Welcome to our September blog post in partnership with highly regarded employment team from 5 Essex Court.
Five from 5
Clare Harrington and Dan Hobbs, employment barristers from 5 Essex Court are editors of our employment law blog. They add their ‘Five from 5’ articles to our blog, as well as other matters of interest. Most months one of these articles will also link you through to a longer article on their own blog Five from 5 - In Depth.
We hope you enjoy reading these. If you would like to receive a discount off of your next employment law book from Bloomsbury Professional, look out for our advert further down the blog.
This month's '5 from Five'
No right for Agency Workers to be considered for roles where permanent staff 'at risk' of redundancy
In Coles v. Ministry of Defence, the EAT examined whether it was discriminatory for an organisation to offer a job currently occupied by a temporary agency worker to its permanent employees, without giving the agency worker the chance to apply as well.
Following a restructuring exercise which placed over 500 Ministry of Defence employees at risk of redeployment, Mr Coles was told that his assignment would come to an end and informed of the subsequent vacancy. However, he was not encouraged to apply for “his” old role and the Ministry of Defence made it clear that it would only consider applications from the at risk employees.
He then brought a claim in the Employment Tribunal, arguing that the Ministry of Defence had breached its obligations to provide equal treatment to agency workers under the Agency Workers Regulations 2010 and the Temporary Agency Worker Directive.
His claim failed in the Employment Tribunal and the EAT subsequently dismissed his appeal.
Whilst the EAT noted that agency workers have the right to be equally informed of vacant positions (under the 2010 Regulations) and that this was a valuable right, it did not extent to a right to secure a permanent position.
Further, the EAT said that the Ministry of Defence was not acting in a discriminatory manner by giving preference to its at risk employees when considering candidates for the role. The right to equal treatment for agency workers under the Directive could only extend to basic working conditions, such as hours and pay.
The normal rule that the Respondent pays the successful Appellant's issue and hearing fees in the EAT holds true even when the fees were actually paid by a third party
In Ibarz v University of Sheffield UKEAT/0018/15/JOJ, Mr Justice Wilkie sitting alone in the EAT has clarified the issue of whether an unsuccessful respondent should pay the issue and hearing fees where the fee had been paid, not by the claimant, but by a third party. The answer, contrary to previous authority on the point, is yes. He held that the EAT had the power to make such an order pursuant to r34A of the Employment Appeal Tribunal Rules 1993.
The claim was primarily about fixed-term contracts but after allowing the appeal, Wilkie J turned to the question of costs. The general expectation in the EAT is that the successful Appellant should be awarded their costs limited by Rule 34A(2A). Rule 34A(2A) provides: ‘If the Appeal Tribunal allows an appeal, in full or in part, it may make a costs order against the respondent specifying the respondent pay to the appellant an amount no greater than any fee paid by the appellant under a notice issued by the Lord Chancellor’.
In a previous decision, Goldwater and Others v Sellafield UKEAT/0178/14/DXA, the EAT had held that this rule precluded an order for costs where the fee had not been ‘paid by the appellant’ but by a third party. Wilkie J gave this line of argument short shrift, describing the decision in Goldwater as ‘wrong’. He was strongly influenced by, amongst other matters, the judgment in Mardner v Gardner and Others UKEAT/0348/13/DA (a case in which Dan Hobbs of 5 Essex Court appeared). There it was said to be contrary to public policy to allow a respondent to avoid costs consequences following unreasonable conduct where the claimant had prudently taken out an insurance policy that would cover his own costs. This, combined with the effect of paragraphs 13 and 14 of The Employment Tribunals and the Employment Appeal Tribunals Fees Order 2013 and Rule 17A(1)(b) of the Employment Appeal Tribunal Rules 1993, seemed to persuade Wilkie J.
Six Year Limitation Period for contract claims in the Tribunal?
Victoria von Wachter
The first instance decision in Grisanti v NBC News Worldwide Inc. deals with an interesting situation that may yet be decided differently on appeal. Ms Grisanti went blithely through her employment from 1996 until termination in 2003 completely unaware that the national insurance she was paying was not finding its way onto the HMRC records. At the time of the hearing in question the mystery of where the money had gone had not yet been resolved but the upshot was that Mrs Grisanti was not entitled to the pension she was claiming in 2015 as she had apparently not paid the requisite NI contributions.
Ms Grisanti pursued both an unlawful deduction from wages claim (which has not yet been dealt with for lack of evidence) and a breach of contract claim under the Employment Tribunals (Extension of Jurisdiction) Order 1994.
The Respondents applied for a strike out on the grounds that the Employment Tribunal had no jurisdiction to hear the claim as the last ‘non-payment’ had been effected in 2003 and was therefore more than 6 years before the Tribunal claim was issued in 2015. This was submitted to fall foul of the Limitation Act 1980 provisions that only allow 6 years’ timeframe for breach of contract claims.
The Claimant persuaded the Employment Judge that the Limitation Act acted merely as a very strong defence as civil courts can in fact consider claims that existed more than 6 years prior to issue.
Furthermore the wording of Article 3 of the Extension of Jurisdiction Order “the claim is one…which a court in England and Wales would ……….have jurisdiction to hear and determine” do not therefore constrain an Employment Tribunal to only considering the last 6 years. The claim must of course arise out of or be outstanding at termination.
The decision does potentially open the door to elderly claims being run in the Employment Tribunal and it will be interesting to see whether the decision remains the same at appellate level.
Fees, review and consultation: The next Chapter
We have been keeping a close eye on the Tribunal fees saga over the last few months.
Following the latest unsuccessful challenge to employment tribunal fees (see Unison, R (On the Application Of) v The Lord Chancellor  EWCA Civ 935), the House of Commons Library briefing paper by Dough Pyper and Feargal McGuinness, dated 14 September 2015, provides an interesting summary of the current position.
The authors remind us of the steep decline in claims since the introduction of fees - in the year to June 2013, employment tribunals received an average of just under13,500 single cases (brought by one person) per quarter. Following the introduction of fees, the number of single cases averaged around 4,500 per quarter between October 2013 and June 2015 – a decrease of 67% (the number of multiple cases dropped by 69%). To many of us, these figures tell their own story but they apparently remain unconvincing to the courts.
Most recently, on 26 August, the Court of Appeal rejected Unison’s appeal on the basis that it could not succeed on statistical evidence alone. In particular the following extract from the judgment is to be noted:
"I have found this part of the case troubling. Like both Divisional Courts, I have a strong suspicion that so large a decline is unlikely to be accounted for entirely by cases of "won't pay" and that it must also reflect at least some cases of "can't pay"; and I have accordingly been tempted by Ms Monaghan's submission that the figures speak for themselves. But in the end I do not think that that is legitimate. The truth is that, looked at coolly, there is simply no safe basis for an untutored intuition about claimant behaviour or therefore for an inference that the decline cannot consist entirely of cases where potential claimants could realistically have afforded to bring proceedings but have made a choice not to. But in fact the difficulty goes further than that. Even if it really were an irresistible inference from the decline in claims that at least some potential claimants could not realistically afford the fees, there is still no basis for forming any reliable view about the numbers of such cases, or how typical they may be; and, for reasons which will appear, that is an important matter. In my view the case based on the overall decline in claims cannot succeed by itself. It needs to be accompanied by evidence of the actual affordability of the fees in the financial circumstances of (typical) individuals. Only evidence of this character will enable the Court to reach a reliable conclusion that that the fees payable under the Order will indeed be realistically unaffordable in some cases"
Lord Justice Underhill made reference to the Government’s forthcoming review of the fees stating:
"I would, however, say this. On 11 June 2015 the Lord Chancellor announced a post-implementation review, which would 'consider how effective the introduction of fees has been in meeting the original financial and behavioural objectives while maintaining access to justice': it had in fact been made clear before the Divisional Courts that such a review would be conducted in due course. The fact that the evidence put before this Court has not satisfied me that there has been a breach of the effectiveness principle should not, and I am sure will not, preclude the Lord Chancellor from making his own assessment, on the basis of the evidence to which he will have access, on that question. The decline in the number of claims in the Tribunals following the introduction of the Fees Order is sufficiently startling to merit a very full and careful analysis of its causes; and if there are good grounds for concluding that part of it is accounted for by claimants being realistically unable to afford to bring proceedings the level of fees and/or the remission criteria will need to be revisited.
So the hunt continues for ‘good grounds’ for concluding that part of the downfall in the number of claims presented is a consequence of claimants being unable to afford to bring proceedings due to the level of fees. Some support for that argument make be taken from recent research which is also referenced within the briefing paper. M Downer et al surveyed claimants, employers and representatives whose cases had gone through the early conciliation process between September and November 2014 (Evaluation of Acas Early Conciliation 2015, Acas Research Paper 04/15, July 2015). Of those claimants whose dispute was not formally settled by Early Conciliation but who still decided against submitting a claim to Employment Tribunal, 26% said they were not submitting a claim because “tribunal fees were off putting” while 20% said it was because “the issue was resolved”.
On 1 September 2015, Nicola Sturgeon MSP announced that fees for employment tribunals would be abolished in Scotland. In the Scottish Government’s Programme for Government 2015-16, it states:
‘We will abolish fees for employment tribunals, when we are clear on how the transfer of powers and responsibilities will work. We will consult on the shape of services that can best support people’s access to employment justice as part of the transfer of the powers for Employment Tribunals to Scotland.’
Is this announcement to be seen as a cause of optimism for the abolitionists in England and Wales? As commented in previous bulletins, it seems extremely unlikely that fees will be abolished. As the briefing paper reminds us, fees were introduced against the background of a 23% reduction in the Ministry of Justice’s budget following the spending review which required the MOJ to make £2bn of savings. The Employment Tribunal service cost £71.4 million in 2014/15 and 13% of the total expenditure was recouped in income from fees. Considering the multiple demands upon the public finances at this time, it would seem unlikely that it would be seen as appropriate to transfer this cost back to the taxpayer in general as opposed to the actual users of the system.
Last month we reported that in Jakowlew v Nestor Primecare Services Ltd (t/a Saga Care) UKEAT/0431/14/BA, a care worker suspended at the time of a relevant transfer remained assigned to the undertaking because, despite her suspension, no real steps had been taken to remove her from the relevant contract prior to the transfer.
The case indicates that employees who are suspended, sick, on holiday, on study leave or on maternity leave at the date of the transfer, will generally transfer despite their absence applying the test first established by HHJ Burke QC in Fairhurst Ward Abbotts Ltd v Botes Building Ltd  EAT/1007/00/DA (March 2003), subsequently approved by the Court of Appeal  IRLR 304 and followed in the writer’s own case of United Guarding Services v St James Security Group Ltd  All ER (D) 158 (EAT):
“The appropriate test, in our judgment, was whether he had been employed to work [in the part transferred] immediately before the transfer, i.e. whether [the part transferred] was his contractual place of work and that was where [the employer] would have required him to work immediately before the transfer had he not been excused from attendance.”
In a departure from the norm, in BT Managed Services v Edwards UKEAT/2015/0241, HHJ Serota QC has found that an employee on long term sick leave did not remain assigned to the undertaking so as to transfer because (i) he had only been kept on the books to receive PHI payments; (ii) there was no expectation of a return to work; and (iii) the Fairhurst test has no application where the employee is permanently unable to contribute to the economic activity carried out by the group.