Employment Bulletin 

ke2To help you keep quickly up to date with employment law, we summarise the key developments arising from cases, guidance, legislation and consultations for this month.

If you would like to discuss any of the points raised, please get in touch with Kathryn Evens (Senior Associate), or with your usual contact in the Foot Anstey Employment team.

 

In this bulletin:

    1. In the courts... recent case updates
    2. Legislation
    3. New Guidance and Consultations
    4. News

In the courts...recent case updates

Employer held vicariously liable for employee's data leak

In MW Morrison Supermarkets plc v Various Claimants the Court of Appeal upheld the High Court ruling that an employer is liable in damages to current and former employees whose personal and confidential data was leaked by another employee. For more information on this case please see our article here.

Employers can be vicariously liable for employee's actions at impromptu after parties.

In Bellman v Northampton Recruitment Ltd the Court of Appeal held that an employer can be vicariously liable for an injury caused at an impromptu work after party. The case concerned an incident whereby a managing director punched a sales manager causing him brain damage.

The incident occurred at a hotel following a Christmas party organised by the Respondent employer. The managing director had arranged for taxis to transport staff to the hotel where the incident had happened and the drinks had predominantly been paid for by the company. The court therefore needed to decide whether there was sufficient connection between the managing director's wrongful conduct and his role to make the company vicariously liable.

The Court of Appeal overturned the high court's decision at first instance (for more information on that earlier decision please see our previous article here). The Court held that the Respondent would be liable for the managing director's actions. The reasons for this were two-fold. Firstly, the nature of the employee's job meant that he was the most senior employee and directing mind. The incident had broken out following an argument during which he was establishing his authority in his role. Secondly, the party had followed on from an organised work event and so there was sufficient connection between the managing director's wrongful conduct and his role to render vicarious liability appropriate.

Employers should therefore bear in mind that they could be liable for employee's actions that flow from organised work events particular as we approach the Christmas party season. Employers should be wary of paying for transport and drinks at such occasions as this could establish a connection between the event and the employee's roles.

Royal Marine Reservist was fairly dismissed for committing to voluntary training without prior approval

In Hawkes v Austin Group (UK) Ltd the EAT was asked to consider whether a volunteer reservist for the Royal Marines had been fairly dismissed for committing to a seven-week non-mandatory training exercise without obtaining his employer's approval.

By way of background, the employee had begun employment in September 2015 as a business development manager with a small property and investment business. His employer was aware that he had to undertake 28 days of training per year as a volunteer reservist and had allowed him 7 days of unpaid leave to enable him to fulfil these requirements.

However, the employee was dismissed without warning as he had committed to undertake a seven week training course abroad during a crucial business period. The employee had less than two years' service but was able to rely upon an exception to bring a claim for unfair dismissal as it was connected to him being a member of the reserve forces. The crux of his claim being that he had not received warning that undertaking such training would lead to disciplinary action, as he would have not undertaken the training if he had known.

The Tribunal found that the employee's dismissal was fair; he had not discussed the matter with his employer before signing up to the training and had conveyed the training as mandatory when it was in fact voluntary. He had also taken this leave in a crucial business period and had failed to fill in a leave application form or produce evidence that he was required at the training. The EAT found that the tribunal had not erred in assessing the fairness of this decision.

Application of causation test for discrimination arising from disability

In the case of Sheikholeslami v University of Edinburgh the EAT has considered the causation test for discrimination arising from disability.

The Claimant was a university professor known to have anxiety and depression. She perceived hostility from colleagues and requested to be transferred to another department. The Claimant's employer did not action the transfer and the Claimant remained absent until her dismissal.

On appeal the EAT held that the tribunal had adopted too narrow an approach to the question of causation. The tribunal had erred in considering the key question to be whether the professor's refusal to return to her previous role was "because of her disability or because of some other reason", such as her having been badly treated in the department. However, the two are not mutually exclusive and it may be that an employee's disability causes feelings that create an inability to return to work if the workplace is perceived to be a hostile and mistreating environment.

The EAT found that the tribunal should have asked whether the employee's absence or refusal to return to work had arisen 'in consequence' of her disability. A comparative exercise is required to ask whether an employer's provision, criterion or practice had the effect of disadvantaging a disabled employee more than trivially against a non-disabled comparator. The appeal was therefore allowed in part in respect of these failings.

Individual employees can be liable for dismissals arising out of whistleblowing detriment

In Timis and anor v Osipov, the Court of Appeal confirmed that employees can pursue claims against individual co-works for a whistleblowing detriment amounting to dismissal.

The Claimant was employed as the Chief Executive Officer for IP ltd, an oil and gas exploration company. He was dismissed at the behest of two fellow directors, Mr Timis and Mr Sage. The principal reason for his dismissal, as the ET later held, was that he had made four protected disclosures protected under whistleblowing provisions.

The employer became insolvent and so the Claimant also sought to bring a claim against the directors in their personal capacity. The ET held that the directors' conduct in dismissing the Claimant had subjected him to a detriment contrary to the whistleblowing provisions. Accordingly the directors were jointly and severally liable to compensate the Claimant for his dismissal. The directors appealed.

Both the EAT and later the Court of Appeal rejected the appeal and upheld the Claimant's claim. It was noted that, for example, individual liability is already in place for discrimination claims under the Equality Act 2010, where dismissal is on the ground of a protected characteristic such as gender, race, religion etc.

The decision provides welcome clarification on this issue. Practically, the situations where an employee will need to pursue a claim against an individual are rare and will depend on the financial prospects of the employer. Having said that, employer's should take pre-emptive action to avoid vicarious liability for the actions of employees, including training and a review of whistleblowing policies.

Pre-transfer TUPE dismissal found to be automatically unfair

In Hare Wines Ltd v Kaur the EAT upheld a decision that the dismissal of an employee immediately before a TUPE transfer was automatically unfair because the principal reason for the dismissal was the transfer.

In this case the Claimant was employed by a wine and beer wholesale business. When the business got into financial difficulties, Hare Wines Ltd agreed to purchase it and staff were to transfer under TUPE. However, the Claimant's employment was terminated two days before the transfer. She was told this was because the business was ceasing to trade but she claimed it was because she objected to the transfer and she brought proceedings for unfair dismissal. Hare Wines Ltd argued that the employee had a strained relationship with her manager and that the reason for the dismissal was personal to the employee's circumstances and therefore unrelated to the transfer. The EAT rejected this argument and upheld the finding that the transfer was the reason for the dismissal based on the specific facts and the proximity of the dismissal to the transfer.

The case demonstrates that where employers dismiss staff close to a transfer date, there is a risk that they are seen to be motivated by the transfer even where there may be another reason for the dismissal. Employers are reminded to carefully document reasons for dismissal at all times and that if you are receiving staff following a TUPE transfer that you carry out full due diligence around staff that are transferring (and reasons why they are not!).

Agency workers and hours of work clauses

In Twenty-Four Seven Recruitment Services Ltd (TFSRS Ltd) and ors v Afonso and ors 191 claimants employed by TFSRS Ltd sought to establish the right to the same pay as permanent workers. Under what is known as the 'Swedish derogation' of the Agency Workers Regulations, the right to equal pay is excluded if the agency worker is engaged under a permanent contract of employment with the agency and a number of formal requirements are satisfied, including that the contract contains written terms and conditions about the hours of work.

The agency workers' employment contracts with the agency stated that their hours of work would be 'any five days out of seven' and the EAT held that this was insufficiently detailed as it did not provide the agency worker with a figure for the expected hours of work per week nor indeed for any other period.

This case is a reminder that employers of agency workers who are paid differently to permanent staff should make enquiries of the agency to ensure that the contracts with agency staff contain the necessary provision including reference to the expected number of hours per week or other period during the assignment.

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Legislation

Changes to the UK Immigration Rules announced

On 11 October 2018, the government published a "Statement of changes in Immigration Rules". The statement outlines the key changes to the rules which are due to take effect from 1 November 2018. The main purpose of the changes are to implement the next phase of the roll-out of the EU Settlement Scheme for resident EU citizens and their family members to obtain the right to remain and work in the UK.

Whilst the changes are largely considered to be positive, they were also published at the same time it was announced that the NHS immigration health surcharge would double.

Under the new rules:

  • Applicants can be given the opportunity to rectify mistakes on their applications which previously may have led to their automatic rejection.
  • Points-based system applicants can submit copies of supporting documents rather than originals (unless requested for verification purposes).
  • EU nationals and their family members will be able to apply for an administrative review if their application under the EU Settlement Scheme is refused on grounds of eligibility.
  • Home Office officials will have greater scope to request documentation which is missing from an application before refusing it.

The full statement can be found here.

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New Guidance and Consultations

Government Consultation on Ethnic Pay Reporting

The Department for Business, Energy and Industrial Strategy (BEIS) has launched a consultation to seek views on introducing mandatory ethnicity pay reporting by employers.

The consultation asks questions on:

  • what ethnicity pay information should be reported by employers to allow for meaningful action;
  • who should be expected to report; and
  • next steps.

The deadline for submissions is 11 January 2019. The consultation document and details of how to respond can be found here.

ACAS Guidance on Mental Health in the workplace

World Mental Health Day took place on 10 October. Statistics indicate that work-related stress alone accounted for 45% of all working days lost to ill-health in 2015/16 and that mental ill health costs UK employers an estimated £34.9 billion per year. It is therefore important that employers take steps to address the issue of mental health in the workplace, to create a supportive environment for staff and to minimise the impact of sickness on business.

ACAS have guidance to help employers manage mental health in the workplace and have also developed a new framework for positive mental health at work, for employers, employees and line managers. The framework can be found here.

Guidance for employers on the GDPR, data protection and the processing of criminal records data during recruitment

New guidance has been published by Unlock to ensure that employers' policies on collecting criminal data during the recruitment process comply with the General Data Protection Regulations (GDPR).

Over 11 million people in the UK have a criminal record and over 75% of Employers admit to discriminating against potential employees who declare that they have a criminal record at the recruitment stage. However, the guidance makes it clear that asking for criminal record data at the application stage could breach data production law as well as the criminal record disclosure rules.

The guidance supports the "ban the box" campaign which aims to persuade employers to remove the tick-box on job applications which asks whether applicants have a criminal record. The purpose of this is to encourage "fair chance" recruitment. The guidance contains the following overarching principles for employers to consider in the information lifecycle:

      1. Necessity – when do you need this information and how much information do you need?
      2. Transparency – are you providing candidates with enough information to enable them to make informed choices and understand their rights? Are you acting as a responsible and accountable Employer?
      3. Lawfulness – is the processing lawful? Are you meeting your obligations under UK Data Protection Regulation?
      4. Security – are you confident that the information can be protected, and safe from loss or damage?
      5. Retention – how long will you retain this information? Where will you retain it and who will have access to it? When will you delete it?

The full guidance can be found here.

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News

Budget – employment implications

For a summary of the key employment issues arising from the budget please click here.

Tipping

The government has announced plans to curb exploitative and inconsistent tipping practices across the hospitality industry in an aim to ensure that tips left for workers are retained by the workers in full.

New legislation, to be introduced at the earliest opportunity, is to set out that tips must not be retained by employers. This is likely to have greatest implications for card tips which, under current legislation, belong to the restaurant owner and there is no legal duty to pass on to its employees, although in practice they often choose not to.

The Department for Business, Energy and Industrial Strategy commented that the legislation will "give consumers reassurance that the money they leave in good faith to reward good service is going to the staff, as they intended – ensuring that hard work is rewarded."

Government announces measures to boost use of apprenticeships

The government has announced a number of reforms including further funding to improve the use of the Apprenticeship Levy.

The uptake in spending the levy funds has not been as high as the government envisaged and is partly being attributed to the restrictions on spending which are limited to training costs, with an employer still being required to foot the apprentices' salary and related costs.

Employers will now be able to invest a quarter of their apprenticeship funds more widely on people working for any businesses in their supply chain not just within their own organisation.

Further funding of £5 million has also been announced to introduce new apprenticeship standards with a view to increasing the types of training courses. These new standards are to be implemented ready for the start of the 2020/21 academic year.

The government is to monitor the operation of this levy through 2020 to ensure it supports the development of the skilled workforce.

Gender pay gap determines women's choice of employer

A new survey by the Equality and Human Rights Commission (EHRC) has revealed that nearly two-thirds (61%) of women take an organisation's gender pay gap into consideration when applying for jobs. The survey also found that 58% of women would be less likely to recommend their present employer if their establishment had a gender pay gap.

The research has prompted concern that there is a lack of substantive action taken by employers to close their pay gaps. It found that whilst 91% of employees had heard of the gender pay gap, almost half had not read or heard any information about their organisation’s own gap and a quarter of employees think their employer should be doing more to tackle it.

Gender Pay Gap Reporting is now into its second year, following the Gender Pay Gap Regulations which came into force 6 April 2017. We have previously published articled on the Regulations here and here. If you are unsure whether these Regulations apply to your business, or if you require further advice regarding compliance with the reporting requirements, please contact a member of our Employment team.

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