Employment Law Bulletin - October 2024

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 preventing 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 exercised 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).

EAT confirms tribunal was correct to allow claim for indirect associative discrimination under s19 Equality Act 2010

‘Associative discrimination’ occurs when someone faces a disadvantage but does not hold the relevant protected characteristic (meaning either sex, race, disability, sexual orientation, religion or belief, age, gender reassignment, pregnancy or marriage) themselves. UK law already recognises direct associative discrimination and harassment. For example, in Coleman v Attridge Law, the European Court of Justice ruled that an employee could claim discrimination due to her child's disability.

However, the position for indirect discrimination was less clear. Could an employee, who suffered the same disadvantage as a protected group, but didn't share the characteristic, make a claim for indirect discrimination under s19 Equality Act 2010? The recent Employment Appeal Tribunal decision in Rollett v British Airways confirmed that they could. Even though separate legislation now covers this under s19A Equality Act 2010, the case remains significant.

In Rollett, a group of employees claimed indirect race and sex discrimination due to changes in their work schedules after a company restructure. They argued that the new schedule disadvantaged non-British nationals (more likely to commute from abroad, indirect race discrimination) and women (more likely to have caregiving responsibilities, indirect sex discrimination). Among the claimants were a male caregiver and a British national living abroad. Neither shared the protected characteristic of the group but claimed they suffered the ‘same disadvantage’.

The employment tribunal agreed that s19 Equality Act 2010 should be interpreted to allow for associative indirect discrimination, following the EU law principles set out in CHEZ Razpredelenie Bulgaria AD v Komisia za zashita ot discriminatsia. The tribunal upheld the claims, even though the claimants didn’t have the specific protected characteristics.
British Airways appealed, arguing the tribunal had overstepped in its interpretation of s19. However, the Employment Appeal Tribunal dismissed the appeal, supporting the tribunal’s decision.

As of January 1, 2024, the principle in CHEZ is directly incorporated into UK law under s19A Equality Act 2010, confirming that a person can claim indirect discrimination even if they don't share the relevant protected characteristic - as long as they suffer the same disadvantage as those who do.

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.

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 preliminary issue. Tribunals are guided by principles set out by the Employment Appeal Tribunal in Grainger v Nicholson, something 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”.

The EAT held that, whilst the threshold for protection under the Convention, and therefore under Equality Act 2010, is low, the tribunal did not err in finding that the Claimant’s beliefs did not pass that threshold.

**EAT rejects Wicked Vision v Rice and follows Court of Appeal decision in Osipov in whistleblowing detriment claim**

Employees have two distinct claims which they are able to bring in relation to whistleblowing: a claim for whistleblowing detriment under s47B Employment Rights Act 1996, and a claim of automatic unfair dismissal on grounds of whistleblowing. There has been some uncertainty in recent times as to whether an employee who claims that they have been dismissed on grounds of whistleblowing can bring, in addition to an automatic dismissal claim, a claim against their employer that the act of dismissal was a detriment on grounds of whistleblowing. The distinction is an important one. The remedies for each claim are different.

The Court of Appeal, in Timis and Sage v Osipov, held that an employee could claim the detriment of dismissal against his employer on the basis that the employer was vicariously liable for the act of the dismissing officer. The Employment Appeal Tribunal reached the opposite conclusion in Wicked Vision v Rice. In the recent case of Treadwell v Barton Turns Development, the EAT followed Osipov.

In Treadwell, the Claimant was dismissed by one of the Respondent’s directors. She claimed automatic unfair dismissal on grounds of whistleblowing against the Respondent. She later applied to amend her claim, to add a claim of whistleblowing detriment under s47B Employment Rights Act 1996 against the Respondent. The detriment relied upon was the decision taken by one of the Respondent’s directors to dismiss. She claimed that the Respondent was vicariously liable for this act of detriment. She did not seek to bring a claim of detriment against the dismissing officer as an individual. The employment tribunal refused the amendment. The Claimant appealed.

The Employment Appeal Tribunal, allowing the appeal, held that it was bound by the decision of the Court of Appeal in Timis and Sage v Osipov which held, at para 91:

"It is open to an employee to bring a claim under section 47B (1A) against an individual co-worker for subjecting him or her to the detriment of dismissal, that is for being a party to the decision to dismiss and to bring a claim of vicarious liability for that act against the employer under section 47B (1B). All that section 47B(2) excludes is a claim against the employer in respect of its own act of dismissal."

The EAT held that it was not bound to follow the opposite conclusion reached by the EAT in Wicked Vision v Rice. This case is, itself, currently on appeal to the Court of Appeal where we should hopefully obtain some clarity.

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.

What’s in a word? The importance of clear drafting when writing contracts

Most employers use standard contractual documentation which is issued to new recruits without much thought. A recent Court of Appeal decision, relating to a commercial contract, serves as a reminder that a lax approach to contractual wording can have big implications, and not just in a commercial context. It is just as important for contracts of employment and settlement agreements. Employers need to make sure they have covered exactly what they want to cover.

In Cantor Fitzgerald v Yes Bank, the Claimant had a contractual agreement with the Defendant under which it was entitled to commission if it found financing for the Defendant in certain, specified circumstances. The relevant phrase was “private placement, offering or other sale of equity instruments”. There was a public sale of equity. The Claimant claimed commission. The Defendant alleged that no commission was due, arguing that the adjective ‘private’ at the start of the list qualified the whole list and not just ‘placement’. The Court of Appeal agreed with the Defendant. The Claimant was not entitled to commission.

The Court of Appeal concluded that, unless something in the drafting of the list suggests otherwise, the reader will naturally tend to assume that an adjective or determiner at the start of a list qualifies the entirety of it. In this case, the word ‘private’ applied not just to ‘placement’ but separately to ‘offering’ and ‘other sale of equity instruments’.

Employers should take the time to check the use of qualifying terms in lists in any key employment documents. Adjectives should not be used at the start of a list unless they are intended to be applied to the full list. Here are some other top tips to avoid wording mishaps in employment and settlement documentation:

Be very careful before making any list definitive. Consider using the phrase ‘including, but not limited to’ when drafting lists.

If you want to mention something specific, but do not want it to impinge on a wider position taken on the same subject elsewhere in the document, then consider including the phrase: ‘without prejudice to the generality of the aforegoing’.

Make sure that, if a provision requires all aspects of a sub-clause to be satisfied, you include the word ‘and’ between each sub-clause. Do not use the word ‘or’.

Make it clear whether clause headings are to be considered as being part of the contract.

If your contract includes schedules or appendices, then make it clear in the main body of the agreement whether or not these are to be considered as part of the contractual agreement.

And Finally...

A warehouse worker has lost his discrimination claim after complaining about his boss having the name ‘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.