NUT v Governing Body of St Mary's Church of England School (IDS Brief 582/February 1997)

European Directives can be directly enforced against voluntary aided schools because they are regulated by Acts of Parliament and a Board of governors is a public body with legal obligations, the Court of Appeal has held. The decision has important implications with more organisations to be treated as emanations of the state, giving more workers the direct benefit of European law.

"Is my employer an emanation of the state?" is hardly a question on the lips of the nation's workers. But the answer makes an important difference for employees' rights at work.

European law is the key. Most European laws relating to employment or health and safety are Directives: instructions to European Union governments to pass laws in their own country. If a government fails to pass the necessary laws, or passes laws which do not implement the Directive properly, it may be challenged in the European Court.

This is a slow process which would not immediately help workers who have been deprived of the rights they should have under the Directive.

The European Court of Justice plugged that gap in two ways. First, employees who work for a state employer can bring a claim against that employer using the Directive, even if it has not been implemented by the government (Marshall v Southampton & South West Hampshire Health Authority [1986] IRLR 140). This is because a state employer should not be allowed to take advantage of the state's failure to comply with European law.

Employees in the private sector cannot rely on this approach. Courts must interpret UK law in a way which complies with European Directives, but, if they cannot and employees lose out as a result, the employees' only possible claim is to sue the Government. This is based on the principle in the Francovich case [1992] IRLR 84.

In short, state employees have a direct remedy against their employers. This is particularly important where the UK does not pass laws in time (as with the Working Time Directive) or where the UK laws do not match up to the Directive they are supposed to implement (as with the TUPE Regulations and the Acquired Rights Directive).

This does not only benefit employees of central government. In various decisions local authorities, NHS Trusts and even privatised water companies (Griffin v South West Water [1995] IRLR 15) have been held to be, in the legal jargon, "emanations of the state".

The test was first set down in Foster v British Gas [1991] IRLR 268 and covers bodies which have been made responsible for providing a public service, where the service is under the control of the state and the body has special powers.

The NEU, formerly the NUT, case concerned the amalgamation of two voluntary aided schools. The Tribunal dismissed claims for unfair dismissal and failure to consult. It said that TUPE did not apply because, at that time, TUPE only covered commercial undertakings. It rejected the argument that the school was an emanation of the state which would have meant that the Directive applied and the claims would succeed.

The Employment Appeal Tribunal took the same view, but this has now been overturned by the Court of Appeal. The Court said that the school was part of the state system. It was regulated by powers passed under Acts of Parliament. The governors were a public body with legal obligations.

The Appeal Court took a wide view. Foster does not set out a rigid three-part test. If the union and the employees did not succeed in their claim, the local education authority and the state would effectively benefit from the government's failure to comply with the Directive: exactly the situation which should be avoided.

This broad approach has important implications. It will mean that more organisations will be treated as emanations of the state and that more workers have the direct benefit of European law.

The most immediate impact will be that those workers can insist that their employers comply in full with the Working Time Directive even though the government has not yet passed a law to implement it.divider rule

Redundancy - employees can't fail to get the points

John Brown Engineering Limited v Brown [1997] IRLR 90 (EAT-Scotland)

Withholding the findings of a redundancy selection points system may make a dismissal unfair if the employee has no opportunity to know how he has been assessed, the Employment Appeal Tribunal in Scotland has held. Although there was an appeals procedure, the employers would not tell the employees either their marks or those of the employees with whom they were compared, making the appeal process a sham.

Trade unions and employees have had great difficulty challenging the use of points systems to choose who is dismissed. This decision puts a welcome constraint on the employer's discretion.

It is very difficult to challenge the application of a points system without knowing the points which have been allocated to individual employees, so a comparison can be made between those selected for redundancy and those who remain. The Court of Appeal in British Aerospace v Green [1995] IRLR 433 refused to order the employer to hand over this information.

This had the practical effect that, once a points system had been established, employees had no effective way of challenging the outcome unless they could show obvious flaws in their own marks. This presented particular difficulty where the overall scheme had been agreed with the union and it was only the application of the scheme to individuals which was challenged in the Industrial Tribunal.

The Scottish Court of Session in King v Eaton [1996] IRLR 199 stressed that redundancy dismissals may be unfair if there is inadequate consultation with the unions and that individual employees must be consulted.

In the Brown case, there was an agreement between the employer and the union on the criteria to be applied to decide on redundancy selection based on a marking system.

The EAT adopted the approach in the British Coal case [1994] IRLR 72 that fair consultation involves consultation when the proposals are still at a formative stage, adequate information on which to respond, adequate time to respond and conscientious consideration of the response.

This applies to consultation with unions and individuals. It may still be necessary to consult with individuals even where the consultation with the union is conducted properly.

The EAT said that withholding all redundancy selection markings may make a dismissal unfair if the employee has no opportunity to know how he has been assessed. An employer who chooses not to publish "league tables" of scores runs the risk of acting unfairly to employees.

The IT must decide if the employees were treated in a fair and even-handed manner. Withholding marks from each employee once the assessment had taken place meant the appeal was a sham. Consequently the dismissals were unfair.

This case has considerable practical significance. In every case, an employer runs the risk of an almost certain unfair dismissal finding if individual employees are not told their scores. Indeed, employers face a high risk of an unfair dismissal award if employees are not told the scores of those with whom they were compared.

This should also make it easier for unions and employees to obtain this information from the employers in Tribunal cases. It will be relevant to the fairness of the dismissal.

It will also be relevant to consultation: the Tribunal needs to consider the likelihood that the employee would have been kept on if a fair procedure had been followed and this is likely to involve consideration of the scores of other employees.