Employment litigation in review - 2020

In this client insight we provide:

• an overview of 10 key developments in employment litigation in 2020;
• our top 10 employment case law developments of 2020;
• our predictions for 2021: the top ten future employment litigation trends; and
• 10 key employment appeals on the horizon for 2021.

10 key developments

1. Impact of COVID: Employment Tribunal delays

The Employment Tribunal (ET) ground to a halt during the height of the pandemic and was slower than the High Court to get remote hearing arrangements off the ground. The latest statistics from the Ministry of Justice (covering the period of April to June 2020) report that the outstanding caseload of the ET rose by 31% during that period, with an 18% increase (to 10,000) in single claims as compared to the same period in 2019, likely fuelled by the rise in unemployment and changes to working conditions during the COVID-19 pandemic. Disposal of cases decreased by 31% in the same period. A backlog of 37,000 cases was reported in September (higher than the peak levels of 2009/10), although it is likely that this figure is now significantly higher. For the week ending on 29 November 2020, the single claims figure had risen to about 43,200. This is a 40% increase since the March 2020 baseline. See here for more information.

2. New Practice Direction and Guidance on remote hearings

The President of the Employment Tribunals (England & Wales) issued a Practice Direction on remote hearings and open justice, which sets out the ways in which open justice will be safeguarded during hearings conducted wholly or partially remotely. There is Presidential Guidance on remote and in-person hearings, which should be read alongside the Practice Direction, which explains the general factors that will influence the judicial decision on the format of the hearing, how the parties should prepare for remote hearings, and other COVID-19 safety measures. Read our Insight for more information.

3. CVP

The Employment Tribunals have made a significant investment in the Ministry of Justice's Cloud Video Platform which has been used since June for straightforward matters, such as substantive preliminary hearings as well as multi-day discrimination claims since June. Whilst there have undoubtedly been some technological challenges it is likely that remote hearings and hybrid hearings are here to stay for the foreseeable future. Whilst more thought may need to be given to the practical and technological arrangements for a virtual hearing in advance, the increased focus on digitalisation and the use of sophisticated electronic bundles can bring significant efficiencies. Interest in judicial mediation has increased during the pandemic, both by telephone and video methods, with many parties commenting on how suitable CVP has proved when it comes to assisting parties to resolve their disputes in this way.

4. Tribunal reform

The government has introduced new reforms to the Employment Tribunal system to address the impact of COVID-19, which had led to a huge backlog of cases and significant delays as well as the need for distancing to minimise infection risk (see press release and new regulations). The changes are designed to increase flexibility for remote hearings and boost hearing capacity. The key reforms include:

• the deployment of non-employment judges into Employment Tribunals, if certain suitability criteria are met;

• allowing legal officers (who are not legally qualified) to carry out certain tasks which are currently performed by Employment Judges;

• allowing multiple parties to use the same claim/response forms where there are common or related issues of fact or law, or it is reasonable to do so; and

• adding an exception to the rules which means that claims that have been withdrawn do not have to be entered onto the public register.
  See our October Employment Insights.

5. Law Commission report on employment law hearing structures

Following its consultation of last year, the Law Commission has published its report on employment law hearing structures, which sets out 23 recommendations for reform. The reforms aim to remove unnecessary discrepancies and issues which arise from the demarcation of jurisdictions between the civil courts and tribunal in the areas of discrimination and employment law, without any major restructuring of the system. Key recommendations include:

• increasing time limits for bringing Employment Tribunal claims to six months;

• introducing a 'just and equitable' test to extend time; and

• increasing the financial limits on contractual claims from £25,000 to £100,000 and allowing breach of contract claims to be brought during employment.

The recommendations are expected to be considered by the government (an interim response was expected by the end of the year, with a full response in spring/summer 2021 but this may be delayed). See our May Employment Insights.

6. Acas early conciliation

Important changes were made to the Acas early conciliation rules, including to allow for a fixed six-week early conciliation process in all cases, rather than the existing process of one month with the potential to extend by two weeks. The rules are amended to allow greater flexibility in handling minor errors, for example to allow for the correcting of mistakes re the early conciliation number. These reforms came into force on 1 December 2020. See our October Employment Insights.

7. Costs award

Whilst cost awards against Claimants are likely to remain the exception rather than the rule in Employment Tribunal proceedings, this year has seen an increase in significant cost orders being made against Claimants, including in particular in Mr C H Tan v Copthorne Hotels in which the Claimant was ordered to pay £432,000 in costs to his employer.

8. Rise in interim relief

We have seen an increase in applications for interim relief this year. This trend is likely to continue as the economic impact of COVID-19 leads to increasing numbers of dismissals. Given that interim relief can require an employer to reinstate a dismissed employee pending their merits hearing and given that many Employment Tribunal hearings are not being scheduled until 2022, this could be an increasingly powerful weapon for employees. In Morales v Premier Fruits (Covent Garden) Ltd, one of the first COVID-related claims, the Employment Tribunal granted an employee interim relief where dismissal was likely due to him seeking assistance from his trade union with bringing a grievance. See our October Employment Insights. Of further significance, on 15 and 16 December 2020 the EAT heard the appeal of Steer v Stormsure in which the Claimant sought to argue that interim relief should also be made available for discriminatory dismissals. The appeal has been expedited to guarantee a judgment before the end of the EU transition period.

9. Pleadings

The EAT has discouraged "narrative style" pleadings. In C v D the Claimant brought claims of unfair dismissal and discrimination. The Claimant's particulars of claim set out a lengthy and detailed narrative of events which failed to identify which facts related to which protected characteristic, the alleged type of discrimination or relevant statutory provisions. Representatives have been encouraged to "adopt a more succinct and clear drafting style". See our October Employment Insights.

10. Anonymity orders

There may be circumstances where Tribunals should consider making anonymity orders under rule 50 of the Employment Tribunal rules even if the affected party does not ask for one. In X v Y,  the Claimant's father put forward evidence in relation to certain mental health issues associated with the Claimant's transgender status which were referred to in the Tribunal judgment. The Claimant subsequently wrote asking for the sensitive material to be redacted. See our September Employment Insights.

Top 10 caselaw developments of 2020

1. Whistleblowing

The Supreme Court has made clear that if an employee (in the hierarchy of responsibility above the employee, such as their line manager) deliberately hides the real reason for dismissal behind an invented reason which the decision-maker adopts (such as pretending it is performance-related rather than whistleblowing), the reason for the dismissal is the hidden reason rather than the invented reason - Royal Mail Ltd v Jhuti. See our Insight.

2. Future career losses

The High Court has allowed a banker's £46 million claim for loss of earnings to proceed (in part) - Benyatov v Credit Suisse. While conducting business in Romania Mr Benyatov was prosecuted and convicted of crimes under Romanian law and his Approved Person status was subsequently revoked. The High Court ruled that Mr Benyatov's claims based on: (i) an implied indemnity to cover his loss of earnings due to his inability to work following his conviction; and (ii) a duty of care to assess the risks flowing from his work in Romania should be allowed to proceed to be determined on the facts. See our July Employment Insights. In a separate case, the High Court has ruled that in limited circumstances there is a duty to provide an ethically acceptable working environment and to take reasonable care to protect post-employment financial interests Rihan v Ernst & Young. See our May Employment Insights.

3. Discrimination claims relating to transgender status

A gender fluid employee received £180,000 in compensation in Taylor v Jaguar Land Rover Ltd showing that people with more complex gender identities can be protected from discrimination under the Equality Act. Jaguar Land Rover has signed up to have a public review of their efforts to become a "standard setting organisation" in the diversity and inclusion field. See our November Employment Insights.

4. Protected beliefs under the Equality Act 2010

In the recent decision of Higgs v Farmor's School an Employment Tribunal has held that a Christian employee's belief that gender cannot be fluid and that an individual cannot change their biological sex or gender could be protected beliefs under the Equality Act 2010. This marks a change in direction following the earlier decisions in Forstater v CGD Europe & ors and  Mackareth v Dept for Work and Pensions. In Forstater v CGD Europe & ors an Employment Tribunal ruled that the belief that gender is biologically determined at birth and immutable thereafter cannot be protected as a philosophical belief under the Equality Act 2010. See our January Employment Insights. This decision echoes the findings in Mackareth v Dept for Work and Pensions from 2019 in which an objection to transgenderism was held to the incompatible with human dignity and not protected under the Equality Act. See November 2019 Insight.

5. Vicarious liability

The Supreme Court handed down two important decision on vicarious liability which will provide comfort to employers. In VM Morrison v Various Claimants Morrisons was held not to be vicariously liable for the conduct of Mr Skelton when he stole and posted into the public domain the personal data of nearly 100,000 employees. In Barclays Bank v Various Claimants the Supreme Court held that Barclays Bank was not vicariously liable for sexual assaults allegedly committed between 1968 and about 1984 by a self-employed medical practitioner with a portfolio practice who conducted medical assessments and examinations of prospective Barclays employees. See our Insight.

6. Professional misconduct

A former partner of Freshfields Bruckhaus Deringer succeeded in his appeal against the Solicitors Disciplinary Tribunal's findings that he had breached SRA Principles after a "sexual encounter" with a junior colleague in 2016 outside working hours. The High Court reversed the Tribunal's findings that he had failed to act with integrity and undermined public trust. The decision could have broader implications for other regulated sectors, such as the financial services sector, where the FCA has made clear that non-financial misconduct, as well as financial misconduct, is relevant to its assessment of fitness and propriety of regulated people. See our Insight.

7. Age discrimination

The Court of Appeal in Heskett v Secretary of State for Justice has ruled that the need to reduce costs to balance the books was a legitimate aim capable of justifying age discrimination. Due to funding cuts and a pay freeze in the public sector, the probation service introduced a new pay policy which meant that it would take 23 years to get to the top of the salary scale rather than the previous 7 or 8. Although saving costs alone is not enough, where financial constraints oblige an organisation to reduce their staff costs to balance the books this can be a legitimate aim. See our December Employment Insights.

8. Equal pay

The Court of Appeal held in Walker v Co-operative Group that an Employment Tribunal used the wrong test when determining whether the Co-op could establish the material factor defence; the test is not whether the difference in pay is justified but whether the reason for the difference is causative and material. See our September Employment Insights.

9. Employment Status

An Employment Tribunal has ruled in Mr S O'Eachtiarna and others v City Sprint (UK) Ltd that, despite new contractual terms, cycle couriers providing their services to CitySprint are still deemed to be workers under the Employment Rights Act 1996. See our September Employment Insights.

10. Restrictive covenants

The High Court held in Square Global Limited v Julien Leonard that the absence of a garden leave set-off clause was not fatal to the enforceability of a non-compete restriction. Mr Leonard resigned without notice alleging constructive unfair dismissal and that his post-termination restrictions were unenforceable. The High Court found Mr Leonard's evidence to be unconvincing and found that he was in breach of his notice period and that the non-compete clause applied for a further 6 months. See our June Employment Insights.

What's on the horizon - 10 future litigation trends

1. Employment Tribunal to embrace remote hearings and e-bundles

We expect that Tribunals will continue to offer remote and hybrid hearings into 2021 and beyond, particularly in light of the current backlog of cases and the risk of further waves of COVID-19. We may start to see electronic bundles becoming the norm in preference to hard copy bundles as all parties benefit from the advantages of modern technology (in particular with respect to searchable pdfs, hyperlinks and bookmarks).

2. Rise in health and safety and other claims connected to COVID-19

We understand that health and safety detriment, unfair dismissal and protected disclosure claims will be treated as priority claims and triaged for early determination given their relevance to public interest and whether it is safe for employees to return to work during the pandemic. The number of these potential claims may well increase further in light of the recent decision in R (Independent Workers' Union of Great Britain) v Secretary of State for Work and Pensions & anor that protection from health and safety detriment should extend to workers - see our December Employment Insights. We also expect an increase in unfair redundancy dismissal claims and contested protective award claims.

3. Rise in whistleblowing claims connected to COVID-19

Protect, a UK whistleblowing charity reported a 37% increase in calls to its advice line from May to September 2020 compared with the previous year, with 41% of those saying that their concerns were ignored by their employer. It seems likely that we will see an increase in whistleblowing claims connected to COVID-19, for instance in relation to alleged furlough fraud and failure to maintain safe working environments and/or provide PPE. In light of this, fostering an open and transparent culture in relation to whistleblowing will only get more important.

4. More trends in litigation:

• Transgender discrimination claims are likely to increase. We see this as a potential growth area, especially in light of the decisions discussed above. The Supreme Court has recently granted permission to appeal in a case regarding gender-neutral passports. If successful the HM Passport Office would be required to issue non gender-specific passports - see our December Employment Insights.

• An increase in claims seeking to protect philosophical beliefs. Casamitjana v League Against Cruel Sports recognised ethical veganism as a philosophical belief capable of protection under the Equality Act 2010 - see Insight and with the increased focus on ESG we may see questions being raised about whether sustainability is a protected philosophical belief.

5. Increase in equal pay litigation in private sector

Samira Ahmed brought a successful equal pay complaint against the BBC earlier this year. Although the recent EHRC report did not make any findings of unlawful discrimination (a conclusion which has been criticised by campaigners as failing to address the systemic failings), there are still four BBC equal pay cases going through the Tribunal process, with three more being dealt with by ACAS, and other fair or equal pay complaints going through the BBC's internal processes. It seems likely that we could see more equal pay litigation against other public and private bodies in the years to come, especially given the disproportionate impact which the COVID pandemic has had on female employees. See our December Employment Insights.

6. Stronger focus on diversity & inclusion / discrimination

In January 2019, the government closed its consultation on the introduction of mandatory ethnicity pay gap reporting. The recommendations from this consultation have not yet been published. However, the #BlackLivesMatter movement, together with the impact of the COVID-19 pandemic on ethnic minority groups and women in the workplace have put diversity & inclusion (D&I) firmly on the agenda for businesses across the world. It seems likely that, as businesses become increasingly focussed on their D&I initiatives, so too will their employee populations. We may therefore see an increase in discrimination claims in the year ahead.

7. An increase in restrictive covenant disputes

The coronavirus pandemic has fundamentally changed workplace norms and expectations. With a significant shift towards remote working, businesses will increasingly be managing an absent workforce, with employees not subject to the usual physical deterrents to employee misconduct. Protecting confidential information and maintaining team culture and loyalty will continue to pose challenges. We are likely to see an increase in the number of disputes and litigation arising from the misuse of confidential information and potential breach of post-termination restrictions.

8. Greater risk of data protection claims

The ICO has issued a number of significant fines this year for data protection breaches, including £18.4 million to Marriott International Inc and £20million to British Airways. We expect this trend of tighter enforcement to continue. The ICO has also recently published updated guidance on Data Subject Access Requests, which together with a likely increase in DSARs may lead to a rise in challenges from employees on the handling of their data. See our Insight.

9. An increase in reinstatement / re-engagement

We are already seeing Claimants increasingly seeking reinstatement and reengagement when pursuing an employment tribunal claim. Challenging economic circumstances and a difficult job market may lead to even more cases where this is sought.

10. Fewer appeals in employment cases

In the case of Tabidi v British Broadcasting Corporation heard in the Court of Appeal earlier this year, Judge LJ McCombe called for amended legislation to make it harder for a second appeal to be brought. In practice this would mean that, once an employment case has been heard in the Tribunal and the EAT, permission to appeal would only be granted if the case raised an important point of principle/practice or there was otherwise a compelling reason for the appeal to be heard. See our July Employment Insights.

What's on the horizon - 10 key appeals in 2021

1. Uber BV and others v Aslam and others

Uber brought an appeal against the decision of the Court of Appeal that Uber drivers are 'workers' under the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998. The case was heard by the Supreme Court on 21 and 22 July 2020 and judgment in awaited. See our December 2018 Insights.

2. Asda v Brierley

The Court of Appeal dismissed Asda's appeal and held that ASDA retail workers could use depot workers as comparators for the purposes of equal pay claims under the Equality Act 2010 and the Equal Pay Act 1970. The case was heard by the Supreme Court on 13 and 14 July 2020 and judgment is awaited.

3. Lee v Ashers Baking Co Ltd and others

The Supreme Court held that it was not discriminatory for a bakery and its Christian owners to refuse to provide a cake bearing the words "Support Gay Marriage" to a gay customer. The case has been referred to the European Court of Human Rights.

4. Forstater v CGD Europe

The ET held that the Claimant's views (including her refusal to accept that trans women are women) were not protected under the Equality Act 2010. The Claimant has appealed to the EAT. The hearing is scheduled for 27-28 April 2021.

5. Conisbee v Crossley Farms Ltd and others

The Claimant has appealed against the decision of the ET that veganism is not a belief qualifying for protection under the Equality Act 2020. EAT hearing dates awaited.

6. Mackereth v The Department for Work and Pensions

The ET held that a doctor engaged to carry out health assessments for the DWP was not discriminated against on the grounds of religion or belief when he was suspended and then dismissed for refusing the address transgender patients by their chosen pronoun. Permission to appeal to the EAT is being sought.

7. Page v NHS Trust Development Authority

The ET and EAT rejected the Claimant's claims for direct and indirect religion or belief discrimination, harassment and victimisation after he was dismissed for expressing opposition to same-sex adoptions in media interviews. Permission to appeal to the Court of Appeal has been granted.

8. Rihan v Ernst & Young Global Ltd

The High Court ruled earlier this year that E&Y were in breach of their duty to take reasonable steps to prevent Mr Rihan from suffering financial loss by failing to perform an audit ethically and create a working environment free from misconduct. Mr Rihan was awarded $11 million in damages for past and future loss of earnings. E&Y has appealed to the Court of Appeal. This appeal will be heard on 2 or 3 February 2021. See our May Employment Insights.

9. East of England Ambulance Service NHS Trust v Flowers

The Court of Appeal held that the voluntary overtime of an ambulance crew should be counted towards their "normal remuneration" for the purposes of calculating holiday pay if it is "sufficiently regular". The NHS Trust has appealed against this decision and the case will be heard by the Supreme Court on 22 June 2021. See our June 2019 Employment Insights.

10. Royal Mail Group Ltd v Efobi

The Court of Appeal held that an ET had been entitled to conclude that a Claimant in a race discrimination claim had not discharged the initial evidential burden of proof on him, as required by section 136 of the Equality Act 2010. Permission to appeal to the Supreme Court was granted on 5 November 2019 and the case will be heard by the Supreme Court on 18 March 2021.

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