Employment Law Alert UK – August 2022

Diversity & Inclusion

• Claimant suffered direct discrimination and victimisation as a result of her gender-critical beliefs. The ET held that the Claimant was directly discriminated against when the Respondent decided not to offer her employment and not to renew her visiting fellowship. The ET also held that removing the Claimant from the Respondent’s alumni webpages was an act of victimisation. In July 2021, the EAT ruled that the Claimant’s “gender-critical” belief (namely that biological sex, is real, important, immutable and not to be conflated with gender identity) was capable of being a protected philosophical belief under the Equality Act 2010. The ET was clear that there is an important distinction between holding a protected belief and the expression or manifestation of that belief. The ET had to determine whether decisions were made because of the Claimant’s belief itself or if the Claimant had manifested her belief in a way to which objection could justifiably be taken. Ultimately the ET did not find that the Claimant had manifested her beliefs in such a way to which objection could be taken and her claims succeeded. The judgment highlights how sensitive and complex this issue is and the need for employers to be alive to both the protection of an employee’s philosophical belief and the risk of potential discrimination and/or harassment in the workplace. (Maya Forstater v CGD Europe & ors)

• Employment Tribunal finds that Chambers discriminated against gender-critical barrister. The Employment Tribunal has upheld claims of discrimination and victimisation against Garden Court Chambers. They were ordered to pay £22,000 in compensation for injury to feelings to the Claimant. The Claimant is a criminal barrister at Garden Court Chambers. She believes that women are defined by their sex, not their gender - a “gender critical” belief. In December 2018 the Claimant complained to her colleagues about Garden Court becoming a Stonewall Diversity Champion. In October 2019 she was involved in setting up a Lesbian Gay Alliance to resist transwomen self-identifying as women. She made a series of tweets about this which led to a number of complaints being made to Chambers, including one from Stonewall. Chambers tweeted in response that it would be investigating concerns about tweets posted and said that the Claimant’s tweets may offend the Bar Standards Board Code. The Employment Tribunal upheld the Claimant’s claims that this was an act of discrimination. The Claimant’s claims against Stonewall (that they had induced or attempted to induce Garden Court to take action against her) were unsuccessful. This decision comes hot on the heels of the Forstater decision, (see above) and emphasises the sensitivities and complexities of navigating these issues. Following the judgment Garden Court Chambers commented that it was “reviewing the judgment carefully … with a view to appeal”. (Bailey v Stonewall and others ET/2202172/2020)

• Careful scrutiny required for age discrimination claim if only a marginal age difference. The EAT held that a small difference in age between the Claimant and their comparator may make it less likely that the alleged discriminatory treatment is because of age (in a case which does not rely on a “cut-off” age) and as such must be subject to careful scrutiny. The Claimant and his comparator were both working for the Respondent as Managing Directors before the Respondent carried out a restructure. Following this restructure, the Claimant, aged 55, was made redundant. He was told that he was “old and set in his ways”. His comparator, aged 51, was given the one remaining Managing Director role. The Claimant brought claims of unfair dismissal, age discrimination and harassment. The EAT held that age discrimination can arise where there is a marginal difference in age, but that this is most likely where an employer imposes a cut-off for the imposition of a benefit or detriment. In the absence of this a small age difference makes it less likely than any difference in treatment is because of age and will need careful scrutiny. The Tribunal at first instance should have expressly considered whether the relevant decision makers considered the Claimant and his comparator to be roughly the same age or not. The failure to do so was an error of law. This case serves as a reminder of the importance of considering age as a risk factor on exit, as this is easy to overlook. (Citibank N.A. v Kirk)

• New consultation on standards for ethnicity data. On 5 July 2022, the government’s Race Disparity Unit published a new consultation on standards for ethnicity data. The new standards are intended primarily for use by government departments and other public bodies but may be useful for any organisations collecting, analysing and reporting ethnicity data. The standards are based around three pillars of the Code of Practice for Statistics: value, trustworthiness and quality and the consultation highlights key considerations and best practices. The consultation closes on 30 August 2022.

• Government responds to report on menopause in the workplace. In July 2022, the Department for Work and Pensions published its response to the independent report ‘Menopause and the Workplace: How to enable fulfilling working lives’. The recommendations in the response include: (i) the appointment of Dame Lesley to the UK Menopause Taskforce alongside another Menopause Employment Champion; (ii) a review of menopause as a cross-cutting policy issue; and (iii) plans to launch a government-backed employer-led campaign.

Whistleblowing

• Employer can take action against a worker who makes a protected disclosure in an unreasonable or unacceptable manner. The Court of Appeal held that there can be a distinction between a protected disclosure and the manner in which it was made, for the purposes of an automatic unfair dismissal claim. The Claimant was employed by the Respondent as Head of Financial Audit, responsible for carrying out risk-based audits of business activities. On 22 October 2018, she made a verbal protected disclosure to Ms Harding, the Head of Legal (about a financial compliance template not being suitable for non-bank-to-bank lending) and followed this up by email the following day. The Claimant’s email was described by the Court of Appeal as ‘accusatory’ and both the email and the interactions that followed questioned Ms Harding’s legal awareness. Ms Harding was so upset by the Claimant’s conduct that she said that she could no longer work with her and the Claimant was summarily dismissed on 3 December 2018. The Respondent cited the fact that the Claimant’s “behaviours, manner and approach had resulted in people not wanting to work with her.” The Claimant brought claims of ordinary unfair dismissal, automatic unfair dismissal, whistleblowing detriment and wrongful dismissal. Dismissing the Claimant’s appeal, the Court of Appeal found that there can, in principle, be a distinction between the protected disclosure of information and the conduct associated with making that disclosure. That being the case, the courts must identify the real reason that operated in the mind of the decision-maker when deciding to dismiss. In the present case, the Court of Appeal upheld the view that it was the Claimant’s lack of emotional intelligence and insensitivity in the way she conveyed her criticisms to Ms Harding that was the reason for her dismissal, not her protected disclosures. Although Lord Justice Underhill said in his judgment that he did not see the decision “as opening any general breach in whistleblower protection”, the judgment has been described as “very disappointing” by whistleblowing charity Protect. Whilst the onus will remain on employers to show what motivated the decision to dismiss, the case is an important reminder to employees that they will not be afforded immunity for unacceptable behaviour in the context of making a protected disclosure. (Ling Kong v Gulf International Bank)

Litigation Process

• Lay member recused from hearing an appeal due to potential bias. The EAT has allowed an application for recusal of a lay member on the EAT’s panel because the lay member had made public statements on Twitter relevant to the issues on appeal. The Claimant was employed by the Respondent as a pastoral administrator and work experience manager. She was summarily dismissed for gross misconduct after posting messages on Facebook which were described as homophobic and prejudiced against the LGBT community. The Claimant brought claims of direct discrimination on the ground of her religion or belief and/or harassment relating to her religion or belief. Her claims were not upheld by the Employment Tribunal. Prior to the hearing of her appeal before the EAT, she had made a recusal application on the basis that one of the lay members had made a number of public statements on Twitter which shows that he was opposed to “gender critical” views. The EAT held that the fair-minded and informed observer could not exclude the possibility of bias and as a result the lay member was recused from the hearing. (Higgs v Farmor's School)

• Acas announced changes to conciliation process. On 4 July 2022, Acas announced improvements to the Acas conciliation process. From July, people who represent large groups of employees or workers will be able to give more information about their case online and will have the option to allow Acas to contact the employer first. It is hoped that these changes will speed up the conciliation process. Later in 2022, Acas is planning to make further improvements to the process by making it easier for employees to find any emotional support they made need.

Employment Contract

• Claimant contractually entitled to annual increase in income protection payments, despite insurance no longer providing for increase. The Court of Appeal has held that the Claimant had a contractual entitlement to increasing income protection payments, even though the Respondent had changed its group income protection insurance policy (which no longer provided for an annual increase in payments). The Claimant was employed by the Respondent as a Test Engineer from 2003. The terms of the Claimant’s employment were set out in his contract of employment, offer letter and a summary of benefits. This included a statement that any benefit paid under the Group Income Protection Scheme would increase by 5% every year (to protect payments from inflation). In 2009 the Claimant commenced a period of long-term sickness absence and started to receive income protection payments. After the first year the Claimant did not receive an increase on these payments, and later brought a claim for unlawful deduction of wages. The Court of Appeal held that the terms of a contract of employment could be contained in more than one documents and that the annual increase was an express term of the Claimant’s contract. The Claimant was contractually entitled to the increase despite the Respondent subsequently changing its insurance policy. This judgment illustrates the importance of giving due attention to benefits conferred under a contract at the outset and ensuring that the limits of any insurance cover are communicated explicitly and clearly to the employee at the outset. (Amdocs Systems Group v Langton)

Employment Relations processes

• Court of Appeal overturns decision to grant injunction preventing dismissal. The Court of Appeal has overturned the decision of the High Court (see our March alert) to grant an injunction preventing the termination and re-engagement of staff for the purpose of withdrawing a contractual benefit to “retained pay”. In 2007 as part of a re-structure and re-location of distribution centres, Tesco wished to retain staff and persuade them to relocate to new sites rather than being made redundant. As a result, it negotiated with the trade union and agreed a new entitlement known as “retained pay” which would apply for as long as the employee was in their current role. A joint statement issued at the time said that "retained pay is guaranteed for life and will increase in line with any future pay increases". In 2021 Tesco sought to dismiss and re-engage those receiving retained pay. The High Court granted a permanent injunction against dismissal. In overturning this decision, the Court of Appeal held that it was not sufficiently clear what both parties intended by the use of the word "permanent", and in any event that this should not override Tesco's right to give notice in the ordinary way under the contract. The Court of Appeal also found that the injunction was not justified, noting that it was not aware of a case in which a final injunction has been granted to prevent a private sector employer from dismissing an employee for an indefinite period. (Union of Shop, Distributive and Allied Workers & Ors v Tesco)

• New guidance for healthcare professionals on fit notes. On 1 July 2022, the Department for Work and Pensions published updated guidance: "Getting the most out of the fit note: guidance for healthcare professionals." This guidance has been issued alongside guidance on who can issue fit notes and a training package on e-learning for healthcare. The guidance was expected further to the changes to the Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) (No 2) Regulations 2022 (SI 2022/630) (for further details see our July alert) allowing more healthcare professionals to sign “fit notes”. The guidance covers the factors that should be considered when determining fitness for work, as well as advice on situations where a patient is reluctant to return to work. Healthcare professionals are encouraged to give practical advice to employers in the free text section, whilst remembering that the assessment is not job-specific and that any advice given is not binding on an employer.

Holiday pay

• Leave for part-year workers is not required to be pro-rated for weeks worked during the year. The Supreme Court has upheld the decision of the Court of Appeal that the “Calendar Week Method” was the correct means of calculating holiday pay for a teacher who worked term-time only, despite the fact that this method results in term-time only staff having the same holiday pay entitlement as full-time staff. Mrs Brazel was employed as a visiting music teacher by the Harpur Trust. She was employed under a permanent contract and entitled to 5.6 weeks holiday. She usually worked between 10 and 15 hours per week (although sometimes much less) and was not required to work during school holidays. When Mrs Brazel was first employed by the Harpur Trust, the “Calendar Week Method” was used to calculate her holiday pay. In September 2011 the Harpur Trust switched to “the Percentage Method” (which was at the time recommended by ACAS), which resulted in Mrs Brazel receiving less holiday pay. Mrs Brazel challenged this calculation. The Supreme Court held that the Calendar Week Method is the correct implementation of the Working Time Regulations and fully compliant with EU law on the basis that: (i) the Working Time Directive does not prohibit a calculation which is more generous than work actually carried out; (ii) a holiday calculation which is proportionately greater than for full-time workers is compliant with the Working Time Directive; (iii) the means of calculating an average week’s pay (where the number of hours worked affects the amount of a week’s pay in some circumstances but not in others) was a policy choice by Parliament; and (iv) nothing in the Working Time Regulations supports the alternative methods of calculating pay suggested by the Harpur Trust. The Supreme Court held that it did not regard any slight favouring of workers with atypical work patterns as being so absurd as to justify the wholesale revision of the statutory scheme. The correct method of calculating weekly pay for a part-year worker is as set out in section 224 of the Employment Rights Act 1996 - weekly pay should be calculated as an average of the most recent 12 weeks’ of earnings, ignoring any weeks where earnings were zero. Whilst the decision only impacts workers who are engaged on permanent part-year contracts and will be of particular significance in the education section, it will also be of interest in other sectors where term-time working is becoming more popular. (Harpur Trust v Brazel)

Other

• Neonatal Care (Leave and Pay) Bill passes second reading. On 15 July 2022, the Neonatal Care (Leave and Pay) Bill had its second reading in the House of Commons. The Bill has now been referred to the Public Bill Committee. The Bill is backed by the government, and if passed would allow parents to take up to 12 weeks of paid leave in additional to maternity and paternity leave. This would be a day 1 right and would apply to parents of babies who are admitted to hospital up to the age of 28 days, and who remain in hospital for 7 days or more.

• Government publishes response to consultation on employment status. On 26 July 2022 BEIS, HMRC and HM Treasury published a long-awaited response to the employment status consultation, launched in 2018. In the response the government acknowledges the complexity of the current system and the challenges faced by individuals and employers when navigating the blurred boundaries between different statuses. It also acknowledges that greater alignment between the systems for assessing tax and employment rights would be beneficial. However, the government has concluded that it is not the right time for legislative reform, citing the fact that this might create cost and uncertainty for businesses when they are focussing on recovering from the pandemic. The government hopes that existing caselaw (the response makes specific reference to the Supreme Court’s judgment in Uber and others v Aslam and others [2021] UKSC 5 (see our Insight)), together with three new non-statutory guides will help provide clarity. In reality, although the guides, which provide worked examples for key factors relevant to employment status, may be helpful, it is still the courts and tribunals which will make actual determinations of employment status, and therefore existing caselaw will remain most important. Employment Status consultation: Government Response.

• OTS to carry out review on hybrid and distance working. On 27 July 2022 the Office of Tax Simplification announced that it will carry out a review of the tax implications of hybrid and distance working. The Policy paper notes that the pandemic has given rise to an increase in flexible working arrangements, which has included employees working overseas for employers based in the UK and also employees doing work in the UK for overseas employers. The review will look to establish likely future trends in international hybrid working and consider the associated tax and social security issues for employees and employers. Policy paper: Review of hybrid and distance working scoping document.