Employment Law Update

As in many areas during Boris Johnson’s tenure as Prime Minister, there has been a lack of focus within the Government on progressing employment law-related changes that we expected to see by now – including changes to flexible working and additional protections for maternity leave returners.  The last two Queen’s speeches have had a noticeable absence of an Employment Bill and many proposed changes have been subject to the fateful phrase “when Parliamentary time allows”. It was clear employment law-related matters were a long way down the priority list.

The approach of the Government has been reactive, with changes proposed to give more teeth to collective redundancy consultation obligations in response to what happened at P&O Ferries and by proposed changes to relax agency worker restrictions during industrial action, made during the initial stages of the national rail strikes in late June 2022.  One could be forgiven for seeing these changes are largely “window dressing”, driven by the need to be seen to be doing something and not considering the core issues which needed addressing. We consider the latter of these proposed changes further below.

It remains to be seen how Mr Johnson’s replacement and the Government that they will lead will prioritise employment-related changes and whether the proposed changes will proceed to the statute book.  What is needed, in our view, is a holistic view of what the UK needs to protect employees and workers whilst giving employers the certainty they need to plan and make decisions.  It will be interesting to see what (if any) priority those competing for the job of Prime Minister give to this area.

Despite the absence of legislative progress, the last few months have resulted in some key employment case law decisions, which we have summarised below:

Fentem v Outform EMEA Limited

The Employment Appeal Tribunal (EAT) has held that a tribunal correctly found that an employer’s decision to exercise a payment in lieu of notice (PILON) clause to terminate the Claimant’s employment early after the Claimant had given notice did not amount to a termination within the meaning of s.95(1) of the Employment Rights Act 1996 (ERA) for the Claimant to bring an unfair dismissal claim against the employer.

The Claimant had given 9 months’ notice on 16 April 2019 and so their last day in employment was due to be 16 January 2020. On 19 December 2019, the employer decided to exercise the PILON clause in the contract to bring the Claimant’s employment to an end early and sent a letter confirming this. The Claimant brought an unfair dismissal claim but the tribunal held that this did not amount to a dismissal within the meaning of s.95(1) of the ERA and the reason for termination remained the resignation. The reason for this was that the tribunal considered it was bound to follow an earlier decision of the EAT in the case of Marshall (Cambridge) Ltd v Hamblin, despite criticisms being made of the decision in Marshall. However, this case is currently awaiting permission from the EAT to appeal to the Court of Appeal.

Therefore, whilst this case is helpful to employers, exercising a PILON clause where an employee has resigned and has qualifying service to bring an unfair dismissal claim is not risk free in our view and placing the employee on garden leave may be better by giving the certainty that the resignation has not been converted into a dismissal.

White v H C One Oval Ltd

The EAT has held that a tribunal was wrong to strike out a claim for unfair dismissal on the basis that it had no reasonable prospect of success because the Claimant had taken voluntary redundancy.

In September 2018, the employer announced it was reducing the number of employees carrying out reception and administrative work. The Claimant was provisionally selected for redundancy and subsequently asked for voluntary redundancy, which was accepted.

After taking voluntary redundancy, the Claimant submitted a claim for unfair dismissal raising a number of complaints, including the fairness of the redundancy process that had been followed. Ultimately, the Claimant argued that the redundancy process was a sham and that she had been targeted for dismissal. This was disputed and the employer argued that, as the Claimant had requested voluntary redundancy, the claim had no reasonable prospect of success. The tribunal struck out the claim as it considered the employer would be able to establish the reason for, and reasonableness of, the dismissal in light of the employee’s request for voluntary redundancy.

The EAT disagreed and found that the tribunal had erred in law. The EAT considered that, if the Claimant’s evidence on the background to the redundancy was accepted, the facts known to the decision-maker may comprise matters beyond the redundancy request. Further, given the Claimant alleged the redundancy process was not genuine, even if the tribunal was satisfied with the reason for dismissal, it would still need to consider the fairness of the redundancy process. Therefore, there was a clear factual dispute to be determined.

Accordingly, even if an employee volunteers for redundancy, if they have qualifying service, employers should exercise caution and still follow a fair process or offer a right of appeal to flush out any issues. Alternatively, a settlement agreement could record the termination and payments, giving the employer certainty that the employee has waived relevant employment-related claims.

Allen v Primark Stores Ltd

The EAT has found that, when selecting a pool for comparison in indirect discrimination claims, the pool must be construed with accurate reference to the provision, criterion or practice (PCP) complained of.

This case concerned a manager at Primark who brought an indirect sex discrimination claim over a policy that required managers to be available to work Thursday nights on request, as she felt this indirectly discriminated against her as a single mother. The tribunal held that, as there were two male managers who had agreed they would work Thursdays where available (but were not obligated to do so), the PCP was not discriminatory.

The EAT disagreed with the tribunal’s approach as it considered the contractual arrangement between the two male colleagues was not the same as the Claimant’s situation as they were only required to work when available on Thursday nights and were not obligated to do so. The EAT held that these two individuals should therefore not have been included in the pool as they were not affected by the PCP that formed the basis of the claim.

This case shows the nuances of indirect discrimination claims and the importance of clearly identifying the PCP, the particular disadvantage suffered by the group and by the Claimant.  This is an area where we frequently work closely with clients both in terms of managing potential change, but considering any potential discriminatory effects of contractual change and addressing them through any consultation processes.

Warburton v Chief Constable of Northamptonshire Police

The EAT has held that a tribunal erred in its approach to determining whether a job applicant complaining of victimisation had suffered a detriment.

The Claimant was unsuccessful in his application to Northamptonshire Police because the vetting process was put on hold pending the outcome of his disability discrimination claim against Hertfordshire Police.

The EAT disagreed with the tribunal’s finding that the failure to progress the Claimant’s application did not constitute a detriment under the Equality Act 2010 (EqA). The EAT considered that detriment should be interpreted widely and that it is enough that a reasonable worker might take the view that the conduct was detrimental, even if a reasonable tribunal did not think that it was, so it is not a purely objective test.

This case shows the low bar for claimants in victimisation claims to establish a detriment. Employers should be particularly cautious in our view where an employee has raised discrimination complaints and remains in employment as it is likely to be easy for a victimisation claim to be made out in these circumstances.

Burke v Turning Point Scotland

An employment tribunal considered as a preliminary issue whether an employee with long COVID was disabled within the meaning of section 6 of the EqA.

The Claimant was employed from April 2001 as a caretaker. He tested positive for COVID-19 and went off sick in November 2020. He was only mildly affected initially but subsequently developed severe headaches, fatigue, joint pain, a loss of appetite and difficulties sleeping. He had to lie down to recover after getting up, showered and dressed. Cooking, ironing and shopping were problematic for him and he felt unable to socialise. The symptoms would improve but then would deteriorate again.

The Claimant was off work and his later fit notes referred to the effects of long COVID and post-viral fatigue syndrome. However, two occupational health reports suggested he was fit to return to work and that he was unlikely to be disabled under the EqA. In August 2021, he was dismissed by reason of ill health.

The tribunal had to decide if the Claimant was disabled during the relevant period. It found that he was on the basis he had a physical impairment which had an adverse effect on his ability to carry out normal day-to-day activities. This effect was more than minor or trivial and long term because it “could well be” that it would last for a period of 12 months when viewed from the last alleged discriminatory act (i.e. the dismissal here).

Although not binding, this case is useful in establishing that long COVID may be a disability within the meaning of the EqA. Nevertheless, this will be determined on a case by case basis depending on the individual’s particular symptoms and how these affect them given this is a legal rather than a medical test. This follows a trend of cases where the effects of a number of conditions such as the menopause have also been considered to be capable of amounting to a disability under the EqA with the requisite duty to consider reasonable adjustments.

Changes to Restrictions on the Use of Agency Workers During Industrial Action

On 23 June 2022, the Government formally announced plans via a press release to repeal Regulation 7 of the Conduct of Employment Agencies and Employment Businesses Regulations 2003 (SI 2003/3319).

Regulation 7 currently bars businesses from hiring agency workers in place of those who are participating in industrial action. Hence, repealing Regulation 7 would result in employment businesses being able to supply temporary workers to fill the duties of employees who take part in industrial action, such as the members of the RMT Union.

If the proposed changes are brought into effect, trade unions have argued that the powers granted to union members (such as the right to strike) will be diluted. Conversely, the government argues that the changes will reduce the impact and disruption to the general public caused by such action.

The government has stressed that, under the proposed changes, any agency workers will be required to have the same skills and qualifications as the striking employees, and so public safety should not be affected.

The announcement was made by the Government only 16 days after the RMT union announced their plans to strike, shocking many at the speed at which the proposed changes appear to be being pushed through.  It also seems to not consider the commercial realities of such a provision for many employers faced with strike action, where it is impossible to draft in workers for many roles with the same skills and qualifications. Even if this provision does ever hit the statute books, it will be politically divisive, but its practical effects are likely to be low for strikes involving skilled or specialised workers.

Further, the Government also announced plans to amend section 22 of the Trade Union and Labour Relations (Consolidation) Act 1992 to increase the maximum damages awarded against trade unions with more than 100,000 members. Where industrial action is found to be unlawful, the maximum damages will rise from £250,000 to £1 million. This will be the first change to the maximum damages awarded against unions since 1982.

Conclusion

2022 has been a confusing and unsettling year for many of us.  The ongoing war in Ukraine clearly has sent significant ripples across the World and the UK is grappling with the worst inflation rate across the G7.  Boris Johnson’s resignation on 7 July 2022 has now put a foreseeable end to the lack of Government inactivity in many areas as the Government stumbled from crisis to crisis.  Whoever succeeds Mr Johnson, hopefully there will be more stability and more focus on what is needed to provide UK employers with access to the employees that they need and the tools they need to manage them, whilst also preserving core rights.  We watch the coming months with interest!

If you are in need of expert advice and guidance to help you navigate through any employment-related queries, please contact Lisa Kelly on 0191 211 7897 or email [email protected]