Not the right look for Abercrombie & Fitch … allegedly

29 06 2009

Riam Dean’s case against the American clothing company Abercrombie & Fitch caught my eye this week. Last summer she had a holiday job working as a shop assistant at the Savile Row branch of A&F.  She alleges she was told to leave the shopfloor and work in the stockroom, for not complying with the company’s strict “look” policy.  Her crime?  She was wearing a white cardigan.  Apparently (and this was all news to me) A&F have a very strict policy on the appearance of their staff which doesn’t include white cardigans it would seem.  This however, wasn’t a claim under the Employment Equality (Prevention of Discrimination to Cardigan Wearers) Regulations, which have yet to be promulgated.  It was instead a claim under the Disability Discrimination Act because Riam wore the cardigan to disguise her prosthetic lower left arm.  She was self-conscious about the join between her arm and the prosthetic at the elbow. She says she had previously been given special permission to wear the cardigan.  The case is ongoing at the moment, the ET hasn’t decided whether to accept her allegations or not and it will be interesting to see the result.  However, if her allegations are upheld it will be a shameful episode for A&F. 

I would anticipate that she is claiming direct discrimination under the DDA.  S.3A of the DDA 1995 provides that

3A(1) For the purposes of this Part, a person discriminates against a disabled person if –

(a) for a reason which relates to the disabled person’s disability, he treats him less favourably than he treats or would treat others to whom that reason does not or would not apply, and
(b) he cannot show that the treatment in question is justified.

In order for a person to be able to claim that they are disabled within the meaning of the DDA they have to jump through a complex series of tests in order to qualify. S.1 defines disability thus;

 

s.1(1) Subject to the provisions of Schedule 1, a person has a disability for the purposes of this Act if he has a physical or mental impairment which has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities.

 

However, there is an exclusion for people who are “severely disfigured”: Schedule 2 para 3(1) they can be deemed disabled without having to satisfy the above test;

An impairment which consists of a severe disfigurement is to be treated as having a substantial adverse effect on the ability of the person concerned to carry out normal day-to-day activities.

Rian’s left arm probably counts as a severe disfigurement and I will await the full case report (if published) to see whether A&F took any points on this. From what I have read there was nothing to suggest that she could not physically do the job.

If she is successful she will be able to claim for injury to feelings as well as her economic losses, although if it was only a holiday job (she is a law student) those will be limited.  There is no qualifying period of employment required before being able to bring a claim under the DDA (unlike with unfair dismissals where 12 months continuous employment is required). 

The case also caught my eye because it reminded me of a friend who was recently told by her boss to cover up her arms, because the severe psoriasis she has on them, might put customers off. I should say she doesn’t work for A&F.  She was very upset, to say the least, and we discussed at some length what her rights were and what she ought to do.  She is still mulling it over. 

But back to Riam’s case, for more commentary on it have a look at the Daily Telegraph’s coverage – http://www.telegraph.co.uk/fashion/fashionnews/5637449/Abercrombie-and-Fitch-worker-with-prosthetic-limb-left-shattered–says-her-mother.html   and also take a look at Usefully Employed’s post on the same case http://blog.usefullyemployed.co.uk/2009/06/25/abercrombie-fitch-disability-row/





BA is in the news again …

24 06 2009

BA has been in the news … again and, as usual, for all the wrong reasons. The company formerly claiming to be the world’s favourite airline has now asked 40,000 of its staff to not just take a pay cut but to work for nothing for a month to ensure the company’s survival.  Now there’s an enticing offer … not.

The offer to staff involves them either working without pay for up to one month, or taking unpaid leave for that time.  The deduction would then be taken out of their salary over a period of three to six months.  Willie Walsh, BA’s Chief Executive, has agreed to take zero pay for July but as his monthly salary is reportedly £61,000  he will have enough saved up not to need to worry about how to pay the milkman. I did hear on the radio (although I haven’t found it again in print anywhere) that some of the affected pilots were being offered equity in the company to make up for the shortfall, which could be a good bet, but why isn’t it being offered to all staff? 

Enough of this: what should an employee do when faced with this dilemma? Very few employees love their jobs enough to want to work for nothing.  On the other hand if accepting a temporary moratorium on pay would prevent redundancy then the issue gets more complicated. Even if true, will the salary sacrifice make much difference? Many of those affected will already be hard pressed paying their mortgages and credit card bills. Will building societies and credit card companies also agree to a reduction in payments to them? My guess is no. If I were an employee of BA my first thought would be to assess whether I believed Willie Walsh when he said that the company’s future was at stake.  On balance, BA should probably be applauded for trying to find a solution other than just slashing headcount.

The legal issue is really the same as I discussed in my earlier posts on pay cuts vs. redundancy.  An employer faces some tricky legal issues when proposing a pay reduction or, as here a complete pay cut. An employee, if not persuaded by management’s declarations of poverty, could claim constructive dismissal if the pay cut is implemented without their agreement.  Under contract law, any unilateral variation of the terms of a contract is a breach of contract.  When, as here, the term in question is fundamental to the very essence of the contract, a breach can be said to be “repudiatory”, meaning the employee can treat him/herself as being released from all obligations under the contract if he/she chooses to do so.   

An employer would be well advised to consult with employees if it wants to impose a pay cut or pay moratorium.  If more than 20 employees are involved then at least one month should be allowed for the consultation process, or three months if more than 90.  The reason for this is that if any employees don’t want to accept the proposed reduction, they could claim not only constructive unfair dismissal but also a “Protective Award” of one or three month’s pay depending on the number of employees involved. It follows from this that there is little or no difference, from an employer’s point of view, in conducting a redundancy consultation process or a pay cut consultation process. An employer that consults over a proposed pay cut will probably be able to demonstrate (to an Employment Tribunal) that it has tried to take all steps to avoid redundancies if that later becomes necessary.

The employer needs to move cautiously and carefully if it is to avoid claims by disaffected employees.  If any “sweeteners” can be given to staff (such as equity, or additional holiday) that is more likely to succeed.  If an employee refuses the pay cut/moratorium the employer could potentially dismiss that employee and state the reason for the dismissal as being “some other substantial reason”, which is one of the potentially fair reasons for terminating an employee’s employment under the Employment Rights Act, but a claim for unfair dismissal will probably follow if that employee has more than 12 months continuous employment experience.

Advice to both employers and employees: take legal advice before going down this route.  If anyone out there reading this works for BA please do get in touch and let me know your views and decision.





Will Court decision lead to an increase in dismissals?

16 06 2009

The House of Lords (HL) has finally handed down judgment in the case of Stringer v HMRC.  To say this decision has been keenly anticipated is an understatement.  I posted on it a little while ago.

The decision confirms that employees are entitled to accrue holiday pay whilst on long-term sick leave.  Some commentators have suggested that employers will want to dismiss those employees to avoid incurring even greater costs caused by the employee’s absence.  This will undoubtedly happen in some cases, but the risk to employers in adopting such a course is risky.  In doing so, they will risk the employee claiming for disability discrimination as well as unfair dismissal.  An employee on long term sick leave may well be able to successfully argue that they are disabled under the DDA.  Both employees and employers also need to bear in mind, of course, that one of the potentially fair reasons for terminating a contract of employment is capability (which includes incapacity to through illness/injury).  Any employer contemplating terminating an employee’s employment because of ill-health needs to proceed very cautiously.

The other main point of this decision is that employees who have previously been denied holiday pay whilst sick can renew their request for unpaid holiday pay for any period within the last six years.  This is because they will be able to argue that the employer has been in breach of contract and in the civil courts it is possible to sue for breach of contract for up to six years after the breach.  Employees will also be able to claim (in the Employment Tribunal) unpaid holiday pay as an unlawful deduction from wages. 

If you need further advice on this subject please contact me.





Alex says it best …

11 06 2009

Following on from my recent post about the usefulness of Twitter, today’s cartoon by Alex in The Daily Telegraph provides his usual incision and wit into the subject of whether Twitter is any use at all.  I’m converted to it, albeit I don’t find nearly enough time to “tweet”. 

The recent poll I ran on this subject has given a resounding answer; most of you think Twitter is a waste of time. 

Alex1106-_1421436a





Should Tube Workers be allowed to strike?

11 06 2009

This is a thought that has been exercising me (and some of my colleagues) today. In comparison to some of my commuting co-workers (particularly those training in to Waterloo) I had a fairly smooth journey in; not that I want to seem smug about it you understand.  It took Nicola, our trainee solicitor, two hours to get from Waterloo into the City.  She wasn’t alone with nightmare tales to tell.   Reading over someone’s shoulder at the station I saw that the London Lite newspaper has also been questioning it given the travel chaos the RMT has foisted on us today. On their letters page they published a selection of readers’ comments which were 4 – 3 against the RMT. The general consensus around my office was that tube workers shouldn’t be allowed to strike, given the amount of chaos and severe disruption it causes.  Is it just me or do the RMT always seem to call a strike when there is a major sporting event on (the Lions tour to South Africa and the ICC Twenty20 World Cup spring to mind and the Ashes Test series starts next month – are there any strikes planned for then?).  At least the weather isn’t that brilliant for them this week.

The days of hard-left Union bosses holding the public to ransom should be long over.  I have distant memories of the winter of discontent in 1978/79 and then the tanker drivers strike gave us a few days off school: I was all in favour of industrial action in those days! Those days though are long gone; tube drivers are paid pretty reasonable salaries in comparison to other public workers and I would support a ban on them being allowed to strike.  Firemen too.  Particularly firemen.

It would require legislation, of course.  At the moment the Trades Union and Labour Relations Consolidation Act 1992 (TULCRA) provides protection to employees taking part in “official” industrial action, so that if an employee is dismissed for going on strike within 12 weeks of starting industrial action, it will be an automatically unfair dismissal.  A Union is required to ballot its members to get approval for strike action and if it fails to do so and endorses a “wildcat” strike, the Union puts itself at risk of being sued by any person suffering loss as a result of the strike.  If this immunity were to be restricted further (or even removed) it might make the more militant unions think twice before calling strike action.  The London Chamber of Commerce claim that the strike today cost 15mn, although I am always sceptical of such claims. It would, of course, infringe the European Court of Human Rights because it has previously been held that restricting strike action encroaches upon the right of freedom of assembly and association”.  A specific and targeted ban on strike action in important areas like the railways and fire service might avoid that problem because of the wider benefit to the public. 

I fully accept that Unions once had a vital role to play in protecting employees’ rights – I’m thinking of the appalling deprivation suffered by the Tolpuddle Martyrs and the railway workers involved in the Taff Vale case in the early years of the last century.  The RMT workers aren’t the Tolpuddle Martyrs though.

What do you think?  Here is another poll.





Rolls Royce v Unite: an update

8 06 2009

On the 28th November last year I posted on the above case, which was heard in the High Court, on the redundancy criteria used by Rolls Royce when selecting candidates for redundancy.  Please see that post for more details of the criteria used.  The interesting point about this particular case is that it looked at the interplay between redundancy selection criteria and the Age Discrimination legislation.  Rolls Royce were seeking a declaration from the Court that their redundancy criteria, which added one point per year of service to individual employees’ scores (in addition to the scores they received for various other criteria) WAS in breach of the Age Discrimination regulations.  This is because employees with longer service would get more points and was thus indirectly discriminatory towards younger employees. 

The case then went to the Court of Appeal, which upheld the High Court’s decision.  The result of this case is that it is not a breach of the age discrimination to award employees points for length of service.    Those regulations do provide that an employer may justify a policy that is, on the face of it, age discriminatory, provided they can justify the reason for the policy.  The High Court viewed rewarding loyalty to longer serving staff and recognising that older employees would probably struggle more to get new employment than younger people as sufficient justification.

The rather unusual factor here was that it was Rolls Royce seeking to overturn its agreed redundancy policy and wanted the court to find that its policy was in breach of the age discrimination regulations.  The company clearly wanted more flexibility in being able to select candidates than its policy allowed and it was the Union that was defending the existing policy, which it had negotiated on behalf of its members in less difficult times. 

Ultimately this decision is probably going to be of limited value apart from in large companies that have collective agreements with their (unionised) workforces that have been in place for some time and pre-date the introduction of the Age Discrimination regulations in 2006.   In those situations it will be of help to the older worker.   Elsewhere the situation is likely to remain the same.  What this decision doesn’t allow is for older employees to claim positive discrimination in their favour.  The redundancy selection criteria used by employers is open to challenge in all cases, if an employee thinks they have been discriminated against on grounds of age (or other discriminatory factor) but this result is likely to be of academic interest only.    

 

It would, perhaps, have carried more weight if it had been the decision from the Court of Appeal following a case that had been heard before an Employment Tribunal and then the Employment Appeal Tribunal, rather than a rather “academic” analysis of the law by the High Court but, nonetheless, it is a useful addition to the employee’s (and Claimant’s solicitor’s armoury





Race Discrimination and Redundancy

5 06 2009

Two recent cases before the Suffolk ET highlighted the risks that employer face when making redundancies.  In this particular matter, Obikwu v British Refugee Council and Ukwaja v British Refugee Council (BRC), two (black) immigration workers were selected for redundancy by their employer, the BRC.  The ET found in favour of both workers in April 2008, but it was only in the last few days that Mr Obikwu’s remedies hearing took place which settled the level of compensation to be paid to him. Ms Ukwaja’s case was determined last January.

They both worked at the Oakington immigration centre in Cambridge.  Plans were announced to close it in May 2006 but were subsequently suspended.  However five months after the decision to close it was put on hold both of the claimants were made redundant.  Their departure removed the only two non-white employees from the staff at the building.  Not surprisingly, both brought claims for unfair dismissal and race discrimination. 

How did this situation arise?  The ET held that the manager in charge of selecting candidates for redundancy, one Anne-Marie Leech, had “subconsciously” favoured colleagues with whom she was friendly.  The Claimants alleged that she was “consciously biased” against them (although the ET rejected that allegation), which was probably not surprising because Ms Leech hosted a party at her house (to which the two Claimants were not invited) and none of those people who did attend were selected for redundancy. It’s not clear from the newpaper reports whether Mr Obikwu and Ms Ukwaja were the only employees made redundant, or just the only two ethnic minority employees amongst a wider cohort.  The ET Chairman noted that white workers with less experience were selected to remain in employment over the two Claimants.  In the circumstances it is not surprising that they both won.

There are two legal issues raised in this case.  One concerns the need for employers to have fair and reasonable (and objective) selection criteria when choosing which employees to select for redundancy.  If an employer fails to make an objective choice then the affected employee may have a claim for unfair dismissal (if they have more than 12 months continuous employment experience at the date of termination).  The maximum compensation that an ET can award for unfair dismissal is capped at £66,200 plus a basic award of £350 per year of service. However, and this is the second legal issue raised in this particular case, if the employer selects an employee for redundancy on grounds of their race, colour, nationality or ethnic or national origin that will amount to an automatically unfair dismissal.  An employee who believes they have been discriminated against on grounds of their race will probably be advised to bring a claim under the Race Relations Act 1976 for compensation because, unlike the compensatory award for unfair dismissal under the Employment Rights Act (ERA), that award is not capped.  That can lead to a very substantial award being made, because the ET can also award compensation for injury to feelings, as well as loss of earnings and other financial losses.  There is also no 12 month qualifying period required under RRA claims.  The employee cannot claim compensation under the RRA and a compensatory award under the ERA.

Mr Obikwu was awarded £65,475 for unfair dismissal, racial discrimination, psychiatric injury and loss of earnings.  I haven’t seen how the award was broken down so it is hard to say what value the ET put on each head of claim.  However, in the case of Ms. Ukwaja, she was apparently awarded £30,000, which comprised £15,000 for injury to feelings due to racial discrimination, £8,349 for unfair dismissal, £5,000 for discrimination and £2,643 for interest on lost earnings.       

From a legal point of view there was nothing particularly noteworthy about these cases.  What caught the eye of the media though was the fact of a charity involved with refugees unfairly dismissing and racially discriminating against two ethnic minority staff: the BRC deserved to be censured for that. However, not everyone might agree with that:  I found one report of the cases on The Independent’s website and read some of the comments that followed the report.  Sadly, some of the respondents saw this story as an example of “another utterly baseless thought crime!  Another opportunity to redistribute monies to chosen victim groups, taken with relish” and “It’s a bit naughty taking a charity to court, surely the funds raised by the Refugee Council would be better spent on helping everyone in [the] developing world move to Europe than on handouts to disgruntled employees”.  No, actually.  The anti-discrimination laws exist for a reason; no employer is exempt.  The whole episode leaves a nasty taste in the mouth.