Duty to consult on redundancy

Employers need to consult before terminating employment and re-engaging on
new terms. This month we examine the meaning of redundancy plus cases on aggravated
damages, discrimination, maternity pay and ex-gratia payments

Meaning of redundancy
GMB v Man Truck and Bus UK
Unreported, June 2000, EAT

Following the merger of two businesses, MTB decided to harmonise staff terms
and conditions by terminating employment and re-engaging on new terms.

The GMB, argued that MTB had failed to comply with its statutory duty to
consult, triggered by the proposed dismissal by reason of redundancy of more
than 20 employees within a 90-day period.

The EAT upheld the claim by giving effect to the extended meaning of
"redundancy" whereby group dismissals resulting from a reorganisation
of working arrangements constituted a redundancy even when there was no
reduction or cessation of work. Accordingly, MTB had a duty to consult.

Assessing aggravated damages
Harling v CL Plastics
EOR Discrimination Digest 44, ET

Harling was taunted about his dyslexia and physically abused by co-workers
and junior managers for about 18 months. When he complained to senior managers
he was not taken seriously. He resigned suffering from stress and depression.

The tribunal awarded him £25,000 for disability discrimination and
constructive dismissal made up of £15,000 for injury to feelings and £10,000
aggravated damages.

The aggravating factors included the length of time for which Harling was
bullied, the fact junior managers were involved in the bullying and the fact
that his complaint was not taken seriously. The way CLP’s witnesses conducted
themselves at the tribunal was also taken into account: they were contemptuous
of the questions asked and attacked Harling’s character.

Compensation for hurt feelings
ICTS (UK) v Tchoula
IRLB 644, EAT

Tchoula’s race discrimination claim listed more than 20 complaints against
ICTS, and following his dismissal he added a number of victimisation
complaints.

All but three of the complaints were dismissed. Tchoula was awarded more
than £50,000, which included £22,000 for injury to feelings and £5,000
aggravated damages. On appeal, the EAT held the award for injury to feelings
was "manifestly excessive" and wrong in law.

Such awards should be compensatory, not punitive, and broadly in line with
personal injury awards. Injuries which resulted in awards of £27,000 included
moderate brain damage and psychiatric injury. Tchoula’s was a "lower category"
case; only three of his claims were successful, the victimisation took place
over only 10 days, and he suffered no depression. The EAT substituted £7,500
for injury to feelings and £2,500 for aggravated damages.

Ultimatum was discriminatory
Stringer v First Leisure Corporation
EOR Discrimination Digest 44, ET

Stringer worked as a deputy manager at a night club in Hull, commuting from
Loughborough where she lived with her husband, who also worked for First
Leisure.

Her senior manager told Stringer she had to show greater commitment to First
Leisure by moving to Hull and choosing between her job or her marriage.
Stringer eventually resigned and brought a sex discrimination claim. The
tribunal held she lost her job because she was a married woman. She was less
favourably treated because of her sex because no ultimatum had been given to
her husband. The tribunal awarded Stringer almost £29,000.

Salary increase should be reflected in maternity pay
Alabaster v Woolwich
IRLB 643, EAT

Alabaster’s expected week of confinement (EWC) was 11 February 1996. On 1
December 1995 her annual salary was increased by almost £1,200 but the increase
was not incorporated into her earnings-related, higher-rate state maternity pay
because it had been calculated with reference to the "relevant
period" (the eight weeks preceding the 14 weeks before the EWC) during
which the increase had not been effective.

Alabaster claimed the SMP regulations failed to implement the European Court
of Justice decision in Gillespie that no distinction should be made between
backdated and immediate salary increases.

A salary increase should have been included in the calculation if it took
effect between the beginning of the "relevant period" and the end of
the maternity leave.

Ex-gratia payment can be set off against damages
Williams v BOC Gases
IDS Brief 661, Court of Appeal

Williams suffered from back problems when he joined BOC in 1988. When his
employment was terminated on medical grounds in 1996, BOC made an ex-gratia
payment of almost £12,000 "to be treated as an advance against damages
which may be awarded".

Williams subsequently brought a personal injury claim alleging that BOC’s
working practices had aggravated his condition. BOC admitted liability and
agreed damages of £3,000.

The judge held the payment should not be set off against the damages because
it was a "benevolent payment". BOC appealed. The Court of Appeal held
a wrongdoer is not required to compensate twice for the same loss. Employers
should be encouraged to make ex-gratia payments in advance of potential claims.
The damages were reduced to nil.

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