Labour Law- Key Cases

Unfair dismissal

Airbus UK v Webb
(unreported, EWCA Civ 49, 7 February 2008, CA)

Five employees were found guilty of misconduct for misusing company time (by watching television during working hours). Four employees were given final written warnings, but one employee was dismissed. This was because he had been given a final written warning for a similar act of misconduct thirteen months earlier. The warning had expired three weeks before the second act of misconduct. The employee brought an unfair dismissal claim which was upheld by an employment tribunal and the Employment Appeal Tribunal (EAT).

The Court of Appeal (CA) over turned the decision of the EAT, and held that the employee was not unfairly dismissed because the employer had relied on an expired warning. In a previous case Diosynth Ltd v Thomson [2006] IRLR 284 CS it was held that a spent warning should be ignored for all purposes. However the CA said that Diosynth was only authority for stating that it would be unreasonable for an employer to rely on an expired warning as a principle reason for dismissal. The CA also stated that under Diosynth the expired warning 'tipped the balance' in favour of dismissal (as other factors taken together would not have justified dismissal), but in the present case the employee was dismissed mainly because of his misconduct and not because of the expired warning.

Implications for employers:

• Employers who take expired warnings into account before implementing a dismissal will not necessarily have unfairly dismissed the employee. However, such a practice is still very risky.
• As a matter of best practice employers should not rely on expired warnings, especially not as the principal reason for dismissal.
• If an employer does rely on an expired warning and there is also underlying misconduct, it may be reasonable to take the warning into account as well -provided that the subsequent misconduct is sufficient to warrant dismissal in its own right.

Stress

Deadman v Bristol City Council
[2007] IRLR 888 CA

A council employee was accused of sexual harassment. The council's policy was that all harassment claims should be sensitively dealt with and investigated by a three-person panel. However, the investigation was carried out by a two-person panel and the employee raised a grievance. The council upheld his grievance, but left a letter on his desk informing him that the claims would be investigated by a three-person panel. The employee went off sick with depression and did not return to work. He then brought a personal injury claim. He argued, based on several Council documents that were not in his employment contract, that the Council had a contractual obligation to act sensitively and had failed to do so by merely leaving the letter on his desk telling him that the matter would be re-investigated.His claim was upheld by the High Court which held that the council was in breach of the employment contract and that it was reasonably foreseeable that such a breach would case a psychiatric illness.

This decision was overturned by the Court of Appeal which held that the use of a two-person panel was in breach of contract but it was not reasonably foreseeable that this would cause the employee a psychiatric illness.

Implications for employers:

• Employers will only be vulnerable to such claims if the harm suffered by the employee was a reasonably foreseeable result of the employer's actions.
• At the very least, employers should follow their own policies and procedures and any statutory procedures carefully.
• If employers implement contractual procedures, very careful attention should be paid to the wording as there may be a contractual term that the employer must follow its published procedure to the letter in the investigation of any complaints made against the employee.
• Employers will always be subject to the implied obligation of mutual trust and confidence, and the duty to take reasonable care, but any damage suffered by an employee must still be reasonably foreseeable.

Sex discrimination

Madarassy v Nomura International plc 
[2007] IRLR 246, CA)

The Court of Appeal held that an employer is not obliged to prove that an employee was treated fairly once she had established that as a pregnant woman she had been discriminated against.

The employee, a banker, who claimed that she had suffered discrimination while pregnant went on maternity leave in March 2001. She also claimed that when she was on maternity leave she was not informed that her department was being restructured which put her at a disadvantage in the restructuring and redundancy process. In November 2001 she was dismissed for redundancy. She brought £1 million proceedings for discrimination citing 33 allegations. These allegations were dismissed by the employment tribunal and Employment Appeal Tribunal, apart from one concerning the employer's failure to carry out a health and safety assessment relating to her pregnancy.

The Court of Appeal had to decide what degree of unfair behaviour an employee was required to establish to transfer the burden of proof onto the employer to prove that it did not act unfairly. The Court of Appeal concluded that there had to be more than a set of circumstances where the tribunal could 'conclude' discrimination. Differences in status and treatment were not sufficient to establish a prima facie case of discrimination. It also ruled that the employer was correct in not carrying out a risk assessment as there was no evidence from the employer that her working conditions put her at risk. The employee is intending to appeal to the House of Lords.

Implications for employers:

• This is an important decision for employers who are now less exposed to sex discrimination claims in such circumstances as it will be harder for employees to establish that discrimination took place.
• In cases under the Sex Discrimination Act 1975 the employee always has to prove a prima facie case of sex discrimination. Previous cases have set this threshold at a very low level. The level now appears to be higher.
• However if a similar dismissal does take place the timing i.e straight after return from maternity leave will not of itself show a prima facie case of discrimination against the employer.
• There must be some other link in addition to the timing which suggests there may be a discriminatory reason for the dismissal, thereby enabling the employee to get the claim off the ground.
• An employee wishing to claim discrimination also now needs to show more than mere differences in status or treatment to force the employer to show that they have not discriminated. There needs to be something more than that.
• Despite this decision obviously the safest, most cautious, course of action for employers is always to try and avoid dismissing employees (or selecting them for redundancy) whilst they are pregnant, or during/upon return from maternity leave.