Posted by Gemma Ospedale, Partner
Employment legal update #50 | October 2021
Our Employment & HR team brings its monthly review of new legislation, guidance and case law.
The CJRS furlough scheme ended effective 30 September 2021, amid calls from some industries for the scheme to continue to support beleaguered employers. There are concerns regarding rising rates of redundancies once the scheme ends.
Operational guidance has been published to assist in supporting the regulations which require mandatory vaccination for all care home workers and anyone entering a care home with effect from 11 November 2021. The following are of note:
- While wider guidance on exemptions from the requirement to be fully vaccinated has been provided, guidance is still being developed around the issue of medical exemptions.
- Employers must maintain and update records of staff vaccination or exemption status and this record keeping should meet data protection requirements.
- Care homes should consider implementing a vaccination policy.
- Employers are advised to use the time before vaccination becomes mandatory to consult with their staff, collate information about vaccination status and advise staff of the possible consequences if the requirements are not met.
- There is guidance on the recommended procedure to follow with staff who are unable to provide evidence of their vaccination or exemption status. It emphasises that all options should be considered including redeployment to a role where vaccination is not mandatory.
- If redeployment is not available and the employer has adopted a fair process, the Regulations may provide a fair reason for dismissal on notice, due to contravention of a statutory restriction or some other substantial reason (SOSR).
- There is a limited exception whereby care homes will not breach the Equality Act 2010 on the grounds of age, disability, religion or belief if they carry out anything they are required to do under the regulations. This means is that if an employer takes steps to ensure that an unvaccinated non-exempt worker does not enter a care home, this will not be unlawful discrimination on the specified grounds. This exception may be available where a care home dismisses staff as a result of the Regulations, provided this is done in a fair and non-discriminatory manner. It should be noted that the exception does not extend to race, sex, sexual orientation, pregnancy and maternity, gender reassignment, marriage or civil partnership discrimination.
There are calls for a “legal right to disconnect” after research by Autonomy Thinktank has uncovered a substantial amount of hidden overtime undertaken by people working from home during the pandemic. This has been found to adversely affect mental health and, disproportionately, working women. A paper called The Right to Disconnect has proposed amendments to the Employment Rights Act to prevent employers requiring staff to monitor or respond to work-related communications or do any work outside working hours. Those who were subjected to a detriment for refusing to work outside their agreed hours would be able to bring a claim in the employment tribunal. An exemption would be given for industries where compliance with these requirements would not be feasible, such as the care sector, where employers would be required to opt-out of the right to disconnect and would have to demonstrate the need to contact workers outside their contracted hours. Similar legislation has been introduced in France, and Ireland is considering it.
Indirect associative discrimination claim upheld
Associative discrimination can be pleaded in the context of direct discrimination under the Equality Act; but until a recent employment tribunal claim, it was not possible to claim that indirect discrimination could be associative because the protected characteristic had to be that of the claimants themselves, and not someone with whom they were associated. That has changed with the decision in Follows v Nationwide Building Society which, while a first instance decision and so non-binding, is nonetheless of interest in the application of an ECJ case concerning indirect associative discrimination.
The European Union directives, which are implemented by the Equality Act, do not require the protected characteristic to be that of the claimants themselves in indirect discrimination claims. The ECJ case of Chez Razpredelenie Bulgaria stated that, in principle, indirect discrimination can be extended to those who are associated with someone with a protected characteristic. The ECJ ruled that it was not necessary for the claimants to have a protected characteristic; it was sufficient for them to demonstrate that they were put at a disadvantage by being associated with someone who had a protected characteristic.
Although the case itself concerned race discrimination, the definition of indirect discrimination in the Equal Treatment Directives is nearly identical to that in the Race Directive. This case was applied in the Follows ET decision.
The claimant was employed by the respondent as a senior lending manager. Her contract was a homework contract although she attended the office 2 / 3 days a week. She had, and the respondent knew this, caring responsibilities for her disabled mother, which is why she needed to work predominantly from home.
When the bank decided to make all senior lending managers office based full-time it conducted a redundancy consultation process. There were a number of volunteers for redundancy but the claimant was not among them and reiterated her desire to remain employed on her current homework contract to enable her to continue to care for her mother. However, she was selected for redundancy and was dismissed. Also dismissed was a male senior lending manager who was not disabled and did not have caring responsibilities but also wanted to stay on the homework contract.
The claimant brought claims for unfair dismissal, indirect sex discrimination, direct and indirect associative disability discrimination on the grounds of her mother’s disability, and indirect age discrimination. The claims of unfair dismissal, indirect associative disability discrimination and indirect sex discrimination were upheld and the others dismissed.
The direct associative discrimination claim failed because her male colleague, who was not disabled and did not have caring responsibilities, was also dismissed, so he received the same treatment as the claimant.
The Tribunal considered the issue of jurisdiction in the indirect associative discrimination claim. It concluded that the relevant section of the Equality Act must be read in the light of the decision in the Chez case, namely that the protected characteristic can apply to someone who is associated with the claimant and is not limited to the claimant having that characteristic in indirect discrimination claims.
The PCP (provision, criterion or practice) was the requirement for all senior lending managers to attend the office on a full-time basis. This was more difficult for those with caring responsibilities, who needed to be at home for periods of time. The Tribunal accepted that it was more difficult for people with caring responsibilities to be office based and that this requirement put the claimant herself at a specific disadvantage because of her association with a disabled person. The fact that she was no longer allowed to work from home put her at a substantial disadvantage compared to those who did not have caring responsibilities for someone with a protected characteristic.
The Tribunal found that the bank had not discussed any alternatives with the claimant, or considered her representations as to how her role could continue to function from home and so had taken no reasonable steps to try to avoid the disadvantage. The tribunal found that the bank was fully aware of Mrs Follows’ situation and why she needed to work from home.
The legitimate aim relied on was rejected by the tribunal as being of itself discriminatory in part, namely the requirement for on-site supervision. Even if it had found this was a legitimate aim, dismissing the claimant was not a proportionate means of achieving it, especially in circumstances where the claimant had been praised for her high standard of remote supervision over a number of years.
Whether or not the Chez decision is followed in other cases, or departed from, remains to be seen because, of course, EU case law is now no longer binding in this country and Courts and Tribunals may depart from it “when it appears right to do so”.. Now that the transition period has ended, pre-Brexit case law on the Equal Treatment Directives and the Race Directive form part of retained EU law, including Chez. It will be interesting to see whether the principle in Chez will be departed from at some point by an appellate court given the clear wording of section 19 of the Equality Act in specifying that, to claim indirect discrimination, the protected characteristic has to be that of the claimant themselves.
Application to amend the pleadings should have been considered before determining time limit
In Sakyi-Opare v Albert Kennedy Trust, the EAT has held that a tribunal was wrong not to consider the claimant’s application to amend her pleadings to include events which had taken place after the lodging of her claim, in deciding that the claim had been brought out of time.
Following the termination of her placement, the claimant lodged a claim for discrimination and harassment on the grounds of religious belief. Just over 3 months after the lodging of her claim, she was invited to a meeting to discuss the concerns which she had raised regarding her treatment. The claimant applied to amend her pleadings to include this meeting as another example of harassment and discrimination.
A preliminary hearing was convened for the tribunal to determine whether or not the claimant’s claim had been brought within time. However it failed to consider her application to amend which, if it had, and if it had accepted the amendment, would have meant that her claim had been brought within time. Notwithstanding that the event which she wished to add to her particulars of claim took place after the lodging of her claim, the EAT held that it fell within the series of continuing acts and as such should have been allowed to be included, which meant that the claimant’s claim had been brought within time.
Redundancies and furlough – two tribunal decisions
Although the two decisions below are first instance and therefore not binding, they give an indication of the way in which Tribunals are thinking where unfair dismissal claims are brought by reason of employees being dismissed as redundant in circumstances where they were on, or could have remained, on furlough.
Mhindurwa v Lovingangels Care Ltd concerned a claimant who was made redundant in circumstances where the employer refused to consider furlough, in July 2020. The tribunal accepted that the requirement for the work which she undertook had diminished, but took into consideration the whole purpose of the CJRS scheme, which was to avoid redundancies if possible. The employer offered no explanation as to why it had not considered placing the claimant on furlough. Furthermore the decision to dismiss was procedurally unfair and consequently the unfair dismissal claim succeeded.
In contrast, Handley v Tatenhill Aviation Ltd concerned an employee who was placed on furlough, initially for either 3 weeks or until he was able to return to work as normal. Three months later however, he was made redundant and he brought a claim for unfair dismissal. His argument was that the furlough agreement prevented him from being made redundant, but the tribunal did not agree. It accepted that the employer needed to cut costs regardless of the CJRS and that it needed this scheme to pay some of the costs of the redundancy (presumably notice pay). While the employer could have left the claimant on furlough for longer, the tribunal found it was not unfair for it not to have done so. Although, like the case above, the dismissal was found to be procedurally unfair the tribunal took the view that, if a fair procedure had been followed, there was a 100% chance that the claimant would have been dismissed, so he received no compensation.
Both the above decisions demonstrate that tribunals will take into account the use or otherwise of the furlough scheme in assessing the fairness of redundancies made during the pandemic when the furlough scheme was live.
IR35 and terms of hypothetical contract
In George Mantides Ltd v HMRC the Upper Tribunal has held that the First-tier Tribunal (FTT) was wrong to infer terms into the hypothetical contract under the IR35 rules.
The claimant company supplied the services of its director as a locum urologist to the Royal Berkshire Hospital. The issue of whether or not IR35 applied arose and the matter ended up at the FTT. The FTT concluded that the hypothetical contract between the hospital and the urologist would, on balance, have been one of employment. The hypothetical contract was between the claimant company and the Royal Berks hospital but, on the evidence available to it, the FTT implied the following terms into a hypothetical contract:
- It would have been for a fixed term, terminable early on 1 week’s notice.
- There would have been no right of substitution.
- Mr Mantides would have been required to provide the services specified on a weekly rota.
The FTT therefore found that, if there had been a contract directly between Mr Mantides and the Royal Berks Hospital, it would have been one of employment.
When the case came before the Upper Tribunal, it took account of the principle in previous case law, which indicated that it should not interfere with the FTT’s findings of fact unless either there was no evidence to support them or they were made on an unreasonable interpretation of the evidence. Accordingly, the Upper Tribunal held that the conclusions reached by the FTT regarding the notice period and the requirement for the hospital to use reasonable endeavours to provide work to Mr Mantides, were not backed up by evidence.
Both factual conclusions were relevant to the FTT’s decision that IR35 would treat the hypothetical contract between the urologist and the hospital as one of employment. As a result, the Upper Tribunal concluded that the FTT had made an error of law.
The outcome of this decision will be considered at a separate hearing after the Court of Appeal decision in Professional Game Match Officials Ltd v HMRC has been published following the hearing in July. This case concerned the necessity to demonstrate mutuality of obligation (and thus employment) for there to be an obligation to provide work, or at least some form of consideration in the absence of work. This case will have a bearing on what happens in the Mantides case.
Email suggesting predetermined decision to dismiss covered by litigation privilege
In Abbeyfield (Maidenhead) Society v Hart the EAT has held that an email between an employer and the HR consultant, which indicated the employer’s initial decision to dismiss the individual, was covered by litigation privilege. The email contained advice with regard to the process of dismissal, the risks of litigation, and there was no indication that the employer intended to act unlawfully or commit any kind of fraud. The employer was seeking advice on how to legitimately dismiss the individual and the associated risks.
The claimant was employed by a charity operating care homes and care services. Following a disagreement with someone at work he was suspended and dismissed for gross misconduct after a disciplinary hearing. His appeal was rejected and he filed employment tribunal claims for unfair dismissal, wrongful dismissal and discrimination.
The respondent duly disclosed all documents relevant to the misconduct during the course of disclosure. However it argued that its communications with its HR consultant on dealing with the claimant’s disciplinary and possible dismissal were inadmissible because they were covered by litigation privilege, with which the tribunal agreed in principle.
However, there was one document that they considered admissible under the “iniquity principle”. This is an exception to the right to assert privilege where advice is sought or given with the purpose or effect of committing a crime or fraud. The email in question, which had been sent by the individual who heard the claimant’s appeal, stated that the claimant had been rude and insubordinate which had caused major issues, and that as such he would not be returning to work ‘under any circumstances’. The tribunal took the view that it would be iniquitous to allow the respondent to argue that the appeal had been fair, when the appeal officer had expressed clear views prior to the dismissal that the claimant’s employment would terminate come what may. The respondent appealed to the EAT.
The EAT commented that the protection of legal professional privilege and litigation privilege should not be easily overridden because of the importance of parties needing to take legal professional advice safe in the knowledge that the communications will not be made public. There must, on the face of it, be a strong argument for a case of fraud, illegality, or some other iniquity for that policy to be overridden.
In the EAT’s view, the email in question did not meet the test to utilise the iniquity principle because it was not asking advice on how to act unlawfully and no such advice was given anyway. The advice received was on the disciplinary process and the risk that dismissal could lead to a claim. The comment by the appeal officer that he did not want the claimant back at work was the type of comment that someone in his situation may feel able to make because of the knowledge that the communications are privileged and to enable him to seek instructions on how best to mitigate risk, which the HR consultant provided. The EAT therefore allowed the respondents’ appeal.
Benefits under PHI policy not limited by employer’s insurance cover
In Amdocs Systems Group Ltd v Langton, the EAT has held that clauses in the employee’s contract regarding benefits payable under the PHI policy, which were not in the employer’s insurance cover, were contractual and as such the employee was entitled to them. This particularly included a 5% escalator for each year after the first year that the benefits were paid out.
The claimant’s offer letter included a summary of benefits, which included the PHI policy and benefits payable under it (75% of salary), as well as the 5% escalator, and that the policy kicked in after continuous absence of 13 weeks. When the employee went on long-term sick, the benefit commenced. However, following the claimant’s transfer of employment to another company, he realised the escalator had not been paid. Upon querying this, he was informed that the escalator had been removed from the company’s insurance cover some years earlier, before he had commenced receiving benefits.
The claimant brought a claim for unlawful deduction from wages on the basis that the escalator was referenced in his summary of benefits and as such was a contractual entitlement regardless of the fact that the escalator had been removed from the insurance policy. The tribunal upheld his claim on the basis that, even though the insurance policy no longer provided for the escalator, the summary of benefits in the claimant’s offer letter and contract of employment did. As such, they were contractual entitlements and the claimant was entitled to be reimbursed for them. The EAT upheld the tribunal decision.
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