Case Round Up – Tilson & Alstom Transport [2010]

In this month’s Employment Law News, we look at issues relating to employee status and post employment reasonable adjustments arising from a disability. In the news, we look at the increase in compensation limits which will take effect from February 2011 and Statutory Payment Increases from April 2011.

CASE ROUND UP

Employee Status

In the recent decision of Tilson & Alstom Transport [2010] EWCA CIV 1308 the Court of Appeal held that an agency worker was not employed by the end user despite the integration into the employer’s business and the level of control that was exercised over the individual.

Mr Tilson was engaged through an agency to work for Alstom Transport between 23 August 2004 and 7 November 2006. When Alstom terminated the relationship he brought a claim that he had been unfairly dismissed.

The first issue for the Tribunal to consider was whether Mr Tilson was employed.

He was fully integrated into the workforce and worked for Alstom in the same manner as their employees – for example, he had to book holiday via Alstom, some of Alstom’s employees reported directly to him and there was a high degree of control over his movements. These all pointed to an employment relationship. However, the Court of Appeal has held that Mr Tilson was not an employee and that the Employment Appeal Tribunal was right in its judgment that Mr Tilson could not bring his claim for unfair dismissal when his engagement with Alstom was terminated.

The reason for the Court of Appeal’s finding was because Mr Tilson was actually an agency worker in a complex agency arrangement, in which he was the service provider and Alstom was the end user. There was no direct contract between Mr Tilson and Alstom and Mr Tilson had, in fact, repeatedly turned down Alstom’s offer of employment to him. He did this because he was paid more as an agency worker than he would be if he were an employee of Alstom, and also for his own tax reasons.

In the Court’s view, it was therefore not necessary to imply an employment relationship between Alstom and Mr Tilson in order to make business sense of their working relationship. The intention of the parties was also taken into account here: namely that Mr Tilson had flatly refused Alstom’s request that he become one of their employees. Mr Tilson had therefore clearly understood that there was no employment contract between him and Alstom and had chosen not to put one in place.

The Court of Appeal has issued two reminders in this case:

1)that a worker is not necessarily an employee simply because they look, act and are treated like one;and
2) that an employment relationship should not be implied where it is not necessary to do so.

Duty to make reasonable adjustments

Under the Equality Act 2010, an employer has a duty to make reasonable adjustments for a job applicant, employee or former employee who, because of their disability, is placed at a substantial disadvantage by a policy, criterion or practice applied by the employer.

In the case of Hinsley ­v­ Chief Constable of West Mercia Constabulary UKEAT/0200/10, Mrs Hinsley, a probationary police officer with West Mercia Constabulary, tendered her resignation from the force on 20 December 2006. The Chief Inspector delayed processing the resignation and urged her to rethink. However, Mrs Hinsley wrote a second resignation letter on 4 January 2007 and left immediately. Her resignation was officially accepted on 11 January 2007 and took effect on 17 January 2007. There was no indication at this time that she was ill.

On 26 January 2007, Mrs Hinsley visited her GP and was diagnosed with depression. Shortly
afterwards, she contacted the Constabulary and asked to be reinstated, stating that she had made a hasty decision in a distressed state of mind brought on by her depression. The Constabulary considered her request and did not agree for her to be reinstated.

Mrs Hinsley brought a claim in the Employment Tribunal alleging that the Chief Constable failed to make reasonable adjustments by not reinstating her.

The Employment Tribunal rejected Mrs Hinsley’s claim and she appealed to the Employment Appeal Tribunal.

The Employment Appeal Tribunal held that the Chief Constable had failed to make a reasonable adjustment. The Tribunal found that the Constabulary tried to persuade Mrs Hinsley to retract her resignation when she had first tendered it. The Employment Appeal Tribunal posed the question: what had changed between then and the end of January when Mrs Hinsley asked for her job back? The Employment Appeal Tribunal held that allowing Mrs Hinsley back into the Service without the need to reapply would have been a reasonable adjustment. In the circumstances, the Chief Constable had breached his duty to make post­employment reasonable adjustments for Mrs Hinsley.

This decision could potentially cause concern for employers as, often, employees that are stressed, anxious or depressed may make irrational decisions such as resigning and, whilst it might be the opportune moment for the employer to accept such a resignation, particularly where there may be performance issues, the Employer should consider any request to retract the resignation otherwise the employee could potentially bring a claim for a failure to make reasonable adjustments.

Increase in Compensation Limits

From 1 February 2011, the compensatory award for unfair dismissal increases from £65,300 to £68,400.

The new maximum for a week’s pay increases from £380 to £400. This will be applied to calculating redundancy payments and the basic award in unfair dismissal cases for employees that are dismissed on the grounds of redundancy from 1 February 2011.

New Statutory Payment Increases from April 2011

Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay

The rates will increase from £124.88 to £128.73. The weekly threshold earnings will rise from £97 to £102.

Statutory Sick Pay (SSP)

SSP will increase from £79.15 to £81.60. The weekly earnings threshold will rise from £97 to £102.

Maternity Allowance

This will increase from £124.88 to £128.73. The earnings threshold is £30.

If you require any further information in relation to this, then please do not hesitate to contact sejal.raja@rlb­-law.com.

©RadcliffesLeBrasseur
Sejal Raja
e: sejal.raja@rlb-­law.com
t: 020 7227 7410


Disclaimer

This briefing is for guidance purposes only. RadcliffesLeBrasseur accepts no responsibility or liability whatsoever for any action taken or not taken in relation to this note and recommends that appropriate legal advice be taken having regard to a client's own particular circumstances.