Inform employee of risk of dismissal in Step 1 letter

1.	The employer must set out in writing the employee's alleged conduct or characteristics, or other circumstances, which lead him to contemplate dismissing or taking disciplinary action against the employee.
2.	The employer must send the statement or a copy of it to the employee and invite the employee to attend a meeting to discuss the matter.

The EAT had previously commented in earlier cases that a Step 1 letter must include the fact, where appropriate, that the employee is at risk of dismissal. In this case, however, the employer argued that those comments were "obiter" (i.e. expressions of opinion and not binding).

While the EAT accepted the relevant comments in one of the earlier cases were obiter, it stated that unless the employee is enabled to understand from the Step 1 letter that he is at risk of dismissal, the purpose of the Step 1 letter in a dismissal case cannot be properly achieved. The employee is entitled to have some idea what type of sanction is in the mind of the employer so that he knows the potential extent of what it is that he may be facing when he goes to the Step 2 meeting.

Back to the top

"Malcolm" comparator test applies in employment

The Employment Appeal Tribunal (EAT) has confirmed that the House of Lords' controversial decision in Mayor and Burgesses of the London Borough of Lewisham v Malcolm, relating to comparators in disability-related discrimination claims, does apply to employment claims.

In Child Support Agency v Truman, the EAT examined the scope of the Malcolm decision (analysed in more detail here). Malcolm was decided in the context of housing law and, in essence, altered the approach to comparators in disability-related discrimination claims.

In the Malcolm case, Mr Malcolm, who had schizophrenia, had been a tenant in a flat let to him by the London Borough of Lewisham. He decided to sub-let the flat and ceased to live there. Lewisham, under housing law, had an unanswerable claim for possession of the flat. When examining the provisions of disability-related discrimination in this housing context, the House of Lords in Malcolm confirmed that the correct comparator was a person without a mental disability who had also sublet a Lewisham flat and gone to live elsewhere (rather than a non-disabled tenant of a Lewisham flat who had not sublet and gone to live elsewhere, as was the broader approach under Clark v Novacold).On the basis of the House of Lords' narrower comparator, it was inevitable that Mr Malcolm's claim would fail, as any Lewisham tenant who had behaved as he did would, as a matter of law, be faced with possession proceedings.

Following the House of Lords decision, there was some discussion as to whether Malcolm, a housing case, also applied to employment cases.  In Child Support Agency v Truman, however, the EAT has now confirmed that the narrower comparator favoured in Malcolm applies equally in the employment context. The wider comparator used in Novacold should therefore no longer apply. The EAT also noted that the policy consideration of adopting the wider comparator construction in employment cases and the narrower one in housing cases is a matter for Parliament, rather than the courts.

Back to the top

Heyday - ECJ hearing date

Over the past couple of years, we have reported on the well-publicised developments in this case which challenges, amongst other issues, the mandatory retirement age of 65 under the Employment Equality (Age) Regulations 2006.  

The Advocate General delivered his Opinion on the case last year, stating that a rule which permits employers to dismiss employees aged 65 or over for retirement can, in principle, be justified - if the rule is objectively and reasonably justified in the context of national law by a legitimate aim relating to employment policy and the labour market, and it is not apparent that the means to achieve that aim of public interest are inappropriate and unnecessary for that purposes.  

The Advocate General's Opinion was a disappointment for those involved in the Heyday challenge. The ECJ usually, but not always, follows the Advocate General's Opinion. If the ECJ does agree with the Advocate General in March, it will be for the High Court to consider whether the mandatory retirement provision is in fact objectively justified.

Back to the top

European Commission: opt-out should stay

The Commission's Opinion states that it is, in principle, supportive of the eventual phasing out of the opt-out, but does not consider that present conditions allow for this. It therefore considers that the opt-out should be retained, but subject to review. The Commission also rejected a proposal to restrict the validity of opt-outs to six months. However, the proposals that there should be no opt out during any probationary period nor any upper limits on working time for workers who agree to opt out were accepted by the Commission.

The European Council now has a further three months to carry out its second reading, so watch this space for further developments.

Back to the top

More job cuts on the horizon

The winter Labour Market Outlook (LMO) survey of 892 UK employers found that more than one in three (36%) plan to cut jobs in the first quarter of 2009. This is double the figure expecting to make job cuts at the time of the previous LMO survey last autumn.

The LMO survey also finds that employers intend to keep a much tighter rein on pay increases in the coming months. Those who plan pay reviews expect staff pay to increase on average by 2.6%. This is much lower than the 3.5% average increase expected last autumn. But as many as one in eight employers do not intend to conduct a pay review at all in 2009.