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Employment case law update: December 2010

Supreme Court: Dismissal by Letter is Effective when employee reads it
The Supreme Court ruled in the case of Gisada Syf v Barratt [2010] UKSC, that the effective date of termination was when the employee read the letter of dismissal and not when it was delivered to their home address. 

The Respondent, Barratt, had delivered the letter of dismissal to Mrs Gisada on the 30th November 2006. Mrs Gisada had been away from her home and had not actually opened the letter until 4th December 2006. The case turned on when her EDT was out of time.

The Supreme Court held that the effective date of termination was 4th December, i.e. when she actually read the letter. It held that she should not be criticised for wanting the letter to remain at home unopened, instead of asking someone at home to open it, as its contents were private. The effective date of termination would be the date she actually learned of the decision to dismiss. The Supreme Court stated that it was desirable to interpret the time limit in legislation in a way favourable to the employee, and that strict contractual laws concerning termination of contracts should not displace the statutory framework.

ECJ Ruling: Compulsory Retirement and Age Discrimination
In Rosenbladt v Oellerking Gebaudereinigungsges mBh [2010], the ECJ held that a compulsory retirement age of 65 in a contract of employment, whilst prima facie discriminatory on grounds of age, is justified if the following conditions are met:

  • the contract (i.e. the retirement age) has been collectively negotiated with a union;
  • the employee will receive a pension so that they have replacement income; and,
  • compulsory retirement has been in widespread use in the relevant country for a long time without having had any effect on the levels of employment.

Mrs Rosenbladt had been employed by a cleaning firm for 39 years. In 2008 she was advised that her employment would terminate when she reached retirement age. She informed her employers that she wished to continue working and issued proceedings arguing that the termination of her employment was unlawful discrimination on grounds of age. The ECJ had to decide whether national legislation permitting an individual employment contract to provide for the automatic termination of an employment relationship upon reaching a specified fixed age was age discrimination.

This decision will have massive ramifications for employers seeking to justify a compulsory retirement age after the default retirement age is abolished in October 2011.

Agency Worker update
The ongoing saga of employee v agency worker was considered again in the case of Tilson v Alstom Transport [2010] EWCA Civ. The appellant technician appealed against a decision of the Employment Appeal Tribunal that he did not have a contract of employment with the respondent train maintenance company. Tilson’s services were provided through a complex agency relationship.

It was held that there was no such employee relationship. The fact that there was a significant degree of integration of a worker into an organisation was not inconsistent with the existence of an agency relationship in which there was no contract between worker and end user. In most cases, it would be unrealistic for the worker to provide any satisfactory service to the employer without being integrated into the mainstream business to a degree and that would inevitably involve control over what was done and the manner in which it was done.

Collective agreements
In Malone and others v British Airways plc [2010] EWCA Civ 1225, the Appellants, cabin crew, claimed British Airways plc was in breach of a term of a collective agreement in that the BA had unilaterally reduced the crew complements on its aircraft below the levels which had been agreed through collective bargaining between BA and the claimants’ trade union. The claimants sought declarations as to their contractual terms and injunctions requiring the defendant to comply with the crew complement levels in operation before the unilateral reduction.

It was held that when considering whether a term in a collective agreement was incorporated into employees’ individual contracts of employment, regard would be had to:

(i) whether the provision impacted upon the working conditions of the employees;
(ii) whether the provision was in truth a collective matter rather than a personal one; 
(iii)  what the parties had intended the provision to mean.

On the facts, it was held the term was not meant to be individually enforceable. The term was intended as an undertaking by BA towards its cabin crew employees collectively and was intended to protect jobs collectively against excessive demands by BA. It was a term intended to be binding only in honour, although there was a danger that if breached industrial action may follow.