Employment tribunal overturns disability discrimination strike-out

Introduction

The Employment Appeal Tribunal (EAT) recently delivered a significant judgment in the case of McMahon vs AXA ICAS Ltd. This case involved multiple appeals concerning claims of disability discrimination and unlawful deductions from wages. The appellant, Ms Carol McMahon, contested the strike-out of her disability discrimination claim and decisions regarding her wages claim under a Permanent Health Insurance (PHI) scheme.

Background

Ms McMahon was employed by AXA ICAS Ltd from January 2000 until her dismissal in September 2013. Her claims arose from her dismissal and the handling of her wages under the PHI scheme during and after her employment. The case was heard by the Honourable Lord Fairley at the Employment Appeal Tribunal in Edinburgh.

The Disability Discrimination Claim

Ms McMahon's disability discrimination claim was initially struck out by the tribunal due to the belief that a fair hearing was no longer possible. This decision was based on the passage of time and the potential impact on witness recollection. However, the EAT found that the tribunal erred by not first allowing the appellant to refine and focus her claim. The EAT ruled that the strike-out order should be set aside and the claim remitted to the tribunal for reconsideration.

Unlawful Deductions from Wages

The appellant also challenged the tribunal's decision regarding her wages claim under the PHI scheme. She argued that the tribunal incorrectly interpreted the scheme by excluding overtime and salary increases from her entitlement. The tribunal had ruled that the PHI scheme only covered basic salary and that the 5% annual increase was a fixed amount. The EAT upheld the tribunal's decision on these points, rejecting the appellant's arguments.

The Cross-Appeal

AXA ICAS Ltd cross-appealed, arguing that their obligation under the PHI scheme was limited to maintaining an insurance policy, not paying wages. The EAT dismissed this cross-appeal, affirming that the scheme entailed a direct obligation to pay a proportion of salary as wages under the Employment Rights Act 1996.

The Amendment Application

Ms McMahon sought to amend her claim to include wages allegedly due after her dismissal, citing a breach of an implied term in her contract. The tribunal refused this amendment, and the EAT upheld this decision. The EAT agreed that the claim for post-dismissal wages was not viable under section 13 of the Employment Rights Act 1996.

Conclusion

The EAT's ruling highlights the importance of procedural fairness in employment claims, particularly concerning the opportunity to refine and specify claims before decisions are made. The case will now return to the tribunal for further proceedings on the disability discrimination claim.

Learn More

For more information on employment law, see BeCivil's guide to UK Employment Law.