30 landmark employment law judgments

Since its first issue on 9 February 1988, Personnel Today has reported on a staggering number of developments in employment case law. Stephen Simpson highlights 30 landmark employment-related judgments during Personnel Today’s lifetime.

1. Employees cannot opt out of TUPE protection

Foreningen af Arbejdsledere i Danmark v Daddy’s Dance Hall A/S (10 February 1988)

The day after the first edition of Personnel Today was published, the European Court of Justice delivered its verdict in this seminal TUPE case.

The ECJ concluded that changes to an employee‘s terms and conditions of employment were void if the only reason for the amendments was a TUPE transfer, and that employees could not agree to opt out of their TUPE rights.

The principle has been eroded to some extent, with an economic, technical or organisational (ETO) reason entailing changes in the workforce now being a valid reason for a variation. However, the principle is still a key one for employers to think about when embarking on the sale or purchase of a business.

2. “But for” test in direct discrimination cases

James v Eastleigh Borough Council (14 June 1990)

This precedent-setting case about admission to a public swimming pool has had a massive impact on how discrimination cases in employment are argued.

The council’s entry policy allowed free swimming for “persons who have reached the state pension age”. A man who had not reached the state pension age claimed direct sex discrimination after he was charged an entry fee to the swimming pool, but his wife, who had reached pension age, was not.

When the case reached the House of Lords, it set out the longstanding test for direct discrimination cases. It asked: “Would the complainant have received the same treatment from the defendant but for his or her sex?” The Lords also emphasised that the alleged perpetrator of direct discrimination will not be saved by the fact that it had an underlying benign motive.

3. No comparator needed in pregnancy discrimination cases

Dekker v Stichting Vormingscentrum voor Jonge Volwassen (VJV-Centrum) Plus (8 November 1990)

In one fell swoop, the ECJ made it easier for women who are discriminated against because of pregnancy to claim direct discrimination.

The ECJ concluded that it was not necessary for a woman to identify a non-pregnant comparator in similar circumstances to demonstrate that she had been discriminated against.

Under the Equality Act 2010, pregnancy or maternity discrimination is defined as “unfavourable treatment”, rather than less favourable treatment. This means that there is no need for a comparison with another person not having a child.

4. No compensation limit in discrimination claims

Marshall v Southampton and South-West Hampshire Area Health Authority (No.2) (2 August 1993)

Until this challenge to the cap on discrimination awards, the amount of compensation that the courts and tribunals could award for discrimination was severely limited.

In a landmark case, the ECJ decided that it was contrary to EU law for member states to place an upper limit on compensation for loss and damage suffered as a result of sex discrimination. In Ms Marshall’s case, her compensation was subject to a limit of £8,500, whereas the tribunal would have awarded her £20,000.

The Sex Discrimination Act 1975 and Race Relations Act 1976 were subsequently amended to remove the cap on discrimination awards. Under the Equality Act 2010, discrimination compensation is currently uncapped.

5. Onus placed on employers to explain unequal pay

Enderby v Frenchay Health Authority and Secretary of State for Health (27 October 1993)

In this leading equal pay case, female speech therapists argued they were paid less for doing work of equal value to male pharmacists and psychologists.

This ECJ decision set a precedent for groups who are arguing that they do work of equal value to another group made up predominantly of workers of the opposite sex.

The ECJ established that, where the statistics are sufficiently compelling to show a disparate impact between the two groups made up largely of different genders, the burden of proof switches to the employer to show that there was a genuine material factor other than sex to explain the difference.

6. Pregnant woman is not the same as a sick man

Webb v EMO Air Cargo (UK) Ltd (14 July 1994)

It is a common scenario in discrimination cases. Shortly after starting work, an employee learns that she is pregnant and informs her employer. She is subsequently dismissed.

This case tackled the misguided argument that a pregnant employee could be treated in this way on the basis that a sick man would have been treated in exactly the same way.

The ECJ held categorically that an employer cannot defend a pregnancy discrimination claim on the basis that a sick man absent for the same amount of time would have been treated in the same way (the “sick man defence”).

7. Dress codes put to the test

Smith v Safeway plc (16 February 1996)

The mid-1990s saw a number of important cases on employers’ dress and appearance policies, including this seminal case.

The employer had a policy that men should have tidy hair no longer than collar length and that no unconventional hairstyles were allowed. However, women could have long hair, provided that it was tied back. When a male employee with a ponytail was dismissed for breaching the policy, he unsuccessfully claimed sex discrimination.

The case established the important principle that differing requirements in a dress code are not necessarily discriminatory, as long as the same rules of smartness or conventionality are applied to men and women.

8. Unfair dismissal qualifying period justified

R v Secretary of State for Employment ex parte Seymour-Smith and Perez (No.2) (17 February 2000)

The length of qualifying service required before an employee is entitled to claim unfair dismissal has always been controversial. In this case, the qualifying period of two years was challenged on the basis that a smaller proportion of women than men could qualify.

The House of Lords accepted that significantly fewer women worked enough to be protected. However, it accepted that, at that point of dismissal (1991), the two-year qualifying period was justified to help to create employment opportunities and to counter any reluctance of employers to take on staff.

The unfair dismissal qualifying period was subsequently reduced to one year from June 1999, but controversially increased again to two years in April 2012.

9. Individuals cannot claim unfair dismissal via civil courts

Johnson v Unisys Ltd (22 March 2001)

The cap on unfair dismissal compensation has sometimes led claimants who have allegedly suffered substantial losses because of the manner of their dismissal to seek recovery via a claim for breach of contract in the normal civil courts, where there is no limit on awards.

The House of Lords in Johnson made it clear that the civil courts could not be used to pursue damages that would otherwise be more suited to an unfair dismissal claim.

The Johnson “exclusion area”, which has saved employers millions of pounds, was reiterated by the Supreme Court in 2011 in Edwards v Chesterfield Royal Hospital NHS Foundation Trust; Botham v Ministry of Defence.

10. Whistleblowing: public interest disclosure can be personal

Parkins v Sodexho Ltd (22 June 2001)

An extra layer of complication was added to whistleblowing laws when the EAT accepted that the disclosure of information concerning a breach of an individual’s own contract of employment could count as a protected disclosure.

This led to employees claiming whistleblowing protection for complaints that were essentially grievances about their own terms and conditions.

The case caused so many problems that whistleblowing laws were changed in June 2013 so that a disclosure is protected only if it is made in the reasonable belief that it is in the public interest.

11. Trade union rights given a boost

Wilson and Palmer v United Kingdom (2 July 2002)

This case provided a boost for UK trade union laws.

The ECHR held that financial incentives to induce employees to give up trade union membership breached their right to freedom of assembly under the European Convention on Human Rights.

As a result of this case, the Trade Union and Labour Relations (Consolidation) Act 1992 was amended to make it unlawful for an employer to take detrimental action against a worker for refusing financial inducements to give up union rights.

12. Level of compensation for injury to feelings

Vento v Chief Constable of West Yorkshire Police (No.2) (20 December 2002)

The Vento bands, which set out the possible awards for injury to feelings in discrimination claims, will be familiar to every employment lawyer in the land.

The bands were originally set in this judgment at £500 to £5,000 (lower band); £5,000 to £15,000 (middle band); and £15,000 to £25,000 (upper band).

Inflation has meant that the bands have since increased to:

• £800 to £8,400 (lower band);
• £8,400 to £25,200 (middle band); and
• £25,200 to £42,000 (upper band).

13. Hypothetical comparator allowed in discrimination claim

Shamoon v Chief Constable of the Royal Ulster Constabulary (27 February 2003)

In direct discrimination cases, the choice of comparator is often a key issue and this House of Lords decision set down some important ground rules.

Here, the employment tribunal attempted to compare a female police officer’s staff appraisal with that of two male police officers who held the same rank as her, but whose circumstances were very different to hers.

In rejecting this approach, the House of Lords stated that:

• the comparator’s circumstances must be the same as, or at least not materially different from, those of the claimant; and
• a hypothetical comparator is permitted in cases where it is not possible to identify an actual comparator.

14. On-call working is “working time”

Landeshauptstadt Kiel v Jaeger (9 September 2003)

This European decision is one of the most important in the raft of case law on what counts as working time.

Here, the ECJ decided that doctors‘ on-call duty, during which they were required to be physically present in the hospital but were permitted to sleep when they were not required, constituted working time.

The ruling has been cited in numerous UK working time cases, including Hughes v Graham and another t/a Graylyns Residential Home, in which a care worker was provided with a flat near her workplace to allow her to be on call seven nights a week. The EAT accepted that she was working when she was on call, regardless of when she was called out.

15. House of Lords widens scope of duty to make reasonable adjustments

Archibald v Fife Council (1 July 2004)

The scope of the duty on employers to make reasonable adjustments for disabled workers really hit home with this case, which involved a road sweeper who became disabled and was unable to continue in that job.

The House of Lords acknowleged that the duty to make reasonable adjustments may require an employer to treat a disabled person more favourably than a non-disabled person, to remove the disadvantage caused by the disability. This includes transferring the employee to a suitable vacant position (here, an office job) to avoid dismissing him or her.

The Lords went as far as to construe the concept of “transferring” the disabled employee to fill an existing vacancy as including promotion, as well as a sideways or downwards move.

16. Unfair dismissal: expired disciplinary warnings not decisive

Diosynth Ltd v Thomson (1 February 2006)

Can employers take into account warnings that have expired when deciding on an appropriate disciplinary penalty? That was the issue in this case of great practical importance for employers.

The Scottish Court of Session accepted that employers should not normally take account of expired warnings when deciding on the disciplinary penalty. Here, the expired warning was fundamental to the decision to dismiss and the dismissal was therefore unfair.

Subsequent case law has distinguished between the circumstances in Diosynth and the situation where dismissal is warranted by the misconduct, but the employee’s previous disciplinary record is taken into account when deciding whether or not a lesser sanction is appropriate (Airbus UK Ltd v Webb).

17. Rolled-up holiday pay unlawful

Robinson-Steele v RD Retail Services Ltd and other cases (16 March 2006)

“Rolling up” holiday pay was once commonplace. This is the practice of arranging holiday pay so that a specific part of a worker’s wages represents holiday pay, meaning that he or she is paid nothing when actually on annual leave.

The ECJ decision in Robinson-Steele was that rolling up holiday pay into wages was unlawful and that workers must receive their normal pay throughout the period of leave.

This case means that employers should not roll up holiday pay, not least because non-payment during annual leave can discourage staff from taking annual leave in the first place.

18. BNP candidate’s dismissal “on racial grounds”

Redfearn v Serco Ltd t/a West Yorkshire Transport Service (25 May 2006)

In July 2005, the EAT delivered one of the most controversial decisions in UK employment law history.

In Redfearn, the EAT suggested that an employee who was dismissed for standing for election for the British National Party (BNP) could claim direct discrimination “on racial grounds” under the Race Relations Act 1976.

The decision raised fears of ludicrous situations where employees who were dismissed for racial harassment could themselves claim race discrimination. These fears were soon allayed when, in May 2006, the Court of Appeal comprehensively dismantled the EAT decision and restored the status quo.

19. Is it reasonable to adjust disabled workers’ sick pay?

O’Hanlon v Commissioners for HM Revenue & Customs (30 March 2007)

This disability discrimination case dealt with an important issue: is it a reasonable adjustment for an employer to continue to pay a disabled worker who has exhausted contractual sick pay?

The Court of Appeal’s answer in this case was a definite “no”. The Court accepted that, unless there were exceptional circumstances, an employer was not obliged to continue paying sick pay to disabled employees whose disability-related sickness absence had exhausted their contractual entitlement to sick pay.

The Court felt that it would not be practical to expect an employer to depart from a sick pay scheme that it applies to everyone, particularly where the employer may have already made other adjustments to help an employee back to work.

20. Annual leave accrual continues during long-term sick leave

Stringer and others v HM Revenue and Customs sub nom Commissioners of Inland Revenue v Ainsworth and others;

Schultz-Hoff v Deutsche Rentenversicherung Bund (21 March 2009)

In Stringer, the ECJ held that the right to paid holiday continues to accrue during sick leave. The Court also said that, on the termination of the employment relationship, a worker who had been on sick leave and unable to take paid annual leave was entitled to a payment in lieu.

A glut of further case law on this followed, including cases in which UK courts and tribunals attempted to apply this ruling to the Working Time Regulations 1998.

In Plumb v Duncan Print Group Ltd, the EAT suggested that an employee who does not take statutory annual leave during sick leave should be able to carry forward the untaken annual leave for up to 18 months from the end of the leave year in which the leave arises.

21. Default retirement age abolished

R (on the application of Age UK) v Secretary of State for Business, Innovation and Skills (25 September 2009)

With the UK population living longer, by the late noughties a key topic of discussion in employment law circles was the default retirement age. Age UK brought a challenge to the traditional notion of a no-questions-asked retirement age, with the challenge culminating in this judgment from the High Court.

While accepting that the UK Government could in principle defend retaining a compulsory retirement age of 65, the High Court said that times had changed and that it could not see the retirement age lasting much longer.

The High Court was right about that and the retirement age was abolished on 1 October 2011.

22. Associative disability discrimination against carers

EBR Attridge Law LLP and another v Coleman (No.2) (30 October 2009)

Before this case, the conventional wisdom in disability discrimination cases was that the claimant always has to be disabled.

Ms Coleman brought a landmark claim that her employer discriminated against her because she was the primary carer for her disabled son. Her case was referred to the ECJ, which held that a non-disabled claimant can potentially claim direct discrimination and harassment under the Equal Treatment Framework Directive.

When Ms Coleman’s case returned to the EAT, it held that UK disability discrimination laws could be read to cover “associative” disability discrimination. The concept was subsequently included in the Equality Act 2010.

23. Sexual orientation vs religious discrimination

Ladele v London Borough of Islington (15 December 2009)

The introduction of civil partnerships in December 2005 was a landmark for LGBT rights in the UK.

However, civil partnerships caused an immediate clash in the employment sphere when some individuals with a strong Christian belief in the sanctity of marriage refused to carry out civil partnership duties.

In Ladele, a Christian registrar claimed religious discrimination after being disciplined for refusing to conduct civil partnership ceremonies between same-sex couples. The Court of Appeal held that her religion was not the cause of any discrimination against because her job required her to provide a non-discriminatory service, which is a stance that other cases have copied since.

24. Right to be accompanied by a lawyer

R (on the application of G) v Governors of X School and Y City Council (29 June 2011)

There was a point in 2010 when employers feared that they would regularly be faced with employees arriving at disciplinary hearings with their lawyers in tow.

In this case, a teaching assistant argued that he should have been allowed legal representation during disciplinary proceedings over allegations of sexual misconduct against a pupil, in view of the possible consequences for his teaching career if the allegation was proven.

While the lower courts agreed with the teaching assistant, the Supreme Court held it was not a breach of his human rights to refuse him the right to be accompanied by a lawyer at a disciplinary hearing.

25. Guidance on employment status

Autoclenz Ltd v Belcher and others ( 27 July 2011)

Although it was an important case at the time, the Supreme Court’s guidance on employment status has taken on added significance in recent years with the glut of gig economy cases.

In Autoclenz, highly detailed contracts issued to car valets asserting that they were self-employed bore no practical resemblance to the reality of the relationship and the Court held that the contracts could be disregarded as a “sham”.

In recent years, Uber, CitySprint and Excel have all been found to have been disguising “workers”, who are entitled to basic rights such as annual leave and the national minimum wage, as self-employed. The tribunals in these cases have followed the lead of the Supreme Court in Autoclenz.

26. ECJ holiday pay decision has major impact for UK employers

Williams v British Airways plc (15 September 2011)

The ECJ ripped up the rule book on calculating holiday pay when it decided that “normal remuneration” during annual leave should include allowances on top of basic pay.

Although involving a dispute over the holiday pay of British Airways pilots who are paid flying allowances as well as basic pay, the decision has had a widespread impact on all UK employers.

UK employers must now include commission, overtime (both voluntary and compulsory) and travel allowances in workers’ paid annual leave.

27. Dress code requirement to cover up Christian cross

Eweida and others v United Kingdom (15 January 2013)

In this long-running case, the issue was whether or not British Airways’ uniform policy that religious items be hidden discriminated against a Christian employee who wore a cross on a necklace.

Although the UK Court of Appeal sided with the employer and rejected Ms Eweida’s claim, the ECHR held that her right to “freedom of thought, conscience and religion” under the European Convention on Human Rights had been breached.

The ECHR judgment makes it very hard for UK employers to justify a workplace ban on the display of religious items on the basis that they do not accord with the employer’s corporate image. A health and safety risk remains the main defensible justification for such a ban (for example, the risk of a necklace getting caught in machinery).

28. Employer cannot veto choice of companion

Toal and another v GB Oils Ltd (22 May 2013)

For a long time, it was accepted that an employer could turn down an employee’s choice of companion in a disciplinary or grievance hearing if it considered the choice to be unsuitable. The “Acas code of practice on disciplinary and grievance procedures” gave the example of choosing a companion from a remote geographical location when someone suitable is available on site.

However, the EAT ruling in Toal fundamentally changed the legal position when it held there was no requirement for an employee’s choice to be reasonable, provided that the companion met the statutory definition (ie a trade union representative or fellow worker).

The decision causes a headache for employers when an employee chooses someone who has previously disrupted proceedings, although in these circumstances the amount of compensation that the employee can receive can be reduced.

29. Regular overtime must be included in holiday pay

Bear Scotland Ltd and others v Fulton and others

Hertel (UK) Ltd v Woods and others

Amec Group Ltd v Law and others [2015] IRLR 15 EAT (4 November 2014)

The EAT in Bear Scotland held that regular compulsory overtime should be included in holiday pay calculations, leading to widespread concern from employers that they could be liable for holiday pay claims dating back years.

Other courts went on to find that holiday pay should also include voluntary overtime (Patterson v Castlereagh Borough Council) and commission (Lock v British Gas Trading Ltd).

To prevent historical holiday pay claims, the law on unlawful deductions from wages has been amended to limit holiday pay claims brought on or after 1 July 2015 to unpaid wages dating back two years.

30. Supreme Court quashes tribunal fees regime

R (on the application of Unison) v Lord Chancellor (26 July 2017)

In our round-up of key decisions of 2017, Personnel Today described the Supreme Court’s demolition of the tribunal fees system as “one of the most important employment law decisions of the last 50 years”.

The Supreme Court agreed wholeheartedly with Unison’s arguments that paying up to £1,200 to bring a claim against an employer was a serious impediment to access to justice.

The Government was forced to cease employment tribunal fees immediately after the judgment and its repayment scheme is well under way.

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