Worker status

Section 230 Employment Rights Act 1996 sets out the legal definitions of employee and worker. To be a worker – and gain the benefits of paid holiday and national minimum wage - there must be a contract between the business and the individual, the contract must be for personal work or service and the organisation should not be a client or customer of the individual. The early part of 2022 saw a worker status case that broke the usual mould. In Johnson v Transopco, the Employment Appeal Tribunal (EAT) found that a taxi driver using a rides app was in business on his own account rather than being a worker.

Mr Johnson was a London black cab driver. He also registered with Mytaxi, a ride app operated by TUK. In one year, he did almost 300 jobs on the app, at a value of around £4,500. In the same year, he earned nearly £30,500 as a self-employed hackney cab driver. He brought claims in the employment tribunal for holiday pay and the national minimum wage based on being a worker for TUK. His claims failed. The tribunal accepted that Mr Johnson had to perform his work personally – he could not delegate it to anyone else. However, they said he was not a worker. This was not a dependent relationship because only a fraction of his overall work came through the app, and it was not his main source of income. When looking at the issue of control, the tribunal found that he was under no obligation to accept jobs and was free to choose instead to pick up street hail passengers, which he did for the majority of the time. He rejected 75 per cent of jobs offered to him through the app and cancelled around 35 per cent of jobs accepted. He could work when he wanted and cancel jobs when he liked. Nor was he controlled in his work by TUK - in contrast to Uber, which set the routes and fares for its drivers, Mr Johnson could choose his routes and his fees were regulated by his TfL regulated taximeter. Unlike Uber, he was sent passenger information and could communicate with them directly. All this indicated a level of independence consistent with being an independent contractor rather than someone being fully integrated into the TUK business. The tribunal found that TUK was a customer of Mr Johnson’s taxi business.

The EAT agreed. They said the tribunal had been entitled to look at the proportion of Mr Johnson’s TUK work and compare it to his overall work/income, in deciding that TUK was a customer of Mr Johnson’s taxi driving business. This information also showed that the relationship was not one of dependence on TUK by Mr Johnson. Although he had an obligation to provide his services personally, the tribunal was correct to conclude that TUK was a client or customer of his taxi driving business.

In this case, it was relevant that Mr Johnson’s work on the app formed a small part of his overall income offering taxi driving services. The decision shows that tribunals may consider what proportion of an individual’s overall business activities are carried out via the business through which they are claiming worker status. This is an employer ‘win’ in the worker status saga but emphasises what we already knew from previous worker status judgments, that cases will turn on their own facts.

 

Content

1. Worker status
2. Menopause
3. Vicarious liability
4. Discrimination
5. Employment tribunals – extensions of time
6. Unfair dismissal
7. Covid-19 – mandatory vaccination
8. Discrimination compensation
9. The ‘gay cake case’
10. And finally..

 

Menopause

The Women and Equalities Committee is conducting an inquiry into menopause and the workplace. In January, MPs heard from high profile employment lawyers who support making menopause a new protected characteristic alongside the other nine which are included in the Equality Act 2010.

The committee heard that there is a lack of clarity about employer obligations towards women going through menopause, who have to rely on other protected characteristics such as disability and sex in order to seek legal protection for perceived wrongs. Women can experience negative or inappropriate comments about their menopause symptoms or miss out on pay or promotional opportunities as a result of them. Marian Bloodworth, a partner at Deloitte Legal, told the committee that many women experience menopausal symptoms which literally affect their ability to work. She feels a protected characteristic of menopause would make it unlawful to discriminate against women who are menopausal or perimenopausal or those who are perceived to be going through it. She also said some employers were not aware of some of the health and safety issues that menopause can present or the need to do specific risk assessments as they do, for example, with pregnant women.

There is also a risk that the effect of menopausal symptoms is mistaken for capability issues. Menopausal women can end up being managed out of businesses by employers who assume there is a performance issue because the employee is not working in the same way as before. Navigating symptoms at work can also cause menopausal women to leave work voluntarily.

Handling menopause badly could result in the economy losing out on the vital skills of hundreds of thousands of women at the peak of their experience in their chosen field. The Committee will eventually report on the issue and the government will have to respond. Watch this space for potential changes to the Equality Act. [back to top]

 

Vicarious liability

Employers must ensure that the workplace is safe for employees. Businesses can be held responsible for the acts or omissions of their employees which take place ‘during the course of employment’. In Chell v Tarmac Cement and Lime, the High Court has looked at whether an employer should be vicariously liable for an employee’s practical joke which seriously injured a contractor.

Both employees and contractors worked as fitters at one of Tarmac’s sites. There were tensions between the two groups because the Tarmac fitters felt their jobs were threatened by the contractors. The claimant contractor had told his own employer and Tarmac about the increased tension in the workforce. A few weeks later, a Tarmac fitter brought explosive pellets into work and hit them with a hammer close to the claimant’s ear as a practical joke. It left him with a perforated eardrum, hearing loss and tinnitus. Tarmac dismissed the practical joker, but the contractor brought a personal injury claim for negligence against Tarmac. He also claimed that Tarmac was vicariously liable for the practical joker’s actions.

The County Court said there was insufficient connection between the practical joke and the duties of the employee as a fitter. The High Court agreed. The claimant complained to the Court of Appeal. In relation to vicarious liability, the question was whether the employee’s actions had been done ‘in the course of his employment’. The Court of Appeal agreed that there wasn’t a close enough connection between the act that caused the injury – the exploding pellets – and the employee’s work to make it fair and reasonable to make the employer vicariously liable. The exploding pellets that had caused the injury were not Tarmac’s equipment and had nothing to do with the employee’s work. Tarmac hadn’t authorised the employee’s actions and what he did wasn’t an unauthorised way of doing something which had been authorised by Tarmac. Exploding the pellets was not done in the course of the employee’s employment. The tension between employees and contractors had not indicated a risk of violence. In relation to breaching its duty of care to the claimant, the risk of injury arising from the prank was not reasonably foreseeable. Even if there had been a risk of injury, expecting an employer to put in place a system to stop practical jokes would be unreasonable and unrealistic. It is obvious that ‘horseplay’ is inappropriate on a working site. Employees were expected to do their jobs with reasonable care and skill and, by implication, not mess around on site. The general site rules warned against ‘intentional or reckless misuse of equipment’, which was a warning against exactly what had happened.

This case follows a series of vicarious liability decisions in which employers have been found not to be responsible for acts of individuals which were not foreseeable. However, employers must not assume that all ‘horseplay’ will be considered in the same way. The facts of this case were very specific: the exploding pellets were not employer equipment and the action in exploding them totally unrelated to the employee’s work. It’s not too hard to imagine a situation where work tools, and work activities, might easily be used for practical jokes or horseplay and potentially land the employer in hot water. Employers might think it sensible to include a clause in contracts to set out very clearly that horseplay, practical jokes, and other similar inappropriate behaviour are unacceptable at work, as a belt and braces measure. [back to top]

 

Discrimination

Discrimination claims must usually be brought in the employment tribunal within three months of any discriminatory act occurring. If the act is one in a series of discriminatory acts, a claim should be brought within three months of the last act in that series. In some discrimination claims, much hangs on whether there is such a ‘continuing act’ that links historical acts to the most recent and brings them within the time limit for tribunal scrutiny. That continuing act argument has been used in cases where the employer has applied a discriminatory policy or rule, where the application of that policy or rule extends over a period of time. This might be the case if there is a policy where discretion is exercised, for example in deciding to promote a man rather than a woman, where time will run from the date of the decision/exercise of that discretion. The ongoing loss of pay is a consequence of the discrimination, rather than a continuation of the discrimination itself.  The Court of Appeal in Parr v Moore Stephens LLP has considered a case recently that relied on the continuing act argument to bring a claim within time.

The employee had been an equity partner with an accountancy firm since 1995. When the firm became a limited liability partnership in 2005, he became an LLP member. The LLP members’ agreement contained a clause (clause 29) that required all partners to have a normal retirement age of 60. The firm retained the discretion to extend employment beyond that age subject to business need. The employee wanted to stay on beyond his normal retirement date, as other partners had done previously. An agreement was reached for him to stay on for two years but only as an ordinary non-equity partner. This meant he would no longer have a financial stake in the business and would be a salaried employee. The ‘de-equitisation’ agreement was reached in April 2018. In September 2018, the employee heard of plans to sell the business. Thinking he was around £3 million out of pocket as a result of his de-equitisation agreement, he sought to bring a direct age discrimination claim. However, his claim would be out of time unless he could show that his employer’s actions were a continuing act rather than a one-off event that took place in April 2018.

The employment tribunal allowed his claim to go forward, saying that clause 29 was the continuing application of a discriminatory rule. The EAT disagreed and said that any losses came from the one-off decision brought about by the de-equitisation agreement. Any claim should have been brought within 3 months of April 2018. The Court of Appeal agreed. The de-equitisation agreement was essentially a demotion. If his employment had ended in April 2018, the time limit for any claim would have run from then. The same was true for a demotion. This was a one-off act with continuing consequences, rather than a continuing act of discrimination. The employee had argued that a discriminatory act concerning a change in status is a one-off act unless it arises from the application of a discriminatory rule or policy. Policy reasons were also at play in not accepting this argument. Such a finding would encourage businesses to stick to default retirement ages ruthlessly if continuing the relationship exposed the business to a discrimination claim as long as the relationship continued.

It is sometimes difficult to distinguish between a continuing act of discrimination and a one-off act of discrimination with ongoing consequences. Here, the employer could demonstrate that it had a genuine discretion to extend an equity partnership beyond the partner’s normal retirement date and there were examples of this happening previously. That meant they were able to show that there was no blanket discriminatory policy that applied to all LLP members. There was no act extending over a period of time in relation to the individual in this case, even though the rule remained in place for LLP members after the date of the employee’s effective demotion. This case shows that the difference between the two is vitally important for employers in order to ensure that claims which are brought outside the employment tribunal time limits are not allowed to proceed, as in this case. [back to top]

 

Employment tribunals – extensions of time

An employment tribunal can extend the time limit for bringing a discrimination claim if it is just and equitable to do so. The things which the tribunal will consider include the length of the delay and any reasons for it, whether the cogency of evidence is affected by the delay, the claimant’s knowledge of the relevant facts of the potential claim and how quickly they acted once they discovered them, the legal advice the claimant received and any prejudice to the employer in accepting the claim late, such as the negative effect on evidence that may result from a delay.

In Wells Cathedral School v Souter, a husband and wife were both teachers and brought claims against their employer for disability discrimination. Ms Leishman had a cancer diagnosis in 2016. After her return to work following treatment, she said she was not allowed to return to her full duties and false allegations were made regarding her performance. She raised a grievance in August 2018, which was rejected in October 2018. She resigned in January 2019 and brought a claim in April 2019. Her husband said he was forced to take compassionate leave following a bereavement and then put on an informal capability procedure following alleged complaints from students. He was signed off with stress from January 2018, brought a grievance in July 2018 on which no decision was made, resigned in April 2019 and brought a claim in July 2019. Both claims were brought outside the normal 3-month time limit. The tribunal had to decide whether it was just and equitable to extend the time limit so the employees could bring their claims. The grievances for both employees had been drafted by lawyers and contained clear allegations of discrimination and statements about the strength of the legal claims sitting behind them.

In making their decision, the tribunal considered the significant delay in the employees lodging their claims and their awareness of the facts which supported their claims by Spring or Summer 2018. The tribunal noted that the claimants were not alleging that they had received negligent legal advice about time limits. The tribunal also considered the relevance of the grievance processes which were ongoing throughout the normal limitation period and the fact that those grievances had put the employer on notice of the discrimination allegations, giving them the opportunity to investigate and preserve evidence. Finally, the tribunal considered whether the employer would be prejudiced by any extension of time, noting that they had known about the discrimination, via the grievances, from the middle of 2018. Although the matter was finely balanced, the tribunal said that the points about the grievance processes and prejudice weighed more heavily in the employees’ favour. The tribunal granted extensions of time to bring the claims. The employer appealed, including on the ground that it was wrong for the tribunal to rely on the claimants’ grievances as a mode of preserving evidence.

The EAT said that these cases are fact sensitive. While some factors, such as the length of delay and the reason for it, may be relevant in most cases, tribunals shouldn’t be ‘mechanistic’ in their approach. A grievance on its own won’t be enough to extend time but it may be a relevant factor in some cases, as it was here. In the same way, the absence of risk that evidence is lost over time (forensic prejudice) is not on its own enough to justify an extension of time, in the same way as no single factor is determinative. It is the tribunal’s job to weigh up all relevant factors and make a decision. In this case, the tribunal hadn’t treated the grievances or the lack of forensic prejudice as decisive – both factors were considered along with all the others. The tribunal was entitled to find that the employees had genuinely tried to pursue a resolution internally via the grievances and that this carried weight in their favour in terms of an extension of time. Similarly, they were entitled to attach weight to the lack of forensic prejudice to the employer. The tribunal had said it was a marginal decision, but it was the tribunal’s decision about which side to come down on. The EAT dismissed the appeal. A full hearing will now take place.

Employers should not think that this case gives employees carte blanche to let their grievances run their course and then expect the tribunal to allow their claims to be lodged late. The judge, in this case, said the decision was marginal and the same arguments may not have the same effect on a different judge or on different facts. Employees will always have to show that it is just and equitable to extend time, and raising a grievance, even a well worded one, will not always result in an extension of time. [back to top]

 

Unfair dismissal

Conduct is one of the five potentially fair reasons for dismissing an employee. Gross misconduct is the term often used for the most serious types of misconduct that undermines the employer’s trust and confidence in the employee to such an extent that it justifies dismissal without notice. Gross misconduct can relate either to deliberate wrongdoing (wilful breach of the express or implied terms of the contract) or to gross negligence. But the unfair dismissal test in section 98 of the Employment Rights Act 1996 refers only to ‘conduct’ and this issue was considered by the EAT in the recent case of Hope v British Medical Association.

The employee was a senior policy advisor at the BMA. He raised a number of grievances against senior managers, one of whom had described him as ‘unprofessional and dismissive’ to another in an email. The employee lost his grievance, but his appeal was partially successful. The outcome of the grievance referred to the disproportionate amount of management time used up in the process and encouraged the employee to meet with his managers now to discuss matters, something he had previously refused to do. The employee went on to raise numerous complaints but didn’t want to actively pursue them, preferring to simply reserve the right to pursue them in future. He was given a deadline by which to confirm whether he wanted to proceed with his grievance, and he raised a grievance about being given a deadline. He was warned that his continued misuse of the grievance process might result in disciplinary action and he raised a complaint about that too. He raised another complaint about not being invited to a meeting. One of his managers started to feel bullied by him. He was then invited to a grievance meeting but refused to attend. He was found to have behaved vexatiously and his grievances were dismissed. He was then disciplined for that same behaviour and dismissed for gross misconduct (though he was paid his notice). The employee brought an unfair dismissal claim.

The employment tribunal said his dismissal was fair. The reason for dismissal was his conduct in raising numerous unfounded grievances and then refusing to progress them or drop them, refusing to attend meetings and seeking resolution through his line manager when the grievances were about more senior managers. The employer had carried out a reasonable investigation and disciplinary process. The tribunal said it was not unreasonable for the employer to have concluded that the employee’s behaviour was vexatious and unreasonable and said dismissal was within the band of reasonable responses open to the employer in the circumstances. The employee appealed, one of the grounds being that the tribunal had not properly considered whether his behaviour met the definition of gross misconduct as either deliberate wrongdoing or gross negligence. The EAT dismissed his appeal. They said that the law contained in section 98 of the Employment Rights Act 1996 gave ‘conduct’ as one of the fair reasons to dismiss, rather than ‘misconduct’ – gross or otherwise. Whether the dismissal was fair did not depend on the label for the type of conduct but whether the employer had acted reasonably in treating the employee’s conduct as sufficient reason for dismissal, bearing in mind its size and resources. The EAT said that the employer had a genuine belief in the employee’s misconduct, reasonable grounds for that view, had conducted a reasonable investigation and the decision to dismiss was within the range of reasonable responses. That was enough. There was no need for the tribunal to analyse whether the conduct amounted to gross misconduct by way of wilful breach of contract or gross negligence.

This case shows how tribunals will apply the law contained in section 98. However, the Acas code of practice refers to ‘gross misconduct’ as potentially justifying dismissal without notice (after a fair procedure) so whether conduct is gross misconduct is still likely to be a relevant consideration in an unfair dismissal case. The judgment also contained helpful comment on the legitimate purpose of grievance procedures, saying they are not a ‘repository’ for complaints that can be left unresolved or resurrected at any time in future when the employee chooses. It may therefore be open to employers to insist that an employee either progress or withdraw a grievance if it has not been possible to resolve it informally. This case will also comfort employers in showing that repeated abuse of a grievance process can in some cases justify dismissal. [back to top]

 

Covid-19 – mandatory vaccination

Mandatory vaccination for NHS and social care workers is set to be scrapped. Sajid Javid, Health and Social Care Secretary, said he believes that the position has now changed with the omicron variant proving to be milder than previous versions of the virus. No doubt the shortage of workers in health and social care was also a consideration, with the U-turn preceded by warnings of shortages of up to 80,000 workers in the sector. On top of existing absence figures within those sectors, further workforce shortages could have pushed the sector to the brink, with unions warning it could have had a catastrophic impact on services. Mr Javid has said that the government will launch a consultation on ending the mandate and, subject to responses, the regulations will be revoked.

The change comes just before a looming deadline for NHS workers. With mandatory vaccines set to come into force in April 2022, Thursday 3^rd February was the last day for staff to get their jabs in order to be fully vaccinated in time for the deadline. NHS guidelines to employers said staff should be invited for formal meetings from 4^th February to warn them that they face dismissal. The potential U-turn comes too late for care home staff, for whom mandatory vaccination was introduced in November. It is expected that those 40,000 who lost their jobs will be able to return to the sector if the mandate is overturned which will be a relief both for those employees and the care home employers alike. [back to top]

 

Discrimination compensation

An employment tribunal in London has awarded a female banker one of the largest awards of compensation ever made by a British employment tribunal. In Macken v …, the employee was a banker with a global banking and financial services company. She won her claims of equal pay with a male colleague, who was paid more than her in salary and bonus, as well as direct sex and victimisation claims. She was dismissed so often by one of her managers with the words ‘not now Stacey’ that colleagues started to use the term sarcastically to make fun of her among themselves. She was subject to crude stories and a witch’s hat was once left on her desk in what the tribunal described as an ‘inherently sexist act’.

In a 78-page remedy judgment, the employee was awarded back pay and bonus pay of nearly £400,000, future losses of around £850,000 as well as injury to feelings, personal injury and aggravated damages awards. The Acas uplift of 20 per cent came to more than £300,000. The total amount of compensation came to just over £2million. The tribunal also ordered the employer to carry out an equal pay audit under regulation 2 of the Equality Act 2010.

The compensation, in this case, was so high because it involved a high earning employee at an international bank. The case doesn’t set any precedent for other employment tribunals but serves as a warning for how costly it can be to get things wrong. The employee, in this case, had made repeated complaints to her employer about her treatment, including complaints about her pay and bonuses. If the matter had been resolved internally at that stage, it would have been not only less costly but would have avoided the employer’s dirty linen being hung out in public. [back to top]

 

The ‘gay cake case’

Back in 2020, the Supreme Court said that a bakery and its Christian owners had not directly discriminated against a customer when they refused to bake a cake bearing the slogan ‘Support gay marriage’. Ending seven years of litigation on this case, the European Court of Human Rights has said that Mr Lee’s claims that the Supreme Court breached his rights under Article 8 (respect for private life), article 9 (freedom of thought, conscience and religion) and Article 10 (freedom of expression) are inadmissible.

The problem here was that Mr Lee did not raise his ECHR rights in the domestic (UK) proceedings and didn’t have a good reason for not doing so. Instead, he relied on UK laws that protect consumers against discrimination on the grounds of sexual orientation. As a result, the European Court said he had denied the UK courts the opportunity to balance his convention rights against those of the bakery (the bakery did raise their own convention rights in support of their refusal to bake the cake). That process was a sensitive balance best undertaken by domestic courts. The European Court did say that what was at stake here was whether the bakery was required to bake a cake expressing Mr Lee’s support for gay marriage, rather than any effect on his private life, or freedom to hold or express his beliefs. As such, it wasn’t clear to the European Court how the facts fell within articles 8, 9 and 10 anyway.

This isn’t an employment case - it involves access to goods and services. However, it does show that the Human Rights Act 1998 gives litigants (including employment tribunal claimants) the right to invoke their ECHR rights directly in UK courts, and UK courts (including employment tribunals) are required to construe domestic legislation in a way that, as far as possible, is compatible with those rights. [back to top]

 

And finally..

Is the two-day weekend set to become a thing of the past? The pandemic has highlighted the importance to employees of work-life balance and wellbeing. Remote and flexible ways of working have proven to be far more effective than expected. Some businesses are now considering a four-day working week - with reduced hours but no loss of pay – to see if that pattern could work for them.

Businesses that have already introduced the measure are reporting increased productivity which more than makes up for the loss of the fifth day. Pursuit Marketing in Glasgow introduced a four-day working week in 2016 and said the pattern increased productivity by 30 per cent. The Chief Operating Officer, Lorraine Gray, says that the reduced week focuses the mind and helps employees to identify parts of the day where they can be more productive. She says it has also stopped the Monday morning sickies. Staff turnover is low and there have been mental health benefits. With productivity up, and sickness down, it seems to be a no brainer. Other businesses are looking to get on board. Unilever has extended a trial in New Zealand because of the recent lockdowns and Morrisons supermarket has said it will introduce the measure for its Bradford headquarters. The pandemic has shown how important work-life balance is for employees but there are environmental benefits to the move, reducing commuting and work-related energy consumption by a fifth with no cost to productivity.

A pilot is due to start in June 2022 and will put the four-day working week to the test across a group of businesses. The six-month trial is being overseen by campaign group 4 Day Week Global and will be run in conjunction with Oxford and Cambridge academics, Boston College, the UK 4 Day Week Campaign and thinktank Autonomy. Camera company Canon is the latest to sign up its 140 Edinburgh based employees to the trial, which is hoping to attract 20 to 30 businesses.

The results from the pilot will make for interesting reading. If it follows the trend, and results show no loss in productivity (or even a gain) for fewer hours of work, it could be a game changer for many businesses. The best talent will want to work for those businesses that embrace new and flexible ways of working which help them to live happier, more balanced lives, as well as thrive at work. Hard work doesn’t always have to mean long hours. [back to top]