Employment tribunal and court judgments | July 2024

A small business owner issued with a fixed penalty notice under section 40 of the Pensions Act 2008 for failure to submit a declaration of compliance with its auto-enrolment duties, has successfully appealed under section 40 of the Pensions Act 2008, citing genuine misunderstanding and prompt remedial action.

The employer company, a coffee shop, first became subject to auto-enrolment duties on 6 May 2023 after it was incorporated on 28 March 2023. The Pension Regulator sent a reminder letter in July 2024 that the business was due to submit a declaration of compliance (now overdue from 5 October 2023). The Regulator issued a compliance notice on 1 November 2023, followed by a fixed penalty notice of £400 on 29 December 2023.

Despite arguing that he lacked experience of auto-enrolment, that he was efficient at meeting his other obligations (such as tax payments to HMRC), and that he was affected by pressures of running a small business, the Regulator upheld its’ decision to issue the notice as it was a key statutory duty.

It stated that, as the other automatic enrolment duties had been complied with, ‘it is not plausible they were not aware of the requirement to declare and were unable to do so.’

The Tribunal rebuked the Regulator and reiterated that it should maintain a sense of proportion and not indulge in ‘overblown rhetoric’ which go against the purpose for which it was created. The penalty was retracted.

This decision might be welcomed by employers as it appears to demonstrate that, if substantive obligations to automatically enrol staff into a qualifying pension scheme and to pay employer contributions are carried out, that there may be some leeway given where procedural requirements are missed accidentally. However, this decision was specific to the facts and it is best to ensure all relevant pension duties are complied with to avoid potential breaches that can lead to such action in the first place and not tempt fate (nor costs associated in challenging such enforcement actions) in this regard.

A tribunal has dismissed an employee’s claims against his former employer, of direct discrimination, unfair dismissal, and wrongful dismissal in relation to his gender critical beliefs.

A new policy was introduced by the Respondent which allowed staff to use their pronouns in their email signatures. The policy did not dictate which pronouns could actually be used. The Claimant protested against the system due to his belief that it promoted a policy of self-identification that was against his beliefs. In protest, the claimant added the words “XYchromosomeGuy/AdultHumanMale” to his email. Having refused numerous management instructions to remove the words, he was eventually dismissed.

Direct discrimination

The ET held that the Claimant’s views, including that sex is biologically binary, satisfied the Grainger criteria (defining a ‘belief’ under s.10 Equality Act 2010 ‘EqA’) and were protected under the EqA. However, whether the manifestation of the belief is protected in law is a separate question from whether the right to hold the belief is protected.

The ET found that the Claimant knew that it was a deliberately provocative act and the purpose of doing the deliberately provocative act was to try to persuade the respondent to change their policy. There was not a sufficiently close causal nexus between the email signature and the claimant’s gender critical beliefs. This meant that the Respondent did not treat the Claimant in the way that they did because of the Claimant’s protected belief. As a result, direct discrimination based on a protected characteristic could not be found.

Unfair dismissal

The Claimant was aware of the Respondent’s public sector equality duty and that the Respondent had obligations to comply with these and consider people with different protected characteristics when making decisions. Given that a fair process was followed by the Respondent and the Claimant refused to change the emails or the signature despite having the chance to do so, the Respondent had no choice but to dismiss and this was within the band of reasonable responses available to the Respondent.

Introducing the policies allowing self-identification in email footers and encouraging inclusion and feelings of inclusion amongst staff and service users who identify as a gender that is not consistent with their biological sex is a key step forwards for many employers. These policies should be clearly explained to employees and guidelines as to how pronouns are to be displayed provided.