Employment Law Bulletin - June 2024

The Government has launched a consultation on plans to change the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The consultation runs until 11 July 2024 and can be accessed here.

TUPE sets out what happens to employees and their contracts of employment when a business (or part of a business) is sold. It also sets out what happens to employees when a service is outsourced or where a previously outsourced service is brought back in-house. TUPE is based on European legislation, and, in the last few years, several European cases have taken TUPE in a direction which the Government feels does not necessarily work for UK businesses. With the regulatory freedom achieved through Brexit, the Government proposes to make the following changes to TUPE:

To clarify that TUPE should only apply to employees not to workers. In its present form, TUPE is stated to apply to ‘employees’ but its definition of ‘employee’ is looser than that contained in Employment Rights Act 1996 and other UK employment legislation. This led to the 2019 tribunal case of Dewhurst v Revisecatch Ltd, which held that TUPE would also catch workers. Although this decision, being one at first instance, is not binding on future cases, the Government proposes to clarify the position.

To confirm that if a business transfers to multiple buyers, the assigned employees cannot have their employment split between them (as the European Court of Justice had held in ISS Facility Services NV v Govaerts). Full employment of a given employee must transfer to one transferee. The Government’s proposal is that, going forward, transferees would be required to agree who should take on each employee. This proposal marks a change from the UK's pre-Govaerts position. Before, the transferee who took on most of the transferring service would get all the assigned employees (Kimberley Housing Group v Hambly). It is unclear how this part of the proposal would work in practice.

If your business undertakes TUPE transfers regularly then you can let the Government know what you think about these proposals here.

Employment (Allocation of Tips) Act 2023

The Government has confirmed that the Employment (Allocation of Tips) Act 2023 will now come into force on 1st October 2024, rather than 1st July 2024 as originally proposed.

Under the Act, employers are required to pass tips on to workers; employers of businesses where tips are left more than occasionally are required to have a tipping policy in place; and workers have a new right to request a copy of their tipping record, in order to enable them to bring a claim where they believe they are not receiving the tips they should be.

Employers will also be required to have regard to a new statutory Code of Practice when distributing tips. The final draft version of this new statutory Code has also now been published and can be accessed here.

The tricky concepts of international and territorial jurisdiction in tribunal claims

If you’re lucky, you will be a UK-based employer with UK-based employees. If a dispute arises, it will be clear that the Employment Tribunal is the appropriate forum for any claim and that UK employment laws are the applicable laws. If only things were always this easy.

A recent Employment Appeal Tribunal reminds those who have employees working offshore or overseas of the different concepts of international and territorial jurisdiction, and how they should be applied to work out if the Employment Tribunal has jurisdiction and whether UK employment laws apply.

In Smith v Stena Drilling, the British Claimant worked for the Respondent on its vessels used to support offshore drilling. The Respondent was a Singapore registered company. Another company in the Respondent’s group was UK based and dealt with the Claimant’s payroll and HR issues. The Claimant was not domiciled in the UK at the point of his dismissal. He had carried-out work in British waters for the Respondent only once in 10 years. He claimed unfair dismissal and discrimination.

The tribunal held that it had international jurisdiction and territorial jurisdiction over the Claimant’s unfair dismissal and discrimination claims.

The EAT held that the tribunal had erred. They had confused international and territorial jurisdiction. The tribunal should have looked at these concepts separately. International jurisdiction is used to work out where claims relating to a contract of employment can be brought. If international jurisdiction is established, then territorial jurisdiction looks at whether the relevant statutes have sufficient international reach to apply to a claimant based overseas.

International jurisdiction can now only be established in the UK through sections 15C and 15D Civil Jurisdiction and Judgments Act 1982. The tribunal had looked beyond these. They should not have done so. The issue of international jurisdiction was remitted.

The EAT then looked at the tribunal's approach to territorial jurisdiction. The EAT held the tribunal was right about the Claimant’s unfair dismissal claim. They had correctly applied the principles from Lawson v Serco. Subject to the error made in relation to international jurisdiction, territorial jurisdiction had been established.

The tribunal had wrongly concluded that it had territorial jurisdiction to hear the Claimant’s discrimination claim. This was governed by Regulation 3 Equality Act 2010 (Work on Ships and Hovercrafts) Regulations 2011 which required that the Claimant worked wholly or partly in Great Britain. It was clear, on the facts, that he did not.

The court remitted the issue of international jurisdiction and, if that were established, territorial jurisdiction for the Claimant's discrimination claim.

Looking behind the motive of the decision maker in whistleblowing detriment claims

Whistleblowers in the UK have protection against being subjected to a detriment in employment by reason of having blown the whistle and made a protected disclosure. They have a separate right not to be dismissed for having made a protected disclosure – any such dismissal is automatically unfair.

In the case of Royal Mail v Jhuti, the Supreme Court held that you could look behind the motive of the decision maker in whistleblowing unfair dismissal cases. The dismissing officer in this case was unaware of the protected disclosure. But someone in the background was manipulating the situation, motivated by the disclosure. The Supreme Court held you could look behind the motive of the decision maker. The employee was automatically unfairly dismissed for whistleblowing.

It was uncertain whether the same principle (of looking behind the motive of the decision maker) could be applied in a case of whistleblowing detriment. The Employment Appeal Tribunal recently looked at this very issue in the case of Williams v Lewisham & Greenwich NHS Trust. The Claimant was a consultant. She had raised concerns about the abandonment of draft guidelines. She also criticised her colleague, Dr E, for failing to hand over at the end of a shift. An altercation occurred between the Claimant and Dr E some weeks later. The Claimant was suspended - twice. She was eventually given a written warning for providing a misleading account of the altercation. She claimed detriment on grounds of having made protected disclosures.

The Claimant's claim failed. The tribunal held that the lack of hand over was a protected disclosure. The protected disclosure did not lead to the detriments. The decision makers in her two suspensions and written warning did not know about the protected disclosure. They were focused on the altercation between the Claimant and Dr E.

The EAT agreed with the tribunal. The tribunal had been correct to hold that, in whistleblowing detriment claims, you should not look behind the motive of the decision maker. The EAT case of Malik v Centros Securities Plc – in which Choudhury P held that ‘importing the knowledge and motivation of another to [the] decision maker … is not permissible in considering the reason why the decision maker acted as he or she did’ – should be followed.

The Supreme Court’s decision in Royal Mail v Jhuti – which held that you could look behind the knowledge of the decision maker in looking at whether the real reason for dismissal was whistleblowing – was not relevant. Malik concerned detriment – where you can bring a separate claim against the individual ‘puppeteer’ in the background if there is one. In dismissal cases like Jhuti,you cannot claim against any background individual.

Malik was the relevant authority in this case and the tribunal had been correct to apply it.

‘Off the record’ conversations – the key differences between ‘without prejudice’ and ‘protected conversations’

It is a business reality that employers may, on occasion, want to have an ‘off the record’ conversation with an employee. Usually, such conversations are a prelude to some form of settlement being reached with the employee to end their employment.

Merely starting a conversation by telling the employee that it is ‘off the record’ will not necessarily mean that it is protected from disclosure. The legal position is more nuanced than that. There are, in fact, two principal ways that an employer can have an ‘off the record’ conversation with their employee.

Without prejudice – to be able to rely on the without prejudice principle to protect a conversation from disclosure, there must be an existing dispute. The offer being made must be a genuine attempt to settle that dispute.

Protected conversation – where there is no existing dispute, but an employer wants to get the ball rolling with settlement, then they can choose to hold a protected conversation. Protected conversations cannot be relied on by the employee in legal proceedings for ordinary unfair dismissal. The employee is also unable to resign and claim constructive unfair dismissal in response to a protected conversation approach. The protection does not extend to discrimination claims, automatic unfair dismissal claims or whistleblowing. It is, therefore, much more limited in its application than the ‘without prejudice’ rule.

Employers are not able to rely on either of these two concepts if they have acted improperly in the way in which they have held the discussions – for example, if they have threatened or intimidated the employee. Before starting a settlement discussion with an employee, consider whether it will be protected and on what basis. Remember – a discussion which starts life as a ‘protected conversation’ often progresses to being ‘without prejudice’ once the parties are in dispute.

Coastal Rescue Volunteer was a 'worker' when he attended activities where he could claim payment

The Employment Appeal Tribunal recently looked at whether a volunteer was a ‘worker’ during periods when he carried out paid volunteer activities. In Groom v Maritime and Coastguard Agency, the Claimant was a Coastal Rescue Officer (CRO) for the Respondent. He worked under a volunteer agreement. He carried out some activities for no payment but was entitled to be paid for many other activities – if he submitted a claim for payment. The Claimant was dismissed by the Respondent. He brought a claim in relation to the right to be accompanied at a disciplinary hearing. Only employees and workers have this right. To be classified as a worker, the Claimant had to show that he had a contract with the Respondent under which he undertook to perform services personally.

The tribunal held that the Claimant was not a worker as, on reviewing the relationship, no contract existed between the Claimant and the Respondent when he attended an activity.

The Claimant appealed. The EAT substituted a finding that the Claimant was a worker during the periods when he was undertaking an activity with promised payment. A contract clearly came into effect each time the Claimant carried out an activity with the promise of remuneration. It was irrelevant that payment was not made automatically and that many volunteers chose not to make a claim for the payment. The EAT held - ‘When a CRO attends a relevant activity, they have a right to remuneration. They attend in the context of a Code of Conduct which sets out minimum levels of attendance at training and incidents. …There is no reason why those factors should not give rise to a contract.’

This case is a reminder that volunteers do not have any special status in law. If the reality of their relationship with the organisation for which they volunteer means that they have a contract under which they perform services personally, then they may be ‘workers’ – giving rise to employment rights such as the right to paid holiday and national minimum wage. There may not be an overarching ‘worker’ contract, but a contract could come into existence on each occasion that the volunteer carries out services.

Tribunal wrong to find employer liable for discrimination but employees who did the acts not liable

Employers are normally liable for the discriminatory actions of their employees which take place in the course of employment. This is what is known as ‘vicarious liability’.

Employees can also be personally liable themselves. Claimants can bring certain discrimination claims against both the corporate employer and any individual employees who allegedly carried out the discriminatory acts.

A recent Employment Appeal Tribunal case looked at whether the legislation in this area allowed tribunals the discretion to find the employer liable for discriminatory acts carried out by named individual employees, but to nevertheless conclude that those employees should not themselves be personally liable for discrimination.

In Baldwin v Cleves School and others, the Claimant brought claims of direct disability discrimination and discrimination arising from a disability against her employer (R1) and also against two individual employees of R1 (R2 and R3). The tribunal found R1 liable for disability discrimination based on the conduct of R2 and R3. However, the tribunal went on to conclude that R2 and R3 should not be held liable for disability related harassment on an individual basis, as their acts were a misguided attempt to deal with a complex situation.

The EAT disagreed and substituted a finding that R2 and R3 were liable (as well as R1) for disability discrimination. The only way an employee will not be liable for discriminatory conduct where the employer has been found liable for it, is if they have been told by the employer that the act is lawful, and they reasonably believe this to be true. This exception did not apply in this case.

The tribunal had found that R2 and R3’s actions amounted to disability discrimination in the course of their employment. They had held R1, as their employer, liable for this conduct under the principles of vicarious liability. They had no discretion to then look at the conduct again when deciding whether R2 and R3 were liable as individuals and look upon it differently. They had already found that the conduct was discriminatory.

And Finally...

Falling asleep on the job can lead to major problems. If you nod off for a few minutes during a training session then, chances are, no-one is going to notice. If your job involves driving or operating dangerous machinery, then it is a much more serious issue.

The Telegraph recently reported that a criminal barrister had been cleared of professional misconduct after falling asleep during a remote hearing. She snoozed all the way through her own client’s cross-examination. The judge was alerted when she failed to respond when he asked if she had any further questions. She had been asleep for over two hours. Much was made in this case of the fact that the barrister fell asleep after having had a jacket potato for lunch. In the event, the Bar Standards Council accepted her explanation that the lapse in concentration had been due to medical issues and she was cleared of misconduct.

Commentators have argued that this case should never have reached a professional misconduct hearing given the barrister’s unblemished record and clear medical factors at play. If you encounter issues with employees falling asleep on the job, make sure you consider the following:

Are there any mitigating circumstances? Ill health, personal problems or wider workplace issues?

Was health and safety endangered as a result of the employee’s actions?

If employees are working in a hazardous environment, do you have a clear procedure for employees to follow if they become fatigued at work? Employees in such roles who come to you and own up to feeling tired should be supported and not reprimanded.