Employment law update – November 2021LexLeyton
There have been a number of gig economy cases examining whether individuals satisfy the definition of ‘worker’ under s230(3)(b) of the Employment Rights Act 1996. The latest case in front of the Court of Appeal, Stuart Delivery Ltd v Augustine, involved a moped courier.
A ‘worker’ is defined as someone who works under a contract of employment, or under other contract, express or implied, where the individual undertakes to personally do or perform any work or services for another party who is not a client or customer of any profession or business carried on by the individual. If they do not satisfy that test, they will usually be deemed to be a self-employed independent contractor with no employment law rights.
As can be seen from this definition, personal service or performance is pivotal to being a worker, and so it follows that someone with an unfettered right to provide a substitute will not satisfy the test. This was the key consideration in the Court of Appeal’s judgement.
Mr Augustine delivered goods by moped. He was subject to ‘general conditions of use’ between himself, the company and the user, but the court took into account all the evidence in relation to the realities of how the arrangement operated.
Mr Augustine could accept individual delivery jobs via the company’s app, and be paid for that job. He also signed up for slots covering the zones with the highest concentration of users, committing to be in a certain area for 90% of the time. In return, he was guaranteed a minimum of £9 an hour, even if he did no deliveries. He could lose that guaranteed fee if he did not abide by certain availability provisions.
Mr Augustine was able to indicate via the app that he wished to give up a particular slot he had signed up to and another driver on the app could take it up. If no-one offered to do so, Mr Augustine had to complete the slot or face penalties.
Mr Augustine brought proceedings in the Employment Tribunal contending he was an employee, or a worker. He was found to be a worker on the basis that he did not have an unfettered right to substitute, and that he did not have any choice over who, if anyone, would accept a slot which he returned. All he could do was release it back to the system and hope that another approved courier accepted it. The EAT dismissed the company’s appeal.
The Court of Appeal clarified that the Pimlico Plumbers judgement had created only two categories to consider when deciding whether someone had to provide personal service or not (and not five as the company had argued). The first was an unfettered right to substitute, in which case there would not be personal service (and hence, the definition of worker would not be satisfied) and the second was a conditional right to substitute which may or may not be inconsistent with personal service, depending on the conditions.
The Court of Appeal in the Augustine case found that the Employment Tribunal was correct to find that the system Mr Augustine worked under was set up to ensure that he did carry out the work, and did turn up for the slots he had signed up to do. That was necessary for the company’s business model to work.
This case shows, once again, that companies which seek to closely control how and when a person works, with limited rights to substitute, are unlikely to succeed in arguing that the individual is not a worker. Further cases are likely given that a firm of solicitors are currently seeking drivers to join a group action against Amazon, a claim which they estimate could be worth over £100 million, owed to at least 3,000 drivers.
Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 prohibits an employer from making an offer to a worker who is a member of a trade union which is recognised, or seeking to be recognised, if the offer would result in the worker’s terms of employment not being, or no longer being determined by collective agreement negotiated by the union, and that result was the employer’s sole or main purpose. This is referred to as ‘the prohibited result’.
In a judgement released at the end of October, Kostal UK Ltd v Dunkley and others, the Supreme Court examined the meaning of section 145B for the first time, ruling that the company made an unlawful direct pay offer to its employees before exhausting the process contained in a non-legally binding recognition and procedural agreement which it had entered into with Unite.
The agreement, which stated that it did not constitute a legally binding agreement, gave Unite sole recognition and bargaining rights. It set our four stages to seek to avoid a dispute, the final stage being reference to ACAS by joint agreement.
Pay negotiations between the company and the union commenced in October 2015, and an offer by the company was rejected by the members in early December. The company then wrote to the employees directly, making the same offer, but stating that if it was not accepted, they would not get the 2015 Christmas bonus. A further unsuccessful negotiation meeting was then held, and an agreement was then reached to refer the matter to ACAS. By January 2016, 91% of workers had accepted the direct offer, and the company wrote to the remaining employees stating that, if no agreement was reached, “this may lead to the company serving notice on your contract of employment”.
A number of employees brought successful complaints to the Employment Tribunal, securing £421,800 in awards. An appeal to the Employment Appeal Tribunal by the Company was unsuccessful. However a further appeal to the Court of Appeal overturned the decisions of the Employment Tribunal and the EAT. The claimants then appealed to the Supreme Court.
In a careful analysis of the wording of the legislative provision, their Lordships unanimously held that the offer had resulted in the prohibited result, although they were split 3-2 as to the reasons. The key point to emerge from this judgement is that an employer can make direct offers to employees once the collective bargaining process has been exhausted. But if it has not been, it can make direct offers only where the purpose of the offers is not solely or mainly to determine workers’ terms outside of the collective bargaining process; in other words, if it had some other, genuine business reason.
In Secure Care UK Limited v Mr R Mott, an employment tribunal found that when an employee is dismissed by reason of having made a protected disclosure in accordance with the whistleblowing legislation, that dismissal will be automatically unfair, even if the employee doesn’t have the requisite continuity of employment to otherwise bring a claim of unfair dismissal.
The EAT disagreed, holding that the Tribunal had made two errors in its reasoning. An examination of the EAT’s judgement shines a light on what an employee has to show to get a whistleblowing dismissal claim over the line.
Mr Mott worked as the logistics manager for a company which provided transport services to NHS Trusts for people with mental health problems. Mr Mott made nine disclosures during his employment, three of which were accepted by the Employment Tribunal as protected disclosures. They related to Mr Mott’s concerns about inadequate staffing and, the day after the final one was made, he was told he was at risk of redundancy. He was dismissed around six weeks later.
The Employment Tribunal judge found that there was a genuine redundancy situation, but that the selection process was questionable, and the fact that Mr Mott had been “pointing out problems” clearly had a material effect on his selection for dismissal. The judge had relied on a Court of Appeal decision, Fecitt v NHS, to support her finding that causation is established if the protected disclosure materially influences the treatment in question.
However, the EAT pointed out that the test in Fecitt only applies to claims of detriment under s47B of the Employment Rights Act, not dismissal. The test for unfair dismissal is that the protected disclosure must be the sole or principal reason for the dismissal. Therefore, the Employment Tribunal judge used the wrong test.
The EAT also found that, when she was considering what had caused the dismissal, the Employment Tribunal judge did not confine her consideration to the three protected disclosures, but rather considered the combined impact and effect of all of Mr Mott’s communications about staffing levels and the associated problems he considered that gave rise to.
In the light of these errors, the appeal was successful, and the case was sent back to the Employment Tribunal to decide whether the three protected disclosures were the sole or principal reason for the dismissal.
This case highlights the different considerations that need to be taken into account when arguing a whistleblowing detriment compared to a whistleblowing dismissal.
Unlike other acts of direct discrimination, age discrimination can be justified by an employer where they can show that the otherwise prohibited treatment was a proportionate means of achieving a legitimate aim.
The EAT has delivered judgements in two cases (Pitcher v the University of Oxford and another, and the University of Oxford v Ewart) in which the EAT upheld the decisions of two Employment Tribunals, even though the two decisions were seemingly at odds with one another. A closer look reveals why this happened.
The University operates an Employer Justified Retirement Age (EJRA) which it says is based on three legitimate aims: inter-generational fairness, succession planning and equality and diversity. The EJRA is said to facilitate other measures in achieving those aims by ensuring that vacancy creation is not delayed and recruitment into senior academic roles might take place from a younger, more diverse cohort.
Professor Pitcher had two roles; one with the University and one at St John’s College. He was compulsorily retired at 67 from both roles, and was refused an extension of tenure with St John’s under the EJRA. Professor Ewart, on the other hand, obtained an extension, vacating his substantive post at the University and taking up a fixed term position, but was later refused a further extension. An Employment Tribunal dismissed Professor Pitcher’s claims of direct age discrimination and unfair dismissal, holding that the EJRA was justified, whereas a differently constituted Tribunal upheld Professor Ewart’s claims of direct age discrimination and unfair dismissal, finding that the University had not shown the EJRA to be justified.
In the Pitcher case, the Tribunal had concluded that the limited evidence demonstrating the impact of the EJRA was because it was relatively new. It gave weight to survey evidence regarding those who would have continued in employment if the EJRA had not been in place, and to the mitigating effects of the extension provisions and post retirement opportunities for senior academics. It also found that the University had dismissed Professor Pitcher for a fair reason, and had acted within the band of reasonable responses.
In the Ewart hearing, the Tribunal had been presented with a statistical analysis which showed that the rate of vacancies created by the EJRA (the focus of the University’s case) was trivial (2-4%), and so concluded that there was insufficient evidence to show the EJRA would contribute to the realisation of the legitimate aims. In addition, the discriminatory impact was severe, and not sufficiently mitigated by the extension provisions, and so the EJRA was not shown to be proportionate.
The EAT heard the appeals of Professor Pitcher and the University against the respective judgements. The reason for the EAT upholding both decisions stems from the fact that the EAT’s task is to consider whether the respective Employment Tribunals had erred in law, not to strive to find a single answer. The two Employment Tribunals had heard different evidence, with a different focus. Professor Pitcher’s evidence had focussed on his rejected extension at St John’s College, whereas Professor Ewart’s had concentrated on continuing to work at the University.
Two Tribunals may reach opposing conclusions on the same broad facts without having made errors of law. Given that the burden of proof lies on the employer to show that a direct age discriminatory policy is justified, this case really brings home the importance of an employer presenting robust evidence to show how their legitimate aims are achieved by the means they adopt. They need to show how they measure the effectiveness of their policy and what actions they take to mitigate the discriminatory effects.
Mandatory Covid 19 vaccination for staff in care homes
The Department of Health and Social Care has issued detailed operational guidance in relation to staff working in care homes. From 11 November 2021 all care home workers and anyone entering a care home needs to be fully vaccinated, unless they are medically exempt. Exceptions to the rule will include residents, people providing emergency assistance or urgent maintenance, friends and relatives visiting residents (including visiting the dying or giving comfort or support in relation to a resident’s bereavement) and those under 18 years old. It will be for the ‘registered person’ (usually the manager of the facility) to ensure the rules are abided by.
Anonymity orders in the Employment Tribunal
In the overwhelming majority of cases, Employment Tribunal hearings are held in public, and their decisions made available on the internet for everyone to read. However, there are occasions when it is appropriate to prevent or restrict the public disclosure of certain aspects of the proceedings, usually by anonymising the identities of specified parties, witnesses or others.
The tribunals and courts often have to carry out a difficult balancing act when deciding whether to grant such orders. On the one hand there is the common law principle of open justice, and the rights to a fair trial and freedom of expression under the European Convention of Human Rights (ECHR). On the other hand, there is the right to privacy enshrined in Article 6 of the ECHR. Considerations such as the risk of being wrongly believed of having committed a crime, and being handicapped in finding new employment have not been found to be sufficient to engage an anonymity order in the past (See BBC v Roden and Ameyaw v Pricewaterhousecoppers Services Ltd).
In the recent case of A v Burke and Hare, a stripper failed to overturn a decision of the Employment Tribunal to grant an anonymity order. Ms A was claiming for unpaid holiday pay against her former employer (a strip and lap dancing bar). She sought to keep her identity secret in the proceedings because she was intending to pursue a career outside of the industry. She argued before the Employment Tribunal that she would be at risk of stigmatisation and sexual violence if she was identified. She said she had performed under a stage name and other staff did not know her name, but that she had been threatened when working as a stripper and called insulting sexualised names.
The Employment Tribunal judge rejected her application, saying that she should have known a public judgement would be issued in her name, and that she should have foreseen that working as a stripper could harm her career prospects.
Ms A appealed to the EAT, arguing that strippers are stigmatised and that she had a right to preserve her honour and reputation. She said that her choice to work as a stripper was irrelevant, and that she wished to leave her life as a stripper behind her, and her employment prospects would suffer if her name was published in a judgement. She also said that she would discontinue her claim if an order was not granted.
The EAT held that stigmatisation alone was not enough, and reiterated the principle from a Court of Appeal case (R v Legal Aid Board ex parte Kaim Todner) that embarrassment and reputational damage are ordinary concomitants of litigation. The EAT did acknowledge that if there was a material risk of continuing verbal abuse and sexual assault different considerations would arise, but that Ms A had not appealed the Tribunal’s conclusion that there was not enough evidence that she would suffer such harm. There was no clear and cogent evidence of the harm that would be done, and so the appeal failed.
The EAT also did not set great store on the contention that there was a high likelihood that her past would become widely known if there was a judgement issued in her real name. No evidence was given about how widespread the practice was of employers and recruitment agents using the online register of Tribunal and EAT judgements.
The EAT did, however, agree that Ms A had not forfeited her right to rely on her Article 8 right of privacy because she had worked as a stripper given that she had worked under a stage name and withheld her name from her co-workers.
Ms A’s threat to withdraw her claim if she did not get the order, which would deny her access to justice, cut no ice with the EAT. It held that the law did not provide access to justice whatever the cost. In addition, the Employment Tribunal had to find a reason why Ms A should not be identified and had to assume that it was in the public interest to publish her name. That was the default position. The EAT did grant Ms A’s application for anonymity in relation to her appeal though, given that public interest to open justice is at its strongest in relation to the merits of a case, and less so at the stage of a preliminary application.
This case is a reminder that the principle of open justice is a high hurdle to jump, and that compelling evidence is needed to obtain an anonymity order.
Sexual harassment in the workplace
The Fawcett Society, a charity campaigning for gender equality and women’s rights at work, has published recommendations for employers to tackle sexual harassment in the workplace. Their report states that at least 40% of women have experienced workplace harassment, and that women who are marginalised for other reasons, such as race and disability, face an increased risk, and different forms of sexual harassment.
The Society also reports that nearly a quarter of women who had been sexually harassed said that the harassment had increased or escalated since working at home due to the pandemic, and that 68% of disabled women reported being sexually harassed at work, the same percentage as the proportion of LGBT workers who had experienced harassment in the workplace.
The report blames the way that many employers respond to complaints, trying to minimise liability, for women facing retaliation and victimisation, and so choosing not to report at all.
The Society’s response is to identify five key requirements to create a workplace that does not tolerate sexual harassment:
- Organisation wide culture change, which addresses misogynistic norms and makes clear that sexual harassment is unacceptable.
- Having a clear and detailed sexual harassment policy that is separate to a general harassment and bullying policy. The policy should define sexual harassment, describe who it applies to, give guidance on how to report sexual harassment, outline the responsibilities of managers and staff, describe the complaint and investigation procedure, describe sanctions, forbid victimisation and commit to reviewing and evaluating the policy.
- Tailored anti-sexual harassment training, which the report recognises would be only one component of the means to prevent sexual harassment. Effective training would not only increase employees’ knowledge of the workplace policy, and change attitudes, but it would also actively reduce or prevent sexual harassment, a result which often does not occur.
- Creating multiple avenues for reporting sexual harassment. This envisages giving the victim the choice of whether to pursue an informal or formal process, although a formal process may be more appropriate in serious cases. The multiple avenue approach also refers to having multiple people who may be told about concerns.
- The way employers respond to reports. The survey found that women rarely feel supported when they report their experiences, and harassers are rarely proportionately disciplined. A thorough and sensitive investigation must be instigated if a formal complaint is raised, and all employees who make a report must be treated with respect and empathy. A clear process should be outlined, and confidentiality maintained. Ongoing support should be provided, both to the complainant and to the managers dealing with the matter. A clear paper trail needs to be kept and specialist help obtained if necessary.
The Fawcett Society and its partners intend to publish an employer toolkit next year, which should be very useful for employers struggling to tackle this difficult but important issue. You can apply to receive a copy on the Society’s website: https://www.fawcettsociety.org.uk/forms/sexual-harassment-toolkit.
The recent EAT case of Rooney v Leicester City Council appears to be only the second case at appeal level addressing disability discrimination arising from menopause symptoms.
In order to be classified as disabled under the Equality Act, a person must have a physical or mental impairment which has a substantial and long term adverse effect on their ability to carry out normal day to day activities.
Ms Rooney’s solicitors made a claim to the Employment Tribunal on her behalf for constructive dismissal and unpaid holiday pay, overtime and expenses. Unbeknownst to Ms Rooney, her solicitors had included a statement that, amongst other things, she accepted that her work-related stress and menopause symptoms were not disabilities. Ms Rooney then made a second claim herself for disability and sex discrimination, harassment and victimisation related to her treatment arising from her menopause symptoms. She applied to have her first claim amended to remove the statement that she accepted she was not disabled.
The Tribunal then decided to hold a preliminary hearing to decide, amongst other things, whether her constructive dismissal, disability and sex discrimination claims should be struck out. The employment judge decided that Ms Rooney was not suffering from a disability in relation to her symptoms of menopause, her depression or her anxiety, and her claims of harassment and victimisation were also dismissed. Her sex discrimination claim was struck out as having no reasonable prospect of success. She appealed to the EAT.
The EAT allowed the appeal, finding that the Tribunal has fallen into several errors. One of the errors was the process adopted by the Tribunal when it decided that Ms Rooney’s symptoms did not have more than a minor or trivial effect on her day to day activities, despite Ms Rooney having given detailed evidence to the employment judge about both the physical symptoms (sweating, hot flushes, palpitations, fatigue, headaches and urinary problems) and the impact upon her day to day activities, including forgetting to attend events, meetings and appointments, losing items, forgetting to lock her car, or apply the handbrake, leaving her house unlocked and leaving the cooker and iron on. The employment judge had not stated that he found that these claimed adverse effects were untrue.
The EAT remitted the case back to a differently constituted Employment Tribunal to carry out a careful factual analysis of whether Ms Rooney was a disabled person at the relevant time. It also found that the employment judge had misapplied the law in weighing what Ms Rooney could do against what she could not, and had not directed himself as to the statutory definition of ‘long-term’. The EAT also upheld the appeal against the striking out of the sex discrimination, harassment and victimisation claims.
It does appear that the Employment Tribunal significantly overstepped the mark in this case. A discrimination claim should only be struck out as having no reasonable prospect of success in the clearest of cases, and it is hoped that this EAT decision will assist Tribunals to treat menopause symptoms seriously.
Recognising the benefits of Neurodiversity
Personnel Today has reported that Rolls-Royce has sponsored a new category in the Undergraduate of the Year Awards, that fully recognises the achievements of neurodiverse university students. Rolls-Royce is seeking “inspiring” students who have autism (ASD), ADHD, dyslexia and dyspraxia, amongst other neuro minorities, as part of a drive to celebrate their strengths in analysis, complex problem solving, design and strategic thinking.
The winner of the category will gain a 10 week paid summer internship, a day shadowing a Rolls-Royce leader and an Apple watch.
It is estimated that one in seven people have conditions linked to neurodiversity, where the brain learns and processes information in a different way from neurotypical people. In 2017 just 16% of people with autism were in full time employment in the UK and, last year, half of UK businesses were found by the Institute of Leadership and Management to be reluctant to employ someone who is neurodiverse.
Students can enter via the Undergraduate of the Year Awards website. The deadline is 31 January 2022. Sixty students will be shortlisted, and a winner will be announced at an awards ceremony on 29 April 2022.
Back to working from home?
HR Review has recently reported that the British Medical Association (BMA) has argued that working from home, the wearing of face masks and other measures contemplated in the Government’s ‘Plan B” should now become compulsory again, in light of the rising number of positive cases of Covid-19 being detected during October. The Health Secretary has, however, ruled this out “at this point”.
This divergence in approach between the country’s leading medical association and government is arguably unhelpful for employers who have been trying to implement a safe return to the workplace over the past several weeks. Despite the government’s stance, employers still owe a duty of care to their staff, and must assess health and safety risk in the light of the prevailing conditions, including high levels of community transmission. Appropriate measures to contemplate for staff coming into the workplace may include compulsory vaccination, mask wearing, social distancing, hand sanitation, increased ventilation, and regular lateral flow tests. A contingency plan in the event of an outbreak, and clear processes would also need to be developed and communicated to managers and staff.
Collective redundancy consultation and compulsory liquidation
It has been a requirement for many years to carry out collective consultation when contemplating a redundancy programme that proposes to make 20 or more employees redundant at an establishment within the period of 90 days. A failure to do so can result in protective awards being made in favour of the affected employees. However, there are some limited exceptions to the requirement; namely when there are “special circumstances which render it not reasonably practicable” for an employer to comply with the collective consultation requirements, so that the employer is only required to take such steps as are reasonably practicable.
In Carillion Services Ltd (In Compulsory Liquidation) and others v Benson and others, the EAT found that there were no “special circumstances” absolving the employer from its collective consultation obligations where the employer had gone into compulsory liquidation and dismissed the claimants on various dates thereafter.
Carillion Group employed around 18,000 employees as at 15 January 2018, the date it entered compulsory liquidation, which was described as the largest and most complex insolvency of its kind in UK history. Around 1,000 dismissed employees lodged claims in the Employment Tribunal seeking protective awards. The company did not deny it had failed to collectively consult, but relied on the exception, contending that the circumstances giving rise to, and the order for the compulsory liquidation were special circumstances.
The group company had been suffering serious financial difficulties from around July 2017, but it states that it was inevitable and unavoidable that the claimant employees would be dismissed by reason of redundancy when its key stakeholders decided on 13 and 14 January 2018 not to approve short-term lending arrangements which precipitated the need to place various group companies in liquidation. The duty to consult collectively was therefore triggered on 14 January 2018. Were there special circumstances as at that date?
The Court of Appeal in a 1978 case (Clarks of Hove v Bakers Union) had held that whether circumstances can be held to be special depended on the cause of the insolvency. A sudden disaster may be, whereas a gradual run down of the company would not be.
The Employment Tribunal held that there were no such special circumstances in this case, and so collective consultation should have occurred. The Company appealed.
The EAT found that there was no evidence, as contended by Carillion, that the government had given it cause to believe that it would not allow it to fail, and that even if the Board had believed that, that was not enough to constitute special circumstances. It was not out of the ordinary or uncommon for key stakeholders such as banks or the government to refuse to fund administrations. There were no sudden intervening events, and the company had been considering compulsory liquidation even before the government had refused to provide financial support.
Furthermore, the fact that a compulsory liquidation always resulted in redundancies did not mean there were special circumstances. The EAT pointed out that, even where avoiding dismissals is impossible, consultation on mitigating the consequences of the dismissals is still valuable.
This is another reminder that it will be only in exceptional circumstances that an employer will be able to avoid collectively consulting when the requirement is triggered. A compulsory liquidation may amount to special circumstances, but each case will be examined on its own merits.