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Employers Update - June 2012

Welcome to a sunny (at last!) June edition of Employ!

This month we bring you lap dancers, policemen and a government request for your views on abolishing third party harassment liability for employers under the Equality Act 2010.

A final reminder also about the next HR Exchange event on Wednesday 13th June 2012!

It promises to be an action packed session focussing on NLP: Engaging Staff, Busting Stress & Getting The Most from your Team and Yourself.

If you haven’t yet registered, it isn’t too late! Follow this link to download the booking form: www.thehrexchange.co.uk.

We hope to see many of you there.

Kind regards

Will Clayton
Head of Employment

Key Employment Team Contacts:

Will Clayton Elaine Hurn Emma Swan Leanne Eddleston
Will Clayton
Head of Employment
Email Will
0844 8000 263
  Elaine Hurn

Email Elaine
0844 8000 263
  Emma Swan
Senior Associate

Email Emma
0844 8000 263
  Leanne Eddleston

Email Leanne
0844 8000 263



In This Edition:

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Indirect Age Discrimination

The Supreme Court has held that a requirement (in this case to obtain a law degree) which works to the comparative disadvantage of a person approaching compulsory retirement age is indirectly discriminatory on the grounds of age.

In this case, the claimant, a 62 year old Police Inspector turned legal adviser to the Police, was unable to progress to “level three” within the department, and therefore further his career, status and salary, because to do so required a law degree, which he did not have. Whilst it was open for the claimant to complete the degree, he would not have been able to do so before reaching the Police compulsory retirement age of 65 years old.

The Supreme Court held that because a person in the claimant’s age group did not have time to acquire the law degree before retirement, they were put at a disadvantage compared to others in another age group.

The court did not, however, rule on the issue of whether the Police were justified in imposing the requirement to obtain the law degree to fulfil a legitimate aim. This question has therefore been remitted back to the Tribunal for determination.

What do I Need to Know?

Under the Equality Act, indirect age discrimination will occur where an employer applies a provision, criterion or practice (“PCP”) to an employee and that PCP puts the employee, and other persons of that employee’s age or age group, at a particular disadvantage compared to other persons and the employer is unable to justify the PCP as a proportionate means of achieving a legitimate aim.

In short, this means that employers should steer away from blanket policies that are applied to all but which disadvantage particular age groups. In this case, the PCP was the requirement of a law degree, and the disadvantage was the fact that the claimant would not be able to progress further up the career ladder.

With regards to whether the PCP is a proportionate means of achieving a legitimate aim (a question yet to be decided in this case), this essentially means that, if employers do adopt a PCP that appears to discriminate against a particular age group, in order to justify this and not be guilty of indirect discrimination, they must show that there is a real business need (legitimate aim) and that the discrimination is reasonably necessary to achieve that aim (a proportionate means). Note, that in this respect, reducing cost alone will not usually be enough to justify discrimination.

Employment Status: Is a Lap Dancer an Employee?

The Employment Appeal Tribunal has held that a lap dancer at a Stringfellows club was an employee rather than a worker or self-employed.

As you will be aware from previous Employ! updates (most notably the recent Weight Watchers decision reported in our March edition), when considering whether an individual is an employee, the Tribunal will look at three main elements: a) the requirement for personal service, b) mutuality of obligation and c) the degree of control exercised by the employer.

In reaching its decision in this case, the EAT considered that despite the relationship being generally understood to be a self-employed arrangement, the three aspects outlined above had been fulfilled. Amongst other things the EAT considered that:

  • The lap dancer had to attend work in accordance with a rota and in return Stringfellows had to provide her with the opportunity to dance and earn money. This fulfilled the requirement for mutuality of obligation;
  • A form of discipline had been built into the contract; if the lap dancer failed to attend weekly meetings at the club, or was late back from a holiday period she would be fined; and
  • Overall Stringfellows were found to have control over the lap dancer’s activities in relation to her work.

What do I Need to Know?

As with other cases on this topic, it emphasises the need to ensure that the label of the arrangement accurately reflects the reality of the situation. The Tribunal will look behind what the agreement states (e.g. if it is labelled as a “self-employed agreement”) to determine whether an individual is, as a matter of fact, a worker or an employee. This is of course important to establish because employees, and workers, are entitled to greater protections under Employment Law (such as protection from unfair dismissal) than self-employed individuals.

Claims Brought in Tandem:

Overlapping Tribunal and High Court Proceedings

The Court of Appeal has ruled that a pre-action letter sent threatening High Court proceedings does not require corresponding Employment Tribunal proceedings to be stayed.

In 2010, the case of Mindimaxnox LLP v Gover established the principle that where there is a considerable overlap between High Court and Employment Tribunal Proceedings, the Employment Tribunal matter should be stayed pending the outcome of the High Court claim.

In this case, the claimant issued proceedings in the Employment Tribunal and then subsequently issued a pre-action letter to the Respondent in anticipation of a High Court claim in respect of the same matters. The claimant did not, however, actually issue a claim in the High Court.

The Respondent applied for the Employment Tribunal proceedings to be stayed as a result of the threatened High Court proceedings and in accordance with the Mindimaxnox principle (as above). The Claimant initially agreed to the stay, which was granted, but then subsequently changed his mind as a result of needing the financial award that he might be awarded upon the successful Tribunal claim to fund the High Court case.

The Court of Appeal held that the stay should be lifted in accordance with the Claimant’s request. In this particular case, no High Court proceedings had yet been issued – only a pre-action letter had been sent. Therefore, there were not any concurrent proceedings and the Mindimaxnox principle did not apply to those circumstances.

What do I Need to Know?

The Court of Appeal’s rationale was that it was wrong to deprive the claimant of his statutory right to pursue a claim in the Employment Tribunal simply because he had indicated in pre-action correspondence that he may also have claims in the High Court.

The court further established that even if the claimant had originally agreed to the stay, he was entitled to subsequently change his mind and did not need to justify his reasons for doing so.

Government Consulting on Third Party Harassment Obligations on Employers

Under the Equality Act 2010, an employer can be liable for harassment of an employee by a third party, such as a customer or visitor, if the employer has failed to take such steps as are reasonably practicable to prevent the harassment and if they are aware that the employee has been harassed in the course of their employment by a third party on at least two other occasions.

On 15 May 2012, the government launched a consultation proposing to repeal this section of the Equality Act in order to remove the burden of this obligation on employers. The Government are therefore asking for the views and opinions of employers, employer organisations and individuals on this proposal.

The rationale behind this proposal includes the following:

  • That the liability imposed on employers under this section of the Equality Act is overly burdensome given that it effectively holds an employer liable for acts of a party beyond its control;
  • The government states that there has been only one case of this type of third party harassment in the Tribunal so far, and therefore the legislation is not achieving any legitimate aim and is simply a further example of unnecessary regulation on businesses who are already finding it tough in the current economic climate.
  • It is considered that employees who suffer treatment caught by this section do have alternative avenues of redress, such as under the more general harassment provisions of the Equality Act, through the Protection from Harassment Act and by claiming constructive dismissal if the employer is breach of their duty of care or of mandatory Health and Safety legislation.
  • The proposal fits as part of the government’s overall “Plan for Growth” to remove unnecessary red-tape and the burden of costs and regulation on businesses, particularly small business, which it believes is hampering the growth of our economy.

The consultation is due to close on 7 August 2012 and therefore views are requested before that date. If you wish to contribute, details of the consultation can be found via this link:

Your Questions Answered

Q: We recently disciplined an employee for persistent lateness. Following an investigation and disciplinary hearing, he received a written warning. He has now committed a further act of misconduct, this time it was an incident involving him swearing at another employee. Can we rely on the previous warning given for lateness to move this employee to the next stage of our disciplinary procedure?

Usually the next stage in an employer’s disciplinary procedure following a written warning for behaviour would be a final written warning and then, beyond that, dismissal. The ACAS Code states that “a further act of misconduct or failure to improve performance within a set period of a warning would normally result in a final written warning”. The Code does not, therefore, dictate that an employee cannot progress down the disciplinary route for differing types of misconduct.

However, whether you can rely on the previous written warning given for lateness to issue a final written warning for this new misconduct issue will depend how widely the first written warning was drafted. If the first warning made clear that any other instances of misconduct during the live period of the warning would result in further disciplinary action being taken, then you should be able to progress to the next stage (once the matter has been fully investigated – see below).

If however, the written warning was drafted narrowly, stating that the next stage in disciplinary action would be taken only if further instances of lateness occurred within the relevant period, then it is likely that you will have to start back at the beginning of the procedure for this new misconduct issue.

In any event it is imperative that a full investigation is carried out into all allegations of misconduct, of whatever nature, and that a full disciplinary process is carried out, including a hearing being held, before any disciplinary sanction is imposed. This is true whether or not you are relying on a previous written warning to move to the next stage.

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