Hall v Xerox UK Ltd UKEAT/0061/14
Content The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the 2002 Regulations) give fixed-term employees a right not to be treated less favourably than a comparable permanent employee on the ground of his or her fixed-term status as regards the terms of their contract, or being subjected to any other detriment by any act or deliberate failure to act by the employer.
In this case, the employer's PHI policy prevented fixed-term employees from qualifying for cover if their contract was to end within 26 weeks.
All the Respondent's permanent and fixed-term employees were entitled to permanent health insurance if they had been off work for 26 weeks or more because of a "qualifying injury". The employment contracts said that the benefit was subject to acceptance by the insurer (Unum), that the Respondent was only liable to pay the employee if it had itself received payment from the insurer, and that there was no obligation to provide any other benefit if the insurer did not make the payments. The insurance policy contained a term that fixed-term employees were not covered by the policy if their fixed-term contracts expired before the end of the 26 week qualifying period.
The Claimant worked for the Respondent from August 2010 under a regularly extended fixed-term contract. On 12 April 2012 he gave himself a hernia whilst repairing photocopying equipment leased by the Respondent to a customer. His contract was to expire on 20 July 2012 and, since he could not be off work for the full 26 week qualifying period before the anticipated expiry of his contract (it was in fact later extended to 20 July 2013), the insurer refused to accept the claim. The Claimant brought a claim for less favourable treatment under the 2002 Regulations. The Respondent accepted that the Claimant was in a less favourable position than a permanent employee in the same circumstances, and the reason for this was because he was a fixed-term employee whose contract was to expire within 26 weeks.
The Employment Tribunal (by a majority) dismissed his claim, finding that although he was treated less favourably than a comparable permanent employee simply because of his fixed-term status and his contract expiring within 26 weeks, this was not due to an act or omission by the Respondent. (The lay member of the tribunal disagreed and held that the Respondent had failed to take steps to ensure that the policy did not contain terms which might disadvantage fixed-term employees.) In any event, the judge held that any less favourable treatment would have been justified since there was no alternative policy available – insurers had an "apparently universal approach" in relation to fixed term contracts (the lay member said that in her view, the Respondent should have paid the Claimant and renegotiated the arrangements with the insurer).
The Claimant appealed and the EAT upheld the tribunal's decision, agreeing it was entitled to find the less favourable treatment was not caused by the Respondent. An employment tribunal, it said, must take a sensible, practical and robust view of the cause of a detriment and The EAT held that the insurer was not the Respondent's agent and agreed that the tribunal was entitled to conclude that, on the evidence available to it, any less favourable treatment would have been justified. The Respondent had been told that no other policy on the market would cover a fixed-term employee in these circumstances. Whilst the employment judge could have investigated alternative policies more fully, he was not obliged to do so.
What to take away
This case is helpful to employers who offer benefits supported by insurance policies with third parties. The tribunal called the Respondent "simply the messenger" of the insurer and was not responsible (whether through agency or otherwise) for the terms of the policy.