What is on your HR agenda for the year? In part one, we looked at the expected legislative reforms. Here, in part two, our Employment, Labour & Equalities team brings you its pick of the top 10 cases that should be on your radar in 2023:

  1. Holiday Pay: Chief Constable of the Police Service of Northern Ireland and another v Agnew and others
  2. Employment status/Collective bargaining: Independent Worker Union of Great Britain v CAC
  3. Employment status: HMRC v Professional Game Match Officials Ltd
  4. Collective bargaining: Mercer v Alternative Future Group Ltd
  5. Fire & rehire: USDAW & others v Tesco Stores Limited
  6. Agency workers: Angard Staffing Solutions Ltd and anor v Kocur and anor
  7. Gender identity: Higgs v Farmor's School
  8. Gender identity: Bailey v Stonewall Equity Ltd
  9. COVID-19: Mhinurwa v Lovingangles Care Ltd
  10. Artificial Intelligence: Manjang & Raja v Uber Eats UK Ltd

From the Supreme Court

Holiday pay

1. Going on a bear hunt?

This year we are expecting an important judgment from the Supreme Court on back pay claims: Chief Constable of the Police Service of Northern Ireland and another v Agnew and others.

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 Employment Appeal Tribunal (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.

Therefore, a series of deductions based on paying basic pay as holiday pay, without including regular overtime or allowances, is not ended by a lawful payment that arises because on a later occasion there was no overtime or allowance that needed to be included.

After delays, Agnew was finally heard by the Supreme Court in December 2022 with judgment expected to be handed down soon. For more on the potential very significant impact of this case, see 'Employment Essentials: top 5 lessons from June 2019 - Holiday pay & overtime revisited'.

Employment status

2. Collective bargaining for non-workers?

Recent years have seen a number of 'worker status' claims from those working in today's gig economy. Many gig economy workers have been able to establish that they do, indeed, have 'worker status'; for example, the high-profile Uber drivers' litigation. However, some have failed, such as the Deliveroo riders.

Under the Trade Union and Labour Relations (Consolidation) Act (TULRCA) 1992, a trade union must consist "wholly or mainly of workers". In Independent Workers' Union of Great Britain v CAC, Deliveroo riders failed to establish that they had 'worker' status under TULRCA 1992. The Court of Appeal concluded that for Article 11 ECHR (in respect of the right to form a trade union) to apply the individuals must be employees or workers.

On 25 and 26 April 2023, the Supreme Court will consider whether the definition of 'worker', for the purposes of TULRCA, can include individuals such as Deliveroo riders whose contracts do satisfy the requirement for personal service.

3. Match day = tax day?

On 26 and 27 June 2023, the Supreme Court will consider whether HM Revenue and Customs (HMRC) were right to have determined that match officials should be taxed as employees in HMRC v Professional Game Match Officials Ltd.

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 this case, the Court of Appeal held that whether an individual's contract is a contract of employment for tax purposes is not dependent on there being an overarching or umbrella contract existing between assignments. As such, an individual engagement (in this case a match) could give rise to working under a contract of employment. Accordingly, the referees were 'employed' rather than self-employed for tax purposes.

Collective bargaining

4. Are striking workers protected from a detriment short of dismissal?

It has long been common practice by some employers to impose a detriment short of dismissal on employees who take part in industrial action; for example, withdrawing discretionary benefits. After the EAT cast doubt on the legality of such practices, the Court of Appeal last year in Mercer v Alternative Future Group Ltd restored the orthodoxy, confirming that UK legislation does not prevent an employer taking action short of dismissal in response to an employee's participation in industrial action. However, the Court did comment that the UK legislation may be in possible breach of Article 11 of the European Convention on Human Rights (freedom of association).

The Supreme Court is now due to consider this issue on 12 and 13 December 2023. This is a highly important appeal for employers with a unionised workforce. Will the Supreme Court agree with the EAT and read words into the existing legislation, or agree with the Court of Appeal that it would be impermissible on the basis of judicial legislative drafting being an issue for Parliament alone?

Fire & rehire

5. Hands tied or untied?

The Supreme Court is set to consider the power of a contractual notice clause. In February 2022, in USDAW & others v Tesco Stores Limited the High Court granted an injunction restraining Tesco from 'firing and rehiring' employees in order to remove a contractual entitlement to enhanced pay known as "Retained Pay". The entitlement, which was negotiated as a retention incentive, was stated to be 'permanent' and was intended to last for as long as the employee remained in the same role. In these unusual circumstances, the High Court held that it was appropriate to imply a contractual term preventing Tesco from exercising its contractual right to terminate on notice for the purpose of removing or diminishing the employee's entitlement to the Retained Pay.

However, in July 2022 the Court of Appeal allowed Tesco's appeal. Although the Retained Pay contractual clause specified no time limit, the express terms of the contracts also included a standard termination on notice clause. As such, Tesco has the right to give notice in the ordinary way, and the entitlement to Retained Pay would only last as long as the particular contract remained in force, rather than the length of time the employment (in a colloquial sense) lasted.

The Supreme Court has now granted permission to further appeal. Will the Supreme Court agree with the High Court that in these unusual circumstances the ability of an employer to terminate a contract on notice should be restricted, or agree with the Court of Appeal that something more is needed to limit an express termination notice clause?

Agency workers

6. Angling for a job?

Under the Agency Workers Regulations 2010 (AWR), from the first day of their assignment, agency workers are entitled "to information about vacancies in the hirer to give [agency workers] the same opportunity as other workers to find permanent employment". But just what is the scope of this right?

So far, the courts have held that under the AWR agency workers simply have a right to be informed by the hirer of vacancies. This does not mean that the agency worker is entitled to apply for, and be considered for, internal vacancies on the same terms as directly recruited employees.

On 7 December 2023, the Supreme Court will consider the further appeal in Angard Staffing Solutions Ltd and anor v Kocur and anor. Should the Supreme Court allow the appeal, this will impact on recruitment practices for businesses engaging temporary agency staff. Or will this appeal prove academic? Under the Retained EU Law (Revocation and Reform) Bill 2022-23, the AWR is a piece of employment legislation that has a good chance of simply being revoked on 31 December 2023 under the Brexit clearout, see Employment Essentials the 2023 forecast: Part one the legislative horizon.

From the EAT

Gender Identity

7. Acceptable or unacceptable manifestation?

The "clashing of rights" in the workplace looks set to continue as a theme for 2023. While those holding a gender-critical belief are protected under the Equality Act 2010 (as are those holding a gender identity belief), the manifestation of such a belief may, depending on the circumstances, be restricted. Last year, the EAT in Mackereth v The Department for Work and Pensions and anor upheld a tribunal finding that a Christian doctor engaged to carry out health assessments for the Department of Work and Pensions was not discriminated against on the grounds of religion or belief when he was dismissed for refusing to address transgender patients by their chosen pronoun.

On 16 March 2023, the EAT will again consider whether the expression of gender critical views amounted to an acceptable or unacceptable manifestation of a protected belief. In Higgs v Farmor's School, the tribunal found that a Christian employee was not discriminated against due to her gender critical beliefs, as her dismissal was not due to the fact of her holding those beliefs but the inflammatory language used in social media posts. To what extent is there a requirement that individuals need to express their beliefs "nicely" in social media posts?

8. Lawful protest or unlawful inducement?

Last year, a barrister succeeded in her claim against her chambers that she had been discriminated against for holding gender critical beliefs and further because of her belief that gender theory, as articulated by Stonewall, is severely detrimental to women (including that it denies them female-only spaces) and to lesbians (in that it labels them as bigoted for being same-sex attracted). However, she failed in her claim against Stonewall Equity Ltd for instructing, causing or inducing discrimination. The tribunal found that the communications from Stonewall critical of Ms Bailey were just a protest and not sufficient to amount to an inducement, or attempted inducement, of any particular course of action by her chambers.

In Bailey v Stonewall Equity Ltd, an appeal to the EAT is currently pending on when the line of unlawful inducement is crossed.

COVID-19

9. Furlough or redundancy?

Even if a dismissal is genuinely on grounds of redundancy, whether it is fair or unfair to dismiss for that reason depends on whether the employer acted reasonably in dismissing the employee for that reason in all the circumstances.

During the period in which the Coronavirus Job Retention Scheme operated, were employers expected to consider furlough under the scheme as an alternative to redundancy? In a genuine redundancy situation, would failure to consider furlough mean any dismissal for redundancy would be procedurally unfair?

The EAT will consider this question on 20 April 2023 in Mhinurwa v Lovingangles Care Ltd. So far the tribunal found in this particular case that failure to consider furlough at all meant the employee's dismissal for redundancy was procedurally unfair.

From the Employment Tribunal (ET)

Artificial Intelligence

10. Discriminatory algorithm?

While employment tribunal decisions are non-binding, they can be a barometer of upcoming trends. Modern work practices mean modern employment law issues. One of the biggest, potentially, is the increased use of Artificial Intelligence (AI).

The London East Employment Tribunal is currently considering the case of Manjang & Raja v Uber Eats UK Ltd. Since March 2020, Uber has operated a facial recognition system, incorporating use of Microsoft's FACE API. Workers are prompted to provide a real-time selfie and risk dismissal if the system fails to match the selfie with a stored reference photo. In addition, the driver may be reported to Transport for London and lose their private hire driver and vehicle licence. As the facial recognition system is significantly more error prone when used by black and minority ethnic workers, does Uber's usage of the system without appropriate safeguards amount to indirect race discrimination? Time will tell.

AI and automated decision making can have a discriminatory impact. AI is edging its way into employment practices and employers need to understand the systems they use. This will be an important case on employer liability for discrimination as a result of deploying potentially discriminatory AI. See our on demand webinar Artificial Intelligence – Help! My manager is a machine for more on this emerging topic.

For more on the legislative reforms on the horizon for 2023, alongside these case law developments, please see Employment Essentials the 2023 forecast: part one, or sign-up to subscribe to future updates on these and other related topics.