News & Views

Employment Law Case Update – March 2024

Employment,
24th March 2024

Employment Law

This month’s case updates include a case of unfair dismissal which sparked a debate over the bounds of reasonable responses of an employer in dismissing an employee for posting a racist ‘joke’ on an intranet, we scrutinize parental leave protection against dismissal, look at whether employers can be held vicariously liable for detriments amounting to dismissal caused by co-workers in whistleblowing cases, and take a look at the potential discrimination of a Christian actor removed from a role due to anti-gay social media posts, although she admitted she would never had played that role anyway. Lastly, looking at Equal Pay, we investigate the ‘material factor defence’.

Unfair Dismissal: Band of Reasonable responses
Parental Leave: Protection against dismissal can arise before employee gives notice to take parental leave
Whistleblowing: Employer cannot be vicariously liable for detriment caused by act of co-worker which amounts to dismissal
Discrimination: Fired ‘Color Purple ‘actor loses appeal over Christian beliefs
Equal Pay: Identification of decision-maker is not essential to material factor defence

Unfair Dismissal: Band of Reasonable responses

In Vaultex UK Ltd v Bialas [2024] EAT 19 the question before the EAT was whether the original tribunal had been entitled to decide that a decision to dismiss an employee for posting a racist ‘joke’ on his employer’s intranet fell outside the band of reasonable responses.

The Claimant posted a racist joke on the Respondent’s intranet, which was used by all its employees. The Respondent was a large company which conducts cash processing. The Claimant had a long, unblemished service record and apologised for his actions but nonetheless, the Respondent decided to dismiss the Claimant for gross misconduct.

The tribunal held that the Claimant had been unfairly dismissed, and had even directed itself, citing pertinent authority, that, in relation to sanction, a band of reasonable responses approach should be applied, and that the tribunal “must not simply substitute its judgment for that of the employer in this case”. The tribunal concluded that, given the Claimant’s record and the fact he had apologised, any sanction above a final written warning fell outside the band of reasonable responses that a reasonable employer could have reached.

The Respondent appealed. The first ground of the appeal was the assertion that the tribunal nevertheless committed the error of substituting its own opinion of the appropriate sanction for that of the Respondent. The second ground was that, on the question of whether the sanction of dismissal was within the band of reasonable responses, the tribunal reached a conclusion which was perverse or not within the range of reasonable decisions open to it.

The EAT found that this was not a case where the tribunal found that there was unfairness because a relevant circumstance was not considered by the employer at all. To the contrary, the tribunal specifically found that the Claimant’s long service and the fact that this was a first offence were taken into account by the Respondent. Secondly, given that the tribunal found that the Respondent’s policies and procedures made it clear that conduct of this sort was considered to be potentially so serious that it could result in dismissal for a first offence, and, indeed, that they explained that, even if not directed at another employee, such conduct might amount to discriminatory harassment of colleagues exposed to it, and that this post was placed on an intranet used by the entire workforce, they did not find that it was reasonably open to the tribunal to conclude, if it did, that the Claimant’s prior clean record of long service meant that dismissal was outside of the reasonable band of responses.

The EAT therefore held that the tribunal had, in fact, substituted its own view for that of the Respondent and upheld both grounds of appeal. The EAT concluded that “any tribunal properly applying the law could not have concluded other than that dismissal, however harsh the tribunal might think the decision, was within the band of reasonable responses open to the employer in this case“. It held that the response was within the band of reasonable responses and therefore substituted a finding of fair dismissal.

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Parental Leave: Protection against dismissal can arise before employee gives notice to take parental leave

In Hilton Foods Solutions Ltd v Wright [2024] EAT 28 the EAT had to consider how protection from dismissal arises regarding parental leave. An employee is protected against being dismissed because s/he took parental leave. In broad terms, an employee is also protected if s/he ‘sought’ to take parental leave, pursuant to regulation 20 of the Maternity and Parental Leave Regulations 1999 (MAPLE Regs), SI 1999/3312. His Honour Judge Tayler noted that this appeal raises one point of construction; what is required for an employee to have ‘sought’ to take parental leave? The Respondent argued that the employee must have complied with certain formal requirements of the MAPLE Regs that are a prerequisite of exercising the right to take parental leave. The Claimant (Mr Wright) argued that whether an employee has sought to take parental leave is a question of fact for the appreciation of the Employment Tribunal having considered all the relevant evidence.

The EAT held that the use of the word ‘sought’ was of an ordinary English construction and therefore the question of whether an employee has ‘sought’ to take parental leave for the purposes of this regulation 20 should be based on a factual determination made by the employment tribunal having considered the relevant evidence and circumstances. In addition, it concluded that there is no absolute requirement that the employee must have given notice to take parental leave pursuant to paragraphs 1(b) and 3 of MAPLE Regs, Schedule 2.

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Whistleblowing: Employer cannot be vicariously liable for detriment caused by act of co-worker which amounts to dismissal

In Wicked Vision Ltd v Rice [2024] EAT 29, the Claimant brought a claim of automatic unfair dismissal against the Respondent on the basis that he was dismissed because he had made protected disclosures. The Claimant later tried to amend his claim, to add that the act of the dismissing officer in dismissing him was a detriment on grounds of whistleblowing for which the Respondent was liable. The tribunal allowed the amendment.

At appeal, the EAT disagreed with the tribunal and held that:

a claimant cannot claim that their employer (a company) is vicariously liable under section 47B(1B) of the Employment Rights Act 1996 (ERA 1996) for the act of a co-worker (in this case the company’s owner) for the ‘detriment of dismissal’; and
such a claim is barred by ERA 1996, s 47B(2) because the alleged detriment ‘amounts to dismissal (within the meaning of Part X)’ of ERA 1996.

Therefore the correct claim was the one originally made by the Claimant.

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Discrimination: Fired ‘Color Purple’ actor loses appeal over Christian beliefs

In Omooba v (1) Michael Garrett Associates Ltd (ta Global Artists) (2) Leicester Theatre Ltd [2024] EAT 30 the EAT held that a theatre company did not discriminate against a Christian actor when it dropped her from a role in a musical production of ‘The Color Purple’ over an anti-gay social media post.

The Claimant was an actor, cast to play the role of Celie in the stage production of ‘The Color Purple’. Celie is seen as an iconic lesbian role and, when the claimant’s casting was announced, a social media storm developed relating to a past Facebook post in which she had expressed her belief that homosexuality was a sin. The consequences of that storm led to the termination of the Claimant’s contracts with the theatre (the Second Respondent) and her agency (the First Respondent). Arising out of those events, she brought Employment Tribunal (“ET”) claims of religion and belief discrimination and harassment, and breach of contract. Shortly before the ET hearing, having only then read the script, the Claimant volunteered she would never in fact have played the part of Celie, and would have resigned from the role in due course. She continued with her claims, but these were all dismissed and an award of costs made against her.

The Claimant appealed against those decisions, and against a further order relating to the continued use of the hearing documents. The Respondents cross-appealed the ET’s finding that the Claimant had suffered detrimental treatment, its failure to find that there was an occupational requirement that the actor playing Celie had not manifested a belief such as that expressed in the Claimant’s Facebook post, and its failure to find that keeping the Claimant on the books of the agency would effectively have amounted to compelled speech.

The EAT dismissed the appeals. Although, contrary to the Respondents’ first ground of cross-appeal, it had been open to the ET to find that the Claimant had suffered detrimental treatment, it had not fallen into the error of confusing reason and motive but had permissibly found that, whilst the Claimant’s belief formed part of the context, it was not a reason for either her dismissal by the theatre or the termination of her agency contract. In the circumstances, it was unnecessary to rule on the occupational requirement or compelled speech arguments. As for the harassment claim, the ET had not failed to have regard to the impact on the Claimant of the social medial storm (the “other circumstances” for the purposes of section 26(4)(b) Equality Act 2010), but had found that the Respondents had not caused, or contributed to, that circumstance, and permissibly found that the Claimant’s treatment had not reasonably had the requisite effect.

The ET had also been entitled to reject the Claimant’s argument that any breach of ECHR rights would amount to a “violation of dignity”; that argument was academic, as the ET had not found that any of the Claimant’s ECHR rights had been infringed. The ET had also been correct to dismiss the Claimant’s breach of contract claim against the Second Respondent. She had been offered the full contract fee, so there was no pecuniary loss. Moreover, as the Claimant knew she would not play a lesbian character, but had not raised this with the theatre, or sought to inform herself as to the requirements of the role of Celie, she was in repudiatory breach of her express obligations, and of the implied term of trust and confidence. Although the Second Respondent was not aware of this at the date of termination, no damages (e.g. for loss of publicity/enhanced reputation) could be due.

In making a costs award against the Claimant, the ET had been entitled to reach the conclusion that her claims either had no reasonable prospect of success from the outset, or that they had no reasonable prospect once the Claimant realised that she would never in fact have played the role of Celie, or that the conduct of the claims had been unreasonable; as such it had permissibly found the threshold for a costs award was met. As for the Claimant’s objection to the amount of the award (the entirety of the Respondents’ costs, subject to detailed assessment), the ET: (i) was entitled to find that the change in the Claimant’s case had an effect on the entire proceedings, and (ii) had drawn inferences that were open to it on its findings as to the conduct of the Claimant’s case, such that it had permissibly taken into account the resources of those who had supported the litigation for their own purposes. As for the order restricting the future publication of all hearing documents, that had been a decision open to the ET under its powers of case management. It had had due regard to the open justice principle and been entitled to exercise its discretion in the way that it had.

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Equal Pay: Identification of decision-maker is not essential to material factor defence

In Scottish Water v Edgar [2024] EAT 32, the Claimant brought an equal pay claim under the Equality Act, 2010. Her comparator was a male employee with the same job title and within the same pay band who had been appointed after her. The Appellant raised a ‘material factor defence’ (i.e. the employer is able to give a genuine reason for the difference in pay between the Claimant and their comparator that is not related to gender) that the difference in pay was due to the comparator’s superior skills, experience and potential. The Appellant led evidence about discussions within its organisation about those matters and about the resultant level of salary ultimately offered to the comparator at the time of his appointment. It also sought to lead comparative evidence of the Claimant’s skills, experience and potential both at the time of and after his appointment.

The Employment Tribunal (ET) directed itself that the Appellant required to prove the identity of the pay decision-maker at the point in time when the comparator was engaged. It concluded that the Appellant had not done so, and that the material factor defence accordingly failed. It also directed itself that comparative evidence of the respective skills, experience and potential of the Claimant and the comparator in a period of time after the comparator’s appointment was irrelevant.

The EAT held that:

an employer does not need to prove the identity of the decision-maker in order to establish a material factor defence to an equal pay claim, and
comparative evidence of the respective skills and abilities of the claimant and the comparator from a period in time after the comparator’s appointment is not necessarily irrelevant to the employer’s defence, according to the EAT.

The ET’s judgment was set aside and the preliminary issue was remitted to a differently constituted tribunal. It was observed that the primary purpose of the reasons section of any decision of an ET should be to explain to the parties clearly and concisely why the tribunal reached its decision.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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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.

News & Views

Employment Law Case Update – February 2024

Employment,
26th February 2024

Employment Law

In this issue, we delve into recent legal cases that shed light on critical aspects of employment law looking at the treatment of a gender-critical professor over their research, the intricacies of whistleblowing as it may or may not affect job applicants, an examination of the Transfer of Undertakings (Protection of Employment) regulations (TUPE), and the delicate balance between anonymity and justice in relation to fabricated sexual assault allegations.

Discrimination & Harassment: Gender-critical professor was discriminated against for research
Whistleblowing: Job applicants are not entitled to bring claims when they have suffered detriment because of making a protected disclosure
TUPE: Liability for harassment claim does not transfer if both employees do not transfer
Anonymity: Claimant who made up sexual assault was not entitled to privacy orders

Discrimination & Harassment: Gender-critical professor was discriminated against for research

In Phoenix v The Open University (3322700/2021 & 3323841/2021), a gender-critical professor has persuaded an employment tribunal that her employer university harassed and discriminated against her based on her views before unfairly pushing her to resign.

At the tribunal, the Employment Judge Young ruled that Open University professors led a ‘call to discriminate’ against Professor Jo Phoenix by releasing an open letter protesting against her gender-critical research network. The discriminatory letter led to a ‘pile-on’ against Phoenix, Judge Young said. The judge said that the university failed to provide a suitable working environment for Phoenix by leaving her exposed to the backlash, which amounted to a breach of the implied term of trust and confidence in her contract and ultimately led her to resign. She found that The Open University did not protect Phoenix from the ‘negative campaign’ against her after she launched her research network because it ‘did not want to be seen to give any kind of support to academics with gender critical beliefs’, the judge said.

The university employed Phoenix as a professor from 2016 until she resigned in December 2021 following what she described as an ‘exceptionally painful’ part of her career amid widespread opposition to her views. Equality laws protect Phoenix’s belief (a position often referred to as gender-critical) which holds a person cannot change their biological sex and that sex cannot be conflated with gender identity, according to the 155-page ruling.

Phoenix ran a research network at the university that examined sex, gender and sexuality from a gender-critical perspective, according to the ruling. But the network met significant opposition from her colleagues, the judgment says. Criminology professor Louise Westmarland harassed Phoenix by comparing her views to those of ‘a racist uncle at the Christmas table’, the judge said. ‘Westmarland knew that likening [Phoenix] to a racist was upsetting’, Judge Young said. ‘We conclude that its purpose was to violate [Phoenix’s] dignity because, inherent in the comment, is an insult of being put in the same category as racists.’

Her colleagues also discriminated against her when they ‘gave her the silent treatment’ during a departmental meeting in response to Phoenix securing a grant of CAN$1m grant for research into transgender prisoners. Criminology lecturer Deborah Drake also discriminated against Phoenix by instructing her not to speak to the rest of the department about her research, about Essex University’s decision to cancel her talk on trans rights and imprisonment and about accusations of being a ‘transphobe’ that she was facing, Judge Young said. ‘Others were allowed to speak about their research in subsequent meetings…and research updates were part of the agenda for departmental meetings’, the judge said.

A series of tweets and retweets by Open University staff referring to Phoenix as transphobic also insulted her and discriminated against her, according to the judgment. The university also continued to harass Phoenix after her resignation by publishing further statements on its website condemning her research, Judge Young said.

‘I am delighted that the tribunal found in my favour’, Phoenix said in a statement. ‘Academics and universities must now, surely, recognise their responsibilities toward promoting diversity of viewpoints and tolerance of alternative views.’ Leigh Day partner Annie Powell, who represented Phoenix, added that she hopes to see ‘no further cases of academics being treated so badly because of their protected beliefs’.

Professor Tim Blackman, vice-chancellor of the Open University, said, ‘Our priority has been to protect freedom of speech while respecting legal rights and protections. We are disappointed by the judgment and will need time to consider it in detail, including our right to appeal.’

The Employment Appeal Tribunal overturned in 2021 a ruling by a lower tribunal that gender-critical views are not a protected belief. It held that the opinions held by a woman who lost her job after she published comments about transgender people online were legally protected. Ms Forstater was subsequently awarded over £106,000 by the employment tribunal. The employment tribunal ruled in a different case in May 2023 that the Open University did not discriminate against a member of staff that it sacked for sending a racist tweet to Star Wars actor John Boyega.

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Whistleblowing: Job applicants are not entitled to bring claims when they have suffered detriment because of making a protected disclosure

The EAT in Sullivan v Isle of Wight Council [2024] EAT 3 confirmed the position that whistleblowing detriment claims are confined to workers (as defined) and do not extend to job applicants, except in the case of applicants for jobs with certain specified NHS employers under the Employment Rights Act 1996 (NHS Recruitment—Protected Disclosure) Regulations 2018. It confirms that using a Gilham style argument, applying the right to freedom from discrimination under Article 14, read with the right to freedom of expression under Article 10, of the European Convention on Human Rights, to extend the reach of such claims to job applicants, will not succeed, in particular because being a job applicant is not some ‘other status’ for the purpose of Article 14.

All workers have the right to bring a claim in relation to any detriment suffered because of any act or omission by their employer, done on the ground that the complainant made a protected disclosure. ‘Worker’ in this context has an extended definition. The protection applies to workers (as defined). Job applicants are generally not covered. However, certain NHS employers are prohibited from discriminating against job applicants because it appears that they have made a protected disclosure.

In Gilham, a whistleblowing detriment claim under Employment Rights Act 1996 (‘the Act’), the Supreme Court held that the claimant, a district judge, was not a worker for the purposes of the Act (because she had no contract) but held that judicial-office-holders were nonetheless entitled to bring claims for whistleblowing protection under the Act because the exclusion of judges was in breach of their right to freedom from discrimination under Article 14, read with the right to freedom of expression under Article 10, of the European Convention on Human Rights (ECHR). The Supreme Court concluded that the Act should therefore be read and given effect so as to extend their whistleblowing protection to the holders of judicial office.

The claimant in this case had two unsuccessful applications for financial officer roles with the respondent. She then lodged complaints alleging that multiple inappropriate/discriminatory comments had been made during her interviews including that she had been called ‘mentally insane’. Her complaints were rejected and she was refused an appeal. Later she lodged claims for discrimination, victimisation and whistleblowing detriment. The detriment claim related to the refusal to allow her an appeal which she said was because of an allegation of financial mismanagement that she had made against one of the interviewers in relation to a charity with which he was involved. She alleged that even though the whistleblowing provisions only applied to workers (which she was not) they should be extended to job applicants, such as her, using Articles 10 and 14 of the ECHR.

The employment tribunal dismissed the whistleblowing detriment claim and the claimant appealed. The EAT upheld part of the tribunal’s decisions but also dismissed the appeal on the basis that:

Whilst the facts fell within the ambit of the right to freedom of expression protected by Article 10 ECHR, it was only applicable subject to the following conditions.
An external job applicant is not in a situation analogous to that of the internal applicant, who is already embedded in the workplace and whose disclosure is made in that context. It was also accepted that this particular claimant’s situation was not analogous to that of an internal applicant. Her application process had come to an end some months previously. Her subsequent disclosure had related to matters unconnected with the application made, or, indeed, with the respondent itself, and had been advanced under a complaints policy of which any member of the public was able to avail themself in relation to any perceived wrongdoing by the respondent. The NHS Regulations were not applicable here.
The claimant had relied on the status of an external job applicant as the ‘other status’ for the purposes of Article 14 ECHR. However, that was found not to be of the same quality as the occupational classification (judicial officeholder) as in the precedent case. The claimant did not possess or acquire a status, or occupational classification, independent of her act of applying for a job.
Whilst the EAT found the employment tribunal’s approach to the question of proportionality was problematic, in the absence of any evidence going to that matter and the structured approach to answering that question required by the precedent case, it was not relevant here due to the above three issues. Had the answers to the those questions been otherwise, the matter would have been remitted for fresh consideration of that particular question.

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TUPE: Liability for harassment claim does not transfer if both employees do not transfer

In Sean Pong Tyres Ltd v Moore [2024] EAT 1 the EAT found that the transferor employer’s primary liability to its employee for the harassment did not transfer to the transferee employer under TUPE where the employee’s employment did not transfer to the new employer for reasons that were not connected with it (e.g. as in this case where the employee’s employment came to an end before the transfer for unrelated reasons).

In this case, the claimant resigned in April 2021 and claimed unfair constructive dismissal and harassment based on the actions of a fellow employee, Mr Owusu. In July 2021, after the claimant had left, there was a TUPE transfer of the respondent business, including Mr Owusu, to Credential. Neither Mr Owusu nor Credential were made respondents to the claim. The claim was only brought against the respondent by whom the claimant had been employed. When the hearing began the respondent’s representative applied to amend the response to argue that the respondent was not liable for the harassment, on the basis that liability for that had transferred to Credential under TUPE 2006.

The employment tribunal dismissed the respondent’s amendment application on the basis that the effect of TUPE 2006 was not to transfer liability for harassment to Credential in respect of the claimant who they had never employed and that, following the Selkent principles, on the facts, the balance of prejudice was in favour of the claimant.

The employment tribunal then upheld the claims of unfair constructive dismissal and harassment. The respondent appealed to the EAT who dismissed the appeal, finding that the transferor employer’s primary liability to its employee for the harassment does not transfer to the transferee employer if the employee’s employment does not transfer for reasons that were not connected with it (e.g. as in this case where the employee’s employment came to an end before the transfer for unrelated reasons).

This should come as a relief to transferees who might otherwise have found themselves liable for Equality Act 2010 claims by individuals who they had never employed (although it is likely that such liability could have been dealt with by suitable warranties/indemnities in a transfer agreement).

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Anonymity: Claimant who made up sexual assault was not entitled to privacy orders

In Z v Commerzbank and others [2024] EAT 11, a claimant who was found by an employment tribunal to have made up a sexual assault allegation, and who had made no such allegation to the police (or other appropriate person), was not entitled to continued protection under anonymity and restricted reporting orders that an employment judge had made. For a claimant to have the protection of section 1(1) of the Sexual Offences (Amendment) Act 1992 (SO(A)A 1992) there must be a formal allegation made in the context of potential criminal proceedings, where a criminal charge may be brought (such as a complaint to the police, a prosecuting authority, a safeguarding body, a social worker or social services department or other person with professional responsibility for taking the complaint further through the criminal justice system). In addition, the tribunal’s decision, that the claimant’s account given in his evidence was in large part false and, in particular, that his complaints of sexual harassment and sexual assault were fabricated, was a material change of circumstances entitling the tribunal to revoke the anonymity and restricted reporting orders. Also, the tribunal’s balancing exercise in relation to Convention rights was not flawed, according to the Employment Appeal Tribunal.

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Further Information:

If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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Mandatory Payrolling of Benefits from April 2026

Paul Webb,
13th February 2024

Tax

The reporting of benefits in kind (BiK) has transformed over the past few years. Gone are the days of paper based P11Ds, having been replaced by online reporting and the option of ‘payrolling’ BiKs through payroll systems.

On 16 January 2024, the government announced a package of measures to support its ambition to simplify and modernise the tax system, using the efficiencies of digital service to drive public sector productivity and to make the tax system simpler and fairer.

One of the measures announced was that the government will mandate the reporting and paying of Income Tax and Class 1A National Insurance Contributions (NICs) on benefits in kind, via payroll software from April 2026.

How it currently works

Currently, employers have two ways of reporting their BiKs:

To report via P11D submission to HMRC, annually, before the deadline of 6 July following the tax year in which the employee received the benefit. Payment of Class 1A employer national insurance contributions (NICs) must be paid before 22 July (if paying electronically). Using the information reported on the P11D, the employee pays the associated income tax through self-assessment, or it is collected by way of an adjustment to the employee’s tax code in the tax year after the benefits or expenses are received.

To payroll benefits, allowing benefits to be reported in real time through pay as you earn (PAYE), meaning no mid-year changes to tax codes as tax is deducted throughout the year. Class 1A employer NICs still need to be reported on P11D(b) by 6 July after the end of the tax year.

One of the drawbacks of the traditional, or legacy, P11D submission is that an employee could wait over a year before seeing any tax related benefits they’re receiving being deducted from their pay. Any change to an employee’s tax code being made so long after the benefit has been received often causes confusion.

Conversely, the payrolling of benefits allows for the tax on BiKs to be collected in real-time via the employee’s pay, reducing the confusion for the employee, however the system is currently not fool-proof and currently employer-provided living accommodation, and interest free/low interest (beneficial) loans cannot be payrolled.

What should employers consider now?

Less flexibility – employers will no longer have the option to payroll only certain BiKs or employees, with all benefits requiring to be reported. This could have a direct cashflow impact on the employee.
Data management – employers will need to be able to easily access the reportable monthly data so they can provide it to the payroll department ahead of payroll processing cut-off dates.
Increased PAYE risk – compulsory reporting of benefits increases the risk of monthly non-compliance and tax driven penalties.
Employee impact – the employee might experience a cashflow impact in 2026/27 when the mandatory payrolling of BiKs and PAYE code adjustments for the prior year overlap.
Employee communication – upcoming changes to the BiKs reporting system will need to be communicated to employees.
Payroll impact – can your current payroll software/outsources payroll provider cope with the change? Will there be an increase in fees?
Process impact – it has yet to be determined how beneficial loans and employee-related accommodation benefits will be reported. What will the impact be for leavers, if processed before payroll cut off?

Next steps

HMRC has confirmed that government ministers will not be putting the change out to public consultation, but instead will be liaise with key stakeholders such as the Chartered Institute of Payroll Professionals (CIPP), to discuss the forthcoming change at length, ahead of implementation come April 2026.

CIPP are seeking to address the following key issues:

Ensuring calculation methods for employer-provided living accommodation and beneficial loans are updated and can be processed via payroll software.
Ensuring working sheets are available for employers and agents to help with calculating values to be used.
Being mindful of the changes required for payroll systems, and the time taken for software companies to implement the changes.
Pushing for real-time payments of Class 1A employer NICs, to eliminate the need for the P11D(b).

Let’s Talk

If you would like any further information on the changes and how they might affect you or your business, please do not hesitate to contact your usual Dixcart UK contact or enquire at hello@dixcartuk.com

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Employment Law Case Update – January 2024

Anne-Marie Pavitt,
26th January 2024

Employment Law

We welcome you back into the land of employment law cases with a few of cases from the back end of 2023. Learn how the ACAS Code plays a crucial role in handling whistleblowing cases, and its implications for compensation uplifts and the limitations of contractual terms. We take a look at how future discrimination claims can be waived when done correctly in a settlement agreement, and evaluate how timings should be considered when looking at constructive dismissal cases, particularly where the claimant has a long employment history and there have been efforts at negotiation.

Whistleblowing: Using the ACAS Code for grievances and compensation uplifts, and whether contractual terms can limit losses
Equality Act: Unknown future claims can be waived in a settlement agreement if sufficiently particularised
Constructive Dismissal: Was resignation too slow to have been ‘the last straw’?

Whistleblowing: Using the ACAS Code for grievances and compensation uplifts, and whether contractual terms can limit losses

In SPI Spirits (UK) Ltd & Anor v Zabelin [2023] EAT 147, the claimant was the Group Chief Investment Officer for the first respondent company (SPI Spirits). He agreed a 30% pay cut from April to June 2020 because of the effects of the coronavirus (COVID-19) pandemic on the business. When the first respondent said that the pay cut was being extended to at least 1 September 2020 the claimant raised, in an email of 4 June 2020 and at a meeting on 5 June 2020, various issues including alleging that the pandemic was being used as an excuse to cut pay and that employees were being intimidated. On 8 June 2020 the claimant had a telephone discussion with the second respondent (Shefler), the majority shareholder in the group, who suggested that the claimant should resign if he didn’t agree to proposed changes to bonuses. When the claimant queried why he should resign the second respondent dismissed him. The claimant brought claims including of automatic unfair dismissal and detriment on the grounds of having made whistleblowing protected disclosures (including regarding (a) the claimant’s pay; (b) the claimant’s 2020 bonus; (c) staff welfare; and (d) coronavirus pretence).

The outcome of the case was that the EAT confirmed that a grievance must be in writing for the ACAS Code on Disciplinary and Grievance Procedures to apply but, once that has occurred, if new grievances arise they do not each have to be put in writing for the Code to be engaged, unless there is a ‘material change’ in the nature or scope of the complaint or redress sought such that fairness requires it. In addition, the uplift to compensation for an employer’s failure to follow the ACAS Code also applies to awards made against individuals if the relevant individual was responsible for the failure. Finally, contractual terms limiting loss will not be upheld if they produce an outcome which would have the same effect as disapplying or limiting a statutory provision, according to the EAT.

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Equality Act: Unknown future claims can be waived in a settlement agreement if sufficiently particularised

In Bathgate v Technip Singapore PTE [2023] CSIH 48 the Inner House of the Court of Session held that the various protections for the employee built into section 147 of the Equality Act 2010 do not exclude the settlement of future claims so long as the types of claim are clearly identified and the objective meaning of the words used encompassed settlement of the relevant claim. Section 147 of the Equality Act 2010 allows claims for discrimination to be settled using a settlement agreement provided that the settlement agreement relates to the ‘particular complaint’. Accordingly, a settlement agreement can relate to a future complaint if there is sufficient description of it in the claims waived.

There has been significant uncertainty for some time about whether or not future claims an employee might acquire against their employer but which have not yet arisen could, with the correct wording, be effectively waived as part of a settlement agreement. This decision by the Inner House of the Court of Session (the Scottish equivalent to the Court of Appeal) comes unequivocally to the conclusion that future claims can be waived in a settlement agreement so long as they are sufficiently identified in accordance with the requirements in Hinton v University of East London [2005] EWA Civ 532.

Whilst employers would be wise to consider including future claims in settlement agreements, those representing individuals may try to exclude future claims. However, it should be noted that the decision in this case may not necessarily be followed in England. While decisions from the Inner House of the Court of Session are often considered by employment tribunals and the Employment Appeal Tribunal (EAT) in England, they are not strictly binding, so caution should be exercised.

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Constructive Dismissal: Was resignation too slow to have been ‘the last straw’?

In Leaney v Loughborough University [2023] EAT 155, the claimant had been a university lecturer and warden of a halls of residence with over 40 years’ service at the University. A student had made a complaint against him in 2018, which he disputed and had led to disciplinary action and in turn a grievance being raised by the claimant. He subsequently resigned as warden in December 2019, and asked several times for a grievance appeal to be held. They told him several times to draw a line under the matter but the claimant persisted. On 29 June 2020, he was told that the university could not look at the issue any further. There followed a period of negotiation between solicitors but due to be back at work that autumn, the claimant was so anxious he was signed off sick by his GP on 10 September 2020, and then resigned with notice on 28 September 2020, thereafter claiming constructive unfair dismissal, alleging a cumulative breach of the implied duty of trust and confidence.

The claimant claimed the notification he had received on 29 June 2020 was the ‘last straw’. The tribunal held that he had affirmed the contract of employment during the three months between 29 June, and his resignation on 28 September 2020 because he should have tendered his resignation prior to this.

The EAT disagreed with the tribunal’s approach and remitted the issue of affirmation for reconsideration, holding:

that the tribunal’s focus should not necessarily be on how much time has passed when considering whether affirmation has taken place, but should take into account all the surrounding facts and circumstances should be weighed.
where there has been a period of delay then length of service should be taken into account in deciding whether the contract has been affirmed but it is fact sensitive. It is understandable that an employee with long service may take longer to consider their position (without necessarily having affirmed) before removing themselves from a secure job, but the surrounding context is vital and should be applied on an case-by-case basis.
a period of negotiation before resignation is relevant. Negotiations could be an employee’s attempt to give the employer the opportunity to ‘put things right’ before resigning and therefore such a delay may not necessarily amount to affirmation of the contract.

His claim was dismissed on the basis that, between the date of the last matter that could potentially be relied upon as a last straw, and the date of resignation, he had affirmed the contract. Having regard to the facts found, and the matters relied upon by the claimant as relevant to the question of whether there had been affirmation, the tribunal erred in its approach to affirmation. The EAT found the tribunal had focused incorrectly on things that did not happen (the Claimant did not delay his resignation because of student exams and did not state that he was working under protest), which, if they had happened, might have pointed away from affirmation. Instead, they should have honed in on what conduct there had been which might have amounted to affirmation. The EAT therefore remitted the matter to the same tribunal for fresh consideration of that issue, in light of the facts found, and, as necessary, the further issues to which the complaint gave rise.

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Employment Law General Update – April 2023

Employment,
25th April 2023

Employment Law

A lot going on this month. New rates and consultations regarding NLW and NMW, new requirement for immigration scale-up route, an update on the Retained EU Law Bill and discussions over the definition of ‘sex’ under the Equality Act. Meanwhile, there is a review into whistleblowing law, an inquiry into seasonal worker visas, a blog on loneliness in the workplace, and a review relating to the work prospects of autistic people.

Staff Pay: Changes to rates of National Living Wage and National Minimum Wage and 2023 consultations
Whistleblowing: Government launches whistleblowing law review
Immigration: Home Office publishes details of a new endorsement requirement for the Scale-up route
Immigration: MAC Chair publishes letter regarding inquiry into Seasonal Worker visa
Welfare: Glassdoor reveals survey findings on employee loneliness
Disability: DWP publishes new review to increase work prospects of autistic people
Disability: Commons briefing highlights lowest rates of employment among disabled people are for those on autism spectrum
Brexit: An update on the Retained EU Law (Revocation and Reform) Bill
Equality Act: EHRC respond to Minister’s request to clarify the definition of ‘sex’

Staff Pay: Changes to rates of National Living Wage and National Minimum Wage and 2023 consultations

SI 2023/354: These Regulations are made to amend the National Minimum Wage Regulations 2015, SI 2015/621. They come into force on 1 April 2023 and increase:

the rate of the national living wage for workers who are aged 23 or over from £9.50 to £10.42 per hour
the rate of the national minimum wage for workers who are aged 21 or over (but not yet aged 23) from £9.18 to £10.18 per hour
the rate of the national minimum wage for workers who are aged 18 or over (but not yet aged 21) from £6.83 to £7.49 per hour
the rate of the national minimum wage for workers who are under the age of 18 from £4.81 to £5.28 per hour
the rate for apprentices within SI 2015/621, reg 5(1)(a) and (b) from £4.81 to £5.28 per hour
the accommodation offset amount which is applicable where any employer provides a worker with living accommodation from £8.70 to £9.10 for each day that accommodation is provided

The Low Pay Commission (LPC) has published a consultation seeking views on the impact of National Living Wage (NLW) and National Minimum Wage (NMW) increases for 2024. The NLW is expected to rise to between £10.90 and £11.43 in 2024. The information gathered will be used to inform the LPC’s recommendations to the government in the Autumn. The consultation closes on 9 June 2023 at 11:45pm.

See also our updated Facts and Figures for 2023

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Whistleblowing: Government launches whistleblowing law review

On 27 March 2023, the government published a press release confirming that they have launched a review of the whistleblowing framework. The press release states that the review will gather evidence on the effectiveness of the current whistleblowing regime in enabling workers to speak about wrongdoing and protect those who do so. The press release confirms that the evidence gathering stage of the review will end in Autumn 2023. The review will pursue views and evidence from whistleblowers, key charities, employers and regulators.

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Immigration: Home Office publishes details of a new endorsement requirement for the Scale-up route

The Home Office has updated its sponsor guidance in relation to the Scale-up route. Notably, it confirms that an ‘endorsing body pathway’ is being launched, on 13 April 2023, for prospective employer applicants who do not meet the sponsor licence eligibility requirements (eg ‘if their HMRC history is not long enough’). As an alternative, prospective sponsors will be able to obtain an endorsement from a Home Office-approved endorsing body and submit this with the licence application (which must be made no more than three months from the date of endorsement). The guidance confirms that the endorsement process will attract a fee, and further details will be published in due course. Other changes include a new Annex SC2, setting out the changes to the route from 12 April 2023, in line with the Statement of Changes in Immigration Rules HC 1160.

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Immigration: MAC Chair publishes letter regarding inquiry into Seasonal Worker visa

The Chair of the Migration Advisory Committee (MAC), Professor Brian Bell, has published a letter written to the Minister of State for Immigration, Robert Jenrick, regarding an inquiry into the Seasonal Worker visa. The inquiry will consider the rules under which the scheme operates, the size and costs of the scheme, the potential for exploitation and poor labour market practice, evidence from international comparisons and the long-run need for such a scheme. Bell has also confirmed that MAC will be working with the Department of Environment, Food and Rural Affairs (DEFRA) during the inquiry.

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Welfare: Glassdoor reveals survey findings on employee loneliness

Glassdoor has published a blog with insights from its new study which surveyed 2,000 employees to understand the levels of employee loneliness in the UK. The blog reveals the impact of poor workplace social life and the importance of workplace friendships to retaining staff.

Key findings include:

six in ten people with less than five years of work experience are lonely all or most of the time
only 51% of employees connect socially with colleagues at least once a month
28% of workers under 35 would stay in a job they did not like if the workplace social life was good
89% of workers believe feeling a sense of belonging with their company is vital to their overall workplace happiness
nearly 49% of workers say a good social life has a significant impact on their overall job satisfaction and mental health

Common reasons for workplace loneliness include less in-person interaction with co-workers, inflexibility in the workplace, and a lack of focus on creating a sense of belonging or community by an employer.

Glassdoor reveals that without a good workplace social life, workers are more likely to be less productive and engaged. They are also more likely to experience stress, anxiety and eventually burnout.

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Disability: DWP publishes new review to increase work prospects of autistic people

The Department for Work and Pensions (DWP), supported by the autism charity Autistica, has launched a review, the Buckland Review of Autism Employment, to increase the employment prospects of autistic people. The review, which will be led by Sir Robert Buckland KC MP and start in May 2023, will consider how the government can support employers to recruit and retain autistic people and enjoy the benefits of a neurodiverse workforce. Recommendations for change will be made to the Secretary of State in September 2023.

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Disability: Commons briefing highlights lowest rates of employment among disabled people are for those on autism spectrum

The House of Commons has released a research briefing on autism, policy and services. The briefing sets out the Department for Work and Pensions’ annual set of statistics on the employment of disabled people, which reports that the lowest rates of employment among disabled people are those on the autism spectrum.

In the 2020–21 financial year, 26.5% of disabled people on the autism spectrum were in employment, compared to 52.5% of all disabled people and 80.4% of non-disabled people in the same period. In 2016, the National Autistic Society reported that 77% of unemployed people with autism wanted to work.

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Brexit: An update on the Retained EU Law (Revocation and Reform) Bill

Retained EU law is a concept created by the European Union (Withdrawal) Act 2018. This Act took a ‘snapshot’ of EU law as it applied to the UK at the end of the Brexit transition period on 31 December 2020 and provided for it to continue to apply in domestic law. The Bill would automatically revoke, or ‘sunset’, most retained EU law at the end of 2023. This would not apply to retained EU law that is domestic primary legislation.

Ministers and devolved authorities could exempt most (but not all) retained EU law from the sunset, and UK ministers (but not devolved authorities) could delay the sunset until 23 June 2026 at the latest for specific descriptions of retained EU law. Any retained EU law that still applied after the end of 2023 would be renamed as assimilated law. The Bill would give ministers and devolved authorities powers to restate, reproduce, revoke, replace or update retained EU law and assimilated law by statutory instrument.

The Bill would also repeal the principle of supremacy of retained EU law from UK law at the end of 2023, although its effects could be reproduced by statutory instrument in relation to specific pieces of retained EU law. The Bill would also make changes to the way that courts could depart from retained EU case law.

The Bill would change the way that some types of retained EU law can be modified. It would ‘downgrade’ retained direct EU legislation so that this could be amended by secondary legislation. It would also remove additional parliamentary scrutiny requirements that currently apply when modifying some types of EU-derived domestic secondary legislation.

The government has published a ‘dashboard’ of retained EU law, although it acknowledges this is not a comprehensive catalogue of all retained EU law that may be in scope of the Bill. The dashboard is due to be updated regularly.

Concerns have been raised throughout the Bill’s progress about the amount of retained EU law to be reviewed before the sunset deadline and whether some may end up being revoked inadvertently. In the Commons, MPs expressed concerns about the impact of large-scale and rapid changes to the statute book as a consequence of the Bill and have highlighted a lack of clarity about what retained EU law the government intends to keep, particularly in the areas of employment, environmental and consumer protections. They were also critical of a lack of parliamentary scrutiny of and input into the process of reforming retained EU law. However, the only amendments made to the Bill in the House of Commons were government amendments to clarify the Bill’s drafting.

The Bill is now with the House of Lords. Five days of Committee proceedings—when a Bill is examined in detail—concluded on 8 March 2023.

Over the five days, Peers put forward many amendments to the Bill on a range of subjects. Opposition peers were scathing in their comments on the Bill. For example, Baroness Ludford (LD), said the Bill was ‘pretty hopeless’ and accused the government of adopting a ‘slash and burn’ approach to legislative reform, with opposition amendments seeking to bring to it ‘some rationalisation and order’. For the government, Lord Callanan, said, on the contrary, a ‘significant minority’ of retained EU law was ‘legally inoperable’ and that it was ‘not good governance’ to subject it to ‘complex and unnecessary parliamentary processes’ before being able to remove it from the statute book. He added that the amendments, including those seeking to delay the sunset, would ‘hamper efforts to realise the opportunities the Bill presents’.

The Bill has come out of Committee stage in the Lords with amendments, including the insertion of a new clause setting out exceptions to the sunset of REUL, and it seems likely that further amendments will be made at Report stage. It is noteworthy that at Second Reading in the Lords a significant number of Conservative peers spoke against the Bill. The level of opposition expressed by peers from all parties indicates that it may not be straightforward for the government to get the Bill into law. It seems likely that the government will need to accept at least some of the Lords’ amendments if it wishes to avoid a lengthy period of ‘ping pong’ between the Lords and the Commons.

In contrast to the approach being taken in respect of much retained EU law, the House of Lords is, in parallel, scrutinising the Financial Services and Markets Bill, which would similarly revoke retained EU law relating to financial services, but contains developed provisions which enable the Treasury and financial services regulators to replace that EU Law with legislation designed specifically for UK markets.

Report stage on the Bill—a further chance for the House of Lords to closely scrutinise elements of the Bill and make changes—began on 19 April 2023.

Authors: David Mundy, Aaron Nelson, and Joanna Purkis at BDB Pitmans, for LexisNexis.

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Equality Act: EHRC respond to Minister’s request to clarify the definition of ‘sex’

On 21 February 2023, the Minister for Women and Equalities, Kemi Badenoch, requested advice from the Equality and Human Rights Commission (EHRC) regarding the definition of the protected characteristic of ‘sex’ in the Equality Act 2010 (EqA 2010). EHRC have provided an initial response to the Minister’s request namely suggesting that the UK government carefully consider implications any change to the legislation could have.

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Employment Law General Update – February 2023

Employment,
27th February 2023

Employment Law

We bring you a month of reports and inquiries. Two reports from a think tank and the IES into how women’s finances are affected by their working life and what impact this can have on the gender pension gap. A new Bill has been given government backing to give zero hours workers more certainty by requesting a more predictable work pattern. A troubling and impactful inquiry has been published into the TSSA, with stark consequences, and a study finds that despite having whistleblowing policies in place, many require better implementation and training.

Pensions: Think tank publishes two reports on the gender pension gap with recommendations
Zero Hours Contracts: Government backs law to give workers right to request more predictable work pattern
Trade Unions: Inquiry finds Sexual harassment rife at TSSA
Whistleblowing: Majority of firms have whistleblowing policies, but lack formal training for those handling concerns, study finds

Pensions: Think tank publishes two reports on the gender pension gap with recommendations

Two reports from think tank Phoenix Insights and the Institute for Employment Studies (IES) exploring women’s finances through the lens of the workplace, set out a number of recommendations to assist women’s ability to save thereby closing the gender pension gap. The gender pay gap already disadvantages women’s future finances because it means they are more likely to contribute less to their retirement savings than their male peers. The research found that this disparity is made worse by life events, including motherhood, menopause, divorce, childcare, menstruation and caring responsibilities which can all disproportionately affect a woman’s earnings, and therefore pension contributions.

Some of the key findings in the reports include that the gender pay gap is a significant contributor to the gender pension gap, yet women on average contribute a larger proportion of their salary to their pension. On average, women are contributing a higher percentage of their monthly income into their pension than men up until middle age – 6.1% compared to 5.8% aged 35-44 by middle age – where care responsibilities fall to one in four women in the UK – men are paying almost £80 more per month into their pension than women. Women are more likely than men to fall under the auto-enrolment threshold (women 35% : men 11%). Automatic enrolment closed the contribution gap in participation but increased the gap in terms of contribution. Women are more likely to be economically inactive due to long-term health conditions than men. There is limited awareness among employers of the causes and consequences of the gender pension gap, resulting in a lack of action over and above the statutory minimum allowances that seek to improve the savings capacity of women across the different life stages.

The think tank report recommends employers should be required to inform employees about the pensions impact that changes to their working hours and earnings may have, to help close the gender pension gap.

The opportunity for employers – five key recommendations:

re-enrol workers into pension schemes annually, rather than the statutory three years, to give workers the opportunity to re-engage if they have taken career breaks or have opted out because of a lack of affordability
ensure employer pension contributions continue during periods of parental leave
adopt a minimum of five days unpaid leave per year for those with childcare responsibilities, and where possible, five days paid carer’s leave
make flexible working the norm from day one and highlight this across all job roles
ensure workplace health policies offer explicit and visible support for reproductive conditions such as miscarriage, fertility treatment, for those diagnosed with endometriosis and managing menopause symptoms

The role of government – five key recommendations:

legally require employers to provide information on how contractual changes impact pension contributions
revisit the Carer’s Leave Bill to ensure that unpaid careers can access up to ten days statutory paid leave
the legal right to flexible working should be available from the first day of employment, and the number of reasons to reject flexibility should reduce from eight to two
widen the coverage of auto-enrolment by lowering age and earnings eligibility threshold to 18 years and £0, respectively
review the advice and guidance boundary so that a larger population can access tailored and reliable financial support

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Zero Hours Contracts: Government backs law to give workers right to request more predictable work pattern

The Department for Business, Energy & Industrial Strategy (BEIS) has announced that the government is backing Blackpool South MP Scott Benton’s Workers (Predictable Terms and Conditions) Bill. The Bill seeks to ensure that all employees, even agency workers, receive more predictable working patterns.

‘Hard working staff on zero hours contracts across the country put their lives on hold to make themselves readily available for shifts that may never actually come’ said Labour Markets Minister, Kevin Hollinrake. ‘Employers having one-sided flexibility over their staff is unfair and unreasonable. This Bill will ensure workers can request more predictable working patterns where they want them, so they can get on with their daily lives.’ The Bill provides that if an employee’s existing working pattern lacks certainty in terms of the hours they work, the times they work, or if it is a fixed term contract for less than 12 months, they may make a formal application to change their working pattern to make it more predictable. The move comes as part of a package of policies designed to further workers’ rights, such as:

paid neonatal care leave
requiring employers to ensure that all tips, gratuities, and service charges are paid to workers in full
entitling unpaid carers to a period of unpaid leave
providing employees with a day one right to request flexible working, and a greater say over when, where, and how they work

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Trade Unions: Inquiry finds sexual harassment rife at TSSA

A misogynistic, ‘mafia-like’ culture of sexual harassment, bullying and violent language has permeated one of Britain’s transport unions, a new independent inquiry has revealed. An investigation by Baroness Helena Kennedy KC into the Transport Salaried Staffs’ Association (TSSA) concluded on 8 February 2023 that ‘there has been sexual harassment, discrimination and bullying within the TSSA and that the leadership and culture has enabled these behaviours through wilful blindness, power hoarding and poor practices’.

Kennedy’s report called for sweeping changes in an organisation where absolute power was concentrated in ‘a very small number of hands’, and called for new leadership at the TSSA. The TSSA opened the investigation in September 2022 after its General Secretary at the time, Manuel Cortes, was accused of sexual harassment by several women. Cortes, who has since retired with an undisclosed payout, denies the allegations. Kennedy pointed out in her report that neither the internal leadership of the TSSA nor the executive committee understood that to say they had not witnessed inappropriate behaviour is not an acceptable response to an ‘atmosphere of fear’ and an environment of ‘open secrets’.

Only two of the 50 people who volunteered to speak to Kennedy as she carried out her inquiry had any positive words to say about the TSSA’s culture, according to her report. The rest described a ‘dysfunctional’ and ‘mafia-like’ culture across the TSSA. The organisation was sexist, racist and homophobic, they said.

Kennedy said that a ‘distressing element’ of her inquiry was realising how little senior leaders at the TSSA seemed to have ‘moved with the times’. Their approach to management was ‘controlling’ and described by many staff members as bullying. The barrister said that, combined with governance failings, meant the ‘outdated attitudes of scepticism and disbelief of women’ formed a ‘dangerous mixture’.

Kennedy noted that the recent history of ‘wage suppression’, particularly in the public sector, and the ‘casual erosion of employment rights’ through precarious work points to an urgent need for healthy trade unions. She recommended a sweeping change of leadership, a realistic time-frame for reform and ‘serious investment of time in culture change’ to make a success of the TSSA.

TSSA said in response that the report made ‘difficult reading’ and highlighted serious problems that the union had to tackle. A spokesperson said the TSSA recognised the need for sweeping reform and stated its commitment to tackle institutional issues and drive through a culture change. ‘As a union, TSSA fights for equality, fairness and social justice for all, regularly winning on equality issues for our members’, the spokesperson said. ‘But it is clear from this report that our union has not followed the values we aspire to for our members.’

The President and Treasurer of the TSSA have stood down with immediate effect and interim replacements had been appointed, the spokesperson added. The TSSA has confirmed it is committed to take comprehensive, considered and meaningful action to address [the report’s] findings, and to enable the necessary further investigation and decisions to be made, the TSSA has suspended all five senior members of staff named in the report, including former General Secretary, Manuel Cortes.

Responding to the report, the TUC stated that ‘sexual harassment and bullying have no place in the trade union movement or any workplace. The TUC believes the women who came forward to share their experiences’. The TSSA have been asked to meet with the TUC General Secretary and the TUC President to discuss next steps.

The Kennedy report comes after a similar 2020 investigation into the GMB, conducted by Karon Monaghan KC, concluded that the GMB is institutionally sexist, and bullying, misogyny, cronyism and sexual harassment are endemic within the GMB.

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Whistleblowing: Majority of firms have whistleblowing policies, but lack formal training for those handling concerns, study finds

On 16 February 2023, an article by People Management reported that a study by whistleblowing and compliance services provider Safecall, which surveyed HR managers and directors from 222 organisations, found that that while 17 per cent of respondent organisations lacked a whistleblowing policy, the majority (83 per cent) did have one in place, and for those companies that provide internal whistleblowing services, only 58 per cent of their investigators had been formally trained.

The report also discovered:

more than two fifths (42 per cent) of employees responsible for managing whistleblowing complaints have either self-taught, learned their skills through experience, or have no experience at all
more than half (57 per cent) of HR professionals surveyed believed that their employees were actively encouraged to report wrongdoing.
however, just 42.6 per cent said employees “generally feel safe” to do so,
the majority (74 per cent) of HR professionals could not be certain that whistleblowers were confident in raising concerns, and
one in five (20 per cent) organisations have whistleblowing processes that their employees would find to be “highly untrustworthy”.

The article goes on to discuss various aspects of having whistleblowing policies. A policy that emphasises how employees can bring matters to their employer’s attention, which may help employers avoid or at least reduce the risk of employment claims by increasing the likelihood that disclosures will be readily identified as qualifying as a protected disclosures.

However, problems arise where there is a fundamental lack of trust between an organisation and its workforce. Having a whistleblowing policy that ensures there is a clear procedure that must be followed by all staff when a complaint is made can support businesses in fostering a transparent and open company culture. The policy should also demonstrate that staff should not be victimised or subjected to any detrimental treatment as a result of bringing a complaint.

Last year, legal experts warned HR professionals of the consequences of workers whistleblowing on their former and current employers for coronavirus job retention schemes, with law firm Pinsent Masons reporting that 13,775 furlough fraud whistleblowing reports were made to HMRC.

Meanwhile, a previous People Management report found that one in five (20 per cent) employees who had gone to their bosses with concerns over furlough fraud and breaches of Covid-19 safety rules were sacked as result.

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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
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 [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.’

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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.

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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 [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.

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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.

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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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Employment Law Case Update – July 2022

Employment,
27th July 2022

Employment Law

This month we look at the saga of the ‘fire and rehire’ issue affecting Tesco employees and how whistleblowers can be fairly dismissed depending on their conduct. We also have two interesting cases about how direct discrimination can be viewed – the doctor who refused to address transgender people by their chosen pronouns who had not been discriminated against versus the feminist who expressed beliefs which could not be objected to (as core beliefs) even though they were capable of causing offence, and was discriminated against.

Fire and Rehire: Court of Appeal overturns injunction restraining termination and re-engagement of Tesco employees
Whistleblowing: Whistleblower’s dismissal not automatically unfair as decision-makers’ view of conduct when making protected disclosures separable from content or fact of disclosures
Direct Discrimination: EAT upholds tribunal decision that Christian doctor was not discriminated against for refusing to address transgender people by their chosen pronoun
Direct Discrimination: Gender critical feminist suffered direct discrimination for expressing her beliefs in a manner that was not “objectively offensive”

Fire and Rehire: Court of Appeal overturns injunction restraining termination and re-engagement of Tesco employees

In USDAW and others v Tesco Stores Ltd [2022] EWHC 201, the Court of Appeal has overturned the High Court’s injunction restraining Tesco from dismissing and re-engaging a group of warehouse operatives to remove a contractual pay enhancement known as “Retained Pay“. This had been incorporated through collective bargaining with the trade union USDAW as a retention incentive during a reorganisation. The collective agreement stated that the enhanced pay would be a “permanent feature” of each affected employee’s contractual entitlement, and could only be changed through mutual consent, or on promotion to a new role.

The High Court had found that there was an implied term not to use termination and re-engagement as a means of removing Retained Pay. However, the Court of Appeal held that such an implied term was not justified. Neither could the employees rely on promissory estoppel since there had been no unequivocal promises related to termination. Furthermore, it was not “unconscionable” to remove a benefit that the employees had already received for over a decade and that far exceeded any redundancy payment to which they would have been entitled had they not accepted the Retained Pay.

In any event, even if there had been a breach, the court held that the injunction was not justified. The court was not aware of any previous cases in which a final injunction had been granted to prevent a private sector employer from dismissing an employee for an indefinite period. Moreover, the terms of the injunction had not been sufficiently clear.

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Whistleblowing: Whistleblower’s dismissal not automatically unfair as decision-makers’ view of conduct when making protected disclosures separable from content or fact of disclosures

In Kong v Gulf International Bank (UK) Ltd [2022] EWCA Civ 941, the Court of Appeal has upheld the EAT’s decision that an employment tribunal directed itself properly on the issue of the separability of the protected disclosures made by an employee and the reason in the minds of the decision-makers for her dismissal. The tribunal had properly considered and applied the guidance on the issue set out in authorities such as Martin v Devonshire Solicitors UKEAT/0086/10 and NHS Manchester v Fecitt and others [2012] IRLR 64. Despite the fact that the tribunal had found that the employee’s conduct when making the protected disclosures had been broadly reasonable and she had not, as alleged, questioned her colleague’s professional integrity, her dismissal was not automatically unfair because the decision-makers believed that she had acted unreasonably. The reason for dismissal in the minds of the decision-makers could be properly separable from the fact of the protected disclosures being made. The court rejected the submissions of Protect as intervenor that an employee’s conduct in making a disclosure should only be properly considered separable from the making of a protected disclosure where that conduct constitutes wholly unreasonable behaviour or serious misconduct.

This decision makes it clear that even where a worker’s conduct is not objectively unreasonable when they make a protected disclosure, their employer may escape liability when it treats them detrimentally or dismisses them because it subjectively believes that the manner in which they made the disclosures was unreasonable. However, the court stressed that particularly close scrutiny of an employer’s reasons for treating them detrimentally would be needed in such a case to ensure that the real reason for adverse treatment was not the protected disclosure itself.

It is understood that the employee is considering an appeal to the Supreme Court.

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Direct Discrimination: EAT upholds tribunal decision that Christian doctor was not discriminated against for refusing to address transgender people by their chosen pronoun

In Mackereth v DWP [2022] EAT 99, the EAT has held that a tribunal did not err in dismissing a Christian doctor’s claims of direct discrimination, indirect discrimination and harassment on grounds of religion or belief because of his refusal to address transgender service users by their chosen pronouns. He relied on his particular beliefs in the supremacy of Genesis 1:27 that a person cannot change their sex/gender at will, his lack of belief in what he described as “transgenderism” and his conscientious objection to “transgenderism“. However, Eady P, sitting with lay members, found that the tribunal had erred in several respects when applying the criteria from Grainger Plc v Nicholson UKEAT/0219/09 to determine whether these beliefs were capable of protection under section 4 of the Equality Act 2010. In particular, the tribunal had erred in holding that the beliefs were not worthy of respect in a democratic society. This threshold must be set at a low level so as to allow for the protection not just of beliefs acceptable to the majority, but also of minority beliefs that might cause offence (approving Forstater v CGD Europe UKEAT/0105/20).

The tribunal had been entitled to find in the alternative that the direct discrimination and harassment claims were not made out. It was permissible to draw a distinction between Dr Mackereth’s beliefs and the way he manifested them, finding that any employee not prepared to utilise a service user’s chosen pronoun would have been treated the same way.

The tribunal had also been entitled to reject the indirect discrimination claim. In holding that the PCPs were necessary and proportionate, it carefully considered the lack of practical alternatives to face-to-face contact with service users. In noting that Dr Mackereth had not identified any further alternatives, over and above those considered and discounted by his employer, this did not amount to the imposition of the burden of proof on him.

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Direct Discrimination: Gender critical feminist suffered direct discrimination for expressing her beliefs in a manner that was not “objectively offensive”

In Forstater v CGD Europe and others ET/22200909/2019, an employment tribunal has upheld a claim of direct discrimination on ground of belief, where an individual’s contract was not renewed because she had expressed gender critical beliefs which some colleagues found offensive. This follows an earlier EAT judgment in which her gender critical beliefs had been held to be protected as a philosophical belief under the Equality Act 2010. They included the belief that a person’s sex is an immutable biological fact, not a feeling or an identity, and that a trans woman is not in reality a woman. The claimant had described a prominent gender-fluid individual as a “part-time cross dresser” and a “man in heels” who should not have accepted an accolade intended for female executives. She had also left a gender critical campaign booklet in the office (which she later apologised for) and posted a campaign video on twitter containing ominous music and imagery, which argued that gender self-ID put women and girls at greater risk.

The respondents argued that it was the way in which the claimant had expressed her beliefs, and not the fact that she held them, that had been the reason for non-renewal. The tribunal held, following earlier case law, that the way in which a belief is manifested is only dissociable from the belief itself where it is done in a manner which is inappropriate or to which objection can reasonably be taken, bearing in mind an individual’s qualified right to manifest their belief under Article 9 of the European Convention on Human Rights. In this case, the claimant’s tweets and other communications were little more than an assertion of the core protected belief (which could not be objected to even though it was capable of causing offence). In some cases the claimant had been provocative or mocking but this was the “common currency of debate” and was not objectively offensive or unreasonable.

The claimant had also been victimised when her profile was taken off the respondent’s website after she talked to The Sunday Times about her discrimination case. However, her claims of indirect discrimination and harassment were dismissed.

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If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: hello@dixcartuk.com

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Unfair Dismissal: Band of Reasonable responses

Parental Leave: Protection against dismissal can arise before employee gives notice to take parental leave

Whistleblowing: Employer cannot be vicariously liable for detriment caused by act of co-worker which amounts to dismissal

Discrimination: Fired ‘Color Purple’ actor loses appeal over Christian beliefs

Equal Pay: Identification of decision-maker is not essential to material factor defence

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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

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Fire and Rehire: Court of Appeal overturns injunction restraining termination and re-engagement of Tesco employees

Whistleblowing: Whistleblower’s dismissal not automatically unfair as decision-makers’ view of conduct when making protected disclosures separable from content or fact of disclosures

Direct Discrimination: EAT upholds tribunal decision that Christian doctor was not discriminated against for refusing to address transgender people by their chosen pronoun

Direct Discrimination: Gender critical feminist suffered direct discrimination for expressing her beliefs in a manner that was not “objectively offensive”

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