In Anderson v Chesterfield High School UKEAT/0206/14/MC, Mr Anderson is currently the elected Mayor of Liverpool. This is an executive post and regarded as full-time. The position carries with it an annual allowance of almost £80,000. He had previously held positions as Councillor of Liverpool City Council, the Leader of the opposition on the Council and ultimately at the time of his election as Mayor, Leader of the Council, which was in effect a full-time post with an annual allowance of approximately £50,000.
Prior to his election as Mayor, he was employed by a neighbouring Local Authority, Sefton Metropolitan Borough Council (“Sefton”) at Chesterfield High School. Once elected Leader of Liverpool City Council he had ceased to work at the School.
Sefton agreed that he should continue as an employee. This was on the basis that he would be paid the maximum allowed as paid leave to enable employees to hold public office by Section 10 of the Local Government and Housing Act 1989 (208 hours per annum). His post was held open. Sefton also continued to pay pension contributions.
This arrangement continued until the School became an Academy. His employment then transferred by a TUPE transfer to the Respondent, now independent of Sefton.
The Respondent was concerned that the arrangement was “inequitable”, principally because the Respondent was paying some £4,500 per annum to the Claimant but the pupils at the school received no benefit. The Respondent accordingly terminated the agreement. The Claimant claimed, inter alia that he had been dismissed unfairly.
The ET found that he had remained an employee and had been dismissed for “some other substantial reason”, a potentially fair reason. However, the dismissal procedure was unfair, and his claim for unfair dismissal was upheld. He was entitled only to a basic award subject to a Polkey deduction and contributory fault.
Mr Anderson appealed. The EAT on 14 April 2015 upheld the decision of the ET on the basis that the deductions were justified on the facts found by the ET and that the Respondent had acted reasonably in taking the view that a continuation of an arrangement whereby Mr Anderson was paid (albeit a modest amount) by a publicly funded school, without having to provide any services, for an indefinite period was of no value to the Respondent and might lead to significant criticism. It was entitled reasonably to regard the arrangement as inequitable and unsustainable and to terminate Mr Anderson’s employment.
His Honour Judge Serota QC said:-
“13. No concern appears to have been given as to what the public perception might be of the expenditure of public money to a full-time politician who was not expected or required to provide any services in return.”
“57. In my opinion the principal reason for the “dismissal” was obvious. The realisation that a continuation of an arrangement whereby the Claimant, an elected official of a neighbouring Local Authority, was paid (albeit a modest amount) by a publicly funded school without having to provide any services for an indefinite period was considered to be of no value to the Respondent and might lead to significant criticism if the arrangement became public. The Respondent was reasonably entitled to regard the arrangement as inequitable and unsustainable. It was also the case that the Respondent considered that the arrangement (including the indefinite holding open of the Claimant’s post) led to some instability within the school.
58. The Employment Tribunal’s conclusions on the Polkey deduction and deduction for contribution were conclusions to which it was entitled to come. Its conclusion that the Claimant was party to a misuse of public funds was certainly within the range of reasonable responses of a reasonable employer. Further, the Claimant’s conduct can reasonably be regarded as culpable or blameworthy. The finding that the Claimant would have been dismissed in any event had a “fair” dismissal procedure been followed is unassailable as a finding of fact that the Employment Tribunal was entitled to make. I am unable to see how consultation would have made any difference. …
59. It seems to me as though the Claimant has simply not given sufficient attention as to how the arrangement he made with Sefton and so continued with the Respondent might look to outsiders. The Claimant was entitled to receive almost £80,000 per annum from Liverpool for his role as elected Mayor, yet also procured a payment (albeit modest) from public funds for which he provided, and was not expected to provide, any service. It was, more likely, considered to be a reverse form for a zero hours contract, whereby the Respondent was bound to make payment of salary but the Claimant was not bound to provide any services. It is certainly fairly arguable that this arrangement may strike members of the public as constituting a misapplication of public monies. …
60. What most people would consider the Respondent’s desire to extricate itself from this arrangement, which could have been a public relations disaster for the school, would seem to me to be a clear example of SOSR for ending the employment relationship with the Claimant. I am satisfied that this is the conclusion to which the Employment Tribunal came and to which it was clearly entitled to come. In the circumstances, the appeal is dismissed.”