Employment law takeaways: our bitesize legal updates for busy HR professionals, provided by Suzanne Horne of Morrison and Foerster. This month: agency workers, re-employment and pension payouts.
1. Tilson v Alstrom Transport – Fully integrated agency worker was not employee of end user
2. Hinsley v Chief Constable of West Mercia Constabulary – It was a reasonable adjustment to re-employ employee who had resigned twice
3. Woodcock v Cumbria Primary Care Trust – Dismissal to avoid pension payout was not age discrimination
Tilson v Alstrom Transport – Fully integrated agency worker was not employee of end user
On 23 August 2004 Mr Tilson started work for Alstrom as an agency worker. During the course of his engagement he was promoted. He was also offered a permanent job on more than one occasion but he refused as the rate of pay was lower than the agency rate. On 7 November 2006 his relationship with Alstrom was summarily terminated. Mr Tilson brought a claim of unfair dismissal. The Employment Tribunal found that Mr Tilson was an employee and that a contract should be implied between him and the end user.
It found that he was fully integrated as a manager into Alstrom’s organisation. For example, he had employees reporting to him, he was authorised to recruit, discipline and dismiss staff, he ordered materials, he had a company phone, computer and network access and he was not at liberty not to turn up to work or to field a substitute. Alstrom appealed the decision to the EAT and the EAT overturned the decision. Mr Tilson then appealed to the Court of Appeal.
The Court of Appeal upheld the EAT’s decision. It held that Mr Tilson was not an employee.It found that even though there was a significant degree of integration of Mr Tilson into Alstrom’s organisation, the contractual documentation between the third party contractor and Alstrom was inaccurate and Mr Tilson had to apply to his line manager to take annual leave, there was still no legitimate basis to imply a contract of employment between Mr Tilson and Alstrom. The EAT added that its conclusion was reinforced by Mr Tilson’s refusal to accept the job offers.
Takeaway: This is an interesting decision given the level of integration of Mr Tilson. Since the case of Dacas in 2004, there has been a steady flow of cases looking at the status and rights of agency workers and this looks set to continue. In addition, ‘agency workers’ is destined to be a ‘hot topic’ for 2011 particularly now the Government has announced that it will not be amending the Agency Workers Regulations 2010 (the "Regulations"). The Regulations are due to come into force on 1 October 2011.
Hinsley v Chief Constable of West Mercia Constabulary – It was a reasonable adjustment to re-employ employee who had resigned twice
Ms Hinsley was a probationary pc in West Mercia Police. In June 2006 she was diagnosed with a thyroid condition and put on medication. West Mercia Police recognised her condition as a disability Thereafter, she became unhappy at work. Over the next few months, West Mercia Police took various steps to assist and accommodate her issues. However, on 2 December 2006 Ms Hinsley said she wished to leave the police.
On 19 December 2006 the Chief Inspector encouraged her to re-consider her position and offered her welfare support but the next day she tendered her written resignation. The Chief Inspector again spoke to her and he asked her to re-consider but Ms Hinsley said she had an alternative job offer outside of the force.
In any event, the Chief Inspector delayed processing her resignation and asked HR to arrange an exit interview. HR arranged an exit interview for 8 January 2007. On 22 December Ms Hinsley told the Chief Inspector that she had been a bit hasty and may stay. She asked to be transferred to a different team.
The Chief Inspector said she could transfer to any team other than the one she had identified as it had performance issues. Ms Hinsley refused. On 2 January 2007 Ms Hinsley telephoned HR to bring forward the exit interview as she planned to start her new job on the 8th January 2007. She had the interview with HR. The HR officer stated that she did not appear to have health problems at that time.
Further, he believed that he had persuaded Ms Hinsley to retract her resignation. However, on 4 January 2007 Ms Hinsley sent a second resignation letter. She left immediately, returning her uniform and warrant card. Her resignation was then accepted and processed.
On 31 January 2007 Ms Hinsley telephoned HR to inform it that she had been diagnosed with depression. She said that she wished to be re-instated as a probationer and to withdraw her resignation.
The same day, she spoke to HR and threatened legal action saying she could now get a considerable sum of money because she was diagnosed with depression.
On 6 February 2007 Ms Hinsley wrote to the head of HR. Her request for re-instatement was then considered by various levels of management. All concluded that Ms Hinsley could not be re-instated or re-engaged after she had left the force without the need to apply again from scratch as this was not permissible under the Police Regulations 2003.
Ms Hinsley brought a disability discrimination claim. She alleged that the failure to reinstate her as a probationer was post-termination discrimination in the form of a failure to make a reasonable adjustment contrary to the Disability Discrimination Act 1995 (as amended) (the "Act"). The Tribunal rejected her claim. It held that the proposed adjustment was prohibited by the Police Regulations 2003.
The EAT overturned the Tribunal’s decision. It held that the Chief Constable had failed to make a reasonable adjustment and so he was in breach of the Act. It found that there was only a perceived procedural bar under the Police Regulations 2003 and that in fact there was no express provision permitting reinstatement but none prohibiting it either.
The EAT compared this with the case of Archibald v Fife Council in which the House of Lords held that it would have been a reasonable adjustment for the Council to dispense with a mandatory competitive interview process where an existing employee was disabled and seeking redeployment.
Takeaway: This case will be worrying for HR and employers given that it illustrates the extent of the duty to make reasonable adjustments even after termination and despite the best efforts of the police to persuade Ms Hinsley to not resign in any event.
Woodcock v Cumbria Primary Care Trust – Dismissal to avoid pension payout was not age discrimination
Mr Woodcock was the former CEO of the Trust. His role was redundant but for almost 12 month thereafter he carried out temporary roles. He was then dismissed at 48 years of age by reason of redundancy without the Trust following a proper consultation exercise. Mr Woodcock brought a claim of unfair dismissal and direct age discrimination. The Employment Tribunal found that part of the reason for his dismissal was the fact that if he was made redundant at or after the age 50 he would have been entitled to a substantial enhanced pension. It held that he was treated less favourably on the ground of age but that such treatment was objectively justified.It considered that the dismissal of Mr Woodcock was a proportionate means of achieving a legitimate aim, namely saving the cost of the substantial pension cost and avoiding Mr Woodcock receiving a windfall. Mr Woodcock appealed the decision on the grounds, amongst other things, that costs alone cannot be a legitimate aim. However, he was unsuccessful. The EAT held that the Tribunal had not decided the justification issue on the basis only of the cost to the Trust. The Trust’s action was also aimed at preventing Mr Woodcock receiving a windfall of the substantial enhanced pension.
Takeaway: In the case of Cross v British Airways, the EAT did hold that cost alone cannot be a legitimate aim for the justification of discrimination: there has to be costs plus some other factor. However, the EAT in this case made some general remarks in its judgment which cast doubt on this established approach. Therefore, this decision may signal a change to a more commonsense approach at the EAT level which is likely to be welcomed by HR and employers as reflecting the reality that considerations of cost can be the deciding factor in certain circumstances.
And finally… Britain’s got talent contestant loses claim
A Madonna impersonator who sued the show after losing out in the audition rounds had his claim of discrimination on grounds of disability thrown out by the Tribunal. Using some creative legal thinking, Mr Grimmer claimed £250,000 for loss of earnings and injury to feelings by comparing the audition to a job interview. Simon Cowell is alleged to have said that "Madonna at 95 would look better and dance better than you" but we think Mr Grimmer could go far in the legal world…
