Daniel Barnett's Latest - November 20th
Daniel Barnett's Latest News
The following case summaries are provided courtesy of Daniel
Barnett to whom we are very grateful:
17 November 2006
The Court of Appeal has handed down an important decision in
Commerzbank AG v Keen. It is important for two reasons.
First, section 3 of the Unfair Contract Terms Act 1977 does not
apply to employment contracts. The point arose because the
employer, a City bank, relied on a clause providing that the
employee had to be in employment as at the date of the bonus to
receive any bonus. The employee argued that such a clause
amounted to an unreasonable exclusion clause seeking to avoid
paying remuneration on a 'value received' basis for work done
during the year.
At paragraph 101 of the lead judgment of Mummery LJ it says that
as a matter of principle and construction it cannot be argued
that under a term for remuneration (in this case a bonus
payment), the employee "deals as a consumer" with their employer
for the purposes of s3 of UCTA. To extend s3 to payment
provisions in respect of personal services rendered by an
employee would be inappropriate, artificial and unconvincing. The
terms were not the standard terms of the business of banking,
rather they were the terms of remuneration of certain employees
of the Bank. Mummery LJ described the existing EAT authority on
this point, Bridgen v American Express as "not entirely
satisfactory" and "not binding on this court."
Secondly, and importantly, Mummery LJ also considered (at paras.
58-60) the hurdles an employee must surmount to show that a
bank's discretionary bonus decisions were irrational or perverse.
The burden was on the claimant to establish that no rational bank
in the City would have paid him a bonus of less than his line
manager recommended. He would also be expected to present
independent evidence, expert or otherwise, supporting his claim.
Kommerzbank AG v Keen
BAILII Judgment
Pensions Changes - Generally and Local Authority
Age Discrimination: Pensions Exemptions
17 November 2006
Calm down everyone. The Employment Equality (Age) (Amendment
No.2) Regulations 2006 have been laid before Parliament.
Coming into force in just a fortnight (1st December 2006), the
regulations make substantial amendments to Schedule 2 of the main
Age Regs. They clarify and extend many of the exemptions relating
to trustees and managers of pension schemes.
Sorry - just paused a moment to yawn. Anyway, carrying on, it's
always nice to see the government complying with the Cabinet
Office's Better Regulation Guidelines (which say that companies
should have a minimum of 12 weeks to comply with new
regulations). Still, it's not like we haven't known age laws were
coming since 2000...
And if anyone is still reading, the CBI have hailed these
amendments as a great victory for common sense -
see the CBI press release
The Employment Equality (Age) (Amendment No.2) Regulations 2006
http://www.opsi.gov.uk/si/si2006/20062931.htm
Local Authority Pensions
17 November 2006
Michael Duggan from Littleton Chambers has Emailed me to point
out another important set of Regulations dealing pensions. As I
can't face doing my own summary, I simply reproduce his Email
(with his permission)...
From: Michael Duggan
Sent: 17 November 2006 11:18
To: Daniel Barnett
Subject: Pensions and Age Discrimination
Dear Daniel,
Further to you newsletter this morning - there are also little
publicised changes to local government pension schemes which will
have an important impact on many thousands of people. As you
know, one of the attractions of local government is that you get
a decent pension and if you leave early, in some circumstances
you get added years. The Government was initially doing away with
the discretion in this respect but have now put in transitional
provisions so that anyone made redundant before 1st April 2007
and who would have qualified under the 2000 regs will now be able
to argue that the LA should exercise its discretion in their
favour (and there appear to me to be strong arguments that, if
they have always awarded added years, custom and practice etc
applies).
Councils are still going to be able to make an award of added
years by way of augmentation. The new regulations also provide
that they need to have a written policy on how they will exercise
their discretion. LAs will no doubt argue that, once the
transitional provisions disappear after April 2007, it is likely
to be discriminatory to award added years.
The upshot is that people who have worked for many years in Local
Government are having benefits taken away from them by virtue of
regulations which will benefit one group (however defined) on the
basis of age but will actively disadvantage the older worker with
many years of service.
Further, how does this all fit in with Schedule 5 of the Age Regs
which appears to preserve existing rights; See Schedule 5
paragraph 9 -surely one of the most obscurely drafted provisions
ever.
Since LAs must now have a written policy there are going to some
interesting issues that arise as to how it will interact with the
Age Regs. I would be interested in any views about what LAs can
now do with regard to added years, what the policy should contain
and what is happening 'on the ground'.
If you can bear to look at them the pension Regs are here: The
Local Government (Early Termination of Employment) (Discretionary
Compensation) Regulations 2006 S1 2006/2914:
http://www.opsi.gov.uk/si/si2006/20062914.htm
Michael Duggan
Statutory Grievance Procedures: Time Limits
16 November 2006
A great description by a High Court Judge of the 2004 procedures
as "rebarbative" (go on, look it up here!:
http://dictionary.reference.com/wordoftheday/archive/2003/01/03.html).
In this case, the EAT rejected the argument that the three-month
extension of time following sending a grievance does not engage
if the grievance is sent before the effective date of
termination.
Curiously, the argument is technically correct (if you suffer
from a virulent strain of pedantry). But the result is absurd,
and the EAT had no hesitation in dismissing the appeal. Underhill
J. held that the extension of time for presenting a claim arises
even when the grievance is lodged before the effective date of
termination, and therefore not technically 'within the normal
time limit'.
Curiously, the point arose in two cases on which judgment was
handed down by the same judge on the same day. The main case is
HM Prison Service v Barula
BAILII Judgment
and the reasoning was affirmed then in Lewisham v Colbourne:
BAILII Judgment
DDA: Reasonable Adjustments on Redundancy
16 November 2006
The Court of Appeal has handed down its decision in NTL
Group Ltd v Difolco.
Mrs Difolco, who was partially paralysed and could only work
part-time, was made redundant. She was offered the chance to
apply for another job as being suitable alternative employment.
This other job was advertised on a full-time basis but she was
told that (should she be appointed) the employer would consider
changing the role to part-time. However, she refused to apply
unless the job was changed to part-time before she applied.
She claimed that by failing to convert the job to part-time, the
employer had failed to make reasonable adjustments.
The Court of Appeal, disagreeing with the EAT, held that this
could not amount to a failure to make reasonable adjustments.
Until Mrs Difolco had applied for the job, no duty to make
reasonable adjustments arose. As Laws LJ said: "If the mere fact
of advertising for a full-time job can constitute an
'arrangement' for the purposes of the DDA then on the face of it
it would potentially discrimination against the whole innominate
class of possible disabled applicants for the job. That, it may
well be thought, would be a reductio ad absurdum." (para. 13)
NTL Group v Difolco
BAILII Judgment
New DTI Guide: Rights and Responsibilities of Employees
13 November 2006
The DTI has published a new 96- page guide for both employers
and employees, entitled 'Rights and Responsibilities of Employees'.
It is an extremely impressive summary of employment law:
comprehensible, thorough and written in plain English. View it
here: http://www.dti.gov.uk/files/file34565.pdf
Non-compliance With Statutory Dismissal Procedure
9 November 2006
The EAT has held that there is no free-standing right to bring a
claim before a tribunal for breach of the statutory procedures.
The Claimant lacked the one-year qualifying period for claiming
unfair dismissal. Nevertheless, he argued that he could bring a
claim for breach of the statutory dismissal procedure, as
contained in the Employment Act 2002. HHJ McMullen QC
upheld the tribunal's decision to strike out his claim.
This decision is plainly correct and one would have thought
relatively uncontroversial. However, the surprising number of
times one sees Claimants running this argument in correspondence
makes this case a useful piece of ammunition in rebuttal.
Scott-Davies v Redgate Medical Services:
BAILII Judgment
Flexible Working for Carers
9 November 2006
The DTI has, this morning, announced who will qualify as a
'carer' under the new right for carers to request flexible
working (coming into force on 6th April 2007 under the Work and
Families Act 2006).
The definition of 'carer' will cover any employee who is or
expects to be caring for an adult who:
* is married to, or the partner or civil partner of the employee;
or
* is a 'near relative' of the employee;
* falls into neither category but lives at the same address as
the employee.
The 'near relative' definition includes parents, parent-in-law,
adult child, adopted adult child, siblings (including those who
are in-laws), uncles, aunts or grandparents and step-relatives.
The DTI estimates that this definition will cover about 80% of
carers.
View DTI Press Release
Take a look at the following items from Daniel Barnett, barrister
(http://www.danielbarnett.co.uk):
Law Society Handbook on Employment Law
by Daniel Barnett and Henry Scrope
Third edition just published
£49.95
Click here for more details
http://www.danielbarnett.co.uk/publications_lawsoc.htm
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http://www.danielbarnett.co.uk/bulletins.htm
Daniel Barnett Archive Now Available
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now available: http://www.emplaw.co.uk
"Age Discrimination" - yet another useful publication from Daniel
Barnett.
Second Edition - Published 3 May 2006
* 170 pages of commentary and analysis on the Employment Equality
(Age) Regulations 2006
* highlighting practical difficulties for employers and legal
advisors
* sets out arguments on both sides when the Regulations are
unclear
Click here to see a sample and for more information:
http://www.danielbarnett.co.uk/age_analysis.htm
Hear audio testimonials or view some sample pages:
http://www.danielbarnett.co.uk/age_analysis_testimonials.htm