Case round up

Case round-up by Eversheds 020 7919 4500

Wives who offer a helping hand
Newnham Farms Ltd v Powell, EAT, 2003, All ER(D) 91

Mr and Mrs Powell were both initially employed at a hop farm but were then
invited to set up and run a new hop farm on a much larger scale.

Mr Powell was to be the manager. Mrs Powell offered to assist him, although
no specific role was expressly given to her. Instead, she carried out a number
of tasks from time to time, mostly administrative, and combined this with
running the house, sorting out childcare for their three children, etc.

For her contribution, the farm owners paid her a token sum of £2,000 per
annum (which, using her tax allowance, also reduced her husband’s tax
liability). On the breakdown of the marriage, Mr Powell moved on and Mrs Powell
not only lost her job with immediate effect but also her home.

Mrs Powell claimed unfair dismissal against Newnham Farms Ltd. Despite the
vagueness of her relationship with the company, the tribunal and, then the EAT,
found that she was an employee and as such had been unfairly dismissed. Two key
aspects of employment status (mutuality of obligation and control) were

Despite the loose arrangement, there was mutuality of obligation between Mrs
Powell and the company, as she was under an obligation to carry out her tasks
(however minimal) and, in return, was paid in her own right. Although control
over her was never exercised in any real sense, the mere right to exercise
control, if needed, was sufficient to confirm her status.

Finally, the reasons why she was paid (being in part to reduce her husband’s
tax liability) were irrelevant.

Contractual disciplinary procedures cannot be changed unilaterally
Lee v Bristol City Council, EAT, EACT/236/01 30 October 2002

Following accusations that he had misused council property, Lee was
summarily dismissed.

The contractual disciplinary procedure in force when he took up his post
required an initial investigation by the chief executive and then by an
investigating committee of councillors.

However, in the year prior to Lee’s dismissal, the council introduced a new
disciplinary procedure, removing the involvement of the chief executive and
investigating committee.

Although the council followed the new procedure, Lee did not see the
evidence until well into the disciplinary process. He did, however, object to
the identity of the disciplining officer.

In response to his subsequent claim for unfair dismissal, the tribunal found
that the council’s change of procedure was a breach of contract and could
potentially have affected the decision to dismiss in his case.

However, it also found that Lee was stopped from relying on the old
procedure because he had not sufficiently objected to it either at the time or
during the course of his disciplinary hearing. Lee appealed.

The EAT overturned the tribunal’s finding that Lee had waived the breach of
contract by his conduct.

An employee rarely does so simply by continuing to work, particularly where
the contract variation has no immediate practical application.

Here Lee had at no stage indicated to the council that he waived his rights
and neither had the council relied on any such representation. As a result, the
old procedure should have been applied.

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