Employment News – Case Update April 2022

A round-up of the most significant employment law cases to be published over the last month including more definitions between workers and self-employed contractors,  indirect discrimination and harassment, unfair dismissal and TUPE.

  • Worker Status: Ryanair pilot was a worker and an agency worker, not a self-employed contractor
  • Indirect Discrimination: Comparison pool for claims must relate to precise PCP pleaded by claimant
  • Harassment: When does perception turn conduct into harassment?
  • Unfair Dismissal: Tribunal erred when striking out unfair dismissal claim by employee who volunteered for redundancy
  • TUPE: ACAS settlement was wide enough to cover transferee’s failure to provide information to transferor

Worker Status: Ryanair pilot was a worker and an agency worker, not a self-employed contractor

In Lutz v (1) Ryanair DAC and (2) MCG Aviation Ltd (2022) ET/3201452/2020, an employment tribunal has held that a pilot placed with Ryanair by MCG Aviation Ltd (MCG) was a worker of MCG and an agency worker for the purposes of the Agency Workers Regulations 2010 (SI 2010/93).

Mr Lutz applied to be a pilot for Ryanair, was successful and was then passed to MCG, which managed Ryanair’s pool of “contracted pilots” who work alongside their employed pilots. MCG organised the setting up of a service company, so that Mr Lutz could operate as self-employed. MCG entered into a five-year fixed-term contract with the service company, under which all work was exclusively for Ryanair, and Mr Lutz “or an agreed acceptable and qualified nominated substitute” would perform the work.

The tribunal held that Mr Lutz was not a self-employed pilot with Ryanair as a customer of his service company. Mr Lutz was never a shareholder, director or employee of the service company, into which MCG had installed him, and Ryanair had no dealings with the service company. Nor was he an employee of Ryanair as there was no contract of employment between them. Since he was not in business on his own account and MCG were the intermediary through which Ryanair dealt with its contracted pilots, the tribunal concluded that MCG supplied Mr Lutz to Ryanair as an agency worker. To be an agency worker, the work must be temporary. The tribunal held that the five-year fixed-term contract between the service company and MCG was not indefinite and was therefore temporary.

In deciding that Mr Lutz was an agency worker, the tribunal found that he had a contract with MCG to supply his services personally and not though the service company. The tribunal’s view was that his ability to swap shifts was not substitution but a rearrangement of the day and time when personal service was required. In any event, there was no unfettered right of substitution. Only another Ryanair pilot could take the shift and permission from Ryanair was required. The contractual documentation purporting to show that it was not a contract for personal service was a sham. Every aspect of the engagement was structured as Ryanair dictated and Mr Lutz’s independence was entirely notional, with Ryanair rostering his flights and requiring him to wear their uniform.

As the tribunal noted, this case has wide implications due to the many purportedly self-employed pilots in the aviation industry engaged under similar arrangements.

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Indirect Discrimination: Comparison pool for claims must relate to precise PCP pleaded by claimant

In Allen v Primark Stores Ltd [2022] EAT 57, the EAT has confirmed that the comparison pool for an indirect discrimination claim must be constructed by accurate reference to the precise provision, criterion or practice (PCP) pleaded by the claimant.

Ms Allen worked for Primark Stores Ltd as a department manager in the Bury store. Following her return from maternity leave, she requested flexible working for childcare reasons. Primark considered her request and offered some accommodation for it. However, it refused to agree that she would not have to work Thursday late shifts.

Ms Allen brought a claim for indirect sex discrimination. She argued that Primark applied a PCP that department managers had to guarantee their availability to work Thursday late shifts, that this PCP put women at a disadvantage because of childcare responsibilities, and that she had been put at this disadvantage. To assess the discriminatory impact of the PCP, the employment tribunal constructed a comparison pool which included all department managers in the Bury store who might be asked to work Thursday late shifts. Amongst others, this pool included two department managers, Zee and Imran, who it was accepted had an implied contractual right not to work Thursday late shifts but did so in emergencies. Having considered the pool, the tribunal concluded that the PCP affected two men (Zee and Imran) and one woman (Ms Allen) and therefore did not put women at a disadvantage. Ms Allen’s claim was rejected. She appealed to the EAT.

The EAT upheld the appeal. It found that, in constructing the pool, the tribunal had redefined Ms Allen’s complaint. The PCP she had identified was not simply that she was being “asked” to work Thursday late shifts, but that she was being required to guarantee her availability to do so. Zee and Imran were not subject to this availability requirement and therefore were in a materially different situation to Ms Allen. By failing to properly engage with the PCP, the tribunal had allowed itself to include within the comparison pool two individuals to whom the disadvantage to which the PCP gave rise did not apply. It was insufficient for the tribunal to consider whether individuals might be “asked” to work the late shift without going on to determine whether there was an element of compulsion in the making of such a request. The tribunal’s decision was set aside and the case remitted.

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Harassment: When does perception turn conduct into harassment?

In Ali v Heathrow Express and Redline Assured Security Ltd [2022] EAT 54 Mr Ali was working for Heathrow Express, and Redline Assured Security Ltd (Redline) was responsible for carrying out security checks at the airport and the stations. Part of this was to leave suspicious objects around to see how security officers responded to them. One such object was a bag containing a box, some electric cabling and, visible at the top, a piece of paper with the words “Allahu Akbar” written in Arabic. Mr Ali, who is a Muslim, was among a group of Heathrow Express’s employees who were circulated with an email reporting on the results of the test and including images of the bag and the note.

Mr Ali complained to the employment tribunal that Redline’s conduct amounted to either direct discrimination against him or harassment of him, as defined in the Equality Act 2010, by reference to his religion, that Redline had acted as Heathrow Express’s agent, and that, accordingly, both parties were liable to him in that respect.

The tribunal concluded that the conduct amounted neither to direct discrimination nor to harassment by effect. As to harassment, this was because, applying section 26(4) of the 2010 Act (i.e. in deciding whether conduct has the effect of harassment each of the following must be taken into account: (a) his perception; (b) the other circumstances of the case; and (c) whether it is reasonable for the conduct to have that effect) it was not, in all the circumstances, reasonable for Mr Ali to perceive the conduct as having an effect falling within section 26(1)(b) (i.e. that the conduct has the purpose or effect of violating his dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for him).

In particular, the tribunal considered that Mr Ali should have understood that, in using this phrase, Redline was not seeking to associate Islam with terrorism, but, in the context of recent incidents in which the phrase had been used by terrorists, had used it in order to produce a suspicious item based on possible threats to the airport. The tribunal decided that it therefore did not need to determine the agency point, nor a defence which invoked section 192 (national security).

Mr Ali appealed against the decision on the harassment complaint on the grounds that it was either perverse or insufficiently reasoned. The appeal on both grounds was dismissed on the basis that a person’s perception is just one of the issues for the tribunal to consider when looking at whether conduct amounted to harassment as defined by s.26 of the Equality Act 2010.

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Unfair Dismissal: Tribunal erred when striking out unfair dismissal claim by employee who volunteered for redundancy

In White v HC-One Oval Ltd [2022] EAT 56, the EAT has held that an employment tribunal was wrong to strike out a claim for unfair dismissal on the basis that it had no reasonable prospect of success because the claimant had requested redundancy.

In September 2018, care home operator HC-One Oval Ltd announced it was reducing the number of employees carrying out reception and administrative work. Ms White was provisionally selected for redundancy. Subsequently, she requested voluntary redundancy, which was accepted.

After termination of her employment, Ms White submitted a claim for unfair dismissal. She alleged that:

  • In July 2018, she had raised a grievance about having to cover the duties of an absent colleague as well as her own, without extra pay.
  • During the redundancy process, an administrative role had become available. This should have been offered to her but was not.
  • The outcome of the redundancy process was that a receptionist recruited just before it began, who had no childcare responsibilities, had been offered a full-time role while the two part-time receptionists had been dismissed. The process had been manufactured to achieve this.

For these reasons, Ms White argued that the redundancy process was not genuine and that she had been targeted for dismissal. The employer disputed Ms White’s allegations. It contended that she had been fairly dismissed for redundancy at her own request and therefore that her claim should be struck out because it had no reasonable prospect of success.

The employment tribunal struck out the claim. It held that, because Ms White had requested redundancy, the employer would be able to establish the reason for, and reasonableness of, her dismissal. However, the EAT found that the tribunal had erred in law. Had the tribunal engaged with Ms White’s case at its highest, as required, it could not have found that there was no reasonable prospect of success. If Ms White’s account of the background to the redundancy was accepted, the facts known to the decision maker might well be found to include matters other than just Ms White’s redundancy request. In addition, Ms White alleged that the redundancy process was a sham. Even if the tribunal was satisfied with the reason for dismissal, it would still need to consider the fairness of the process. There was a factual dispute here which was not suitable for summary determination. The case was remitted to the tribunal for consideration by a different judge.

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TUPE: ACAS settlement was wide enough to cover transferee’s failure to provide information to transferor

In Clark v Middleton and another [2022] EAT 31, the EAT has held that an employment tribunal was correct to find that, in a claim for a failure to inform and consult under the Transfer of Undertakings (Protection of Employment) Regulations 2006, no award could be made against the transferee for its failure to provide information to the transferor about measures it proposed to take in connection with the transfer, under regulation 13(4). This was because of an earlier withdrawal of claims against the transferee following an ACAS-conciliated settlement between the claimant and the transferee, which the EAT considered was wide enough to encompass the transferee’s liability for failure to provide that information.

However, the tribunal had erred in making a zero award in respect of the transferor’s failure to notify the transferring employee of the identity of the transferee company on the basis that this was merely a “technical breach”. It matters to know the name and identity of the unique legal person who will be the employer, and the tribunal should not have viewed this as a mere technicality. The EAT remitted the claim to a fresh tribunal to decide the remedy.

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Further Information:

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

The information provided within this document is for general informational purposes only. While every effort has been made to ensure its accuracy, no responsibility can be accepted for inaccuracies. Readers are advised that laws and practices may change over time. This document is provided solely for informational purposes and does not constitute accounting, legal, or tax advice. Professional advice should be sought before making any decisions based on the contents of this document.