SECOND EDITION

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Titles in the series:

Company Law
Constitutional Law
Contract Law
Criminal Law
Employment Law
English Legal System
European Community Law
Evidence
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 SECOND EDITION

Alison Bone
LLB, MA, PGCE, MIPD, Dip HRM

Marnah Suff
BA, LLB, Cert F Ed, Barrister

CP
Cavendish
Publishing
Limited

London • Sydney
Second edition first published in Great Britain 1999 by Cavendish
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© Suff, Marnah 1999

First edition 1997
Second edition 1999

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British Library Cataloguing in Publication Data

Bone, Alison
Essential employment law – 2nd ed
1. Labour laws and legislation – Great Britain
I. Title II. Suff, Marnah III. Employment law
344.4’1’01

ISBN 1 85941 369 2

Printed and bound in Great Britain

Foreword

This book is part of the Cavendish Essential series. The books in the
series are designed to provide useful revision aids for the hard pressed
student. They are not, of course, intended to be substitutes for more
detailed treatises. Other textbooks in the Cavendish portfolio must
supply these gaps.
The Cavendish Essential series is now in its second edition and is a
well established favourite among students.
The team of authors bring a wealth of lecturing and examining
experience to the task in hand. Many of us can even recall what it was
like to face law examinations!

Professor Nicholas Bourne

General Editor, Essential Series

v
Preface

There is arguably never an ideal time to update an Employment Law

textbook, but the summer of 1999 seems particularly fraught, since the
Employment Relations Bill 1999 is currently finishing its passage
through Parliament. It is presumed that this will have the status of a
fully fledged statute around the time of publication and so it is referred
to throughout as the Employment Relations Act 1999 and treated as
being in force, although its implementation will be staggered over sev-
eral months and much of the detail is yet to be revealed. To avoid con-
fusion with the Employment Rights Act 1996, which is referred to as
the ERA 1996, the new Act is abbreviated to EReA 1999.
Given this caveat, the law is stated as at July 1999.

Alison Bone
University of Brighton

vii
Contents
Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii

1 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
The scope of employment law . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Sources of employment law . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
The machinery for resolving disputes . . . . . . . . . . . . . . . . . . . . .6
Statutory bodies with specific functions . . . . . . . . . . . . . . . . . .11
The Commissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12

2 The contract of employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

The contract of employment and self-employment . . . . . . . .16
Formation of the contract . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
Terms agreed between employer and employee . . . . . . . . . . .26
Implied terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
Incorporation of terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39

3 Statutory rights for employees during the course

of employment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Continuity of employment . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Transfer of Undertakings (Protection of Employment)
Regulations (TUPE) 1981 – as amended by
subsequent legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Statutory provisions on pay . . . . . . . . . . . . . . . . . . . . . . . . . . .51
Protection against deductions (ss 13– 27, Pt II of the
ERA 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
Maternity rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
Time off provisions (ss 50– 63 of the ERA 1996) . . . . . . . . . . . .62
Sunday working . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
European directives and their implementation . . . . . . . . . . . .64

4 Anti-discrimination legislation . . . . . . . . . . . . . . . . . . . . . . . . . . .67

Discrimination on the grounds of sex . . . . . . . . . . . . . . . . . . . .67
The Equal Pay Act 1970 (as amended) . . . . . . . . . . . . . . . . . . .89
The Race Relations Act 1976 . . . . . . . . . . . . . . . . . . . . . . . . . . .100
The Disability Discrimination Act 1995 . . . . . . . . . . . . . . . . . .101

ix
ESSENTIAL EMPLOYMENT LAW

Religion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .104
Age . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .105
The influence of EU Law on UK discrimination law . . . . . . .106
Criticisms of discrimination law . . . . . . . . . . . . . . . . . . . . . . .108

5 Termination of the contract of employment –

wrongful dismissal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .111
Termination of a contract of employment . . . . . . . . . . . . . . . .111
Wrongful dismissal (dismissal in breach of contract) . . . . . . .111

6 Termination of the contract of employment –

unfair dismissal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119
Unfair dismissal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .119

7 Termination of the contract of employment –

special categories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
Dismissals which are automatically fair . . . . . . . . . . . . . . . . .141
Dismissals which are automatically unfair . . . . . . . . . . . . . . .141

8 Termination of the contract of employment – remedies . . . . .147

Remedies for unfair dismissal (ss 111–32 of the ERA 1996) . .147
Redundancy payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .151
Unfair dismissal and management prerogative . . . . . . . . . . .160
A new model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .162

9 Trade unions and their members . . . . . . . . . . . . . . . . . . . . . . . .165

The status of a trade union . . . . . . . . . . . . . . . . . . . . . . . . . . . .166
Freedom of association . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .168
Freedom of association – positive guarantees
against trade unions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .175

10 Trade unions and employers – industrial relations . . . . . . . . .179

Industrial relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .179
Collective bargaining . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .180
The right to organise . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
The right to recognition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .181
The right to information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .183
The right to consultation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .185
Works Councils . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .190

x
 CONTENTS

11 Trade unions and employers – industrial action . . . . . . . . . . .193

Liability in tort . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .194
Loss of immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .203
New union liability (citizen’s right of action) . . . . . . . . . . . . .208
Liability of the trade union . . . . . . . . . . . . . . . . . . . . . . . . . . . .209
Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210
Picketing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .210
A ‘right to strike’ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .215

Index . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .219

xi
1 Introduction

You should be familiar with the following areas:

• the scope of employment law

• the sources of employment law including European law
• the machinery for resolving disputes in employment
• statutory bodies with specialised employment functions

The scope of employment law

Employment law is one of the more dynamic and controversial areas
of English law; so controversial, in fact, that there is no agreement even
on what it should be called. Books headed Labour Law, Employment
Law or Industrial Law will be found to cover much the same material,
that is:
• individual employment law – the law governing the relationship
between individual employees and their employer;
• collective labour law – the law governing the relationship between
employers and employee organisations, that is, trade unions;
• statutory controls over health and safety at work.
Due to the major growth in the content of employment law generally,
the law on health and safety at work often has to be moved to a
separate manual. The law on health and safety at work is not covered
in this volume.
Employment law is a matter of close interest to political parties,
which accounts for the growth of legislation on employment matters
in the last 30 years. It is also a matter of concern for the European

1
ESSENTIAL EMPLOYMENT LAW

Union (EU), and there has been a vast influx of law from Europe into
UK employment law in recent years, not all of it tune with the views
of the government of the day.
It is necessary to consider briefly the sources of employment law
and the legal framework within which it operates.

Sources of employment law

Labour law is found in common law, in statute law and in European law.

Common law
The relationship of employer and employee, the terms of the contracts
of employment, the respective duties of employer and employee are
all governed by the principles of the law of contract which emanate
from the common law. In addition, access to the statutory protection
given to employees is dependent on the existence of the contract of
employment whose requirements are again set by the common law.
The common law has also been important in the development of
collective labour law. Trade unions were illegal organisations in the
eyes of the common law and any industrial action they organised was
seen as a civil offence, that is, a tort. Statutory protection has been
given to both trade unions and their activities over the years. It is still
necessary, however, in any action to restrain trade union activity to
first identify the tort they are alleged to be committing. The common
law also remains important in establishing the relationship between a
trade union and its members.

Legislation
Legislation has become increasingly important in recent years. In the
1960s and 1970s, many Acts of Parliament provided new rights for
employees, for example, the right to redundancy payments, the right
not to be unfairly dismissed, the right not to be discriminated against
on the ground of sex or race. In the 1980s and 1990s, the emphasis
changed with the advent of the Conservative government and much
legislation was introduced to restrict the immunities of trade unions
organising industrial action. When the Labour Party came to power in
May 1997, they acted as soon as possible to ‘opt in’ to the Social
Protocol (more commonly, but, erroneously, referred to as the ‘Social
Chapter’). This led to the UK making provisions to comply with the

2
 INTRODUCTION

European Works Council Directive and also the Parental Leave

Directive. The latter is dealt with by the Employment Relations Act
(EReA) 1999 which it was stated would be the only major piece of
employment law legislation to be passed during the Labour
government’s first term of office.

European Law
Entry into the European Union has resulted in very many significant
developments. European law takes precedence over national law,
whether case law, prior legislation or even subsequent legislation
(Factortame v Secretary of State for Transport (1991)).
The greatest effect on English law has been in the area of sex
discrimination, transfer of undertakings and health and safety.
There are three basic sources of European law.

The Treaty of Rome

The Treaty of Rome is directly effective within all the countries of the
European Union, and does not need any national legislation for its
implementation. It has direct effect both horizontally and vertically,
that is to say, it will confer rights upon individuals both against other
private citizens and against the state, for example, Art 141 of the Treaty
of Rome which requires equal pay for men and women (see
Chapter 4).

The Treaty of Amsterdam

This treaty, which came into effect on 1 May 1999, was negotiated with
a view to preparing the EU for enlargement through institutional and
procedural reform. In the event, no such reforms were made and the
treaty has done little more than update some previously agreed
modifications. In terms of policy, there is an extra chapter on
employment and the Social Chapter has now become incorporated
into the text of the treaty. For students, the most annoying aspect of the
treaty is that it has renumbered several articles of the Treaty of Rome
as a result of streamlining; for example, the former Art 119 has now
become Art 141 (the basis for equal pay legislation, as mentioned
above).

3
ESSENTIAL EMPLOYMENT LAW

The legislation of the European Union

• Regulations which, like the Treaty, are directly applicable; and
• Directives, which require national governments to introduce
legislation to achieve a certain end. If not implemented, or
imperfectly implemented, these too can be directly effective in so far
as they affect ‘emanations of the State’ (that is, vertical effect). This
phrase has been liberally interpreted to cover not only public
authorities but ‘a body, whatever its form which has been made
responsible, pursuant to a method adopted by the State, for
providing a public service under the control of the State’. On this
basis, the House of Lords held that British Gas was an emanation of
the State (Foster v British Gas (1991)).
They are not, however, directly effective against private employers
(they do not have horizontal effect). Employees of private
employers may instead sue the government for damages for their
failure to implement the directive as required. In Francovich v Italian
Republic (1992), it was held that a government could be sued
provided:
– the directive was intended to confer rights on individuals;
– it is sufficiently clear and direct;
– the individual can show that he suffered loss as a result of the
government’s failure.
In the early years, directives could only be passed by the unanimous
vote of all Member States, but, in 1986, the Single European Act
permitted majority voting on measures aimed at the functioning of the
internal market. While unanimity is still required with regard to
general employment law matters, qualified majority voting applies to
directives on health and safety. It is expected, with the growth in the
numbers of countries within the European Union, that qualified
majority voting will increase.

The decisions of the European Court of Justice (ECJ)

The ECJ is the final arbiter in the interpretation of European law. When
matters involving European law arise in a case, they can be referred
directly to the ECJ for resolution or they can be decided by the national
court in accordance with existing interpretations of the European
Court.

4
 INTRODUCTION

Examples of the methods by which European law influences UK

employment law
• Legislative implementation
The Transfer of Undertakings (Protection of Employment)
Regulations (TUPE) 1981 were introduced in order to comply with
the Acquired Rights Directive 77/18.7 (see Chapter 3).
Changes were made in TURERA 1993 to written particulars, unfair
dismissal and pregnancy protection in accordance with various
directives (see Chapters 2, 3 and 7).
Changes were made to the Equal Pay Act in 1983, and to the Sex
Discrimination Act in 1986, in order to comply with decisions of the
ECJ (see Chapter 4).
• Judicial implementation – direct effect
The European Community Act 1972 accepted that EC law should be
enforced in the UK, therefore:
(a) national courts are under a duty not to apply UK law which
conflicts with EU law, for example, Webb v EMO Cargo (UK)
(1994) (see Chapter 4);
(b) the Treaty of Rome confers rights on individuals providing it is
unconditional and sufficiently precise: Barber v Guardian Royal
Exchange Assurance Group (1994) (see Chapter 4);
(c) Directives (again if unconditional and sufficiently precise) are
directly effective against ‘emanations of the state’, for example,
Foster v British Gas (1991).
• Judicial implementation – indirect effect
Uniform principles of interpretation are to be applied throughout
the Union. The ‘purposive’ European approach to interpretation
should be applied to both directives and corresponding UK
legislation. In Marleasing (1992), it was held that UK legislation
should be interpreted in accordance with the relevant directive
irrespective of whether the legislation was introduced in order to
implement the directive, for example, in Pickstone v Freemans (1988),
words were implied into the Equal Pay Act in order to make it
comply with the former Art 119 (see Chapter 4).
• Judicial review
(a) subordinate legislation, for example, regulations, may be
challenged on the ground that it is ultra vires, for example, the
‘commercial venture’ requirement in TUPE (see Chapter 3);

5
ESSENTIAL EMPLOYMENT LAW

(b) primary legislation, that is, Acts of Parliament may be

challenged if it conflicts with EU Law, for example, R v Secretary
of State for Employment ex p EOC (1994) which led to the
abandonment of the minimum hours per week requirement for
unfair dismissal and redundancy payments.
• Infringement proceedings
Infringement proceeding were brought against the UK Government
in respect of their failure to implement properly the provisions of
the former Art 119 in the Equal Pay Act 1983, the Sex Discrimination
Act 1986 and the requirements of the Acquired Rights Directive in
TUPE.
• Damages against the government
See Francovich v Italian Republic (1992) above, p 4.

The machinery for resolving disputes

The institutions of employment law reflect to a large extent the sources
of employment law.

Civil courts
Disputes arising in connection with common law matters are mainly
dealt with in the ordinary courts, for example, purely contractual
matters are dealt with in the county court or the High Court according
to the amounts of money involved. Applications for an injunction to
stop a union proceeding with industrial action will again be heard in
the High Court, as will a complaint by a union member that the union
has not complied with its own rules or has infringed the rules of
natural justice in its dealings with him.
However, following the mass of legislation introduced in the last
30 years, many new institutions have been created to deal specifically
with employment and industrial relations disputes.

Employment tribunals
Employment tribunals (ET) were previously known as industrial
tribunals (their name was changed by the Employment Rights
(Disputes Resolution) Act (ERDRA) 1998). Tribunals were set up in
1964 to deal with disputes relating to industrial training, but their
jurisdiction has been extended considerably and now covers almost all
individual aspects of employment law including unfair dismissal. ET

6
 INTRODUCTION

members include some with great experience of industrial relations

and, as an ex-chair has said, ‘reality should prevail over technicality’.
Work of the tribunals is governed by the Employment Tribunals Act
1996 and the Employment Tribunals (Constitution and Procedure)
Regulations 1993.

Composition and procedure

The tribunals are organised on a regional basis, and each tribunal
consists of a legally qualified chairman and two lay members, one
drawn from a panel nominated by employers’ organisations and the
other from a panel nominated by employee organisations.
The work of ETs has increased so dramatically that, in 1999, public
advertisements were placed in leading newspapers and journals
asking any interested individuals with industrial relations experience
to apply for a position as a lay member.
Legal aid is not available for employment tribunals. Proceedings are
intended to be less formal, less expensive and speedier than that of a
court. Originally, it was believed that persons would appear
themselves without the need for legal representation. However, in
recent years, tribunals have become more legalistic, and legal, or other
representation is more common and seems especially desirable in claims
involving complicated matters of law such as equal pay, discrimination,
reductions in wages or the transfer of an undertaking.
Costs are not normally awarded, but may be ordered if one of the
parties has behaved ‘frivolously, vexatiously, or otherwise
unreasonably’.
A tribunal may order a prehearing review, on the application of one
party or on its own motion, where it appears that some contention is
unlikely to succeed. This may be conducted by the Chairman alone;
written or oral representations may be made but no witnesses will be
called, nor documents considered. If the tribunal decides that the
contention is a hopeless one, then it can require the party concerned to
deposit £150 if he or she insists on continuing the proceedings.
The chairman may sit alone to consider cases on a wide range of
issues, including cases where both parties consent to his doing so.
Tribunals may review their own decision within 14 days of the
decision being sent out, on the grounds that:
• there was an error by tribunal staff;
• one party did not receive notice of the hearing;
• the decision was made in the absence of one of the parties;
• new evidence has become available; or

7
ESSENTIAL EMPLOYMENT LAW

• the interests of justice requires such a review.

There is a right of appeal to the Employment Appeal Tribunal within
six weeks on a point of law.

Jurisdiction
Employment tribunals are empowered to deal with a wide range of
matters arising from a number of statutory provisions including:
• the written particulars of the terms of employment;
• redundancy payments;
• unfair dismissal;
• guarantee payments;
• suspension from work on medical grounds;
• trade union membership and activities;
• time off work;
• the right to maternity leave;
• the Sex Discrimination Act;
• the Equal Pay Act;
• the Race Relations Act;
• the Disability Discrimination Act;
• time off for ante-natal care;
• secret ballots;
• unreasonable exclusion from trade union membership;
• failure to consult a trade union on redundancies or the transfer of
an undertaking; or
• unlawful refusal of employment on the grounds of trade union
membership.
They now also have jurisdiction over contractual claims which:
• arise or are outstanding on the termination of an employee’s
employment;
• are not greater than £25,000;
• are brought within three months of the termination of employment;
• do not relate to personal injuries, living accommodation, intellectual
property, breach of confidence, restrictive covenants.
The employer may bring a counterclaim within six weeks.

8
 INTRODUCTION

The Employment Appeal Tribunal

The Employment Appeal Tribunal (EAT) was originally set up by the
Employment Protection Act 1975. It consists of a chairman who is a
High Court judge and two or four lay members chosen as for the
employment tribunal.
It hears appeals on points of law only from the employment
tribunal on most of the jurisdictions exercised by a tribunal and from
the Certification Officer. Appeals are restricted to points of law in
order to discourage appeals. In BT v Sheridan (1990), it was stated by
the Court of Appeal that points of law cover only:
• an error of law; and
• the tribunal’s decision was perverse.
The EAT is not bound by its own previous decisions.
Appeals from the EAT lie to the Court of Appeal and thence to the
House of Lords. If the case has a European dimension, it may be
referred to the ECJ.

Advisory, Conciliation and Arbitration Service (ACAS)

ACAS was set up in the mid-1970s to improve industrial relations and
and to encourage collective bargaining. The latter function, however,
has been taken away and ACAS now aids the settlement of industrial
disputes. It is regulated by TULR(C)A 1992 as amended by TURERA
1993 and ERDRA 1998.
ACAS has a tripartite structure which is common in employment
situations. Three members are independent, three represent employers
and three represent employees. The chairman is appointed by the
government, but the government cannot direct ACAS as to how to
exercise its function. ACAS may charge fees to those persons who
benefit from its activity; however, fees are charged at present only for
certain publications and seminars.
The functions of ACAS reflect its name, and are as follows:
• Advice
It provides free advice on a wide range of employment matters to
both employers and employees. Some 60,000 queries a year are
usually dealt with.
• Conciliation
(a) individual disputes – Every application to an employment
tribunal is referred to ACAS who try to effect an agreement

9
ESSENTIAL EMPLOYMENT LAW

between the parties without the need for a hearing. It is

estimated that one-third of claims are settled at this stage, and
another one-third are withdrawn. With one exception only, an
agreement to settle an employment tribunal complaint will only
be binding if it has been effected through ACAS. The one
exception relates to a settlement agreed by the claimant’s legal
advisor;
(b) collective disputes – ACAS may strive to bring disputing parties
together in order to reach a settlement either on its own
initiative or at the request of one of the parties.
• Arbitration
Where a trade dispute exists, ACAS may, with the consent of the
parties, refer the matter to an independent arbitrator or to the
Central Arbitration Committee (CAC).
The role of ACAS was extended by ERDRA 1998 so that it has
authority to conciliate in relation to redundancy claims and also to
offer binding arbitration in unfair dismissal claims. There is some
delay in implementing binding arbitration, but it is expected to be
operational in early 2000.
• Codes of Practice
ACAS is empowered to issue Codes of Practice ‘containing such
practical guidance as the service thinks fit for the purpose of
promoting the improvement of industrial relations’. Codes of
Practice have been issued on Disciplinary Practices and Procedures
in Employment; Disclosure of Information to Trade Unions for
Collective Bargaining Purposes; and Time Off for Trade Union
Duties and Activities. Also, there is an advisory booklet on
Discipline at Work. Codes of Practice are not legally binding in that
failure to follow the Codes will not necessarily attract liability, but
they must be taken into account by the tribunals whenever relevant.

The Central Arbitration Committee (CAC)

This was set up in 1975 as a permanent and independent industrial
relations arbitration body and is now governed by TULR(C)A 1992. It
consists of a chairman and representatives of employers and
employees. There are a number of deputy chairmen who share the
work. Arbitration committees are set up with a chairman and an equal
number of members from both sides of industry.
Their function is to hear complaints from trade unions that an
employer has failed to disclose information for collective bargaining

10
 INTRODUCTION

purposes (see Chapter 10). If an employer fails to comply with a

declaration of the CAC, then it may declare that certain terms should
automatically become part of the contract of employment of the
relevant employee. This is a compulsory arbitration power.
The CAC will also arbitrate on disputes referred to it by ACAS. This
is a voluntary power.
Before 1980, it also had compulsory powers to arbitrate in
recognition disputes. This was abolished in 1980 and reintroduced by
the Employment Relations Act (EReA) 1999, which provides for
compulsory recognition procedures. There is no appeal from the
decisions of the CAC, but they may be challenged by judicial review
proceedings in the High Court.

Statutory bodies with specific functions

The Certification Officer
The office of Certification Officer was created in 1975 to:
• maintain a list of independent trade unions; and
• to issue certificates of independence to trade unions.
Most rights given to trade unions are given to independent trade unions,
so a certificate of independence is a vital matter (see Chapter 10).
Additional duties have been entrusted to the Certification Officer
since 1979. The Officer also:
• keeps records of annual membership and financial returns, copies
of union rules and other documents which unions are required to
file;
• investigates complaints concerning the election of trade union
officials, the allotting procedures for setting up political funds,
political expenditure and the amalgamation of trade unions;
• deals with matters formerly dealt with by the Commission for the
Rights of Trade Union Members and the Commissioner for
Protection Against Unlawful Industrial Action.
An annual report is made to the Secretary of State for Employment
who will present it to Parliament.

11
ESSENTIAL EMPLOYMENT LAW

Commissioner for the Rights of Trade Union Members

(CROTUM)
This office was created by the Employment Act 1980 to assist union
members in taking action against their own union where the latter
had:
• failed to comply with the regulations on political expenditure, the
election of union officials, the use of funds or property, ballots for
industrial action and maintenance of the register of members;
• taken disciplinary or expulsion proceedings against a member.
The Commissioner was abolished by the EReA 1999 and the role
transferred to the Certification Officer.

Commissioner for Protection Against Unlawful Industrial

Action (COPAUIA)
This office was created in 1993.
The Commissioner had the power to assist any party who wished
to take action on the basis that the supply of goods or services to him
or her had been prevented or delayed by unlawful industrial action.
This Commissioner’s role was also abolished by the EReA 1999.

The Commissions

Commissions have been set up to oversee and assist in the operation

of various legislation.

The Equal Opportunities Commission (EOC)

The EOC was established by the Sex Discrimination Act in 1975. It
consists of between eight and 15 members. It has a duty to:
• work towards eliminating discrimination on the grounds of sex;
• promote equality of opportunity between men and women;
• review the operation of the Sex Discrimination Act 1986 and the
Equal Pay Act 1983; and
• submit proposals for amendment.
It has the power to:

12
 INTRODUCTION

• give advice and financial support to suitable claimants;

• take action itself in respect of certain acts, for example,
advertisements;
• formulate and issues Codes of Practice which have the same effect
as ACAS Codes;
• carry out formal investigations, but only where it has some evidence
that unlawful acts are taking place (Re Prestige Group plc (1984));
• where it discovers discrimination, to issue non-discrimination
notices.

The Commission for Racial Equality (CRE)

The Commission for Racial Equality was established by the Race

Relations Act 1976. Its remit and powers are very similar to those of
the EOC above. It has a duty to:
• work towards the elimination of discrimination;
• promote equality of opportunity and good relations between persons
of different racial groups;
• keep under review the working of the Act.
It has, however, a wider jurisdiction with regard to non-employment
matters.

The Disability Rights Commission (DRC)

This will be established by the year 2000 as a result of the provisions
of the Disability Rights Commission Act 1999. It replaces the former
National Disability Council which had very few powers. Like the
existing Commissions, the main functions of the DRC will be to work
towards elimination of discrimination and to spread good practice,
while providing information and advice for employers, service
providers and disabled people. It will have the power to carry out
formal investigations and issue non-discrimination notices. A unique
power is for statutory agreements to be made with anyone who is
subject to a formal investigation. By this agreement, the DRC will
suspend any formal investigation and the person subject to it will
undertake to comply with ‘such requirements as may be specified in
the agreement’. The intention is to avoid the need for a non-
discrimination notice. The DRC may assist individuals who have
complained, or who are proposing to complain, to an employment
tribunal of discrimination.

13
2 The contract of
employment

You should be familiar with the following areas:

• the distinction between contracts of employment and self-

employment
• the formation and variation of a contract of employment
• the terms agreed between employer and employee,
whether express or implied
• the terms implied by the common law
• the terms incorporated from collective agreements,
awards or otherwise

The contract of employment is central to British labour law.

• many statutory rights – for example, unfair dismissal, redundancy
payments – are dependent on the presence of a contract of
employment. In addition, common law contractual concepts are
used to define certain elements of the statutory rights;
• there is no legal structure for collective agreements. They become
enforceable only when incorporated into an individual contract of
employment;
• the economic torts which are the basis for controlling industrial
action are based on a breach of the contract of employment;
• the contract itself is an important source of employment rights and
duties, both in respect of express terms – for example, salaries,
hours of work holidays – and terms implied by the court.

15
ESSENTIAL EMPLOYMENT LAW

The contract of employment and self-employment

Despite its pivotal role, the statutory definition of a contract of

employment is not helpful. Section 230 of the ERA 1996 states it is ‘a
contract of service or apprenticeship, whether express or implied, and
(if it is express) whether oral or in writing’. It can, in some
circumstances, be difficult to distinguish between a contract of service
(a contract of employment) and a contract for services (self-
employment). In view of the importance of this distinction, it is
unfortunate that there is a lack of precision in the dividing line
between them.

Significance of the distinction

(1) Only an employee qualifies for:

• employment rights granted under the Employment Rights Act
1996, for example, guarantee payments, entitlement to written
particulars, protection against unfair dismissal, redundancy
payments, minimum periods of notice, and so on;
• certain social security benefits such as jobseekers allowance;
• certain health and safety protection, for example, under the
Factories Act;
• the benefit of certain implied terms, for example, the employer’s
duty of care.
(2) An important distinction concerns taxation. Employees are taxed
under Sched E of the Income and Corporation Taxes Act 1970,
whilst the self-employed enjoy more favourable treatment, being
taxed under Sched D, with more generous allowances.
(3) An employer is vicariously liable for all the torts committed by his
employees, but is not normally responsible for the torts of his
independent contractors.
From the employer’s point of view, it may be desirable to hire
independent contractors, as witnessed by the growth of self-
employment in recent years. The employer is relieved of the
administrative tasks involved in making PAYE deductions and
National Insurance deductions from wages. It may have certain VAT
advantages and help to avoid the need to negotiate with trade unions.
It also frees him or her from having to observe the provisions of the
Employment Rights Act 1996.

16
 THE CONTRACT OF EMPLOYMENT

Advantages to the individual employee, however, tend to be more

apparent than real. He must ensure that he is paid enough to cover
insurance premiums, holiday money, pension contributions. Some of
the industrial safety legislation, some of the most important social
security rights, and the modern employment protection legislation
apply only to employed persons. According to Smith and Wood, ‘An
independent contractor may be in a better monetary position while
working, but at a grave disadvantage if he falls off a ladder or is
sacked’.

Identifying the contract of employment

The control test
In Victorian times, the distinguishing element was control. In Yewens v
Noakes (1880), it was stated that ‘A servant is a person subject to the
command of his master as to the manner in which he shall do his
work’. Today, control is still important: but it is not decisive. It is
inappropriate, for instance, when dealing with persons with special
skills.

The organisation test

The control test was briefly replaced by the organisation test which
required an employee to be an integral part of the employer’s
organisation. In Cassidy v Ministry of Health (1951), it was held that the
Ministry was vicariously liable for the negligence of a surgeon in
performing an operation because the hospital authority was in a
position to make rules concerning the organisation of the medical
staff’s work, as opposed to the manner in which it was done. The
surgeon was an integral part of the organisation. The great
disadvantage of this approach lies in its failure to define exactly what
is meant by integration and organisation.

The multiple test

The modern approach has been to abandon the search for a single test
and to adopt a multiple test, thereby weighing all the factors for and
against the existence of a contract of employment to decide whether a
worker is in business on his own account. Control and organisation are
taken into account, as is the power to suspend and dismiss, and
pensions; but no one factor is decisive. In Ready Mixed Concrete v
Ministry of Pensions (1968), McKenna J held that there were three
conditions necessary to establish that a contract of service existed:

17
ESSENTIAL EMPLOYMENT LAW

• the employee agreed to provide his own work and skill;

• there must be some element of control exercised by the employer;
• the other terms of the contract must not be inconsistent with the
existence of a contract of employment.
In Market Investigations Ltd v Minister of Social Security (1969), an
interviewer worked infrequently under a series of contracts whereby
she interviewed in accordance with the company’s instructions. She
had to complete the work within a certain time, but, otherwise, had no
specified hours of work. There was no provision for holiday or sick
pay and she was free to work for other organisations. The court found
that the company did have some control over the way in which she
worked and that the terms of the contract were consistent with a
contract of service. She did not provide any equipment and took no
risks. The court concluded she was not in business on her own account.
The court emphasised that there was ‘no exhaustive test compiled nor
strict rules laid down’, but suggested that the following would be
among the factors to be considered:
• degree of control by the employer;
• degree to which the worker risks loss/stands to profit;
• ownership of tools and equipment;
• degree to which the worker is an integral part of the business;
• method of payment;
• whether deductions are made for tax and national insurance;
• whether there is a mutuality of obligation;
• the terms used by the parties – a factor to be considered but not
decisive.
In Lee v Chung and Shun Shing Construction Group (1990), the Privy
Council implicitly approved of the test of ‘Is he in business on his own
account?’ and also the criteria adopted in Market Investigations (above).

A decision for the courts

The label given to the arrangement by the parties themselves will be
taken into consideration but, as stated above, it is not decisive. The
court will look at the essence of the arrangement, not merely at any
agreement between the parties themselves as to how it should be treated.
In Ferguson v John Dawson & Partners (1976), Ferguson worked as a
labourer on a building site. He was designated as a labour only
subcontractor. The Court of Appeal held that he was an employee; his
work was under the control of the firm’s site manager. The court stated

18
 THE CONTRACT OF EMPLOYMENT

that it considered the concept of the ‘lump’ (labour only

subcontracting) as being no more than a device which each party
regarded as being capable of being put to his own advantage, but
which, in reality, did not affect the relationship of the parties. Control
was the dominant factor in this case.
In Lane v Shire Roofing Co Ltd (1995), the Court of Appeal agreed that
control was an important element but stated that it might not be
relevant in the case of a skilled worker with discretion to decide how
the work should be carried out. In such cases, the test should be
‘Whose business was it?’. Was the worker carrying out his own
business or was he working on his employer’s business? The Court of
Appeal held that a builder who ran his own one man business and
who was categorised as self-employed for tax purposes was an
employee when he was employed by a roofing firm to re-roof a porch,
injuring himself badly whilst doing so. They went on to say that, in the
case of safety at work, there was a real public interest in recognising an
employer/employee relationship where it existed, because of the
statutory and common law duties placed on the employer.
The Court of Appeal stated in Massey v Crown Life Insurance Co Ltd
(1978) that, where the nature of the relationship is in doubt or is
ambiguous, the label given to the relationship by the parties
themselves could solve the ambiguity. In that case, the court accepted
that a branch manager who had arranged to be treated as self-
employed and registered himself as John Massey & Associates was an
independent contractor. However, in Young and Woods v West (1980),
where a sheet metal worker chose to be treated as self-employed, the
Court of Appeal stated that it was impossible to regard Woods as being
in business on his own account, and he was therefore held to be an
employee. The court stated that the label chosen by the parties can be
a relevant factor but only if other factors did not dictate a different
answer.
In the above cases, the most important factors are seen to be
’control’ and the ‘own business’ test.

Atypical workers
Another test which has become important, particularly in relation to
‘peripheral workers’ or atypical workers, is mutuality of obligation.
In O’Kelly v Trusthouse Forte Plc (1983), the Court of Appeal refused
to find regular casual waiters were employees even though they had a
well established and regular working relationship with Trusthouse
Forte. It was held that the relationship lacked the essential mutuality
of obligation to classify them as employees. The company had no

19
ESSENTIAL EMPLOYMENT LAW

obligation to offer them work and technically the workers could refuse
work when it was offered even though in practice they did not do so,
because refusal would result in removal from the regular list.
The same reasoning is also found in Wickens v Campion Employment
(1984), where ‘temps’ engaged by a private employment agency were
not accorded employment status because of the lack of a binding
obligation on the part of the agency to make bookings for work and
the absence of any obligation on the part of the typists to accept any
bookings made. Similarly, in McLeod v Hellyer (1987), the court found
that trawlermen who entered into separate contracts for each voyage
were self-employed.
A different approach was taken by the court in Nethermere (St Neots)
Ltd v Gardiner (1983). Here, homeworkers making clothing were
accorded employee status on the basis that the regular giving and
taking of work over a period evidenced the necessary mutuality of
obligation. This was held to be so, even though the workers were
under no obligation to undertake a particular quantity of work and, in
certain weeks, did no work at all.
It has been suggested that, because atypical workers are now
becoming almost typical, the courts should take this into account.
In Clark v Oxfordshire Health Authority (1998), a nurse who was
retained by a health authority on a casual basis to fill temporary
vacancies was held not to be an employee. The Court of Appeal stated
that, in the absence of a mutuality of obligations, a contract of
employment did not exist.
The Court of Appeal decided in Carmichael and Another v National
Power plc (1998) that casual workers who agreed with a company to act
as guides at a power station on an as and when required basis, that
involved the company giving a reasonable share of work offered and
the guides performing a reasonable amount of work so offered,
entered a binding contract of employment. C and L were paid for the
number of hours they worked, paid tax and National Insurance and
were provided with uniforms. The following questions needed to be
posed:
• was there an agreement?;
• what were the terms?;
• did the parties enter a contractually binding arrangement?;
• was the relationship a contract of employment?
In relation to the last point, the tribunal had concluded there was no
contract, since the applicants could turn down work at any time, but
the court held that there was an implied term that no more than a

20
 THE CONTRACT OF EMPLOYMENT

reasonable amount of work would be offered and that the applicants

would take no more than a reasonable amount. Here, there was a
contract of service and the employees were entitled to a written
statement of terms of employment

Secondment of employees
Where an employee is seconded to another firm, his original firm will
remain liable unless it can be proved that control was transferred.
In Mersey Docks and Harbour Board v Coggin and Griffiths (1947), the
Harbour Board loaned a crane and a driver to a firm of stevedores who
became responsible for the driver’s wages. It was held that the
Harbour Board were the driver’s employers as they had failed to
prove that control had been transferred. Conversely, in Garrard v
Southey (1952), the plaintiff was loaned to carry out some electrical
work. The foreman of the temporary employers not only told him
what to do but also specifically controlled the way he was to do it. It
was held that the temporary employers were his employer in the
circumstances.
The court distinguished between cases where a complicated piece
of equipment was loaned together with an employee and where an
unskilled or semi-skilled workman was transferred on his own.
Transfer of employment is more easily accepted in the latter case.

Agency workers
The above rules are applied. Although the Employment Agencies Act
1976 requires agencies to communicate to their clients and workers the
status of the latter, this is not conclusive since the courts may have
regard to the real relationship. Depending on the actual arrangements,
an agency worker may be self-employed, an employee of the client, or
an employee of the agency.
In McMeechan v Secretary of State for Employment (1997), the Court of
Appeal held that an agency worker had a contract of employment
despite the fact that his contract of service described him as self-
employed. The court stated that the status of the employee depended
on the interpretation of all the terms of the contract. Matters which led
to the decision included the agency’s right to dismiss, a grievance
procedure and the duty of confidentiality.
However, the EAT later concluded in Knights v Anglian Industrial
Services (1997) that K, an agency worker, who was placed exclusively
with one company for three years and who had tax and National
Insurance deducted from his wages, was not an employee of the

21
ESSENTIAL EMPLOYMENT LAW

agency. The deduction of tax and National Insurance was not

conclusive, held the court – there were far more factors that pointed to
the conclusion that K was not an employee of the agency. (He may
have fared better if he had argued that he was an employee of the
company for whom he worked for three years.)

Directors
General rule – a non-executive director will not be an employee: an
executive director may be an employee. However, in Buchan v Secretary
of State for Employment (1996) and Ivey v Secretary of State for Employment
(1996), two company directors who owned controlling interests in
their companies were held by the EAT not to be employees. It was
stated that it would, for instance, be inappropriate to allow such
individuals to claim unfair dismissal or redundancy payments since
the decision to dismiss them could only have been taken with their
consent.

Partners
Partners are self-employed.

Law and fact

The Privy Council confirmed in Lee v Chung (1990) the statement made
by the Court of Appeal in O’Kelly v Trusthouse Forte (1983) that the
categorisation of the contract is a question of fact, not a question of law,
apart from those cases where the tribunal is required to interpret a
written document, as in Davies v Presbyterian Council of Wales (1986).
As an appeal can only be made on a question of law, or on the
ground that the decision of the tribunal is perverse, few appeals can be
made. This could result in different tribunals reaching different
conclusions on very similar facts.
It is sometimes suggested that the distinction between employment
and self-employment should be differently drawn according to the
purpose for which it is being made, so that, for instance, one might
lean more heavily in favour of employment status in unfair dismissal
case and industrial safety cases than in tax and social security cases.
The courts have experienced great difficulty in classifying so-called
‘peripheral’ or ‘atypical’ workers – those whose work is temporary,
part time or casual.
European Directives have prompted action to be taken, however.
The EReA 1999 implements the Part Time Work Directive 97/81 in that
the Secretary of State has a duty to make regulations ‘for the purposes

22
 THE CONTRACT OF EMPLOYMENT

of seeing that persons in part time employment are treated for such
purposes and to such extent as the regulations may specify, no less
favourably than persons in full time employment’. These regulations
must be in place by April 2000. There is also a draft directive on fixed
term work which will impose a duty on Member States to introduce
legislation preventing employers from abusing the practice of
employing workers under successive fixed term contracts and impose
a duty to inform such workers of job vacancies and to facilitate their
access to appropriate training opportunities.

Formation of the contract

A contract of employment can be entered into formally or informally.

It can emerge as a result of an advertisement, an interview,
negotiations, exchange of letters or casual conversations.
To be a valid contract, it will require an offer and an acceptance of
that offer; an intention to be legally bound, certainty of terms and
consideration. Its validity can be affected by illegality, lack of capacity,
misrepresentation, mistake, duress or undue influence.
Job advertisements do not normally amount to an offer, but can be
used to help interpret the contract.

Illegality
In practice, illegality provides the main problem. If a contract is illegal
at common law, this will render void not only the agreed and
incorporated terms but also the terms implied by common law or
imposed by legislation. A contract is void for illegality if it is for an
illegal purpose, for example, to defraud the Inland Revenue.
In Cole v Fred Stacey (1974), the employee was given an additional
payment which was not taxed as income. It was held that he was not
entitled to a redundancy payment as the contract was illegal and void.
Not knowing that an action is illegal will not validate the contract. In
Salveson v Simons (1994), a farm manager had most of his salary paid
under the PAYE system, but £2,000 was paid as management fees to a
partnership of which he was a member but which carried out no
identifiable services. The EAT maintained that this was clearly a case
of defrauding the inland revenue; the fact that the parties did not
realise that it was illegal was irrelevant and the contract was void. The
claimant could not, therefore, sue for unfair dismissal.

23
ESSENTIAL EMPLOYMENT LAW

A contract will not be void, however, against an employee:

• if the illegality was only in its performance, for example, a driver
was convicted of exceeding the speed limit during the course of his
employment;
• if the employee was unaware of the illegality and did not profit
from it, for example, Hewcastle Catering v Ahmed (1991): two
employees were allowed to sue for unfair dismissal although they
had carried out their employer’s instructions to present bills in a
way which could allow the employer to evade making VAT
payments.
The written statement of terms
Section 1 of the Employment Rights Act 1996 requires an employer to
give employees a written statement of certain terms and conditions of
their employment within eight weeks of the commencement of
employment. The aim of this provision is to ensure that the employee
knows his legal rights under the contract. The statement need not be
given to the self-employed or employees who work mainly outside the
UK.
The statement must contain the following information:
• identification of the parties;
• the date on which employment began and the date on which the
employee’s period of continuous service began, taking into account
any employment with a previous employer which counts towards
that period. (This is important for the employee to calculate his
entitlement to many statutory benefits.)
• scale or rate of pay;
• intervals of pay – weekly, monthly, etc;
• hours of work;
• holiday entitlement (including statutory holidays) and holiday
pay;
• job title, or brief description of work; and
• the place or places of work.
The above terms must be set out in one document, called the principle
document. In addition, the following information must be given but
may be given in instalments provided all information is given within
an eight week period:

24
 THE CONTRACT OF EMPLOYMENT

• sick leave and any entitlement to sick pay;

• pension and pension schemes – whether a contracting out
certificate is in force;
• where the employment is not permanent, the period for which it is
intended to continue, or the date on which it is to end;
• any collective agreement which affects the terms and conditions of
employment;
• where the employee is expected to work outside the UK, the period
of foreign service, the currency to be used for pay and any extra
benefits.
In addition, if the employer has more than 20 employees, he must give
them details of any disciplinary or grievance procedures, specifying
the person to whom the employee may apply if he has a grievance or
is dissatisfied with any disciplinary decision and any further steps
which may follow.
Terms and conditions relating to absence for sickness or injury, or to
pension schemes, or to disciplinary or grievance procedures need not
be given in detail but may refer to another document which is
reasonably accessible to the employee, for example, a company
handbook. Reference may be made to a collective agreement or to
statutory rights in the case of length of notice.

Changes
Any changes in the terms contained in the written particulars must be
communicated in writing to employees within one month of the
change.

Status of the written statement

The written statement is not a contract of employment merely a
statement of those terms of the contract required by law to be included
in the written statement. As such:
• It is prima facie, but not conclusive evidence of the terms of the
contract. The employer can show that it is erroneous by bringing
strong evidence to the contrary; the employee may challenge it on
the basis of less strong evidence. In System Floors v Daniel (1982), an
employee was able to show that the date of commencement of
employment shown in the written particulars was incorrect. The
fact that the employee did not challenge the statement when it is
issued does not prevent him from challenging it at a later date. The
signature of the employee only indicates receipt of the document.

25
ESSENTIAL EMPLOYMENT LAW

However, if it is headed ‘Contract of Employment’ and is signed as

such by an employee, then it will be taken to be the contract of
employment, and the parol evidence rule will apply (Gascol
Conversions v Mercer (1974)).
• It will not necessarily contain all the terms of the contract.

Remedy for failure to provide a written statement

An employee may apply to the tribunal which may declare what
particulars the employee should have been given. It was held in
Eagland v BT plc (1993) that the tribunal may identify a term that has
been agreed – either expressly, or by implication – from the
surrounding circumstances or the behaviour of the parties, but it may
not invent terms which had not been agreed by any of the above
methods.

Terms agreed between employer and employee

Express terms
The express terms may be written, oral, or partly written and partly
oral. The written parts may be found in various pieces of paper,
including correspondence, works rules, collective agreements, staff
handbooks or company journals. The task of the tribunal will be to
interpret the meaning of such express terms.
In Cole v Midland Display Ltd (1973), the employee was a manager
employed on a ‘staff basis’. He refused to do overtime without pay and
his subsequent dismissal was held to be fair. The essence of being
employed on a staff basis at that time was that he was guaranteed
wages whether there was work or not including during sickness. In
return, ‘staff’ were expected to work overtime where necessary,
without pay if reasonably requested to do so.
Although it may be possible to refer to an advertisement in order to
ascertain the exact terms of a contract, such statements cannot override
the express terms. In Deeley v British Rail Engineering (1980), the
advertisement referred to a ‘Sales Engineer (Export)’. The contract,
however, referred to a ‘Sales Engineer’, and the written terms stated
that he was to perform duties ‘as required’ by his employer. It was
held that he was a ‘Sales Engineer’ and not an ‘Export Sales Engineer’.

26
 THE CONTRACT OF EMPLOYMENT

Implied terms
In addition to the express terms, there are terms which will be implied
into the contract, in order to give ‘business efficacy’ to the contract (the
Moorcock basis). Such terms are terms implied in fact and are based on
the presumed intention of the parties. See terms implied in law, below.
The test used is that of the ‘officious bystander’ who on asking
whether such and such a provision was part of the contract, would
have been told ‘of course, it was too obvious to mention’.

Custom and practice

Custom and practice are important sources of implied terms. An
employee is presumed to contract with his employer against a
background of customs which are ‘reasonable , certain, and notorious’.
In Sagar v Ridehalgh (1931), deductions from the wages of a cotton-
weaver for bad workmanship were upheld by virtue of the existence
of a longstanding custom of the trade which was well known.
In Harwick v Leeds Area Health Authority (1975), however, the
applicant was dismissed after exhausting her period of sick pay –
which was an entitlement to two months on full pay and two months
on half pay. This was in accordance with the normal practice at the
time in the Health Service. It was held that such a rule was, in fact,
outmoded and unreasonable and that the dismissal was unfair.

Works rules
Employers may issue booklets or post notices containing the rules of
the workplace. These may or may not be terms of the contract
depending on the circumstances.

Contractual rules
Rules can be express terms:
• if the employee signs an acknowledgment that they are part of the
contract;
• if reasonable notice of their existence is given to the employee. The
notice must be such that reasonable employees would consider
them part of their contract and they must be brought to the notice
of employees at or before they enter into the contract.
Rules can also be implied terms in accordance with the above rules, for
example, the employee has accepted employment on ‘the usual
conditions’.

27
ESSENTIAL EMPLOYMENT LAW

Non-contractual rules
Works rules are not necessarily contractual in character.
In Secretary of State v ASLEF (1972), Lord Denning stated that the
British Railways Rule Book, although signed by each employee, was in
no way a contract of employment. They were ‘instructions to a man as
to how he should do his work’. The distinction is important because
the terms of the contract can only be changed by agreement, whereas
unilaterally imposed instructions may be changed unilaterally by the
employer.
In Cresswell v Board of Inland Revenue (1984), employees of the Inland
Revenue refused to cooperate in using computers as they believed that
it could lead to a loss of jobs. They claimed a customary right to do the
job manually. It was held that the employer could require them to do
what was the same job but by different methods.

Variation of contractual terms

The terms of the contract of employment may only be varied with the
consent of both parties and there is no power which entitles one side
to act unilaterally.
If the employer unilaterally varies the contract and:
• the employee leaves as a result – this will amount to ‘constructive
dismissal’ by the employer; or
• the employee stays on – then:
(a) this may be taken to be an implied acceptance of the changed
terms. In Aparau v Iceland Frozen Foods (1996), however, the EAT
distinguished between contractual terms such as pay rates
which have an immediate effect and mobility terms which may
not. Care must be taken before deciding that staying on without
protest indicates acceptance of mobility terms. In that case, an
employee claimed constructive dismissal when her employers
required her to move to another store in accordance with a
mobility clause which they had unilaterally introduced a year
previously. It was held that she was constructively dismissed;
(b) if the employee refuses to agree to the change – there will be a
breach of contract on the part of the employer.
In Rigby v Ferodo Ltd (1988), the court accepted that the
employees had not agreed to a reduction in their wages by
Ferodo and allowed a claim for back pay. Where an employee
protests about the change, but stays on it is a question of fact in
each case whether he has accepted the change.

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 THE CONTRACT OF EMPLOYMENT

However:
• the express terms of the contract may permit a variation;
• a contract may be varied by virtue of a collective agreement. In
Burke v Royal Liverpool University Hospital Trust (1997), the trust was
involved in tendering for an internal bid which would retain jobs
and entered into correspondence with the trade union
representative who agreed, in order to remain competitive, to less
favourable terms and conditions which involved a reduction in
wages. This was conditional on the success of the tender, following
which all employees received three months’ notice of the new
terms and conditions and were asked to sign and return these as
confirmation of acceptance. B later claimed at a tribunal that
unlawful deductions had been made from her wages. The EAT
agreed that the collective agreement, together with custom and
practice, provided evidence of a clear agreement that the union and
the Trust would be able to make a contract that was legally binding,
once incorporated into individual contracts. Consideration had
been provided for the reduction in wages because the alternative
was loss of tender and consequent loss of jobs;
• a contract of employment cannot remain static permanently. If an
employee refuses to accept a variation, there will be no wrongful
dismissal provided the correct notice is given. The dismissal may
also be fair on the grounds of ‘some other substantial reason’
provided that the employer can show:
(a) the change is necessary or desirable from the point of view of
the business;
(b) the employee was fully informed and consulted with regard to
the variation;
(c) due consideration was given to any objections and alternative
suggestions; and
(d) the employer has acted reasonably throughout.
See Chapter 5 – Unfair dismissal.

Overriding terms
Can the implied term of mutual trust and confidence (see below)
override an express term of the contract, for example, a mobility clause
concerning either geographical or task mobility? Does it require the
employer to apply the express terms in a reasonable manner?

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ESSENTIAL EMPLOYMENT LAW

• If a mobility clause is vague (but not if it is clear according to the

EAT) then it must be interpreted in a reasonable manner by the
employer (Rank Xerox v Churchill (1988)).
• Even where it is explicit, the EAT held in United Bank v Akhtar
(1989) that the employer must apply the mobility clause in
accordance with the implied term of trust and respect. In that case,
the court found, despite the presence of a mobility clause, that
Akhtar had been constructively dismissed when he was ordered to
move from Leeds to Birmingham, on six days’ notice.
In White v Reflecting Roadstuds Ltd (1991), however, the EAT refused to
find constructive dismissal when an employee was transferred to a
lower paid job. They distinguished Akhtar by stating that that case
decided that employers could not enforce an express term in such a
way as to prevent the employee from performing his contract. They
also suggested that the employer would have to establish reasonable
or sufficient grounds for the move.

Implied terms

Terms implied by law (as distinct from terms implied in fact – see
‘agreed terms’) have been described as legal duties masquerading as
contractual terms. Such duties have been imposed by the courts and
are implied into every contract of employment.

Duties of the employer

(1) To pay the employee

This is the most fundamental duty of the employer. It provides
consideration for the contract.
• Suspension without pay on any ground would therefore
constitute a breach of contract on the part of the employer,
unless such procedure was allowed by an express term of the
contract, or was implied by custom or practice. In Bird v British
Celanese (1945), an employee was suspended for two days in
accordance with the firm’s practice. This was held to be valid.
In Cantor Fitzgerald International v Callaghan (1999), the issue was
whether failure to pay an employee’s full salary amounted to a
repudiatory breach. The Court of Appeal distinguished between
administrative errors and other slips which resulted in failure to

30
 THE CONTRACT OF EMPLOYMENT

pay and a deliberate refusal. The former would not amount to

breach, the latter would, even if the amount was very small. In
this case, the employees were told that a loan would not incur a
tax liability, but, due to a mistake, the Revenue were
misinformed and a tax demand was made. A senior director in
the employing company decided that this liability would not be
met by the company and, as a result, the defendant C and others
decided to leave and work for a competitor in breach of a
restrictive covenant. The employer sought an injunction to
enforce the covenant, but it was held this would not be granted,
since the employers had repudiated the contract themselves by
reneging on their promise with regard to the nature of the loan.
• The rate of pay may be expressly agreed between the parties or
specified in a collective agreement. In most cases, it will be clear
as it will have been stated in the ‘written particulars’ (see above)
and in the ‘itemised pay statement ‘ (see below). However, if the
statutory statements have not been issued and neither the
contract nor a collective agreement says anything, then a
‘reasonable’ amount must be paid.
• At common law, the general rule is that an employer must pay
the wages of all employees if they are available for work, even
though none is provided by the employer. However, if the lack
of work is due to circumstances beyond the control of the
employer then there is no obligation to pay wages, as was the
case in Browning v Crumlin Valley Colleries (1926), where a mine
became unsafe due to flooding and work had to be stopped. It
was held that there was no need to pay wages. This general
right to be paid may be excluded by express or implied
agreement or by custom. Many collective agreements now
provide for a ‘guaranteed week’. (See, also, Chapter 3 –
Guarantee payments.)
• Details of any provisions relating to sick pay should have been
included in the‘written particulars’. However, if none have been
supplied then, according to Mears v Safecar Security (1982), a
tribunal must look at all the surrounding circumstances, in-
cluding whether sick pay had been paid in the past. The
presumption in favour of sick pay will only be effective if there
was absolutely no other evidence to go on. In Aspen v Webbs
Poultry and Meat Group (1996), the High Court held that where
there was a permanent health insurance scheme which
provided for the payment of three-quarters of salary to

31
ESSENTIAL EMPLOYMENT LAW

incapacitated employees until their death, retirement or

dismissal, there was an implied term that the express
contractual provisions on dismissal would not be used so as to
remove the employees’ entitlement to the insurance. (See
Chapter 3 – Statutory sick pay.)

(2) To provide work

The employer does not have a duty to provide work except:
• in the case of piece work or payment by commission:
In Turner v Goldsmith (1891), it was held that a commercial
traveller must be allowed a reasonable opportunity to earn his
commission which was his sole means of remuneration;
• where it is necessary in order to enable a reputation to be
acquired or maintained, for example, in acting or journalism;
• where provision of work is necessary in order to maintain an
employee’s skill or contacts in his profession. In Provident
Financial v Hayward (1989), the question ‘Will the skill atrophy?’
was used as a test by the court when dealing with an injunction
to prevent an accountant working for a rival firm during
‘garden leave’.

(3) To provide for the safety of the employees

An employer may be liable:
• directly – for his own breach of duty; or
• indirectly – an employer is vicariously liable for the negligence
of his servants during the course of their employment.
An employer has a duty to take reasonable care for the safety of his
employees. In Wilson and Clyde Coal Co Ltd v English (1938), the
House of Lords laid down that the employer’s duty of care
included a duty to provide and maintain:
– safe plant and equipment
The employer must ensure that the place of work is safe, that
he has provided a suitable, sufficient, and safe plant, where
it is needed and which is well maintained. If a plant which
has been obtained from a reputable third party is found to be
defective then, at common law, the employer would not be
liable. However, the Employers Liability (Defective
Equipment) Act 1969 provides that the employer shall be
liable in those circumstances to the employee and he may
then seek reimbursement from the supplier;

32
 THE CONTRACT OF EMPLOYMENT

– safe system and method of work

This is the widest duty and covers such matters as the
general conditions of work, coordination of work
departments, training and supervision. In Bux v Slough
Metals (1973), Bux was provided with safety goggles but
declined to use them. It was held that the employers had
fulfilled their duty to provide suitable equipment, but had
failed in the duty to provide adequate training and
supervision.
It covers not only physical injuries, but also psychological
harm, such as a nervous breakdown caused by stress (Walker
v Northumberland CC (1995)). It can apply to accidents which
occur outside of the employer’s premises, as in General
Cleaning Contractors v Christmas (1953), where a window
cleaner fell when cleaning a client’s windows. The employers
were held responsible for not providing a safe system of work;
– competent staff of fellow employees
This too will cover supervision and training and also
horseplay. In Hudson v Ridge Manufacturing Co Ltd (1957),
Hudson was injured by a practical joke played by a fellow
employee who was a notorious practical joker. It was held
that the employer was liable.
Alternatively, instead of suing his employer for breach of the
implied term of the contract, an employee who has been injured at
work may sue in the tort of negligence or for breach of statutory
duty.

(4) To indemnify the employee for expenses properly incurred in the

performance of his work

(5) To deal promptly with grievances

In Goold v McConnel (1995), salesmen had approached the company
on a number of occasions seeking to discuss their grievances
concerning a new sales scheme. After the company had failed to
respond to several such requests, the salesmen resigned and
claimed constructive dismissal. No written statement had been
supplied. The EAT held that it is an implied term of the contract of
employment that the employer would reasonably and promptly
afford an opportunity for its employees to obtain redress of their
grievance; a failure to do this would be a fundamental breach of
contract.

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ESSENTIAL EMPLOYMENT LAW

It has been suggested that this would be particularly useful in

sexual or racial harassment cases, where it is alleged that the
employer has failed to deal with the employee’s complaints.

(6) References
Traditionally, there was no legal duty to provide a reference or
testimonial. However, if a reference is given, care should be taken
to see that the reference is accurate. If a reference contains untrue
statements, then the employer may be liable:
• to the employee for defamation – however, if he can show that the
statement was made in pursuance of a social duty (for example, to
a prospective employer), then, provided he made the statement in
good faith, he will be protected by the defence of ‘qualified
privilege’;
• to the employee in the tort of negligent statements;
• to the employee under an implied duty of care in the contract of
employment. In Spring v Guardian Assurance Plc (1994), the
House of Lords held that an employer who provides a reference
has a duty to the employee regarding the preparation of the
reference and may be liable to him for economic loss suffered as
a result of the employer’s negligent misstatements. The duty of
care could also arise from an implied term in the contract of
employment that, if a reference is given, due care and skill must
be exercised. The court did not consider that the law of defama-
tion alone gave the employee sufficient protection. The court
also suggested that there are circumstances where it is necessary
to imply a term into a contract of employment that the employer
will provide the employee with a reference at the request of a
prospective employer;
In Bartholomew v London Borough of Hackney (1999), B sued his
employer because he had revealed in a reference that he was
suspended from work due to a charge of gross misconduct.
Although this was correct, B argued that the letter as a whole
was unfair since it gave no context, nor did it explain that B had
denied the charge. The Court of Appeal rejected this complaint,
but did reinforce the rules that an employer is under a duty to
give a reference that is ‘true, accurate and fair’. Arguably, this is
wider than the duty previously recognised, since fairness is a
more subjective criterion.

34
 THE CONTRACT OF EMPLOYMENT

• to the recipient – either for the tort of deceit or negligent

statements.
Refusal to give a reference may amount to victimisation if the
employee concerned has previously alleged discrimination (see
Chapter 4).

(7) Duty of good faith (duty of mutual respect)

This has developed into an important duty in connection with
constructive dismissals claims (see Chapter 5). An employer has
been held to have broken this duty of good faith when he:
• used abusive language (Palmanor Ltd v Cedron (1978));
• made false accusations of theft (Robinson v Crompton Parkinson
(1978));
• criticised managers in front of subordinates (Associated Tyre
Specialists v Waterhouse (1976));
• failed to protect an employee against harassment (Bracebridge
Engineering v Darby (1990));
• ignored a non-smoker’s complaints about the smoky
atmosphere in which she had to work (Waltons and Morse v
Dorrington (1997));
• conducted business in a way which was likely to damage an
employee’s future job prospects as it was foreseeable the
business would become insolvent (Malik and Another v Bank of
Credit and Commerce International (1997)).
Controversy has arisen as to whether this implied duty can be used
to limit an employer’s exercise of his express powers under the
contract. See ‘Overriding terms‘, above.

Duties of the employee

(1) To render personal service

The employee must carry out his work personally. He may not
delegate his duties.

(2) To take care

The employee must carry out his work with proper care and skill.
In Lister v Romford Ice and Cold Storage Company (1957), it was held
that an employee who injured a fellow employee by his negligent
reversing of a vehicle had broken a term of his contract and would

35
ESSENTIAL EMPLOYMENT LAW

have to reimburse his employer for any losses caused to him. The
British Insurance Association has agreed not to insist upon
enforcement of this duty in the absence of fraud. The nationalised
industries and local authorities follow a similar policy.

(3) To obey all reasonable and lawful orders

• The order must be within the terms of employment: in O’Brien v
Associated Fire Alarms (1968), it was held that an electrician who
had been lawfully employed to install fire alarms in Liverpool
could lawfully refuse to work in Barrow in Furness, 120 miles
away.
• It should not require the employee to do something dangerous
(Ottoman Bank v Chakanian (1930)); or something illegal (Morrish
v Henlys Ltd (1973)).
• Modern cases tend to take the view that a single and isolated act
of disobedience does not amount to an intention to repudiate
the whole contract.

(4) To give faithful service – ‘the duty of fidelity’

‘The practical duty in any given case is to find exactly how far the
rather vague duty of fidelity extends’, per Lord Greene MR.
It would seem to cover the following:
• Not to wilfully disrupt the employer’s business
In Secretary of State v ASLEF (1972), railwaymen in a ‘work to
rule’ had by a meticulous observance of the rule book brought
the railways to a standstill. The Court of Appeal held that they
had wilfully embarked on an action which would obstruct the
employer’s business and bring it to a standstill. To do so would
be to break an implied term in their contracts. In Ticehurst v BT
Plc (1992), Mrs Ticehurst, who was a BT manager and a union
official, refused to sign an agreement to work normally and not
to withdraw goodwill during a dispute between BT and the
union. The Court of Appeal held that her threat to withdraw
goodwill amounted to a breach of the implied term that she
would serve her employer faithfully. It was necessary to imply
this term into a manager’s contract because they are in charge of
other employees and must exercise judgment and discretion
when they give orders.

36
 THE CONTRACT OF EMPLOYMENT

• Co-operation and adaptability

In Sim v Rotherham BC (1986), a refusal by a teacher to cover for
an absent colleague was held to be a breach of the duty to
cooperate. In Cresswell v Board of Inland Revenue (1984), it was
held that the employee’s refusal to computerise was a breach of
this duty.
• Not to compete
(a) Spare time work
What a worker does in his spare time is normally his own
business; however, it has been stated that ‘it would be
deplorable if it were laid down what a worker could,
consistent with his duty to his employer, knowingly,
deliberately and secretly set himself to do in his spare time,
something which would inflict great harm on his employer’s
business’. In Hivac v Park Royal Instruments Ltd (1946), an
injunction was granted against a competitor restraining him
from employing the plaintiff’s employees from making
valves for him in their spare time. It was not necessary to
show that any confidential information had been divulged.
(b) Ex-employees
An ex-employee is free to go into competition with his ex-
employer. But, whilst employed, he must not break his duty
of fidelity, for example, a milk-roundsman may not canvass
his customers on his last day at work (Wessex Dairies v Smith
(1935)); a tradesman may not copy out a list of his
employer’s clients before leaving (Robb v Green (1895)).
However, there was no breach of duty when two junior
employees wrote to a supplier for information.
The contract may contain an express restrictive covenant
governing an ex-employees conduct.
Such a covenant will only be enforceable insofar as it is
reasonable. In TSC Europe (UK) Ltd v Massey (1999), the High
Court held that a non-poaching covenant was unenforceable
because it was an unreasonable restraint on trade, as it applied
to all employees of the company, regardless of seniority or
knowledge and was in relation to poaching of employees who
joined the company after the employee who was subject to the
restraint had left.
An employer may also use garden leave to protect its interests –
the departing employee is placed on garden leave during a

37
ESSENTIAL EMPLOYMENT LAW

period of notice so that he is unable to work for a new employer.

Forcing an employee to take garden leave, if it is not provided
for in the contract, amounts to breach of contract which will
release the employee from any further obligations (William Hill
Organisation v Tucker (1998)).
• Not to divulge any confidential information
The employee must not disclose any confidential information
about the employer’s business to an unauthorised person. Such
information may be as to its profitability, new designs or models
or mode of operation or anything relating to the business. This
obligation may continue even after the employment has ended.
An employee instructed in a secret manufacturing process will
be prevented by an injunction from disclosing that process to a
rival company whom he later worked for. This rule will not
apply if the employee is obliged by law to disclose information
under the Health and Safety at Work Act 1974.
The nature of confidential information was explained in
Faccenda Chicken Ltd v Fowler (1986). Fowler had been employed
as Sales Manager of Faccenda Chicken until he resigned along
with eight other employees in order to set up a rival business
selling fresh chickens from refrigerated vehicles. Neither Fowler
nor the other employees were subject to any restrictive
covenants. Faccenda claimed that Fowler and the others had
broken their contracts by using confidential sales information
relating to the requirements of customers and the prices they
paid to the detriment of the company. The Court of Appeal laid
down the following guidelines with regard to confidential
information. Information is confidential if:
– the nature of the information requires it;
– the nature of the employment requires it;
– the employer has impressed on the employees the
confidential nature of the information;
– the confidential information can be isolated from other
information which the employee is able to disclose.
Applying these principles, the court held that Fowler and his
colleagues had not broken their duty of fidelity – the information
they had used was not confidential.
• Whistle blowing
There is an exception to the general duty that confidential
information must not be disclosed, where the disclosure is in the
public interest.
38
 THE CONTRACT OF EMPLOYMENT

In Initial Services v Putterill (1968), a former employee revealed to

the Daily Mail that the company was involved with others in a price
fixing agreement contrary to the Restrictive Practices Act; and, in
Lion Laboratories v Evans (1985), an ex-employee publicised the fact
that the accuracy of a breathalyser used by the police was in doubt.
In both cases, injunctions against the ex-employees were refused on
the ground that the information was in the public interest.
Normally, in order to be protected by the ‘public interest’ defence,
the information must be accurate. However, in Re a Company’s
Application (1989), where an employee complained to Fimbra and to
the inland revenue, it was held that the fact that both had a duty to
investigate such matters meant that the employee did not have to
prove the accuracy of his allegations.
The Public Interest Disclosure Act (PIDA) 1998 gives statutory
protection for those disclosing information in certain circumstances:
See Chapter 5 – Unfair Dismissal.
• Not to make a secret profit
For example, taking a secret commission from a supplier, see Boston
Deep Sea Fishing v Ansell (1888).
Note that the Patents Act 1977 and the Copyright Designs and Patents
Act 1988 imply certain terms concerning the ownership of inventions
and copyright into the contract of employment.

Incorporation of terms

Collective agreements between trade unions and employers or

employers associations are not legally enforceable. The terms of a
collective agreement may, however, become enforceable between an
individual employer and an individual employee by being
incorporated in the employee’s contract of employment. It was held in
Marley v Forward Trust (1986) that a clause in the collective bargain
stating ‘this is not an enforceable agreement’ does not affect the issue
of incorporation.
The following conditions must be satisfied:
(1) There must be evidence of an intention to incorporate
There have been suggestions that collective terms should be
incorporated into a contract on the basis that the union is
negotiating as agent for its members. This has not been pursued as
it involves many difficulties, for example, the position of later

39
ESSENTIAL EMPLOYMENT LAW

enrolled employees. However, in Singh v BSC (1974), it was held

that Singh, who had resigned from the union, was not bound by a
new shift system which the union had negotiated after his
resignation and which he did not wish to observe.
By express incorporation
For example, by a statement in the written terms that the contract
is to be subject to the terms of a particular collective bargain.
In Robertson v British Gas (1983), the statement read ‘The provisions
of the Agreement of the Joint National Council will apply to you’
and added ‘incentive bonus scheme conditions will apply to meter
reading and collective work’. It was held that this incorporated the
bonus scheme into the employee’s contract of employment and,
furthermore, the Gas Board could not unilaterally withdraw the
scheme as it had become part of the employee’s contract of
employment. He was entitled to his bonus.
On the other hand, if the statement states that the employee is to be
bound by the collective agreement in force for the time being, then the
contractual terms can be varied without any further consent on the
employee’s part. Since the collective agreement itself is not legally
binding, the employer can also de-recognise the union and move to
individual bargaining without the consent of the employee.
In Cadoux v Central Regional Council (1986), rules drawn up by the
employer were expressly incorporated into the contract of
employment; yet because, as employer’s rules, they were subject to
unilateral change, it was held that benefits under the rules (which
related to a pension scheme) could be removed by the employer’s
unilateral act.
The contract of employment may be undertaken on the basis of
‘union rates of pay’ (wages clauses only are incorporated) or ‘union
conditions’ (all the provisions of the collective agreement are
incorporated). Employees who work for public institutions are
normally engaged on the basis of the appropriate scale laid down
by the negotiating bodies and the only scope for individual
bargaining may be on the precise point of entry into the scale.
Implied incorporation
It is also possible to incorporate the terms of a collective agreement
into a contract of employment by implication. The most common
basis for this is that both employer and employee have consistently
behaved as if the agreement was part of the contract, that is,
incorporation as a result of custom and practice. It was held,

40
 THE CONTRACT OF EMPLOYMENT

however, in Hamilton v Futura Floors (1991), that an employer’s

membership of a trade association will not alone be enough to
incorporate a term into an employee’s contract.
(2) The term must be suitable for incorporation
Some terms of the collective bargain are unsuitable for
incorporation as they are intended to govern managerial relations
rather than the rights of individual employees, for example,
conciliation procedures, union recognition rights or redundancy
procedures.
In British Leyland v McQuilken (1978), the collective agreement
provided that on the closure of a department, employees would
have a choice between retraining and redundancy. After a change
in management policy, McQuilken was offered a choice between
transfer to another location or redundancy. The EAT overturned the
tribunal’s finding of constructive dismissal, stating that ‘the
collective provision was a long term plan dealing with policy rather
than the rights of individual employees’. In Young v Canadian
Northern Railway Co (1931), the Privy Council held that a
redundancy scheme providing for ‘Last In First Out’ (LIFO) was
not incorporated. In Marley v Forward Trust (1986), however, the
Court of Appeal held that collective agreement providing for a six
month trial in a new job or a redundancy could be relied on by the
employee.
In Alexander v Standard Telephones and Cables (1991), the EAT held
that a selection process, LIFO, was not suitable for incorporation,
but enhanced rights of pay for redeployed workers were
incorporated; in that case, wages were specifically referred to in the
written terms.

Duty to inform
It was held in Scally v Southern Health and Social Services Board (1991)
that, where there are changes to the incorporated collective agreement
to the employee’s advantage, the employer has a duty to so inform the
employee. In that case, the plaintiffs who were doctors in Northern
Ireland sued their employers for the failure to inform them of a new
right to purchase added years of pension entitlement.
However, in University of Nottingham v Eyett and Another (1999), the
High Court held there was no positive duty to warn an employee that
the date on which he was proposing to take early retirement might not
be the most financially advantageous to him.

41
ESSENTIAL EMPLOYMENT LAW

‘No strike’ clauses

Considerable difficulties have been experienced in the past with ‘no
strike’ clauses. A great deal may depend on the precise wording, for
example, ‘the union will not call a strike until the procedure for
settling the dispute is exhausted’. This is an obligation on the union
and is unsuitable for incorporation. However, ‘the employees will not
go on strike until procedures for settling the dispute are exhausted’ is
capable of incorporation.
Section 180 of the TULR(C)A 1992 now provides that such a clause
will not be binding unless:
• the collective agreement is in writing;
• it expressly states that the term is to be incorporated into the
individual contract;
• a copy of the collective agreement is reasonably accessible to the
employees concerned;
• the individual contract expressly or impliedly incorporates such a
term.

42
3 Statutory rights for
employees during the
course of employment

You should be familiar with the following areas:

• the concept of ‘continuity of employment’
• the effect of the Transfer of Undertakings Regulations
• statutory provisions on pay
• restrictions on deductions from pay
• maternity rights
• ‘time off’ entitlements
• ‘working time’ legislation

Most rights for employees both during and on termination of

employment are now found in the Employment Rights Act (ERA)
1996, but there are still some matters which are included in other
legislation, for example, the Transfer of Undertakings (Protection of
Employment) Regulations (TUPE) 1981, the Social Security
Contributions and Benefits Act 1992, and the Trade Union and Labour
Relations (Consolidation) Act (TULR(C)A) 1992.
Many of the rights are free standing, for example, time off
entitlements, but others, such as the requirements for ‘continuous
employment’ and the meaning of a ‘weeks pay’ are to be read in
conjunction with other rights such as unfair dismissal, redundancy
payments (see Chapters 5, 6, 7 and 8) or guarantee payment (see
below).

Continuity of employment
Most rights granted by the ERA 1996, whether during employment or
on its termination, are dependent on the employee having a certain

43
ESSENTIAL EMPLOYMENT LAW

period of ‘continuous employment’. It is important in ascertaining

who is qualified for those rights and also, in some cases, in computing
what benefits are due, for example, in the case of redundancy
payments.
Prior to 1994, ‘continuous employment’ could only be claimed by
employees who worked for at least 16 hours a week or eight hours a
week if they had worked for that employer for five years.
In March 1994, however, the House of Lords declared in R v
Secretary of State for Employment ex p EOC (1995) that the minimum
hours thresholds were incompatible with community law and the ERA
1996 does not now require any minimum hours worked per week in
order to qualify for continuous employment.

Retrospective claims
In Biggs v Somerset CC (1995) and McManus v Display Foods Ltd (1995),
the Employment Appeal Tribunal (EAT) considered what national
time limits were applicable to claims from part timers dismissed in the
1970s. The EAT declared that the time limits contained in the EP(C)A
1978 applied, that is, three months for unfair dismissal and six months
for redundancy payments. The court stated that the Treaty of Rome
did not confer a right to unfair dismissal or redundancy payments, it
simply operated to remove the offending conditions which were
considered discriminatory. As the claims were brought under the
EP(C)A 1978, the time limited in that Act applied.
The most controversial aspects of the rulings centred on the
question of when time began to run. The employees argued, that as
their claims were based on the direct effect of the former Art 119, the
relevant time limits did not begin to run until it became clear that the
hours thresholds in the EP(C)A 1978 contravened Art 119 (now
Art 141).
The basis of EAT’s decision in both cases was that the employees
could have relied on the direct effect of the former Art 119 at the time
of their dismissal to challenge the discriminatory hours thresholds
then in operation. The Court of Appeal upheld the ruling.

Weeks which count (s 212 of the ERA 1996)

Continuity begins on the day the employee starts work under the
contract. If, however, the starting day is a non-working day, for
example, a bank holiday then continuity will start on that day,
although he does not actually start work until the following day
(Salvation Army v Dewsbury (1984)).

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

The following weeks count towards continuous employment:

• Weeks covered by a contract of employment – providing the contract
of employment subsists there is continuity even if the employee does
not actually work, for example, because of absence due to holiday,
sickness, injury, pregnancy or confinement.
• Weeks not covered by a contract of employment – even where there
is no subsisting contract of employment there is continuity in the
following four circumstances:
(a) where an employee is absent through sickness or injury for up
to 26 weeks. However, if an employee is away through illness
and then remains away for pension purposes, there will not be
continuity (Pearson v Kent CC (1992));
(b) where an employee is absent from work on account of a
temporary cessation of work, for example, lack of orders, fire,
strike at a suppliers. The cessation must refer to the employees
work; the employer may still be carrying on business. The
temporary nature of the cessation will be judged on the basis of
hindsight.
In Bentley Engineering v Crown (1976), two years absence on
account of redundancy was held to be a ‘temporary absence’.
In Ford v Warwickshire CC (1983), the phrase was held to cover
the case of a school teacher who had been employed on eight
consecutive fixed term contracts for the academic year
(September to July). The summer vacations were held not to
break continuity. It did not matter that the cessations were
predictable and regular;
(c) where an employee is absent and by arrangement or custom the
employment is considered as continuing, for example,
secondment or leave of absence for personal reasons.
In Wishart v National Coal Board (1974), an employee of the
National Coal Board did not lose continuity when he worked
for a year for a firm which carried out development work for the
Coal Board.
In Lloyds Bank v Secretary of State for Employment (1979), it was
held that a bank employee who worked one week on, one week
off was absent ‘by arrangement’;
(d) where an employee is absent from work because of pregnancy
or confinement up to a limit of 26 weeks.

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ESSENTIAL EMPLOYMENT LAW

But, if the employee returns to work in accordance with the

statutory maternity leave provisions, then all the weeks in which
she was away will count.
Note
• Employment is presumed to be continuous unless the contrary is
shown.
• Continuity means employment with a certain employer; it is not
broken because the employee has been moved to a new
department, or has been promoted.
• An employee who is re-engaged or reinstated as a result of a
tribunal order or ACAS conciliation or a private agreement will not
have suffered a break in employment. The weeks away will also
count towards his years of employment.
• Certain weeks when the employee is on strike, or is working
abroad, do not count towards continuity of employment, but do not break
continuity.

Change of employer (s 218 of the ERA 1996)

Continuity is preserved in some cases even where there is a change of
employer. Where the respective employers agree to this the ‘written
particulars’ should record this fact.
• Where the trade or business is transferred:
(a) there must be a transfer of the business, not merely a transfer of
the assets. In Melon v Hector Powe (1981), a factory which
manufactured ‘made to measure’ men’s suits was bought by a
firm who used the premises to manufacture ‘ready made’ suits
but only after they had completed the work in progress. Held by
the Court of Appeal: there was no transfer of the business;
(b) there must be a transfer of goodwill not merely a business
opportunity (Bumstead v John Carr Ltd (1967));
(c) the employee must be employed at the ‘moment of transfer’
(Teesside Times v Drury (1980)).
The burden of proving the transfer is on the employee:
❍ where an Act of Parliament causes one company to replace

another;
❍ where the employer is a partnership, personal representatives or
a trust and the composition is changed;

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

❍ where the employee is employed by an associated company, that

is, a company of which the other has control, directly or
indirectly, or if both companies are controlled by a third person;
❍ where the employee is employed by a school maintained by a
LEA and is transferred to another school or LEA;
❍ where there is a relevant transfer under TUPE 1981.

Transfer of Undertakings (Protection of

Employment) Regulations (TUPE) 1981 –
as amended by subsequent legislation
It is important to note that, where the ownership of a business is
changed through a transfer of shares, for example, in a takeover bid,
there is no change of employer. The employees are still employed by
the same corporate entity, that is, the company and none of the
following provisions apply. Where a business is transferred from one
person to another person, the following rules may apply.

At common law
Contracts of employment are not transferred.
See Nokes v Doncaster Amalgamated Colliery (1940). The transfer of the
business is treated as a fundamental breach of contract which allows
the employee to leave and claim breach of contract.

Under s 218 of the Employment Rights Act 1996 – see above

Under TUPE 1981

These were introduced in order to comply with the Acquired Rights
Directive and must be interpreted in accordance with the directive.
They provide for the automatic transfer of:
• contracts of employment – that is, all rights, powers, duties and
liabilities under or in connection with such contract;
• collective agreements;
• trade union recognition,
to the transferee, in the case of a relevant transfer.
The Acquired Rights Directive was amended by Directive 98/50 and
now allows Member States to provide for automatic transfer of pension
rights (which were formally excluded). At the time of writing, it has yet

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ESSENTIAL EMPLOYMENT LAW

to be seen whether the UK will amend TUPE to allow for such

provision.
They also make it automatically unfair to dismiss an employee for any
reason connected with the transfer unless it is for an economic,
technical, or organisational reason connected with a change in the
workforce.
The regulations and the directive were introduced in order to
protect the rights of employees and cannot be used to transfer a
contract of employment against the employee’s will. In Katsikas v
Konstantinidis (1993), it was held by the European Court of Justice (ECJ)
that an employee can resist an automatic transfer of his contract.
The regulations now provide that an employee may terminate a
contract of employment if he objects to being transferred to the
transferee, but this is not to operate as a dismissal, so that there is no
entitlement to unfair dismissal compensation or redundancy
payments.
The initial legislation was introduced unenthusiastically by the
government and had to be amended in TURERA 1993 after the
European Commission had commenced infringement proceedings.

Problem areas in the regulations

(1) What is a ‘relevant transfer’?
Originally, the definition excluded any undertaking which was not
in the ‘nature of a commercial venture’. This, however, was changed
in TURERA 1993 following the decision of the ECJ in Dr Sophie
Redmond Stitchung v Bartol (1992), where it was held that a transfer
of a subsidy from a local authority from one foundation dedicated
to helping drug addicts to another was capable of constituting a
transfer under the directive.
The government, however, still argued that there had to be a
transfer of an ‘undertaking’ or ‘business’ not merely the transfer of
a ‘function’ or ‘activity’.
This argument, also, was defeated in Rask v ISS (1993), where the
ECJ held the directive covered the situation where Philips had
contracted out its canteen services to ISS, who would receive a fee
from which labour, management and administrative costs would be
met. Philips would provide the premises, equipment, refuse
collection and cleaning products. ISS would offer employment to
Philips employees.

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

It was again defeated in Christel Schmidt, etc (1994), where it was

held that the directive covered a situation where a bank transferred
to a cleaning company the cleaning of a branch which had
previously been cleaned by one employee.

(2) What is a ‘transfer’?

Originally the courts in this country excluded from a ‘transfer’ a
change in the holder of a franchise or the emergence of a new
contractor when a fixed term contract had ended, on the ground
that there was no direct transfer. But, following certain decisions of
the ECJ, that view has been changed.
In Daddy’s Dance Hall (1988), it was held that the directive covered
the termination of a non-transferable lease over a restaurant and bar
and the granting of a new lease.
In P Bork A/S (1989), it was held that the forfeiture of a lease over a
factory followed by the sale of the freehold to a new owner could
amount to a ‘transfer’.
In Dines v Initial Health Care Services (1994), the Court of Appeal
ruled that the regulations did apply to a second phase contracting
out where a cleaning contract which had originally been awarded to
Initial Health Care Services under a competitive tendering process
was granted to a new company on the expiration of the first
contract. It confirmed that the transfer could take place in two
stages – first, by handing back the cleaning to the authority and
then the authority granting the contract to a new firm. The decisive
criterion seems to be whether there has been a transfer of an
‘economic entity which retains its identity after the change has
taken place’.
The EAT held in Farmer v Danzas (1993) that the crucial time in
which an economic entity has been retained is immediately after the
transfer. The fact that the transferee later integrated the work with
his own business did not alter the position.
In Rygaard (1995), the ECJ introduced a further criterion. In addition
to the undertaking retaining its identity it had to be stable and
capable of continuation. In that case, a company subcontracted a
specific task to another company, which in turn assigned some of
the work to another company.
However, a shift of emphasis was seen in Suzen v Zehnacker
Gebausereinigung ets (1997), where the ECJ, whilst confirming that a
relevant transfer required an identifiable economic entity that had

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ESSENTIAL EMPLOYMENT LAW

retained its identity after the transfer, ruled that the directive does
not necessarily apply when a contracted out service is transferred
from one contractor to another. The directive only applies if the
change of contractor involves the transfer of significant tangible or
intangible assets or the major part of the workforce who provided the
service prior to the change in contractor. They also pointed out that an
entity cannot be reduced merely to the activity entrusted to it.
The ruling was followed by the Court of Appeal in Betts and Others
v Brintel Helicopters (1997), where it was held that TUPE did not
apply to a change in the contractors providing contracted out
helicopter services to a third party as there was no transfer of assets
or employees. The decision applied to a second generation
contracting out, but the court expressed the opinion that there is no
logical distinction between first generation contracting out and a
subsequent change of contractors.
Despite the decision in Suzen, the EAT has decided in similar cases,
for example, Lightways (Contractors ) Ltd v William Hood (1999), that
there has been a transfer covered by TUPE leading to further
confusion.

(3) Was the employee employed immediately before the transfer?

In Secretary of State for Employment v Spence (1987), it was held that
only employees employed at the very moment of the business
transfer had their contracts transferred to the buyer. An employee
dismissed by the vendor of the business four hours before the
transfer was not covered by the regulations.
However, in Litster v Forth Dry Dock and Engineering (1990), the
House of Lords confirmed Spence, but held that an employee
dismissed by the vendor ‘for a reason connected with the transfer
was covered’. In order to comply with the directive, the regulations
must be read to include ‘or would have been so employed if he had
not been unfairly dismissed for a reason connected with the
transfer’. So an employee dismissed at the behest of the transferee
will be dismissed in connection with the transfer.
In Ibex Trading v Walton (1994), the Employment Appeal Tribunal
(EAT) confirmed that every dismissal aimed at making a business
more attractive to a buyer would not fall within TUPE. If no offer
had yet been made, no collusion had taken place, then the dismissal
is not in connection with the transfer. (The transferee was insolvent
in that case.)

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

In Longden v Ferrari (1994), the EAT held:

(a) where there is a series of transactions leading to a sale, the
transfer takes place on the actual sale;
(b) a transfer is not to be considered a principal reason for a
dismissal where the prospective purchaser selects whom he
wishes to retain, but places no pressure on the transferor to
dismiss. (A conclusion much criticised.)

Statutory provisions on pay

The employees right to remuneration is governed like the other terms
of the contract of employment, by:
• agreement;
• collective agreements;
• terms implied by the common law;
• terms imposed by legislation.
These legislative provisions must be read in conjunction with the
implied duties of an employer to pay his employees (see Chapter 2).

Amount of remuneration
A national minimum wage came into force on 1 April 1999 with the
implementation of the National Minimum Wage Regulations 1999. The
Regulations are very detailed and only the major points are outlined
here.
There is a long list of exclusions including workers under the age of
18, apprentices, work experience or those on government funded
training, sandwich placement students, homeless persons, au pairs or
nannies who are treated as family members and family members
working in the family business.
The rate is £3.60 per hour for most aged 22 or over (except for the
first six months if training is involved) and, for those between 18 and
21, £3.00. This rate is averaged over a reference period of a month or
whatever shorter period the worker is paid by. The Regulations define
different types of work (‘time work’, ‘salaried hours work’, ‘output
work’ and ‘unmeasured work’), since most of the Regulations depend
on how the worker is paid, rather than on the job done.
There is a long list of elements that do not count towards the
minimum wage including, for example, loans or advances of wages,

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ESSENTIAL EMPLOYMENT LAW

pension payments, redundancy payments, sick pay, etc, and guidance

as to how to calculate the hourly rate. ‘Sufficient’ records have to be
kept, but detailed records are not necessary for workers earning less
than £1,000 per month or £12,000 per annum. Such records must be
kept for a minimum of three years after the pay reference period.

‘Weeks pay’ (ss 221–24 of the ERA 1996)

The phrase ‘weeks pay’ is used in relation to certain benefits, for
example, redundancy payments or compensation for unfair dismissal.
It is to be calculated as follows:
• Where there are normal hours of work, and the remuneration does
not vary, then ‘weeks pay’ is the amount paid under the contract of
employment.
It was held in Tarmac Roadstone Holdings Ltd v Peacock (1973) that,
for overtime to be included, it must be obligatory on both employer
and employee. It will, however, include contractually binding
commission and bonus payments.
• Where there are normal working hours, but the remuneration
varies with the amount of work done, for example, in respect of
piece work, then the weeks pay is the pay for the normal working
hours at the average hourly rate. The average hourly rate is
calculated by dividing the total amount of pay received during the
last 12 working weeks (minus overtime pay as above) by the
number of hours worked during that time.
• If there are no normal hours, then the weekly pay is calculated by
establishing the average weekly pay over the preceding working
weeks.
Note
If, for some reason, the employee is not at work one week that would
not feature as part of the ‘working weeks’. However, if his
remuneration has been reduced as a result of a shortage of work
during the last 12 weeks, that would affect his average weekly pay.

Sick pay

Contractual
Under the ERA 1996, details of any terms relating to sick pay should
be given in the written particulars. The position should therefore be
clear. However, if no written particulars are supplied or their accuracy

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

is challenged, then the court may have to consider the possibility of an

implied term (see Chapter 2).

Statutory sick pay

Employees are entitled under the Social Security Contributions and
Benefits Act 1992 to statutory sick pay (SSP) for the first 28 weeks of
sickness. There is a legal obligation on all employees to pay SSP with
no contracting out by agreement with employees.
The scheme was originally introduced in order to transfer the
administration of the old sickness benefit scheme to the employer.
Since 1994, however, only employers employing less than 20
employees may recover the money from the government.
Main provisions
The employee must be suffering from some disease or physical or
mental disability which renders him incapable of work, and:
• the period of incapacity must be a period of four or more
consecutive days (which may include Sundays or holidays).
Two periods of incapacity are treated as one if they are not
separated by more than two weeks;
• The period of incapacity will start with the incapacity for work and
end with the first of the following:
❍ the day the employee returns to work;
❍ after 28 days;
❍ the termination of the contract; or
❍ a pregnant employee reaches the beginning of the 11th week
before the expected week of confinement.
The method by which the employee is to notify his employer is a
matter for agreement between them.

Pay during lay offs or short time working

For position at common law, see Chapter 2. Due to the rather uncertain
position at common law, collective agreements now cover a wide
range of employees. These often have the effect of guaranteeing
workers some of their wages during the first few days, weeks or
months of the lay off.
A statutory right to payment in the event of lay-offs is provided in
ss 28–34 of the ERA 1996. This provides that where employees are laid
off because:

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ESSENTIAL EMPLOYMENT LAW

(a) there is a diminution in the requirements of the employers business;

or
(b) any other event which affects the employers business,
there must be made a guarantee payment of up to a maximum daily
rate specified from time to time for up to five days in any three month
period. There is no right to a guarantee payment, however, if the lay
offs are due to a trade dispute involving any employee of the employer
or of an associated employer.
To be eligible the employee must:
• have at least one month’s continuous service;
• be laid off for the whole of his normal working hours;
• not have unreasonably refused an offer of alternative employment;
• be available for work.
Employers who have entered into a collective agreement may be
exempted from the statutory requirements.
Where an employer fails to make a guarantee payment, an
employment tribunal can order him to do so.

Suspension on medical grounds (ss 64–65 of the ERA 1996)

An employee with one month’s continuous employment is entitled to
up to six months’ pay if he is suspended from work in accordance with
legislation made under the Health and Safety at Work Act 1974, for
example, Control of Lead at Work Regulations; Ionising Radiation
Regulations; Control of Substances Hazardous to Health Regulations.
He is not entitled to payment under this section, however, if:
• he is not fit for work;
• he turns down suitable alternative employment; or
• he does not make himself available for work.

Suspension on maternity grounds

An employer must suspend from work:
• a woman of child bearing age doing work which could involve a
risk to the health or safety of a new or expectant mother or her baby;
• a new or expectant mother working at night who has a medical
certificate advising her not to work at night.

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

A woman who is suspended on maternity grounds is entitled to her

full pay for all the time she is suspended, unless she has turned down
an offer of suitable alternative work. No period of continuous
employment is required.

Protection against deductions (ss 13 – 27, Pt II of

the ERA 1996)
These are now found in the ERA 1996, but were originally introduced
in the Wages Act 1986 which stated as its purpose: ‘To replace ancient
and obsolete laws by a comprehensive, easily understood, easily
enforceable and fairer set of statutory rights for all workers, manual
and non-manual.’
The Wages Act 1986 repealed the Truck Acts which applied to
manual workers and which required them to be paid in ‘coin of the
realm’. Workers may, therefore, now be paid by cheque or credit
transfer.
The Truck Acts also controlled deductions from manual workers
pay, requiring them to be fair and reasonable. The ERA controls
deductions from the wages of all employees, but does not require the
deductions to be ‘fair and reasonable’.
Section 13 makes any deduction unlawful unless it is authorised in
one of the following ways:
• by statute – for example, PAYE;
• by a term in the contract – provided the contract is in writing, or the
term is notified in writing to the employee before the deduction is
made.
It was held in York City Travel v Smith (1990) that, provided the
consent or agreement is given before the event (in this case a
collective agreement) and the written notice is given before the
deduction is made, the deduction will be valid. However, written
notice must be given to each worker individually. In Kerr v Sweater
Shop (1996), it was held that a notice displayed on a notice board
was not sufficient;
• by the specific consent of the employee, signified in writing – the
agreement must predate the event which gave rise to the deduction.
In Discount Tobacco and Confectionery Ltd v Williamson (1993), large
stock deficiencies were discovered by the employer in February. In

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ESSENTIAL EMPLOYMENT LAW

March, the manager signed an agreement allowing the employer to

deduct £3500 from his wages at the rate of £20 a week. The
employer quoted s 1(4) which states that any agreement by the
worker shall not operate to authorise a deduction made before the
agreement was signed and argued that the agreement had to
predate only the deduction. The EAT disagreed, the agreement had
to predate the event giving rise to the deduction. The deductions
prior to the agreement in March were, therefore, invalid.
Wages are defined (s 27) as any sum payable to the worker by the
employer in connection with the employment, including ‘any fee,
bonus, commission, holiday pay or other emolument referable to his
employment, whether payable under the contract or otherwise’.
In Delaney v Staples (1992), the applicant had been summarily
dismissed, but was given a cheque for £82 as payment in lieu of notice.
The cheque was later stopped. The applicant also claimed to be
entitled to a commission and holiday pay amounting to £55. The
House of Lords held that ‘payments in lieu’ were not wages, but were
damages for breach of contract.
In Kent Management Services Ltd v Butterfield (1992), it was held that
commission and bonus schemes which were stated to be ex gratia and
not payable in exceptional circumstances were ‘wages’ within the
meaning of the Act when they had been calculated and where there
were no exceptional circumstances. But, in London Borough of
Southwark v O’Brian (1996), the EAT held that withdrawing car
expenses did not breach the above provisions as these were ‘expenses’
not ‘wages’.
Section 13(3) provides that: ‘Where the total amount of any wages
paid on any occasion ... is less than the total amount of wages that are
properly payable to him, then except in so far as the deficiency is
attributable to an error in computation, the amount of the deficiency
shall be treated ... as a deduction.’ It is for the tribunal to decide what
sums are ‘properly payable’ using the principles of the law of contract
(Yemm v British Steel (1994)).
It was confirmed in Delaney v Staples that total non-payment can
qualify as a deduction and, in Bruce v Wiggins Teape (1994), where the
employer unilaterally withdrew enhanced contractually agreed
overtime and the employees continued to work under protest, the EAT
held there was no distinction between a reduction and a deduction.
In Morgan v West Glamorgan CC (1995), the EAT again confirmed
that a decision to demote an employee and reduce his salary resulting

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

from an erroneous view of the legal and factual position was a

deduction. It also held that an erroneous view of the legal and factual
position was not a computation error.
Section 14 contains a list of exceptions to which s 1 does not apply:
• overpayment of wages or expenses;
• disciplinary proceedings held by virtue of statutory provisions.
This has been held to refer only to some public employments.
Disciplinary proceedings recommended by ACAS will not qualify
(Chiltern House v Chambers (1990));
• a statutory requirement to deduct wages to pay over to a public
authority;
• payments agreed by the employee which are made over to a third
party;
• a strike or other industrial action in which the employee took part;
• the satisfaction of a court or a tribunal order requiring the employee
to pay something to the employer.
These deductions will not infringe the Act if they are otherwise lawful,
that is, there is power to make these deductions under the common
law. However, in Sunderland Polytechnic v Evans (1993), it was held that
the tribunal could not investigate whether there was a right to deduct
money as a result of industrial action by the employee – this was a
common law matter for the civil courts to examine. The employer need
only state that the deduction fell within one of these exceptions. The
same decision was reached in SIP (Industrial Products) v Swinn (1994),
where an employer deducted a sum of money from wages to cover
money which the employee had dishonestly obtained. The EAT said it
was not for the tribunal to decide on the lawfulness of a deduction
under s 14. This was a matter for the civil courts.
The confusion concerning jurisdiction and the need to go to the
county court has virtually disappeared since the Employment
Tribunals Extension of Jurisdiction Order 1994, which provided that an
employee may bring a claim of up to £25,000 before an employment
tribunal for breach of contract or for a sum due under that contract if
the claim arises or is outstanding on the termination of employment.
However, jurisdiction will still remain an issue where there is no
termination as in Sunderland Polytechnic v Evans.
There are similar provisions to the above governing payment by an
employee to his employer.

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ESSENTIAL EMPLOYMENT LAW

Retail workers (ss 17–22 of the ERA 1996)

This relates to workers involved in the supply of goods or services.
Retail contracts often contain onerous terms requiring workers to
make good cash shortages or stock deficiencies. Section 13 (above)
applies to retail workers and s 17 provides that the deduction must not
exceed 10% of the gross wage on any one occasion. This does not
apply, however, to the final payment when there is no limit.
Deductions must be made within 12 months.

Complaints to an employment tribunal (s 23)

A worker may make a complaint to an employment tribunal within
three months of the deduction.
Note
It is now automatically unfair to dismiss an employee for exercising a
statutory right. See Chapter 7.

Maternity rights
Four basic rights exist in connection with pregnancy:
• a right to time off for ante-natal care;
• a right not to be dismissed on the grounds of pregnancy;
• a right to maternity pay; and
• a right to maternity leave.

Time off for ante-natal care

A woman has a right to paid time off in order to attend an ante-natal
appointment advised by a doctor, midwife or health visitor. The
employer is entitled to ask for proof of the appointment and of the
pregnancy. If the employer unreasonably refuses her request, then she
may complain to an employment tribunal, which may award a sum
equal to the sum she should have been paid for time off.

Dismissal on the ground of pregnancy (s 99 of the ERA

1996)
A dismissal on the ground of pregnancy is automatically unfair (see
Chapter 7).

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

Maternity pay (Pt XII of the Social Security and Benefits

Act 1992)
There are three rates of maternity pay or maternity allowances. These
are separate from any contractual entitlement which the employee may
have.
(a) Statutory maternity pay
A woman who:
• has had 26 weeks’ continuous employment at the 15th week
before the expected date of confinement; and
• whose average earnings are at, or above, the lower limit for
paying national insurance contributions is entitled to 18 weeks’
maternity pay from her employer.
This consists of:
• six weeks’ pay at 90% of her salary; and
• 12 weeks at the higher rate of statutory sick pay.
A woman so qualified can choose when she wants her maternity
pay to start.
(b) Maternity allowance
A woman who:
• has worked and made national insurance contributions for 26
out of the last 66 weeks before the expected date of birth; and
• is employed on the 15th week before the expected date of birth
is entitled to a maternity allowance which is equal to the
statutory sick pay at the higher rate.
(c) Maternity allowance
A woman who:
• has worked for 26 weeks out of the last 66 weeks; but
• is not employed at the 15th week before the expected date of
birth is entitled to a lower rate maternity allowance which is
equal to the statutory sick pay at the lower rate.
In all cases, the pregnant woman must give her employer 21 days’
notice in writing of her intended absence. The employer may set off
92% of the 12 week element against national insurance contributions,
unless a small employer (paying less than £20,000 per annum in
National Insurance contributions) who can set off 105.5%.

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ESSENTIAL EMPLOYMENT LAW

Maternity leave (ss 71–85 of the ERA 1996, as amended by

the EReA 1999)

(a) Maternity leave

All women are entitled to a minimum of 18 weeks’ maternity leave
regardless of their length of service or hours per week worked. It
may commence any time after the 11th week before the expected
date of birth on any day designated by the woman.
A woman who needs to be away on medical grounds before the
11th week may claim statutory sick pay. If she is away sick at any
time within six weeks of the expected date of birth, then the start of
her maternity leave is triggered automatically.
During maternity leave, she is entitled to all benefits under her
contract except pay.
(b) Maternity absence
A woman who has been continually employed for one year at the
11th week before the expected birth may claim an additional
maternity leave period and this can extend to the end of the 29th
week after the date of her actual confinement.
Note
• Her contract should still be in operation on the 11th week – she
does not actually need to have been at work.
• She may commence her leave any time after the 11th week –
which allows her a total of 40 weeks.
• At the time of writing, there are very complicated notice
requirements which the pregnant woman must comply with in
order to qualify for the above provisions, but these are likely to
be modified by regulations.

Notice requirements for both maternity leave and maternity absence

(1) Twenty one days at least before her leave is due to start, she must
give notice in writing to the employer that she is pregnant, and also
the expected day of her confinement.
(2) She must give 15 days’ notice of when her leave will start, this may
be combined with the above.
(3) If leave commences early because of absence within six weeks of
the expected date of confinement or because of early birth, she
must serve notice of this to the employer as soon as possible – in
writing if so requested by the employer.

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

(4) The employer may require, in writing, not less than 10 days before
the end of the 18–29 week period, whether she still intends to
exercise her right to return. He must also specify what would
happen if she fails to respond. To preserve her right to return, she
must respond positively within 14 days.
(5) Finally, she must give at least 21 days’ notice of her intention to
return.
(6) If she wishes to return before the end of her 14 day notice, she must
give her employer seven days’ notice of this.
(7) A woman entitled to up to 40 weeks’ maternity leave may, in certain
circumstances, delay her return for a period of up to four weeks
provided she supplies a medical certificate. It was held by the Court
of Appeal in Crees v Royal Insurance and Greaves v KwikSave Stores
(1998) that, where women were unable to return to work after this
extension because of temporary illness, they had exercised their
statutory right to return by giving written notice of their intention
to return on a specified day. There was no express provision that
there was a requirement for the physical presence of the employee
at work. Since the employers had, in fact, prevented the employees
from returning when their temporary illness had ceased, this was
deemed to be dismissal. Since no procedure had been followed, the
employees’ claims of unfair dismissal were successful.

Continuation of contract
The statutory right to 18 weeks’ maternity leave now expressly
stipulates that the contract is to remain in existence during that period.
The 18 week provision gives the employee an unconditional right to
return to her original position. The only exception relates to a
redundancy, and in that situation she must be offered any suitable
alternative employment that is available. The 29-week entitlement,
however, gives her the right to return to her original position, unless:
• it is not reasonably practical and she is offered suitable alternative
employment;
• her employer has five employees or less and it is not reasonably
practical to re-employ her.

Compulsory leave
There is a compulsory period of leave in the two weeks after childbirth
during which the employer is not allowed to permit the employee to
return to work.

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ESSENTIAL EMPLOYMENT LAW

When a woman has a contractual maternity entitlement giving her

more money or more leave, she may exercise whichever of her
contractual or statutory rights which are most beneficial to her – she
may exercise a ‘composite right’ consisting of the most favourable
aspects of any of her rights as opposed to being required to choose
between one bundle of rights or another.

Time off provisions (ss 50 – 63 of the ERA 1996)

Employees have a statutory right to time off work for certain specified
purposes. There is no continuous employment requirement for these,
except for time off to seek work whilst under notice of redundancy
where continuous employment of two years is necessary.
• Trade union duties (s 168 of the TULR(C)A)
Trade union officials of independent recognised trade unions have
a right to a reasonable amount of paid time off in order to undertake
union duties such as negotiation with the employer on matters for
which the union is recognised and also for training for such duties.
ACAS has issued a Code of Practice which gives examples of duties
for which time off should be given, for example, preparing for
negotiation, consulting and reporting back to union members, as
well as actual negotiation on such matters as terms and conditions
of employment, recruitment policies, redundancies, etc. The Code
also suggests that an employer should release employees for initial
basic training in industrial relations as soon as possible after they
have been appointed.
They should be paid what they would have received had they
worked normally during that time.
• Trade union activities (s 170 of the TULR(C)A)
Trade union members of recognised independent trade unions are
entitled to a reasonable amount of unpaid time off to take part in
union activities. This does not include taking part in industrial
action, neither does it cover such matters as lobbying parliament
against proposed legislation.
• Safety representatives (reg 4 of the Safety Representative, etc,
Regulations 1977 and reg 7 of the Health and Safety Regulations
1996)

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

Safety representatives (whether appointed by a trade union or

elected by the workforce) are entitled to as much paid time off as
they need in order to undertake their duties and undergo relevant
training. Candidates for election as an employee safety
representative are entitled to reasonable (unpaid) time off.
• Elected employee representatives (for collective consultation
purposes)
Elected employee representatives are entitled to reasonable paid
time off in order to perform their functions; and candidates for
election as employee representatives are entitled to reasonable paid
time off for the purpose.
• Acting as occupational pension scheme trustee
Paid time off for the purpose of performing their functions and to
undergo training as occupational pensions scheme trustees is
authorised by ss 58 and 59 of the ERA 1996.
• Jury service
The Juries Act 1994 states that an employee must be given time off
to answer the summons, unless he is excused jury service. In theory,
the court pays the employee financial loss caused by this service
(but self-employed people running businesses who are involved in
long trials would argue that the payments are insufficient).
• Public duties (s 50 of the ERA 1996)
An employer must allow an employee a reasonable amount of
unpaid time off to perform a specified range of public duties or
attend meetings, for example, Justices of the Peace, prison visitors,
members of local authorities, statutory tribunals, police authorities,
a relevant health or education body and the environment agency.
• Redundancies (s 52 of the ERA 1996)
Employees under notice of redundancy are entitled to a reasonable
paid time off to look for new work or to arrange training.
• Pregnancy (s 58 of the ERA 1996)
Pregnant employees have a right to paid time off to receive ante-
natal care (for provisions on maternity leave, see above).

Sunday working
Part IV of the ERA (incorporating the provisions of the Sunday Trading
Act 1994) is designed to ensure that shop work on a Sunday is

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ESSENTIAL EMPLOYMENT LAW

voluntary, except for those employed only to work on a Sunday. A

shop worker is defined as ‘anyone who is or may be required under
their contract to do shop work, which is work in or about a shop’.
They are classified into:
• protected shop workers – who were employed before the
provisions came into force and who are not required under the
contract to work on a Sunday;
• opted out shop workers – who may be required under the contract
to work on a Sunday, but have given three months’ written notice
to opt out.
It is automatically unfair to dismiss, or select for redundancy either
category for refusing to work on a Sunday.
They must not be subjected to any detriment short of dismissal for
refusing to work on a Sunday, for example, disciplinary action or
blocked promotion. (Financial incentives for those who work on a
Sunday is not a detriment to those who do not.)
The employer must give new employees a statement of their rights
to opt out within two months of starting work. Both protected shop
workers and opted out shop workers may lose protection if they opt
in, but may opt out again at a later date.

European directives and their implementation

New statutory restrictions on hours of work and rest periods were

introduced in October 1998 in order to comply with the EC Working
Time Directive, which should have been implemented by November
1996.
The Regulations provide for:
• a maximum working week of 48 hours a week, but exceptions can
be made in the case of employees who volunteer to exceed the
maximum. It does not in any case apply to jobs where working time
is not measured;
• a minimum rest period of one day a week and 11 hours a day, and
a rest break after six hours. Again, these do not apply where
working time is not measured, or in jobs which require continuity
of service, or shift work (except for rest breaks), or where there is a
collective agreement to the contrary;
• special protection for night workers, for example, shifts averaging
no more than eight hours, transfer to day work where possible if

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 STATUTORY RIGHTS FOR EMPLOYEES DURING THE COURSE OF EMPLOYMENT

unfit to continue night work, free health checks and health and
safety facilities equal to those available during the day. Same
exclusions apply to some limits on shifts as apply to rest periods;
• four weeks’ minimum annual leave after November 1999.
Certain industries, for example, transport, sea fishing and doctors in
training, are covered by different rules. Certain types of workers can
also be exempted from most of the provisions where they are not
employed on fixed hours, for example, managerial or professional jobs
and family workers.

The Young Workers Directive

The Health and Safety (Young Persons) Regulations 1997 partly
implemented the provisions of this directive in so far as it refers to
health and safety protection for young workers. They prevent an
employer from employing a person under 18, unless he has first
carried out a risk assessment. The employment of persons under
school leaving age is also prohibited in a number of specified
circumstances. Further provisions were implemented by the Children
(Protection at Work) Regulations 1998. These apply to children under
minimum school leaving age: children aged 13 are only able to
undertake ‘light work’ specified in local authority byelaws. Those aged
14 may only work two hours on weekdays, five hours on Saturday
(rising to eight when the child is 15) and two hours on Sundays.
During school holidays, the limit is five hours on weekdays and
Saturday (eight, if the child is 15 or over) within a weekly limit of
25 hours (35, if the child is 15 or over). There must be rest breaks every
four hours of at least an hour and at least two weeks free of work in any
one year period.

Parental Leave Directive

The directive gives all workers an individual right to at least three
months unpaid leave following the birth or adoption of a child. This
right may be exercised at any time before the child’s eighth birthday,
and should be on a non-transferable basis, that is, where both parents
work, they should be entitled to three months leave each.
The directive also entitles workers to unpaid time off work on
grounds of force majeure for urgent family reasons in cases of sickness
or accident making the immediate presence of the worker
indispensable.
The EReA 1999 provides for regulations to implement this directive.

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ESSENTIAL EMPLOYMENT LAW

New rights under the EReA 1999

• All workers have the legal right to be accompanied by a fellow

employee or trade union representative of their choice during
grievance and disciplinary procedures.
• Workers are allowed time off during working hours to accompany
another who is subject to disciplinary or grievance proceedings.
If a worker is refused the representative of their choice, there is a
penalty not exceeding two weeks’ pay.

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4 Anti-discrimination
legislation

You should be familiar with the following areas:

Legislation prohibiting discrimination on the ground of:

• Sex – the Sex Discrimination Act 1975 (as amended); the
Equal Pay Act 1970 (as amended); Art 141 (formerly Art
119) of the Treaty of Rome; the Equal Pay Directive 75/117;
the Equal Treatment Directive 76/207
• Marital status – the Sex Discrimination Act 1975; the Equal
Treatment Directive 76/207
• Race, colour, nationality, ethnic origin, or national origin –
the Race Relations Act 1976
• Disability – the Disability Discrimination Act 1995

Note
In most instances, decisions made by the courts under the Sex
Discrimination Act (SDA) 1975 and under the Race Relations Act
(RRA) 1976 are interchangeable and the same cases can be used, and
are used, to interpret either act. The two Acts follow much the same
pattern and use much the same terminology. Statements made with
regard to the SDA will in general also apply to the RRA which will
only be dealt with separately in so far as it differs from the SDA. A
major difference is that the RRA is not currently subject to European
law, although the Treaty of Amsterdam enables race to be made the
subject of anti-discrimination measures.

Discrimination on the grounds of sex

It is necessary to examine the relationship between different pieces of

legislation in connection with sex discrimination.

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ESSENTIAL EMPLOYMENT LAW

Relationship between the Sex Discrimination Act and the

Equal Pay Act
The Equal Pay Act (EqPA) 1970 covers contractual rights, for example,
pay, holidays, fringe benefits; the SDA covers non-contractual rights;
for example, appointments, promotion, dismissal. They are mutually
exclusive in their coverage and any action must be brought under the
correct statute, but it has been said that they must be interpreted so as
to form a ‘harmonious code’.
The RRA covers both contractual and non-contractual matters.

Significance of EU legislation
It is important that students turn back to p 3, Chapter 1, at this stage
to refresh their knowledge of the effect of EU law on domestic law.
The following EU legislation applies to this area:
• Article 141 Treaty of Rome
This requires that men and women should receive equal pay for
equal work. Pay is defined to cover pay or any other consideration
whether in cash or in kind and whether received directly or
indirectly.
• Equal Pay Directive 75/117
This clarifies Art 141. It states that it requires equal pay to be paid
for work of equal value. It also states that any job classification
must be drawn up to exclude discrimination on grounds of sex.
• Equal Treatment Directive 76/207
This requires the implementation of the principle of equal
treatment for men and women in all aspects of employment.
Article 141 is directly effective. Directives are directly effective
vertically but not horizontally. However, it has been suggested that
since the Equal Pay Directive only explains the provisions of Art 141,
and does not go beyond that, then it has the same effect as Art 141
itself.
If there is a remedy under English law, then that should be sought.
But, if a better remedy is available in European law, then a claimant
may base her claim on European law. She may take her claim to the
European Court of Justice (ECJ) after she has exhausted the legal
processes in the UK; or as is becoming increasingly common, the UK
court may refer the matter for advice to the ECJ.

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 ANTI-DISCRIMINATION LEGISLATION

The Sex Discrimination Act 1975

These provisions also apply to the RRA 1976, except for those matters
separately considered on pp 100–01.

Prohibited grounds
The SDA 1975 prohibits discrimination on the grounds of sex and
marital status. Although expressed here in terms of discrimination
against women, it applies equally to men and women. Indeed many of
the cases brought under the SDA 1975 have been brought by men.

Kinds of discrimination
The Acts define three kinds of discrimination – direct discrimination,
indirect discrimination and victimisation.

Direct discrimination
Direct discrimination is less favourable treatment on grounds of sex,
marital status or race, etc.
There are two requirements:
• less favourable treatment leading to a detriment being suffered;
• on the prohibited grounds.
Less favourable treatment
A good recent example of direct discrimination (although involving
race, not sex) is the case of Weathersfield Ltd t/a Van and Truck Rentals v
Sargant (1999). S had only been employed for a few days as a
receptionist by the car rental business when she was told, as part of her
induction, that there were special risks attached to leasing to black and
Asian people and that she should not lease them cars. S was so upset
she decided she could no longer work for the company, so she left and
claimed direct discrimination under the RRA. The ET held that she
was asked to carry out unlawful discriminatory acts by her employer
which had led to her resignation and that she had suffered a detriment.
The Court of Appeal agreed.
• Sexual harassment
In Porcelli v Strathclyde Regional Council (1985), sexual harassment
was held for the first time to amount to less favourable treatment
and consequently to sex discrimination. Previous cases on sexual
harassment had been based on constructive dismissal, but, in this
case, the claimant lacked the necessary period of continuous
employment and so had to rely on the SDA 1975. A laboratory

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ESSENTIAL EMPLOYMENT LAW

technician was driven into resigning by the campaign of

unpleasantness conducted by her two male colleagues. They
argued that they would have behaved in a similar way to a male
colleague they disliked. It was held, however, that it amounted to
sexual harassment because of the methods used and it resulted in
less favourable treatment.
Sexual harassment is defined by the European Commission in a
Code of Practice as ‘Conduct of a sexual nature, or other conduct
based on sex affecting the dignity of men and women at work,
including conduct of superior colleagues’.
In Wileman v Miniec Engineering Ltd (1988), a subjective test was
used. What may be offensive to one person will not necessarily be
offensive to another. A small amount of compensation was also
issued because the claimant wore ‘provocative clothes’ and ‘flaunted
herself’.
In Bracebridge Engineering v Darby (1990), it was held that one
incident could amount to sexual harassment. A failure by an
employer to take a complaint seriously or to make a proper
investigation would amount to a constructive dismissal.
It is for the tribunal to decide what amounts to less favourable
treatment. In Stewart v Cleveland Guest (Engineering) Ltd (1994), the
EAT refused to overturn a tribunal’s decision that the employers
had not discriminated against the complainant on grounds of sex by
allowing male employees to display nude pinups in the workplace,
although they knew that she found them offensive – on the ground
that she had not suffered less favourable treatment. She did,
however, successfully claim constructive dismissal.
In de Souza v AA (1986), the Court of Appeal stated that racial insults
by themselves are not enough; they must also suggest to the
reasonable worker that he had been disadvantaged in his work.
• Dress and appearance
Employers often require certain standards of dress from their
employees whilst at work.
In Schmidt v Austick Bookshop Ltd (1977), the EAT held that it was not
unlawful for an employer to dismiss a woman for wearing trousers
at work as male employees were also subject to restrictions on what
they could wear. There was no less favourable treatment. This
ruling was confirmed by the Court of Appeal in Smith v Safeway plc
(1996) where it declared not unlawful the dismissal of a man for
having a ponytail. Men and women could be treated differently

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 ANTI-DISCRIMINATION LEGISLATION

without this amounting to less favourable treatment, provided the

rules required from all employees a conventional standard of
appearance.
Prohibited grounds
Sex
This has previously been enforced by the courts in this country as a
prohibition against discrimination on the ground of gender.
However, in P v S (1996), the ECJ held that the dismissal of a
transsexual was covered by the Equal Treatment Directive. The court
denied that the directive was confined to whether a person was of one
sex or another, but was intended to cover any discrimination
whatsoever on the grounds of sex.
The law is now to be found clearly stated in the Sex Discrimination
(Gender Reassignment) Regulations 1999 which came into force on
1 May 1999. The Regulations extend the SDA to cover discrimination
on grounds of gender reassignment (GR) discrimination on grounds of
sex. The Regulations give a wide definition of GR which provides
protection against discrimination by employers at all stages of the
process, although there is no definition of when sex changes. Treatment
of a GR case will be compared with those who are absent, because of
sickness or injury, in order to determine whether there has been less
favourable treatment.
The SDA does not mention sexual orientation as a basis for
discrimination, but recent dismissals in the armed forces of lesbians
and homosexuals have raised the question as to whether such
dismissals can be deemed to be in breach of the law. There are two
possible approaches: the ‘but for’ test which indicates that intention of
the employer is irrelevant, which would probably lead to a successful
discrimination claim in such cases; or the narrower approach, whereby
the employer argues that all employees are treated equally, but that like
must be compared with like: treatment of straight men with straight
women; gay men with lesbian women. The RAF argue, in this vein,
that homosexual employees of either sex are treated equally – they are
dismissed. In 1995, four ex-forces employees, one female and three
male, unsuccessfully sought judicial review of the decision to dismiss
them from their posts because of their sexual orientation, despite
exemplary service records: R v Minister of Defence ex p Smith and Others
(1996)
The judge in the High Court felt unable to reach any other decision
on the construction of the law, but said that he felt Parliament would
have to address the issue, since it was clear that the omission was
anachronistic. The case then went to the Court of Appeal where it was

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ESSENTIAL EMPLOYMENT LAW

argued that, even if the SDA did not address this type of
discrimination, the Equal Treatment Directive did. The Master of the
Rolls, agreeing with the previous decision said:
I find nothing whatever in the Treaty of Rome or in the Equal Treatment
Directive which suggests that the draftsmen of those instruments were
addressing their minds in any way whatever to problems of discrimination
on grounds of sexual orientation. Had it been intended to regulate
discrimination on that ground it could easily have been done, but, to my
mind, it plainly was not.

The other judges expressed similar views, but, of course,

discrimination on grounds of sexual orientation is comparatively
recent and it is not surprising that it was not thought of when the
Directive was drafted – neither was sexual harassment, for that matter,
but that has long been established as being covered. In the meantime,
the Army announced ((1997) The Times, 24 March) that it is to change
its rules to end the ban on homosexuals. The Navy, however, is
opposed to lifting its ban, as it feels that the presence of known
homosexuals would ‘undermine morale and destroy operational
effectiveness’. In R v Secretary of State for Defence ex p Perkins (1997), the
High Court referred to the ECJ a case, brought by a former Navy
medical assistant who was dismissed for homosexuality, to decide
whether discrimination for sexual orientation comes within the Equal
Treatment Directive. The judge making the referral, Mr Justice
Lightman, said that he thought the applicant had a ‘significant
prospect of success’. However, in R v Secretary of State for Defence ex p
Perkins (No 2) (1998), the judge decided not to refer the matter of sexual
harassment of a gay man to the ECJ, saying there was ‘no scope for
reasonable doubt’ as to how the question referred would be answered.
He may have been influenced in this decision by the judgment of the
ECJ in Grant v South-West Trains Ltd (1998), ruling that the employer’s
refusal to allow travel concessions to same sex cohabitees does not
amount to discrimination prohibited by the former Art 119. Unusually,
they went against the opinion of the Advocate General. The court,
however, made it clear that it was up to governments, not judges, to
push the frontiers of EU law into such a delicate area. Only a handful
of States has given any form of legal recognition to homosexual
partnerships and the judges noted that : ‘In the present state of the law,
stable relationships between two persons of the same sex are not
regarded as equivalent to marriage or stable relationships outside
marriage between persons of the opposite sex.’

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Pregnancy
There has been considerable controversy as to whether a refusal to
employ or promote or to dismiss a woman on the grounds of
pregnancy would amount to discrimination on the ground of sex.
First, it was held not to be so, on the ground that there was no male
equivalent (Turley v Allders Department Store (1980)). Then, the EAT
decided that a pregnant woman could be compared to a man with a
long term health problem. But, in Dekker v VJU Centrum (1991), a Dutch
case, the ECJ ruled that a refusal to appoint a pregnant woman was
direct sex discrimination and contrary to the Equal Treatment
Directive.
In Webb v EMO Cargo (1995), Webb was recruited to take over the
work of a pregnant employee who was on maternity leave, but was to
remain with the company afterwards (appointed for an indefinite
period). She then discovered that she was pregnant and was dismissed.
The case was referred to the ECJ by the House of Lords. The ECJ held
that the dismissal amounted to direct sex discrimination. (Note – direct
discrimination cannot be justified.) The House of Lords applied the
ruling of the European Court. But, Lord Keith went on to say that
pregnancy would not necessarily be a relevant circumstance where a
woman is refused employment for a fixed period during the whole of
which her pregnancy makes her unavailable for work.
Caruana v Manchester Airport plc (1996) was the first case since Webb
which involved a fixed term contract. C had been employed as a
researcher on a series of fixed term contracts, her last one running from
1 January to 31 December 1992. In July 1992, C informed her employers
she was pregnant and later gave notice that she would be commencing
maternity leave on 11 December. She was told on 3 December that her
current contract would not be renewed, as she would unavailable for
work in January 1993. C, who was self-employed, could not claim
unfair dismissal, but claimed sex discrimination in that the decision not
to renew her contract was discriminatory. The tribunal who heard her
claim before the ECJ’s decision in Webb dismissed her claim. The EAT
held that, following Webb, refusal to renew C’s contract when her
unavailability was due to pregnancy amounted to sex discrimination.
The respondent’s argument that the Webb decision did not apply to
fixed term contracts could not be accepted, since Lord Keith’s
limitation of the rule only applied to situations where the employee
would not be able to work for any part of the fixed term. The EAT were
not prepared to suggest (as they had been invited to do) situations
which Lord Keith may have had in mind when delivering his
judgment.

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ESSENTIAL EMPLOYMENT LAW

Since s 99 of the ERA 1996, which made it automatically unfair to

dismiss on the ground of pregnancy, this problem will only arise in
future in connection with recruitment or promotion or selection for
training courses.
Refusal of job share or alternative work
The Court of Appeal has agreed that an employer’s refusal to consider
a job share on return from maternity leave was discriminatory. In Cast
v Croydon College (1998), C resigned because she could not carry on the
job on a full time basis after returning from maternity leave and it was
held that the time limit for bringing a sex discrimination claim began
to run when her employment ended and not when her employer
originally refused the job share arrangement several months earlier (as
the EAT had said).
In Iske v P & O European Ferries (Dover) Ltd (1997), I was not offered
a transfer to shore based work when merchant shipping regulations no
longer permitted her to work at sea as she was pregnant. This
amounted to direct discrimination, held the EAT.
Note
(1) Sex must be the reason for the less favourable treatment, but motive
is not relevant
In Peake v Automotive Products Ltd (1978), Lord Denning stated that
allowing women to leave work five minutes before men were
allowed to leave was not discriminatory, but was a matter of safety
and chivalry. He accepted in a later case that this was wrong, but
still tried to justify the decision on the de minimis principle.
In Grieg v Community Industry (1979), it was held that a good motive
was not a defence. In that case, two women were recruited as
painters and decorators on a building site. One did not turn up on
the first day, and the director sent the other woman home as he
genuinely believed it would be unwise for her to be the only
woman on the site.
In James v Eastleigh Council (1990), the House of Lords held – by a
bare majority – that the council was discriminatory in allowing free
entry to a swimming pool to Mrs James who was 61, but also
required Mr James who was also 61 to pay the full fee. The council
did not intend to discriminate but wished to give concessions to
pensioners. The House of Lords affirmed that the test for
discrimination is objective (the ‘but for’ test) and that motive is
irrelevant. The State retirement age is itself discriminatory and to
base the concessions on that is also discriminatory.

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But, see Dhatt v McDonalds Hamburger Ltd (1991), where an Indian

was asked to provide a work permit. This would not have been
required of a UK or EC applicant. The Court of Appeal held that this
request was not based on discrimination, but on the immigration
legislation of the UK Government. The ‘but for’ rule was not
applied in this case.
(2) The right to discriminate cannot be purchased
In Ministry of Defence v Jeremiah (1980), men who volunteered for
overtime were required to work in dirty conditions in the ‘colour-
bursting shop’, but this would not apply to women as it would
affect their hair. It was held that this was discriminatory despite the
fact that men were paid extra ‘obnoxious’ money.
(3) Employers must not rely on ‘stereotypes’
In Coleman v Skyrail Oceanic Ltd (1981), Mrs Coleman was dismissed
when she married an employee from a rival firm, because she might
give away confidential information (which she had not done during
her engagement) and that her husband was the breadwinner. The
Court of Appeal held that the dismissal was discriminatory – on the
ground that the assumption that the man was the breadwinner
without any investigation was itself discriminatory.
In Horsey v Dyfed CC (1982), it was held discriminatory to refuse a
request for social work training on the ground that at the end of the
training period the applicant would stay in London where her
husband worked, rather than return to Wales. Again, the council
had relied on stereotypical views, instead of investigating the actual
circumstances. The EAT did not say that an employer could never
act on the basis that a woman would give up her job to follow her
husband. What the employer could not do was assume that she
would do so.
Marital status
There is no prohibition against a person being discriminated against
because he or she is single.

Indirect discrimination
Judicial recognition of ‘indirect’ or ‘adverse impact’ discrimination can
be traced to the US Supreme Court ruling in Griggs v Duke Power Co
(1971), where certain aptitude tests were held to be discriminatory. It
has been described as involuntary, or hidden, or institutional
discrimination, where tests or requirements which are applied to both
sexes in fact discriminate against one sex.

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ESSENTIAL EMPLOYMENT LAW

It occurs when:
(1) An employer imposes a requirement or condition.
The requirement or condition:
• May be precisely defined, as in Price v Civil Service Commission
(1978), where the applicant had to be under 28 years of age; or it
can be a number of ‘vague factors’, as in Clarke v Eley Kynoch Ltd
(1982), as long as they must be complied with.
• Must be a total bar to the job. In Perera v Civil Service Commission
(1983), the applicant complained that the respondents took into
account practical experience in England and the ability to
communicate in English into their consideration of applicants
for administrative trainees. It was held that these were not
requirements or conditions, but merely some of the plus and
minus factors which employers took into consideration.
However, in Enderby v Frenchay AHA (1994) (see p 95), the ECJ held
that where a case is being brought directly under the former Art
119, a ‘requirement’ is not necessary. But, it was held in Bhudi v IMI
Refiners Ltd (1994) that it remains necessary for cases brought under
the SDA. This has been criticised on the grounds that it allows
employers to evade the effect of the Act by substituting criteria for
requirements.
(2) The applicant is unable to comply with the requirement or
condition. The courts have held that ‘can comply’ does not
necessarily mean ‘can physically comply’. In Mandla v Dowell Lee
(1983), a case involving a Sikh’s refusal to cut his hair, the House of
Lords understood ‘can comply’ to mean ‘can comply consistently
with the customs and cultural conditions of the racial group’, rather
than ‘can physically perform’.
In Price v Civil Service Commission (1978), the EAT thought that the
phrase was to be interpreted broadly. ‘It should not be said that
because it was theoretically possible for someone to do something,
that he can do it in practice.’ Mrs Price, who was 36, sought to
become an executive officer in the Civil Service, but her application
was rejected because the employers sought candidates between the
ages of 17 and 28. The reason why she had not applied within that
age group was because she had two small children and she argued
that this was the position of many women, so considerably fewer
could qualify for the job. The tribunal rejected the application on
the ground that the number of men and women in the relevant age
group was the same, and since no one is obliged to have children,

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the applicant could have complied with the condition. The case
was sent back by the EAT with instructions to examine ‘current
usual behaviour’, and ‘general social facts’. In fact, the respondents
then conceded that the number of women who could comply with
the conditions were much less than the number of men. They failed
to justify the practice, since it was too wide and discriminatory a
way of achieving the aim of the Civil Service to retain a proper
career structure.
(3) A considerably smaller proportion of the applicant’s group can
comply with the requirement.
• The Court of Appeal has held that this is a question of fact for
the tribunal to decide.
• It is important to bring statistical evidence to show ’that a
considerably smaller proportion can comply’.
In Clarke v Eley Kynoch Ltd (1982), where the dismissal of part
time workers in a redundancy was held to be discriminatory, it
had been shown that 100% of the part time workers in that
organisation were women and that 80% of part time workers
nationally are women.
But, in Kidd v DRG Ltd (1985), no statistics were quoted by the
claimant. The tribunal held that it is not safe to assume that a
greater proportion of women than men or married women than
unmarried women took on a child caring role. The EAT agreed
that it was right for the tribunal to reject ‘generalised
assumptions’.
• The correct pool must be selected for comparison.
In Jones v Manchester University (1993), the university advertised
for a graduate aged between 27–35 years of age. Miss Jones,
aged 46, and otherwise well qualified for the post was not short
listed. Miss Jones had qualified as a mature student and, as
there were more female than male mature students, more
female students would be debarred from applying for the post.
The Court of Appeal, however, held that the correct pool in this
case was all graduates, not only those who graduated as mature
students, and warned against choosing a pool in a way that
manipulated the result.
In R v Secretary of State for Employment ex p EOC (1995), a case
concerning part time workers, the correct pool was held to be all
part time workers in the country.

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• There is no specific meaning for ‘considerably smaller’ in the Sex

Discrimination Act.
However, in R v Secretary of State for Employment ex p Seymour
Smith (1995), the Court of Appeal found that the proportion of
women who could meet the two year qualifying period for
unfair dismissal claims was 90% of the proportion of men. This
was found to be sufficient under the Equal Treatment Directive
and gave rise to a presumption of indirect discrimination which
was for the government to justify. After a referral to the ECJ, the
final decision of the House of Lords is still to be given at the time
of writing.
The court stated that the weight attached to ‘considerable’
should not be exaggerated.
cf – US, where the phrase means 80%.
(4) The requirement cannot be justified.
In Steel v UPOW (1977), the court stated that the tribunal in
considering justification had to weigh up the needs of the enterprise
against the discriminatory effect of the requirement or condition.
The tribunal must be satisfied that the requirement is necessary, not
merely convenient. Further, it must consider whether there was a
non-discriminatory method of achieving the same end.
However, the requirement was later diluted: in Singh v Rowntree
(1979), it was stated that the requirement must be ‘reasonable’. In
Ojutiku v MSC (1982), the requirement ‘should seem sound and
tolerable to right thinking people’.
In Hampson v DES (1989), the House of Lords held that the employer
must show a ‘real necessity’ for the requirement, be it economic or
administrative efficiency and that a balance be struck between the
discriminatory effect of the requirement or condition, and the needs
of the person who applies it.
It followed the ruling of the ECJ in Bilka-Kaufhaus v Weber Von Herz
(1986), where it was stated that, in order to justify a requirement, it
had to be shown that the requirement:
• corresponded to a real need on the part of the undertaking;
• was appropriate for achieving that end; and
• was necessary for achieving that end.
Attempting to change working hours may seem justifiable, but was
not argued in the case of London Underground Ltd v Edwards (1995).
Here, E, a single parent, successfully argued that the introduction of

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new rostering arrangements which meant that she would have to

work long hours, which would affect her ability to look after her
child, amounted to indirect sex discrimination. E was one of
London Underground’s few female train drivers and, although she
was required to work a night shift under the old scheme, she found
it easy to arrange a swap with other drivers to do other day shifts in
exchange, since the night shift attracted a bonus payment. Under
the new scheme, the hours were rearranged, so it was more difficult
for her to arrange swaps and the morning shift start time moved
from 8.00 to 4.45 am – a very difficult time for those with child care
responsibilities. In addition, if she wished to swap duties, she
would have to swap a short night shift for a longer day shift. The
tribunal held that this amounted to indirect sex discrimination and
London Underground appealed.
The EAT confirmed the ET’s award of £5,000 including £4,000 for
injury to feelings. Mr Justice Mummery said
The relevant question ... relates to the intention with which the requirement
or condition was applied, not to the more generalised intention relating to
the introduction of the rostering arrangements. The application of the
requirement or condition resulted in [the applicant] being treated
unfavourably on the ground of her sex. An intention to produce these
consequences could be inferred.

Lord Keith stated in Rainey v Greater Glasgow Health Board (1987)

(see p 95, below) that justification under the Sex Discrimination Act
has now, therefore, been brought into line with justification under
European law and also the defence of ‘material difference’ under
the Equal Pay Act 1970, but it is not clear that the rule laid down in
Hampson is identical with that in Bilka-Kaufhause.
Note
The Burden of Proof in the Sex Discrimination Directive requires the
UK to define indirect discrimination as existing ‘where an apparently
neutral provision, criterion or practice disproportionately
disadvantages the members of one sex’. The burden of proof which is
currently on the applicant will, after the law has been changed, be
shared between the parties. This means that, once the courts have
accepted the claim that there is a case to answer, the employer will be
required to prove that no discrimination took place.

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Victimisation
Victimisation occurs where a person is treated less favourably because
he brings or has brought proceedings, given evidence or information
or alleged a contravention of the SDA, the EPA or the RRA.
Victimisation has proved difficult to establish in practice.
In Aziz v Trinity Taxis Ltd (1988), Aziz was expelled from an
association of taxi drivers for having made a secret tape recording with
a view to obtaining proof of discriminatory practices. The respondents
successfully argued that any individual who had breached
confidentiality in the same way would have been expelled. To amount
to victimisation, the applicant must have been dismissed for one of the
matters set out in the Act.
It has been said (Townsend-Smith, R, Discrimination Law, 1998,
London: Cavendish Publishing) that the provisions on victimisation
are unduly technical and do not act as an adequate deterrent. The
Public Interest Disclosure Act 1998, which covers whistleblowers, does
provide some protection and is wider than that under the SDA and
RRA, since no comparator is required, but narrower too in the sense
that the former provisions would not cover bringing of proceedings or
giving evidence: merely the disclosure that an employer has failed to
comply with the statute. The EReA 1999 provides, however, that there
be no compensation limit for detriment suffered as a result of
whistleblowing and this may have an impact.
An important decision of the ECJ concerned victimisation of a
former employee in Coote v Granada Hospitality Ltd (1998). The ECJ
ruled that the SDA was in breach of the Equal Treatment Directive by
not allowing claims to be brought against an employer by a former
employee. In this case, C was refused a reference from her former
employer against whom she had claimed sex discrimination, alleging
that she had been dismissed because she was pregnant. That
complaint was settled. She now claimed that refusing to provide a
reference was victimisation, but the EAT referred the matter to the ECJ,
since the SDA provided that protection was only available during
employment. The ECJ judgement is clear and, as a result, the SDA will
need to be interpreted in line with this ruling. Former employees
cannot be penalised because they brought sex discrimination or equal
pay claims, either by refusing to give them a reference or in the

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contents of the reference and this applies however long ago the employee
was employed. The implications are clear – records must be accurate
and managers who give references must be informed of this ruling.

Discrimination in employment
The Act covers not only employees, but anyone working personally.
Since the protection is not dependent on a contract of employment, the
EAT held in Leighton v Michael (1996) that an employee may bring a
claim of discrimination even though her contract is unenforceable
because it is tainted with illegality.
Section 7(1)(a) of the SDA covers:
• arrangements for selecting employees and the making of an offer of
employment.
In Saunders v Richmond BC (1977), a woman who applied for a job as
a golf professional was asked certain questions such as how she
thought a man might take to being instructed by a woman. It was
held that these questions were pertinent to the job and not
discriminatory.
In the EOC Code of Practice, employers are advised not to ask
questions about marriage or family intentions;
• the terms upon which employment is offered. (The terms
themselves when employment has been obtained will be covered
by the EPA.);
• refusing or omitting to offer employment.
Section 7(1)(b) of the SDA covers:
• access to promotion or training
See Horsey v Dyfed CC (above, p 75);
• dismissal, or any other detriment
See MOD v Jeremiah (above, p 75);
In Porcelli v Strathclyde (1986), sexual harassment per se was held to
be a detriment. But, in De Souza v AA (1986), racial insults by
themselves were held not to amount to a detriment.

Exceptions
• The provisions of the Act do not apply to special treatment afforded
to women in connection with pregnancy or childbirth.

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• The Act stated that it did not apply to provisions relating to death
or retirement, but this has been overruled by the ECJ in Marshall v
Southampton and West Hampshire Health Authority and Barber v Royal
Exchange Ass Group (see below, p 98).
• Health and safety requirements.
• Miscellaneous matters:
(a) Prison Officers (ss 17–21);
(b) Necessity of complying with statutory requirements (s 51);
(c) National Security (s 52).
• Positive action (s 48).
Where in the previous year there were no, or few, members of one
sex doing a particular job, an employer may:
(a) encourage women to take advantage of opportunities for doing
that work;
(b) afford women only ‘access to facilities for training’ to help fit
them for doing that work.
These are the only positive actions allowed by the Act.

Genuine occupational qualifications

These apply only to recruitment, transfers and training.
They do not apply to the terms upon which employment is offered,
dismissal or subjecting a person to a detriment.
Neither do they apply where the employer already has a sufficient
number of suitable employees to carry out the duties.
The sex of a person is a ‘genuine occupational qualification’ in the
following circumstances:
• where the nature of the job calls for authentic male or female
characteristics (excluding physical strength or stamina), for example,
actors, models;
• where the job needs to be held by a man or a woman in order to
preserve decency or privacy because it is likely to involve physical
contact, or because persons are in a state of undress, or using
sanitary facilities.
In Wylie v Dee & Co (1978), a tribunal held it was wrong to turn
down a woman applicant for a job as sales assistant in a menswear
shop, as there were plenty of other employees in the shop who
could take inside leg measurements;
• the employee is required to live in premises provided by the
employer, which are not equipped with separate sleeping

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accommodation, or sanitary facilities and it would be unreasonable

to expect the employer to provide theses items;
• the job is in a single sex establishment, such as a prison, a hospital
or other establishment for people who need special care, and it is
reasonable that the job should be held by a person of a particular
sex;
• the holder of the job provides people with personal services,
promoting their welfare or education, which can most effectively be
provided by a person of a particular sex.
In Times v Hodgson (1981), a male supervisor was chosen for
redundancy ahead of the only female supervisor, as the employer
wished to retain one female to deal with the problems of female
workers, for example, to take them to the first aid room, etc.
But, in London Borough of Lambeth v CRE (1990), the Court of Appeal
held that personal service must involve personal contact and an
administrative post such as housing manager would not qualify;
• the job needs to be held by a man because of the restrictions
imposed by laws regulating the employment of women;
• the job is likely to involve foreign service in a country with laws
regulating the employment of women;
• the job is one of two to be held by a married couple;
• the job involves living or working in a private home and involves
intimate physical or social contact.
The Sex Discrimination (Gender Reassignment) Regulations 1999
incorporate some additional genuine occupational qualifications in
relation to discrimination on gender reassignment (GR) grounds. These
apply only if:
• the job involves the holder of the job being liable to be called upon
to perform intimate physical searches pursuant to statutory powers;
• the job is likely to involve the holder doing his work or living in a
private home and needs to be held other than by a person
undergoing or who has undergone GR because objection might
reasonably be taken to allowing such a person: (a) if the degree of
physical or social contact with a person living in the home; or (b) the
knowledge of intimate details of such a person’s life which is likely
to be available or allowed to the holder of the job;
• the nature or location of the establishment makes it impractical for
the holder of the job to live elsewhere than in premises supplied by

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the employer and such premises are such that reasonable objection
could be take for reasons of privacy and decency for sharing with a
person undergoing GR and it is not reasonable for employer to
equip those premises with suitable accommodation;
• the holder of the job provides vulnerable individuals with personal
services which cannot effectively be provided by somebody
undergoing GR.
The last two exceptions are unique to those who have undergone or
who are undergoing GR.

Other forms of employment discrimination (ss 11–15)

In addition to discrimination in ‘employment’, other types of
discrimination is made unlawful, for example, discrimination against
‘contract workers’, discrimination by trade unions, partnerships,
qualifying bodies, vocational training bodies and employment
agencies.

Other unlawful acts (s 41)

• It is unlawful to give instructions to discriminate or to offer any

benefits to induce such discrimination.
• An act done by an employee ‘in the course of his employment’ shall
be treated as having been done by the employer, whether or not it
was done with his approval, unless he can show that he took such
steps as were reasonably practical to prevent the employee from
doing the act.
In Tower Boot Co v Jones (1997), the Court of Appeal held that the
phrase ‘in the course of employment’ should be interpreted
broadly without reference to its meaning at common law. A black
16 year old had left the company after one month because he had
been physically assaulted and verbally abused by his fellow
workers. His arm had been burnt with a hot screwdriver, metal
bolts were thrown at his head, his legs had been whipped, he was
called ‘chimp’, ‘monkey’ and ’baboon’. The EAT decided that this
behaviour could not be treated as done ‘in the course of
employment’ as they could not be described as improper modes of
performing authorised tasks. The Court of Appeal reversed the
decision.

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In Burton v Rhule and De Vere Hotels (1996), the EAT decided that an
employer subjects an employee to racial harassment where the
harassment is inflicted by a third party (Bernard Manning) and
where the employer could have put a stop to the harassment or
reduced the extent of it.
An example of a situation where it was deemed that the employer did
not have control is found in Thompson v Black County Housing
Association Ltd (1999). Here, T, an Afro-Caribbean care worker in a
residential home for people with learning difficulties was racially
abused by a resident, Miss D. The manager met with Miss D and
warned her and she apologised, but later the abuse continued. Miss D
was then given a final written warning that any further occurrence
would result in her eviction. T claimed racial discrimination
unsuccessfully. The employer had acted in a reasonable manner to try
and prevent the racial abuse and the only way it could be permanently
eradicated would have been by evicting the resident – a solution which
T himself had rejected.

Employment advertisements
It is also unlawful to advertise in such a manner as to indicate an
intention to discriminate and the use of a job description in
advertisements with a sexual connotation, such as a ‘waiter’, ‘postman’
will be assumed to be discriminatory unless the advertisement
contains an indication to the contrary. It is the EOC alone which can
take action in this connection. The EOC has issued a document called
‘Guidance on Employment Advertising’ containing useful advice.

Enforcement
An individual must bring a claim within three months of the
discrimination, unless the tribunal considers it ‘just and equitable’ to
extend the time. Tribunals have been instructed to apply this in a liberal
fashion.
The three months run from the last act of discrimination. An act
which continues over a period is deemed to have been performed at
the end of the period (Barclays Bank v Kapur (1991)). A distinction must
be made, however, between a continuing act and an act which has
continuing consequences, for example, a failure to appoint a person to
a particular post.

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Burden of proof
Lord Wedderburn has pointed out that law in action depends more
often than not on burdens of proof and procedures.
The burden of proof is on the individual alleging the discrimination.
This poses great difficulty, especially in cases involving a failure to hire
or to promote – where most complaints arise.
There have been arguments over whether the burden of proof
moves, once a prima facie case of discrimination has been established.
In King v Britain China Centre (1991), the Court of Appeal ruled that
there could be no formal reversal of the burden of proof, but because it
was unusual to find direct evidence of discrimination, a tribunal is
entitled to draw an inference from the primary facts. If, for instance, a
person from a different race seems to have been treated differently,
then the tribunal may deduce that this was because of racial dis-
crimination unless the employer can provide a convincing explanation.
Under US law, once the applicant has shown that she has the necessary
minimum qualification, it is for the employer to show that she was less
qualified than the appointee.
Note the effect of the Burden of Proof in the Sex Discrimination
Directive mentioned previously.

Questionnaires
In an attempt to help with the proof of discrimination, the claimant
may submit a questionnaire to the employer asking for details, for
example, of the sex/race of those shortlisted for interview.

Statistics
Statistical evidence may be important both for direct and indirect
discrimination.
In West Midland Passenger Transport v Singh (1988), the claimant
sought statistics relating to the ethnic origin of applicants for
promotion and the ethnic origin of those who were successful and
these were considered by the tribunal, and contributed to the success
of his claim. It was pointed out that the CRE Code of Practice
recommended ethnic monitoring and employers also used evidence of
this sort to disprove discrimination. However, if employers do not
monitor, then statistical evidence will not be available.

Discovery of documents
Proving discrimination may be impossible without access of
documents which the employer holds, for example, qualification,
references, etc. Since these are confidential, the applicant will not have
access to them unless discovery is ordered.

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In Nasse v SRC (1979), the Court of Appeal held that an employment

tribunal should not order the disclosure of a reference given in
confidence except in rare cases, where, after inspection of the
documents, the chairman decides that it is essential in the interests of
justice that the confidence should be overridden.

Remedies

• An order declaring the rights of the parties.

• An order requiring the respondents to pay damages.
Originally, a limit was placed on the amount of damages payable.
However, in Marshall v SW Hants AHA (No 2) (1993), the ECJ
declared that such a limit was contrary to the Equal Treatment
Directive which required claimants to be compensated in full. This
was only effective vertically against emanations of the state.
The limit was removed for all claimants under the SDA by the Sex
Discrimination and Equal Pay Regulations 1993 and for claimants
under the RRA by the Race Relations (Remedies) Act 1994.
The effect of this change has been dramatic, as seen from damages
of up to £300,000 awarded against the Ministry of Defence in a
sequence of cases arising from the dismissal of pregnant
servicewomen.
The Court of Appeal enunciated the following principles for
assessing damages in Alexander v The Home Office (1988):
❍ The object of damages is restitution. It should not be minimal,
because this trivialises and diminishes public respect for the
policy behind the act; excessive awards could have the same
effect and given the impossibility of precise quantification,
awards should be restrained.
❍ Damages can be awarded for injury to feelings, but injury to
feelings is of shorter duration than physical injury. Such
damages, however, can be substantial as in HM Prison v Jonson
(1997), where damages of £21,000 for injured feelings were
awarded to a black prison warder who had had to suffer racial
abuse over an extended period.
❍ The conduct, character and circumstances of the claimant must
be taken into account.
Note
Damages were not originally available for indirect discrimination,
unless discrimination was intended. This was again altered to comply

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with European law. Regulations now allow the tribunal to award

damages where it would be just and equitable to do so.
• A recommendation of action to be taken by the respondent to
reduce the adverse effect of discrimination – for example, Price v
Civil Service Commission (above). However, it was held by the Court
of Appeal in NW Thames AHA v Noone (above) that the employer
could not be ordered to offer the applicant the next vacancy as the
AHA was required by law to advertise all vacancies.
The EAT relied on the above decision in British Gas v Sharma (1991)
to hold that they did not have the power to order that the applicant
be promoted when the next vacancy arose, although there was no
such legal requirement to advertise in the case of British Gas. If the
employer does not comply with a recommendation, then
additional compensation can be ordered.

Future developments

• Treaty of Amsterdam
As a result of this treaty, there is a new provision on non-
discrimination. A new Art 6A has been added to the Treaty of
Rome which provides:
... the Council, acting unanimously on a proposal from the Commission
and after consulting the European Parliament, may take appropriate action
to combat discrimination based on sex, racial or ethnic origin, religion or
belief, disability, age or sexual orientation

This provides a treaty base to allow the Council to adopt an EC

Directive prohibiting racial discrimination (and, indeed, age and
disability discrimination). Note, however, that any measure must
be adopted unanimously, rather than by qualified majority vote.
• EC consultation on sexual harassment
The EC has published a consultation document that asks
employers and trade unions to indicate whether they wish to
negotiate a binding European level agreement on sexual
harassment or whether they would prefer the Commission to take
the initiative – perhaps, in the form of a Directive. There is a
suggestion that an employer might be required to issue a policy
statement to all staff notifying employees of the procedure to be
followed if sexual harassment occurs (already the law in Belgium).
Another proposal includes mandatory counselling facilities for
workers suffering from sexual harassment.

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The Equal Opportunities Commission

For the duties and function of the EOC, turn to Chapter 1, p 12.

The Equal Pay Act 1970 (as amended)

The EqPA 1970 is concerned with the establishment of equal terms and
conditions of employment for men and women. The Act provides that
the contract of employment of all women is deemed to include an
equality clause, which will operate whenever a woman is employed on
like work with a man, or on work which is rated equivalent, or on work of
equal value.
If a claim is upheld, the employment tribunal may also award
damages which represent arrears of pay. In Levez v T H Jennings (Harlow
Pools) Ltd (1999), a case involving arrears of remuneration in an equal
pay claim, the EAT referred to the ECJ the question of whether the two
year limitation period on backdated compensation under the EqPA
was contrary to EC law. The ECJ ruled that, where the employee’s
delay in bringing the equal pay claim was caused by the employer’s
deliberate misrepresentation as to the level of remuneration received
by a male comparator, this limit was contrary to European law. In such
circumstances, national law should include a discretion to extend any
limiting period.
The EqPA 1970 is subject to the overriding effect of Art 141 (the
former Art 119) of the Treaty of Rome and the Equal Pay Directive
75/115.
Disputes on equal pay can be brought directly under these
provisions claims brought under the national legislation must be
interpreted in the light of European legislation and disputes can be
referred for a final decision to the European Court of Justice.

The comparator
The comparator must be in the ‘same employment’ as the applicant,
that is, must be employed by her employer or an associated employer
at the same establishment or at another establishment which has
common terms and conditions of employment.
• Associated employer
Employers are ‘associated’ under the Act if one is a company of
which the other (directly or indirectly) has control, or both are

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companies of which a third person (directly or indirectly) has

control.
In Scullard v Knowles (1996), the EAT held that this definition
excluded employers who were not companies. However, it also
pointed out that Art 141 does not require an employer to be a
company and that the ECJ has stated that it applies where men and
women work in the ‘same establishment or service, whether private
or public’.
• Common terms and conditions
In Leverton v Clwyd CC (1989), a nursery nurse claimed parity with
clerical staff employed by the council at a different establishment.
The council had concluded a comprehensive collective agreement
with NALGO (the purple book) covering all staff and containing six
separate pay scales. The House of Lords concluded that this was a
situation where there were common terms and conditions for all
staff.
In British Coal Corporation v Smith (1994), the Court of Appeal
explained that ‘common terms and conditions’ must be those of
men working at the women’s establishment, or which would be
available for male employees at the women’s establishment if there
were any.
• The complainant may choose the man with whom she wishes to be
compared and the tribunal may not substitute another man whom
it considers more appropriate.
• Multiple comparators are allowed.
• In Macarthys v Smith (1979), the European Court of Justice held that
a woman could use a former employee as comparator.
• The appellant cannot choose a hypothetical comparator.

Like work
In order to determine whether a woman is employed on ‘like work’,
the Act provides that:
• The work must be the ‘same or broadly similar’ and any differences
between the work done is not of practical importance.
In Capper Pass v Lawton (1977), the EAT upheld a decision that a
woman who worked as a cook in the directors dining room was
entitled to equal pay with the two assistant chefs who worked in the
works canteen.

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• If there are differences between the work done, the tribunal must
ask whether they are such that it is reasonable to see them reflected
in the wage settlement. Would two men doing those jobs be paid
differently?
In Noble v David Gold & Son Ltd (1980), the men worked in a
warehouse loading and unloading, whereas the women did lighter
work, such as sorting and packing. Held: not on ’like work’.
• Regard must be had to what happens in practice. Are any
additional duties in a man’s contract of employment spurious?
In Electrolux v Hutchinson (1976), more highly paid men performed
the same work as women, but their contracts included a flexibility
clause and a commitment to overtime. However, the EAT
discovered that they had not actually been required to fulfil these
duties and held that they were on ’like work’ with the women.
• The time at which work is done is not necessarily significant.
In Dugdale v Kraft Foods Ltd (1977), men and women worked on ‘like
work’ but the men worked night shifts and the women worked
during the day. It was held that the hours at which work is
performed is by itself no bar to equal pay at the basic rate – the men
could be compensated by an unsocial hours premium.
However, in Thomas v NCB (1987), it was held that a male canteen
assistant, working on his own, unsupervised, at night, was not on
‘like work’ with canteen assistants who worked during the day
under supervision.

Work rated as equivalent

A woman’s work will be considered to have been rated equivalent to
that of a man if it had been given equal value under a properly
conducted job evaluation scheme (JES), for example, in terms of effort,
skill, decisions, etc.
In Eaton v Nuttal (1977), it was said that the scheme had to be
‘thorough in analysis and capable of impartial application’.
To qualify, the JES:
• must be analytical.
In Bromley v Quick (1988), it was held that it must contain an
accurate job description and criteria against which each job is
measured. A subjective job evaluation would not suffice;
• Must have been accepted as accurate by the parties who
commissioned it – generally the employer and a trade union.

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Once both parties have accepted the validity of the scheme, it must be
put into force.
In O’Brian v Sim-Chem Ltd (1980), a JES was carried out, but before it
was put into operation, the government announced a voluntary
incomes policy. The House of Lords held that once the scheme had
been completed, the equality clause was to operate.

Work of equal value

The original Act only provided for equal pay for ‘like work’ or ‘work
rated as equivalent’. Following the decision of the ECJ in Commission of
the European Communities v UK (1982) that the Act did not fully comply
with the principle of ‘equal pay for equal work’, the government
introduced the Equal Pay Amendment Regulations 1983 which
provided a third ground upon which a woman could claim equal pay,
that is her work is of equal value to that of a man. The Regulations
came into force on 1 January 1984.
They provide as follows:
(1) An equality clause is to be implied into a woman’s contract of
employment where a woman is employed on work which in terms
of demand made upon her (for instance, under such headings as
effort, skill and decision making) is of equal value to those of a man
in the same employment.
(2) A woman may only claim under the Regulations if it is not work to
which either of the first two situations apply. But, there is no such
limitation either in Art 141 or the directive.
In Pickstone v Freemans plc (1988), the applicant was a warehouse
operative who worked alongside male warehouse operatives and
received the same pay. She brought an equal value claim naming as
her comparator a male checker warehouse operator who was paid
at a higher rate. Held: she was entitled to do this under the Treaty
of Rome.
(3) A woman will be allowed to pursue an ‘equal value’ claim, even if
her job and that of her male comparator are already covered by a
JES provided she can show that the system used to measure the jobs
clearly and manifestly discriminated on grounds of sex.

Procedures in an equal value claim

• If the claimant was not already covered by a JES scheme which is
not ‘clearly and manifestly discriminatory’, then the tribunal can

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proceed with the claim as long as the JES was completed before the
hearing (Dibro v Hore (1990)).
• The tribunal can refuse to proceed if the claim clearly has no hope
of success.
• If the employer proves a ‘material difference or material factor’
defence (see below), which must be pursued at this stage, then the
tribunal cannot proceed with the claim. If considered at this stage,
then it cannot be considered later. In the absence of any of the
above, and if the applicant has established reasonable grounds for
determining that the work is of equal value, the tribunal must
proceed. Since 1996, the tribunal has a discretion as to whether it
will refer the matter to an expert drawn from a list of suitable
persons held by ACAS, or deal with the matter itself.
If referred to an expert:
• the expert will examine the jobs in question, hear representations,
and report to the tribunal;
• the tribunal can accept the report, reject it, or commission a further
report;
• once the tribunal accepts a report, it automatically becomes
evidence on the question of equal value.

Material difference and material factor

Even though a woman can show she is employed on ‘like work’
or ‘work rated as equivalent’, the employer may still be able to defend
an equal pay claim by showing that the variation in was due to a
‘material difference other than sex’. The burden of proof in this case is
on the employer and his defence may include such matters as
difference in length of service, a merit grading scheme, better
qualifications, better skill, different status, a night work premium,
additional responsibility allowance, etc.
A new defence was introduced for employers in ‘equal value’ claims
– he may show that the difference in pay is due to a ’Material factor,
other than sex’. This change was apparently calculated to widen the
scope of the employers defence, to include non-personal matters.
However, both defences are governed by European law and, since
Rainey v Greater Glasgow Health Authority (1988) (see p 95, below) both
are seen to operate in a very similar way.
The EOC’s Code of Practice on Equal Pay, which came into force in
March 1970, states that the material factor defence is the ‘reason put

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forward by the employer to explain why the comparator, although

doing equal work, is paid more than the applicant’.

Scope of material difference and material factor defence

In Tyldesley v TML Plastics Ltd (1996), the EAT held that a genuine
material factor defence can be established if the employer can show
that the difference in pay is due to a genuine material factor which is
not sex. There is no additional requirement to show that the difference
is objectively justified unless it adversely impacts on women as a
group. In that case, the comparator was paid more than the claimant
because he had more experience in total management skills. It was not
necessary to show a real need for people with those skills. ‘The EqPA
1970 is about eliminating sex discrimination, not achieving fair wages.’
The same principle was applied by the House of Lords in the case of
Strathclyde Regional Council v Wallace (1998). W and others, all female,
were teachers employed by SRC. She and others were doing the work
of principal teachers, but, because of financial and other restrictions,
were not given the relevant salary increase. The women claimed equal
pay with male principal teachers. After two decisions in the women’s
favour, the Court of Session allowed the employer’s appeal, stating
that the employers were not required to provide objective justification
for the factors put forward to explain the difference in pay. The House
of Lords agreed – in this case, there was no suggestion that the teachers
(there were a total of 134, 81 of whom were male) were not receiving
equal pay because of a sex related reason The genuine material factor
defence had been established and no justification was required.
Where, however, the difference is itself tainted by sex in that it
affects a considerably higher proportion of women than men, that is, it
has an adverse impact, then it must be objectively justified.
The ECJ ruled in the Danfoss case (1991) that, where an undertaking
applied a system of pay which was characterised by a lack of
transparency and a female worker establishes that the average pay of
the female is lower than that of the male workers; the burden of proof
is on the employer to show that his pay practice is not discriminatory.
In Bilka-Kaufhause v Weber von Harz (1986), the ECJ held that, in such
circumstances, the defence will only succeed, if the employer can show
that:
• there was a real need for the provision;
• it was suitable for satisfying that need;
• it was necessary for that end.

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Where there was an adverse impact, The House of Lords also in Rainey
v Greater Glasgow Health Board, below, required the material factor to be
objectively justified.

Examples of material differences or material factors

Market forces
In Clay Cross (Quarry Services) Ltd v Fletcher (1979), a woman was
employed as a sales clerk at £35 a week. A colleague left and was
replaced by a male employee who was paid £43 a week – the sum he
was already earning in another job. The Court of Appeal held that
‘market forces’ which led to the unequal pay was no excuse.
However, this was overruled in Rainey v Greater Glasgow Health
Board (1988), where a health authority decided to set up its own
prosthetic service. The rates of pay for qualified prosthetists was on the
same scale as medical physics technicians. However, in order to attract
a sufficient number of qualified persons to get the service started, it
was necessary to make a higher pay offer to those who came from the
private sector. The applicant who came from the health service sought
equal pay with a man on a higher salary who came from the private
sector. Held: the difference in pay was due to a genuine material
difference other than sex and this could be objectively justified by the
needs of the employer. The House of Lords thought that the decision in
Clay Cross was unduly restrictive, as economic grounds, objectively
justified and also economic convenience were both capable of being
genuine material differences other than sex.
In Benveniste v Southampton University (1989), it was held that
although the defence applied when a woman lecturer was taken on at a
low salary due to financial problems at the university, the defence would
cease to apply when the University’s financial problems were over.
The proportionality test
The extent of the market forces defence was considered by the ECJ in
Enderby v Frenchay AHA (1994). In that case, senior speech therapists
employed by the Health Authority, claimed their work was of equal
value with male principal pharmacists and male clinical
psychologists, whose salaries exceeded theirs by up to 60%. The
claimants pointed out that speech therapists were predominantly
female whereas the comparator professions were predominantly male,
and that this was the real reason why speech therapists were paid less.
The employers argued that an overall shortage of applicants to the
other professions meant that higher salaries had to be offered. It was

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accepted, however, that this would not account for all the difference.
While accepting that market forces could constitute a genuine material
difference, the ECJ indicated that the defence would only hold good for
such part of the difference as could be attributed to that reason.
A further decision which limits the market forces defence is found
in Ratcliffe v N Yorkshire CC (1995), where the council’s direct service
organisation cut the pay of a group of employees in order to enable it
to put in a low bid to carry out work which was subject to competitive
tendering. The House of Lords held that, ‘although conscious of the
difficult problem facing employers in seeking to compete with a rival
tenderer ..., to reduce women’s wages below those of their male
comparators was the very kind of discrimination which the Act tried to
remove’. It was also stated that the distinction between direct and
indirect discrimination with the possibility of justifying the latter,
could not be imported from the SDA 1975 into the EqPA 1970.
Claiming equal pay has never been easy and recent case decisions
continue to show the struggle most applicants face. After the Ratcliffe
dinner ladies case, the work of catering assistants who had been
employed by Yorkshire County Council and rated as of equal value
with other local government employees was contracted out to private
employers. The applicants then argued that they were entitled to rely
on Art 141 to claim a continued right to equal pay with current
employees whose work had also been rated as of equal value. The EAT
turned down their claim because they no longer shared the same
employer, although the reasoning is unclear, since it was recognised
that it was possible for a claim to succeed where applicant and
comparator were in the same service, even if they did not share the
same employer: Lawrence v Regent Office Care Ltd (1999).
The decision in Evesham v North Hertfordshire Health Authority (1999)
is easier to rationalise. E was one of the successful speech therapists in
the Enderby case. When she brought her claim, E was comparing herself
with a psychologist with only one year of service. She, however, had
six years of service and argued, here, that this should be taken into
account. The EAT disagreed. She had chosen her comparator and was
only entitled to be paid the same as her comparator at the date of claim
– not to be put on a particular pay scale at a certain point.
Collective bargaining
In Enderby v Frenchay (above), another argument put forward by the
employer was that the pay structure, in each case, resulted from free
collective bargaining and that this constituted sufficient justification.
The ECJ held that this was not an acceptable reason – separate

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collective bargaining may explain the difference, but does not justify it.
This was also subsequently rejected as a defence by the Court of
Appeal in British Coal Corp v Smith (1994) – a case involving
mineworkers and catering staff.
Red circling
Problems have arisen with regard to ‘red circling’, that is, where an
employee is redundant, but is offered lower graded work but at his
existing rate of pay. Such protected salary or ‘red circling’ may be
challenged by women workers who are doing the same work but are
paid the lower salary. The ‘red circling’ may be accepted as a ‘genuine
material difference’ provided it is not the result of past discrimination
and providing it is phased out as soon as possible.
In Snoxell v Vauxhall Motors (1977), the company had different rates
of pay for men and women doing the same job. On the EqPA 1970
coming into force, the women’s rate was established as the rate for the
job, but the men previously employed were ‘red circled’ at their
previous rate. Held: this was merely repeating past discrimination and
was therefore no defence. (The company did not in any case have a
plan to phase out the red circling.)
Part time work
In Jenkins v Kingsgate (1981), the ECJ held that the fact that a man
worked full time and a woman worked part time could constitute a
‘genuine material difference, provided that it was not merely an
indirect way of reducing the pay of part time workers who were
predominantly or wholly women. Any variation between the pay of
full time men and part time women would have to be justified by
reference to some non-discriminatory object.
This was also emphasised by the ECJ in Bilke-Kaufhause v Weber von
Herz (see above). The ECJ declared that certain State provisions in
Germany disqualifying part-time workers from sick pay schemes or
redundancy schemes were unlawful. This led to R v The Secretary of
State for Employment ex p EOC (1994), where the qualifying hours for
redundancy payments and unfair dismissal were also held to be
unlawful by the House of Lords.
Performance related pay
In the Danfoss case above, the ECJ considered criteria which have a
discriminatory effect, for example, flexibility, which would need to be
justified. They also stated that clear criteria should be adopted and
applied objectively; and that a discriminatory impact should be
examined and justified where necessary.

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Note
In Leverton v Clwyd (above), the wide difference in the parties
conditions of work were held to be a ‘material difference’.

Remedies
If the tribunal finds in favour of the claimant, it will make an award of
damages or arrears of pay which can be back dated. The EqPA 1970
provides of a limit of two years, but the validity of this is in doubt as a
result of the ECJ decision in Levez v Jennings (1999) (see above).

What must be equalised?

In Hayward v Cammell Laird Shipbuilders Ltd (1988), the applicant joined
Cammel Laird as a catering trainee. During the first three years, she
was paid the same rate as apprentice painters, insulation engineers and
joiners, but, thereafter, she was paid at a lower rate. However, she
enjoyed supervisor sickness benefits, paid meal breaks and extra
holidays. Her claim for equal value was referred to an independent
consultant who evaluated the jobs under the headings of:
• physical demands;
• environment considerations;
• skill and knowledge;
• planning and decision making;
• responsibility.
He found the work of the applicant was of equal value with that of the
three male comparators. The tribunal, however, dismissed the claim –
her terms and conditions as a whole (not just the cash pay) were not
less favourable. The House of Lords reversed this decision – the basic
salary of the applicant should not be less favourable than that of her
comparators.
This approach was approved by the ECJ in Barber v Guardian Royal
Exchange (1991).

Pensions
Pay has been interpreted very widely under Art 141. This has been
particularly significant with regard to pensions.
Equality of retirement age was established in Marshall v Southampton
AHA (1986); access to occupational pension schemes by part timers in
Bilke-Kaufhaus GmbH v Weber von Hartz (1987); age entitlement to

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pensions and pension benefits in Barber v Royal Guardian Exchange

(1991). Mr Barber had been made redundant at the age of 52. Under the
provisions of his non-contributory pension scheme, a man, if made
redundant before the age of 62, could claim an immediate pension at
55. Women, however, if redundant, could claim a pension at 50. Mr
Barber alleged sex discrimination, but, under the SDA 1975 as it then
was, retirement and pension provisions were exempted from its
operation. The Court of Appeal asked the ECJ to give a preliminary
ruling on whether a pension payable under a redundancy scheme
could be ‘pay’ within the meaning of Art 141. The ECJ gave the
following ruling:
• benefits paid to an employee under a compulsory redundancy
constitutes pay under Art 141;
• private pensions are pay. It is contrary to Art 141 for a man to be
entitled to a deferred pension and a woman to be entitled to an
immediate pension;
• the direct effect of Art 141 on entitlement to pensions may not be
relied on for entitlement prior to 17 May 1990, unless legal
proceeding had already been instigated.
Subsequent cases have explained and interpreted further the full
effects of Barber.
In Smith v Advel Systems (1994), the ECJ held that levelling down is
not discriminatory.
Pensions are now covered by the Pensions Act 1995 and the
Occupational Pension Schemes (Equal Treatment) Regulations 1995
which provide both for equal access to schemes but also for equal
treatment during membership. Claims for equal treatment in pension
schemes are to be brought under the EqPA 1970, and must be made
during the relevant employment or within six months afterwards. If
such claims are successful, the employer must provide the resources
necessary to secure the applicant’s accrued rights.
Note
It remains lawful to discriminate between men and women in relation
to bridging pensions in order to compensate for the fact that men are
currently entitled to a state pension at a later age than women; and also
in the use of sex related factors when calculating employers’
contributions or determining certain benefits.

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The Race Relations Act 1976

The RRA 1976 is similar in form and content to the SDA 1975 on which
it was based. The cases which have been used to interpret the SDA also
apply in most cases to the RRA, but there are certain differences.
The RRA:
• covers contractual and non-contractual matters;
• prohibits discrimination on grounds of ‘colour, race, nationality, or
national or ethnic origin.’ The term ‘ethnic origin’ has been held to
be wider than ‘race’.
In Mandla v Dowell Lee (1983), the House of Lords explained that for a
group to constitute an ethnic group, it needed certain characteristics,
for example:
• a long history;
• a common cultural tradition;
• a common geographical origin;
• a common language;
• a common religion;
• a minority group.
The following have been held to be ethnic groups:
Sikhs – in Mandla v Powell Lee (1983);
Jews – in Seide v Gillette Industries (1980);
Gypsies – in CRE v Dutton.
The following have been found not to be separate ethnic groups:
non-Welsh speaking Welshmen in Gwynedd CC v Jones (1986);
Rastafarians – in Crown Suppliers v Dawkins (1993).
Muslims do not belong to an ethnic group, but it has been held
that discrimination against Muslims can be indirect
discrimination against Asians.
• prohibits discrimination ‘on the grounds of race, etc’.
(Cf the SDA which prohibits discrimination on the grounds of ’her’
sex.) In Showboat Entertainment Centre v Owens (1984), Owens who
was white was dismissed from her job as a manager for failing to
obey an order to exclude black people. In Wilson v TB Steelworks
(1979), an offer of a job to a white woman was withdrawn when she

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revealed that her husband was black. In both of the above cases,
there was discrimination on the grounds of race;
• specifically states that segregation is to count as ‘less favourable
treatment’. But, see Pell v Mogdill (1980).

Genuine occupational qualifications

These comprise:
• dramatic or other performances;
• artists or photographers models;
• personal services.

The Disability Discrimination Act 1995

Definition of disability
A person is disabled ‘if he has a physical or mental impairment which
has a long term adverse effect on his ability to carry out normal day to
day activities’.
The Disability Discrimination Regulations 1996 provide guidance
on what amounts to a disability; the following do not qualify: addiction
to alcohol or any other drug, unless originally medically prescribed;
personality disorders, a tendency to steal, or start fires, or to physical
or sexual abuse; exhibitionism or voyeurism; disfiguring tattoos; hay
fever.
The definition will, however, cover:
• persons who have had a disability, but who have now recovered;
• persons who have some means of coping with the disability;
• a progressive condition (for example, cancer or multiple sclerosis)
from the time it has an adverse effect on a person’s day to day
activities.
Successful claims under the DDA 1995 have been brought for
disabilities including MS (dismissal not justified), asthma and heart
conditions (driver’s dismissal not justified), but an applicant with
congenital myotonic dystrophy did not succeed (job rejection justified
as application form contained errors).

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Meaning of discrimination
It is unlawful for a person to treat a person less favourably for a reason
related to his disability, than he would treat others to whom that
reason would not apply.
One of the most significant decisions to date is that of the Court of
Appeal in Clark v TDG Ltd t/a Novacold (1999), not least because it is the
first disability discrimination case to reach this level. Here, C was
dismissed because of too much absence. He was disabled with a back
injury and was absent from work for 16 weeks on full sick pay and N
dismissed him after obtaining a doctor’s report that was unable to give
an exact time when he could return to work, giving, as a reason, his
incapability of performing his job. With whom should C’s treatment be
compared? The tribunal said he should be compared with someone
who had been off work for a similar length of time, but not for
disability reasons. On this basis, there was no discrimination, as such a
person would have been treated in the same way. The EAT agreed with
the choice of comparator. However, the Court of Appeal did not. They
said that, in deciding whether the reason for less favourable treatment
does not or would not apply to others, it is simply a case of identifying
others to whom the reason for the treatment does not or would not
apply. It does not turn on a like for like comparison of the treatment of
the disabled person and of others in similar circumstances. In this case,
the ‘others’ C should be compared with were employees who were
performing the main functions of their job.
This case has serious implications, since many employers will have
to justify unfavourable treatment of a disabled person: the decision
effectively shifts the burden of proof to the employer once the
applicant has shown that they are a disabled person and that the
treatment they are complaining of is related to their disability. As the
Equal Opportunities Review report of the case states, this does not
mean that, every time an employer turns down a disabled job
applicant, it will have to show a justification for so doing. The decision
focuses on whether the reason for the decision was disability related.
There must still be a link between the reason for the treatment and the
disability.
Unlike direct discrimination on the ground of sex or race, this less
favourable treatment can be justified by the employer showing that the
disability is ‘both material to the circumstances of the particular case,
and substantial’. Regulations have confirmed that the discrimination is
justified:

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• in the case of pay – if it arises from a general scheme of performance

related pay;
• in the case of pension benefits – where the cost of those benefits is
substantially greater;
• in the case of insurance – if the disability is relevant to the risk
insured.
There is no provision covering indirect discrimination, but s 6 requires
that where any arrangement made by an employer or any physical
feature of the premises puts a disabled job applicant or employee at a
substantial disadvantage, there is an obligation on the employer to make
a reasonable adjustment in order to prevent the disadvantage arising. An
unjustified failure to meet this duty amounts to unlawful discrimination.
The extent to which an employer has to make ‘reasonable
adjustments’ was examined in the case of Kenny v Hampshire
Constabulary (1999), where it was decided that it did not include a duty
to provide a personal carer to help a worker go to the toilet.
Adjustments to the physical premises may be reasonable, as might
allowing access to a personal carer provided by the worker.
In Morse v Wiltshire County Council (1998), the EAT said that a
tribunal must go through a number of steps when dealing with an
employer’s failure to make reasonable adjustments. First, it must be
decided whether such a duty is imposed on the employer in the
circumstances of the particular case. If so, the tribunal must next decide
whether the employer has taken such steps as it is reasonable, in all the
circumstances of the case, for it to have taken in order to comply with
its duty. If it has not, the tribunal must finally decide whether the
employer has shown that its failure to comply with its duty is justified.
In this case, the tribunal had failed to follow the required steps in
considering M’s case and that reasonable adjustments had not been
made when he was subjected to the selection criteria for redundancy.
In Goodwin v Patent Office (1999), very clear guidance was given on
the procedure to be adopted by tribunals hearing such cases, stressing
the need to focus on what an applicant is unable to do, or can only do
with difficulty, rather than what he can do. The EAT also emphasised
the DDA 1996 provisions in relation to medical treatment which must
be ignored for the purposes of deciding whether an impairment has an
effect on the normal day to day activities. The actual decision (which
involved a paranoid schizophrenic who was not on the proper
medication and who was deemed disabled after his activities upset
female staff) has disturbed some, but is due to the language of the
statute.

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Regulations have identified physical features as covering the design

and construction of a building; the approach, the access or the exits;
fixtures, fittings, furniture, equipment, or materials.
It is conceded, however, that it is not reasonable for an employer to
alter features which are covered by: Building Regulations; a term in a
mortgage; a restrictive covenant or a lease where consent has to be
obtained.

Remedies
Complaints must be presented to a tribunal within three months. The
tribunal may make a declaration, order the employer to pay
compensation and/or recommend that the employer take specified
action. The damages are to be based on the assessment of damages in
the law of tort. There is no upper limit.
The Act came into operation on 2 December 1996 – so far, there are
relatively few cases.

Criticisms of the Act

• Narrow definition of disability, for example, does not cover those

with a reputation for disability, but with no actual disability.
• The extent to which employers can plead that the discrimination is
justified.
• No body was originally set up to review and enforce it, cf CRE, EOC
However, the Disability Rights Commission is currently being
established (see Chapter 1).
• Act is not applicable to small employers, that is, under 15
employees.

Religion
There is no general provision covering discrimination on religious
grounds, but it may, in certain circumstances, amount to indirect
discrimination on racial grounds. The Fair Employment Act 1989
which does deal with religious discrimination applies only to Northern
Ireland.

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Age
There has been much discussion in recent years concerning age
discrimination, and its effects. However, there is, as yet, no specific
legislation covering age discrimination, although it has, in certain
cases, been dealt with under sex discrimination.
In Nash v Mash/Roe Group Ltd (1998), Nash successfully argued that
a ban on unfair dismissal claims to those over retirement age was
discriminatory. Following this was the case of Simpson v British Timken
Ltd (1998), which involved a 67 year old woman who was unable to
claim redundancy pay for the same reasons – this has been referred to
the ECJ.
The government published, in June 1999, a code of practice ‘Age
Diversity in Employment’, intended to tackle age discrimination in
employment. Although it is only a code, employers would do well to
heed its guidance in the light of recent legal pronouncements on the
status of such codes, which were declared in Goodwin v Patent Office
(1998) to contain clear guidance which would normally be taken into
account by the courts. It includes the following:
• recruit on the basis of skills and abilities needed to do the job, which
should be stated clearly in the job advert; (do not use age limits or
age ranges in job adverts – think carefully before using such phrases
as ‘young graduate’ or ‘mature person’);
• select on merit by focusing on application form information about
skills and abilities and on performance at interview; (use mixed age
range on interview panels; avoid using age as an integral part of the
application form);
• base promotion on the ability, or demonstrated potential (after
suitable training) to do the job;
• encourage all employees to take advantage of relevant and suitable
training opportunities; (age should be no barrier);
• make selections for redundancy on the basis of objective, job related
criteria to ensure the skills needed to help the business are retained
(age should not be the sole criterion);
• ensure the retirement schemes are fairly applied, taking individual
and business needs into account (obviously, pension schemes need
consideration, but, again, age should not be the sole criterion).
This code must be seen as a positive step forward, but the decision of
the Court of Session, in Taylor v Secretary of State for Scotland (1999), is
probably another step back! This case involved a management circular

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to employers agreeing to ‘offer opportunities to all staff regardless of

gender, race, religion, sexual preference, disability or age’. Did this
amount to a legally enforceable contractual right not to be
discriminated against on the basis of age? The court seemed happy to
agree that the policy did provide such a right, but, when T argued that
a change in the employer’s retirement age policy which led to
dismissal amounted to breach of the contract, his claim was dismissed.
The case seemed to turn on the fact that the minimum retirement age
was 55 (the age of T at the time he brought the claim) and the original
contract stated that this could be extended to 60, but the variation took
away what was perceived to be a discretionary right of the employer to
extend.
Note, also, the provisions of the new Art 6A of the Treaty of Rome
mentioned above.

The influence of EU Law on UK discrimination law

As can be seen from the above, Art 141 and its accompanying
directives have had a major influence on sex discrimination and equal
pay in the UK. The influence has been exerted in the following ways:
• Enforcement actions taken by the European Commission against
the UK Government. For example, the decision of the ECJ that the
EqPA 1970 did not meet the requirements of Art 141 as explained in
the Equal Pay Directive led to the Equal Pay (Amendment)
Regulations 1983 which incorporated the principle of ‘equal value’
into UK law.
The decision of the ECJ that the SDA 1975 did not fully meet the
requirements of the Equal Treatment Directive led to the Sex
Discrimination Act 1986 which withdrew exceptions covering small
businesses, private houses and midwives.
• Judicial review
In R v Secretary of State for Employment ex p EOC (1995), the House of
Lords declared that the provisions in the EPCA 1978 whereby part-
time employees working for fewer than 16 hours a week were
subject to different qualifying requirements for redundancy
payments or claims of unfair dismissal were incompatible with the
Equal Treatment Directive. This decision led to the Employment
Protection (Part Time Employees) Regulations 1995 which led to the
harmonisation of qualifying conditions for full time and part time
workers.

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• The direct effect of Art 141 and the direct effect against ‘emanations
of the state’ of the accompanying directives.
Thus, UK claimants can use EC law as free standing right
enforceable by the tribunals or courts. For example:
(a) to take advantage of the more generous meaning given to ‘pay’
in Art 141. It has been held to cover, inter alia, non-contractual
payments, such as post-retirement travel concessions (Garland v
British Rail Engineering Ltd (1982)); ex gratia and voluntary
redundancy payments (Barber v Guardian Royal Exchange (1990));
contractual and statutory redundancy payments (Barber); sick
pay (Rinner-Kuhn v FWW Spezial Gebaudereingung GmbH (1989));
paid leave for attending a training course (Arbeiter wohlfahrt der
Stadt Berlin v Botel (1992)); Occupational Pension Schemes
(Barber);
(b) to choose a predecessor as a comparator is allowed under
Art 141 (Macarthys Ltd v Smith (1981));
(c) to require an employer to justify a factor which has a disparate
effect on the incomes of groups of men and women, as in
Enderby v Frenchay AHA (above), following Danfoss (above), in
the same way that indirect discrimination has to be justified
under the SDA 1975. This allows the tribunals to investigate why
occupations made up mainly of women are paid less than
predominantly male occupations employed by the same
employer. This would not be possible under the EqPA 1970,
which does not provide for indirect discrimination.
• UK courts have to interpret UK legislation in accordance with EU
law either by:
(a) referring a query to the ECJ, as in Webb v EMU Cargo;
(b) itself interpreting the SDA or the EqPA in order to comply with
EU legislation, as in Pickstone v Freemans.
Most of the advances in sex discrimination or equal pay since the mid-
1970s have has in fact been made as a result of EU law. And it does not
end there; there have also been changes made to the RRA 1976, in order
to keep it in tune with the changes made to the SDA 1995, for example,
the removal of the upper limit on damages: and as can be seen from the
above, Art 141 has also led to changes being made to the qualifications
for bring a claim for redundancy payments or unfair dismissal.

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Criticisms of discrimination law

The growth of anti-discrimination legislation is seen as useful in
introducing the principles of equal treatment into employment. It is also
praised in that it covers all workers, not merely employees and, thus,
provides an example to other areas of employment law in how to avoid
the problems associated with contracts of service and contracts for
services.
It is criticised, however, for its uneven operation, as not all forms of
discrimination are covered, for example, there is no prohibition on
discrimination on the grounds of age or religious belief (except in
Northern Ireland) or sexual orientation.
Sex discrimination legislation has been criticised on the basis that
the legislation takes the male as a norm; women are expected to fit into
a structure designed to suit men, for example, full time work, rewards
for continuous employment or seniority. Most women have
fragmented careers, the difference in the career structures should be
recognised. Women, it is argued, should not be treated as ‘deficit men’.
Both race and sex discrimination legislation are presently about
equality of opportunity not equality of outcomes. They are even handed,
applying equally to both men and women and to all races, thus making
positive action impossible (except in respect of s 48 of the SDA).

Procedures

• Cases must be brought by individuals – an employee may find

difficulty in knowing whether he or she has been discriminated
against in the first place; discovery of document is not available
until the case has commenced.
Legal aid is not available: the EOC and the CRE may give assistance
but both are short of funds. Class actions are not possible.
• The procedures are complicated – the burden of proof is on the
claimant, cf unfair dismissal where it is up to the employer to prove
that the dismissal is fair, on the ground that he made the decision
and he has all the facts at his command. The position has been
improved somewhat by King v China Co Ltd (see above). The Burden
of Proof in Sex Discrimination Directive will improve matters (see
above).

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Procedures in cases involving sex discrimination are particularly

complicated. The EOC has recommended that the SDA and the
EqPA should be replaced by a single act. In addition, cases may be
‘lobbed’ back and fore to the ECJ. The case of Enderby v Frenchay
Health Authority took over 10 years to come to a conclusion.
• It is also alleged that employment tribunals have difficulty in
dealing with discrimination cases. They are comparatively few;
specialisation in tribunal staff is not allowed and it has been argued
that tribunals often apply quite wrongly the ‘reasonableness’ test to
discrimination cases.

Remedies

• The position with regard to remedies has improved following

decisions of the ECJ in Marshall v SW Hants AHA (No 2) (1993) (see
p 87, above), but damages are still not available as of right for
indirect race discrimination.
• Recommendations can be made by the court to an employer, but
there have been no orders to reinstate or hire which contrasts
unfavourably with the position in the US.

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5 Termination of the contract
of employment – wrongful
dismissal

You should be familiar with the following areas:

• the consequences which may follow a termination of
employment
• the requirements of an action for wrongful dismissal
• the remedies for wrongful dismissal

Termination of a contract of employment

There are contractual and statutory consequences to a termination of
employment:
(1) Wrongful dismissal – dismissal in breach of contract; contractual
remedy.
(2) Unfair dismissal – dismissal contrary to the provisions of the
Employment Rights Act 1996; statutory remedy.
(3) Redundancy payments – entitlement under the Employment
Rights Act 1996; statutory remedy.

Wrongful dismissal (dismissal in breach of

contract)
The statutory provisions governing unfair dismissal (see below) were
brought in because of the weaknesses in the protection given to
employees by the common law, which did not consider the fairness or
otherwise of any dismissal, but merely looked at whether the correct
procedures had been followed and where the damages, in any case,
would not exceed the wages due under the appropriate period of

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notice. However, there has been a revival of interest in recent years in

wrongful dismissal, particularly in the case of highly paid employees
with entitlements to long periods of notice or with fixed term contracts
because of deficiencies in the arrangement for the statutory claims, for
example:
• low success rates of applications;
• the low level of compensation;
• many employees are not qualified to claim because of the
qualification period;
• the tribunals are reluctant to order re-instatement or re-
engagement.
In addition, the statutory requirements for the length of notice and the
disciplinary procedures to be set out in the written particulars have
also assisted employees in identifying a breach of contract on the part
of the employer.

Grounds for claims of wrongful dismissal

The employer has committed a breach of contract, for example:
• proper notice has not been given – either contractual notice or
reasonable notice if no contractual period is stated. A minimum
period of notice is now also granted by s 86 of the Employment
Rights Act 1996;
• contractual procedures have not been followed, for example, the
contractual disciplinary procedures;
• the contract may stipulate that dismissal is only possible on certain
grounds, for example, university tenure.

Defences available to the employer

There was no dismissal

For example where:
• The employee resigned.
But, it must be a genuine resignation, not one given under a threat
that if he does not resign, he will be dismissed. In such a case, he
will be treated as dismissed. However, in Staffs CC v Donovan (1981)
it was held that the institution of disciplinary proceedings was not
a threat of dismissal.

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Constructive resignation was, at one time, promoted as an

argument against dismissal where an employee had committed a
fundamental breach of contract – it was argued that he had
dismissed himself. However, in London Transport Executive v Clarke
(1981), where an employee left for an extended holiday in Jamaica
contrary to express instructions, it was pointed out by the Court of
Appeal that in the law of contract a fundamental breach does not
terminate the contract. It allows the other party to terminate the
contract if he so wishes. Therefore, it was the employer, in that case,
not the employee who had terminated the contract.
(The court in this case accepted that the ‘elective’ theory, that is,
that termination of the contract takes place when the innocent party
accepts a repudiation of the contract, not when the other party
actually repudiates it, applies to contracts of employment as it does
to other contracts. This had previously been a matter of dispute.)
• The termination was by mutual agreement.
Again, there must be a genuine agreement, for example, the
employee left in return for various benefits, as in Birch v University
of Liverpool (1985), where academic staff who volunteered for early
retirement were held to have terminated their contracts by
agreement or, in Sheffield v Oxford Controls (1985), where the
applicant resigned after being promised £10,000 and certain other
benefits.
Note
Problems have arisen with regard to agreements that the contract will
automatically come to an end on the happening of a future event. In
Igbo v Johnson Matthey Chemicals (1985), an employee signed an
agreement which stated that if she did not return to work by a stated
date, her contract of employment would automatically terminate on
that date. The EAT considered that this was an agreed termination, but
the Court of Appeal pointed out that it contravened EPCA now s 203
of the ERA 1996 in that it purported to limit the effect of the
employment protection legislation, and it was, therefore, void.
Presumably, such a provision will ensure that there is no dismissal for
the purpose of a wrongful dismissal claim, but will be ineffective in
claims for unfair dismissal or redundancy payments.
• The contract was frustrated.
‘Frustration occurs whenever the law recognises that without the
fault of either party, a contractual obligation has become incapable

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of being performed, because the circumstances in which

performance is called for would render it a thing different from that
which was undertaken in the contract.’
At common law, a contract of employment is frustrated by the
death of an employer, compulsory liquidation of a company, and
the dissolution of a partnership. (But, see the ERA 1996 for the
position on unfair dismissal.)
Two circumstances create particular difficulties with regard to
frustration of a contract of employment.
Sickness
The courts have as a general rule been reluctant to hold that a
contract has been frustrated because of sickness, because a wide
acceptance of the doctrine would undermine the aims of
employment protection legislation.
However, in Egg Stores v Leibovici (1977), the EAT stated that the
following factors should be taken into account:
• the length of previous employment;
• the nature of the job;
• the nature, length and effect of the disability;
• the need for the work to be done by a replacement;
• the risk of acquiring liability to a replacement;
• whether wages had been paid;
• the acts and statements of the employer;
• whether, in all the circumstances, the employer could have been
expected to wait longer.
In Notcutt v Universal Equipment Company Co Ltd (1986), a 64 year
old employee who had worked for the company for 36 years
suffered a heart attack. After a while, it became obvious that he
would never be able to work again. The Court of Appeal confirmed
the approach taken in Egg Stores v Leibovici and held that the
contract was frustrated.
Frustration is less likely to be pleaded by an employer since the
passing of the DDA 1995 which imposes a duty on the employer to
make ‘reasonable adjustments’.
Imprisonment
The doctrine of frustration does not apply if the frustrating event
was self-induced. The courts have accepted, however, in a number

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of cases that imprisonment can frustrate a contract. In Shepherd v

Jerrom (1986), the Court of Appeal held that imprisonment was
potentially a frustrating event, the offence is the fault of the person
who committed it, but the term of imprisonment is the decision of
the court. In this case, the applicant had entered into a four year
apprenticeship agreement when, after 21 months, he was sentenced
to six months in Borstal. The Court of Appeal held that the contract
was frustrated. Imprisonment will not necessarily amount to
frustration in all cases, however, for example, if the event had been
foreseen.
• The contract was completed.
For example the contract was for the completion of a particular
task. In Ryan v Shipboard Maintenance (1980), it was held there was
no dismissal as the contract had been discharged by performance.
• The contract was a fixed term contract.
There is no dismissal at common law, when the fixed term comes to
an end, but see unfair dismissal provisions.

The dismissal was justified

• It was in accordance with the contract.
• It followed repudiatory conduct by the employee, for example,
gross misconduct. The law of contract allows the other party to
treat the contract as discharged where there has been a
fundamental breach on the part of one party.
Examples of gross misconduct – the employee has gone on strike;
worked to rule; has stolen from the employer; has committed an act
of violence; sometimes disobedience or drunkenness would
qualify. It may be one major incident or it may be a collection of
minor incidents, as in Pepper v Webb (1969), where a refusal to obey
accompanied by swearing was the ‘last straw’. Some conduct may
also be labelled in the contract as a condition.
Note
A fundamental breach of contract by the employer allows the
employee to leave and claim damages for breach of contract, as in
Hanley v Pease (1915), or in accordance with the ‘elective’ theory, he
may remain and claim damages for breach of contract, as in Rigby v
Ferodo Ltd (see p 28, above).

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Remedies
Damages
Damages are the normal remedy for breach of contract. They will
include:
• normal income plus fringe benefits during period of notice or
period of fixed term contract;
• loss of right to claim for unfair dismissal (if applicable).
They will not include compensation for injured feelings, or
humiliation, or the fact that future earnings are affected (Bliss v SE
Thames AHA (1985)). The injured party must mitigate his loss, that is,
he must try to obtain another post. It was held in Yetton v Eastwoods
Froy (1966), however, that he need not accept any job, for example, one
much lower in status and income than his previous job.
Deductions
The following sums will be deducted:
• other earnings;
• tax (on sums above £30,000);
• National Insurance contributions;
• jobseekers allowance and/or income support.

Equitable remedies
Traditionally, equitable remedies have not been considered suitable for
breaches of contracts of employment. Specific performance is not
available. Injunctions, however, have traditionally been available to an
employer to enforce a negative covenant in a contract of employment
(Warner Bros v Nelson (1937)).
Since the ‘elective theory’ has now been accepted as applying to
contracts of employment (see LTE v Clarke above), this provides
employees with a possibility of obtaining an injunction to restrain the
employer from committing a breach of contract, for example, by
dismissing the employee without the proper formalities.
Interlocutory injunctions have been issued to prevent an employer
from proceeding with a dismissal in the following cases:
• Where trust and confidence still remains. In Hill v Parsons (1972),
the Court of Appeal issued an injunction where an employer had
been reluctantly forced to dismiss a long serving employee in a
closed shop, on the ground that both employer and employee still
had confidence in each other. It has been argued that where the case

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is brought to obtain the salary whilst the proper procedures are

followed, then the preservation of trust and confidence is
immaterial.
• To prevent an employer from committing a breach of contract, for
example, by ignoring a contractual dismissal procedure. In Jones v
Lee (1980), the court restrained a local authority from dismissing a
headmaster until it had granted him a contractual right to a
hearing. In Irani v Hants Area Health Authority (1985) and Powell v
Brent (1987), the fact that trust and confidence remained between
the parties was again considered important. However, in Wadstock
v Brent (1990) and Robb v Hammersmith and Fulham (1991), the
preservation of trust and confidence between the parties was
ignored.
• Where the contract allows dismissal only on specific grounds.
In McLelland v Northern Ireland GHSB (1957), the court maintained
that the employer could be restrained by an injunction or a
declaration in such cases.
It has been suggested that a dismissed employee with suitable
grounds should immediately seek an injunction, otherwise he may
have been deemed to have accepted the termination.

Declarations
Declarations were issued by the court in Gunton v Richmond upon
Thames (1980) to declare that the contract still existed and also in
McLelland v Northern Ireland GHSB.

Public law remedies

Certain public law remedies may be available to certain office holders
through judicial review.
Despite the returning interest in wrongful dismissal, unfair
dismissal, that is, dismissal contrary to the ERA 1996 is still the most
suitable remedy for most employees.

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6 Termination of the contract
of employment – unfair
dismissal

You should be familiar with the following areas:

• the qualifications necessary to bring an action of unfair
dismissal
• the ‘potentially fair’ grounds for dismissal
• the tests for ‘reasonableness in the circumstances’

Unfair dismissal
Deakin and Morris (1998) state that the law relating to unfair dismissal
and redundancy payments affects the entire structure of the
employment relationship:
• it sets the norms for lesser disciplinary sanctions, for example,
suspension or demotion;
• it qualifies the common law right to insist on unilateral change;
• dismissal law is the bulwark of those fundamental employment
rights currently recognised by UK law, for example, trade union
membership, health and safety protection, pregnancy and
maternity rights.

Aims of dismissal legislation

The following have been suggested as the main aims of dismissal
legislation:
• to provide job security; not by giving absolute protection, but
protection against arbitrary managerial decision making;

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• to provide a property right in a job. This, however, has been

disputed as employment protection has very little resemblance to
actual property rights. There are few ‘jobs for life’ today.
It has been said that the purpose is to provide a right to dignity and
autonomy for the employee. Employees must be treated with respect
for their person and individuality, but dismissals which are for rational
considerations (redundancy or incapacity) and are carried out with
due process and procedural fairness are legitimate:
• to increase managerial efficiency. It was felt that introducing formal
disciplinary and dismissal procedures would enable employers to
manage their workforce more efficiently and improve personnel
management generally, which pre-1971 was very poor in many
organisations;
• to improve industrial relations. It was believed that the
improvement in personnel management and the fact there would
be an impartial forum to decide the fairness of a dismissal would
improve industrial relations and, in particular, would lessen the
industrial conflict which often followed dismissals;
• to improve labour market flexibility. One of the main aims of the
Redundancy Payments Act 1965 was to give employees displaced
from declining industries incentives to abandon resistance to
technical change, and enhance job mobility.
The Employment Rights Act 1996 provides that, subject to certain
exceptions, every employee has the right not to be unfairly dismissed.
Note
• A complaint of unfair dismissal does not depend on whether there
has been a breach of contract, but on whether the dismissal is unfair
according to statutory criteria.
• The concept of unfair dismissal goes beyond the contractual
position in that it provides employees with a measure of job
protection. It met the requirements of the International Labour
Organisation (ILO) recommendations which were accepted by the
UK in 1964, and it also corresponded with similar developments in
other countries.

Burden of evidence and proof before tribunals

Stage 1 – The burden of proof is on the applicant to show:
• he or she was an employee;

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 TERMINATION OF THE CONTRACT OF EMPLOYMENT – UNFAIR DISMISSAL

• he or she was not excluded from bringing an action;

• he or she brought the claim within the time limits;
• he or she was dismissed.
Stage 2 – The burden of proof is on the employer to show that he had
a valid reason for the dismissal.
Stage 3 –
• the tribunal must be satisfied that the employer acted ‘reasonably
in the circumstances’;
• the tribunal must consider all the facts and circumstances and
decide whether or not the dismissal was fair.
They must take into account the size and administrative resources of
the employers undertaking, and the question shall be determined ‘in
accordance with equity and the merits of the case’.

Stage 1
These requirements also apply to a claim for redundancy payments.
It is important to refer back to certain sections of Chapters 2 and 3
where this is indicated in the text, as these are essential features of the
right to bring a claim
The applicant must show that:

A – He is an employee
(1) see Chapter 2 for the difference between contracts of employment
and contracts for self-employment; and
(2) the effect of contractual flaws on the contract of employment, for
example, illegality.

B – He is not excluded from bringing the action

(1) An applicant will be excluded if he has been ‘continually
employed’ for less than one year. (This was reduced from two years
by the Unfair Dismissal and Statement of Reasons for Dismissal
(Variation of Qualifying Period) Order 1999).
• For meaning of ‘continuous employment’ see Chapter 3, pp 43–47;
Four questions should be asked in order to establish one year’s
continuous employment:

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(a) When did the employee start work?

This has been held to be the starting date on the contract of
employment rather than the actual day on which he started
(Salvation Army v Dewsbury (see Chapter 3, p 44).
(b) When was the effective date of termination?
• when the contract was terminated by notice – the date on
which the notice expired;
• when the contract was terminated without notice, the date
on which the employer told the employee he was fired.
In the above cases, the statutory period of notice can be added
to the date if it is not given, unless the dismissal is justified on
ground of gross misconduct. There was a clear decision in
Jancuik v Winerite (1998), by the EAT, that damages were not
available in wrongful dismissal for the lost opportunity to claim
unfair dismissal, but, in the case of Raspin v United News Shops
KL Ltd (1999), they appeared to have changed their mind! In this
case, they regarded such an award as permissible where the
employer is in breach of an obligation to follow a contractual
disciplinary procedure and there is a finding of fact that, if this
had been done, the employee would have had the requisite
service. This accords with the principle that, as far as money
can, the employee is placed in the position he would have been
in but for the employer’s breach. Jancuik was distinguished on
its facts.
• Where a fixed term contract is not renewed – the date on
which it expired.
• Constructive dismissal – if the employee leaves without
notice, the date of departure; if he gives notice, the expiry of
the notice.
• Dismissal with pay in lieu of notice.
The date of termination will depend on an interpretation of
the dismissal letter. In Dedman v British Building &
Engineering Appliances Ltd (1974), the employee was handed
a letter on 5 May which said ‘there is no alternative but to
dismiss you immediately’. He left that day, but received his
full pay for May together with another months pay ‘in lieu of
notice’. Held: the contract was terminated on 5 May.
However, if he is given ‘paid leave’, then the effective date of
termination will be the date on which his notice expired.

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 TERMINATION OF THE CONTRACT OF EMPLOYMENT – UNFAIR DISMISSAL

In Adams v Sankey Ltd (1980), a dismissal letter stated: ‘You are

given 12 weeks’ notice from 5 November. You will not be
expected to work out your notice, but will receive money in
lieu of notice.’ Held: the effective date of termination was 12
weeks from 5 November.
• Where there is an internal appeals procedure.
The date of termination will be the date of the original dis-
missal unless the contract specifically states that the
employee is not dismissed until the appeal is heard, for
example, a suspension without pay until the appeal is heard
does not preserve the contract until after the appeal.
(c) Is the difference between the two dates one year, that is one
calendar year?
(d) Was the employment continuous? – see Chapter 3, pp 43–47.
(2) He is over the normal retiring age on the effective date of termination.
The normal retiring age will be the age at which employees expect
to retire.
• This will normally be the contractual retiring age, but this can be
rebutted by evidence that the contractual age has been
abandoned in practice.
In Waite v GCHQ (1983), it was held that the normal retiring age
was the age at which the employees can normally expect to be
compelled to retire.
• A normal retiring age established by practice can be varied by
the employers announcement, as this will change the expecta-
tion of the employees Hughes v Dept of Health and Social Security
(1985). But, it has been confirmed by the EAT that the normal
retiring age cannot be reduced below the contractual retiring
age unless the contract has been lawfully varied (Bratko v Beloit
Walmsley Ltd (1995)).
• Different groups of employees can have different retiring ages
(Coy v DHSS (1985)).
• If there is no normal retiring age, then the retiring age will be 65.
In Barclays Bank v O’Brian (1994), the employer stated that the
normal retiring age was 60, but allowed one group to stay on.
When the applicants were dismissed at 60, they claimed that
there was no normal retiring age and therefore 65 should apply.
The EAT disagreed – where the employer had laid down a
normal age, that applied even if there were exceptions.

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• Sixty five is the maximum retiring age for redundancy

payments.
• Unfair dismissal claimants whose dismissal was union related
may however have a higher normal retiring age.
(3) He normally works outside Great Britain.
The Court of Appeal have stated that this is to be ascertained by
consulting the contract of employment.
Thus, in Hillier v Martintrux (1978), an HGV driver who spent 90%
of his time on the continent was not excluded. His work was
controlled in the UK; he was paid in sterling and was subject to UK
income tax. In Janata Bank v Ahmed (1981), on the other hand, an
employee of a Bangladeshi Bank was held to work ordinarily
outside the UK on the basis that his appointment here was in the
nature of a posting and he could be recalled at any time.
(4) He belongs to a miscellaneous category, for example, share
fishermen; the police; members of the armed forces and other
crown employees where the minister has issued an exempting
certificate.
Note
Prior to the EReA 1999, it was possible for an employee under a fixed
term contact of one year or more to agree in writing not to claim unfair
dismissal simply because his contract was not renewed.

C – He has brought the claim within the time limit

A claim is commenced when it is delivered to the Central Office of
Tribunals. An action for unfair dismissal must be commenced:
• Within three months of the effective date of termination (see
above, for date of termination).
• Within such further period as the tribunal considers reasonable
in cases where it is satisfied that it was not ‘reasonably practical’
for the complaint to be presented within the three month period.
It was held in Palmer v Southend BC (1984) that this is a question
of fact and not law and will rarely be subject to appeal.
Ignorance of ones rights will not normally be sufficient nor will
awaiting the results of criminal proceedings. Not learning of a
material fact until after the time limit will be ‘just cause’.
• It has been stated that tribunals should be fairly strict in
enforcing the time limits.

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• If the applicant is wrongly advised by a ‘skilled adviser’, that is,

solicitor, trade union official, CAB adviser, then his action
should be against the advisor (London International College v Sen
(1993)), but not where the wrong information was given by an
employee of the tribunal.

D – He has been dismissed

A dismissal takes place in the following circumstances.
(a) Termination by the employer with or without notice.
In most cases, this is straightforward, but problems can arise, for
example:
• in the case of words of abuse, for example, ‘f—- off’. In Stern
v Simpson (1983), it was stated that it is not the actual words
used which are important but the intention behind them,
which must be ascertained from the surrounding
circumstances; or words used in the heat of the moment
(Martin v Yeoman Aggregates (1983)).
• there must be an actual dismissal not just a warning of
dismissal in the future;
• resignations or mutually agreed terminations do not amount
to a dismissal, nor is there a dismissal when the contract is
frustrated (see Wrongful dismissal – Chapter 5).
(b) Expiry of a fixed term contract without renewal
(c) Constructive dismissal
The employee terminates his contract in circumstances entitling
him to terminate it without notice by reason of the employer’s
conduct.
The Court of Appeal has held that to entitle the employee to
resign, the employer’s conduct must amount to a breach of
contract. In Western Excavating Ltd v Sharp (1978), an employee
was suspended for five days without pay. Being penniless, he
asked his employer for a loan. This was refused. He claimed
unfair dismissal on the grounds that he had been forced to
resign because of his employer’s unreasonable conduct. His
claim was upheld by the tribunal and by the EAT. The Court of
Appeal, however, held that ‘unreasonable conduct’ was not the
test; there had to be a breach of contract. In this case, there was
no contractual obligation to make the payment and, therefore,
no breach of contract and therefore no dismissal.

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It is only, therefore, in those cases where there has been a

significant breach of contract can there be a constructive
dismissal. The contractual rules with regard to a fundamental
breach are followed.
Examples of breaches by the employer.
• attempting to impose a unilateral change in the terms of
employment, for example, demotion, change in the nature of
the work, change in location of employment;
• doing something not authorised by the contract of
employment, for example, suspension without pay;
• breach of an implied term in the contract.
In BAC v Austin (1978), a failure to investigate a complaint about
the inadequacy of protective equipment was held to be a breach
of the implied duty to take reasonable care for the health and
safety of employees.
The development of the implied term of mutual trust and con-
fidence has greatly expanded the range of constructive
dismissal, and it has been argued that it has to a large degree
outflanked the purely contractual approach laid down in
Western Excavating (see Implied terms, Chapter 2).
It has been extended to cover, inter alia:
• false accusations of dishonesty and theft (Robinson v
Crompton Parkinson (1978));
• using foul and abusive language (Palmanor Ltd v Cedron
(1978));
• making unjustified complaints and warnings (Walker v Josiah
Wedgwood (1978));
• sexual harassment (Gardener v Beresford (1978));
• dressing down an employee in front of colleagues (Hilton
International Ltd v Protopapa (1990));
• assault (Bracebridge Engineering v Darby (1990)).
(Note, also, United Bank v Akhtar and White v Reflecting Roadstuds,
which deal with the question of whether this implied term can be
used in conjunction with an express term. See Chapter 2, p 30.)
Note
• lawful conduct by the employer cannot amount to a constructive
dismissal;

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• if there is a genuine dispute as to the contractual position, there is

no repudiation by the employer;
• a repudiation may be anticipatory, for example, the employer
announces that he is going to implement unilateral changes in the
terms and conditions in the future;
• if the employer has committed a repudiatory breach and the
employee does not take any action, then there is a danger that this
will be construed as an agreement by the employee to a variation of
the contract.
A constructive dismissal is not automatically a fair dismissal. See,
Variation of contract, Chapter 3.

Stage 2

The reason for the dismissal

The onus is on the employer to establish the reason for the dismissal,
that is, ‘the set of facts known to the employer or beliefs held by him
which caused him to dismiss the employee’ (Devis & Sons v Atkins, see
below). Section 92 of the ERA 1996, as amended in 1999, provides that
an employee with one year’s service who has been dismissed (apart
from those constructively dismissed) may require the employer to
provide a written reason for the dismissal. If the employer
unreasonably fails to do so within 14 days, then the employee may
complain to an employment tribunal which may order payment of two
weeks’ salary to the employee.
Note that pregnant employees are automatically entitled to written
reasons for dismissal regardless of how long they have been employed
and no request needs to be made.
The employer must be consistent. The reason for the dismissal
should not differ from that on the ‘written reasons for the dismissal’ or
the ‘Notice of Appearance’. An employer may not plead in the tribunal
a reason which he has not stated in the Notice of Appearance, unless
the facts he has related are capable of satisfying a different label. For
instance the employer may have quoted facts to establish a
‘redundancy’, but those fact actually disclose a reorganisation of the
business which comes under the heading of ‘some other substantial
reason’.
The reasons must be known to the employer at the time the
dismissal took place. He cannot rely on after discovered facts to justify

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the dismissal. In Devis & Sons v Atkins (1977), an employee was

dismissed for disobeying instructions. Evidence of dishonesty was
later discovered. The House of Lords held that this could not be relied
upon by the employer as the fairness of the dismissal was based on the
reasonableness of the employer’s conduct and this had to be judged on
facts known to him at the time he took the decision.
After discovered conduct may, however, be relevant:
• in assessing the amount of the compensation (see below);
• in relation to an appeal hearing by the employer.
If the appeal is turned down then the dismissal dates from the original
decision to dismiss. It was held by the House of Lords in West Midland
Cooperative Society v Tipton (1986) that the appeal is part of the
dismissal process and any information favourable to the employee
must be taken into account. They also approved the statement in
National Heart and Chest Hospitals v Nambiar (1981) that new
misconduct revealed during an appeal could not be used by the
employer to justify the dismissal under consideration, but could
provide grounds for a subsequent dismissal.

Potentially fair reasons for dismissal

(a) Capability or qualification
This covers:
• Competence
An employer must prove the inability or incompetence of the
employee. General allegations without proof are not normally
enough. A pattern of incompetence is generally required, but a
single incident if sufficiently serious can suffice. In Alidair v
Taylor (1978), a pilot was dismissed after he had landed a plane
in a dangerous manner. The subsequent dismissal was held to
be fair, as the employer had clearly lost all confidence in the
capability of the pilot.
Formal warnings are normally a matter for misconduct, not
inability. However, it was pointed out by the EAT in James v
Waltham Holy Cross UDC (1973) that: ‘An employer should be
very slow to dismiss upon terms that an employee is incapable
of performing his work without first telling him of the respects
in which he is failing to do his job adequately, warning him of

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the possibility or likelihood of dismissal on this ground, and

giving him an opportunity to improve his performance.’
Dismissal without warning would be justified, however, if it is
shown that the employee is irredeemably incompetent.
The employee should also show that he has investigated the
reason for the incompetence, for example, has the employee
been properly trained?
Other matters to be established: Has he been properly
supervised? Did he have proper equipment? Had he been given
an adequate job description? Did he have appropriate
conditions of work?
• Neglectful incompetence
The employee is capable of doing the work, but is neglecting to
do so. In this case, the employer is dealing with misconduct and
should invoke the disciplinary procedure.
• Ill health
In the case of long term ill health, the tribunal will have to
balance the needs of the business and the welfare of the
employee.
Matters taken into account are similar to those taken into ac-
count in the case of frustration. See Egg Stores v Leibovici (1977);
Chapter 5, p 114.
In East Lindsay v Daubenay (1977), the employer’s own physician
asked a doctor to examine the employee and, as a result of his
advice, recommended retirement. The decision was considered
unfair as the employee had not had an opportunity to see the
report, or to discuss it with the employer or to obtain his own
medical report. The EAT stressed the importance of
consultation. It also stated that the tribunal should consider
whether it was reasonable to ask the employer to wait any
longer before dismissing in the light of the nature of the
employee’s illness, the actual and potential length of his
absence, the circumstances of the individual employee, the
urgency for a replacement, and the size and nature of the
employers undertaking. The main procedural requirements are
concerned with ascertaining the true position, and involve:
❍ consultation with the employee – this is also useful in
acquainting the employee with the employer’s thinking;
❍ obtaining up to date medical information.

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This however can be difficult in view of the Access to

Medical Reports Act 1988 and the decision in Bliss v SE
Thames RHA (1987) which established that the employer
does not have the right to insist that the employee undergo
a medical examination.
A refusal by the employee however may lead to a finding
of a fair dismissal;
❍ an alternative job, if available and suitable should be
offered to the employee.
In the case of short term illnesses (uncertified or certified),
warnings may be relevant. In International Sport Ltd v Thompson
(1980), the applicant was away from work about 25% of the time
with various complaints (all covered by a medical certificate)
including dizzy spells, anxiety and nerves, bronchitis, virus
infection, cystitis, arthritis of the left knee, dyspepsia and
flatulence. She was given a series of warnings including a final
warning. The company’s medical advisor saw no point in
examining her. She was dismissed and the dismissal was held to
be fair.
• Qualifications
These must relate to the actual work carried out by the employee.
(b) Conduct
Misconduct is the commonest ground put forward to justify
dismissals.
This ground is not defined in the ERA 1996, but a wide range of
misconduct has been held by the tribunals to justify dismissal, for
example, fighting, swearing, drunkenness, neglect, obstructive
conduct, absenteeism, insubordination, breach of confidence,
sleeping on duty, lateness, horseplay, theft, dangerous conduct,
immorality, disloyalty, drug taking, unsuitable clothes, breaking
hygiene rules. Disobedience will be a ground for dismissal
providing the order was reasonable, and was authorised by the
contract. An example of the employers managerial prerogative is
seen in Boychuck v HJ Symonds Holdings Ltd (1977), where the
applicant was held to be fairly dismissed because of her insistence
on wearing badges proclaiming her lesbianism. The EAT con-
sidered the a reasonable employer can be allowed to decide what,
on reflection or mature consideration, can be offensive to customers
or fellow employees.

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In order to justify the dismissal, however, the misconduct must be

serious, or repeated on more than one occasion. Acts of misconduct
can be classified into:
• Acts of a trivial nature which will only amount to grounds for
dismissal if they are repeated more than once, for example,
lateness, absenteeism. These will have to be monitored over a
period of time and must be dealt with by warnings (informal,
then formal).
• Serious matters which may be handled by an immediate final
warning.
• Extremely serious matters – gross misconduct – which can lead
to instant dismissal. It is helpful if the categories of gross
misconduct are spelt out in the disciplinary rules so that all
employees will know the consequences of these acts. The
employer’s categorisation of gross misconduct must still be
reasonable.
The misconduct must normally be misconduct at work, but
misconduct outside work may justify a dismissal if it has a bearing
on the employee’s position at work. In Richardson v Bradford (1975),
a senior meat inspector employed by the council was convicted of
theft from his rugby club. It was held that his subsequent dismissal
was fair as the integrity of a public official in a position of trust was
of prime importance.
Procedures
In judging misconduct, courts and tribunals must have regard to
the ACAS Code of Practice No 1 – ‘Disciplinary Practices and
Procedures in Employment’. Failure to follow the provisions of the
Code will not necessarily mean that the dismissal is unfair, but it is
strong evidence that it is so.
The Code’s recommendations include:
• Disciplinary rules should be clearly stated, preferably in
writing, and given to each employee. (There is an exception for
firms with under 20 employees.)
• All employers should establish procedures, indicating range of
possible sanctions, and who may impose them.
• The procedures must provide for a full investigation of all
allegations.
It is not necessary for the employer to prove that the employee was
guilty of the alleged offence, but he must show that he had
reasonable grounds for that belief.

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In Lock v Cardiff Railway Co (1998), the EAT held that a tribunal had
made an error of law in that it failed to have regard to the ACAS
Code of Practice on Disciplinary Practice and Procedures. Lock, a
train conductor, was dismissed when he told a teenage boy to leave
a train because he did not have a valid ticket or money to pay the
excess fare. Unfortunately, the boy was left stranded in a strange
area with no means of getting home. L admitted he had made a
mistake and the disciplinary procedure provided a wide range of
possible sanctions, but did not specify which would be regarded as
gross misconduct justifying dismissal. L then alleged the dismissal
was unfair. The tribunal held that the employer had acted fairly, but
the EAT disagreed – the COP requirements that offences justifying
summary dismissal for a first breach be specified were not taken
into account.
In BHS v Burchell (1980), it was held that the employer must
establish:
(a) he genuinely believed that the employee was guilty of the
misconduct in question;
(b) he had reasonable grounds for the belief;
(c) he had carried out such investigations as were reasonable in the
circumstances.
Problems may arise if the police are investigating an offence. In that
case, it may be wise for an employer to suspend an employee on
full pay until the hearing. If, however, he is satisfied that the
employee is guilty, he may dismiss him, as in BHS v Burchell.
Blanket dismissals are not normally acceptable, but if suspicion
falls on more than one person and there is no way of identifying
which of them is guilty, then both may be fairly dismissed (Monie v
Coral Racing (1980); Parr v Whitbread (1990)).
• Employees should have adequate notice of any charges, and
must be given an opportunity to put their side of the story. They
should have a right to be represented by a trade union official,
or by a fellow employee at any meeting or hearing. They should
be given reasons for the employer’s decision.
• There should be a right of appeal against the decision.
• Except for gross misconduct, no one should be dismissed for the
first breach of discipline. A four-stage procedure is suggested;
oral warning; first written warning; final written warning;
disciplinary action; this could be dismissal or it could be

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suspension without pay if this is authorised in the contract of

employment. This is a suggested procedure; it does not have to
be slavishly followed. Warnings should always set out clearly
the consequences of further offences.
Problems have arisen with regard to whether warnings for
different offences should be treated separately, or whether they
should be viewed as part of a general pattern In Auguste Noel v
Curtis (1990), the applicant was dismissed for the ‘abuse of two
cheeses’. He had previously received warnings following an
altercation with another employee and for not keeping
worksheets. The EAT held that the dismissal was fair as the
employer was entitled to look at the overall picture to decide
whether the employee’s behaviour was satisfactory.
No warnings are necessary in the case of gross misconduct, but
the other requirements will still apply, for example, full
investigation, hearings, consistency, appeals. Certain behaviour
is generally regarded as gross misconduct, for example,
violence, dishonesty, but other offences can be treated as gross
misconduct by being categorised as such in the disciplinary
procedures, for example, working for a competitor, clocking
offences, but a tribunal may still find the dismissal unfair if the
punishment bears no relation to the offence (Ladbroke Racing v
Arnott (1983)).
• Rules must be applied consistently. Regular waiver of a rule
may lead employees into a false state of security. However, in
Haddiannou v Coral Casinos (1981), the EAT ruled that previous
behaviour on the part of the employer was relevant only in three
circumstances: (a) to show that some kind of misconduct could
be overlooked; (b) to show that the purported reason for the
dismissal was not the real one; and (c) to show that some lesser
penalty may be more appropriate.
An employee’s past record should be taken into account. Long
service, together with a good record, should normally amount
to extenuating circumstances (Johnson Matthey Metals v Harding
(1978)).
In P v Nottingham CC (1992), it was suggested by the Court of
Appeal that the fairness of the dismissal may be determined by
whether or not the employer has sought alternative
employment for the employee. This had previously been
relevant only in cases involving redundancy or ill health.

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(c) Redundancy
Redundancy is defined in s 139 of the ERA 1996 – see Chapter 8
p 154.
An employer does not have to justify a redundancy unless it is an
obvious sham. A selection for redundancy will automatically be unfair
if the employee was selected:
• for a reason connected with trade union membership;
• because of pregnancy or childbirth;
• because the employee had raised certain health and safety
issues;
• because the employee had asserted a statutory right.
Automatic unfairness on the ground of contravention of an agreed
procedure was repealed by the Deregulation and Contracting Out Act
1994.
It was stated in Bessenden Properties v Corness (1977) that, in all other
cases, the employer must carry out the redundancy in a reasonable
manner. Certain criteria were suggested and these were confirmed in
Williams v Compair Maxam (1982) where it was laid down by the EAT,
that a tribunal should consider whether:
• Objective criteria were used in the selection of employees for
redundancy. It is accepted that the choice of criteria for selection is
a matter for management, but management should have objective
standards, and there should be some mechanism for ensuring that
the criteria were objectively applied.
• The possibility of transfer to other work was investigated (Vokes v
Bear (1974); BUSM v Clarke (1977)).
• Employees were warned and consulted. In Polkey v Dayton Services
Ltd (below), the House of Lords held that ‘in the case of a
redundancy, the employer will not act reasonably unless he warns
and consults any employees affected or their representatives’. In
that case, three drivers had been dismissed without warning.
But, see Duffy v Yeomans & Partners (below).
• The Trade Union or employee representatives were consulted. See
Chapter 10.
It was held in Clarke v Eley-Kynoch Ltd (1983) that a woman who is
prejudiced on the ground of sex by a selection procedure for
redundancy may complain of indirect discrimination under the
SDA 1975.

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(d) Continued employment would be a contravention of the law

For example, if a driver loses his licence.
A mistaken belief by the employer that he cannot lawfully continue
to employ cannot come under this heading, but may qualify as
‘some other substantial reason’ (Sandhu v DES (1978)).
Even in this case, dismissal is not automatically fair. In Sutcliff and
Eaton Ltd v Pinney (1977), the applicant, a hearing aid dispenser was
sacked when he failed to pass the Hearing Aid Council’s
examination and was, thus, removed from the appropriate register
of dispensers. Since, however, it was possible for him to obtain an
extension of time to take the examination and prosecution was
unlikely, his automatic dismissal was considered unfair.
(e) Some other substantial reason (SOSR)
This ground has been much criticised. Its vagueness means that
almost any reason will qualify provided it is ‘substantial’ which
again may lie only in the eye of the beholder.
Examples
• Reorganisation of the business
This can be used where the requirements of a redundancy
cannot be met. It allows the employer to avoid redundancy
payments and unfair dismissal compensation. The tests applied
are not very demanding, and seem to have eased over the years.
Thus, in Ellis v Brighton Co-op (1976), it was stated that the test
was whether, if the changes were not implemented, ‘the whole
business would come to a standstill’.
However, in Hollister v NFU (1978), all that was required was a
’good business reason’. And, in Banerjee v City and East London
AHA (1979), a ‘discernible advantage to the organisation’.
The EAT and the Court of Appeal would seem to accept that to
compete in a free market, employers need the freedom to trim
and make efficient their workforce without hindrance. But,
more recently, however, there are some indications that
tribunals will require more information about the need for the
reorganisation, for example, in Ladbroke Courage Holidays v Asten
(1981), the EAT indicated that an employer had to produce some
evidence of the reorganisation as well as the need for it. And, in
Humphreys and Glasgow Ltd v Broom and Holt (1989), the EAT
upheld a finding of unfair dismissal when an employer had in-
creased working hours without any compensation on the

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ground that he needed to cut overheads without showing any

evidence for the need.
However, it has been argued that these are merely minimal
protections for the employee and do not interfere with
management prerogative.
• Change in contract terms
Unfair dismissal provisions have proved no defence against
unilateral changes in contractual terms or pay. In RS Components
v Urwin (1973), employees were dismissed when they refused to
accept a new clause in their contract restricting them from
competing with their employer after they left the firm. Held: the
dismissal was fair for SOSR. The employer needed this
protection in view of the actions of some previous employees.
In St John of God v Brook (1992), a charity run hospital was faced
with possible closure for financial reasons. It offered new
contracts of employment on inferior terms to the workforce.
Thirty of the 170 employees refused to accept and were
dismissed. The tribunal found the dismissal unfair but the EAT
reversed the decision, stating that the test was whether the
employer had behaved reasonably in offering the new contracts,
not whether it was reasonable for the employees to reject them.
• Temporary work
SOSR has been used to justify dismissal of temporary workers.
In N Yorkshire v Fay (1985), the dismissal of a teacher on a fixed
term contract was held to be fair as the teacher knew that the
post was temporary.
• Pressure by a customer or a third party
See Dobie v Burns International Security (1984), where the
dismissal of an employee by a security firm after Liverpool
Airport Authority had refused to accept him as a guard was
held fair despite the fact that it would not have been fair if it was
based only on the decision of the employer.
• Non-renewal of a fixed term contract
In Terry v E Sussex CC (1976), it was held that non-renewal of a
fixed term contract was capable of being for ‘some other
substantial reason’. The onus will be on the employer to show
the reason for the non-renewal and that it was substantial and
that the employer had acted reasonably in the circumstances.

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• Dismissal for a an economic, technical, or organisational reason

entailing changes in the workforce under TUPE 1981. See
Chapter 7.

Stage 3
If the employer establishes a fair reason for the dismissal, then it is for
the tribunal to find on the basis of the evidence presented whether or
not the employer acted reasonably in treating that ground as a ground
for dismissal. The decision must be reasonable in the circumstances
and in accordance with equity and the substantial merits of the case.
Note
• The burden of proof in Stage 3 is neutral.
• The tribunal, in assessing the reasonableness of the dismissal,
should take into consideration the size and administrative
resources of the employers undertaking.
• It involves both substantive and procedural circumstances.

Substantive fairness
(1) It is not for the tribunal to substitute its own decision for that of the
employer. They should not hold the dismissal unfair because it is
not what they would have done in the circumstances. The test is
whether the dismissal fell within the range of responses to the
employee’s conduct within which one employer might take one
view, and another employer another view.
It has been suggested that the tribunal acts as an ’industrial jury’
applying the accepted standards of industry.
In Iceland Frozen Foods v Jones (1982), the EAT laid down the
following general principles:
• In applying this rule, the tribunal must consider the
reasonableness of the employer’s decision, not whether they
considered the dismissal fair.
• In judging the reasonableness of the employer’s conduct, a
tribunal must not substitute its own decision as to what was the
right course for that of the employer.
• In many cases, there is a band of reasonable responses to the
employee’s conduct with which one employer may take one
view and another quite reasonably take another.

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• The function of the tribunal is to determine whether, in the

particular circumstances of the case, the decision to dismiss fell
within the band of reasonable responses which a reasonable
employer might have adopted. If the dismissal falls within the
band, then the dismissal is fair. If it falls outside the band, then
it is unfair.
(2) The employer must have acted reasonably in forming his view of
the facts.
See BHS v Burchell (1979), p 132.
(3) The reasonableness of the employer’s decision must be judged on
the basis of facts known to him at the time of the dismissal.
See Devis & Sons v Atkins (1977), p 128.
(4) It is the reasonableness of the employer’s decision which is
examined not fairness to the employee. See Monie v Coral Racing
(1980); Parr v Whitbread (1990); St John of God Ltd v Brooks (1992),
above.

Procedural fairness
The dismissal must also have been carried out in a reasonable manner.
The concept of procedural fairness was not contained in the
legislation, but has been developed by the courts and tribunals who
have been influenced by the ACAS Code of Practice on Disciplinary
Procedures and also by the principles of natural justice. The Code’s
guidelines do not carry the force of law, but any provision which
appear to a court or tribunal to be relevant must be taken into account.
The disciplinary procedures to be followed will in most cases be
incorporated into the contract of employment.
Thus, in the case of:
• misconduct – the employer should have followed the Code of
Practice in respect of warnings, careful investigation of the
circumstances, allowing the employee to state his case, and a right
of appeal;
• capability – investigation, consultation, and an offer of alternative
work if available. Also, a warning when appropriate;
• redundancy – consultation, a fair selection for redundancy, and an
offer of alternative employment when available;
• other substantial reason – consultation and any other suitable
procedure.

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The test is whether the employer had acted reasonably, not whether
there had been any injustice to the employee.
Previously, the Court of Appeal had declared in British Labour Pump
Co Ltd v Byrne (1979) that, if on the balance of probabilities, dismissal
would have followed even if the correct procedures had been adopted,
then the dismissal was fair (the ‘no difference’ rule).
However, this decision was overturned by the House of Lords in
Polkey v Dayton Services Ltd (1987), where a company had decided to
replace four van drivers by two salesmen and a representative. Only
one of the drivers was considered suitable for transfer to the new
duties, and accordingly the other three were made redundant. The first
Mr Polkey knew of the situation was when he was called into the
branch manager’s office and told he was being made redundant. He
was immediately driven home by one of the other drivers, who was
then dismissed in the same way on his return. The tribunal found that
the company had deliberately disregarded the provisions of the Code
of Practice. Having expressed their disapproval of the manner of the
dismissal, they nevertheless considered themselves bound by the
decision in British Labour Pump Co Ltd and held the result would have
been the same, even if there had been consultation and, that
consequently, Mr Polkey’s dismissal was fair. The EAT and the Court
of Appeal considered themselves similarly bound, but the House of
Lords held that the rule in British Pump Co Ltd was mistaken. In
considering whether the employer acted reasonably or unreasonably –
it is what the employer did that must be judged, not what he might
have done. Would a reasonable employer have dismissed without
consultation or warning as provided in the Code of Practice.
Since Polkey, the adoption of a correct procedure has been of prime
importance in adjudging the fairness of a dismissal. However, even if
a dismissal is found to be procedurally unfair it may be possible for the
award of compensation (see below) to be reduced on the ground that
it would not have made any difference to the ultimate decision. In any
case, it is now argued that the rule in Polkey has been diluted by the
decision in Duffy v Yeomans (1994), where the Court of Appeal held
that, in order to comply with Polkey, an employer who does not consult
does not need to take a conscious decision not to consult with an
employee. It is sufficient that, judged objectively, the employer does
what a reasonable employer might do. It has been pointed out that this
decision resembles closely the ‘no difference rule’ which Polkey
replaced.

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The rules of natural justice

The principles of natural justice, that is, the right to be heard and the
absence of bias have been considered in connection with:
• The right to state his case
It was established in Khanum v Mid Glamorgan AHA (1978) that:
(a) the employee should know of the accusations he has to meet;
(b) the employee should be given an opportunity to state his case;
and
(c) the person taking the decision should act in good faith.
• The right of appeal
This should be set down in the contract of employment. A full
judicial-style hearing is not necessary, but the appeal should not be
heard by the same people who took the decision to dismiss. The
employee should be informed of his right to appeal, and his right
to be represented.

Review by the EAT and the Appeal Court

An appeal lies to EAT only on questions of law, and a decision on
whether a dismissal is fair or unfair has been categorised as a question
of fact. The Court of Appeal held in Neale v Hereford and Worcester
(1986) that an employment tribunal decision can only be attacked if:
• there was a misdirection of law;
• the decision was perverse.
The Court of Appeal has also disapproved of legal guidelines being
laid down by the EAT. In Bailey v BP Oil (Kent Refinery) Ltd (1980), it
was stated that each case must be judged on its facts: ‘In our judgment,
it is unwise for the court or the EAT to set out guidelines, and wrong
to make rules and establish presumptions for tribunals to follow or
take account.’
These decisions of the Court of Appeal have been seen as part of the
attack on ‘legalism’ in tribunal cases.

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7 Termination of the
contract of employment
– special categories

You should be familiar with the following areas:

• dismissals which are automatically fair
• requirements of dismissals which are automatically fair
• dismissals which are automatically unfair
• requirements of dismissals which are automatically
unfair
• remedies for dismissals which are automatically unfair

Dismissals which are automatically fair

National security
A minister of the Crown may issue a certificate that specified
employment be excluded from the protection of unfair dismissal
protection in order to safeguard national security (Council of Civil
Service Union v Minister for Civil Service (1985)).

Dismissals which are automatically unfair

Certain dismissals are termed automatically unfair. These include the
following:

Dismissal for trade union membership or trade union

activities
A dismissal on the above ground is automatically unfair. Since it is an
essential part of the protection given to trade union members, details
are included along with action short of dismissal and a prohibition on

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ESSENTIAL EMPLOYMENT LAW

refusal to employ for the same reasons under the heading of ‘Freedom
of Association’ in Chapter 9.

Dismissal of those taking part in lawfully organised

industrial action
The EReA 1999 changed the law and it is now unlawful for an
employer to dismiss those taking part in lawfully organised industrial
action for a period of eight weeks. If all reasonable steps are taken to
resolve the dispute after this time, then dismissal will be fair.

Dismissals covered by the Transfer of Undertakings

Regulations
It is essential, at this stage, that students return to Chapter 3 for a
description of the qualifying transfers and the employees who are
covered by the Regulations, see Chapter 3, pp 47–51.

When is the dismissal unfair?

Any dismissal caused by the transfer, or any reason connected with it,
is automatically unfair.
One year’s continuous employment is necessary before a claim can
be brought.
However, if the dismissal was for an ‘economic, technical, or
organisational reason entailing changes in the workforce’ (ETO), it will
be deemed fair on the ground of ‘some other substantial reason’.
The House of Lords held in Gorictree v Jenkinson (1994) that, despite
this, the employees may still claim a redundancy payment. ETO has
not yet been interpreted by the ECJ. However, the Advocate General
has given it as his opinion that it would only cover cases where
dismissals would have taken place anyway without a transfer. This
view has not been followed by the British Courts.
It was stressed in Berriman v Delabole Slate Ltd (1985) that, for an
ETO, there must be a change in the workforce. Merely reducing an
employee’s pay in order to standardise employee benefits will not
suffice. Similarly, in Wheeler v Patel (1988), it was held that a dismissal
by the transferor at the behest of the transferee in order to get a higher
price for the business does not qualify as an ‘economic’ reason; the
three words must be read together.
A change in the workforce requires either a change in numbers
and/or a change in functions.

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It does not always require a diminution in numbers. In Crawford v

Swinton Insurance Brokers Ltd (1990), where a clerk was required to
become an insurance salesman, it was held that this entailed a change
in the workforce.
The transferred employee is in a better position than existing
employees whose terms can be changed by a reorganisation which
qualifies as ‘some other substantial reason’. It is not clear when a
dismissal ceases to be in connection with a transfer.

Which employer is liable?

• A pre-transfer dismissal not connected with the transfer – the
transferor.
• A pre-transfer dismissal connected with the transfer – the transferee.
• A pre-transfer dismissal connected with the transfer but fair for
ETO reasons, but where redundancy payments have to be made,
the transferee.
• A post-transfer dismissal connected with the transfer – the
transferee.
Where the contract has been transferred under TUPE, then the
transferee alone will be responsible.

Dismissal on the ground of pregnancy (s 99 of the

ERA 1996)
See Chapter 3 for other pregnancy rights. Prior to 1994, it was
automatically unfair to dismiss an employee on grounds of pregnancy,
provided the employee had two years ‘continuous service’; and unless
she was incapable of doing the job she was employed to do, or
continued employment would infringe a statutory provision. Now,
however, those provisions have been superseded as follows.
An employee is deemed to be unfairly dismissed if the reason or the
principle reason for the dismissal was:
• pregnancy, or any reason connected with the pregnancy;
• her maternity leave was ended by dismissal for reasons connected
with the childbirth;
• she availed herself of maternity leave;
• she was dismissed within the four weeks after the end of her
maternity leave;

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• one of the requirements which gives rise to suspension on medical

grounds;
• she was dismissed within the four weeks after the end of the
maternity leave, and was covered at that time by a medical
certificate;
• she was made redundant and was not offered suitable alternative
work;
• she was selected for redundancy for one of the above reasons.
An employer who dismisses a pregnant woman while she is on
maternity leave must give her a written statement of the reasons for
the dismissal. A dismissal for one of the above reasons is an
‘inadmissible dismissal’ and does not, therefore, require a one year
period of continuous employment.
Note
(1) In Brown v Rentokil (1998), B went sick almost immediately after
learning she was pregnant. The employer had a rule that anyone
who exceeded 26 weeks sick leave was dismissed and she was duly
dismissed after this period. At the time of dismissal, B only had
18 months service – insufficient to claim unfair dismissal as the law
then stood, so she argued that she had been unfairly discriminated
against on the grounds of sex. The employer’s argument was that
B had been dismissed because she had been off sick for 26 weeks
and that any person, whatever sex and for whatever reason, would
have been treated the same way.
The ECJ made it clear that there was no sick man defence here.
Dismissal for a reason related to pregnancy, which this was, is
automatically sex discriminatory and it does not matter if the
decision is in accordance with an absence policy. Brown was
protected from the minute she was pregnant, not when her
maternity leave started. Any pregnancy related absence during this
period must be discounted.
If continued employment would be contrary to a code of practice or
statutory enactment, she must be offered suitable alternative
employment or be suspended on ‘maternity grounds’ (see
Chapter 3).
(2) A dismissal on the ground of pregnancy is also contrary to the
SDA: see Webb v EMO, p 73.
(3) In O’Neill v Governors of St Thomas More RCVA School (1996), the
EAT ruled that the dismissal of a religious education teacher after

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it became generally known that she was pregnant by a Roman

Catholic priest was on the grounds of pregnancy. This contrasts
with the previous case of Berrisford v Woodward School (1991), where
it was held that a pregnant teacher who had indicated that she
would not be getting married was dismissed on the ground of
morality rather than pregnancy. It was not discriminatory because
a male teacher would have been dismissed in the same
circumstances.

Health and safety (s 100 of the ERA 1996)

It is automatically unfair to dismiss (or to subject to any other
detriment):
• Any person on the grounds that:
(a) he left, or proposed to leave his place of work in circumstances
of serious or imminent danger; or
(b) he took or proposed to take appropriate steps to protect himself
or other employees in circumstances of serious or imminent
danger.
• Employees who have a specific responsibility for health and safety
on the grounds that:
(a) they carried out activities in connection with health and safety
which they had been designated to carry out; or
(b) they carried out functions in connection with their position as
safety representatives, or members of safety committees.
It is also automatically unfair to select employees for redundancy on
any of the above grounds. Such dismissals are termed inadmissible,
and therefore do not require a qualifying period of one year, there is no
age limit and there is enhanced compensation and a possibility of
interim relief (see Chapter 8).

Asserting a statutory right

It is automatically unfair to dismiss an employee if the reason for the
dismissal was that the employee brought proceedings to enforce
certain statutory rights or alleged in good faith that his employer had
infringed one of those rights.
The relevant statutory rights are:

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• any right under the ERA 1996, for which the remedy is a complaint
to an employment tribunal;
• the right to require an employer to stop deducting union
subscriptions, or contributions to a unions political fund;
• actions relating to trade union recognition or collective bargaining
arrangements;
• minimum notice requirements under the ERA 1996;
• the right to complain of action short of dismissal on grounds
related to union membership or union activities;
• the right to time off for trade union duties and activities;
• the right to take parental leave or time off for domestic incidents.
Again, the normal one year qualification period and the age limits do
not apply.

Other automatically unfair dismissals

Special protection is also given to:
• employees who refuse to work on Sunday (Chapter 3);
• employees appointed as member trustees of pension funds;
• employees appointed as employee representatives for consultation
on redundancies or the transfer of undertakings;
• employees dismissed in connection with the Working Time
Regulations;
• employees dismissed for ‘whistleblowing’ within the provisions of
the Public Interest Disclosure Act 1998.
Normal qualifying periods are not required for any of the above; and
trustees of pension funds, those dismissed for ‘whistleblowing’ and
employee representatives also qualify for enhanced compensation and
interim relief (see Chapter 8).

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8 Termination of the contract
of employment – remedies

You should be familiar with the following areas:

• the statutory remedies for unfair dismissal
• the entitlement to redundancy payments
• the calculation of redundancy payments
• some observations on unfair dismissal and redundancy
payments

Remedies for unfair dismissal (ss 111–32 of

the ERA 1996)

Reinstatement and re-engagement

A tribunal which has found that the claimant was unfairly dismissed
must ask him whether he wishes to be reinstated or re-engaged.
Reinstatement means that the employee is fully restored to his
former position as if he had not been dismissed, for example, arrears
of pay, pay rises, seniority are all restored.
Re-engagement is more flexible. It can be re-engagement by the
employer, a successor or an associate employer in a comparable job.
The tribunal can use its discretion with regard to the restoration of any
benefit.
If he wishes to be re-employed, then the tribunal must consider:
• Whether re-employment is practicable
It is for the employer to show that re-employment is impracticable
It could arise from the unfitness or inability or unsuitability of the
claimant to do the work (Rao v Civil Aviation Authority (1994));
opposition to his return from the workforce (Coleman v Magnet
Joinery Ltd (1975)); the breakdown of personal relationships in a
small firm (Enessy Co SA v Minoprio (1978)).

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The appointment of a permanent replacement may not be taken

into account unless the employer can show that the work could
only be done by a permanent replacement, or that the permanent
replacement was appointed after a reasonable lapse of time
without the claimant notifying his wish to be re-employed.
• Whether the claimant caused or contributed to the dismissal, in
which case the tribunal must consider whether it would be just to
order re-engagement.
If the tribunal does order re-engagement and the employer fails to
comply, this does not amount to contempt of court. Instead, the
tribunal must order compensation to be paid together with additional
compensation for the failure to comply (see below).
However, at this stage, the employer has a second opportunity to
show that re-employment is impracticable. In Port of London Authority
v Payne (1994), the Court of Appeal stated that the original judgment
could be judged afresh at this stage; that re-engagement should be
judged on the basis of practicability not possibility, and that the
commercial judgment of the employer must be taken into account.
They held that the decision that re-engagement was practicable
because the employer could have asked for volunteers for redundancy
was incorrect.
In practice, reinstatement or re-engagement are rarely ordered; a
recent survey places it as 1% of decided cases. Re-employment is
sometimes termed the ‘lost remedy’.

Compensation
The government used to announce each September any increase in the
statutory limits on compensation, but those were index linked by the
EReA 1999. The figures used here are those in force in 1999.
Compensation consists of:
(1) A basic award
This is calculated in the same way as a redundancy payment. It is
based on three factors – the age of the claimant, the length of
continuous employment, the weekly pay of the claimant.
Age Weeks pay for each year of employment
18–21 0.5
22–40 1.0
41–65 1.5

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No account is taken of
• any service beyond 20 years;
• any week’s pay above £220.
The maximum basic award is therefore £6,600.
The basic award may be reduced by the amount of any redundancy
money that has been paid. In addition, it may be reduced to such
extent as the tribunal considers just and equitable, for example, if
the employee has unreasonably refused an offer of reinstatement or
re-engagement; or if the employees conduct prior to the dismissal
justifies it.
(2) Compensatory award
This is based on the estimated loss sustained by the claimant. The
tribunal will specify the amount under the following headings:
• immediate loss of wages;
• future loss of wages;
• loss of benefits;
• expenses in seeking work;
• loss of pension rights;
• loss of future employment protection;
• manner of dismissal.
Certain deductions must be made from the compensatory award:
• The claimant must mitigate his loss so far as possible, for
example, by taking reasonable steps to find other employment.
If he fails to do so, the award may be reduced.
In Bessenden Properties v Corness (1977), the claimant turned
down an offer of employment. The Court of Appeal stated the
test was ’where the applicant had no hope of recovering
compensation from anyone else, and if he had considered
merely his own interest, and had acted reasonably in all the
circumstances, would he have accepted the job’?
• The tribunal may reduce the award to such extent as it considers
‘just and equitable’ if it considers that the employee caused or
contributed to his dismissal.
• The amount by which any redundancy payment exceeds the
basic award, may be taken from the compensatory award.
• Jobseeker’s allowance may be recovered by the DfEE – but not
if a settlement is reached out of court.

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• Compensation may be reduced if the applicant has failed to take

advantage of internal appeals procedures before making a
tribunal application. This power was introduced by the ERDRA
1998.
The compensatory award is subject to a maximum of £50,000
(raised by EReA 1999 from £12,000).
(3) Additional compensation for a failure to re-engage or
reinstatement:
• in cases of race or sex discrimination 26–52 weeks’ pay (based
on the maximum statutory wage allowed);
• in other cases of unfair dismissal – 13–26 weeks’ pay (also based
on the maximum statutory wage allowed).
(4) Special award
In cases of unfair dismissal on the ground of trade union
membership, etc, assertion of a statutory right, employee
representatives and pension trustees there are special provisions.
Such awards are calculated as follows:
• basis award – here subject to a minimum of £2,900;
• compensatory award – calculated in the usual way;
• special award:
❍ where reinstatement or re-engagement is not ordered, a
weeks pay multiplied by 104, or £14,500, whichever is the
greater. This award is subject to a maximum of £29,000;
❍ where an employment tribunal has made an order for
reinstatement or re-engagement of the dismissed employee,
and the employer does not comply therewith – a week’s
pay multiplied by 156, or £21,800, whichever is the greater
sum. There is no maximum in this case.
The award is subject to a reduction if the employee is nearing
retirement, or is responsible for conduct which makes deduction
just and equitable or has unreasonably prevented the reinstatement
order being complied with.
Note
The additional and special awards are to be consolidated by the EReA
1999, but details are not known at the time of writing. The EReA also
provides for unlimited compensation for whistleblowers and those
dismissed or selected for redundancy for health and safety reasons.

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Note
Where pressure is put on an employer by a Trade Union or its
members to dismiss non-unionists where there is a closed shop
agreement, the employer may request the trade union or the person
exercising the pressure to be joined in the proceedings. If
compensation is awarded, the tribunal may order the trade union or
other person exercising the pressure to pay all or part of the
compensation.

Interim relief
If a dismissal is alleged to be for trade union membership, or
recognition of a trade union, or non-membership, or collective
bargaining arrangements, or trade union activities, or any of the other
above reasons qualifying for interim relief, the tribunal may order that
the claimant be retained in employment, and his contractual benefits
preserved until the hearing of the claim. The application to the tribunal
must be supported by a certificate signed by an official of a trade union
to the effect that there are reasonable grounds for believing that the
dismissal was on these grounds.

Redundancy payments

Redundancy payments were first introduced by the Redundancy

Payments Act 1965 and it was the first provision to entitle workers to
a payment when they lost their jobs. It is said to have led inevitably to
the unfair dismissal payments six years later.
The aims of the act have been variously described as:
• rewarding long service;
• giving an employee a property right in his job;
• promoting job mobility in a time when the old heavy industries
were running down and new technologies were emerging;
• improving industrial relations by rendering strikes over job losses
less likely.
Whatever its original aims, it has recently been described as itself
redundant due to the low nature of the payments available. The
compensation for unfair dismissal is considerable higher as are many
private redundancy schemes run by various organisations.
Statutory redundancy provisions are now be found in ss 135–65 of
the ERA 1996.

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Qualifications for bringing a claim

In considering the cases on redundancy, it is important to remember
that, before 1971, it was to the employee’s advantage to prove that they
were redundant, as this was the only way they could obtain
compensation for losing their jobs. Since 1971, however, employees
tend to argue that they were not redundant as this might lead to a
higher unfair dismissal compensation.
To be entitled to a redundancy payment, an employee:
• must not be disqualified from bringing a claim;
• must have completed a ‘qualifying period’ of ‘continuous
employment’;
• must have been dismissed; and
• the dismissal must have been due to a redundancy.

Persons disqualified form bringing a claim

• Persons who have attained the normal retiring age (see Chapter 6,
for meaning of ‘normal retiring age’) or the age of 65.
• Employees who are entitled to an occupational pension of periodic
payment or a lump sum may be served a notice by the employer
that his right to a redundancy payment is excluded or reduced. If
the annual value of the pension is equal to one-third of the
employee’s leaving salary and is payable immediately, the
employer may exclude altogether the right to receive a redundancy
payment. If the pension is less than one-third or is not payable
immediately but within 90 weeks, the redundancy payment is
reduced proportionately.
• Those who have signed a waiver clause, who are employed under
a fixed term contract or two years or more.

Continuous employment
To claim a redundancy payment, the employee must be continuously
employed for a period of two years.
Continuous employment is particularly important for redundancy
payments as it governs not only entitlement but also the amount of the
redundancy payment.

Dismissal
• Dismissal ordinarily means dismissal as in ‘unfair dismissal’ (see
Chapter 6, pp 125–27).

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‘Jumping the gun’ is a major problem in the case of redundancies.

In Morton Sundour Fabrics v Shaw (1966), Shaw was warned that his
job was likely to end at some time in the future. He immediately
found another job and left. Held: no dismissal.
Special arrangements have however been made for an employee
under notice who wishes to leave early; he must serve an
’anticipatory notice’ on his employer; if the employer does not
object, the employee may leave early and retain his right to
redundancy payments. If, however, the employer requests him to
withdraw his ‘anticipatory notice’, and he refuses to do so and
leaves, then the question of redundancy payments must be decided
by the tribunal.
If an employee during the period of notice goes on strike and is
dismissed for doing so, he is still entitled to redundancy payments.
Employees on strike during period of notice may be required to
return to work to work the number of days of notice lost during the
strike.
• Where an employee has been laid off (without pay) or put on short
time (entitled to less than half a week’s pay) for at least four
consecutive weeks or for any six weeks out of a period of 13 weeks,
this entitles the employee:
(a) to serve notice, claiming a redundancy payment; and
(b) to terminate the employment.
The employer may serve counter notice if he believes that there is a
reasonable prospect of resuming normal working.
Entitlement to redundancy payment will then be considered by a
tribunal.
• An employee volunteers for redundancy – provided the initial
approach comes from the employer.

No dismissal
• Where the employee accepts an offer of alternative employment
with the employer, or an associated employer, or a new owner of
the business, and the new contract starts immediately or within
four weeks of the ending of the old contract.
If the new renewed contract differs in any way from the previous
contract, the first four weeks of work under the contract are
regarded as a trial period. (A longer trial period may be agreed for
the purpose of retraining the employee.)

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ESSENTIAL EMPLOYMENT LAW

If the employee terminates the contract during the trial period or is

dismissed for any reason concerned with the new employment, he
is treated as having been dismissed at the end of the previous
contract and entitled to redundancy payments.
• Where the employee unreasonably refuses an offer of re-
engagement in the same or suitable alternative employment.
Whether the alternative employment is suitable must be judged
objectively – looking at the nature of the work, the hours, the pay,
the conditions, qualifications and experience.
In Taylor v Kent CC (1969), a headmaster became redundant when
his school was amalgamated with another. He was offered
alternative employment in a mobile pool of teachers covering staff
shortages in another part of the county. Held: not suitable
alternative employment because of the change in status.
There was a similar finding in O’Brien v Associated Fire Alarms
(1969) because of a change in location.
In Thomas Wragg v Wood (1976), the EAT considered the fact that the
offer had been made very late in the day; the employee had already
accepted other work; he also feared that the offer would be
temporary.
In considering ‘suitable alternative employment’ – the court looks
at the jobs (objective). In considering ‘unreasonably refused’ – court
looks at personal matters (subjective).

Redundancy
This occurs when an employee is dismissed because:
• The employer has ceased to carry on the business for which the
employee was employed.
The tribunal may not go behind the decision to inquire whether it
was necessary to close down.
In Moon v Homeworthy Furniture (1977), employees made redundant
when a factory closed claimed that it had not been closed for
economic reasons – but as a retaliatory measure by the employer
because it had a bad industrial relations record. EAT declined to
examine the reasons for the company’s decision.
• The employer has ceased to carry on business at the place where
the employee was employed.
In UK Atomic Energy Authority v Claydon (1974), it was held this
means the place ‘where under his contract of employment he could

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be required to work’. This contractual approach, however, was

challenged in Bass Leisure Ltd v Thomas (1994), where the EAT held
that the tribunal should ascertain the employee’s normal place of
work on a factual basis regardless of whether the contract required
the employee to move from one place to another.
If there is no mobility clause in the contract, the courts will be
reluctant to imply one (see O’Brien v Associated Fire Alarms Ltd
(1969)).
Note
Even if there is no mobility clause, the employee may still be denied
a redundancy payment if the offer of employment elsewhere is
seen as an offer of suitable alternative employment. See, also,
Nelson v BBC (1980); United Bank v Akhtar (1989); White v Reflecting
Roadstuds Ltd (1991) (see Chapter 3, p 30).
• The employer’s need for employees to carry out work of a particular
kind has ceased or diminished.
There is a redundancy, where the work has not ceased or diminished,
but:
• Independent contractors have been appointed to carry out the
work (the need for employees has diminished) (see Bromby and
Hoare v Evans (1972)).
• The employer needs to cut his salary bill.
In an early case, it was held that this did not amount to a
redundancy. But, in AUT v University of Newcastle (1987), where a
lecturer was dismissed when funding was withdrawn, it was
argued that there was no redundancy as the work still remained to
be done. The EAT held, however, that the requirements of
businesses are defined solely by the employer and here it had been
decided that the lecturer was not necessary – there was, therefore,
a redundancy.
• The work has been re-organised and shared amongst a number of
employees – with the result that some employees are dismissed. In
Robinson v BI Airways (1978), two posts disappeared after a re-
organisation of tasks, and were replaced by one new post. Held:
there were two redundancies.
• The work has increased – but it can be done by fewer employees by
new improved means, for example, mechanisation.

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ESSENTIAL EMPLOYMENT LAW

There is no redundancy, however, where:

• The work remains, but it is to be performed at a different time, that
is, tasks remain the same – but there are changes in the terms and
conditions of employment. See Lesney Products v Nolan (1977),
where employees had worked a long day shift with a lot of
overtime in the evenings. The employers replaced this arrangement
by two day shifts which meant that the weekly pay of employees
was reduced by roughly a third. Held: no redundancy.
Similarly, in Johnson v Notts Combined Police Authority (1974), clerks
who had worked normal office hours were required to work a two
shift system. They refused and were dismissed. Held: no
redundancy – although there was a change in the contract, they
were not entitled to redundancy payments.
But, night shift, as opposed to day shift, work may be work of a
particular kind: see MacFisheries Ltd v Findlay (1985).
• The demands of the job have changed, and the employee fails to
adapt to new working methods. In North Riding Garages Ltd v
Butterwick (1967), a workshop manager with 30 years’ experience
was dismissed following a takeover and reorganisation of the
business. The manager found it difficult to adapt to new methods
in particular coping with costs estimates. Held: no redundancy –
the firm still needed a workshop manager. Butterwick could not
adapt to the changing needs of job. See, also, Hindle v Percival Boats
(1969).
It is sometimes difficult to decide whether there is a different job or
whether it is the same job but the demands of the job have changed.
The court concentrates on the characteristics of the job, rather than the
aptitudes of the employee. In Vaux Breweries v Ward (1968), after the
refurbishment of a pub, the employer decided to replace an elderly
barmaid with a younger one. Held: no redundancy – the requirements
of the work had not changed merely the kind of employee favoured by
the employer.
However, in Murphy v Epsom College (1985), the employee had been
employed as a general plumber. The heating system was upgraded by
introducing an electronic control system. Murphy was made
redundant and replaced by a heating technician. Held: there was a
redundancy – the new employee was doing a different job.
The distinction between a strict contractual approach and a job
function test has also emerged in connection with whether the
employee can be required to do a different job (as with a geographical
mobility clause).

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In Nelson v BBC (1977), the contract test was invoked. The employee
described as ‘Producer Grade 3’ was able to deny he was redundant
when the Caribbean Service was closed down.
However, a recent decision of the EAT effectively called into
question a long line of cases interpreting the statutory definition of
redundancy and pronounced them to be wrong! There have been
several cases indicating that the contractual duties of the employee
must be taken into account – if a clerical worker spent most of her time
typing, but her duties included filing, she was not redundant if her
employer required her, in future, to spend most of her time filing.
Another approach (the functional approach) is to concentrate on what
the employee actually did. In Safeway Stores v Burrell (1997), Judge
Clark cut through both these approaches and made it clear that the
statutory definition should be adhered to and proposed the following
three part test:
• was the employee dismissed?;
• had the requirements of the employer’s business for employees
(Note: not this employee) to carry out work of a particular kind
ceased or diminished, or were they expected to cease or diminish?;
• if so, was the dismissal of the employee caused wholly or mainly
by the cessation or diminution?.
This test, thus, moves the focus of redundancy from the employee’s
contractual duties to the needs of the employer in a general sense. In
this case, B commenced working for Safeway as a petrol filling station
manager in Penzance with the status of section manager. As a result of
a delayering proposal, the status of section manager disappeared,
although a ‘controller’ was still required for the petrol station. B did
not want to apply for this latter post and was dismissed with a
redundancy payment. He claimed unfair dismissal.
The tribunal decided that, despite his title, B had very little
managerial responsibility and was, in reality, doing the job of
‘controller’ before the reorganisation and there was, thus, no
redundancy. The Chairman felt that B could have been required by
Safeway to carry out far more functions than he actually did and that
there really was a manager’s job that had ceased to exist. Safeway
appealed against the majority decision that there was no redundancy.
The EAT examined cases which propounded the contract test (for
example, Nelson) and decided that it was misguided. In Nelson, the real
reason for N’s dismissal was his refusal to transfer to other work, not
redundancy. Applying the three part test, above, the EAT concluded
that the majority of the tribunal had failed to apply the correct

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statutory test in finding B’s dismissal was not for redundancy and had
not considered whether Safeway had established that they had some
other substantial reason for dismissal and, if so, whether they were
reasonable in treating this as a sufficient reason for dismissal. The
appeal was allowed and remitted to a fresh tribunal
The Safeway approach to redundancy was adopted again in the case
of Strathclyde Buses Ltd v Leonard (1997). In this case, the EAT held that
four employees who were dismissed following a merger were
redundant, even though there had been no apparent diminution in
their workload. The whole process of merging with another company
involved an expectation of job losses and it was that expectation which
was the reason for the dismissal. (The tribunal had ruled that there
were no redundancies and that the dismissals were unfair because the
employer had failed to establish a potentially fair reason.) The EAT
also held that the enhanced value of the shares which the employees
would have received but for the dismissal was too remote a loss to be
included in any compensatory award for unfair dismissal.
An EAT decision which caused much debate was that of Church v
Lancashire NHS Trust (1998). C worked for the trust as a help desk
operator in the computer services group. It was decided there would
have to be redundancies in this section, but no one volunteered. The
trust decided to hold a competitive exercise – those failing being made
redundant. C was told to attend a competitive interview for two posts
– one, his existing job and another. His union advised him not to
attend as they were dissatisfied with the way the redundancies were
handled. As a result, he was deemed not to have succeeded in his
application for a post and, following an unsuccessful internal appeal,
was made redundant. C complained of unfair dismissal and argued
that he was not redundant. C’s post still remained after the
reorganisation, but had been filled by another employee. He was
therefore ‘bumped’ out of his job. The tribunal held that he had been
made redundant, but that he was fairly selected and consulted and
that, therefore, the dismissal was not unfair. C appealed, arguing that
he had not been dismissed for redundancy. Authority for ‘bumped’
redundancies coming within the statutory definition is very long
standing and Safeway also confirmed this.
However, in this case, the EAT looked at a number of Court of
Appeal decisions on the definition of redundancy and decided none of
them established a bumped redundancy as coming within the
definition. The court therefore felt free to ignore other previous EAT
decisions – it decided that a bumped employee would not be regarded

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as having been dismissed for redundancy reasons, but, rather by the

application of some procedure requiring a dismissal because of a
reorganisation. The trust still required C’s particular kind of work to
be done. The test should not be contractual or functional, but a sensible
mix of the two! We thus have conflicting EAT decisions on the
definition of redundancy and, in particular, the status of bumped
employees.
The most recent case to look at the definition is Shawkat v
Nottingham City Hospital NHS Trust (1999). Here, the EAT looked at the
extent to which the specific work of S could be taken into account in
deciding whether he was redundant and held that, in a case which
does not involve bumping, the work that S was actually doing must be
taken into consideration. No more emphasis than this was given to it,
however, so it would seem that, as a result of this case, we have moved
slightly away from the objective Safeway test and back slightly towards
the function test.

Reduction for misconduct

Under s 140 of the ERA – if the employee commits an act of
misconduct which at common law would entitle the employer to
terminate the contract without notice, the employee will be disentitled
to a redundancy payment. This is a total disqualification.
In Sanders v Earnest Neale Ltd (1974), the employees conducted a
work to rule. The employer sacked them and the factory closed down.
Held: it was not a dismissal for redundancy. The dismissals had led to
the closing of the factory – not the other way round.
There are two exceptions:
• If the employee takes part in a strike or other industrial action
whilst on notice for redundancy and is dismissed, the employee
remains entitled to his redundancy payments. The employer can,
however, serve a notice of extension on the employee after the end
of the strike requiring him to work the number of days lost through
the strike; if he refuses he loses redundancy pay.
• But, in Simmons v Hoover (1977), a strike of some months caused a
contraction in the employer’s business. The employer dismissed
the employees on the ground of redundancy. Simmons claimed a
redundancy payment. Held: he was not entitled. This exception
applies only to employees going on strike after a redundancy has

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been declared. In Bonner v Gilbert Ltd (1989), an employee while

under notice of redundancy was dismissed for suspected
dishonesty. The EAT held that the test was whether the employee
was guilty not the employer’s belief in his guilt.
Under s 92(3), if the employee commits any other form of misconduct
whilst on notice for redundancy, the tribunal may award him such part
of his redundancy payment as it considers to be just and equitable.

Payments
Responsibility rests with the employer.
If there is a dispute, a complaint may be made to the employment
tribunal within six months of dismissal.
Amount of payment:
For each year of employment between:
18–21 0.5 week’s pay
22–41 1 week’s pay
42–64 1.5 week’s pay
For men and women over 64, there is a reduction of one-twelfth in the
total entitlement in respect of each month over that age, so that
entitlement ceases entirely on reaching 65.
All payments are subject to a maximum of 20 years’ reckonable
employment.
All payments are also subject to a maximum week’s pay which is
altered each year to meet inflation (at present, £220 per week).
Maximum payment possible: 20 x 1.5 x 220 = £6,600.
For calculation of weeks pay, see Chapter 3.

Unfair dismissal and management prerogative

It has been argued that, despite its perceived aim of protecting the
rights of employees, the unfair dismissal provisions do in fact embody
a strong element of management prerogative, that is, management’s
right to hire and fire and to organise or reorganise a business.
Arguments against:
• Certain dismissals are automatically unfair.
For example, dismissals on the ground of union membership or ac-
tivities, sex, race, pregnancy, transfer of an undertaking, asserting a
statutory right, health and safety.

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• In other cases, employer has to establish that the dismissal is for

one of five fair grounds: see pp 128–36.
• In all cases, employers must follow a fair procedure.
Arguments for strong element of management prerogative.
• Dismissal must be reasonable in the circumstances.
The standard used is that of employers generally, not an objective
standard set by the tribunal. See Iceland Frozen Foods v Jones
(Chapter 6, p 137), where it was held that a tribunal must decide
whether the dismissal was within the range of responses of a
reasonable employer.
Hugh Collins points out that the word ‘range’ broadens the scope
for legitimate disciplinary action and that the tribunal’s
requirement that the employer’s action was ‘unreasonable’ rather
than ‘reasonable’ again broadens the scope.
• Even with regard to specific grounds, reasonableness is examined
from the employer’s viewpoint not from whether it is unjust to the
employee. See BHS v Burchell; Monie v Coral (above); dismissal on
the ground of illness.
• The reason for the dismissal must be established, but ’some other
substantial reason’ is deliberately expressed in wide terms and
interpreted widely by the court. It has been argued that almost any
ground will do.
Particularly important for management prerogative is the
employer’s right to reorganise (Hollister v NFU); the employer’s
freedom to change the contract of employment provided certain
procedures are followed (RS Components v Urwin).
• The court will not examine the need for a redundancy, only the
procedures used.
Collins argues that these factors create a presumption of fairness,
and an excuse for non-intervention. The tribunals endorse the
practices of management. The Court of Appeal’s statement in Bailey
v BP Oil (1980) means that tribunals cannot enunciate their own
standards; they can only reach a decision on the facts.
He also points out that the juridification of employment relationship
runs deeply contrary to the settled values of the common law. The
judiciary is required to abandon its traditional neutrality, and to
protect job security. They have shown themselves to be reluctant to do
this.

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The importance of contractual principles

It is also argued that the statutory protection for unfair dismissal has
been diluted by the importation of common law contractual
principles. For example:
• There must be a valid contract in the first place. If, for instance, the
contract is void for illegality, there can be no claim of unfair
dismissal.
• Constructive dismissal is dependent on a breach of contract by the
employer: Western Excavating v Sharp, although the effect of this has
been lessened to a certain extent by the development of the implied
term of good faith.
• The employee’s implied duty to obey has been influential in respect
of dismissals on the ground of misconduct.
• It is argued that the reluctance of the tribunals to order
reinstatement or re-engagement arises from the common law
practice of refusing specific performance for contracts of
employment.
• The employer may also influence the position through his drafting
of the contract in the first place, that is:
(a) he may devise his arrangements in such a way that it becomes a
contract for services (self-employed) rather than a contract of
service;
(b) he will draft the disciplinary arrangements.
He may identify the offences which will amount to gross misconduct
which may therefore lead to dismissal without previous warnings.

A new model
Hugh Collins has suggested an alternative controversial model for
unfair dismissal legislation. He has suggested that dismissal should be
classified as follows.
Disciplinary dismissals – which would involve some misconduct or
incompetence or inability on the part of the employee.
The procedures would be more or less the same as at present.
Economic dismissals – which would cover both redundancy dismissals
under the present system, and also reorganisation of the business

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which currently qualifies as ‘some other substantial reason’. He

suggests that this category should include any dismissal for a business
reason unconnected with the behaviour of the employee. He does not
consider that any compensation should be payable by the employer in
these circumstances.
Public rights dismissals – which would cover not only dismissals on the
grounds of race, sex, disability or trade union membership, but also
age, religion, political views and sexual orientation. It should also
incorporate the right to strike, and right to free speech. They should all
qualify for enhanced compensation.
Collins argues that it is where the current arrangements depart from
this model that they are seen as unsatisfactory.

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9 Trade unions and their
members

You should be familiar with the following areas:

• the status of trade unions
• freedom of association as it affects employers
• freedom of association as it affects trade unions
• enforcing members rights

On the one hand, trade unions are voluntary unincorporated

associations and so belong to the same legal category as, for example,
tennis clubs, and their leaders have from time to time claimed for them
the same unhampered control over their own affairs as a tennis club.
On the other hand, in reality, there are considerable differences
between trade unions and tennis clubs; trade unions wield
considerable political and economic influence; their decisions have
considerable impact on the working life of British people and trade
union membership may be an important factor in securing access to or
retaining a job. Trade union representatives sit on commissions,
committees and tribunals; the effect of collective bargaining is
sometimes socially indistinguishable from legislation; unions
participate in the making of rules and norms which affect a large
proportion of the population.
The law reflects this reality because legislation has increasingly
intervened to regulate the internal affairs of trade unions.

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The status of a trade union

Definition
Section 1 of the TULR(C)A defines a trade union as:
An organisation (whether permanent or temporary) which either:
• consists wholly or mainly of workers of one or more descriptions whose
principal purposes include the regulation of relations between workers
and employers, or
• consists wholly or mainly of organisations described above or their
representatives.

Note
The definition covers individual trade unions and confederated
organisations, for example, Confederation of Shipbuilding and
Engineering Unions; or the Trades Union Congress.
‘Workers’ is a term wider in import than employee. It can include
the self employed, provided they are obliged by their contract to offer
their personal services. It does not, however, cover professional
organisations such as the Law Society, or those who sell a work of
some kind, for example, authors working for the BBC. ‘Purposes’
include other purposes including political objects may also be
included. These are, however, subject to strict statutory controls.

Form of association
Section 10 of the TULR(C)A provides that a trade union shall not be a
body corporate, but shall nonetheless be capable of making contracts;
suing and be sued in its own name, and be prosecuted in its own
name. Its property will be held by trustees on its behalf.
Special Register Bodies, that is, professional bodies whose principal
purposes include labour management relations, for example, Royal
College of Nursing, may however retain their corporate status.

Listing
The Certification Officer maintains a list of trade unions.

Accounting records
Any trade union which has been in existence for at least a year must
keep accounting records providing a true and fair view of the unions

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affairs, and make annually to the Certification Officer a return of its

financial affairs of the previous calendar year, audited by qualified
officers. Penalties are imposed for non-compliance.

Certificate of independence
A trade union that is on the list may apply to the Certification Officer
for a certificate that it is an independent trade union.
A union is independent if:
• it is not under the domination or control of an employer or a group
of employers, or an employers association; and
• it is not liable to interference by an employer or any such group or
association arising out of the provision of financial or material
support or by any other means whatsoever tending towards such
control.
In Squibb UK Staff Association v Certification Officer (1979), the Court of
Appeal held that the above wording prohibited an organisation which
was ‘vulnerable to interference’, rather than ‘likely in fact to be
interfered with’. In that case, the union was so reliant on the
employer’s support that it could not continue without it. It was
refused a certificate of independence.
The Certification Officer set out the following criteria for deciding
whether a union was independent.
• History – was it set up by management with management help?
In Blue Circle Staff Association v CO (1977), the EAT approved of the
Certification Officers criteria and confirmed that a staff association
set up six months previously by the employer with total employer
control (‘a sophisticated instrument of personnel control’) was not
independent.
• Finance – if a union receives a subsidy from an employer, it is
unlikely to be classified as independent.
• Facilities – if the employer subsidises the union by providing free
office space, free mail and telephones, free meeting place, free
photocopying, as in the Squibb case, then the union is unlikely to be
independent. Note, however, that the ACAS Code of Practice
advises that employers should make available to union officials the
facilities which they need to perform their duties efficiently.
• Attitude – a lack of a ‘robust attitude in negotiation’ may indicate a
lack of independence.

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• Membership – if membership is limited to one company this may

indicate a lack of independence. It is not an absolute bar to
independence, however, see NUM.
• Rules – in Blue Circle, the employers nominated the chair of the
Joint Central Committee; in addition, management representatives
had originally been members of the committee and had helped to
draw up the rules which removed them in order to apply for a
certificate of independence.
In Government Communications Staff Federation v CO (1993), the EAT
held that the federation was liable to interference as the Director of
GCHQ could withdraw his approval for their existence.
An appeal lies to the EAT against a refusal by the Certification
Officer to grant a Certificate.
Most of the rights give to trade unions or to trade union members
are given only to trade unions in receipt of a certificate of
independence.

Freedom of association

This is considered a fundamental human right which appears in

international declarations and covenants such as the Universal
Declaration of Human Rights 1948; The European Convention of
Human Rights; the amended Treaty of Rome; as well as in a number of
constitutions. It appears alongside other freedoms such as freedom of
speech, freedom of religion, freedom from arbitrary arrest.
It involves:
• an absence of prohibitions;
• the presence of positive guarantees.

Absence of prohibition
The first essential is freedom from criminal restraint, but this does not
guarantee that its exercise will not be impeded by social forces, for
example, employers or the unions themselves.
The UK was one of the first countries in Europe to lift the ban on
trade unions.
• The Combination Law Repeal Act 1824 removed the criminality of
trade unions by neutralising the common law of criminal
conspiracy, and confirmed the repeal of earlier statutory provisions
against combinations.

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• The Trade Union Act 1876 removed finally the illegal nature of
trade unions. Until then, although not criminal, they were still
illegal as organisations in restraint of trade, and their agreements
were thus unenforceable.
At no time since has this freedom of association been impaired except:
• in the case of the armed forces who are not permitted to join a trade
union;
• between 1927 and 1946, established civil servants were not allowed
to be members of any organisation unless its membership was
restricted to crown servants, and it was not affiliated to any outside
organisation;
• since the Police Act 1919, members of the police force have not been
free to join trade unions;
• in 1984, employees at GCHQ were prohibited from joining trade
unions on the ground of securing national safety, but this
prohibition was removed by the Labour government in 1997;
Until recently, there was a glaring contrast between the wide scope of
this freedom, and the absence of any legislation to guarantee its
exercise.

Positive guarantees against employers

Early protection
• ‘Fair wages’ clauses were inserted into government or other public
authority contracts which made it a condition of the contract,
license or subsidy, that the employer and subcontractor used union
labour. This was repealed in 1982.
• The Industrial Relations Act 1971 proclaimed that for the first time
in this country freedom of organisation as a legal principle, that is,
the freedom to be a member of a trade union and to participate in
its activities, and to stand or to hold office. If an employer infringed
this principle, this would be an unfair industrial practice, and
compensation would be payable to the employees concerned.
These rights however, were only granted to ‘registered’ trade
unions, and since most trade unions refused to register, the
provision was not of practical importance, even before the Act was
repealed in 1974.

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The present situation

Lord Wedderburn has stated that ‘a right to associate has been built on
the building blocks of individual rights’. However, in recent years,
these building blocks have been weakened.
The individual rights concerned are:
• the right to paid time off for union duties, and unpaid time off for
union activities (see Chapter 3, p 62);
• protection against dismissal, or action short of dismissal for trade
union membership or trade union activities, and refusal to offer
employment on the ground of trade union membership.

Dismissal for trade union membership or trade union

activities
A dismissal on the above ground is automatically unfair and,
therefore:
• there is no qualifying period of continuous employment;
• there is no need to show that the dismissal is reasonable in the
circumstances;
• there is no maximum age limit;
• an application for interim relief may be made within seven days of
the dismissal, accompanied by a signed certificate from a union
official that there is reasonable ground for believing that the
dismissal is made on this ground. The tribunal may then make an
order preserving the employee’s benefits under the contract, until
the case is determined.
An order for damages will include, in addition to the compensatory
award:
• a minimum basic award of £2,900;
• where reinstatement or re-engagement is not ordered, a special
award of 104 weeks’ pay (minimum £14,500; maximum £29,000);
• where reinstatement or re-engagement is ordered but not complied
with, 156 weeks’ pay (minimum £21,800; there is no maximum in
this case).
Where the employee is not qualified to bring a claim of unfair
dismissal, then the burden of proof is on the employee.
This can be difficult, as seen in Smith v Hayle Town Council (1978),
where the applicant, the town clerk, was dismissed shortly after
announcing that he was joining a trade union. His dismissal was

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approved by six votes to five in a council meeting. He was able to

show that one of the councillors who had voted for his dismissal had
done so on the ground of union membership, but was unable to
establish the grounds for the other councillors’ actions. The Court of
Appeal held that, although there was an element of anti-unionism, this
had not been proven to be the main reason for the decision.

The dismissal must have been on the ground of:

(a) Trade union membership

For example, carrying a union card.
In Discount Tobacco Co Ltd v Armitage (1990), the EAT considered that
union membership extended to cover using the ‘essential services of a
trade union’, such as invoking the assistance of a union official to
obtain a written statement of the terms of employment. However, in
Associated Newspapers v Wilson (1995), the House of Lords stated that
membership of a union and using its services could not be equated. In
that case, it was held that collective bargaining was not a union
service.
It also originally covered membership of a particular trade union
rather than just unions in general: see NCB v Ridgeway (1987), where a
member of the NUM was held to have been discriminated against
because he was not awarded the same rise as members of the NUM,
but see Assoc Newspapers v Wilson (below).
(b) Trade union activities at an appropriate time
These have been held to cover:
• attending union meetings, acting as shop steward, attempting to
recruit new members;
• activities in a previous employment.
In Fitzpatrick v British Railways Board (1992), Miss Fitzpatrick joined
British Rail without disclosing that she had been dismissed from a
previous employment on account of her disruptive union activities.
When they discovered this, she was dismissed. The Court of Appeal
held that the dismissal was due to the employer’s fear that she would
repeat that behaviour in her current employment, and the dismissal
was therefore on the ground of trade union activities.
They do not cover:
• taking part in industrial action;
• trade union type activities, which are not official trade union
activities.

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In Chant v Aquaboats (1978), an employee was dismissed for or-

ganising a petition complaining about safety at work. He was a
member of a union, but the union had not asked him to organise a
petition, and he was not an union official. It was not dismissal on
the ground of trade union activities;
• actions specifically prohibited by union rules;
• the activity of a trade union, as distinct from the activity of union
members.
In Carrington v Thermastore (1983), between 60 and 65 of the
company’s employees had joined the TGWU. The union had
applied to the company for recognition. The company then asked a
charge hand to select 20 employees for redundancy. All 20 were
union members. The Court of Appeal held that the dismissal was
in retaliation for the union action/activity, but was not related to
what the individual employees had done. It was therefore not on
the ground of trade union activity;
• activities at other than an appropriate time.
An appropriate time means outside working hours, or ‘within
working hours, in accordance with arrangements agreed with or
consent given by the employer’.
In Post Office v Union of Post Office Workers (1974), the House of Lords
held that working hours means any time when, in accordance with his
or her contract of employment, he or she is required to be at work, and
at work has been held to be actually working. This means that no
permission is required for union activities during recognised breaks or
before or after a working day. The House of Lords has inferred from
this an entitlement for employees to take part in union activities on the
employer’s premises using facilities normally available to employees
provided this does not cause any expense or inconvenience to the
employer, or to employees who are not union members.
Consent may be implicit; but it was held in Marley Tile Co v Shaw
(1980) that a union meeting was not held with the consent of the
employer who had merely remained silent when he had been
informed by an employee that he was going to a union meeting.

Action short of dismissal

Under ss 168, 169, 172 of the TULR(C)A 1992, every employee has a
right not to have action short of dismissal taken against him by his

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employer for the purpose of preventing or deterring him from being a

member of a trade union, or penalising him from doing so, or
preventing or deterring him from taking part in the activities of a trade
union at an appropriate time, or penalising him from doing so, or
compelling him to become a member of a trade union.
‘Membership of a trade union’, and ‘activities of a trade union’
mean the same as they do with regard to the prohibition on dismissal.
Matters taken into consideration include:
• Purpose
In Gallagher v Dept of Transport (1994), the employee had been
allowed to spend all his working hours on trade union duties for
some four years. He applied for promotion, but was unsuccessful
because his employers were not satisfied as to his managerial
ability; he was advised to take a managerial post in order to show
his capability; this would inevitably reduce his time on union
activities. The Court of Appeal held that this request might have
the effect of reducing his union activities, but that was not its
purpose. Therefore, there was no breach of this section.
In Associated Newspapers Ltd v Wilson (1995), the House of Lords
confirmed that the fact that union membership may become less
attractive as a result of the employer’s action did not necessarily
mean that deterring union membership was its purpose.
• Action
In Associated Newspapers Ltd v Wilson, the company de-recognised
the NUJ and entered into individualised contracts with employees.
Those who entered the new contracts got a pay increase; those who
wished to retain collective bargaining did not.
Similarly, in ABP v Palmer (1995), employees who were prepared to
enter individual contracts got higher pay increases than those who
did not. In both cases, the Court of Appeal held that this
contravened the law: in both cases the employer’s purpose was to
end collective bargaining, and this was likely to lead to a decrease
in union membership. It discouraged union employees from being
members of trade unions.
Following this decision, the government quickly added a new
section to TURERA which was going through Parliament at that
time. This provided that even if the employer’s intention is
discriminatory, if it is also intended to further a change in the
employer’s relationship with any class of employees the action will
be permissible unless it was something which no reasonable
employer would do.

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It has been suggested that this goes further than merely reversing
the decision of the Court of Appeal and that it could be used to
justify preferring one union over another. However, this insert
would now seem unnecessary in view of the House of Lords’
decision. The House, on appeal, reversed the decisions of the Court
of Appeal on the ground that ‘action short of dismissal’ will not
cover an omission. This decision curtails significantly the
protection given to employees. It means that refusing to union
members a benefit given to other employees may not now be
unlawful, even if the employer’s purpose is to discourage union
membership. It overrules the decision in NCB v Ridgeway (above).
The House of Lords also considered whether the employer’s
purpose had been unlawful. In the case of Wilson, the employer’s
purpose had been to encourage as many employees as possible to
sign up to the new contracts, thus avoiding any confusion, and the
purpose in Palmer was to encourage greater flexibility. In neither
case did the House of Lords find any evidence that the purpose was
to deter union membership. In the White Paper, Fairness at Work,
the government said that they were not happy with the current
state of the law on this matter and the EReA 1999 enables the
Secretary of State to make regulations about such cases.

Remedy
An application must be made to a tribunal within three months of action
complained of. The tribunal may make a declaration that the statute has
been breached, and may also award such compensation as it considers
‘just and equitable’. The EAT has held that the employee must have
suffered some injury as a result of the infringement: it has also suggested
that injury should include non-pecuniary losses such as injury to health,
or the frustration of a ‘deep and sincere wish to join a union’.

Refusal of access to employment (s 137 of the TULR(C)A

1992)
It is unlawful for an employer to refuse to employ anyone on the
grounds of trade union membership or non-membership. Originally, it
was proposed to give protection only to non-members, that is, ex-
tending the prohibition on post entry closed shops to pre-entry closed
shops. However, following the publication of the European Social
Chapter, it was decided to extend the same protection to unionists and
non-unionists.

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The decision in Beyer v Birmingham City Council (1977) would be the

same today. In that case, a well known union activist gained
employment with the council by using a false name. When his real
identity was discovered, he was dismissed on the ground of
misconduct. It was held that he was not protected because previous
union activity was not protected. He would not be protected by s 137
either when seeking employment as ‘union activity’ is not covered.
The EReA 1999 gives the Secretary of State the power to prohibit
blacklists which contain details of trade union members or people who
take part in trade union activities which are compiled with a view to
being used by employers or recruitment agencies.

Freedom of association – positive guarantees

against trade unions

Trade unions have also been reluctant, in some cases, to allows persons
freely to join or have been quick to effect an expulsion. Legal
intervention has also proved necessary in this area.

Right to join a trade union

At common law, there was no right to join a trade union. Lord
Denning did try to establish a ‘right to work’. In Nagle v Fielden (1966),
in a case involving the Jockey Club’s refusal to issue a licence to
woman trainer on the ground of her gender, he stated that this right
would be infringed if a body having a monopoly over the activity in
question, refused admission without good reason.
He reiterated this view in Edwards v Sogat (1971), on the grounds
that the closed shop interfered with a person’s right to work when a
trade union refused to re-admit him. Since Lord Denning’s retirement,
however, this has not been pursued.

Statutory provisions
Section 174 of the TULR(C)A 1992 now provides that unions may not
exclude or expel someone except on one of four grounds:
• the applicant does not satisfy an enforceable membership criterion,
for example, employment in a particular trade or occupational group
or having a particular qualification;
• he does not qualify on geographical grounds;
• he is no longer employed by the relevant employer;

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• the exclusion or expulsion is attributable to his misconduct (does

not cover resignation from another union, being a member of a
particular political party, or unjustifiable discipline under s 65 – see
below).
A complainant has the right to make a claim to an employment
tribunal within six months. If the complaint is well founded, the
tribunal makes a declaration and compensation can be awarded.

Discipline and expulsion

The courts have traditionally exerted some control over union
expulsions and disciplinary procedures on the ground of breach of
contract and the rules of natural justice.

Breach of contract
The courts have interpreted the union’s rule book as a contract
between the members and the union. In Lee v Showman’s Guild of GB
(1952), where the union had fined a member £100 for ‘unfair
competition’, the court held that, whereas it would be bound by the
internal tribunal’s finding of fact, it was for the court to decide
whether the conduct complained of could constitute unfair
competition.
Similarly, in Easterman v NALGO (1974), the court decided that no
reasonable domestic tribunal could have categorised the plaintiff’s
conduct as conduct which in the opinion of the branch committee
rendered her unfit for membership. (She had refused to take part in a
strike designed to disrupt elections.)
The court will intervene on behalf of a member, if either:
• the rules are not followed; or
• the internal tribunal has not interpreted the rules properly.
The court will only declare a rule void if it is illegal or contrary to
public policy, for example, a rule attempting to exclude the jurisdiction
of the court: Lee v Showmans Guild of GB (1952). However, a rule
requiring a member to exhaust internal appeals before going to court
will be upheld.

Natural justice
The rules of natural justice apply to the disciplinary powers of a trade
union, that is, a member is entitled to:

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(1) A right to be heard. This involves:

• sufficient notice of the charge against him.
In Annamunthodo v OWTU (1961), the plaintiff knew that he was
charged with making allegations against the union president,
and knew that he could be fined. He did not know that he could
be expelled. Held: the subsequent expulsion was void;
• an opportunity to present his case.
There is no right to legal representation, or to an appeal.
(2) The rule against bias
In White v Kusych (1951), the plaintiff was expelled from the union
because of his opposition to the closed shop policy. The fact that
those involved in the hearing had spoken out against that policy
did not invalidate the decision. But, in Roebuck v NUM (1978), two
union officials had given evidence to a newspaper in a libel action
taken by the union president, Mr Arthur Scargill, on behalf of the
union. Mr Scargill presided over the hearing which recommended
that the two officials be suspended from office for conduct
prejudicial to the union, and then chaired the area council meeting
which not surprisingly confirmed the decision. It was held that the
suspension was void. Mr Scargill had been the complainant, and
had made up his mind before the first hearing commenced, let
alone the second.

Statutory provisions
For expulsion see, also, s 174 of the TULR(C)A 1992. In addition to the
above actions at common law, ss 164–67 of the TULR(C)A 1992 now
creates a right not to be unjustifiably disciplined.
Disciplined is defined to include:
• expulsion;
• fines;
• refusal of access to any benefits;
• any other detriment.
Unjustifiable is defined to cover:
• failing to participate in industrial action;
• failing to contravene a provision in a contract of employment;
• asserting breaches of the regulations by an official or union
representative, unless the assertion is made in bad faith;

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• failing to agree or withdrawing agreement to deduction from

wages of union fee;
• resigning or proposing to resign membership, or proposing to join
or refusing to join another union;
• working with non-union members;
• working for an employer who employs non-union workers
requiring the union to perform an act which by statute it must
perform.
If the action complained of is an exclusion or expulsion under s 174,
and the reason is a breach of s 165, the exclusion or exclusion is
automatically unreasonable. In NALGO v Courtney-Dunne (1991), the
EAT held that if a member is successful in obtaining a declaration and
compensation, the union must put him in the position he was in before
the unjustifiable discipline was imposed. The compensation awarded,
should, however, reflect the loss suffered and should not be punitive.
In Bradley v Nalgo (1991), the complainant was expelled for not
taking part in industrial action, and claimed compensation. The union
did not contest the declaration, neither did it revoke the expulsion. The
EAT awarded the minimum compensation only. The expulsion did not
affect his job prospects nor his ability to join another union.

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10 Trade unions and employers
– industrial relations

You should be familiar with the following areas:

• the nature of industrial relations
• the framework for collective bargaining
• the right to recognition
• the right to information
• the right to consultation
• Works Councils

Industrial relations

The principal function of a trade union is the conduct of industrial

relations – the regulation of relations between its members and their
employer. Traditionally, collective bargaining has been the central
feature of British industrial relations and British labour law has sought
to provide an equilibrium between employers and workers in order to
ensure the effective operation of a system of collective bargaining. This
was associated with a policy of ‘voluntarism’ or ’abstentionism’ or
‘collective laissez faire’ – whereby unions and employers were expected
to make their own agreements; and patch up their own quarrels with
a minimum of state or legal interference.
Trade unions had a preference for collective bargaining even over
supportive legislation:
• unions had obtained more advances through industrial strength
than through reliance on the law;
• there was class antagonism to the judiciary;
• the common law had shown itself hostile to collectivism, preferring
individual rights over collective power.

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However, it has been argued that the law does have a role to play in
industrial relations:
(a) It provides a floor of minimum rights for the individual employee
(see Chapter 3).
(b) The law puts a ceiling on industrial action. Free collective
bargaining implies the right to use the economic strength of the
collective unit in order to secure the best possible bargain. The law
defines what industrial action is permissible, and what is not (see
trade union immunities; Chapter 11).
(c) The law buttresses and supports the system of collective bargaining
by various props.
(d) The law can fill some of the gaps left in the system of collective
bargaining by providing for the conditions of work of those
workers who are inadequately unionised, and who cannot
therefore properly participate in the system of collective
bargaining, for example, Wages Councils; Fair Wages Resolutions;
s 11 of the EPA 1975 which allowed employers or trade unions to
bring before the CAC employers who did not observe their general
level of terms or conditions in a particular trade or industry. These
were, however, all repealed between 1979 and 1987. Another device
– contract compliance – was also rendered illegal.
(e) The law can create a framework for collective bargaining.
A right to recruit and organise is given by protecting the individual
against victimisation for union membership or union activities, and
by giving union officials time off to carry out their duties (see
Chapter 9).
(f) The law encourages the peaceful settlement of disputes by offering
facilities for conciliation, mediation, arbitration, etc.
(See Chapter 1 for the roles of ACAS and CAC.)

Collective bargaining

The most important feature of industrial relations is the process of

collective bargaining. The wages and other conditions of employment
of many workers are settled by some form of collective negotiations
between their union or unions and their employer or employers.
Traditionally the central purpose of British labour law was to ensure
the effective operation of a system of collective bargaining.

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However, in recent years, the emphasis has shifted.

• In 1991, the government in a Green Paper indicated its preference
for individual bargaining over collective bargaining.
• ACAS and CAC remain as agencies to promote peaceful
settlements of disputes, but ACAS’s statutory duty to encourage
the extension, development and reform of collective bargaining has
been removed.
• Collective bargaining rights have been removed from teachers.
• Many of the props introduced for collective bargaining have been
removed (see above).
It is argued that the following rights are required for effective
collective bargaining.

The right to organise

See the freedom of association (Chapter 9).

This right which is exercised through a series of individual rights
has been weakened in recent years.

The right to recognition

Until reintroduced by the EReA 1999, there was no legal right to

recognition by an employer of a trade union. The 1999 Act introduced
a new schedule to the TULR(C)A which deals with recognition,
collective bargaining and derecognition.
A trade union (TU) is able to apply to the CAC for recognition in
organisations with more than 20 employees. Before such an
application can be considered, the TU must show that they have at
least 10% of the bargaining unit as members and that they were more
likely than not to win a ballot. Also, the CAC must be persuaded that
the union is likely to have the support of a majority of the bargaining
unit. If the union then shows that a majority of the bargaining unit are
members of the union, recognition will be automatic without a ballot,
unless the CAC decides ‘good industrial relations’ require a ballot or it
concludes that a significant number of union members do not want
recognition (this may happen because the members tell the CAC or it
can deduce it from the circumstances in which they joined the union,
including, if relevant, the fact that they have only been members for a

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short time). Recognition will be granted after a ballot where a majority

in the ballot and at least 40% of eligible voters vote for recognition.
The recognition process starts with two stages during which the
employer and union can reach agreement on recognition. If these fail,
the CAC will be involved. If a ballot is held, for whatever reason, there
are detailed procedures and time limits. The CAC decides whether a
postal or workplace ballot should occur and will take into account
costs, practicality and the likelihood of the ballot being affected by
unfairness or malpractice if held at the workplace. Costs are divided
equally between the employer and the union.
Once the ballot is imminent, the employer has three duties:
• to co-operate with the union and the person appointed by the CAC
to conduct the ballot;
• to provide the CAC with information; and
• to give the union reasonable access to the workers.
The CAC may order immediate recognition without a ballot taking
place if an employer fails to fulfil these duties.

Meaning of ‘recognition’
Definition is in the TULR(C)A 1992: ‘... recognition of the union by the
employer to any extent, for the purpose of collective bargaining.’
• There must have been an agreement between the employer and the
union to negotiate on one or more of specified matters.
• The agreement may be express or implied. Most problems arise
from alleged implied agreements.
In NUGSAT v Albery Bros (1979), the EAT stressed that recognition was
an important step and should not be assumed to have taken place
without clear and unequivocal evidence, and usually a course of
conduct over a period of time. It needs evidence of negotiation with a
view to striking a bargain, a willingness merely to discuss would not
suffice.
In USDAW v Sketchley (1981), the EAT rejected the argument that the
union had been ‘recognised’ when the employer accepted union
representative for disciplinary and grievance procedures, but not for
negotiating terms and conditions of employment.
Note
(1) Collective agreements are not legally enforceable, unless the
contrary is stated in the agreement. An employer may, therefore,
de-recognise a trade union.

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(2) Until the EReA, there was no mechanism governing an ex-

employer’s choice of a recognised union. He could recognise a
union which had minimal support in his organisation. Problems
arose with single union deals, often on green field sites, some
negotiated before a single employee had been recruited.

The right to information

Section 181–85 of the TULR(C)A 1992 requires an employer to disclose

to any recognised trade union, information without which the trade
union would be, to a material extent, impeded in carrying out
collective bargaining, and which is information which it would be in
accordance with good industrial practice that he should disclose.
Note
(1) The right is based on recognition, so the employer can resist
disclosure of certain information by refusing to bargain on that
issue.
In R v CAC ex p BTP Tioxide Ltd (1981), the union ASTMS had
bargaining rights in respect of certain terms and conditions of
employment, but in respect of a particular job evaluation scheme, it
only had the right to make representations on behalf of its members
seeking revaluation of their jobs, not the right to negotiate over the
scheme itself. Because of this the Divisional Court held that the
CAC had exceeded its jurisdiction in ordering disclosure by the
employer of information relating to the scheme.
(2) Collective bargaining must relate to matters set out in s 224 of the
TULR(C)A 1992 – see below.
Information must relate to collective bargaining, not, for example,
to a company’s investment strategy.
(3) The ACAS Code of Practice gives examples of information which
might be relevant, for example:
• pay and benefits (pay systems, job evaluation and grading
schemes, total pay bill, fringe benefits);
• conditions of service (recruitment, training, promotion and
redundancy policies, appraisal systems, health and safety
matters);
• manpower (analysis of workforce, manpower and investment
plans, any planned changes);

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• performance (productivity, efficiency, and their savings, return

on capital, state of order book);
• financial (cost structure, gross and net profits, sources of
earnings, assets, liabilities, allocation of profits, government aid,
transfer prices, loans within a group, and interest charged).
(4) Exceptions
Section 181 of the TULR(C)A 1992 enumerates the following
exceptions:
• information conveyed to the employer in confidence;
• information relating specifically to an individual, for example,
individual salaries;
• information, the disclosure of which would cause substantial
injury to the employer, for example, customers would be lost, or
suppliers would refuse to continue supplying.

Remedies for failure to supply information

(a) Union complains to CAC.

(b) CAC may:
• refer matter to ACAS for conciliation;
• itself conduct a hearing, after which it may make an order;
• if the order is not complied with, then the CAC may make an
award on the terms and conditions of employment of the
employee concerned, which will be incorporated into their
contracts of employment.
Very few cases have been heard under this section.
It has been suggested that some unions are fearful that too much
pressure in this area could lead to de-recognition. Some unions in any
case believe that some information could inhibit a union, and that it is
for management to manage, and how it gets itself into a position to
meet the expectation of the employees is the management’s problem,
not the union’s.
Note
Under the Companies Act, the Directors’ Report in companies
employing more the 250 employees must contain a statement
describing what action has been taken to introduce, maintain, or
develop a systematic dissemination of relevant information to

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employees, consultation with employees on matters likely to affect

them, encouraging their involvement with the company through
employee share schemes, and similar arrangements.

The right to consultation

Until the EReA 1999, recognised trade unions had a statutory right to
consultation in four circumstances:
• in relation to dismissals for redundancy (as a result of the Directive
on Collective Redundancies);
• where there is a transfer of an undertaking (as a result of the
Acquired Rights Directive);
• on health and safety matters;
• before contracting out of a state pension scheme.
The EReA added:
• on training – where the CAC awards recognition and specifies a
method for conducting collective bargaining (as opposed to
agreement having been reached) an employer must invite unions to
send representatives to a meeting to consult about the employer’s
policy on training.

The duty to consult on redundancies

This duty was altered on 1 March 1996, as a result of the Collective
Redundancies and Transfer of Undertakings (Amendment)
Regulations (1995). These were issued following the decision in
Commission of EC v UK (1995), where the ECJ held that, in limiting the
right to consultation to representatives of recognised trade unions, ‘the UK
was not complying with either Directive’.
An employer who proposes to dismiss 20 or more employees as
redundant over a period of 90 days must consult ‘appropriate
representatives’ of the threatened employees, that is, either
representatives elected by the threatened or affected employees or a
representative of an independent trade union recognised for the group
or category of employees to which the redundant employees belong.
The employee representatives may be elected on an ad hoc basis, as
and when the redundancies are proposed, or under standing
arrangements which may or may not relate specifically to redundancy
or other situations.

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The employer may choose to consult an employee representative

even when he recognises a trade union.
Redundancy was redefined in 1993 to cover any dismissal which
was not related to the individual concerned thus covering dismissals
arising from a reorganisation or restructuring as well as from a ‘down
sizing’.
Consultation must take place regardless of whether it makes any
difference.

When must consultation take place?

The employer must consult in ‘good time’ (instead of ‘at the earliest
opportunity’) and:
(a) if 20–99 employees are to be dismissed in one establishment within
30 days, at least 30 days before the dismissal;
(b) if 100 or more employees are to be dismissed in one establishment
within 90 days, 90 days before the dismissal.
‘Establishment’ is not defined.
In Barratt v UCATT (1978), employers proposed to dismiss 24
construction workers across eight sites which were administered from
one location The EAT confirmed that they formed one ’establishment’.
Associated employers, however, cannot constitute one employer for
this purpose, even where three companies shared accounting and
personnel services, and were all subsidiaries of a holding company, as
in Green Ltd v ASTMS (1984).

‘Proposing to dismiss’
It was stated in Hough v Leyland Daf Ltd (1991) that the duty comes into
effect once the employer has formed some view as to how many
employees are to be dismissed, when it is to take place and how they
are to be arranged. In that case, the EAT confirmed that a proposal had
been formulated when a company’s security manager made a firm
recommendation that its security function should be contracted out
and was given the go ahead to finalise the arrangements.
However, in R v British Coal ex p Vardy (1993), Glidewell LJ pointed
out that the wording in the directive differed from that in the Act. He
pointed put that the directive requires consultation to begin when the
employer is contemplating redundancies not when he is proposing
them.

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Consultation
To comply with the duty, the trade union or employee representative
must be given the following information in writing:
• the reason for the proposal;
• the numbers and descriptions of the employees it is proposed to
dismiss as redundant;
• the total number of employees of such description employed at the
establishment in question;
• the proposed method of selecting the employees who are to be
dismissed;
• the proposed method of carrying out the dismissals, including the
period they are to take effect.
The original requirement was basically procedural. But, in 1993, the
TURERA added a duty to consult about:
• avoiding the dismissal;
• reducing the number of employees to be dismissed;
• mitigating the consequences of the dismissals.
The consultation must now be undertaken with a view to reaching
agreement. It must take place in sufficient time before the notices are
sent out. In R v British Coal ex p Price (1992), the court stated that
consultation should take place when plans are still at the formative
stage.
Note
It is still consultation not negotiation.

Defence
An employer may be excused complying fully with the requirements.
‘if there are special circumstances which render it not reasonably
practicable for him to comply’.
In Clarks of Hove Ltd v Bakers Union (1978), 368 of 380 employees
were summarily dismissed on the same day that the company ceased
to trade, with no prior consultation. It had been in severe financial
difficulties for some time. The Court of Appeal held that an insolvency
which had been evident for some time was not ‘special circumstances’
under the Act. A sudden disaster such as destruction of the plant, or a
trading boycott would qualify as ‘special circumstances’, but not
ongoing financial problems.

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Similarly, it was held in GMB v Rankin & Harrison (1992) that

shedding employees to make a company more attractive to a buyer is
not something ‘special’, but a common incident in any form of
receivership or insolvency.
However, it a question of fact.
In USDAW v Leancut Bacon (1981), the employer had spent six
months trying to negotiate a take-over. The bidding company,
however, pulled out after studying the employer’s half yearly
accounts, whereupon the employer’s bankers withdrew credit
facilities and put in a receiver. Two days later, the employees were
made redundant. In this case, the EAT considered that the employers
could rely on the special circumstances defence.

Remedies
If the employer fails to comply with these requirements, a claim may
be lodged with the tribunal:
• in the case of a failure relating to elected representatives by any of
the employee representatives;
• in the case of a failure relating to a trade union representative by
the trade union;
• in any other case, by any of the employees who have been or will
be made redundant.
The claim must be presented either before the proposed dismissals
take effect, or within three months of the dismissals, unless it was not
‘reasonably practical’ for it to do so.
If the claim is well founded, the tribunal must make a declaration to
that effect and may make a ‘protective award’ which will be for the
protected period – that is a period beginning with the date on which
the first dismissal complained of took place and lasting as long as the
tribunal considers ‘just and equitable’. This is subject to maximum
periods which are 90 days where the minimum consultation period
was 90 days, 30 days where the minimum consultation period was 30
days.

The protective award

In Spillers French v USDAW (1979), the EAT considered whether the
protective award was intended to be compensatory or penal. Since the

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Act instructs the tribunal to take into consideration the seriousness of

the employer’s fault, the EAT considered that it was not intended to be
based entirely on the loss to the employee, and the fact that they had
not suffered a loss did not mean that an award could not be made.
If the protective award is not paid by the employer, then the
employee must complain to an employment tribunal.
The Court of Appeal has recently confirmed that the tribunal has no
power to order an injunction to prevent the dismissals.
However, in R v British Coal ex p Vardre, the court issued a
declaration that no collieries were to be closed until the specified
procedures have been followed.

Consultation under TUPE

‘Long enough’ before a ‘relevant transfer’, both transferor and
transferee employers have a duty to consult appropriate
representatives (see consultation on redundancies) of any affected
employees.
They must be informed of:
• the fact of the transfer;
• the reasons for the transfer;
• the timing of the transfer;
• the legal, economic and social implications of the transfer.
Where the employers intend to take any measures which may affect
their employees, they must consult the representatives about the
measures; they must consider any representations made by the
representatives; and they must give reasons if they reject those
representations.
Note
Each employer only needs to consult his own representatives.

Defence
A similar defence of ‘special circumstances’ as with consultation on
redundancies.

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Remedies
As with redundancies (see above).
The tribunal may make a protective award of a ‘just and equitable’
sum of up to four weeks’ pay.
Note
Under reg 9, if an undertaking or part of an undertaking is transferred
and it retains its identity distinct from the remainder of the transferees
business, then any recognition of a union is transferred. (It can
however be de-recognised!)
If the identity is not preserved, reg 9 does not apply.
Under reg 6, any collective bargain agreed by the transferor is
transferred to the transferee. (Note – collective bargains are not legally
enforceable unless this is specifically stated in the agreement.)

Health and safety

Where a union is recognised, it is entitled to appoint safety
representatives who have certain rights with regard to investigating
potential hazards in the workplace, and employee’s complaints, and
also conducting safety inspections. They must also be consulted by the
employer on safety matters.

Pensions
If an employer wishes its employees to be contracted out of the state
earnings related pension scheme, it must consult recognised
independent trade unions, in default of which a contracting out
certificate must be refused.

Works Councils

The European Works Council Directive, which now applies to the UK,
provides as follows:
• A European Works Council (EWC) or a procedure for informing
and consulting employees must be established in every community
scale undertaking, that is, undertakings with at least 1,000
employees in the European Union; and at least 150 in each of at
least two Member States.

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• The Central Management is responsible for implementing this

obligation. Where it resides outside the EU, the obligation must be
carried out by its representative agents.
• The management must set up a special negotiating body which is
charged with determining with central management various
matters concerning the EWC, including its scope, functions,
composition and terms of office.
• The directive does not apply if there is an information and
consultation agreement covering the entire workforce already in
operation.
• Subsidiary requirements must be laid down by the member state in
which the central management is situated; and these will apply if
the central management refuses to commence negotiations within
six months of a request from employees; or if the parties fail to
agree, within three years of such request.
These subsidiary arrangements should provide:
(a) the EWC should be composed of 3–30 employees;
(b) the EWC should have the right to meet with central management
once a year to be informed and consulted on the progress of the
business;
(c) the EWC also should have the right to be informed of any special
event, for example, relocation, closure or collective redundancies.
• Central management should not be obliged to transmit information
which would seriously harm the undertaking and be prejudicial to
the organisation.
• Members of special negotiating bodies should not be authorised to
reveal any information where it has been expressly provided to
them in confidence.
This directive must be implemented in the UK by 15 December 1999.
Note that EWCs only apply to multinational companies, but there
are European proposals for companies who have employees in only
one Member State. The proposal is for a directive which would require
Member States to ensure that employers employing 50 people have the
machinery or procedure for consultation with employees.
The UK Government is opposed to this proposal.

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11 Trade unions and employers
– industrial action

You should be familiar with the following areas:

• the common law liability for industrial action
• the immunities
• the loss of immunities
• the liability of trade unions
• the remedies for industrial action
• the law on picketing
• the ‘right to strike’

There is no general right to strike in the UK, unlike many other

countries where such a right is enshrined in their constitutions. There
is a limited right to claim unfair dismissal if dismissed while taking
part in official action – see Chapter 7.
There is no general right for trade unions to organise a strike either.
Trade unions ceased to be illegal organisations with the passing of the
Trade Union Act 1871. The Conspiracy and Protection of Property Act
1876 further provided that anything done ‘in contemplation or
furtherance of a trade dispute’ (the golden formula) was not a criminal
conspiracy – unless the act itself was a crime. However, trade unions
still found themselves in conflict with the civil law in Taff Vale Rly v
Amalgamated Society of Railway Servants (1901), where the House of
Lords held that the union must pay damages to the company for losses
caused to it by a strike.
Following this, the government passed the Trade Disputes Act 1906
which gave trade unions total immunity from action in tort, and
individuals, immunity from actions for conspiracy or inducing a
breach of contract, provided they were acting ‘in contemplation or

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furtherance of a trade dispute’. The statutory protection was extended

to cover the tort of intimidation in 1965, following the case of Rookes v
Barnard (below). This remained the position until 1971, when a
different model was briefly introduced by the Industrial Relations Act,
which was itself repealed in 1974 with the previous situation being
restored. Since 1980, however, there have been extensive changes, but
the basic system of torts and immunities still remain. In order to
establish the liability or otherwise of a trade union for any form of
industrial action it is necessary:
• to identify the commission of a tort;
• to examine whether it is covered by a statutory immunity;
• to check whether the immunity has been lost;
• to explore the liability of trade unions;
• to identify the appropriate remedy.
This chapter follows that sequence in examining the liability of trade
unions for organising industrial action.

Liability in tort

The economic torts normally involve deliberate action designed to

cause economic loss to the plaintiff. Damages for economic loss is,
therefore, recoverable because the loss is intentional. They are based
on the illegal infliction of harm, rather than the unjustified infliction of
harm.

Conspiracy
An agreement by two or more persons to do an unlawful act, or to do
a lawful act by unlawful means.

Conspiracy to injure
This makes unlawful when done by two, what would be lawful if done
by one. The predominant purpose of the action must be to injure the
other party. If causing injury not promoting the union’s interest is the
main purpose, then the tort has been committed.
In Quinn v Leatham (1901), Leatham refused to dismiss non-
unionists, but offered to pay their union fees. He was told that, unless

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he dismissed them, his customers would be threatened with a strike if

they continued to do business with him. Held: the tort of conspiracy
had been committed. However, if the purpose is to further union
interests, there is no conspiracy, as in Crofter Hand-Woven Harris Tweeds
v Veitch (1942), where it was held that the union’s action in ‘blacking’
the supplies of the plaintiff and other suppliers who were outside the
‘closed shop’ operated by the union, was legitimate as its object was to
further the interest of the union and its members.
The anomalous nature of the tort has long been recognised; it has
been detected very rarely, but the House of Lords stated in Lonrho v
Shell (1982) that it was too well established to be discarded.

Conspiracy to use unlawful means

There must be an intention to injure, but it need not be the
predominant intention. This was established by the House of Lords in
Lonrho v Fayed (1991).

‘Unlawful means’
• They must be integral to the act – not, for example, speeding to a
meeting.
• Unlawful acts include crimes and torts and probably breaches of
contract.
Both branches of the tort require:
(a) two or more persons to be involved;
(b) a combination, that is, a common purpose;
(c) damage suffered by the plaintiff.
The immunities (see below) cover a conspiracy to injure, but not a
conspiracy to injure by unlawful means. However, actions which are
covered by an immunity cannot amount to unlawful means, so if the
tort which provides the unlawful means is covered by an immunity
then it ceases to be unlawful.

Inducing a breach of contract

This tort is the one most commonly committed during a strike. The tort
may be committed in one of two ways.

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Direct inducement
This is committed when A persuades B to break his (B’s) contract with
C. It was first established in Lumley v Guy (1853) where Guy persuaded
a well known soprano to break her contract with Lumley and to sing
for him instead. It requires:
• a knowledge of the contract;
• an inducement to break the contract;
• an actual breach of contract.
It is committed when a union which is in dispute with an employer
calls its members out on strike in breach of their contracts of
employment with that employer.

Indirect inducement
This occurs when a trade union who is in dispute with firm A calls out
on strike its members who work for firm B in order to effect a breach
of a commercial contract between A and B. This is direct inducement
of a breach of a contract of employment against firm B and an indirect
inducement of a breach of a commercial contract against firm A.
For an indirect inducement to be a tort, unlawful methods must be
used. The classic statement of the elements of the tort of indirectly
inducing a breach of contract is found in the judgment of Jenkins LJ in
Thomson v Deakin (1952), where the plaintiff was well known for not
employing union members. The TGWU called on its members who
drove for Bowaters to ‘black’ supplies to Thompson. Bowaters did not
ask their drivers to deliver to Thompsons, but, instead, informed
Thompson that they were unable to fulfil their contract.
He stipulated four requirements:
(1) The defendant knew of the existence of the contract and intended
to procure its breach. Originally, actual knowledge of the contracts
terms was required, but, more recently, the courts have interpreted
this requirement more broadly and it is not necessary to know the
precise terms of the contract, only that the contract existed.
In Merkur Island Shipping Co Ltd v Laughton (1983), a union had
blacked a ship in Liverpool docks. The House of Lords held that the
union must have known of the existence of commercial contracts
which would be broken if the fully laden ships could not leave port
and this was sufficient.
Similarly, the requirement for intention has been extended to cover
a reckless indifference as to whether the contract would be
terminated lawfully or not. In Emerald Construction v Lothian (1966),

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the union wished to rid a building site of Emerald who were labour
only subcontractors. Such subcontractors normally were entitled to
very short periods of notice, but Emerald was entitled to an
unusually long period. The union called a strike to force the main
contractors to get rid of Emerald. It was held that the union wanted
the contract terminated, lawfully or unlawfully. It had deliberately
turned a blind eye to the specific terms and wanted Emerald out.
(2) The defendants persuaded or procured employees to break their
contracts of employment with this intention.
It is sometimes difficult to distinguish between persuasion and
communicating information. A statement of fact was held not to be
an inducement in Thomson v Deakin, where it was held that an
inducement involved ‘pressure, persuasion or procuration’, but the
courts have again broadened their view. It has been suggested that
if information is communicated with the intention that it should
bring about a breach, then it is inducement; and the fact that it is
described as information or advice or a friendly warning will not
alter the situation.
(3) The employees did break their contracts of employment.
(4) A breach of a commercial contract ensued as a necessary
consequence of the breach of the contracts of employment. (But, see
Torquay Hotel Co Ltd v Cousins (1969).)
Notes 3 and 4 are factual matters. Did the inducement lead to the
workers breaking their contracts of employment? Did that lead as a
necessary consequence to the breach of the commercial contract? The
answer will depend on the facts of each particular case.
In the case of indirect inducement, ‘unlawful means’ are required.
For example a breach of contract, a tort, or some other form of civil
liability, for example, a breach of statutory duty.
It was held in Meade v Haringey Council (1979) that inducing a local
authority to break its statutory duty to provide education was a tort.
(It should be noted that the statutory immunity covers breach of
contract but not breach of statutory duty.)

Who can sue?

The limits of the remoteness rule are not totally clear, for example:
• Employers who have suffered breaches of contracts of employment
can sue.
• Persons who suffer a breach of a commercial contract where the
breach was intended can sue.

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• It is not clear whether other persons who have suffered a breach of

a commercial contract but who were not the intended objects of the
action can sue.
In Falconer v ASLEF (1986), a commuter successfully sued the union in
a county court for expenses incurred as a result of a strike, on the
ground that the union must have intended to inconvenience him as
this was a way of putting pressure on British Rail.
However, in Barretts and Baird v IPS (1987), where abattoirs were
unable to operate due to a strike by meat inspectors, the court held that
it was an essential element of the tort that the unions predominate
purpose should have been to harm the plaintiffs and the action
therefore failed (see Citizens Charter below).

Defences
There is a possible defence of justification, but it has only been
successful in one case. See Brimelow v Casson (1924); SW Miners
Federation v Glamorgan Coal Co Ltd (1905).

Interference with a contract

A new tort of interfering with a contract was discovered in Torquay
Hotel Co v Cousins (1969). The TGWU were in dispute with the hotel
owners who refused to recognise the union. The union informed Esso
that a particular hotel was blacked and that fuel supplies to it should
stop. Esso, most of whose drivers belonged to the TGWU made no
attempt to deliver oil to the hotel. There was a force majeure clause in
the contract with the hotel, so they were not liable for breach of
contract. The Court of Appeal were uncertain as to whether there was
a breach of contract which was excused or whether the force majeure
clause prevented there being a breach at all. However, they held that
this did not matter, as it was also a tort to interfere with a contract. This
was confirmed as a tort by the House of Lords in Merkur Island
Shipping v Laughton (1983).

Intimidation
This was introduced by the House of Lords in Rookes v Barnard (1964),
Barnard, the branch secretary of the union which operated a closed
shop at BOAC, told the company that if they did not dismiss Rookes
who had resigned from the union, they would organise a strike.
Rookes was consequently dismissed with the requisite notice, so there

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was no breach of contract. Rookes sued on the basis that the threat of
a strike (a breach of contract) was a threat of an unlawful act. The
House of Lords agreed that the threat of a breach of contract was an
unlawful threat for the purpose of intimidation.
This was a very controversial decision:
• Prior to this case, it had been thought that a threat of physical
violence was required for the tort of intimidation: cf duress in
contract.
• The plaintiff was dismissed lawfully with notice.
• There was no breach of contract by the employees; if they had gone
on strike, the immunities would have applied.
• The defendant was a union official, not an employee; he could not
have threatened a breach of contract.

The requirements of the tort

(1) The defendant must threaten the third party or pressurise him into
a course of action.
(2) The threat must be of some unlawful act, such as crime, tort, or
breach of contract.
(3) The threatened person must submit to the threat.
(4) The plaintiff must suffer damage.

Interference with trade or business by unlawful means

It has been suggested that the above nominate torts should be drawn
together into one innominate tort – interfering with trade or business
by unlawful means. In 1906, this was protected by an immunity.
However, in 1982, this immunity was repealed on the ground that it
was unnecessary.
It is argued:
• if there had been an immunity, there must have been a tort;
• if there is a tort of ‘intimidation’, that is, threatening to use
unlawful means to interfere with a business. then there must be a
tort of interfering with a business by unlawful means;
• the tort was referred to by Lord Denning in Torquay Hotel v Cousin
and recognised by the House of Lords in Merkur v Laughton (1983)
and in Lonrho v Fayed (1989).

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‘Unlawful means’ could be:

• the commission of a tort (other than one protected by an immunity);
• a breach of contract, or threat to break a contract (Rookes v Barnard);
• a breach of a statutory duty (Meade v Haringey LBC (1979) and Assoc
British Ports v TGWU (1989)).
• contempt of court;
• a crime – not necessarily. In Lonrho v Shell, it was pointed out that
not every statute creating an offence also created the tort of breach
of a statutory duty.

Other possible torts

Economic duress
See Universe Tankship v ITF (1982). This would be an unjustified
infliction of injury rather than an illegal one.

Inducing a breach of a statutory duty

See Meade v Haringey (1979); Assoc British Ports v TGWU (1989).

Immunity under TULR(C)A 1992

Section 219 gives immunity from action for the torts of:
• inducing a breach of contract;
• interfering with a contract by unlawful means;
• threatening to do either;
• conspiracy, providing the act done by one person alone would not
be actionable.
There is no immunity for interfering with trade or business by
unlawful means, or conspiracy by unlawful means, but actions
covered by an immunity do not amount to unlawful means provided
the tort is committed ‘in contemplation or furtherance of a trade
dispute’.
A ‘trade dispute’ is defined in s 244(1) of the TULR(C)A as a dispute
between workers and their employer which relates wholly or mainly
to one of the following:
• terms and conditions of employment, or the physical conditions in
which any worker is required to work;
• engagement or non-engagement, or termination or suspension of
employment or the duties of employment, of one or more workers;

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• allocation of work or the duties of employment between workers or

groups of workers;
• matters of discipline;
• a worker’s membership or non-membership of a trade union;
• facilities for officials of trade unions; and
• machinery for negotiation, and other procedures relating to any of
the above matters, including the recognition by employers or
employers associations of the rights of a trade union to represent
workers in such negotiation or consultation or in the carrying out
of such procedures.
Note
• There must be a dispute. In Brent v Hogan (1945), a union asked
brewery managers for confidential information regarding income
in order to frame a pay claim. It was not protected by the
immunities when sued for inducing a breach of contract (the
implied term of confidentiality), as there was no dispute at that
time.
• Between ‘workers and their employers’ (pre-1982, the wording
included disputes between ‘workers and workers’ and ‘workers
and employers’). In Dimbleby & Sons Ltd v NUJ (1984), journalists
employed by Dimbleby refused to send copy to TBF Ltd, rather
than to their own associated printing house, T Bailey Foreman,
where the printers were on strike. TBF Ltd was also an associate
company of T Bailey Foreman. The journalists were taking
sympathy action to support the printers. The NUJ first argued that
they were employed by the same employer and, secondly, that the
dispute was about the allocation of work. While the House of Lords
accepted that the dispute was about the allocation of work, the
journalists were not in dispute with their employer. All the
companies were separate legal entities, and the journalists were not
employed by T Bailey Foreman who was the employer in dispute.
• For a proper purpose, that is, not for a political purpose.
In BBC v Hearn (1977), the union asked its members not to transmit
the Cup Final after the BBC had refused to take steps to see that the
broadcast would not be transmitted to South Africa, whose policy
of apartheid the union opposed. Held: there was not trade dispute
but a political dispute which was not covered by the immunities.
(Lord Denning suggested that had the union asked for a clause to
be inserted in the staff’s contract allowing them to be dictated by

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their conscience in such matters, this would have been turned into
a trade dispute. This was subsequently disapproved of by the
House of Lords.)
Note
Since 1982, the dispute must relate ‘wholly or mainly’ to the trade
dispute, not merely be ‘connected with’ it.
In Mercury Communications Ltd v Scott Garner (1984), a dispute arose
out of the government’s licensing of operators other than British
Telecom to operate telecommunications. The POEU instructed its
members employed by BT not to connect Mercury, a private
company to the BT network. The union argued that it had issued
this instruction in furtherance of a dispute with BT over employee’s
job security, which it claimed would be put at risk if Mercury was
connected. The Court of Appeal rejected this argument and held
that the dispute was primarily concerned with the union’s
objection to government policy. In reaching this decision, the court
was heavily influenced by evidence of a Job Security Agreement
between the union and the employer, which the union had not
sought to invoke, a fact which pointed away from the union having
a genuine concern about jobs.
However, in Wandsworth LBC v NAS/NUT (1994), where the union
had instructed its members to boycott all unreasonable and
unnecessary elements of the national curriculum, the Court of
Appeal rejected the council’s claim that the boycott was motivated
by ideological objection to the tests and accepted that it was about
teacher’s working time and was, therefore, mainly related to the
terms and conditions of employment. The court paid considerable
importance to the ballot which preceded the industrial action
which asked the members whether they were willing to take
industrial action ‘to protest about the excessive workload and
unreasonable imposition made on teachers by the national
curriculum and assessment and testing’. See, also, Assoc British
Ports v TGWU (1989).
• Which affects workers in this country. (The union in BBC v Hearn
would now also fail on this ground.)
The dispute must be ‘in contemplation or furtherance of’ the trade
dispute. In a number of cases in the 1970s, the Court of Appeal under
Lord Denning tried to develop a doctrine of ‘remoteness’, and to
remove immunity from activities they considered too removed from
the original dispute, that is, secondary action, which was used with

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considerable effect during the ‘winter of discontent’. However, the

House of Lords held that ‘acting in contemplation or furtherance’ was
to be judged objectively. As long as a person genuinely believed that it
assisted in achieving the objectives, then he was acting ‘in
contemplation or furtherance of a trade dispute’, even if the belief was
an irrational one.
In Express Newspapers v McShane (1980), the NUJ was in dispute
with provincial newspapers. Their members came out on strike but the
strike was ineffective as the newspapers still obtained news from the
Press Association. The union then called out their members at the
Press Association, but many ignored the call to strike. The union then
called upon their members in the National Newspapers to ‘black’
news from the Press Association. Lord Denning and the Court of
Appeal decided that this action was too remote from the original
dispute and unlikely to have any effect on it and was, therefore, not ‘in
contemplation or furtherance of a trade dispute’. The decision was
overturned by the House of Lords for the above reasons.
In Duport Steel v Sirs (1980), after British Steel refused a pay claim,
the steel unions called their members out on strike. As this had very
little effect, they then called out their members in the private steel
companies in order to put pressure on the government to intercede
and make more money available to the Corporation. Again, Lord
Denning held that the strike in the private sector was too remote from
the original dispute with British Steel and that, in fact, it was in
pursuance of their dispute with the government. Again, the decision
was reversed by the House of Lords who held that it was in
contemplation or furtherance of a trade dispute.

Loss of immunities
The above immunities will be lost in the following situations.

A secondary action
Section 224 of the TULR(C)A 1992 removes immunity for inducing a
breach of, or interfering with a contract of employment, or threatening
to do so, where the employer under the contract of employment is not
a party to the dispute; except in the case of lawful picketing (see
below). A contract of employment for these purposes, includes work

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done by an independent contractor who undertakes to do the work

personally.

B Action for prohibited purpose

Section 224 of the TULR(C)A 1992 will not be a defence in the
following circumstances:
• Industrial action taken to put pressure on an employer to impose
union membership and union recognition requirements, for
example, in a closed shop (ss 144–45 and 186–87 of the TULR(C)A
1992) also renders void any terms in a contract which requires the
other party to recognise a trade union or to maintain a closed shop).
• Sections 222–25 of the TULR(C)A 1992 provide that there will be no
immunity for industrial action designed to get such terms inserted
into contracts between employers.
• Pressure to maintain a closed shop. Section 222 of the TULR(C)A
1992 removes immunity ‘if one of the reasons was to pressurise the
employer to discriminate against non-union members’.
• Reinstatement of strikers. Section 223 of the TULR(C)A 1992
removes immunity from industrial action which is even partly
taken because of the dismissals of unofficial strikers.

C Failure to hold a ballot

Immunity from the tort of inducing a breach of contract, or interfering
with its performance will be lost, unless a ballot is held in advance of
the action (but not threatening a breach of contract, that is,
intimidation).
This only applies to ‘official’ strikes. Immunity is not lost in this
way in the case of unofficial strikes.
Note
Any union member has a right to restrain a trade union from calling
for industrial action without a ballot. Normally, an employer must
await the industrial action to start before he can take action.
However, in P & O Ferries v NUS (1988) an injunction was awarded
to stop the union balloting on secondary action.

Requirements of a valid ballot

(See, also, Code of Practice on Trade Union Ballots.)
• It must be a postal ballot.

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• Only those who are thought reasonably likely to take part in the
industrial action should be balloted. Standard – reasonable
practicability. It was held in BRB v ITT (1985) that a ballot is not
invalid because a few members did not receive a ballot paper.
In London Underground Ltd v NURMTW (1995), the union had
organised a ballot of its members and this had resulted in a vote in
favour of industrial action. The union served the requisite notice on
the employers and included the names of 20 new members who
had joined the union after the ballot. It then served notice of further
industrial action and this included the names of a further 672
employees who had joined the union since the strike and had not
been included in the first notice. The employers alleged that since a
large number of new members had been included the action could
not be said to be supported by a ballot, and sought an injunction.
The Court of Appeal held that industrial action is to be regarded as
having the support of a ballot if a majority of those voting have
declared themselves willing to take part. The participation of a
particular individual in collective industrial action, and the
industrial action itself are two different things. It is the industrial
action which must have the support of the ballot, not the
participation of those taking part in it. The view expressed obiter by
Lord Donaldson in PO v UCW (1990) that ‘any call for industrial
action following a ballot should be limited to those who were given
an opportunity to vote’ was unsustainable in so far as it related to
changes in union membership.
• Where there are separate workplaces, then, if all members are
balloted (or all members in the same bargaining unit), separate
returns are not needed, but, if a union is planning to ballot only
some of its members at different workplaces and cannot justify this
on neutral grounds – separate ballots must be organised.
A ballot may be held covering employees of different employers if
it is reasonable for the union to believe that there are common
factors (University of Central England v NALGO (1993)).
• The ballot paper
(a) Must contain the statement ‘If you take part in the strike, or
other appropriate course of action, you may be in breach of your
contract of employment’ (health warning), even in the case of an
overtime ban.
(b) If industrial action short of a strike is contemplated, as well as a
strike, then the two questions must be placed separately. In PO

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v UCW (1990), the union asked members if they would be

prepared to take industrial action up to and including ’strike
action’. The Court of Appeal held that this rolled up question
did not comply with the requirements, and rendered the ballot
ineffective.
In West Midlands Travel Ltd v TGWU (1994), the Court of Appeal
decided that where a union holds a ballot on industrial action,
and more than one question appears on the ballot paper, then,
for the purpose of counting votes, each question is to be
effectively treated as a separate ballot. It is sufficient, therefore,
for the majority of those voting on a particular question to have
said ‘yes’ to action, even if they do not constitute a majority of
those who had returned ballot papers. (Q.1 – 1,265 – yes; 1,225 –
no; 147 – blank: Q.2 – 1,059 – yes; 1,156 – no; 427 – blank. 2,642
members had voted altogether. The employer sued the TGWU
for damages to cover their loss of £419,000.)
In London Borough of Newham v NALGO (1993), the Court of
Appeal confirmed that the union was perfectly entitled to be
partisan. In that case, the voting paper asked whether the
members were prepared to go on strike, ‘on strike pay
equivalent to full take home pay’.
(c) Must contain a statement of who is to call legal action.
In Tanks and Drums v TGWU (1991), the union had nominated its
general secretary as having authority to call a strike.
Negotiations with the employer had been led by the union’s
district secretary. Two weeks after the ballot in favour, the
district official obtained the general secretary’s permission to
implement the action if a better offer was not forthcoming after
a meeting with the employer the next day. As no further offer
was made the strike went ahead. The employer sued for an
interim injunction claiming that the general secretary had
delegated his power to decide. The court held that this was not
a blanket delegation; the permission was specific enough to
warrant holding that the general secretary had called the action
as required by the legislation.
• A scrutineer must be appointed (unless under 50 are entitled to
vote).
• Notice must be given to the employer:
(a) seven days before opening of ballot, giving date of ballot,
describing (so that they can be easily identified) the members
likely to vote;

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(b) three days before the ballot, giving a specimen ballot paper;
(c) seven days before industrial action, to employers of members
likely to take part stating whether the action is intended to be
continuous or discontinuous, and describing (so that he may
readily ascertain them) the members likely to take part.
In Blackpool and Fylde College v NATFHE (1994), the union gave the
requisite notice to the employer which specified ‘all our members
in your institution’. The employers argued that this was not
sufficiently precise to enable it to identify those employees. The
college had been told by the union previously that about a third of
employees were union members (288), but only 109 had their dues
debited from their salaries. The Court of Appeal thought it
‘inescapable’ that on these facts the employer had not received
adequate information. The court was at pains to insist that unions
would not necessarily be ordered to give names in every case, but
where the union does not have 100% membership in a particular
category, this is presumably what it means. This obligation to give
employers a list of members’ names was withdrawn by the EReA
1999.
• Result
Bare majority of those voting sufficient.
(Note – voting now seen as valuable tactic by the union.)
• Timescale
Action prior to the EReA normally has to be called and start within
four weeks. This was extended by the EReA to eight weeks if the
union and employer agree. In RJB Mining v NUM (1995), a ballot
called by the union closed at 10 am Tuesday 16 May. The union
called a series of one day strikes to commence with the day shift on
Tuesday 16 June. It was held that the four week period ended on
midnight 15 June and an injunction was therefore issued. The Court
of Appeal turned down the union’s contention that since the day
shift commenced at midnight on the 12/13 June, the action was
within the four-week period. The court stated that the period
finished at the end of one day and did not overlap into the next.
Although ‘midnight’ is the word used to identify the end of one
period and the beginning of another, it does not follow that there is
a moment in time which belongs to both days. Cf Monsanto v
TGWU (1987) where union members voted in favour of industrial
action over the employment of temporary labour. The company
responded with counter-sanctions, including the suspension of sick

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pay schemes, guaranteed week and early retirement schemes. The

union suspended industrial action pending further sanctions, but
reimposed it two weeks later after negotiations broke down. The
Court of Appeal held that there was no need for a further ballot; the
industrial action had not been discontinued but merely suspended
temporarily for the purpose of negotiation with the employer, with
the intention that it would be reimposed should the negotiations
fail. The court also rejected that to reimpose action fell outside the
terms of the ballot; these were sufficiently wide to encompass any
matters within the scope of settling the original dispute.
In PO v UCW (1990), however, the Court of Appeal held that a
ballot in September 1988 did not render lawful a strike in
September 1989, although there had been industrial conflict in the
meantime, that is, a series of selective 24 hour strikes between
October and December, culminating in a national one day strike in
December. There was no action between January and April 1989,
but, in May, action started again, culminating in a strike in
September. The disputes were all over the same issue, but the Court
of Appeal held that the dispute which began in May was a new
campaign and that a fresh ballot should have taken place before the
action commenced.
It has been suggested that, where industrial action is suspended,
the union should make clear to their members that this is
contingent on the successful outcome of negotiations; and that it is
important to ensure that the terms of the questions on the ballot
paper are wide enough to cover any matter which might arise out
of the dispute.
Note
Where an interlocutory injunction is issued, the union may call for an
extension of time.
The balloting arrangements are extremely complicated and detailed
and it has been argued that a trade union which wishes to comply with
the law finds it very difficult to know how to do so.

New union liability (citizen’s right of action)

Application to the court by members of the public is allowed for

unlawful industrial action which is likely to prevent or delay the
supply of goods or services to them, or reduce their quality.
The remedy is an injunction.

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Liability of the trade union

Trade unions are now protected against actions in tort only if they are
acting in ‘contemplation or furtherance of a trade dispute’. Section 22
of the TULR(C)A 1992 now provides that a trade union will only be
liable if the act in question is authorised or endorsed by a responsible
person of the union. For example:
• the principal executive committee;
• any other person empowered by the rules to authorise or endorse
the kind of act in question;
• the president or general secretary;
• any official, whether or not employed by the union, or any
committee;
An act will be that of an official if it is done by any group of which
he is a member.
• any committee of the union to whom an employed official
regularly reports.
Note
A trade union may repudiate the acts in question through its executive
committee, president, or general secretary, provided they do so at the
earliest opportunity and they do not act in a manner that is
inconsistent with the repudiation.
Written notice must be given to the committee or individual
involved, also to strikers and the employer and must contain a
stipulated statement.

Financial limits
If a trade union is successfully sued in tort, there are limits to the
amount of damages which may be awarded, dependent on the size of
the union’s membership:
Under 5,000 members – £10,000 limit
Between 5,000–25,000 – £50,000 limit
Between 25,000–100,000 – £125,000 limit
Over 100,000 members – £250,000 limit

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Remedies

(1) Damages
See limits on liability of trade unions.
(2) Injunctions
The most common remedy sought is an interlocutory injunction.
In American Cynamid Co v Ethicon Ltd (1975), the court laid down the
following tests for the issue of an interlocutory injunction.
(a) Is there a serious issue to be tried?
(b) Has the plaintiff shown that the action if continued would do
him irreparable harm which cannot be remedied by a
subsequent award of damages?
(c) On the balance of convenience, is the harm suffered by the
plaintiff greater than the harm which would be suffered by the
defendant if he had to cease his action.
Section 221 of the TULR(C)A 1992 provides that:
• If there might be a trade dispute defence to the request, the court
should not grant an injunction ex parte until all reasonable steps
have been taken to inform the defendant, and give him an
opportunity to state his case.
• The court must have regard to the fact that the defendant might
succeed in a trade dispute defence at a full trial.
In NWL v Woods (1979), it was stated by the court that if it is likely that
the defence would succeed at a full trial, then an injunction should not
be ordered.
The legal consequences of breaching an injunction:
(1) committal for contempt of court;
(2) sequestration.

Picketing
The term picketing is used to describe the conduct of persons who seek
to persuade other persons to take a certain course of action, or not to
do something, usually entering work premises or delivering supplies
during industrial action.
Three main problems exist with regard to picketing:

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(a) it is unclear whether the simple act of picketing is unlawful or not;

(b) there is no clear distinction between picketing and public
demonstration;
(c) whereas the law gives protection only for ‘peaceful communication
or persuasion’, pickets often see their object as stopping people
from working.
Section 15(1) of the TULR(C)A 1992 says:
It shall be lawful for a person in contemplation or furtherance of
a trade dispute to attend:
(a) his own place of work; or
(b) if he is an official of a trade union, at or near the place of
work of a member of that union whom he is accompanying
and whom he represents, for the purpose only of
peacefully obtaining or communicating information, or
peacefully persuading any person to work or abstain from
working.

(Cf ‘secondary action’.)

There are three exceptions to ‘own place of work’ requirement:
• if workers work normally at more than one place of work, or it is
impracticable to picket their own place of work, then they may
picket the place from where their work is administered;
• workers who are dismissed during the dispute in question may
picket their former place of work. But, see News Group Newspapers
v SOGAT (1986), where it was held that employees dismissed when
News International moved from Fleet Street to Wapping were not
entitled to picket at Wapping, because they had never worked
there;
• trade union officials (see above).
For ’near’, see Rayware Ltd v TGWU (1989);
• see, also, the Code of Practice on picketing; in particular the advice
that six pickets should be the optimum number and which has been
applied by the courts to such an extent that it is now almost seen as
the law.

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Civil liability for picketing

(1) The economic torts

For example, interfering with a contract, etc.
In Union Traffic Ltd v TGWU (1989), the Court of Appeal held that
the mere presence of pickets may be deemed sufficient to constitute
an ‘inducement’, if it clear that their presence is intended to induce
a breach of contract. (It must, however, be directed at one of the
parties to the dispute – Middlebrook Mushrooms v TGWU (1993).)
(2) Private nuisance
That is unlawful interference with a person’s enjoyment or use of
his own land. In News Group Newspapers v SOGAT (1986), it was
held that the behaviour of the pickets or demonstrators did
interfere with the right of the plaintiff to enjoy his own property, as
he had to incur extra transport and security costs, and also suffered
a high turnover of staff as a result of the action.
In Thomas v NUM (South Wales Area) (1986), the High Court held
that:
• mass picketing in itself constituted a nuisance;
• regular picketing outside the home of a non-striker would
constitute a private nuisance;
• interference by harassment of employees who wished to go to
work was a species of private nuisance (since doubted) and also
an unreasonable interference with a persons right to use the
highway;
• the daily presence of 50–70 men hurling abuse, requiring the
presence of the police, and the use of vehicles to transport
employees to work amounted to a nuisance.
Does peaceful picketing amount to private nuisance, when not
protected by the formula? In Hubbard v Pitt (1976), Lord Denning
stated ‘picketing by itself is not a nuisance’, but Lord Justice Orr
stated that the picketers’ state of mind was important, and in this
case he was satisfied that the picketers intended to interfere with
the plaintiff’s business.
In Thomas v NUM (1986), Scott J stated that picketing by itself
would not amount to common law nuisance, but held that it would
be tortious if it interfered with the plaintiff’s right to use the
highway; and in that case the injunction granted by the court
restricted picketing to peacefully communicating information in

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numbers not exceeding six.

(3) Public nuisance
In News Group Newspapers v SOGAT (1986), the conduct of the pickets
and demonstrators was found to be an unreasonable use of the
highway, and the plaintiff was found to have suffered special
damage (see, also, Thomas v NUM (1986)).
(4) Trespass
To mount a picket on the employer’s land would be tortious.

Criminal liability
It is the criminal law which is of the greatest practical significance, for
example, during the miners’ strike over 11,000 criminal charges were
brought.
The immunity given by TULR(C)A is no defence to a criminal
charge.

Breach of the peace

Obstructing a police officer in the course of his duty.
Police have wide discretion. A policeman has a duty to prevent a
breach of the peace. If a police officer believes that a breach of the
peace is about to be committed, he has a duty to prevent it. Resistance
would be an offence.
In Piddington v Bates (1961), a policeman ordered the pickets to be
reduced to two. The defendant pushed past the policeman with the
statement that he knew his rights. He was arrested, charged with
obstruction and found guilty.
The refusal of a police order to stop obstructing the highway was an
offence in Tynan Balmer (1967).
In Broome v McLachlan (1985), it was held that the police have a
power to disperse pickets some way from their destination if they
reasonably believe a breach of the peace will occur should they get to
their destination. In that case, pickets from Kent were stopped on the
M1 before they could reach Nottinghamshire.

Obstruction of the highway

Pickets have no right to stop a vehicle if they do not wish to stop. In
Broome v DPP (1974), a picket failed to persuade a lorry driver to stop,
and thereafter stood in front of the lorry, and refused to move when
asked to do so by the police. The House of Lords held that there was
no right to obstruct the highway, only a freedom, and the picket

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should have been convicted of obstruction.

Public nuisance
It is an offence to obstruct the public in the exercise of their right to free
passage along the highway (s 241 of the TULR(C)A 1992 – originally in
the Conspiracy and Protection of Property Act 1875).
The following offences are committed by those who try to compel
another to do or not do something:
• using violence towards or intimidating that person, his family, or
injuring his property;
• persistently following that person from place to place;
• hiding tools, clothes or other property, or depriving or hindering
the use of such;
• watching or besetting the person’s home, workplace, or the
approach to either;
• following a person with two or more others in a disorderly fashion
in any road or street.
Watching and besetting is the most common charge, but it must be
done wrongfully and without legal authority. Thus, if the picket is
covered by an immunity, it will not be wrongful unless some other
wrong has been committed (Thomas v NUM).

Public Order Act 1994

In particular, note:
Part 1: s 1 – riot; s 2 – violent disorder; s 3 – affray; s 4 – causing fear,
or provoking violence; s 5 – causing harassment, alarm, or distress.
Part 2: ss 11–13 – police must be given advance notice of processions
and can impose conditions if they think it necessary to prevent serious
disorder or damage to property or disruption to the life of the
community; s 14 – conditions may be imposed on any public assembly
on the same grounds.

Protection from Harassment Act 1997

This Act contains provisions which could be used by police when
dealing with pickets.

A ‘right to strike’

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 TRADE UNIONS AND EMPLOYERS – INDUSTRIAL ACTION

There has been considerable discussion in recent years as to whether

the immunities which protect trade unions in certain circumstances
should be replaced by a ‘right to strike’ as is the case in many other
European countries. In the early 1980s, the CBI and other employer
organisations promoted the move to a closely defined ‘right to strike’
as a means of limiting the industrial power of trade unions. It has since
been seen that this can be done by limiting the immunities, and the
enthusiasm for a ’right to strike’ is now seen as a way to remove ‘the
insecure foundation of the freedom to strike’.
The reason for the development of immunities rather than a ’right’
is explained by Lord Wedderburn as lying in the history of working
class movements in this country. Trade unions were comparatively
strong at an early date, before there was a working class political party,
or indeed universal franchise. The ‘right’ in other European countries
developed out of ideological movement which often preceded strong
trade unions. Secondly, ‘rights’ are not a feature of the British
Constitution which in any case is ‘unwritten’. There is no ‘right’ to free
speech either.

Arguments for a ‘right to strike’

• Immunities protect only the organisers of strikes.

At common law, a strike is a fundamental breach of contract which
allows the striker to be summarily dismissed.
Under unfair dismissal provisions, it is sometimes fair to dismiss a
striker, provided there is no victimisation; but even victimisation is
allowed in the case of an unofficial strike.
This is contrasted with the position in France, Germany and Italy,
where a strike does not involve a breach of contract, but a
suspension of the contract.
• It would be an opportunity to simplify the system.
The present system is seen as unnecessarily complicated. There is
the initial problem of understanding the economic torts; the scope
of the immunities, the complicated provisions where the
immunities are lost, and the responsibility of trade unions. The
International Labour Organisation has complained about the
complexity of English law in this area.
• ‘Rights’ would avoid the problem of courts developing new torts
which are not covered by existing immunities.

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ESSENTIAL EMPLOYMENT LAW

For example, Rookes v Barnard; Torquay Hotel v Cousins; Meade v

Haringey; Merkur Island Shipping v Laughton (above).
• There is a problem with terminology in the present system.
’Immunities’ are seen as social privileges not available to the rest of
the community. Hayek declared: ‘There will be no salvation for
Britain until the special privileges granted to trade unions three-
quarters of a century ago are revoked.’

Arguments against a change

• Kahn-Freund has pointed out that, however, the right is phrased,

there will still be a need for some limitations, for example, strikes
which harm outsiders, involve continuous processes, or essential
services.
• Lord Wedderburn has pointed out that changing terminology will
not get rid of problems. He has shown that the right to strike means
different things in different European countries.
For example, in France and Italy, a ‘strike’ covers only a total
cessation of work; but, in Germany, a ‘work to rule’ is also covered.
Most European countries give some protection to secondary action
but the degree of protection differs.
In Germany, the ‘right to strike’ has been reduced to a narrow range
of circumstances by official trade unions alone, and then only when
all procedures have been exhausted.
Considerable emphasis is placed in Europe on differences between
conflicts of interest and conflicts of rights.
Lord Wedderburn stresses that in switching to a system based on
’rights’ many decisions would have to be taken on a number of
issues, and also that positive rights do not necessarily afford a
wider area of industrial legality.
• ‘Rights’ would still be open to judicial interpretation. They would
not avoid the hostility of the courts, for example:
(a) picketing is already expressed as a right, but it is narrowly
interpreted by the courts;
(b) ‘in contemplation or furtherance of a strike’ was narrowly
interpreted by the Court of Appeal in Express Newspapers v
McShane and Duport Steels v Sirs (1980).
• One of the most intractable problems with regard to industrial
action is the issuing of interlocutory injunctions. This would not be

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changed by reformulating the protection. Courts insist on the

discretionary nature of injunctions.
• Several problems would be posed, for example:
(a) ‘no strike agreements’ – could a ‘right to strike’ be negotiated
away by trade unions?
(b) will a ‘right to strike’ also extend to cover a ‘right not to strike’
Will protection be given against disciplinary action by trade
unions or fellow employees?
(c) will the ‘right to strike’ cover a ‘right to lockout’?
Professor Ewing proposes that, in addition to changing to a system
based on rights, dismissal during a strike should be made
automatically fair; and changes should be made to the granting of
injunctions. Lord Wedderburn points out that the change from
immunities to ‘positive rights’ solve few problems, but also create new
problems. He suggests that the economic torts should be abolished, a
labour court created, and that in a strike, the contract of employment
should be suspended not breached.
‘Rights’, in most European countries, have arisen out of their own
historical development, as immunities have arisen out of the historical
development in this country.
The passing of the Human Rights Act 1998 (which will come fully
into force on 2 October 2000) incorporates the European Convention
on Human Rights into UK law. Article 11 gives right to freedom of
peaceful assembly and freedom of association but not specifically a
right to withhold labour.

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Index

ACAS Code of Practice No 1 – Codes of Practice

‘Disciplinary Practices and ACAS, 10
Procedures in equal pay, 93
Employment’, 131, 183 racial monitoring, 81
ACAS, see Advisory, time off, 62
Conciliation and unfair dismissal, 131, 183
Arbitration Service Collective agreements, 39–41
(ACAS) custom and practice, 40
Advertisements, 23, 85 equal pay, 96–97
Advisory, Conciliation and industrial relations, 179–80
Arbitration Service no strike clauses, 42
(ACAS), 9–10, 184 terms and conditions, 39–41
Age discrimination, 105–06 Collective bargaining, 180–81
Agencies, 21–22 Collective labour law, 1
Annual leave, 65 common law, 2
Ante-natal care, see Maternity Collins, Hugh, 162–63
Appeals, Commission for Racial
contract of employment, 22–23 Equality, 13
Employment Appeal Commission for the Rights
Tribunal, 9, 140 of Trade
Employment Tribunal, 8 Union Members, 11, 12
unfair dismissal, 140 Commissioner for Protection
Arbitration, see Advisory Against Unlawful
Conciliation and Industrial Action, 11, 12
Arbitration Common law, 2
Service (ACAS) civil courts, 6
Armed forces, 72 collective labour law, 2
trade unions, 2
Company directors, 22
Ballots, 204–08 Compensation for
Breach of the peace, 213 termination
of contract of
employment, 148–51
Capability or
See, also, Redundancy
qualifications, 128–30
Competence, 128–29
Central Arbitration
Conciliation, see Advisory,
Committee (CAC), 10–11, 184
Conciliation and
Certification Officer, 11, 166, 167
Arbitration
Children, 65
Service (ACAS)
Civil courts, 6

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ESSENTIAL EMPLOYMENT LAW

Conduct, 130–33, implied terms, 27, 30–39

159–60 inducing breach, 195–98
Conspiracy, 194 interference with, 198
to injure, 194–95 maternity leave, 61
to use unlawful mobility clause, 29–30
means, 195 multiple test, 17–18
Constructive dismissal, 28, mutuality of
125–27 obligation, 19–21
Consultation, no strike clauses, 42
redundancy, 185–89 organisation test, 17
trade union right, 185 overriding terms, 29
transfer of own business test, 18–19
undertakings, 189–90 part time employment, 22–23
Continuity of restrictive covenants, 37
employment, 43–44 secondment to
change of employer, 46–47 another firm, 21
leave of absence, 45 and self-employment, 16–17
part time workers, 44 termination of
pregnancy, 45 employment, 8
redundancy, 45 terms, 26–27,
reinstatement, 46 28–42
retrospective claims, 44 void, 23–24
secondment, 45 written statement
sickness, 45 of terms, 24–26
temporary cessation Courts, 6
of work, 45 Custom and practice, 27, 41
weeks which count, 44–46
Contract of employment
agency workers, 21–22 Damages
appeals against deductions, 116
rulings on, 22–23 disability discrimination, 104
atypical workers, 19–21, 22 dismissal for trade
collective agreements, 39–41, union membership
42, 96–97, or activities, 170–72
179–80 equal pay, 98
contractual rules, 27–28 industrial action, 197–98
control test, 17, injury to feelings, 87
18–19, 21 picketing, 211–12
custom and practice, 27 racial abuse, 87–88
directors, 22 sex discrimination, 87–88
express terms, 26, 29 trade union members, 178
fact, not law, 22–23 trade union sued
fixed term, 125, 136 in tort, 209–10
formation, 23 wrongful dismissal, 116
illegal, 23–24 Deductions from wages, 55–58

220
 INDEX

Disability discrimination duties, 35–39

criticisms of Act, 104 ex-employees, 37
definition of disability, 101 expenses, 33
Disability Rights Commission, 13 fixed term work, 23
employment tribunals, 8 garden leave, 37–38
meaning of grievances, 33–34
discrimination, 102–04 inventions of, 39
remedies, 104 part time, 22–23
Disability Rights payment of, 30–32
Commission, 13 relationship with
Disciplinary procedure, 66 employer, 2
Dismissal, 125–28 safety, see Health and
competence, 128–29 safety at work
constructive, 28, 125–27 secondment to
fair reasons, 128–36 another firm, 21
fixed term contract, 125, 136 spare time work, 37
misconduct, 130–33 torts, 16
national security, 141 unfair dismissal,, 121
new model, 162–63 whistleblowing, 38, 146
Notice of Appearance, 127 Employers
redundancy, 134–36 duties, 30–35
reorganisation of relationship with
business, 135–36 employee, 2
sickness, 129–30 private, 4
unfair, see vicarious liability
Unfair dismissal for torts
wrongful, of employee, 16
see Wrongful dismissal Employment agencies, 21–22
Dress and appearance, 70–71 Employment Appeal
Tribunal, 9
unfair dismissal
EC Consultation on sexual appeals, 140
harrassment, 88 Employment discrimination, 84
Economic duress, 200 See, also, Race,
Emanation of the State, 4, 107 Sex discrimination
Employee bringing claims, 85–86
agency workers, 21–22 criticisms of law, 108–09
and confidential Equal Opportunities
information, 38 Commission,
continuity of see Equal Opportunities
employment, 43–51 Commission
contract of EU law, 106–08
employment, instructing to
see Contract of discriminate, 84
employment remedies, 87–88

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ESSENTIAL EMPLOYMENT LAW

Employment tribunals, 6–7 Treaty of Rome, 3

appeals, 8 European Works Council
composition, 7 Directive, 3, 190–91
costs, 7 Expenses, 33
deductions from pay, 58
jurisdiction, 8
legal aid, 7 Fair wages clauses, 169
procedure, 7–8 Fixed term contracts, 23, 125, 136
prehearing reviews, 7 Freedom of association, 168–78,
181
Equal Opportunities
Commission, 12–13
Gender reassignment, 83
Equal pay, 3, 5, 68, 89
Golden formula, 193
Grievances, 33–34, 66
collective bargaining, 96–97
Guarantee payments, 8
comparator, 89–90
employment tribunals, 8
EU legislation, 68 Health and safety at work, 1
like work, 90–92 duty of employer, 32–33
market forces, 95 young workers, 65
material difference, 93–98
material factor, 93–98 Holiday entitlement, 24
part time work, 97 Homosexuals, 71–72
performance Hours of work, 64
related pay, 97–98
proportionality test, 95–96
red circling, 97 Illness, see Sickness
work of equal value, 92–93 Imprisonment, 114–15
European Court of Justice, 4 Independent contractors, 17–21,
European Union, 2–3 155
Directives, 4 Individual employment
discrimination law, 106–07 law, 1
enforcement actions, 106 Industrial action, 193–94
equal pay legislation, 68 action for prohibited
European law, 3–6 purpose, 204
infringement proceedings, 6 ballots, 204–08
judicial implementation, 5 breach of statutory duty, 200
judicial review, 5–6, 106 breach of the peace, 213
legislation, 4 citizen’s right of action, 208
legislative implementation, 5 conspiracy, 194–95
majority voting, 4 criminal liability, 213–14
Regulations, 4 dismissal for, 142
Social protocol (Social economic duress, 201
Chapter), 2, 3 immunities, 200–08
Treaty of Amsterdam, 3 inducing breach of

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 INDEX

contract, 195–98 absence, 60

interference with allowance, 59
contract, 198 alternative work
interference with trade on return, 74
or business by ante-natal care, 8, 58, 63
unlawful means, 199–200 compulsory leave, 61
intimidation, 198–99 continuation of contract, 61
liability of trade continuity of
union, 209–10, employment, 45–46
211–14 employment tribunals, 8
no-strike clauses, 42 job shares on return, 74
notice to employer, 206–07 leave, 60
picketing, 210–13 notice requirements, 60
right to strike, 193–94, parental leave, 65
215–17 statutory maternity pay, 59
secondary action, 203–04 suspension on
torts, 2, 194–203 grounds of, 54–55
Industrial relations, 179–80 unfair dismissal, 58, 143–45
Industrial tribunals, see Minimum wage, 51–52
Employment tribunals Misconduct, 130–33
Information redundancy payments, 159–60
failure to supply, 184–85 Mobility clauses, 155
trade union right, 183 National security, 141
Natural justice, 139–40, 177
International Labour Night workers, 64–65
Organisation Notice of Appearance, 127
recommendations Nuisance, 212, 213
on employment
rights, 120
Intimidation, 198–99 Obstruction of the
highway, 213

Judicial review, 5–6

Jury service, 63 Parental leave, 3, 65
Part time work
equal pay, 97
Lay offs, 53–54 Partnerships, 22
Legal aid, 7 Pay, 30–31
Legislation deductions, 55–58
European law, 3–6 ECJ ruling on what
source of employment constitutes, 99
law, 2–3 maternity pay, 59
meaning of, 107
method of payment 55
Marital status, 72, 75 PAYE 55
Maternity, 73–74, 81 retail workers, 58

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ESSENTIAL EMPLOYMENT LAW

short time working, 53–54 qualifications for

sick pay, 31–32, bringing
52–53 claim, 152–59
statutory provisions, 51–55 reasons for, 154–56
Pension scheme trustees, 63 red circling, 97
Pensions reorganisation, 155
equal pay, 98–99 three part test, 157
transfer of time off to look for
undertakings, 47 new work, 63
Picketing, 210–13 trade union
Politics and consultation, 185–89
employment law 1 Re-engagement, 147–48
Pregnancy, see Maternity References, 34–35
Private nuisance, 212 Reinstatement, 46, 147–48
Promotion, 81 Religion
Public duties, 63 discrimination on
Public nuisance, 212, 213 religious
grounds, 104
Northern Ireland, 104
Race, 100 Remuneration, see Pay
Commission for Rest breaks, 64
Racial Equality, 13 Retail workers
discrimination on deductions
religious grounds, 104 from wages, 58
employment tribunals, 8 Sunday working, 63–64
genuine occupational Retirement provisions, 82
qualifications, 101 Retirement age
racial discrimination, 88, equality, 98–99
100–01 and unfair dismissal, 123–24
Recruitment, 23, 81, 85
Redundancy, 134–36
alternative Safety representatives
employment, 153–54 time off work, 62–63
Scope of employment law 1–2
continuous Self-employment 16–17
employment, 152 agency workers, 21–22
dismissal, 152–53 atypical workers, 19–21
economic reasons, 155 partnerships, 22
independent contractors tests, 17–19
brought in, 155 Sex discrimination, 5, 67, 69,
mechanisation, 155 71–72
misconduct, 159–60 See, also, Employment
mobility clauses, 155 discrimination
payments, 8, 121–40, burden of proof, 79
151–60 conditions, 76–79
protective awards, 188–89 damages, 87–88

224
 INDEX

death and retirement common law, 2

provisions, 82 European Union, 2–6
direct discrimination, 69–75 legislation, 2–3
dress, 70–71 Statutory rights, 43
employment process, 81–84 continuity of
employment tribunals, 8 employment, 43–51
enforcement of Sunday working, 63–64
legislation, 85–87 Suspension
Equal Opportunities maternity grounds, 54–55
Commission, 12–13 medical grounds, 8, 54
and equal pay, 68
gender reassignment, 83
genuine occupational Taxation, 16
qualifications, 82–84 Termination of
illegal contracts, 81 employment, 111
indirect discrimination, 75–79 contractual claims, 8
less favourable unfair dismissal,
treatment, 69–71 see Unfair dismissal
marital status, 75 wrongful dismissal,
positive action, 82 see Wrongful
pregnancy, 73–74, 81 dismissal
prohibited grounds, 69 Time off work, 62
questionnaires, 86 elected employee
remedies, 87–88 representatives, 63
requirements, 76–79 employment tribunals, 8
sexual harassment, 69–70, 88 jury service, 63
sexual orientation, 71–72 occupational pension
statistics, 86 scheme trustees, 63
transsexuals, 71 pregnancy, 8, 58, 63
victimisation, 80–81 public duties, 63
Shop workers, redundancy, 63
see Retail workers safety representatives, 62–63
Short time working, 53–54 trade union duties, etc, 62
Sickness Torts
and continuity of conspiracy, 194–95
employment, 45 economic duress, 200
dismissal, 129–30 employer’s vicarious
pay, 31–32, 52–53 liability, 16
statutory sick pay, 53 immunity from
suspension on action in
medical grounds, 54 trade disputes, 200–3
wrongful dismissal, 114 inducing breach of
Social protocol contract, 195–98
(Social Chapter), 2, 3 industrial action, 2, 194–203
Sources of employment law interference with
contract, 198

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ESSENTIAL EMPLOYMENT LAW

interference with trade against employers, 169–70

or business by and redundancies, 185–89
unlawful refusal to employ
means, 199–200 because
intimidation, 198–99 of membership, 174–75
private nuisance, 212 right to consultation, 185
public nuisance, 212 right to information, 183–85
and secondary action, 203 right to join, 175
trade union liability, 209–10 right to recognition, 181–83
trespass, 213 secret ballots, 8
Trade unions, 165 status, 166
accounting records, 166–67 time of work for
action short of duties, etc, 62
dismissal for transfer of undertakings
membership consultation, 189–91
or activities, 172–4
ballots, 204–8 Training, 81
Certificate of Transfer of undertakings, 5
Independence, 167–68 statutory rights of
Certification Officer, 11, employees, 43, 47–51
166, 167 trade union
citizen’s right of action, 208 consultation, 189–90
collective agreements, 39–41 unfair dismissal, 142–43
collective bargaining, 180–81 Transsexuals, 71
common law, 2 Treaty of Amsterdam, 3
contract with members, 176 Treaty of Rome, 3
definition, 166 Trespass, 213
discipline, 176–78
dismissal for
membership Unfair dismissal, 119
or activities, 141–42, aims of legislation, 119–20
150–51, appeals, 140
170–72 automatically unfair, 141–46
expulsion, 176–78 burden of proof, 120–21
failure to consult, 8 compensation, 148–51
freedom of continuous
association, 168–78, employment, 121–23
181 contractual principles, 162
industrial relations, 179–80 employee
liability in tort, 194–203, representatives, 146
209–10 employment tribunals, 6, 8
members, 2, 8 health and safety, 145
and natural justice, 177 incompetence, 128–29
no strike clauses 42 management
positive guarantees prerogative, 160–62
misconduct, 130–33

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 INDEX

natural justice rules, 139–40 whistleblowing, 146

pension fund Working Time
trustees, 146 Regulations, 146
pregnancy, 58, 143–45
procedure before
tribunal, 121–40 Victimisation, 80–81
procedural fairness, 138–39
reasons for dismissal, 127–36
Wages, see Pay
redundancy, 134–35
Whistleblowing, 38, 80, 146
reinstatement and
Working hours, 64
re-engagement, 147–48
Working Time
remedies, 147–51
Regulations, 146
retiring age, 123–24
Works Councils, 3, 190–91
sickness, 129–30
Wrongful dismissal, 111–12
stage process, 121–40
defences, 112–15
statutory rights, 146
grounds for claim, 112
substantive fairness, 137–38
remedies, 116–17
Sunday working, 146
time limit for claim, 124–25
Young workers, 65
transfer of
undertakings, 48,
132–43

227