Equality Focus

Discrimination on grounds of religion or belief
Power v Greater Manchester Police
You'll recall that we reported in our Bulletin of 19 November on the EAT's decision to recognise that Mr Power (P), a police trainer who believed that psychics can contact people after their death and help in the investigation of crime, was entitled to protection from discrimination under the Employment Equality (Religion or Belief) Regulations 2003.

However, whilst P was entitled to protection on the grounds of his beliefs, a subsequent Tribunal hearing has ruled that this was not the reason for his dismissal.  The Tribunal held that the employer's decision to dismiss was due to P's inappropriate behaviour which was unrelated to his belief.

McFarlane v Relate Avon Limited
The EAT has held that the dismissal of a relationship counsellor who refused to offer sex therapy to gay couples on the basis of his religious beliefs was not unfair and did not amount to discrimination.

Mr McFarlane (M) was a Christian who was employed by Relate (R) as a relationship counsellor.  Part of his role included the provision of psycho-sexual therapy (PST).  After M refused to provide PST to same-sex couples, R commenced disciplinary proceedings.  Initially, M agreed to provide PST to all couples.  However, despite these assurances M did not change his behaviour and was eventually dismissed.  M brought claims against R for unfair and wrongful dismissal, discrimination (direct and indirect) and harassment.  The Tribunal upheld the claim for wrongful dismissal but dismissed all other claims.  M appealed.

The EAT dismissed M's appeals finding that M's dismissal was fair and not discriminatory.  In particular, the EAT found that:

• R's action to dismiss was due to M's refusal to provide PST to same-sex couples rather than his belief;

• R would have treated a person who did not share M's beliefs but who refused to provide PST to same-sex couples in the same way; and

• R's requirement that all counsellors should be required to provide services to same-sex couples was a proportionate means of achieving R's aim of providing a non-discriminatory service to their clients. 

Comment
Employers can take some comfort from the fact that, whilst Mr Power's belief was deemed to be capable of protection, it did not necessarily follow that the employer's actions were discriminatory.  The decision as to whether the employer has discriminated will be decided on the evidence in each case.

It also appears likely that the conflict between religious beliefs and rights relating to sexual orientation will continue to create issues for employers.  Employers should try to identify any possible issues at an early stage and ensure they use a consistent approach in applying any relevant policies in this area.

News

National Minimum Wage relates to basic pay
Hamilton House Medical v Hillier
Mrs Hillier (H) worked for Hamilton House Medical (HHM).  Her contract stated that her basic rate of pay was less than the national minimum wage (NMW).  However, in practice H always received more than the NMW because she only ever worked nights for which the rate of pay was the basic rate plus 30%.  HHM claimed there was no breach of the NMW provisions as H only ever worked nights and therefore her basic pay was in fact the rate of pay she received for her night work.

Both the Tribunal and the EAT rejected this argument and held that an employee's basic rate of pay was that provided under an employee's contract of employment and that any premium for working unsociable hours should be excluded when considering an employee's hourly rate of pay.  The EAT pointed out that "the philosophy of the National Minimum Wage Regulations is clearly that an employee's basic minimum wage before overtime enhancement or other allowances should not fall below the statutory minimum and ..... it would be completely contrary to the purpose of the legislation if that obligation could be avoided simply because an employee chooses to normally work those hours when she would be in receipt of some enhancement."

Comment
The national minimum hourly wage is currently £5.80 for workers aged 22 years and over, £4.83 for workers aged 18-21 inclusive, and £3.57 for all workers under the age of 18 who are no longer of compulsory school age.  Rates of pay should be reviewed to ensure that all basic wages, as provided for in an employee's contract of employment and without consideration of any additional enhancement such as shift allowance or time and a half, are at least equal to the national minimum wage.

Financial Services Bill
In response to the 2007/2008 banking and credit crisis, various proposals, including measures dealing with remuneration and incentives which promote unacceptable risk, have been developed.  The Queen's Speech of 18 November 2009 included reference to the Financial Services Bill which requires FSA regulation of remuneration within the financial sector to promote effective risk management.  The Bill also includes an FSA power to:

• Prohibit specified types of remuneration (but only in the interests of securing effective risk management or compliance with international standards);

• Make contractual terms void if they breach such a prohibition; and

• Provide for the clawback of payments made under void terms.

Comment
The practical significance of the Bill can only be fully assessed once enacted and in use.  It is of course, highly contentious. The powers to prohibit and make void specified unacceptable arrangements (and claw back any payments made under those arrangements) could make it easier for the FSA to end the use of, for example, multi-year guaranteed recruitment bonuses (which they already identify as unacceptable).

The powers may be effective in deterring unacceptable practices because they will apply directly to specific contracts and employees targeting those contracts which encourage inappropriate risk taking.  The debate about bankers' bonuses has included frequent calls for the clawback of controversial payments despite the legal difficulties in doing so.  The inclusion of some statutory provisions overriding these legal risks would be helpful to employers.  Perhaps there is still some work to be done as any clawback rules would not apparently authorise clawback of incentive payments for misconduct or poor performance, which surely are the circumstances in which many would consider clawback most appropriate?

Recent Cases

TUPE – Failure to Consult
Cable Realisations Limited v GMB Northern
Cable (C) decided in 2007 to either sell or close its cable business.  On 31 May, a non-binding offer was made by Paramount (P) and on 28 June, the board of C's holding company decided to pursue the sale.  C's workforce were informed of this decision the following day by notices placed at the site.  On 3 July, C met union reps for the first time and the reps complained that consultation had not taken place in good time.  C posted notices advising staff that due diligence had started on 13 July, and on 18 July, C advised that it would comply with its obligations if there was a business transfer.  When C, P and the union met on 25 July, the timescale for the purchase was expressed in weeks.  C received a measures letter on 15 August from P saying that it did not envisage taking any measures in relation to the transferring employees.  That day, C met with union reps and provided the information required by the TUPE Regulations.  A further meeting was held on 17 August to address the union's questions.  C's annual shutdown then took place from 20 to 31 August, and the transfer completed on 3 September.  The union brought claims on behalf of its members that C failed to comply with its information and consultation obligations.

The Tribunal held that C had breached the Regulations by failing to inform the union long enough before the transfer.  The Tribunal said that the transfer could have been deferred to allow for a short period of voluntary consultation, and awarded three weeks' wages in respect of each of the union's affected members. 

On appeal, the EAT held that the obligation to inform is a discrete obligation which applies even if no measures are contemplated in relation to the transfer.  The EAT also found that due to the shutdown, the union did not have adequate time to speak with management and union members so this period should have been discounted when considering whether information had been provided long enough before the transfer.  Finally, the EAT found that the award of three' weeks wages reflected the justice of the case, saying that "like baby bear's porridge, it was just right".

Comment
This is quite an unusual case as it would not be normal for such a large number of employees to be on holiday at the same time prior to a transfer (in this case 99% of the employees represented by the union).  The main point to note from this case is the EAT's finding that the purpose of information being provided long enough before the transfer is to enable meaningful consultation which requires sufficient time to respond to information and for those responses to be considered.