UK Employment Law Update - July 2015

By Ian Hunter, Warren Wayne, Elizabeth Lang, James Froud


Below we shed some light on a few of the latest developments in UK employment law. We hope you find the updates useful.

Mohammed Rafi Hottak and AL –v- (1) The Secretary of State for Foreign and Commonwealth Affairs; (2) The Secretary of State for Defence [2015] EWHC 1953

The High Court held that Afghan interpreters, who were working for the British armed forces in Afghanistan, could not bring claims for direct and indirect race discrimination under the Equality Act 2010 (EqA). The interpreters had sought to bring the discrimination claims on the grounds that the redundancy and relocation policies offered by the British armed forces were less favourable/less generous than those that were offered to Iraqi nationals working for the British armed forces in Iraq.

Applying the test in Lawson –v- Serco Limited [2006] (which concerned the territorial jurisdiction of the Employment Rights Act 1996) the Court and held that the EqA did not apply to the Claimants  as it could not be said they had closer connections with Britain and British employment law than Afghanistan and Afghan law.  


The Judgment gives a useful summary of the relevant tests applied on questions of territorial jurisdiction. The decision is potentially useful for UK companies employing staff in overseas posts, providing a useful reminder that benefits offered to employees working in one location do not need to mirror the benefits offered in other locations; establishing different sets of benefits in separate locations will not automatically create grounds for race discrimination claims.  

Plumb –v- Duncan Print Group Limited [2015] UKEAT 0071

This case concerned a review of the Working Time Directive ('WTD') and how it affects workers on sick leave. The EAT held that the WTD does not require workers who are on sick leave to demonstrate that they are physically unable to take annual leave in order to carry over accrued unused statutory holiday to a subsequent leave year. It will be sufficient that a worker is on sick leave and chooses not to take annual leave during that period. The EAT noted that the right to carry over leave is not unlimited and, having applied the Advocate General's opinion and the principles of the Holidays with Pay Convention, as adopted by the International Labour Organisation, noted that the WTD requires workers on sick leave to take their annual leave within a period of 18 months of the end of the leave year in which it accrues. Whilst currently binding, the EAT has granted leave to appeal this decision to the Court of Appeal.


It will be interesting to see if this case is appealed and whether the decision of the EAT is overturned. Whilst the decision removes the additional burden on employees to show why they cannot take annual leave during periods of sickness, it places an onus on employers to carry over the leave into the next leave year. This could cause difficulty for some employers who may struggle to find the necessary cover when honouring the accrued annual leave

Arcadia Petroleum Ltd and others v Bosworth and others [2015] EWHC 1030 (Comm)

The Claimants were oil trading companies, and the key Defendants were former senior managers of those companies, two of which were domiciled in Switzerland.  The Claimants alleged that the Defendants had conspired to defraud them by involving companies controlled by them in trading transactions and taking the profit. The Claimants issued claims in the English courts for conspiracy and breach of fiduciary duty.

The two Swiss-domiciled Defendants argued that the English court did not have jurisdiction to hear the claims against them, because Articles 18-20 of the Lugano Convention (to which Switzerland is a contracting state) stipulates that employers wishing to sue employees on" matters relating to  individual contracts of employment"  may only do so in the country in which the employee is domiciled.

However the High Court held that the Lugano Convention did not prevent claims for conspiracy being brought in England because they were not claims relating to an individual contract of employment but rather a set of alleged wrongs by a number of wrongdoers.  However, some of the claims for breach of fiduciary duty did relate to the Defendants' contracts of employment and so could not be brought in England against the Swiss-domiciled Defendants.


This case underlines the complexity of employment related litigation where there is an international element.  Whilst the Lugano Convention is limited in scope, the Recast Brussels Regulation contains equivalent provisions in relation to employment disputes and applies to all EU member states.  Before issuing proceedings against an existing or former employee an employer should therefore consider carefully the nature of the dispute, the applicable law of the contract, any applicable jurisdiction clauses and the domicile of the individual to determine the territory in which the action should be brought.

CHEZ Razpredelenie Bulgaria C-83/14

This is a decision from the ECJ in which it was held that a person may claim indirect discrimination under the Race Directive (Directive 2000/43) despite not possessing the protected characteristic which has given rise to the discriminatory practice in question.

The Claimant, Ms Nikolova, ran a shop in a predominantly Roma area of Bulgaria, although she was not Roma herself. She brought a claim for discrimination against her electricity provider CHEZ Razpredelenie Bulgaria ("CRB"). CRB usually placed its meters 1.7 metres above ground but in this district, due to tampering and theft, CRB placed them 6 metres above ground. This was an apparently neutral practice which placed persons of Roma ethnicity at a disadvantage compared to others. The practice also meant that Ms Nikolova, who believed she was being overcharged for her electricity, was unable to check her meter readings.

The ECJ held that, since the wording of the Directive is silent on whether a disadvantaged person must possess the protected characteristic in question, the provision should not be construed too restrictively and must be interpreted in line with its over-arching aim, which is to eliminate all discrimination on ethnic or race grounds.

Therefore, although Ms Nikolova was not of Roma origin herself, she still suffered less favourable treatment (when compared with customers who were not in the particular area) because of her association with the Roma population in the particular district. The ECJ was clear that a less restrictive interpretation of the Race Directive is necessary, which allows for associative discrimination where a claimant may suffer alongside a protected group.


The decision has potentially significant implications in the UK. Previously it was thought that indirect discrimination by association was not possible because, under s.19(2)(b) of the Equality Act 2010, a person claiming indirect discrimination must share the protected characteristic in question. However, the courts and tribunals are expected to interpret equality legislation consistently with the source EU Directives. The case may therefore open the floodgates to indirect discrimination claims as it allows claimants and their lawyers to be more artistic when formulating grounds of complaint. The decision also creates difficulties for employers wishing to evaluate the risks attached to the implementation of any provision, criterion or practice which could place a particular group of people at a disadvantage.

The Trustees of Swansea University Pension & Assurance Scheme and another v Williams UKEAT/0415/14

The EAT held that a tribunal's decision that a disabled employee was treated "unfavourably" for the purposes of a claim for disability discrimination was manifestly perverse.

The Claimant had worked full-time for Swansea University for 10 years and was part of a final-salary pension scheme. He suffered from various psychological problems and as a result, reduced his working hours by half (by way of reasonable adjustments made by the University) before taking ill-health early retirement. The reduction in working hours had led to a corresponding reduction in salary. This affected the Claimant's final pension, which he claimed should have been calculated on the basis of his full-time salary. He alleged that the University's failure to do this amounted to discrimination arising from his disability pursuant to s.15 Equality Act 2010 ('EqA').

At first instance the Tribunal upheld the claim, concluding that the scheme was discriminatory. However, on appeal the EAT held:

  1. The scheme only applied to people who were disabled and was intended as a benefit, to enable participants to retire early with the provision of financial security; the scheme was therefore not discriminatory;

  2. The use of "unfavourably" (in s.15 EqA) was purposefully chosen and does not equate to "detriment" or mean the same as "less favourable treatment", being the language used in other provisions of the EqA and requiring a comparator.

  3. The University had complied with its requirements under the EqA to make reasonable adjustments by reducing the Claimant's hours. The EAT noted that the EqA would be fundamentally flawed if making a reasonable adjustment, which in this case resulted in a reduced pension, could give rise to a successful claim under s.15 of the EqA for unfavourable treatment, as it would require an employer to comply with one obligation on the premise of acting contrary to another; and

  4. The tribunal had incorrectly applied the "less favourable treatment" test by comparing the Claimant's position to people with different disabilities, even though these may not have resulted in reduced working hours (affecting final salary on retirement).


This case provides clarity on how to approach the relatively new concept of discrimination arising from disability. Employers should derive some comfort from the decision as it runs contrary to the adage often used that they are "damned if they do and damned if they don’t". The EAT made clear that advantageous treatment could not be "unfavourable" just because it could have been more advantageous; the likelihood that employers will be held liable for the negative consequences of adjustments designed to positively assist disabled employees is therefore much reduced.