Employment Law Alert UK – October 2023

Employee relations

TUPE transfer does not necessarily take place at the end of a series of transactions. The EAT has held that in circumstances where a business is transferred though a series of transactions, the transfer does not necessarily have to be at the end of the series. The last transaction could just be the "last piece of the jigsaw" long after the transferee has started running the relevant business. The EAT also held that when determining a transfer date a tribunal can consider matters outside of the UK. The Claimant was employed in a division of the transferor which was transferred to the transferee as part of a series of transactions from March 2019 to May 2020. The Claimant's employment was terminated in March 2020 after which she brought claims of automatic unfair dismissal and victimisation. The effective date of transfer was key to establishing whether it was the transferor or transferee who terminated her employment in March 2020 and whether any of her claims were out of time. The ET found that the transfer date was 1 October 2019, when 95% of the UK operations had transferred, but the EAT disagreed with this reasoning. In particular it found that one sub-division of the business should not have been excluded from the analysis just because it was mostly based in Germany with only a handful of employees in the UK. The case had been remitted to a new tribunal. Irrespective of this decision, in the vast majority of cases a transfer will happen at the end of series, but it is worth noting the possibility of this happening earlier and ensuring that any analysis not too UK focussed. (Rajput v Commerzbank and Société Générale)

Employees did not unreasonably refuse offer of suitable employment. The EAT held that the Claimants' refusal of alternative employment was not unreasonable and that the ET gave sufficient consideration to the questions of suitability and reasonableness. The Claimants were employed by the Respondent as Heads of Human Resources. When these roles became redundant due to a restructuring they were offered employment as Senior HR Leads. The Respondent argued that the roles were suitable alternative employment, and that the Claimants acted unreasonably in refusing them. As a result the Respondent did not make redundancy payments to the Claimants. When assessing the claim with respect to those redundancy payments on appeal, the EAT held that there was no requirement on an employment judge to consider in every case how the facts "ought to have appeared to the employee" and that it had been sufficient to consider whether the employees' perceptions were "groundless from their point of view". On the facts, the EAT accepted that the roles were suitable but found that the Claimants had not been unreasonable in refusing them. The uncertainly around the new roles and their credibility in the new group structure meant that the Claimants' perceptions of reduced autonomy and status were not groundless. They were therefore entitled to statutory redundancy payments. (Mid and South Essex NHS Foundation Trust v Stevenson & ors)

Employee's termination on ill-health grounds was termination by mutual consent, rather than dismissal. The EAT held that the Claimant had made an informed decision to terminate his employment, and that therefore in the absence of a "dismissal" his unfair dismissal claim had to fail. The Claimant was disabled by reason of ASD, anxiety and moderate depression. He was employed by the Respondent as a home claims advisor from March 2012 and was enrolled on an enhanced PHI scheme with UNUM. In 2014 his health deteriorated such that he had a significant period of absence from work. The Claimant attempted to return to work in August 2017, but by May 2018 he was signed off again. Given that it was difficult to see the Claimant being able to return to his role in the near to medium future, it was agreed at a meeting and in subsequent correspondence that the Claimant's employment would terminate and he would move to an alternative PHI scheme which would pay 80% of his salary until retirement. This was confirmed to the Claimant by letter, after which he brought claims of unfair dismissal and disability discrimination. Those claim was rejected by the ET and the Claimant's appeal to the EAT were also unsuccessful. The EAT found that the Claimant had freely given mutual consent to a termination of his employment, that it was not unequitable to refuse to extend time in relation to his reasonable adjustments claim, and that there had not been any substantive unfairness at the ET hearing. (Riley v Direct Line Insurance Group)

SRA releases guidance on supporting clients with external investigations. On 26 September 2023 the SRA published guidance on supporting clients with interviews during external investigations. The guidance acts as a reminder of the risks of conflicts of interest arising in relation to an external investigation, particular in circumstances where a solicitor acts for both employer and employee. 

Whistleblowing

An intervening act by a third party will not necessarily break the chain of causation in a whistleblowing detriment claim. The EAT has held that the decision of the General Teaching Council of Scotland (GTCS) to carry out an investigation into the Claimant did not constitute an intervening act to break the chain of causation in the Claimant’s whistleblowing detriment claim where the initial reference to the GTCS was made in bad faith. The Claimant worked as a teacher in a nursery. She made protected disclosures about the practices in the nursery in which she worked. As a result of these disclosures a complaint was made about her to the GTCS regarding the Claimant's fitness to teach. Although the ET agreed that the report to the GTCS was retaliation for the Claimant having made protected disclosures, it concluded that when the GTCS took the decision to investigate further this broke the chain of causation and prevented the Claimant from claiming compensation for future losses as part of her whistleblowing detriment claim. The EAT did not agree, finding that the decision to investigate in this case was a natural and reasonable consequence of the Respondent's wrongful act in making the initial report. As a result that act remained the effective cause of the Claimant's loss. The case has been remitted to the same Tribunal to re-assess compensation. The case acts as an important reminder that both direct and indirect consequences of any potentially retaliatory measure could be in scope for the purposes of a whistleblowing detriment claim. (McNicholas v Care and Learning Alliance)

Diversity, Equity & Inclusion / ESG

FCA & PRA publish Consultation Papers on D&I. On 18 September 2023, nearly two and a half years after the joint Discussion Paper, the FCA and PRA finally published Consultation Papers on D&I. The proposals set out in those consultation papers demonstrate a commitment to meaningful improvement of D&I in financial services. Of particular note, the regulators are proposing a new definition of "discriminatory practices" which relate to "demographic characteristics" and is deliberately wider than the "protected characteristics" protected under the Equality Act 2010. In addition significant new reporting obligations are proposed. For our detailed analysis of the proposals please see our Insight. Responses to the Consultation Papers are due by 18 December 2023, with the rules becoming effective one year after the Policy Statement is published which is expected in 2024.

Litigation procedure

Employment Tribunal should not have struck out claim on basis of breach of orders. The EAT held that despite the Claimant's non-compliance with orders, his claim should not have been struck out and that a fair trial was still possible. The Claimant had brought claims of unfair dismissal and disability discrimination against his employer. There were numerous orders made in relation to the claims, including the provision of information and disclosure in relation to the Claimant's alleged disability, and to produce a schedule of loss. There were also various hearings in the run-up to the full liability hearing, during which unless orders were issued on more than one occasion. In early 2015 the claim was struck-out for the first time, but reinstated following subsequent compliance with the relevant order. At a hearing two weeks before the full merits liability hearing the claim was struck out and this decision was not reconsidered by the ET. On appeal to the EAT, the EAT found that the case could still be fairly tried at the listed hearing, despite the Claimant's lack of compliance with orders and "challenging" approach to the litigation. Interestingly the case was decided in advance of the revised EAT Practice Direction (see further below) which (although applicable to cases in the EAT, rather than the ET) advocates a stricter approach to time limits and promotes the importance of inter-party co-operation. (T v Royal Bank of Scotland PLC)

EAT updates procedure rules and practice direction. On 8 September 2023 the Employment Appeal Tribunal (Amendment) Rules 2023 were laid before Parliament. The rules will amend the Employment Appeal Tribunal Rules 1993 with effect from 30 September 2023. The key changes include amendments to the EAT forms and the number of documents required to be submitted in support of a claim and the introduction of discretion to amend the time limit for submission of an appeal where there has been a minor error. Alongside this the EAT has published a revised Practice Direction which is designed to be more accessible to users - it gives examples of what is not an error of law and what might be. The Practice Direction includes a new section on litigants in person and remote hearings, new forms for applying for case management orders or directions and emphasises that the EAT will take a strict approach to time limits. The Practice Direction also contains interesting commentary about the importance of co-operating with the other party to an appeal and that a party's appeal or response may be struck out if parties do not communicate in a respectful and appropriate manner.

Employment status

New statutory right for workers to request a predictable working pattern. On 18 September 2023 the Workers (Predictable Terms and Conditions) Bill received royal assent. The Act will create a statutory right for workers, including agency workers, to request a predictable working pattern. The Act sets out eligibility criteria, the duties of employers when dealing with an application and how complaints might be made to the Employment Tribunal and associated remedies. The new rights are anticipated to be effective from September 2024 and ACAS has indicated that it intends to consult on a draft Code of Practice to assist with handling requests.

Data protection

Regulations passed establishing UK-US data bridge. On 21 September 2023 the Data Protection (Adequacy) (United States of America) Regulations 2023 were laid before Parliament. The Regulations establish the US as a country that provides adequate levels of protection of personal data and create a "data bridge" allowing the transfer of data between the UK and US within the EU-US Data Privacy Framework without specific authorisation. The regulations come into force on 12 October 2023.

ICO publishes new guidance for employers. On 3 October 2023 the ICO published guidance on lawful monitoring in the workplace. The guidance acknowledges that with the increase in remote working, and the advances in technology, an increasing number of employers may consider monitoring their staff. The guidance is primarily structured as responses to key questions (ie “how do we ensure our monitoring is fair?”) and includes helpful checklists. The ICO has also published new guidance for employers on processing health data, which is sensitive data for the purposes of the UK GDPR. The guidance covers how worker health data can fairly be used by an employer and how it can be lawfully processed. The guidance also includes checklists to highlight key considerations for employers when dealing with different types of health information (ie sickness records, occupational health records and health monitoring).