December 2004 Employment Law Enews

Welcome to the latest edition of steeles employment enews. In this edition we look at an employees right to work a 48 hour week, how an employee was unaware of illegal contract of employment, EAT upholds compensatory award for injured feelings.

Insistence on 48-hour maximum week - ramifications for salary

The Employment Appeals Tribunal, has decided an important point which has vexed practitioners since the Working Time Regulations ("the Regulations") were introduced in 1998. Under the Regulations, an employee has a right to work a maximum 48-hour week (averaged over a four month period). He can opt-out of the right if he wishes, but cannot be subjected to a detriment if he refuses to opt-out.

Employers and solicitors have been concerned that employees can insist on the same salary being paid for a 48-hour week, that they were previously paid for working 60+ hours a week - as it was open to argument that a reduction in salary may be a detriment.

In Clamp v Aerial Systems Ltd the Employment Appeals Tribunal ("EAT") has taken the common sense approach that a reduction in salary, if an employee withdraws his opt-out from the 48 hour maximum week, is NOT a detriment - but just a "consequence" of the employee's actions. On this basis presumably any reduction in salary would have to be on a pro rata basis.

Mr Clamp had previously signed an agreement opting-out of the Regulations but following his wife becoming ill in February 2003 decided, following discussions with his employer, to withdraw his agreement from the opt-out arrangement. The EAT found that reducing salary accordingly was a consequence and not.

Employee did not Knowingly Participate in Illegality

Mrs Wheeler was a Thai national married to an English husband and had been employed in a Thai restaurant. During her employment Mrs Wheeler had consistently taken home £220 per week despite her basic pay being £220. She had repeatedly asked for further pay-slips but, despite assurances never received pay-slips, tax codes or a P45 or P60. Mrs Wheeler was dismissed and she claimed unfair dismissal.

At Tribunal it was found that Mrs Wheeler had been aware of the situation and over the course of three years had benefited from this arrangement by paying neither tax nor National Insurance ("NI"). The Tribunal found, in deciding against Mrs Wheeler, that despite her poor understanding of the British tax system, her husband was aware of the failure to pay tax or NI and that Mrs Wheeler too should have understood the situation.

The Tribunal considered the length of time over which the Mrs Wheeler had acquiesced to be significant, concluded that the contract of employment was illegal and that it could not allow the court to enforce it in unfair dismissal proceedings. The Tribunal confirmed that, but for the illegality it would have made a finding of unfair dismissal in favour of Mrs Wheeler and, that the employer was in breach of the Employment Rights Act 1996 in failing to provide pay-slips. This decision was upheld by the Employment Appeals Tribunal and Mrs Wheeler appealed to the Court of Appeal.

The Court of Appeal reviewed the facts and found in favour of Mrs Wheeler. Following their earlier decision in Hall v Woolston Hall Lesiure Ltd it confirmed that as well as knowledge of illegality, the contract will only be unenforceable where the employee actively participates in the illegal performance, with the degree of participation being a question of fact. Accordingly it upheld the appeal and referred the matter back to the Tribunal to consider the merits of the unfair dismissal claim.

EAT upholds £400,000 award for injured feelings

The Employment Appeal Tribunal (EAT) has upheld a compensatory award of £400,000 for injury to feelings. The award is thought to be the highest of its kind in a disability discrimination case. Jacqueline Beart was awarded the compensation for her claim of disability discrimination under the Disability Discrimination Act.

Mrs Beart was employed as a Temporary Executive Officer at Swaleside Prison on the Isle of Sheppey. She had worked for the prison service for 18 years until she went on sick leave with severe depression in 1997 following a conflict with her Line Manager. She never returned to work. She was dismissed following a disciplinary investigation into allegations that she was working while claiming sick pay.

The investigator's report was found to be misleading and an employment tribunal upheld Mrs Beart's claims of disability discrimination and unfair dismissal. The tribunal found that the employer had failed to make a reasonable adjustment by way of relocation or redeployment, as recommended in a medical report. The medical advice given to Mrs Beart's employers recommended that she should be moved to another prison, but this never happened.

In 2001 an employment Tribunal ruled that Mrs Beart had been the victim of disability discrimination because the Prison Service "failed to make a reasonable adjustment, namely, in relocating her".

Nick O'Brien, director of the Disability Rights Commission, said making adjustments for someone with a mental health problem at work could be done "quite simply" and did not necessarily involve a great deal of expense. The Prison Service was criticised by the tribunal for wilfully ignoring the Disability Discrimination Act and this was reflected in the size of the award.

This article copyright © 2004 Steeles Law. All rights reserved.