Courts of Appeal conflict over definition of detriment

Two apparently Contradictory judgements address whether treatment must have
any material consequences to constitute a detriment under discrimination law.
Plus, cases on Tupe, termination payments and unfair dismissal for misconduct
unrelated to employment

Detrimental treatment must have adverse consequences
Shamoon v Chief Constable of Royal Ulster Constabulary

Shamoon, a chief inspector, was deputy head of a division within the traffic
branch of the RUC and reported to a superintendent. Along with other chief
inspectors she carried out staff appraisals, even though the RUC’s scheme
provided appraisals would normally be completed by a superintendent.

Two constables were appraised by Shamoon and complained about her methods.
The substance of one of the complaints was upheld. The other constable took his
complaint to the Police Federation.

The superintendent decided he would carry out future appraisals himself but
if he were unavailable Shamoon would do the appraisal. However, the other chief
inspectors continued to carry out appraisals as before. Shamoon successfully
claimed sex discrimination on the basis that removing her right to carry out
appraisals was a detriment.

The RUC successfully appealed to the Northern Ireland CA. There had to be
some material and substantial physical or economic consequence arising from the
discrimination to constitute a detriment. Shamoon had no contractual right to
carry out appraisals. Shamoon had not been treated less favourably than any
other chief inspector in the same circumstances: the reason for her treatment
was the constables’ complaints, not Shamoon’s sex.

Detriment occurred even though no material disadvantage
Garry v London Borough of Ealing
Unreported, July 2001, CA

In 1996 the borough discovered that its housing benefits manager, Garry, a
Nigerian, had been investigated for housing benefit fraud in her previous job.
In March 1997 it launched its own investigation, appointing a special senior
investigator, although Garry was unaware of this until May 1997. By August the
investigator’s superiors concluded there was insufficient evidence to justify
disciplinary action, but failed to tell anyone and the investigation continued.
A year later Garry inquired about the investigation’s progress and was told no
further action would be taken.

Garry’s claim for race discrimination was successful. The tribunal found she
had been treated less favourably on the grounds of her race and there had been
a stereotypical assumption that Nigerians were likely to be involved in benefit
fraud. Garry’s lack of awareness of the continuation of the investigation after
August 1997 was a detriment.

The borough successfully appealed to the EAT which held that as Garry had
not been disadvantaged in her employment there was no detriment.

Garry successfully appealed to the Court of Appeal. She had clearly suffered
a detriment, regardless of whether she was aware of the investigation; the
investigation continued longer than necessary because of her race and her
colleagues were likely to be aware of it.

Tupe – failure to consult
(1) James McKinnon, JR (Haulage) Limited ("Mackinnon") (2)
John Maitland & Sons ("Maitland") (3) Bibby Distribution Services
("Bibby") v TGWU
Unreported, EAT (Scotland), July 2001

Mackinnon’s contract with a third party for the delivery of milk transferred
to Maitland and Bibby and the Tupe regulations applied. Contrary to regulation
10, however, McKinnon failed to inform and consult with its employees about the
transfer, a number of whom then claimed compensation.

At the tribunal, McKinnon argued that regulation 5 operated to transfer all
of its liabilities, including its liability to pay compensation for failing to
inform and consult, to Maitland and Bibby. The tribunal disagreed. Since
liability for McKinnon’s failure to inform and consult arose under the
regulations themselves rather than otherwise in connection with the contract of
employment, liability did not transfer.

The TGWU’s appeal to the EAT was unsuccessful. The EAT agreed with the
distinction between liabilities arising under the regulations themselves and
other employment-related liabilities. If liability for failure to inform and
consult transferred, there would be no incentive for transferors to comply with
the obligation to inform and consult.

Pre-transfer dismissal was fair
Thompson v SCS Consulting and others
Unreported, September 2001 EAT

In December 1998, receivers were appointed to SCS and having taken into
account its financial difficulties concluded all the employees would have to be
dismissed. Open Text wanted to purchase SCS and it was agreed the dismissals
would be deferred until 29 December to give Open Text time to identify which
employees should be retained. The remaining employees would be dismissed by the
receivers (a pre-condition of the sale). Thompson was dismissed and 11 hours
later SCS transferred to Open Text.

Thompson claimed his dismissal was connected with the transfer and was
automatically unfair under Tupe rules. The tribunal disagreed and held he had
been dismissed for an economic, technical or organisational reason. The EAT
upheld this decision.

The tribunal found SCS was overstaffed and insolvent and the workforce had
to be cut to make it viable. It agreed any liability for dismissal would not
have been transferred because Thompson was not employed "immediately
before the transfer".

Care needed when assessing compensation
Olakotan v Dr Iqbal
Unreported, June 2001, EAT

Olakotan, a practice nurse, began a university course for which she needed
Iqbal’s permission. She misled him as to her eligibility for the course and the
likelihood of funding, and when it became clear Olakotan was ineligible she was
asked to leave the course. Iqbal discovered the deception and dismissed her.

Olakotan successfully claimed unfair dismissal because Iqbal had not
followed a fair procedure. But the tribunal found evidence of a history of
misconduct and that the deception was "the last straw".

The tribunal held that a fair procedure would have made no difference to the
decision to dismiss and awarded Olakotan two weeks’ pay, £970, which was the
time it would have taken to follow a fair procedure. It also held that Olakotan
had contributed to her dismissal to a "substantial extent".

Olakotan successfully appealed the issue of quantum. The EAT found that the
tribunal had failed to identify clearly how compensation had been assessed.

The apparent 100 per cent reduction for contributory fault was inconsistent
with the finding that Olakotan had contributed to her dismissal to a
"substantial" extent. Moreover the tribunal had failed to clarify
what specific element of misconduct had been taken into account in the
assessment of Olakotan’s contributory fault

Beware when negotiating exit agreements
Richardson (Inspector of Taxes) v Delaney
IDS Brief 691, High Court

Delaney’s employment was terminable by either party on 18 months’ notice,
although the company had a discretion to terminate with immediate effect by
making a payment in lieu of notice.

In December, rather than paying under the Pilon, the company gave Delaney
written notice of termination. At the same time it proposed settlement terms
which provided for termination by mutual consent that month on the basis that
Delaney would receive a compensation payment for loss of office of £68,001 less
tax, plus company car.

Delaney rejected the terms but pursued negotiations. Eventually an increased
payment of £75,000 plus the car was agreed and Delaney’s employment terminated
on 28 December.

The High Court held that as the negotiations led to a consensual termination
there was no breach of contract. The payment was therefore an emolument of
employment and taxable in full.

The effect should be noted of this case on all settlements negotiated before
employment terminates.

Bringing the employer into disrepute
The Post Office v Liddiard
IDS Brief 690, CA

Liddiard was a postman convicted of assaulting a French police officer
during the 1998 World Cup. He was subsequently identified by a national
newspaper’s "name and shame" campaign and dismissed for bringing the
Post Office into disrepute.

Liddiard successfully claimed unfair dismissal. The tribunal found that
Liddiard had an excellent employment record and the misconduct was unrelated to
his employment. Also, the Post Office had ignored his claims of innocence and
the decision to dismiss had been influenced by the adverse press coverage. The
EAT upheld the decision.

The Post Office successfully appealed to the Court of Appeal, which remitted
the matter back to the tribunal. The Post Office had been brought into
disrepute because of the press coverage, which was a direct consequence of
Liddiard’s conduct.

It was reasonable for the Post Office to rely on the conviction by the
French court. The correct question was whether, given the press coverage, the
Post Office had acted reasonably in treating his conduct as grounds for

Payment in lieu of holiday pay on termination
Witley and District Men’s Club v Mackay
IDS Brief 690, EAT

Mackay, a club steward since 1989 was summarily dismissed in April 1999 for
theft. At that time he had 26 days’ accrued, but untaken, holiday. A collective
agreement incorporated into Mackay’s contract stated that employees dismissed
for gross misconduct were not entitled to pay in lieu of accrued but untaken
holiday and consequently the club withheld payment.

Mackay successfully claimed breach of the Working Time Regulations 1998,
which provide that a payment in lieu of accrued but untaken holiday must be
made on termination. The club was ordered to pay £1,100 holiday pay.

On appeal the club argued that the collective agreement was a
"relevant" agreement within the meaning of the regulations which
could limit the operation of the regulations by providing that where
termination is for gross misconduct no payment in lieu of accrued, but untaken,
holiday will be made. The EAT disagreed. It was not intended that the
regulations would enable employers to make "no payment" in these

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