Employment Law News – February 2020
- Contracts: Illegal performance may not prevent subsequent enforcement of contract
- Disability discrimination: Disability must have “long-term effect” at the time of discriminatory acts
- Age Discrimination: Compulsory retirement age at University not justified
- Equality Act: One-off decisions may amount to a PCP for discrimination claims
- Indirect discrimination: It is not discriminatory to pay men less for shared parental leave
- Whistleblowing: Employer not liable to surgeon who damaged his reputation by trying to set the record straight
- National minimum wage: Government announces changes to salaried hours work and salary sacrifice schemes
- Equal Pay: Fawcett Society publishes research to support a new Bill
- Ethnic diversity: Parker Review publishes update report on ethnic diversity on boards
- Data Protection: Nominations open for Practitioner Award for Excellence in Data Protection
Contracts: Illegal performance may not prevent subsequent enforcement of contract
In the recent case of Robinson v His Highness Sheikh Khalid Bin Saqr Al Qasimi UKEAT/0106/19, the employee worked for the employer for a period of ten years under a contract which specifically provided that the employee would be responsible for paying her own income tax, but during the first seven years she failed to do so. However, once the employer became aware of the issue of non-payment of tax and took steps to address it, the employee remained employed for a further three years during which time deductions for tax and national insurance were made despite the parties being in dispute about the historical position.
The employee made various disclosures which she claimed were protected prior to her dismissal. She made claims for unfair and wrongful dismissal, and that she had suffered a detriment for making protected disclosures. The tribunal found that the reason for the dismissal was not related to the disclosures and any detriment she suffered was not materially influenced by the making of protected disclosures. Her dismissal would have been unfair but by knowingly performing her contract illegally by failing to pay income tax (as set out in the express provision in her contract that she was responsible for doing so) she was prevented from enforcing the contract and bringing any claims.
The law states that parties to an employment contract that is affected by illegality may be prevented from bringing claims in an employment tribunal or elsewhere. The effect of illegality on an employment contract will depend on the way in which the illegality arises. Where an employment contract is lawful when made but is illegally performed, the contract’s enforceability will depend on the knowledge and participation of the parties. It will be a question of fact in each case whether there has been a sufficient degree of active participation by the employee (Hall v Woolston Hall Leisure Ltd  ICR 99).
On appeal at the EAT, the decision was overturned. The EAT found that the tribunal had erred in its approach to illegality. The earlier period of illegality did not prevent the employee from bringing claims for wrongful and unfair dismissal when she was dismissed at the end of that three-year period, as the prior period could be severed from the legitimately performed contractual period when she was paying the income tax. Her claims for unfair and wrongful dismissal were upheld whilst the whistleblowing claims failed at first instance on the facts.
Disability discrimination: Disability must have “long-term effect” at the time of discriminatory acts
In Tesco Stores Ltd v Tennant UKEAT/0167/19/00 the EAT has held that to claim disability discrimination, a claimant must show that their condition had a “long-term effect” at the time of the alleged acts of discrimination.
Under s.6(1) of the Equality Act 2010, a person is disabled if they (a) have a physical or mental impairment and (b) if the impairment has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. Under paragraph 2(1) of schedule 1 of the Act, the effect of an impairment is “long-term” if it (a) has lasted for at least 12 months, (b) is likely to last at least 12 months or (c) is likely to last for the rest of the life of the person affected.
In this case, the claimant was employed by Tesco as a check out manager from June 2005. From September 2016, she was off sick for extended periods as a result of depression. She brought a claim for disability discrimination a year later (September 2017), alleging discriminatory acts which took place between September 2016 and September 2017. A preliminary hearing to determine disability took place in December 2018. The employment tribunal found that the claimant’s depression was an impairment that had had an adverse effect from 6 September 2016. Given that the claimant was still suffering from depression 12 months later, the tribunal found that the definition of disability under the Act was satisfied. However, the tribunal found no evidence on prognosis to suggest it was likely to last more than 12 months, or the rest of her life. Tesco appealed.
The EAT upheld the appeal, dismissing the claim. It held that it was necessary to determine whether the definition of disability was satisfied at the time of the discriminatory acts, not at the time the claim was submitted. The claimant could show that her condition had lasted for 12 months from 6 September 2017, but not before. Therefore, the EAT substituted a finding that the claimant was disabled from 6 September 2017. Since the relevant period was then up to 11 September 2017, this would severely limit the scope of the claimant’s claim. Therefore, the definition of “long-term” in paragraph 2(1)(a) of schedule 1 was not met in respect of acts which took place before this date.
Interestingly, permission was refused to remit the case to the tribunal to consider whether the claimant could show she was disabled at an earlier date on the basis that her condition was likely to last 12 months under paragraph 2(1)(b) of schedule 1. The EAT held that this argument had been attempted by the claimant before the tribunal, had failed, and had not been cross-appealed. Therefore, it would not be right to allow the claimant to raise the point again on remission.
Age Discrimination: Compulsory retirement age at University not justified
In Ewart v Chancellor, Master and Scholars of the University of Oxford ET/324911/2017 an employment tribunal has upheld a university professor’s claims for direct age discrimination and unfair dismissal following his compulsory retirement under the university’s Employer Justified Retirement Age policy. The university had argued that the policy was not discriminatory as it was a proportionate means of achieving a legitimate aim.
The tribunal found that there were legitimate aims for the policy, which included intergenerational fairness and career progression for junior academics; facilitating succession planning; and promoting equality and diversity (noting that recent recruits were more diverse than the existing workforce, especially the older cohort).
The tribunal went on to find that the policy was “in principle capable of contributing to the legitimate aims”. However, statistical evidence suggested that the EJRA only created 2-4% more vacancies than would otherwise have arisen, an effect that the tribunal described as “trivial in comparison with the discriminatory effect”. There was also no evidence of a system of career progression for junior academics, or expectation that they would be promoted, as senior posts were often filled externally. In relation to the diversity aim, the policy was only one of many diversity measures adopted by the university, and the evidence suggested that the university did not view it as a particularly significant measure. In conclusion, the university had not shown that having a policy made a sufficient contribution to the legitimate aims to justify its discriminatory impact. The tribunal therefore did not need to go on to consider whether the particular retirement age chosen in the policy (67) was itself appropriate.
Since the reason for dismissal was unlawfully discriminatory, the tribunal also held that it could not amount to “some other substantial reason”, meaning that the dismissal was unfair.
This decision contradicts an earlier decision in Pitcher v University of Oxford ET/3323858/2016, in which the university’s Employer Justified Retirement Age was held to be justified. It is believed the University intends to appeal this decision.
Equality Act: One-off decisions may amount to a PCP for discrimination claims
In Ishola v Transport for London  EWCA Civ 112, the claimant was an employee who worked for TfL for almost eight years and was considered to be a disabled person suffering with depression and migraines. Following a period of sickness absence in May 2015, he did not return to work and was dismissed on grounds of medical incapacity in June 2016. He brought several claims, of which only one was pursued, and subsequently dismissed, but for a limited finding that there was a breach of the duty to make reasonable adjustments (in the respondent’s lateness in advising of a reduction to his sick pay and failure to allow a friend or family member to accompany him to sickness review meetings) and a corresponding finding of unlawful indirect discrimination.
The single ground of appeal raised by the claimant that the Court of Appeal considered was that the tribunal had taken too narrow and technical an approach with regard to the reasonable adjustments claim in that the respondent operated a provision, criterion or practice (‘PCP’) of requiring the claimant to return to work without concluding a proper and fair investigation into his grievances prior to his dismissal. The tribunal had held that this was not a PCP but a “one-off act in the course of dealings with one individual”.
The EAT upheld the Tribunal’s decision, concluding there had been no error of law. The Court of Appeal agreed with the EAT on the concept of a PCP: that although a one-off decision or act can be a PCP, it is not necessarily one.
Indirect discrimination: It is not discriminatory to pay men less for shared parental leave
In May last year we reported on the two cases of Hextall v Chief Constable of Leicestershire Police and Ali v Capita Customer Management 2019 EWCA Civ 900. The matter had been appealed to the Supreme Court but permission to appeal has now been refused, meaning the Court of Appeal’s decision is upheld.
The Court of Appeal held that it is not sex discrimination for employers to enhance pay for women on maternity leave, but offer only the statutory rate for both men and women on shared parental leave.
There were three issues: direct sex discrimination, indirect sex discrimination and sex equality clauses. The two cases were sufficiently similar to be heard at the same time. They involved male employees, fathers, wanting to take Shared Parental Leave (“SPL”). Broadly speaking, they argued that it was sex discrimination that men on SPL were not paid the same rate as women who received enhanced maternity pay. Weekly statutory rates for Shared Parental Pay and Statutory Maternity Pay (“SMP”) are the same but some employers pay above the SMP rate (enhanced maternity pay) and there is no statutory requirement for employers to matched enhanced maternity pay for men and women who are on SPL. The question then was whether this was direct or indirect sex discrimination.
The Court of Appeal reached the following conclusions, which are now precedent:
- The correct comparator for a man on SPL is a woman on SPL, rather than a mother who had just given birth because the predominant purpose of the minimum 14 weeks leave required by the Pregnant Workers Directive is not just childcare but other matters exclusive to the birth mother resulting from pregnancy and childbirth which are not shared by her husband or partner. Therefore there could be no direct discrimination because the man could not be treated less favourably.
- There was no “particular disadvantage” to which men were put. Women on maternity leave are materially different, for the reason given above, and so men on parental leave and women on maternity leave are not in comparable positions for the purposes of Equality Act 2010.
- Even if Mr Hextall’s claim had fallen within the sexual equality clause section of the Equality Act 2010 (indirect sex discrimination based on an equal pay claim) it could not succeed because of the specific exclusion in the Act which states that “A man cannot make a claim based on more favourable terms enjoyed by a woman as a result of pregnancy or childbirth”. This exclusion prevented him from relying on the sexual equality clause because the more favourable term (enhanced maternity pay) was in connection with pregnancy or childbirth, rather than just childcare following the birth of a child.
Whistleblowing: Employer not liable to surgeon who damaged his reputation by trying to set the record straight
In Jesudason v Alder Hey Children’s NHS Foundation Trust  EWCA Civ 73 the Court of Appeal has upheld an employment tribunal’s decision to reject a whistleblowing detriment claim by an employee (Mr Jesudason, a consultant paediatric surgeon) who had raised concerns with various parties, including the media, about malpractice at the Department of Paediatric Surgery at Alder Hey Children’s Hospital. In responding to the media furore, the employer had falsely stated that the employee’s complaints were completely without foundation, and had failed to acknowledge that an independent report had made recommendations for improvements which the employer had acted upon.
The court held that, although the employee had made protected disclosures and had suffered a detriment to his reputation, the detriment did not arise from the protected disclosures. The employer had been motivated by an intention to minimise the harm from adverse, and in part misleading, information which the claimant had chosen to put in the public domain.
National minimum wage: Government announces changes to salaried hours work and salary sacrifice schemes
The government has responded to a consultation launched in December 2018 on whether certain aspects of the national minimum wage (NMW) legislation should be amended to ensure that they do not inadvertently penalise employers.
Having considered over 100 responses to the consultation, the government has announced that it will amend the NMW legislation to relax the current rules relating to “salaried hours work”. This will allow employers to pay salaried hours workers on different payment cycles, to choose a calculation year for their workers, and to make premium payments to salaried hours workers. These changes are intended to come into force on 6 April 2020.
Although the government has decided not to amend the NMW legislation in relation to salary sacrifice schemes, several measures have been announced to help employers understand the rules and drive compliance. These include improving the available guidance, waiving certain financial penalties for breach of the salary sacrifice rules, a resumption of the NMW Naming Scheme (subject to a higher arrears threshold), providing pro-active support for new, small businesses, and giving employers access to help directly from HMRC (via a telephone helpline and online).
Equal Pay: Fawcett Society publishes research to support a new Bill
The Fawcett Society (a campaigning women’s rights charity) has published research to accompany the launch of the Equal Pay Bill 2019-20, which was introduced as a private members’ bill in the House of Lords by Baroness Prosser on 28 January 2020. The Bill was developed by a Fawcett Society working committee made up of equal pay and human resources experts, within input from the EHRC.
The research revealed that:
- a staggering 40% of people do not know that women have a right to equal pay for work of equal value;
- only 36% of people know that women have a legal right to ask male colleagues about their salary if they believe they may be the victim of pay discrimination; and
- in most workplaces, people do not talk openly about what they earn – with only 24% reporting that salaries are discussed openly in their workplace.
Among other things, the Bill aims to give women who suspect they may be suffering pay discrimination a statutory right to know what a male comparator is being paid. It would extend pay gap reporting to employers with 100 or more employees (rather than 250 as at present) and would widen the scope of pay gap reporting beyond gender, to include the pay gap between employees of different ethnic groups. This is something on which the government has consulted but not yet legislated.
Ethnic diversity: Parker Review publishes update report on ethnic diversity on boards
On 5 February 2020, the Parker Review Committee published an update report, the first following its final report into the ethnic diversity of UK boards in October 2017. The new report includes detailed data both on the current profile of FTSE 350 boards and on ethnic diversity reporting (the latter commissioned by the Financial Reporting Council (FRC) from Cranfield School of Management).
The original Parker report recommended (among other things) that there should be at least one director of colour on each FTSE 100 board by 2021 and on each FTSE 250 board by 2024. The update report suggests that, while companies are not yet up to speed, there has been movement and it might still be possible to meet the targets.
The data on ethnic diversity reporting is described by the FRC in a separate press release as unsatisfactory. Among the headline findings are that:
- Over half of FTSE 250 companies (52%) fail to mention ethnicity in their board diversity policy.
- Most of the FTSE 350 do not set measurable ethnicity targets.
- Only 14% of FTSE 100 companies set measurable objectives for board ethnic diversity. For FTSE 250 companies the figure is 2%. Even where objectives have been set, no FTSE 350 companies report progress against them.
The FRC will be closely monitoring how companies report on their policies or explain their lack of progress in this area. It expects to see improvements.
The update report includes:
- Company success stories, illustrating good practices that may make it easier to meet the Parker Review targets.
- Success profiles (of individual directors).
- A Directors’ Resource Toolkit developed by Ernst & Young (principal sponsor to the Parker Review report) to assist companies and those responsible for recruitment.
Data Protection: Nominations open for Practitioner Award for Excellence in Data Protection
Those businesses that process a lot of data may be interested to know that the ICO has just opened its nominations for the third annual Practitioner Award for Excellence in Data Protection. They are looking for individuals who have shown an outstanding impact in relation to accountability or inspiring public trust and confidence in how personal data is processed. An award such as this could be a very useful addition to a business’s marketing strategy and integrity, showing a strong commitment to the individuals they serve.
Individuals can nominate themselves or nominations can be made by a colleague, and the winner will be announced at the ICO Data Protection Practitioners’ Conference in Manchester on 6 April 2020.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org.