What's on the horizon for employment law in 2021? Part 3: Beyond the elephants in the room

12 February 2021


What is on your HR agenda for the year? In part one of our preview we took a look at the elephants in the room of COVID-19 pandemic and Brexit. In part two, we looked beyond those elephants to the key 2021 legislative changes (many held over from 2020) and awaited court judgments from cases heard in 2020. In part three, we conclude our preview with a look at the upcoming 2021 appeals to note.

The 2021 key cases: upcoming appeals to note

  1. Holiday pay: (1) voluntary overtime, (2) back claims, (3) part-year workers
  2. Collective bargaining: (1) unlawful inducement
  3. Agency workers: (1) temporarily assignments
  4. Discrimination: (1) burden of proof, (2) interim relief, (3) clash of protected characteristics

1. Holiday pay – a trio of Supreme Court hearings

Calculating holiday pay should be straight forward, but often has proved to be anything but, providing a seemly endless stream of legal challenges. Just when you thought surely there cannot be any more highly significant overtime and calculating holiday pay cases left out there, in 2019 another three came along. Unsurprisingly, in the most part, all three cases are on their way to the Supreme Court to be heard in 2021, and we live in hope that they will finally provide some much needed clarity.

Voluntary overtime: East of England Ambulance Service NHS Trust v Flowers

On 22 June 2021, the Supreme Court will look at the issue of voluntary overtime. In 2019 the Court of Appeal once again confirmed that when calculating holiday pay for the four weeks of holiday entitlement under regulation 13, Working Time Regulations 1998 (WTR) 'normal pay' is that which is 'normally received'. Voluntary overtime should be taken into account where the individual can establish a "pattern of voluntary overtime which was sufficiently regular and settled". Focusing on whether overtime is or isn't "voluntary" is irrelevant. The key is regular receipt.

But also check the contractual provisions to see if there is a contractual right to have overtime included, in which case there may not be a need to establish a regular pattern of overtime. In Flowers, regardless of the WTR claim, the claimants were in any event entitled under a contractual clause to have any voluntary overtime pay received in the preceding three months included in their annual leave calculation, whether or not that voluntary overtime was part of a regular and settled pattern of overtime worked by the individual claimant.

We wait to see what else we can learn from the Supreme Court on this issue.

Back pay claims: Chief Constable of the Police Service of Northern Ireland and another v Agnew and others

Immediately following Flowers, the Supreme Court will consider this very significant appeal on 23 and 24 June 2021.

In 2019, the Northern Irish Court of Appeal (NICA) challenged the perceived wisdom on holiday underpayment back pay claims. It held the Working Time Regulations (Northern Ireland) (identical relevant provisions to the Working Time Regulations) must be construed as allowing claims for underpayments for holiday pay that were part of a series of underpayments potentially going back a number of years. It also rejected the 2015 EAT judgment in Bear Scotland Ltd v Fulton and other cases to hold that a series is not ended as a matter of law by a gap of more than three months between unlawful deductions related to holiday pay.

This case also raises the question as to in which order regulation 13 leave (4 weeks derived from the Working Time Directive) and regulation 13A/26A leave (1.6 weeks derived from UK law only) is taken. This is important as the EU case law concerning holiday being pay 'normally received' relates to regulation 13 leave only. In Agnew the NICA took a rather unhelpful composite approach stating there is no requirement that leave from different sources is taken in a particular order.

For more on the potential very significant impact of this case see 'Employment Essentials: top 5 lessons from June 2019 - Holiday pay & overtime revisited'. Definitely one to watch!

Part-year workers: The Harpur Trust v Brazel (UNISON intervening)

Towards the end of the year, on 9 November 2021, the Supreme Court will consider the appeal on the (more complicated than it should be) issue of holiday pay calculations for casual workers. Is a 12.07% of annualised hours short-cut of any help?

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, term-time only workers are entitled to 5.6 weeks' holiday based on their weekly work pattern during the term. Also,, the express provisions for calculating holiday pay for workers with variable hours contained in the WTR cannot be overridden by capping annual holiday pay at 12.07% of annualised hours for ease of calculation. 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.

For more on the issues involved in this case see 'Employment Essentials: 5 Lessons from August 2019 - Holiday Pay for term-time only workers not subject to pro rata reduction'.

2. Collective bargaining

Unlawful inducement: Dunkley and Ors v Kostal UK Ltd

Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 makes it unlawful for employers to offer incentives to workers with the sole or main purpose of undermining collective bargaining by the union. But just how wide is the scope of section 145B? In particular, if acceptance of a direct offer would mean that at least one term of employment will be determined by direct rather than collective agreement, is that sufficient to amount to an unlawful inducement, even if other terms continue to be determined collectively?

In 2019 the Court of Appeal held that where workers' terms of employment are determined by collective agreement, s145B will only come into play if the employer's purpose is to achieve the result that one or more of the workers' terms of employment will no longer be determined by collective agreement on a permanent basis. It is not sufficient if the employer's purpose is merely to ensure that the term or terms will, on this one occasion, not be determined collectively. See 'Unionised workforces & varying contractual terms'.

Unsurprisingly, the union involved in this case is not happy with this judgment and the Supreme Court will now hear the further appeal on 18 May 2021.

3. Agency workers

Temporarily assignments: Angard Staffing Solutions Ltd & Anor v Kocur & Ors

Following the controversial 2013 EAT decision in Moran v Ideal Cleaning, the number of agency workers potentially falling within the provisions of the Agency Workers Regulations 2010 (AWR) is significantly fewer than originally anticipated. Not all agency workers are covered - 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 AWR. However, in July 2020 the EAT significantly narrowed the potential size of the gap.

In Kocur, the EAT held that although the worker only ever worked for one end-user for over four years, he did so under a series of separate temporary assignments, each of which was for a defined period. Accordingly he was protected under the AWR. A temporary supply may be followed by another supply to work for the same hirer temporarily, and then another, and another.

On 28 April 2021, the Court of Appeal will consider the appeal by the end-user that the arrangement reflected an indefinite, open-ended and permanent relationship between the parties more akin to direct hires working under a zero hours contract and therefore outside the AWR protection as placed 'indefinitely', rather than a series of discrete temporary placements.

4. Discrimination

Burden of Proof: Royal Mail Group Ltd v Efobi

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 overturned this accepted orthodoxy saying that the shifting burden of proof rule under the Equality Act 2010 did not put any burden on the claimant at all. A few months later, the Court of Appeal in another case reasserted the established view that the onus lies initially with the claimant.

The Supreme Court will now consider the 'burden of proof' issue on 18 March 2021. It is likely the Supreme Court will agree with the Court of Appeal, however, should it instead agree with the EAT, this will have a very significant impact on defending discrimination claims.

Interim relief: Steer v Stormsure Ltd

In certain types of unfair dismissal case (restricted to union membership or activity, activities as an employee representative or whistleblowing), a tribunal can grant the employee interim relief by making an order for the continuation of their employment pending final determination of the case. This means the employee remains on full pay until their unfair dismissal claim is concluded, which is likely to be several months. Even if they ultimately lose, they will not be required to reimburse the former employer the pay received as a result of the interim relief order.

The EAT has held that the inability of employment tribunals to grant interim relief in respect of claims of a discriminatory dismissal or victimisation is a breach of Article 14 of the European Convention on Human Rights. The EAT does not have the power to make a declaration of incompatibility under the Human Rights Act 1998 so the case is now going to the Court of Appeal who can consider whether such a declaration should be made. If a declaration is made and the relevant legislation subsequently changed to make interim relief available in discrimination, then claimants will have a potential powerful negotiating tool. It is however important to remember that interim relief is not automatically granted. A tribunal has to be persuaded at an urgent and relatively short hearing that the claimant is 'likely' to succeed with their claim and this is quite a high bar. It can also be a risky move by a claimant, as failing to obtain an interim order sought may put the employer on stronger ground in settlement negotiations.

The Court of Appeal is expected to hear the appeal sometime in late 2021.

Clash of protected characteristics: Page v Lord Chancellor & Page v NHS Trust Development Authority

In 2019 the EAT found that a lay magistrate, who is a practising Christian, had not suffered victimisation based on religious belief when he was removed from office after publicly expressing disapproval for same-sex couple adoptions. The EAT reached a similar finding in relation to the non-renewal of a non-executive directorship he held with the NHS. The claimant's appeal against both decisions was heard by the Court of Appeal on 4 November 2020. The judgment is expected to offer guidance for employers when there is an apparent clash between rights protected under the Equality Act 2010.

Hopefully the Court of Appeal guidance will be available before the EAT considers similar issues in Maya Forstater v CGD Europe and others on 27 & 28 April 2021. In this case, a tribunal found the claimant's views, as expressed on social media, including her refusal to accept that transwomen are women, were not protected under the Equality Act 2010. The claimant's views, in their absolutist nature, were found to be incompatible with human dignity and the fundamental rights of others.

NOT LEGAL ADVICE. Information made available on this website in any form is for information purposes only. It is not, and should not be taken as, legal advice. You should not rely on, or take or fail to take any action based upon this information. Never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. Gowling WLG professionals will be pleased to discuss resolutions to specific legal concerns you may have.