January 2023 Bulletin
Covid-related safety measures
Sections 100(1)(d) and (e) of the Employment Rights Act 1996 provide employees with protection from dismissal if they leave the workplace, refuse to return to it, or take other steps to protect themselves, if they reasonably believe there is serious and imminent danger. The first Covid-related claim of this nature reached the Court of Appeal in Rodgers v Leeds Laser Cutting. The employee worked in a large warehouse with few other employees. There were Covid-related safety measures in place even before the first lockdown, including extra cleaning and social distancing. The employee worked the first week of lockdown but then messaged his manager to say he wouldn’t be coming to work until lockdown eased. He was worried about passing on the virus to his vulnerable child. He was dismissed a month later and brought an unfair dismissal claim.
The employment tribunal said that a reasonable belief in serious and imminent danger should be judged on what was known at the time the actions were taken. The tribunal said that the employee didn’t believe there was serious and imminent danger in the workplace – he believed there was serious and imminent danger everywhere. His message said he would return when the pandemic eased not when the workplace was made safe. He also was inconsistent about his fear, taking other Covid-related risks outside work. The workplace was large enough to facilitate social distancing. His belief in danger was not reasonable. The EAT agreed. The employee could have taken reasonable steps to avert the danger by adhering to safety guidelines in place, including distancing, handwashing and mask-wearing, both at work and in general. The employee appealed.
The Court of Appeal agreed with the tribunal. The employee’s belief that there was serious and imminent danger in the workplace was not reasonable on the facts – the size of the workplace, the measures in place and ability to socially distance. The Court stopped short of giving more general guidelines because cases are so fact specific. However, they said there were five questions to ask in this kind of case:
- Did the employee believe there was serious and imminent danger at work?
- Was that belief reasonable?
- Could the employee have reasonably averted that danger?
- Did they leave (or refuse to return to) work because of that danger?
- Was that the reason for the dismissal?
The employee in this case did not help himself, claiming he was too scared of the virus to attend his large workplace whilst being willing to take other risks outside work. Although the employee did not win, this litigation shows that the ‘danger’ does not have to be workplace-specific and can include danger that exists more widely like a pandemic. An employee must reasonably believe that the danger affects their ability to go to work. Employers who follow government and industry specific guidance will significantly reduce any ‘danger’ posed to staff by a virus and with it the risk of litigation.
Unfair dismissal – redundancy
Teixeira v Zaika Restaurants
If an employee wins an unfair dismissal case, the employment tribunal will decide how much compensation is due. If the employer has made procedural errors during the dismissal, and the tribunal decides that the employee would have been dismissed anyway had a fair procedure been followed, the tribunal can reduce compensation to zero. This principle is known as the Polkey principle – named after the case from which the principle derived. The EAT has considered this issue recently in Teixeira v Zaika Restaurants.
The employee was a chef who worked in a team of ten at a restaurant in London. He was the only non-specialised chef and the least experienced. When the pandemic hit, the restaurant was affected, and they made the employee redundant without any warning or consultation. The employee brought an unfair dismissal claim. The tribunal found that his dismissal had been procedurally unfair. However, they said that a pool of one would have been fair in this case and therefore his dismissal was inevitable even if a fair procedure had been followed. They awarded him no compensation.
The EAT disagreed. The dismissal had been procedurally unfair as there had been no warning or consultation. The tribunal had not considered the requirement for some consultation which may have widened the pool of employees at risk. Even if dismissal had been inevitable, that process would have delayed the employee’s dismissal which meant that some compensation would be justified. The EAT said that a pool of one without any warning could be fair, but it was difficult to see how it could have been in this case where the restaurant continued to operate, and all the other chefs were retained. The tribunal had not provided reasons why it was fair here. The case was sent back to the same tribunal to deal with the compensation.
This case shows that an award of zero compensation for an unfair dismissal must be properly reasoned and justified. In some cases, pools of one and no warning may be fair. This case is a warning to employers about the dangers of abandoning a fair process, even in the face of something as serious as a pandemic and something as obvious as the downturn in business for hospitality. Even in extreme circumstances, the absence of a fair procedure can be costly.
DWP rate increases
The DWP has published its annual increases for various employment related pay rates which will take effect in April 2023. Statutory maternity, paternity, shared parental and parental bereavement pay will increase from £156.66 to £172.48. Statutory sick pay will go up from £99.35 to £109.40.
National minimum wage levels will also increase in April 2023:
- Age 23 and over: £10.42 (from £9.50)
- Age 21 and 22: £10.18 (from £9.18)
- Age 18-20: £7.49 (from £6.83)
- Age 16 and 17 : £5.28 (from £4.81)
- Apprentice rate: £5.28 (from £4.81)
Employers must ensure that they revisit employees’ pay to ensure that they meet the new rates at the right time.
Royal National Orthopaedic Hospital Trust v Howard
Bathgate v Technip
Arvunescu v Quick Release
COT3 settlement agreements, negotiated and arranged by Acas, can be a cheap and easy way to settle employment tribunal claims. The Court of Appeal has considered a case where an employee brought a claim after signing a COT3, the terms of which the employer said prevented him from bringing the claim. There is currently conflicting case law on the ability for settlement agreements to waive future, unknown claims. Royal National Orthopaedic Hospital Trust v Howard said that if parties want to settle unknown future claims, the wording of the agreement must be absolutely clear on that. However, in Bathgate v Technip, the Scottish EAT said that the law did not allow parties to settle unknown future claims.
In Arvunescu v Quick Release, the employee worked for the employer for a very short period. He left and brought a race discrimination claim. This was settled by a COT3 agreement which waived all claims the employee “has or may have against [the employer]…arising directly or indirectly out of or in connection with his employment with [the employer], its termination or otherwise”. After his dismissal, the employee applied for a job at an associated company in Germany and was turned down. He brought a victimisation claim against the employer. The tribunal said the COT3 covered the victimisation claim and said it had no reasonable prospects of success. The EAT said the claim fell under a different provision of the Equality Act 2010 (that the company knowingly helped the German company carry out the victimisation) but said it was still caught by the COT3. The employee appealed.
The Court of Appeal said the COT3 agreement applied. The employee had been rejected from the job with the German company before he signed the COT3. It was a future claim that was being waived but one which existed at the time the COT3 was signed. The claim arose not out of his employment but ‘in connection’ with it. The settlement agreement was designed to settle all and any claims existing at the date of the agreement including a claim arising from the job rejection which occurred a month before that.
This case was decided on the basis of the wording of the particular settlement agreement and involved a potential claim where the facts had already arisen at the date the employee signed it. It did not deal with the settlement of future claims arising after the date of the COT3 agreement. There are learning points for employers to take away though. Any waiver of future claims must be explicitly clear and using the words ‘out of’ and ‘in connection with’ is advisable to ensure all possible claims are caught.
Hilaire v Luton Borough Council
Employers are obliged to make reasonable adjustments to remove or reduce any substantial disadvantage that disabled employees experience because of workplace arrangements. In Hilaire v Luton Borough Council, the EAT has confirmed the limits of that requirement. The employee was disabled. The employer went through a reorganisation and needed to make redundancies. All employees were required to interview for a place in the new structure. Adjustments were made for the employee, including extra time and support with his job application. However, he refused to attend an interview and submitted a sick note saying he was not well enough. He didn’t respond to requests about when he would be fit. All 13 other candidates had been interviewed and decisions needed to be made, so the employee was given a deadline to attend an interview. He said he was too ill. However, a week later he attended an appeal hearing against a sickness sanction. He was dismissed for redundancy.
The employee brought a reasonable adjustments claim, saying the employer should have slotted him into a role in the reorganised business. The employment tribunal said he could have attended the interview if he had wanted to and dismissed his claim. The employee appealed. The EAT said the tribunal had made a legal error because they hadn’t considered the impact that the employee’s disability had on his ability regarding the interview process itself rather than just his ability to attend it. However, the evidence showed that the employee didn’t do the interview for reasons that were nothing to do with his disability. He thought the employer was using the process as a way of disguising his dismissal for sickness absence with redundancy. Slotting him into a role would have reduced the disadvantage but would have affected the other potentially redundant employees. The EAT said that a reasonable adjustment was not a vehicle for giving an advantage over and above removing a particular disadvantage (experienced by a disabled employee).
This case shows that reasonable adjustments are designed to remove disadvantage experienced as a result of disability, rather than giving an advantage which exceeds the levelling of the playing field. The employer in this case had made reasonable adjustments to the recruitment process, but the law did not require them to prioritise the employee for a job over other employees if there were reasonable adjustments that could remove the disadvantage. Employers must consider each case carefully to ensure that they hit the sweet spot on every occasion.
Richards v Waterfield Homes and Unity Build and Repairs
The EAT has given judgment in an employment status claim which confirms that the ‘label’ that parties place on a working relationship is only one piece of the puzzle. Too much weight must not be given to that label if the reality of the relationship suggests something different. In Richards v Waterfield Homes and Unity Build and Repairs, the employee worked for the business as a skilled carpenter. At the time he was taken on, he was registered with the CIS as a contractor. CIS is a scheme where a sub-contractor can have 20 per cent, rather than 30 per cent, of earnings deducted and paid to HMRC in tax and NI (with a reckoning at the end of the year). The CIS scheme is an industry wide scheme where workers are treated as self-employed. All workers for the business were described as self-employed. The business switched the employee to an employment contract in 2018 after taking legal advice about ‘regularising’ contracts. The employee objected to the contract because it described him as an employee from 2018 rather than 2010 when he started working for the business.
The tribunal said that the relationship was ‘close’ to an employment one but decided the employee was self-employed because of the method of payment under the CIS scheme. The employee appealed and won. The EAT said that there were no other factors cited by the tribunal judge which pointed towards self-employment other than the payment method. The judge had focussed too much on this agreement between the parties rather than the other facts of the arrangement. Based on the facts set out by the judge, the self-employed label was manifestly wrong. He was an employee throughout the relevant period.
The claim has been sent back to the tribunal to deal with the substantive issues including holiday pay. This case is a reminder that a tribunal should look at all elements of the working relationship when making a decision on employment status. A label, even an agreed one, should not be given too much weight if all other elements of the arrangement points in another direction.
Compensation – unfair dismissal
Hilco Capital v Harrington
If an employee wins a claim for unfair dismissal, a tribunal will decide what compensation is fair in the circumstances. The stakes are raised in a whistleblowing unfair dismissal because the statutory unfair dismissal compensation cap (currently £93,878 or a year’s gross pay, whichever is less) does not apply. Employees are required to ‘mitigate’ their losses by seeking employment elsewhere. If there are additional reasons why the employee in a whistleblowing case has not been able to secure alternative employment – because of stigma associated with the whistleblowing – they will need to provide evidence in support of that contention.
In Hilco Capital v Harrington, the employee won her claim for unfair dismissal because of whistleblowing. She did not apply for any new jobs before the remedy hearing. There had been suitable jobs she could have applied for. However, she said it would have been pointless to apply because any company would have stigmatised her as a whistleblower and not given her the job (once she had explained why she had lost her old job). The tribunal said that her failure to apply for jobs was not an unreasonable failure to mitigate her losses. The tribunal awarded her £244,328.45.The employer appealed, saying the tribunal had made a legal error by awarding stigma damages without the employee providing any evidence to support that suspicion.
The EAT agreed with the employer. The onus was on the employer to prove that the employee has not properly mitigated their losses. A failure to look for work at all could well amount to a failure to mitigate loss unless there is a good explanation for it. It was the tribunal’s job to decide in this case whether it was such a failure. The EAT said that making no job applications wasn’t necessarily fatal if the employee had put forward other evidence which supported her concerns about being stigmatised by the whistleblowing. In other successful cases, employees had made some applications, and failed, which supported their assertions that they were being marginalised in looking for work. Here, the employee had not applied for a single job in three years. She had failed to mitigate her losses, because there was no evidence, or findings of fact, to support her assertions that job seeking would have been pointless.
This case serves as a reminder to both employers and employees that employees are required to look for alternative work if they have been unfairly dismissed. In this case, the employee had not applied for a single job in three years. In the absence of any evidence to support why this was reasonable, it was not. She had failed to mitigate her losses and the employer was not required to pay for associated losses.
Mainali v New Godalming Sushi Limited
Is it harassment to text a colleague in the wee small hours? Not according to Mainali v New Godalming Sushi Limited. Mr Mainali was a sushi chef in business with a colleague, Mr Lohani, to provide sushi at Waitrose. Mr Lohani was the main shareholder in the business. Relationships deteriorated. Mr Lohani sent a rota to staff on a group WhatsApp after midnight. Mr Mainali was furious, saying it was wrong to bother staff at that time of night. He told Mr Lohani to ‘go f*** yourself’. Relations further deteriorated, including a scuffle on Waitrose shop floor. The employee left the business. He brought claims in the employment tribunal for discrimination, saying the late-night message had been a deliberate attempt to disturb him and persuade him to leave his job. The tribunal didn’t agree. The judge accepted that the rota was sent in a group chat, rather than to the employee only. They also accepted Mr Lohani’s evidence that he had no intention to disturb and expected colleagues to read the rota at their leisure.
Even in dramatic cases with obviously unreasonable behaviour by an employee, there is some learning. Employers, and managers in particular, should seriously consider the timing of messages sent to employees, especially communications made to private phones. In this case, the facts did not support the employee’s claims. However, in other cases, late-night messages to private mobiles could be construed as oppressive. Make sure messages are sent to work email accounts if possible. Tell employees they can (and should) switch off work devices outside work hours. Ensure managers know the potential pitfalls associated with overstepping the divide between home and work.