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March/April 2010

Welcome to the April 2010 issue of the CLO Employment Update. This month, we have case law on disability related discrimination where an employee was dismissed for misconduct and the first reported ET judgement on carry-over of unused holiday where the employee has been unable to take the holiday due to sickness.

For further information on any of these legal developments or employment law advice, telephone 0131 275 7833 or email a member of the CLO Employment Team: Murdo Macleod, Hazel Craik, Norma Shippin, Rhidian Davies or Chris Reeve.

If you have any queries about our programme of seminars, or would like to discuss your organisation’s individual needs in relation to training, please contact your own employment team contact, or, if unavailable, Murdo Macleod, the team leader.

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All contents of this email update are for information only and are not to be construed as legal advice and should not be treated as a substitute for specific advice.

 

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Disability Related Discrimination

 

Rejection of disability-related explanation for misconduct did not make dismissal discriminatory (but in this case did make it unfair) …
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Annual leave entitlement

 

Tribunal finds holiday during sickness could be carried over to next year …
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Disability Related Discrimination

 

In The City of Edinburgh Council v Dickson the EAT upheld a tribunal's finding that a diabetic employee's dismissal for gross misconduct was unfair because the decision-taker had refused to engage with, or properly investigate, the employee's defence that his conduct resulted from a hypoglycaemic episode.

However, the EAT overturned the tribunal's findings on disability discrimination. The fact that the employee's explanation related to his disability did not mean that the council's conduct in rejecting that explanation was on the grounds of his disability or for a reason related to it.

Legal Background
A person (A) directly discriminates against a disabled person (B) if, on the ground of B's disability, they treat B less favourably than they treat or would treat a comparator not having that particular disability whose relevant circumstances, including abilities, are the same as, or not materially different from, those of B.

A also discriminates against B if, for a reason related to B's disability, A treats B less favourably than A treats or would treat someone to whom that reason does not apply, and A cannot show that the treatment is justified. This has become known as "disability-related discrimination".

The scope of disability-related discrimination has been drastically narrowed by the House of Lords' decision in the housing case, Mayor and Burgesses of the London Borough of Lewisham v Malcolm [2008] UKHL 43.  Following these authorities, a "narrow" comparator approach now applies to disability-related employment claims, which makes them barely distinguishable from direct disability discrimination claims.

In the case reported below, the EAT considered whether the employer's decision to dismiss amounted to direct disability discrimination or disability-related discrimination.
 
Facts of the case
Mr Dickson, who suffers from type 1 (or insulin-dependent) diabetes, was employed by Edinburgh City Council (the council) as a community learning and development worker based in the community wing of a high school.

On 6 June 2007, Mr Dickson was seen viewing images of a "seriously pornographic" nature on a computer in the community wing. A disciplinary hearing was convened on 28 February 2008 at which he explained that, although he had no recollection of the incident, his out-of-character behaviour must have resulted from a hypoglycaemic episode. At the time of the incident his diabetes was poorly controlled due to a mis-prescription of the wrong strength of insulin.

The council's Neighbourhood Manager did not accept that explanation, believing that Mr Dickson's conduct was conscious and deliberate. Mr Dickson was summarily dismissed with immediate effect and his subsequent appeal against the dismissal was unsuccessful.

Mr Dickson brought proceedings in the employment tribunal claiming both unfair dismissal and disability discrimination. The tribunal found that Mr Dickson had been unfairly dismissed, essentially because the council had made no real attempt to investigate or understand Mr Dickson's defence that his conduct was due to his medical condition. It made a reinstatement order on the basis that it would be practicable for the council to comply with such an order and Mr Dickson had not caused or contributed to his dismissal.

The tribunal also held that Mr Dickson's dismissal constituted direct disability discrimination and that if it was wrong in that, it would have found it to have constituted disability-related discrimination.

The council appealed against the unfair dismissal and disability discrimination decisions and against the order for reinstatement.
 
EAT Decision
The EAT dismissed the appeals against the tribunal's finding of unfair dismissal and the order for reinstatement, but allowed the appeal against the finding of disability discrimination.

Unfair dismissal claim
The EAT decided that the  tribunal was entitled on the evidence to find that the council had failed to satisfy the three elements of the Burchell test.  Although it believed Mr Dickson was guilty of the alleged misconduct, it did not have reasonable grounds for that belief because the Neighbourhood Manager simply refused to "engage with" Mr Dickson's defence. The council had also carried out an inadequate investigation, choosing to take into account an uninformed opinion from a third party (that hypoglycaemia could not explain Mr Dickson's behaviour) rather than properly investigating the possible consequences of Mr Dickson's condition with qualified doctors.

The tribunal was also entitled to conclude that a fair investigation would probably have held that Mr Dickson was not responsible for his actions on the occasion in question.

Direct disability discrimination claim
The tribunal found that a hypothetical comparator who offered an explanation that was not based on their disability would have been treated more favourably, in that the "non-disability explanation" would have been investigated.

The EAT concluded that, in concentrating on identifying the correct comparator rather than whether the treatment was on grounds of disability ("the reason why question"), the tribunal had reached the wrong result.

The "reason why question" involves the tribunal looking at what was influencing the mind of the decision-taker to determine whether the disability formed part of the reason for the less favourable treatment.  There was no reason to suppose that the fact that Mr Dickson was a diabetic influenced the Neighbourhood Manager's thinking at all. The tribunal had wrongly concluded that because the explanation which the decision-taker rejected was a "disability explanation", it followed that the rejection of the explanation was on the ground of that disability.

The tribunal had also failed to build into its description of the hypothetical comparator the feature that their defence - that is, of some non-disability-related automatism - was also one which the council "failed to understand".

Disability-related discrimination claim
The approach to determining the reason for the treatment is the same as that in direct discrimination cases.  The tribunal misunderstood the principles in Taylor v OCS.  The question is why the claimant's explanation was rejected. There was no reason to suppose that the council did so because Mr Dickson was diabetic. The fact that an employee's disability is "part of the story" (and so played a causative role) does not mean that it formed part of what motivated the decision-taker. In this case, the fact that Mr Dickson's explanation was based on his disability, did not mean that the ground on which the council rejected the explanation was itself "disability-related".

The tribunal had also erred in finding that if it was wrong about the direct disability discrimination claim, it would have found in Mr Dickson's favour on the basis of disability-related discrimination. As noted by Mr Justice Underhill P, this was no longer possible since Malcolm: "On the present state of the authority, the two ways of putting the case stand or fall together".
 
Comment
The EAT's decision on disability discrimination is not surprising and is consistent with the Court of Appeal's decision in Taylor v OCS where a profoundly deaf employee unsuccessfully argued that he was dismissed for a disability-related reason because he had been unable to explain himself properly at his disciplinary hearing. While the court agreed that this might be the case, it found that the employer did not have Mr Taylor's inability to explain his conduct on account of his deafness in mind when it dismissed him.

 

 

Further resources and Information
City of Edinburgh Council v Dickson

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Annual leave entitlement

 


In Shah v First West Yorkshire Limited an employment tribunal held that an employee whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry over that leave entitlement to the following holiday year.

In reaching this decision, the tribunal interpreted the Working Time Regulations 1998 in line with the EC Working Time Directive by reading into regulation 13(9) (the provision preventing carrying over of statutory holiday) words allowing holiday to be carried over to a subsequent holiday year if it coincided with sickness absence. This is the first tribunal decision giving effect to the ECJ's decision in Pereda v Madrid Movilidad SA.

Legal background
Article 7 of the EC Working Time Directive provides that member states must "ensure that every worker is entitled to paid annual leave of at least four weeks in accordance with the conditions for entitlement to, and granting of, such leave laid down by national legislation and/or practice".

These provisions are implemented in Great Britain by regulations 13 to 16 of the Working Time Regulations 1998 (WTR), which give workers the right to 5.6 weeks leave per year. At least four weeks of that leave can only be taken in the leave year to which it relates. A relevant agreement may provide for the carry over of all or any of the remaining leave.
 
The right to annual leave during long-term sickness absence
In the conjoined cases of Stringer and others v HM Revenue & Customs; Schultz-Hoff v Deutsche Rentenversicherung the ECJ ruled on the effect of long-term sick leave on a worker's right to annual leave under the Directive.
 
The European Court of Justice (ECJ) confirmed that a worker on sick leave accrues annual leave despite not working, but held that it is for member states to decide whether a worker can take their annual leave during a period of sick leave. A worker on sick leave who has been unable to take annual leave must be allowed to take it following their return to work, even if this means carrying it over to another year.

In Pereda v Madrid Movillad SA the ECJ made it clear that a worker who is incapacitated during a period of previously-scheduled statutory holiday should, as far as the Directive is concerned, have the right to reschedule the holiday to a later date. Moreover, if the worker remains sick until the end of the relevant leave year, the Directive requires him to be allowed to reschedule that holiday in the next leave year.

Interpreting domestic legislation in line with a directive
Under the principle of indirect effect, a national court is required to interpret national law, "so far as possible, in the light of the wording and purpose of [a relevant EC directive] in order to achieve the result pursued by [the directive]".

In EBR Attridge Law LLP and another v Coleman No (2) the EAT considered the circumstances in which a court or tribunal can find it "possible" to interpret domestic law in line with a directive. In Coleman the EAT concluded that there was nothing "impossible" about adding words to the provisions of the Disability Discrimination Act 1995 (DDA) so as to cover associative discrimination. Although such an addition would change the meaning of the DDA, this did not make it impermissible as the real question was whether the new meaning was compatible with the "underlying thrust" or "scheme" of the domestic legislation.
 
Facts
Mr Shah booked four weeks' holiday from 22 February to 21 March 2009. As he worked three days a week, this accounted for 12 days of his annual holiday entitlement. The relevant holiday year under his contract of employment ran from 1 April to 31 March.

In January 2009 Mr Shah broke his ankle and was absent from work between 15 January to 18 April 2009. His sickness absence, therefore, overlapped with his booked period of holiday. However, during this absence he received contractual sick pay and was also paid holiday pay, at a higher rate, for the twelve days leave he had booked.

On 4 April 2009 he wrote to his employer, First West Yorkshire Limited (FWYL), asking to reclaim his 12 days' holiday. FWYL responded on 21 May that the holiday could not be reclaimed as it related to a previous holiday year and had therefore been "lost".

On 16 September 2009 Mr Shah submitted a claim for loss of holiday under the WTR and unlawful deduction from wages under section 13 of the Employment Rights Act 1996. FWYL argued that:

  • The tribunal had no jurisdiction to hear Mr Shah's claim because it had been submitted more than three months after the date on which the holiday should have been taken and was therefore out of time.
  • Regulation 13(9) of the WTR requires leave to be taken in the current holiday year only.

Decision
The tribunal upheld Mr Shah's claim. It made a declaration (under regulation 30 of the WTR) that FWYL had refused to permit Mr Shah to exercise his rights under the WTR by refusing him to take his accrued holiday in the following holiday year when he was prevented from taking it in the current leave year.

The tribunal noted that Mr Shah's primary claim was for his lost holiday entitlement, rather than unlawful deductions from wages. In any event, Mr Shah accepted that if he was successful in carrying over the 12 days' holiday to the next holiday year, he may be required to repay the corresponding holiday pay received during his sick leave.

The tribunal held:

  • It was clear, following the ECJ's decision in Pereda, that in order to comply with the Directive, national law must permit an employee who falls sick during a period of annual leave to take that annual leave subsequently, within the current holiday year, or if time does not permit, within the following leave year.
  • If it was not permissible to construe regulation 13(9) of the WTR in such a way, Mr Shah would be left with a claim against the Government for its failure to implement the Directive properly. This would be an inadequate remedy for Mr Shah as, at most, it might financially compensate him but it would not require FWYL to permit him to carry over his leave.
  • The primary health and safety purpose of regulation 13(9) is to give workers paid periods of holiday regularly throughout the year and prevent them from storing it up or taking lengthy periods of extended leave. It is entirely consistent with that primary purpose for workers who have fallen ill and have consequently been unable to take their leisure, to be allowed to take their leave, if necessary, in the following year, as Pereda requires.
  • It was entirely consistent with "the underlying thrust" of the WTR to add words to regulation 13(9) to cover the "limited and special situation" dealt with in Pereda.

The tribunal therefore construed the WTR by adding the words set out below.  Read this way, Mr Shah was entitled to take the holidays which he was prevented by ill-health from taking in March 2009 at some subsequent time in the following leave year.

Words added to the end of regulation 13(9) of the WTR by the tribunal

"Save where a worker has been prevented by illness from taking a period of holiday leave, and returns from sick leave, covering that period of holiday leave, with insufficient time to take that holiday leave within the relevant leave year; in which case, they must be given the opportunity of taking that holiday leave in the following leave year".
 
Comment
Following Pereda, employment practitioners and commentators anticipated whether (and, if so, to what extent) tribunals would be prepared to give the WTR a purposive interpretation consistent with that decision. This is the first case in which a tribunal has given effect to Pereda. As Mr Shah's position was "essentially the same" as Mr Pereda's (as acknowledged by the tribunal), it would have been surprising if the tribunal had not considered itself bound to follow Pereda.

In interpreting the WTR, the tribunal adopted the same approach as the EAT in Coleman.  As the strict language of regulation 13(9) of the WTR itself makes it impossible to give the WTR a purposive interpretation in line with Pereda, the tribunal read in additional words. However, while the EAT's interpretation of the DDA in Coleman is binding on tribunals and the EAT, the tribunal's interpretation of the WTR in Shah is not. Nevertheless, in light of the incompatibility between regulation 13(9) and the Directive (as reinforced by Pereda), it seems likely that tribunals will apply this decision.

 

 

Further resources and Information

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