2021 was another year dominated by COVID-19. In 2020, for many the employment words of the year were "homeworking" and "furlough". While furlough continued to feature heavily in much of 2021, the end of September brought the winding up of the Coronavirus Job Retention Scheme. Following the vaccine roll out, the 2021 employment phrase and word of the year became "no jab no job" and for many "hybrid working", though "homeworking" is again making a last minute sprint finish for 2021.
As the world of work is evolving, uncertainty remains high as new COVID-19 variants emerge. But for now as 2021 draws to a close, we sit back in front of the telly with a light heart (well as much as one can muster in the midst of a pandemic) and reflect on our pick of the 2021 employment case law highlights. And, of course, our 2021 awards.
- Employment status: Dallastatus; Dynasty of obligation
- Holiday pay: Damp Squib Games; Lost Again
- National Minimum Wage: Father Bed; Only Pre-employment Fools and Horses; Keeping Up Expenses
- Equalities & human rights: Tipping Proof Point; Have I Got Associative News for You; Lip-Service Battle; University Challenged; Didn't Give Us a Clue; Preliminary Question Time; The Statutory Price is Right; Flexible Motherland; Supermarket Pay Sweep; Who wants to be Vaccinated?
- Whistleblowing: Causation, Causation, Causation
- Unfair dismissal: The Masked Employee; I'm a Concerned Worker Get Me Out of Here; Strictly Come Furloughing; The Only Way is Not an Appeal; Say Yes to the Process; The Crystalized Maze; Don't Take Me Out
- Tribunal & court rules: Embarrassing Bodies of Evidence; First Data
- Collective bargaining: Bargaining Hunt; The TULRCA Repair Shop
- Contractual terms: Sherlocked In; Line of Customary Duty
- TUPE: Only TUPE Connect; A Question of Legal Basis
- Insolvency: Not Stranger Things; Forsey the Magistrate Delayer
- The 2021 awards (drum roll please…)
Listen to our podcast 'Employment Essentials: Our 2021 top picks'
2021 brought the final season of the long-running Uber litigation and more. Let's start with some 80's US soap classics.
We began the year with the Supreme Court answering the employment law equivalent to "Who shot JR?" - "What are Uber drivers?" In February, the Supreme Court in the long-running and high profile case of Uber BV and ors v Aslam and ors upheld the finding that Uber drivers are 'workers' for the purpose of rights under the Employment Rights Act 1996, the Working Time Regulations 1998 and the National Minimum Wage Act 1998.
The Supreme Court agreed that the contractual documentation did not reflect the reality of the agreed working relationship, but as with every long-running saga there was a twist - the contractual documents were never the starting point in the first place! Whether or not an individual is a worker is primarily a question of statutory interpretation, not contractual interpretation. When you are deciding whether a particular individual is a worker or not, you do not start with the contract and see whether that is the sort of contract a worker would have. Instead, you start with the statutory provision - for example the right to the minimum wage - and see whether they fall into the statutory definition of a worker 'irrespective of what had been contractually agreed'.
The modern approach to statutory interpretation is to look at the purpose of a particular provision and to interpret it, so far as possible, in the way that best gives effect to that purpose. In this case, the purpose of the national minimum wage legislation is to give protection to vulnerable individuals who have little or no say over their pay and working conditions because they are in a "subordinate and dependent position in relation to a person or organisation who exercises control over their work". The 'touchstone' of subordination and dependence was the degree of control exercised - the greater the control, the stronger the case for classifying the drivers as workers.
And the Uber Court of Appeal season was all a dream…
Pending appeals, such as in Addison Lee Ltd v Lange that sought to distinguish its position from that of Uber on the basis of differences in their contractual documentation, had their permission to appeal revoked. In light of the Supreme Court twist that statute not contract was the starting point, the Court of Appeal considered Addison Lee now had "no reasonable prospect of success".
Dynasty of obligation
In the dynastic hierarchy of who is entitled to employment law protection, 'employees' are king, being afforded the greatest level of protection with the 'self-employed' with very little protection. Somewhere in the middle are those classed as 'workers' who have the benefit of some important rights including those in relation to national minimum wage (NMW), working time/holiday pay, discrimination and whistleblowing protection.
When considering whether an individual is an employee, 'mutuality of obligation' - the employer is obliged to provide work and the employee is obliged to undertake the work - is an important factor to establish. But what role does this factor play in establishing worker status?
This year, in Nursing and Midwifery Council v Somerville, the EAT points out that rather confusingly, the phrase 'mutuality of obligation' has been used in the case law in two different senses:
- Sense 1: simply denotes the exchange of promises or consideration from each party of a kind necessary to create any form of bilateral contract - best described as 'mutuality of obligation'.
- Sense 2: refers to an obligation on an employee to accept and perform some minimum amount of work for the employer, who is obliged to offer some work and/or pay for the same - better described as 'irreducible minimum of obligation'.
The EAT has clarified that the absence of any obligation on an individual to accept and perform some minimum amount of work in sense 2 (required to establish 'employee' status) was not fatal to establishing ‘worker' status. Once a contract is agreed between an employer and an individual to personally perform work on a particular occasion, 'mutuality of obligation' in sense 1 may be established for the duration of that contract.
While employment status for employment law purposes has three options, employment status for tax purposes is a binary question: either employed or self-employed. In HMRC v Professional Game Match Officials Ltd, the Court of Appeal too has considered the importance of 'mutuality of obligation'. In line with the Somerville judgment, the Court of Appeal held there was no mutuality of obligation in the overarching contract because PGMOL was not obliged to offer, and, if offered, the referee was not obliged to accept work (sense 2 above). However, mutuality of obligation was present in the individual (match-day) contracts (sense 1 above). Accordingly, the referees were 'employed' rather than self-employed for tax purposes.
And don't forget
Delayed from last year due to the pandemic, since 6 April 2021, existing public sector restrictions and rules on IR35 (workers providing services through intermediaries) have been extended to medium and large private sector organisations. Under the controversial change to the rules, instead of the contractor having responsibility for determining their employment status for tax purposes, the client/hirer needs to deal with the assessment. The client/hirer will have responsibility for passing the status notification down the chain and directly to the worker. The client and other entities in the contractual chain have various obligations depending on the outcome of the status determination and where the entity sits in the contractual chain. These range from administrative obligations to tax and NICs withholding obligations and could in turn be liable for any missing tax if they get it wrong.
Calculating holiday pay should be straight forward, but often has proved to be anything but, providing a seemingly endless stream of legal challenges. Perhaps not the most relaxing, but how about some thrillers set in mysterious and deadly locations.
Damp Squib Games
This year we expected trio of important Supreme Court judgments, but… unfortunately we got:
- East of England Ambulance Service NHS Trust v Flowers regarding meaning of 'normal pay'; and
- Chief Constable of the Police Service of Northern Ireland and another v Agnew and others concerning a number of issues mainly relating to a series of holiday underpayment back pay claims.
Both settled shortly before they were due to be heard by the Supreme Court. In the case of Agnew, this leaves a divergent position in Northern Ireland from the rest of the UK.
The not yet:
The appeal in The Harpur Trust v Brazel (UNISON intervening) did proceed and was heard by the Supreme Court on 9 November. This case concerns holiday pay calculations for casual workers. In particular, should holiday entitlement be pro-rated to prevent term-time only casual workers from receiving a disproportionately higher level of holiday pay than full-time or part-time workers who work throughout the whole year?
In 2019, the Court of Appeal held that while the pro-rata principle for holiday entitlement and related pay applies in the case of full-year part-time workers, it does not apply in the case of part-year workers such as term-time only teachers. As such, the often used 12.07% of annualised hours short-cut for calculating holiday pay is unlikely to work for part-year workers. The calculation set out in the WTR must be used even where it results in part-year workers receiving a higher proportion of their annual earnings as holiday pay.
At the time of writing, the judgment of the Supreme Court is yet to be handed down. Perhaps it will be a last minute Christmas present!
Back in 2017, the CJEU held in King v Sash Window Workshop Ltd and another, that a worker is entitled to be paid on termination for any periods of annual leave that have accrued during employment if they have been discouraged from taking that leave because it would have been unpaid. There is no limit on the amount of leave that can be carried over in this type of case because an employer that does not allow workers to take paid leave must bear the consequences.
However, the EAT in March significantly limited the impact of King. In the long-running case of Smith v Pimlico Plumbers Ltd, having succeeded in establishing 'worker' status, Mr Smith has so far been unsuccessful in his substantive holiday back pay claim. The EAT has held that King does not mean that a worker has a right to carry over payment for annual leave in circumstances where the worker actually took annual leave but was not paid for it. Although King established that a worker is entitled to carry over, without limit, any annual leave untaken because the employer refuses to remunerate it, King does not apply where leave was in fact taken, albeit unpaid.
Unsurprisingly, Mr Smith has further appealed this latest judgment that was heard by the Court of Appeal on 7 or 8 December, judgment not yet handed down at time of writing.
National Minimum Wage
The NMW Regulations are complex and contain various technical traps that could catch employers out. Let's lighten the mood with some 90s comedy.
Treatment of "sleep-in" shifts for NMW purposes is an area that can often cause confusion. Where a worker is required to work a number of 'sleep-in' night shifts at the employer's premises and be available in case of an emergency, does the full night shift constitute 'working' for the purposes of the NMW? Alternatively, is the worker only 'working' for NMW payment purposes when they are awake to carry out any relevant duties?
Prior to 2018, a number of EAT judgments held many workers were 'working' the entire sleep-in shift even when sleeping. The EAT judgments had significant implications for many care providers. Not only would many employers need to adjust their pay arrangements going forward, they faced significant back-pay claims as well as potential HMRC enforcement notices. That position was overturned by the Court of Appeal in 2018, leading to a further appeal to the Supreme Court
In March 2021, the Supreme Court ruled in the combined judgment in Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad t/a Clifton House Residential Home that under the NMW sleep-in provisions, an individual who is expected to sleep during their shift and only be woken infrequently (a sleep-in care worker) is only entitled to the NMW when they are awake for the purposes of work.
Only Pre-employment Fools and Horses
Where a worker is required by an employer to undertake compulsory pre-employment induction training, does that training time attract the national minimum wage? According to the EAT, probably.
A purposive interpretation of the NMW regulations is required so time spent completing employer required ‘pre-employment' training may attract the NMW. In Opalkova v Acquire Care Ltd, the EAT held that while not yet an employee, individuals required to attend induction training will likely have worker status with the employer during the period of that training. As in this case, it will not matter that the individual had not yet started the main job (indeed she was not allowed to do so until the training was complete). Also, it did not matter that her main employment contract was not produced and signed until after the training.
Keeping Up Expenses
Under reg 13 of the NMW Regulations 2015, certain deductions from wages or payments by a worker to the employer, and payments by the worker to third parties that relate to their employment must be taken into account when calculating a worker's hourly pay. This is because these deductions or payments will reduce the amount of the total earnings for NMW purposes, except where the employer reimburses or intends to do so.
Whether an optional payment is "related to their employment" has been a tricky issue for some time. Indeed, HMRC distinguishes between uniforms that are "required" by the employer to be worn and uniforms that are "optional".
In Augustine v Data Cars Ltd the EAT held the correct test is whether the expenditure is 1) "in connection with employment" and 2) not reimbursed by the employer. The expenditure does not have to be a requirement of the employment - it did not have to be necessarily incurred, nor wholly or exclusively incurred, in connection with the employment. On this basis, it was irrelevant that the worker was able to use his own car but instead took the option to lease a car from the employer or that he had elected to rent the work uniform to enable him to be classed as a "gold driver", which would allow him to undertake a certain level of work. He had clearly incurred both expenses in connection with his employment and both costs were therefore deductible for the purposes of calculating whether he had received the NMW.
Equalities and human rights
On the equalities front, 2021 has brought us Supreme Court guidance on the shifting of the balance of proof tests, a significant development in associated indirect discrimination, an easing in equal pay comparator tests and more. We now turn to some quizzing and gaming.
Tipping Proof Point
Under the shifting burden of proof principle that applies in discrimination cases, it has long been held that the claimant has to initially prove facts from which the tribunal could infer that discrimination has taken place. It is only if such facts have been made out on the balance of probabilities that the burden shifts to the employer to prove that - again on the balance of probabilities - the treatment in question was in no sense on the protected ground. In 2017 the EAT controversially questioned this accepted orthodoxy.
In July, the Supreme Court handed down its judgment on the 'burden of proof' issue in Efobi v Royal Mail Group Ltd confirming that the established orthodoxy remains.
As for the drawing of inferences, the Supreme Court emphasises that tribunals should be free to draw, or decline to draw, inferences in the case before them using their common sense. While "no adverse inference can be drawn at the first stage from the fact that the employer has not provided an explanation…It does not follow, however, that no adverse inference of any kind can ever be drawn at the first stage from the fact that the employer has failed to call the actual decision-makers. It is quite possible that, in particular circumstances, one or more adverse inferences could properly be drawn from that fact."
A couple of months later, the EAT in Bennett v MiTAC Europe Ltd, provided expanded guidance on what happens once the burden of proof has shifted to the employer to establish that discrimination has not occurred, in particular where the employer does not call the actual decision-making manager as a witness at the hearing. It will be important for tribunals to consider whether the decision maker was available to give evidence. While there may always be documentary evidence sufficient to prove a non-discriminatory reason for an employer's treatment of an employee, the EAT makes clear that not calling the relevant decision-maker to give evidence or not providing an explanation for their absence, risks adverse inferences being drawn.
Have I Got Associative News for You
Under the concept of 'associative' discrimination, it is not necessary for an employee to be disabled to bring a direct disability discrimination claim: the claim can be based on someone else's disability with whom they are associated. In 2015, the concept of associative discrimination was expanded, at least at EU level, to indirect discrimination. In CHEZ Razpredelenie Bulgaria AD v Komisia za Zashtita ot Diskriminatsia, the Court of Justice of the European Union (CJEU) held that an indirect discrimination claim may be brought by a person not possessing the protected characteristic. It is enough that the person suffers alongside those who have a protected characteristic, provided the treatment stems from a measure that impacts disproportionately due to that group's protected characteristic. This left a question mark over the indirect discrimination provisions of the Equality Act 2010, which require an individual to establish that the PCP creates a group disadvantage based on a protected characteristic that they themselves possess.
In what may prove to be the most significant tribunal decision of 2021, the London Central employment tribunal upheld a claim of indirect associative discrimination on the grounds of disability. It concluded that the indirect discrimination provisions contained in the EqA 2010 must be read as applying to an employee who is associated with a person with a relevant protected characteristic despite the clear wording in the Act that the claimant themselves have the protected characteristic in issue.
In the case of Follows v Nationwide Building Society, Mrs Follows was the principal carer for her disabled mother. Following a restructuring, the employer decided that senior managers would be required to work fully office-based to provide effective on-site supervision. The tribunal accepted that carers for disabled people were less likely to be able to be office-based than non-carers. Applying Chez, Mrs Follows was put at a substantial disadvantage because of her association with her mother's disability. The requirement was not objectively justified and therefore the tribunal upheld the claim of indirect associative discrimination.
Although the case is not binding on other tribunals, as it is only a first-tier decision, it suggests tribunals may more readily find that where a PCP disadvantages an individual who has an association with an individual with a protected characteristic, indirect discrimination may be established.
For the purposes of the Equality Act 2010, anything done by an employee in the course of employment is treated as having also been done by the employer, regardless of whether the employee's acts were done with the employer's knowledge or approval. However, there is a statutory defence available to an employer if it can show that it took "all reasonable steps" to prevent the employee from doing the discriminatory act or from doing anything of that description.
But how does an employer surmount the "all reasonable steps" hurdle?
Well, we knew the bar was set high and the EAT in Allay (UK) Ltd v Gehlen highlighted just how high. Employers need to show they have provided substantial training on discrimination issues both at regular intervals and on an ad hoc basis if it becomes apparent that prior training was ineffective or has been forgotten.
The provision of training on equality and harassment is not simply a tick box exercise. If an employer wants to succeed in running the employer's defence, it is likely to have to show that, alongside any other relevant steps, the training provided to employees was comprehensive, rigorous, regularly refreshed and is being effectively applied in practice by those who have undergone the training.
The EAT has upheld the decisions of two different employment tribunals, one finding that the University of Oxford's mandatory retirement age was objectively justified, the other finding that it was not! (Pitcher v Chancellor Masters and Scholars of The University of Oxford and anor; and Chancellor Masters and Scholars of The University of Oxford v Ewart).
Compulsory retirement of an individual will amount to unlawful direct age discrimination unless the employer can objectively justify it as a "proportionate means of achieving a legitimate aim". An employer will most likely overcome the "legitimate aim" hurdle in many cases with the legitimate aims of (1) inter-generational fairness; (2) succession planning; and (3) equality and diversity. However, when it comes to the "proportionate means" hurdle, this is much trickier, though not impossible.
The nature of the proportionality assessment means that it is possible for different tribunals to reach different conclusions even when considering the same measure adopted by the same employer in respect of the same aims. In the two cases, both brought by professors who had been refused extensions under the retirement policy, the presentation of the claims and the evidence before the tribunals differed in material respects in relation to statistical evidence and evidence of detrimental impact. From these two cases you may be tempted to simply extrapolate that Physics professors are better with statistical evidence than English professors!
Didn't Give Us a Clue
With regard to disability discrimination, this year we have also learned:
- Unlike unfair dismissal cases, in which the fairness of a dismissal must take into account all the circumstances up to and including an appeal, in a discrimination claim whether a dismissal and the outcome of an appeal against that dismissal are discriminatory must be treated as separate issues. The EAT in Stott v Ralli Ltd held that a tribunal was right to reject a claim for discrimination arising from disability where an employer only found out about the employee's disability after dismissing the employee, when a post-dismissal grievance was raised. Actual or constructive knowledge of a disability by the employer is required at the time of dismissal.
- The question of whether a claimant's impairments have an adverse effect on their ability to carry out normal day-to-day activities is an objective one and cannot be determined by a claimant's subjective beliefs about how to manage their conditions resulting in self-imposed avoidance behaviours. In this case there was no medical evidence to support her beliefs and some were contrary to medical advice (Primaz v Carl Room Restaurants Ltd and ors - EAT).
- Under the Equality Act 2010, a person is disabled from the date that they have cancer and not just from the date on which their diagnosis is pronounced (although a diagnosis often provides the first evidence of cancer). If a disability is undiagnosed and unsuspected by the employer, it will not be possible for the employer to have discriminated because of it. On the other hand, if a person does have cancer, and the employer believes that to be the case, disability and knowledge can potentially be established before a medical diagnosis has been obtained (Bennett v MiTAC Europe Ltd -EAT).
Preliminary Question Time
This EAT in the high profile judgment of Forstater v CGD Europe and ors (Index on Censorship and Equality and Human Rights Commission - intervening) acknowledges what it refers to as the ongoing public 'transgender debate' between those holding a gender identity belief and those holding a gender critical belief.
The EAT has held that gender-critical beliefs, including a belief that sex is immutable and should not be conflated with gender identity, are protected under the Equality Act 2010. This judgment is on a preliminary question of whether a gender critical belief may amount to a philosophical belief under the EqA. The EAT has concluded that it does. That does not mean, however, that those with gender critical beliefs can indiscriminately and gratuitously refer to trans persons in terms other than they would wish. Such conduct could, depending on the circumstances, amount to harassment or discrimination. It is the manifestation of a belief that may, depending on the circumstances, be restricted. What was not open to the tribunal was to impose in effect a blanket restriction on a person not to express those views irrespective of those circumstances. Both those holding a gender identity belief and those holding a gender critical belief are protected under the law.
The Statutory Price is Right
Where employers offer enhanced contractual maternity pay to mothers, can they only offer statutory shared parental leave (ShPL) pay to fathers? Does a failure to match contractual enhancement for fathers taking ShPL amount to direct or indirect sex discrimination?
Back in 2019, the Court of Appeal emphatically held that employers who pay enhanced contractual maternity pay but only statutory ShPL pay do NOT directly or indirectly discriminate against men and are not in breach of equality of terms (equal pay) legislation. At the centre of this highly significant judgment was the Court of Appeal's conclusion that birth mothers on maternity leave are in materially different circumstances to men (or women) on ShPL, and that this distinction does not simply expire at the end of the two week compulsory maternity leave period.
This year in Price v Powys County Council, the EAT considered the same question but this time the comparison was with an employee taking adoption leave. Is it discriminatory for a male employee on ShPL to be paid less than a female comparator on statutory adoption leave (AL)? The EAT has again held 'no'. As is the case for those on maternity leave, the predominant purpose of AL is not simply to facilitate childcare and it is therefore not the same as ShPL.
The penalty for an employer who unreasonably refuses a request under the right to request flexible working regulatory framework is relatively limited. There is no mechanism by which a tribunal can enforce a request for flexible working, although it can award up to eight weeks' pay (subject to the statutory cap) if it finds that an employee's complaint is well founded.
However, some employees may also have alternative recourses against their employer if their request for flexible working is refused. For example, women returning from maternity leave may be subjected to indirect sex discrimination if their request is refused. This is based on the fact that it is still the case that mothers are more likely to carry primary responsibility than fathers, meaning more women than men need to amend their working pattern to fit their caring responsibilities.
On 6 September, a tribunal in Thompson v Scancrown Ltd T/a Manors awarded £185,000 highlighting this risk. A notable feature of the case was that the employer dealt with the request to vary hours by simply repeating a number of reasons for refusal lifted straight from the flexible working regulations themselves. This contributed to their failure to get over the hurdle in the indirect discrimination claim of showing that their refusal was a 'proportionate means of achieving a legitimate aim'.
Supermarket Pay Sweep
Most of the large supermarkets are in the grips of large-scale equal pay claims with predominantly female retail shop floor employees seeking to compare themselves with predominantly male distribution depot employees. Can private employers avoid equal pay claims through corporate structures that physically separate female-dominated and male-dominated workforces? No.
In March, the Supreme Court in Asda Stores Ltd v Brierley and ors upheld the decisions of the lower courts that a group of predominantly female retail employees can compare themselves to a group of mainly male distribution employees for the purpose of equal pay claims. Even though the two groups worked at completely separate establishments, such that no distribution worker would have done distribution work at a retail site, and no retail worker would have done retail work at a distribution depot, a comparison could be made because the employer observed broadly common terms and conditions for the relevant groups across its sites. The question is would the comparator have been employed on the same or substantially the same terms if they had been employed in the same role at the claimants' establishment? Cases that do not pass this threshold test will likely be exceptional.
The Supreme Court judgment provides a comprehensive summary of the current law relating to the "common terms" requirement under section 79(4)(c) of the Equality Act 2010 and helpful guidance for future cases.
While Asda was able to be decided as a matter of purely UK law. In addition to "common terms" test under the EqA 2010, equal pay claimants may also bring a claim under EU law (Article 157 of The Functioning of the European Union). Known as the "single source" test, the focus is on whether there was a single source responsible for the inequality and which could restore equal treatment. The EU test of ‘single source' has always been considered to be wider in its interpretation than the UK test of 'common terms'.
In June, the CJEU in K v Tesco Stores Ltd (a UK reference submitted before Brexit) confirmed that Art 157 TFEU has direct effect in equal value claims. Under the UK "common terms" test, there is some contractual analysis needed for a woman to demonstrate that there is a valid comparison. The EU "single source" test cuts through this and creates a simpler, broader test for women to establish the right to compare with a cross-establishment comparator. If there is a single source for the terms and conditions that is responsible for the ongoing inequality and which could restore equal treatment, that comparison can be made.
Following Asda and Tesco, in September a tribunal has held that retail workers in Morrisons and Safeway supermarkets can compare themselves for equal pay purposes with logistics workers in their employer's regional distribution centres. At a preliminary hearing, the tribunal held that the majority of the claimants were employed on "common terms" with the logistics workers for the purposes of section of the EqA 2010. Further, the terms on which they were employed had a "single source" for the purposes of their directly effective rights under Article 157 TFEU (Abdar and others v Wm Morrison Supermarkets plc and another).
These judgments do not mean that the equal pay claims will succeed, only that the claimants can rely on the terms and conditions of employment of the distribution/logistical employees as a valid comparison. The claimants are still required to show that they performed work of equal value and the employers can still rely on any defence available to it, including the genuine material factor defence.
Who Wants To Be Vaccinated?
As care home staff are now required to be vaccinated and front line health-care workers will be subject to a similar requirement soon, we have what may prove to be a timely judgment from the European Court of Human Rights (ECtHR). In April it held that the imposition of penalties for non-compliance with a compulsory national mandatory pre-school vaccination requirement for children in the Czech Republic did not breach Article 8 (private and family life) nor Article 9 (thought, conscience and religion) - Vavřička and others v Czech Republic.
The ECtHR considered that: "it cannot be regarded as disproportionate for a State to require those for whom vaccination represents a remote risk to health to accept this universally practised protective measure, as a matter of legal duty and in the name of social solidarity, for the sake of the small number of vulnerable children who are unable to benefit from vaccination".
Protecting the health of the public can be a legitimate aim and justified. In the context of COVID-19, this case suggests that human rights concerns over compulsory vaccination and status certification may not bar such policies. However, it should be noted that this particular case concerned childhood vaccination against long-standing diseases with well-known vaccines. The exact nature of the vaccination policy and penalties was also relevant.
Since the 2013 changes to the whistleblowing provisions, the issue of causation has housed the main arguments in whistleblowing claims. A bit of property hunting now.
Causation, Causation, Causation
Evidence of a protected disclosure and a detriment or dismissal is not enough to satisfy the whistleblowing provisions: there must be a causal link between the two. Significantly the standard of proof for this causal link differs depending on whether the claim is one of unfair dismissal or one of detriment.
To succeed in an unfair dismissal claim, the protected disclosure must be 'the reason' or, if more than one, the principal reason for the dismissal. However, in a detriment claim the worker will only need to establish that the protected disclosure materially (in the sense of more than trivially) influences the employer's treatment of the whistleblower. The test for causation in detriment cases is therefore significantly less onerous than that applied in respect of dismissals. This year:
- In Secure Care UK Ltd v Mott, the EAT reminds us that "there can be no doubt that the causation tests to be applied under section 103A [dismissal] and section 47B [detriment] respectively are distinct".
- In Kong v Gulf International Bank Ltd, the EAT upheld a tribunal decision that an employee who was dismissed for questioning a colleague's professional competence in relation to the subject matter of a protected disclosure was not automatically unfairly dismissed. The manner in which the employee criticised her colleague was properly separable from the protected disclosure as the reason for dismissal.
- In Oxford Said Business School Ltd and anor v Dr Elaine Heslop, the EAT confirmed that there is no tension between the tribunal's rejection of an automatic unfair dismissal claim and a finding that a detriment claim was made out. The EAT found that the tribunal permissibly gave different answers to different questions in concluding that the protected disclosures more than materially influenced the imposition of the various detriments suffered at the hands of the whistlebower's line manager, and its subsequent conclusion that the protected disclosures were not the reason or principal reason for the employee's dismissal.
This year the tribunals have begun to see the realities of COVID-19 and related restrictions impacting dismissal cases. So we now turn to our reality TV picks.
The Masked Employee
In Kubilius v Kent Foods Ltd, an employment tribunal held that a food distribution company had fairly dismissed one of its drivers who refused to wear a face mask at all times as required by a client when the employee was on the client's site. In this case, the employer's employee handbook expressly required customer instructions regarding PPE to be followed.
I'm a Concerned Worker Get Me Out of Here
Section 100 of the Employment Rights Act 1996 provides employees with protection from dismissal for exercising their rights to leave the workplace and take steps to protect themselves where they reasonably believe there is serious and imminent danger to health and safety.
In Rodgers v Leeds Laser Cutting Ltd, an employment tribunal held that to succeed in a claim under s100 due to fears about COVID-19, the employee will need to show that the reason for refusing to return to the workplace was a belief that a serious and imminent danger was posed due to something directly linked to their working conditions (or possibly in travelling to and from the workplace in some cases), not simply circumstances of serious and imminent danger in society at large.
In September, permission was given to appeal to the EAT and the case is currently awaiting listing.
Also, in Accattatis v Fortuna Group (London) Ltd, the dismissal of an employee (a PPE distributor) who demanded furlough or home working when neither was appropriate, was held not automatically unfair under s100. Under section 100(1)(e), a claimant must show not only that he reasonably believed there were circumstances of serious and imminent danger but also that he took or proposed to take appropriate steps to protect himself from danger. The claimant's response was not only that he wanted to stay at home (he was offered holiday or unpaid leave), but also to demand that he be allowed to work from home (on full pay) or be furloughed (on 80% of pay). These demands were not appropriate steps to protect himself from danger, so his claim failed.
Likewise in Moore v Ecoscape UK Ltd, an employee failed in a claim for unfair constructive dismissal under s100 in light of the employee's "homeworking or nothing" attitude. In this case, the employee's job could not be done from home and the employer had put in place significant protective measures for the whole workforce and offered additional measures to alleviate the employee's fears.
In contrast, the dismissal of an employee who refused to deliver equipment to the home of a manager who was self-isolating due to exhibiting COVID-19 symptoms was automatically unfair under s 100 ERA 1996. The tribunal found that while his inexperienced manager was dealing with huge uncertainty at the start of the first lockdown, when a lot was unknown, her reaction to his legitimate concerns for his and his family's safety was not excusable or reasonable (Ham v Esl Bbsw Ltd). Also in Gibson v Lothian Leisure, an employee who was dismissed after raising specific concerns about the lack of PPE was found to have been automatically unfairly dismissed under s100.
Please note that employment tribunal decisions are non-binding on other employment tribunals but these decisions may be persuasive. As ever, each case will depend on its own particular facts.
Strictly Come Furloughing
For employers who undertook a redundancy programme while the CJRS was in operation, a number of tribunal judgments have been addressing the question of "should furlough / extended furlough have been considered as an alternative for the dismissals to be have been fair?"
Employment tribunal judgments are non-binding on other employment tribunals and as ever, each case will depend on its own particular facts. However, from the judgments that have been reported to date, the trends appear to be:
- If an employer simply hadn't considered furloughing staff as an alternative to redundancy, a tribunal could decide that their dismissals are unfair (Mhindurwa v Lovingangels Care Ltd), BUT
- The decision as to whether to place or keep someone furloughed was a matter for the employer. Provided the decision not to furlough or not considering furlough as a suitable option in a particular case is within the range of reasonable responses, a decision to dismiss for reason of redundancy should not necessarily be unfair (see Handley v Tatenhill Aviation Ltd, France v Bannockburn Miners Charitable Society and Nawaz v Bultup Ltd).
If defending a claim, an employer should set out why it rejected furlough at the time or should not be criticised for not considering it (e.g. a public sector employer not eligible for furlough funding).
Furlough is not cost neutral. Furloughed staff continued to accrue holiday and service. Delaying redundancies could therefore have increased costs. Also the tapering provisions in place at various times meant that employers would be responsible for paying employer NICs and pension contributions and a portion of the wages for some months.
The Only Way is Not an Appeal
Generally, to establish that a dismissal was fair, the employer must not only have a fair reason for dismissal but also act reasonably in treating that reason as sufficient to justify dismissal. In order to act reasonably, an employer must follow a fair procedure and in most cases, allowing the employee a right to appeal a decision to dismiss will be required as part of establishing that a fair internal procedure has been followed. Indeed the relevant ACAS Code of Practice requires that an employee be advised in writing of the right of appeal when the employer's decision is communicated.
But, does failing to allow a right to appeal inevitably mean the procedure followed is unfair? Two cases this year illustrate that a lack of an opportunity to appeal a decision to dismiss does not automatically result in an unfair dismissal. As ever, the touchstone is the reasonable responses test with the absence of an appeal one of the many factors to be considered in determining fairness.
- Although an appeal will normally be part of a fair procedure, that will not invariably be so. Whether a dismissal is fair or unfair depends on whether, "in the circumstances", including the size and administrative resources of the employer's undertaking, the employer acts reasonably or unreasonably in treating the reason for dismissal as a sufficient reason for dismissing the employee - Moore v Phoenix Product Development [EAT].
- In a redundancy situation, the absence of an opportunity to appeal does not "of itself" make a redundancy dismissal unfair; absence of an appeal is one of many factors to be considered in determining fairness. If the original selection for redundancy was in accordance with a fair procedure, the absence of an appeal is not necessarily fatal to the employer's defence - Gwynedd Council v Barratt and anor [Court of Appeal].
Say Yes to the Process
In Burn v Alder Hey Children's NHS Foundation Trust, the Court of Appeal considered an employer's obligation to act fairly in the context of disciplinary processes. In obiter (non-binding judicial comments on a matter arising in a case but which does not require a decision in that case) it indicated tentative support for implying a term into employment contracts that disciplinary processes should be conducted fairly. This would be a separate implied term to the implied term of trust and confidence.
While these comments are obiter, it opens the door for the point to be argued in a future case. Whether such an implied term exists (and its scope) and what protection it would afford employees in addition to the implied duty of trust and confidence remains to be seen. One to watch!
The Crystalised Maze
It is settled law that to succeed in a complaint of automatic unfair dismissal for asserting a statutory right (thereby disapplying the two year service requirement), there must have been an infringement of a statutory right, not merely an anticipation of future infringement. If an employee is instructed to work in breach of the weekly rest break provisions contained in the Working Time Regulations 1998, when does the infringement occur? In Simoes v De Sede UK Ltd the EAT confirms that an infringement crystalised when the employee was instructed to work in breach of the WTR. It was not necessary for the relevant shift or work pattern to have been worked for the alleged infringement to have occurred.
Don't Take Me Out
If a tribunal finds that an employee was unfairly dismissed, in most cases the remedy sought is financial compensation. However, alternative remedies of reinstatement and re-engagement are also available. Before making a reinstatement or re-engagement order, a tribunal will consider a number of factors including whether there has been a breakdown of trust and confidence between the claimant and the employer rendering an order not reasonably practicable.
In Kelly v PGA European Tour, the Court of Appeal has now confirmed that a breakdown of trust and confidence is relevant not just in misconduct cases but also where an employer doubts an employee's capability. If an employer genuinely and rationally believes that an employee is not capable of performing a role or that their conduct has led to a breakdown in trust and confidence, this will make it impracticable for that employee to be re-engaged. It is the employer's beliefs that are relevant in this regard.
Tribunal and court rules
Turning back to a bit of reality TV, a couple of points of note this year on the rules.
Embarrassing Bodies of Evidence
Under Rule 50 of the Employment Tribunal Rules, the tribunal has the power to make and to grant an anonymity order preventing or restricting the public disclosure of any aspect of the proceedings as it considers necessary in the interests of justice. We have been repeatedly reminded that the threshold to obtain an anonymity order is indeed high, embarrassment will not be enough:
- Unruly and disruptive behaviour by a claimant at a preliminary hearing held in private does not give rise to an expectation of privacy to support a request for an order under rule 50 (Ameyaw v PricewaterhouseCoopers Services Ltd - EAT).
- Fear of future stigmatisation due to nature of the work done (exotic dancing) will be insufficient (A v Burke and Hare - EAT)
While the bar is set high, there is no general rule that having been named in a public tribunal hearing or judgment an application for an order under Rule 50 must inevitably fail. In TYU v ILA Spa Ltd, the EAT held that an employment judge was wrong to reject an application brought by an individual, who was neither a party nor a witness in tribunal proceedings, for her name to be removed from the resulting judgment. She was named in relation to allegations of misconduct in a claim by a former colleague. As ever, each case will depend on its particular facts, which will include the particular position of the applicant in relation to the proceedings.
As one employer learned to its cost, disclosure as part of an employment tribunal claim is a different regime to disclosure of personal data under a Data Subject Access Request. Failure to deal with a DSAR simply because there are also employment tribunal proceedings ongoing with the same employee does not mean the DSAR can be ignored. In the case of First Choice Selection Services Limited, this resulted in being issued with an ICO Enforcement Notice.
2021 has been an unexpectedly highly significant year in terms of trade union member protection for asserting collective bargaining rights. For employers with a unionised workplace, here is our pick of the must know cases as we settle down to some antique hunting.
Under section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992, employers are prohibited from making offers to employees with the sole or main purpose of undermining collective bargaining by the union (the prohibited result).
But just how wide is the scope of section 145B? When can lawful variation tip into being an unlawful inducement? Is it enough, as the unions argued, that if the offer is accepted, at least one term of employment would be directly and not collectively agreed, at least for the time being until the term is subsequently varied or replaced by one negotiated through collective bargaining? Or, as the employer argued, is it restricted to offers which, if accepted, would require workers who are trade union members to agree to forego or relinquish collective bargaining rights permanently?
The Supreme Court in Kostal UK Ltd v Dunkley and others has rejected both arguments as they focused solely on the content of the employer's offer rather than the 'prohibited result'. The question is whether there was a real possibility that, had the offer not been made and accepted, the relevant term for the period would have been determined by a new collective agreement. If there was no such possibility then it cannot be said that making the individual offer has caused the 'prohibited result'. Accordingly an employer may make an offer directly to its workers in relation to a matter that falls within the scope of a collective bargaining agreement but only where the employer has first followed, and exhausted, the agreed collective bargaining procedure (this is likely to involve a considerable length of time). What an employer cannot do with impunity is what the employer did in this case: make a direct offer to its workers, including union members, before the collective bargaining process had been exhausted.
Let's turn back to the question of just how wide is the scope of section 145B? Well, s145B appears very wide indeed, though employers do have an ability to lawfully vary terms without it amounting to an unlawful inducement where collective bargaining has genuinely been exhausted, with all stages of the procedure set out in the collective agreement having been concluded. As such, employers will need to factor in time for the collective bargaining process or face potential heavy penalties.
If a complaint is upheld for breach of s145B TULRCA (unlawful inducement), the award is £4,341 (revised annually in April) per union member receiving the offer. If more than one offer is made, the award is per offer. Where an offer is made to a large number of union members the cost can be considerable. In the case of Kostal where two separate offers were made this amounted to just under £440,000 in relation to the 57 union members being claimants.
Also this year, the EAT sitting in Scotland has held that the three-month time limit for presenting an unlawful inducement claim starts to run from the date the employer makes the offer of the new terms and conditions, not on any later date when the employer indicates its intention to impose the new terms on employees who have refused the offer (Scottish Borders Housing Association Ltd v Caldwell and ors).
The TULRCA Repair Shop
Two judgments of the EAT this year bring highly significant implications for employers facing industrial action. It has long been common practice for employers, to withdraw discretionary benefits from employees who take part in industrial action. Employers adopting practices of this kind are now at risk of being held to have acted unlawfully. Instead, they may only safely deduct from an employee’s pay an amount that is commensurate to the period for which they were taking industrial action.
Under section 146 TULRCA employers are prohibited from subjecting an employee to a detriment for the sole or main purpose of deterring them from taking part in the activities of an independent trade union at an appropriate time, or penalising them for doing so. For these purposes, an “appropriate time” is specified as being outside of the employee’s working hours, or at a time within them with the employer’s consent (it would be very unusual for an employer to consent to industrial action). The upshot is that, until now, employees have not enjoyed protection from detriment short of dismissal for taking part in industrial action – for instance, through their employer withdrawing discretionary benefits. In contrast, employees have long had separate protection from being dismissed for taking part in protected industrial action (under provisions set out in sections 237 to 238A of TULRCA).
Departing from previous case law, in June the EAT in Mercer v Alternative Future Group Ltd has held that workers are protected from detriment short of dismissal for taking steps to prepare for, and taking part in, industrial action. The EAT has held that protection from detriment for participating in industrial action should be read into s146 as absence of any protection from detriment short of dismissal amounted to a breach of an employee's human rights. Accordingly an “appropriate time” for the purposes of s146 must be read as including “a time within working hours when [a worker] is taking part in industrial action”.
Given the implications of this case, unsurprisingly, the Court of Appeal will hear a further appeal on 20 January 2022.
In the subsequent November judgment of Morais v Ryanair DAC, the EAT confirmed the position as held in Mercer and added:
- this same interpretation applies in relation to the references to 'trade union activities' in the Blacklisting Regulations 2010; and
- that under both s146 TULRCA and the Blacklisting Regulations 2010, there is no requirement that the industrial action must be "protected industrial action" in relation to the trade union, ie action to which the statutory immunity provisions in TULRCA 1992, Pt V apply.
The document called the "contract of employment" will rarely contain all the terms governing the relationship as contractual terms may be derived from a variety of sources. A contract will be made up of express, implied common law and statutory terms and may also contain terms incorporated from other documents such as works rules or collective agreements. Turning to a bit of detective drama, we are reminded.
If there is any ambiguity or uncertainty as to whether an employer's express contractual obligation to provide benefits was limited by reference to the specific terms of its insurance cover, any such ambiguity will be resolved against the employer and in favour of the employee.
In Amdocs Systems Group Ltd v Langton, the EAT reminds employers of the importance of clearly setting out in an employee's contractual documentation that any liability to make PHI payments will be limited to the amounts received from the scheme insurer for that purpose. In this case, the employer was held to be contractually locked in to pay a 5% per annum "escalator" payment regardless of the fact that this was not covered by its insurance. This case is being appealed.
Line of Customary Duty
In Thomas and Others v FW Farnsworth Ltd (ta Pizza Factory) the EAT provides a useful reminder of the factors to be considered when considering whether an entitlement to enhanced redundancy benefits has been implied over time via custom and practice.
- On how many occasions, and over how long a period, the benefits in question have been paid. The longer the payments have been made and the greater the frequency, the more employees are likely to understand them as payments made as of right.
- Whether the benefits are always the same. An employer may invariably make enhanced redundancy payments but if the amounts or the terms of payment are varied, that is inconsistent with an acknowledgment of legal obligation.
- The extent to which the enhanced benefits are publicised generally. If published to the workforce generally, that tends to convey they are paid as a matter of obligation.
- How the terms are described. Payments consistently described as ex gratia are likely to be just that.
- What is said expressly in the contract. No implied term should conflict with the express terms.
In this case, the employees failed to establish a contractual right to enhanced redundancy payments. While enhanced redundancy payments had been made on at least two previous occasions, on at least one occasion enhanced payments were not made. Also, the calculation of the enhanced payments that were made on the two occasions, while similar, were not identical and were described as ex gratia.
This year the courts have considered a couple of TUPE conundrums.
Only TUPE Connect
When a contract is retendered, services that were originally provided by a single contractor are often divided between two, three, four or more new contractors. This can lead to difficult questions about whether the original contractor's employees transfer and if so where? Until recently, tribunals have taken a fairly pragmatic approach, either finding that employees transfer to the contractor that has taken the largest share of the services or that the services are so fragmented that there is no transfer. However, the Employment Appeal Tribunal (EAT) sitting in Scotland has held that employees' contracts can be split so they can potentially transfer to multiple employers not only on a TUPE transfer but also on a service provision change (SPC) - McTear Contracts Ltd v Bennett.
The practical impact may be problematic. It will usually be hard to 'split' employees' day to day work between different employers. It is likely that splitting a full-time contract of employment into a number of part-time contracts will be detrimental for the employee. It will be complicated working out how much of the employee's contract will transfer to each of the transferees. Transferees and transferors should however be mindful of this when negotiating allocation of liabilities in contractual documents.
A Question of Legal Basis
Under TUPE, if a relevant transfer results in a substantial change in working conditions that is to the transferring employee's material detriment, they have the right to treat themselves as having been dismissed (regulation 4(9)) and may bring a claim for automatically unfair dismissal.
Lewis v Dow Silicones UK Limited, is a reminder that what may amount to a fundamental breach of contract for the purposes of unfair constructive dismissal under the ERA 1996 and what may amount to a substantial change to working conditions to the material detriment of the employee for the purposes of reg 4(9) TUPE are different. In this case, the changes introduced post transfer to how standby and call out arrangements worked were not a fundamental breach of contract because they could be made within the express terms of his existing contract. However, something does not stop being a substantial change just because an employer has a right to introduce it.
2021 has brought some useful reminders for directors of insolvent companies and administrators of their obligations to collectively consult where redundancies are likely. Let's settle down with some teen sci-fi.
Not Stranger Things
In Carillion Services Ltd (In compulsory liquidation) and others v Benson and others, the EAT reminds us that compulsory liquidation itself will not be a special circumstance within the meaning of section 188(7) TULRCA allowing an employer to escape liability for failure to collectively consult before making redundancies.
It has long been established that to amount to special circumstances, events must be "out of the ordinary, or something uncommon". Although unexpected by the company, the withdrawal of financial backing by its stakeholders, and the Government's refusal to provide financial support, did not meet this very high benchmark.
Forsey the Magistrate Delayer
Employers must give notice to the Insolvency Service when they are proposing to make 20 or more employees redundant at one establishment within a period of 90 days or less. Under scarcely used provisions in the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), failure to notify is a criminal offence.
Magistrates are to hear the criminal prosecution of David Forsey (a director) and Robert Palmer (the administrator) in relation to the closure of a USC warehouse. USC gave 200 warehouse employees 15 minutes' notice of redundancy and did not alert the Insolvency Service. These prosecutions were brought in 2015 and so far Mr Forsey and Mr Palmer have been pursuing a number of legal challenges to the prosecutions resulting in years of adjourned Magistrate hearings.
In the latest challenge, Mr Palmer argued that administrators are not covered by the offence as administrators are neither officers of the company nor 'similar' to the identified officers (director, manager or company secretary). Administrators are not subject to the same duties as other officers and must act in the best interests of external parties (the creditors). The High Court rejected this argument as an administrator assumes a managerial role in succession to the directors and has all the same powers, including an express power to dismiss the company's employees. Administrators are officers of the company for these purposes (The Queen on the application of Palmer v Northern Derbyshire Magistrates Court).
The 2021 awards (drum roll please…)
The "U-turn" Award
and the winner is… The Restriction on Public Sector Exit Payments Regulations
Just four months after the long trailed yet at the same time hastily implemented regulations came into force, they were revoked in February.
The "Perpetual Extensions" Award
and the winner is… Right to work checks
While the CJRS gave them a run for their money, the adjusted process for right to work checks to be carried out over video calls introduced in March 2020 was announced to be closing on 16 May 2021, then 20 June 2021, then 31 August 2021,and now extended until 5 April 2022.
The "Shortest Ever Judgment" Award
and the winner is… The EAT in Tcaci v Stacey Employment Services Ltd
In an appeal of a rejected claim form, on the ground that no ACAS early conciliation number was given in section 2, the EAT simply allowed the appeal, as "that decision must have been made in error because in fact the correct EC number did appear in the claim form".
The "Nice Try" Award
and the winner is… a city finance worker
For his unsuccessful unfair dismissal claim. In the sexual harassment equivalent to the "dog ate my homework", he was dismissed for exposing his 'tight' underwear to a female colleague on a Zoom call and then unbelievably blamed his pet puppy for knocking over his laptop.
The "Almost got away with it" Award
and the winner is… a hospital worker in Italy
For continuing to get paid despite just not turning up to work for 15 years! If it wasn't for that pesky long-service award they tried to give him he may still be getting away with it.
That wraps up our 2021 employment law review. If you have any questions about this article, or any employment law queries in general, please contact Jane Fielding or Connie Cliff.