October 2022 Bulletin
Last month saw the tabling in the House of Commons of the EU Law (Revocation and Reform) Bill. If brought into force, the Bill provides that all EU derived legislation will fall away unless it is specifically retained by a certain date (December 2023, with the option to extend until December 2026). That means that employment law staples, including TUPE, part-time/fixed-term worker regulations and holiday pay rules may disappear. The government will decide which laws it wants to retain. There is no indication yet of what’s likely to be in and out.
This move ends the previous position of EU law supremacy over domestic legislation. In the government’s own words, the aim is to ‘restore primacy to Acts of Parliament’. There are also provisions to give the courts more power to depart from retained EU law and to downgrade EU law so it doesn’t have the same status as domestic Acts of Parliament.
While Remainers may mourn in principle, employment law practitioners may secretly hope that change in some areas of law, such as TUPE, may help to bring legislative clarity to previously complex and litigious area of employment law.
Discrimination – time limits
Kumari v Greater Manchester Mental Health NHS Foundation Trust
Section 123(1) of the Equality Act 2010 says that discrimination claims must be brought within three months of the alleged discriminatory act or such other period that the tribunal thinks is ‘just and equitable’ in the circumstances. An extension of time will be the exception not the rule. The tribunal can consider anything it thinks is relevant when making that decision, including the length of the delay and the reasons for it, the effect of delay on the cogency of evidence and how quickly the employee acted once they knew that they had a potential legal claim. The employment appeal tribunal (EAT) has looked at a case recently where the tribunal had considered the merits of the potential claim when deciding whether to grant an extension of time.
In Kumari v Greater Manchester Mental Health NHS Foundation Trust, the employee lodged her claims too late. She then applied to amend the same claim to add another claim, which was also out of time. The tribunal refused to allow the claim or the amendment. Among other things, they considered that the merits of the claims appeared to be weak, though not so weak that they had no reasonable prospects of success at all. The employee appealed, saying the tribunal should not have taken the merits of the claims into account because to do so would undermine the strike out regime that the employer could call on afterwards if felt the merits of the claims were poor.
The EAT dismissed the appeal. There is no exhaustive list the tribunal must go through when deciding about extensions of time. There is nothing to say that the merits cannot be one relevant consideration in a particular case. The tribunal must make its decision based on relevant factors identified during the hearing, bearing in mind that they will not have all the evidence at this preliminary stage. In this case, the evidence showed that the tribunal had weighed up all relevant matters including the apparently poor merits. The claims suggested that some of the conduct was not targeted at the employee, and it was difficult to link anything in the claim to race. It was relevant that the tribunal had allowed the employee to address these points during the hearing. The ‘balance of prejudice’ test in amending claims was also fact-specific and there was nothing to say why considering the merits of a potential claim was unreasonable.
This case is a reminder that extensions of time for claims lodged late will be the exception rather than the rule. There is a presumption that late claims will not be accepted, meaning an employee will have to show why it is just and equitable to extend time, rather than the employer having to show why it is not. Employers should never roll over in relation to late claims but make employees prove that the extension is justified.
Ponticelli v Gallagher
When there is a TUPE transfer, all of the transferor’s (the original employer) rights, powers, duties and liabilities connected to the transferring employee’s contract of employment transfer to the transferee (the new employer). The EAT has looked recently at whether a share incentive plan (SIP), whose terms are contained in a collateral contract rather than the contract of employment, transfers during a TUPE transfer.
In Ponticelli v Gallagher, the employee was part of a share incentive plan (SIP) with his original employer. His employment then transferred to Ponticelli. The employee’s contract of employment did not mention the SIP, and the terms of the arrangement were contained in a separate agreement. That agreement said that shares must be sold or transferred to the employee or the company’s share account within 90 days of leaving employment. His employment transferred and his shares left the SIP and were transferred to him. Ponticelli offered a one-off sum as compensation for losing the right to participate in a SIP. The employee applied to the tribunal for a determination of his terms and conditions, saying he had the right to participate in a similar SIP with the new employer.
The employment tribunal said the employee had the contractual right to participate in a SIP as part of his overall financial package. That right transferred and he had the right to participate in a comparable scheme with the new employer. The employer appealed, saying the rights did not arise under the contract of employment or in connection with it, but via some other agreement (which they conceded was contractual). The EAT dismissed the appeal. They said that the right to participate in the SIP had clearly arisen under or in connection with the employee’s contract of employment. The SIP was directly connected to the overall financial package he received in return for his services as an employee. Those rights and obligations transferred to the new employer. He was entitled to participate in an equivalent scheme.
Share schemes are often kept deliberately separate from contracts of employment and often purport to be non-contractual. This case suggests that the right to participate in a share scheme like a SIP is a right ‘in connection with’ the employment contract and therefore will transfer under TUPE. This is a logistical nightmare for a new employer who does not already operate this kind of scheme. It is vital for businesses to consider the contractual (or otherwise) nature of this kind of scheme during the due diligence process that precedes any TUPE transfer.
University of Dundee v Chakraborty
Communication between a client and their solicitors for the purposes of getting legal advice, and any documents prepared for the purposes of litigation, are ‘privileged’. This means that they do not have to be disclosed to the other party during any legal proceedings. In University of Dundee v Chakraborty, the employer argued that an original grievance investigation report acquired retrospective privilege and therefore did not need to be disclosed in proceedings.
The employee raised a grievance against his line manager about bullying and discrimination. A University colleague was appointed to investigate the matter and produced an original report (though did not send it to the employee). The employee lodged tribunal proceedings. The University took legal advice on the investigation report and changes were recommended. Those changes were made, and the investigating officer also made changes of her own. That amended report, marked as having been amended following legal advice, was disclosed to the employee. He asked for the original version of the investigation report, but the employer refused, saying it was privileged. They said a comparison of the original report with its later version would reveal the legal advice that had been provided – as such the original document acquired privilege retrospectively. The employment tribunal agreed so the employer appealed.
The EAT said that it was not possible for a document to acquire privilege retrospectively. Here, the later report may have been privileged. However, the original report was not prepared for the purposes of getting legal advice, nor was it prepared in contemplation of litigation. The fact that a comparison may show what advice was received was irrelevant. However in this case, on the facts, the investigator had made her own changes between versions 1 and 2 of the report and so any changes made by way of legal advice would not be discernible from those simply made on her account.
Employers often seek advice on the content of investigation reports during grievances and disciplinary processes, in cases where they are expecting or involved in litigation. Although the advice may be privileged, the original investigation report will not be. This highlights the importance of getting investigations right first time, which means having a sound workplace procedure and investigating officers who are well trained and confident in conducting investigations.
MTN-1 v Daly
Employers may be familiar with employees seeking extensions of time to lodge late employment tribunal claims, for a variety of reasons. In MTN-1 v Daly, the EAT was faced with a case where the boot was on the other foot, and it was the employer who needed more time.
The employee brought an unfair dismissal claim against their small employer. The claim was sent to the company’s registered office – their accountant’s office. It was then left on the CEO’s desk, who didn’t open the envelope. The Covid pandemic had resulted in the company’s offices being closed and a cash flow crisis. Due to his ADHD and depression and being in a ‘very dark place’ mentally, the CEO had hyper-focussed on the business and also a sick friend who was in a Covid-related coma. Even when he knew about the claim, the CEO did not engage with it due to this hyper-focussing. The tribunal issued default judgment in the employee’s favour. The company’s appeal against this judgment was lodged after 4pm on the last day, and so was late.
The EAT extended the time limit to allow the appeal. They accepted that the CEOs mental health, and the resultant hyperfocus, was the reason the appeal was late. They said that but for this, the appeal would not have been granted. Companies must expect to be sent correspondence at a registered office address and put in place processes to ensure it is dealt with appropriately.
This case shows that employers can also avail themselves of an extension of time in the right case. However it is a reminder that only really cogent reasons will ever justify an extension of time, whichever foot the boot is on.
Tijani v The House of Commons Commission
Can continued lateness justify dismissal? The EAT in Tijani v The House of Commons Commission held that it could. The employee had been a cleaner at the House of Commons since June 2015. She was given a first written warning in December 2017 for being late 17 out of 20 days. She got a final written warning, to stay in place for 24 months, for continued lateness in April 2018. The employee didn’t appeal and was told that further absence could result in dismissal. She was still frequently between 2 and 33 minutes late – 43 more times by January 2019 and 7 additional late arrivals before the formal process began. The employee was dismissed. She appealed, but the appeals officer said her record showed no significant improvement even discounting the times when she was late by only a couple of minutes. The appeal failed.
She brought a claim for unfair dismissal and lost. She appealed to the EAT, saying that the tribunal had not seen a copy of the employer’s disciplinary policy during the original hearing and therefore could not measure the nature or extent of the misconduct or the appropriate range of sanctions. She also said that the tribunal’s conclusion that poor timekeeping was generally a misconduct issue was not well informed and speculative. She said the tribunal had not properly considered her arguments about inconsistent treatment compared to other employees who had not been dismissed for their lateness.
The EAT disagreed. With regard to inconsistent treatment, the tribunal asked the employee to name a colleague with a similar record of lateness who had not been dismissed – but the employee had not provided any names. The tribunal had seen evidence that six other cleaners had not been dismissed because their attendance had improved, evidence that the employee had not challenged. The tribunal was entitled to conclude that lateness was a conduct issue. Despite the unfortunate absence of the disciplinary policy during the tribunal process, the tribunal was entitled to find that the dismissal was fair given the sheer number of absences, the final written warning and the employee’s knowledge that further lateness could result in her dismissal. The employer did not need to show any ‘damage’ to the business as a result of the lateness – the lateness itself was enough. The EAT agreed that employees should not only show up on time but also be ready to start work on time.
This case highlights the importance of two things in conduct proceedings: following a fair procedure (warnings, appeals etc) and treating employees consistently. In this case, the employer not only got this right but had the evidence to show it. The absence of the disciplinary policy in evidence was irrelevant here. However, having a clear policy on lateness, and the potential sanctions for continued lateness, ensures employees understand not only the rules, but the potential consequences if they don’t stick to them.
Many of us have been caught up in strikes recently, whether it’s being unable to get to a meeting because there are no trains or your mum’s birthday card arriving late ‘because of the strikes’ (not because you posted it late). Strikes have been announced or considered in a variety of industries from teachers to telecoms, refuse workers to railways. Further disruption is almost guaranteed.
In the summer, the government revoked legislation which prevented employers from getting temporary or agency workers to cover the work of striking staff. This change devalues the threat of strike action and reduces the ability of unions to hold a business to ransom. This month, trade unions have bitten back. Unions have mounted a legal challenge to that move via a claim for judicial review of the government’s decision. They are claiming that the decision was unfair, based on out-of-date information and that the government has failed to consider article 11 of the ECHR and the right to freedom of association and the right to strike. Various individual claims have been lodged by individual unions, but the claims are likely to be heard together.
The business secretary is required to respond within 21 days of a claim being lodged. Watch this space to see how this battle progresses.
Bill Shankly, the first great manager of Liverpool FC, is quoted as saying: ‘Some people believe football is a matter of life and death, I am very disappointed with that attitude. I can assure you it is much, much more important than that.’ Anyone with a season ticket, or who is related to someone with a season ticket, will appreciate that sentiment. Football fandom can seem like a pretty strong and forceful belief when viewed from the outside, especially on match days. But is supporting a football team a philosophical belief, on a par with other religious and philosophical beliefs, which attracts protection from discrimination under the Equality Act 2010? Not according to the employment tribunal at a preliminary hearing in McClung v Doosan Babcock.
The employee had been a Rangers fan for 42 years. He was a club member and received annual birthday cards. He attended home matches at least twice a month and away games when he could. He spent a large proportion of his disposable income on going to matches or watching them on Sky Sports. He believed his support of Rangers was a way of life and as important to him as attending church is for religious people. He said it was a philosophical belief, a protected characteristic under the Equality Act.
The employment tribunal did not agree. Although his belief was genuinely held, it did not meet the other essential criteria for a protected belief set down in the case of Grainger v Nicholson. Support for a football club – an active interest in it and a desire for them to win – is different from a belief. The tribunal said the employee’s support for Rangers was like supporting a political party which case law has confirmed is not capable of being a protected philosophical belief. Being a football fan is a lifestyle choice, not a belief about a weighty or substantial aspect of human life. The employee’s belief lacked the required cogency, cohesion and importance. It didn’t warrant the same respect in a democratic society as matters such as ethical veganism.
This might be disappointing for football fans but is unsurprising bearing in mind the previous case law on the kinds of belief that can and cannot be protected. It might stop a potential discrimination claim in its tracks for Mr McClung, but it won’t stop him celebrating his belief in Rangers in the stands on a Saturday afternoon.