This month’s newsletter highlights some critical aspects of employment law underscoring the evolving interpretations of workers’ rights, employer obligations and procedural safeguards. The EAT has clarified worker status, once again, providing guidance on how a black cab driver supplementing his income using a ride-hailing app was not a “worker” but operated independently, contrasting with the Uber precedent emphasizing factors like business autonomy and flexibility in accepting or rejecting fares. Another case showed the EAT upholding the inadmissibility of pre-termination settlement negotiations in unfair dismissal claims unless improper behaviour is evident, reaffirming the protective scope of “without prejudice” conversations. And lastly, an employer has been found liable for unfair dismissal and discrimination after firing an employee upon learning she was pregnant during her return from maternity leave, with the tribunal spotting inconsistencies in the employer’s rationale.
Worker Status: Driver using a black cab app was not a worker
Unfair Dismissal: Evidence of pre-termination negotiations inadmissable
Unfair Dismissal: Pregnant employee sacked when pregnant on return from maternity leave
Worker Status:Driver using a black cab app was not a worker
In Johnson v GT Gettaxi (UK) Ltd [2024] EAT 162, the EAT held that the Claimant was not a worker of the Respondent company. The Respondent operated a customer application which allowed members of the public to order black cabs, rather than hailing a black cab on the street. Licensed black cab drivers could sign up to the driver app, are free to ply for hire while signed up to the app and can register with other similar taxi apps at the same time as using the driver app.
The Claimant was a licensed black cab driver from April 2014. He signed up and used the Respondent’s app between April 2015 and 2017 and made 171 journeys, making up approximately 5% of his earnings. In 2020, when he re-applied to use the app, his application was refused. He believed that this was because he had made protected disclosures. This gave rise to a preliminary issue as to whether or not the Claimant was a worker under s.230 of the Employment Rights Act 1996.
The case had obvious echoes of Uber BV & Ors v Aslam & Ors [2018] EWCA Civ 2748, where the Supreme Court held that Uber drivers were workers. However, both the employment tribunal and the EAT found that the Claimant was not a worker of the Respondent and that the Respondent’s drivers, more generally, were not workers. They were in business on their own account as black taxi drivers. The use of the Respondent’s app was just a way to increase their business. The following points were relevant to this conclusion:
No penalties were imposed by the Respondent for rejections of rides offered. This indicated that the Claimant was in business on his own account.
The Claimant was free to follow the routes he considered best and there was no penalty for not following the GPS route (unlike in Uber v Aslam).
The Claimant was given limited details about passengers on accepting fares. There was nothing stopping the Claimant from making arrangements direct with passengers for other trips.
Drivers were able to increase their earnings by plying for hire in the traditional way as a black cab driver or by signing up to other apps. This was different to Uber, as Uber drivers could not ply for hire in the same way as a black taxi can.
Unfair Dismissal: Evidence of pre-termination negotiations inadmissable
In Gallagher v McKinnon Auto and Tyres Ltd [2024] EAT 174, the Employment Appeal Tribunal upheld the tribunal’s decision that pre-termination negotiations between the Claimant and the Respondent were inadmissible in his unfair dismissal claim.
Under s.111A of the Employment Rights Act 1996, pre-termination discussions, known as ‘protected conversations’, are inadmissible in ordinary unfair dismissal claims if conducted without ‘improper behaviour’, allowing confidential conversations about mutually agreed employment termination terms, even without a prior dispute. The provision is supported by an ACAS Code.
The Claimant had worked as a branch manager for the Respondent and due to illness had been absent. When he returned to work, the Respondent decided his position was no longer needed and proposed a redundancy process. At a meeting stated to be ‘off-the-record’, the Claimant was offered a settlement agreement and given 48 hours to respond, with the indication that redundancy would follow if he declined. The Claimant refused and was subsequently dismissed for redundancy. He claimed unfair dismissal and attempted to use the settlement discussions in evidence. The tribunal ruled these discussions were protected pre-termination negotiations, and since there was no improper behaviour, they were inadmissible.
The Claimant appealed to the EAT, arguing that the tribunal’s decision in this regard was perverse. He argued there was improper behaviour as:
He was told the meeting was a ‘return to work’ meeting and was taken by surprise when it was used to propose severance terms – it was therefore set up under false pretences;
He was only given 48 hours to consider a redundancy offer of £10,000, contrary to ACAS guidance suggesting a minimum of 10 calendar days; and
He was told his role was redundant, therefore exerting undue pressure on him implying his dismissal was inevitable if the offer was not accepted.
The EAT upheld the decision of the ET. In dismissing the appeal, it held that 1 and 2 did not represent improper behaviour in the circumstances: the discussions were calm, and the Claimant was given an opportunity to consult with family and seek advice. While the meeting’s purpose was not transparent, this did not amount to impropriety sufficient to override the statutory inadmissibility of the negotiations. The EAT agreed that the 48-hour deadline for considering the verbal offer was not unreasonable under the circumstances. The Claimant could have accepted, countered, or rejected the offer. The Respondent’s statement that the role was redundant was found to relate to initiating a redundancy process rather than a definitive dismissal threat.
In respect of 3, the EAT held that it was important to distinguish redundancy situations from disciplinary situations. The ACAS Code does state that a form of undue pressure can be telling an employee that, if they do not accept the offer, they will be dismissed. However, this guidance specifically refers to a disciplinary situation. In this case, a redundancy situation had arisen. It was accepted that the Respondent had told the Claimant that his role was redundant. However, this did not mean that dismissal was inevitable as there were still the possibility of alternative employment.
The Claimant attended a meeting with the managing director, Jeremy Morgan, in February 2023 that began “positively”, with him “saying the business was doing well” and explaining they recently managed to secure a contract with the NHS. Mr Morgan went on to say he was looking forward to her coming back to work and they agreed what hours she would be working. However, towards the end of the meeting, the Claimant admitted she was pregnant again. When her maternity leave ended at the end of March, no one contacted her about her return to work and they failed to respond to an enquiry about her holiday allowance for later in the year. A little while later, following other contact between the two in April, Mr Morgan called to say that following financial difficulties, late payments and a new software system being installed, she was being made redundant.
The judge found there was significant inconsistency in Mr Morgan’s reasoning for making the Claimant redundant. During their February meeting, he had claimed the business was doing well and made no mention of financial difficulties. He also hadn’t made any mention of the new software that supposedly made the Claimant’s role obsolete, even during their April phone call. No evidence of either had been produced during the tribunal case and at no stage did he send the Claimant a written statement setting out the reasons for the dismissal. He therefore ruled that the Claimant was dismissed because she was pregnant.
The judge found that her dismissal was “unfair, discriminatory, and caused significant emotional distress.” He emphasised that being fired while pregnant and losing financial stability had a profound impact on her, particularly given her family responsibilities.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
In our last update of the year we bring you technical tribunal processes...
News & Views
Employment Law General Update – March 2024
Employment,
24th March 2024
Employment Law
We bring news of several changes to the leave allowances for parents and carers in this month’s update. We also look at the latest report from the Treasury about the shocking levels of sexual harassment and bullying in the city whilst the Parker Review has found while there has been some improvement in ethnic minority representation on boards, there is still plenty of room for improvement. We also share news on the new ICO guidance on information sharing in a mental health emergency at work.
Discrimination: Sexism in the City report finds ‘shocking’ levels of sexual harassment and bullying
Diversity and Gender Pay Gap: Parker Review Committee update report expands scope of targets for ethnic minority representation
Data Protection: ICO issues guidance on information sharing in a mental health emergency at work
Parental & Carer’s Leave: New Regulations come into force
The new Paternity Leave (Amendment) Regulations 2024 (SI 2024/329) are made to amend the Paternity and Adoption Leave Regulations 2002, SI 2002/2788, the Paternity and Adoption Leave (Adoption from Overseas) Regulations 2003, SI 2003/921, and the Paternity, Adoption and Shared Parental Leave (Parental Order Cases) Regulations 2014, SI 2014/3096. They came into force on 8 March 2024 and apply to children whose:
expected week of childbirth is after 6 April 2024; or
expected date of placement for adoption, or expected date of entry into Great Britain for adoption, is on or after 6 April 2024.
The changes include, amongst other things:
allowing an employee to choose to take either two non-consecutive weeks’ paternity leave (birth), or a single period of either one week or two weeks; and
extending the period in which paternity leave (birth) must be taken from 56 days after the birth of the child, to 52 weeks after the birth.
The new Maternity Leave, Adoption Leave and Shared Parental Leave (Amendment) Regulations 2024 (SI 2024/264) are made to extend an existing statutory protection from redundancy that currently applies to those employees who are on maternity, adoption or shared parental leave. The extension means this protection also applies to pregnant women and new parents who have recently returned from any period of maternity or adoption leave, or from a period of six or more weeks of shared parental leave. The Regulations are due to come into force on 6 April 2024. Therefore any employers currently considering commencing a redundancy process or in the middle of one should review any affected employees who may now be protected under these new Regulations.
The Carer’s Leave Regulations 2024 (SI 2024/251) are made to implement a new statutory entitlement to Carer’s Leave for employees from 6 April 2024. They ensure that this leave will be available to employees for the purpose of caring for a dependant with a long-term care need. They are also due to come into force on 6 April 2024.
These are supported by The Carer’s Leave (Consequential Amendments to Subordinate Legislation) Regulations 2024 (SI 2024/266) which make necessary amendments to various pieces of secondary legislation in consequence of the Carer’s Leave Act 2023 which makes provision for the new statutory right to carer’s leave, available for employed carers from 6 April 2024. When calculating entitlements to certain other benefits or rights, leave is often a relevant factor. This instrument makes provision to ensure that it is clear in those pieces of secondary legislation how carer’s leave should be treated in those calculations.
Discrimination: Sexism in the City report finds ‘shocking’ levels of sexual harassment and bullying
The Treasury Committee has published its Sexism in the City report, following an inquiry launched in July 2023, and is calling for an end to the ‘era of impunity’ after finding a ‘shocking’ prevalence of sexual harassment and bullying, and a culture which is ‘holding back women’ in the City. The Committee welcomes proposals by the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) to strengthen their regimes for tackling non-financial misconduct, including sexual harassment, but calls on them to ‘drop their prescriptive plans for extensive data reporting and target setting’. The FCA has responded to the report.
Diversity and Gender Pay Gap: Parker Review Committee update report expands scope of targets for ethnic minority representation
The Parker Review Committee has published its March 2024 report into ethnic diversity across UK businesses. For the first time, the Committee has expanded its review to include senior management data, commenting that this yields a clearer picture than looking into boards of directors alone. It has also expanded its research to include private companies (50 in total) as well as listed companies. The report found that:
96% of FTSE 100 companies have at least one ethnic minority director on their board, compared with 44% of private companies;
ethnic minorities currently represent an average of 13% of senior management positions within FTSE 100 companies, with a target set to increase this average to 17% by 2027.
Hywel Ball, Chairman and Managing Partner of EY UK, says:
“The Parker Review, and the targets that it sets, provide an important benchmark and objective criteria to encourage fair representation of ethnic minorities. Crucially, it ensures we lead efforts to diversify UK business with respect to ethnicity from the top down and continue to be held accountable, no matter the macroeconomic climate. Representation matters – the more diverse boardroom and executive teams are, the greater the ripples across the organisation. Over the last nine years, there has been good progress but we are still a long way from achieving parity based on ethnicity. This year’s figures – 12 ethnic minority CEOs in the FTSE 100 and 7 Chairs – are encouraging but show there is work to be done to ensure our business leaders fairly represent their customers and society they serve.”
Data Protection: ICO issues guidance on information sharing in a mental health emergency at work
The Information Commissioner’s Office (ICO) has issued guidance for employers on sharing their workers’ personal information in a mental health emergency. The guidance sets out advice on when, and how, it is appropriate to share workers’ personal information where the employer believes that someone is at risk of causing serious harm to themselves or others due to their mental health. The ICO adds that it is good practice to plan ahead in order to make timely and better-informed decisions during a mental health emergency. The guidance considers what a mental health emergency is, how mental health information differs under data protection law, how to plan for information sharing and the lawful bases and special category conditions that are most likely to apply.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
In our last update of the year we bring you technical tribunal processes...
News & Views
Employment Law Case Update – October 2023
Anne-Marie Pavitt,
24th October 2023
Employment Law
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.
Sex Discrimination: Erosion of reputation as “an effective and useful member of staff” due to pregnancy is discriminatory
Sex Discrimination: ‘Deadnaming’ transgender worker amounts to less favourable treatment
Holiday Pay: Landmark case confirms a gap of three months or a correct payment does not necessarily break a series of deductions
Contract: Bonus clause conditional on staying in employment not restraint of trade
Sex Discrimination: Erosion of reputation as “an effective and useful member of staff” due to pregnancy is discriminatory
In Smith v Greatwell Homes (3316461/2021) a tribunal had to consider the employer’s actions and treatment of Ms Smith, following her declaration to her boss that she was pregnant. This case was reported in People Management on 13 October 2023:
Ms Smith began working at Greatwell Homes in March 2019 as a business improvement analyst within the business improvement team, where she was apparently a valuable and ambitious member of staff. The tribunal noted she was a “credible and consistent witness”. Within her team there were three members of staff: herself, a business improvement manager and a head of business intelligence. However, the person occupying the post of business improvement manager – the person who was meant to be Ms Smith’s line manager – had been absent from August 2019 due to long-term ill health. She never returned to work and resigned in early 2020. Consequently, Ms Smith was required to take on a “significant proportion” of the responsibilities that should have been her line manager’s.
The firm’s head of property services and compliance, Miss Herzig, viewed Ms Smith as a valuable member of the team and encouraged her to apply for a more senior post with line management responsibilities should one become available. In April 2020, Ms Smith informed Miss Herzig that she was pregnant. The tribunal found the news was not effectively communicated to human resources by Miss Herzig, and Ms Smith was required to confirm with HR that she was expecting a baby on two further occasions. “We find that this was symptomatic of the respondent’s attitude towards the claimant and/or to the fact she was pregnant,” it said.
Ms Smith’s first claim arose during the same month. All staff were given a free day off by the company as a thank you for their efforts during the Covid pandemic. The day off was a Friday, however, when Ms Smith mentioned that she did not work Fridays, the firm refused to allow her to take a different day off. In September 2020, she went on maternity leave. Other than a few emails from HR about pension matters and some personal messages from Miss Herzig, Ms Smith did not hear from her employer during her maternity leave.
Then in April 2021, Ms Smith received a text message from Miss Herzig in which she was informed that someone had been appointed as her new manager and the firm had also hired a Governance and Assurance Manager, which was only published internally on the company intranet. These were both roles, the tribunal ruled, that would have been opportunities for Ms Smith to progress within the company. The claimant was not happy about the text and what she perceived to be a lack of communication from the respondent during her maternity leave, which went against the company’s maternity policy – which stated that employees on maternity leave must be informed of job vacancies. She commenced a grievance which was heard by Mr Wilesmith, but it was not upheld.
In August 2021, the respondent began to send job adverts to Ms Smith. This included a re-advertisement of the Governance and Assurance Manager’s post, as the current person occupying the role was on a 12-month contract and it would end in April 2022. The claimant resigned by letter dated 31 August. By a letter of the same day, the respondent accepted her resignation.
The tribunal held that Ms Smith was treated less favourably by the respondent on the grounds that she was on maternity leave, and commented that neither Miss Herzig nor Mr Wilesmith were impressive witnesses. It noted: “Neither demonstrated sufficient knowledge, skills or empathy in the way they dealt with the claimant throughout this process. It was the tribunal’s view that both were ill-equipped to deal with equality and diversity issues. It is incumbent on an employer to make sure that appropriately skilled and experienced staff deal with equality and diversity issues. The respondent had singularly failed in this regard.”
Regarding the free day off, the tribunal said the firm’s decision to not allow her to reschedule a day off was “unfavourable towards part-time workers, and therefore indirectly discriminatory towards female members of staff, as well as deeply unsympathetic in relation to the claimant herself”. It also ruled that Ms Smith “clearly [had] less favourable treatment” because she was on maternity leave as she was “barred from the opportunity” of participating in any recruitment process, or the chance to compete with other applicants to progress her career.
Employment judge Wood said: “In our view, it is clear that Miss Herzig’s view of [Smith] as an effective and useful member of staff had been eroded by the knowledge that she had become pregnant and was on maternity leave. It may have been, in part, a subconscious attitude. Nonetheless, we are clear that it was the reason, or a significant part of the reason, for the unfavourable treatment.” It also said the firm’s decision to send Smith job ads in August 2021 for vacancies that were expected to become available in April the following year were just “window dressing” to disguise the treatment that had gone before. Greatwell Homes was consequently ordered to pay Ms Smith £50,000.
Sex Discrimination: ‘Deadnaming’ transgender worker amounts to less favourable treatment
InAB v Royal Borough of Kingston upon Thames (ET/2303616/2021) the tribunal ruled that the Borough of Kingston Council had committed several acts of direct discrimination against its employee, Miss AB, because of her status as a transgender woman her while she was undergoing a gender transition by using her previous name. The Employment Tribunal upheld 10 of her claims and awarded her nearly £25,000 in damages.
The majority of the claims that succeeded were instances in which she was ‘deadnamed’—the term for referring to a trans person by the name, and therefore gender, that they used before they transitioned. The council used Miss AB’s deadname on her office door pass, her pension records, the staff directory, the internal complaints system and her parking pass, according to the judgment. All of these instances amounted to ‘less favourable treatment’ and were ‘because of the claimant’s protected characteristic’, the tribunal found. The tribunal also sided with Miss AB when she argued that management’s decision to remove some of her job responsibilities was an act of direct discrimination. ‘We conclude that [Miss AB’s manager] in taking this action was not simply acting unreasonably, but that the claimant’s protected characteristic was part of the reason for this treatment’, the tribunal ruled. ‘The claim therefore succeeds’.
The panel also found that management’s response to a complaint from Miss AB was direct discrimination because they failed to take the complaint seriously. It found that management ‘did not treat the claimant’s allegation with respect’ and demonstrated ‘a dismissive attitude towards the issue’. ‘We have to conclude that some part of his reaction was because of the claimant’s protected characteristic’, the panel ruled. Similarly, the tribunal held that a manager fell foul of discrimination law when he failed to properly escalate Miss AB’s complaint. ‘Again, we have to conclude that some part of his reaction and his lack of action was because of the claimant’s protected characteristic’, the panel said.
However, many of Miss AB’s claims failed because she filed them too late and did not give the judge a sufficient reason for her delay. Miss AB argued that her employer’s decision to cut off her direct contact with internal councillors was a discrete, rather than ongoing, act. However, the tribunal found that although the decision had ongoing consequences, it was a discrete act and it fell outside the tribunal’s time limits. The panel also found that a reprimand one of the managers gave Miss AB also took place too long before she filed her claim, but added that the claim would have failed in any event because the reprimand was a reasonable management response to her failing to obey an instruction.
The tribunal disagreed with Miss AB’s argument that the council’s failure to implement a health and safety risk assessment for gender transition was discrimination. There was no obligation to undertake such a risk assessment, the judgment said. The panel also found that the council did fail to have appropriate Equalities Act policies in place but said this ‘was not because of the claimant’s protected characteristic but because of HR failures on a wider scale’.
The tribunal awarded Miss AB £21,000 as compensation for injury to feelings plus £4,423 in interest.
The Claimants were police officers and civilian staff working for the police in Northern Ireland. The case arose because they had historically only received basic pay for annual leave but the parties had agreed there had been an underpayment because the holiday pay should have included periods of compulsory overtime. The claimants brought claims for underpayment of holiday pay, and the question before the court was how far did this underpayment go back? The relevant Northern Irish legislation (mirroring the Employment Rights Act 1996) provided that a claim could only be made in respect of a payment made in the three months before the claim was brought. However, if the deduction was part of a series, the deductions could be linked together provided that the claim was brought within three months of the last of the series of deductions.
Previously, the EAT in Bear Scotland v Fulton had previously concluded that deductions could only be linked in a series if there was a gap of three months or less between each deduction but here the Supreme Court has now held that where a series of deductions are all based on an employer failing to properly meets its obligations to pay holiday correctly and, but for the mandatory cut off after 3 months which was set out in Bear Scotland, they would otherwise constitute a series, employees should be able to link each deduction. To hold otherwise would produce unfair consequences.
The Supreme Court held that:
(1) the EU principle of equivalence requires the police officers to be allowed the more advantageous series extension found in the Employment Rights (Northern Ireland) Order 1996 even though they are not workers for the purposes of that legislation,
(2) the series extension is therefore read into the relevant part of the Working Time Regulations (Northern Ireland) 2016 to achieve this, and
(3) what constitutes a series of deductions is a question of fact which does not require a contiguous sequence and is not necessarily brought to an end by a gap of three months or a correct payment if that correct payment was calculated when the claimants were at work.
It further found that, (1) there is no legal requirement that leave derived from different sources must be taken in a particular order, (2) it is inappropriate to apply a general principle of using calendar days in the reference period when calculating a worker’s normal pay, and (3) the appropriate reference period when calculating normal pay in any case is a question of fact.
Contract: Bonus clause conditional on staying in employment not restraint of trade
In Steel v Spencer Road LLP (trading as Omerta Steel) [2023] EWHC 2492 (Ch) the Chancery Division dismissed the appellant’s appeal from a decision which had dismissed his application to set aside a statutory demand served by the respondent. The appellant was a former employee of the respondent. Under the terms of his employment contract, his remuneration was by way of a basic annual salary plus a discretionary bonus scheme. The bonus was conditional on the appellant remaining in the employment of the respondent for three months from the date of payment of any bonus, and not having given or been given notice to terminate his appointment during that period.
In January 2022, the appellant was paid a bonus which was an amount considerably larger than his basic salary at the time. Later, he gave notice of termination of his employment in February. The respondent had requested repayment of the bonus under the clawback provisions in the employment contract. The appellant refused to do so and had argued that the bonus clawback provisions were unenforceable on the grounds that they were in restraint of trade and/or penalty clauses. The court held, among other things, that there was no doubt that an employee bonus or commission scheme which was conditional on the employee remaining in employment for a specified period of time operated as a disincentive to that employee resigning. That had not, however, turned such a provision into a restraint of trade.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
In our last update of the year we bring you technical tribunal processes...
News & Views
Employment Law Case Update – September 2023
Employment,
21st September 2023
Employment Law
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. The questions will always be: is that reason fair and/or have you followed the correct procedure? Have a look at our case run down here.
TUPE: Employment decision on when a TUPE transfer takes place
Redundancy: Employees in restructure did not unreasonably refuse suitable employment
Unfair Dismissal: Direct Line beats claims advisers case over agreed exit
Unfair Dismissal: Conclusion on the fairness of a dismissal must be based on the established reason for that dismissal
Sex Discrimination: Tribunal’s misstatement of grievance outcome materially impacted on its consideration of the claim
TUPE: Employment decision on when a TUPE transfer takes place
In Rajput v Commerzbank and Société Générale [2023] EAT 116 the EAT held that (i) in a ‘series of transactions’ cases, the transfer does not necessarily take place at the end of the series, and (ii) when determining the date of the transfer, a tribunal can have regard to matters which occur outside the UK. Regulation 3(1)(a), which provides that the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246 apply to undertakings which are ‘situated immediately before the transfer in the UK’, does not mean that a tribunal must focus solely on events which take place within the UK-businesses which are situated in the UK.
Sarah Clarke, barrister at 3PB, who represented the claimant in this appeal, writes in a case analysis for Lexis Nexis that, on the face of it, the EAT’s finding that a transfer can take place at any point within the ‘series of transactions’ could cause uncertainty and increase the amount of litigation in this area. However, she goes on to say that she considers that, in the vast majority of cases, a transfer will take place at the end of the series. The question to be determined is when responsibility for the carrying on of the business transfers to the transferee and it is difficult to envisage many situations in which responsibility would transfer over prior to the end of the transactions. Indeed, as a matter of logic, if a transfer is ‘effected’ by a series of transactions, it cannot be until the last of those transactions that the transfer is complete, as otherwise the later transactions could not have ‘effected’ the transfer. However, this argument was rejected by the EAT and, in her view, there is scope for further judicial consideration of this.
In relation to the location of the business, this case makes it clear that, when determining when a transfer takes place, a tribunal’s focus ought not to be solely on those matters which occur in the UK. The relevance of geography to TUPE is simply that the business must be situated in the UK immediately before the transfer takes place. However, this does not preclude the business operating from other locations outside the UK. Thus, when dealing with this issue, parties must ensure that they provide evidence to the tribunal which clearly explains all matters relevant to the transfer, regardless as to where in the world those events took place.
The claimant was employed by Commerzbank (CB) from 2012 as a senior compliance officer. She was dismissed in March 2020 and brought various claims, including automatic unfair dismissal (on the basis that the sole or principal reason for her dismissal was the TUPE transfer) and victimisation (following a previous successful discrimination claim she had brought against CB). She had worked within the Equity Markets and Commodities Division (EMC) of the business, which was sold to Société Générale (SG), following a business purchase agreement which was signed in November 2018.
The EMC business was divided into three divisions, namely Flow Trading, Asset Management (AM) and Exotics, Vanilla and Funds (EVF), and was spread across several countries, including the UK, Luxembourg and Germany. The claimant worked across all three divisions.
For the purpose of the business sale, each division was (i) allocated its own purchase price, and (ii) divided into sub-batches, which transferred over a period of time. The EVF division transferred over in six batches from March to October 2019, with AM transferring over from May to November 2019. The last part of the EMC business to transfer over was Flow. It was based mainly in Germany, with only a small presence in London consisting of five employees. Most of Flow had transferred over by March 2020, with the remainder transferring in May 2020.
The employment tribunal found that the transfer took place on 1 October 2019 on the basis that 95% of the UK operation had transferred over by then. The judge thus ignored the last division which transferred over, as this was based predominantly in Germany.
The EAT, Mr Justice Kerr sitting alone, concluded that:
‘…there is no presumption or rule that a transfer effected by a series of transactions occurs at the end of the series. Completion may be artificially delayed. The last transaction in the series may be a minor detail, putting the last piece of the jigsaw in place long after the transferee has started running the business to the exclusion of the transferor.’
However, he agreed that the judge had erred in excluding from his consideration the Flow part of the business. The question to be determined was when responsibility for the carrying on of the business was transferred to the transferee (CELTEC v Astley). It was an agreed fact that Flow formed ‘part of the organised grouping of resources’ which comprised the EMC business. There was no reason why an ‘organised grouping of resources’ (in the words of TUPE 2006, SI 2006/246, reg 3(2)) could not be located across several countries at once. A business or part of a business can be ‘situated’ in the UK without its entire operation being located in the UK. He concluded that ‘there is nothing in the TUPE Regulations that required the tribunal to confine its consideration to the part of the organised grouping of resources based in this country.’
Redundancy: Employees in restructure did not unreasonably refuse suitable employment
In Mid and South Essex NHS Foundation Trust v Stevenson [2023] EAT 115 the EAT had to consider whether the respondent had been entitled to refuse to make redundancy payments to the claimants where the employment tribunal had held that the alternative roles offered to them were ‘suitable’ but that their rejection of them was not unreasonable due to their personal perceptions of those roles.
The EAT held that there was no error in the employment tribunal’s approach:
— the relevant statutory test is whether the claimants ‘unreasonably’ refused an offer of employment that was suitable to them (the suitability of the role is not in and of itself determinative)
— even though the claimants’ perception of the roles was objectively groundless, the employment judge had found that there was a sufficient basis for their personal perceptions of the roles (eg that they would be a loss of autonomy and status) for them not to have acted unreasonably in refusing them
Unfair Dismissal: Direct Line beats claims advisers case over agreed exit
Insurer Direct Line has successfully defended a case by a claims adviser that it unfairly dismissed him, with the EAT ruling that the employment tribunal had been entitled to find that there was no dismissal because the employee had mutually agreed to terminate his employment after his mental health problems meant he could not work.
In Riley v Direct Line Insurance Group plc [2023] EAT 118, the EAT ruled that an employment tribunal was entitled to find that Matthew Riley had consented to leaving his job. This is because he knew that he would receive lifetime insurance payments after being left unable to work due to mental health problems stemming from autistic spectrum disorder.
His Honour Judge (HHJ) Murray Shanks said the employment tribunal did not err when it rejected Riley’s case that he was duped into terminating his employment. ‘There was ample evidence for the conclusion reached, and the tribunal considered in detail whether Mr Riley’s consent was freely given’, he said. HHJ Shanks added that the tribunal ‘went to considerable lengths to emphasise their conclusions that Mr Riley was not tricked or coerced in any way and that he participated in the discussions, was given time and fully understood what he was doing’.
Riley was absent from work from 2014 until October 2017 due to anxiety and depression, according to the judgment. He began to make a phased return—but was again left unable to work from May 2018 because of anxiety and paranoia, the judgment says. He met with managers in August 2018 and September 2018, when he discussed leaving the job and relying on an insurance policy with UNUM that would make payments equating to 80% of his salary until he reached retirement age, according to the judgment.
Direct Line notified Riley in September 2018 that he was being dismissed following a meeting at which UNUM confirmed that he would be entitled to the benefits of the policy, the judgment says. Riley launched a case at the employment tribunal later that year, lodging claims of unfair dismissal and disability discrimination over allegations that he had been tricked by managers, according to the judgment.
But the tribunal dismissed his case in 2019, rejecting Riley’s evidence that he was put under pressure and did not understand what he was being told by managers. It also found that Riley had told managers that he knew terminating his employment to rely on the insurance policy was ‘where it’s been heading for the last four years’, according to the appeal judgment. The tribunal also concluded that Riley’s discussions with managers about his leaving had been supportive and designed to help him make the right decision.
John Platts-Mills, of Devereux Chambers, Riley’s counsel, argued before the EAT that the tribunal had failed to address the questions of who really terminated their client’s employment and whether the claims adviser really gave ‘true, mutual consent’, according to the appeal judgment.
But HHJ Shanks rejected the argument, ruling that the tribunal had ‘considered evidence relating to this in detail’. ‘It is true that they did not expressly refer to his disability in this context, but they must have had it well in mind when they rejected his evidence that he did not understand what was being said at meetings and found that he had made a fully informed decision’, he said.
Unfair Dismissal: Conclusion on the fairness of a dismissal must be based on the established reason for that dismissal
In Greater Glasgow Health Board v Mullen [2023] EAT 122, the EAT dismissed the employer’s appeal against the decision of the employment tribunal which found that the employer’s reason for dismissing their employee was a belief by it in the existence of misconduct consisting of aggressive and threatening behaviour by him to one of his line reports. The tribunal further concluded that the employer’s belief in the existence of that misconduct was genuinely held and reached after reasonable investigation. The issue was whether the tribunal had erred in their decision.
The EAT held, among other things, that: (i) in the circumstances it was not open to the employment tribunal to base its conclusion about the fairness of the dismissal in terms of section 98(4) of the Employment Rights Act 1996 on a factual hypothesis that the ‘real reason’ for the dismissal was something different to the established reason; and (ii) on the findings in fact made by the employment tribunal, the only conclusion to which they could properly have come was that dismissal was within the range of reasonable responses open to the employer and was fair. Consequently, the employment tribunal’s judgment was set aside, and the claim of unfair dismissal was dismissed.
Vicarious Liability: School not liable for acts of work experience student
In MXX v A Secondary School [2022] EWHC 2207 (QB) the Court of Appeal upheld the High Court’s decision that the defendant, a co-educational secondary school providing education for children aged 11 to 16, was not vicariously liable for the sexual assaults carried out by PXM on the claimant (a pupil), subsequent to PXM undertaking a work experience placement at the school. The court held that the judge had been wrong to have found that the relationship between the defendant and PXM was not akin to employment but that:
— given the limited nature of PXM’s role during the course of one week (eg he had no pastoral responsibility), the facts did not begin to satisfy the requirements of the close connection test
— the grooming which led to the sexual offending was not inextricably woven with the carrying out by PXM of his work during his week at the defendant’s school such that it would be fair and just to hold the defendant vicariously liable for the acts of PXM.
Disability Discrimination: Tribunal rules insurer discriminated against menopausal worker
A British insurance company has been ordered to pay one of its former workers £64,645 after the tribunal found it failed to make reasonable adjustments for an employee with menopausal symptoms, who later resigned.
In Lynskey v Direct Line Insurance Services Ltd ET/1802204/2022 and ET/1802386/2022, Employment Judge Wade found that Direct Line Insurance Services Ltd did not fully consider the impact of menopause on Maxine Lynskey when it launched a warning and disciplinary process based on her performance. ‘At that time the disadvantage the claimant faced in doing her job while struggling with menopausal symptoms ought to have been recognised as such and adjustments made’, Judge Wade wrote.
The insurer must pay the sum to Lynskey to account for a range of factors, including damages for injury to feelings as well as losses she suffered, according to a remedy judgment. These events are a ‘serious and sustained number of contraventions over a period involving both the claimant’s line manager and her line managers and HR’, the tribunal found.
Lynskey was a motor sales consultant for Direct Line from April 2016. She had ‘very good’ performance ratings in that role. She then informed her manager at a meeting she was having health issues related to menopause.
‘It was clear from the information the claimant provided that she was being profoundly affected by menopausal symptoms and was seeking treatment for them; that was apparent from March 2020’, Judge Wade wrote.
Lynskey then moved to a different team considered to be a ‘better fit’ in light of her personal and health circumstances, albeit one that did not involve a sales related bonus. However, the tribunal found that with this new role, Lynskey’s managers should have been aware of health issues that would affect her performance. ‘The respondent knew, or ought reasonably to have known, from March 2020, that the claimant had become a disabled person by reason of menopausal symptoms’, Judge Wade wrote. ‘She was self-evidently at a disadvantage in comparison with colleagues without her disability in meeting the respondent’s performance standards and targets, and generally more likely to be sanctioned or face disciplinary/performance warnings.’
Lynskey began underperforming, and was told she wouldn’t receive a pay rise because her performance was rated ‘need for improvement’, the judge wrote. The tribunal ruled that it was unfavourable treatment to score her performance without fully factoring in her disability. ‘Need for improvement is inherently unfavourable if the person, through disability, cannot, in fact, improve, or meet the required standards’, it said. She later faced a warning meeting where her manager ‘failed to recognise or take in the explanations’ around her symptoms. Lynskey then faced a disciplinary meeting where her health condition was not fully considered. Judge Wade found that the subsequent disciplinary warning ‘was unfavourable treatment because of something arising in consequence of disability’.
‘It is clear a less discriminatory approach could have been taken, including occupational health referral, consideration of other roles, and accepting the claimant’s mitigation, namely her disability’, the judge wrote.
After a period of ill health and personal issues outside work, Lynskey’s sick pay was stopped, the ruling said. She then submitted a grievance to her employer before ultimately resigning in May 2022, then brought constructive unfair dismissal and Equality Act 2010 complaints against the insurance company.
The tribunal upheld Lynskey’s arguments that Direct Line failed to make reasonable adjustments for her, as well as her complaints about discrimination because of her menopause symptoms. It rejected her complaints relating to constructive unfair dismissal, sex and age.
The tribunal handed down an extempore judgment (given verbally at the end of the case, not written down) on 28 April 2023, and Direct Line requested the written reasons, which were published on 25 August 2023.
Sex Discrimination: Tribunal’s misstatement of grievance outcome materially impacted on its consideration of the claim
In Iourin v The Chancellor, Masters and Scholars of the University of Oxford [2023] EAT 108 the EAT considered a number of appeals against an employment tribunal’s decision dismissing the claimant’s claims for direct sex discrimination, victimisation, and disability discrimination against the respondent under the Equality Act 2010.
The claimant had attempted to hug and kiss a colleague when they were in a car together. She raised a grievance and the grievance committee held that this conduct was unwanted but that, in the context of their relationship, it did not amount to harassment or sexual harassment. The claimant was however required to undergo training related to harassment, which he claimed was sex discrimination.
In finding that this did not amount to sex discrimination, the employment tribunal had made a material error of law by relying on its mistaken account of the grievance committee’s finding—stating that it was harassment but not sexual harassment—in reaching its conclusion that this was the non-discriminatory reason for the training requirement. That claim was therefore remitted to the employment tribunal for rehearing.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
In our last update of the year we bring you technical tribunal processes...
News & Views
Employment Law General Update – May 2023
Employment,
29th May 2023
Employment Law
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.
Employment rights
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.
Parental leave
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 releaseduring 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.
The data contained within this document is for general information only. No responsibility can be accepted for inaccuracies. Readers are also advised that the law and practice may change from time to time. This document is provided for information purposes only and does not constitute accounting, legal or tax advice. Professional advice should be obtained before taking or refraining from any action as a result of the contents of this document.
In our last update of the year we bring you technical tribunal processes...
News & Views
Employment Law Case Update – February 2023
Employment,
27th February 2023
Employment Law
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
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 [2023] 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 [2002] 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
InAlston and 44 Ors v The Doctors Laboratory Ltd and Ors [2023] 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 [2023] 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.
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