Employment law 2018 review: another year [nearly] over...

17 December 2018

Although Brexit has been and remains top priority for the legislative draftsmen, the tribunals and courts have brought us significant employment and equalities legal developments. For now, we leave the Brexit uncertainty aside and instead reflect on our pick of the 2018 employment cases and developments to remember.




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'Fantastic [Brexit] Beasts and Where to Find Them'

Another year dominated by the Fantastic Brexit Beasts. But where to find them? Deal, no deal or even another referendum?

While #Brexit has dominated much of public debate and Government time, #Metoo and #gigeconomy have also featured prominently in public debate though they are assigned to the Government's growing list of "future legislative reform needed if we just had time" pile - shame JK Rowling couldn't make Hermione's time turner a reality.

The Government has repeatedly stated that it intends to maintain current UK employment laws so that existing workers' rights are unchanged following exit day, this could of course change, as political fortunes change ('Fantastic [Brexit] Beasts: the [G]rimes of Grindel[gov]'). The reality is that it is unlikely the Government will change its mind and repeal all EU-derived employment law or make large-scale changes to employment law in the aftermath of Brexit. There may be scope to tweak some provisions within the current legislation, but political considerations make it relatively unlikely that core employee rights would be reduced significantly following Brexit.

  • Employment status: Tinker, Ta[y]lor, Soldier, Spy; Little [Plumb]er Girl
  • Agency & zero-hours workers: The [not so] Constant Gardener; The Constant [Cherry-Picking] Gardener; The Spy Who Came in [on Zero-hours]
  • Whistleblowing: The Man with the Golden [Claim]; The [Word] is Not [always] Enough; From [Kosovo] with Love
  • Vicarious liability: 2001[+]: an [Employer Liability] Odyssey
  • On call time & NMW: Sleeping [most of the time] Beauty
  • Working time: Snow White and the Seven [Working Time] Dwarfs: Sleepy, B[r]a[z]ful, Happy, Grumpy, Doc, Sneezy & [N]opey
  • Contract: Mission [Risk] Impossible; Mission Impossible [to know for sure]
  • Termination: The Terminator: Judgment Day; The Terminator: [Statutory] Salvation; The Terminator: The Rise of the [Tax] Machine
  • TUPE: Lock, Stock and TUPE [Transferring Employees]
  • Data protection: The [Data] Matrix: Reloaded; The [Data] Matrix: [SA]Revolution
  • References: Star [Words]: the [Employer] Strikes Back; Star [Words]: Return of the [Reference]
  • Maternity: The Parent Trap; The Parent Trap II
  • Equal pay: The Equalizer
  • Disability discrimination: [Equality] Potter & - the Goblet of [Issues]; the Deathly H[o]llow [Questions]; the Prisoner of [Long-hours Culture]; [the Order of the [PHI]
  • Victimisation & harassment: [Equality] Potter & - the Half-[Truth] Prince; [the Chamber of [Inaction]; [the Philosopher's [Focus]
  • Tribunal rules: [Ministry of Justice] and the Holy Grail; [ACAS'] Flying [Conciliation] Circus
  • The 2018 awards (drum roll please)…

Employment status

"Employment status is a complex and wide ranging subject that many have said has no real solution - and that if we did manage to "solve it", we should immediately move on to world peace as we'd clearly be on a roll."
John Whiting OBE, Tax Director, Office of Tax Simplification, March 2015

John Whiting, now CBE, is the writer's personal favourite taxman for this simple and honest statement, which continues to be true. Like last year, determining worker status in modern workplaces has once again been a hot topic in 2018.

Tinker, Ta[y]lor, Soldier, Spy

Back in February we finally saw the delayed Government Response to the recommendations of the Taylor review of modern working practices; and the answer to the tricky employment status issue is…more consultation and thinking!

The Government has rejected Matthew Taylor's recommendation for introducing a 'worker status by default' presumption and is instead revisiting the possibility of a new statutory test to determine employment status. As acknowledged in the latest consultation which closed on 1 June, codification of the test for employment status would involve trade-offs. On the one hand, a simple and clear formula will give more certainty. On the other hand, the current case law based framework provides the nuance and flexibility often needed when applying the test to different circumstances which are inevitable in the labour market.

Ultimately, employment status is a complicated subject because employment relationships are just that - complicated. A status test set down in legislation rather than case law doesn't change that fact. Trying to encapsulate the nuanced factors developed over years of case law into legislation will be no easy feat. But have the courts been any more helpful this year?

Little [Plumb]er Girl

Since the 2016 landmark tribunal decision (and 2017 Employment Appeal Tribunal (EAT) judgment) that Uber drivers are workers (despite Uber's best efforts at drafting bamboozling contractual clauses) there has been a seemingly endless supply of successful new claims predominantly concerning couriers [Insert your choice of courier company name and you will most likely find a case].

In June, the Supreme Court delivered its judgment in Pimlico Plumbers Limited & Anr v Smith on whether a plumber who was self-employed for tax purposes was nonetheless a worker for employment law purposes. In relation to the personal service requirement for establishing 'worker' status, the Supreme Court confirmed that a limited or occasional power of delegation could still be consistent with personal performance. The 'dominant purpose' of the contract remained one of personal service.

The Supreme Court's judgment significantly decreases the importance of the right of substitution as a determining factor. A substitution clause in and of itself does not magically prevent worker status. On the other hand, integration in the business appears to be a factor of increasing importance in the current wave of worker status cases.

The Supreme Court has tweaked the judicial test by succinctly articulating the 'dominant purpose' factor. But this is more judicial test evolution rather than revolution. Unfortunately, for hopes of world peace, arguments over the required elements of worker status are far from over. Whether and to what extent 'mutuality of obligation' between assignments is relevant to a person's status during assignments is still up for grabs. 'Mutuality of obligation' is a crucial factor to establish 'employee' status, but is it required and if so, to what extent, for establishing 'worker' status? As the Supreme Court said there is no easy answer to this question and it will have to await appraisal on another occasion.

The further appeal in the Uber case was heard by the Court of Appeal on 30 and 31 October. Will the judgment, when handed down, provide an answer? No doubt whichever way the judgment goes, the losing party will further appeal.

Unfortunately, we are not much closer to tackling world peace!

Agency & zero-hours workers

The [not so] Constant Gardener

Last year in Jones v Birds Eye, the employment tribunal reminded us that following the 2013 EAT decision in Moran v Ideal Cleaning, the number of agency workers potentially falling within the provisions of the Agency Workers Regulations 2010 was significantly lower than originally anticipated. Following Moran, not all agency workers are protected; it is only those supplied to work temporarily. Those placed indefinitely (meaning open-ended in duration) are not placed 'temporarily' and are therefore outside the scope of the Agency Workers Regulations (AWR).

In both Moran and Jones the agency workers were found not to be temporary and so not covered by the AWR. Conversely this year in Brooknight Guarding Ltd v Matei we have an example of an agency worker placed temporarily. The EAT agreed with the tribunal, that while a relief security guard mainly worked at one site, it was as a 'cover security guard'. Each 'as required' assignment was on a temporary rather than on a permanent or indefinite basis.

The Constant [Cherry-Picking] Gardener

In Kocur v Angard Staffing Solutions Ltd, an employer breached the AWR in providing an agency worker with fewer enhanced contractual days' holiday and shorter paid rest breaks than comparable permanent employees, despite the agency worker receiving a higher hourly wage. The EAT rejected the defence that the agency worker's higher rate of pay offset his inferior holiday entitlement and rest breaks - the AWR require a term-by-term comparison not a package approach.

The Spy Who Came in [on Zero-hours]

For a part-time worker to establish less favourable treatment under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000 (PTW) they need to identify an actual full-time worker comparator who is: employed by the same employer under the same type of contract and engaged in the same or broadly similar work having regard to level of qualification, skills and experience.

In Roddis v Sheffield Hallam University, the EAT considered what constitutes the 'same type of contract' for PTW purposes in the context of a claim by an employee working under a zero hours contract. The University argued that a lecturer's zero-hours contract was not the 'same type of contract' so he could not compare himself with a full-time lecturer on a permanent contract of employment.

A good academic try? Well no. The EAT had no trouble in rejecting this argument. 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 themselves to a full-time worker. 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.

Whistleblowing

The Man with the Golden [Claim]

Back in June 2013, the Public Interest Disclosure Act 1998 was revamped. Significant new provisions were introduced. The changes included introducing co-workers' liability for victimisation with corresponding employer statutory vicarious liability.

In November, the Court of Appeal in Timis and Sage v Osipov confirmed that an individual's personal liability for detriment which they cause to a whistleblower colleague can extend to liability for that colleague's dismissal. Where a distinct prior detrimental act done by a co-worker results in the whistleblower's dismissal, the whistleblower can still recover compensation for losses flowing from the dismissal - a so-called 'dismissal consequent on detriment' claim. In this case, it leaves two wrongdoer directors on the hook for just over £2 million of losses, the employer company being insolvent.

The [Word] is Not [always] Enough

For there to be a qualifying disclosure under the whistleblowing legislation, there must be a disclosure of information, not a matter of opinion or an allegation. In practice, information and allegations are often intertwined. In June, the Court of Appeal clarified that the question is whether the disclosure has "sufficient factual content and specificity" (Kilraine v London Borough of Wandsworth).

Lessons:

  • words that are too general and devoid of factual content capable of tending to show one of the relevant failures (e.g. breach of a legal obligation) will not amount to information, but
  • words that would otherwise fall short can be boosted by context or surrounding communications. For example, the words "You have failed to comply with health and safety requirements" fall short on their own, but may constitute information if accompanied by a gesture of pointing at sharp implements lying on a hospital ward floor.

From [Kosovo] with Love

This year we have also learnt on the whistleblowing front:

  • A whistleblower may be able to bring a detriment claim against overseas colleagues as well as their employer (Bamieh v EULEX (Kosovo) and others);
  • A person who subjects a whistleblower to a detriment must personally be motivated by the protected disclosure in order for a detriment claim to succeed (Malik v Cenkos Securities); and
  • A whistleblower can, in principle, claim post-termination losses if they are attributable to pre-termination detriments (Wilsons Solicitors LLP v Roberts).

Vicarious liability

2001[+]: an [Employer Liability] Odyssey

Common law vicarious liability is a principle of strict, no-fault liability for wrongs committed by another person. In an employment relationship, an employer may be liable for the wrongs committed by an employee where there is a sufficient connection between those wrongs and the employee's employment. This is a very long-standing legal principle with the foundation of the 'modern' principle going back to 1912 (Lloyd and Grace, Smith and Co). But have 21st century developments expanded its scope?

Following a number of appellate level 21st century judgments, when considering whether an incident has sufficient connection with the employer, it is not merely a question of whether the employee was 'at work' in a strict sense. Instead it is whether the employee was otherwise 'clothed in the employer's authority' or ''acting within the field of activities assigned to them'.

For example, an employer was liable for a Managing Director's violent assault of a colleague at an impromptu post-Christmas work party after-party as the MD 'chose to wear his metaphorical managing director's hat' at the time of the incident. Another employer was vicariously liable for a data breach by a rogue employee as access to the data was within the field of activities assigned to him. The fact that the rogue employee's actions were designed to harm the employer was irrelevant.

On-call time & NMW

Sleeping [most of the time] Beauty

July saw the Court of Appeal hand down one of the most significant judgments of the year - a combined judgment in Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad t/a Clifton House Residential Home. In a single judgment, the Court of Appeal has effectively overturned the precedent value of numerous EAT judgments concerning the treatment of 'sleep-in' shifts for national minimum wage (NMW) purposes.

Where a worker is required to work a number of 'sleep-in' night shifts at the employer's premises (to be available in case of an occasional emergency but otherwise expected to sleep all or most of the shift), does the full night shift constitute 'working' for the purposes of the NMW? The Court of Appeal has now answered this question ruling: "the only time that counts for NMW purposes [during sleep-in-shifts] is the time when the worker is required to be awake for the purpose of working".

Quite simply the only time that counts for NMW purposes is the time when the worker is required to be awake and actually carrying out work. Time spent sleeping/relaxing does not count. Factors previously found to point towards NMW being payable for the entire sleep-in shift are now irrelevant. The sleep-in exception in the NMW Regulations applies to cases where "the essence of the arrangement is that the worker is expected to sleep".

Working time

Snow White and the Seven [Working Time] Dwarfs

Sleepy [but ready to go]

Turning to on-call time for Working Time Directive purposes, until this year Court of Justice of the European Union (CJEU) case-law has tended to focus on the worker's location during stand-by periods and whether it is at a place determined by the employer. Early this year, in Ville de Nivelles v Matzak, the CJEU considered whether on-call time is 'working time' for fire-fighters on-call at home but with a duty to respond within eight minutes. The CJEU has held that such time is 'working time'.

Perhaps a bit counterintuitively, this judgment still reaffirms the importance of proximity to the workplace. In this case, the obligation for the firefighters to remain physically present at the place determined by the employer (their homes) and the 'geographical and temporal constraints' resulting from the requirement to reach their place of work within eight minutes, limited the opportunities which the firefighters had to devote themselves to their personal and social interests. The situation of the firefighters in this case could therefore be distinguished from that of a worker who, during his stand-by duty, must simply be at his employer's disposal inasmuch as it must be possible to contact him. While being on employer premises during on-call time is not required, the proximity of the worker to the workplace at a place determined by the employer (even if it is the worker's home) is still a key factor.

Hey Ho Hey Ho it's off to work we go…

In what is now a perennial favourite, holiday leave accrual, carry-over and pay calculations have once again featured heavily over the year.

B[r]a[z]ful

Working out holiday entitlement for term time only workers, casual and zero hour workers can often prove to be an administrative headache. The Working Time Regulations (WTR) require holiday pay to be calculated on the basis of the average hours worked in the preceding 12 weeks immediately before payment is made. However, many employers have instead worked out holiday pay by using a 12.07% of annualised hours shortcut as set out in ACAS guidance (5.6 weeks is equivalent to 12.07% of hours worked over a year for a full time worker).

While the 12.07% method is accurate in many cases, it isn't always. In March, the EAT in Brazel v The Harpur Trust confirmed that calculating holiday pay for variable hour, term-time workers based on 12.07% of annualised hours is incorrect. The express provisions contained in the WTR cannot be overridden for ease of calculation. As shown in Mrs Brazel's case, the shortcut did not work accurately for part-time term time workers. Employers using a 12.07% of annualised hours calculation as a shortcut need to review their holiday pay calculation practices or face potential claims.

Happy & Grumpy

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 compensation for claims for failing to provide rest breaks does not extend to injury to feelings, being akin to a breach of contract claim.

While compensation for failure to provide 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 since they are more akin to a statutory tort (South Yorkshire Fire and Rescue Service v Mansell & ors).

[Get me to the] Doc

We have also had yet another EAT judgment on overtime and holiday pay calculations. The EAT in Flowers and others v East of England Ambulance Trust, once again confirmed that for a WTR claim "normal pay" is that which is "normally received". Focusing on whether overtime is or isn't "voluntary" is irrelevant. The key is regular receipt. But also check the contractual provisions. If there is a contractual right to have overtime included, there may not be a need to establish a regular pattern. In Flowers, regardless of the WTR claim, the claimants were entitled under a contractual clause to have any overtime pay received in the preceding three months included in their annual leave calculation whether or not the overtime worked was part of a regular and settled pattern.

Gesundheit Sneezy

In two German references, Kreuziger v Land Berlin and Max-Planck v Shimizu, the CJEU held that a worker who does not apply for paid annual leave during employment does not automatically lose the right to an allowance in lieu of untaken leave on termination. The worker must have been given an opportunity to take that leave. While employers are not required to force workers to actually exercise their right to take paid annual leave, a bit of nagging may be needed. It is for the employer to show that it encouraged the worker to do so, while informing them, accurately and in good time, of the risk of losing that leave at the end of the applicable reference period.

Lessons:

  1. employers should have a clear holiday policy explaining the loss of untaken entitlement at the end of the holiday year.
  2. In addition, employers are well advised to issue reminders, a reasonable time, prior to the end of the leave year to those who have not taken/booked at least four weeks' leave, encouraging them to take it and warning if they do not they will lose it (unless one of the exceptions applies i.e. sickness absence).

[N]opey

The CJEU has confirmed that the Working Time Directive (WTD) does not require holiday leave accrual during the taking of parental leave (Tribunalul Botoşani v Dicu). Parental leave (in the UK 18 weeks' unpaid leave to care for a child) is distinguishable from sickness absence and maternity leave. If national law suspends the employment contract during parental leave, then annual leave entitlement does not accrue during the taking of that parental leave. Parental leave is not equivalent to a period of actual work for determining the duration of paid annual leave.

In the UK, legislative provisions which apply to maternity, paternity, adoption and shared parental leave expressly state that during the leave period the employee is entitled to the benefit of all the terms and conditions of employment except remuneration - so holiday leave accrual continues during these leave periods. However, there is no corresponding legislative provision in relation to EU law derived parental leave.

Contract

Mission [Risk] Impossible

If an employer unilaterally imposes a contractual change, it is possible for employees' agreement to be implied if they continue to work without protesting after the change has been imposed. But this is risky. Careful analysis of all communication from employees (both verbal and written) is necessary to ensure nothing has been communicated that suggests or evidences objection to the changes. Where the change imposed does not have immediate effect, silence would not be considered to be agreement simply as a result of the passage of time.

In April, the Court of Appeal in Abrahall and ors v Nottingham City Council reminded employers just what risky business it is to assume agreement. In this case, the Court held that a group of employees who continued to work following their employer's imposition of a pay freeze did not agree to a variation of contract. Although the employees did not bring tribunal claims until two years later and did not individually communicate protest, they had protested through their trade unions at the time. The employees continuing to work could not be taken as unequivocal acceptance of a change that was wholly to their disadvantage. A decision by the union not to take industrial action over the imposed change did not equate to accepting the variation.

Mission Impossible [to know for sure]

Also in April, we received Supreme Court clarification on when contractual notice of termination served by post takes effect (Newcastle upon Tyne NHS Foundation Trust v Haywood). In the absence of any specific contractual provision, contractual notice takes effect only when the employee personally takes delivery of the letter containing the notice (so not date recorded delivery signed for by a family member). In this case, the date of termination was crucial because it determined whether the notice period expired on or before the employee's 50th birthday, which affected her pension entitlement by some £200,000.

This judgment now aligns the contractual law position with the statutory position in respect of the effective date of termination (EDT) under the Employment Rights Act 1996.

Lesson: when dismissing an employee, it is usually best to inform the employee in person (written confirmation being simply that, confirmation, and not the mode of first communication of the actual decision). This will remove any ambiguity about the date of dismissal.

Termination

The Terminator: Judgment Day

From this year's crop of unfair dismissal judgments we have learned:

A head teacher's failure to disclose to school governors a close personal relationship she had with a registered sex offender was misconduct justifying dismissal (Reilly v Sandwell Metropolitan Borough Council - Supreme Court). This judgment is of particular note as Lord Wilson questions how useful is the long-standing Burchell v BHS reasonableness test, but without reaching a conclusion. The Supreme Court has, in effect, invited argument in a future case.

Misconduct does need to necessarily amount to gross misconduct for a fair dismissal. There is no magic in labelling something as gross misconduct rather than as serious misconduct for unfair dismissal purposes. As ever, each case will be fact specific to determine whether the employer acted reasonably in treating that reason for dismissal as sufficient to justify dismissal (Quintiles Commercial UK Ltd v Barongo - EAT).

The deemed extension of the effective date of termination by statutory minimum notice does not apply where the employer is entitled to immediately dismiss (summary dismissal) by reason of the employee's conduct (Lancaster and Duke Ltd v Wileman - EAT)

An employee's letter giving 'notice' was not an unambiguous resignation. The context for the letter was that the employee was expecting to take up a different role in another department (although that role was subsequently withdrawn) and the tribunal was entitled to read it as giving notice of intention to leave a particular role rather than to terminate employment (East Kent Hospitals University NHS Foundation Trust v Levy - EAT).

Where an employee is contractually entitled to receipt of Permanent Health Insurance (PHI) payments, absent any over-riding express terms, the courts will imply a term preventing an employee being dismissed where this would deprive them of the benefits to which they would otherwise be entitled under the PHI scheme. While an employee may use the implied term in a breach of contract wrongful dismissal claim, tribunals must not allow that breach to automatically dictate its conclusions on unfair dismissal. Having said that, breach of the implied term will still be a very important relevant factor when assessing fairness (Awan v ICTS UK Ltd - EAT).

The Terminator: [Statutory] Salvation

It is automatically unfair to dismiss an employee for taking part in the activities of an independent trade union. Union officials who are also employees will lose this protection where they are found to have acted wholly unreasonably or maliciously in carrying out their functions. But where is the line drawn?

The Court of Appeal confirmed a trade union official was automatically unfairly dismissed despite misuse of confidential information. In the Court's view, it is not uncommon for a union representative to be given, without soliciting it, information that he or she realises has been obtained without the owner's consent. Although it might be said that the only correct course in such circumstances would be to decline the information or destroy it, the court was 'not here concerned with an ethics seminar'. Instead the key question was whether the very limited way in which Mr Morris made use of the obviously illegally obtained information (forwarding it to HR and insisting on a meeting to discuss the contents) was a 'sufficient departure from good industrial relations practice to take his conduct outside the scope of 'trade union activities' .

The Court held the line had not been crossed. At most, some sort of warning for storing and not deleting the information might have been appropriate. The official's conduct was not outside the scope of 'trade union activities' and he was therefore entitled to the statutory automatic unfair dismissal protection (Morris v Metrolink RATP Dev Ltd).

The Terminator: The Rise of the [Tax] Machine

On the tax front, since 6 April the way that termination payments are taxed has changed. All payments in lieu of notice are now treated as earnings subject to tax and class 1 NICs. Effectively, employers are required to subject to tax an amount equivalent to the employee's basic pay (as defined in the new rules) if notice is not worked. However, planned changes making termination payments above £30,000 subject to class 1A NICs (employer liability only) have been postponed even further to April 2020, which is good news for employers.

TUPE

Lock, Stock and TUPE [Transferring Employees]

While case law on transfers of undertakings has been relatively quiet this year we have had some interesting cases and some rare examples:

A renewed warning that if a parent company takes over the day-to-day running of the business of a subsidiary, this may result in a TUPE transfer of the subsidiary's employees to the parent. Significant care should be taken when a parent company decides to show more of an interest in the business of its subsidiary (whether following a share acquisition or otherwise). If the parent starts making decisions and issuing directions in a manner which suggests that it has assumed control of the subsidiary, it could inadvertently become the employer. In Guvera Ltd v Butler a parent company learned that lesson at some considerable cost, with awards for failing to inform and consult on the intra-group transfer amounting to £3.5 million having been made to the numerous claimants in this case.

European case-law in line with existing UK case-law that a temporary cessation of activities prior a transfer does not necessarily prevent the existence of a transfer of undertaking (Colino Sigüenza - CJEU).

A reminder that in assessing whether there has been a service provision change (SPC) to multiple new providers, the effect of fragmentation must be considered when identifying the relevant activity. In some cases, the way a service is carried out post-transfer will be a relevant consideration in determining whether the activities are fundamentally the same as those carried out by the outgoing contractor. It is important to assess the issue of fragmentation early on in the analysis, because in some cases the fragmentation will be so acute that it will no longer be possible to say that there has been a service provision change (London Care Ltd v Henry and others - EAT).

EAT guidance on the meaning of 'undertaking', 'economic entity' and 'administrative function', which is rarely seen in domestic cases. A useful round-up of case law (both domestic and European) in relation to services or entities performing functions within the public sector (Nicholls and others v London Borough of Croydon).

A rare example of a permitted change to terms and conditions following a TUPE transfer. A transferor was not prevented from withdrawing a travel time allowance. The genuine reason for its withdrawal was that it was outdated and unjustified, not for a reason related to the transfer (Tabberer v Mears Ltd - EAT).

Data protection

The [Data] Matrix: Reloaded

It was hard to miss that on 25 May, the EU General Data Protection Regulation (GDPR) together with the new Data Protection Act 2018 came into force introducing a raft of important changes to the data protection regime. Key changes include:

  • Stricter and more detailed conditions for the use of consent;
  • More detailed privacy notices, whilst still being concise and easily understood;
  • Overlapping controller and processor obligations, especially around security;
  • Mandatory breach notification requirements; and
  • More severe sanctions for non-compliance (maximum fines reaching an eye-watering up to the greater value of €20 million or 4% of global annual turnover).

The [Data] Matrix: [SA]Revolution

In July we received Court of Appeal guidance on the balancing test needed when dealing with a "mixed data" Subject Access Request and when a third party objects to their data being disclosed (B v General Medical Council):

  • There was no rebuttable presumption that the objector's views should prevail. The earlier leading case of Durant v Financial Services Authority did not mean that there was priority in favour of the interests of the objector over the interests of the requester;
  • The fact that the requester might be seeking the information with a view to litigation should not interfere with the data controller's assessment; and
  • A data controller might consider whether to disclose information on the proviso that an assurance or binding contractual undertaking is made that the information will not be disseminated more widely.

Although the decision concerns the DPA 1998, it will continue to have relevance under the DPA 2018 and GDPR regime.

References

Star [Words]: the [Employer] Strikes Back

This year employers are reminded that checking references given by applicants is an important part of any recruitment process. Especially where experience equates to safety, doing so is critical.

In Francis-McGann v West Atlantic UK Ltd, a pilot applied for a captain position with a freight airline. He falsely claimed to have previously worked as a captain and gave as a referee Mr Desilijic Tiure - in hope that the reference would never be checked. The pilot was appointed as a captain before his references were checked and provided with training based on him already being an experienced captain.

The person who initially decided to hire Mr Francis-McGann was clearly not an obsessive Star Wars fan. When his references were checked, it became obvious that Mr Desilijic Tiure was fictitious, being Jabba Desilijic Tiure, better known as Jabba the Hutt of Star Wars fame! However that was merely the first Episode.

After being summarily dismissed, Mr Francis-McGann brought a tribunal claim for three months' unpaid notice pay! The tribunal had no qualms in dismissing his claim and allowing the employer's cross claim for recovery of training costs in accordance with a contractual clause in the sum of £4,725. The force was clearly not with Mr Francis-McGann.

Star [Words]: Return of the [Reference]

In July, the EAT gave a warning to prospective employers considering withdrawing a job offer following the receipt of an unsatisfactory reference criticising an applicant's levels of absence in their previous job without first considering whether there was an underlying disability.

In South Warwickshire NHS Foundation Trust v Lee a prospective employer was liable for discrimination arising from disability when it withdrew a job offer after receiving and relying upon two unsatisfactory references. One of the references was unduly negative and inaccurate because it heavily relied on disability-related absences. The tribunal found the discriminatory reference had more than a minor influence on the new hirer's decision-maker. As such, it did not matter that the non-discriminatory reference may in and of itself have been sufficient cause to withdraw the job offer (although this may be relevant when awarding compensation). Lesson - consider references critically to assess whether any adverse comments in references may relate to disability necessitating follow-up enquiry.

Maternity

The Parent Trap

Do employers need to match enhanced maternity pay for fathers taking Shared Parental Leave (ShPL)?

Early in April, the EAT in Ali v Capita Customer Management confirmed that it is not direct sex discrimination for employers to offer 14 weeks' enhanced maternity pay but only statutory ShPL pay.

While this case is in line with Government guidance and the traditional view, it is notable that Mr Ali's case concerned an enhanced maternity pay period of only 14 weeks which happens to be the minimum maternity leave period required under the EU Pregnant Workers Directive. As such, a question mark remains where enhanced contractual maternity pay period exceeds 14 weeks.

The Parent Trap II

While we received at least a limited answer on the question of direct sex discrimination (subject to a pending appeal), the question of indirect sex discrimination is still very much up for grabs. Three weeks after the EAT handed down the Ali judgment, the EAT handed down its related judgment in Hextall v Chief Constable of Leicestershire Police.

In Hextall, the same question was considered through the prism of an indirect discrimination claim. In this case the EAT held the original tribunal incorrectly analysed the question of comparators and also failed to correctly identify the particular disadvantage. The case was therefore sent back to the tribunal. The question of indirect discrimination continues to be unresolved and we wait a further tribunal decision (determined on the correct legal basis). Like Ali, Hextall too is subject to a pending appeal.

Equal pay

The Equalizer

While large private sector equal pay claims against several large supermarkets are making their way through the tribunal system and the usual endless preliminary issues, this year we have learned:

  • Once a claimant has shown that she has suffered a particular disadvantage (and there is also group disadvantage of people of the same sex) that is enough and the employer cannot rebut that by requiring her to prove the reason why that disadvantage has been suffered. On the flip side, if it can be shown by the employer that the statistics are not in fact significant and reliable, particular disadvantage will not be made out and no objective justification will be required (McNeil and ors v Commissioners for HM Revenue and Customs);
  • The contractual right to equal pay is not affected by the later promotion of their comparator (Reading Borough Council v James and others); and
  • A promotion or change in role within the same organisation will not necessarily amount to a 'radical', 'fundamental' or 'significant' change so as to break a 'stable working relationship' for the purposes of calculating time limits for an equal pay claim (Barnard v Hampshire Fire and Rescue).

Disability discrimination

[Equality] Potter & the Goblet of [Issues]

'Discrimination arising from a disability' is still a relatively new concept first introduced by section 15 of the Equality Act 2010. Over recent years we are gathering a body of case-law on the intricacies of this concept which involves the employer treating the employee "unfavourably because of something arising in consequence" of the employee's disability. Section 15 entails two distinct causative issues: The first involves examining the employer's state of mind: did the unfavourable treatment occur because of the employer's attitude to the relevant 'something'? The second is objective: is there a causal link between the disability and the 'something'?

This year we have learned:

  • An employer can be liable for discrimination arising from disability when dismissing a disabled employee for misconduct even though the employer was unaware that the employee's actions were due to their disability. The causal link between the 'something' and the unfavourable treatment is an objective matter for the tribunal that does not depend on the employer's knowledge (City of York Council v Grosset - Court of Appeal);
  • The concept of 'something arising in consequence of disability' entails a 'looser connection' than strict causation and may involve more than one link in a chain of consequences (Sheikholeslami v University of Edinburgh - EAT); and
  • Failing to consider part-time working as an alternative to dismissal may amount to unjustified discrimination arising from disability (Ali v Torrosian and others - EAT).

[Equality] Potter & the Deathly H[o]llow [Questions]

In Donelien v Liberata UK, the Court of Appeal reassures employers that they can rely on the advice of occupational health advisers in determining whether an employee is disabled, so long as appropriate questions are raised and further clarification is sought where necessary.

An employer does not necessarily need to take every step possible to establish whether an employee is disabled in order to avoid having constructive knowledge of disability. The test is what an employer could reasonably be expected to know. In this case, the employer had not relied solely on an occupational health report stating that the employee was not disabled. It had also taken into account 'return to work' meetings and letters from the employee's GP. An employer's efforts need not be perfect and, in the circumstances, the employer had taken reasonable steps to ascertain the nature of the employee's illness and could not reasonably have been expected to do more particularly when dealing with an uncooperative employee.

[Equality] Potter & the Prisoner of [Long-hours Culture]

To establish an indirect discrimination claim, the employee will need to show that the employer applied a "provision, criterion or practice" (PCP) that puts, or would put, those of the employee's protected group at a particular disadvantage compared to other groups. In Carreras v United First Partners Research, the Court of Appeal held that an expectation that an employee would work late does not have to be presented as an instruction to cause a disadvantage. If the disabled employee can establish the existence of a long-hours culture, this may be enough to amount to a 'practice' under the Equality Act 2010.

[Equality] Potter & the Order of the [PHI]

In Colt Technology Services Ltd v Brown, the EAT decided an important point regarding the effect of PHI on discrimination compensation, where the employee has had the opportunity to choose different levels of PHI cover through a workplace flexible benefits scheme.

The EAT considered the 'insurance exception' to the general rule that claimants should only be compensated for actual loss. The policy behind the exception is that an employer should not be able to benefit from an employee's prudence in taking out insurance, and so insurance pay outs are not set off against the employee's financial losses in those circumstances. In the context of a flexible benefits package - where an employee can choose the level of their insurance benefits in exchange for foregoing extra salary - this principle must be apportioned. The portion paid for by the employer without the employee foregoing extra salary will be offset (in this case 50%) and the portion for which the employee had foregone extra salary will not (in this case an additional 25%).

Victimisation & harassment

[Equality] Potter & the Half-[Truth] Prince

In relation to a claim for unlawful victimisation under the Equality Act 2010, "giving false evidence or information, or making a false allegation, is not a protected act if the evidence or information is given, or the allegation is made in bad faith." But does an ulterior motive for making a victimisation claim show bad faith?

In Saad v Southampton University Hospitals NHS Trust, the EAT confirmed that honesty not motivation is key. The primary question for victimisation purposes is whether the employee has acted honestly in giving the evidence or information, or in making the allegation, that is relied on as a protected act. The existence of a predominant ulterior motive, while potentially relevant, is not the focus of the enquiry. In this case, just because the allegation was raised as a means to deflect criticism during a performance process did not automatically mean it was done in bad faith.

[Equality] Potter & the Chamber of [Inaction]

In Unite the Union v Nailard, the Court of Appeal reminds employers that 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 harassment. If the reason for the failure to act was influenced, consciously or unconsciously, by the relevant protected characteristic, then that failure to act may itself amount to harassment. 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.

[Equality] Potter & the Philosopher's [Focus]

In Bakkali v Greater Manchester Buses, the EAT point out that in harassment claims, context is a crucial element. Conduct "related to" a protected characteristic (in the test for harassment) is wider in scope than conduct "because of" a protected characteristic (in the test for direct discrimination). It requires a broader enquiry, involving "a more intense focus" on the context of the offending words or behaviour.

Tribunal rules

[Ministry of Justice] and the Holy Grail

The Holy Grail: financially sustainable access to justice.

Following last year's abolition of tribunal fees by the Supreme Court, the number of claims has been steadily increasing. While the number of individual tribunal claims overall has not yet returned to the pre- 2013 introduction of the fees regime level, we have reached an important statistical milestone. September's quarterly statistics revealed that single-claim receipts are, for the first time, at a higher level than when fees were first introduced.

While the number of claims is set to rise over the near future, the Ministry of Justice in November announced that a new fee regime "balancing tribunal funding and access to justice" was "in development".

[ACAS'] Flying [Conciliation] Circus

Four years after the introduction of mandatory ACAS early conciliation (EC) we finally have appellate level confirmation on how to apply the 'stop the clock' provisions. In April, the EAT confirmed the widely accepted view that the time limit to present a claim should always be extended by the number of days it takes to complete the EC procedure (Luton Borough Council v Haque).

The 2018 awards (drum roll please…)

The 'Judicial Slam' Award

and the winner is… Lord Wilson sitting in the Supreme Court

…in response to a particular employer's submission in the Pimlico Plumber worker status case, he simply states "I will not lengthen this judgment by elaborating upon the poverty of this particular complaint"

The 'Cat amongst the pigeons' Award

and the winner is… Lord Wilson sitting in the Supreme Court

…for inviting future challenge to the long-standing Burchell v BHS reasonableness test

The 'it was never going to happen' Award

and the winner is… Caste discrimination legislation

…Back in 2013, the House of Lords (very much against the Government's wishes) amended section 9(5) of the Equality Act 2010 to so that the Government 'must' legislate for caste to be an aspect of race discrimination. After years of feet dragging, the Government has announced that rather than legislate in this area it will instead amend section 9(5) so it doesn't have to.

The 'nice try' Award

and the winner is… Mr Francis-McGann,

… a former West Atlantic pilot for the sheer audacity of bringing a breach of a contract claim (notice pay) after being summarily dismissed when it was discovered he provided a false reference from a fictional Star Wars character Desilijic Tiure, better known as Jabba the Hutt.

The 'good Karma' Award

and the winner is… West Atlantic

… for its successful training costs counter-claim against Jabba the Hutt's alleged former protégé.


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