Employment Law Alert UK - March 2023

Diversity and inclusion and ESG

Failure to provide adequate toilet facilities constituted direct sex discrimination. The EAT held that requiring female employees to pass urinals used by men to access a toilet cubicle constituted less favourable treatment and therefore was discrimination on the grounds of sex. The Claimant was employed by the Respondent as an office clerk. The Respondent operated from a church building which also hosted a play group. The women’s toilets were used by children attending the playgroup. For safeguarding reasons female employees could not use the toilets without ensuring that there were no children inside. Instead, female employees were offered the use of a toilet cubicle inside the male toilets which had no lock and which required them to pass the urinals. The Claimant used the female toilets where possible but there were situations where she had no choice but to use the toilet in the men’s toilets, in which there was no sanitary bin. The EAT applying “robust common sense” found that the Claimant had not been provided with adequate toilet facilities and that the risk of seeing a man using the urinals for a woman is not the same as seeing a man using the urinals as a man. The EAT noted that neither the fact that it was possible that a man might have been able to assert direct sex discrimination (by virtue of being seen by a woman at the urinals) nor the fact that another woman might not have objected to the arrangements was fatal to the Claimant’s claim. (Earl Shilton Town Council v Miller)

FCA publishes speech on requirements of an effective COO and Discussion Paper on sustainability. On 8 February 2023 the FCA published a speech by FCA COO Emily Shepperd. This speech highlighted the role which COOs have to play in shaping the culture of their organisation, making use of hard powers (ie rules and enforcement) and soft powers (ie open communication and strong relationships). The speech also emphasised the importance of organisational focus on D&I, specifically on what current data shows about progress in this area, as well as an increasing focus on ESG as organisations strive to incentivise best practice. On 10 February, the FCA published Discussion Paper (DP23/1), which opens an industry-wide dialogue on financial services firms’ sustainability-related governance, incentives, and competence arrangements. See our ESG View.

FTSE 350 companies reach 40% women on boards. The FTSE Women Leaders Review published in February 2023 celebrates the fact that FTSE 350 companies have achieved the goal of 40% female boards three years ahead of target. This is heralded as a significant milestone and serves to inspire further progress in the years to come.

McDonald’s signs pledge with EHRC amid claims that there have been thousands of reports of sexual harassment. It has been announced that McDonald’s have signed a legally binding pledge with the EHRC which commits to: (i) communicating a zero-tolerance approach to sexual harassment; (ii) conducting an anonymous survey of workers about workplace safety; (iii) enhancing policies and procedures to prevent sexual harassment and improve responses to complaints; (iv) delivering anti-harassment training for employees; (v) introducing specific training and materials to help managers identify areas of risk within their restaurants and take steps to prevent sexual harassment; (vi) supporting the uptake of policy and training materials across the franchise and supporting the reporting of sexual harassment; and (vii) monitoring progress towards a safe, respectful and inclusive working environment. McDonald’s is not alone in having reached an agreement with the EHRC, a step which is usually taken when the EHRC receives evidence that there have been significant breaches of the Equality Act by an organisation. The announcement and the remedial measures emphasise the importance of having in place robust effective procedures for addressing complaints of harassment in the workplace.

Employment Relations processes

Court of Appeal issues ruling on scope of duty of care. The Court of Appeal has upheld the decision of the High Court to dismiss the former banker’s claim for career-long loss of earnings for alleged breach of duty of care and breach of an implied contractual indemnity. See our Insight. This is a very welcome decision for employers, but the litigation is also a reminder of the circumstances in which employers do owe a duty of care to their employees in carrying out their duties. (Benyatov v Credit Suisse (Securities) Europe Ltd)

Workers (Predictable Terms and Conditions) Bill backed by government. On 3 February 2023 the government announced its support for a private member’s Bill which, if passed, will allow workers on zero hours contracts (including agency workers) to apply for more predictable working patterns. The Bill would allow workers to apply for a change in terms and conditions if there is a lack of predictability in their existing contract (which is presumed to be the case for fixed-term contracts of 12 months or less). Applications could be rejected on the basis of specified statutory grounds but must be dealt with reasonably. NB The Transparent and Predictable Work Directive is being implemented across European Member States; please let us know if would like to discuss implementation.

Employee can suffer detriment or disadvantage from a rejection of a flexible working request even where employer then granted her original request before they return to work. The EAT has held that once a flexible working application has been determined then the PCP will apply, even if the employee has not returned to work or started to work under the new arrangement. The Claimant was employed as an assistant store manager. During her maternity leave she made a flexible working request asking to work three days a week on her return. Her flexible working request was rejected. She later appealed this decision and was offered to work four days a week, working flexible hours. Childcare arrangements prevented the Claimant from accepting this request, and so she (via her lawyers) requested that the request be reconsidered (noting that alternatively she would have to resign and claim constructive dismissal). Her original request was then agreed. The Claimant returned to work but nevertheless brought a claim alleging indirect sex discrimination. The EAT allowed the Claimant’s appeal, remitting the case to a new Tribunal. Crucially the EAT found that the flexible working PCP had been applied from the date upon which the Claimant’s appeal had been determined. Employers should be mindful that any successful appeal will not cure any disadvantage or detriment suffered by the employee as a result of the initial rejection, but could be helpful when it comes to a Tribunal considering any compensation. (Glover v Lacoste UK Ltd)

Call for evidence on protection of human rights at work. On 10 February 2023 the Joint Committee on Human Rights issued an inquiry into the protection of human rights at work. The call for evidence invites written submissions on freedom of association, workplace surveillance, freedom of thought, conscience and religion, freedom of expression, labour market exploitation, retained EU law and international human rights treaties. The call for evidence closes on 24 March 2023.

Litigation

Court of Appeal considers Tribunal’s rejection of Rule 50 privacy order. The Court of Appeal has considered the Employment Tribunal’s decision to refuse a Rule 50 order in circumstances where it was alleged that disclosure of information would be contrary to the interests of justice, endanger personal safety, infringe human rights and breach confidentiality obligations. The Claimant was made redundant by the Respondent. Following which the Claimant brought claims of unfair dismissal, automatic unfair dismissal, whistleblowing detriment and disability discrimination. In connection with those proceedings the Respondents made an application under rule 50(1) Schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 to prohibit the disclosure of certain information in relation to the alleged protected disclosures which it claimed was necessary to protect the safety and security of current and former employees, including non-participants in the proceedings located outside of the UK. The Court of Appeal found that the Employment Tribunal should have considered the evidence of a potential witness who feared the consequences for himself and others of giving evidence in proceedings to the extent that he said that he would not allow the Respondent to defend proceedings without the order when considering whether granting the order was in the interests of justice. The case has been remitted for redetermination and reconsideration of the application. (Clifford v Millicom Service UK and others)

EAT struck out claims of Claimant who refused to co-operate with the Respondent and the Employment Tribunal. The EAT upheld the decision of the ET that it was proportionate to strike out the Claimant’s claim in circumstances where the Claimant had acted in such an unreasonable manner in relation to the conduct of his claims that a fair trial was no longer possible. The Claimant brought claims alleging unfair dismissal, race and disability discrimination, among others. After five preliminary hearings, during which the Claimant demonstrated a “continued refusal to co-operate” the EAT found that there was no error of law in deciding to strike out the entire claim. During the preliminary hearings the Claimant continued to add a plethora of claims, did not cooperate with agreeing the list of issues and could not explain his repeated non-compliance. HHJ Taylor was at pains to stress that strike out is a “last resort” and that tribunals are “open to the difficult” but that in this exceptional case a fair trial was no longer possible. (Smith v Tesco Stores)

EAT finds that “without prejudice” letter constituted an effective letter of dismissal. The Claimant brought a claim of unfair dismissal following the termination of his employment by the Respondent. The Respondent sought to argue that the Claimant’s claim was out of time relying on a letter headed “without prejudice” constituting effective notice of termination of employment. The EAT upheld the decision of the Employment Tribunal that the “without prejudice” letter did constitute effective dismissal, finding that it had two distinct parts, one dealing with termination of employment (with a specified termination date) and the legal requirements in connection with that, and the other part dealing with a proposal for an additional ex gratia payment. The EAT upheld the decision of the ET that the letter was sufficiently clear that the Claimant’s employment was to be terminated. The EAT also affirmed that the letter could constitute effective notice of termination of employment even if it constituted a repudiatory breach that was not accepted by the Claimant. (Meaker v Cyxtera Technology UK Limited)

Without prejudice privilege did not apply to exit discussion. The EAT upheld the decision of the Employment Tribunal that a discussion which took place between the Claimant and the Respondent to discuss terms for termination was not covered by without prejudice privilege. The Claimant was employed by the Respondent as Chief Risk Officer. In October 2018 the Respondent determined that there was no longer a need for the Claimant’s role and met with the Claimant to discuss terminating the Claimant’s employment. Agreement was reached on a number of points, including in relation to a severance payment, but not in relation to holiday pay. It was agreed that the discussion would be kept confidential and that a settlement agreement would be entered into, but neither party referred to the discussion as being “without prejudice”. The EAT found that there was no hostility or dispute between the parties in relation to the exit, the only disagreement was in relation to holiday pay and that the outcome of the meeting was understood to be a “gentleman’s agreement” which had been reached without the need to take legal advice. The case serves as an important reminder that although not determinative, express reference to a conversation taking place on a “without prejudice” basis is likely to be helpful in preventing reference to any such conversation in any subsequent litigation. (Scheldebouw v Evanson)

Business protection

CMA issues guidance for employers on avoiding anti-competitive behaviour. The CMA have published guidance for employers on how to avoid anti-competitive behaviour. The guidance outlines 3 main types of anti-competitive behaviour: no-poaching agreements between competing companies – ie agreeing not to approach / hire each other’s employees, wage-fixing agreements and information sharing, and sets out actions that businesses can take to avoid breaking competition laws. Please see our Insight for further detail and commentary.

Employment status

EAT has clarified that contractual terms are one of a number of factors for a court to consider where there is a dispute in relation to employment status. The EAT has given guidance on the interpretation of the Supreme Court decision in Uber BV v Aslam (see our Insight) and others making clear that the written agreement between the parties is not irrelevant in determining the true intention of the parties, but rather one of a number of factors which all need to be considered. Specifically, that it would not be an error for a Tribunal to start with the express contractual terms, provided that all other relevant factors are also considered. (Ter-Berg v Simply Smile Manor House Ltd and others)

Our March Alert placemat summarises the key developments and cases.