Employment case law round-up – October 2014

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Withdrawal of Employment Tribunal claims – Drysdale v Department of Transport [2014] EWCA Civ 1083
When dealing with litigants in person or unqualified representatives, the Employment Tribunals has a wide margin of appreciation in terms of the amount of assistance or intervention it can give in any particular case. In this case, the Court of Appeal held that a Tribunal took adequate steps to ensure that a claimant, represented by his unqualified wife, had taken a properly considered decision to withdraw his claim. Importantly, it held as a general principle that Employment Tribunals are not required to adjourn proceedings in order to enable a claimant to reflect on a decision to withdraw.

The Court set out some principles which offer welcome clarification for respondents. Notably, it held that Tribunals should not ask why a claimant is withdrawing a claim unless there are exceptional circumstances justifying it. In addition to this, it stated:

  • It is a long-established and desirable practice of Employment Tribunals to provide such assistance to litigants as may be appropriate in formulating and presenting their cases.
  • What level of assistance or intervention is “appropriate” depends upon the circumstances of each particular case including whether the litigant is representing himself and, if not, whether his representative is legally qualified.
  • The appropriate level of assistance or intervention is constrained by the overriding requirement that the tribunal must at all times be, and be seen to be, impartial as between the parties, and that injustice to either side must be avoided.

Walker Morris comment
This decision provides useful clarification on a point that can sometimes crop up in practice and, as in this case, part way through a hearing. It is helpful to be able to immediately refer to this decision if necessary.

Sex discrimination injury to feelings award too high – The Cadogan Hotel Partners Ltd v Ozog UKEAT/0001/14
The EAT has allowed an appeal against an Employment Tribunal’s injury to feelings award for sex discrimination in the middle ‘Vento’ band on the basis that the award was too high.

Ms Ozog was a waitress at the Cadogan Hotel. She was subject to sexual harassment by the head waiter which included:

  • Touching Ms Ozog inappropriately by kissing her arms and touching her arms and back.
  • Asking her if she had a boyfriend.
  • Undoing a button on his trousers, taking off his belt and approaching Ms Ozeg and another female colleague saying “Do you want this body? Come on, you are a woman. You should want this body”.
  • Threatening and bullying Ms Ozog.

Ms Ozog reported the behaviour to her supervisor but the Hotel failed to deal with it. Subsequently, Ms Ozog was suspended in relation to a dispute about her performance. She complained again about the sexual harassment and then resigned with immediate effect.

The EAT found that the Tribunal had erred by focusing on its own view of the respondent’s conduct in making an award of £10,000 for injury to feelings rather than looking at the effect the conduct had actually on the claimant who gave evidence that it had never gone beyond making her feel “very uncomfortable”. The EAT found that this should be classified in the lower Vento band, and substituted an award of £6,600.

The EAT also allowed the Hotel’s appeal against the Tribunal’s finding that the Acas Code of Practice on Disciplinary and Grievance Procedures had been engaged, which had resulted in a 25% uplift in the compensation awarded. The EAT found that Ms Ozeg had only made her grievances orally and not in writing, so the Acas Code did not apply.

Walker Morris comment
This decision provides a useful illustration of the correct assessment of injury to feelings awards for sexual harassment. The focus should be on the effect of the conduct on the claimant and not on how the Tribunal views the conduct. The decision is also noteworthy because it confirms that, following guidance produced by the President of the Employment Tribunals in March 2014, a 10% uplift will now be applied to all injury to feeling awards. Hence the substituted injury to feelings award of £6,000 was uplifted to £6,600. Employers need to be aware of this 10% uplift when dealing with discrimination claims as it obviously increases the potential value of the claim.

Less favourable treatment of fixed term employee caused by PHI insurance policy – Hall v Xerox UK Ltd UKEAT/0061/14
The EAT has confirmed that a fixed term employee did not suffer unlawful detriment under the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the ‘Regulations’) when he was excluded from benefits under the PHI policy provided by his employer, Xerox.

Xerox provided PHI insurance cover to all its employees who had been off sick for more than 26 weeks but this was specifically stated to be subject to the terms of the insurance policy between Xerox and the insurance company (UNUM). Xerox’s employment contracts expressly provided that the PHI benefit was subject to acceptance by the insurer, that Xerox was only liable to make payment to the employee if it had been paid by UNUM and that Xerox was not liable to provide any replacement benefit if no payment was made by UNUM. Under UNUM’s policy, fixed term employees were not entitled to benefit if their fixed term contract expired before the end of the 26 week qualifying period and, accordingly, Mr Hall was technically excluded from cover despite Xerox extending his contract.

Mr Hall claimed he had been less favourably treated by Xerox in breach of the Regulations arguing that Xerox were liable for UNUM’s acts because it was acting as an agent of Xerox.

The Tribunal and the EAT held that whilst Mr Hall had been treated less favourably under the Regulations this was not caused by any act or omission of Xerox. Rather, it was caused by the terms of the insurance policy supplied by UNUM who were not acting as Xerox’s agent. Moreover, the EAT found that even if there had been less favourable treatment by Xerox it is likely this would be justified because Xerox was bound by the ‘apparently universal approach’ of PHI insurers to fixed term contracts.

Walker Morris comment
Xerox’s employment contracts were well drafted and ruled out the possibility of Mr Hall bringing a breach of contract claim because they expressly provided that:

PHI benefit was subject to acceptance by the insurer.
Xerox was not liable to make payment to the employee if it had not received payment from the insurer nor was it liable to provide any replacement benefit if no payment was made by UNUM.
Employers who provide a PHI benefit as part of employees’ packages should check their contracts of employment to ensure the above points are included. Typically such clauses will state that the employer will only provide such cover on the basis that the employee satisfies the normal underwriting requirements of the relevant insurance provider and the premium is a rate which the Company considers reasonable.

It is also wise to include a clause to the effect that the employer reserves the right to discontinue, vary or amend the scheme (including the level of cover) at any time on reasonable notice.