Welcome to our employment newsletter packed with practical insights and up-to-date advice to help you navigate the ever-evolving world of employment law. If you have any questions or need further clarification on any of the topics discussed, please don't hesitate to reach out. We're here to help, whether you're an employer seeking advice on compliance and best practices, or an employee looking to understand your rights.
Supreme Court re-instates injunction preventing Tesco from using fire and re-hire to remove ‘permanent’ right to retained pay
In 2007, Tesco re-organised its warehouses resulting in mass relocations. As an alternative to potential redundancy, Tesco negotiated with USDAW (the recognised trade union) that it would give any staff who stayed on, and agreed to be relocated, a ‘Retained Pay’ payment which would be paid to them each month. Retained Pay was described in the contracts of employment as ‘permanent’. In 2021, Tesco attempted to remove Retained Pay by firing and re-hiring on new terms which excluded Retained Pay.
USDAW initially got an injunction from the High Court stopping Tesco from terminating the impacted contracts of employment. The High Court held that the contracts of employment were subject to an implied term that Tesco could not terminate the contracts for the purpose of removing Retained Pay. This decision was overturned by the Court of Appeal, who held that no such implied term existed; Tesco had the right to give notice in the ordinary way, and the entitlement to Retained Pay would only last as long as the particular contract endured.
USDAW appealed this decision to the Supreme Court. The Supreme Court, re-instating the injunction and overturning the Court of Appeal’s decision, held that Tesco’s right to terminate the employment contract, by giving the requisite notice, was qualified by a term implied by fact that Tesco’s right to dismiss could not be used for the purpose of depriving employees of the right to Retained Pay.
The case is likely to be specific to its facts, but it does illustrate that there are exceptional occasions where an employer’s ability to exercise an express term of the contract of employment (here, the right to terminate a contract by giving contractual notice) will be limited by an implied term. Similar examples exist where an employer has tried to terminate employment to remove an employee’s right to receive permanent health insurance benefits (Aspden v Webbs Poultry).
Tribunal didn’t have to reduce compensatory awards where it had found contributory conduct by the employees
When looking at unfair dismissal compensation, employers often argue that the conduct of the employee has contributed to their dismissal. The Employment Rights Act 1996 makes it clear that contributory conduct by an employee can have an impact on the level of compensation awarded. Unfair dismissal compensation is focused on actual losses, mainly loss of earnings. The sum which would otherwise be awarded can, however, be reduced by the tribunal by ‘such proportion as is just and equitable’ (s123(6) Employment Rights Act 1996), to take account of the employee’s contributory conduct.
In the recent case of Keirle and others v Notaro Homes, the Employment Appeal Tribunal was called upon to consider whether it can ever be ‘just and equitable’ to make no deduction once contributory fault has been found. In this case, the Claimants were dismissed. The Respondent said that the dismissals were because of social media posts made by each of the Claimants. The Claimants alleged that the real reason was that they had made protected disclosures. They claimed automatic unfair dismissal on grounds of whistleblowing.
The employment tribunal made a finding that the Claimants had made blameworthy social media posts. However, the real reason for their dismissal was that they had made protected disclosures. The social media posts were just the “cloak for the dismissals”. Their claims succeeded.
At remedy stage, the tribunal didn’t apply any reduction to the compensatory award on account of the contributory conduct, in the form of social media posts. The Respondent appealed the remedy point, arguing that the tribunal must make some reduction where it had found contributory conduct.
The Employment Appeal Tribunal, rejecting the appeal, held that, although a finding of contributory conduct usually results in some reduction to the compensatory award, there is no legal requirement that there must be a reduction in every such case. It was open to the tribunal to decide that no reduction at all was just and equitable, as it had done in this case.
Sickness and holidays
If an employee falls ill during a period of booked holiday, then, provided they notify the employer, they are entitled to convert the holiday to sick leave. This saves them holiday days which can then be used at another time. What does this mean for employers?
Here are some key points:
- Time off on holiday is paid as normal pay. Sick leave rules are different. If the employer pays Statutory Sick Pay, only then will this be payable (if the employee is entitled to it). If the employer operates enhanced sick pay, then this would be payable instead, unless policies state otherwise.
- Make sure that the absence is logged as sickness on any attendance management system. Absences on holiday are not generally monitored, but the monitoring of sickness absence is very important. Again, a clear rule on this makes it less likely that employees will seek to re-categorise their leave as sick leave without good reason.
- Consider what evidence you can require the employee to produce in relation to their sickness. If the employee is abroad, then they may struggle to obtain a medical note. However, you could include in your sickness policy a requirement to produce medical evidence if possible. You could even agree to reimburse the cost of obtaining a doctor’s note abroad.
- If calling in sick whilst on holiday is a particular issue for your business, then consider amending your sick pay policy to state that any absences for sickness during pre-booked holidays will be paid at Statutory Sick Pay only. This provides a financial disincentive.
- If an employee falls sick whilst on holiday and there is not enough time in the current holiday year for them to take the holiday days they have effectively ‘recouped’ whilst being off sick, then the employee must be allowed to carry over the holiday into the next holiday year. This rule applies to four weeks every holiday year (or the full 5.6 weeks for part year and irregular hours workers for holiday years beginning after 1st April 2024). The carried over holiday must be taken within 18 months of the year it accrued.
5 things you should know about part-time workers
According to the UK Parliament’s UK labour market statistics, over 8 million people are currently employed on a part-time basis. Part-time workers in the UK have protection from discrimination in the form of the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000. Here are 5 things you should know about this legal protection:
- Equal Treatment: Part-time workers must receive the same treatment as full-time workers, including pay rates, benefits, and leave entitlements, unless there is a justified reason for the difference.
- Pro Rata Basis: Benefits such as holiday entitlement and pensions should be calculated on a pro rata basis, meaning part-time workers should receive a proportionate amount compared to full-time workers.
- Right to Request Full-Time Work: Part-time workers have the right to request a move to full-time work if a suitable position becomes available.
- Protection from Discrimination: It is illegal to treat part-time workers less favourably solely because of their part-time status, ensuring they are protected from unfair treatment and discrimination.
- Access to Training and Promotion: Part-time workers should have the same access to training opportunities and career progression as full-time workers.
Statistically speaking, women and those with disabilities are more likely to work part-time than other people. Employers should bear in mind the separate and distinct risk of sex or disability discrimination claims in circumstances where part-time workers are treated less favourably than their full-time colleagues.
Workers (Predictable Terms and Conditions) Act 2023 shelved
It has been confirmed that the Workers (Predictable Terms and Conditions) Act 2023 will not be brought into force this autumn, as originally expected. The Act gave workers with uncertain hours the right to request predictability about their working days and times, the number of hours worked, and the length of their contract. The Act received Royal Assent in September 2023 and Acas had published a draft Code of Practice on handling requests made under it. This now all looks to have been shelved.
However, the idea itself is likely to live on. A spokesperson for the Department of Business and Trade gave the following statement to Practical Law:
"We will introduce a new right to a contract that reflects the number of hours regularly worked as part of our significant and ambitious agenda to ensure workplace rights are fit for a modern economy, empower working people and deliver economic growth."
This statement is in-line with the briefing note which accompanied the King’s Speech in July, where proposed legislation “banning exploitative zero-hours contracts” was linked to “ensuring workers have a right to a contract that reflects the number of hours they regularly work”.
It appears that, rather than muddy the waters by having two separate legal mechanisms for requesting predictability, the government has decided to scrap the one it inherited and move forward with new legislation, which may well form part of its forthcoming Employment Rights Bill.
Anti-Islamic aspects of Claimant’s belief in English nationalism not a protected belief under Equality Act 2010
Under Equality Act 2010 employees have protection against discrimination on grounds of ‘religion or belief’. Whether or not a person’s views should be regarded as a ‘protected belief’ is often a contentious initial issue. Tribunals are guided by principles set out by the Employment Appeal Tribunal in Grainger v Nicholson - principles which the EAT had to consider in a recent case involving a belief in English nationalism.
In Thomas v Surrey and Borders Partnership NHS Foundation Trust, the Claimant said that his assignment had been terminated by the Respondent because of his belief in English nationalism. As a preliminary issue, the employment tribunal considered whether his belief was a ‘protected belief’ under Equality Act 2010.
The tribunal held that, although many aspects of the Claimant’s belief in English nationalism would have been found to be protected by Equality Act 2010, his belief included anti-Islamic beliefs. He believed that there was no place in British society for Muslims or Islam itself and that Muslims should be forcibly deported from the UK. The tribunal held that his belief fell foul of the fifth criteria from Grainger v Nicholson: that the belief must be worthy of respect in a democratic society, must not be incompatible with human dignity and not conflict with the fundamental rights of others. The Claimant’s belief was not protected. The Claimant appealed.
The Employment Appeal Tribunal agreed with the tribunal. UK law had to be interpreted, insofar as possible, in accordance with the European Convention of Human Rights (the Convention). Article 17 of the Convention states that a person cannot claim the protection of the Convention where to do so would allow the performance of any act “aimed at the destruction of any of the rights and freedoms” set out in the Convention. The EAT noted that forcible deportation of Muslims from the United Kingdom would undoubtedly amount to the destruction of their Convention rights. The language used by the Claimant fell within the grave forms of “hate speech” which are not protected under Equality Act 2010.
The EAT held that, whilst the threshold for protection under the Convention, and therefore under Equality Act 2010, is low, the tribunal was right to find that the Claimant’s beliefs did not pass that threshold.
Policy paper setting out what to expect from Low Pay Commission on national minimum/living wage from next year
The Low Pay Commission (LPC) has published a Policy Paper setting out how it will respond to its updated remit from the government. The LPC is an independent body that advises the government on the National Minimum Wage (NMW) and National Living Wage (NLW) each year.
Following July’s general election, the LPC’s remit has been updated to require it to take account of the cost of living and expected inflation up to March 2026, and to not fall below two-thirds of median hourly earnings when setting recommendations for NMW/NLW. Given that wages are currently rising faster than inflation, the two-thirds of median hourly earnings currently forms the ‘floor’ for the LPC’s recommendations.
To assess the cost of living, the LPC states that it will use a broad range of metrics and evidence, including headline measures of inflation, the ONS Household Cost Index (HCI) and other qualitative measures of living standards.
Points to take from the Policy Paper which may assist employers with what might be coming up in terms of the level of NMW/NLW from April next year include:
- An expectation that there will be a larger increase to the 18-20 year old rate, than to the 21 and above rate. This is to bring the two rates closer together and work towards the government’s aim of abolishing the 18-20 year old rate in due course.
- The LPC’s current central estimate is that an NLW increase to £12.10 (5.8 per cent) would be required to maintain the ratio of the NLW to median hourly pay at two thirds of median earnings. However, this figure is likely to be subject to change (it has already increased from an estimate of £11.89 back in March).
The LPC is due to submit its recommendations to government by the end of October 2024.
Tribunal erred by failing to consider if it was a reasonable adjustment to hold off dismissing disabled employee until merger was completed
Where an employer knows (or reasonably ought to know) that an employee is disabled, the duty to make reasonable adjustments is engaged. Employers must take reasonable steps to remove any disadvantage at which an employee is placed by reason of their disability. A recent EAT case looked at whether it could be a failure to make reasonable adjustments where an adjustment was raised at appeal stage.
In Cairns v Royal Mail Group, the Claimant was employed as a postal delivery person on outdoor duties. A knee injury and osteoarthritis (a disability) meant he could no longer work outdoors. He moved to a supernumerary indoor role for a period. The Respondent began a consultation to dismiss him on grounds of ill-health retirement. He could no longer do his outdoor job. At the time, no other indoor vacancy existed. The Claimant was dismissed.
He claimed unfair dismissal. He also claimed that failing to wait, at appeal stage, for the imminent merger of the Claimant’s postal centre with another centre (which would have created indoor roles), was a failure to make reasonable adjustments and discrimination arising from a disability. The employment tribunal dismissed all claims, holding that there comes a time when a surplus job must come to an end.
The Claimant appealed the outcome on discrimination. The Employment Appeal Tribunal, allowing the appeal, held that the tribunal had focused too much on the situation at the time of dismissal. In doing so it had failed to consider an essential part of the Claimant’s case: that the Respondent ought, at the time of his appeal, to have kept him in employment so that he could be assigned to an indoor role on the merger of the two postal offices.
Recruitment decision made based on who would ‘fit in’ with the team found to be discriminatory
Employers need to be able to demonstrate that decisions on recruitment have been made fairly, based on criteria which have been applied to all applicants. Allowing subjectivity to creep in risks any decision taken being challenged as discriminatory. This happened in the recent case of James & Saine v London & Quadrant Housing Trust. The Respondent advertised three vacancies for leadership positions. There were six internal candidates, three were white and three were black (and/or black/white mixed). The Respondent appointed two white candidates. The two claimants (who were both black) were not appointed. The Respondent decided to re-advertise the third vacancy externally despite having found that that the Claimants were not ‘not appointable’ to it. The Claimants claimed that the decision not to appoint them was direct race discrimination. The tribunal agreed. The Respondent based its decision on who to appoint on a subjective view of who would ‘fit in’, rather than objectively considering qualifications and suitability for the job. The tribunal stated, “basing recruitment decisions on subjective views, or gut feelings, increases the risk of stereotypes and unconscious bias coming into play”.
The oversight was a costly one for the Respondent, who ended up paying out £95,000 in compensation to the two claimants.
This case reminds HR teams that recruitment processes must be free from discrimination and minimise the risk of unconscious bias. Recruitment and interview processes should be reviewed to make sure that they stand up to scrutiny and are based on an objective assessment of suitability.
And finally, a warehouse worker has lost his discrimination claim after complaining about his boss being called ‘Willy’. In Aylmer v Dnata Catering, the Claimant objected to his boss William McGinty referring to himself as ‘Willy’. The Claimant asked his boss to avoid using the name because of its other common use as a slang term for penis. He said in an email to his boss: “If you don't remove it and keep insisting on being called that - I consider it as sexual harassment.” When his complaints were not followed-up, he claimed that he had been victimised on the basis that his initial complaints related to sexual harassment.
Unsurprisingly, the tribunal rejected his complaint. The employment judge ruled that Willy is a “common abbreviation” for William and the Claimant’s complaint about using that abbreviation was not a ‘protected act’ (on which the Claimant could base a claim of victimisation).
Perhaps it is a sign of the times that a once common abbreviation of the name William could, today, be regarded by someone as ‘disrespectful’ and ‘less than human’. Luckily, common-sense prevailed before the tribunal and the claim went nowhere.