October 2021 Bulletin

Part-time worker discrimination

Forth Valley Health Board v Campbell

The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 do exactly what it says on the tin. They prevent an employer treating a part-time worker less favourably than their full-time colleagues on the grounds of their part time status.. Less favourable treatment of a part-time worker can be justified if the treatment is a proportionate and necessary way to achieve a legitimate business aim. The Employment Appeal Tribunal has looked recently at a case where a part-time worker said he was being treated less favourably because he wasn’t given a paid 15-minute break when he worked a shorter shift than his full-time colleagues.

In Forth Valley Health Board v Campbell, the employee worked an average of 16 hours a week over a 6-week rota. He did a mixture of shorter and longer shifts. The employer paid employees for a 15-minute break if they worked a shift of 6 hours or more. The employee got a paid 15-minute break when he worked a 6-hour shift at the weekends but not when he worked a 4 hour shift mid-week. He said that this was less favourable treatment because his full-time colleagues got a paid break on every shift. The employment tribunal agreed, saying it was less favourable treatment for part time workers who worked fewer hours.

The EAT disagreed. The tribunal’s ‘but for’ (the employee’s part-time status) test was wrong. The correct approach was to consider why the employee was treated less favourably in relation to paid breaks. On the facts, it wasn’t because of his part time status, but because of the length of shift he was working during the week. That was evident because he got a paid break when he worked a longer shift at the weekends. If part time workers worked longer shifts, they would receive the paid break.

This is a common-sense decision based on sound legal principles. Different treatment on its own is not enough. The important question in a part-time worker discrimination case is the reason for the treatment. Here, the reason for the lack of a paid break was the length of shift the employee was working, not the fact that he worked part-time. His part-time status was incidental and irrelevant.

Whistleblowing

Royal Mail v Jhuti

Kong v Gulf International Bank

Employers must not treat an employee badly because they have made a protected disclosure. If the main reason for dismissing an employee is that they made a protected disclosure, the dismissal will be automatically unfair. Usually, it is the facts known to the person making the decision to dismiss that are relevant to an unfair dismissal claim, rather than any other facts which might be known to other employees. In Royal Mail v Jhuti, however, the Supreme Court confirmed a narrow qualification to this rule: if a manager decides that an employee should be dismissed for one reason (for example, whistleblowing) but hides that behind another false reason (such as performance or conduct) which the dismissing officer adopts, then the reason for the dismissal is the hidden reason.

In Kong v Gulf International Bank, the employee made protected disclosures about a legal agreement for a financial product. The person who had drafted the agreement, the Bank’s Head of Legal, confronted the employee, who queried the Head of Legal’s knowledge of the relevant issues. The Head of Legal then complained to HR  and the CEO, saying the employee had questioned her professional integrity rather than her legal knowledge. She gave the impression that she couldn’t work with the employee anymore and minimised their contact. There had been previous issues about the employee’s interactions with colleagues. As a result, HR and the CEO decided that the employee should be dismissed. They drew up a report about the issues, including the current and past colleague incidents, and persuaded her manager that dismissal was appropriate. They told the employee that she was being dismissed because of her manner and approach with colleagues, not the protected disclosures. The employee brought claims for whistleblowing detriment, unfair dismissal and automatic unfair dismissal.

The employment tribunal upheld the ordinary unfair dismissal claim. It also said the detriment claim – for her treatment by the Head of Legal – would have won but for being lodged out of time. However it dismissed the automatic unfair dismissal claim. The decision makers – HR, the CEO and the employee’s manager – had decided to dismiss based on the employee’s conduct, not the protected disclosures. Even though there was an element of invention by the Head of Legal, by saying the employee questioned her integrity rather than her knowledge, it wasn’t right to attribute her motivation to the employer. The EAT agreed. The Jhuti exception only applies in extreme circumstances. Whether the Head of Legal had perceived the criticisms as relating to her integrity or her knowledge was nowhere near the kind of invention or manipulation necessary to meet the Jhuti principles. In this case, the dismissing managers had full knowledge of the facts, including the whistleblowing, and had not been misled by the Head of Legal’s ‘invention’ about the reason for her being upset. The Head of Legal was not involved in the employee’s dismissal and, when asked, said she was unsure whether it was merited. It was also relevant that the Head of Legal, though more senior than the employee, was not in the employee’s chain of managerial reporting. The EAT said the employee’s concerns about the Head of Legal’s knowledge was separable from the whistleblowing about the legal agreement and the tribunal had carefully deliberated about the principal reason for the dismissal. The issue here was not the employee’s views on the legal agreement – the whistleblowing – but the way she had conveyed them, in circumstances where she had form for ruffling colleagues’ feathers.

This case confirms that the Jhuti exception will be extremely rare. There is a big difference between entirely invented allegations about an employee’s performance (Jhuti) and the kind of ‘manipulation’ potentially relevant in this case, with the Head of Legal, either intentionally or otherwise, side-stepping direct allegations about her competence and alleging her integrity had been brought into question. It’s worth noting that the claim of whistleblowing detriment relating to the employee’s treatment at the hands of the Head of Legal was a good claim, but for timing. But that didn’t mean that the necessary causation was there to connect the employee’s dismissal to the whistleblowing as well.

Working time

XR v Dopravni podnik hl m Prahy

The CJEU has considered another case involving rest breaks that can be interrupted at short notice and whether they meet the requirements of the Working Time Directive. Article 2 says that working time is any period of time where the worker is working, at the employer’s disposal and carrying out their duties. A rest break is any period which is not working time. There is no halfway house here – time is either working time or a rest break. A series of European cases have looked at rest breaks which can be interrupted at short notice and whether that undermines the whole point of the WTD  which is to promote health and safety.

In XR v Dopravni podnik hl m Prahy, the employee was a firefighter. In a 12 hour shift he had two unpaid thirty-minute rest breaks which he could take at the canteen 200m away from his workstation. During that break, he could be interrupted at any time if there was an emergency call. He would then have to be outside the canteen within 2 minutes of that call. The break was only included in working time if it was interrupted by an emergency call out. The employee said all breaks should be paid.

The CJEU confirmed that the purpose of the WTD is health and safety, not pay. It was relevant here that the firefighter was required to remain at work and away from his family and social environment at all times during his breaks. He had little freedom to manage his own time during rest breaks. The same would be true even if an employee doesn’t have to be at work during a break but the constraints placed on them has a significant impact on their ability to pursue personal and social interests. A rest break where an employee can be called back at short notice should be regarded as working time because the worker cannot plan any kind of recreational activity even for a short period because they don’t know if or when they will be called out. This is likely to the put the employee on ‘permanent alert’. The ECJ said a rest break where an employee can be called back on 2 minutes notice should be classified as working time if it is clear that the limitations imposed on the employee objectively and significantly affect their ability to manage their own time and devote it to their own interests.

This case follows the existing line of authorities on this issue but is a more extreme example because the response time is so short. ECJ cases are no longer binding on UK courts post-Brexit but can be taken into account when construing EU derived law. However it is worth noting that the entitlement to rest breaks under the WTR 1998 do not apply in relation to the police and emergency services where working requirements conflict. This case is relevant to other employers though, especially those in sectors such as hospitality and the care sector where breaks may be interrupted at short notice due to business requirements. An unpaid break must be a genuine break.

Employment tribunals

Some changes to the employment tribunal process will come into force on 6 October 2021 and are designed to remove some unnecessary red tape.

Rule 54 will be changed to show that a preliminary hearing can be requested by either party or fixed at the employment tribunal’s own initiative on reasonable notice. If the hearing involves preliminary issues then the parties must be given at least 14 days’ notice and the order must specify the relevant preliminary issues that will be addressed.

Another change which will potentially reduce red tape for employees is the change to the early conciliation requirements. Currently, an employee must start an Acas early conciliation process – and get an Acas EC reference number – separately for each respondent. This might be relevant in a discrimination case, where a claim is brought against both the employer and individual alleged discriminators. The new rules will allow an employee to name one or more respondents on the Acas form or in a telephone call, short cutting the process which was previously cumbersome and time consuming for employees. This is good news for employees, and makes common sense, but anything that makes the process easier for employees is something that employers must beware.

Contract law – employment contracts

Amdocs Systems Group v Langton

Benefits such as permanent health insurance are often referred to only briefly in a contract of employment, with the details set out separately in an insurance policy or employment handbook. Employers usually aim to limit their liability to the terms of the relevant insurance policy. To do that, the contract must clearly specify that the entitlement is limited to the insurance policy terms – thus incorporating that term into the contract of employment – or an employer might end up paying more than it expected.

In  Amdocs Systems Group v Langton, the employee was originally employed by a company called Cramer. He was given an offer letter, summary of benefits and an employment contract. The offer letter and benefits summary set out his entitlement to Income Protection Payments (IPP) of a certain percentage of pay, plus a 5 per cent escalator each year after the first year, if he went on long term sick leave. The benefits summary said that the entitlement was governed by the terms of the group policies. At this time, the relevant benefits were covered by an insurance policy taken out by Cramer. ASG bought Cramer and the employee TUPE transferred to ASG. After the transfer, HR gave a talk saying IPP would not be affected, which was later confirmed in writing. Some time later, the employee went on long term sick leave and began to receive IPP. He was told that the escalator had not been and would not be paid because the Cramer scheme no long applied. The employee brought a claim for unlawful deduction from wages for failing to apply the escalator.

The employment tribunal upheld his claim saying he was contractually entitled to the escalator. The EAT agreed. They noted that a reference to insurance underwriting a benefit was not of itself enough to limit the employer’s liability to the terms of the policy. Any such limitation must be set out in clear terms in the contractual paperwork. The EAT said the employee’s contract, offer letter and summary of benefits were ‘plainly’ contractually binding. The offer letter, although giving only headline terms, set out clearly when the IPP benefit would kick in, how much it would be and how long it would last. The summary of benefits repeated this entitlement unambiguously. A clause in the contract purporting to incorporate the terms of a handbook as varied from time to time only had the effect of incorporating provisions on which the other contractual documents were silent. Here, the contractual documents were clear so that clause did not affect IPP and change its terms or the employee’s contractual entitlement. Nor was the entitlement limited to the relevant insurance policy. If an employer wants to rely on an insurance policy, to limit or qualify what the contractual documents have expressly set out, they must take steps to bring the terms of the policy to the employee’s attention. Here, the employee had not known about or been given the insurance policy terms. In any event, the relevant policy here was the one in place when the contract was made with Cramer, and that was the one conferring entitlement to an escalator. If the employer wanted to rely on less favourable terms of any future policy that would need to be expressly set out. ASG was bound by the agreement made between the employee and his previous employer, even though ASG did not have insurance backing to those terms.

This case doesn’t change the law but is a sage reminder to employers who are involved in TUPE transfers. Transferee employers must check contractual PHI policies for any transferring employee and check whether the terms will be covered by their existing insurance policy.  Employers must also set out expressly in contractual documents that PHI payments will be limited to the sums covered by the scheme insurer. Just saying they are governed by a policy is not enough.

Unfair dismissal

Gwynedd County Council v Barrett

The opportunity to appeal against dismissal is usually considered to be an essential element of a fair dismissal. In the recent case of Gwynedd County Council v Barrett, the Court of Appeal said that this is not necessarily the case in a redundancy dismissal.

The employees were teachers who worked at a community school. School provision was reorganised, and the local authority decided to close that school and replace it with a new community school at the same location. The authority told staff that all employment contracts would be terminated and that the new staffing structure for the new school would be decided by application and interview. Unsuccessful candidates would be made redundant unless they could be found suitable alternative employment. The employees applied for jobs but did not get them. They were not given an opportunity to make representations to the school or appeal the position prior to their dismissal. The employees brought unfair dismissal claims. The tribunal said the dismissals were unfair because of the lack of consultation, the way they had to reapply for their jobs and because they were denied the right to appeal. On the failure to provide the right to appeal, the tribunal noted that an employer required ‘truly exceptional circumstances’ to refuse the right to appeal, which did not exist in this case. The EAT agreed. The local authority appealed to the Court of Appeal, in part on the basis that applying the ‘truly exceptional circumstances’ test had been wrong in law.

The Court of Appeal confirmed that failing to allow an appeal in a redundancy case did not necessarily make the dismissal unfair. If the employer had followed a fair procedure in terms of the selection process then the lack of any appeal was not necessarily fatal. However it was one of many factors to be considered when deciding whether a dismissal was fair. The Court of Appeal said the tribunal’s approach had been sound. They had not applied a blanket rule that the dismissals must be unfair because there had been no appeal. They had looked at the procedure in the round, including the absence of any opportunity for the employees to raise a grievance about the process or be consulted about the dismissals. The tribunal had applied a test of fairness and considered whether the employer’s approach in this case fell within the band of reasonable responses. They found it did not based on the procedure as a whole.

This case confirms that denying an employee an appeal against a redundancy dismissal will not necessarily result in a finding of unfair dismissal. However, it is clearly best practice to do so. In this case, the redundancy process as a whole had been generally unfair. Had there been an appeal, there would have been another opportunity for the employer to put matters right. Rather than an extra annoying hurdle, employers should consider appeals processes as an opportunity to ensure that their own house is in order. Much better to do that internally than in the public environment of an employment tribunal hearing.

Flexible Working

The government has published a consultation document – Making flexible working the default – which proposes various changes to the existing rights for employees to request flexible working. This consultation document comes hot on the heels of the widespread flexible working that business and workers have had to adopt in the wake of the Covid-19 pandemic. Homeworking has increased exponentially and been shown to work in many fields where it was previously rare. The pandemic has also created more awareness of the importance of work-life balance and caring responsibilities for children and family members who are unwell. Although some of this flexible working may not be sustainable in the long term, our eyes have been opened to what is possible and the government is seeking to capitalise on this opportunity.

The proposals do not set out an automatic right to flexible working. However they do propose to remove the 26 weeks’ qualifying service to make the right a ‘day 1’ right. The proposals retain the important basic system of a conversation between employer and employee about what will work in their individual situation in terms of balancing the employee’s aims and desires with the needs of the business. The other proposals include:

  • Potentially making changes to the eight business reasons for refusing a flexible working request if they are no longer reasonable in 2021.
  • Requiring an employer to suggest alternatives to the arrangements requested by the employer if the flexible working request is rejected, in order to promote compromise.
  • Changing some of the administrative process, for example exploring whether to allow employees the right to make a statutory request more than once in a 12-month period.
  • Raising awareness of the existing right to request a temporary flexible working arrangement which the government believes is under-utilised at the moment.

The consultation is open until 1 December 2021. Make your contribution to the debate here:
https://beisgovuk.citizenspace.com/lm/flexible-working/

And finally…

Most employers have long been alive to issues of diversity in business in terms of protected characteristics such as  race, sex and disability. But what about class? Socio-economic grouping is not a protected characteristic, so is seeking to ensure a certain percentage of ‘working class’ employees a hurdle too far?

Not for KPMG, who have announced a new target that 29 per cent of partners and directors should come from a ‘working class’ background by 2030. Employees with parents in manual jobs, such as plumbers, electricians, butchers and van drivers, will meet the definition of ‘working class’ for this target. The firm told Personnel Today that 23 per cent of its partners and 20 per cent of its directors currently meet this definition. The firm said that those from lower socio-economic backgrounds were paid on average 8.6 per cent less than those whose parents worked in management or professional jobs. The firm also plans to train all its staff on the invisible barriers that exist to those from less affluent backgrounds. The Chair of KPMG comes from a working class background herself and says she is a passionate believer that greater diversity improves business performance, brings fresh thinking and a wider perspective on decision making, all of which deliver better outcomes for clients.

KPMG is not alone in recognising that talent lies in every demographic but that people from lower socio-economic groups often have less opportunity to seek out those professional roles. This is unfair for job seekers but also denies business the widest pool from which to seek the very best talent. Creating targets means that the impetus for providing that opportunity lies with the business, levelling the playing field and creating more opportunity for those who need it. Seeking out new pools of talent from potentially untapped sources good for diversity and diversity is good for business. Our differences are often our strengths.

About David Parry

David graduated with a Law with French degree from Leicester and Strasbourg Universities. He qualified as a solicitor in 1989 and has specialised in employment law ever since, first at Cole & Cole (now Morgan Cole) then at Mallam Lewis & Taylor who merged with Darbys in 1999. David became a partner in 1995. Until 2013, David was the Head of the Employment Team at Darbys that became one of the best-regarded in Oxford and the Thames Valley. Contact David now

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