February 2021 Bulletin
Interim relief is a powerful employee remedy. Section 128 of the Employment Rights Act 1996 sets out the limited circumstances in which it can be sought: for dismissals relating to trade union or health and safety representative activities, and whistleblowing cases. If an employee shows that there is a ‘pretty good chance’ that they will win their claim, the employment tribunal can make an order for their reinstatement (to their old job), reengagement (to an equivalent role) or simply for their contract to continue. Essentially, interim relief reverses the dismissal pending the final hearing. In what may turn out to be a landmark case, the Employment Appeal Tribunal has looked at whether this remedy should also be available in discrimination cases.
In Steer v Stormsure, the employee had been employed for only a few months when she raised allegations of sexual harassment against a colleague. She lodged a grievance. She also asked to work from home to safeguard herself from harassment. The employer reluctantly agreed but asked her to install monitoring software onto her computer, which the employee found oppressive. She alleged that her working hours were then reduced to 60 per cent. She claimed that the reduction in hours was an express or constructive dismissal that amounted to sex discrimination or victimisation. She brought a claim for discrimination under the Equality Act 2010 and requested interim relief in relation to her discriminatory dismissal.
Nevertheless, there are many changes that could be made that would not be regarded as sufficient to affect trade, but which could be of importance to those interested in employment law. The rules on holiday pay for example have been causing difficulty for many years and there is a serious disparity between the annual leave provisions of the Working Time Regulations and the requirements of the Working Time Directive as it has been interpreted by the European Court. There is now nothing to stop the UK Government from providing clarity on such issues as the inclusion of overtime in the calculation or the effect of long-term sickness absence on an employee’s entitlement. If the Regulations were to be amended, the UK courts would have to apply the new rules without considering the requirements of the Directive.
Other changes that might be suggested include: making it easier to agree a change in terms and conditions following a TUPE transfer, capping compensation in discrimination cases and perhaps simplifying some of the rules on agency workers. How much appetite or capacity the government has for making such changes remains to be seen. But given the outstanding commitments from the 2019 Conservative Party manifesto on redundancy protection for new parents and additional leave for carers, a significant Employment Bill in 2021 is very much on the cards.
Employment tribunal procedure – ACAS uplifts
Wardle v Credit Agricole Corporate and Investment Bank
Employers and employees must follow the ACAS Code of Practice in relation to disciplinaries and dismissals. If either party fails to follow the Code, the tribunal can increase or decrease tribunal compensation by up to 25%. In Wardle v Credit Agricole Corporate and Investment Bank, the Court of Appeal said that a tribunal should only fix the rate of uplift once it has considered how much the uplift would equate to financially, to ensure it isn’t disproportionate. An Employment Tribunal can ‘reconsider’ any judgment where it is necessary in the interests of justice. A tribunal can do this of its own initiative, at the request of the Employment Appeal Tribunal or if one of the parties makes an application for a reconsideration within 14 days of a judgment. The Employment Appeal Tribunal has recently looked at a case where an employer asked a judge to reconsider a case ‘of its own initiative’ in circumstances where they were out of time to make the application themselves.
In Banerjee v Royal Bank of Canada, the employee won his claim for whistleblowing unfair dismissal. The Employment Tribunal found that the employer had failed to follow the ACAS Code and ordered a 25% – the maximum – uplift. This was contrary to the Wardle approach because the percentage uplift was fixed before the remedy hearing which would calculate the employee’s compensation. This was especially important in this case because the employee was a highly paid City trader and the 25% uplift equated to £261,000. The employer wanted this decision to be reconsidered but by the time of the remedy hearing the time limit for making an application had expired. The employer argued that the tribunal could reconsider the decision of its own initiative, telling the tribunal ‘that’s what you should do’. The tribunal agreed. It decided that the parties should calculate how much compensation was owed to the employee and then address the ACAS uplift afterwards. The employee appealed, saying that the employer had essentially got around the expired time limit by planting the reconsideration idea, which meant any reconsideration would not be on the tribunal’s ‘own initiative’.
The EAT disagreed. Although the issue of reconsideration was discussed at the remedy hearing, the employer did not actually make an application. The tribunal could still decide itself whether to reconsider a judgment. The fact that the employer had reminded the judge about his ability to reconsider the judgment, and suggest that they should do this, did not undermine the tribunal’s ability to act on its own initiative. A (failed) application by one party to reconsider a judgment might stop an employment tribunal being able to take that step ‘on its own initiative’, but that had not happened here because no application had been made. An advocate can remind a tribunal about its own powers without undermining their ability to act independently.
This is a win for the employer in both form and context. The power to reconsider judgments is rarely used by tribunals. It is comforting to know that parties are not prevented from reminding a judge of the rules and their overriding duty to deal with matters fairly and justly. There is a sage reminder for employers though about the importance of making any relevant tribunal applications within the appropriate time limits. This judgment is also a helpful aide-memoire about ACAS uplifts, which should be considered at the remedy rather than liability stage.
Heskett v Secretary of State for Justice
One of the key differences between direct and indirect discrimination is that a claim for indirect discrimination can be defeated if the employer can show that the provision criterion or practice under challenge is a ‘proportionate means of achieving a legitimate aim’. The circumstances in which this defence of justification will succeed have been the subject of many years of case law. One principle that has emerged is that an employer cannot simply rely on cost savings as a legitimate aim – although it has generally been accepted that cost can be counted as one among several factors – a so called ‘costs plus’ approach.
The issue came up for review by the Court of Appeal in Heskett v Secretary of State for Justice in which an employee complained of indirect age discrimination. The case concerned the pay of probation officers which was based on a pay scale with 25 incremental points. A probation officer would previously have progressed three points up the scale each year, with the result that they could reach the top of their pay scale within about 8 years. In 2010, however, the Government introduced a pay freeze – limiting the increase in any public sector employer’s pay bill to just 1%. The Probation Service responded to this by limiting pay progression to just one point on the scale per year. Since those at the bottom of the scale were likely to be younger than those at the top it was clear that this change would amount to indirect age discrimination unless it could be shown to be a proportionate means of achieving a legitimate aim.
The employment tribunal said it did not have the jurisdiction to grant interim relief in discrimination cases. The employee appealed to the EAT. The EAT said the difference in protection for discrimination cases breached the European Convention on Human Rights (ECHR) – article 14 on the prohibition of discrimination and article 6 on the right to a fair trial. The difference in remedy between whistleblowing and discrimination claims was not justifiable. However, they did not have the power to make a ‘declaration of incompatibility’ with section 3 of the Human Rights Act 1998 (which says that UK legislation must be read in a way which is compatible with the ECHR). Nor were they prepared to interpret the Equality Act 2010 in such a way as to extend interim relief to discrimination cases. As a result, they dismissed the appeal but granted permission for the employee to appeal to the Court of Appeal which does have the power to rule on the incompatibility point.
This is an important decision for employers. If the employee wins her appeal, a brand-new remedy will be available to employees in discrimination cases. Brexit will not affect the outcome because the UK will continue to sign up to the ECHR. Currently, interim relief is rarely sought and even more rarely won due to its very limited application. If the remedy extends to discrimination claims, there could be a deluge, especially at a time where there are significant delays in the employment tribunal process due to Covid-19. Employers should not panic though. For interim relief to be granted, an employee needs to have a ‘pretty good chance’ of winning their claim. This is no small hurdle, and many will fail to get over it.
Chalmers v Airpoint
An employee is victimised when an employer treats them badly for raising allegations of discrimination. The discrimination complaints are called ‘protected acts’, because the employee is protected if they raise them. In Chalmers v Airpoint, the EAT has looked at whether an employee saying something ‘may be’ discrimination is enough to qualify as a protected act.
The employee emailed her employer saying that their actions – in arranging a Christmas event for a date when she could not attend – ‘may amount to discrimination’. In the same email, she also complained that her manager was unapproachable, aggressive and unhelpful. The tribunal found that the party arrangements were not an act of discrimination. In addition, the employee’s email was not a protected act because it didn’t contain an allegation that someone had contravened the Equality Act 2010. They considered the employee to be articulate and well-educated. They also noted the specific lack of reference to ‘sex discrimination’. As a business support manager, the employee carried out some HR functions for the company so had insight into discrimination issues. The tribunal therefore felt it was surprising that she was equivocal about discrimination complaints when she had been so clear about other issues – if she had wanted to raise discrimination complaints, she would have done.
The EAT said the tribunal had been entitled to come to this conclusion. They noted the tribunal’s reasoning and confirmed they had been entitled to conclude that this email was not a discrimination complaint which qualified as a protected act. The EAT said that the tribunal had considered whether the lack of the word ‘sex’ (in relation to discrimination) and use of the word ‘may’ were due to the employee’s ‘lack of facility’ with words or ignorance about the concept of sex discrimination. They found that if she had wanted to raise a sex discrimination complaint, she would have done. The EAT said those findings were not perverse on the facts.
This case does not mean that equivocal language will never be enough to turn a complaint into a protected act. The facts in this case were very specific – a well-educated employee, familiar with HR processes, and someone who had complained in very clear terms about other matters. On that basis, the tribunal concluded that she would have complained in clear terms had she intended to. Other employees may be understandably less informed or be less direct and have a lower hurdle to clear when raising discrimination complaints. Care must always be taken in relation to any correspondence which cites discrimination. It’s probably safer to assume it does qualify as a protected act and proceed cautiously.
Furlough – updated guidance
Coronavirus Job Retention Scheme
The government has updated its advice in relation to the Coronavirus Job Retention Scheme to confirm that employees can be furloughed if they are unable to work some or all of their hours due to caring responsibilities resulting from Covid-19. The guidance says that ‘caring responsibilities’ includes caring for children who are at home because schools/childcare facilities have shut or caring for a vulnerable person in the household.
The change in advice follows requests from the TUC and opposition MPs for the government to provide more support for working parents during the third lockdown. The government rejected calls for parents to be given the right to demand furlough, though the new guidance creates more flexibility for both parents and employers. It is almost impossible to do a decent day’s work alongside home-schooling children. The option to furlough might be attractive to some employers who are able to cover the work in another way. This will not always be possible though and sensitive discussions will be necessary with employees who can’t be furloughed to see what other support or assistance may help them to juggle their responsibilities. Redistributing some work, changing working hours or being more flexible on deadlines can all help parents who are trying to juggle during the normal working day. Stressed, overstretched employees are not efficient or productive workers. In these strange times, what works best for employees will often be the best thing for the business too.
Cummings v British Airways
Indirect discrimination arises when an employer applies a policy to everyone which puts people who share a protected characteristic (such as race or sex) at a ‘particular disadvantage’. The policy must also put the employee in question at that disadvantage. It involves a comparative exercise: showing that one group is disadvantaged when compared to another. These groups are often referred to as the ‘pools for comparison’. The pools need to include all the workers affected by the policy but exclude those who are not. In Cummings v British Airways, the EAT examined who should go into these pools in an indirect sex discrimination claim involving childcare.
British Airways had a policy that crew members who took parental leave would have one rest day removed for every three days’ parental leave taken in a monthly roster. The policy was applied to the employee who brought an employment tribunal claim. The employment tribunal found that the policy did not put women at a particular disadvantage when compared to men. The pools for comparison were men with childcare responsibilities and women with childcare responsibilities within the workforce. Since 100 per cent of both groups suffered the same disadvantage when they took parental leave, the tribunal said there was no particular disadvantage to women.
The EAT said there was a problem with this reasoning. Not all employees with childcare responsibilities would apply for and take parental leave. This means that not all people with childcare responsibilities in either group – male or female – would be disadvantaged. It had been acknowledged in the Supreme Court case of Essop that women still bear the bulk of childcare responsibilities in society. Of 2500 cabin crew, 69 per cent were women and 31 per cent were men. Of those who took parental leave, 417 were women compared to 92 men. A far greater proportion of female employees (24.2 per cent) took parental leave compared to male employees (11.9 per cent). But what was missing from the evidence was the comparison between the specific number of male and female staff with children of the relevant age, who therefore had ‘childcare responsibilities’. This was an error of law and the matter was sent back to a fresh employment tribunal to consider the following questions:
1. Did the policy put staff with childcare responsibilities at a disadvantage;
2. Did it put women in that group at a particular disadvantage when compared with men; and
3. Was it justified?
This case is a helpful explanation of how the pools for comparison are made up in an indirect discrimination claim. It is a complex analytical exercise with this case showing how eminent lawyers and even judges can get it wrong. It’s worth employers getting early legal advice in relation to allegations of indirect discrimination so that any problematic policies can be weeded out and changed before cases get to court.
Devon and Cornwall Police v Town
Section 18 of the Equality Act 2010 deals with pregnancy and maternity discrimination. An employer discriminates against an employee if they treat her less favourably while she is pregnant or on maternity leave, either because of the pregnancy (or any related illness) or because she has taken maternity leave. This kind of discrimination cannot be justified. The period of protection starts when the employee becomes pregnant and finishes at the end of maternity leave. The Employment Appeal Tribunal has recently looked at whether changing a pregnant employee’s job to remove workplace risks can be considered less favourable treatment.
In Devon and Cornwall Police v Town, the employee was a frontline police officer who worked in the Response Team. When she became pregnant, a risk assessment confirmed that she could safely remain in the Response Team with some adjustments. Instead, the employer applied their generic policy that employees on restricted duties would be transferred to the Crime Management Hub, a back office role. They essentially ignored the risk assessment. The employee did not want to transfer and the transfer affected her mental health and made her ill. She brought claims for pregnancy discrimination and indirect discrimination.
The employment tribunal said the employee had been discriminated against on grounds of pregnancy. The employer had also indirectly discriminated against her by applying the policy on restricted duties because women were more likely to be forcibly transferred due to pregnancy or associated ill health. The employer appealed, saying that a policy designed to protect someone from risk could not be ‘unfavourable’ treatment. They also argued that the policy only disadvantaged pregnant women, not women in general. The EAT disagreed. The ‘unfavourable’ treatment was being moved to a job the employee didn’t want and which made her ill, not being ‘removed from danger’. The tribunal had found on the facts that this was unfavourable treatment and that it was because the employee was pregnant. These findings of facts were not perverse so there was no basis for appeal against pregnancy discrimination. For the purposes of an indirect discrimination, the EAT said that it was enough that the policy was more likely to affect women – as a group they were more likely to be subject to the policy due to pregnancy and only women can get pregnant. It wasn’t necessary that all women actually suffered from the disadvantage.
This case shows how important it is for employers to engage with pregnant women about steps that are taken to protect them from work-related risks. In this case, the risk assessment clearly showed that the employee could safely remain in her substantive role. The tribunal noted that any ambitious frontline police officer would consider the move to a non-operational role as a retrograde step. In circumstances where the employee actively wanted to stay in her job, steps to ignore both a risk assessment and her own desires were foolhardy. Protecting women from clear dangers is vital, but this case demonstrates the risks associated with going too far.
Gordon v J&D Pierce (Contracts) Limited
A constructive dismissal arises when an employer fundamentally breaches the employee’s contract, entitling them to resign and say they were effectively dismissed. The breach must be fundamental, which means it is really serious and goes to the root of the contract. If there is a fundamental breach of contract, the employee has a choice: to accept the breach and act on it by resigning or to waive the breach and affirm the contract by continuing to work.
In Gordon v J&D Pierce (Contracts) Limited, the employee’s relationship with his manager had deteriorated. He resigned and claimed constructive dismissal, saying that the trust and confidence had been destroyed. The employment tribunal dismissed his claim, saying that both sides had contributed to the relationship breakdown. Trust and confidence had not been breached and the employee had not been entitled to resign and claim he was pushed. The tribunal also said that in raising a grievance, the employee had affirmed the contract. The employee appealed.
The EAT dismissed the employee’s appeal because they agreed that there had been no breach of contract. On that basis, they didn’t strictly need to deal with the affirmation point, but chose to do so. The EAT said that engaging in a grievance process after a breach of contract did not necessarily mean a contract had been affirmed. The same principle would apply to other internal processes such as a disciplinary appeal. Exercising a contractual right such as appealing against a disciplinary sanction or raising a grievance should not be regarded as affirmation of the contract as a whole. These processes are severable from the remainder of the contract and can survive it, even when the rest of the contract is considered to have been terminated by a breach. If the employee wins the appeal or grievance, it is then open to them to affirm the rest of the contract too and continue in employment.
This decision makes sense. It would be odd if the very processes designed to resolve differences – disciplinary appeals process and grievances – could not be used by an employee in circumstances where their contract has been breached. It would completely undermine the industrial purposes of these processes. The employee lost his appeal anyway in this case, but the clarity provided by the EAT will be welcomed by all parties.
Employment tribunals – compensation
Hakim v The Scottish trade Unions Congress
If an employment tribunal finds that an employee has been unfairly dismissed, they will then need to decide whether, and how much, compensation should be paid. The tribunal can order the amount it thinks is ‘just and equitable’ bearing in mind the employee’s losses. Compensation can be reduced by an amount a tribunal thinks is just and equitable if the employee caused or contributed to their dismissal. In Hakim v The Scottish trade Unions Congress, the EAT has looked at how employment tribunals should approach the issue of calculating losses.
The employment tribunal found that the employee had been unfairly dismissed. The tribunal reduced his compensation for several reasons. Firstly, they said that 35 job applications in 4 years was not a good enough search for alternative employment. They felt his job hunt had been too narrow, confined as it was to the equalities/trade union/third sector jobs. They also noted he hadn’t attempted to retrain or look for volunteering work. They decided it was just and equitable to reduce his compensation by 30%.
The EAT didn’t like that. In order for percentage reductions to be just and equitable, a tribunal must be able to justify the use of such a ‘crude’ approach. This approach might be reasonable if there is a lack of evidence about alternative employment prospects and/or what wages that alternative employment would attract. But this case was different. The employee had secured alternative employment at a specific wage. The tribunal said he would have secured employment earlier had he tried harder. Rather than apply a percentage reduction, the tribunal should have decided when the employee should have secured employment and deduct from his compensation the earnings he would have received had he mitigated his loss properly. Percentage deductions are fine as long as a tribunal can justify why they are made, which the tribunal here did not. The judge sent the case back to the tribunal to do the sums again properly.
This case doesn’t rule out percentage deductions on compensation which are widely used in other ways in employment law (i.e. for Polkey deductions) and other legal claims. But what a tribunal must do is justify that deduction. This is useful for employers to know both in relation to tribunal claims but will also be relevant at an earlier stage in relation to settlement. Gathering evidence about the employee’s mitigation, or lack of it, is always important.
‘no jab, no job’
With the coronavirus vaccination programme well underway in the UK, many employers are considering what vaccination might mean for their business. Some companies are announcing that they will dismiss or refuse to recruit employees who aren’t vaccinated. With 23 per cent of employers telling an HRLocker survey that they plan to make vaccination compulsory, everyone wants to know whether a ‘no jab, no job’ policy is legal.
It’s easy to see why employers want their workforces vaccinated. A fully vaccinated workforce will (hopefully) mean a substantial reduction in both the incidence of the virus in the workplace and the risk that the virus poses to both staff and customers/clients. But a blanket rule might get you into trouble. If a vaccine contains animal-derived products, then a vegan or a Muslim employee might refuse the jab and bring an indirect discrimination claim if they are dismissed as a result. The policy is applied to everyone but can put people with ethical or religious views at a disadvantage. Although such a policy could theoretically be justified – as a proportionate means of achieving a legitimate aim – it would be tricky here. Employers might need to make an exception for such employees.
Aside from discrimination, a ‘no jab, no job’ policy will be difficult for most employers to justify. There are many reasons for this. The vaccine is not compulsory, so an employment tribunal is unlikely to welcome an employer trying to make it obligatory via the back door. The risk of adverse effects from the jab, however small, cannot be completely removed or ruled out – it might be tricky to justify a dismissal for refusing a vaccine which might pose a health threat. Many people are nervous about a new jab which has been developed and approved so quickly, keen to wait and see whether anyone develops side-effects in the next few months. Forcing someone to take a vaccine might also infringe on their human rights. Whilst for most employers, this policy won’t be justifiable, there are some workplaces where vaccination is more mission critical. The pandemic has caused devastation in our care homes and there is a shortage of NHS staff due to infection and isolation requirements. Vaccinations will protect vulnerable patients and staff from the virus, potentially reducing or removing its devastating effects. In these workplaces, the chances of defending such a dismissal are much greater. As always, a fair procedure must be followed, including exploring redeployment from the frontline for those who refuse the jab.
For most employers though, there is plenty of time to mull things over before making any dismissal decisions. Most people of working age are many months away from being offered a vaccine. For those who are currently vaccine hesitant, let winter give way to spring, allowing more time for people to see that vaccination does not damage health. When jab time comes, many employee concerns may have gone away, hopefully taking Covid with them.