Kaur v M G Rover Group Limited

Sally Logan and Polly Meudell of Addleshaw Goddard bring you comprehensive update on the latest decisions that could affect your organisation and provide advice on what to do about them

 Kaur v M G Rover Group Limited
Terms of employment and collective agreements

In 2003, Kaur, along with 100 other employees, was faced with the threat of compulsory redundancy. She maintained that, in line with the terms of collective agreements which were expressly incorporated into her contract of employment, her employer was not entitled to declare employees of her category and grade compulsorily redundant. The agreements in question were ‘Rover Tomorrow – The New Deal’, which included a job-security provision, and second, ‘The Way Ahead’, which stated that: “There will be no compulsory redundancy”. Her contract of also gave her the option to give notice to terminate her employment for any reason.

Kaur applied to the court for a declaration that both the collective agreements were incorporated into her contract of employment, with the effect that she had a contractual right not to be made compulsorily redundant.

In the High Court, the judge held that the provision relating to job-security in the ‘New Deal’ agreement was no more than an expression of an aim or expectation and so was not incorporated into the individual employee contracts. However, the judge agreed that ‘The Way Ahead’ agreement was incorporated, and had the effect that no compulsory redundancy was the aim of the agreement and it prevailed over the employers’ right to terminate on notice. Kaur, therefore, had a contractual right not to be made compulsorily redundant.

The employer went to the Court of Appeal. Kaur cross-appealed, on the grounds that the job security provision of ‘The New Deal’ was not incorporated in her contract of employment. The Court of Appeal allowed the appeal and dismissed the cross-appeal.

The main thrust of the decision is that even where a document (such as a collective agreement) is expressly incorporated into a contract of employment by general words it is still necessary to consider whether any particular part of that document should actually be a term of the contract. This is particularly so in the case of collective agreements made between employers and trade unions, as there may well be certain provisions in the agreements which are clearly not intended to give rise to legally enforceable contractual rights between the employer and the employee.

There is no general principle of law that notice clauses in contracts of employment are to prevail over other express terms concerned with termination. In all cases it is a matter of construing the individual contract of employment.

In the present case, if a term providing for no compulsory redundancy had been incorporated into the individual contract, MG Rover would have been bound by the term.

What you should do

  • Take care when drafting documents which relate to employment relationships that the contractual status of the document is clear.
  • If documents such as collective agreements contain provisions which have differing contractual status, be careful to differentiate between the different types of terms.

Gallagher and others v Alpha Catering Services Ltd
Working Time Regulations

Under regulation 12(1) of the Working Time Regulations 1998, workers are entitled to take an uninterrupted rest break of at least 20 minutes if their daily working time exceeds six hours, subject to any collective or workforce agreements in force. Workers are entitled to spend such breaks away from their workstations if they have one. There are a number of exceptions to this entitlement, two of which are: where the worker’s activities involve the need for continuity of service or production; and where there is a foreseeable surge in activity. In these cases, workers are entitled to an equivalent period of compensatory rest.

Alpha, an airline catering business, employed shift workers to transport food and equipment from its warehouse to the aircraft. Each team of two workers completed two round trips per shift. The work fluctuated (depending on the number of flights and the weather), was time-pressured and involved intervals of ‘downtime’ during which the workers had no work to do, but required to remain in/near the vehicles and maintain radio contact. Most workers consumed their own refreshments during periods of ‘downtime’ as they had no access to the airport facilities.

Alpha argued that, where the periods of ‘downtime’ lasted in excess of 20 minutes, they qualified as rest breaks. Although the Court of Appeal accepted that the fact that a worker is on call during a particular period is not in itself sufficient to make that period working time, ‘downtime’ could not amount to a rest break as the essence of a rest break is that the worker know at the start of it that he or she has a period free from work to do as he or she pleases.

The Court of Appeal did not accept Alpha’s arguments that the workers were subject to the exemptions from rest breaks outlined above. It held that it is the activities of the worker that require continuity rather than the activities of the employer, ie, there must be enough workers to cover rest breaks if business must continue uninterrupted, and that ‘surges’ in activity only include exceptional levels of activity arising seasonally, or on special days, different to the normal daily and weekly fluctuations which occur.

This decision reminds us that the purpose of the Working Time Regulations is to protect the health and safety of workers and that tribunals are, therefore, likely to interpret the regulations restrictively.

What you should do

  • Check that workers entitled to rest breaks under the working time regulations are able to take uninterrupted periods of at least 20 minutes, during which they are able to leave their workstations and spend their breaks as they choose.
  • Ensure you have sufficient workers to cover for rest breaks.

Brumfitt v Ministry of Defence and another
Sex discrimination and sexual

This is the latest case dealing with the law on sexual harassment.

Brumfitt attended a training course during which her male supervisor directed a substantial number of offensive and obscene remarks at both the female and the male personnel in attendance. Brumfitt brought an internal complaint about the remarks, and when her grievance was not resolved to her satisfaction, she brought a claim of sex discrimination in respect of both the alleged harassment and the way in which her complaint had been investigated.

The employment tribunal acknowledged that the Brumfitt found the language to which she had been exposed ‘offensive and humiliating to her as a woman’ and that women were more likely to be offended by the conduct than men. However, Brumfitt’s complaint was dismissed because she had not been exposed to the conduct because of her sex but rather, like others of both sexes, because she had been required to attend the training course. The Employment Appeal Tribunal (EAT) agreed with this approach.

Although this decision seems like good news for employers, it has been criticised because it does not recognise the fact that even where men and women are treat in the same way, less favourable treatment can result where that treatment is regarded differently by the different sexes. This is because the concept of less favourable treatment involves behaviour and the consequences which the behaviour has on an individual. By way of contrast, the case of Moonsar v Fireways Express (Case Round-up, Employers’ Law, Feb 2005) did acknowledge that certain types of behaviour may be regarded as degrading or offensive by a women, but not a man, and that such behaviour could amount to less favourable treatment which is detrimental.

The good news is, however, is that these issues will be resolved later on this year when a new, freestanding definition of sexual harassment is introduced which does not require a comparison with the treatment of a member of the opposite sex.

What you should do

  • Ensure that staff receive adequate training on equal opportunities policies and are given examples of what sort of behaviour may constitute less favourable treatment/harassment, as this is not always as obvious as it may seem. It is also worth explaining that the motive of the alleged discriminator is irrelevant when deciding whether behaviour constitutes less favourable treatment.
  • All complaints of sex discrimination/sexual harassment should be taken seriously

Brearley v Timber Tailors
Unfair dismissal – e-mail and
internet policies

This case concerned an issue commonly faced by HR managers, namely the enforcement of e-mail and internet policies.

Timber Tailors alleged that, over a period of 15 weeks, Brearley had sent out and received more than 300 personal e-mails (36 of which were sexually explicit or contained bad language) to her female lover while at work. Brearley was subsequently dismissed on grounds of gross misconduct.

Brearley argued that the true reason for her dismissal was that Tailors, which was about to make 38 of its 110 staff redundant, could not afford her redundancy. She also said the e-mails were a private matter between her and her partner and did “no harm to the company” and were none of its business. Tailors contended that the volume of e-mails was excessive, that the content was notably sexually explicit and sometimes offensive and that since she had been sending the ‘offensive’ messages, the standard of Brearley’s work had slipped. The company argued that this behaviour amounted to gross misconduct which warranted dismissal.

The tribunal disagreed, ruling that “the employee had been given no prior warning that her behaviour warranted criticism, and undoubtedly if she had been she would have stopped”. It held that Brearley had been unfairly dismissed and awarded her more than 26,000 in compensation.

This case emphasises the importance of having an e-mail and internet policy which employees are aware of. Issues which such policies should cover include the relevant limits on personal use of e-mail and internet facilities, restrictions on the sending of offensive or obscene material together with an explanation of what constitutes such material, information about the type of monitoring which the employer carries out (if any) and that misuse will constitute misconduct which may result in disciplinary action. If misuse could potentially be considered to be gross misconduct, the disciplinary policy should make that clear. In the absence of such a policy it will be difficult to deal with misuse of e-mail and internet facilities effectively.

Having no policy, failure to follow a policy, unlawful monitoring or breaches of the employee’s rights under the Data Protection Act 1998 are all factors which are likely to influence a tribunal when deciding whether such a dismissal is unfair.

Another point to bear in mind is that workplace policies must be enforced consistently and that all employees should be treated fairly. Had the claimant thought that her dismissal was by reason of her sexuality, she could potentially have brought a claim under the Employment Equality (Sexual Orientation) Regulations 2003. As with all discrimination claims, the compensation which a tribunal can award in respect of a successful complaint brought under the regulations, is unlimited.

What you should do

  • Review your e-mail and internet policy and make sure it complies with relevant legislation.
  • Ensure employees are aware of the policy and that managers are properly trained in handling breaches of the policy.
  • Emphasise to managers the importance of enforcing the policy consistently to avoid the risk of discrimination claims.

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