EmpLaw Newsletter May 2021
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.
The Uber v Aslam domino rally has begun. In Addison Lee v Lange, the Court of Appeal has refused the employer permission to appeal the EAT’s decision that Addison Lee drivers are workers. Addison Lee provided private hire and courier services. Drivers were formally recruited and given training. They had guidelines on how to do the job. They leased branded cars. Each driver had a handheld computer from which jobs would be allocated. They could log on and off the system when they wanted. However, when logged on they were deemed ready to work and expected to accept jobs. The drivers' contractual paperwork said they were independent contractors, but drivers brought claims saying they were workers and entitled to holiday pay and the national minimum wage.
The employment tribunal and EAT said the drivers were workers. By signing up to the contract and hiring the car, the drivers were undertaking to do some work for Addison Lee. They remained subject to Addison Lee rules in between shifts: they couldn't alter the car branding, no one else could drive the car and they paid ongoing vehicle charges. As a result, there was an implied overarching contract between 'logging on' sessions. Even without the overarching contract, the 'worker' definition was satisfied each time the individuals logged into the app. This was because they were undertaking to accept jobs allocated to them (even though the contracts said they didn’t have to). They were not running small businesses on their own account. Addison Lee appealed but were told that they would have to wait until after the Supreme Court judgment in Uber v Aslam.
Preventing the employer from arguing the point further, the Court of Appeal said that there was a contract in place every time a driver logged onto the Addison Lee app. Like Uber drivers, Addison Lee drivers are workers and entitled to holiday pay and the national minimum wage. This is the end of the road for Addison Lee and a first domino down for the gig economy fight for worker status. The courts will be hoping this decision dissuades employers from arguing the point unnecessarily and avoids the need for a costly and time-consuming caselaw domino rally.
- Equal pay
- Discrimination - compensation
- Sex discrimination
- Unfair dismissal
- Unfair dismissal – Covid-19
- Disability discrimination
- Directors' liability
- And finally ..
The Supreme Court handed down a final judgment in the Asda equal pay saga. In Asda v Brierley, a predominantly female group of Asda store workers are saying they should be paid the same as a group of predominantly male distribution depot workers who are paid more than them. The proposed comparators work at different ‘establishments’ – the claimants work in Asda stores and the comparators in Asda distribution depots. Section 79(4)(c) Equality Act 2010 says that if equal pay comparators do not work at the same workplace, then the employees must be on ‘common terms’ of employment to bring an equal pay claim. ‘Common terms’ isn’t defined in law, but case law has shown that the ‘common terms’ test is met where:
- The worker and comparator are on broadly the same (or ‘common’) terms of employment.
- Common terms apply in general for employees across the employer’s sites.
- Individuals employed to do the kind of work as the comparator does, but at the claimant’s workplace, are on broadly the same (or ‘common’) terms as the comparator.
- No work similar to the comparator takes place at the claimant’s workplace but, if it did, those workers would be on broadly the same terms as the comparator.
In Asda v Brierley, the 35,000 store workers were on retail terms and the distribution workers on distribution terms. Although these terms were set by different management bodies, all management was ultimately controlled by Asda’s executive board, and (as was the case then) Wal-Mart governance. The store workers terms were not collectively negotiated by a trade union, but the distribution workers were represented by recognised trade union GMB in pay bargaining.
The employment tribunal said the women could compare themselves to the distribution workers on various bases, including that there was a single source of all the employees’ terms – Asda’s executive board – which could have introduced equality. The tribunal said their terms were similar enough to be ‘common’, having been set within the same employer. The tribunal also said that the comparators would have been paid on distribution terms had they been employed at store locations. The Employment Appeal Tribunal, the Court of Appeal and now the Supreme Court agreed. With no comparator class of employees at the stores, the Supreme Court said the question was whether the comparators would have been paid in the same way had they been employed in their roles at Asda stores. The Court found that the comparators would have been on distribution terms rather than retail terms. That satisfied the ‘common terms’ test. In future, all an employment tribunal needs to do is ask whether the comparators would be employed on the same (or substantially the same) terms if they were employed at the site where the claimants worked. If the claimants and comparators are already on broadly the same terms, wherever they work, then the common terms test will already be met.
This doesn’t mean that Asda has lost the equal pay case. The claimants must now show that that they do work of equal value to the comparators and Asda can defend the claims by showing there is a genuine material factor that justifies the difference in pay. [back to top]
If an employee wins a discrimination claim, an employment tribunal will award compensation for injury to feelings, designed to compensate the employee for the hurt and embarrassment caused by the discrimination. This is on top of any financial losses that flow from the discriminatory treatment. Although Section 119 and 124 Equality Act 2010 set out that damages can include an injury to feelings award, the guidance on how to value those hurt feelings was originally set out by the Court of Appeal in a case called Vento v Chief Constable of West Yorkshire Police.
The Vento case established three bands: a lower band for less serious cases, including one-off acts; a middle band for serious cases that don’t justify a top band award and a top band for the most serious cases such as a lengthy campaign of discrimination. Only in exceptional cases will injury to feelings exceed the top band or fall below the bottom band. The award is compensatory rather than punitive, so its value is based on how the discrimination has affected the individual employee, rather than a judgement on the employer’s behaviour.
The ‘Vento’ bands adjusted each year to take account of inflation. The new rates set out below will apply to claims brought on or after 6 April 2021:
Bottom band - £900 -£9,100
Middle band – £9,100 – £27,400
Top band – £27,400 to £45,600
Claims that were brought before 6 April 2021 will still have the old rates applied: lower band £900 - £8,800; middle band £8,800 to £26,300 and top band £26,300 to £44,000. [back to top]
Direct discrimination happens if an employer treats an employee less favourably than it treats others because of sex. A female employee would need to show that she has been treated less favourably than a real or hypothetical comparator of the opposite sex whose circumstances are not materially different to hers. In Ali v Capita Management, the Court of Appeal decided that a man on shared parental leave could not compare himself to a woman on maternity leave who was paid more than him. The Court of Appeal said that the purpose of maternity leave goes beyond childcare and centres around the health and wellbeing of the pregnant and birth mother. Mr Ali’s claim failed because his circumstances were materially different to his comparator’s. The correct comparator was a woman on shared parental leave. The EAT has recently considered a similar case, this time involving a man on shared parental leave and a woman on adoption leave.
In Price v Powys County Council, a male employee wanted to take shared parental leave so his wife could return to work. He was told he would be paid shared parental leave pay, which was the same as statutory maternity pay. Under Council policies, employees on statutory maternity leave or statutory adoption leave were entitled to enhanced maternity or adoption pay. Mr Price decided not to take the leave and brought a claim for direct discrimination, comparing himself with a female employee on statutory maternity leave and a female employee receiving adoption pay, both of whom were paid at the enhanced rates.
The employment tribunal applied Ali and said the comparators’ circumstances were materially different. The purpose of statutory maternity leave was different to shared parental leave, as Ali had clearly set out. The circumstances of someone on adoption leave were also different. Adoption leave goes well beyond facilitating childcare and is designed to allow parents to take steps to prepare and maintain a safe environment for the child and time to form a parental bond. Adoption leave begins at the latest on the day of adoption, which was a material difference to shared parental leave and underlined the need for the adopter to prepare a safe environment and develop a bond with the child. The flexibility in relation to shared parental leave – which can move back and forth between parents – showed that it was designed to give parents greater choice about childcare responsibilities. Ordinary maternity and adoption leave can only be taken in one continuous block of 26 weeks which, the EAT said, showed that its purpose went beyond childcare. The EAT said the correct comparator was a woman on shared parental leave, who would receive the same pay as Mr Price.
This decision isn’t surprising and follows the reasoning in Ali, applying it to adoption leave. It is welcome clarification for employers. However, it is clear that the demand for parental leave is increasing, but the lack of enhanced pay, often in the face of enhanced schemes for maternity and adoption leave in the same employer, is stopping them. This decision doesn’t deal with the wider societal issue of how you create more equality between the sexes – and less assumption that women will bear the brunt of childcare - if payment for men taking parental leave is not equal to women taking other kinds of child-related leave. Food for thought. [back to top]
Reinstatement and re-engagement are potential remedies in an unfair dismissal claim. Reinstatement means the employee is put back into the job from which they were dismissed. Re-engagement means that an employee is taken back on by the business in comparable employment to the job from which they were dismissed, or other suitable employment. An employment tribunal must consider reinstatement first, and then if it decides not to reinstate the employee, go on to consider re-engagement. At each stage, the tribunal must consider whether taking the employee back on, in their previous or another role, is practicable. Practicable means re-employment is more than just possible - it means that re-employment is capable of being carried into effect with success. The Court of Appeal has looked recently at the practicability test in Kelly v PGA European Tour.
The employee had worked for the employer for 26 years, latterly as Group Marketing Director. In 2015, the employer took on a new Chief Executive Officer. Within the first couple of months, the new CEO had concerns about the employee’s performance and his ability to ‘buy in’ to his new vision for the business. The CEO tried to negotiate the employee’s exit. During this process, the employee secretly recorded meetings. When negotiations failed, the employee was dismissed without following a fair procedure. He brought claims for unfair dismissal. The employer conceded his dismissal had been unfair due to the lack of procedure. The employee sought reinstatement or re-engagement to the business.
The employment tribunal decided the employee should be re-engaged into the role of Commercial Director, China. Speaking Mandarin was an essential criterion for the role. The employer objected to this because the employee couldn’t speak Mandarin and they felt trust and confidence had broken down. The tribunal noted that the employee was willing to learn and adept at languages. The trust and confidence issues weren’t so serious and concerns about his performance and integrity (about the recordings) could be overcome. Reengagement to this role was practicable. The EAT disagreed and allowed the company’s appeal, so the employee appealed to the Court of Appeal. The Court of Appeal agreed with the EAT. An employer’s genuine belief in an employee’s lack of capability in relation to a role, or a genuine belief that trust and confidence has broken down, can mean re-engagement is not practicable. The tribunal here had substituted its own view rather than considering whether the employer’s doubts about integrity and capability were genuine and rational. Reengagement to a job where the employee didn’t meet the essential criteria was perverse.
Employers will be heartened by confirmation at this level that re-engagement to a role where an employee lacks essential skills, or where trust and confidence has been destroyed, is not reasonable or practicable. The Court also noted that the rules didn’t require an employer to consider vacancies that had been filled by the time the remedies hearing took place, just vacancies that existed at the time of the hearing. Reemployment remedies are tricky as they necessarily follow a dismissal which is unfair. That will always have an impact on relationships. This case shows that the re-engagement remedy is limited, and in some cases, an employer can avoid it. [back to top]
Sections 100(1)(d) and (e) of the Employment Rights Act 1996 provides employees with protection from dismissal if they exercise their rights to leave the workplace or take other steps to protect themselves if they reasonably believe there is serious and imminent danger. There have been murmurings about employees using these provisions to justify refusing to work during the Covid-19 pandemic. Employers are nervous - if the mere existence of the virus creates a serious and imminent danger, regardless of safety measures taken, what is to stop all and any employees refusing to work? An employment tribunal has now handed down a judgment on this topic in Rodgers v Leeds Laser Cutting, giving insight into how these claims will be dealt with.
The employee had less than two years’ service as a laser operator. He was one of around five employees who worked at any one time in a large warehouse-type building. A colleague developed Covid-19 symptoms and went off work. The employee developed a cough and decided to self-isolate. At this point, the employer had already put some measures in place including social distancing, extra cleaning and staggered breaks. They reiterated government advice to staff. On 29 March 2020, the employee sent a text message to his manager that he would not be coming to work until lockdown eased because he was worried about bringing the virus home to his vulnerable child who had sickle cell anaemia. He was dismissed a month later. The employee didn’t have enough service to bring an ordinary unfair dismissal claim so he brought claims for automatic unfair dismissal under s100(d) and (e) Employment Rights Act which don’t require two years’ service.
The employment tribunal said that a reasonable belief in serious and imminent danger should be judged on what was known at the time the actions were taken. On the facts, the tribunal found that the employee didn’t believe there was serious and imminent danger in the workplace – he believed there was serious and imminent danger everywhere. That said, his evidence about his fear was undermined by his decision to drive a friend to hospital the day after he left work. The message to his manager referred to coming back when the pandemic eased, not when the workplace had been made safe. The size of the workplace and real ability to socially distance also meant that objectively such a belief was not reasonable. He could have averted danger by following the safety measures and refusing to do the occasional task that overstepped them. It wasn’t reasonable for him to absent himself from work when it was possible to socially distance. Nor had he taken appropriate steps to communicate his fears of imminent danger to his employer. Most interestingly, the tribunal rejected the employee’s assertion that Covid-19 presents serious and imminent danger regardless of what steps an employer takes to mitigate the risk. To do otherwise would mean that any employee could rely on these provisions to ‘down tools’ (as the judge put it) during the pandemic. However, the judge did say that these provisions can apply to situations arising from the pandemic and every case will have to be decided on its facts.
This case isn’t binding on other tribunals but gives welcome insight into how employment tribunals may construe these provisions in relation to the pandemic. The employee, in this case, gave contradictory and confusing evidence which undermined his evidence about workplace danger. The workplace was large, social distancing was possible and safety measures were already in place even in March 2020. This case shows that implementing safety measures is vitally important – it will significantly reduce the risk of ‘danger’ posed to staff by the virus in the workplace and therefore the risk of tribunal claims. [back to top]
The definition of disability is contained in s6 Equality Act 2010. A person is disabled if they have a physical or mental impairment that has a substantial and long-term adverse effect on their ability to carry out normal day to day activities. Substantial means more than minor or trivial. In Elliott v Dorset County Council, the EAT has looked at the test in relation to an employee who was only diagnosed with autism because of difficulties he was having at work.
The employee had worked for the Council for 34 years. He had agreed with a previous manager to record working hours as 9am – 5pm regardless of the hours he worked. A new manager started, with whom the employee had problems communicating. The manager started disciplinary proceedings for falsifying his hours of work. In reality, the employee was obsessive in the way he worked, habitually working late into the night. Whilst helping the employee with his disciplinary, his union representative recommended he have an autism assessment. It confirmed autism and Asperger’s. Whilst he was being disciplined, a restructure was announced and the employee chose to leave employment with a redundancy package in order to avoid the proceedings. He brought a claim for disability discrimination. An employment tribunal decided that he was not disabled because the impact of his autism on day-to-day activities was only trivial.
The EAT disagreed. The tribunal had set out the law correctly but applied it incorrectly. They didn’t properly identify the relevant day to day activities in the case and decide whether the disability had a substantial adverse effect on them. They focussed on what the employee could do rather than what he couldn’t do or could only do with difficulty. In considering whether the effect of the disability was substantial, the tribunal had looked at what the employee could do compared with other people, rather than what he could have done had he not had autism and Asperger’s. The EAT also said that a coping strategy doesn’t prevent an effect from being substantial unless the strategy will always work and never break down, for example, if the employee is under stress. The EAT confirmed that the test is not a spectrum – if the employee can show that the adverse effect is more than minor or trivial then the effect is substantial. There is no need to look at the Equality Act guidance for further help if the answer is clear.
This is a case where an employee was only diagnosed with autism precisely because of the difficulties he was having at work. He left employment because of those difficulties. The EAT judge remitted the case to a fresh tribunal to decide whether he was disabled but gave a big hint that determining disability at a preliminary hearing may not be the best way forward. This case may make it harder for employers to argue that impairments don’t have a substantial adverse effect. Tactically, it may be better to argue disability as a preliminary point in cases where the employee has less than two years’ service and where a negative finding will knock out of the whole case. [back to top]
Directors are governed by the Companies Act 2006, which requires them to act in good faith in the best interests of the company, taking into account the interests of employees. Directors must also exercise reasonable care, skill and diligence in their duties. A director will not be liable for a breach of contract if they are acting in good faith and within the scope of their authority.
In Antuzis v DJ Houghton, the employees were chicken catchers on a farm. They worked extremely long hours and were regularly underpaid. They were not paid holiday pay and underpaid in relation to overtime. Pay was sometimes withheld as a punishment. In 2019, the High Court found that the directors were liable for those breaches of contract, as well as the company. The directors had known about the breaches of contract and had not complied with their general duties under the Companies Act. They were not acting in good faith or in the best interests of the company and induced the breaches of contract purely for financial gain.
The remedy hearing took place recently. The High Court awarded the employees the full amounts claimed for overtime, holiday pay and wages. The employees also asked the Court to award aggravated and exemplary damages. Aggravated damages are compensatory, exemplary damages are punitive. The Court said the contractual payments would not compensate the employees for the exploitation and abuse they had suffered. They awarded aggravated damages of 20 per cent of the sums awarded to the employees. They didn’t award exemplary damages because of the high sums awarded in aggravated damages and the fact that there was no evidence that the directors had made more money than this by exploiting their staff.
This case is an example of how employees can use a variety of claims to seek financial compensation that is greater than the sums owed. This case was an extreme one, where the employees were treated very badly. Although aggravated damages may be rare in such cases, it is a shot across the bows for directors who flout their duties under the Companies Act. [back to top]
The silver linings to the Covid-19 cloud often involve a new sourdough habit or less time commuting. The Office for National Statistics has done a study of working patterns during the pandemic which may show some more unexpected silver linings. Unsurprisingly, the study (which looked at working patterns over the last 10 years) showed that more of us are working at home, rising to more than a third of the population during the pandemic.
Far from showing homeworking meant slacking off, the survey showed that there was an unpaid overtime boom in favour of employers during the pandemic. Full-time homeworkers did the most unpaid overtime in 2020, with an average of 6 hours a week of unpaid overtime compared to 3.6 hours a week for non-homeworkers. The study also showed that sickness levels for homeworkers actually fell during the pandemic, albeit at just under 1 per cent. There is a suggestion that this may mean people are working through periods of illness rather than taking time off, which may not always be a good thing.
Andrew Mawson of Advanced Workplace Associates has said that the data shows how much employees have embraced home working during lockdown with many wanting to retain this kind of flexibility in future. He said surveys suggest that only five per cent of employees are now happy to work five days a week in the office, from 45 per cent before lockdown. If employers can come to some sort of compromise with employees, a hybrid model of home and office working, the advantages may go further than overtime and sickness. Whether employees spend the freed-up commuting time on the sourdough starter or making an early start on work so they can do the school run, it’s easy to see how a better work-life balance is much more easily achieved. Happy employees are invariably more productive, and flexibility creates loyalty. Win-win. [back to top]