Employment Law Newsletter – July 2021
- Constructive Dismissal: EAT holds constructive dismissal can amount to an act of unlawful harassment under the Equality Act 2010
- Indirect Discrimination: Headscarf ban capable of justification only if it applies to all visible signs of political, philosophical or religious belief
- COVID-19: Employee who remained in Italy at outbreak of pandemic was automatically unfairly dismissed
- Employment Status: Deliveroo riders do not fall within scope of trade union freedom right under Article 11 ECHR given lack of employment relationship with Deliveroo
- COVID-19: ET3 accepted out of time when employer argued it had not received notification of ET1 submitted in first lockdown
- Compensation: Tribunal entitled to assess discrimination compensation on basis of career-long loss where claimant suffered from PTSD, depression and paranoia
- Disability Discrimination: Tribunal erred in law by failing to consider claimant’s challenge to employer’s justification defence
- Ethnic Pay Gap: CBI, TUC and ECHR sign letter calling for mandatory ethnic pay gap reporting
- Data Protection: European Commission adopts UK adequacy decisions
- Flexible Working: CIPD warns there is a risk of developing a ‘two-tier’ workforce over access to flexible working
- Low Pay: In-work Progression Commission report on removing barriers faced by those on low pay
- COVID-19: Treasury direction extending Self-Employment Income Support Scheme to 30 September 2021
- ACAS: New guidance published on hybrid working
- Flexible Working: SMF survey reveals that 80% of workers would be against a four-day working week in exchange for lower pay
Constructive Dismissal: EAT holds constructive dismissal can amount to an act of unlawful harassment under the Equality Act 2010
In Driscoll (née Cobbing) v V & P Global Ltd and another EA-2020-000876, the EAT has held that a constructive dismissal can constitute an act of unlawful harassment under the Equality Act 2010 (the Act), departing from its earlier contrary decision, Timothy James Consulting Ltd v Wilton  ICR 764.
The harassment provisions in the Act must be construed purposively, so as to conform with all relevant EU directives, on which the original legislative wording was based. However, in Wilton, the EAT had not referred to the European law, simply holding that harassment in the context of employment, as prohibited by section 40 of the Act, did not expressly include resignation amounting to constructive dismissal. Having examined the relevant directives, the EAT was satisfied that each of them proscribes harassment on the grounds of their respective protected characteristics, including in relation to dismissals. It was notable that, under the directives, harassment is expressly deemed to be a form of direct or indirect discrimination, and should be treated as such. Further, the ECJ has long held that the term “dismissal” is to be construed widely to include, for example, termination as part of a voluntary redundancy scheme and reaching an age limit under an employer’s general retirement policy. There was therefore no principled basis for excluding constructive dismissal from the scope of the applicable directives.
The EAT also drew support from domestic case law, namely Meikle v Nottinghamshire County Council  ICR 1, where the Court of Appeal held that a constructive dismissal could amount to a discriminatory act for the purpose of a disability discrimination claim.
In light of its analysis, the EAT held that Wilton was not correctly decided. As the decision was “manifestly wrong”, it was appropriate for the EAT to depart from its earlier decision. Accordingly, where an employee resigns in response to repudiatory conduct which constitutes or includes unlawful harassment related to a protected characteristic, the constructive dismissal is itself capable of constituting “unwanted conduct” for the purpose of section 26 of the Act.
Indirect Discrimination: Headscarf ban capable of justification only if it applies to all visible signs of political, philosophical or religious belief
In IX v WABE eV (Cases C‑804/18 and C‑341/19) EU:C:2021:594, the ECJ has bolstered existing case law on religious dress bans in the workplace, holding that an employer’s policy of political, philosophical and religious neutrality may justify indirect discrimination on the grounds of religion or belief caused by a rule prohibiting the wearing of any visible sign of such beliefs. An employer’s aim of preventing social conflicts may also be a legitimate aim.
However, a dress ban limited to conspicuous, large-sized signs of political, philosophical and religious belief is likely to be directly discriminatory, which cannot be justified. As such, an employer’s ban must apply to all such signs if its indirectly discriminatory effects are to be capable of objective justification.
To objectively justify indirect discrimination on the ground of religion or belief caused by an employer’s dress code, it is necessary for the employer to show that the rule meets a genuine need, taking account of the rights and legitimate wishes of customers or users as well as the adverse impact to the employer in the absence of such a policy. The aim must be appropriate for the purpose of achieving the aim pursued and limited to what is strictly necessary. In the context of a policy of neutrality, this requires it to be applied in a consistent and systematic manner, to include all visible signs of political, philosophical or religious beliefs and to be limited in application to only those workers who come into contact with customers or users.
When examining whether indirect discrimination on the grounds of religion or belief resulting from an employer’s rule is objectively justified, the rights and freedoms recognised by the Charter of Fundamental Rights and the European Convention on Human Rights must be taken into account. In addition, a national rule that lays down an additional requirement for justifying an employer’s rule must also be considered.
COVID-19: Employee who remained in Italy at outbreak of pandemic was automatically unfairly dismissed
The employment tribunal in Montanaro v Lansafe Ltd ET/2203148/2020 held that an employee is automatically unfairly dismissed if the reason (or, if more than one, the principal reason) for their dismissal is that, in circumstances of danger which the employee reasonably believed to be serious and imminent, they took (or proposed to take) appropriate steps to protect themselves or others from the danger (section 100(1)(e), Employment Rights Act 1996).
Mr Montanaro (M) was employed by Lansafe Ltd (L) Ltd from 17 February 2020 and provided services to L’s client, B. M believed he had permission to take holiday on 9 and 10 March for his sister’s wedding in Italy. On 9 March, Italy went into lockdown and UK government guidance stipulated 14 days’ isolation on return from Italy. On 10 March, M was told to keep his mobile and laptop on and wait for instructions. On 11 March, L sent a letter to M in London (despite knowing he was in Italy) advising that he had been dismissed with effect from 6 March for failing to follow company procedures and taking unauthorised leave. In absence of communication from L, M was told by B to continue working remotely and M sent information to L about travel restrictions in Italy. On 1 April, L sent M’s P45 and final payslip by email. M successfully claimed automatic unfair dismissal under section 100(1)(e).
The tribunal held that there were circumstances of danger, given the declaration of a pandemic and the risk of catching a contagious virus which could lead to serious illness and death, and that M reasonably believed the danger was serious and imminent. M had taken appropriate steps to protect himself and others. He had asked L for advice, instructions and assistance with documentation had L initially wanted him to fly to London. He had forwarded appropriate information about the situation in Italy. He was ready to receive communication and instructions for work on his mobile and laptop. When he didn’t hear from L he communicated direct with B and continued his work on a day-to-day basis. The purported dismissal letter had not been relevant to M’s circumstances and L’s evidence as to the reason for dismissal had not been credible. M had been dismissed because he had communicated the difficulties posed by the pandemic and proposed to work remotely from Italy until circumstances changed.
Employment Status: Deliveroo riders do not fall within scope of trade union freedom right under Article 11 ECHR given lack of employment relationship with Deliveroo
The Court of Appeal in Independent Workers Union of Great Britain v Central Arbitration Committee and another  EWCA Civ 952 has unanimously held that Deliveroo riders do not fall within the scope of the trade union freedom right under Article 11 of the European Convention on Human Rights because they are not “in an employment relationship” with Deliveroo. The Central Arbitration Committee had been entitled to reach the conclusion it did given that Deliveroo riders are, genuinely, not under an obligation to provide their services personally and have a “virtually unlimited” right of substitution.
In reaching its decision, the court confirmed that the question of whether Article 11 is engaged in respect of the right to form and join trade unions should be determined having regard to the International Labour Organisation Recommendation 198 (2006). This broadly reflects the position taken in domestic law in identifying the characteristics not only of a contract of service but also a “worker contract”. In particular, it refers to the fact that work “must be carried out personally by the worker”. The absence of such an obligation, as in the case of Deliveroo riders, must therefore point away from worker status and an employment relationship. The decision reiterates the importance of personal service and the value of genuine and unfettered rights of substitution when seeking to argue that an individual is neither an employee nor a worker.
COVID-19: ET3 accepted out of time when employer argued it had not received notification of ET1 submitted in first lockdown
If a respondent wishes to defend an employment tribunal claim, it must present its response (using the prescribed ET3 form) to the tribunal office within 28 days of the date on which it was sent a copy of the claim by the tribunal. If the 28-day deadline has expired the respondent must make a written application for an extension of time, copied to the claimant, setting out the reason why the extension is sought and stating whether it requests a hearing. The application must be accompanied by either a draft of the response, or an explanation of why it is not possible to attach a draft.
In Fyfe v Arcadis Human Resources Ltd ET/4102033/2020 Mr Fyfe submitted an ET1, claiming breach of contract and age discrimination, during the initial phase of the first COVID-19 lockdown. The tribunal’s notification of the claim was not received by Arcadis Human Resources Ltd despite it having an operational post room with skeleton staff throughout lockdown. On 15 July 2020, Mr Fyfe sent Arcadis an email attaching his evidence prior to a final hearing on 17 July 2020. Arcadis immediately instructed a solicitor who contacted the tribunal to put himself on the record, request copies of the ET1 and indicate that Arcadis wished to defend the claim and apply for an extension of time to do so. On 16 July 2020, a written application and draft ET3 were sent to the tribunal. The hearing on 17 July 2020 was converted to a preliminary hearing to hear the application.
The tribunal accepted that these events occurred at an unprecedented time, when many individuals and organisations were adjusting to new working practices, and that Arcadis had not received notification of the claim. It noted the guidance on the exercise of discretion given by the EAT in Kwik Save Stores Ltd v Swain  ICR 49. Arcadis had acted swiftly once it knew of the claim. Considering the balance of prejudice, while Mr Fyfe would not now succeed on a “default judgment” basis, he might still prove his case. By contrast, if Arcadis was precluded from participating, it might have judgment against it in relation to serious matters. Given the overriding objective and interests of justice, the extension of time was allowed and the ET3 was accepted.
Compensation: Tribunal entitled to assess discrimination compensation on basis of career-long loss where claimant suffered from PTSD, depression and paranoia
The EAT, in Secretary of State for Justice v Plaistow UKEAT/0016/20 and UKEAT/0085/20, has upheld an employment tribunal’s decision to calculate compensation for direct sexual orientation discrimination and harassment on the basis of career-long loss. The employee suffered from PTSD, depression and symptoms of paranoia, as well as other functional impairments, and his conditions were likely to be life-long. His case was one of the rare cases where a career-long basis for assessment of financial loss was appropriate.
However, the EAT allowed appeals against various other aspects of the calculation, including the employment tribunal’s decision to apply only a 5% discount to reflect the possibility of employment being cut short for another reason (for example, due to early death, disability or other unforeseen circumstances) and its award of a 20% uplift for failure to comply with the ACAS Code of Practice on Disciplinary and Grievance Procedures. The EAT accepted that the employment tribunal had not demonstrated that it had considered the absolute financial value of the award it was making, despite having evidence that would have given it a clear indication of the probable level of award in issue (likely to be over £2 million).
The case is a rare example of an individual being treated so badly in their employment that the resulting injury was likely to be permanent, meaning that it was very unlikely that they would be able to return to any work before retirement age and therefore justifying compensation on a career-long basis.
Disability Discrimination: Tribunal erred in law by failing to consider claimant’s challenge to employer’s justification defence
In Brightman v TIAA Limited  UKEAT/0318/19 the EAT has held that a tribunal erred in law by failing to consider a claimant’s challenge to her employer’s justification defence in respect of her discrimination arising from disability claim.
Mrs Brightman had various long-term conditions and was disabled for the purpose of the Equality Act 2010. This was not in dispute. On 11 January 2017, she was dismissed by reason of capability on the basis of the available medical evidence, the fact that no further adjustments were possible, her unacceptable level of attendance (which her employer concluded was likely to continue) and the lack of alternative roles. She unsuccessfully appealed and brought various claims, including unfair dismissal and discrimination arising from disability. The tribunal dismissed her claims. She appealed to the EAT.
The EAT noted the following:
- Mrs Brightman’s last day of sickness absence was 24 October 2016 (two and a half months before her dismissal was confirmed), and she attended work throughout the dismissal and appeal processes.
- By the date of her dismissal, her GP report was over a year old and her OH report was based on a consultation from six months earlier (the referral being to assess her fitness to work).
- At the time of dismissal, she had a new central line, was under the care of a new medical team and was optimistic about the future.
The case was not about dismissing an employee on long-term sickness absence but dismissing a working employee because of the risk that she would have further periods of sickness absence in the future. The EAT concluded that the tribunal had impermissibly relied on employer medical evidence that post-dated the dismissal, which it had allowed to be introduced to fill the evidential “gap” and was irrelevant to the liability hearing. Regarding the discrimination arising from disability claim, Mrs Brightman’s absence record was the “something arising“. Her employer’s legitimate aim seemingly concerned the “unpredictable nature” of her absence and the need for other employees to provide cover. However, the tribunal erred by not adequately engaging with her arguments on justification (notably, in circumstances where her employer had been sustaining her absence levels for years). Employers must tread carefully before dismissing, even where an employee has had multiple periods of prolonged absence. Medical evidence relied on should be current, and the employee’s condition and prognosis at the time of dismissal considered.
Ethnic Pay Gap: CBI, TUC and ECHR sign letter calling for mandatory ethnic pay gap reporting
The Guardian reports that in a letter addressed to Cabinet Office minister Michael Gove, the Confederation of British Industry (CBI), the Trades Union Congress (TUC) and the Equality and Human Rights Commission (EHRC) have called for a clear timetable for the introduction of mandatory ethnic pay gap reporting. Citing the potential of data collection to solve racial inequality in the workplace, the signatories argue that mandatory reporting would highlight pay disparities and the lack of minority representation in senior positions with the hope that this would push employers towards action.
A government spokesperson indicated that the findings of the Commission on Race and Ethnic Disparities were still being considered and that the government would respond in due course. The Commission’s report did not recommend mandatory reporting.
Data Protection: European Commission adopts UK adequacy decisions
On 28 June 2021, the European Commission adopted the two UK adequacy decisions under the General Data Protection Regulation ((EU) 2016/679) and the Law Enforcement Directive. This means that personal data can now flow freely from the EU to the UK as the UK offers an equivalent level of protection to personal data as under EU law. The Department for Digital, Culture, Media and Sport has updated its guidance to confirm the decisions.
The decisions include sunset clauses that limit the decisions to four years, after which they will be reviewed.
The Information Commissioner, Elizabeth Denham, has welcomed the decisions as a positive result for UK businesses and organisations and a testament to the strength of the UK’s data protection regime, noting that “adequacy is the best outcome as it means organisations can carry on with data protection as usual“.
Flexible Working: CIPD warns there is a risk of developing a ‘two-tier’ workforce over access to flexible working
Website, People Management, has reported on a league table prepared by the CIPD over access to flexible working using analysis by the HR body of the Office for National Statistics’ Labour Force Survey data. It reports that “the UK is at risk of becoming a two-tier workforce when it comes to who has access to flexibility with some regions of the country already becoming flexible ‘notspots’”, because some areas of the country have much better access to flexible working than others.
Flexibility was measured by looking at 1) where employees were permitted to work, 2) how informally flexible working policies were operated, including how start and end times were determined and 3) whether employees were able to take leave on short notice.
It turns out employees in the south-east of England have the best access to flexible working options, followed by the east of England and Northern Ireland, which the CIPD states reflects the predominance of certain sectors in different parts of the country, as well as areas with a higher concentration of higher-skilled and higher-paid jobs, which are concentrated in London and the south east.
Low Pay: In-work Progression Commission report on removing barriers faced by those on low pay
On 12 October 2020, the Department for Work and Pensions (DWP) launched a call for evidence seeking views on challenges to progression in low-pay sectors, benefits of progression to employers and localities, and examples of good practice across the country. On 1 July 2021, the DWP published the In-Work Progression Commission’s report ‘Supporting progression out of low pay: a call to action’. The report notes that people in low-pay sectors find it very hard to progress to, and stay in, higher earning work. The reasons for this include a lack of skills, logistical challenges, such as a lack of suitable transport or childcare arrangements, as well as confidence and motivational barriers. It recommends that employers play their role in minimising and removing these barriers and in establishing a culture of lifelong learning to support their workforces. Developing skills and an understanding of the value of continual learning is essential to help people in low pay sustainably progress in work.
Employers should adopt the “5-point progression checklist“:
- an individualised progression and learning plan,
- shadowing and work experience, and
- supporting professional development.
They should also develop transparent progression pathways to ensure that entry-level jobs are a stepping-stone. An appropriate senior leader should be responsible for embedding support for progression into management practice. Employers should know about the transport and childcare options available to their staff and use this to inform business practice.
The report recommends that the government works with employers to consider how employers can be supported to accurately monitor individual progression over time, increasing transparency around in-work progression, with particular focus on those in the lowest-skilled roles. This could include developing an appropriate metric to track individual progression and looking at whether, in the longer term, pay reporting data should be part of annual company reports. The report recommends that care workers in England should be registered under a central body (as in the Devolved Administrations) which can manage and certify their registration, training and ongoing professional and skills development.
COVID-19: Treasury direction extending Self-Employment Income Support Scheme to 30 September 2021
On 6 July 2021, HM Treasury issued a further Treasury direction under sections 71 and 76 of the Coronavirus Act 2020, modifying and extending the terms of the Self-Employment Income Support Scheme (SEISS) to cover the period beginning on 1 May 2021 and ending on 30 September 2021. In particular, the Treasury direction provides for claims for the fifth SEISS grant (SEISS 5) to be submitted on or before 30 September 2021 in respect of that period. A claim cannot be amended after 30 September 2021. Applications for SEISS 5 will open from late July 2021.
The amount of the grant will be determined by a turnover test. Individuals whose turnover has fallen by 30% or more will receive 80% of three months’ average trading profits, capped at £7,500. However, individuals whose turnover has fallen by less than 30% will receive a 30% grant, capped at £2,850.
ACAS: New guidance published on hybrid working
On 13 July 2021, ACAS published new guidance on hybrid working to help employers consider whether it could be an option for their workplace and how to fairly introduce it. ACAS has also published the results of a survey showing that over half of employers expect an increase in employee requests for flexible working. The advice includes tips for employers on how to:
- Consult with staff on the practical considerations regarding introducing hybrid working.
- Support and manage staff who are hybrid working and ensure all hybrid workers are treated fairly.
- Create a hybrid working policy.
- Handle hybrid working requests from staff.
It advises employers to consider whether technology could assist hybrid working, and issues such as health and safety, data privacy, cybersecurity, onboarding new joiners, and how teams will communicate remotely.
The guidance was developed after consultation with the government’s Flexible Working Taskforce which previously recommended that flexible working should be the default position for all workers.
Flexible Working: SMF survey reveals that 80% of workers would be against a four-day working week in exchange for lower pay
Personnel Today reports that a briefing paper published by the Social Market Foundation (SMF) records that 80% of workers surveyed would not be in favour of a four-day working week, if it meant that they earned less. While workers in banking (14%), energy & water (13%), manufacturing (13%), transport & communication (13%), and construction (12%) were most likely to say they wanted to work less, those working in the hospitality (14%), other services (12%), and public administration sectors (8%) were most likely to say they wanted to work more hours.
The survey also found that the workers who stood to benefit most from a four-day week were more likely to be higher earners, those in higher occupational classes, and men.
The introduction of a four-day working week is one of the proposals currently being considered by the government’s flexible working taskforce following a call from cross-party MPs.
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