Employment Law Alert UK – December 2024

Diversity, Equity & Inclusion

ACAS updates its guidance on gender reassignment discrimination. On 29 October 2024 ACAS published an update to its guidance on gender reassignment. The guidance outlines specific measures that an employer could take to seek to prevent gender reassignment discrimination, which include supporting an employee who is transitioning, reviewing policies on absence or appointments and appointing an LGBT+ champion. The guidance also states that large employers should consider having a transitioning at work policy.

ET finds that support for UKIP is not a protected philosophical belief. The ET has dismissed discrimination claims brought by the Claimant finding that her beliefs, (associated with her membership of the UK Independence Party (UKIP)), did not constitute a protected philosophical belief under section 10 of the Equality Act 2010. The Claimant was employed by the Respondent from October 2022 until she was dismissed on 21 July 2023, in connection with her social media posts on Twitter (now “X”). The Claimant contended that her difficulties with the Respondent arose when the Respondent became aware that the Claimant had been a UKIP councillor and that she was bullied and harassed in connection with this. The ET concluded that whilst the Claimant’s views were genuinely held, they were opinions or viewpoints rather than beliefs with the requisite level of cogency, seriousness, cohesion, and importance, to constitute an underlying philosophical belief, and therefore did not qualify for protection under the Equality Act. However, the ET noted that her support for controversial figures and her social media posts, although potentially offensive to some, did not disqualify her views from respect in a democratic society. Interestingly the ET suggested that an unfair dismissal claim, focusing on her treatment due to political opinions or affiliation, might have been more appropriate, but the Claimant did not pursue this. (Fairbanks v Change Grow Live)

EHRC publishes checklist, action plan and monitoring logs. On 12 November 2024 the EHRC published further guidance for employers. The guidance (which comes in the form of checklists, action plans and monitoring logs was initially designed for the hospitality sector (there are checklists for before, at the start and at the end of shifts), but the EHRC says that the materials can also help employers more broadly, given key messages around enhancing communication with staff and implementing effective policies and procedures for addressing sexual harassment. The EHRC also provides an example action plan for integrating monitoring into daily operations. One key takeaway is the suggestion of a “monitoring log” every quarter to help record the effectiveness of measures.

Harassment

Defects in investigation give rise to unfair dismissal claim following incidents of sexual harassment. The ET has held that significant procedural flaws in the investigation and disciplinary process rendered the Respondent’s dismissal of the Claimant unfair. Concerns were raised with the Respondent about two separate incidents of sexual harassment involving the Claimant. Significantly some of the allegations focussed on the Claimant’s alleged conduct outside the toilets at a team drinks event in July 2023, in an area where there was CCTV. The CCTV footage significantly undermined the complainant’s version of events. The ET determined that in light of this, the evidence against the Claimant was unreliable and that the Respondent therefore did not have reasonable grounds for the belief in his misconduct. Although there was sufficient evidence to suggest misconduct in a separate incident in January 2023, the ET concluded that dismissal was not a reasonable response, considering the procedural unfairness and the unreliable evidence for the January incident. Of particular note the ET found that evidence of those who had been interviewed had been transposed inaccurately into the investigation report, there were inconsistencies in the accounts of those interviewed and the investigator did not address the discrepancies between the complainant’s account and the CCTV with her. This decision highlights the importance of a fair procedure and reliable evidence in disciplinary processes leading to dismissal, and the delicate balance which employers are required to strike when wanting take a zero tolerance approach towards sexual harassment of any sort. (Mr Rustambekov v Fieldfisher LLP)

Employee Relations

EAT rules pre-termination negotiations inadmissible. The EAT has upheld the decision of the ET that evidence of pre-termination negotiations was inadmissible in the Claimant’s unfair dismissal claim. The Claimant had a period of absence from work during which the directors covered his role, and ultimately concluded that they could manage without it. A meeting was arranged which the Claimant expected to be about his return to work. Instead, the Respondent made a settlement offer to the Claimant for an agreed exit. The Claimant did not accept this offer, and instead (as had been communicated to him at the meeting) a redundancy process was initiated and the Claimant was ultimately dismissed. The Claimant sought to argue that discussions about severance terms prior to his dismissal should be admissible. Specifically the Claimant argued that the negotiations were tainted by undue pressure –that he had been misled about the purpose of the meeting and was given only 48 hours to consider the severance offer. The EAT found no error in the ET's application of the law, particularly regarding the "impropriety exception" which allows for the admissibility of evidence if negotiations were conducted improperly. The EAT found that the ET's judgment that there was not undue pressure, either individually or cumulatively, was not perverse. The decision emphasises the careful consideration employers should give to the context and conduct of pre-termination negotiations. The decision reinforces the protective scope of section 111A while acknowledging the potential for exceptions in cases of improper behaviour. (Gallagher v McKinnon’s Auto and Tyres Ltd)

Footballer partially successful in unauthorised deduction of wages claim. The ET has partially upheld a claim of unauthorised deductions from wages under section 13 of the Employment Rights Act 1996. The ET found that some deductions from the Claimant’s wages in 2022 and 2023 contravened section 13 of the Employment Rights Act 1996, entitling the Claimant to repayment. However, deductions made for other specified periods were deemed not in contravention. In August 2021 the Claimant was remanded in custody following a number of allegations of serious sexual offences. The Claimant was suspended by the Football Association and this and the Claimant’s bail conditions prevented him from fulfilling his contractual obligations (i.e. training and playing football). The Claimant was ultimately cleared of all charges. The ET's detailed judgment considered the Claimant’s contractual obligations, the nature of the impediments to the Claimant's ability to work, and whether these were avoidable or unavoidable on his part, leading to a nuanced decision on the various periods in question. The ET ultimately found that the Claimant was entitled to have been paid during the period when he was suspended and on bail (given that there was no avoidable impediment to him returning to work) but that he was not “ready, willing and able” to work while he was suspended and in custody (for which he was at least in part responsible). EJ Dunlop commented: "I doubt that quite so much legal expertise and endeavour has ever before been expended in the prosecution and defence of a wages claim brought by a single claimant. But then, I am also fairly sure that no other single claimant has ever alleged that sums in the region of £11 million have been deducted from his wages." (Mendy v Manchester City Football Club Ltd)

AI

ICO has published guidance on AI tools and recruitment. On 6 November 2024 the ICO published a report on AI tools in recruitment. The report was published following a consensual audit with developers and providers of AI tools for recruitment. Conducted from August 2023 to May 2024, the audit evaluated AI tools used in sourcing, screening, and selecting candidates. The audit identified areas for improvement in data protection compliance and management of privacy risk, but also identified areas of good practice. The ICO report outlines seven key recommendations for organisations to ensure fairness, transparency, data minimisation, and compliance with data protection laws when using AI in recruitment processes. These recommendations aim to mitigate bias, uphold privacy, and clarify the roles of AI providers and recruiters as data controllers or processors. Additionally, the ICO has published a list of questions for employers considering AI recruitment tools and announced a webinar to further discuss best practices.

Working time

Supreme Court decision in Agnew put into practice. The EAT, following Agnew, found that underpayments to the Claimant arising from incorrect calculations of holiday pay were part of a series of deductions, for which the Respondent was ordered to pay. The Respondent conceded that it had incorrectly calculated the Claimant’s holiday pay. The EAT, found that the ET had erred in its judgment by not recognising the underpayments as part of a series of deductions, which were incorrectly deemed out of time due to intervals exceeding three months. Contrary to the ET’s application of Bear Scotland v Fulton, the EAT applied the Supreme Court’s decision in Chief Constable of the Police Service of Northern Ireland v Agnew, emphasising that the interval between payments and a single correct payment did not disrupt the series of deductions. Instead the court must take into account “all relevant circumstances including the similarities, differences, frequency, size and impact of the deductions, as well as how they came to be made and applied and what linked them together”. Consequently, the EAT substituted its decision, ruling that all underpayments based on the same calculation error constituted a series of deductions within the tribunal's jurisdiction, dating back to the two-year limitation period starting from 11 August 2019, and ordered the Respondent to pay the Claimant £496.75 for the unlawful deductions. (Deksne v Ambitions Ltd)

Remuneration

PRA and FCA announce plans regarding bonuses of senior bankers. On 26 November 2024 the PRA and FCA published a joint consultation which proposes several changes to the senior banker remuneration regime. The PRA and FCA plan to relax restrictions on senior bankers' bonuses, aiming to enhance the UK's growth and competitiveness while maintaining financial stability. Key proposals include shortening the bonus deferral period to five years for top-tier bankers and to four years for others, with an option for partial bonus payment starting from the first year. The changes also involve removing certain EU-derived guidelines, reducing the number of individuals affected by pay rules, and granting firms more discretion in determining applicable employees. The consultation closes on 13 March 2025.

Other interesting things

SRA publishes guidance on legal professional privilege. Building on the SRA’s 2023 thematic review on working in-house, on 18 November the SRA published its much anticipated final guidance materials to support in-house solicitors and their employers (particularly for governing boards, chief executives and directors of organisations which are not regulated by the SRA) by assisting them to understand the SRA’s regulatory regime and how this might impact on in-house lawyers’ work in practice. This placemat provides a summary of each of the guidance materials (including identifying the changes from the draft guidance where relevant).