Employment litigation in review – 2024

The EAT confirms that settlement agreements can be used to settle future statutory claims relating to acts or omissions which occur after the date of the settlement agreement provided the type of claim is clearly identified – either in generic terms, such as unfair dismissal, or using the relevant statutory reference. This principle applies both where the employment relationship has ended and where there is a continuing employment relationship. In practice, broader public policy and ethical considerations will be relevant alongside this legal analysis – for example where, if there is an ongoing relationship, the company may not want to be seen to remove legal redress for any unknown future act of discrimination or harassment. The Court of Session in Bathgate v Technip Singapore PTE Ltd and the EAT in Clifford v IBM have provided valuable clarity on the remit of settlement agreements, particularly regarding the settlement of future unknown claims. These decisions can perhaps be seen to mark a shift of emphasis towards honouring the freedom of contract of the parties. In Bathgate the Scottish Court of Session held that future unknown claims can be validly waived under a settlement agreement, provided that the claim is "clearly identified and the objective meaning of the words used is such as to encompass settlement of the relevant claim". In Clifford the EAT followed suit finding that the Claimant had validly waived a disability discrimination claim arising from disability salary payments (which were not increased). These decisions allow a clean break with employees - provided that a settlement agreement is clear and comprehensive – welcome news for employers.

The pendulum of employee vs. employer friendly whistleblowing decisions continues to swing. The EAT acknowledge that an employer’s “collective memory” of protected disclosures could give rise to liability for whistleblowing detriment and victimisation First Greater Western Ltd v Moussa); but the decision maker must have knowledge of substance of a protected disclosure to establish liability for a whistleblowing claim (Nicol v World Travel and Tourism). However, arguably the most significant whistleblowing case law question of 2024 has been whether an individual can bring a claim for whistleblowing detriment (for which the employer is vicariously liable) which arises from the actions from one of the employer’s workers. Whilst it was held in Wicked Vision v Rice that such a claim is barred by section 47(2) of the Employment Rights Act 1996 (ERA), in Treadwell v Barton Turns Development Ltd the EAT allowed a claim for the "detriment of dismissal". The EAT, referencing the Court of Appeal decision in Timis and Sage v Osipov, allowed the claim, clarifying that an employee can bring a claim against an individual co-worker for the detriment of dismissal and a vicarious liability claim against the employer - the only claim excluded by section 47B(2) is a claim against the employer in respect of its own act of dismissal. It is worth noting that the decision in Wicked Vision has been appealed to the Court of Appeal – we await the outcome of that appeal in 2025.

The Court of Appeal (overturning the EAT) confirmed that small scale redundancy exercises (below the threshold for triggering collective redundancy consultation), do not require general workforce consultation. The adequacy of any consultation process and therefore the fairness of a particular redundancy will depend on the facts of each case. However, the Employment Bill proposes removing the establishment rule from the relevant legislation, (meaning that employers would need to count redundancies across all sites / workspaces) which may drive greater workforce consultation as the collective consultation threshold is triggered more regularly. (Haycocks v ADP RPO UK Ltd)

In 2024 legal challenges arising from the expression of personal beliefs in the workplace continue. In February the Open University apologised unreservedly for its treatment of Phoenix after her expression of gender-critical beliefs and has since launched a review (Phoenix v The Open University) and in Miller v University of Bristol the Claimant was found to have been unfairly dismissed following his expression of anti-Zionist beliefs. The courts considered the threshold between a protected belief and an unacceptable manifestation of that belief, and whether the actions taken by an employer were driven by the individual’s belief, or other factors. In Miller, the ET upheld Mr Miller’s claim but found that comments directed at students and university student societies were 'culpable and blameworthy' and resulted in a 50% reduction in the Claimant's losses from his unfair dismissal claim. In Omooba v Michael Garrett Associates Ltd and anor the EAT found that the decision of a theatre company to terminate the Claimant’s contract was a commercial decision, driven by the impact of negative publicity, funding and potential disruption on the viability of the production, rather than because of the Claimant’s belief that a person could not be born gay and that homosexuality is not right.

There have also been two key cases of note about the use of preferred pronouns. In Orwin v East Riding of Yorkshire Council the Claimant added "XYchromosomeGuy/AdultHumanMale" to his email signature in protest to his employer’s policy on preferred pronouns. The ET found Mr. Orwin's gender-critical beliefs to be a protected philosophical belief but dismissed his claims of direct discrimination and unfair dismissal. It concluded that the Respondent's actions were not due to the Claimant’s beliefs themselves but were a response to his provocative and non-compliant manifestation of those beliefs, which was not protected under the Act. The High Court in Sutcliffe v Secretary of State for Education upheld a prohibition order which prevented the Claimant from teaching having found that he deliberately used female pronouns to refer to a transgender male pupil.

Flexible working is ingrained in many workplaces since the pandemic and, in April, a right to request flexible working became a day 1 right for employees. For employers grappling with the challenge of accommodating an increasingly agile workforce, the decision in Wilson v Financial Conduct Authority is welcome. The Claimant (who had worked from home exclusively during the pandemic) submitted a flexible working request seeking to continue to work exclusively from home, in spite of a new policy from her employer requiring employees to be in the office 40% of the time. Crucially the ET found that the FCA had properly considered the Claimant's flexible working request and rejected it on legitimate grounds. The ET noted that it may be harder for employees in management positions to argue that there is no detriment from remote working and that at this stage there are acknowledged weaknesses with remote working (in particular following fast-paced exchanges or observing and responding to non-verbal communication).

Disability continues to be the protected characteristic which provides the highest number of successful discrimination claims. Cases in this area turn on their specific facts and accordingly trends can only be identified with caution. However, it is clear that mitigating risk for employers in this area continues to require A detailed factual consideration of the employee's condition, current role and a positive practical consideration of possible adjustments is often key to an employer’s defence. The EAT made clear in Miller v Rentokil that there can be a high bar for demonstrating that it is reasonable not to offer an alternative role on a trial basis. In a similar vein, in Bugden v Royal Mail Group the EAT held that the employer should have considered the possibility of redeployment as an alternative to dismissal. That is not to say though that there cannot be circumstances where the requested adjustments ask too much of an employer. In Powell v University of Portsmouth the EAT held that it was reasonable to refuse the requests of a principal lecturer to not have to do face-to-face teaching given his risk of experiencing a blackout.

(Also of note was the decision in Godfrey v NatWest Market plc) which included useful commentary on actual or constructive knowledge of disability: in assessing constructive knowledge the ET should have considered whether the employer might reasonably have been aware of the need to make enquiry as to the possible effects of a more general mental impairment (our emphasis); and (Bodis v Lindfield Christian Care Home), concerning a claim for discrimination arising from disability where the EAT made clear that the “something arising” need only be a minor part of the reason for the treatment, provided that it is an “effective cause”.]

A cautionary tale for employers came in the High Court decision of McCormack v Medivet Group Ltd in which it was held that divesting an employee of core functions and responsibilities amounted to a repudiatory breach of contract, notwithstanding a contractual flexibility clause. The Claimant was employed as Director of Clinical Operations. Following a management re-structure the Claimant was appointed Chief Clinical Officer, some of the Claimant's previous responsibilities were allocated to a new COO. Although the Claimant’s contract contained a flexibility clause the High Court found that the decision to appoint the Claimant to a new role and change her responsibilities was not an appropriate exercise of the discretion afforded by that clause. The High Court held that given that these clauses give an employer discretionary powers which could be exercised to the disadvantage of the relevant employee there is an onus on employers to exercise those powers honestly, rationally and in the interests of good management. Even if, on the face of it, a clause allows for changes to an employee's role and responsibilities to be made, the exercise of that discretion must not be irrational or perverse.

In a landmark equal pay case, the ET ruled that Next Retail Ltd unlawfully paid its predominantly female sales consultants a lower wage than its mostly male warehouse employees. The ruling, which could result in Next paying around £30 million in back pay, is hugely significant for similar ongoing equal pay claims in the private sector. The tribunal found that over 3,500 sales consultants were right to claim that their work was of equal value to that of warehouse workers and should have been compensated equally. The ET concluded that Next's pay policy constituted indirect sex discrimination due to its disproportionate impact on women, who were significantly overrepresented among sales staff and part-time workers, and did not accept the higher market rate for warehouse staff justified the pay disparity. It is reported that Next plans to appeal the decision. (Thandi and others v Next Retail Ltd)

In an important decision which may increase the number of indirect discrimination claims, the EAT held that section 19 of the Equality Act 2010 allows for indirect discrimination claims to be brought by individuals who do not share the same protected characteristic as the disadvantaged group but suffer the same disadvantage due to a provision, criterion or practice (PCP) applied by their employer. The EAT had to consider whether prior to the introduction on s19A this approach fell on the right side of the boundary between interpretation (going with the "grain" of the legislation) or constituted an amendment (effectively "turning the scheme inside out"). Significantly the EAT found that it did have jurisdiction to consider claims brought by Heathrow-based cabin crew (a British national commuting from France, and a man with caring responsibilities), who argued that scheduling changes disproportionately disadvantaged non-British nationals and women with caring responsibilities. Although it is worth noting that the new s19A of Equality Act 2010 (effective from 1 January 2024) now enshrines associative indirect discrimination, it is noteworthy to see the EAT focusing on the key aims and drivers of the Equality Act to promote equality and prevent discrimination in the workplace in reaching its finding. (British Airways plc v Rollett and ors(Minister for Women and Equalities intervening).

Another case which has yo-yoed through the courts over the last couple of years is that of Tesco Stores Ltd (Respondent) v Union of Shop, Distributive and Allied Workers and others (Appellants). The case centres around an additional contract benefit (“retained pay”) which had been introduced by Tesco in 2007 as a retention incentive in the context of a restructuring exercise. When Tesco sought to remove that additional benefit in 2021, employees sought an injunction to prevent them. In this significant final decision, the Supreme Court has overturned the findings of the Court of Appeal, and instead reinstated the decision of the High Court and determined that Tesco could not terminate employees' contracts to avoid paying "retained pay.” In reaching this conclusion the Supreme Court found that an implied term prevented Tesco from terminating the relevant employees on notice for the purpose of removing or diminishing the employees’ entitlement to that benefit. The Supreme Court found that the contracts should function as the parties reasonably intended, and the promise of retained pay was intended to be a significant inducement for employees to relocate. The Supreme Court also held that it was appropriate for the High Court to have granted an injunction in circumstances where there had been no breakdown of mutual trust and confidence and where damages would not have been an adequate remedy. (Tesco Stores Ltd (Respondent) v Union of Shop, Distributive and Allied Workers and others (Appellants))