EmpLaw Newsletter December 2023

The content of this newsletter is provided for general information purposes only and it is not intended to be legal or other professional advice. It should not be considered a substitute for taking professional advice in relation to specific circumstances. No responsibility can be accepted by Assicurazioni Generali S.p.A. for any action taken as a result of the information provided.

Guidance on ‘heat of the moment’ resignations

In the recent case of Omar v Epping Forest District Citizens Advice, the Employment Appeal Tribunal provided guidance on ‘heat of the moment’ resignations. In this case, the Claimant had verbally resigned during a heated discussion with his line manager. He later sought to retract his resignation, arguing that it had been tendered in the heat of the moment. The Respondent contended that the Claimant’s resignation should stand, and his employment came to an end. The Claimant claimed unfair dismissal.

The key preliminary issue was whether the Claimant’s purported verbal ‘resignation’ was effective.

The EAT reviewed the authorities in this area and gave the following guidance:

  1. Once given, a notice of resignation or dismissal cannot be unilaterally retracted. The giver of the notice cannot change their mind unless the other party agrees.
  2. In accordance with normal rules of contractual interpretation, words of dismissal or resignation must be looked at objectively in all circumstances of the case.
  3. The subjective uncommunicated intention of the speaking party is not relevant; the subjective understanding of the recipient is relevant but not determinative.
  4. It is not sufficient if the party merely expresses an intention to dismiss or resign in the future. The reasonable bystander, in the position of the recipient of the words, must understand that the speaker is giving notice of dismissal or resignation, through their selected words.
  5. The reasonable bystander, in the position of the recipient, must feel that the dismissal or resignation is ‘seriously meant’, ‘really intended’ or ‘conscious and rational’. They must consider whether the speaker of the words genuinely intends to resign/dismiss, whilst also being ‘in their right mind’ when doing so.
  6. The point in time at which the objective assessment must be carried out, is the time at which the words are uttered. The question is whether the words appear to have been ‘really intended’ at the time they are said.
  7. However, evidence as to what happened afterwards is admissible insofar, as it is relevant and casts light, objectively, on whether the resignation/dismissal was ‘really intended’ at the time.
  8. In each case, it is ultimately a question of fact for the Tribunal in regard to which side of the line a case falls.

Where a partnership provides services to a business, it is not possible, by reason of that relationship, for one of the partners to be an employee of that business

A recent Employment Appeal Tribunal case looked at whether, when a partnership entered into an agreement to carry out work with a business, it was possible for the individual partners to be found to be employees of that business. In Anglian Windows Ltd v Webb, Mr. Webb was in a partnership with his wife. The partnership traded as Webb Consultants. Webb Consultants entered into an agreement with Anglian Windows, under which Webb Consultants agreed to provide personnel to carry-out the role of Area Sales Leader. In reality, it was actually Mr. Webb who carried out this work. The activities were provided through the partnership and, in return, were paid for through the partnership.

When Anglian Windows ended its agreement with Webb Consultants, Mr. Webb brought a claim of unfair dismissal against them. He alleged that, notwithstanding the existence of the partnership, he was a direct employee of Anglian Windows.

The Employment Appeal Tribunal held that Mr. Webb was not an employee of Anglian Windows. Section 230(1) Employment Rights Act 1996 defines an employee as ‘an individual who has entered into or works under (or…worked under) a contract of employment’. A contract with a partnership is not with ‘an individual’; it is a contract with at least two partners. A contract with a partnership is not for personal service, but with each of the partners, such that the contractual obligations are not personal to any one partner (whether or not they are, in fact, performed by one partner). The EAT looked at the line of case-law relating to employee status, and found here that the written agreement (between the partnership and Anglian Windows) was not a sham; it represented the true intention of the parties at the time it was entered-into.

In reaching this conclusion, the EAT confirmed that Firthglow Ltd v Descombes, a previous EAT decision, remained good law. In this case, it was held that where work was being undertaken under an agreement with a partnership, this precluded the possibility of one of the individual partners being able to claim he was an employee. The EAT cautioned that this principle did not, however, mean that tribunals could not, where the agreement was found on analysis to be a sham, look behind it and find that, in fact, one of the individual partners was an employee in a relevant case.

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Changes to be made to TUPE consultation requirements

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 are due to come into force on 1 January 2024. One of the areas tackled in this legislation are the consultation requirements under Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The new Regulations reduce the burden of consultation requirements under TUPE, by allowing small businesses (with fewer than 50 employees) undertaking a transfer of any size, and businesses of any size undertaking a small transfer (of fewer than 10 employees), to consult their employees directly if there are no existing representatives in place. Previously, all businesses with more than 9 employees had to appoint and consult with representatives in relation to any TUPE transfer.

The new position on consultation applies for all transfers taking place on or after 1 July 2024.

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Government publishes new laws on holiday pay

The government have published the Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 which contains amendments to the law on holiday pay including:

  • Simplifying holiday pay calculations by making rolled-up holiday pay (12.07% of pay) lawful for part-year workers, and those who work irregular hours. Since the case of Robinson Steele v RD Retail Services, paying rolled-up holiday pay has been technically unlawful in the UK. The rules allowing rolled-up holiday pay will only kick in for holiday years commencing from 1 April 2024 onwards. This means that if a business has a holiday year which starts on, say, 1 January, then it won’t be able to move across to the new system until 1 January 2025, as this will be the first holiday year beginning after 1 April 2024.
  • The other changes focus on restating various pieces of retained EU case law (to make it clear it remains part of UK law, post Brexit) to allow carry over of:
    • All statutory annual leave to the following year when a worker is unable to take their leave due to being on family related leave.
    • Regulation 13 leave (4 weeks per year) for a maximum of 18 months where a worker is unable to take their leave due to sickness.
    • Regulation 13 leave where the worker has not been given opportunity to take the leave, or the employer has failed to inform them that any leave not taken and which cannot be carried over, will be lost.
    • Defining a week’s pay for the purposes of holiday pay for Regulation 13 leave, to include commission payments and other payments, such as regular overtime payments.

The Act is due to be enacted on 1 January 2024.

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Government announces new minimum wage rates to apply from April 2024

The Government has announced that it has accepted the Low Pay Commission’s recommendations on minimum wage rates, to apply from 1 April 2024.  The result is the largest ever increase in the minimum wage in cash terms, and the first time it has increased by more than £1. Significantly, the National Living Wage will apply to all workers aged 21 and over for the first time (it had only previously applied to those aged 23 and over). The rates from 1 April 2024 are as follows:

      1. National Living Wage for workers aged 21 and over will increase to £11.44 per hour
      2. For workers aged 18-20 inclusive the rate will increase to £8.60 per hour
      3. For workers aged 16-17 inclusive and those on apprenticeships the rate will increase to £6.40 per hour
      4. The daily rate for accommodation offset will rise to £9.99

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Indirect discrimination by association – a welcome clarification

Indirect discrimination occurs where an employer applies a provision, criterion, or practice (PCP) even-handedly but, in practice, it places those with a certain protected characteristic at a particular disadvantage. The wording of the test for indirect discrimination, under section 19 Equality Act 2010, requires the claimant to share the protected characteristic of the disadvantaged group in order to have a claim.

However, in 2014, a European case: CHEZ Razpredelenie Bulgaria AD v Komisia za zashita ot diskriminatsia (C-83/14) EU:C:2015:480 held that in indirect discrimination cases, there was no need for the Claimant to share the protected characteristic of the disadvantaged group, so long as they could show that they suffered (or would suffer) the same disadvantage as that group. In CHEZ, the Claimant lived in a Roma district where the electricity supplier installed meters at a significant height. They did this as there was evidence of tampering in the district. The Claimant could not read her meter owing to its height and believed she was being over-charged. She claimed that the practice was race discrimination against those of a Roma ethnic origin, and that she had been indirectly discriminated against as she suffered the particular disadvantage (not being able to read her meter), alongside the protected Roma group (despite not being Roma herself). Her claim succeeded.

The Equality Act 2010 (Amendment) Regulations 2023 has now added a new provision (Section 19A) to the Equality Act 2010, which enshrines the idea of indirect discrimination by association in law, with effect from 1 January 2024. So, where a PCP places those who share a protected characteristic at a particular disadvantage, and the Claimant does not have that characteristic, but does suffer ‘substantively the same’ disadvantage as those who do have the protected characteristic, then this will be (subject to any objective justification the employer might offer) indirect discrimination. The concept was described by the Advocate General in CHEZ as ‘discrimination par ricochet’ – the idea that those who suffer collateral damage, alongside a protected group, should be able to claim indirect discrimination together with them.

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Doctor who settled whistleblowing claim through Acas was prevented from bringing a new claim for detriment relying on the same protected disclosures

In the recent case of Ajaz v Homerton University Hospital NHS Foundation Trust, the Employment Appeal Tribunal held that, where the Claimant had settled her whistleblowing claims through Acas and had signed a COT3 agreement, she was prevented from bringing new claims which relied upon the same protected disclosures, even if the alleged detriments had not occurred at the point that the previous claim was settled under the COT3.

The EAT held that to allow the new claim to proceed would be an abuse of process. The COT3 settled the ‘issues’ in the proceedings – not just the complaints. One of the issues in the proceedings in this case, had been whether the disclosures relied upon were protected disclosures. This issue had been settled by the COT3 so could not be re-litigated in a new claim - even if the new claim was alleging new detriments.

This case is a reminder that COT3 agreements, negotiated through Acas, have a potentially wider ambit than settlement agreements entered-into under section 203 Employment Rights Act 1996. Settlement agreements are limited, by section 203(3)(b) Employment Rights Act 1996, to the settlement of ‘particular proceedings’. The case of Bathgate v Technip (which is currently being appealed to the Court of Appeal) held that the scope for settlement agreements to settle future unknown claims, is limited by the statutory reference to ‘particular proceedings’. This case indicates that COT3s are not so limited.

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A reminder of the importance of early consultation in redundancy cases

In the recent case of Joseph de Bank Haycocks v ADP RPO UK Limited, the Employment Appeal Tribunal reminded employers that it is an important general principle that consultation in a redundancy situation should take place at a formative stage. In this case, the employee and the wider workforce were not consulted about redundancy proposals prior to pooling and scoring taking place. The Claimant was then provided with neither the criteria for selection, nor his scores against the criteria, prior to being dismissed for redundancy. He was provided with this information on appeal.  The EAT held the full appeal did not make the dismissal reasonable and it was found to be 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 own scores), it could not repair [the] gap of consultation in the formative stage’.

The EAT went on to review the case law in this area 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 adequate information, and adequate time in which to respond, is given along with conscientious consideration being given to the response.
  • In consultation, the purpose is to avoid dismissal or reduce the impact.
  • A redundancy process must be viewed as a whole, and an appeal may correct an earlier failing, making the process reasonable.
  • 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, automatically, make a process fair.
  • The relevance, or otherwise, of individual scores will relate to the specific complaints raised in the case.

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Direct race discrimination: You can’t choose as an actual comparator someone whose circumstances are materially different to your own

In the case of Hughes v Virgin Active Limited, the Claimant worked for the Respondent as a manager of a gym. He was summarily dismissed and brought various claims against the Respondent, including unfair dismissal and direct race discrimination. One of the reasons for his dismissal, was that he was found to have made an offensive comment to a colleague related to her nationality (Iranian). He claimed that this was direct race discrimination and pointed out that another colleague had not been investigated, after saying to the Claimant that he was only taking action against them because they were “old, fat and black”.

The tribunal agreed that this difference in treatment, when compared with an actual comparator, meant that the burden of proof had shifted to the Respondent to disprove discrimination.

The EAT disagreed. They found that the tribunal had failed to consider whether there were any material differences between the circumstances of the Claimant and his chosen ‘actual’ comparator. If they had done so, they would have found that the Claimant’s comment related to his colleague’s race. His comparator’s comment related to her own race. The EAT found that the circumstances did appear to be materially different, such that the tribunal should not have treated this as a case involving an actual comparator.

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And finally…

It is certainly true that workplaces have generally become more relaxed and agile places following the pandemic, but it would appear, from the results of a recent survey, that this relaxed approach may be being taken a little too far. A survey of 1,035 employees and 500 employers by Indeed, found that the average employee now wears pyjamas to work 46 days a year! No doubt this figure is made up predominantly of those who can work from home, and who are only ‘seen’ by colleagues and clients from the waist up in online meetings.

The results of this survey show that, even if an employer has a stated dress code, it is very difficult to extend that dress code outside of the confines of the physical office. It is unlikely to be reasonable to require employees to take a ‘selfie’ each day to prove that they have got dressed and are no longer wearing their PJs! A pragmatic approach may be to ‘say nothing of it’, provided that what employees choose to wear on their ‘working from home’ days is not visible and has no impact on productivity or business reputation.

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