Case round up

Mohammed Khan v NIC Hygiene

Discrimination on religious grounds

Regulations protecting employees from discrimination on religious grounds were introduced in December 2003, and a tribunal in Leeds has just delivered a landmark ruling in the first successful case under the regulations.
Khan was dismissed after taking six weeks off work to undertake the Hajj pilgrimage to Mecca – a trip Muslims are required to complete under the five pillars of Islam, if they are able to do so. The employers said Khan’s leave was unauthorised and dismissed him for misconduct.
The tribunal ruled that Khan was unfairly dismissed and discriminated against on religious grounds.

A refusal to permit an employee to take time off work for religious reasons may be discriminatory even if the refusal is made in accordance with normal procedures.

What you should do

  • Consider all requests for leave on grounds of religion or belief carefully and sympathetically. You will need to be able to justify a refusal to take such leave on business grounds
  • If you operate a holiday system whereby the organisation closes for specific periods when all staff must take their annual leave, you should consider whether such closures are justified as they may prevent individuals taking leave at times of specific religious significance to them
  • Review other policies and procedures and ensure you can justify any rules that potentially discriminate on grounds of religion or belief.

Villalba v Merrill Lynch & Co Inc

Sex discrimination, equal pay and unfair dismissal

Senior banker Stephanie Villalba recently lost her high-profile sex discrimination and equal pay claim for £7.5m. Although she succeeded in her unfair dismissal claim and in part of her victimisation claim, given the cap on the compensatory award and the likely level of award for victimisation, this will not be much consolation for Villalba.

The tribunal accepted that Merrill Lynch had performance concerns with Villalba and found that it would not have treated a man with such performance issues more favourably. Her sex discrimination claim therefore failed. The tribunal also accepted Merrill’s justification for any differences in pay between Villalba and her male colleagues. However, the tribunal did hold that Merrill Lynch knew or suspected that Villalba intended to make a complaint of discrimination, and that she was subjected to unlawful victimisation in respect of a number of acts.
It is not yet known whether Villalba or Merrill Lynch will appeal against any part of the ruling.

In an unusual move, the tribunal permitted Villalba to compare her pay with that of international colleagues as “Merrill Lynch is a worldwide organisation that considers its discretionary pay awards… on a worldwide basis”. This could have a wide-ranging impact on companies that operate on a global basis as, although the tribunal’s judgment on this point is not binding, it sets a precedent that could be used in other equal pay claims.

The tribunal criticised the company’s HR department for its “unprofessional behaviour” concerning its treatment of Villalba after she made an internal complaint. It also criticised the lack of implementation of equal opportunities policies, a “culture of secrecy and opaqueness regarding pay” and a “subjective approach to bonuses”.

What you should do

  • Ensure employees who raise internal complaints are treated with care so that successful victimisation claims can be avoided
  • Review pay levels and, at a minimum, ensure you are able to justify any pay differentials. Consider undertaking a formal job evaluation exercise
  • Ensure policies are properly implemented in practice.

Amy Goddard v Wilkinson Hardware Stores

Harassment – compensation and reasonable steps defence

Goddard succeeded in her sexual harassment claim that she brought following treatment meted out to her by her manager over a period of time. Abuse of power in this case persuaded the tribunal to award compensation for injury to feelings of 20,000; which falls within the highest of the three bands in the Vento case (which set out guidelines for injury to feelings awards).

Employers will be vicariously liable for the discriminatory acts of their employees unless they can show they have taken reasonable steps to prevent the acts occurring. In this case, the employers had appropriate policies, but training and induction courses did not bring these sufficiently to the attention of the workforce. The management staff were insufficiently trained and so were not aware of the policies and procedures or how to operate them. There was a confidential helpline, but its existence was not sufficiently publicised to staff. The ‘reasonable steps’ defence therefore failed.

What you should do

  • This is an important point for employers to remember: it is all very well drawing up wonderful policies, but this will not help you at tribunal unless you have brought the policies sufficiently to the attention of the workforce and trained your managers so that they are able to properly implement them.
  • If you set up a confidential helpline, this could help you rely on the reasonable steps defence – provided that you publicise the helpline sufficiently.

London Borough of Waltham Forest v Omilaju

Constructive dismissal – ‘last straw’

It is a general principle that a series of actions by an employer may cumulatively amount to a breach of the implied term of trust and confidence, even though each individual action may not. The Court of Appeal in this case was considering whether there can be a constructive dismissal even where the final act – or ‘last straw’ – that persuades the employee to resign, was in fact a reasonable step taken by the employer.

Omilaju brought a number of unsuccessful tribunal claims against his employer during his employment. Omilaju’s employer refused, in accordance with its normal policies, to pay Omilaju his salary when he had been absent without leave attending the tribunal hearing. Omilaju resigned, alleging that his employer’s refusal to pay him his salary during the unsuccessful tribunal hearing was “the last straw in a series of unfavourable treatments… over a period of years” which had destroyed his trust and confidence in his employer.

The tribunal found that the employer’s action in refusing to pay Omilaju his salary was perfectly reasonable and justifiable conduct. Did this mean that the refusal to pay salary could not be identified as the last straw?

The Court of Appeal said that, to result in a breach of the trust and confidence term, a last straw, which is not in itself a breach of contract, must be an act in a series of earlier acts which cumulatively amount to a breach of the implied term.

“The essential character of the act is that, when taken in conjunction with the earlier acts on which the employee relies, it amounts to a breach of the implied term of trust and confidence. It must contribute something to that breach, although what it adds may be relatively insignificant.”

The Court went on to find that – although this would be unusual – the final straw, viewed in isolation and on an objective basis, need not be unreasonable and blameworthy conduct.

What you should do

Bear in mind that the last straw in a case of constructive dismissal can be a relatively trivial act and one that does not, on its own, amount to a breach of contract. Further, the act may, in an unusual case, be conduct that is neither unreasonable nor blameworthy in any respect.

Hot spots

Direct sex discrimination

  • The EAT decided that a female employee had been discriminated against on the grounds of sex when her male colleagues downloaded pornographic images on to their computer screens, even though they did not show the images directly to her. Where the behaviour was so obvious as in this case, the fact that the employee did not complain to the employer about the behaviour of her colleagues did not affect her claim. It was enough that she knew what was going on and found the behaviour of her colleagues unacceptable.
    Moonsar v Fireways Express

Compensation for loss of earnings

  • The EAT held that the tribunal had been entitled to make an injury to feelings award without referring to the tax implications. The compensatory award, on the other hand, was correctly grossed up to take account of the tax payable by Vince-Cain on the amount of the award exceeding £30,000. In addition, the tribunal had been entitled to order the employer to compensate the employee for loss of earnings in respect of the four-year period during which she intended to retrain by attending university.
    Orthet Limited v Vince-Cain

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