Martineau Education Bulletin

September 2009

www.martineau-uk.com

Key contact:
Smita Jamdar
Partner and Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

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Contents

Strategy, Students and Governance

The OIA Report 2008 | read
In the light of the Office for the Independent Adjudicator's Annual Report we look at what can be done to minimise student complaints, focussing on the four areas highlighted in the report: plagiarism, fitness to practice, postgraduate students and disability practice.
Charity Commission guidance on research by HEIs | read
We comment on the Charity Commission's new guidance on research by HEIs. The guidance explains, in particular, how the requirements of charitable status and public benefit affect HEI research; when research will, and will not, be charitable; what private benefits are; and when they are acceptable in furtherance of a main charitable aim.

Finance, Technology and IP

Cloud computing | read
We look at the trend by universities to use cloud computing, particularly for student email accounts, and examine some of the data protection issues which may arise.
A helping hand for trade mark applicants | read
We report on the UK Intellectual Property Office's new "Right Start" service which will enable some trade mark applicants to defer part of their trade mark application fee.

Estates

Workplace parking levy | read
The new Workplace Parking Levy will enable local authorities to charge employers for a licence for car parking spaces used by employees. We examine the ramifications for universities.
Consultation on Extending Permitted Development Rights | read
In this article we consider government proposals to extend permitted development rights which, if implemented, would give universities wider scope to develop their estates without obtaining express planning permission.

Human Resources

Disability discrimination update | read
An update on two recent important judgments in the context of disability discrimination legislation.
Compromise agreements - the easy option? | read
The current economic climate and associated redundancies means that universities are increasingly using compromise agreements. However, there are potential pitfalls in this seemingly safe option.

Full article details

• Strategy, Students and Governance

The OIA Report 2008 | back to top

The rise of a culture within higher education whereby students perceive themselves as consumers within an economic sector is commonly perceived to have caused a significant rise in student complaints. However, the publication of the annual report of the Office for the Independent Adjudicator earlier this year shows that the number of complaints made is remarkably small, and that the proportion of these complaints actually upheld by the OIA is very low.

During the academic year 2007-2008 only 900 complaints were made to the OIA, and of these only 7% were found to be justified and 16% found to be partially justified. Given the size of the higher education sector this figure would suggest that the vast majority of universities have efficient and effective internal complaints procedures which successfully resolve the majority of complaints which inevitably arise from time to time.

Nevertheless, complaints can be expensive in terms of management time and resources and, when they become litigious, they can become extremely expensive in terms of legal cost. So what, if anything, can be done to minimise the chances of complaints arising?

The 2008 report identifies four specific areas where the OIA feels there is room for improvement. These are:

plagiarism;
fitness to practice;
postgraduate students; and
disability practice.

Improvement in these areas would be likely to lead to a reduction in complaints across the sector.

Plagiarism

The OIA clearly favours a pro-active approach to dealing with the dangers of plagiarism and suggests that good practice would include the effective education of students at the beginning of their course.

Plagiarism is a serious allegation and it is therefore extremely important for a university to have policies and procedures in place for handling complaints relating to plagiarism and to ensure that such policies are implemented. To minimise the likelihood of student complaints such policies ought to be clearly and effectively communicated to students, and ought to accord with principles of natural justice and procedural fairness.

Fitness to practise

Students studying for a professional qualification are often engaged in work placements which may involve input from a placement host when assessing professional competences. In the 2008 report, the Adjudicator Rob Behrens mentions cases in which institutions have “deferred uncritically” to the opinion of a placement host on the issue of whether fitness to practise proceedings should be instigated. Although it is entirely reasonable for a university to consider the views of a placement host when assessing a student’s competencies the OIA stresses the importance of students being judged fairly. In particular, there is a suggestion that it is good practice to ensure that students are briefed in advance about expected behaviour on placements, and that if concerns about a student’s fitness to practise do arise the student is given an opportunity to change his/her behaviour.

Postgraduate students

Complaints from postgraduate students are said to “feature prominently” within the OIA’s case load. However, simple steps may be taken to reduce the frequency of complaints. These include:

ensuring supervisors hold regular supervision meetings with students;
maintaining appropriate records of supervision meetings; and
providing timely feedback to underperforming students.

Disability practice

The OIA report identifies a need for universities to develop their understanding of the requirements of the DDA and of official guidance on how it should be implemented. In particular, the OIA stresses a need to regularly consider whether procedures, policies and practices are putting students with disabilities at a significant disadvantage.

Complaints handling

In addition to continuing to improve in the four areas identified by the OIA, universities may also reduce the level of complaints by ensuring that:

their complaints processes are well resourced;
complaints are handled sensitively; and
the university’s policies, procedures and regulations are followed by those handling internal complaints.

In summary, although the 2008 report refers to discrete areas in which improvement may be made, the overall number of complaints suggests that universities are handling complaints efficiently and effectively.

Andrew Holden
Associate, Commercial Disputes
T: 0870 763 1661
E: andrew.holden@martineau-uk.com

© Martineau 2009

Charity Commission guidance on research by HEIs | back to top

Public benefit has always been a requirement for charitable status, but the Charities Act 2006 did away with the previous presumption that any educational charity involved public benefit. Following its earlier guidance on public benefit generally, and specifically on public benefit and the advancement of education and fee-charging, the Charity Commission has now issued guidance on research by HEIs in England and Wales (http://www.charitycommission.gov.uk/supportingcharities/higherres.asp).

The Charity Commission is on a rapid learning curve in respect of HE. The new guidance has been developed in consultation with the HE Tax Forum, and takes account of the changes to the rules on non-primary purpose trading introduced by the Finance Act 2006. HEFCE will adopt the guidance as principal charity regulator for the sector in England. It replaces the 2004 “Dibble letter” from the Commission’s then Director of Legal Services, which, although widely disseminated, had no formal status.

The guidance recognises the potential conflict between the government’s agenda for the contribution of HE research to the economy (emphasised by the disappearance of DIUS into BIS) and the continuing basic proposition that HEIs must act solely in furtherance of their charitable objects - which means that non-primary purpose trading by universities is both restricted and taxable, and that any private benefit arising from research or its exploitation must be no more than incidental.

There is said to be no reason why these competing principles should be mutually exclusive, but this is at the cost of maintaining the legal fiction involved in carrying out non-charitable research via a subsidiary trading company, which pays for services at arm’s length and gift-aids its profits back to the university. How much simpler life would be if the government had accepted the recommendation of the Cabinet Office report which preceded the 2006 Act, that charities should be permitted to raise funds by non-primary purpose trading.

Like the guidance on advancement of education, the research guidance contains musings on when knowledge is useful or of value, issues which readers may care to refer to their philosophy departments. Dissemination remains a key test for charitable research. This may be done simply by making the knowledge available, by publication, usually within six months, or by teaching. Unpublished research may still be sufficiently disseminated if it is catalogued and available on request. In that case a charge is permissible, providing that it does not effectively exclude access.

The practical application of results for the public benefit is another acceptable form of dissemination. The example given is research leading to new medical treatments; but that is an area in which private benefit will often be much more than incidental. The guidance is very tentative in dealing with dissemination of results which are protected by registering IP rights: “the HEI may take the view in certain circumstances that the act of registration in itself amounts to both adequate and appropriate dissemination”. However, it is strong on the duty of charity trustees to enhance the charity’s assets by protecting IPR where appropriate, and to share in returns of exploitation even where, under collaborative arrangements, IPR is owned by another party.

Research sponsored by or done under contract with a commercial organisation may or may not be charitable, depending on whether public benefit is compromised by arrangements for restriction on dissemination or ownership of IPR. If a company sponsoring research secures pre-publication access to the results, that is a non-charitable private benefit unless it can be justified as being necessary, reasonable and in the interests of the university. Licensing of IP rights which leads to the application of results for public benefit and a financial return for the university is unexceptionable, but an exclusive licence which precludes publication or further use would have to be justified in the same way.

To qualify as charitable, paid contract research must involve public dissemination of results within a reasonable time, but again an exception is permitted if the university demonstrably has a particular interest in the work, either because of related work it is already doing or because the research adds to existing “fundamental research interests”. Applying a university’s funds to jointly owned spin-outs must be justified either as a prudent investment, or if there is both a reasonable prospect that the venture will lead to wider public benefit, and private benefit to the other participators is no more than incidental.

Like all Charity Commission guidance, this publication is addressed to the charity’s trustees - in the case of a university, the members of its Council or Board of Governors - who have overall responsibility for compliance with charity law, although they may, and surely do, delegate individual decisions. This requires a proper framework of policies and procedures for identifying and dealing appropriately with charitable and non-charitable research, the application of which will presumably be monitored in future by HEFCE as part of its principal regulator’s role.

On the basis of straw polls held during the last few years at sector events where we have spoken about these issues, we do not think the regulator will find a consistent approach between institutions. Most Finance Directors had established procedures which they thought satisfied the requirements of the Dibble letter; but that was in a regime which lacked a monitoring function. It remains to be seen whether this range of interpretations will be disturbed by the new guidance and its application.

There is reason to hope it will not, provided that a structured approach is in place. The Charity Commission lists the confirmations it would seek if judgments had to be made on whether research was charitable or not, but says it is difficult to see what reason there might be for intervention provided the governing body has:

acted within the university’s objects and powers;
not taken irrelevant or improper irrational considerations into account;
managed any conflict of interest; and
made a rational decision.

These are of course the same precepts which govern all of a university’s public law functions, and the guidance strikes a reassuring note by raising the standard of enquiry to this level, well above that of the detailed content. Charity regulators are not, it seems, likely to be poring over individual sponsorship arrangements or research contracts.

Smita Jamdar
Partner and Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

© Martineau 2009

• Finance, Technology and IP

Cloud computing | back to top

Cloud computing is instantly alluring to universities - particularly when budgets are being tightened. In some ways it can be likened to the promises made in those debt consolidation adverts on daytime TV where "one simple monthly payment is all you need". Choose one of the cloud providers and you can get away from all that daily hassle maintaining servers, keeping up to date with operating systems, paying various licence and maintenance fees, implementing upgrades and security patches. All you need to do is pay a rental fee to one of the cloud providers - and among them are the biggest names on the web and computing, such as Amazon, Google, Microsoft, Ubuntu, Rackspace, Salesforce, Zoho, Yahoo and Sun.

In the HE sector, we have seen a significant move towards either the adoption of cloud computing, or at least it has been given very serious consideration - if only for student email. Moving student email is perhaps understandable as it can be resource intensive and is not a core activity for universities. However, this is not without risk and universities should consider the terms offered by providers very carefully. Providers offer different contractual assurances in relation to security and data protection and the university will have obligations to students associated with their personal data. We cover some of the data protection issues below, but universities should also consider the contractual promises given on uptime and continuity issues around contract termination if they want to switch providers or bring the service back in-house.

1. Security & Data Protection

Under the Data Protection Act (DPA), the university (as a data controller) is under an obligation to ensure that:

(1) any organisation which processes its students' data is bound by the DPA (by written agreement); and
(2) has appropriate security measures in place to protect that data.

Some providers give no guarantee over security of data and this may put the university in breach of the DPA. Others give blanket exclusions of liability for any loss of data or unauthorised access. These exclusions usually relate to the provider's basic service, which can be comparatively cheap. A higher level of security and uptime guarantee (even up to the level required to meet the Banking Industry Security standard SAS 70 Type II certification) is offered by some and does indicate that better security should be available, but this may be significantly more expensive.

2. Location of Data & Data Protection

The DPA requires that personal data should not be transferred outside of the EEA unless the country of destination ensures an adequate level of protection in relation to personal data. Where relevant, universities should check that their chosen provider has signed up to the safe harbor agreement in the US confirming that they provide a similar level of protection to the DPA in US Data Centres.

Some providers' contracts allow them to host data anywhere, meaning data could easily be transferred outside of the EEA/US, potentially putting the university in breach of the DPA and university data into jurisdictions without data protection safeguards.

In time, will providers offer the option of clouds based solely within the EEA? If so, the expectation is that they will be significantly more expensive than the "we store it where we like" solution.

As Westminster University pointed out before they moved to GoogleApps, 96% of students auto-forwarded their University e-mail to personal web mail accounts (hotmail etc.), meaning that University data was not only often going outside of the EU but also out of the University's domain. Any use of e-mail accounts provided by the University should already be subject to strict terms and conditions of use whilst the student is a member of the University to protect against potential misuse.

Moving undergraduate email to the cloud is an easy way get quick costs advantages, with comparatively low risk, but the concerns could be significantly greater (with the technology and service offerings still in their infancy) if there was a decision to move regulatory, research and academic material from university-owned systems to cloud computing services without properly considered and negotiated service contracts.

Des Burley
Partner, Intellectual Property & Technology Team
T: 0870 763 1107
E: des.burley@martineau-uk.com

© Martineau 2009

A helping hand for trade mark applicants | back to top

The UK Intellectual Property Office has announced that from 1 October this year, trade mark applicants will be able to take advantage of a new “Right Start” service. Further clarification as to how the system is to work in practice is expected in due course, but this service will aid cash flow for university spin-out companies looking to protect their brands.

The service will allow some UK trade mark applicants to defer half of the trade mark application fee until after the UK Intellectual Property Office has produced its initial assessment of whether the mark can be registered. If any problems arise at this stage, then the UK Intellectual Property Office will discuss these informally, and only if the applicant decides to proceed will the remainder of the fees be payable. Where the full filing fee is still payable, the UK Intellectual Property Office will also introduce fee reductions for e-filed trade mark applications.

These initiatives will mean that applicants risk losing less money in respect of trade mark applications which are later rejected. This is great news for small businesses who often neglect to register the name of their business when they start up. Start up businesses are often understandably short of funds on inception, but many do not appreciate that without an established reputation in their name they stand very little chance of protecting it at this early stage unless they register a trade mark. Many also think incorrectly that registration of their company name at Companies House gives sufficient protection to business owners.

Helen Driscoll
Partner, Intellectual Property & Technology Team
T: 0870 763 1635
E: helen.driscoll@martineau-uk.com

© Martineau 2009

• Estates

Workplace parking levy | back to top

On 1st October 2009 the Workplace Parking Levy (England) Regulations (‘the Regulations’) will come into force. The seeds for the Workplace Parking Levy were sown in the Transport Act 2000 (‘the Act’), which came into force on 30 November 2000.

The Act introduced a licensing scheme which allows local authorities to charge for a licence which will be required by, principally, employers as occupiers of premises. The licence is for car parking spaces, which are to be occupied by motor vehicles, which are provided at the employer’s place of business and used by, amongst others, employees. Each car parking space will be a “licensed unit”.

A university falls within the category of a “business” as it provides a course of education or training, which is specifically caught by the Act. In calculating the number of car parking spaces, those provided for pupils or students who are attending a course of education or training will be counted, in addition to those used by employees. Parking spaces provided for business customers are also caught by the provisions of the Act.

It is said that the principal aim of the Levy is to provide an incentive to businesses to discourage car commuting and to encourage alternative modes of transport. The measures are also said to be consistent with the government’s principles of sustainable development.

The Act allows local authorities to create schemes to cover the whole or part of the area for which that local authority, or licensing authority, has administrative responsibility. A licensing scheme can only be made where it is desirable for the purposes of directly or indirectly facilitating the achievement of policies in the licensing authority’s local transport plan.

The first scheme, proposed by Nottingham City Council, has been confirmed and will come into effect in 2012. The Regulations were in introduced to provide an appropriate regulatory framework for consideration of their scheme order, although the Regulations themselves will apply to the whole of England excluding London. Nottingham City Council’s scheme order has introduced a Levy which will impose fees from £250 per licensed unit and affects businesses with 11 or more staff car parking spaces.

The Council intends to utilise the money paid by way of licence fees to fund a proposed second tramline, and to invest in an improved public transport scheme which includes the following:

more link bus services and funding to continue existing link services which serve areas not covered by commercial public transport;
improving Nottingham station with improved connections to buses and trams; and
increasing support and advice to businesses for travel planning and parking management.

The Regulations are remarkably bare, concentrating in the main on the penalty charges and associated provisions. There is, for example, no procedure laid out for the making of an order or a form for the orders themselves. The Regulations do not specify charging levels, exemptions or discounts. The government considers that these are matters that are best left to the local authority making the licensing scheme.

A licensing scheme is required to be submitted to, and confirmed by, the Secretary of State for Transport and may be confirmed with modifications. The Act does not require a licensing authority to expressly carry out consultation before making, varying or revoking a licensing scheme, but there is an expectation that consultation will take place and that there is an assessment of the impact on those who will be affected by the licensing scheme. A scheme order will not be confirmed if this has not been done.

A licensing scheme must:

designate the area covered by the scheme;
state the days on which, and hours during which, a licence is required;
specify the charges payable on licence (expressed as a specified sum per licensing unit); and
state whether or not the licensing scheme is to remain in force indefinitely or the period for which it is to remain in force, if not indefinitely.

The Regulations, as stated above, are in the large part centred around penalty charges. A penalty charge can be imposed in the following circumstances:

where workplace parking spaces are provided and there is no licence in force;
where the number of vehicles occupying workplace parking spaces exceed the maximum number expressed in the licence;
if a condition attached to a licence has been breached.

So is this a burden or a benefit? The British Chamber of Commerce estimated that the Levy, if every local authority introduced a licensing scheme, could cost businesses £3.4 billion each year. Local authorities may have ambitious local transport plans which require funding and the Levy will be seen as a solution. Universities may benefit in the long run from improved local transport, but a big consideration for a university will be whether the cost per licensed unit can be passed on, for example to staff or students. There would appear to be no reason why the charge cannot be passed on unless there is, unusually, a contractual right to a parking space. Some universities already charge for parking and therefore would the Levy mean that parking at that university would be prohibitively expensive?

From an administrative point of view a licence cannot be granted for more than one year at a time, and accordingly there is the burden of ensuring that a licence is renewed and that the information provided upon renewal is correct to ensure that there is no overpayment or underpayment, exposing the university to the penalty charge pitfall. A licence may be granted subject to conditions and therefore procedures will need to be in place to ensure that compliance with conditions is being met to ensure that the licence holder is not exposed to penalties for breach of conditions.

If a local authority is considering introducing a Levy a university ought to consider inputting into the consultation process as well as assessing what the potential financial liability will be by considering how many liable spaces they have, and how they are going to recover the cost. This will also involve ascertaining who will want to continue to use parking spaces once the Levy is introduced.

Martineau is committed to environmental issues and to reducing our carbon footprint - see our dedicated climate change portal at www.cc-forum.co.uk for further details. In order to find out how our clients are tackling the issue of green travel we have devised a short questionnaire which can be found at www.martineau-uk.com. We would be very grateful if readers could take the time to complete it - results will be published in a future bulletin.

Clive Read
Partner, Property Team
T: 0870 763 1439
E: clive.read@martineau-uk.com

Rebecca Thompson
Solicitor, Property Group
T: 0870 763 1388
E: rebecca.thompson@martineau-uk.com

© Martineau 2009

Consultation on Extending Permitted Development Rights | back to top

Planning Minister John Healey recently announced the opening of a consultation by the Department for Communities and Local Government on “Improving Permitted Development”.

In the consultation paper, the government proposes to extend permitted development rights (known as “PD Rights”). Where a proposed development falls within one of the categories of development to which PD rights apply developers (including universities) do not need to obtain express planning permission. Rather, planning permission is deemed to have been granted.

The consultation proposes a specific extension to the PD rights which currently exist for universities (as well as other educational bodies) contained within Part 32 of the Town and Country Planning (General Permitted Development) Order 1995 (known as the GPDO).

Existing PD Rights for universities

At present Part 32 of the GPDO permits the erection of any building on the site of a university, where that building is required for use as part of the university (or for a purpose incidental to it). However, development is not automatically permitted:

unless the predominant use of the existing buildings on the site is for the provision of education;
where the cumulative total floor space of any buildings erected on the site (other than the original university buildings) would exceed 10% of the total floor space of the original university buildings on the site - this can be difficult to assess and can be limiting: for example, what might be considered to be the “original university buildings”?
where the total cubic content of the buildings erected on the site (other than the original university buildings) would exceed 250 cubic metres;
where any part of the new building would be within 20 metres of the site boundary;
where any playing field land is used.

There has been criticism that these existing PD rights are not clearly expressed and, as a consequence, are not fully understood or taken advantage of by universities.

Proposed extension to PD rights for universities

The consultation proposes that planning permission be deemed to be automatically granted for universities for use of up to 100 square metres for extensions to existing buildings and to allow one new building per existing building. These allowances would be subject to:

new buildings being a maximum height of 5 metres;
additional floor space not exceeding 25% of the size of the original building;
extensions being no higher than the existing building or 5 metres if within 10 metres of the boundary;
new buildings or extensions being no closer than 5 metres to any boundary and no closer to a highway than any existing building;
the buildings not being within the curtilege of a listed building;
a maximum of 50% ground coverage;
similar materials being used to those used on existing buildings.

If introduced, these proposals will give universities quite significant allowances in which to develop their estates without obtaining express planning permission. As universities already have duties to consider the environment and are generally very good in consulting local stakeholders, this looks like a genuine move in the right direction, which universities should be urged to take advantage of.

The proposals could give universities even more autonomy to develop, and alter the balance of power of negotiations with local authorities. For example, where a local authority is resistant to a university’s development proposals to which PD rights do not apply, or where the local authority is seeking excessive section 106 contributions to local infrastructure, a university could use PD rights as a fall back position in its negotiations with the local authority to secure a better or less onerous deal. The extended PD rights could also save universities the significant time, effort and money required to obtain planning permission for their proposals. Given these clear advantages, it will remain important for universities to seek advice at an early feasibility stage to consider whether and how they may be able to take advantage of the proposed changes to the GDPO.

The consultation also covers proposals for the extension of PD rights for other sectors including retail shops, offices, industry and warehousing.

The one further area of detail which might be of interest to universities are the proposals for dealing with air conditioning units. Generally speaking, planning permission is required for air conditioning units because of their potential impact on local amenity in terms of noise and heat. The government proposes to extend PD rights to air conditioning units subject to certain limitations. No firm decision has been made but the proposed limitations might include:

noise arising from the operation of the unit not exceeding 40 decibels;
units only being attached to buildings in town centre areas;
units not exceeding 8 cubic metres;
units only being installed at the rear of a building;
units only being 5 metres or more from a boundary;
units not being visible from a highway where in a conservation area or world heritage site.

The consultation closes on 23 October 2009. For those wising to comment, or look at the proposals in more detail, further information is available at www.communities.gov.uk

Reducing the burden and simplifying the policy framework

There has been much criticism that the changes to the planning regime introduced by and following the Planning and Compulsory Purchase Act 2004 have only served to increase delays and make the process ever more complex by adding to the level and detail of information which applicants are required to submit. In an attempt to reverse this trend the government is proposing to revise its approach to planning applications to ensure that local authorities only ask for relevant information where it is necessary. Proposals include simplifying the requirements for Design and Access Statements by requiring a more straightforward explanation of how the context of development influences its design, and reducing the number of applications that require a Design and Access Statement for small scale changes.

The government is also announcing a programme to streamline its planning policy statements to make them clearer, shorter and more user friendly. It is conducting a “wide ranging review” with the intention of changing 13 of the 26 statements by the end of the year. The aim is to consolidate the policy into a much reduced set of statements. The intention is laudable in the context of the complexities of existing regime. However, haven’t we heard this all before? There is surely a case for letting the policy framework settle down for a while before introducing yet further changes.

The real challenge for universities and their professional advisers is keeping on top of successive changes. We know from our own experience that local planning authorities themselves are struggling to keep up, and this can only lead to problems when they are the ones tasked with making compliant decisions.

Luke Plimmer
Associate, Property Group
T: 0870 763 1428
E: luke.plimmer@martineau-uk.com

© Martineau 2009

• Human Resources

Disability discrimination update | back to top

How likely does “likely” have to be?

Under the Disability Discrimination Act 1995 (the DDA), a person is disabled if he or she has a “physical or mental impairment which has a substantial and long-term adverse effect on his/her ability to carry out normal day-to-day activities”.

Previous guidance determined that an impairment would be considered substantial and long-term if it was “likely” to last more than 12 months, with “likely” having the normal meaning of “more probable than not”. But in the case of SCA Packaging v Boyle [[2009] IRLR. 746], the House of Lords overturned the previous guidance and decided that the word “likely” refers to an outcome that is “possible” and “could well happen”.

The case concerned Ms Boyle who suffered from hoarseness and vocal nodules. Ms Boyle had her nodules removed and managed her condition by following a strict regime, such as sipping water and avoiding areas of high noise levels. When her employers removed an office partition between Ms Boyle and a large, noisier part of the office Ms Boyle bought a claim of disability discrimination alleging that her employer had failed to make reasonable adjustments.

The key question was whether Ms Boyle was “disabled” within the meaning of the DDA. The House of Lords had to consider the meaning of the word “likely” in two specific contexts: (a) the likelihood of a substantial adverse effect if the corrective measures were not taken and (b) the likelihood of a recurrence of that effect at some point in the future.

The House of Lords held that Ms Boyle was disabled under the DDA. According to Baroness Hale, the word “likely” simply means that it is a real possibility, in the sense that it “could well happen”, rather than something that is probable or “more likely than not”.

Lord Hope said that where someone is following a course of treatment or a regime on medical advice then an employer can assume that if that regime was not adhered to then the condition is “likely” to recur. If the condition had a substantial effect on the individual prior to treatment then the employer should assume that if it were to recur then its effect would be substantial.

The practical effect of the judgment is that employees with a physical or mental condition which has little impact on their day to day lives because it is controlled may still benefit from protection under the DDA. This could apply to employees with, for example, rheumatoid arthritis, epilepsy or diabetes. When employees raise health concerns employers will need to consider whether the DDA applies and whether reasonable adjustments should be made even if the employee seems fit and well.

EAT decision mitigates the effect of London Borough of Lewisham v Malcolm

Since the House of Lords decision in the Malcolm case, if a claimant wishes to establish that a dismissal was an act of disability discrimination he/she has to identify a comparator who is not disabled but whose circumstances are otherwise the same, and show that the comparator would not have been dismissed. The decision significantly restricted the scope of “disability-related discrimination” under the DDA.

However the EAT’s decision in Fareham College Corporation v Walters [Appeal Nos. UKEAT/0396/08/DM; UKEAT/0076/09/DM] provides a route for claimants which avoids the high hurdles laid out in Malcolm. The decision in Walters makes it clear that, if at the point at which the employer was considering dismissing the employee, there was a reasonable adjustment that could have been made which would have avoided the dismissal (eg offering an alternative role), then the dismissal will be unlawful disability discrimination by reason of the failure to make reasonable adjustments.

Universities should therefore be mindful of any reasonable adjustments that can be made to avoid dismissals.

Jane Byford
Partner and Head of Employment and Pensions Group
T: 0870 763 1378
E: jane.byford@martineau-uk.com

© Martineau 2009

Compromise agreements - the easy option? | back to top

The current economic climate and associated redundancies means that universities are increasingly using compromise agreements. However, there are potential pitfalls in this seemingly safe option.

The basics

In order to be valid, a compromise agreement:

must be in writing;
must relate to a particular complaint or proceedings; and
the employee must have received advice from a relevant independent adviser (who must be identified in the agreement and state that the statutory requirements have been complied with).

If the university has not commenced a redundancy consultation and the employee has not uttered the words “compromise agreement” then the university raising it risks the employee refusing it, resigning and claiming constructive unfair dismissal or, alternatively, claiming that any subsequent decision is unfair as the university has predetermined the outcome of the redundancy process.

“Without Prejudice” negotiations

It would be a mistake to think that all conversations and documents labelled “without prejudice” cannot be referred to in subsequent proceedings. To limit the risk of “without prejudice” discussions being subject to the prying eyes of a Tribunal there must be a “dispute” in existence.

The two Court of Appeal cases of Brunel v Vaseghi [[2007] EWCA Civ 482] and Framlington Group Ltd v Barnetson [[2007] EWCA Civ 502] illustrate the restrictive interpretation given to a “dispute”. The commencement of a disciplinary, performance management or grievance procedure is unlikely to be sufficient. Such procedures should proceed as far as possible before starting ”without prejudice” discussions, or, preferably, the employee should raise the issue of termination or settlement first.

In the case of Mezzotero v BNP Paribas [[2004] IRLR 508], at the hearing into a grievance alleging sex discrimination the bank invited the employee to have a “without prejudice” conversation, she agreed, and it put a termination proposal to her. The EAT held that she could refer to the conversation on the basis that “without prejudice” discussions may be used to settle a dispute but not to create one. The EAT also discussed the greater potential for the without prejudice label being questioned in discrimination cases in order to “root out the evil of discrimination”. It is therefore crucial that no admissions or potentially damaging statements are made behind the perceived shield of “without prejudice” discussions which may be relied upon later.

In the recent case of Kirklees Metropolitan Borough Council v Radecki [[2009] EWCA Civ 298], prior to the employee signing the agreement which stated that his employment terminated on 31 October, Mr Radecki informed the Council he was not content with the terms of the agreement and he brought a claim for unfair dismissal the following March. The Council sought to rely on the date of termination in the agreement. The Court of Appeal held that the Council could not do this because the agreement had not been concluded, but held that the employee was out of time because the Council had stopped paying his salary on that date. It is therefore key that the employee is informed of his/her termination date in an open letter in case the compromise agreement is not concluded.

The importance of warranty clauses

Recently, in the case of Stanley v Capital Law LLP [UKEAT/0417/08], the EAT demonstrated the potential effect of an employee’s breach of a warranty in a compromise agreement. The agreement included a warranty that the employee had not committed any repudiatory breach of contract which would have entitled the employer to terminate his employment without notice or payment in lieu of notice.

After the receipt of a customer complaint, the employer discovered that the employee had committed a repudiatory breach and therefore a breach of warranty. The employer refused to pay the termination payment. The EAT agreed with the employer. This highlights how a carefully drafted agreement can protect an employer against the unforeseen.

The case of Crystal Palace FC v Dowie [[2007] EWHC 1392 (QB)] illustrated the important point for employers that, if the severance sum being offered is on the basis of the employee not having found alternative work, the compromise agreement should include a warranty from the employee that he has not been offered nor accepted alternative work at the time of signing, so that the employer does not have to rely on verbal representations which later turn out to be untrue.

Compensation - how much is too much?

Despite confidentiality clauses, unexplained departures put the rumour mill of an organisation into overdrive and can often make it difficult for the departing employee to be discrete regarding the terms and amount. Therefore, it is vital that a precedent is not set by awarding an amount under a compromise agreement which leads the remaining employees hoping their shoulder is the next one to be tapped and giving them the upper hand in any negotiation.

Proper consideration of the appropriateness of the amount awarded is even more essential for public sector employers. In Rose Gibb v Maidstone and Tunbridge Wells NHS Trust [[2009] EWHC 862 (QB)] the High Court held that compensation of £250,000 for the termination of its Chief Executive’s employment (following serious outbreaks of a superbug in 2006) was ultra vires and therefore unenforceable. The main reason for the judgment was that the potential liability for an unfair dismissal claim (including a payment in lieu of the notice entitlement) was approximately £145,000 and that the Court could see no justification for the additional £105,000. The Court said that it was important that consideration was given to the need for obtaining value for money, public justification and to be seen not to reward failure.

In conclusion

While compromise agreements are definitely a useful tool in the current climate, this tool only works if the way the idea is raised, the drafting, the negotiation and the amount of compensation is fit for purpose.

Outside the remit of this bulletin are the potential tax issues associated with the payments under a compromise agreement. Look out for more on this topic next month.

Sian Howells
Solicitor, Employment & Pensions Team
T: 0870 763 1446
E: sian.howells@martineau-uk.com

© Martineau 2009

© Martineau

The bulletin contains a summary of complicated issues and should not be relied upon for specific matters. You are advised to take legal advice on particular problems. Please contact us and we will be happy to assist.