Employment Law Bulletin - January 2024

The importance of early consultation with the workforce in redundancy situations

A recent Employment Appeal Tribunal decision reminds employers that it is crucially important that redundancy proposals are shared with the workforce at a formative stage. Failure to do so could make any resulting dismissals unfair. In Joseph de Bank Haycocks v ADP RPO UK Limited, the Claimant and the wider workforce were not consulted about redundancy proposals before pooling and scoring took place. The criteria for selection and the Claimant’s own scores were not provided to him before his dismissal. This information was, however, provided on appeal. The EAT held that the failure to consult at a formative stage meant that the dismissal was unfair. The EAT held that ‘whilst the appeal could correct any missing aspect of the individual consultation process (e.g. the provision of the claimant’s …scores), it could not repair [the] gap of consultation in the formative stage’.

The EAT helpfully took the time to review previous authorities and set out the following guiding principles for fair redundancy consultation:

the employer will normally warn and consult either the employees affected or their representative.
a fair consultation occurs when proposals are at a formative stage and where the employee is given adequate information and adequate time to respond along with conscientious consideration being given to that response.
in consultation, the purpose is to avoid dismissal or reduce the impact of redundancies.
a redundancy process must be viewed as a whole and an appeal may correct an earlier failing.
it is a question of fact and degree as to whether consultation is adequate and it is not automatically unfair that there is a lack of consultation in a particular respect.
any particular aspect of consultation, such as the provision of scoring, is not essential to a fair process.
the use of a scoring system does not make a process fair automatically.
whether it is reasonable to show an employee the scores of others in a pool will be case-specific.

Employers seeking to carry-out a fair consultation process in a redundancy situation should take account of each of the points above and act appropriately from the very moment that redundancies are contemplated.

A guide to the different types of seasonal workers and their rights

During demanding times, many companies need to bring in temporary staff members to help take on the additional work. Seasonal workers can provide an effective short-term solution, however, it is important that you do not neglect their rights.

There are different ways in which businesses attempt to plug labour shortages; all come with their own pros and cons.

Some businesses opt to engage fixed-term workers. Fixed-term workers are generally employees. They have a right to be treated as favourably as the permanent employees. They also have day one rights in relation to discrimination under Equality Act 2010. They should receive a written contract of employment which sets out the fixed-term period of employment. Consideration should be given to including a clause which allows the business to terminate the employment earlier than the end of the fixed term. This would allow the business to work flexibly if demand is not as high as anticipated, or if there are issues with an employee’s performance.

Another option is to engage agency workers. Agency workers have no direct contractual relationship with the business. The business will use an agency to provide it with workers. The Agency Workers Regulations 2010 apply to agency workers who are assigned to do temporary work for hirers through temporary work agencies. The workers have day one rights – the business must allow access to collective facilities and amenities and provide access to information about job vacancies from the first day of their assignment. Under the Agency Workers Regulations 2010, when an agency worker has undertaken the same role, whether on one or more assignments, with the same hirer for 12 continuous calendar weeks, they are entitled to the same rights as someone employed directly.

A third option is to engage zero hours workers. These workers would be engaged by the business directly on an ‘as and when required’ basis. They would have day one rights in relation to discrimination and would also have an entitlement to paid holiday. This form of engagement works best where the business is not sure of the level of additional labour required. The downside is that zero hours workers have the right to refuse work offered. So, if you have insufficient numbers on your books, you may not have sufficient labour in place to support a sudden increase in demand.

Definition of disability – Williams v Newport City Council

The Employment Appeal Tribunal recently looked in detail at the definition of disability under Equality Act 2010 and, in particular, what should be regarded as ‘day to day activities’ when considering whether a Claimant’s impairment has a substantial adverse impact on day to day activities.

In the case of Williams v Newport City Council, the Claimant was employed as a social worker. The Respondent made changes to her job role and introduced a requirement that she attend court if necessary. She went off-work sick with stress - triggered by the introduction of this requirement (she had previously had a bad experience in court). The Claimant’s GP provided an opinion that the Claimant was likely to make a full recovery as long as she was not required to make court appearances. She was dismissed for capability and claimed unfair dismissal and disability discrimination. Her disability discrimination claims initially failed, as the tribunal held that she was not a disabled person. The tribunal found that her condition did not have a substantial long-term adverse impact on her ability to carry-out day to day activities because the only activity it impacted, on a long-term basis, was attending at court. The tribunal ‘did not consider that that was in any sense a day–to–day activity’.

The EAT overturned this decision. The tribunal had found that the Claimant’s anxiety meant that she could not return to her job at all until the requirement to attend court was removed. The tribunal, having made these findings of fact, could only properly have concluded that the impairment also had a substantial adverse effect on her ability to carry out normal day-to-day activities – it was preventing her from going to work at all. The EAT substituted a finding that the Claimant was a disabled person.

This case should now be looked at in light of the changes to the guidance on the definition of disability contained in the Equality Act 2010 (Amendment) Regulations 2023. The Regulations state that a person’s ability to participate fully and effectively in working life on an equal basis with other workers is relevant when looking at ‘day-to-day activities’.

Occupational requirements must be applied proportionately to avoid liability for discrimination

Paragraph 1 to schedule 9 of the Equality Act 2010 sets out the general occupational requirement exception, which applies to direct discrimination claims. There will be no liability for direct discrimination where holding a particular protected characteristic (or, in some cases, not holding it) is an occupational requirement.

The application of the requirement must, however, be a proportionate means of achieving a legitimate aim. The exception is not without limit - as the Respondent found in the recent Employment tribunal case of Donnelly v PQ. In this case, the Respondent was a physically disabled woman who had employed the Claimant (a man) as one of her carers. During the Claimant’s probationary period, the Respondent decided that she had concerns about a man providing intimate care. She extended his probationary period. Upon discovering the reason for the probation extension, the Claimant resigned.

The reason for extending probation was because the Claimant was a man. The Respondent was not comfortable with the idea of a man providing the full range of toilet care that she needed. The Claimant made a claim for direct sex discrimination.

The Respondent sought to rely on the general occupational requirement exception. The employment tribunal held that extending the probationary period was discrimination, in the way that the Respondent afforded the Claimant access to an opportunity for promotion. The occupational requirement exception could be applied in principle - it was an occupational requirement for a personal assistant to be a woman to carry out the full requirements of that role. The Respondent had a legitimate aim of privacy and dignity. However, her means of achieving that aim in extending the Claimant’s probationary period were not proportionate. The Respondent could have preserved her privacy and dignity in less discriminatory ways, including overlapping his shifts with female carers, explaining concerns before any need to extend probation arose and creating the opportunity to build a relationship of trust before such care was required.

This case is a reminder of the narrow application of the general occupational requirement exception. It will only be relevant in exceptional circumstances and its application must be justified.

The Supreme Court confirms an important limitation on trade union recognition rights

In November 2023, the Supreme Court handed down their judgment in the case of Independent Workers Union of Great Britain v CAC. The Union had applied to the CAC for recognition in respect of a group of riders working for Deliveroo. The CAC had refused to accept the Union's application on the basis that the riders were not ‘workers’ of Deliveroo, within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992. Riders were not required to provide personal service and were allowed to use substitutes.

The Union appealed the refusal on the basis that it breached Article 11 of the European Convention on Human Rights, arguing that the definition of ‘worker’ in the Act should have been construed to give effect to Article 11. Article 11 protects the right to freedom of association and to form and join a trade union. European case law makes it clear that the Article 11 right to form and join a trade union only applies to those in an employment relationship and that this should be looked at through the lens of the European concept of an employment relationship. The Supreme Court had to have regard to the factors set out in the International Labour Organisation Employment Relationship Recommendation, 2006 No 198 in considering whether the riders were employees. The Recommendation focuses on a multifactorial approach looking at performance of the work and remuneration of the worker.

Applying this test, the Supreme Court held that the riders were not in an employment relationship, so the provisions of Article 11 which protect trade union activity did not apply to them. The CAC were correct to refuse the application for recognition.

A reminder that contractual agreements can’t be used to subvert statutory employment rights

A recent Employment Appeal Tribunal decision reminds employers that contractual terms cannot be used if their effect is to subvert or limit statutory employment rights. Disputes which have their root in statutory employment rights (such as unfair dismissal and discrimination) can only generally be settled through ACAS (using a COT3 agreement), or by signature of a settlement agreement which complies with the requirements set out in section 203 Employment Rights Act 1996 (including a requirement that legal advice is taken by the employee).

In the case of SPI Spirits (UK) Limited v Zabelin, the Employment tribunal found that the Claimant had been subjected to detriment and automatically unfairly dismissed on grounds of whistleblowing.

The respondent argued that it would be ‘just and equitable’ for the Claimant’s remedy to be capped at £270,000, as this was the maximum liability on termination included in the contract of employment. The Respondent argued that the Claimant was legally trained and had taken advice on the contract such that the cap should be applied. They further argued that the award should not be uplifted for failure to follow the ACAS Code of Practice as the Claimant’s written grievance did not contain any protected disclosures. These were made later - verbally. The tribunal disagreed, applied a 20% uplift to compensation and awarded the Claimant over £1 million.

The respondent appealed. The EAT agreed with the tribunal:

Any attempt to limit liability for employment claims in contractual documentation will be ineffective – an unenforceable contractual cap on the tribunal’s awards (s203 Employment Rights Act 1996).
The fact that the contractual clause was ‘freely negotiated’ did not mean that it would be ‘just and equitable’ to apply the cap. For whistleblowing cases, there is no cap and compensation should reflect the loss caused. The tribunal should not be fettered in its ability to reach an appropriate compensation figure.
Although a grievance needs to be in writing in order for the ACAS Code apply, the fact that no protected disclosure was included in the written document itself did not mean that the ACAS Code on grievances did not apply.
Regardless, the relevant sections of the ACAS Code in this case were those that relate to disciplinary proceedings. Where the employer dismisses or takes other action against an employee because, in substance, of what it regards as culpable conduct, the discipline provisions of the ACAS Code will apply.

Embassy uses state immunity to deny the jurisdiction of the employment tribunal in a discrimination case

In the recent case of The Royal Embassy of Saudi Arabia (Cultural Bureau) v Alhayali, the Claimant worked for the Respondent in their Cultural Affairs department where her duties included supporting Saudi students in the UK on cultural projects. She brought various discrimination claims against the Respondent. The Respondent claimed state immunity. State immunity can be claimed in tribunal proceedings to deny jurisdiction where the individual’s role is an exercise of sovereign authority.

The tribunal concluded that the Claimant’s role was ‘ancillary and supportive’ to any exercise of sovereign authority, so state immunity could not be claimed. The Employment Appeal Tribunal disagreed, holding that the fact that the Claimant’s role was ‘ancillary and supportive’ did not automatically mean that it could not attract state immunity - it could still do so if the functions discharged by her were ‘sufficiently close’ to the exercise of sovereign authority. The EAT found that the Claimant’s ‘ancillary and supportive’ work (looking after the interests of Saudi students in the UK and promoting Saudi academic and artistic work) were duties which were ‘sufficiently close’ to the exercise of sovereign authority and that state immunity applied.

The EAT further concluded that state immunity did not apply to the Claimant’s claim that her discriminatory treatment by the respondent had caused psychiatric injury. The carve-out for state immunity in relation to personal injury claims under s5 State Immunity Act 1978 extended to claims for psychiatric injury. It was not limited to physical or bodily injuries.

And Finally...

The politics which surround the work fridge and its contents are often the cause of significant workplace friction. Employees who have their lunch taken and eaten are often seriously aggrieved. Usually, HR can resolve such issues by way of a polite note on the fridge door and a suggestion that food is named.

However, one employee in the US recently revealed on Reddit that he had taken more dramatic steps to identify who had been eating his sandwiches. Upset that his lunch kept being taken from the work fridge, he laced his sandwich with prescription-strength laxatives. He then reported to HR that his lunch (and his medication) had been stolen. The culprit was found by HR in a nearby toilet. HR took no action against the employee who had set-up the prank but sacked the sandwich-stealer (who was also, according to the Reddit article, interviewed by the police in relation to theft of prescribed medication).

Although this example is an extreme one, it is a reminder to HR that theft of any sort within the workplace should be taken seriously. As one person commented on the Reddit article:

"This is why employers shouldn't disregard lunch thieves. It's only a matter of time until they turn their thieving hands on the employers' things or somehow cause damages to their employer."