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July 2011 Updates

Implied terms

In Tasneem v Dudley Hospitals, the Employment Appeal Tribunal decided that the Claimant's contract of employment did not contain an implied term to the effect that he must be expressly informed of a job vacancy.

The Claimant was a locum consultant. In 2006, the NHS Trust increased the number of substantive consultants over locums, to improve quality. The Claimant was not given a substantive post and was dismissed from his locum post. The Employment Tribunal decided that this was for some other substantial reason (SOSR) and that the dismissal was fair. The Claimant made various claims including breach of contract, the latter based on earlier events.

The Employment Appeal Tribunal decided that the Trust was not in breach of contract in not expressly informing him of the new contract. The Claimant could reasonably be expected to know about the new contract opportunity and, as a matter of fact, did know about it.

Dismissals for refusing a pay cut

In Garside & Laycock v Booth, the employer needed to cut costs and asked employees to accept a pay reduction of 5%. The Claimant refused and was dismissed from his job. When he was dismissed, he was the sole employee out of 77 who opposed the change. The Employment Tribunal found the dismissal unfair.

The Employment Appeal Tribunal decided that the Tribunal had got things wrong in a number of areas. Firstly, it was not the case that an employer may only offer less favourable terms if the very survival of the business depended on it. That was too high a threshold. Secondly, instead of assessing the reasonableness of the employer's decision by asking what it was reasonable for the employee to do (accept the pay cut or not), the Tribunal should have asked itself whether the employer, having established "some other substantial reason", had acted reasonably and fairly in dismissing the employee.

Striking out unfair dismissal claims

In the case of Lockey v East North Homes Leeds, the Employment Appeal Tribunal found that unfair dismissal (and breach of contract) claims should not be struck out for having no reasonable prospect of success if it is arguable that part of the employer's reasoning for finding gross misconduct was flawed.

The Claimant had been dismissed for gross misconduct. He had failed to carry out a management instruction, sworn at a senior member of staff and behaved unacceptably in front of a client. The Tribunal accepted at the pre-hearing review that the third of those reasons was flawed because the employer had not interviewed the client.

The Employment Appeal Tribunal decided that the Tribunal should have allowed the claims to proceed. In order to determine whether dismissal for gross misconduct was unfair in the circumstances, it would be necessary to hear evidence around whether the employer could reasonably have dismissed the Claimant on the first two grounds only, particularly when they were factually disputed and might not, in the circumstances, have amounted to gross misconduct.

Equal pay, TUPE red-circling and genuine material factors

The Employment Appeal Tribunal has decided, in Skills Development Scotland v Buchanan, that red-circling (protecting) of an individual's pay following a TUPE transfer will normally be a genuine material factor justifying a difference in pay between a man and a woman.

The Employment Appeal Tribunal also decided that an employer is under no duty to "narrow the pay gap'" after the transfer, for example by freezing the salary of the transferred employees until others have caught up and equalised. Provided that the decision to award everyone pay rises is not tainted by sex, the employer will still be able to establish a defence to an equal pay claim.

TUPE - service provision changeovers

In Nottinghamshire Healthcare NHS Trust v Hamshaw and others, the Employment Appeal Tribunal has decided that there cannot be a relevant transfer under TUPE where the services provided to a client post-transfer are not fundamentally or essentially the same as they were before the change of provider.

In this case, the Nottinghamshire Healthcare NHS Trust ran a care home. When this was closed, the residents were re-housed into homes of their own. Two new independent providers became responsible for their care. A number of care workers in the former home were offered jobs with the new providers. The Trust thought that TUPE should apply. The new providers said it did not.

The Employment Appeal Tribunal said that there was no TUPE transfer. Under the new arrangements, former residents were to live in their own flats. The care provided was, therefore, different. The individuals were assisted with domestic tasks but they did not have access to all of the features and assistance of a fully staffed care home. The economic entity had changed entirely.

Constructive dismissal - an objective test

In McBridge v Falkirk Football Club, the Employment Appeal Tribunal has decided that the duty not to act in a manner likely to damage trust and confidence must be judged from an objective standpoint. This means that an employer cannot rely upon assumptions in a particular industry. In this case, it was argued that 'an autocratic style of management' was 'the norm in football'.

The Claimant, the Club's U19 team manager, resigned after his right to pick his team was removed, seemingly at random, following the appointment of an Academy Director. The Tribunal did not support his claim for constructive dismissal. The Tribunal decided that the Claimant's contract implied a term that he would lose his right to pick his team once an Academy Director was appointed. They therefore found no breach of contract by the Respondent.

The Employment Appeal Tribunal disagreed with the Employment Tribunal's decision and substituted a finding of constructive dismissal. It criticised the Employment Tribunal for implying a term into the Claimant's contract which contradicted an express term and, in any case, was unnecessary, not obvious and imprecise.

Paid holiday for sick workers

The Employment Appeal Tribunal has decided, in NHS Leeds v Larner, that a worker who is absent through sickness does not have to submit a request for annual leave in order to be entitled to it.

The Claimant was signed off sick for the whole of the pay year 2009/2010. She was then dismissed on grounds of incapability due to ill-health but her employer refused to make any payment in respect of her untaken annual leave, arguing that no formal request for leave had been made. The main issue on appeal was whether the failure to make such a request denied the Claimant the normal entitlement to payment in lieu of annual leave upon termination of employment.

The Employment Appeal Tribunal decided that, as the Claimant had been unable to take her annual leave due to her sickness absence, she retained her "right to enjoy a period of relaxation and leisure", or payment in lieu on dismissal, in the following year.


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SRA number 404293