Employment Law Newsletter – April 2021

Cases:

Cases:

Equal pay: Retail employees can compare themselves to distribution employees working at different establishments

The Supreme Court has upheld the decisions of the tribunal, the EAT and the Court of Appeal in Asda Stores Ltd v Brierley and others [2021] UKSC 10 that a group of predominantly female retail employees could compare themselves to a group of mainly male distribution employees for the purposes of an equal pay claim.

Even though the two groups worked at completely separate establishments, such that no distribution worker would have done distribution work at a retail site, and no retail worker would have done retail work at a distribution depot, a comparison could be made because the employer observed broadly common terms and conditions for the relevant groups across its sites.

When claimants and comparators are based at different establishments, determining whether the statutory requirement for common terms is satisfied boils down to asking a single question: would the comparator have been employed on the same or substantially the same terms if they had been employed in the same role at the claimants’ establishment? Cases that do not pass this threshold test will likely be exceptional.

For the benefit of future cases, the court provided a comprehensive summary of the current law relating to the common terms requirement under section 79(4)(c) of the Equality Act 2010. The court also provided guidance for future equal pay cases involving similar preliminary issues over the common terms requirement, confirming that:

• It is a threshold test only. Tribunals should not tolerate a prolonged enquiry into it and appeals are to be discouraged.
• Inference from the facts and circumstances may more readily provide an answer to the test than the opinions of individuals employed in the business. There is no requirement for any form of line-by-line comparison of different sets of terms and conditions.
• The threshold test should not be elevated into a major hurdle nor used as a proxy for other elements of an equal pay claim.

The case can now proceed to the next stage to determine whether the work of the two groups was of equal value.

Sex Discrimination: An employer who pays a man on shared parental leave less than a woman on statutory adoption leave is not discriminating

In Price v Powys County Council UKEAT/0133/20/LA (V), the EAT has upheld the decision of an employment tribunal that it is not discriminatory for an employer to provide enhanced adoption pay but no enhanced shared parental pay.

The claimant, a man, alleged that such a policy was direct discrimination on the grounds of sex, since a man on shared parental leave (SPL) would receive less pay than a woman on statutory adoption leave (SAL).

However, the EAT found that the underlying purpose of SPL and SAL is materially different. SPL is aimed at the facilitation of childcare and giving parents greater choice, whereas the purpose of SAL goes well beyond childcare alone and includes matters such as encouraging the formation of a parental bond and the taking of steps to prepare and maintain a safe environment for the child.

In addition, the EAT held that the tribunal had been correct to find that SPL and SAL operated in materially different ways. For example, SAL could only be taken in one continuous period, could begin before the placement of a child and was an immediate entitlement on the placement of a child, all of which contrasted with the regime for SPL.

Taking all the above into account, the EAT concluded that the tribunal had been right to determine that a woman on SAL was not an appropriate comparator for a man on SPL. The correct comparator was a woman on SPL. Since a woman on SPL would have received the same pay as a man on SPL under the employer’s policy, there was no sex discrimination.

Equality Act: How to determine substantial adverse effect of disability using Equality Act 2010 definition

In Elliott v Dorset County Council [2021] UKEAT/0197/20, the EAT has allowed an appeal against an employment tribunal’s finding that a claimant was not disabled, holding that the tribunal had failed to adopt the correct approach to determining whether the admitted impairment had a substantial adverse effect on the claimant’s ability to carry out day-to-day activities.

Section 6(1) of the Equality Act 2010 sets out the statutory definition of disability:

“A person (P) has a disability if P has a physical or mental impairment, and the impairment has a substantial and long-term adverse effect on his ability to carry out normal day-to-day activities”.

The EAT held that the statutory definition of “substantial” meaning “more than minor or trivial”, as set out in section 212 of the Equality Act 2010, prevails over any guidance. If the adverse effect has a more than minor or trivial effect on the ability of a person to carry out day to day activities, the definition is met. A tribunal should only consider the guidance in the Equality Act 2010: Guidance on matters to be taken into account in determining questions relating to the definition of disability (“the Guidance”) and the EHRC Employment Statutory Code of Practice (“the Code”) if the statutory definition fails to provide a conclusive answer.

If it is necessary for the tribunal to take into account the Guidance or the Code, the suggestion they contain that “substantial” means that an impairment has a greater effect than the “normal differences in ability which might exist among people” requires a comparison with people who are broadly similar to the claimant, other than not having the alleged disability.

The EAT encouraged consideration of the context of the whole provision, and statute, in order to properly analyse and apply individual sections. The focus of the test of whether an impairment has a “substantial” adverse impact is to look at what a person cannot do, or can do only with difficulty, rather than on the things that the person can do. To assess whether an impairment has a substantial adverse effect on day-to-day activities, the employment judge must first determine what the day-to-day activities are.

The EAT remitted the question of whether the claimant was disabled to a new tribunal.

COVID-19: Calculation of a Week’s Pay Regulations do not have retrospective effect

An employment tribunal in Bayliff v Fileturn Ltd ET/2304837/20 has held that the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (SI 2020/814) did not apply retrospectively to the calculation of an employee’s notice pay for the period before the regulations came into force. Where an employee was given notice before the regulations came into force on 31 July 2020, and their notice continued after that date, their notice pay only had to be calculated in accordance with the regulations after that date.

We believe that this is the first available decision on this issue. Although the decision will not be binding on other employment tribunals, it provides some helpful clarification for employers who only had one day’s notice of the regulations coming into force, and had to quickly determine how to calculate employees’ notice pay in the light of them.

Unfair Dismissal: Failing to receive ACAS early conciliation certificate did not mean time limit should have been extended

In Stratford on Avon District Council v Hughes [2020] UKEAT/0163/20, the EAT has allowed an appeal against an employment tribunal’s finding that it was not reasonably practicable for a claimant to have presented his claim in time, where he had not received the early conciliation certificate by the expiry of the relevant limitation period.

The claimant was dismissed on 29 March 2019 and contacted ACAS on 25 June 2019. ACAS informed him on 2 August 2019 that the employer did not wish to continue with the conciliation process and emailed him a certificate that day. However, the claimant did not receive the certificate. Under section 207B(4) of the Employment Rights Act 1996, the primary limitation period expired on 2 September 2019, that is “one month after day B”. By the time the claimant had obtained a copy of the certificate and presented his claim, on 5 September 2019, it was three days out of time.

An employment tribunal extended time on the basis that it had not been reasonably practicable for the claimant to have presented his claim in time because he needed the early conciliation certificate in order to lodge the claim. The EAT found that this reasoning was flawed. The question which the tribunal should have asked was whether, in all the circumstances, it would have been reasonably practicable for the claimant to have obtained the early conciliation certificate sooner, not whether he behaved reasonably in waiting until after the expiry of the primary limitation period to contact ACAS. The concept of “reasonable practicability” involves a heavier onus than just behaving reasonably, but is not to be equated with what is physically possible.

Other News:

COVID-19: Government launches four roadmap reviews including consultation on workplace social distancing measures

On 5 April 2021, the government updated its Roadmap Reviews policy paper to provide clarity on how the COVID-19 pandemic will be managed after the final step of the government’s roadmap out of lockdown is reached on 21 June 2021. The four roadmap reviews are as follows:

• The COVID-Status Certification Review will consider the possibility of COVID-status certification as a way of reopening the economy and reducing social distancing restrictions.
• The Global Travel Taskforce will explore how and when the re-opening of non-essential international travel will take place.
• The Events Research Programme will work with national and local public health authorities to develop approaches to social distancing, ventilation, test-on-entry protocols and COVID-status certification in different venues.
• The Social Distancing Review will establish how social distancing measures can be reduced in different settings, including the workplace. The government’s ability to relax social distancing measures will be tied to decisions made by the COVID-Status Certification Review, particularly whether COVID-status certification could enable changes to social distancing.

As part of the Social Distancing Review, a spokesperson for the Department for Business, Enterprise and Industrial Strategy (BEIS) has announced that it is consulting with businesses about the introduction of long-term social distancing measures to bring workers back into the office. Possible strategies include the implementation of six months of social distancing each year and the longer-term use of masks and see-through plastic screens. On 8 April 2021, business department officials hosted a conversation with professional services to discuss potential strategies.

COVID-19: Updated HMRC guidance to address operation of CJRS from May 2021

On 8 April 2021, HMRC made minor changes to various guidance notes relating to the Coronavirus Job Retention Scheme (CJRS). Some notable changes include:

• New guidance on how to identify whether an employee’s relevant reference day is 19 March 2020, 30 October 2020 or 2 March 2021.
• New guidance and worked examples on calculating usual working hours and 80% of wages for non-fixed rate employees with a relevant reference day of 2 March 2021. As with non-fixed rate employees with a relevant reference day of 30 October 2020, only the averaging method may be used where an employee has a relevant reference day of 2 March 2021.
• When using the averaging method to calculate average wages for non-fixed rate employees for claim periods starting on or after 1 May 2021, days spent on family-related statutory leave, “statutory sick pay leave” or “reduced rate paid leave” following the leave, and related wages, should not be taken into account. The exception to this rule is where an employee was on one of these types of leave throughout the entire period used to calculate their average wages. In this case, such days and related wages should be included.
• Multipliers for use when calculating grant amounts for July, August and September 2021, when the government contribution reduces. In addition, daily maximum wage amounts are provided for May 2021 to September 2021 inclusive.

The updated guidance also notes that, in the event of a TUPE transfer, employers should ensure that information needed for future claims under the CJRS is passed on to the new employer (including an employee’s relevant reference day and details of 80% of the employee’s wages).

A further Treasury Direction in respect of the extension of the CJRS from 1 May to 30 September 2021 dated 15 April 2021 was published on 19 April 2021 and can be found here.

See the updated guidance for more information:

1. HMRC: Guidance, Check which employees you can put on furlough to use the Coronavirus Job Retention Scheme (updated 8 April 2021);
2. Calculate how much you can claim using the Coronavirus Job Retention Scheme (updated 8 April 2021);
3. Steps to take before calculating your claim under the Coronavirus Job Retention Scheme (updated 8 April 2021).

COVID-19: TUC survey reveals that employers are failing to follow COVID-secure rules

The TUC’s biennial survey of over 2,100 workplace safety representatives has revealed that workers are being placed at risk by employers who are failing to meet COVID-secure rules.

Despite there being a legal obligation for employers to consult with safety representatives, more than a quarter (27%) of those surveyed were not involved at all in their employer’s risk assessments. In relation to COVID-19 risk assessments in particular, 34% of representatives said that neither they nor other safety representatives were consulted.

The survey also revealed that only 31% of representatives believe that social distancing rules and physical barriers between colleagues in the workplace were being implemented by their employer all of the time. Only 29% said that their employers were implementing appropriate distancing measures between employees and customers, clients or patients all of the time. 40% of representatives said that adequate PPE was either not always provided or not provided at all to workers.

Alarmingly, the survey states that 65% of workplace safety representatives have had to respond to growing numbers of mental health concerns since the pandemic began, with70% citing stress as a workplace hazard.

Racial Equality: Commission on Race and Ethnic Disparities publishes its first report

On 31 March 2021, The report of the Commission on Race and Ethnic Disparities was published. The Commission was set up by the Prime Minister in 2020 to identify racial disparities and inequalities in Britain and ways to address them. A number of its recommendations will have a direct impact on the work of employment lawyers. These include:

• Recommendation 1: challenge racist and discriminatory actions by funding the Equality and Human Rights Commission (EHRC) to use its compliance, enforcement and litigation powers to address policies or practices which cause racial disadvantage or are produced by racial discrimination.
• Recommendation 3: improve the transparency and use of artificial intelligence by publishing guidance on applying the Equality Act 2010 to algorithmic decision-making and requiring transparency from public sector bodies when it is used.
• Recommendation 8: advance fairness in the workplace by developing resources and evidence-based approaches readily available to employers.
• Recommendation 9: investigate what causes existing ethnic pay disparities by requiring the publication of a diagnosis and action plan for organisations who voluntarily publish ethnicity pay figures. The Department for Business, Energy and Industrial Strategy (BEIS) has been tasked with producing guidance for employers to draw on. The government’s response to its consultation on introducing mandatory ethnicity pay gap reporting is still awaited. It had been expected that the Commission would call for mandatory ethnicity pay gap reporting to be introduced.
• Recommendation 16: open up access to apprenticeships by creating a targeted apprenticeships campaign to inform marginalised young people of the career pathways open to them.
• Recommendation 17: encourage innovation by creating an enterprise programme for entrepreneurs from underrepresented and low-income backgrounds across the UK.

The report also flagged the term BAME as “unhelpful”, stating that it is more productive to consider the disparities and outcomes of specific ethnic, rather than homogenous, groups.

The EHRC has recognised the report as a step towards targeting Britain’s “sources of inequality” and has welcomed the prospect of additional funding. However, the report has also been widely criticised for downplaying institutional racism in the UK.

Racial Equality: Competition and Markets Authority publishes ethnicity pay gap data for 2019-2020

The Competition and Markets Authority (CMA) has voluntarily published its Competition and Markets Authority: Ethnicity Pay Gap Report: 1 April 2019 to 31 March 2020, using the same principles that apply to statutory gender pay gap reporting. The report, which contains data recorded as at 31 March 2020, shows that the ethnicity profile of CMA staff was 22% BAME (Black, Asian and Minority Ethnic) and 69% non-BAME. Acknowledging that there are too few BAME employees in senior roles, the median pay gap (difference between the midpoints of the average hourly pay of BAME and non-BAME staff) was reported as 34.8%. By contrast, the equivalent gender pay gap figure reported for the same snapshot date was 2.9%

The CMA’s ethnicity bonus gap (calculated using the median average) was 44.2%. By contrast, the gender bonus gap calculated using the median average was -2.5%. The high ethnicity bonus gap can be explained by a number of factors, including the lack of BAME employees in senior roles. In addition, a number of key individuals attracted pivotal role allowances during the year, and all recipients of such allowances were non-BAME.

The report sets out a number of action points to close the ethnicity pay gap at the CMA, which include the creation of an internal development programme for under-represented groups, using data to challenge and check progress on improving diversity in recruitment, and the creation of a Positive Action Steering Group. This group will oversee the implementation of the CMA’s Race Action Plan.

The government consultation on introducing mandatory ethnicity pay gap reporting was launched in 2018. The consultation closed on 11 January 2019 and a response has yet to be issued. However, it is expected that the Commission on Race and Ethnic Disparities, which was set up by the Prime Minister in 2020, will shortly call for annual ethnicity pay reporting to be made mandatory for larger employers.

Discrimination: Number of trans people hiding identity at work rises to 65%, survey says

65% of trans employees feel they need to hide their trans status at work according to a survey published by YouGov on behalf of Totaljobs. The figure, which represents a pool of 410 people, signals a 13% increase compared with statistics published in 2016, and corresponds with a 7% rise in the number of trans employees who quit their jobs as a result of an unwelcoming work environment in the same period, reaching 43% this year.

Katie Budd, head of indices and resources at LGBT+ charity Stonewall, has urged employers to take a zero-tolerance approach to trans exclusion, recommending the development of transitioning at work policies, as well as ensuring that organisations become public trans allies.

Discrimination: Dress code prohibiting large-scale signs of political, philosophical or religious belief indirectly discriminatory but allowing small-scale signs can be justified

Advocate General Rantos has given an Opinion in IX v WABE eV (Cases C‑804/18 and C‑341/19) EU:C:2021:144 that a German employer’s rule prohibiting the wearing of any visible sign of political, philosophical or religious beliefs in the workplace is not direct discrimination based on religion or belief. Direct discrimination cannot occur where all religions or beliefs are covered in the same way by the rule.

Indirect discrimination caused by such a rule can be justified by the employer’s intention to pursue a policy of political, philosophical and religious neutrality in the workplace in order to take account of the wishes of its customers. This is distinguished from the situation where an employer imposes such a rule in direct response to a request from a customer.

The potential to justify indirect discrimination is not limited to rules prohibiting the wearing of any visible sign of political, philosophical or religious belief; a rule limited to the prohibition of wearing conspicuous, large-scale signs of political, philosophical or religious beliefs can also be justified if it is implemented in a consistent and systematic manner.

When examining whether indirect discrimination on the grounds of religion or belief resulting from an employer’s rule is appropriate and necessary, the right to freedom of thought, conscience and religion recognised by the Charter of Fundamental Rights and the European Convention on Human Rights may not be taken into account. However, a national court may apply national constitutional provisions that protect the freedom of religion which, in effect, lay down an additional requirement for justifying an employer’s rule, provided those provisions do not undermine the principle of non-discrimination laid down in the Equal Treatment Framework Directive (2007/78/EC).

Technology: TUC pushes for restrictions on use of artificial intelligence in workplace

On 25 March 2021, the TUC published a report urging the government to introduce new legal protections for workers exposed to the use of artificial intelligence (AI) in the workplace. The report, based on a study by the AI Law Consultancy, claims that workers are currently at risk of being “hired and fired” by potentially discriminatory algorithms. Indeed, the TUC’s general secretary Frances O’Grady has warned that algorithms, which have been used more widely since the start of the COVID-19 pandemic, could lead to “widespread discrimination and unfair treatment”, particularly for gig economy workers and those in insecure work.

This issue was highlighted recently when Uber was criticised after its AI software for facial identification reportedly failed to accurately identify dark-skinned faces, resulting in many workers being unable to access its app and find jobs. The software uses a photo comparison tool to compare pictures of drivers with photos held on its database when the contractors open the app, to prove they are the person who has logged on. Tests have shown that the software used by Uber has a failure rate of 20.8% for darker-skinned female faces and 6% for males.

Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com