Update: employment

Employment contracts

In Luke v Stoke on Trent City Council [2007] EWCA Civ 761 the claimant, who was the subject of a disciplinary investigation by her head teacher, brought complaints of bullying and harassment and then went off sick with stress for many months.

The grievance included over 30 different complaints and the local authority employer agreed that she would remain away from the school at which she worked pending an investigation and report. The investigator duly reported.

She did not support any of the complaints, bar one, and proposed an action plan that would permit a return to work by the claimant, supported by mediation. The claimant said that she would work with the recommendations but did not accept the report.

The employer took the position that she could not return to the school where she had previously worked unless she did accept the report because otherwise she would be only too likely to raise the same grievances again, and proposed either that she could undertake similar duties at a different school, or else that the disciplinary issues which had preceded her grievance would have to be resolved.

The claimant refused to go to another school. The employer stopped paying her so she brought a claim for unlawful deduction of wages, claiming that the employer had no right to require her to work anywhere other than at the school for which she had been employed: there was no mobility clause in her contract.

Both the employment tribunal and the Employment Appeal Tribunal (EAT) dismissed her claim on the basis that, in the circumstances of this case, a term could be implied permitting the employer to move the claimant, even though there was no such express right in the contract.

The Court of Appeal dismissed her appeal but on different and more elegant grounds. Although the employee's contract did not contain a clause permitting the employer to request her to work anywhere other than her original school, it was unnecessary to imply a clause to the contrary. They thus avoided having to decide whether such a term could be implied or not, and sidestepped the issue of the relationship between express and implied terms: it is settled law that you can not imply a term that contradicts an express term. Instead, said the Court, it was possible, and preferable, to find a solution to the claim in the employment relationship itself as created by the contract.

There were reciprocal obligations in the employment relationship. Mrs Luke had a duty was to comply with the local authority's reasonable requirements, whether they took the form of instructions or management decisions, as long as they fell within the scope of the contract. There was nothing in the contract which entitled her to set the terms on which she would return to teach at the centre or to continued receipt of a salary for not teaching at the centre, as reasonably required by the local authority within the scope of the contract.

The instant case was a straightforward case of 'no work, no pay' and it was not necessary to imply a further term into the contract to cover the situation. It was apparent from the findings of the tribunal that, without the implication of any term, the local authority was not obliged to continue to pay Mrs Luke for not working at the centre: she was not performing any work for the local authority under the contract.

Contrary to the reasonable stance taken by the local authority, Mrs Luke would not accept the report. Had she chosen to comply with the local authority's reasonable position she could have returned to the centre and the action plan would have been implemented.

She would have been back at work and would then have been entitled to be paid for her work. Therefore Mrs Luke's claim against the local authority for arrears of salary under the contract failed.

Victimisation claims

In recent months, the Court of Appeal has also had to look at the scope of the 'without prejudice' rule. Two recent cases illuminate different aspects of the rule.

In Brunel University and Anor v Webster and Anor [2007] EWCA Civ 482 the employer had issued a newsletter in which, in the context of race discrimination claims by the employees, it stated that it would defend its reputation against unfounded allegations of discrimination 'especially when accompanied by unwarranted demands for money'.

Perhaps not altogether surprisingly, the employees then brought claims of victimisation relying on this publication to show that they had been subjected to detriment for bringing a discrimination claim.

The employer tried to argue that the employees could not rely on the without prejudice communications which had taken place with regard to compensation to progress their victimisation claims. The Court of Appeal upheld the employees' argument that they should be entitled to refer to these discussions. From the facts of this case, the court could readily do so because both parties had in fact referred to these communications in the claim and response forms and that was sufficient to waive privilege.

The court pointed out that the university's internal enquiry panel had also reviewed these without prejudice discussions and so it was inappropriate in the circumstances for the employers to seek subsequently to cloak them with privilege.

As with the case of BNP Paribas v Mezzotero [2004] UKEAT 0218 04 3003, it is (once again) issues in a victimisation claim that has caused the without prejudice rule to be reviewed. While not commenting on the correctness of the decision in Mezzotero, the court did comment that it might be difficult to prove victimisation if employees are never allowed to rely on without prejudice communications.

Framlington Group v Barnetson [2007] EWCA Civ 502 is a reminder that the principles in Mezzotero are to be narrowly construed. In that case the claimant was negotiating terms of an early departure and no litigation had been threatened.

The Court of Appeal overturning the trial judge, concluded that the discussions were covered by the without prejudice rule in spite of the fact that there was no litigation in prospect. Per Lord Justice Auld 'the crucial consideration would be whether in the course of negotiations the parties contemplated or might reasonably have contemplated litigation if they could not agree' (paragraph 34).

Information and consultation

In the first EAT award under the Information and Consultation of Employees Regulations 2004, MacMillan Publishers Limited were 'fined' £55,000 for failing to arrange a ballot to elect employee representatives, following a valid request.

In Amicus v Macmillan Publishers Ltd [2007] UKEAT 0185 07 2407, the trade union Amicus took a complaint through the Central Arbitration Committee (CAC) that the employers had failed to hold the ballot required by Regulation 19 (1) of the Information and Consultation of Employees (ICE) Regulations. This was apparently not the first time that a complaint had been made about these employers and which had been upheld.

The EAT judgement carefully analyses findings of the CAC in relation to the breach. The complaint had been brought to the EAT under Regulation 22, pursuant to the CAC's declaration that McMillan was in breach. The limit of the penalty that the EAT can apply is £75,000.

In the present case the EAT concluded that the employer's failure was significant and had been compounded by the fact that there had been earlier breaches in respect of the same regulations.

In balancing these factors against the fact that the employer had recognised its legal duties, albeit belatedly, the EAT concluded that it would impose a serious penalty albeit it not the most serious, hence the figure of £55,000. The decision shows very clearly that the ICE Regulations have teeth and is expected to generate additional interest in their use by employee representatives.