Employment legal update #56 | June 2022
Our Employment & HR team brings its monthly review of new legislation, guidance and case law.
The practice of “fire and rehire” has garnered a lot of publicity in recent months. As a result, the government, cognisant of the issues, has committed to publishing a new statutory code of practice, together with legislation regulating it, “when Parliamentary time allows”. This has been triggered by the P&O fiasco, as well as other publicity surrounding this tactic. Representations from unions will be allowed during the drafting of the code.
The ONS has confirmed that the UK had a disability pay gap of 13.8% in 2021, with disabled employees earning a median of £12.10 per hour and non-disabled employees earning a median of £14.03 per hour. This increases the disability pay gap from 11.7%, reported in 2014.
Following the absence of the Employment Bill in the Queen’s speech which was expected to feature a number of employment points, a senior government official has stated that the intention to introduce legislation for workers to keep tips has been dropped for "the foreseeable future". This will now be introduced as soon as Parliamentary time allows.
A survey of over 1,000 employers has reported a considerable increase in the number of employers stating that home and hybrid working has increased their organisation's productivity or efficiency. When the same question was asked in in October and November 2021, 41% of employers responded that these new ways of working had increased productivity or efficiency in their organisation, an increase from 33% in December 2020. There is a corresponding decrease in the number of employers reporting a negative impact of home and hybrid working, down from 23% in 2020 to 18% in 2021.
On the subject of remote working, Stephenson Harwood has brought in a policy of allowing its employees to work from home permanently full-time – with a corresponding 20% reduction in pay. They are required to attend the office once a month but will be reimbursed travel expenses. Partners are not allowed to take advantage of this; and any associates who do so will apparently probably be ruled out of partner promotion. The firm feels there is unlikely to be much take-up because they already have hybrid working as it is.
The ONS reports that sickness absence in 2021 increased to 2.2%, the highest since 2010, and rising from a record low of 1.8% in 2020.The single biggest reason for sickness absence was COVID-19, which accounted for 24% of absence, up from approximately 14% in 2020.
BEIS has issued a press release highlighting the actions it says the government has taken "to support workers and build a high skilled, high productivity, high wage economy" following the absence of any mention of the Employment Bill in the Queen’s speech. Key measures were:
- The increase of the national minimum wage (NMW) and national living wage (NLW) in April 2022 and naming and shaming employers who failed to pay the NMW.
- An extension of the ban on exclusivity clauses for all workers whose guaranteed weekly income is below the Lower Earnings Limit – legislation is to be introduced to implement this.
- Commitment to produce a statutory code of practice on fire and rehire.
- Abolition of the Swedish derogation which allowed agency workers to be paid less than permanent staff in certain circumstances.
- Introducing the right to receive a written statement of terms on day one for all workers.
- Consultation on making flexible working the default (currently awaiting government response).
- Introducing a legal right to two weeks' paid bereavement leave for those who have lost a child.
- Support for employees through the COVID-19 pandemic, including the furlough scheme.
BEIS has published a report outlining the enforcement of the national minimum wage (NMW) and national living wage (NLW) during the 2020-21 financial year revealing the following: –
- £16.8 million in arrears was identified for over 155,000 workers
- HMRC issued 575 penalties, totalling £14.1 million
- The average arrears per worker was £108
- There were 15 cases where the total arrears owed by the employer was over £100,000.
- During this time period, 139 employers were "named and shamed".
Strikeout of claim requesting redundancy was wrong
In White v HC-One Oval Ltd the EAT has held that the tribunal was wrong to strike out the claimant’s unfair dismissal claim where she had requested redundancy.
The claimant worked in a care home as a part-time receptionist. A restructure involved her in redundancy consultation. She instead requested voluntary redundancy and her employment was terminated, whereupon she brought a claim for unfair dismissal. She claimed that the redundancy was a sham, being brought on the back of having lodged a formal grievance, and that although she had been told that her receptionist role would be likely to be made redundant and an administrator role may be considered as a job share, she was only offered a receptionist role with additional duties. Furthermore, a full-time administrator/receptionist role had been given to someone who had only recently started. She argued that they had deliberately recruited a full-time receptionist with a view to this person replacing the two part-time roles and that the redundancy was effected to get rid of these two roles, and specifically her as she had lodged a complaint. She said this was why she had requested voluntary redundancy.
The company argued that she had been offered the administrator role on a job share basis, but she had declined and requested redundancy.
The company applied to strike out the claim as having no reasonable prospect of success and the tribunal agreed on the basis that she could have claimed constructive unfair dismissal, resigning in consequence of the alleged breach and it was clear she had been wanting to complain about the company’s behaviour before being placed at risk of redundancy. She instead volunteered for redundancy and the tribunal felt the employer would be able to demonstrate a fair reason for the dismissal and a fair process having been followed.
However, the EAT disagreed, finding that the tribunal had not engaged with the claimant’s case at all and had not read into the factual background to properly assess whether there was any foundation for the claimant alleging that the redundancy was a sham, or the offer of the administrator job-share role. Furthermore, it had not considered the position taking the claimant’s case at its highest. As a result, the claim was remitted back to the tribunal before a different judge.
Comparison pool for indirect discrimination must relate to actual complaint
In Allen v Primark Stores Ltd the EAT has confirmed that the comparison pool for an indirect discrimination claim must refer to the exact provision, criterion or practice (PCP) pleaded by the claimant.
The claimant’s request for flexible working on return from maternity leave was partially agreed, but she was told that she would have to work Thursday late shifts in her role as department manager. In her claim for indirect sex discrimination, she argued the PCP of guaranteed availability to work Thursday late shifts put women at a disadvantage as compared to men because of childcare responsibilities and that she had been so disadvantaged.
The comparison constructed by the tribunal included all the department managers in her store who might be asked to work shifts. This included two department managers who had an implied contractual right not to work Thursday late shifts but did so in emergencies. The tribunal considered that the pool affected 2 men and 1 woman and therefore did not put the claimant at a disadvantage, so the claim failed; and she appealed to the EAT.
The EAT upheld the appeal. It found that, in constructing the pool, the tribunal had redefined the claimant’s complaint. She had argued that the PCP was being asked to work on Thursdays when in fact it was just that she had to guarantee she could. The two men were in a different position as they were not required to guarantee their availability at all. As such, the disadvantage identified did not apply to them. The Tribunal had not done enough in just considering whether they might work as they had not looked at whether they could be compelled to do so. The tribunal's decision was set aside, and the case remitted.
This case focuses on the importance of the correct PCP and the pool of people to which it relates.
No automatic unfair dismissal where employee refuses to work because of pandemic
In Rodgers v Leeds Laser Cutting Ltd, the EAT has upheld a tribunal’s decision that an employee who was dismissed for refusing to return to work during the pandemic was not automatically unfairly dismissed under S.100 of the Employment Rights Act 1996 which deals with health and safety dismissals. This is the applicable section where an employee either leaves or refuses to return to work in circumstances of danger. The EAT held that the tribunal was right to consider that, on the facts as presented to them, there was no reasonable belief that there was a serious and imminent danger, either in the workplace or in the environment which prevented him returning to work.
The claimant was a laser operator who worked in a large warehouse-type space, where there were usually around five staff on site at any one time. The risk assessment undertaken at the beginning of the pandemic recommended social distancing, sanitising surfaces, and staggering start/finish/lunch/break times, many of which were already in operation. One Sunday at the end of March the claimant emailed his employer saying he had no choice but to remain at home because he had an extremely vulnerable child (sickle cell disease), and a baby with underlying health problems. He obtained a self-isolation note from NHS 111 covering around 1 week. Subsequently, however, he drove a friend to hospital and worked in a pub. Neither he nor his employer made any effort to make contact and the end of April he was sent his P45.
He brought a claim of automatic unfair dismissal on health and safety grounds under S.100(1)(d), which provides for automatic unfair dismissal if the reason for dismissal is that ‘in circumstances of danger which the employee reasonably believed to be serious and imminent and which he could not reasonably have been expected to avert, he left (or proposed to leave) or (while the danger persisted) refused to return to his place of work or any dangerous part of his place of work’. He also relied on S.100(1)(e), which applies where the employee takes ‘appropriate steps to protect himself or other persons from the danger’.
The tribunal found that he did not fall within either section and that his concerns were in general terms and not just the workplace, and that he intended to remain at home until the end of lockdown. It also concluded that his absence from work was not an appropriate step to take to protect himself or others.
He appealed to the EAT which dismissed the appeal and in doing so considered the case only under S.100(1)(d) with the parties’ agreement, because leaving or refusing to return to a place of work did not constitute taking steps in accordance with s.100(1)(e). The EAT noted that the tribunal had accepted that the pandemic caused some circumstances of danger at work and elsewhere, and so this element of s.100(1)(d) was satisfied. (The EAT considered whether it might be enough for the claimant to reasonably believe that such circumstances exist, and acknowledged this argument, but did not have to decide the point.)
The EAT accepted reasonable belief but noted but that the tribunal had concluded he thought his workplace constituted no more serious a risk than the world at large and that the circumstances were not sufficiently serious to prevent him returning to work. It accepted that he had a genuine belief in the risk to his children but that this was not serious enough to justify him leaving the workplace and not return. It also took into account the fact that social distancing and other steps had been implemented to protect the health of those working.
Finally, the EAT held that the tribunal was entitled to find that there were steps that the claimant could reasonably have taken, but did not, to avert the danger, having regard to his concerns about the health of his children. He could have worn a mask, socially distanced, and washed his hands. He did not make out that there was any particular difficulty about his journey from home to his place of work that would need him to take any additional steps to those which had been taken to protect the workplace.
This case demonstrates that the courts will take a fairly robust view of those trying to assert that a dismissal is automatically unfair for health and safety reasons because of the pandemic.
Application of statutory cap on financial awards
In Dafiaghor-Olomu v Community Integrated Care, the EAT has confirmed the order in which any deductions for payments made by the employer should be dealt with in assessing the amount of compensation payable to employees following a successful tribunal case. It held that payments made by the employer to the employee concerning an unfair dismissal claim must be deducted from the total compensatory award before the statutory cap is applied.
The claimant’s claim for unfair dismissal was successful and she was awarded £46,153.55 which was paid by the respondent. Her re-engagement claim was rejected and so she appealed to the EAT, which sent the case back to the tribunal for a remedies hearing. Re-engagement was again rejected but at the second remedies hearing the amount awarded to the claimant was increased to £128,961.59 following further evidence and the tribunal considering that the first award was insufficient. The question arose of how the respondent’s earlier payment of the lower award should be dealt with.
Under S.124(5) of the Employment Rights Act 1996, the statutory cap on unfair dismissal compensation must be applied to the overall assessment of compensation after ‘taking into account’ any payment made by the employer in respect of the claim, and any deductions required by law. The dispute centred on whether the tribunal should deduct the payment already made from the amount now awarded and then apply the cap; or whether the amount previously paid could be used as a credit against the higher award.
This went to the EAT which held that the cap had to be applied after the earlier payment was deducted from the overall award. The respondents asserted that the words ‘taking into account’ meant the deduction of the sum that it had already paid to the claimant, and that failing to do so meant that no account would be taken of the sum. Its argument was that if the payment was deducted from the overall award prior to the cap being applied, it would not get credit for the payment of the first award and would thus be penalised for complying with the tribunal order to pay that first award.
However, the EAT held that it had to apply the clear wording of the statute and what it believed to be the intention of the legislation, which was that the tribunal should calculate the employee’s total compensation and then subtract from it any prior payments. In this way the disparity between the employee’s loss and the sum paid is lessened. They accepted that the words ‘taking into account’ were vague but were satisfied that they referred to a reduction in the sum due.
The EAT commented that it sympathised with the respondent because it could hardly have foreseen that, on appeal, the issue of compensation would be revisited and a higher figure awarded. Had it done so, it probably would not have made the initial payment with the result that, overall, it would have ended up paying less: £74,200 instead of £46,153.55 plus £74,200.
Provision of EC certificate following claim being lodged is not enough
In Pryce v BaxterStorey Ltd, the EAT has confirmed the tribunal was correct to rule that it did not have jurisdiction to hear the claimant’s claims of sex and race discrimination because she had not obtained an ACAS Early Conciliation certificate before she filed her claims. Although she had sent an email to the tribunal attaching the certificate a few days after submitting the ET1, the rules state that the certificate must be filed at the time the claim is lodged and not retrospectively. As such, the claimant could not be treated as re-presenting her claim.
Initially the claim was accepted; but at a Preliminary Hearing, the judge noted that the certificate had not been supplied when the claim was lodged. Since the tribunal had no discretion to waive a statutory requirement, the claim was struck out.