Employment Essentials: 5 Lessons from March 2018

28 March 2018

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

  1. Condition described as 'pre-cancerous' in medical report was still a deemed disability under the Equality Act
  2. Redundancy selection and 'bumping'
  3. Compensation for failure to allow rest breaks does not extend to 'injury for feelings'
  4. Calculating holiday pay for casual term time workers
  5. MPs call for improved paternity rights




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1. Condition described as 'pre-cancerous' in medical report was still a deemed disability under the Equality Act

Generally, for a person to be disabled under the Equality Act 2010, the individual must establish that they have a physical or mental impairment and the impairment has a substantial and long-term adverse effect on his or her ability to carry out normal day-to-day activities (section 6). However, there are some conditions that are expressly deemed to be disabilities under section 7. Individuals with a section 7 condition are deemed to have a disability from the point of diagnosis without the need to satisfy the various elements of the section 6 statutory test. Cancer is a deemed condition.

In Lofty v Hamis (t/a First Café), the Employment Appeals Tribunal (EAT) held that a type of skin cancer (lentigo maligna) described as "pre-cancerous" was a cancer within the meaning of section 7. The evidence before the tribunal was that Mrs Lofty had an "in situ" melanoma. That meant there were cancer cells in the top layer of her skin. The evidence explained that "pre-cancer" may be regarded as medical shorthand for a particular stage in the development of cancer; it does not mean there is no cancer for the purposes of the Equality Act.

The EAT noted that a diagnosis of pre-cancerous cells might mean something different depending upon where the cells are to be found, but, in terms of skin cancer, the evidence showed that it was a type of cancer.

Employers should be extremely cautious before concluding that a condition labelled as "pre-cancerous" does not mean "cancer". It would need cogent medical evidence to that effect.

2. Redundancy selection and 'bumping'

'Bumping' is the process of moving an employee whose role is at risk of redundancy into another role, and dismissing the employee currently performing that role. Depending on the situation, the employer may need to consider the possibility of 'bumping' a potentially redundant senior employee into a more junior employee's position.

In March the Employment Appeal Tribunal (EAT) considered when an employer may be required to consider 'bumping' a junior (Mirab v Mentor Graphics (UK)). Specifically, the EAT looked at whether an employee needed to ask his employer to consider allowing him to be redeployed into another more junior role, in order for the employer to be under an obligation to consider 'bumping' as part of conducting a fair redundancy process.

The EAT concluded, on the one hand, there is no rigid rule saying that an employer must always consider 'bumping' in order to dismiss fairly in a redundancy case. On the other hand, there is no rule that says an employer does not need to consider 'bumping' unless the employee raises it. The question is always for the tribunal to determine, on the particular facts of the case, whether what the employer did fell within the range of reasonable responses.

In this particular case, the tribunal's conclusion that the employer had not been required to consider 'bumping' was predicated on the basis that the employee at risk had not raised it as a possibility. As such the matter has been sent back to the tribunal to reconsider the issue on the correct basis.

Employers must ensure that any redundancy selection process is fair. This means that there is a genuine redundancy situation and that a fair procedure is followed throughout, including when determining the selection pool and in consideration of alternatives to redundancy. 'Bumping' will not be appropriate in every case. There is no general obligation on an employer to consider 'bumping', nevertheless in some circumstances it may be unreasonable not to do so. So, the dreaded "it depends on the facts of the case".

3. Compensation for failure to allow rest breaks does not extend to 'injury for feelings'

Under regulation 12 of the Working Time Regulations (WTR), unless they fall within one of the exemptions, workers are entitled to a rest break away from their work station of not less than 20 minutes where daily working time is more than six hours. Where a tribunal finds an employer to be in breach of the rest break provisions, it must make a declaration to that effect and may make an award of such compensation as is "just and equitable" in all the circumstances, having regard to the employer's default and any loss sustained by the worker as a result.

In Gomes v Higher Level Care Ltd, the Court of Appeal was asked whether compensation for failing to provide rest breaks can include an injury to feelings award. If yes, this would significantly increase the value of rest break breach claims.

The Court of Appeal has confirmed that claims for failing to provide rest breaks are akin to breach of contract claims. As such when assessing compensation, the remedy is a payment of compensation for the time of the missed breaks based on the individual's rate of pay and does not extend to injury to feelings.

While compensation for breach of rest breaks and annual leave does not extend to awards for injury to feelings, not all WTR claims are excluded. In contrast, compensation for injury to feelings may be awarded in working time detriment claims. In January the EAT in South Yorkshire Fire and Rescue Service v Mansell & ors, held that compensation or injury to feelings could be awarded for working time detriment claims because in effect such claims are based on a statutory tort rather than akin to contract claims and should therefore be regarded in the same way as discrimination claims.

The nature of a right (is it a statutory tort or is it more akin to a breach of contract claim?) is therefore crucial in determining whether injury to feelings is available for the breach of the WTR 1998.

4. Calculating holiday pay for casual term time workers

Under the WTR every worker is entitled to 5.6 weeks' annual leave. A week's leave should allow workers to be away from work for a week. It should be the same amount of time as the working week: if a worker does a five-day week, he or she is entitled to 28 days' leave; if he or she does a three-day week, the entitlement is 17 days' leave.

Working out holiday entitlement for term time only workers, casual and zero hour workers can often prove to be an administrative headache. Under the WTR and section 224 of the Employment Rights Act 1996 (ERA), holiday pay should be calculated on the basis of the average hours worked in the preceding 12 weeks immediately before payment is made .

However, some employers have instead worked out holiday pay by using 12.07% of annualised hours. This is based on the 'Your questions answered' section of the Holidays and Holiday Pay ACAS Guidance which states that 5.6 weeks is equivalent to 12.07% of hours worked over a year for a full time worker.

The EAT in Brazel v The Harpur Trust has now confirmed that calculating holiday pay for variable hour, term-time workers based on a calculation of 12.07% of annualised hours is incorrect.

In this case, Mrs Brazel worked as a part-time music teacher at a school. She worked during term time under a zero-hours contract, under which her weekly hours fluctuated, and she was required to take her holiday during school holidays. Her contract stated that she had the right to 5.6 weeks' annual leave, in line with the WTR. She was paid her accrued holiday pay three times per year, in April, August and December.

The school calculated her entitlement to holiday pay as 12.07% of the hours worked in the preceding term relying on the ACAS guidance. Mrs Brazel brought a claim for underpayment of holiday pay as paying 12.07% of hours worked was not the same as paying the normal rate of pay averaged over the 12 weeks prior to holiday being taken as required by the WTR.

The EAT agreed with Mrs Brazel. The EAT accepted that the WTR may, in effect, advantage those who work fewer weeks during the year compared to those who work the full number of weeks. Nevertheless, a part-time worker who works irregular hours throughout each week of the year is entitled to holiday pay calculated under the WTR and section 224 ERA, which is based on average earnings over a 12-week period. Her holiday pay is therefore based on an average week's pay over that period, reflecting the number of hours that she worked.

The EAT makes it clear that the express provisions for calculating holiday pay for workers with variable hours contained in the WTR cannot be overridden by capping annual holiday pay to 12.07% of annualised hours for ease of calculation.

Employers using a 12.07% of annualised hours calculation as a shortcut need to review their holiday pay calculation practices or face potential claims.

5. MPs call for improved paternity rights

On 20 March, the House of Commons' Women and Equalities Committee published a report, Fathers and the workplace, calling on the Government to make a number of improvements to fathers' rights at work.

The report concludes that the right to request flexible working has not created the necessary cultural change and the Government itself admitted to the inquiry that its flagship Shared Parental Leave scheme will not meet its objective for most fathers.

The report comes as the deadline approaches for gender pay gap reporting. The Government says that fathers taking a more active role in caring for their children is a key way of ending the gender pay gap. The Committee believes that current policies are not keeping up with social changes, and that enabling fathers to play a greater role caring for babies will also help address the causes of the gender pay gap.

The main recommendations of the report include:

1. Statutory Paternity Leave and Pay

  1. Remove the qualifying period for paternity leave (two weeks) making it a "day one" right.
  2. Increase Statutory Paternity Pay to 90% of earnings subject to a cap for high earners (currently two weeks' pay at the flat statutory rate of £140.98).
  3. Give self-employed fathers "paternity allowance".

2. Antenatal Appointments

  1. Give fathers a day one right to paid time off to attend antenatal appointments (currently unpaid).
  2. Consider increasing the current limit of two appointments.
  3. Change the qualifying criteria for agency workers making unpaid time off a day one right, and paid time off after 12 weeks.

3. Shared Parental Leave and pay

  1. Consider replacing the cumbersome shared parental leave system with an additional 12-week, what the report calls, "paternal" leave entitlement (better referred to as additional paternity leave), to be taken in the first year:
    1. fathers and second parents would be eligible for this leave in their own right.
    2. paid at 90% (capped) for four weeks and at statutory levels for eight weeks,
    3. a right neither dependent upon nor affecting the mother's maternity leave or pay period.

4. Flexible working requests

  1. Bring forward legislation to ensure that all new jobs are advertised as flexible by default, unless there are immediate strong business reasons against it.

5. Culture change

  1. Consider adding 'paternity' to the list of protected characteristics in the Equality Act 2010.
  2. The Government to take steps to change negative workplace attitudes towards fathers' participation in childcare.

We wait to see if the Government responds to the growing pressure for further change.


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