1. Disability: employers could face increase in claims from obese employees

The Advocate General of the ECJ has given his opinion rejecting the contention that EU law prohibits discrimination on the ground of obesity per se. However, the effects of obesity may mean that an obese individual satisfies the definition of disability, at least where they are morbidly obese.

This is largely consistent with the approach taken by the EAT inWalker v SITA in 2013. However, the publicity surrounding this case (concerning a childminder allegedly dismissed due to his obesity preventing him from carrying out his duties, such as bending down to tie children's shoelaces) may mean employers face an increase in claims, assuming the ECJ takes the same line when it gives its judgment. The Court's judgment is expected in the next few months and, although the Advocate General's opinion is not binding on the Court, it is often followed. Employees and job applicants may claim discrimination or harassment, or contend that an employer has a duty to make reasonable adjustments such as larger office furniture or work equipment, preferential parking arrangements, or changes to duties or work location to accommodate reduced mobility.

See our blog for further details.

(Kaltoft v The Municipality of Billund, C-354/13)

2. Disciplinaries: no right to increase sanction on appeal unless express provision

An employer has no contractual right to increase a disciplinary sanction on appeal under a contractual disciplinary policy unless the policy expressly permits this.

The Court of Appeal has ruled that the right to appeal is provided for an employee's benefit and therefore, where a policy is silent on the issue and there is no second stage of appeal, there is no implied power to increase the disciplinary sanction on appeal. The Court noted that the non-statutory Acas guide on discipline expressly states that an appeal should not result in an increase in penalty.

The Court in this case issued an injunction restraining the employer from reconsidering the sanction. Employers without contractual procedures could face unfair dismissal claims if a sanction is increased to dismissal on appeal.

Employers wishing to reserve the right to increase a sanction on an appeal should do so expressly. Such an appeal should be a re-hearing rather than a review of the decision below, and ideally should also provide for a further stage of appeal in relation to the sanction, in order to help defend claims that any subsequent dismissal is unfair.

(McMillan v Airedale NHS Foundation Trust, CoA)

3. Restrictive covenants: Court of Appeal refuses to correct poor drafting

A recent case highlights the importance of careful and tailored drafting of covenants.

Read literally, a covenant prohibited an ex-employee from working for companies selling the ex-employer's own products, rather than products in competition with or similar to the ex-employer's products. The High Court had been willing to amend the clause to cover the latter to prevent the clause being absurd, but was overruled by the Court of Appeal. A court is entitled to construe ambiguity to avoid absurd results, but here there was no ambiguity and the employer was stuck with a commercially meaningless covenant.

(Prophet plc v Huggett, CoA)

4. Termination: employees can be held to notice period and need not be paid if they refuse to work

Last year the Supreme Court ruled that, where an employer dismisses an employee with immediate effect in breach of the employment contract, the employee can choose whether to accept this breach as bringing the contract to an end or to affirm the contract so that it continues until the end of the contractual notice period. A recent High Court ruling has confirmed that the reverse also applies: if an employee leaves without giving contractual notice (save in constructive dismissal circumstances), the employer has a choice whether to accept the breach as ending the contract, or to affirm the contract. If it chooses to affirm, it cannot force the employee to work but it can require the employee not to work for a competitor or contact clients and to observe any restrictive covenants. Further, if the employer is willing for the employee to work during the notice period but the employee refuses, there will be no obligation to pay the employee during this period.

The case highlights the importance of making a prompt decision on how to respond to a repudiatory breach by an employee.  If the decision is to hold the employee to the contract, care must be taken to avoid conduct which could be treated as accepting the breach (such as issuing a P45).

(Sunrise Brokers LLP v Rodgers, HC)

5. TUPE: consultation rules for micro-employers relaxed from 31 July 2014

The January 2014 reforms to TUPE provided that, for transfers taking place on or after 31 July 2014, micro-businesses (with fewer than 10 employees) do not have to elect and consult with employee representatives if there are none already in place and can instead inform and consult with the individual affected employees.

6. Whistleblowing: reform proposals and guidance

  • The Government has published a consultation seeking views by 30 September 2014 on how to implement the proposed duty on prescribed persons to produce annual reports on whistleblowing.
  • The Chartered Insurance Institute has published a set of guidance on whistleblowing as part of its ongoing ethical guidance series. This includes a guidance paper for supervisors and managers on how best to respond to someone blowing the whistle to them; although aimed at CII members the practical steps suggested are useful advice for other businesses too. There is also a guidance paper for directors with responsibilities for running or overseeing their firm’s whistleblowing programme, which explains how to design and implement effective whistleblowing arrangements and provides a checklist for assessing the effectiveness of arrangements.
  • The Financial Conduct Authority and the Prudential Regulation Authority have proposed not to introduce financial incentives for whistleblowers, concluding that introducing financial incentives would be unlikely to improve the number or quality of disclosures received from whistleblowers. For further details see our blog.

7. Women on Boards: EHRC guidance on the limits of lawful positive action

The Equalities and Human Rights Commission has published guidance on the legality of women-only shortlists for the executive search sector, available here.

The guidance discusses the legal framework and notes that the law only permits employers to prefer the under-represented gender when choosing between candidates of equal merit (as a tie-break provision), and there is unlikely to be sufficient evidence of equality of merit at the longlisting and shortlisting stages. The guidance states that the EHRC “does not believe it is lawful to address under-representation by longlisting or shortlisting only female candidates to the detriment of male candidates”. It is also not lawful to adopt artificially low thresholds for criteria to allow more candidates into a tie-break position. Further details are set out in our blog

The EHRC has also launched a GB-wide inquiry into the recruitment and appointment practices of the top 350 listed companies at board level. The findings of the inquiry are due to be published in spring 2015 and used to produce best practice guidance.

8. Zero hours contracts: consultation on anti-avoidance measures

The Small Business, Enterprise and Employment Bill includes a provision banning the use of exclusivity clauses in contracts which do not guarantee any hours.  A Government consultation now seeks views by 3 November 2014 on measures to prevent employers getting round the ban and protect employees from detriment.  The Government has also announced that it is planning to develop sector-specific codes of practice on the fair use of zero hours contracts.

9. New resources: flexible work form, SPL guide, illegal work, disabled employees

The Government has published the following new resources for employers: