January 22 2007 Employment Law Enews

Welcome to the latest employment law e-newsletter.

The dangers of mixing business with pleasure

In the case of B v A (EAT 9.01.07), the EAT has overturned a tribunal's decision that a personal assistant was subjected to sex discrimination when a solicitor with whom she had been involved in an intimate relationship dismissed her.

A had been employed as a secretary/receptionist in a small solicitor's firm where B worked as a solicitor. She was soon promoted to the role of B's personal assistant and by the end of the following year had begun a relationship with him. She later embarked upon a relationship with another man. On 6 February 2005, B saw A with this other man and dismissed her later the same day, without following any procedure.

A brought both unfair dismissal and sex discrimination claims against the solicitor and won on both counts. The tribunal found that the reason for A's dismissal was that B was "driven by jealousy on the discovery of [A's] relationship with [another man]". However, the Employment Appeal Tribunal (EAT) upheld B's appeal against the finding of sex discrimination. In its judgment, the EAT ruled the tribunal should have asked the question of whether A's treatment was based on the grounds of sex or was it for some other reason. The dismissal occurred because of the relationship breakdown, not because of A's gender, and therefore it could not amount to sex discrimination.

Intimate relationships between employees can cause employers a number of legal and practical headaches, not least when the relationship breaks down. In this case, since the dismissal was not based on the grounds of the employee's sex, it could not constitute direct sex discrimination. However, employers should still be wary of this kind of claim as depending on the facts of a given case, it may be possible to argue that treatment of this kind could amount to harassment. In any event, the tribunal's finding of unfair dismissal was not challenged and it is very unlikely that a dismissal in similar circumstances would ever be held fair.

Frustration of contract or dismissal?

In Hatton Logistics Ltd v Waller (EAT 3.10.06), the EAT upheld a tribunal's decision that a lorry driver's contract of employment had not been frustrated and that he had been unfairly dismissed.

Mr Waller was an LGV driver for Hatton Logistics Ltd (Hatton). During a routine health check heart problems were discovered and as a result he was told not to drive pending further tests and his licence was suspended. Mr Waller was subsequently off work for six months, during which he submitted a series of medical certificates, the last of which read "awaiting possible cardiac pacemaker". His employers then wrote to say that they had decided to terminate his employment on the grounds that it had become "frustrated" as he could not perform his driving duties and would be unable to do so for a further six months. In fact, Mr Waller did not need a pacemaker and was able to work again much sooner. He brought a successful claim for unfair dismissal

The Employment Appeal Tribunal (EAT), whilst critical of the tribunal's reasoning, upheld its decision that the contract had not been frustrated. Hatton were wrong to state that Mr Waller would not be able to work for six months; the restriction imposed by the DVLA following the fitting of a pacemaker was only six weeks. It was also not definite that Mr Waller was to be fitted with a pacemaker. As the potential frustrating event relied upon by the employer was the necessity for a pace-maker implant, the fact that this did not happen meant that Hatton's appeal must fail.

This case is a reminder that it is unsafe for an employer to rely on frustration when terminating an employee's contract for incapability. It is unlikely that the fitting of a pace maker would ever be regarded as an event frustrating the contract. Frustration of a contract of employment will only be found in extreme circumstances and it is much safer to go through the proper procedures, particularly in the case of a long-term sickness absence. Employers should always take care to ensure that any dismissal is both procedurally and substantively fair, regardless of the reason for dismissal.

DTI confirms timetable for additional statutory holiday

The DTI has recently issued a further consultation paper together with draft Regulations implementing its plans to extend statutory holiday entitlement under the Working Time Regulations.

Currently, workers are entitled to the equivalent of four weeks paid annual leave per year under the Regulations (20 days for full time employees). The Regulations allow employers to include bank holidays in meeting this requirement, although many already permit workers to take bank holidays in addition to four weeks leave. Trade unions have been campaigning for many years for bank holidays to be excluded from the calculation, and in June 2006 the DTI issued a consultation paper seeking views on how this should be achieved. That consultation ended in September 2006 and the DTI has now issued draft Regulations to amend the existing Working Time Regulations, due to come into force on 1 October 2007.

From 1 October 2007, the minimum statutory holiday entitlement will increase to 4.8 weeks (24 days for a full time employee) including bank holidays. From 1 October 2008, the minimum entitlement will be to 5.6 weeks (28 days) including bank holidays.

This will pose some practical difficulties for employers whose holiday year does not start on 1 October, since the extra holiday entitlement will only apply to part of the year. There will also be administrative costs associated with the changes. The consultation paper includes examples of how leave should be calculated where the additional entitlement (both in 2007 and 2008) will only apply to part of the employer's holiday year, and for employees working part time. The DTI has also indicated that it plans to make an online calculator available to assist employers in implementing the changes. Employers should notify all affected employees of the increase in holiday entitlement in order to comply with their obligations under the Employment Rights Act 1996 to inform employees of changes to their terms of employment, within one month of the changes taking place.

Further details are available from the DTI website.

Top 10 Employment Law Developments of 2006 Briefing

As you are aware, employment law is a rapidly developing area and all the indications are that the relentless pace of development is set to continue. With this in mind and to start off the new year we will be running briefing sessions covering the top ten developments of 2006 as well as some predictions of forthcoming developments to ensure you start 2007 in the best shape to protect your business.

The emphasis of these briefings is very much on the practical implications of all the changes and what they mean for you and your business. The briefing that we offer differs from that of many other training providers, as it is delivered by qualified and experienced lawyers who specialise exclusively in employment law and who advise employers on a daily basis on the practical implications of legal changes. The session will revisit the following major developments:

• Age discrimination
• Atypical workers
• Part Time Workers
• Work and Families
• Working Time
• Vicarious liability
• Statutory procedures
• Equal Pay
• Disability Discrimination
• Immigration developments in 2006

This briefing takes place on Tuesday 13 February 2007 at Broadway House, Tothill Street, London, SW1H 9NQ. The cost is £75 + VAT. To book your place please book online.

For further information regarding either of the above topics, or indeed any other immigration or nationality issue, please contact Mark Barnett at immigration@steeleslaw.co.uk.

This article copyright © 2007 Steeles Law llp. All rights reserved.