Employment and Immigration Legal Update 12/05/08 COURT OF APPEAL DECISION ON THE BURDEN OF PROOF FOR UNFAIR DISMISSALThe Court of Appeal has held that it is for the employer to prove that it had a potentially fair reason for dismissing an employee and even when the employee asserts a different reason for the dismissal the burden of proof does not pass to them. Facts Dr Kuzel was dismissed by her employers, Roche Products Ltd (Roche). Dr Kuzel issued a claim for unfair dismissal asserting that she was dismissed because she had made a number of protected disclosures. Roche maintained that her dismissal was in fact for ‘some other substantial reason’, namely a breach of trust and the breakdown of the working relationship. The Tribunal found that Dr Kuzel had not established that the real reason for the dismissal was because she had made protected disclosures i.e. Dr Kuzel’s claim under the Employment Rights Act had not been ‘made out’. The Tribunal rejected Dr Kuzel’s automatic unfair dismissal claim that the reason for her dismissal was due to the protected disclosures she had made and the Tribunal rejected Roche’s assertion that it was for some other substantial reason. The Tribunal unanimously found that Dr Kuzel had been unfairly dismissed and that her dismissal was unfair by reason of the absence of a potentially fair reason. Dr Kuzel appealed to the Employment Appeal Tribunal and was successful in showing that the Tribunal had erred in law when it did not accept that the real reason for the dismissal was due to Dr Kuzel’s whistleblowing. The EAT concluded that the Tribunal’s use of the term ‘’make out” meant that the Tribunal had incorrectly placed the burden of proof on Dr Kuzel which she had failed to discharge. Held The case went to the Court of Appeal who found unanimously in favour of the decision of the original Tribunal. The Court rejected Roche’s submission that it was for Dr Kuzel to show that her dismissal was a result of her whistleblowing. Just because the Tribunal did not accept the employer’s potentially fair reason for the dismissal it does not mean that the Tribunal has to accept the reason put forward by the employee. In other words, it is open to the Tribunal to conclude that the real reason for the dismissal was not put forward by either side. The Court of Appeal found that the Tribunal had not placed the burden of proof on Dr Kuzel when it stated that she had not 'made out' her claim, instead what the Tribunal was concluding was that Dr Kuzel’s claim was not made out because Roche had disproved it. The result was that the dismissal was unfair because Roche had failed to show some other substantial reason, but the dismissal was not automatically unfair because Roche had shown that the whistleblowing was not the reason for the dismissal. The difference to Dr Kuzel therefore was the potential compensation that could be awarded when dismissed as a result of making a protected disclosure (automatic unfair dismissal) which is unlimited compared to the compensation that is capped when a fair reason is not shown by the employer (unfair dismissal). Commentary It is therefore now clear that the burden of proof in unfair dismissal cases is placed firmly on the employer’s shoulders. The employee can challenge the evidence provided by the employer and can provide his/her own evidence as to why the dismissal took place but ultimately the burden will not pass to them. The employer will still have to show that there is a potentially fair reason for dismissal as ultimately it is they that should know the reason for the dismissal as it was their decision to dismiss. IDENTITY CARDS TO BE ISSUED FOR SOME FOREIGN NATIONALS PRESENT IN THE UKThe UK Borders Act 2007 granted the Border & Immigration Agency power to make identity cards compulsory for all foreign nationals who are subject to immigration control in the UK. Pilot stages have begun in Croydon and as part of this all customers are now subject to biometric testing. From the 28 April 2008 all customers requiring a UK residence permit for extension to stay as a student or as a husband, wife or civil partner will need to apply for a biometric immigration document as well as completing the usual application form. Identity cards will be introduced for all foreign nationals on a rolling basis throughout the next few years and will replace the stickers and immigration status documents currently used and it is hoped that by 2012 the cards will be issued to foreign nationals who are already settled in the UK. The new identity cards will include digitalised photographs, fingerprints and biometric information on individuals and will stand alone as evidence of an individual’s identity. The identity cards aim to provide an easy and secure way for individuals to prove who they are. It is also hoped that the new identity cards will make it easier for employers and sponsors to check whether individuals are entitled to work and study in the UK. For further information and assistance please contact Mark Barnett - Head of Immigration at immigration@steeleslaw.co.uk or on 0207 421 1720 EMPLOYER’S BENEFITS PACKAGE HELD NOT TO BE DISCRIMINATORY ON GROUNDS OF AGEThe Tribunal recently considered a complaint brought by an employee that her employer's provision of a fund to employees, from which they could purchase items from a flexible benefits package, was discriminatory. This claim was brought on the basis that one of the benefits available for employees to purchase was a private medical insurance scheme, the premium for which was calculated by reference to the employee's age and gender. Facts The employer, an insurance company, GHL Insurance Services UK Ltd ("GHL"), was experiencing a high turnover of staff and was underperforming. This prompted GHL to revise the benefits package available to its employees to improve its staff retention rate. It therefore engaged the services of a specialist consultancy to manage and advise upon the introduction of a flexible benefits package. GHL consulted with staff about the new benefits package and carried out a survey, the results of which revealed that staff considered the most attractive benefit to be the opportunity to purchase private medical insurance. Following the consultation process GHL put in place a new benefits package whereby employees with less than 5 years service were offered a fund of 5% of their basic salary from which they could purchase various benefits. These included Private Medical Insurance ("PMI") which could be purchased by employees and/or their family members. The cost of premiums under the PMI scheme were calculated by reference to age and gender tables, a feature common to many such schemes in the market place. The Claimant in the case, Mrs Swann, was 51 years of age at the date of joining the scheme. Mrs Swann claimed that because the premiums under the PMI scheme were age related and more costly for an older employee than a younger employee, the scheme was discriminatory. The cost of Mrs Swann's PMI premium was £631.56, compared to that of a 21 year old woman for whom the premium would be £256.44. GHL resisted this claim on the grounds that the benefit that it provided, and therefore the treatment which the Tribunal should be considering (and determining whether or not was less favourable on the grounds of age), was the provision by GHL of the fund of money, and not the PMI scheme itself. In the case of employees with less than 5 years service, this fund was 5% of the employees' basic salary and this benefit was not discriminatory as it was not age-related. Decision The majority of the Tribunal agreed with GHL that the treatment GHL subjected Mrs Swann to, which fell to be considered in this case, was the provision of the fund of money to purchase items within the flexible benefits package. It was not disputed that the provision of these funds to employees was unaffected by the employees' ages. Accordingly the Tribunal found that GHL's provision of this benefit was not discriminatory. However, the Tribunal stated that as this was a novel case, it should also go on to consider the alternative argument put forward by Mrs Swann - which was that the treatment which should be considered was not the allocation of the fund but that the PMI scheme was discriminatory as the calculation of the premiums was age related. In this respect the Tribunal acknowledged that the method of calculation of the premium was age-related and therefore amounted to less favourable treatment on the grounds of age. However, the Tribunal considered this treatment to be justified. This was on the basis that GHL was experiencing a high turnover of staff and it genuinely believed, having taken advice from a specialist consultant, consulted with staff and carried out a survey, that the PMI scheme would achieve the legitimate aim of effective recruitment and staff retention. The treatment was therefore justified and GHL's benefits package was not discriminatory on the grounds of age. Commentary This case is the first reported Tribunal case to consider the whether a benefits package of this kind is discriminatory on the grounds of age and to consider the justification defence available to employers in this context. Age discrimination is the only form of direct discrimination for which a defence of justification is available. Whilst may practitioners and employers feared that Tribunals would apply this defence narrowly, it appears that provided employers can establish that they have made all reasonable efforts to offer their employees a benefit package that is most advantageous to staff, then they will be in good stead to rely on the defence. | 
