Welcome to May'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 Times sued for transphobic discrimination
News UK (who publishes the Times) has been sued by a former editor for discrimination, harassment, victimisation and unfair dismissal on the grounds of gender reassignment.
After 14 years' service the editor, who transitioned genders during her employment with the newspaper, was made redundant. In her complaint, the editor included stories that the newspaper published about trans people as well as her experience of suffering from bullying and the blocking of promotions during her employment.
News UK has denied all of the claims. The hearing continues.
£16 million of employment tribunal fees awaiting refund by the government
Following the Supreme Courts' decision that employment tribunal fees were unlawful, it has been reported that the government is yet to refund £16 million to claimants.
Since the refund program commenced, the government has made 21,300 refunds at a cost of £16.95 million. For more information, please see our article here which sets out how employers can access refunds for fees they have paid.
Low Pay Commission publishes second NMW non-compliance and enforcement report
The Low Pay Commission's report has found that in April 2018, 439,000 people were paid less than the hourly minimum wage that they should have been paid. Of those people, 369,000 were not paid the National Living Wage, which workers aged 25 and over are entitled to. The report uncovered that men are more likely to be paid at least the minimum wage. Underpayment is also higher for the youngest and oldest workers and the largest numbers of underpaid individuals work in hospitality, retail and cleaning and maintenance.
The report recommends the Government continues to invest strongly in communications around the minimum wage compliance and enforcement and to build a suitable complaints process. The report also recommended that employers are given adequate guidance in an effort to reduce the need for enforcement.
Addison Lee drivers earning "below minimum wage" strike
Addison Lee drivers have staged their first 24 hour strike against their poor pay and working conditions.
Previous court decisions have held that Addison Lee drivers are 'workers' and should therefore receive the minimum wage however some drivers claim to be paid £4.72 per hour.
Our previous commentary on this can be found here.
In the courts... recent case updates
Unfair Dismissal for attempting to convert someone from one religion, belief or opinion to another
In Kuteh v Dartford and Gravesham NHS Trust, the Court of Appeal held that it was not unfair to dismiss an employee for improper proselytising (attempting to convert someone from one religion, belief or opinion to another).
In this case, despite a nurse giving an assurance to her manager that she would cease initiating conversations about religion with patients, she continued to do so which resulted in disciplinary proceedings being brought and the Claimant being dismissed.
The Court of Appeal, agreeing with the reasoning of the employment tribunal and EAT, held that the nurse had both improperly proselytised to patients and not followed a lawful management order and, even having regard to the importance of the right to freedom of religion, it was open to the tribunal to conclude that the dismissal was fair.
In this case the Claimant did not bring a religious discrimination claim. However, previous case law suggests that employees will struggle to succeed in a claim for either direct or indirect religious discrimination where they continue to proselytise during their employment when they have been given a prior clear instruction not to do so.
Arrears of pay claim can be brought if employer becomes insolvent and pay has not been quantified
In Graysons Restaurants Ltd v Jones the Court of Appeal upheld the EAT’s decision and found that in principle, arrears of equal pay can be claimed from the National Insurance Fund if an employer becomes insolvent and pay for the purposes of an equal pay case has not yet been quantified.
TUPE establishes that liability from insolvent employers for unpaid sums of up to 8 weeks' arrears of wages to an employee are payable by the Secretary of State and do not transfer to the transferee so long as it falls under a ‘relevant statutory scheme’. However, the EAT held that liability for sums in excess of the amount payable from the Secretary of State transferred to the transferee under TUPE.
ECJ holds that employers must record Working Time
The ECJ in Federación de Servicios de Comisiones Obreras (CCOO) v Deutsche Bank SAE agreed with the opinion of Advocate General Pitruzzella when holding that the Working Time Directive required employers to keep records of the actual daily working time of its employees.
The ECJ noted that without any such requirement, Member States would not be able to establish an "objective, reliable and accessible system enabling the duration of time worked each day by each worker to be measured".
The practical effect of this judgment is that, provided EU law remains in force in the UK, there is a serious risk that the Working Time Regulations ("WTR") in the UK do not comply with the Directive's requirements. Employers should therefore note that the Government and the courts may interpret the WTR in line with the purpose of the Directive and employers should look to pre-emptively record the working time of its employees to avoid the risk of claims. Currently the Health and Safety Executive guidance states that specific records are not required and employers may be able to rely on records maintained for other purposes, for example pay. However, the ECJ judgment suggests this approach may not comply with the Directive's requirements.
Unfair dismissal time limits for Claimants apply even if blameless
In Pora v Cape Industrial Services Ltd the EAT upheld the decision that it was “reasonably practicable” for a unfair dismissal claim to be presented in time even when the Claimant was blameless and the delay was solely the fault of his representatives. The Claimant was referred to a law centre well within the time limit and sought to bring claims of unfair dismissal and race discrimination. He said he was repeatedly assured by the law centre that his claim was to be presented on time and that everything was in order but this was not the case.
Despite having sympathy for the Claimant, who had done everything he could to present the unfair dismissal claim in time, the EAT applied the strict approach established in case law and concluded there were no grounds for interfering with the original tribunal's conclusion. The Tribunal did, however, allow the race discrimination claim to proceed to a full hearing for determination of whether it would be just and equitable to extend time on that claim. This case illustrates the differences in the application of the "reasonably practicable" and "just and equitable" tests for extension of time and the impact the different tests can have for Claimants who lodge claims outside of the prescribed time limits.
One-off act of racial discrimination cannot be limited to lower bracket of Vento
In Base Childrenswear Ltd v Otshudi, the EAT upheld the decision of the tribunal which made awards of £16,000 for injury to feelings in the middle bracket of Vento, loss of earnings, interest, aggravated damages and personal injury, plus a 25% uplift for failure to comply with the ACAS code. This was despite the tribunal finding that there was only a one-off act of racial discrimination.
In upholding the decision, the EAT outlined that although whether the act amounted to a course of conduct or was a one-off is taken into account, the Vento bands are not prescriptive and any injury to feelings award is to be determined on a case by case basis.
This case demonstrates that the question the ET will look to answer is always "what was the particular effect on this individual complainant?" and a one off act could potentially be more serious than a course of conduct. The other point to note is the Tribunal awarded a 25% uplift for failure to follow the ACAS code in respect of her dismissal (even though the employee did not have unfair dismissal rights) and a grievance lodged after the employee had been dismissed. Whilst this point was not specifically considered by the EAT as it did not form part of the appeal, it did not suggest the Tribunal's finding was erroneous so it would be advisable for employers to follow the Code in respect of post-termination grievances.
A dismissal may be discriminatory even if employer does not know of disability until appeal hearing
In Baldeh v Churches Housing Association of Dudley and District Ltd, the EAT held that a dismissal may be discriminatory even if an employer did not know of the employee's disability at the time of the dismissal, when they are told about it at the appeal hearing.
Employers should be aware that an appeal is considered a fundamental part of any dismissal. It is therefore relevant for employers to continually evaluate their knowledge (whether actual or what they ought to have known) of the employee's disability up to the point at which it decides the potential appeal.
Employees are working "time work" where they go beyond merely being on call
The EAT in Frudd v Partington Group held that wardens and / or receptionists who were on call from evening to morning were working "time work" under the National Minimum Wage Legislation in situations where their responsibilities went beyond merely being on call.
In reaching its decision, the EAT found that the Claimant was entitled to the national minimum wage for the period between the end of the Claimant's shift (between 4.30pm and 8.30pm) and 10pm as they were required to undertake tasks such as showing round prospective customers and welcoming late arrivals. However, between 10pm and 8am (the remainder of shift),they were not on working time, unless they were called out for an emergency for which they received remuneration, as they were only on-call.
Note that the sleep-in exception as highlighted in the Mencap case did not apply here because the Claimants were not working a sleep-in. For more information on the latest developments of the Mencap case, please see our March monthly round-up.
Courts and Tribunals (Online Procedure) Bill announced as part of the courts and tribunal reform programme
The Courts and Tribunals (Online Procedure) Bill (the "Bill") has been announced as part of the courts and tribunals reform programme. The first reading of the Bill was on 1 May 2019 with the second reading to take place on 14 May 2019.
The Bill creates the framework for developing new, simplified rules for online services in civil, family and tribunal proceedings and is planned to assist with the creation of clear and understandable rules for new digital processes.
First reading of Bill aligning NICs and income tax on termination payments and sporting testimonials
The House of Commons debated and agreed, without amendment, the National Insurance Contributions (Termination Awards and Sporting Testimonials) Bill (the "Bill") which amended the NICs treatment of termination payments and sporting testimonials.
The Bill will impose a NICs charge on any termination payments that are subject to income tax, which will affect termination payments over £30,000. If the termination payment is made to the employee, their spouse, civil partner, blood relative or dependent then providing it was paid in connection with the termination of the employee's employment, the charge will come into force.
The Bill will now move to the Commons Report stage.
Cap on public sector exit payments
The government has revived the consultation process in relation to the proposed cap on public sector exit payments first initiated in August 2015. The cap will apply to payments made by public sector authorities to its employees and payments made by public sector offices to office holders, affecting local authorities, the NHS and Police Forces to name a few.
It is thought that the cap will set a limit of £95,000 on the total amount of remuneration an employee receives on exiting the organisation and will therefore potentially encompass a variety of different types of payments including severance or ex gratia payments. However, the draft Regulations do provide for a number of exclusions including death in service payments, statutory redundancy payments and payments in lieu of notice which do not exceed one quarter of the person's salary. The consultation will close on 3 July 2019 and we will be including an in-depth article in next month's bulletin.
Chair's Commons Bill seeks new protections for pregnancy and maternity discrimination
The Chair of the Women and Equalities Committee (the "Committee"), Maria Miller MP, has pushed for new protections for pregnant women and mothers by introducing the Pregnancy and Maternity (Redundancy Protection) Bill 2019.
On 1 May 2019, the Committee published its response to the BEIS’ consultation and supported the proposal to extend redundancy protection for new mothers from the date they notify their employer in writing of their pregnancy to six months after their return from maternity leave. Additionally the Committee agreed with BEIS’ suggestion that protection should be extended to those on shared parental and adoption leave, however they asked for further clarity as to which forms of parental leave would qualify.
The Committee urged the government to develop a website for both employers and individuals to use as a resource when making decisions and, in an effort to ensure health professionals can provide comprehensive advice on this topic, to seek counsel from the GMC and National Midwifery Council. It also recommended companies should be required to report on retention rates for women 12 months after returning from maternity leave and 12 months after lodging an application for flexible working. The Committee referred to the widespread support for increasing the time limit in claims for pregnancy and maternity discrimination from three to six months.