In brief – November monthly round up

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.

If you would like to discuss any of the points raised, please get in touch.

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

Employee who was promoted several times maintained 'stable working relationship' for purpose of bringing equal pay claim

In Barnard v Hampshire Fire and Rescue the Employment Appeal Tribunal (EAT) considered the meaning of 'stable working relationship' within the Equality Act 2010 and held that it could be maintained through promotions, such that the worker's equal pay claim would be in time.

The Claimant was employed by Hampshire Fire and Rescue. She moved through a number of different roles, several of which were promotions. When she brought an equal pay claim in relation to the entirety of her employment, the tribunal had to determine if any part of the claim was out of time. There is a six month limitation period for bringing equal pay claims in the employment tribunal and the time starts to run from the day the 'stable working relationship' ends. The tribunal decided that the Claimant's promotions resulted in a significant change in her work which broke the 'stable working relationship' thereby rendering part of her claim out of time.

The EAT held that the tribunal had failed to apply the correct test when considering the 'stable working relationship'. The tribunal should have considered whether the character, nature or type of work and the employment relationship had changed in a 'fundamental' or 'radical' way and should have also explored the nature and extent of the changes between the Claimant's roles more fully. The EAT allowed the appeal and remitted the case for a rehearing by a different tribunal.

Employee called a "fat ginger pikey" at work did not suffer racial or disability discrimination

In Evans v Xactly Corporation the EAT held that an employee who was a member of the traveller community and suffered from Type 1 Diabetes was not discriminated against on the grounds of race or disability when his colleague called him a  "fat ginger pikey".

Whilst the Tribunal accepted that on the face of it the remark was derogatory, when examining the context in which it was made they found that the incident could not amount to harassment. The Respondent's office environment was one of 'jibing and teasing'; the Claimant was friends with the colleague who made the remark; and he regularly engaged in office 'banter' of this kind with fellow employees. The EAT therefore held that the statutory definition of harassment was not met as the comment was not unwanted and did not have the purpose or effect of violating the Claimant's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for him.

The case is a reminder that the context in which behaviour takes place is a key consideration in complaints of harassment. Note however that the law on harassment has not changed, and that the above case should not be read as authority that such language will never constitute harassment.

Part-time employee who was paid proportionately less than her full time comparator was subjected to less favourable treatment

In British Airways v Pinaud the EAT considered the issue of parity of pay where part-time employees were expected to have 53.5% of the availability of full-time employees but were only paid for 50% of the full-time salary.

Ms Pinaud was employed as a part-time crew member. She was required to be available for 130 days of the year whereas her full-time colleagues were expected to be available for 243 days. However, she was paid 3.5% less in proportion to her full-time comparator. BA argued that in reality Claimant actually worked fewer days than her comparator as she did not actually work all of the days she was required to be available. However this was irrelevant. The tribunal found that the Claimant had suffered less favourable treatment. This treatment was not found to be objectively justifiable because it was considered to be open to BA to pay the Claimant 3.5% more than it actually did.

BA appealed to the EAT. The EAT allowed the appeal on objective justification but rejected the appeal against the finding of less favourable treatment. The EAT considered that the impact of increasing the part-time employees pay needed to be considered particularly in light of the 628 similar stayed claims. BA appealed the finding of less favourable treatment to the Court of Appeal.

The Court of Appeal rejected the appeal as the facts constituted prima facie unfavourable treatment. The case has been remitted to the tribunal to consider the issues of the justification defence and remedy.

Heirs of deceased employees can inherit the right to untaken paid annual leave

In Wuppertal v Bauer and Willmeroth Broßonn the Court of Justice of the European Union held that where an employee dies having not taken all of their paid annual leave, their heirs may be entitled to compensation in lieu of that untaken paid leave.

Whilst the Court had previously decided entitlement to paid annual leave does not lapse upon death, there was still uncertainty surrounding the position where domestic law precluded compensation in lieu of untaken paid leave from forming part of the estate. This case clarified that in such situations EU law shall prevail and incompatible domestic law will be disapplied in claims against private and public employers.

Employee on long-term disability benefits protected from dismissal by implied term

In Awan v ICTS the EAT disagreed with the decision of the employment tribunal which found that the employer's dismissal of the Claimant, who was a disabled employee on long-term disability benefits, was fair.

The EAT found that, on a proper construction of the employee's contract, a term should be implied that "once the employee has become entitled to payment of disability income due under the long-term disability plan, the employer will not dismiss him on the grounds of his continuing incapacity to work." The EAT held that the tribunal's conclusion that the dismissal was fair and a proportionate means of achieving a legitimate aim was erroneous. The case was remitted to a fresh tribunal.


Post-Brexit employment rights

Two draft statutory instruments, the Employment Rights (Amendment) (EU Exit) Regulations 2018 and The Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018 have been laid before Parliament. They are anticipated to come into effect on 29 March 2019 (exit day).

Their purpose is to remove references in employment law legislation which will no longer be appropriate following withdrawal. The draft statutory instruments are being shared as illustrative examples of how the European Union (Withdrawal) Bill can be used to correct retained law relating to employment rights.

The proposed changes include:

  • Repealing various powers of the Secretary of State that are derived from EU directives
  • Removing references to EU legislation where they are no longer appropriate
  • Making changes to Transnational Information and Consultation of Employees Regulations 1999 (SI 1999/3323) (TICE Regulations) which will attempt to replicate the current position as far as possible.

New guidance and consultations

Government consultation on the Shortage Occupation List

The Migration Advisory Committee has been commissioned by the Government to review the Shortage Occupation List (SOL). The SOL indicates occupations and job titles held to be in shortage across the UK, or in Scotland only, that could be filled through non-EEA migration.  The MAC is currently seeking views and evidence from stakeholders including businesses, employers, recruiters and trade unions.

The full consultation can be found here and responses can be submitted using the online form. The deadline for submissions is 6 January 2019.

The Women and Equalities Select Committee is set to launch an inquiry into the use of NDAs to silence victims of harassment and discrimination

Following the #metoo movement, the use of Non-Disclosure Agreements in sexual harassment cases has been an employment law hot topic. Practitioners and academics alike have been torn on the issue with some alleging that NDAs unethically silence victims of sexual harassment and others arguing that NDAs can actually empower victims by giving them leverage, or because they can allow complainants to avoid the stress of litigation.

The Women and Equalities Select Committee recently released an inquiry into this issue and recommended that the Government should address unethical use of NDAs. Following that report, the Committee has launched a new inquiry which has broadened the scope of their investigation to cover the use of NDAs in circumstances where any form of harassment or discrimination has been alleged.

The inquiry is currently at the submissions stage. The Committee is considering submissions on whether there are certain types of harassment or discrimination where NDAs are more likely to be used, whether the use of NDAs should be restricted in these cases and what safeguards may be used to protect victims in such cases.

ACAS has published new advice on performance management

ACAS published advice on performance management and treating staff fairly. The advice has been published following research that 1 in 10 employers consider their performance management systems to be demotivating for employees and only 1 in 10 use their systems for planning and monitoring development.

The advice suggests that good performance management is essential and that arrangements are best left as simple as possible. The criteria for measuring performance should be clear, fair and not discriminatory and development of staff should be an on-going consideration. The full advice can be found here.


Institute for Public Policy Research has published "The Fair Pay Report"

A report on the ways in which pay transparency can help tackle inequalities has been published by the Institute for Public Policy Research. The report follows the success of the gender pay gap regulations which have since seen high levels of compliance.

The report recommends extending mandatory pay-gap reporting to cover ethnicity for companies with more than 250 employees and extending the mandatory gender pay gap reporting smaller companies (with 50 or more employees). The full report can be found here.

Government urges businesses to reveal the numbers of disabled people they employ

The Department for Work and Pensions has launched a voluntary framework to encourage businesses to report how many of their staff have a disability or a health condition. The Government created the framework in partnership with employers and charities. The framework sets out reporting recommendations for both disability and mental health and wellbeing. Whilst it is aimed at large employers with over 250 employees, it can be used by employers of any size. The Government believes that greater transparency and reporting is essential to building a more inclusive society.

Government's leaked plans to toughen workers' rights?

It has been widely reported that the Business Secretary Greg Clark intends to implement a number of recommendations which emerged from the Taylor Review. Theresa May is reported to back the plans, which include introducing legislation to give gig economy workers the right to request a temporary or fixed hours contract after 12 months of work. There is also a plan to close the 'Swedish derogation' loophole which enables employers to pay agency workers less than full time staff for doing the same job. Another potential proposal is to start naming and shaming employers who do not pay out after employment tribunals.

Tribunal fees may be reintroduced

The Ministry of Justice (MoJ) is considering reintroducing fees for employment tribunal claims. Richard Heaton, Permanent Secretary at the MoJ, believes it is possible to create a fee system which strikes an appropriate balance between funding the court system and ensuring access to justice. However, no firm plans have been made.