EmpLaw Newsletter May 2018
Here is our latest on-line Employment Law newsletter which will assist in keeping you informed of various current employment issues. 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.
With the gender pay gap reports now published, we know that there is a significant gender pay gap in the UK with men at many companies being paid on average more than women. It does not necessarily mean that those businesses have an equal pay problem – that depends on the reason for the gap. One reason can be that women often take on the primary childcare role which can have a knock-on effect on their earnings potential.
The government had hoped that the introduction of shared parental leave in 2015 would help to address this societal difference. The legislation allows for either parent to take shared parental leave if the mother curtails her maternity leave. Shared parental leave is paid at a statutory rate. Many employers pay an enhanced rate of maternity pay, but less employers have chosen to do the same for shared parental pay. This is thought to have contributed to the slow uptake for shared parental leave (as low as 2% according to the Department for Business recently).
In Capita v Ali, Mr Ali raised an employment tribunal claim against his employer for direct sex discrimination when he was not given enhanced shared parental pay, in line with the enhanced maternity pay that a woman on maternity leave would have received. Mr Ali argued that as the shared parental leave regime allows parents to choose which of them takes leave to care for their child (after the mother’s two-week compulsory maternity leave period) it was discrimination if a man was not paid the same as a woman for the remaining leave. The tribunal agreed with him, highlighting that men were now being encouraged to take a greater role in childcare and there should not be an assumption that the mother is always best placed to do that.
The Employment Appeal Tribunal disagreed. Women who gave up their maternity leave and instead took shared parental leave with the father were not paid enhanced shared parental pay. They were paid the same as men – the statutory rate. The purpose of the relevant EU legislation on maternity leave is the health and wellbeing of the pregnant and birth mother, rather than the care of the child. Mr Ali should have been compared with a woman on shared parental leave and not a woman on maternity leave. He was paid the same as a woman on shared parental leave, so he lost his sex discrimination claim.
Interestingly, the EAT did comment that after 26 weeks the purpose of maternity leave might change from biological recovery from childbirth and the special bonding period between mother and child. It may be possible after that to draw a valid comparison between a father on shared parental leave and a mother on maternity leave. We expect further case law in this area. For now, you should ensure that you pay men the same shared parental pay rate as you pay women who take shared parental leave.
- Shared Parental Leave – indirect discrimination
- Injury to feelings payment not taxable
- Delay in closure of childcare voucher schemes
- GDPR guidance on legitimate interests
- Rights of EU workers in the UK after Brexit
- Claim struck out for speaking to journalist during evidence
- Giving references
- Notice of termination
- Bringing tribunal claims without the correct information
- Constructive dismissal – the last straw
Hextall v Chief Constable of Leicestershire Police also deals with not enhancing shared parental leave; but in this case, the claim was one of indirect discrimination. PC Hextall took shared parental leave when his self-employed wife gave birth to their second child in April 2015. His leave lasted from June to September, and over that time he was paid at the statutory minimum rate. Had he been a female police officer who had given birth to a child he would have been able to take maternity leave and would have been paid his full salary over that period.
The Tribunal rejected his claim of direct discrimination and his alternative claim of indirect discrimination. In each case the Tribunal held that women taking maternity leave were not appropriate comparators for a man taking shared parental leave. PC Hextall’s appeal focussed on the issue of indirect discrimination.
The EAT held that for indirect discrimination the question was whether the ‘provision, criterion or practice’ at issue caused a particular disadvantage to those who shared a protected characteristic. In this case the question was whether men were placed at a particular disadvantage when compared with women by the employer’s policy of providing fully paid maternity leave but only statutory shared parental leave. The Tribunal had held that both men and women taking shared parental leave received the same pay and that men were not therefore at a disadvantage. But that was the wrong approach. It was inherent in an indirect discrimination claim that the 'provision criterion or practice' was applied to women as well as men. The point was that, as the Tribunal accepted, men were overwhelmingly more likely than women to take shared parental leave without first being entitled to take maternity leave. The whole matter of indirect discrimination was sent back to a different Tribunal to be considered afresh.
It seems likely that at the fresh hearing it will be found that the employer’s policy causes men a particular disadvantage. The question will then be whether it is justified as a ‘proportionate means of achieving a legitimate aim’. Judging from this initial appeal, it may be some time before we get clear guidance on that issue. [back to top]
The Court of Appeal has decided that a settlement payment for injury to feelings for discrimination by an employer was not taxable. Mr Moorthy agreed a settlement package of £200,000 with his employer which included an amount for injury to feelings for age discrimination. No specific amount was specified at the time, but during the subsequent litigation with HMRC, the parties agreed that £30,000 was for injury to feelings.
The relevant tax legislation provides that no tax is payable ‘on account of injury’ to an employee. HMRC argued that injury to feelings did not come within this definition and that the legislation was to capture compensation for personal injury instead. The Court of Appeal disagreed, deciding that it did include injury to feelings and so Mr Moorthy did not need to pay tax on that amount. The tax legislation has however now been changed to specifically exclude injury to feelings, so going forward you should tax these payments. [back to top]
Employees can buy childcare vouchers to use to pay for childcare in a tax efficient way by sacrificing their salary. Eligible employees do not pay income tax or national insurance contributions on the amount sacrificed. They receive tax exempt vouchers provided that they remain with the same employer, the employer continues to run the scheme and the employee does not take a break from receiving the vouchers for one year or more. Existing childcare schemes were supposed to close to new entrants from April 2018. However, the government has now delayed this until 4 October 2018. Eligible employees can continue to sacrifice salary for childcare vouchers.
Employees who are not eligible can instead take part in the replacement tax-free childcare voucher scheme. This does not involve salary sacrifice and has different eligibility rules. [back to top]
The new data protection regime under the EU General Data Protection Regulation and the new Data Protection Act come into force on 25 May. With this in mind, the Information Commissioner’s Office has issued new guidance which is helpful to employers who are considering processing data under the lawful basis of ‘legitimate interests.’ The guidance can be found here alongside the ICO’s other GDPR guidance.
The guidance states that ‘legitimate interests’ is the most flexible lawful basis for processing, but you cannot assume it will always be the most appropriate. It is likely to be appropriate where you use people’s data in ways that they would reasonably expect and which have a minimal privacy impact, or where there is a compelling justification for the processing. The interests can be your own or the interests of third parties. They can include commercial interests, individual interests or broader societal benefits.
The ICO highlights a three-part test for employers and other data controllers to undertake. You must identify a legitimate interest; show that the processing is necessary to achieve it; and balance it against the individual’s interests, rights and freedoms. You should keep a record of your assessment and include details of your legitimate interests in the privacy information which you provide to employees. [back to top]
The UK government has updated its guidance on the rights of EU citizens to live and work in the UK. It reflects the agreement reached recently between the UK and the EU on the Brexit implementation period which will run between 29 March 2019 and 31 December 2020. The guidance can be found here.
It is intended that the free movement of people between the EU and the UK will continue during the implementation period. EU citizens who have lived in the UK for 5 years by 31 March 2020 can apply for settled status. This would allow them to continue to live and work in the UK. Those arriving before Brexit, but who won’t have been in the UK for 5 years can apply for a temporary residence permit until they are able to apply for settled status. Those arriving during the implementation period will also need to register. EU citizens arriving after 31 December 2020 will be subject to the future immigration system which has not yet been announced. The guidance says that there is no need for EU citizens living in the UK to do anything at this stage. It is also worth remembering that the agreement on citizens, as with everything in the Brexit negotiations, depends on the UK finalising the whole withdrawal agreement with the EU. [back to top]
A claimant who spoke to a journalist while she was under oath during a break in her evidence has had her claim struck out for unreasonable conduct. Ms Chidzoy was a journalist who brought various claims against the BBC including whistleblowing and sex discrimination. During her cross-examination she was asked about an email referring to a story about the Dangerous Dogs Act which referred to her as ‘Sally Shitsu’ - a term she had objected to. The BBC responded that Ms Chidzoy had said that she would not have objected if she had been called ‘Sally Rottweiler.’ The use of those words was discussed during the tribunal proceedings.
The tribunal adjourned for a break and Ms Chidzoy was warned by the tribunal not to discuss her evidence or any aspect of the case with any person during the adjournment. During the break she was seen talking to another journalist and overheard using the words ‘dangerous dogs’ and ‘Rottweiler.’ The tribunal decided that Ms Chidzoy’s disregard for its instruction not to discuss the case meant that its trust in her was irreparably damaged. This amounted to unreasonable conduct and it struck out her claim. The Employment Appeal Tribunal agreed. If you face tribunal proceedings you should remind your witnesses not to discuss their evidence during the hearing. [back to top]
Employers have a duty of care to employees when writing a reference. You must exercise reasonable care and skill. The reference should be true, accurate and fair. You must take reasonable care that it is not misleading by what is included or omitted from it. If you provide a reference and it contains information that is inaccurate then you could be sued for any resulting loss. This can be seen in a recent High Court case where Mr Hincks sued Sense Network Ltd. He argued that they had made a ‘negligent misstatement’ about him in a reference.
Sense Network Ltd had set out negative opinions in a reference based on a previous investigation into Mr Hincks’ conduct. Mr Hincks argued that the person giving the reference should have satisfied himself that the investigation was reasonable and procedurally fair. He said that some of the reference was not accurate, overall gave a misleading impression and was based on a sham investigation.
The High Court dismissed his claim. A reasonable reference writer did not need to look into the procedural fairness of earlier investigations. Instead a referee should conduct an objective and rigorous appraisal of facts and opinions, particularly negative opinion. The referee should take reasonable care to be satisfied that the facts in the reference are accurate, there was a proper and legitimate basis for the opinion and that the resulting reference was fair and not misleading. This case involved the financial services industry where the employer had a duty to provide a more detailed reference. Most employers will be safer restricting their references to facts only. [back to top]
Where an employment contract is silent on when notice is deemed to be given, notice of termination takes effect when it is actually received by the employee and s/he has read it (or had a reasonable opportunity to read it).
In April 2011, Ms Haywood was told she was at risk of redundancy. She turned 50 on 20 July 2011. Redundancy after her 50th birthday would have entitled her to a considerably more generous pension than redundancy beforehand. Ms Haywood was contractually entitled to be given 12 weeks’ notice, but her contract was silent about how notice was deemed given.
On 19 April 2011, Ms Haywood went on holiday. On 20 April, her employer sent notice of termination by recorded delivery and ordinary post. She read it on her return from holiday, on 27 April. If delivery was deemed effective before 27 April, she would have received the much lower pension. But if it was deemed effective on the day she returned from holiday and read it, she would have received the much more generous pension.
The majority of the Supreme Court held there was no good reason to disturb the long-standing line of caselaw from the EAT. The notice was only deemed effective when it was read by the employee (or s/he had a reasonable opportunity to read it). Thus it was not deemed effective until 27 April, and she was entitled to the higher pension. [back to top]
Two recent cases have dealt with the question of whether an employment tribunal claim can proceed without the right information. In the first case the Court of Appeal allowed a claim to proceed when the claimant hadn’t provided any details of the claim. Ms Parry had presented an employment tribunal claim form to her employer Haberdashers’ Monmouth College. She claimed unfair dismissal and arrears of wages by ticking the relevant boxes. However, in the box which requires details of the claim she simply put, “Please see attached.” Her solicitors then mistakenly attached information relating to a different case. The Tribunal allowed the claim to proceed anyway and the school argued that it should not as it could not sensibly be responded to and was now out of time.
The Court of Appeal ruled that the claim could have been responded to by the school even without the correct details from Ms Parry as they knew that she had been dismissed. This does not mean that the employer will always be assumed to have knowledge of everything that has occurred. The Court highlighted that if Ms Parry had brought a discrimination claim without any detail, then the claim may have been properly rejected.
In the second case the claimant Ms Aynge worked in a pub, fell out with the licensee Mr Trickett and left before the end of her shift. Mr Trickett said, “This is your last shift tonight. That’s it, you’re done.” Ms Aynge brought a claim for unfair dismissal but said nothing about constructive dismissal. She was unrepresented. The employment tribunal dismissed her claim as it had not been properly plead as constructive dismissal. The Employment Appeal Tribunal disagreed. It ruled that the judge should not take an overly technical approach in these sorts of cases. Ms Aynge had raised enough information about the row and what Mr Trickett had said on her claim form, even though she had not stated she was claiming constructive dismissal. Her claim was allowed to proceed. [back to top]
An employee can resign in response to a serious breach of contract by the employer and claim constructive unfair dismissal. The employee must not delay too long after the breach has occurred before resigning or s/he will be unsuccessful and will be taken to have ‘affirmed’ or waived the breach. Sometimes employees resign following a ‘last straw’ at the end of a course of conduct or series of breaches. The last straw does not have to be anything substantial.
What if the employee has affirmed a previous breach of contract, but then resigns in response to a last straw? Can that last straw revive the previous breach and allow the employee to bring a successful constructive dismissal claim? The Employment Appeal Tribunal has said that it cannot.
Ms MacKenzie was an assistant manager at Pets at Home. While pregnant she applied for a promotion. Pets at Home refused to fast-track her into the promoted role. She was not successful in an open recruitment process. While on maternity leave she applied again but was unsuccessful. A few months later a less experienced assistant manager told her he had been successful. Ms MacKenzie resigned and relied on his apparent promotion as the last straw. However, the EAT decided that Ms MacKenzie had a choice as to whether to resign at the time of the earlier breaches of contract (when she was not fast tracked for promotion) and chose not to. She had affirmed those breaches of contract and so she could not rely on them in her constructive dismissal claim. [back to top]