In May we had another significant development in the growing body of case law concerning discrimination arising from disability increasing the potential for employers to fall foul of this legal concept. We also received a reminder of where we are now on third party harassment, dress codes and zero hours contracts and of course the most 'e-mailed' about legal development of recent years, the coming into force of the GDPR.

Gowling WLG's employment, labour & equalities experts bring you the latest top five employment law developments that may affect your business.

  1. Discrimination arising from disability: knowledge of consequences of disability not required.
  2. Government guidance on dress codes a bit too back to basics.
  3. Can an employer's inaction in the face of third party harassment itself amount to harassment?
  4. Zero-hours employee employed on 'same type of contract' as full-time comparator?
  5. The General Data Protection Regulation (GDPR) and new Data Protection Act 2018 have arrived.

1. Discrimination arising from disability: knowledge of consequences of disability not required

Section 15 of the Equality Act 2010 provides that a person (A) discriminates against a disabled person (B) if A treats B unfavourably because of something arising in consequence of B's disability, and A cannot show that the treatment is a proportionate means of achieving a legitimate aim.

In City of York Council v Grosset, the Court of Appeal has upheld the decision of an employment tribunal that an employer was liable for discrimination arising from disability when it dismissed an employee for misconduct even though it was not aware that the employee's actions were due to his disability.

In this case, Mr Grosset was a teacher suffering from cystic fibrosis. Various reasonable adjustments were agreed to accommodate his disability. However, these were not properly recorded and when a new headteacher took over, Mr Grosset was subjected to an increased workload resulting in considerable additional stress that impacted upon his disability.

While under an increased level of stress, he showed an 18-rated film to a class of 15-year-olds without the school's approval or parents' consent. During the consequent disciplinary proceedings, he accepted that showing the film was inappropriate but maintained it was an error of judgement arising from stress. The school did not accept this explanation and dismissed him for gross misconduct.

The Court of Appeal has upheld a finding that Mr Grosset's dismissal amounted to discrimination arising from disability. The Court rejected the Council's submission that a discrimination arising from disability claim could not succeed unless Mr Grosset could show that the school appreciated that his behaviour in showing the film arose in consequence of his disability. Section 15 entails two distinct causative issues:

  1. Did the employer treat the employee unfavourably because of an (identified) 'something'?; and
  2. Did that 'something' arise in consequence of the employee's disability?

The first issue involved examining the employer's state of mind, to establish whether the unfavourable treatment occurred because of the employer's attitude to the relevant "something". In this case, the relevant "something" was found to be showing the film and the Council's attitude to this was demonstrated by their decision to dismiss Mr Grosset because he showed the film.

The second issue was objective: whether there was a causal link between the disability and the "something"? The tribunal had found that there was a causal link: Mr Grosset had shown the film due to the exceptionally high stress he was suffering, which arose from the effect of increased work demands on his disability.

As the Council was well aware of Mr Grosset's disability (though not all of its effects) it was unable to justify the dismissal. If the employer knows the employee has a disability, it needs to look more carefully into the matter before taking unfavourable action. The tribunal was entitled to take account of the employer's failure to make reasonable adjustments when considering a justification defence.

In this case, Mr Grosset had mentioned the potential causal connection between his condition and his behaviour in showing the film and the Council did have some medical evidence available to it when it took its decision, although not as much evidence as was available to the Tribunal when it heard the claim. However, this case sets a high bar and even where the employee doesn't make the link as Mr Grosset did, employers considering disciplining a disabled employee need to think twice before proceeding without considering obtaining medical evidence on whether the employee's actions could in any way be a consequence of their disability. For more on this complex and tricky topic listen to our podcast.

2. Government guidance on dress codes a bit too back to basics

On 17 May, the Government Equalities Office (GEO) published its guidance, 'Dress Codes and sex discrimination - what you need to know'.

In December 2015, Nicola Thorp arrived to work as a receptionist wearing flat shoes and was sent home without pay by her agency for failure to comply with its dress code, which required women to wear shoes with heels of between two and four inches. The story received widespread media coverage and Ms Thorp started a petition calling for the law to be changed to make it illegal to require women to wear high heels at work.

Fast forward to 2017 and Parliament considered the petition calling for employers to be banned from requiring female employees to wear high heels at work which had gained more than 152,000 signatures. This led to the Petitions and Women and Equalities Committees' 50-page joint report on High heels and workplace dress codes published at the end of January 2017.

The report called for the Government to take urgent action to improve the effectiveness of the Equality Act in preventing discriminatory practices relating to dress at work. In particular, the report recommended that the Government should review this area of the law; that more effective remedies should be available; and that detailed guidance and awareness campaigns targeted at employers and workers should be developed.

In April 2017, the Government rejected any recommendations that would require legislative change, favouring an approach based on more detailed guidance and awareness campaigns and undertook to produce guidance during summer 2017 and to explore other options for raising further awareness of the law on dress codes.

The GEO guidance has now come out and is not as detailed as we might have expected. It simply reminds employers that dress code policies for men and women do not have to be identical, but standards imposed should be equivalent.

On the issue of a high heels requirement for women, it says it is likely to be unlawful under the Equality Act 2010 with the discomfort or health issues that may entail, and as there is no male equivalent. The code also stressed that employers should have regard to any health and safety implications, so if an employer requires staff to wear particular shoes as part of a dress code rather than for personal protective equipment purposes, then they should consider whether this makes staff more prone to slips and trips or injuries to the feet.

On the issue of men being required to wear a shirt and tie, the guidance says that would not be unlawful if women are also expected to wear smart office attire.

As regards religious symbols the guidance again is brief, namely that employers should be flexible and not set dress codes which prohibit religious symbols that do not interfere with an employee's work.

3. Can an employer's inaction in the face of third party harassment itself amount to harassment?

Prior to October 2013, under section 40(2) of the Equality Act, employers were potentially on the hook for harassment committed not only by their employees, servants and agents but also by third parties over which it had little or no control, such as customers or visitors. However, from 1 October 2013, protection against third-party harassment was repealed.

On 24 May, the Court of Appeal handed down its judgment in Unite the Union v Nailard. The case largely concerns the Union's liability for harassment committed by two of the union's 'elected workplace' officials who have been held to be agents of the union. But of wider application, the Court of Appeal also reviewed the legal position on third party harassment generally. In particular whether an employer's inaction in the face of third party harassment can itself amount to harassment?

The Court of Appeal has confirmed that following the repeal of section 40(2) in 2013, the Equality Act no longer makes employers liable for "failing to protect against third party harassment as such, though they may of course remain liable if the proscribed factor (e.g. sex as in this case) forms part of the motivation for their inaction". In other words, a failure to protect an employee against discrimination by someone else (who is not an employee, agent or servant) does not by itself constitute an act or omission on the grounds of the relevant protected characteristic. But if the reason for the failure to act, was influenced, consciously or unconsciously, by the relevant protected characteristic, than that failure to act may itself amount to harassment.

Employers should remember that they owe a duty of care to their employees and harassment can be committed by inaction was well as action. Failure to act in relation to third party harassment which is brought to the employer's attention, may itself amount to unwanted conduct on the part of the employer. Employers should ensure that they train staff on dealing with harassment issues, make it clear that harassment from suppliers, clients and customers is not tolerated and keep clear records of issues arising.

4. Zero-hours employee employed on 'same type of contract' as full-time comparator

Part-time workers have the right not to be treated less favourably than their full-time colleagues, either as regards the terms of his or her contract, or by being subjected to any other detriment by any act, or deliberate failure to act, by his or her employer - the Part Time Working (Prevention of Less Favourable Treatment) Regulations 2000 (PTW).

To establish less favourable treatment, the part-time worker must under regulation 2(4)(a) first identify an actual full-time worker comparator who is:

  1. employed by the same employer;
  2. under the same type of contract; and
  3. engaged in the same or broadly similar work having regard to level of qualification, skills and experience

In Roddis v Sheffield Hallam University, the Employment Appeal Tribunal (EAT) considered what constitutes the "same type of contract" in the context of a claim by an employee working under a zero hours contract.

In this case, Mr Roddis, was employed as an associate lecturer under a zero hours contract of employment. He wished to compare himself with a full-time academic lecturer, Mr Leader, employed under a permanent contract of employment. Both Mr Roddis and Mr Leader were classed as employees as they both head contracts of employment with the University. But did the fact that Mr Roddis' contract was a zero-hours contract of employment mean he was working under a different type of contract for the purposes of the PTW?

The tribunal said yes and rejected Mr Roddis' claim on that basis. But on appeal, the EAT has confirmed that the tribunal was wrong. Regulation 2(3) PTW provides a comprehensive list of categories of different types of contract being:

  1. employees employed under a contract that is not a contract of apprenticeship;
  2. employees employed under a contract of apprenticeship;
  3. workers who are not employees;
  4. any other description of worker that it is reasonable for the employer to treat differently from other workers on the ground that the workers of that description have a different type of contract.

These categories are broadly drafted to enable a comparison to be made between full and part-time workers. In the words of the EAT, if a part-time worker's hours of work were seen as a distinctive feature of dissimilarity compared to that of a full-time worker, it would defeat the purpose of the legislation. It cannot be that a zero-hours contract of itself constitutes a different type of contract for the purposes of the PTW, since the consequence would be that an employee on a zero-hours contract would never be able to compare him or herself to a full-time worker.

On that basis, both Mr Roddis' and Mr Leader's contract of employment fell squarely within category (a) satisfying the "same type of contract" requirement. The case will now to go back to the tribunal to decide whether Mr Roddis can establish that he was engaged in the same or broadly similar work to that of his comparator, Mr Leader. This will inevitably be fact specific. If Mr Roddis is able to get over that hurdle, the employer will then have the opportunity to argue objective justification, again depending on the facts of the case.

As the EAT points out, if a contract of employment containing a zero hours clause was a distinct type of contract under the PTW, the PTW would be self-defeating. In Mr Roddis' case, if you substitute "part-time employee" for "zero-hours employee", the point becomes obvious.

This case once again highlights the importance of employment status. Part-time employees can compare themselves with full-time employees, part-time apprentices with full-time apprentices and part-time workers with full-time workers. The categories are mutually exclusive under the PTW. While a residual category exists, this could only come into play for those who were not an employee, apprentice or worker which the EAT acknowledges is a category for which an example has yet to be identified.

5. The GDPR and new Data Protection Act 2018 have arrived

It was hard to miss that on 25 May, the EU GDPR together with the new Data Protection Act 2018 came into force introducing a raft of important changes to the data protection regime. The changes mark the biggest change in the evolution of EU and UK data protection law in a generation seeking to take into account technological advances and provide harmonised data protection laws across the EU (including in the UK post-Brexit).

The overriding themes are accountability and giving individuals more control over how their personal data is handled by others. Key changes all employers need to know include:

  1. Stricter and more detailed conditions for the use of consent

    Consent must be freely given, specific, informed and unambiguous. In the context of an employment relationship, using 'consent' as the legal basis for processing personal data will be increasingly difficult. The GDPR identifies a limited number of other legal bases, of which 'processing that is necessary for the purposes of the legitimate interests pursued by the controller', is often likely to be the better option in an employment context, although even more stringent rules apply to sensitive personal data, now called special category data.
  2. More detailed privacy notices, whilst still being concise and easily understood

    The requirements relating to privacy notices under GDPR are more detailed and specific placing more emphasis on making them understandable and accessible. Privacy notices need to contain additional information, such as details of the legal basis for the processing of the personal data that is held.
  3. Overlapping controller and processor obligations, especially around security

    Data processors (i.e. those who process personal data on behalf of a data controller) are, for the first time, subject to direct legal obligations.
  4. Mandatory breach notification

    Breaches of the data protection requirements must be reported to the national supervisory bodies (i.e. the Information Commissioner's Office (ICO) in the UK) within 72 hours of the controller becoming aware of the breach. The notification requirement does not apply if the breach is unlikely to result in a risk to data subjects (for example, because all data on a laptop was encrypted).
  5. More severe sanctions for non-compliance.

    The GDPR imposes significantly greater fines for non-compliance than under the old Data Protection Act 1998 (DPA) regime, up to the greater value of €20 million or 4% of global annual turnover.

The new regime applies to all public and private data controllers in EU Member States as well as those establishments outside the EU, but who offer goods and services to, or monitor the behaviour of, EU residents.

Information Commissioner's Office guidance and online resources to assist organisations is available at https://ico.org.uk.