Employment Law Newsletter – December 2021
- COVID-19: SEISS was indirectly discriminatory against new mothers but was justified
- Equal Pay: Morrisons’ retail workers employed on common terms with distribution centre workers
- Disability Discrimination: Tribunal erred in focusing on adverse effects of claimant’s avoidance behaviours rather than impairments
- Disability Discrimination: Tribunal reasoning in disability case did not show critical evaluation of justification issue
- Wrongful Dismissal: Tribunal should have weighed claimant’s oral testimony against opposing hearsay evidence
- Flexible Working: Agreeing to appeal hearing outside the three month decision period does not mean the decision period is extended
- Equal Pay: Fawcett Society urges employers to stop asking about previous salary to reduce pay inequality
- Guidance: CIPD publishes new Effective Hybrid Working guidance
- Flexible Working: Study shows refusing to accommodate flexible working requests costs UK businesses almost £2 billion a year
- Workers: Government call for evidence on umbrella company market
- Support for Women: Employment Minister calls on employers to provide stronger career support to stop menopause affecting careers
- Parental Leave: Survey reveals prospect of better parental leave policies would lead six in ten employees to switch jobs
- Statutory Pay Rates: April 2022 proposed increases to statutory maternity, paternity, adoption and sick pay announced
COVID-19: SEISS was indirectly discriminatory against new mothers but was justified
Under the SEISS (Self-Employment Income Support Scheme), grants were awarded to self-employed individuals based on average trading profits (ATP) in the three full tax years preceding 2019/20. The scheme was amended in July 2020 to include those who had not qualified because of the effect of childcare, pregnancy or maternity on their trading profits or total income for the tax year 2018-2019.
In R (on the application of Motherhood Plan) v HM Treasury  EWCA Civ 1703 an application for judicial review of the scheme was brought by a self-employed mother and a maternity rights charity. They argued that, contrary to the ECHR, it was indirectly discriminatory to calculate grants based on ATP in previous tax years, since women on maternity leave during those years received smaller payments than they would otherwise have been entitled to. Alternatively, applying Thlimmenos v Greece  ECHR 162, grants for women on maternity leave in the calculation period should have been calculated differently to remove the disadvantage they suffered if treated the same as everyone else.
The Court of Appeal held that the High Court had been wrong to find that the use of ATP did not constitute prima facie indirect discrimination. The judge had found that the disadvantage to new mothers was not “caused by the scheme itself” but by their reduced earnings while on maternity leave. However, that mis-identified the alleged disadvantage, which was that recent mothers’ earnings in the measured period would be disproportionately unrepresentative of their hypothetical earnings had there been no pandemic, resulting in lower payments under the scheme for recent mothers as a group. That disadvantage was caused by the use of ATP as the relevant measure.
However, the High Court had reached the correct conclusion on justification. The indirect discrimination was justified because the SEISS was devised in the extreme and unique circumstances of the pandemic, where time was of the essence. Obtaining additional information from recent mothers would have significantly delayed the implementation of the scheme and the information would have been difficult to verify. In addition, the choice of ATP to assess profits had legitimate aims, namely: effectiveness; speed of delivery; ease of verification to reduce the risk of fraud; and the need to avoid perverse effects and costs. The requirements of speed and simplicity meant that the government was justified in introducing the scheme in a form which did not contain special provision for new mothers.
Equal Pay: Morrisons’ retail workers employed on common terms with distribution centre workers
In Abdar and others v Wm Morrison Supermarkets plc and another (2021) ET/1811283/18 an employment tribunal has held that retail workers in Morrisons and Safeway supermarkets could compare themselves for equal pay purposes with logistics workers in their employer’s regional distribution centres. At a preliminary hearing, the tribunal held that the majority of the claimants were employed on common terms with the logistics workers for the purposes of section 79(4) of the Equality Act 2010 (EqA 2010). Further, the terms on which they were employed had a single source for the purposes of their directly effective rights under Article 157 of the Treaty on the Functioning of the European Union (TFEU).
Subject to any appeal, the next stage will be for the tribunal to determine whether the retail workers’ roles are of equal value to those of the logistics workers. The tribunal noted that there is a dispute between the parties as to whether the ECJ’s decision in K and others v Tesco Stores Ltd  IRLR 699 is binding in this case, by virtue of Articles 86 and 89 of the Withdrawal Agreement and sections 6, 7A and 7C of the European Union (Withdrawal) Act 2018 (Withdrawal Act). In Tesco, the ECJ held that Article 157 of the TFEU extends to equal value claims. However, although the referral was made pre-Brexit, the decision was handed down after the UK left the EU. It is not disputed that if Tesco is not binding, the tribunal may have regard to it to the extent that it considers it relevant. It was accepted that the tribunal was bound by section 6 of the Withdrawal Act and the EAT’s judgment in Asda Stores Ltd v Brierley and others  ICR 384 that Article 157 of the TFEU has direct effect in equal value cases. The supermarkets did not therefore advance any arguments as to the binding effect of Tesco in the tribunal proceedings, but may do so on any appeal.
Disability Discrimination: Tribunal erred in focusing on adverse effects of claimant’s avoidance behaviours rather than impairments
In Primaz v Carl Room Restaurants Ltd t/a McDonald’s Restaurants Ltd and others  UKEAT 2020-000110, the EAT has held that a tribunal erred in focusing on the behaviour adopted by a claimant in an attempt to manage her conditions when considering whether those conditions had an adverse effect on her day-to-day activities. The claimant suffered from epilepsy and vitiligo and avoided coffee, alcohol, cosmetics, cleaning products, sunlight and all medications (including those prescribed by her physicians to manage her conditions), believing that they would adversely trigger her conditions. However, there was no medical evidence to support the claimant’s beliefs, and she was acting contrary to medical advice in refusing to take medication.
The EAT held that the question of whether a claimant’s impairments had an adverse effect on their ability to carry out normal day-to-day activities was an objective one and could not be determined by a claimant’s subjective beliefs about how to manage their conditions. In this case, the claimant only relied on physical, not mental, impairments. The tribunal had to disregard the claimant’s coping mechanisms, even though her belief that they were necessary was strongly held. It should have considered the impact the actual conditions had on the claimant’s day-to-day activities, leaving aside the impact of her avoidance behaviours. The EAT remitted the question of disability to a fresh tribunal, noting that this was a novel point of law on which it believed there was no previous case law.
Disability Discrimination: Tribunal reasoning in disability case did not show critical evaluation of justification issue
In Gray v University of Portsmouth  UKEAT 2019-000891, the EAT has allowed an appeal where a tribunal failed to provide sufficient reasoning in its judgment to demonstrate that it caried out a critical ev aluation on the question of objective justification in respect of a claim for discrimination arising from disability under section 15 of the Equality Act 2010.
Mr Gray was employed by a University in its Information Service department from 2009. He was dismissed in 2017 following a two-year sickness absence related to his disability. He complained to an employment tribunal that he had suffered discrimination arising from his disability, alleging that the University had treated him unfavourably by initiating a formal meeting under their absence process, stopping his sick pay, dismissing him and rejecting his appeal against dismissal.
The tribunal rejected the claim. It determined that the University had a legitimate aim in ensuring the efficient running of the Information Service department as part of its provision to students. The Tribunal considered each of Mr Gray’s complaints and held that the actions taken were a proportionate means of achieving the legitimate aim.
Mr Gray appealed to the EAT, arguing that the tribunal had erred in its approach to objective justification under section 15 and had not adequately explained its conclusions. The EAT noted that the critical evaluation required for the purpose of section 15 means the tribunal must carry out its own assessment of objective justification. Further, the tribunal is required to make clear how it had undertaken its assessment by demonstrating that critical evaluation in its reasoning.
The EAT took issue with the tribunal’s findings on Mr Gray’s dismissal and the decision to uphold that dismissal on appeal. In its judgment, the tribunal had stated that it was “obvious” that continuing to hold Mr Gray’s job open was significantly disruptive for the University but, critically, failed to explain why it reached that finding. The judgment had not included findings about how Mr Gray’s job was being covered, whether his absence was actually causing any disruption or whether the University incurred additional cost. The EAT allowed the appeal and remitted the matter to the original tribunal.
Wrongful Dismissal: Tribunal should have weighed claimant’s oral testimony against opposing hearsay evidence
In Hovis Ltd v Louton  UKEAT 2020-000973, the claimant, a lorry driver for Hovis, was summarily dismissed for smoking while driving his company vehicle, which was a serious breach of the company’s smoking policy and a criminal offence. He denied smoking, and the investigator found no physical evidence of smoking in the vehicle. However, the evidence at his disciplinary hearing, which was accepted by the employer, included written statements by two eyewitnesses (a Hovis manager and his wife, who alleged that they saw the claimant smoking when they overtook him on the motorway). It also included dashcam footage confirming that it was indeed his vehicle.
A tribunal found the dismissal fair but wrongful. On the wrongful dismissal point, the tribunal noted that it had to undertake its own assessment of whether the claimant had been smoking. Neither of the eyewitnesses gave oral testimony, although their written statements from the internal investigation were put in evidence. The tribunal held that, without being able to assess their testimony, it could not conclude that the claimant was guilty on the balance of probabilities.
The EAT rejected Hovis’s first ground of appeal, that the tribunal had impermissibly fallen back on the burden of proof rather than making a positive finding. This was not a case where the evidence both ways had been equally compelling, leaving the tribunal unable to make a decision. Rather, the tribunal had held that there was insufficient evidence to support a finding that the claimant had been smoking.
However, the EAT upheld the second ground of appeal, namely, that the tribunal had wrongly attached no weight to the hearsay and documentary evidence. The employment judge had said that, without the eyewitnesses in attendance, she was “unable” to evaluate their credibility against that of the claimant, and therefore “cannot find” that the claimant had been smoking. In the EAT’s view the judge was wrong to say that she was “unable” to assess the credibility of the statements or that it was not open to her to find against the claimant. The statements were admissible as hearsay, and there was no rule that oral testimony must necessarily trump opposing hearsay or documentary evidence if the judge finds it more reliable or compelling.
For those reasons the EAT overturned the finding of wrongful dismissal and remitted it to a fresh tribunal.
Flexible Working: Agreeing to appeal hearing outside the three month decision period does not mean the decision period is extended
In Walsh v Network Rail Infrastructure Limited  UKEAT 2020-000724, the claimant submitted a flexible working request in February 2019, which the employer rejected in March and the claimant appealed. Following much correspondence causing a delay in arranging the date of the appeal hearing, it was eventually agreed between the parties in late June 2019 to hold the hearing on 1 July. However, this meant the appeal hearing was outside the three-month ‘decision period’ for resolving the request.
Before the appeal hearing, on 25 June, the claimant submitted a tribunal claim alleging breaches of the flexible working legislation, including that the process had not been concluded within the decision period. The tribunal held that by agreeing to attend the appeal hearing he had, by implication, agreed to extend the decision period itself meaning his claim was made prematurely and therefore the tribunal did not (yet) have jurisdiction to hear the claim.
The EAT disagreed, holding that in order to extend the decision period it must be clear that there is an agreement to extend the decision period. Agreeing to attend an appeal hearing does not necessarily mean that the employee also agrees to extend the decision period.
Equal Pay: Fawcett Society urges employers to stop asking about previous salary to reduce pay inequality
The BBC reported on 18 November 2021 that The Fawcett Society is urging employers to stop asking jobseekers about their previous salaries. The Fawcett Society is the UK’s leading membership charity campaigning for gender equality and women’s rights at work, at home and in public life and this is part of their “Equal Pay Day 2021 Briefing” campaign.
The question about past salaries is faced by almost half of working adults (47%) and affects 61% of women’s confidence to negotiate better pay. The Fawcett Society is calling on employers to stop this practice which contributes to pay inequality by replicating gaps from other organisations. Only a quarter of people surveyed believe their salary should be based on their previous rate of pay, but more than half (58% of women and 54% of men) think they have been offered a reduced salary because of this question.
Guidance: CIPD publishes new Effective Hybrid Working guidance
The CIPD (Chartered Institute of Personnel and Development) has published new guidance on 3 December 2021 around Effective Hybrid Working. The guidance was produced in partnership with the government’s Flexible Working Taskforce. The guidance focuses on the key areas of:
- People management
- Recruitment and induction
- Inclusion and fairness
- Health, safety and wellbeing.
They explain that hybrid working is a form of flexible working where workers spend some of their time working remotely (usually, but not necessarily, at home) and some of their time at their employer’s workplace. The Taskforce, which was relaunched earlier this year, is a partnership across unions, businesses, and government departments, and aims to improve public policy around flexible working. Members include the CBI, the Federation of Small Businesses (FSB), the British Chambers of Commerce (BCC) and Working Families.
The guidance was published on International Day of Persons with Disabilities, and is intended to encourage employers to train managers on how to ensure best practice in hybrid working. Inclusivity in the key to making hybrid working effective, allowing all employees access to flexible arrangements who are then treated equally regardless of how they work. It is also important to take into account people’s individual working preferences and personal circumstances. There could be unintended consequences for non-office based employees as they may miss out on things which happen in the office (such as training or learning opportunities), likewise promotions or other business opportunities may not be so obvious for those who choose to work from home more, leading to inequality. As such, hybrid working policies should be kept under regular review, with input from employees being key to maintaining working relationships.
The guidance also covers performance management, remote communication and effective collaboration, as well as ways to improve recruitment processes in order to accommodate flexible working practices.
Flexible Working: Study shows refusing to accommodate flexible working requests costs UK businesses almost £2 billion a year
Personnel Today reports that, according to a study conducted by Flexonomics, refusing to accommodate flexible working requests is costing UK businesses £2 billion a year. The cost is attributed to the link between flexible working and employee morale, boosted productivity and lower employee absence. The study found that flexible working is currently contributing £37 billion to the UK economy and a 50% increase in flexible working could result in a net contribution of £55 billion to the UK economy and create 51,200 new jobs.
The report also looks at removing the myths around flexible working only being suitable for a few sectors and highlights how the construction and other “hard-to-flex” sectors could embrace flexibility through methods such as self-rostering.
Ahead of the government’s response to the consultation into flexible working, the report calls for more to be done to ensure businesses are being clear about flexible working opportunities in its job adverts and to be more proactive about communicating the benefits of flexible working to businesses.
Workers: Government call for evidence on umbrella company market
On 30 November 2021, HM Treasury, HMRC and BEIS published a call for evidence on the umbrella company market. It follows concerns about the tax and employment rights risks posed by umbrella companies. An umbrella company is a company that employs a temporary worker (an agency worker or contractor) on behalf of an employment agency. The agency will then provide the services of the worker to their clients.
Umbrella companies currently fall outside the regulation of the recruitment sector (Employment Agencies Act 1973, Conduct of Employment Agencies and Employment Businesses Regulations 2003 (SI 2003/3319) and Agency Workers Regulations 2010 (SI 2010/93)). In April 2020, the government sought to address transparency on employer identity and pay for assignments of agency workers supplied through umbrella companies by introducing the Key Information Document (KID). The government proposes a multi-stage process of further action. Primary legislation will bring umbrella companies into the regulatory framework. Regulations will then set out minimum requirements and address common issues, including:
- Non-payment of wages and payroll skimming (where umbrella companies “skim” money from payslips or inflate deductions to retain money that should be received by a worker).
- Non-payment of holiday pay (by failing to inform workers of their entitlement or failing to pay the correct amount).
The Employment Agency Standards Inspectorate will continue to ensure compliance with the KID and enforce the regulations. Workers are invited to share their experiences of working through umbrella companies and the KID, to identify means of better protecting workers based on the most up-to-date market practices. Specifically, views are invited on the reasons for the increased use of “joint-employment” contracts in which an umbrella company and employment business both employ the worker (making it more difficult for workers to understand the nature of their relationship with either entity).
HMRC gives examples of tax (direct and indirect) non-compliance and evasion by umbrella companies and the steps that it has taken to combat such activities. However, HMRC seeks more evidence about the specific tax risks posed by umbrellas and how these risks might be mitigated. Evidence is sought from, among others, umbrellas and entities contracting with them, on their experiences, the steps they take to ensure tax compliance in their labour supply chains and the further steps HMRC and the government should take to prevent and tackle non-compliance.
Responses are requested, where possible by email (firstname.lastname@example.org) by 11.45 pm on 22 February 2022.
Support for Women: Employment Minister calls on employers to provide stronger career support to stop menopause affecting careers
In a press release issued on 25 November 2021, the Minister for Employment called on employers to strengthen their support of the careers of women who suffer from serious menopause symptoms. The press release was issued alongside the publication of findings from the independent report commissioned by the government in July 2021, which found that almost one in four women are forced to leave work as a result of menopause symptoms and those who experience serious symptoms take an average of 32 weeks of leave. Without the support of employers, this could limit progression and lead to long-term unemployment. The Minister for Employment has urged employers to use a national network of advisors, “50 Plus Champions”, to support and retain their workers over the age of 50, including women experiencing the menopause.
The government will be responding to the recommendations of the report in the coming months. The recommendations of the Women and Equalities Committee’s inquiry into menopause in the workplace are also awaited.
As we have previously reported, ACAS now has guidance for employers on how to help women at work dealing with the menopause, which you can view here: Menopause at Work.
Parental Leave: Survey reveals prospect of better parental leave policies would lead six in ten employees to switch jobs
According to a survey conducted by Virgin Money, six in ten parents or expectant parents would change jobs if offered better parental leave benefits, reports Personnel Today. Virgin Money The survey revealed that employees were also worried that they would miss out on promotions or career opportunities while on maternity leave (58%) or lose their job (52%). Most of those who responded believed that parental leave policies are an important factor when considering roles at a new organisation (92%) and one in seven (14%) had already left roles due to poor parental leave entitlements, whilst almost a third (29%) of working parents feel maternity and paternity leave in the UK is generally outdated. Virgin Money goes on to report on other benefits workers and parents expect their company to offer include 30 days annual leave (55%), wellbeing days (39%), private medical insurance (31%) and the opportunity to work remotely abroad each year (28%).
The survey coincides with the launch of Virgin Money’s new parental leave policy, which offers equal family leave to all employees from the first day of employment. David Duffy, CEO of Virgin Money, said: “The pandemic has permanently changed our approach to working life. It’s clear to us that by taking a purpose-driven approach to how we work, we can help colleagues achieve a work-life balance that brings out their best.”
Statutory Pay Rates: April 2022 proposed increases to statutory maternity, paternity, adoption and sick pay announced
The Department for Work and Pensions (DWP) has published its proposed increases to a number of statutory benefit payments. The following rates are expected to apply from April 2022:
- The weekly rate of statutory sick pay (SSP) will be £99.35 (up from £96.35).
- The weekly rate of statutory maternity pay (SMP) and maternity allowance will be £156.66 (up from £151.97).
- The weekly rate of statutory paternity pay (SPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory shared parental pay (ShPP) will be £156.66 (up from £151.97).
- The weekly rate of statutory adoption pay (SAP) will be £156.66 (up from £151.97).
The rates will be confirmed once an Order is made and are due to come into effect on 11 April 2022. The national minimum wage rates that will apply from April 2022 were announced in the Autumn Budget.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com
Employment Law Newsletter – June 2021
- Contracts: Prior period of illegal performance did not prevent subsequent enforcement of contract
- Discrimination: Gender critical belief was a “philosophical belief” under the Equality Act 2020
- Discrimination: Absence of interim relief remedy for discrimination cases not incompatible with ECHR
- Vicarious Liability: Both original employer and company to whom employees loaned held vicariously liable for traders’ tortious acts
- Fiduciary Duties: No-conflict rule and fully informed consent
- COVID-19: Solicitor unfairly dismissed for refusing to agree changes to employment contract during pandemic
- COVID-19: Dismissal of employee who expressed concerns about commuting and attending the office during lockdown and asked to be furloughed was not automatically unfair
- COVID-19: Dismissal automatically unfair for raising concerns about lack of COVID-secure workplace measures
- Worker Status: Employment tribunal to decide whether postmasters are workers
- COVID-19: Employers join pledge to promote vaccine uptake amongst staff
- Gender Inequality: Government publishes response to Women and Equalities Committee report on gendered economic impact of COVID-19
- Flexible Working: Government to commence consultation on flexible working while National Rail catches up with the times
- Parental Leave: Maternity Action publishes proposals to reform shared parental leave and John Lewis leads the way
- Diversity: Report suggests firms with targeted support for ethnic minority workers have higher revenues
- Legislation: Skills and Post-16 Education Bill introduced in Parliament
- Employment Rights: Government publishes response to consultation on single enforcement body
- ACAS Update: In response to ACAS report, government confirms no current intention to ban “fire and rehire” practices
Contracts: Prior period of illegal performance did not prevent subsequent enforcement of contract
In Robinson v His Highness Sheikh Khalid Bin Saqr Al Qasimi  EWCA Civ 862, the Court of Appeal has restated the correct approach for common law illegality as a defence to claims for unfair dismissal. This case arose out of a dispute as to who was responsible for paying tax and national insurance contributions. For seven years Ms Robinson had received an income from the Sheikh and neither party had paid the necessary taxes due. From 2014, the money was paid less deductions equal to what was due if Ms Robinson were self-employed but the parties continued to dispute the preceding seven years. This continued until 2017 when the Sheikh dismissed Ms Robinson for failing to account for her taxes (an illegal act). She brought claims for automatic unfair dismissal for making a protected disclosure, unfair dismissal and wrongful dismissal.
The law is 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; this is referred to as “common law illegality”. “Statutory illegality” is where the employment contract has been expressly or impliedly prohibited by statute; it is void and unenforceable in line with the statutory prohibition, and the parties’ knowledge and intentions are not relevant.
The Court of Appeal relied upon the Supreme Court’s judgment in Patel v Mirza  UKSC 42, where it held that tribunals should have regard to the three considerations set out below and whether there was a sufficient causal link between the illegal conduct and the claim being made to the tribunal. The Supreme Court held that, to determine if the defence of illegality will succeed, a court should consider the policy factors involved and the nature and circumstances of the illegality:
- The underlying purpose of the prohibition which had been breached and whether the purpose would be enhanced by denial of the claim.
- Any other relevant public policy on which the denial of the claim may have an impact.
- Whether denial of the claim would be a proportionate response to the illegality.
The mere fact that one of the parties to the contract had performed it illegally was not a sufficient test for the doctrine of illegality to apply.
Discrimination: Gender critical belief was a “philosophical belief” under the Equality Act 2020
In Forstater v CGD Europe and others  UKEAT/0105/20, the EAT has overturned an employment tribunal’s decision that a gender critical belief (including a belief that sex is immutable and should not be conflated with gender identity, and that trans women are men) was not a philosophical belief under the Equality Act 2010. The tribunal had held that the claimant’s belief failed the fifth criterion in Grainger v Nicholson  IRLR 4 (EAT) that the belief must be “worthy of respect in a democratic society, be not incompatible with human dignity and not conflict with the fundamental rights of others“. In the EAT’s view, taking account of the European Convention on Human Rights, a belief would have to be akin to Nazism or totalitarianism, or espouse violence and hatred in the gravest of forms, to fall foul of that part of the test. It is only in extreme cases involving the “gravest violation of other Convention rights” that a belief would fail to qualify for protection at all. The claimant’s gender critical beliefs, which were widely shared in society and did not seek to destroy the rights of trans persons, clearly did not fall into that category.
The EAT also held that the tribunal had failed to follow the principle that courts and tribunals should not inquire into the validity of a belief and must remain neutral as between competing beliefs. Furthermore, the tribunal had been wrong to rely on the “absolutist” nature of the claimant’s belief. The firmness with which a belief is held (even if others might think it irrational or offensive) is not a reason to deny protection.
This appeal was only about the preliminary issue of whether the claimant’s belief qualified for protection. The merits of the claim (including the question of whether her treatment amounted to unlawful discrimination) remain to be determined. Mr Justice Choudhury was at pains to point out that the judgment was not to be taken as expressing any view as to the merits of the transgender debate. Nor did the judgment mean that trans individuals have no protection from discrimination or harassment, which may include misgendering.
Discrimination: Absence of interim relief remedy for discrimination cases not incompatible with ECHR
In Steer v Stormsure Ltd  EWCA Civ 887, the Court of Appeal has dismissed a claim that the lack of interim relief remedy for discrimination cases is incompatible with the right to a private life under Article 8 of the European Convention on Human Rights (ECHR) read with Article 14 of the ECHR (which prohibits discrimination). The court held that the claimant did not have the necessary status for protection under Article 14. The fact that interim relief is available to a dismissed whistleblower but not to a discrimination claimant who has been dismissed does not constitute discrimination on the ground of sex, and the status of being a litigant in a particular type of case is not a protected status. Even if that was not the case, the court found that the available remedies for discrimination cases, taken as a whole, are not any less favourable than those available to a dismissed whistleblower. Even if they were less favourable, the difference in treatment as regards the availability of interim relief is objectively justified.
Vicarious Liability: Both original employer and company to whom employees loaned held vicariously liable for traders’ tortious acts
In Natwest Markets Plc and another v Bilta (UK) Ltd and others  EWCA Civ 680, the Court of Appeal has held that, due to a 19 month delay in the giving of judgment at first instance, it could not be satisfied that the trial judge had reached the right conclusions. It allowed an appeal against the decision of Justice Snowden and ordered a re-trial. In this case, the claimants alleged that the defendants were liable for dishonestly assisting a large VAT fraud relating to the sale of carbon credits.
The second defendant (formerly RBS SEEL) also brought a discrete ground of appeal, arguing that the judge was wrong to find that it was vicariously liable for the wrongdoing of the individual traders, alongside the first defendant (formerly RBS). The traders were originally employed by RBS SEEL but had been loaned to RBS. The Court of Appeal dismissed this ground of appeal, on the basis that the traders were so much a part of the work, business and organisation of both companies that it was just to make both employers answer for their tortious acts and omissions in the course of their employment.
Regarding the test for “blind eye knowledge“, the Court of Appeal agreed, obiter, that it was not enough that the defendant merely suspected something to be the case, or that he negligently refrained from making further inquiries.
The re-trial is no surprise here, given the general rule that judgments should be delivered within three months of the hearing. More significant is the decision about vicarious liability, rejecting the bold argument that the shift to the organisation to whom the employee was loaned was so complete that the original employer should have no liability at all.
Fiduciary Duties: No-conflict rule and fully informed consent
In Reader v SPIE Ltd & another  EWHC 1221, the High Court has considered whether an employee director of a target company had breached his fiduciary duty when negotiating an enhanced bonus for a transferring employee when moving him onto the buyer’s standard employment terms.
G had sold his company, G&L, to S. Under the Share Purchase Agreement, G would be liable if a key employee, R, did not agree to S Group’s employment terms, including its less favourable bonus scheme. R moved onto S Group’s standard terms as part of a contract negotiated by G on behalf of G&L. A side letter enhanced R’s bonus for the relevant financial year. G&L did not pay the enhancement and R started proceedings in the County Court. S claimed that G would be liable to it in respect of any award in R’s favour. S settled R’s claim, but proceedings continued between S and G. Judgment was entered for S on the basis that, as part of his fiduciary duty not to act in a position of conflict of interest, G should have done more to draw the enhanced bonus to the attention of Y, the director of G&L making the decision. G appealed.
The High Court allowed G’s appeal holding, among other things, that:
- It is an inflexible rule of equity that a fiduciary must not act in a position where his interest and duty conflict, or may possibly, conflict. There are few exceptions, but one is that there can be no breach where there is fully informed consent. The burden of proving informed consent is on the fiduciary.
- The judge had erred in holding that, as part of the no-conflict<a id=”contract”></a>duty, G was obliged to explicitly invite Y’s attention to the enhanced bonus provision. No such obligation existed. Having decided that the enhanced bonus term was plainly disclosed by G, the correct conclusion was that there was no breach.
- The only thing Y needed to know from G, to make a fully informed decision, was the set of terms proposed for R (including the enhanced bonus). Y had been aware of the bonus due to R under his previous employment terms, and of G’s personal interest in getting R to accept the new terms. By authorising G to sign the documents on behalf of G&L, Y must be taken to have understood what they meant.
COVID-19: Solicitor unfairly dismissed for refusing to agree changes to employment contract during pandemic
In Khatun v Winn Solicitors Ltd ET/2501492/2020 the employment tribunal has found that a solicitor was unfairly dismissed for refusing to agree to changes to her employment contract as part of the firm’s response to the COVID-19 pandemic. The firm had required all staff to agree to a variation giving it the freedom to place them on furlough or to unilaterally reduce their pay and hours to 80%, potentially for up to nine months. The claimant, who was not among the employees earmarked for immediate furlough, was the only one to refuse. She told the firm that, if it became necessary to furlough her or to reduce her hours at some point in the future, she would consider a variation then.
The tribunal accepted that the firm had “sound, good business reasons” for the variation, and therefore had the potentially fair “some other substantial reason” for dismissing an employee who would not agree to it. However, the tribunal considered the dismissal unfair in the circumstances of this case, due to lack of consultation and failure to reasonably consider solutions other than dismissal.
The firm’s directors had decided at the outset that the new terms were non-negotiable and that anyone refusing to sign would be dismissed. The claimant’s attempts to discuss the matter had not resulted in any meaningful discussion, simply a re-stating of the firm’s position. The firm had acted too quickly in dismissing the claimant only two days after sending her the new terms. It had also failed to offer any right of appeal, which might have provided an opportunity for both sides to cool off and reach an agreement.
COVID-19: Dismissal of employee who expressed concerns about commuting and attending the office during lockdown and asked to be furloughed was not automatically unfair
In Accattatis v Fortuna Group (London) Ltd 3307587/2020 an employment tribunal has found that an employee who said he felt uncomfortable commuting and attending the office during lockdown and asked to be furloughed was not automatically unfairly dismissed under section 100(1)(e) of the Employment Rights Act 1996 (ERA 1996).
Mr Accattatis worked for Fortuna Group (London) Ltd, a company which sells and distributes PPE. During March and April 2020, Mr Accattatis repeatedly asked to work from home or be placed on furlough, explaining that he was uncomfortable using public transport and working in the office. Fortuna told Mr Accattatis that his job could not be done from home, and that furlough was not possible because the business was so busy, but that he could instead take holiday or unpaid leave. Mr Accattatis declined and asked three more times to be furloughed. After the final request on 21 April 2020, he was dismissed by email the same day.
Mr Accattatis did not have sufficient service to claim ordinary unfair dismissal. He instead alleged he had been automatically unfairly dismissed under section 100(1)(e) of the ERA 1996 for having taken steps to protect himself from danger.
The tribunal observed that the government had announced on 14 February 2020 that COVID-19 posed a serious and imminent threat to public health. This, together with Mr Accattatis’ emails expressing concern about commuting and attending the office, showed he reasonably believed there were circumstances of serious and imminent danger.
However, it was a requirement under section 100(1)(e) for Mr Accattitis to have taken appropriate steps to protect himself from danger or to have communicated the circumstances of danger to Fortuna. Fortuna had reasonably concluded that Mr Accattatis’ job could not be done from home and that he did not qualify for furlough but had instead suggested taking holiday or unpaid leave. Mr Accattatis’ response was not only that he wanted to stay at home (which was agreed), but also to demand that he be allowed to work from home (on full pay) or be furloughed (on 80% of pay). These demands were not appropriate steps to protect himself from danger, so his claim failed.
Although not binding, this case is a reminder that the pandemic may not on its own justify a refusal to attend work under section 100(1)(e) if employers have reasonably tried to accommodate employees’ concerns and reduce transmission risk.
COVID-19: Dismissal automatically unfair for raising concerns about lack of COVID-secure workplace measures
In the case of Gibson v Lothian Leisure ET/4105009/2020, the claimant, Mr Gibson, worked as a chef in a restaurant owned by Lothian Leisure. The restaurant closed temporarily in March 2020 due to the first COVID-19 lockdown, and Mr Gibson was furloughed. Before re-opening the restaurant, the employer asked Mr Gibson to come into work. Mr Gibson was concerned about catching COVID-19 at work and passing it onto his father, who was clinically vulnerable. When Mr Gibson raised concerns about the lack of PPE or other COVID-secure workplace precautions, the employer’s response was robustly negative, and he was told to “shut up and get on with it“.
With no prior discussion, the employer dismissed Mr Gibson summarily by text message on 30 May 2020. It did not pay him any notice pay or accrued holiday pay. The message said that Lothian Leisure was changing the format of the business and would be running it with a smaller team after the lockdown.
An employment tribunal held that Mr Gibson had been unfairly dismissed under section 100(1)(e) of the Employment Rights Act 1996 (ERA 1996) because he had taken steps to protect his father in what he reasonably believed to be circumstances of serious and imminent danger. Alternatively, since the wording of the employer’s text message suggested a possible redundancy situation, Mr Gibson had been unfairly selected for redundancy under section 105(3) because he had taken those steps. The circumstances of danger were the growing prevalence of COVID-19 and the potential significant harm to Mr Gibson’s father if he contracted the virus. Mr Gibson reasonably believed that this was a serious and imminent danger, leading him to raise concerns regarding the lack of PPE. Until Mr Gibson had raised those concerns, he had been a successful and valued member of staff.
The tribunal also awarded Mr Gibson pay in lieu of notice and untaken holiday, underpaid furlough pay, and pension contributions that had been deducted but not paid into the pension scheme. It dismissed his claim under the whistleblowing provisions of the ERA 1996. His concern had only been for the health of his father and the tribunal was not satisfied that this met the public interest test under section 43B, although the point was arguable.
Worker Status: Employment tribunal to decide whether postmasters are workers
Website Personnel Today, has revealed that over 100 postmasters and sub-postmasters are bringing an employment tribunal claim against the Post Office in a bid to be classified as workers under the Employment Rights Act 1996, entitling them to benefits including holiday and sick pay. The claimants, who run Post Office franchises, will deploy arguments based on the level of control exerted by the Post Office, in a similar vein to those raised in Uber and others v Aslam and others  UKSC 5.
The case will be heard at the London Central employment tribunal later this month and will have an impact on thousands of postmasters and sub-postmasters across the country.
COVID-19: Employers join pledge to promote vaccine uptake amongst staff
Employers of over one million workers have pledged to promote a positive safety message and signpost staff to NHS providers in a bid to improve the UK’s vaccine uptake. Nine of the UK’s biggest employers, including IKEA, Asda and Nationwide, have signed the pledge which will also mean that employees will be able to get their vaccines during working hours. Interestingly, this announcement follows the publication of a poll by the British Chambers of Commerce (BCC) which found that 78% of employers had no plans to implement “vaccine certification” for employees returning to the office.
Gender Inequality: Government publishes response to Women and Equalities Committee report on gendered economic impact of COVID-19
On 14 May 2021, the government published its response to the Women and Equalities Committee report ‘Unequal Impact? Coronavirus and the gendered economic impact’. The report found that government policies had consistently overlooked women’s caring responsibilities and the employment inequalities experienced by them and made wide-ranging recommendations.
The government’s response, however, rejects many of the recommendations, including a review of the adequacy of Statutory Sick Pay, amendments to Form HR1 to capture protected characteristic information, funding of training schemes aimed at women in certain fields and the publication of a gender equality plan for apprenticeships. However, it does state the following:
- Amendments to the Flexible Working Regulations 2014 (SI 2014/1398), removing the 26-week service requirement for making a flexible working request, will be considered. The government wants to make it easier for people to work flexibly and is committed to encouraging flexible working. It will consult on making flexible working the default position, with a consultation to be issued in due course.
- The government is committed to bringing forward an Employment Bill “when parliamentary time allows“. However, there was no mention of an Employment Bill in the Queen’s Speech of 11 May 2021. Consequently, the government will not publish the draft Employment Bill by the end of June 2021, as the report recommends.
- The government still intends to extend the redundancy protection period afforded to mothers on maternity leave. This protection will apply to pregnant women and for six months after a mother has returned to work, and will cover those taking adoption and shared parental leave. The measures will be brought forward “as soon as Parliamentary time allows“. No specific timeframe is provided. Notably, the measures were mentioned in the 2019 Queen’s Speech following a BEIS consultation in January 2019. The government is also considering proposals to require large employers to publish their parental leave and pay policies, with its formal response to a consultation from July 2019 awaited.
Finally, while calls for disability pay gap reporting are rejected, the government states that it is continuing to analyse relevant data and will respond to the ethnicity pay gap consultation in due course.
Flexible Working: Government to commence consultation on flexible working while National Rail catches up with the times
The Guardian reports that the government has confirmed it plans to commence a consultation which would consider whether flexible working would become the default option unless there are good reasons not to (a proposal originally set out in the Conservative Party’s 2019 election manifesto and subsequently included in the Employment Bill outlined in the Queen’s Speech). According to The Guardian, a government spokesperson has stated that this would not go as far as giving staff a legal right to work from home.
The government has stated on numerous occasions that it intended to consult on flexible working, including in its recent response to the Women and Equalities Committee report on gendered economic impact of COVID-19. A government advisory group, made up of business associations, charities and trade unions from ACAS to the CBI, has also recently recommended that flexible working should be the default position.
Following hot on the heels of this, National Rail recently announced a new ‘Flexi Season ticket’ which offers 8 days of peak time travel Monday to Fridayin a 28 day period, any time between two stations. The tickets will be on-sale from 21 June 2021, for use from 28 June 2021.
Parental Leave: Maternity Action publishes proposals to reform shared parental leave and John Lewis leads the way
Maternity Action has published a report recommending reform of shared parental leave (SPL). The report follows the campaign it started in April 2021 with other groups including the TUC and the Fawcett Society, and the government’s failure to include the long-awaited Employment Bill in the Queen’s Speech which could have included proposals for SPL reform (see our May newsletter).
Maternity Action considers that the current scheme is not fit for purpose. Data provided by business minister Paul Scully, in response to a parliamentary question in February 2021, indicated that take-up among eligible fathers was just 3.6% in 2019/20, well below the government’s 25% target, and only 2% of all new fathers took SPL in 2019. The pandemic has only increased the problem, with the Women and Equalities Committee February 2021 report on the gendered impact of COVID-19 finding that the gender childcare gap increased during the pandemic (see above).
The report proposes that a new system should be introduced that provides individual, non-transferable, rights for each parent, as sharing or transferring of leave between parents has not worked, being too complex and poorly understood by parents and employers. A “6+6+6” model is proposed, replacing both the existing statutory maternity leave and SPL schemes. The first six months of leave being reserved for the mother, and then six months of non-transferable parental leave for each parent. This could be taken concurrently or consecutively, all in one go, or in smaller blocks of weeks or months, up to 18 months after the birth.
The report also recommends that:
- Maternity, paternity and parental leave and pay should be day one rights for all working parents, regardless of employment status.
- The right to return to the same job after any period of leave should be strengthened.
- Statutory leave pay should be increased to at least the national minimum wage level, and should in time be increased to the real living wage level and then wage-replacement levels.
In autumn 2021, John Lewis will introduce what is thought to be the UK’s first equalised parental pay policy, offering 26 weeks’ paid leave to all employees who have been at the company for a year when they have a baby. This will constitute 14 weeks of full pay and 12 weeks of 50% contractual pay. Employees who lose pregnancies will also receive greater support; being granted two weeks of paid leave alongside emotional support provisions including free counselling and mental health services.
John Lewis’ new policies come as part of efforts to redefine its responsibilities towards equality, one of its founding principles.
Diversity: Report suggests firms with targeted support for ethnic minority workers have higher revenues
People Management reports that Henley Business School has published a report revealing that businesses with targeted measures to support their ethnic minority workers have an average revenue of £5.6 billion; 58% higher than the £3.6 billion made by firms that do not.
The report, which analysed the earnings of 100 firms in the FTSE 350, also found that the market capitalisation for companies who have targeted measures was an average of £4.3 billion higher than companies that have failed to introduce any. In the introduction to the report, lead researcher Dr Naeema Pasha suggests that the research demonstrates that adopting an inclusive culture can help organisations improve wellbeing, engagement, sustainability and innovation, leading to better outcomes for all employees.
Legislation: Skills and Post-16 Education Bill introduced in Parliament
On 18 May 2021, the Skills and Post-16 Education Bill 2021-22 (the Bill) was introduced in Parliament. It contains measures aimed at creating more routes into skilled employment and ensuring that the training on offer meets the needs of local areas.
The Bill provides the legislative underpinning for the reforms set out in the ‘Skills for Jobs White Paper’. It is intended to improve the functioning of the post-16 education system and support the introduction of the Lifetime Skills Guarantee, aimed at transforming the training and skills system to ensure more people gain skills to progress their employment prospects.
The following measures introduced by the Bill are likely to be of interest to employers:
- A power for the Secretary of State for Education to designate employer representative bodies to lead the development of local skills improvement plans.
- A duty for education and training providers to co-operate with employer representative bodies to develop and review local skills improvement plans, and to have regard to them when making decisions on the provision of post-16 education and training.
- Additional functions for the Institute for Apprenticeships and Technical Education in relation to new categories of technical qualifications that relate to employer-led standards and occupations.
The Bill is scheduled to have its second reading on 15 June 2021.
Employment Rights: Government publishes response to consultation on single enforcement body
On 8 June 2021, the Department for Business, Energy and Industrial Strategy (BEIS) published the government’s response on the proposal to create a single enforcement body for employment rights. The proposal was made in the government’s Good Work Plan policy paper published in December 2018 and consulted upon in the latter half of 2019.
As a result of the consultation responses received, the government proposes to create a single enforcement body which will bring three existing bodies into one organisation with a significant remit to enforce employment rights and improve employers’ compliance. The body will have an extensive remit to protect workers in relation to national minimum wage, labour exploitation and modern slavery, holiday pay for vulnerable workers and statutory sick pay. The government will legislate to implement the single enforcement body “when parliamentary time allows”.
ACAS Update: In response to ACAS report, government confirms no current intention to ban “fire and rehire” practices
On 8 June 2021, ACAS published its report into so-called “fire and rehire” practices. The report was commissioned by BEIS and delivered to minsters in February 2021.
Intended as a fact-finding exercise, rather than to recommend reforms to the practice, the report notes a wide range of opinions amongst participants over the use by employers of fire and rehire. Although use of the practice has increased during the COVID-19 pandemic, participants did not agree over whether this was because employers were using the pandemic opportunistically as a “smokescreen” to diminish employees’ rights or whether it was merely a response to the scale of the challenges faced by businesses during this time.
There was a similar divergence of views amongst participants over whether reform to the practice was needed and, if so, what these reforms should be. Some participants in the report felt that fire and rehire is never reasonable and should be outlawed by legislation. Others felt that the practice can be reasonable if used as a genuine and unavoidable last resort. Concerns were also expressed that any reform could lead to less flexibility for employers, resulting in more businesses failing, and consequently to more redundancies.
Responding to the report in the House of Commons, Paul Scully MP, Parliamentary Under-Secretary of State for BEIS, confirmed that the government does not propose to devise “heavy-handed legislation” to ban fire and rehire at this stage. Instead, Mr Scully confirmed that the government has instructed ACAS to prepare clearer guidance on when fire and rehire should be used and good practice for employers. However, Mr Scully said the government will continue to work with ACAS on this issue, and confirmed that “nothing is off the table“.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org.
Employment Law Newsletter – May 2021
- Worker Status: Court of Appeal refuses permission to appeal against finding that Addison Lee Drivers were workers
- Worker Status: Does worker status require a minimum degree of obligation or commitment?
- Disability Discrimination: Mental health of gym trainer not properly accounted for
- Collective Agreements: Despite being incorporated into individual contracts collectively agreed terms may not confer individual rights
- Contract: Directors jointly and severally liable for aggravated damages and unpaid wages after inducing breaches of contract
- COVID-19: Dismissal of employee who left workplace over concerns about infecting his children not automatically unfair
- COVID-19: Regulations on calculating a week’s pay for furloughed employees extended to 30 September 2021
- COVID-19: Updated HMRC guidance to address operation of CJRS from May 2021
- COVID-19: Adjusted right to work check measures extended to 20 June 2021
- National Minimum Wage: Low Pay Commission publishes fourth NMW non-compliance and enforcement report
- National Minimum Wage: BEIS updates guidance on calculating NMW for sleep-in workers
- Parental Leave: Campaigners push for reform of “deeply flawed” shared parental leave scheme
Worker Status: Does worker status require a minimum degree of obligation or commitment?
In Nursing & Midwifery Council v Somerville  UKEAT 0258_20_0505 the EAT has dismissed the Nursing & Midwifery Council’s (NMC) appeal against a tribunal’s finding that Mr Somerville was a worker. Somerville was a panel member chair of its Fitness to Practice Committee, and he made a claim against the NMC for unpaid statutory holiday pay, contending that he was either an employee or worker.
At first instance, the tribunal judge found that:
- there were a series of individual contracts between the parties each time Mr Somerville agreed to sit on a hearing, for which the NMC agreed to pay him a fee, and also an overarching contract between them in relation to the provision of his services as a panel member chair;
- these written materials correctly represented the parties’ true agreement;
- there was no contractual obligation on Mr Somerville to offer / accept a minimum amount of sitting dates and he was free to withdraw from dates he had accepted;
- Mr Somerville agreed to provide his services personally to the NMC and there was no right of substitution;
- the NMC was not a client or customer of a profession or business carried on by Mr Somerville.
Accordingly, there was insufficient mutuality of obligation to give rise to an overarching employment contract or an employment contract in relation to individual assignments that he accepted. Therefore, in rejecting this alternative contention that he was an employee, the tribunal decided that there was no irreducible minimum of obligation, as Mr Somerville was not obliged to offer a minimum amount of sitting dates and he was free to withdraw from dates he had accepted. In light of the contract that existed between the parties, the personal service involved and the client/customer finding, the tribunal instead found Mr Somerville to be a worker within the meaning of section 230 Employment Rights Act 1996 (ERA) and regulation 2(1) Working Time Regulations 1998 (WTR).
The NMC appealed this conclusion on the basis that: (i) the tribunal had misdirected itself in law, since an absence of mutuality of obligation in the sense of an absence of an irreducible minimum of obligation as identified in the employee caselaw was incompatible with a finding of worker status; and (ii) in finding the NMC was not a client or customer of a business carried on by Mr Somerville, the tribunal had failed to consider relevant factors and had taken into account irrelevant considerations.
The EAT dismissed the appeal holding thata review of the authorities (including the Supreme Court’s decision in the recent Uber case) and the statutory language indicated that an irreducible minimum of obligation in the sense relied upon by the NMC was not a prerequisite for satisfying the ERA and WTR definitions of worker status, in circumstances where, as here, an overarching contract existed between the parties under which the individual agreed to perform services personally to the NMC and had done so in respect of a series of separate contracts. The absence of an irreducible minimum of obligation could be relevant to the question of whether the client/customer exception applied, but it was not necessarily fatal to a conclusion of worker status. Further, that in considering the client/customer exception in this case, the tribunal had made no error of law; the weight that it attached to particular factors was a matter for its evaluation.
Worker Status: Court of Appeal refuses permission to appeal against finding that Addison Lee Drivers were workers
The Court of Appeal has refused permission to appeal from the EAT (Addison Lee Ltd v Lange and others  EWCA Civ 594) against a finding that Addison Lee minicab drivers were “limb (b)” workers*, and that time in which drivers were logged onto the Addison Lee portal, and had not notified the company that they were taking a rest break, was working time under the Working Time Regulations 1998 (WTR 1998). The court had previously given permission on the papers, but had stayed the appeal pending the Supreme Court’s decision in Uber BV and others v Aslam and others  ICR 845. Following the Uber decision, the court had set aside its original grant of permission and held an oral hearing to re-consider the matter. It held, in the light of Uber, that the appeal in this case has no reasonable prospect of success.
The employer sought to distinguish Uber on the basis of differences in the contractual documentation (specifically, that there was an express contract between Addison Lee and its drivers that negated any mutuality of obligation). However, the Supreme Court in Uber had re-affirmed the principle in Autoclenz Ltd v Belcher and others  IRLR 820 (SC) that, in deciding limb (b) worker status, the tribunal is interpreting the statute rather than interpreting the contract, and should disregard any contractual provisions that do not reflect reality. The tribunal’s factual finding that, when a driver was logged on, they were undertaking to accept jobs allocated to them, was, in the court’s view, “unappealable”.
The court also held that, following Uber, there was no arguable error of law in the employment tribunal’s conclusion that when drivers were logged on, this satisfied the definition of working time as they were at the employer’s disposal.
(* “Limb b” means working under any other contract (other than a contract of employment) where the person agrees to do the work personally, and the relationship between the parties to the contract is not akin to a client or customer of any profession or business relationship.)
Disability Discrimination: Mental health of gym trainer not properly accounted for
A case from London South employment tribunal (Burton v Nuffield Health V 2300147/2019) has recently hit the headlines because the judge found in favour of the claimant, Ali Burton, who claimed disability discrimination and victimisation against her employer Nuffield Health. Burton worked at a branch of the fitness chain Nuffield Health.
The tribunal heard that Burton disclosed her mental health condition (generalised anxiety disorder (GAD) and a phobia of coming into contact with bodily fluids) at the interview stage, and again to Nuffield’s in-house occupational health team during her induction. Occupational health passed her as fit to do the job with agreed modifications (such as avoiding hygiene-related tasks which could trigger her GAD; exempt from undertaking health appointments involving blood tests; and that her shift hours should be reduced and consecutive to ensure “ample time off” to manage her condition).
It began with a senior general manager who, unaware of Burton’s condition, asked her to pick up used towels from the floor in the gym. She refused, explaining it was due to her mental health, and was told “we all have to do things that are unpleasant” and advised to use gloves. The manager apparently made mocking remarks and questioned how this might affect her working in the gym, making her feel pressured and embarrassed.
What followed was a series of different managers, who clearly demonstrated they had been given no training in how to either have appropriate discussions with her or simply be able to deal with such a condition, treating her in such a way as to upset her to the point where she raised a grievance. She was questioned over her reduced hours, asked to explain her condition, and asked to provide her medical notes to show her latest diagnosis. Following a meeting, the grievance was not upheld and again she was asked to provide her GP notes and medical history. Following a protracted process of trying to challenge the grievance, it was still not upheld and so Burton lodged a tribunal claim alleging direct discrimination and victimisation.
Her claim of victimisation was not successful but the complaint of direct discrimination succeeded in part, as did her complaint of discrimination because of something arising in consequence of disability; of harassment; and of failure to make reasonable adjustments. The tribunal found Nuffield Health lacked “adequate arrangements” for communicating important information about Burton’s condition, and that this formed part of an “ongoing discriminatory state of affairs”. There was clearly a limited understanding of her condition and a failure to appropriately train managers to deal with such conditions.
Collective Agreements: Despite being incorporated into individual contracts collectively agreed terms may not confer individual rights
In Hamilton v Fife Council UKEATS/0006/20/SS (V) the claimant was a teacher whose department had surplus staff. She was told that as the member of staff with the shortest length of service she could be transferred to another school as a result of a collective agreement, meanwhile the school advertised a vacancy for a full-time position in her department. The relevant term of the collective agreement said that where a teacher has been designated surplus, a permanent post would not be advertised. The claimant resigned, claiming (among other things) constructive unfair dismissal on the basis that the school was in repudiatory breach of this term. The tribunal disagreed, finding on the facts that the events said to constitute breaches of the underlying contract either had not been proved to have happened or, to the extent that they had been proved to have happened, did not constitute breaches of the contract. Where there had been one single breach the tribunal found, however, that such breach had not caused the her resignation. The claimant appealed.
The EAT dismissed the appeal. It held that whilst collectively agreed terms may be incorporated into individual employment contracts, tribunals must consider whether
“any particular part of the collective agreement founded upon is apt to be a part of an individual contract of employment or whether, alternatively, it is essentially collective in nature between the employer and the relevant union”.(para. 28)
The judge went on to say that collectively agreed terms incorporated into individual contracts which regulate certain matters such as pay, holiday entitlement and hours of work, etc, are all capable, of giving rise to enforceable individual rights on the part of employees. On the other hand, collectively agreed terms which are truly collective in their nature are not (e.g. redundancy procedures). The term in question was vague and lacked specification as to when it could be invoked demonstrating that it was not intended to confer individual rights, but simply a broad statement of agreement about what was expected to happen in a surplus situation. Therefore, there was no breach of contract and the appeal failed.
Contract: Directors jointly and severally liable for aggravated damages and unpaid wages after inducing breaches of contract
The High Court in Antuzis and others v DJ Houghton Catching Services Ltd and others  EWHC 971 (QB) has ordered two company directors to pay aggravated damages to a group of exploited migrant workers whose employer failed to pay them overtime, holiday pay and the applicable minimum wage under the Agricultural Wages Act 1948 and associated Orders.
The claimants had been employed as chicken catchers by DJ Houghton Catching Services Ltd. They brought High Court claims against the company for breach of contract relating to unpaid wages, unlawful deductions from wages and unpaid holiday pay. They also claimed against the company directors for the tort of inducing the breaches of their employment contracts by the company. In 2019, the court upheld the claims and ordered the assessment of damages at a separate quantum trial.
Following the quantum trial, the court awarded damages of the full amounts claimed by the employees for wages, overtime and holiday pay. However, since the claims against the directors were based in tort, the employees also asked the court to award aggravated and exemplary damages.
The court noted that aggravated damages are compensatory in nature. In this case, the court accepted that recovery of the monies due under the employment contracts would not compensate the employees for the exploitation, manipulation and abuse carried out by the employer and its directors that had been inflicted by the systematic denial of the employees’ statutory righ
ts. In respect of aggregated damages, the court therefore uplifted by 20% the damages awarded to the employees. Conversely, the court noted that exemplary damages are punitive in nature. Given the substantial aggravated damages already awarded and the lack of evidence that the profit made by the directors had exceeded this sum, the court declined to award exemplary damages.
This case is an interesting example of how employees could use tort claims to seek redress for breach of contract or certain statutory rights from the directors of their employer and to achieve compensation exceeding their actual financial loss. However, the underlying facts of this case are extreme and the circumstances in which such a claim may be brought are therefore likely to be limited.
COVID-19: Dismissal of employee who left workplace over concerns about infecting his children not automatically unfair
In Rodgers v Leeds Laser Cutting Ltd ET1803829/2020, an employment tribunal found that the dismissal of an employee who told his manager he would not return to work until after lockdown because he feared he would infect his children with COVID-19, was not automatically unfair.
An employment tribunal has considered a COVID-19 related claim under sections 100(1)(d) and (e) of the Employment Rights Act 1996 (ERA) which provide employees with protection from dismissal for exercising their rights to leave the workplace and take steps to protect themselves where they reasonably believe there is serious and imminent danger.
Mr Rodgers messaged his manager on 29 March 2020 to state that he would be staying away from his workplace “until the lockdown has eased” because he was worried about infecting his vulnerable children (a baby and a child with sickle-cell anaemia) with COVID-19. A month later, he was dismissed.
Mr Rodgers did not have sufficient service to claim ordinary unfair dismissal. Instead, he alleged that he had been automatically unfairly dismissed for exercising his rights under sections 100(1)(d) and (e) of the ERA.
The tribunal found that a reasonable belief in serious and imminent workplace danger had to be judged on what was known when the relevant acts took place. On the facts, such a belief could not be established, so sections 100(1)(d) and (e) were not engaged and the claim failed. In particular:
- Despite Mr Rodgers’ concern about COVID-19, he had breached self-isolation guidance to drive a friend to hospital on 30 March 2020 (the day after leaving work).
- Mr Rodgers’ message to his boss did not mention concerns about workplace danger and he could not show there had been any such danger. In March 2020, government safety guidance advised hand washing and social distancing. The employer had implemented both precautions.
- Mr Rodgers had not taken any steps to avert danger or raised concerns with his manager before absenting himself from work. This was not appropriate.
The tribunal rejected Mr Rodgers’ argument that COVID-19 created circumstances of serious and imminent workplace danger regardless of the employer’s safety precautions. It found that accepting this submission could lead to any employee being able to rely on sections 100(1)(d) and (e) to leave the workplace, simply by virtue of the pandemic.
This decision is not binding and turned on the specific facts. However, it demonstrates the importance of implementing appropriate COVID-19 secure measures. Employers who do so may reduce the risk of successful claims under sections 100(1)(d) and (e) by making it harder for employees to establish that the workplace is dangerous.
COVID-19: Regulations on calculating a week’s pay for furloughed employees extended to 30 September 2021
On 31 July 2020, the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) Regulations 2020 (SI 2020/814) (Week’s Pay Regulations) came into force, requiring employers to calculate various statutory payments, including redundancy and notice pay, with reference to a furloughed employee’s normal week’s pay.
The Week’s Pay Regulations were amended in November 2020 and February 2021 to extend their duration to reflect subsequent extensions of the Coronavirus Job Retention Scheme.
On 20 April 2021, the Employment Rights Act 1996 (Coronavirus, Calculation of a Week’s Pay) (Amendment) (No 2) Regulations 2021 (SI 2021/487) were made. They came into force on 30 April 2021 and ensure that the Week’s Pay Regulations will continue to operate until 30 September 2021, reflecting the further extension of the CJRS announced in the Spring 2021 Budget.
COVID-19: Updated HMRC guidance to address operation of CJRS from May 2021
HMRC has updated various guidance notes, in particular in relation to the calculation of furlough pay for non-fixed rate employees with a relevant reference day of 2 March 2021.
On 8 April 2021, HMRC made minor changes to various guidance notes relating to the Coronavirus Job Retention Scheme (CJRS). Some notable changes include:
- New guidance on how to identify whether an employee’s relevant reference day is 19 March 2020, 30 October 2020 or 2 March 2021.
- New guidance and worked examples on calculating usual working hours and 80% of wages for non-fixed rate employees with a relevant reference day of 2 March 2021. As with non-fixed rate employees with a relevant reference day of 30 October 2020, only the averaging method may be used where an employee has a relevant reference day of 2 March 2021.
- When using the averaging method to calculate average wages for non-fixed rate employees for claim periods starting on or after 1 May 2021, days spent on family-related statutory leave, “statutory sick pay leave” or “reduced rate paid leave” following the leave, and related wages, should not be taken into account. The exception to this rule is where an employee was on one of these types of leave throughout the entire period used to calculate their average wages. In this case, such days and related wages should be included.
- Multipliers for use when calculating grant amounts for July, August and September 2021, when the government contribution reduces. In addition, daily maximum wage amounts are provided for May 2021 to September 2021 inclusive.
The updated guidance also notes that, in the event of a TUPE transfer, employers should ensure that information needed for future claims under the CJRS is passed on to the new employer (including an employee’s relevant reference day and details of 80% of the employee’s wages).
COVID-19: Adjusted right to work check measures extended to 20 June 2021
The temporary COVID-19 adjusted right to work check measures will now end on 20 June 2021, not 16 May 2021 as previously announced by the Home Office (Home Office and Immigration Enforcement: Coronavirus (COVID-19): right to work checks (updated 12 May 2021).) This new date is the planned date for bringing in step four of the government’s roadmap out of lockdown and allows employers to continue with digital right to work checks while social distancing is still in place.
The temporary changes, in place since 30 March 2020, have allowed right to work checks to be carried out over video calls and for job applicants and existing workers to send scanned documents or a photo of their documents to employers via email or a mobile app, rather than sending the originals.
From 21 June 2021, employers must once again either:
- Check the applicant’s original documents.
- Check the applicant’s right to work online, if they have provided the employer with their share code.
Employers will maintain a statutory defence against a civil penalty if the right to work check undertaken was done in the prescribed manner or as set out in the COVID-19 adjusted checks guidance. No further retrospective checks on employees who had a COVID-19 adjusted check will be required.
National Minimum Wage: Low Pay Commission publishes fourth NMW non-compliance and enforcement report
The Low Pay Commission (LPC) has published its fourth standalone report, Non-compliance and enforcement of the National Minimum Wage 2021. The LPC has adapted its approach to reflect the existence of the Coronavirus Job Retention Scheme (CJRS), which has prevented it from carrying out its usual analysis. In addition, the data it would normally consider only covers the period up to April 2020. Rather than looking at flawed data, the report attempts to assess the immediate challenges for National Minimum Wage (NMW) enforcement. It also considers the likely challenges that will affect enforcement over the coming year.
The report does not, on the whole, make new recommendations. It instead reviews progress in key areas identified in previous years. The following points may be of particular interest:
- The LPC notes that the government consulted in 2019 on proposals to create a single enforcement body. While the report mentions that legislation is expected to be brought forward in an Employment Bill, there is no current timetable for this. The Queen’s Speech of 11 May 2021 did not mention an Employment Bill.
- The LPC will continue to monitor emerging case law (noting, in particular, the Supreme Court’s decisions in Uber and Mencap) and their implications for NMW enforcement.
- As the CJRS is phased out, the LPC anticipates that shifts in the economy and labour market will make it more important than ever to ensure NMW compliance. The report notes that the complexity of the CJRS, coupled with a refocusing of HMRC’s targeted enforcement regime, is likely to have increased the risk of underpayment. HMRC has advised the LPC that complaints from workers have declined since April 2020, although the precise reasons for this are unknown.
The LPC anticipates that the impact of the CJRS on workers’ hours and pay will be a recurring feature for many years, noting that the low volume of complaints represents a serious barrier to an effective enforcement system. Consequently, it recommends a pro-active approach from the government to build confidence in the complaints process. It also considers that HMRC’s limited resources must be targeted effectively.
National Minimum Wage: BEIS updates guidance on calculating NMW for sleep-in workers
On 23 April 2021, the Department for Business, Energy and Industrial Strategy (BEIS) updated its guidance on calculating the national minimum wage (NMW) to clarify the position for sleep-in workers in light of the Supreme Court’s decision in Royal Mencap Society v Tomlinson-Blake and others  UKSC 8.
The revised guidance on ‘Sleep-in’ shifts (which appears under the heading Special situations in the section entitled Working hours for which the minimum wage must be paid) confirms that, following Royal Mencap, sleep-in workers are only entitled to the NMW when they are awake for the purposes of working and not when they are permitted to sleep. However, the guidance explains that the position is different for workers who are expected to perform activities for all or most of a shift, and are only permitted to sleep between tasks where possible. In such cases, it is likely that the NMW must be paid for the whole of the shift, including for any time spent asleep, on the basis that the worker is in effect working all of that time. The guidance also confirms that the NMW will be payable for time spent asleep if the employer does not provide workers with suitable sleeping facilities.
To illustrate how the principles outlined by the Supreme Court in Royal Mencap may apply to particular scenarios, the guidance now includes five short examples which explain whether a worker would be entitled to the NMW if:
- They spend time awake but are woken only occasionally to perform tasks.
- They take night calls on a nightshift.
- They are permitted to nap during a work shift.
- They are woken to deal with an emergency but not required.
- They are woken frequently, contrary to original expectation.
The updated guidance and examples are a helpful starting point for employers grappling with the recent changes to this complex area of law. Nevertheless, as the guidance itself reiterates, to determine whether the NMW should be paid to sleep-in workers, employers will need to apply the relevant principles to the specific facts of the situation they are dealing with.
Parental Leave: Campaigners push for reform of “deeply flawed” shared parental leave scheme
The Guardian reports that campaign groups including the TUC, Maternity Action and the Fawcett Society have joined forces in a bid for governmental reform of the “deeply flawed” and underused shared parental leave (SPL) scheme introduced in 2015. The campaigners are urging the government to reform SPL in its long-awaited Employment Bill, and to replace it with a new model of parental leave which would give both parents non-transferable paid leave to care for their child, encouraging fathers to share the burden of childcare which still falls largely on new mothers.
The groups also pushed for the publication of the government’s evaluation of the SPL scheme, which was due in 2019 and is now scheduled to be published in late 2021.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com
Employment Law Newsletter – January 2021
A review of 2020’s biggest employment law issues and a look at what we should expect from the bright and glittery 2021.