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Employment Law, Why Join Content

Employment Law Cases

Case 1 – Procedure in Dismissal

Edip Adanir had worked for the Ritz Hotel in London for over seven years when, in April 2003, he was sacked for gross misconduct.  The hotel’s deputy restaurant manager was dismissed after conspiring to steal up to £7,000 in fine wine and £300 in food from the restaurant, where his friends dined for free or at a huge discount, in December 2002.  Originally from Turkey, Mr Adanir claimed race discrimination and unfair dismissal.

The hearing ruled he was not sacked for racial reasons.  Instead it accepted the Ritz's claim that Mr Adanir was sacked for gross misconduct.  However, they also ruled that Mr Adinar had been treated unfairly by the hotel and, as the hotel had failed to follow correct procedure in terminating Mr Adinar’s contract, ruled that they had acted contrary to best practice (and since October 2004, law) and granted Mr Adinar £6,265 compensation.

Case 2 - Enhanced Redundancy Payments

Mr Keeley was employed by Fosroc International.  His contract of employment referred to Fosroc's staff handbook, which contained a section stating: "Those employees with two or more years' continuous service are entitled to receive an enhanced redundancy payment from the company... Details will be discussed during both collective and individual consultation."

Keeley was made redundant, but did not receive an enhanced redundancy payment, so he brought a claim for breach of contract.

The High Court judge noted that, although the handbook referred to employees being "entitled" to a redundancy payment, the whole provision took its "colour" from the context in which it appeared.  In his view, the provision was "marooned" among other provisions that were aspirational or procedural, and therefore obviously non-contractual.  He, therefore, concluded that Keeley did not have a contractual right to an enhanced redundancy payment.  Keeley appealed

The Court of Appeal, overturning a High Court decision, has held that a provision for an enhanced redundancy payment in a staff handbook was incorporated into an employment contract, therefore entitling the employee to the payment. The High Court had decided that although the handbook referred to employees being entitled to the payment the provision was located among others which were aspirational or procedural and therefore non-contractual. The CA concluded that the use of the word entitled in the clause which said 'Those employees with two or more years' continuous service are entitled to receive an enhanced redundancy payment from the company...' meant it was appropriate to regard the payment as contractual.  It was irrelevant that the provisions among which it appeared were non-contractual.  Also, redundancy provisions are a widely accepted part of an employee’s pay package and were therefore particularly apt for incorporation into the employment contract.

This case confirms the long standing position that employers should be very careful to specify in company handbooks which sections are intended to have contractual effect, and which are merely aspirational expressions of policy.

Case 3 - Disability Discrimination

Mrs O’Hanlon suffered from clinical depression which amounted to a disability under the Disability Discrimination Act 1995 (DDA).  Over four years she had 365 days off sick, 320 relating to her disability.  The HMRC sick pay policy provided that full pay would be provided for up to six months absence in any 12 months, and half pay for up to a further six months, subject to an overriding maximum of 12 months paid leave in any four year period.  Mrs O’Hanlon brought a claim of disability discrimination arguing that she was substantially disadvantaged by the policy compared with a non-disabled employee and that the HMRC had not made reasonable adjustments to its policy to allow her to receive full pay while off sick.  She also claimed that she had been subject to disability-related discrimination since her absence was related to her disability and the failure to continue paying her was unjustified.

The Employment Appeals Tribunal (EAT) decided that whilst technically there may be discrimination on the grounds of disability as a result of the reduced sick pay there were powerful economic reasons to justify the sick pay policy adopted.  It would have cost HMRC a very significant sum (estimated to be in the region of £6 million per annum) to pay full pay to all disabled employees for their entire period of absence.

The EAT also considered that only very rarely would an employer be expected, as a reasonable adjustment under the DDA, to give a disabled employee more sick pay than a non-disabled employee.  The purpose of the DDA was to enable disabled people to participate in the work place and not be treated as ‘objects of charity’.

Employers who reduce pay caused by sickness absence therefore, may be committing discrimination related to disability, however, it may be justified on grounds of expense, only as long as someone not suffering from a disability would be treated the same i.e. have their pay reduced.

© 2013 Moorepay Compliance Ltd (No. 03056267) is authorised and regulated by The Financial Conduct Authority for general insurance business.

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