Case round upOn 1 Jul 2003 in Personnel Today Our resident experts at Pinsents bring you a comprehensive update on all thelatest decisions that could affect your organisation, and advice on what to doabout themDunnachie v Kingston upon Hull City Council, EAT Damages for ‘injury to feelings’ not available in unfair dismissal cases* * * * Dunnachie successfully claimed constructive unfair dismissal afterresigning from his job following months of harassment from his manager. He hadthree weeks’ stress-related absence from work before resigning. He suffered noreal financial loss as he obtained a new job straight away, but received£10,000 compensation for humiliation, distress and damage to family life. TheEAT overturned the award, ruling that such compensation could not be awarded inunfair dismissal claims. Until the House of Lords’ decision in Johnson v Unisys in 2001, it wasthought that compensatory awards for unfair dismissal could include onlyfinancial losses suffered as a consequence of the dismissal. Johnson was notitself an unfair dismissal case, but rather a case of whether wrongfuldismissal damages could include a claim for damages for stress caused bydismissal. The Lords rejected that possibility, but Lord Hoffman’s judgment suggestedthere was no reason why compensation for unfair dismissal should not includecompensation for injury to feelings, psychiatric injury or damage toreputation. As a direct consequence, some tribunals have awarded damages for injury tofeelings in unfair dismissal claims. This is the first time the EAT has had anopportunity to consider the issue, and the possibility of such awards has beenemphatically rejected. It considered that if non-economic losses wererecoverable in the tribunal, it was likely to result in all applicants claimingcompensation for general damages for distress, depression, stress, injury tofeelings or loss of family life resulting from dismissal. The EAT added thatlegislation would be required before the scope of the compensatory award couldbe widened to include non-financial loss. Last year in Sutherland v Hatton, the Court of Appeal re-iterated the manylegal obstacles that employees must overcome to claim damages for personalinjury arising from occupational stress. The importance of Dunnachie is that itprecludes staff using unfair dismissal claims as an easier route tocompensation for psychiatric injury. Johnson itself prevents the recovery ofcontractual damages of this kind where the employee is dismissed in breach ofcontract. But damages for stress can be recovered in claims where the breach ofcontract does not relate to dismissal, for example, where the implied duty oftrust and confidence is breached in the handling of disciplinary matters priorto dismissal. What you should do – Remember that even if employees can’t recover damages for stress orpsychiatric injury caused by unfair dismissals, the financial consequences ofsuch stress can be compensated for – if the stress prevents or delays themobtaining alternative employment, for example – Train managers how to deal effectively with disciplinary issues,performance reviews etc. Poor handling – unjustified allegations, unwarrantedsuspensions and lengthy delays, for example – can breach the implied duty oftrust and confidence. This allows damages for stress-related illness to beclaimed as contractual damages, in addition to a constructive unfair dismissalclaim – Review how effective your harassment procedures and policies are inpractice. Are employees using internal procedures rather than resigning andclaiming constructive dismissal? Are you missing out on an opportunity toresolve these matters in the workplace? TGWU v Morgan Platts Ltd (in administration), EAT Ninety-day protective award made for failure to consult on 35redundancies * * * * Morgan Platts went into administration. Administrators informed the35 employees that their employment would terminate with immediate effect. Noefforts were made to consult collectively with the trade union. A protectiveaward of 30 days’ pay was made by the tribunal, but increased on appeal to 90days. The Trade Unions Labour Relations (Consolidation) Act (TULRCA) requirescollective consultation on redundancies to start either 30 days before thefirst dismissal (if between 20 and 100 redundancies are proposed), or 90 daysbefore (if 100 or more redundancies are proposed). In the past, the maximum length of the protective award corresponded tothese minimum periods for consultation. However, in 1999 TULRCA was amended toallow a 90-day protective award in all cases, even if the minimum consultationperiod was 30 days. The effect was unclear – protective awards shouldcompensate employees for the period of consultation lost by the employer’sbreach, so how could a 90-day award be made in a 30-day consultation case? In this case, the tribunal’s award was based on the fact the employees hadlost 30 days consultation. But the EAT accepted the union’s argument that thecorrect approach was to start with the maximum award of 90 days, and thenconsider whether there were any circumstances to justify reducing it. What you should do – Protective awards can be hugely expensive. Be sure to always check in goodtime whether the obligation to consult applies before any major reorganisationor redundancy exercise – The 30 and 90-day periods are the minimum. Consult as early as possibleand before a fixed decision is taken – If there are difficulties in carrying out all the obligations in full, doas much as you can. While you are likely to be in breach, you may avoid amaximum award – When buying businesses from administrators or receivers, make carefulenquiries about pre-purchase dismissals. Indemnity protection will not be anoption, so if necessary, take such liabilities into account in the purchaseprice. Hendrickson Europe Ltd v Pipe, EAT First EAT decision on the Part-time Workers Regulations * * * Pipe had been employed for almost 12 years as an accounting assistanton part-time hours. She was one of four accounting assistants – the othersworked full-time but had considerably less service. The employer informed Pipeit required only three full-time accounting assistants and that if she wantedto stay, she must work full-time. Pipe could not comply due to familycommitments, but offered to increase her hours to 32.5 per week – only fivehours short of the full-time hours. This offer was rejected and she wasdismissed. The tribunal found she had been unfairly dismissed, and subjected todiscrimination because of her part-time status. The employer appealed. The employer argued Pipe was not dismissed because she was a part-timeworker but for reasons of redundancy, as the employer decided it needed threefull-time accounting assistants. The EAT rejected this. It noted that Pipe wastold that she would have to work full-time if she wanted to stay in employment.One of the purposes of the regulations was to protect part-time workers fromsuch pressure. It was for the employer to decide how many staff were required,but the tribunal was entitled to consider all the circumstances, including thatPipe was a part-time worker who would only have been five hours short offull-time service if her employer had considered her offer. What you should do – Prior to the regulations, it was not uncommon for employers to start offwith part-time workers when selecting for redundancy. This practice is nolonger lawful – Take care when defining selection pools in a redundancy exercise involvinga mix of full-time and part-time workers. Consider the selection criteriacarefully as well – Selecting part-timers for redundancy will amount to discrimination as willeliminating all part-time roles and allowing workers to apply for full-timeroles. Commercial considerations may justify such discrimination, butultimately, this is for the tribunal to determine. Macdonald v the Advocate General of Scotland; Pierce v the Governing Bodyof Mayfield School, House of Lords Sexual orientation not covered under the Sexual Discrimination Act 1975 * * * * Macdonald was dismissed from the RAF because he was a homosexual.Pierce, a teacher, was subjected to a sustained campaign of abuse because shewas a lesbian. Both argued their treatment was direct sex discrimination.Macdonald argued he was dismissed because he was sexually attracted to men – awoman who was also sexually attracted to men would not have been dismissed.Pierce used a similar argument in relation to her situation. The House of Lords found that Macdonald was dismissed because he was ahomosexual. Although this was a discriminatory policy, the discrimination wassolely on the grounds of sexual orientation, not gender. Comparing Macdonald’streatment to that of a heterosexual woman was not the ‘like for like’ comparisonrequired under the Sexual Discrimination Act. The appropriate comparator was alesbian, who would also have been dismissed under the policy. The House of Lords found that even where harassment is gender-specific, thisin itself did not establish conclusively that the harassment is “on thegrounds of sex”. In many such cases, tribunals have taken the view thatthere is no need to look for a male comparator and rejected arguments that aperson of the opposite sex would have been similarly treated. The House ofLords has indicated that this approach is wrong – the tribunal must still besatisfied that the harassment is on the grounds of sex. The House of Lords also suggested that the case of Burton v de Vere Hotels(more commonly known as the Bernard Manning case) was wrongly decided. Anemployer’s failure to prevent third parties committing acts of sexual or racialharassment will only amount to discrimination by the employer, if it can beshown the employer failed to take such steps because of the employee’s sex orrace. What you should do – Remember that the Employment Equality (Sexual Orientation) Regulationswill make it unlawful to discriminate against people on the grounds of theirsexual orientation. The regulations come into force on 1 December 2003 – Prepare for these regulations by reviewing your current equal opportunitypolicies and harassment procedures to ensure homosexuals are also protected. Case of the month by Sara SawickiObligation to employees continuesafter termination of employmentRelaxion Group plc v Rhys-Harper; De-Souza v London Borough of Lambeth;Jones v 3M Healthcare Ltd and Others – House of LordsEmployers are liable for post-employment discrimination andvictimisation* * * * *The principal question raised by these appeals waswhether former employers are liable under discrimination legislation for actsor omissions arising after employment.The three joint cases concerned a claim by a female employee ofsexual harassment during an appeal against dismissal, and also that theinvestigation into her complaint was discriminatory; a complaint that a failureto comply with a reinstatement order was an act of racial victimisation; andvarious complaints by four disabled staff that, for example, refusals toprovide references were acts of victimisation resulting from earlier complaintsbrought under the Disability Discrimination Act (DDA) 1995.The Court of Appeal had previouslyruled that such complaints were not possible under discrimination legislation,relying on prior rulings to show that acts or events occurring after employmenthas terminated cannot amount to unlawful discrimination.The House of Lords overturned these decisions. The relationshipof employer and employee can outlast the actual contract of employment. Formerstaff should still be protected under the discrimination legislation in caseswhere the relationship between the employer and employee still continues,notwithstanding termination of employment.The Lords found that the female employee’s claim that shesuffered sexual harassment during her appeal against dismissal, wasattributable to the employment relationship, and therefore protected under theSexual Discrimination Act (SDA) 1975. In the complaint of race discrimination relating tonon-compliance with the reinstatement order, it was held that this arose notfrom the employment relationship but from a tribunal’s order, and this claimfailed.In the DDA claims, which mainly related to the provision ofreferences following termination of employment, the court found that anemployment relationship triggers an obligation on the employer not todiscriminate, which applies to all aspects of the employment relationship –including those arising after employment has ended. The failure to provide areference or the provision of a detrimental reference post-employment wascovered under discrimination legislation.What you should do – Be careful how you treat former employees who have raised issuesconcerning sex, race or disability discrimination following termination oftheir employment, particularly when providing references– If you have a policy on the provision of references, ensureit is non-discriminatory and is followed in all cases. This should prevent asuccessful claim of less favourable treatment. If you do not have such apolicy, consider introducing one– Take care to avoid discrimination when paying benefits whichfall due after termination. Ensure that such payments are dealt with inaccordance with the contract and/or company policy. Previous Article Next Article Comments are closed. Related posts:No related photos.