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Employment law case updates - April 2015

1 April 2015

“Right to vary” clauses are ineffective

The High Court has found that the Department for Transport was not entitled to make changes to terms in its staff handbook that had been incorporated into employees’ contracts of employment.  The Court found that an employer can only make unilateral changes in accordance with any variation provisions if such a change would not pose a detriment to employees.  

Similarly, two recent Employment Appeal Tribunal (EAT) cases have also found in favour of employees on this point.  In one case the employer could not rely on a general flexibility clause to unilaterally reduce paid sick leave and, in the other, the employer was not entitled to unilaterally vary working times where the relevant contractual clause was stated to be “subject to variation”.

This spate of cases serves as a reminder to employers to take care when attempting to rely on variation clauses to make changes to terms of employment, particularly where such changes pose a detriment to employees.

Sparks and another v Department for Transport [2015] EWHC 181 (QB)

Norman and others v National Audit Office UKEAT/0276/14

Hart v St Mary’s School (Colchester) Limited UKEAT/0305/14

Requirement to agree new terms of employment was indirectly age discriminatory

In this case, a requirement for employees to agree new terms and conditions was found to be a “provision, criterion or practice” (PCP) that was indirectly discriminatory towards older workers.  These employees were found to suffer a greater disadvantage than younger employees as they stood to lose benefits, such as annual leave, which they currently enjoyed on the basis of their length of service. On the facts of this case, the PCP was objectively justified as there was no less discriminatory way for the employer to achieve its legitimate aim of reducing staff costs to ensure its future viability and to have in place market-competitive, non-discriminatory terms and conditions.  Going forward, employers looking to make changes to terms and conditions should consider whether such changes may have a discriminatory effect, and if so, whether they can be objectively justified.

Braithwaite and others v HCL Insurance BPO Service Ltd UKEAT/0152/14 and UKEAT/0153/14

No constructive dismissal where employee delays resigning and accepts sick pay

The EAT has demonstrated, once again, how difficult it is for employees to succeed with a constructive dismissal claim.  In this case, the employee was found to have affirmed her employment contract and accepted her employer’s alleged fundamental breach when she when she waited 18 months to resign.  The EAT rejected her argument that she was too ill to resign during that time.  Further, her acceptance of 39 weeks’ sick pay was a key factor pointing towards her affirmation of her contract.

Colomar Mari v Reuters Ltd UKEAT/0539/13

What steps should an employer take to escape constructive knowledge of disability?

The EAT has held that an employer that took all reasonable, but not all possible, steps to find out whether an employee was disabled did not have constructive knowledge of the disability.  The disability in question arose from an assortment of medical conditions causing the employee to be absent from work on a very regular basis for short periods at a time and there were varied reasons given for the absence.  The employer relied on a poor occupational health (OH) report but also took other steps, such as “return to work” meetings and reviewed correspondence with the employee’s GP.  The EAT considered that the employer’s actions should be viewed as a whole and that the test is of reasonableness, not a “counsel of perfection”.  Employers should take heart from this decision, especially when dealing with continuing short-term absences.

Donelien v Liberata UK Ltd UK EAT/0297/14

Pornographic email sent five years earlier was repudiatory breach

In this wrongful dismissal case, the High Court held that a senior employee who sent an email containing pornographic images committed a repudiatory breach, which his employer was entitled to rely on for summary dismissal under the employment contract.  The unusual aspect to this case is that the email in question was sent more than five years earlier and was only discovered when the employer conducted a successful “fishing exercise” aimed at finding a reason to escape paying the employee for a long notice period.  Employers should take care before embarking upon such an exercise themselves as the seniority of the employee and the fact that a recipient of the email was a young female employee significantly influenced the judgment.  It was also crucial that the employer did not affirm the contract once the breach came to light.  Employers should also note that this was a wrongful dismissal case and therefore that it makes no finding as to whether such dismissal would be unfair.

Williams v Leeds United Football Club [2015] EWHC 376 (QB)