Spring 2021 Employment Law update - Part 2: Focus on equalities issues

14 minute read
14 May 2021

In this series of insights, Gowling WLG's Employment, Labour & Equalities team bring you a quick round-up of the need-to-know employment law developments from January to April 2021.

In Part 1, we looked at COVID-19 related developments. In Part 2, we turn to the latest on equalities issues:

  1. Importance of anti-harassment policies
  2. Shared parental leave pay
  3. Clash of protected characteristics
  4. Injury to feelings awards
  5. Equal pay comparators
  6. Gender pay gap reporting deadline extension
  7. Statutory pay rates annual increase
  8. Modern Slavery statements latest

In Part 3, we will look at the latest developments concerning 'workers' and pay and in our final Part 4, the two Ts: TUPE and tribunals.

1. Importance of anti-harassment policies

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, the bar is set high. Recently, the Employment Appeal Tribunal (EAT) in Allay (UK) Ltd v Gehlen highlighted the need for employers to provide 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.

While the bar is set high, it is not impossible to surmount. For more about what employers should be doing see our alert, 'Why employers need rigorous anti-harassment policies, training and practice'.

2. Shared parental leave pay

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, see 'Enhancing maternity pay but not shared parental leave pay does NOT discriminate against men'.

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.

Recently, 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 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 EAT held that the predominant purpose of AL is the child's welfare, a matter going far beyond facilitation of childcare, and would include matters such as the forming of a parental bond, becoming a family, and the taking of steps to prepare and maintain an appropriate and safe environment for the adopted child. The EAT also noted as a material difference, that AL could start before the placement (so its purpose is not childcare per se) and is an immediate entitlement upon placement, whereas ShPL cannot start pre-adoption and is not immediate.

Not offering enhanced ShPL pay when providing enhanced adoption leave pay does not amount to direct sex discrimination just as in the case of enhanced maternity pay. While employers are not required to offer enhanced ShPL pay, where they offer enhanced maternity and enhanced adoption leave, it is of course open to employers to enhance ShPL pay. Employers should ask themselves if offering enhanced ShPL pay will assist in attracting and retaining talent in their organisation.

Legislative reform instead?

Back in July 2019, BEIS published a Consultation Good Work Plan: Proposals to support families including proposals for high-level options and principles for reforming the parental leave and pay system to enable parents to balance the gender division of parental leave (the term 'parental leave is used in a generic sense not Parental Leave under reg 13 Maternity and Parental Leave etc Regulations 1999).

On 21 March 2021, in a response to a written Parliamentary question asking what assessment has been made of the potential merits of equalising paternity and maternity leave rights, BEIS states that the results of the 2019 consultation are currently being assessed and the response to the consultation is expected later in 2021. This will include an evaluation of the Shared Parental Leave and Pay scheme and the results of a large-scale representative survey that sought views on parental leave and entitlements generally.

3. Clash of protected characteristics

The Court of Appeal has upheld the findings that a Christian magistrate did not suffer victimisation when he was removed from office after expressing his disapproval about same-sex adoptions on national morning television. The reason for his removal was not his views as such but the fact that he had publicly advertised the bias that he would display in the exercise of his judicial functions.

In his related case, an NHS Trust did not discriminate against him on religious grounds in his position as a non-executive director after it decided not to renew his term. The Trust had a genuine and reasonable concern that his expression in the national media of his views risked impairing the willingness of gay people with mental health difficulties to engage with its services (Page v Lord Chancellor and Page v NHS Trust Development Authority).

The tension between religion and sexual orientation in discrimination claims continues. The main argument used by Mr Page was that it is too artificial to distinguish between simply having a particular view and the manner in which the individual expresses it. However, in this case, it was sufficiently easy for the Lord Chancellor to demonstrate that Mr Page was removed for inappropriate conduct in publicly displaying a preconceived bias towards same-sex adopters in relation to his judicial role. Likewise, the Trust was able to make the distinction that it wasn't that he had the views, it was the fact that he repeatedly contacted the media having been told repeatedly that he should not without forewarning the Trust.

4. Injury to feelings awards

Unlike unfair dismissal compensation, which is limited to financial loss, discrimination compensation can also cover non-financial losses. In most cases, this will include an injury to feelings award.

In 2003, the Court of Appeal set out clear guidelines for the amount of compensation to be given for injured feelings and set out three bands of potential awards known as the Vento bands (named after the case in which they were first stated). Since 2003, the bands have been revised on several occasions to take account of inflation. Following the latest revision on 6 April 2021, the bands are now:

  • The lower band: £900 - £9,100, for "less serious cases, such as where the act of discrimination is an isolated or one-off occurrence".
  • The middle band: £9,100 - £27,400 for "serious cases, which do not merit an award in the highest band".
  • The upper band: £27,400 - £45,600 for "the most serious cases, such as where there has been a lengthy campaign of discriminatory harassment on the ground of sex or race". Only in "the most exceptional case" should an award for injury to feelings exceed the top of this band.

5. Equal pay comparators

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 Asda Stores Ltd v Brierley and ors, the Supreme Court has upheld the decisions of the tribunal, the EAT and the Court of Appeal that a group of predominantly female retail employees could 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 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.

When claimants and comparators are based at different establishments, determining whether the statutory requirement for common terms is satisfied boils down to asking a single question: 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.

This judgment does 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 employees as a valid comparison. The claimants are still required to show that they performed work of equal value and Asda would still be able to rely on any defence available to it, including the genuine material factor defence.

6. Gender pay gap reporting deadline extension

On 23 February 2021, the Government Equalities Office announced that due to the continuing impact of the COVID‑19 pandemic, employers will have an additional six months to report their gender pay gap information. The changes relate to gender pay gap information that was due to be published by 30 March 2021 for most public authority employers, or 4 April 2021 for private, voluntary, and all other public authority employers. All employers now have until 5 October 2021 to report their gender pay gap information and no enforcement action will be taken by the EHRC if they report by then.

7. Statutory Pay Rates annual increases

The April 2021 annual increase to statutory payments are:

  • From 4 April - statutory maternity, paternity, adoption and shared parental pay is now £151.97 (up from £151.20).
  • From 6 April - statutory sick pay weekly rate is now £96.35 (up from £95.85).

8. Modern Slavery statements latest

The Home Office has launched its own central registry for Modern Slavery Act 2015 statements.

Section 54 of the Modern Slavery Act 2015 (MSA) requires certain organisations to publish an annual statement setting out the steps they have taken to identify and address their modern slavery risks. There is currently no legal requirement for these organisations to publish their statements on a government website.

Following its transparency in supply chain consultation, the Government is proposing to legally require organisations to publish their statements on a Government website. Pending the legislative change (date to be confirmed), the Home Office launched this new registry service on 23 February 2021 that allows organisations to voluntarily add their statements to the registry. Any organisation that has created a modern slavery statement will be able to use the service.

If you have any questions relating to this insight, or employment law in general, contact Anna Fletcher or Connie Cliff.

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