On appeal

first_img Comments are closed. Related posts:No related photos. Previous Article Next Article Continuingour regular series on the implications of recent significant cases. GarethBrahams, senior solicitor at Lewis Silkin, looks at the issuesEmploymenttribunals are usually anxious to prevent employers relying on technicalities toavoid liability for mistreating their staff. However, three recent decisions onappeal suggest the ‘technical ruse’ is alive and well. Nodiscrimination in appointing personal acquaintance Coker and Osamor v Lord Chancellor and another – Court of Appeal [2002]IRLR 31 TheCourt of Appeal has upheld the EAT’s decision that the Lord Chancellor was notin breach of the Sex Discrimination or Race Relations Acts when he appointed aperson personally known to him, Garry Hart, as his special adviser, without advertisingthe post. Thecase turned on whether it could be said that the application of a requirementthat an applicant should be personally known to the Lord Chancellor could besaid to have a disproportionate effect on persons of one sex or racial group. TheCourt said the test for indirect discrimination focused on the effect of therequirement in question on the ‘pool’ of potential candidates. There could onlybe a discriminatory effect if a significant proportion of the pool was able tosatisfy the condition. Only in that situation would it be possible for therequirement to have a disproportionate effect on the men and the women, or theracial groups, that formed the pool. Itfollowed, said the Court, that where the requirement excluded almost the wholepool, it could not constitute indirect discrimination. TheCourt concluded that making an appointment from within a circle of family,friends and personal acquaintances is unlikely to constitute indirectdiscrimination, because the people known to the employer are likely torepresent a tiny proportion of those who would otherwise be qualified to fillthe post. The requirement of personal knowledge “will exclude the vastproportion of the pool, be they men, women, white or another racial group”.However,the Court did expressly accept that recruitment exercises conducted by word ofmouth, personal recommendation or other informal recruitment methods may wellconstitute indirect sex or race discrimination. Hourlyrate can incorporate holiday pay Blackburn and others v Gridquest Ltd t/a Select Employment and others –EAT IDS Brief 702 p12 Blackburnand others were employed by agencies and supplied to work for Ford MotorCompany. They claimed they had not received their entitlement to holiday payunder the Working Time Regulations 1998. Theemployers contended that the employees’ hourly pay was at a ‘rolled-up’ ratethat included payment for holidays and sickness, and the holiday pay elementshould go towards discharging their liability under the Regulations. However,the employment tribunal upheld the employees’ claim, stressing that none ofthem had been told their hourly rate included holiday pay. Accordingly, theywere entitled to additional holiday pay under the Regulations. TheEAT allowed the employers’ appeal. It said that if the employees’ remunerationincluded an element of holiday pay, that element should be ‘stripped out’ andthe employer given credit for it. TheEAT sent the case back to the tribunal to determine whether each employee’s paywas calculated on the basis that it did include an element representing holidaypay. Ifso, the holiday-pay element of the rolled-up rate had to be set against thenumber of weeks’ paid annual leave to which a worker was entitled under theRegulations. Workerwith personal services company not an ’employee’ Hewlett Packard Ltd v O’Murphy – EAT [2002] IRLR 4 O’Murphywas a computer specialist who set up his own private limited company, CircleTechnology, as a vehicle for providing his services. In 1994, Circle enteredinto a contract with an employment agency, Eaglecliff, which then suppliedO’Murphy’s services to Hewlett Packard (HP). Thisarrangement lasted for six years until HP decided O’Murphy was no longercapable of efficiently carrying out his work. It terminated his assignment withimmediate effect. O’Murphy claimed unfair dismissal, and an employment tribunaldecided HP was the correct respondent to the complaint as he had been itsemployee from 1994 to 2000. AlthoughO’Murphy had been paid through Eaglecliff and Circle Technology, the tribunalwas influenced by the fact that he was under HP’s control in respect ofperformance and discipline, and was largely integrated into its workforce. TheEAT allowed HP’s appeal, holding that the tribunal ought to have focused onwhether there was a contract between O’Murphy and HP. According to the EAT, anindividual who hires his services through an agency to a third party cannot bethe third party’s employee unless there is a contractual relationship betweenthem. TheEAT concluded there was “no contractual nexus” between O’Murphy andHP because he had been assigned to work at HP’s premises by Eaglecliff whichhad, in turn, engaged O’Murphy’s services through a contract with CircleTechnology rather than directly with him. Thisruling has implications for professionals falling within the scope of the IR35rules on taxation of personal service companies. Under IR35, an individualworking through a personal services company for a client firm is deemed to bean employee for income tax purposes if they would otherwise be regarded asemployed under a contract of employment with the client. TheEAT’s ruling confirms that such individuals have the worst of both worlds, inthat they will be taxed as employees but unlikely to qualify for statutoryemployment rights such as unfair dismissal, redundancy pay and maternity leave.However,the position is different under discrimination law, which specifically protects”contract workers”. In Abbey Life Assurance Co Ltd v Tansell [2000]IRLR 387, Tansell hired out his computer consultancy services through his owncompany, which supplied him to an employment agency. In turn, the employmentagency supplied his services to Abbey Life. TheCourt of Appeal held that Tansell could bring a claim under the DisabilityDiscrimination Act 1995 directly against Abbey Life when it terminated thearrangement. Anindividual working through a personal services company could bring adiscrimination complaint against the “end-user” of his or herservices, despite the absence of a direct contractual relationship. On appealOn 19 Feb 2002 in Personnel Todaylast_img

Leave a Reply

Your email address will not be published. Required fields are marked *