Case law round-up – October 2016

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Job applicants purely seeking compensation for discrimination are not protected by the Equal Treatment Directive – Kratzer v R&V Allgemeine Versicherung AG

The Court of Justice of the European Union (CJEU) has held that where a person makes a job application purely to entitle them to claim compensation for unlawful discrimination they will not be protected by Equal Treatment laws.

The facts

Mr Kratzer applied for a job as a graduate trainee. Unfortunately, the job specification was worded in a way that suggested the employer was looking for recent graduates which, on the face of it, could have been perceived as discriminating against older candidates. The employer used an automated bulk selection process which rejected Mr Kratzer’s application out of hand.  Mr Kratzer subsequently demanded 14,000 Euro in compensation for age discrimination from the employer.  It invited him to an interview stating that his rejection had been as a result of the automated system and should not have happened.  He declined this invitation and pursued his claim.  His sole intention was to claim compensation for discrimination rather than to actually be considered for the position.

The question for the CJEU was whether a person making a job application solely in order to obtain compensation for discrimination under the Equal Treatment Directive rather than to obtain the job advertised falls within the protection of the Directive. The Court found that such a person would not be entitled to the protection of the Directive because they are not truly ‘seeking employment’ and so could not be considered to be a ‘victim’ of discrimination.

What does this mean for employers?

Whilst situations like this are rare, the decision makes it clear that disingenuous applicants making applications just to seek compensation are not, as a rule, protected by discrimination law. However, employers using automated selection processes to deal with bulk job applications should be on their guard against unintentional discrimination arising from the lack of a ‘human eye’ overseeing decisions. If Mr Kratzer had been able to persuade the Court that he genuinely wished to be considered for the job then the decision could have been very different.

Finally, this case serves as a reminder that any terminology in job advertisements that might imply the employer is looking for younger applicants (such as ‘school leavers’ or ‘recent graduates’) or older applicants (such as ‘mature person’ or ‘retired person’) should be avoided.

Protecting disabled employee’s pay can be a reasonable adjustment – G4S Cash Solutions (UK) Ltd v Powell UKEAT/0243/15

The Employment Appeal Tribunal (EAT) has held that an employer may, as a reasonable adjustment under the Equality Act 2010, be required to continue employing a disabled employee in a less senior role at his or her existing rate of pay.

The facts

Mr Powell began employment with G4S in 1997 as an engineer maintaining ATMs. He suffered back pain (accepted as being a disability) and, from 2012, he was no longer able to carry out the duties of his role. He was therefore moved to a less senior role as a ‘key runner’ and his existing pay was protected.  G4S led Mr Powell to believe that this change was a long-term arrangement.  After a year, G4S proposed reducing Mr Powell’s pay by 10% to reflect the change in his duties.  He was unwilling to accept this and was dismissed.

The EAT held that the dismissal had been discriminatory and that G4S was required, as a reasonable adjustment, to employ Mr Powell as a key runner on the same salary as he received in his previous role. The EAT made it clear that requiring employers to ‘make up pay’ would not always be a reasonable adjustment and each case would depend on its facts.  However, in this case, the following facts influenced the EAT’s decision:

  • G4S had led Mr Powell to believe that the change to his role on the same rate of pay was a long-term arrangement.
  • G4S’ main argument for reducing Mr Powell’s pay was that other employees might resent it rather than it being an unsustainable cost for the company. This was not accepted as a valid reason.
  • The Equality Act 2010 plainly envisages that an element of cost may be involved when making a ‘reasonable adjustment’.
What does this mean for employers?

As the EAT made clear, each case will depend on its own facts and what is deemed to be ‘reasonable’ for the particular employer given its size and resources. This case shows that arguments about other staff feeling ‘resentful’ about adjustments are unlikely to be accepted as valid.  Financial considerations will have to be weighed in the balance along with other factors.  We would always recommend that legal advice is sought.

Injury to feelings – Tribunals have power to increase Vento bands in line with inflation – AA Solicitors Ltd v Majid [2016] UKEAT/0217/15

A recent decision of the Employment Appeal Tribunal (EAT) has confirmed that injury to feelings awards for discrimination should be adjusted for inflation. Moreover, Tribunals should apply a 10% uplift to such payments. This means that injury to feelings awards could be higher than anticipated and is of note to employers currently involved in discrimination claims.

The facts

The claimant was dismissed after rejecting sexual advances made by her boss. He was the principal of a solicitor’s firm and she was a trainee solicitor at that firm. She brought a sex discrimination claim and the EAT upheld an injury to feelings award of £14,000. The EAT held that as injury to feelings ‘Vento’ bands have not been adjusted for inflation since 2009, it was appropriate that such awards should be adjusted for inflation.

The EAT also considered conflicting authorities on the question of whether Tribunals should apply a 10% uplift to injury to feelings awards (known as a ‘Simmons’ uplift following a Court of Appeal decision of the same name) and held that, in the absence of a further decision of the Court of Appeal, the 10% uplift should be applied.

 What does this mean for employers?

The latest Retail Prices Index (RPI) for July 2016 gives an RPI increase of nearly 23% since 2009. Accordingly, the upper limit of the top ‘Vento’ band of £30,000 could, following adjustment, be closer to £48,700 (including the 10% uplift).

This is an important development as it potentially increases the liability of employers involved in discrimination claims. As ever, advice to employers remains:

  • Keep equal opportunities policies up to date
  • Train staff on what is and what isn’t acceptable behaviour
  • Stay vigilant to ensure that any issues are dealt with before they become a bigger problem
  • Deal swiftly with any discriminatory behaviour