Issue 90 - May 2007

RECRUITMENT SPECIAL - Introduction

April saw a number of cases which affect recruiters and employers alike and impact on the arrangements employers make with regards to their most important assets. Therefore this issue provides particular focus on this area.

Age Discrimination in Interviews – A lesson from the Irish and a warning to recruiters.…

Whilst the Irish legal rulings have no jurisdiction over the Tribunals in England and Wales they do have a persuasive influence and so recruitment agencies and employers are advised to be mindful of the case of Cunningham v BMS Sales (Decision No: DEC-E2007-006).

The case was brought by 47 year old Mr. Paul Cunningham who approached a recruitment agency for an IT job. He was in the usual way provided with a registration form requesting his age and date of birth. He completed the form and gave an incorrect age of 37 but did not give his date of birth. He also failed to answer questions asking about whether he was “living with parents/renting/mortgaged accommodation" and "number of children" on the basis that he considered these to be irrelevant and invasive.

When he pointed this out to the recruiter interviewing him he was told that prospective employers use this information (including details of age and date of birth) to decide if a candidate is likely to remain with them if offered employment. The recruiter stated that when he is face to face with a possible employer and is asked the question as to the age of the candidate he felt that if he was not able to answer accurately, he would not be doing his job. The recruitment agency later argued that as a responsible sales recruiter, there has to be confidence that the details provided by candidates are correct and accurate in order to build a successful working relationship.

At the end of his interview Mr Cunningham was told that there were job possibilities and one in particular which was suitable for his skills set. A few days later the recruiter sought to pursue the matter with him and he was told that without the information in relation to his age his application would not go forward. Mr Cunningham not surprisingly complained that he was being discriminated against on the grounds of his age.

As you might expect in its defence the recruitment agency argued that that had Mr Cunningham not proved to be evasive and uncooperative in providing it with information and in deliberately providing incorrect information, it would have had no reservations in representing him. It seems that they felt that Mr Cunningham was hiding something.

The Equality Officer held that he had been discriminated against on grounds of his age, and awarded him 5,000 Euro. Not a huge award but the stakes could have been much higher. Employers and recruiters are advised to consider carefully how to respond in situations where job applicants are evasive or indeed give misleading information in relation to questions which can potentially give rise to accusations of discrimination. As well as age, job applicants can also be reluctant to disclose details about health and absence records. Regular refresher equal opportunities training can of course also help

Status – just who do you think you are?

The Courts and Tribunals are regularly asked to decide whether someone is an employee (and if they are who is the employer) or self employed or in fact falls within that middle category of “worker” thereby having the right to various “employment” protections which until recent years were the preserve of the employee.

These cases typically arise when a party to a contract is aggrieved because of the termination of the contract and gives particular difficulties to those parties where the way things have been carried out in practice does not accord with the written arrangements or the arrangements which were set out at the start of the relationship and which changed over time.

The recent case of Mr Croke v Hydro Aluminium Worcester Ltd (UKEAT/0238/05/ZT) was just such a case and concerned a consultant engineer, Mr Croke who sought protection from suffering a detriment under the “whistle blowing” legislation.

Mr Croke set up his own personal limited company, Amerstar with himself as a director and his wife as company secretary. Mr Croke signed, as director of Amerstar, a contract with Huxley a recruitment consultancy business for the provision by Amerstar to Huxley of technical services. Importantly Mr Croke was not a direct party to the contract which contained the usual terms you would expect to see in a typical consultancy arrangement. Huxley facilitated Mr Croke attending an interview for work with a company called Hydro and as a result of that he was offered work. Consequently Huxley and Hydro entered into an agreement for the supply of technical services to be provided by Mr Croke through his limited company Amerstar.

Therefore the contractual arrangements were clearly aimed at keeping Mr Croke at arm’s length from the end user Hydro:

All went well until there was a falling out between Mr Croke and certain employees at Hydro which led to Hydro notifying Huxley that it no longer wanted the claimant on site.

Notwithstanding the contractual documentation the reality of the working relationship between Hydro and Mr Croke was as follows:

• Mr Croke was the only consulting engineer provided by Amerstar,
• In evidence, Hydro admitted that it would have been unhappy to accept a substitute because it had spent time training Mr Croke to carry out the necessary engineering tasks,
• Hydro accepted that, although Mr Croke was not subject to Hydro’s disciplinary processes and could, within reason, choose his own time to attend work, in practice he attended during normal working hours,
• Mr Croke was provided with the IT equipment necessary to perform his duties,
• He received neither holiday pay nor sick pay but was subject to Hydro’s overall direction when working at Hydro.
• During the period Mr Croke worked at Hydro he was identified by name in internal documents and described as a contractor,
• He was however interviewed personally before his company was offered the work through Huxley and his personal details were contained in the temporary work/contract form,
• He was given a security swipe card to record his presence at Hydro.

These kinds of practical arrangements are not unusual in the working world. In this case however the EAT did NOT find that there was an implied contract of employment between Mr Croke and Hydro. However what they did decide is that because Mr Croke was introduced personally to Hydro and his services were supplied to them he was therefore still a “worker” for the end user namely Hydro, meaning that Hydro carried the can for cancelling the contract as a result of Mr Croke making protected complaints about some of their working practices. The moral of the story therefore is not to assume that even with the use of corporate vehicles an organisation can avoid liabilities in relation to people working for them and in particular take care when dealing with agency workers who raise complaints or blow the whistle!

Two more cases of agency workers - and this time they belong to nobody!

There has been flurry of agency cases in the past 6 months or so putting agency relationships and recruiters under the spotlight. In April this trend continued. In the two EAT cases of Heatherwood & Wexham Park Hospitals v Kulubowila & others and Astbury v Gist it was decided that the end user was not the employer of the agency staff member. Furthermore in the second case it was even conceded that it is possible for an agency worker not to be an employee of either the agency or the end user or indeed anybody – contrary to comments made in the noteworthy Dacas case of 2004.

In Heatherwood & Wexham Park Hospitals the EAT helpfully concluded that; “…it is not enough to form the view that because the Claimant looked like an employee of the Trust, acted like an employee and was treated like an employee, the business reality is that he was an employee and the ET must therefore imply a contract of employment.’

Instead it decided that; ”the affairs of the parties were as consistent with the express arrangements, [ie a triangular agency arrangement]. It cannot be said that it is necessary to infer a contract of service between the [end user and the individual].”

It may be that the facts of this case were particularly important in so far as the individual had applied for a permanent post and been refused by the hospital Trust and they had come to a different short-term arrangement instead. However it gives a little further breathing space to the traditional bank and agency staff arrangements widely operated.

If you have any questions about this, or any other employment law related matter, please be in touch with any member of the team. Also, if you think that you should have received an invitation to our Early Bird seminar recently, but did not, please let us know.

“Consultation on Measures to Protect Vulnerable Agency Workers”

These cases will clearly not be the final word on the subject of who is responsible for agency staff and of course recruiters and employers might want to feed in to the Government’s current consultation process on this subject. According to DTI statistics there are some 17,000 employment agencies and employment businesses in the UK with an estimated 1 million temporary and contract workers and the industry plays an important role in providing flexibility in Britain's labour market. The consultation closes on 31 May 2007 and its stated intention is “to address the bad practices highlighted in Success at Work that affect the most vulnerable agency workers, but without placing burdens on the majority of reputable agencies, who do not use these practices. Simultaneously we are seeking to reduce burdens on reputable agencies where we can do so without removing important protections for workers”

Quickfire

• ACAS has published two revised guides dealing with smoking at work and redundancy payments.
• An important amendment to the Employment Equality (Religion or Belief) Regulations 2003 took effect on 30th April 2007. Section 77 of the Equality Act 2006 amends the Regulations so as to replace the current definition of "any religion, religious belief or similar philosophical belief" with "any religion, or religious or philosophical belief". The important bit is the removal of the word 'similar'. This was previously interpreted in Baggs v Fudge (the BNP member who claimed facism was a 'similar philosophical belief') as requiring that the philosophical belief be similar in nature to a religious belief (so Mr Baggs' claim was struck out). Not so now!
• The House of Lords has overturned the Court of Appeal in St Helens Borough Council v Derbyshire (see bulletin 30/7/05), holding that forceful and intimidating letters sent by an employer to a group of employees claiming Equal Pay can amount to victimisation. The House of Lords held that the employer, who had written letters to equal pay Claimants pointing out that they might be responsible for the loss of their colleagues' jobs if they won their claims, had subjected those Claimants to a detriment on the grounds they had brought a tribunal claim. Whilst acknowledging that the Council was entitled to take legitimate steps to try to settle claims, the House of Lords found that it had crossed the line.
• In O'Hanlon v Commissioners for HM Revenue & Customs the Court of Appeal held that, when her entitlement to sick pay had been exhausted under HM Revenue & Customs' sick pay policy, the employer's failure to continue to pay Mrs O'Hanlon was neither a failure to make a reasonable adjustment nor disability-related discrimination.
• In Premier Foods PLC v Garner the employer had a dismissal and disciplinary procedure which allowed it to increase (or reduce) the sanction in the event of an appeal by an employee against a disciplinary decision. In this case, an employee appealed against a final written warning but the employer increased the sanction to summary dismissal on appeal. The EAT agreed with the tribunal that the whole disciplinary procedure could not be looked at as one continuous process and the employer should have started the procedure again when the new evidence came to light which it took into account in increasing the sanction.

Finally a helpful and realistic approach to the statutory disciplinary procedures from the EAT in the case of Ingram v Bristol Street Parts in which a finding of automatic unfair dismissal was overturned where this finding was made merely because the employee had not received all of the evidence of the case against her before the disciplinary hearing. The case was one of fraudulent accounting by an accounts clerk.

Early Bird Workshops

Last but not least a reminder that our next Early Bird session will be held on 24th May 2007 in Norwich and 12th & 13th June 2007 in Ipswich and will look at the terms of compromise agreements – what to include, how to deal with tri-partite TUPE related agreements and other key issues. If you would like to come along please contact Kristina Elliott on 01473 406250 or email kristina-elliott@birketts.co.uk.

The content of this document is for general information only. As always, specific professional advice should be taken on each individual matter © Birketts Solicitors 2007. Birketts LLP is constituted as a limited liability partnership in accordance with the Limited Liability Partnerships Act 2000. Where we refer to a 'partner' of Birketts LLP, whether in this brochure or in any other correspondence or communication with you, the term 'partner' means a member of Birketts LLP, and shall not be construed as indicating that the members of Birketts LLP are carrying on business in partnership within the meaning of the Partnership Act 1890.

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