Working Relations September 2019

With Halloween looming, it is impossible not to highlight the intense activity of the UK parliament in the run up to Brexit day and, in particular, the Supreme Court ruling that the prorogation of parliament was void and of no effect. Brexit aside, there have also been a number of interesting EAT cases, in relation to whistleblowing, sexual harassment and the disclosure of privileged advice.

Key Developments

Brexit: prorogation of Parliament unlawful

It has been a month of intense activity for the UK Parliament. Following the Supreme Court ruling that prorogation was “void and of no effect”, MPs returned to work on 25 September. Boris Johnson has declared that “we will respect the law and we will come out on October 31”. How he proposes to achieve both outcomes (in the absence of an agreed deal) is not clear.

Given the increased likelihood of a General Election in the coming weeks, the Labour Party has announced some radical plans in relation to workers’ rights and the UK tax regime, if elected. The proposals include a cap on weekly working time, changes to employment status, banning zero hours contracts and raising the national minimum wage. See Labour Intensive – Unlawful Prorogation Update for further information.

The Government has also published revised immigration plans for no-deal Brexit, which will include a transition period from exit day until 31 December 2020, during which time EU citizens who move to the UK for the first time will be able to apply for a 36-month temporary immigration status.

New ICO guidance on responding to DSARs

This month, the ICO has published further guidance on the meaning of “manifestly unfounded and excessive” data subject access requests (DSAR). Organisations may refuse to respond to a request if it is manifestly unfounded or excessive or may charge a fee for doing so. However, they must consider each request on a case-by-case basis and be able to demonstrate why they have refused a request if they choose to do so.

The guidance explains that a request may be manifestly unfounded if the individual is “malicious in intent and is using the request to harass an organisation with no real purposes other than to cause disruption”. It also lists a number of factors that are indicative of malicious intent, such as where the individual has explicitly stated that they intend to cause disruption, but the guidance stresses that the factors are only intended as a guide and that each request must be considered in context. There is also guidance on the meaning of “excessive”, for example where a request repeats the substance of or overlaps with previous requests – although stresses that there may be legitimate reasons for making repetitive requests. There is also some guidance on the basic information an organisation must provide where a request is refused and when it might be appropriate to charge a fee.

The ICO has updated their guidance on timescales for responding to a DSAR. The timescale has now changed to reflect the day of receipt as ‘day one’, as opposed to the day after receipt. For example, a SAR received on 03 September should be responded to by 03 October (effectively, a “corresponding date” rule).

Government guidance on calculating holiday pay

BEIS has provided updated guidance on calculating holiday pay for workers without fixed hours or pay. The guidance now takes into account the recent decision in the Brazel v Harpur Trust, in which the Court of Appeal confirmed that the 12-week reference period was the correct approach to calculating holiday pay for a music teacher who was a term-time only worker.

The Government website has also currently removed its holiday pay calculator whilst it is updated.

Developments in the gig economy

The Senate in California has recently approved a bill stipulating that companies behind the so-called 'gig economy', like Uber, will have to treat their staff as employees. As a result, Uber drivers in California will be entitled to the minimum wage, paid holidays and sick leave.
Read more about how the decision may have ramifications around the world where similar cases are being considered.

In the UK, the Court of Appeal considered the status of Uber drivers in 2018 and ruled that Uber drivers were “workers” and not self-employed, and therefore entitled to certain employment rights (such as holiday pay and rest breaks etc) but not all the rights of an employee. The appeal to Supreme Court is pending.

This month, there has also been a new reference to the CJEU regarding the employment status of Yodel couriers, including to determine whether the right to use a substitute precludes a finding of “worker” status.

FCA letter on 2019/20 remuneration round

The FCA has published a letter sent to the Remuneration Committee Chairs of level 1 firms, setting out its findings and observations from the 2018/19 Remuneration Round and how it plans to assess firms throughout 2019/20. The letter reiterates that culture and governance is a key cross-sector priority and that the FCA will be reviewing firms’ remuneration and recognition practices to ensure that approaches to rewarding and incentivising all staff reinforce healthy cultures and do not drive
behaviours that would lead to harm to consumers or markets.

Key Cases

Whistleblowing: EAT considers public interest test

Okwu v Rise Community Action – Employment Appeal Tribunal

The Claimant worked for a small charity, which supports victims of domestic violence, FGM or HIV. Due to concerns about her performance, the charity extended her probation period. The Claimant then raised a number of complaints in a letter, including concerns that the charity was acting in breach of the Data Protection Act 1998 (DPA) by failing to provide her with her own mobile phone and secure storage for sensitive files. She was dismissed for poor performance and brought a claim for automatic unfair dismissal on whistleblowing grounds.

The Tribunal dismissed her claim on the basis that her complaints were not in the public interest because they concerned “personal contractual issues” raised as relevant to her performance issues. In any event, it found that the reason for her dismissal was poor performance and not the letter. The Claimant appealed.

On appeal, the EAT found that the Tribunal had failed to ask whether the Claimant had a reasonable belief that her disclosure (relating to breaches of the DPA) was in the public interest, and that it was hard to see that it could not have been. The EAT also found that the Tribunal had failed to address the Claimant’s case that nothing had happened between the decision to extend her probation and to terminate her employment, save for the letter. The case was remitted to the Tribunal.

Harassment: EAT rules shoulder massage not sexual harassment

Raj v Capita Business Services Ltd & anor – Employment Appeal Tribunal

The Claimant worked for the Respondent as a Customer Services agent. His employment was terminated under the probation process for performance reasons. He brought various claims in the Tribunal, including sexual harassment and harassment related to sex regarding the actions of his female team leader. In particular, he referred to unwanted physical contact by his team leader who had massaged his shoulders on two or three occasions in the open plan office where he worked. Whilst the Tribunal concluded that the conduct was unwanted and had a prohibited effect, it dismissed his harassment claim on the basis that the conduct was not related to his sex.

The Claimant appealed on the basis that the Tribunal had failed to apply the shifting burden of proof provisions (under section 136 Equality Act 2010) when determining whether unlawful harassment had occurred. This involves a two-stage test whereby the Claimant must prove there are facts which could show (in the absence of an adequate explanation) that an unlawful act has been committed, and only then for the Respondent to prove that they did not commit the unlawful act. In this case, the EAT found that the Tribunal had been correct to conclude that the stage-one threshold had not been reached, and so the burden of proof did not shift to the Respondents.

Disclosure of privileged advice: no cherry-picking

Kasongo v Humanscale UK Ltd – Employment Appeal Tribunal - 09 September 2019

The Claimant was employed by Humanscale as a marketing executive for 11 months before she was dismissed. Two weeks before her dismissal, she informed her employer that she was or might be pregnant. She brought claims of automatic unfair dismissal and discrimination on the ground of pregnancy and maternity. Her employer denied knowledge of her pregnancy and asserted that she was dismissed for poor performance and conduct issues.

At Tribunal, Humanscale deliberately disclosed several documents containing legal advice because they showed that dismissal on performance and conduct grounds was already underway before the Claimant allegedly informed them of her pregnancy. Specifically, these included a telephone note of a call between its HR manager and their lawyer seeking advice on termination, and an email of the same date summarising that advice for their in-house legal team. There was also a draft termination letter with lawyer’s comments redacted. However, the Claimant managed to read the redacted words and sought to rely on them. The Tribunal took the view that the redacted words were covered by legal professional privilege and the Claimant appealed.

The EAT held that the telephone note and email were privileged, and that the employer had waived privilege in respect of those documents. In doing so, the employer had caused a collateral waiver of privilege in other documents containing advice about dismissal, which meant that the redacted comments in the draft termination letter could be relied upon. Judgment on the full merits hearing is awaited.

Discrimination: vegetarianism not a belief protected under Equality Act 2010

Conisbee v Crossley Farms Ltd and others – Employment Tribunal

The Claimant, Mr Conisbee, was employed as a waiter/barman for five months before resigning. He alleged discrimination on the ground of religion or belief, with his belief being vegetarianism. At a preliminary hearing, the Tribunal held that vegetarianism did not qualify for protection under the Equality Act. Applying the test in Grainger v Nicholson, whilst his belief was deemed to be genuinely held and worthy of respect in a democratic society, it did not concern a weighty and substantial aspect of human life, and did not attain the requisite level of cogency, seriousness, cohesion and importance, primarily because the reason for being a vegetarian can differ greatly.

Error to simply make default judgment where claim undefended

Limoine v Sharma – Employment Appeal Tribunal

Ms Limoine was employed by Ms Sharma as a nanny to accompany her and her children on flights between London and Thailand. When Ms Sharma failed to pay her, Ms Limoine brought a claim for arrears of pay and other payments. In her response, Ms Sharma argued that she had effectively acted as a porter and not a nanny, and offered to pay her at a reduced rate. She also made a counter-claim for breach of contract, seeking to claim damages for the expenses she had paid. Ms Limoine overlooked to enter a response to that claim.

At the hearing, the Tribunal entered default judgment in Ms Sharma’s favour and dismissed Ms Limoine’s claim, ordering her to pay £1,285 in damages to Ms Sharma. Ms Limoine appealed. The EAT ruled that it was an error of law to enter judgment simply on the basis that a claim is undefended, without giving further consideration to the matter. It is open to the Judge to require further information, and the Presidential Guidance suggests that if there is reasonable doubt about any material matter a hearing should be listed. In this case, it was relevant that there was a live defended claim with which the employer’s claim overlapped and it was clear that Ms Limoine contested it. Both claims were remitted to the Tribunal.

Whistleblower denied interim relief

Beevers v FICC Market Standards Board & ors – Employment Tribunal

The Claimant, formerly a technical advisor at the FMSB, has claimed automatic unfair dismissal for whistleblowing and associated detriment. The Claimant was involved in US litigation involving Deutsche Bank, and alleges that he was pressured to stand down as an expert witness in the case. In this context, he made a number of protected disclosures and was subsequently dismissed.

This case concerned his application for interim relief to treat the contract as continuing and continue to pay him until a full judgment is made. Given that this is an exceptional form of interim relief in unfair dismissal cases, the Tribunal had to consider whether the Claimant’s case has a “pretty good chance of success” – it is not sufficient to show a likelihood on the balance of probability. The Tribunal found that there was a real prospect that the Claimant would not establish the facts on which he relies and a real prospect of establishing a degree of dishonesty on his part, and therefore that the claim might fail. On that basis, the application was rejected.

Salary sacrifice scheme not a supply for VAT purposes

HMRC v Pertemps Ltd - UK Upper Tribunal (Tax and Chancery Chamber) – 07 August 2019

Salary sacrifice arrangements under which a reduced amount was paid to employees in a tax efficient manner did not involve any supply for VAT purposes.

The Upper Tribunal (UT) has held that salary sacrifice arrangements put in place by an employer did not involve any supply of services by that employer to its employees. They were simply an alternative method of remunerating employees and did not involve the making of any supplies or the carrying on of any economic activity by the employer.

Further details are available here.

Stay Ahead of the Curve

• An overview of anticipated changes to Employment law in England and Wales is available here.

Events

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