We look at Vernon v Azure Support Services Ltd and others UKEAT/0192/13, a case involving Port Vale Football Club, which raised an interesting point regarding whether or not a TUPE transfer served to bring an end to a continuing act of harassment. The EAT also examined who the correct comparator should be in a direct discrimination claim arising from the dismissal of a female employee, based on allegations that she had been having a relationship with a football player contrary to her employer's policy.

Facts

Ms Vernon was employed by Port Vale (Valiant 2001) Football Club Ltd (Port Vale) as a sales manager for their conferences and events. On 4 July 2011 her employment was transferred by operation of TUPE to Azure Support Services Ltd (Azure). Ms Vernon's colleague, Mr Bedding, was Port Vale's football sales manager. His employment did not transfer to Azure. Ms Vernon alleged that Mr Bedding had subjected her to acts of sexual harassment both before and after the transfer. Ms Vernon apparently raised complaints with both Port Vale and Azure but nothing was done.

One of the requirements that had been placed on Azure when it took over the catering function for the football club was that its employees should not have any personal relationships with Port Vale's footballers. Towards the end of the summer of 2011, rumours began to circulate regarding a relationship that Ms Vernon was allegedly having with one of the players. In September 2011 Ms Vernon was asked about these rumours and denied the allegation. However, the rumours continued and the football club's chief executive formally requested Ms Vernon's suspension.  Ms Vernon was subsequently suspended.

An investigation was carried out but no evidence was found to substantiate the allegations and Ms Vernon returned to work. On doing so, she revealed to her line manager more details about what had happened between her and the footballer (ie that he had contacted her on Facebook, obtained a telephone number, written his name in the dirt on her car, followed her to the bank and gone to her house on her day off and they had been communicating by text message).

Prior to this, Ms Vernon had only disclosed that the player had written his name on her car. In light of this, Ms Vernon's employment was terminated the following day based on Azure's view that Ms Vernon had breached the duty of mutual trust and confidence and had jeopardised Azure's contract with Port Vale. Ms Vernon appealed against her dismissal but her appeal was rejected. Ms Vernon subsequently brought a claim in the employment tribunal.

Employment tribunal decision

By the time of the hearing, Port Vale had gone into administration and neither Port Vale nor Mr Bedding were in attendance or represented. The tribunal held that the claimant's dismissal was directly discriminatory on grounds of her sex: had Ms Vernon been a man, she would not have been dismissed.

The tribunal also upheld the allegations of harassment and decided that Mr Bedding was jointly and severally liable with Port Vale for the elements of this that occurred prior to the TUPE transfer of Ms Vernon's employment to Azure. However, from the date of the transfer of Ms Vernon's employment, Ms Vernon and Mr Bedding were employed by different employers and Port Vale could not be liable for any acts of harassment that occurred after that date.

The tribunal held that the harassment was a continuing act that continued until 1 October 2011, which was the date of Mr Bedding's dismissal. The ET1 was lodged on 29 December 2011 and the claim was therefore in time.

Both Ms Vernon and Azure appealed to the EAT.  Ms Vernon appealed against the finding that Port Vale's liability for the harassment carried out by Mr Bedding did not transfer to Azure under TUPE and Azure appealed the decision that her dismissal constituted direct discrimination on the grounds of her sex.

EAT decision

The EAT allowed Ms Vernon's appeal and rejected Azure's appeal.

At the beginning of the hearing, Azure had accepted that liability for Mr Bedding's ongoing harassment of the claimant had transferred to it, however it sought to argue that the claim was out of time and the date of the TUPE transfer was the date that should be used to calculate the limitation period in respect of this claim. The EAT disagreed with this, holding that the limitation period was three months from the date of the conduct complained of but where there was a continued course of conduct (as in this case), the three months ran from the end of that period. Therefore the transfer of Ms Vernon's employment to Azure in July 2011 did not bring an end to the continuing act of conduct. Azure was therefore liable for the acts of harassment carried out by Mr Bedding before the transfer.

In terms of Ms Vernon's dismissal, Azure argued that the tribunal had made an error by simply using "any male employee" as a comparator and that instead the relevant comparator should have been a homosexual male who had a relationship with one of Port Vale's football players. The EAT held that this could have been the case (ie that the relevant comparator could have been a homosexual male) but this was not the only option. Here, the comparator could have been a hypothetical heterosexual male who was in a relationship with a hypothetical female footballer or a hypothetical homosexual male employee in a relationship with a hypothetical homosexual male footballer. The key was that the circumstances of the hypothetical comparator had to be sufficiently similar to Ms Vernon's. In light of that finding, Azure's appeal against the finding of sex discrimination was dismissed.

Comment

This case is important for a number of reasons. First, in circumstances where a service provision change results in employees' employment being legally transferred to another employer but does not result in any geographical change to their workplace, it confirms that liability for any issues between transferring and non-transferring employees will transfer to the transferring employee's new employer. In addition, where the discrimination is a continuing act, the TUPE transfer does not stop the relevant course of conduct in its tracks for limitation purposes. Azure could not be liable for what happened post-transfer because Mr Bedding was not their employee but Port Vale was liable for Mr Bedding's actions pre-transfer and that liability transferred to Azure. The finding might well have been different had the harassment been a one off act that had occurred pre-transfer. Liability would still have transferred to Azure but if no claim was brought within three months of the act complained of, then any complaint subsequently brought was likely to be out of time.

The decision regarding the comparator question is perhaps less significant but the EAT's comments that there can be more than one right way to approach the issue of the correct hypothetical comparator are helpful.