28/06/2017
Welcome to the June 2017 edition of our employment law report: our monthly round-up of key employment law developments and what they mean for you.
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Featured case |
Jodie Sinclair looks at fair redundancy following absence for cancer treatment. |
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News round-up |
Employment news round-up, June 2017 New developments on holiday, the gig economy, IR35 and Brexit news. Ashley Norman reports. |
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Briefing |
Alastair Currie provides an update on recent tribunal cases that are examining equalised shared parental leave pay – do men have the right to be paid the same as women? |
Context is all
Jodie Sinclair looks at fair redundancy following absence for cancer treatment.
The background
Discrimination 'arising from' disability is a relatively new concept, introduced by the Equality Act back in 2010. It is designed to cover situations where a disabled person is treated unfavourably because of something arising in consequence of their disability, rather than because of their disability itself (that is covered by direct disability discrimination). For example, discrimination arising from disability would occur if a disabled wheelchair user was disciplined for being repeatedly late for work, but their lateness was caused because they sometimes had to wait longer for an adapted bus to take them into work.
Unlike direct disability discrimination, employers may be able to defend a claim for discrimination arising from disability, but only if the treatment is justified, i.e. a proportionate means of achieving a legitimate aim.
Caselaw has established that there are two steps to the test to be applied by tribunals in determining whether discrimination arising from disability has occurred.
- Did the claimant's disability cause, have the consequence of, or result in, "something"?
- Did the employer treat the claimant unfavourably because of that "something"? (Basildon & Thurrock NHS Foundation Trust v Weerasinghe, EAT 2014)
There only needs to be a loose connection between the employee's disability and the unfavourable treatment; it is not necessary for the claimant's disability to be the cause of the respondent's actions for a claim to succeed. It is enough for the "something arising" as a consequence of the employee's disability to be a significant influence on, or 'effective cause' of, the unfavourable treatment.
Under the Equality Act 2010, certain conditions are 'deemed disabilities' for the purpose of disability discrimination protection, meaning that individuals suffering from those conditions do not have to meet the usual statutory tests to establish that their illness is sufficiently serious to be classed as a disability. Cancer is one such 'deemed disability'.
The facts
Mr Charlesworth was a branch manager at Dransfields Engineering Services Ltd (DES). DES was not profitable and from 2012 onwards it was looking to make cost savings.
In the summer of 2014, Mr Charlesworth developed renal cancer and was off work from October to December 2014. In November 2014 (i.e. shortly after Mr Charlesworth's sick leave commenced) DES's operations manager identified the possibility of restructuring the business in a way that would delete Mr Charlesworth's post, saving the business £40,000.
There was no alternative post available to Mr Charlesworth and he was subsequently made redundant in April 2015, approximately four months after his return to work following his treatment for cancer. Mr Charlesworth chose not to appeal, but subsequently brought claims for unfair dismissal, direct disability discrimination and discrimination arising from disability.
The tribunal dismissed his claims. With regard to his discrimination arising from disability claim, it accepted that there was a link between his disability-related absence and his dismissal, as his absence had highlighted to DES that Mr Charlesworth's branch could function without anyone covering his role. However, it considered that this stopped short of a dismissal because of sickness absence. Mr Charlesworth's absence was just the context within which the events occurred; it was not causative.
Mr Charlesworth appealed.
The decision
In Charlesworth v Dransfields Engineering Services Limited, the Employment Appeal Tribunal (EAT) dismissed the appeal and upheld the employment tribunal's decision.
The EAT considered that the tribunal had correctly applied the two stage test outlined above (see 'background') and was entitled to find that Mr Charlesworth's absence was not an effective cause of the decision to dismiss him.
The EAT agreed with the tribunal that Mr Charlesworth's absence "threw into sharp relief" (paragraph 18) the employer's ability to manage without anyone fulfilling his role; but that was not the same as saying that he was dismissed because of his absence. However, the EAT noted that each case will turn on its own facts.
What does this mean for me?
Whilst recent disability discrimination case law has shown a trend towards employee friendly decisions, this decision sees the EAT adopt an employer friendly approach. That said, it is important to note the EAT's observation that cases of this type will turn on their own facts, so a tribunal may be entitled to come to a different conclusion on a case with apparently similar facts.
Taking that into account, it would not be advisable for employers to re-work existing redundancy or equalities policies on the basis of this decision or change working practice. Employers seeking to dismiss disabled employees because disability related absence has highlighted that they are surplus to requirements will need to be very confident that the absence merely forms back of the backdrop to the decision to dismiss and is not because of the disability related absence. In other words, employers will need to establish no causal link between the "something" that arises because of an employee's disability and the employer's subsequent actions.
Employment news round-up, June 2017
New developments on holiday pay, the gig economy, IR35 and Brexit news. Ashley Norman reports.
Carrying over holiday
Can workers carry over untaken holiday?
In a case called King v The Sash Window Workshop Limited, the European Courts are again grappling with the question of holiday pay. Preparatory to the hearing of the full case, the Advocate General to the European Court of Justice (ECJ) has given their Opinion on the question of whether a worker who has not attempted to exercise their right to annual leave - because they thought they would not be paid - is entitled to claim payment for that untaken leave on the termination of their employment. The Advocate General has said that, in those circumstances, the worker in question would be entitled to claim unpaid leave for the whole period of their employment. In the Advocate General's view, it was unreasonable to expect a worker to take annual leave before they knew whether they would be paid for it.
Significance for the 'gig economy'?
The Opinion specifically noted that this is an important question in respect of those working in the growing digital economy / 'gig' economy. Such individuals are often classified as 'workers' (rather than employees) and, therefore, entitled to paid annual leave, but are often unaware of the existence of that right and / or are deterred from taking holiday.
The Opinion of the Advocate General is not binding but, although the ECJ is not obliged to follow the Advocate General's Opinion, it often does so. Please click here for the full transcript of the Advocate General's Opinion.
For more information on employment law and the digital economy, please see our article, 'Manager' vs 'Technology Platform'. If you would like to know more about the utilisation of a flexible workforce as a strategic tool, please see our Agile Working Toolkit.
Modern workforce changes on the horizon
Staying with the topic of the 'gig economy', the Queen's Speech, delivered on 21 June 2017, confirmed that the government will seek to "enhance rights and protections in the modern workplace." This is likely to refer to the Independent Review of Employment Practices in the Modern Economy (led by Matthew Taylor, Chief Executive of the Royal Society of Arts) which is expected to be published imminently.
IR35 / taxation of intermediaries – important NHS update
As we have been reporting in recent months, public sector organisations and agencies are grappling with new contractors' taxation requirements: i.e. ensuring that people who work for a public sector organisation via a limited company pay the right level of tax and National Insurance is now the responsibility of the public sector end-user or agencies, rather than the individual themselves. Please click here for a summary of the new rules.
NHS Improvement have now issued an important update to their IR35 guidance on the new intermediaries rules – the update is here. In summary, it explains that its previous guidance that all agency staff, locums and bank staff should be on the payroll for PAYE, following the IR35 reforms, was incorrect and the correct approach is that a case-by-case analysis should be undertaken.
To arrange a free initial meeting to discuss how we can assist you with actively managing the implementation of the IR35 reforms, please contact Jodie Sinclair, Partner (jodie.sinclair@bevanbrittan.com) or Victoria McMeel, Associate (victoria.mcmeel@bevanbrittan.com).
A snapshot of NHS whistleblowing past, present & future
If you need an overview of whistleblowing in the NHS, look no further than this briefing paper, which was published by the House of Commons library on 14 June 2017.
The paper provides a clear and concise summary of
- the key legal concepts
- the background to the current whistleblowing landscape in the NHS, focussing on the response to the publication of the Francis Report into the failures at Mid-Staffordshire NHS Foundation Trust and subsequent reports
- future developments, including the current proposal to introduce new protections for whistleblowers seeking employment in the NHS.
The paper also provides a list of organisations which provide further help and guidance on NHS whistleblowing, and links to other sources of information, including the national NHS whistleblowing policy. The briefing paper was prepared for the purpose of providing impartial information for Members of Parliament, but would also be a useful reference document for anyone who needs to get up to date on both the background and current status of whistleblowing issues as they specifically affect the NHS.
Brexit – are you prepared for the workforce changes ahead?
As negotiations for our departure from the European Union get under way this month, there have been several new developments in respect of the likely workforce impact of Brexit and how employers are responding to this change.
A new survey finds that there is a gap between employers' expectations of how immigration rules are likely to operate post-Brexit, and the government's stated aim of reducing net migration to tens of thousands (as pledged in the 2017 Conservative manifesto). The think-tank, Resolution Foundation, has published research which suggests that just under half of employers are unprepared for forthcoming changes to immigration rules. The key statistics are:
- 30% of employers believe that EU/EEA nationals with a job offer will still have the opportunity to move freely throughout the EU
- 17% of employers do not expect any change in the law governing free movement of workers
- 46% of respondents do not expect a reduction in the number of EU/EEA nationals in their workforce over the next 12 months.
These findings are at odds with the likelihood that unfettered access to an EU/EEA workforce will be curtailed post-Brexit, as the government seeks to implement what it sees as one of the key drivers behind the referendum result. As the government announced this week in its paper on Safeguarding the Position of EU Citizens, its intention is to grant 'settled status' to EU citizens who have been resident in the UK for at least five years at a specified cut off point. This will allow them to work in the UK, as well as study and use public services. The cut off point will be subject to negotiations, but is expected to be no earlier than 29 March 2017 and no later than 29 March 2019. A 'light touch' online process will be put in place to allow qualifying EU residents to apply for settled status. A summary diagram of the proposals is at page 13 of the paper.
Although the EU withdrawal negotiations have only recently commenced, the make-up of the UK workforce is already changing:
- the latest immigration statistics show that net migration has fallen from 335,000 immediately prior to the EU referendum to 248,000 at the end of 2016; and
- the Health Foundation has reported that there has been a 96% drop in the number of EU nurses registering to practice in the UK: 46 EU nurses registered in April 2017 compared to 1304 in July 2016. It has been reported this month that NHS leaders are now in talks to fill the recruitment gap by offering roles to nurses from India.
A report by the CIPD and the National Institute for Economic and Social Research, Tackling Post-Brexit Labour and Skills Shortages, published on 19 June 2017, echoes concerns around workforce planning, highlighting that most employers fill vacancies with EU staff because they cannot recruit UK based staff.
Prudent employers will be taking these issues into account when considering their long term staffing strategies. For more information on how to stay ahead of the curve on current and forthcoming immigration challenges, please contact Ashley Norman or Jaspal Basra, and please see our Brexit immigration law briefing.
In terms of how the negotiations will progress in the coming months, there will be a week of negotiations each month and the time in between will be used to work on, and exchange, proposals. The first round of negotiations will focus on citizen's rights, the single financial settlement and other separation issues.
Sharing and caring
Alastair Currie provides an update on recent tribunal cases that are examining equalised shared parental leave pay – do men have the right to be paid the same as women?
The introduction of shared parental leave in April 2015 was intended to level the playing field between male and female employees' right to time off to look after their children in the first year after they are born. After the mother has taken two weeks of compulsory maternity leave, employed parents can then share up to 50 weeks' of Shared Parental Leave (SPL) between them – either by the mother returning to work and transferring the remaining leave to her partner, or by parents sharing the leave between them (either concurrently or consecutively).
Up to 37 weeks of statutory shared parental leave pay is available – and is paid at a flat rate, equivalent to the rate of weekly prescribed statutory maternity pay (currently £140.98 per week). There is no specific statutory requirement for employers to provide enhanced contractual shared parental leave pay, or to match shared parental leave pay to enhanced maternity pay.
And this leaves open an important question: can employers enhance only maternity pay and not mirror those benefits for male employees taking SPL?
There is an argument that a woman taking maternity leave cannot be compared to a man taking shared parental leave, because they are two different 'categories' of leave and are not a 'like for like' comparison.
Moreover, section 13 of the Equality Act 2010 makes it lawful for employers to provide special treatment to female employees "in connection with pregnancy and childbirth", without that being discriminatory against men. This prevents great swathes of litigation by men in relation to the numerous additional maternity and pregnancy benefits afforded to women in the workplace.
However, it was expected that the question of matching pay between maternity leave and SPL would be a key battleground after the SPL scheme was introduced, and the case law on this point is now starting to come through.
Last year, an employment tribunal decided that a police force's policy of providing full pay to mothers on maternity leave, but paying only statutory shared parental pay to partners, was not discriminatory (Hextall v Chief Constable of Leicestershire Police). The reasoning of the employment tribunal was that maternity pay is, by definition, a 'special benefit' for women; and, therefore, no direct comparison could be made between a woman on maternity leave and a man on SPL.
Following hot on the heels of that decision, this month another employment tribunal has found that enhancing only maternity pay, and not SPL pay, was discriminatory. In Ali v Capita Customer Management Limited, a new father was allowed to take SPL but was only entitled to two weeks' leave at full pay; whereas his female colleagues were entitled to take 14 weeks' maternity leave, at full pay. The employment tribunal's view was that, beyond the compulsory maternity leave period, men and women are in the same position with respect to caring for newborns, so treating them differently amounted to direct discrimination.
Interestingly, the tribunal noted (at paragraph 5.41) that men are now being encouraged to take a more active role in looking after babies, and this should be able to occur away from generalised assumptions about the mother being the primary caregiver. The tribunal dealt swiftly with the 'special treatment' argument under section 13 of the Equality Act 2010: it held that the enhanced pay was not related to pregnancy or childbirth but related to caring for a baby. In other words, the mother was able to access better benefits for undertaking the same role as the father, namely looking after a baby, and this was discriminatory.
An appeal against the Hextall decision was registered on 5 June 2017 and we understand that Capita intend to appeal against the decision in Ali.
It is hoped, therefore, that there will be binding authority provided soon on the heated question of equalisation of maternity pay and SPL pay. Where does that leave us in the meantime?
- Employment tribunals are free to reach their own conclusions, notwithstanding the diverging opinions in Hextall and Ali, as neither of these decisions are binding.
- Until a binding authority is provided, there is no specific rule preventing employers from enhancing maternity pay but not SPL pay.
- The lowest risk approach, however, is to equalise benefits for both types of leave; but the cost of doing so may be prohibitive, unless the statutory minimum is applied across the board (following an employment tribunal case called Snell v Network Rail, in 2016, Network rail reportedly revised enhanced SPL pay downwards when its policy of enhancing SPL pay only for women was found to be discriminatory).
We will keep you updated on developments.
