A summary of October’s employment law cases, which include an interesting look at how not to exclude staff on maternity leave, how to properly handle transgender workers, calculating holiday pay where employees are subject to compulsory overtime and the use of contract clauses to retain employees where discretionary bonus payments are payable which do not amount to restraint of trade.
This month we bring you a plethora of interesting cases centring around dismissal in all its forms – be they agreed, part of a restructure or initiated for a reason.
This month’s news provides an update on the effect of the Retained EU Law Bill and the scrapping of the sunset clause, a new smart regulation from the DBT, a report on the post-pandemic economic growth in the UK labour markets, new guidance from ACAS on both managing stress at work and making reasonable adjustments for mental health at work, a new podcast from the HSE to support disabled people in the workplace and a consultation from the EBA on the benchmarking of diversity practices. Lastly, we have the results of research carried out on unfair treatment of parents following fertility treatment.
- Brexit: Government scraps the proposed sunset clause from the Retained EU Law Bill and Minister confirms effect of the Bill on equality and employment rights
- Employment Law: Department for Business and Trade – Smart regulation unveiled to cut red tape and grow the economy
- Flexible Working: House of Commons Committee report on post-pandemic economic growth in UK labour markets
- Health at Work: ACAS publishes new guidance on managing stress at work and making reasonable adjustments for mental health at work
- Disability: HSE launches podcast to support disabled people in the workplace
- Diversity: EBA publishes consultation on guidance on benchmarking of diversity practices
- Sex Discrimination: Research reveals unfair treatment at work after fertility treatment
Brexit: Government scraps the proposed sunset clause from the Retained EU Law Bill and Minister confirms effect of the Bill on equality and employment rights
On 10 May 2023, the government announced that it will scrap the proposed sunset clause from the Retained EU Law (Revocation and Reform) Bill. As we have previously reported in our Employment Law News, the sunset clause would have meant that most retained EU law in secondary legislation would have been revoked at the end of 2023. Instead at least 600 pieces of retained EU law will be set out in a revocation schedule, which can be found here. Any laws not listed in the revocation schedule will be retained automatically.
Meanwhile, the Department for Business and Trade has published a response to a letter by the Rt Hon Caroline Nokes MP, Chair of the Women and Equalities Committee, requesting further explanation about the Retained EU Law Bill’s effect on equality rights and protections. The response by the Rt Hon Kemi Badenoch MP, Minister for Women & Equalities, confirms that the Retained EU Law Bill does not intend to undermine equality rights and protections, employment rights or maternity rights in the UK. It sets out that most equality protections will remain unaffected, as they are provided for in primary legislation, in particular the Equality Act 2010 (to which no changes are expected because of the Bill) and any relevant secondary legislation and additional instruments will be considered.
It also highlights that where additional provision is required, the Bill enables the UK Government and the devolved governments to protect the rights and protections of UK citizens. This includes a restatement power which allows departments to codify rights into domestic legislation. The response emphasises that this power will secure rights and protections, by laying them out accessibly and clearly in statute.
The response sets out that the government does not intend to amend workers’ legal rights through the Bill, that the UK provides for greater protections for workers than are required by EU law and that the government remains committed to making sure that workers are properly protected in the workplace.
The response emphasises that the repeal of maternity rights is not and has never been government policy, and that the UK is in fact further along than the EU when it comes to maternity rights.
Employment Law: Government’s “Smart regulation unveiled to cut red tape and grow the economy”
On the 10 May 2023 the Department for Business and Trade published its paper “Smarter regulation unveiled to cut red tape and grow the economy” which the government describes as “the first dynamic package of deregulatory reforms to grow the economy, cut costs for businesses and support consumers …”
The governments announcements include the following proposed amendments to employment law:
- The government is proposing to remove retained EU case law that requires employers to record working hours for almost all.
- Making rolled-up holiday pay lawful. Rolled up holiday pay is where an employer includes a sum representing holiday pay in an enhanced hourly rate rather than continuing to pay workers as normal when they actually take leave. This was ruled to be in breach of the Working Time Directive by the ECJ well over a decade ago.
- The merger of annual leave (20 days derived from the EU’s Working Time Directive) and additional leave (being the additional 8 days holiday provided under the Working Time Regulations). Whilst this appears to be sensible it will be interesting to see how the European case law which specifically applies to the 20 days annual leave, such as what constitutes holiday pay and taking such holiday in the year in which it falls, is dealt with.
- TUPE – there are proposals to do away with the need for elections of employee representatives for businesses with fewer than 50 employees or transfers of fewer than 10 employees.
The government has launched consultation on these points.
The government has also proposed limiting the length of non-compete clauses to three months. This will require the passing of legislation, which, the government says will be dealt with when parliamentary time allows.
So we wait to see exactly what legislative changes come about following these announcements.
Flexible Working: House of Commons Committee report on post-pandemic economic growth in UK labour markets
A House of Commons Committee report says the government must reconsider the need for an Employment Bill in the upcoming King’s Speech to address gaps in employment protections. The government has two months to respond to the committee’s proposals which are on topics including the machinery of government with responsibility for labour market policy; technology and skills development; workers’ rights and protection; and older workers.
The report, which follows on from a Call for Evidence on the state of play in the UK Labour market post-Brexit and the COVID-19 pandemic, highlights that:
- with 500,000 people having left the British workforce since the start of the pandemic, a shortage of labour weighs heavily on the potential for economic growth;
- economic inactivity has risen among people aged 50 to 64 years;
- the way in which the recommendations of the Taylor Review have been implemented has been fragmented and drawn-out;
- the enforcement of labour market rules is under-resourced.
It calls on the government to:
- consider establishing a Ministry of Labour and appoint a new Minister of State for Labour in the Cabinet, as well as a Cabinet Committee on Labour;
- take various actions in respect of technology and skills;
- reconsider the need for an Employment Bill in the upcoming King’s Speech to address gaps in employment protections;
- consider new legal structures for flexible work that include appropriate rights and protections for workers;
- provide more protection for workers from any damaging effects of night-time working;
- pursue the creation of the planned single enforcement body which would clarify rights of redress for those most in need;
- continue and expand support for older workers.
It also calls on businesses to:
- be more open to create more flexible constructions of work;
- offer more flexible working opportunities to benefit from a huge untapped pool of older workers and to assess whether their recruitment practices and workplaces are ‘ageist’.
Health at Work: ACAS publishes new guidance on managing stress at work and making reasonable adjustments for mental health at work
Managing stress at work:
ACAS has published new advice for employers on managing stress at work after YouGov revealed 33% of British workers disagreed that their organisation was effective at managing work-related stress. YouGov was commissioned by ACAS and surveyed just over 1,000 employees in Great Britain. ACAS sets out that stress can be caused by demands of the job, relationships at work, poor working conditions and life events outside of work such as financial worries. An ACAS poll in March 2023 revealed that 63% of employees felt stressed due to the rising cost of living.
Advice for employers on managing stress at work include:
- looking out for any signs of stress among staff. Signs include poor concentration, tiredness, low mood and avoiding social events;
- being approachable available and have an informal chat with staff who are feeling stressed;
- respecting confidentiality and being sensitive and supportive when talking to staff about work-related stress;
- communicating any internal and external help available to staff such as financial advice if the cost of living is a cause of stress.
ACAS states that creating a positive work environment can make employees healthier and happier at work, reduce absence levels and improve performance.
ACAS advice on managing stress can be accessed here.
Making reasonable adjustments for mental health at work:
ACAS has published new guidance for employers and workers on reasonable adjustments for mental health. ACAS states that ‘employers should try to make reasonable adjustments even if the issue is not a disability’. The guidance covers:
- what reasonable adjustments for mental health are;
- examples of reasonable adjustments for mental health;
- what reasonable adjustments can be made for mental health;
- requesting reasonable adjustments for mental health;
- responding to reasonable adjustments for mental health requests;
- managing employees with reasonable adjustments for mental health;
- reviewing policies with mental health in mind.
ACAS has also published case studies exploring how different organisations have helped staff with reasonable adjustments for mental health.
Disability: HSE launches podcast to support disabled people in the workplace
The Health and Safety Executive (HSE) has launched a new podcast aiming to help employers support disabled workers and those with long-term health conditions in the workplace. The podcast features discussion by host Mick Ord, former BBC Radio journalist, Moya Woolley, Occupational Health Policy Team Leader at HSE and Rebecca Hyrslova, Policy Advisor at Federation of Small Businesses (FSB); and offers advice for employers on how to create a supportive and enabling workplace, take an inclusive approach to workplace health, understand the work barriers that impact on workers, make suitable workplace adjustments or modifications, develop skills, knowledge and understanding, use effective and accessible communication, and support sickness absence and return to work.
Diversity: EBA publishes consultation on guidance on benchmarking of diversity practices
The European Banking Authority (EBA) has launched a consultation on guidelines on the benchmarking of diversity practices including diversity policies and the gender pay gap pursuant to Articles 75(1) and 91(11) of the Capital Requirements Directive IV (Directive 2013/36/EU) (CRD IV) and Article 34(1) of the Investment Firms Directive (Directive (EU) 2019/2034). The EBA has been collecting data on diversity since 2015 based on information requests. The EBA hopes that the issuance of these guidelines will lead to a higher level of transparency regarding the EBA’s work on the topic of diversity and gender equality and will help improve the quality of the collected data as well as the awareness of all stakeholders on these topics. The new reporting format is expected to apply for the collection of data in 2025 for the financial year 2024. Responses are sought to the consultation by 24 July 2023.
Sex Discrimination: Research reveals unfair treatment at work after fertility treatment
Pregnant Then Screwed published a press release during Infertility Awareness Week revealing the unfair treatment women face in the workplace due to their reproductive health. Research has revealed that of the 43% of women who informed their employer of their fertility treatment, one in four did not receive any support from their employer. One in four women also experienced unfair treatment because of undergoing fertility treatment. Unfair treatment was also experienced by 22% of women who disclosed their pregnancy loss to their employer while 6% of partners who disclosed the same faced negative treatment.
The press release confirms Pregnant Then Screwed will be launching a new programme to help employers deal with reproductive health issues in the workplace better. They will be hosting a Women in the Workplace seminar for businesses to find out more about the new training and accreditation scheme which signals fertility friendly employers. This free event will take place in June 2023.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org
This month’s review covers a range of issues. We look at sex discrimination involving a lack of a private toilet for a female employee, how an employee who worked term time should have had her holiday pay calculated to take account of the national minimum wage, a potential revision of couriers’ holiday pay following the Pimlico Plumbers case, how not to deal with a flexible working request, and an appeal to reconsider a dismissal related to the pandemic.
- Sex Discrimination: Risk of seeing man at urinal was direct sex discrimination
- Pay: Contractual terms of salaried term-time worker entitled her to NMW for 52 weeks of the year
- Holiday Pay Claims: Tribunal decision remitted following Court of Appeal decision in Pimlico Plumbers
- Indirect Discrimination: Rejection of flexible working request is application of PCP
- COVID-19: Sales rep wins bid to dispute firing over COVID-19 home working
Sex Discrimination: Risk of seeing man at urinal was direct sex discrimination
In Earl Shilton Town Council v Miller  EAT 5, the EAT has rejected Earl Shilton Town Council’s case that it did not treat ex-clerk Karen Miller worse than men in its shared toilet arrangement. The council launched its appeal after the employment tribunal ruled in 2020 it failed to provide appropriate toilet facilities to ex-clerk Karen Miller for almost two years between 2016 and 2018. The tribunal concluded that Ms Miller had been treated less favourably because she ran the risk of seeing men using the urinal. The council argued in its appeal that Ms Miller was not treated less favourably than men because they were just as much at risk of being seen at the urinal as she was of seeing them. The Judge Tayler rejected its case, concluding that Ms Miller’s sex discrimination claim did not fall apart just because a man could also make a similar complaint. It was enough to establish that Ms Miller had a worse experience than a man would seeing another man at the urinal, he said.
‘Taken from her perspective the claimant was treated less favourably than men in that she, a woman, was at risk of seeing a man using the urinals’, Judge Tayler said. ‘While a man might see another man use the urinals, the treatment of the claimant, as a woman, was less favourably.’
The judgment details how the council, which was based in a Methodist Church that it shared with a playschool, only had access to a female toilet that was in the school’s half of the building. Female staff would have to check with playschool workers that no children were using the toilet first because of child safety concerns, according to the judgment. The toilets were not always immediately accessible as a result. The council offered her the use of the men’s toilet, which has a single cubicle and a multi-person urinal. But there was no lock on the external door, creating the risk that a woman might walk in on a man using the urinal or leave the cubicle to find a man using it. The council also contended in its appeal that the sharing arrangements could not be discriminatory because they were caused by child safety concerns.
Judge Taylor ruled that the arrangements were not good enough, citing the lack of a sanitary bin and suggesting that installing a lock on the toilet door may have made it compliant.
‘The facilities were inadequate for the claimant because she is a woman’, he said. ‘Accordingly, the safeguarding issue could only go to motive and could not prevent direct discrimination being established.’
Pay: Contractual terms of salaried term-time worker entitled her to NMW for 52 weeks of the year
In Lloyd v Elmhurst School Limited  EAT 169, the claimant was employed by the respondent, a private school, as a teaching assistant. She initially worked two days a week and then this was increased to three days a week (21 hours per week). She was paid monthly in equal instalments. The claimant’s contract did not set out hours of work. However, it stated that during term time she would work as directed by the Head Teacher and be entitled to the usual school holidays as holidays with pay. The respondent calculated the claimant’s salary based on 40 weeks of the year. The claimant brought a claim in the employment tribunal for unlawful deduction from wages based on an underpayment of the National Minimum Wage (NMW). She argued that her hours over the year should be calculated as 52 weeks x 21 hours, and not 40 weeks x 21 hours. If her method of calculation was accepted as correct there was an underpayment of the NMW.
A salaried worker is entitled to receive the NMW for their ‘basic hours’ which, by virtue of regulations 3, 21(3), 22(5) of the NMW Regulations 2015 (NMWR 2015), are determined by the terms of their contract of employment, even if those basic hours are greater than the hours actually worked. On the facts of this case, even though the claimant only worked term-time as a teaching assistant, she was entitled to the NMW for 52 weeks of the year rather than just her working weeks plus statutory holiday, because her contract provided that ‘… she was entitled to the usual school holidays as holiday with pay’, according to the EAT.
The employment tribunal dismissed the claimant’s claim. It found that the claimant worked term-time only; when the claimant accepted her job it was on her and the school’s understanding that she would work term time only; the contract did not explicitly set this out but this was consistent with clause 3(b) of the contract; the wording of clause 4 of the contract did not mean that these hours were deemed to be working hours for the purposes of the NMW legislation; the wording ‘the usual school holidays as holidays with pay’ did not mean that the 12 weeks of school holiday should be paid at the same rate as when the claimant was working/on statutory leave and included in her basic hours worked calculation for NMW purposes.
The claimant appealed to the EAT. In relation to the construction of ‘basic hours’ in NMWR 2015, it was not in dispute that the claimant was a permanent employee, who was employed throughout the school year and who was engaged in ‘salaried hours work’ for the purpose of NMWR 2015, nor that the claimant met the four conditions in regulation 21, including the second condition in regulation 21(3) that she was entitled to be paid in respect of a number of hours in a year and that those hours necessarily could be ascertained from her contract.
The principal point of dispute on statutory interpretation was which non-working hours of absence or holiday count towards basic hours. The claimant argued that, while it depends on the individual contract, basic hours include all the hours which are paid as contractual holiday. While the respondent argued that the only periods of absence which count towards basic hours are those which are absences from days when the worker would otherwise be working.
The EAT allowed the appeal. It agreed with the claimant on the issue of statutory interpretation and held that the code, Act and regulations were a poor guide to what hours are to be treated as basic hours, and the ascertainment of the claimant’s ‘basic hours’ depended on the meaning of her contract: the statutory question was not answered by looking at the hours which she in fact worked. Her annual basic hours, as ascertained from her contract, would then fall to be divided by 12 to give the hours of salaried work for each one-month pay reference period. It held that as a matter of general principle, some periods of fully paid absence count towards the ‘basic hours’ of salaried hours work, e.g. if the worker’s contract said they were entitled to a salary of £400 a week for a 40-hour week and to seven weeks’ holiday at full pay their annual basic hours would be based on a multiplier of 52 weeks.
In relation to the individual grounds of appeal, the EAT held that the tribunal erred in examining the hours the claimant in fact worked, to which it added her statutory entitlement to paid annual leave; failing to ascertain the number of hours in the year for which the claimant was entitled to salary in accordance with her contract, as to which the meaning of clause 4 of her contract was of central importance; examining whether the claimant was engaged in ‘working activity’ outside term-time, rather than asking whether those periods of contractual holiday could form part of her basic hours; inconsistently including statutory leave but excluding contractual leave; and relying regulation 27 (whether a worker is ‘available at or near a place of work’ for the purpose of doing work) and not to regulation 21(3), and, in doing, so wrongly focused on when the claimant was in fact engaged in working or working activity.
The EAT remitted the matter to a freshly constituted employment tribunal for the determination, in light of its judgment, of all the issues relevant to the claimant’s claim of unlawful deduction from wages.
Holiday Pay Claims: Tribunal decision remitted following Court of Appeal decision in Pimlico Plumbers
In Alston and 44 Ors v The Doctors Laboratory Ltd and Ors  EAT 13 a group of couriers have successfully applied to the EAT to set aside by consent an employment tribunal decision on an application of time limits in holiday pay claims under the Working Time Regulations 1998 (WTR 1998) which had ruled that they could carry over paid holidays between years only if they had not already taken unpaid leave, after arguing that a Court of Appeal decision voided the employment tribunal judgment on this point.
Forty-five claimants, 38 of them represented by trade union Independent Workers of Great Britain (IWGB), argued before the EAT that the Court of Appeal’s decision in Smith v Pimlico Plumbers Ltd in February 2022 removed restrictions on how much paid leave they are due. The Honourable Mrs Justice Eady, current President of the EAT, agreed, saying that an employment tribunal’s 2020 decision in the couriers’ case ‘cannot stand and must be set aside’. The couriers ‘were and remain entitled to carry over any untaken paid annual leave’ until their contracts end or the employer, The Doctors Laboratory Ltd, allows them to take the paid holidays they have accrued, Mrs Justice Eady ruled.
It is one of the first cases to rely on the Pimlico Plumbers precedent, which allows people who were wrongly denied paid holiday to claim up to 5.6 weeks’ worth of pay—the equivalent of statutory annual leave—for each year of their employment. For people who have been misclassified as self-employed rather than workers, the precedent removed a previous two-year limit to compensation claims—now, they can stretch back as far as 1996.
The Doctors Laboratory, the UK’s largest independent clinical lab, did not give its couriers paid holiday until 2018, when it conceded they were entitled to up to four weeks a year as ‘limb (b) workers’, a legal category of worker under section 230(3) of the Employment Rights Act 1996.
The company argued before the employment tribunal in 2020 that unpaid leave the couriers had taken before 2018 should be subtracted from their holiday entitlement going forward.
The tribunal agreed the couriers’ right to carry over leave year-on-year ‘exists subject to qualification’.
Employment Judge Elliott ruled that unpaid leave was ‘capable of amounting to annual leave’ because it fulfils the health and safety objective of the European Working Time Directive, which is the root of UK working time law. But the couriers’ counsel argued before the EAT that Pimlico Plumbers allows workers to accumulate paid holiday if they have taken unpaid leave for reasons beyond their control.
The couriers and The Doctors Laboratory remain at odds over whether the couriers count as workers. If so, they could be entitled to the full 5.6 weeks’ statutory annual leave. Judge Eady remitted the matter to the employment tribunal for further directions.
Indirect Discrimination: Rejection of flexible working request is application of PCP
In Glover v (1) Lacoste UK Ltd (2) Harmon  EAT 4 the EAT dealt with the question of when a provision, criterion or practice (PCP) can be said to have been ‘applied’ to an employee, for the purposes of a claim of indirect discrimination under section 19 of Equality Act 2010. The EAT held that once an application for flexible working (eg to work on a limited number of days only each week) is determined, following an appeal process, the PCP (eg to be fully flexible as to working days) has been applied, and may therefore have put the applicant at a disadvantage, for the purposes of an indirect discrimination claim. That is the case even if the applicant is away from work when the request is made and never returns to work. It remains the case even if the employer subsequently agrees to the terms of the original application.
COVID-19: Sales rep wins bid to dispute firing over COVID-19 home working
The EAT has agreed to hear arguments from a salesman fired after asking to work from home or be granted a leave of absence during the COVID-19 lockdown, that the employment tribunal failed to consider his belief that these were reasonable steps to avoid infection. The EAT granted Francesco Accattatis permission to challenge a decision in favour of his former employer Fortuna Group, which sells protective medical equipment like face masks and gloves. The company said Accattatis had failed to ‘support and fully comply with company policies’, which included working from its office in Enfield, North London, when it fired him in April 2020, approximately a month into the first national coronavirus lockdown. But Accattatis argued a 2021 employment tribunal ruling only considered the company’s belief that it was not possible for him to work from home or be placed on furlough. ‘To focus exclusively on the respondent’s view of the situation was an error’, his counsel, told the EAT. ‘I don’t see that the respondent’s view of whether something is feasible, or whether it was feasible, was a relevant matter’.
Under the Employment Rights Act 1996 (ERA 1996), it is unlawful to fire an employee for refusing to return to a workplace because they believed there was a ‘serious and imminent danger’ they couldn’t reasonably avoid. Whether the steps the employee took were appropriate to avoid that danger must be judged ‘by reference to all the circumstances, including, in particular, his knowledge and the facilities and advice available to him at the time’.
The employment tribunal ruled Accattatis’ requests were not appropriate steps because the company ‘reasonably and justifiably concluded’ that he could not work from home or claim furlough.
But Judge James Tayler agreed at a hearing on 9 February 2023 that it is arguable the tribunal misinterpreted the law and allowed the appeal to proceed. Accattatis will also be able to argue that the reason Fortuna gave for his dismissal was not properly distinguished from managers’ low opinion of him.
He had asked his bosses several times about working from home, which he felt was possible. Fortuna and the tribunal disagreed that Accattatis was needed in the office to manage deliveries of equipment and use specialist software, the 2021 judgment noted. He sent several emails throughout April 2020 while on sick leave for a suspected case of Covid-19 urging managers to place him on furlough. ‘I can assure you I already received confirmation from several sources that [the] coronavirus job retention scheme is easily accessible, by any company still actively trading during this time of emergency, without any downside to it’, one email reads. His counsel said this demonstrated Accattatis’ belief that furlough was possible and that urging Fortuna to reconsider was an appropriate step. ‘It’s the manner of the demands, that they were impertinent, that was the reason for the dismissal’, he said.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com