Employment law

Sex discrimination - burden of proofThe Sex Discrimination (Indirect Discrimination and Burden of Proof) Regulations 2001 were laid before Parliament on 20 July 2001 and will come into force on 12 October 2001.

The 12-week time lag is supposed to give employers time to consider and prepare for the changes to the Sex Discrimination Act 1975 which the regulations introduce.

The object is to implement the European Directive on the burden of proof.

To achieve this, two technical changes to the 1975 Act are required.

The first makes it clear that in a tribunal claim, it is up to the applicant to establish facts which constitute a prime facie case of sex discrimination.

The burden of proof then shifts from the applicant to the respondent to show that there is a non-discriminatory reason for the respondent's actions.

Since this is in line with the decision in King v GB China Centre (1991) IRLR 513, the practical impact of the change will be limited.

The second change clarifies the meaning of the phrase 'indirect discrimination'.

For employment and vocational training, a new and slightly wider approach has been introduced, covering the application of a 'provision, criterion or practice' which, although apparently neutral, disproportionately disadvantages one sex more than the other and which cannot be objectively justified.

This concept was already within the 1975 Act, but the wording has been amended so as to be more in line with the directive.ACAS annual reportThe Advisory, Conciliation and Arbitration Service (ACAS) published its latest report in July.

As usual, it makes interesting reading.

There has been an 80% increase in requests nationally for ACAS assistance on voluntary trade union recognition - up to 384 in the past 12 months - with 66% of the completed cases leading to parties agreeing full trade union recognition.

There was a modest 1.3% increase in applications dealt with by ACAS conciliators - up to 105,304.

The figures show a 21% rise in the total number of complaints about discrimination - up to 17,657.

The report suggests that the new ACAS arbitration scheme may well be the answer 'for those who would prefer a more informal, non-legalistic, relatively speedy and cost-efficient process' for resolving unfair dismissal disputes and it is hoped that the scheme will be extended to Scotland shortly.

But the earliest indications, at least anecdotally, are that there is little interest in the scheme among either employers or employees.

It remains to be seen whether, if backlogs in the tribunal persist, ACAS arbitration will appear more attractive, particularly to employees.Mutual trust and confidenceBG Plc v O'Brien (2001) IRLR 497An employee was, by mistake, singled out when his employers failed to offer him a revised employment contract providing for an enhanced redundancy payment.

When subsequently made redundant, he was the only employee to be excluded from the enhanced package.

A tribunal decided that the company was in breach of its implied duty of trust and confidence in failing to offer him an enhanced package to which, but for the company's misunderstanding of his status, he would have been entitled.

The Employment Appeal Tribunal (EAT) upheld that decision.Whether an employer is in breach of the contractual duty of trust and confidence depends on whether, objectively, he has acted in a manner likely to destroy or seriously damage the relationship of confidence between him and the employee.

If his conduct has that effect, the next question is whether there was a reasonable and proper cause for the behaviour.

Offering a particular benefit to the entirety of a class of employees bar one is capable of seriously damaging or destroying the trust and confidence between the employer and that one employee.

Where such an act is done without reasonable and proper cause, it would be in breach of what Lord Steyn referred to as the employer's obligation of 'fair dealing' in Johnson v Unisys (2001) IRLR 279.

The employer's argument that the duty of trust and confidence is not capable of imposing positive obligations upon an employer was rejected.

The editor of the IRLR summarises the effect of the case candidly: 'Thus, the law inches ever closer to an implied duty of reasonableness.

Whatever the doctrinal distinctions between "fair and even-hand" and "reasonable", it must be open to question whether the difference will be of practical significance in many cases'.Redundancy and reorganisationShawkat v Nottingham City Hospital NHS Trust (No.2) (2001) IRLR 555The Court of Appeal ruled that the mere fact of a reorganisation of a business, as a result of which the employer requires one or more employees to do a different job from that which he or she was previously doing, is not conclusive of redundancy.

The tribunal must go on to decide whether the change had any, and if so what, effect on the employer's requirements for employees to carry out work of a particular kind.It does not necessarily follow from the fact that a new post is different in kind from the previous post (or posts) that the requirement of the employer's business for employees to carry out work of a particular kind must have diminished in terms of section 139(1)(b)(i) of the Employment Rights Act 1996.Nor does the fact that an employee of one skill was replaced by an employee of a different skill compel the conclusion that the requirements for work of a particular kind have ceased or diminished.

That is always a question of fact for the tribunal.

In the present case, a tribunal found that although the reorganisation of a hospital's cardiac and thoracic departments changed the work which the employees in the latter department, including the applicant, were required to carry out, the trust's requirement for employees to carry out thoracic surgery had not ceased or diminished.

TUPEADI (UK) Ltd v Willer and others (2001) IRLR 542The Court of Appeal grappled with the definition of a transfer for the purposes of the Transfer of Undertakings (Protection) of Employment Regulations 1981 (TUPE) and the implication of its earlier, controversial decision in ECM (Vehicle Delivery) Service Ltd v Cox (1999) IRLR 559.

The outcome was a majority decision: Lord Justice Simon Brown, dissenting, found ECM 'impossible ...

to reconcile with the ruling ECJ jurisprudence.'ADI provided security services at a shopping centre.

After it decided to end the contract, the incoming contractor decided not to take on any of the ADI staff at the centre.

An employment tribunal and the EAT decided that TUPE did not apply.

Following the European Court's decision in Ayse Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservice and another ECJ Case C-13/95 (1997) IRLR 255, the EAT found that neither the workforce nor any significant assets had transferred.The Court of Appeal agreed that the mere loss of a service contract to a competitor cannot by itself indicate the existence of a TUPE transfer.

So the question was whether the ECM view, that a transferee who does not take on the transferor's staff in order to avoid the application of TUPE cannot rely on the fact that the employees were not taken on to show that there was no transfer, was supportable.

The majority of the Court of Appeal were content to follow ECM, with Lord Justice Dyson stating that none of the European Court cases have dealt with the ECM point: in cases such as Suzen, there was a transfer of some or all of the transferor's workforce, and the question was whether having regard to all the relevant factors there was the transfer of an undertaking.Lord Justice May said: 'It is clear that the state of the European and domestic authorities is unsatisfactory.' Few people would disagree with that.

By Martin Edwards, Mace & Jones, Liverpool