In brief – October monthly round up

Welcome to October'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, legislation and consultations for this month.

If you would like to discuss any of the points raised, please get in touch with Helen Dallimore, Managing Associate or with your usual contact in the Foot Anstey Employment team.

In this bulletin:

  1. In the courts...recent case updates
  2. Legislation and consultations
  3. News

In the courts... recent case updates


In Raj v Capita Business Services, the EAT held that unwanted massaging of a male employee's shoulders by a female manager did not constitute harassment.

Whilst the EAT found that there was unwanted conduct which had the effect of creating an offensive environment for the Claimant, s.26 of the Equality Act also requires that such conduct is related to a relevant protected characteristic. Establishing the first part of the statutory test for harassment did not give rise to a prima facie presumption that the unwanted conduct was related to a relevant protected characteristic. The EAT confirmed that the burden of proof had not shifted to the Respondent to show that the massage was not related to the Claimant's sex. In any event, the EAT found that the conduct was not in fact related to sex, reasoning that the contact was with a "gender neutral" part of the body.

Notwithstanding the EAT's decision in this case, employers should be alerted to the risks of this type of behaviour in the workplace. Given the fact-specific nature of judicial reasoning in employment tribunal cases, a tribunal could well make a finding of harassment in a similar case. Moreover, the existence of such behaviour in the workplace is likely to undermine attempts by employers to create a positive culture. For more information on this case and the issue of harassment, please see our previous article here.

Rudeness and insubordination not deemed to be professional misconduct issues

The Court of Appeal has agreed with an Employment Tribunal decision that allegations of misconduct against a doctor, which included rudeness and insubordination, were not constituted as allegations of professional misconduct.

In Idu v East Suffolk and North Essex NHS Foundation Trust, the allegations made against the doctor were solely focused on her personal conduct rather than her medical skills. This meant that the NHS Trust did not need to have an independent medically-qualified person present on the disciplinary panel under its professional standards policy.

Idu was charged with gross misconduct in April 2016 after a disciplinary investigation and was also found guilty of misconduct resulting in her being summarily dismissed. After failing to win an internal appeal Idu brought a claim for unfair dismissal. One of the points she brought related to procedural failure by the NHS Trust in that they failed to follow the professional standards policy where, at a hearing of professional misconduct, the panel must include a member who is medically qualified and not employed by the NHS Trust. Idu argued that her dismissal was procedurally unfair.

The Employment Tribunal found that the case was not professional misconduct and so the requirement under the professional standards policy did not apply. Idu appealed to the EAT but was unsuccessful as the Eat held that her rudeness and insubordination did not amount to professional conduct issues. Idu then appealed to the Court of Appeal.

The Court of Appeal dismissed her appeal, upholding the EAT's decision that none of the allegations were related to her medical skills and so none of them raised questions of professional conduct. The Court of Appeal also rejected Idu's argument that the issues had 'arose from' exercising her medical skills and that issues that cover a consultant's professional responsibilities should be covered. In the Court of Appeal's view, they could not find that such conduct would necessarily arise from her exercise of medical skills and that all the allegations concerned her relationship with her employer and other staff members.

Clarification on the application of legal professional privilege

The Court of Appeal has held in Curless v Shell International Limited, that legal professional privilege was maintained in circumstances where legal advice was given about the option of dismissing an employee ("Mr Curless") on grounds of redundancy, where the employee in question had already brought a claim of disability discrimination at an Employment Tribunal, raised an internal grievance and there were on-going capability concerns. Mr Curless had been made redundant by Shell, with his employment ending on 31 January 2017. He had subsequently brought a second Employment Tribunal against Shell in March 2017. The Court of Appeal was asked to consider in this matter whether a particular email, between Shell's in-house lawyers, in respect of Mr Curless's redundancy, were subject to legal advice privilege or not.

Mr Curless argued that an e-mail between Shell's in-house lawyers contained advice suggesting that a redundancy situation be created by Shell so as to act as a 'cover' for the real dismissal reasons of Mr Curless (i.e. those based on the existing disability discrimination claim he had brought against Shell, in addition to his grievance). Mr Curless argued this email should not be covered by legal professional privilege because it was effectively advising Shell to take discriminatory action and that the redundancy was a sham, thereby invoking the 'iniquity exception' where privilege would be lost in such 'iniquitous' circumstances. This case was slightly unusual in that the e-mail of advice was anonymously sent to the employee by a third party.

The Court of Appeal disagreed with Mr Curless, finding that there was a genuine redundancy situation and the e-mail was giving advice as to how the redundancy process could be applied to the employee. It was found that this was the sort of advice that lawyers provide "day in, day out" and should therefore be covered by legal professional privilege.

This case gives more comfort to lawyers and their clients that they can have discussions about possible termination scenarios and attached risks in more difficult situations where employees have more enhanced legal protection. But we do need to be aware that there is no absolute right to legal professional privilege and there still remains the risk that were legal advice is not considered conventional that it will not be protected by legal professional privilege and therefore may be used in legal proceedings.

Prior to the Court of Appeal Hearing, Shell had successfully obtained an anonymity order and the case was reported as X v Y Ltd (see our previous bulletin on this case in September 2018).

Retrospective measures to eliminate sex discrimination

The ECJ has held that a pension scheme cannot retrospectively alter pension entitlement by levelling down benefits in order to equalise a discriminatory measure (Safeway Ltd v Newton).

In 1991, Safeway announced that normal pension age would be changed to 65 for both men and women. It was explained that the change was required following the ECJ decision in Barber v Guardian Royal Exchange, which confirmed that unequal benefits for men and women constituted sex discrimination. Previously, men had been entitled to withdraw their pensions at 65, whereas women could take their pensions at 60.

The ECJ held that eliminating discrimination by retroactive effect could not be achieved by removing the advantages of the persons within the favoured category – that is, by levelling down the benefits of women as a result of increasing their retirement age to 65. Rather, discrimination could only be equalised by granting persons within the disadvantaged category the advantages of those in the favoured category. In this case, therefore, the discrimination could only have been equalised by reducing the retirement age of men to 60. The judgment accorded with the general principle of legal certainty which prohibits implementing measures from having retroactive effect. The ECJ did, however, comment that there could be an exception to this general rule where there is an overriding reason in the public interest, such as preventing the financial balance of the pension scheme from being seriously undermined.

In this case the UK Court had not asserted that the retroactive equalisation by levelling down the benefits was necessary to avoid undermining the financial balance of the scheme, despite the sums at stake being in excess of £100 million, so the ECJ found there was no objective justification for that measure and it remains to be seen whether this will be further contested.

Entitlement to statutory redundancy payment in addition to contractual redundancy payment

In Ugradar v Lancashire Care NHS Foundation Trust, the EAT considered the relationship between statutory redundancy payment entitlement and NHS contractual redundancy payment entitlement, finding that the individual was entitled to both.

Ms Ugradar's NHS employment contract incorporated Agenda for Change terms and conditions, which state that an employee's statutory redundancy entitlement is to be offset against any contractual payment. Her contractual claim was worth £43,949.04 and her statutory entitlement was £5,868. The EAT found that, after the offset, her contractual entitlement was reduced to £38,071.04. This was then reduced to £25,000 in accordance with the maximum amount that can be awarded by a tribunal for a contractual claim. However, the EAT held that Ms Ugradar remained entitled to the statutory payment on top of the contractual payment. Further, it was held that any provision within a contract of employment purporting to restrict rights to a statutory redundancy payment would be void due to the rule against contracting out in s.203 Employment Rights Act.

Employers in other sectors who operate similar contractual redundancy schemes will need to be aware of the interplay between their scheme and the statutory redundancy entitlement of employees.

Altering a draft investigation report did not render a dismissal unfair

In Dronsfield v The University of Reading, the EAT upheld a tribunal's decision that removing evaluative conclusions from a draft investigation report did not render a dismissal unfair.

The final version of a joint investigation report into the conduct of a teacher, who admitted having a sexual relationship with a student, omitted opinions given by the investigator. The initial drafts contained an opinion that the conduct was not immoral, scandalous or disgraceful and therefore did not justify dismissal. The university went on to dismiss the teacher for gross misconduct. The university's in-house solicitor had recommended amending the report since the investigator's role was not supposed to involve making evaluative conclusions; such conclusions should have been left to the disciplinary panel.

The EAT found that the tribunal had looked at the overall fairness of the disciplinary process and that no evidential material had been withheld. The external barrister who heard the internal appeal into the dismissal had been entitled to reach a decision that the investigators had not changed the report with any intention to make a dismissal more likely.

This case highlights the need for employers to give clear instructions to investigators in order to ensure that they do not stray into giving evaluative opinions. Given that the role of the investigator is just to determine whether the employee has a prima facie case to answer, employers need to narrowly define the factual matters to be investigated.

Judicial review of state pension age increases for women

In R. (on the application Of Delve and another) v Secretary of State for Work and Pensions, the High Court dismissed a judicial review claim which challenged the government's increase of the state pension age to 65. The change came into effect gradually in order to bring the retirement age for women in line with the age for men. This increase from 60 to 65 was part of an attempt to achieve equalisation with both sexes since having had retirement ages increased to 68 to attempt to address concerns about the cost associated with paying state pensions for longer as people continue to live longer.

A campaign group brought the claim, arguing that many women had not been given sufficient time to prepare for the extra years without a pension due to the lack of notification about an increase. Further, they argued that the change amounted to unlawful discrimination on the grounds of sex and age.

The High Court found there to be no discrimination and went on to state that, even if there had been, it could have been justified due to the legislation having a legitimate purpose and foundation. It held that the claimants had no legitimate expectation that the retirement age would not be altered without consultation and that interested bodies had been consulted prior to the introduction of the legislation.

It was also made clear that the issue was largely driven by fiscal and social policy which the court considered was beyond its control.

BBC News Presenters Lose IR35 Appeal

The First-tier Tax Tribunal held that IR35, legislation that allows HMRC to collect additional payment where a contractor is an employee in all but name, applied to contracts of three news presenters working for the BBC through their personal service companies (Paya Ltd and others v HMRC). The decision was made through a casting vote.

The Tribunal recognised a mutuality of obligation after applying established case law as the contracts obliged the BBC to provide and pay a minimum number of days' work whilst also obliging the presenters to be available on a "first call basis". Nor could the Tribunal find any meaningful right of substitution.

The BBC had a degree of control under the contracts as an employer as it determined the place of work; the presenters were obliged to follow the BBC's editorial guidelines with ultimate control lying with the BBC and the presenters were restricted to carry out work for others.

HMRC also argued that the presenters' advisers were acting carelessly. The Tribunal dismissed this claim, noting that the advisor's different interpretation of IR35 did not amount to acting carelessly, and so the six-year time limit under Section 36 of the Taxes Management Act 1970 (the "TMA") did not apply, but the four-year limit in Section 34 of the TMA did. This meant that HMRC was time restricted from issuing some of the determinations.

The ruling in this case opens the BBC up to further claims by the HMRC in relation to other workers on similar contracts which are potentially subject to IR35. From April 2017 amendments were made to hold public authorities liable for determining the tax status of their contractors who work through Personal Services Companies ("PSCs") and this is being extended to private sector employers from April 2020. For further information on the updates coming in April 2020 to IR35, please click here.

Strike ballot statutory notice requirements

The Court of Appeal has held that a strike ballot notification providing the ranks of pilots was compliant with the duty on trade unions to notify employers of the categories of employees to be balloted for industrial action under section 226A of the Trade Union and Labour Relations (Consolidation) Act 1992.

In British Airways plc v British Airline Pilots' Association, British Airways pursued an injunction in the High Court following BALPA's notification of their intention to hold a ballot in order to ascertain whether its members wanted to strike. One of their arguments was that providing the ranks of relevant pilots was insufficient to enable them to identify the employees that were to be included in the ballot. British Airlines contended that the notification should have specified whether the pilots were assigned to short-haul or long-haul fleets, which would have been useful in terms of planning how to mitigate disruption.

The High Court rejected the injunction application; British Airways appealed to the Court of Appeal. The Court of Appeal dismissed the appeal. It found that, whilst an underlying policy behind the legislation was to enable employers to make contingency plans to mitigate the business disruption caused by the industrial action, this had to be weighed against the other legislative policy of giving unions clarity over notification requirements and avoiding unduly burdening them. BALPA and British Airways both customarily referred to pilots by rank, and the pilots' employment contracts did not make reference to fleet. The Court therefore concluded that, although the provision of more information would have been of assistance to British Airways, BALPA's notification of rank was enough to satisfy the statutory requirements.

This case demonstrates the approach that courts will take to such disputes. Job roles are capable of being described in varying degrees of detail (such as job title, grade, function and job description). Employers will often be able to argue that they would have benefitted from more detailed information, but this will be balanced against practical considerations for the trade union.

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Legislation and consultations

Workers (Definition and Rights) Bill

If passed, the Bill would introduce radical changes such as providing workers with identical employment rights to employees by merging the definition of 'worker' and 'employee'. Zero-hours workers would be afforded greater protection, with employers required to give seven days' notice of shifts and liable to pay a financial penalty if they cancel a shift that has been accepted by the worker.

It should be noted, though, that the Bill is a private member's bill being introduced under the 'ten minute rule'; these bills do not often become law.

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Diversity and inclusion: employers should not focus too heavily on diversity metrics at the expense of genuine inclusion

A report published by the CIPD advises employers to concentrate on promoting inclusion as opposed to focussing too heavily on diversity metrics. The report advocates tackling fundamental issues such as bias and poor progression. The CIPD said that employers are often too concerned with having a workforce that appears to be diverse, therefore over-concentrating their diversity efforts on the recruitment process. As a result, often, not enough emphasis is placed on including and supporting employees from diverse backgrounds once they are in the organisation. Given the systemic nature of inclusion issues, employers should not be looking for a 'quick fix'. Instead, employers should take a holistic approach to inclusion and diversity and look to foster a positive culture in which all individuals feel genuinely included. This will entail considering whether there are wider barriers that are preventing the inclusion of individuals from diverse backgrounds. If specific barriers are identified, these can then be addressed by practices and policies. To access the report, click here.

New government-backed Board aiming to enhance workplace diversity and inclusion

The newly-formed Men as Change Agents (MACA) "Lead the Change" Board consists of business leaders who will come together in an attempt to promote diversity and inclusion at the top of companies. The Board will look to ensure that 33% of executive level FTSE 350 business leaders are women by the end of 2020, which is a target that was outlined in the Hampton-Alexander Review into female leadership. Further, following recommendations of the Parker Review into ethnic diversity on UK boards, the MACA "Lead the Change" Board is targeting at least one ethnic minority director on each FTSE 100 board by 2021, and at least one ethnic minority director on each FTSE 250 board by 2024. To put these targets into context, Sir John Parker found that only 85 of the 1,050 director positions in the FTSE 100 were occupied by people from ethnic minorities in July 2017.

The Board will emphasise the business case for diversity; businesses in the top 25% for gender diversity are 21% more likely to have profits that are above average because they are not excluding talented individuals.

Workplace culture to blame for workers' poor mental health

A report published by Business in the Community and Mercer Marsh Benefits has said that many employers are not doing enough to support their employees' mental health. Time to take ownership claims that 39% of workers in the UK experienced mental health issues directly related to their job in the past year. Contributory factors such as working overtime, feeling unsupported and rarely taking annual leave (due to workload) were identified.

The report highlights that board members hold different opinions towards mental health than employees, with 51% of board members thinking that the firm provides effective support compared to just 38% of employees. The report encourages employers to offer employees fair pay, security and professional development opportunities. Further, employers should acknowledge the impact that work can have on employees' mental health and take steps to mitigate the impact, as well as publicly reporting the organisation's wellbeing performance.

Employment tribunal statistics

The Ministry of Justice's quarterly statistics showed a 14% increase in single claim receipts and a 19% increase in outstanding caseload in comparison to the same period (April to July) the previous year. The mean age of cases at disposal increased by 5 weeks to 33 weeks, whilst the number of disposals decreased by 3% compared to the same period last year. Multiple claim receipts dropped by 57% and multiple claim disposals fell by 38%, with the average age of multiple claims at disposal increasing from 133 weeks to 140 weeks.

The total value of refund payments made under the fee refund scheme from its launch in October 2017 to 30 June 2019 was approximately £17.6 million. 22,000 refund payments were made after 22,100 refund applications had been received.

The Ministry of Justice's annual employment tribunal statistics have also been published for 2018/19. The number of claimants who were represented by a lawyer dropped from 74% to 64%. Compensation levels for all types of discrimination (except for age) dropped on average, as did the mean compensation for unfair dismissal. Costs awards to both claimants and respondents decreased compared with 2017/18; awards to claimants fell from 169 to 51, with costs awards to respondents decreasing from 310 to 158.

Governments and employers must act to ensure that workers benefit from automation

The Business, Energy and Industrial Strategy (the "BEIS") has published a report after its inquiry launched in 2018 on automation and the future of work.

The report outlines the need for the government to introduce incentives and support businesses in retraining and upskilling workers. The BEIS also recommended that any government funds and advice services for automation should also be fully accessible to small-to-medium businesses. The report also recognises that some jobs will be at risk which may increase existing inequalities, which can be felt harder in certain regions of the UK. A focus on retraining and automation policies would ensure that the workforce would not be left behind.

The BEIS conclude their report by urging the government to take more seriously the opportunities and risks of automation and collaborate with those who want to take advantage of automation to boost living standards and productivity whilst also creating high-quality jobs. Failing to do so will result in British businesses being uncompetitive with their international counterparts, with entire workforces and regions left behind.

Tribunal seeks clarification on worker status from ECJ

The Watford Employment Tribunal has referred a number of questions to the European Court of Justice (the "ECJ") in relation to the UK's position on determining worker status in a case concerning a Yodel courier.

The question raised (amongst others) asks for the ECJ's view on whether the right to engage a substitute by an individual mean that they cannot be considered a worker. This would be an important clarification for individuals in the gig economy as issues on classification are a hotly contested point in this sector.

CBI urgently requests governmental reform for effective Apprenticeship Levy

Despite spending over £44 billion a year on skills training by employers, the number of apprenticeships remains low in the UK. Whilst businesses have welcomed the changes to the Apprenticeship Levy, 26% of organisations paying the levy do not use it and instead treat it as a tax.

In its recently published report, the CBI recommends that the government launch its proposed consultation on future plans for the levy. The report makes four recommendations to bring reform. These are:

  • increase transparency around Levy receipts and expenditure;
  • make the Levy system more user-friendly;
  • create a sustainable financial plan for the Levy budget; and
  • open up conversations about the future of the Levy.