Employment Law Alert UK – July 2023

Litigation

Privilege likely waived by sharing advice on investigation report with investigator. The Scottish Court of Session has held that there was probably a waiver of privilege over legal advice sought in connection with a grievance investigation report when that legal advice was shared with the investigator, and even if it wasn't waived then, it certainly was when it became known that the investigation report had been changed as a result of that advice. As covered in our October alert, in this case the Claimant raised a grievance against his line manager which was investigated by an internal investigator and a report was produced. This report was subsequently reviewed by the Respondent's legal advisers, and amendments were made by them. The final report was disclosed to the Claimant in the context of Employment Tribunal claims of race discrimination and harassment. Importantly, the final version of the report sent to the Claimant was noted to have been "amended and reissued" following legal advice. The Claimant sought disclosure of the original report, which was granted by the Employment Tribunal. The EAT dismissed the Respondent's appeal on the basis that the investigation report did not retrospectively become privileged as a result of subsequent legal review. The Scottish Court of Session also dismissed the Respondent's appeal, but this time reasoned that there had been a waiver of privilege. It found that disclosure of the advice to the investigator and the inclusion of the footnote caused the privilege to be "abandoned". Colin Passmore, Partner at Simmons & Simmons, describes the "controversial" decision as "concerning", noting it is necessary to watch whether the EAT in England and Wales will follow. In the meantime, it would be prudent to think carefully about how and when legal advice will be sought in connection with an investigation at the outset, and to be mindful of the risks of evidencing that a report has been influenced by legal advice. (University of Dundee v Chakraborty)

A list of issues is a case management tool not a binding pleading. The EAT has held that a litigant in person set out sufficient information in her claim form and witness statement to alert the Tribunal and Respondent's representatives to her claim that her dismissal was an act of unlawful discrimination. The fact that this claim was not included in a previously agreed list of issues did not stop the EAT from finding that the list of issues should have been revisited at the start of the hearing to include this. The Claimant brought a claim alleging that she had suffered direct discrimination on the grounds of disability and age. In the list of issues no reference was made to the claimant's mental impairment or any of her claims under s.15 Equality Act 2010 regarding her dismissal. However, given that the Claimant said in her closing submissions: "I am claiming unfair dismissal because I believe that the Respondent did not take into consideration the extent of my mental health disability", the EAT found that the issue should have been considered then if not before. Interestingly HHJ Katherine Tucker also commented that it would have been appropriate for the Respondent to have alerted the Tribunal to the possibility of a section 15 claim. The judge also made a number of observations about the challenges of remote hearings when dealing with a litigant in person, and advised caution. (Moustache v Chelsea and Westminster NHS foundation)

Diversity and inclusion and ESG

EAT finds that a teacher's beliefs, which employer deemed homophobic and transphobic, were protected under the Equality Act 2010 and right to freedom of expression. The EAT has held that the Employment Tribunal erred in rejecting outright claims of direct religion or belief discrimination brought by a teacher following posts made on Facebook, and rather found that the teacher's beliefs were protected. Any action taken by the school needed to be proportionate and objectively justified.  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 which were rejected by the ET. The EAT found that the Facebook posts were a manifestation of the Claimant's beliefs and as a result, in determining the Claimant's claims the Tribunal had to consider whether the action taken by the school was because of the manifestation of the Claimant's protected belief (which is prohibited under the Equality Act 2010) or whether the Claimant had manifested her belief in a way to which objection could justifiably be taken. The case has been remitted for redetermination.  

The EAT noted that this was a case where more than one outcome was possible, but nonetheless set out some basic principles to apply to cases in this area:

• The freedom to manifest a belief is a fundamental right, but one which is qualified.

• Whether a restriction on the right can be objectively justified is context-specific and will depend on the nature of employment.

• The following factors will be relevant:

  • the content of the manifestation;
  • the tone used;
  • the extent of the manifestation;
  • the individual's understanding of the likely audience;
  • the extent and nature of the intrusion on the rights of others, and any consequential impact on the employer's ability to run its business;
  • whether the individual has made clear that the views expressed are personal, or whether they might be seen as representing the views of the employer, and whether that might present a reputational risk;
  • whether there is a potential power imbalance given the nature of the individual's position or role;
  • the nature of the employer's business, in particular where there is a potential impact on vulnerable service users or clients;
  • whether the limitation imposed is the least intrusive measure open to the employer.

(Higgs v Farmor's School)

Claimant's alleged belief in ethical veganism was not genuinely held. The Employment Tribunal has found that dismissing the Claimant for refusing to be vaccinated against COVID-19 was not unfair and that she did not have a genuinely held belief in ethical veganism for the purposes of a claim of religion or belief discrimination. The Claimant worked in a care home. She was dismissed in November 2021 after the legal requirement for staff in registered care homes to be vaccinated came into force. She raised a grievance raising concerns about the vaccine and citing ethical veganism - she claimed that given that the vaccine had been tested on animals being vaccinated would be inconsistent with her vegan beliefs. The tribunal held that while ethical veganism could amount to a protected belief, the Claimant still had to show that the Grainger guidance was met in her particular claim. In this case the Employment Tribunal concluded that other than her diet, she failed to show how she had made changes in her life to follow her belief, and therefore did not demonstrate that she genuinely holds a belief in ethical veganism. (Owen v Willow Tower Opco 1 Ltd)

Claimant was harassed by witnessing conduct of a sexual nature towards a colleague. The Employment Tribunal has held that the Claimant's dignity at work was violated by incidents which he had witnessed, which involved demeaning and derogatory conduct, despite not being involved in the incidents. In reaching this conclusion the Employment Tribunal found that for a claim of harassment to be successful does not require the relevant conduct to be directed towards the individual claiming harassment. Whilst the judgment does not elaborate on the Employment Tribunal's reasoning in finding a violation of dignity, it is perhaps reasonable to assume that the seriousness of the incidents reported (which included a female member of staff being pinned to a chair and an employee gyrating on her) was key to this finding. In light of this decision it would be advisable to ensure that regular D&I training is taking place within your organisation (which covers looking at bystanders and expectations for them), and that those involved in investigating any issues are alive to the importance of sensitive handling of issues, which may go beyond the "victim" of an incident. (Coffey v Coople UK Ltd)

No requirement for Employment Tribunal to consider subconscious discrimination. The EAT has affirmed that the Employment Tribunal is not required to separately and expressly refer to subconscious discrimination in all decisions. The Claimant was of Indian origin and alleged direct discrimination on grounds of race. The Employment Tribunal dismissed these claims, and on appeal, the Claimant argued the Tribunal had omitted the question of subconscious discrimination. The judge confirmed that the requirement for such consideration depends on the facts presented before the Tribunal in each case. The Tribunal's failure to consider subconscious discrimination was therefore not an error of law. The appeal was dismissed. (Ms K Kohli v Department for International Trade)

Employee relations

Tribunal reasonable to conclude that perception and context are key in a claim of harassment.  The EAT has upheld the decision of the Employment Tribunal that the Claimant, who only learned about derogatory comments made about her in the context of an internal investigation, had not been harassed. In the context in which she learned of the comments, it was not reasonable for the Claimant to have concluded that the comments created an intimidating, hostile environment for her. The Claimant has Asperger's Syndrome. Her relationship with her colleagues gradually deteriorated such that two of her colleagues submitted bullying and harassment complaints against her. In turn the Claimant raised a grievance alleging that she had been harassed by management, which was not upheld. The Claimant sought to bring a claim of harassment on the basis of disparaging comments which came to light during the course of these investigations. The Tribunal dismissed these claims, finding that it was inevitable that during the course of a bullying and harassment investigation the Claimant would hear things that she did not like, but that in that context, it was not reasonable for the Claimant to conclude that this conduct had the proscribed effect. In her appeal the Claimant sought to argue that her dignity could be violated even before the point at which she was aware of the relevant conduct. The EAT rejected this suggestion, affirming that perception is key in a case of harassment and that it could see no issue with the Tribunal's findings with respect to reasonableness under section 26(4). (Greasley-Adams v Royal Mail Group Ltd)

Employer could have fairly dismissed an employee for Facebook posts, but fell down on procedure. The Employment Tribunal held that it was justified for the Respondent to have taken action against the Claimant for her racially disrespectful Facebook posts, but that procedural issues with the disciplinary process rendered the Claimant's dismissal unfair. The compensation awarded to the Claimant was reduced by 75% due to her conduct. The Claimant made various racially disrespectful posts on her private Facebook account relating to the killing of George Floyd which then circulated across Twitter. She was told by the Respondent to remove the posts as certain colleagues had complained, but refused and was eventually dismissed for gross misconduct. The ET found that it was reasonable for the Respondent to rely upon the content of the Claimant's Facebook posts (despite the Claimant alleging that these were private) for disciplinary purposes. In addition, it held that the Respondent's restrictions on the use of social media pursued a legitimate aim and was exercised proportionately. This case highlights the importance of a carefully considered social media policy which sets clear expectations for employees. (Ms T Webb v London Underground Limited)

Employment contract cannot result in holiday pay on termination lower than the Working Time Regulations requires. The EAT has held that the Employment Tribunal should not have concluded that a "relevant agreement" could enable a lower than statutory payment in lieu of holiday entitlement. After a period of absence due to ill-health, the Claimant was dismissed by his employer. His employer agreed to make a payment in lieu of holiday accrued but not taken. The Claimant's employment contract calculated this as 1/365th of annual salary for each day's leave, but this resulted in an amount which was less than the statutory formula in Regulation 14 of the Working Time Regulations 1998. At first instance, the Employment Tribunal found the Claimant's contract to be a "relevant agreement" and agreed with the Respondent's calculation. However, the EAT allowed the Claimant's appeal, finding the WTR formula should have been used. In light of this decision it would be worth reviewing existing provisions to ensure that any clauses providing for a payment less than the statutory amount only apply with respect to additional contractual holiday. (Connor v Chief Constable of West Yorkshire Police)

ACAS guidance on absence trigger points. On 7 June 2023 ACAS published new guidance on absence trigger points. This is where an organisation has in place a review point system based on the number of absences an employee has within a certain period or the length of an employee's absence. The guidance is clear that where an employer has such a system in place, they should have a clear policy and that at no point which review points automatically trigger disciplinary action. The guidance also advocated flexibility in the use of review points to avoid discriminating against employees. 

Business protection

High court refuses an interim injunction to enforce a 12-month non-compete covenant because of employer's unreasonable delay. The High Court held that although the covenant was not so clearly unreasonable such that there was no serious issue to be tried, the Claimant's unreasonable delay in bringing proceedings meant that an interim injunction was refused. The Claimant, a trading and investment firm, employed Mr Couture in London, until he resigned on 30 March 2022. His contract provided for one year's notice during which the Claimant was placed on garden leave. On 23 March 2022 Mr Couture accepted an offer to work for a competitor, Verition. Shortly after that the Claimant informed Mr Couture that (as per the terms of his contract), the Claimant would impose a full 12 month non-compete restriction on Mr Couture running from the end of his garden leave. This particular covenant was unusual because it provided for the Claimant to specify the length of the restriction at anything between zero to twelve months from the termination date. On 12 July 2022 Mr Couture informed the Claimant that he intended to join Verition after his garden leave. Nearly a year later, after various periods of correspondence, on 14 April 2023 the Claimant served its claim form together with its application for an interim injunction. The High Court refused the interim injunction and made an order for a speedy trial. It held that the covenant was not "clearly unreasonable". There is also an onus on employers wishing to seek an interim injunction against former employees to act without unreasonable delay.  The judge took particular note of the fact that there had been a period of 4 months during which the Claimant had failed to respond to correspondence or take any further action.(Jump Trading International Ltd v Couture [2023] EWHC 1305 (KB))

Call for evidence by Legal Services Board on lawyers' role in the misuse of NDAs. On 2 May 2023, the LSB issued a call for evidence on the relationship between lawyers and the misuse of non-disclosure agreements. The LSB aims to address concerns that legal professionals are breaching  professional ethical obligations by drafting NDAs to conceal discrimination, harassment and bullying. These concerns extend to the coercion of vulnerable individuals to sign unethical NDAs. The LSB will publish conclusions later in 2023, with potential recommendations including an updated code of conduct and new training/monitoring programmes run by regulators. The call for evidence closes on 14 July 2023.

Employment status

EU Council approves approach to Platform Workers Directive. After much negotiation, on 12 June 2023 EU labour minsters finally reached agreement on the general approach of the proposed Platform Workers Directive. Significantly, the new Directive will introduce a legal presumption of employment status for gig economy workers where their platform exerts control and direction over them. The Directive proposes that where any three of the below criteria are fulfilled, there will be a presumption of employment status unless the digital platform can demonstrate that no employment relationship exists:

The digital labour platform:

• determines upper limits for remuneration;
• dictates what the individual wears / how they act towards service recipients;
• supervises performance by electronic means;
• controls working hours / periods of absence;
• limits individual's ability to take accept / refuse work;
• limits individual's ability to use subcontractors or substitutes;
• restricts individual's ability to build a client base / do work for a third party.

It is hoped that the Directive, when it is passed, will improve the working conditions of gig economy workers by ensuring that the contractual relationship which they have best reflects the work that they do with the relevant digital platform - in reality millions of gig economy workers may gain access to employment rights. The Directive will also regulate the use of artificial intelligence, ensuring that workers are informed about the use of automated monitoring and decision-making systems on digital labour platforms. Negotiations with the European Parliament are due to begin with a view to reaching provision agreement. Although it has taken three council presidencies to reach this point, now that there is a general consensus we may see more rapid progress.

Whistleblowing

ACAS publishes new whistleblowing advice. On 6June 2023, ACAS published guidance for employers and employees handling whistleblowing disclosures. This includes practical advice for employees who might be considering making a protected disclosure as well as providing guidance for employers on responding to a disclosure and whistleblowing policies.