Case round up

first_imgCase round upOn 1 Feb 2004 in Personnel Today Our resident experts at Pinsents bring you a comprehensive update on all thelatest decisions that could affect your organisation, and advice on what to doabout them.Abler v Sodexho, ECJ ECJ rules that change of catering contractor was a transfer of anundertaking * * * A hospital had outsourced catering services for patients and staff toan external contractor.  The contractorprepared and served meals on the hospital’s premises.  A new contractor, Sodexho, was appointed.  The ECJ rejected Sodexho’s argument that,because it provided its own menus, stock, recipes, and staff and so took overnone of the previous contractor’s workforce or assets, there was no transfer ofan undertaking on the change of contractor. Key pointsPrevious ECJ rulings, such as Suzen, have indicated that, in outsourcingcases, there can be no transfer of an undertaking without a transfer of assetsor employees.  Here, the ECJ held thatthe catering services were not labour-intensive services, characterising thecatering operation as being asset-reliant rather than based on manpower.Consequently, the absence of a transfer of staff was not determinative.  The issue was whether assets hadtransferred.  The ECJ ruled that Sodexhohad taken over assets, namely the right to use the hospital’s premises andutilities as well as equipment provided by the hospital for preparing meals andwashing up.  These assets wereindispensable to the service.  Theirtransfer was sufficient to indicate a transfer of an economic entity. This case may not have a major impact in the UK where case law favours awider approach than that adopted in previous ECJ rulings. Nonetheless, in many outsourcings, contractors are given the use of premisesand equipment.  This ruling clarifiesthat this may be decisive in determining whether TUPE applies. What you should do – Assume that TUPE applies to a change of contractor – Clients should ensure service contracts contain appropriate provisionsgoverning the application of TUPE on change of contractor and when the contractterminates.  These would includeindemnities to future contractors and provision for the exchange of workforceinformation during retendering exercises – Incoming contractors should protect themselves against transferringliabilities under TUPE, either in the contract price or via indemnities. Dillon v Ford Motor Company Ltd, EAT Indirect discrimination claim fails because applicant could not show detriment* * * Ford’s Dagenham sites were divided into two parts, the north and southestates.  The more desirable jobs weremainly on the south estate. The proportion of ethnic minority staff on the north estate was considerablyhigher than that on the south estate. Ford’s policy was to advertise vacanciesinternally in the estate in which they were located.  This disadvantaged workers in the north estate, by reducing theiropportunity to apply for the better jobs on the south estate. This policy was applied during a redundancy exercise in which theapplicant’s position was made redundant. He succeeded in showing that the policy was indirectly discriminatory asits effect was that redeployees from the north estate were not given theopportunity to apply for posts on the south estate.  The policy was not justified on objective grounds.  However, the applicant’s complaintfailed.  He could not demonstrate thathe had suffered a detriment, in particular failing to demonstrate that he wouldhave applied for any of the vacant jobs on the south estate.  The EAT upheld the decision. Key pointsThe decisive element here was the applicant’s inability to demonstrate thatthe policy was a personal detriment. However, the case is an important reminderof the potential for policies and practices to have a disproportionate impacton employees of particular races and ethnic backgrounds. Employers should note that from July 2003, a new and wider test of indirectdiscrimination was introduced.  Thisapplies to any policy, practice or criterion that puts persons of a particularrace, ethnic origin, or nationality at a particular disadvantage when comparedwith other people. This test no longer requires statistical comparisons of the proportion ofpeople from different ethnic groups who can and cannot comply.The test of justification is also more narrowly defined than before.  However, applicants must still show that thepolicy, practice or criterion puts them at a disadvantage.  The outcome in this case would probably bethe same had it been decided under the new rules, but only because theapplicant was unable to identify any job for which he would have applied. What you should do – Do not underestimate the importance of the new definition of indirect racediscrimination.  It is an easier testfor applicants to satisfy and makes it harder to establish justification – Review all employment policies and practices, particularly those relatingto recruitment, promotion, career progression, pay and redundancy/redeployment – Ask if these rules disadvantage particular groups of workers and are theynecessary – Remember that effective workforce monitoring is critical for detectingpotentially discriminatory practices – Ensure that vacancies are advertised widely, both internally andexternally, to ensure that people from all ethnic groups have an opportunity toapply. Preston v Wolverhampton Healthcare NHS Trust, EAT Allonby v Accrington and Rossendale College, ECJ Two important rulings in part-time pension litigation * * * * The EAT and the ECJ have issued important decisions affecting the60,000 equal pay cases brought by part-time workers in respect of theirexclusion from pension schemes. Key pointsIn Preston, the EAT ruled that: the Equal Pay Act (EPA) is breached wherepart-time workers are excluded from pension schemes but membership iscompulsory for full-time employees; there is no breach where pension schememembership is compulsory for full-time staff but optional for part-time staff;the EPA can be breached by a failure to inform part-time staff that theexclusion on membership of the pension scheme has been withdrawn.However, it must be shown that the employer’s policy was not to inform andthat this policy had a disproportionately adverse effect on female staff; whereemployees have been subject to a TUPE transfer, liability in these cases cannottransfer under TUPE.Transferees are liable only if they themselves gave access to pensionschemes to full-time staff but not part-timers.  However, the six- month time limit for the employee to bring aclaim against a transferor did not start at the date of transfer.  TUPE’s effect was to deem employment withtransferor and transferee as continuous, so that the time limit begins only ontermination of the employment with the transferee. Allonby is a case on the Teacher’s Superannuation Scheme, which is subjectto statutory regulation.  The key pointis that if the statutory rules of the scheme contravene Article 141 of the ECTreaty, a claimant does not have to show that a comparator of a different sexhas been employed by the same employer and received higher pay for equal workor work of equal value. What you should do Employers involved in this part-term pensions litigation should: – Review the impact of these rulings on their own cases – Consider the EAT’s encouragement for the parties in these cases to pursuerealistic settlements– Look out for the Government Actuary’s Department issuing a formula forestablishing figures to be paid by applicants to join schemes and settle theirdisputes. Connex South Eastern v Kelly Dismissal for misconduct was outside the band of reasonable responses * * * A train driver left his train unattended at a station when a reliefdriver did not turn up.  The driver wascharged with a breach of the Driver’s Rule Book and dismissed for grossmisconduct. Key pointsThe tribunal concluded that the employer acted unreasonably in treating thismisconduct as a sufficient reason for dismissal.  The employer’s appeal failed. The case illustrates that harsh disciplinary decisions in cases ofisolated acts of misconduct can result in unfair dismissal liabilities. What you should do – Make sure that disciplinary rules and standards are clearly communicatedto employees – If dismissing for single acts of misconduct take a ‘sanity check’ toensure that dismissal is a reasonable and proportionate response and thatlesser sanctions are not appropriate. Case of the month by Chris MordueCode of Practice to change after personal data gets redefinedDurant v Financial Services AuthorityCourt of Appeal restricts scope of Data Protection Rules* * * * * This is a hugely important decision on the scope andapplication of the Data Protection Act 1998 (the DPA). The case followed asubject access request made by Mr Durant against the Financial ServicesAuthority (FSA).  The FSA investigatedDurant’s complaint against Barclays but closed its investigation withoutinforming Durant of its outcome, acting under statutory confidentiality obligations.The FSA refused Durant access to its investigation documentsand papers disclosed to it by Barclays. The Court of Appeal upheld the County Court ruling that Durant was notentitled to access to the documents under the DPA.ÊThe Court of Appeal ruled on two key issues under the DPA: thedefinition of ‘personal data’; and the extent to which manual filing systemsare covered by the 1998 Act.Key points‘Personal data’ is the most important concept in the DPA, as the obligationson data controllers, and the rights of data subjects (including the right toobtain access to data), apply only to personal data.  The Court of Appeal’s restrictive approach reduces the wholescope of the DPA. Uncertainty around the interpretation of this term previouslyled many data controllers to take a cautious approach, in some cases going sofar as to class as ‘personal data’ any document that refers to an individual byname.  Such an approach increased theburdens imposed by the DPA, in particular the burden of responding to datasubject access requests.The Court of Appeal rejected the argument that a documentcontains personal data merely because an individual is named in it.  The information has to be biographical to asignificant extent and the data subject must be the focus of the information.On this view, the information held by the FSA on Durant’scomplaint was not personal data, and access did not have to be provided.The 1998 Act extended previous legislation to cover manual asopposed to simply electronic filing systems. According to the Court of Appeal, manual records are caught only if theyare of sufficient sophistication to provide the same or similar readyaccessibility as a computerised filing system.The appropriate test for determining whether manual recordsfall under the DPA is whether: – they contain files that are structured and referenced in sucha way as to clearly indicate at the outset of a search whether specificinformation capable of amounting to personal data on the data subject is heldwithin the system, and, if so, in which file or files it is held; – and which has, as part of its own structure or referencingmechanism, a sufficiently sophisticated and detailed means of readilyindicating whether and where in an individual file or files specific criteriaor information about the applicant can be readily located.The Court of Appeal urged a ‘sensible and practical’interpretation of the DPA, which minimised the time and cost associated withdata access requests.In this case, while the FSA’s files contained folders bearingDurant’s name, they were structured in date order and contained a range ofdocumentation, some of which was clearly not personal data. Any personal datacould only be identified by a manual trawl through the files.The requirement to leaf through a number of files to see whatand whether information qualifying as personal data is contained in the filesexceeded the scope of the DPA.What you should do– Make sure your data protection officers and HR staff areaware of this important ruling– Review your data protection policy, especially any definitionof personal data, and your internal guidance on responding to data protectionrequests– Consider whether your manual filing systems fall within thescope of this ruling. You may wish to ensure that documents that clearlycontain personal data are held in specific files or parts of files.While this may mean that the documents are disclosable, it willbe easier to respond to access requests; watch out for the InformationCommissioner’s Codes of Practice being revised in light of this decision. Comments are closed. 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