there are objectively justifiable grounds for doing so. If the House of Lords takes a different view, then the position will certainly be complicated!
Restrictive Covenants
The High Court has recently held that a restrictive covenant which prevented an ex-employee from working for named major competitors for a period of six months was reasonable and enforceable. The Employee had argued that the existing confidentiality provisions, and a covenant against solicitation of former customers, would be sufficient to protect the Employer. The High Court disagreed and held that there was a real risk that the Employee, who was a Senior Sales Executive, with extensive confidential business knowledge about the Employer, might cause significant financial loss to the original Employer. No injunction was granted, but the Employee would be liable in a claim for damages to the extent that any loss could be proven.
New Gender Reassignment Rules
The Gender Recognition Act 2004 will come into force on 4 April 2005 and will provide transsexuals the opportunity of obtaining legal recognition of their acquired gender. The new legislation will also amend the Sex Discrimination Act 1975 and increase the protection afforded to employees against less favourable treatment on the ground that they intend to undergo, are undergoing or have undergone gender reassignment.
TUPE and Pensions
The question of pensions transfer is now covered in the Pensions Act 2004 at Sections 257 and 258. This provides an element of pension protection on a transfer although a transferred Employee may well end up with a considerably lesser form of pension benefit. The minimum requirements to be observed by a Transferee Employer will be set out in regulations and the anticipated commencement date for the sections and any supporting regulations is 6 April 2005.
Sexual Harassment and Pornographic Images
The EAT has recently held that a female Employee had been sexually harassed when male colleagues downloaded pornographic images onto their computer screens. The EAT were able to reach this conclusion even though the images were not shown to her and she made no complaint to her Employer at the time. This seems to make life very difficult for Employers who now appear to be held responsible for harassment that they have not been told about. This decision was made before the new Statutory Grievance Procedure requirements came into place and the fact that there had been no complaint could now have an impact on a potential Claimant’s case.
If you have any questions on the above points or on employment law generally, please speak to Nick Roper, Partner on 01752 292357.