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Suzanne Horne

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Legal update: Discrimination and commission


Employment law briefing – practical, digestible takeaways to help you make sense of the confusing world of employment case law from Suzanne Horne of Morrison and Foerster. This month, discrimination and capping commission.

Homer v Chief Constable of West Yorkshire

Takeaway: Requirement of a degree not age discrimination

The Court of Appeal has held that it was not indirect age discrimination to have a requirement that an employee have a law degree in order to be a higher grade which was better paid. Mr Homer was 61 years of age and a legal adviser. He did not have a law degree. When he applied to be re-graded for a role which required the job holder to have a law degree he was unsuccessful. He claimed indirect age discrimination on the grounds that if he studied for a law degree part-time he would not complete the course until he was 65 years of age when he planned to retire. Therefore, he argued that the requirement was a ‘provision, criterion or practice’ that placed him and those aged 60 to 65 at a particular disadvantage which was not justified. The Court of Appeal said no, the particular disadvantages of less pay and a lower grade resulted from age not age discrimination. In effect, they resulted from the fact that he intended to retire.   

Point of Interest: This is the first occasion on which an appeal in relation to age discrimination claim has been considered by the Court of Appeal. The decision will undoubtedly be welcomed by those in HR who have responsibility for recruitment given its obvious impact on job adverts and role requirements. However, HR need to be aware that the decision leaves open some further arguments such as whether those in an older age group are less likely to have a degree and the ambit of any justification. 

McFarlane v Relate Avon Limited

Takeaway: Dismissal of Christian not religious discrimination
The Court of Appeal has refused permission to appeal by a Christian counsellor against his dismissal by Relate for failing to give an unequivocal commitment to counsel same-sex couples. It held that he was not unfairly dismissed or the victim of direct or indirect discrimination on the grounds of religion or belief.

Point of Interest: The Court of Appeal said it was bound by the recent decision of Ladele which held that it was not discriminatory for a council to sack a Christian registrar who refused to perform civil partnership ceremonies for religious reasons. The case illustrates how an employee who fails to comply with an equal opportunities policy can be fairly dismissed and how HR can help an employer deal with the need to balance competing and some times conflicting statutory duties. 

BP plc v Elstone

Takeaway: A protected disclosure can be made before employed

The EAT has held that a worker has the protection of the whistleblowing legislation even if the protected disclosure in question was made to his or her previous employer. In a very literal interpretation of the legislation, the EAT took the view that provided the ‘worker’ was employed by someone at the time of the protected disclosure, this was sufficient to satisfy the test set out in the Employment Rights Act 1996.

Point of Interest:
It seems unfair that a new employer is at risk for actions which pre-date their employment or engagement of the worker but it is a reminder of the importance of having a robust recruitment process for all staff and ensuring the business sticks to it. If BP had checked why Mr Elstone left his previous company before hiring him it may have been alive to the issue. It may also have avoided any potential liability as it is not unlawful to refuse to employ someone if they have made a protected disclosure to their previous employer but it is unlawful to subject them to a detriment because of such disclosure once they are a worker.  

Greenland v GX Networks Limited

Takeaway: Employer could not unilaterally alter targets or cap commission even if it has a discretion to do so

Explanation: Mrs Greenland’s contract of employment provided that she was entitled to commission of up to 100% of salary if she made sales targets and additional commission if she exceeded the targets. It also stated that GX Networks Limited could alter the amount of her commission by altering the targets or if the sales director exercised his discretion to cap the commission at 100% of salary by exception only. Mrs Greenland’s targets were reviewed upwards and the sales director capped the commission. Mrs Greenland made a claim in the high court for non-payment. The Court of Appeal held that she was entitled to the additional commission. It said the employer had failed to consult with her about the change in targets when this was part of the scheme and it could not be said that there were any ‘exceptional’ circumstances which justified a cap.

Point of Interest: We all know that bonus and commission schemes are useful tools to incentivise employees, particularly in a sales function but these types of schemes need to be fully costed and worked through prior to implementation. In Mrs Greenland’s case, the company set the targets too low. Therefore, HR needs to ensure that the rules of the schemes are well-drafted, the targets set are challenging and appropriate and that if any alterations are made to the scheme or the amount payable it assists the business to avoid a breach of the implied duty of trust and confidence.

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