Welcome to March's In Brief employment law update.
To 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.
In this bulletin:
The headlines about the Brexit extension won't have escaped your notice. The position around if, when or how the UK will leave the EU remains unclear and changes on a daily basis, a situation that the British Chambers of Commerce (BCC) have commented is "unacceptable". There is currently a deadlock in the Brexit process; although a cross-party group of MPs has now taken over control of the timetable from the Government in order to try and break it by holding a series of "indicative votes" on alternative ideas, so far none of these has held a majority.
What is clear is that, until an alternative plan is agreed by Parliament and the EU 27, the default position is that the UK will leave the EU without a deal on Exit day. The EU has agreed to extend Exit day from 29 March until 12 April. However, should the Government approve Theresa May's deal if it is put forward again, the EU have agreed that Exit day will be further extended to 22 May.
Whilst some businesses have been preparing for a no deal for some time, others have not; now may be the time to ramp this up and look to use any extension as time to focus on planning for this possibility.
In the context of people management and strategy, we have been working with clients to prepare bespoke, sensitive and informative communications to all staff with the aim of providing comfort and reassurance on how the business is preparing for a no deal Brexit as well as communicating the legal position for EU citizens (for more information on this please see our article: Deal or No Deal, the EU immigration dilemma). For more assistance with this please contact Karen Bates or another member of our employment team.
In the courts...recent case updates
Apportionment of liability under Agency Workers regulations
In London Underground v Amissah, the Court of Appeal considered the calculation of compensation under the Agency Worker Regulations 2010 and apportionment between a temporary work agency and a hirer.
London Underground had engaged agency workers through an agency, Trainpeople. Trainpeople paid its workers less per hour than London Underground paid its employees for the same work, so London Underground agreed to pay Trainpeople the difference on the basis that Trainpeople would then pay this on to its workers. However, Trainpeople dishonestly withheld this money and had gone into liquidation by the time the agency workers realised. The agency workers therefore brought a claim against London Underground for a breach of the Agency Workers Regulations on the basis that they were paid less than comparable London Underground staff.
The Tribunal apportioned liability equally between Trainpeople and London Underground but, when assessing the amount of compensation payable by London Underground, decided that it was 'just and equitable' that London Underground should pay nothing (as if they did, they would essentially be paying for the underpayments for a second time, and this would not be fair).
On appeal, the Court of Appeal agreed that Employment Tribunals can award compensation for a breach of the Agency Workers Regulations and can reduce the amount of compensation payable if it is just and equitable to do so. However, that would be exceptional, and where the Claimant was blameworthy. On the facts of this case, it was not just and equitable to reduce the compensation so that London Underground did not pay anything. London Underground had chosen to deal with this particular agency, and they had chosen to pay the agency directly, trusting that the agency would forward this money on to its workers. London Underground, not the Claimants, should therefore bear the risk of Trainpeople's dishonesty. The assessment of compensation has now been remitted to the Tribunal, where it is likely that London Underground will be held liable for the full amount.
Final warnings must be 'live' in order to dismiss for misconduct
In Beattie v Condorrat War Memorial and Social Club & Ors, the EAT confirmed that to fairly procedurally dismiss an employee for misconduct (as opposed to gross misconduct) the employee must already have been issued with a valid live final warning which was not manifestly inappropriate.
This case is really a reminder of the importance of thorough investigation before issuing a final written warning to avoid a challenge on its validity when you later dismiss on notice for further acts of misconduct.
For further discussion about this case and practical points that employers should consider before procedurally dismissing an employee for misconduct, see our article here.
Compensatory rest breaks do not need to be an 'uninterrupted' 20 minute break
In Crawford v Network Rail Infrastructure Ltd, the Court of Appeal held that, where the entitlement to a rest break under the Working Time Regulations 1998 (WTR) is excluded, the compensatory rest that the employer must provide for an equivalent period must have the same value in terms of contributing to an employee's wellbeing but does not need to be an 'uninterrupted' 20 minute break. Multiple breaks cumulatively totalling 20 minutes was acceptable.
Sleep-in shifts and National Minimum Wage Regulations: Supreme Court to hear Mencap appeal
The Supreme Court has permitted an appeal against last year’s Court of Appeal decision in Royal Mencap Society v Claire Tomlinson-Blake. In this case, the Court of Appeal decided that the duration of the "sleep-in" shifts for the purpose of the National Minimum Wage Regulations (MNWR) are to be characterised as "available to work" rather than "working".
Following the Court of Appeal's decision, employers in the care sector believed that they had clarity in relation to "sleep-in" shifts and the NMWR. However, it now appears that clarity will not be provided until the outcome of the hearing in the Supreme Court. Please see our article on the Court of Appeal decision here.
Personal reasons cannot prevent a dismissal from being automatically unfair
The Court of Appeal ruling in Kaur v Hare Wines determined that under a TUPE transfer, if the transfer is the sole or principal reason for dismissal it is automatically unfair and "purely personal reasons" cannot prevent such a dismissal from being automatically unfair.
The claimant was employed as a cashier at Hare Wines Ltd (HWL). The claimant and a colleague had long running difficulties when working together. It transpired that this former colleague went on to become a director of the company that was to take over HWL in a TUPE transfer. On the day of the transfer the claimant was dismissed. She accordingly brought a claim for automatic unfair dismissal.
The Employment Tribunal found that the claimant was dismissed as the employer/transferee company did not want her, meaning the dismissal was because of the transfer and therefore automatically unfair. HWL unsuccessfully appealed to the EAT and subsequently to the Court of Appeal, arguing that the real reason was that the claimant objected to the transfer. The Court of Appeal disagreed as it found that the claimant had not objected to the transfer.
The key question was whether the employee was dismissed (a) due to her poor relationship with the former colleague (with the dismissal on the day of the transfer purely coincidental) or (b) because HWL did not want her on the books because of the poor relationship with the former colleague. It was a matter for the Court of Appeal to determine which of these was the sole or principal reason for the dismissal.
In answering this question the court highlighted two facts as being particularly relevant:
- The dismissal was on the day of the transfer (being strong evidence in the claimant's favour)
- The relationship between the claimant and the director had continued for some time without HWL seeking to terminate the claimant's employment.
It was found that HWL anticipated there would be ongoing difficulties in the working relationship and it was therefore decided that they did not want her to transfer (a fact that had also been communicated to the transferor). Therefore, the reason for the dismissal was the transfer and it was consequently automatically unfair.
An employer may suspend an employee without breaching the implied term of trust and confidence when they have reasonable and proper cause for doing so
In London Borough of Lambeth v Agoreyo, a primary school teacher was suspended pending investigation into the incidents in which it was claimed she had used excessive force in relation to two children in her class. The teacher resigned that same day, and subsequently commenced proceedings against the school for repudiatory breach of the implied term of trust and confidence.
At first instance, the County Court held that the school had “reasonable and proper cause” for the suspension so there was no breach of the implied term of trust and confidence. However, on appeal the High Court found that the suspension had been a "knee-jerk reaction" and it was not "reasonable and/or necessary" to suspend her and consequently there was a breach. This was then appealed again to the Court of Appeal, which agreed with the County Court, finding that there was "reasonable and proper cause" to suspend the teacher and therefore there was no breach of trust and confidence.
Please see here our article on this case and suspensions more widely.
Using an inaccessible email address during maternity leave could be classed as unfavourable treatment
In SW Yorkshire Partnership NHS Foundation Trust v Jackson, the EAT concluded that sending an important email to a woman whilst she is on maternity leave to an email address which she could not access could be considered to be unfavourable treatment under the Equality Act 2010.
Whilst on maternity leave, the claimant was put at risk of redundancy. She was sent a letter to her work email address detailing information on redeployment opportunities. However, she did not find out about the opportunities for several days, and although this caused no substantial harm, it was a legitimate concern and her claim for unfavourable treatment under Equality Act accordingly succeeded given that the reason she did not get the email was because she was on maternity leave.
On appeal however, the EAT held that the Tribunal had erred in applying the test for causation. Although the unfavourable treatment would not have happened 'but for' taking maternity leave, the Tribunal should have considered the reason why the email was sent to her work email. There was, however, no finding on this point. The 'reason why' test can be satisfied where a rule is applied which is inherently discriminatory, or where the protected characteristic has actually operated on the discriminator's mind. To avoid this, employers should seek to agree contact details with pregnant employees before they start maternity leave (and observe them).
The 'potential future breach' of a statutory right is insufficient to claim automatic unfair dismissal
In Spaceman v ISS Mediclean Ltd, the EAT confirmed that a claimant cannot claim automatic unfair dismissal for a 'potential future breach' of a statutory right – there must have been an actual infringement for the claim to be successful.
The claimant was employed as a hospital porter and had less than two years' service. An allegation of sexual harassment was made against him by a female colleague, and he was invited to a disciplinary hearing. The claimant heard from a colleague that the respondent had already made up its mind to dismiss him, and at the disciplinary meeting argued that he was being unfairly dismissed on the basis that he had not been given a fair hearing. He was then dismissed.
Although he could not claim unfair dismissal (as he had less than two years' service), he brought a claim for automatic unfair dismissal on the basis that the respondent had infringed a statutory right – i.e. his right not to be unfairly dismissed. He claimed that the reason for his dismissal was the fact that he had made an allegation that he was being unfairly dismissed. The Employment Tribunal struck out the claim on the basis that the right in question in this case was the right not to be unfairly dismissed, but the assertion of this right could only be made after the dismissal. Therefore, it could not be relied on as the reason for dismissal.
On appeal, the EAT agreed, confirming that a claimant can only claim automatic unfair dismissal for an actual breach of a statutory right (not an anticipatory one).
An employer can discriminate on grounds of religion against an employee who shares the same religion
In De Groen v Gan Menachem Hendon Limited, the EAT found that it is possible for an employer to discriminate against an employee on the grounds of religion even if that employee shares the same religion as the employer.
In this case, the claimant was a teacher at an ultra-orthodox Jewish nursery and began cohabiting with her partner, both of whom were practicing Jews but did not consider cohabitation outside of marriage to be impermissible. When the nursery found out, the claimant was asked to lie to pupils' parents about her cohabitation as some of them could find this practice morally offensive. She refused to lie, and was dismissed. She then brought a claim for discrimination on grounds of religion, arguing that she was treated less favourably because she did not consider cohabitation outside of marriage to be impermissible.
The EAT agreed with the claimant, finding that she had been discriminated against on grounds of religion. The EAT confirmed that, if the claimant and respondent are of the same religion, but the claimant is treated less favourably because of a lack of belief on a point that the respondent considers to be a tenet of that religion, this will amount to discrimination.
New guidance and consultations
Confidentiality Clauses – Proposals for Reform
The government has launched a consultation on new laws to prevent the misuse of non-disclosure agreements in cases of workplace harassment and discrimination.
Following on from #metoo, the government is concerned that, although confidentiality clauses can often be used legitimately (for example, in employment contracts to protect trade secrets or as part of settlement agreements to give both parties the freedom to move on), they are being used more and more frequently to prevent the disclosure of workplace harassment and discrimination when there is a genuine public interest case for publishing this information.
To prevent the misuse of non-disclosure agreements, the government is consulting on measures to:
- Ban confidentiality clauses which prevent a victim reporting or discussing potential criminal acts with the police
- Require any confidentiality clause in an employment contract to be included in the written statement of employment particulars that is issued at the start of the employment relationship
- Require all confidentiality clauses to highlight which types of disclosure the clause cannot prevent, and make void any clause which does not comply with this obligation
This consultation is open until 29 April 2019. We will report on any proposed legislative changes that come out of this consultation in future bulletins.
For more on the latest developments arising from #metoo, please see our article here.