Employment law

Transfer of Undertaking (Protection of Employment) Regulations

RCO Support Services & another v UNISON & others [2002] IRLR 401

A change in hospitals providing in-patient care took place within the Aintree Hospitals NHS Trust area.

The appellant contractors took over the provision of cleaning and catering, but there was no transfer of significant assets, and none of the relevant employees was taken on by the new employers.

Nevertheless, an employment tribunal decided that there had been a relevant transfer within the meaning of the Transfer of Undertaking (Protection of Employment) Regulations 1981 (TUPE).

This was because the arrangements at the two hospitals were equivalent, and there was an 'economic entity' that retained its identity after the transfer.

The Employment Appeal Tribunal upheld that ruling on the basis that despite the decision of the European Court in Suzen v Zehnacker Gebaudereinigung GmbH Krankenhausservice [1997] IRLR 255, there can be a transfer of an undertaking even though neither significant assets nor a majority of the workforce moves over: [2000] IRLR 64.

On appeal, it was argued that Suzen set irreducible minimum requirements for a transfer and that, on the facts, TUPE could not apply.

The Court of Appeal rejected this argument.

Whether or not most of the employees are taken on by the new employer is only one of the facts which must be considered in making an overall assessment of the transaction.

It has become clear from Suzen and later judgments that the European Court now interprets the Acquired Rights Directive as setting limits to its application in contracting-out cases which were not expressly identified in earlier decisions such as Spijkers v Gebroeders Benedik Abbatoir CV (1986) 2 CMLR 296 or Schmidt v Spar Und Leihkasse Der Frheren mter Bordesholm Kiel und Cronshagen [1994] IRLR 302.

In particular, the mere fact that the putative transferee carries on the same activities or supplies the same services as the putative transferor had done does not by itself support the conclusion that an entity retains its identity.

In this case, the tribunal was entitled to characterise the facts it found as involving retention of the identity of the economic entities of cleaning and catering.

Following ECM (Vehicle Delivery) Service v Cox [1999] IRLR 559, the tribunal was entitled to have regard, as a relevant factor, to the reason why the employees were not taken on by the new employer.

The contractors had been willing to take on the cleaning workers if they first resigned from their previous employment and accepted re-employment on its terms and conditions, in preference to automatic employment on terms and conditions applicable as a result of a TUPE transfer.

The tribunal was entitled to take this into account as relevant evidence pointing to, rather than away from, the retention of the identity of the undertaking.

Costs

Kovacs v Queen Mary & Westfield College and another [2002] IRLR 414

It is not every day (to put it mildly) that a losing party in tribunal proceedings is subjected to a costs award of 62,000.

That is what happened to Iren Kovacs and the Court of Appeal ruled that an employment tribunal was entitled not to take her means into account when deciding to make a costs order against her.

The tribunal described the proceedings as '...

a determined, persistent attempt to manipulate the judicial process into the witch-hunt against both respondents ...

Things which got in the way of that aim (objections by the respondents, rulings by the chairman, the proper courtesies of the tribunal room itself etc) were attacked, criticised, misrepresented or ignored.

We are satisfied that this was done deliberately.' It was argued on behalf of Ms Kovacs that a party's means are important because employment tribunals have 'a unique place in the life of this country, providing as they do a means of resolving industrial tensions and ventilating grievances in the sensitive fields of racial and sexual discrimination.

It is ...

important the parties are not deterred from their use by the prospect of adverse costs orders beyond their means.' But this was flatly rejected.

As Lord Justice Simon Brown said: 'It is right that parties should not be deterred from invoking the tribunal's jurisdiction; there seems to me altogether less reason ...

not to deter them from behaving unreasonably.' Nor was there anything in the submission that it was 'quite simply unfair and unjust' not to have regard to a party's means when deciding whether to order costs.

'The plain fact is,' said Lord Justice Simon Brown, 'that courts up and down the country, including this court, daily make orders for costs (often very substantial costs) against impecunious parties ...

without any suggestion being made that this could be thought unfair.'

Disability discrimination

The Disability Rights Commission (DRC) has published a thought-provoking consultation document concerning its first review of the Disability Discrimination Act 1995.

Noting that it is now more than two years since the disability rights taskforce reported, the DRC proposes changes to the law, including some recommended by the taskforce but already rejected by the government.

The main proposals include the following:

l Public bodies must be placed under a legal duty to promote equality of opportunity for disabled people.

l All partners, statutory office holders and local councillors should be protected by the DDA.

l Future civil rights legislation should allow coverage of both businesses with one employee and businesses seeking to recruit and hold their first employee.

l The employment provisions should cover police and prison officers and fire-fighters.

l The employment provisions should cover barristers and advocates, with enforcement through employment tribunals.

l The DDA employment provisions' justification for failure to make a reasonable adjustment should be removed.

The employment code of practice should be revised to include examples of when it may be reasonable not to make an adjustment and the factors to be taken into account in assessing reasonableness should be expanded to reflect valid justifications.

l Occupational pension schemes should have to make 'reasonable adjustments' to their documentation and information.

l Employment tribunals should be able to order reinstatement or re-engagement under the employment provisions of the DDA.

l Disability-related enquiries before a job is offered should be permitted only in very limited circumstances.

l Local authorities should be allowed, if they wish, to appoint from a shortlist made up exclusively of disabled applicants who meet the relevant competencies - with a reasonable adjustment if necessary - without interviewing suitable non-disabled candidates.

l The reasonable adjustment duty be extended to cover dismissal and omissions to act.

l HIV infection should be deemed a disability from the point at which it is diagnosed.

l People with cancer should also be deemed to be disabled from the point at which it has required substantial treatment.

l People who are certified as blind or registered partially sighted should be conclusively presumed to meet the DDA definition of disability.

l Multiple sclerosis should be covered from the point of diagnosis.

By Martin Edwards, Mace & Jones, Liverpool