The reporting of benefits in kind (BiK) has transformed over the past few years. Gone are the days of paper based P11Ds, having been replaced by online reporting and the option of ‘payrolling’ BiKs through payroll systems.
On 16 January 2024, the government announced a package of measures to support its ambition to simplify and modernise the tax system, using the efficiencies of digital service to drive public sector productivity and to make the tax system simpler and fairer.
One of the measures announced was that the government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions (NICs) on benefits in kind, via payroll software from April 2026.
How it currently works
Currently, employers have two ways of reporting their BiKs:
To report via P11D submission to HMRC, annually, before the deadline of 6 July following the tax year in which the employee received the benefit. Payment of Class 1A employer national insurance contributions (NICs) must be paid before 22 July (if paying electronically). Using the information reported on the P11D, the employee pays the associated income tax through self-assessment, or it is collected by way of an adjustment to the employee’s tax code in the tax year after the benefits or expenses are received.
To payroll benefits, allowing benefits to be reported in real time through pay as you earn (PAYE), meaning no mid-year changes to tax codes as tax is deducted throughout the year. Class 1A employer NICs still need to be reported on P11D(b) by 6 July after the end of the tax year.
One of the drawbacks of the traditional, or legacy, P11D submission is that an employee could wait over a year before seeing any tax related benefits they’re receiving being deducted from their pay. Any change to an employee’s tax code being made so long after the benefit has been received often causes confusion.
Conversely, the payrolling of benefits allows for the tax on BiKs to be collected in real-time via the employee’s pay, reducing the confusion for the employee, however the system is currently not fool-proof and currently employer-provided living accommodation, and interest free/low interest (beneficial) loans cannot be payrolled.
What should employers consider now?
Less flexibility – employers will no longer have the option to payroll only certain BiKs or employees, with all benefits requiring to be reported. This could have a direct cashflow impact on the employee.
Data management – employers will need to be able to easily access the reportable monthly data so they can provide it to the payroll department ahead of payroll processing cut-off dates.
Increased PAYE risk – compulsory reporting of benefits increases the risk of monthly non-compliance and tax driven penalties.
Employee impact – the employee might experience a cashflow impact in 2026/27 when the mandatory payrolling of BiKs and PAYE code adjustments for the prior year overlap.
Employee communication – upcoming changes to the BiKs reporting system will need to be communicated to employees.
Payroll impact – can your current payroll software/outsources payroll provider cope with the change? Will there be an increase in fees?
Process impact – it has yet to be determined how beneficial loans and employee-related accommodation benefits will be reported. What will the impact be for leavers, if processed before payroll cut off?
Next steps
HMRC has confirmed that government ministers will not be putting the change out to public consultation, but instead will be liaise with key stakeholders such as the Chartered Institute of Payroll Professionals (CIPP), to discuss the forthcoming change at length, ahead of implementation come April 2026.
CIPP are seeking to address the following key issues:
Ensuring calculation methods for employer-provided living accommodation and beneficial loans are updated and can be processed via payroll software.
Ensuring working sheets are available for employers and agents to help with calculating values to be used.
Being mindful of the changes required for payroll systems, and the time taken for software companies to implement the changes.
Pushing for real-time payments of Class 1A employer NICs, to eliminate the need for the P11D(b).
Let’s Talk
If you would like any further information on the changes and how they might affect you or your business, please do not hesitate to contact your usual Dixcart UK contact or enquire at hello@dixcartuk.com
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
With Chancellor Rachel Reeves’s first Budget scheduled for Wednesday 30th October 2024, we have set...
News & Views
Employment Law Case Update – January 2024
Anne-Marie Pavitt,
26th January 2024
Employment Law
We welcome you back into the land of employment law cases with a few of cases from the back end of 2023. Learn how the ACAS Code plays a crucial role in handling whistleblowing cases, and its implications for compensation uplifts and the limitations of contractual terms. We take a look at how future discrimination claims can be waived when done correctly in a settlement agreement, and evaluate how timings should be considered when looking at constructive dismissal cases, particularly where the claimant has a long employment history and there have been efforts at negotiation.
Whistleblowing: Using the ACAS Code for grievances and compensation uplifts, and whether contractual terms can limit losses
In SPI Spirits (UK) Ltd & Anor v Zabelin [2023] EAT 147, the claimant was the Group Chief Investment Officer for the first respondent company (SPI Spirits). He agreed a 30% pay cut from April to June 2020 because of the effects of the coronavirus (COVID-19) pandemic on the business. When the first respondent said that the pay cut was being extended to at least 1 September 2020 the claimant raised, in an email of 4 June 2020 and at a meeting on 5 June 2020, various issues including alleging that the pandemic was being used as an excuse to cut pay and that employees were being intimidated. On 8 June 2020 the claimant had a telephone discussion with the second respondent (Shefler), the majority shareholder in the group, who suggested that the claimant should resign if he didn’t agree to proposed changes to bonuses. When the claimant queried why he should resign the second respondent dismissed him. The claimant brought claims including of automatic unfair dismissal and detriment on the grounds of having made whistleblowing protected disclosures (including regarding (a) the claimant’s pay; (b) the claimant’s 2020 bonus; (c) staff welfare; and (d) coronavirus pretence).
The outcome of the case was that the EAT confirmed that a grievance must be in writing for the ACAS Code on Disciplinary and Grievance Procedures to apply but, once that has occurred, if new grievances arise they do not each have to be put in writing for the Code to be engaged, unless there is a ‘material change’ in the nature or scope of the complaint or redress sought such that fairness requires it. In addition, the uplift to compensation for an employer’s failure to follow the ACAS Code also applies to awards made against individuals if the relevant individual was responsible for the failure. Finally, contractual terms limiting loss will not be upheld if they produce an outcome which would have the same effect as disapplying or limiting a statutory provision, according to the EAT.
Equality Act: Unknown future claims can be waived in a settlement agreement if sufficiently particularised
In Bathgate v Technip Singapore PTE [2023] CSIH 48 the Inner House of the Court of Session held that the various protections for the employee built into section 147 of the Equality Act 2010 do not exclude the settlement of future claims so long as the types of claim are clearly identified and the objective meaning of the words used encompassed settlement of the relevant claim. Section 147 of the Equality Act 2010 allows claims for discrimination to be settled using a settlement agreement provided that the settlement agreement relates to the ‘particular complaint’. Accordingly, a settlement agreement can relate to a future complaint if there is sufficient description of it in the claims waived.
There has been significant uncertainty for some time about whether or not future claims an employee might acquire against their employer but which have not yet arisen could, with the correct wording, be effectively waived as part of a settlement agreement. This decision by the Inner House of the Court of Session (the Scottish equivalent to the Court of Appeal) comes unequivocally to the conclusion that future claims can be waived in a settlement agreement so long as they are sufficiently identified in accordance with the requirements in Hinton v University of East London [2005] EWA Civ 532.
Whilst employers would be wise to consider including future claims in settlement agreements, those representing individuals may try to exclude future claims. However, it should be noted that the decision in this case may not necessarily be followed in England. While decisions from the Inner House of the Court of Session are often considered by employment tribunals and the Employment Appeal Tribunal (EAT) in England, they are not strictly binding, so caution should be exercised.
Constructive Dismissal: Was resignation too slow to have been ‘the last straw’?
In Leaney v Loughborough University [2023] EAT 155, the claimant had been a university lecturer and warden of a halls of residence with over 40 years’ service at the University. A student had made a complaint against him in 2018, which he disputed and had led to disciplinary action and in turn a grievance being raised by the claimant. He subsequently resigned as warden in December 2019, and asked several times for a grievance appeal to be held. They told him several times to draw a line under the matter but the claimant persisted. On 29 June 2020, he was told that the university could not look at the issue any further. There followed a period of negotiation between solicitors but due to be back at work that autumn, the claimant was so anxious he was signed off sick by his GP on 10 September 2020, and then resigned with notice on 28 September 2020, thereafter claiming constructive unfair dismissal, alleging a cumulative breach of the implied duty of trust and confidence.
The claimant claimed the notification he had received on 29 June 2020 was the ‘last straw’. The tribunal held that he had affirmed the contract of employment during the three months between 29 June, and his resignation on 28 September 2020 because he should have tendered his resignation prior to this.
The EAT disagreed with the tribunal’s approach and remitted the issue of affirmation for reconsideration, holding:
that the tribunal’s focus should not necessarily be on how much time has passed when considering whether affirmation has taken place, but should take into account all the surrounding facts and circumstances should be weighed.
where there has been a period of delay then length of service should be taken into account in deciding whether the contract has been affirmed but it is fact sensitive. It is understandable that an employee with long service may take longer to consider their position (without necessarily having affirmed) before removing themselves from a secure job, but the surrounding context is vital and should be applied on an case-by-case basis.
a period of negotiation before resignation is relevant. Negotiations could be an employee’s attempt to give the employer the opportunity to ‘put things right’ before resigning and therefore such a delay may not necessarily amount to affirmation of the contract.
His claim was dismissed on the basis that, between the date of the last matter that could potentially be relied upon as a last straw, and the date of resignation, he had affirmed the contract. Having regard to the facts found, and the matters relied upon by the claimant as relevant to the question of whether there had been affirmation, the tribunal erred in its approach to affirmation. The EAT found the tribunal had focused incorrectly on things that did not happen (the Claimant did not delay his resignation because of student exams and did not state that he was working under protest), which, if they had happened, might have pointed away from affirmation. Instead, they should have honed in on what conduct there had been which might have amounted to affirmation. The EAT therefore remitted the matter to the same tribunal for fresh consideration of that issue, in light of the facts found, and, as necessary, the further issues to which the complaint gave rise.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
This month our case digest is dominated by unfair dismissal and victimisation claims...
News & Views
Employment Law General Update – November 2023
Employment,
22nd November 2023
Employment Law
This month’s employment law updates cover various critical issues. The Work and Pensions Committee seeks input on statutory sick pay, while the Government has published its response to the EU employment law consultations. The Home Office updates illegal working penalty guidelines, and we have Government guidance on the handling labour unions before strikes. The TUC’s data on the disability pay gap underscores the importance of inclusivity, and a WoRC report examines systemic factors in the exploitation of migrant workers. Stay informed for compliance in this evolving employment landscape.
Sick Pay: Work and Pensions Committee publishes call for evidence on statutory sick pay
Immigration: Home Office publishes updated code of practice on illegal working penalties
Trade Unions: Government publishes guidance on issuing work notices ahead of strike action
Disability: TUC publishes latest data on disability pay gap
Immigration: WoRC report looks at systemic drivers of UK migrant worker exploitation
Sick Pay: Work and Pensions Committee publishes call for evidence on statutory sick pay
The Work and Pensions Committee has issued a call for evidence on statutory sick pay (SSP), requesting the public views and ability to submit evidence until Friday, 8 December 2023. The Work and Pensions Select Committee calls for this inquiry to assess the existing ‘effectiveness of SSP in supporting claimants and if SSP should be reformed to better enable a recipient’s recovery and return to work’.
Retained EU Employment Law: Government response to consultation and new draft regulations available
Retained EU Employment Law consultation response
The government has officially released its response to the ‘Retained EU Employment Law’ consultation, addressing proposed reforms within the Working Time Regulations 1998 (WTR) related to annual leave, holiday pay calculations, and record-keeping requirements. Additionally, it responded to the consultation concerning the annual leave entitlement calculation for part-year and irregular hours workers in light of the Supreme Court’s Harpur Trust v Brazel 2022 ICR 1380 decision.
The government has proposed the introduction of a ‘rolled-up’ holiday pay system for irregular hours and part-year workers and allow for an annual leave accrual method of 12.07% of hours worked for these groups. This means that instead of receiving a separate payment when taking annual leave, certain workers, specifically those with irregular hours or part-year employment (which may include agency workers), will get an extra amount added to their regular pay.
However, the government has decided not to proceed with the idea of creating a single annual leave entitlement that combines the ‘basic’ and ‘additional’ annual leave entitlements into a single 5.6-week entitlement (i.e. four weeks required by EU law and the 1.6 weeks mandated by the Working Time Regulations). Instead, they want to maintain two separate “pots” of annual leave with two different pay rates. This means that workers will still receive four weeks of leave at their normal pay rate and 1.6 weeks at a basic pay rate.
Additionally, the government plans to pass laws to make it clearer what should be included in the calculation of normal remuneration for holiday pay. They are also considering more significant changes to how holiday pay rates are determined.
In response to the Harpur Trust ruling, the initial proposal suggested using a 52-week reference period to calculate annual leave entitlement. However, many people raised concerns about the extra work this would create and the challenges it posed for workers whose hours changed from year to year or for those in their first year of employment.
To keep things simpler, the government has opted for a different approach. They will use an accrual method to figure out annual leave entitlement, where workers get 12.07% of the hours they’ve worked in a specific pay period. This method was commonly used before the Harpur Trust decision and better reflects the hours a worker has actually worked in the current year. For other workers in their first year of employment, things will remain the same. They will continue to accrue annual leave by receiving 1/12th of their statutory entitlement on the first day of each month and adjusting it accordingly.
The response also mentions that the government will maintain certain EU case laws to protect workers’ rights regarding carrying over unused annual leave when they can’t take it due to maternity, family-related leave, or being sick. They will also introduce a way for irregular hours and part-year workers to accrue annual leave when they’ve had periods of maternity, family-related leave, or sickness.
Additionally, the government will proceed with changes to record-keeping requirements in the Working Time Regulations (WTR). This change clarifies that businesses do not have to keep daily records of how many hours each worker works. This clarification aims to address concerns that a previous ruling by the European Court of Justice might have required employers to track the exact daily hours worked by each employee, rather than maintaining adequate and proportionate records based on the workplace and working patterns.
Regarding TUPE (Transfer of Undertakings), the government will move forward with its proposal to simplify consultation obligations during a transfer. Small businesses (with fewer than 50 employees) will be allowed to directly consult with employees if there are no existing employee representatives, avoiding the need to organize elections for new representatives. Additionally, businesses of any size can directly consult with employees (if there are no existing representatives) when a transfer involves fewer than ten employees.Top of Form
Draft Regulations
The Department of Business and Trade has published the draft Equality Act 2010 (Amendment) Regulations 2023. The draft SI restates some protections in relation to pregnancy, maternity and breastfeeding, indirect discrimination, access to employment and occupation, equal pay and the definition of disability which would otherwise be lost from 1 January 2024 under the Retained EU Law (Revocation and Reform) Act 2023 (REUL(RR)A 2023).
These draft regulations are proposed to reproduce in domestic law certain interpretive effects of retained EU law which, under REUL(RR)A 2023, will cease to apply to the UK statute book after the end of 2023. This will mean that, in the areas covered by this instrument, the law will continue to have the same effect after the end of 2023 as it did before. They are due to come into force on 1 January 2024.
The draft Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 will amend the Working Time Regulations 1998 (in relation to record-keeping, paid holiday for irregular hours workers and part-year workers, normal pay, and the carrying forward of paid holiday) and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (in relation to information and consultation obligations on small businesses for transfers on or after 1 July 2024) and revoke the European Cooperative Society (Involvement of Employees) Regulations 2006. They are due to come into force on 1 January 2024.
Immigration: Home Office publishes updated code of practice on illegal working penalties
The Home Office has published a new draft Code of Practice on the civil penalty schemes for employers (preventing illegal working). The draft is an update to the version published in March 2022 and will be the sixth version of the code. This latest version of the code will be applied to all right to work checks from 22 January 2024 including where a follow-up check is required to maintain a statutory excuse, even if the initial check was undertaken using a previous version of the code which was current at the time.
The draft code has been amended further to the issue of draft Statutory Instruments (SIs) which will raise the starting point for penalties to £45,000 for a breach (if there are no previous breaches in the last three years) and £60,000 for repeated breaches. The draft codes will come into force at the same time as the related SIs, which are: (Employment of Adults Subject to Immigration Control) (Maximum Penalty) (Amendment) Order 2023 and the Immigration (Restrictions on Employment and Residential Accommodation) (Codes of Practice) (Amendment) Order 2023. These are each stated to come into force on 22 January 2024, or, if later, on the twenty-first day after the day on which it is made. However, the code assumes 22 January 2024 as a commencement date.
Trade Unions: Government publishes guidance on issuing work notices ahead of strike action
The Department of Business and Trade has published guidance for employers, trade unions and workers on issuing work notices ahead of strike action. Work notices, which were introduced under the Strikes (Minimum Service Levels) Act 2023, allow employers to require a workforce to meet minimum service levels for an upcoming strike period where the trade union has given notice to the employer of the strike and the employer provides a service covered by minimum service level regulations.
The new guidance is designed to be read alongside the government’s range of guidance on industrial action which can be found here.
The guidance covers:
the purpose of a work notice and the steps for preparing it;
considerations when preparing a work notice;
considerations upon deciding to issue a work notice;
consulting with trade unions;
guidance on producing a work notice;
guidance on notifying workers of a notice;
duties on workers and trade unions following issue of a work notice;
Disability: TUC publishes latest data on disability pay gap
The Trade Union Congress (TUC) has published new analysis [TUC slams “zero progr<a id=”back”></a>ess” on disability pay gap in last decade | TUC] of the pay gap between non-disabled and disabled workers. According to data from the TUC, the pay gap is currently higher than it was 10 years ago, with non-disabled workers earning approximately 14.6% more than disabled workers.
The key findings of the analysis include:
the pay gap is only marginally lower than it was when the TUC launched disability Pay Gap Day in 2016/17;
disabled women face the biggest pay penalty with non-disabled men earning an average of 30% more;
the industry with the biggest pay gap is financial and industrial services which currently stands at 33.2%;
disabled workers are twice as likely to be unemployed than non-disabled workers;
one in 10 BME disabled workers are unemployed compared to nearly one in 40 white non-disabled workers;
disabled workers are more likely to be on zero-hours contracts than non-disabled workers.
The TUC has called for action from the government to put an end to discrimination against disabled workers in the labour market and has backed Labour’s New Deal for Working People.
Immigration: WoRC report looks at systemic drivers of UK migrant worker exploitation
The charity Work Rights Centre (WoRC) has published a report which looks at what lies behind increasing reports of migrant worker exploitation in the UK, particularly in certain sectors such as health and care. Drawing on 40 case studies, interviews with caseworkers, and policy analysis, the report identifies the post-Brexit work sponsorship system and piecemeal/weak labour enforcement as two key systemic drivers. It makes a number of recommendations, including reforms to the work sponsorship system (replacing employer sponsorship entirely, or alternatively a range of reforms to the sponsorship system to facilitate protection of sponsored migrants against exploitation), increasing protections for all workers (including establishing a Single Enforcement Body for all labour rights, giving protection against unfair dismissal from the first day of employment and instituting secure reporting of exploitative practices), and implementing a migrant worker welfare strategy (including the creation of an independent Migrant Commissioner role).
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
This month our case digest is dominated by unfair dismissal and victimisation claims...
News & Views
Employment Law Case Update – November 2023
Employment,
22nd November 2023
Employment Law
This month’s case law shines a light on a less-common area of worker status – where a partnership is providing a service to a company and how to ensure no employee relationship is found, and provides a useful insight into using comparators for discrimination claims.
Worker Status: Individual providing services through genuine partnership cannot be an employee
Worker Status: Individual providing services through genuine partnership cannot be an employee
In Anglian Windows Ltd t/a Anglian Home Improvements v Webb [2023] EAT 138 the EAT held that if there is an agreement between a genuine partnership and an employer for the partnership to provide certain services, then, providing that the arrangement is not a sham, there cannot also be an employment relationship between the individual partner providing those services and the employer, and, accordingly that partner cannot bring a claim of unfair dismissal against the employer (because they do not have the necessary status of being an employee).
This judgment concerns the unusual situation of a partnership entering into an agreement with a company for one of its partners to perform a sales role and then that individual partner trying to claim that they are an employee of that company in order to claim unfair dismissal.
The claimant and his wife had a partnership trading as Webb Consultants. The claimant was appointed as Area Sales Leader for the respondent but provided services (and was paid) through Webb Consultants. The contract provided that the claimant would not be an employee and would ‘at all times remain either a self-employed sole trader, a limited company or a partnership’. The claimant was dismissed and claimed unfair dismissal. The respondent applied to strike out the claim on the basis that it did not have reasonable prospects of success because the claimant was not an employee.
The employment tribunal refused to strike out the claim on the basis that the fact of these arrangements (which involved a genuine partnership and were not suggested to be a sham) did not preclude the possibility of the claimant being able to establish employee status. In reaching this conclusion, the tribunal sought to distinguish the EAT’s decision in Firthglow Ltd v Descombes and anor UKEAT/0916/03. The respondent appealed.
The EAT disagreed with the tribunal’s finding. The EAT held that the tribunal had erred in seeking to draw a distinction between this case and Descombes, where it had been held that, where the relevant work was being undertaken under an agreement with a partnership, that precluded the possibility of one of the individual partners being able to claim he was an employee. The tribunal ought to have followed Descombes. Although it was open to the EAT not to follow a previous decision at this level, none of the circumstances that might warrant adopting this course of action. Moreover, the agreed facts, confirmed by the tribunal’s own findings, meant that the possibility of the existence of a contract of employment between the claimant and the respondent was precluded in the circumstances of this case. That being so, the claimant’s claim of unfair dismissal could have no reasonable prospect of success and the tribunal ought to have allowed the respondent’s strike out application. Therefore the appeal was allowed, the tribunal’s judgment set aside and a finding substituted that the claimant’s claim must be dismissed as having no reasonable prospect of success.
Although employers might, as a result of this judgment, be tempted to engage people to work for them through a partnership (as a means of avoiding them gaining rights as employees) the fact that the courts and tribunals will look behind any such arrangement to determine whether it is a sham, and not reflecting the true agreement between the parties, should discourage them from doing so in practice.
Constructive Unfair Dismissal: Incorrect use of hypothetical comparators
In The No. 8 Partnership v Simmons [2023] EAT 140 the claimant pursued claims of constructive unfair dismissal and of direct associative disability discrimination, relating to the respondent’s refusal to grant her time off for her dependent father under section 57A Employment Rights Act 1996. In considering the claim of direct discrimination, the Employment Tribunal constructed hypothetical comparators without first giving the parties the opportunity to give evidence or make submissions on the hypothetical circumstances envisaged. The tribunal also found that the reason for the refusal of section 57A leave was the respondent’s unwarranted misinterpretation of the section and that one of the decision-makers was dismissive of the care that aged parents required. Having found that the respondent had thus discriminated against the claimant, the tribunal concluded that this meant that it had breached the implied term of trust and confidence, which had also been breached by the respondent’s failure to personally communicate with the claimant before reaching any decision. The respondent appealed.
The EAT allowed the appeal. By failing to afford the parties the opportunity to address its hypothetical comparisons (in evidence or submissions), the tribunal had adopted an unfair procedure. The comparators thus constructed were also flawed as they failed to provide a like-for-like comparison for the purposes of section 23 Equality Act 2010 and, in the case of the second case, relied on a comparison with an individual sharing the same protected characteristic as the claimant. Moreover, given its finding as to the respondent’s reason for refusing section 57A leave, it was perverse of the tribunal to conclude that this was because of the claimant’s father’s disability. That conclusion was also perverse given the tribunal’s further finding that one of the respondent’s partners would have treated any carer of an aged parent (regardless of disability) in the same way.
Having allowed the appeal against the finding of discrimination, this also undermined the tribunal’s reasoning on constructive unfair dismissal. The alternative basis for that conclusion was, however, also flawed as the tribunal had failed to apply the correct test when determining whether there had been a breach of the implied term of trust and confidence and had failed to provide an adequate explanation of it finding that a breach arose from a failure of personal communication.
In the direct race discrimination case of Virgin Active Ltd v Hughes [2023] EAT 130, the question before the EAT was whether it was correct for the employment tribunal to consider a colleague who had made a comment about her own race as a valid comparator for a claimant who had made a comment about a colleague’s race.
The claimant in this case was a gym manager who had been dismissed. He had won several claims at the tribunal, including unfair dismissal, automatic and ‘ordinary’ unfair dismissal, and race discrimination concerning the handling of his disciplinary process and a grievance. The respondent appealed on various grounds and succeeded in overturning the findings related to race discrimination.
The tribunal had considered three of the claimant’s colleagues as comparators, even though their situations appeared significantly different from the claimant’s. The tribunal argued that the differences in treatment of these comparators shifted the burden of proof and upheld the complaint.
However, the EAT disagreed with the tribunal’s approach. It pointed out that the tribunal had not adequately assessed whether the claimant’s comparators were indeed suitable comparators, given their differing circumstances. A tribunal should carefully evaluate any material differences between a claimant and a valid comparator. The more significant the differences in their circumstances, the less likely the disparate treatment indicates discrimination. To illustrate this, the EAT provided an example: if two individuals of different races both undergo a job interview and one succeeds while the other does not, this alone wouldn’t be enough to shift the burden of proof. However, if both candidates scored equally in an assessment but were treated differently, that might indeed warrant shifting the burden of proof.
Additionally, the judgment highlighted that delay, on its own, is not sufficient grounds for an appeal. (The judgment had been delayed due to the Employment Tribunal Judge’s serious ill-health.)
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
Tax
