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Suzanne Horne

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Employment law takeaways for July


Employment law takeaways: our bitesize legal updates for busy HR professionals, provided by Suzanne Horne of Morrison and Foerster. This month, vauge resignations, alleged mental disability and whoops-a-daisy (mind your language).

1.    J v DLA Piper UK LLP  – What does an employee have to prove if s/he alleges s/he has a mental disability?
2.    Heaven v Whitbread Group plc  – Conditional resignations do not work
3.    Attrill and others v Dresdner Kleinwort Limited and Commerzbank AG  – HR letters means bankers entitled to bring claims for discretionary bonuses
4.    Ravat v Halliburton Manufacturing and Services Limited  – An employee living in the UK every other month entitled to bring an unfair dismissal claim
5.    Neary v Service Children’s Education and others  – Dual residency not preclude discrimination claim

J v DLA Piper UK LLP – What does an employee have to prove if s/he alleges she has a mental impairment?

J successfully applied for a job at DLA. Prior to starting work, DLA withdrew the job offer. J claimed that the offer was withdrawn as a result of her disclosing her medical history of depression. DLA claimed it was withdrawn due to a recruitment freeze. J brought a claim of disability discrimination. Although the substantive claim is yet to be determined, the EAT was asked to consider the approach taken by the Tribunal to the issue of whether J was disabled within the meaning of the DDA. The EAT held that the correct approach when dealing with claimants who allege that they are depressed is to determine the effect of the condition on the normal day-to-day activities. It needs to determine if s/he has clinical depression or a reaction to difficult circumstances or stress producing similar symptoms as only the former qualifies as a disability. Further, that a GP’s evidence should have been given due consideration even though they are not specialists 

Takeaway:  Trying to find the appropriate way to deal with employees or applicants with mental illness is not easy particularly if there is a long term history of depression. 

It used to be that a mental “impairment” had to be ‘clinically well recognised’ but this was repealed in 2005.  The case illustrates that you cannot be too formulaic in trying to determine the issue.  The risk for HR is that once you are on notice of a potential disability as here, you need to have clear objective evidence to prove that you have not treated the applicant or employee differently by reason of their disability.

Heaven v Whitbread Group plc – Conditional resignations do not work

On 29 August 2008 Mr Heaven sent a letter of resignation to his employer Whitbread in which he said that he was resigning conditional upon being paid in lieu of his one month notice period and receiving a ‘glowing’ reference.  Whitbread wrote back to Mr Heaven and said it could not accept his resignation. It said that Mr Heaven had to indicate if he was resigning or not. On 3 September 2008, Mr Heaven confirmed he was resigning with effect from 29 August 2008. Whitbread then accepted his resignation. There was then a dispute as to the effective date of termination. The EAT held that the date of termination was 3 September 2008. It said that the effective statutory date of termination depends upon what happens between the parties, not what they have agreed. 

Takeaway: Whitbread acted wisely here. Whilst most situations can be resolved if the parties agree, a Tribunal will not allow the employer and the employee to backdate resignations. If you receive a vague or conditional letter of resignation, you should write to clarify the date and terms as soon as possible.

Attrill and others v Dresdner Kleinwort Limited and Commerzbank AG – HR’s letters means bankers entitled to bring claims for full discretionary bonuses

In 2009, Dresdner cut the 2008 discretionary bonuses notified to most of its investment bankers by 90%.  The bankers issued proceedings in the High Court for the full payment. They alleged that they had a contractual entitlement to the monies arising from: (i) the CEO’s announcement at a ‘Town Hall’ meeting at which he said that there would be a guaranteed bonus pool of 400 million euros for staff bonuses; and/or (ii) letters sent by HR to them stating that their discretionary bonus of a particular amount had been provisionally awarded, even though such letters included a condition that the payment was subject to a reduction of 90% if there was a material deviation in profit. The bank claimed that the bankers’ claims had no reasonable prospect of success as the bonuses were cut as a result of the banking crisis. Although the High Court held that the Town Hall announcement was not binding as it was too vague, it did hold that the letters from HR could be enforceable. Therefore, the bankers were able to continue with their claims against the bank.

Takeaway: The above case was an application by Dresdner to get the bankers’ claims thrown-out at an interim stage. Therefore, as yet, we do not know if the carve out in the letters from HR will be sufficient to justify the 90% cut in bonus. Clearly, any figure put in writing around bonus time is likely to give rise to a reasonable expectation. Therefore, any caveats should be built into the bonus rules at the outset as reliance upon newly created conditions is likely to be subject to legal challenge.

Quick Fire Jurisdictional & Territorial Conundrums…
An employee living in the UK but working every other month in Libya was entitled to bring an unfair dismissal claim. An individual can be resident in more than one place at the same time and so have the benefit of the discrimination legislation which only protects applicants/employees who are ‘ordinarily resident in Great Britain’. 

…and finally:
Whoops-a-daisy…A female firearms officer has been awarded £575,000 in damages for sexual discrimination.  The tribunal found that her male colleague made comments about her breasts and called her a ‘lipstick’, a ‘whoopsy’ and a ‘daisy’.


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