Employment Eye May 2018

Welcome to the May 2018 edition of our employment law report: our monthly round-up of key employment law developments and what they mean for you.

 

Featured case	What you don't know might hurt you Anne Palmer on a landmark discrimination ruling: knowledge of an employee's disability is not required. Read more
Briefing	Status update Ashley Norman takes a look at the current state of play on employment status, following this month's ruling on Addison Lee's cycle couriers. Read more
News round-up	Employment news round-up, May 2018 Tim Gooder rounds up this month's employment law news in brief, including shared parental leave pay, whistleblowing news, what to expect in pay enforcement, new guidance and IR35 reform. Read more
Events and training	Free training sessions running in June on avoiding, and preparing for, employment tribunal claims. Read more

 

What you don't know might hurt you

Anne Palmer on a landmark discrimination ruling: knowledge of an employee's disability is not required.

The background

Discrimination 'arising from disability' occurs when an individual is treated 'unfavourably' because of something arising in consequence of their disability (section 15(1)(a) Equality Act 2010 ('EqA 2010')).

However, if a tribunal finds that discrimination arising from disability has occurred, then a defence is available if the treatment in question is justified, i.e. a 'proportionate means of achieving a legitimate aim'.

In order to establish whether discrimination arising from disability has occurred, an employment tribunal must ask itself two questions.

1. Did the claimant's disability cause, have the consequence of, or result in 'something'?
2. Did the employer treat the claimant unfavourably because of that 'something'?

Discrimination arising from disability does not occur if the employer can show that it did not know, and could not reasonably have been expected to know, that the employee had a disability.

An example of how this works in practice is provided in the Equality and Human Rights Commission Employment Code of Practice

• The licensee of a pub refuses to serve a person who has cerebral palsy because she believes his slurred speech means he is drunk. However, the slurred speech is a consequence of his impairment. If the licensee is able to show that she did not know, and could not reasonably have been expected to know, that the customer was disabled, she has not subjected him to discrimination arising from his disability.

If the licensee did know that the customer's behaviour was due to disability (or ought reasonably to have known) then disability related discrimination will have occurred, but the licensee would have a defence if she could show that her actions were justified, i.e. a proportionate means of achieving a legitimate aim.

But what happens if an employee is treated unfavourably, and the employer knows the employee is disabled, but concludes that there was no link between the disabled person's misconduct and their disability? This unanswered question was considered this month by the Court of Appeal (CA) in City of York Council v Grosset.

The facts

The claimant, Mr Grosset, was a teacher in a school run by the City of York Council. Mr Grosset suffers from a disability, cystic fibrosis. The school was aware that Mr Grosset suffered from a disability.

Due to an increasing workload and a series of additional pressures placed on Mr Grosset at work, he began to suffer from severe stress and his health deteriorated. Mr Grosset's inability to cope with his increased workload was caused by his disability, in particular his inability to work in his own time because of a time-consuming exercise regime required to keep his condition under control. During this period of extreme stress, he showed a class of fifteen year olds an eighteen rated horror film. When this came to light, the school brought disciplinary proceedings against Mr Grosset and summarily dismissed him for gross misconduct.

In the dismissal proceedings, Mr Grosset accepted that showing the film had been a serious error of judgment but that it was caused by the stress condition from which he was suffering in consequence of his disability. The employer did not, however, accept that the showing of the film had been caused by an error of judgment caused by the stress he was under as a result of his disability.

Medical evidence available at the time did not support Mr Grosset's claim about the reason for his misconduct; but subsequent evidence available at the tribunal hearing showed that this was, in reality, the cause of Mr Grosset's actions.

An employment tribunal, and the Employment Appeal Tribunal, held that Mr Grosset's treatment amounted to discrimination arising from disability, which was unjustified. The employer appealed.

The decision

The CA agreed with the employment tribunal and the Employment Appeal Tribunal that Mr Grosset's treatment was unjustified discrimination related to disability.

The CA said that in order for a disability related discrimination claim to arise, it is not necessary for the employer to believe that there is a link between an employee's misconduct and their disability.

In Mr Grosset's case, the employer

• knew that Mr Grosset suffered from cystic fibrosis, a disability, and
• subjected him to a detriment (dismissal)
• in consequence of actions which arose in relation to his disability, namely his lapse of judgment caused by the extreme stress he was suffering as a consequence of his disability.

Therefore, all the elements of discrimination arising from disability were established, and the school could not show that its actions were justified.

 

As an aside, the Court of Appeal noted that various reasonable adjustments should have been put in place and these were very likely to have prevented Mr Gosset's stress condition from arising. The CA said that the tribunal was right to take this failure into account when deciding that the decision to dismiss was not justified.

What does this mean for me?

This is a landmark decision in that it is the first time that the link between an employer's knowledge of the cause of an employee's actions and any resulting unfavourable treatment has been considered. The CA's wide approach to the interpretation of section 15(1) of the EqA 2010 means that an employer may be open to claims of disability related discrimination, even if the employer did not believe that misconduct was caused by a claimant's disability.

However, the impact of this ruling is softened because of the availability of a justification defence, if an employer can show that their actions were a proportionate means of achieving a legitimate aim.

It will be important, therefore, to ensure that medical evidence is carefully reviewed before making disciplinary decisions in relation to disabled employees; and if there is a risk that any unfavourable treatment might be linked to actions caused by an employee's disability, the justification for that decision should be clearly established and documented.

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Status update

Ashley Norman takes a look at the current state of play on employment status, following this month's ruling that Addison Lee's cycle couriers are 'workers'.

Employment status has long been a knotty issue, but has come to fore recently with the rise of 'gig' or 'platform' working, facilitated by the exponential growth of online apps, used to access services and manage workers.

But why is employment status such a vexed issue? This is because the status of an individual provides the 'gateway' to various levels of rights and benefits, with the 'employee' category being the 'gold standard', attracting the highest level of protection; with limited rights available to workers - most importantly, the right to be paid the minimum wage and take paid holiday.

Self-employed contractors are entitled to very little legal protection, limited mainly to protection from discrimination.

And, in terms of casual / 'gig' workers' rights, the stakes have been significantly raised recently by the ruling in King v the Sash Window Workshop (ECJ). This decision held that workers who are deterred from taking leave because they believe they are not entitled to paid holiday must be given the right to carry over any untaken leave, indefinitely. This case will now return to the Court of Appeal, for it to determine if the UK's Working Time Regulations can be interpreted in a way which is consistent with the ECJ's findings. If they find that it can, then workers who were unaware of their right to holiday could potentially claim for unpaid holiday for the whole of their period of employment.

There has been a run of cases recently in which the question of employment status has been examined, with the most recent decision being this month's ruling in Addison Lee Ltd v Gascoigne. This case concerned cycle couriers who were engaged via an 'app', but were described in their contracts with Addison Lee as independent contractors. The Employment Appeal Tribunal (EAT) found that the couriers were, in reality, workers. In reaching this conclusion, the EAT noted that during the periods that the couriers were 'logged-on' to the Addison Lee app, there was

• a contractual relationship with a clear obligation to offer work, provided they were in the approved area, and
• that an offer of work would generally be accepted, unless it transpired that a parcel was too heavy.

The fact that the claimant, Mr Gascoigne, was entitled to log off at any time was not incompatible with the mutual obligation between the parties to offer and accept work.

This decision follows on from, and is aligned with, the recent cases of Dewhurst v CitySprint and Boxer v Excel Group Services, which also concerned couriers. In common with the tribunal in the Addison Lee case, the tribunals here were quick to look behind the apparent contractual position in order to examine the reality of the relationship between the parties.

Similar conclusions were reached in the EAT's decision in the case of Uber v Aslam, where taxi drivers were found to be engaged as workers for as long as they were

• in the territory in which they were authorised to work
• signed in to the Uber app and
• ready and willing to accept bookings.

This decision is currently under appeal, and expected to be heard in October 2018.

Another key employment status case to look out for is Pimlico Plumbers v Smith. In February 2017, the Court of Appeal found that plumbers who were engaged on 'self-employed' contracts were found, in fact, to be workers. This decision is currently on appeal, and was heard by the Supreme Court in February 2018 - a decision is awaited.

Not withstanding that the decisions outlined above have found purported 'contractors' to be workers, this will not always be the case, due to the highly fact-sensitive nature of employment status analysis. A good example of a case which went a different way is the Independent Workers Union of Great Britain v RooFoods Ltd (t/a Deliveroo), in which the Central Arbitration Committee found that Deliveroo riders were not workers. This was because of their genuine and almost unfettered ability to send substitutes to undertake their assignments – thereby defeating the argument that they had the relationship of 'personal service' required for worker status. By contrast, there was no right of substitution in Addison Lee's contract, since its drivers and riders were required to pass criminal records checks, which meant personal performance was required.

The current state of play as far as employment status is concerned is complex, and somewhat in a state of flux as we await the government's response to its consultations following on from the Good Work report by Matthew Taylor (please click here for our summary) and the outcomes of the Pimlico Plumbers and the Uber appeals. Hopefully, some clarity will be provided in the foreseeable future. In the meantime, you would be well advised to consider whether your contractual structures accurately reflect the true nature of the employment status you wish to achieve. Although there are uncertainties around defining employment status, it is still possible to draft and implement contractual relationships which maximise the prospect of a tribunal finding that an individual is engaged in the manner you intended, whether as an employee, worker or self-employed contractor.

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Employment news round-up, May 2018

Tim Gooder rounds up this month's employment law news in brief, including shared parental leave pay, whistleblowing news, what to expect in pay enforcement, new guidance and IR35 reform.

It started with a kiss…

Hot on the heels of the shared parental leave pay decision in Capita v Ali (please click here for our recent report on this case), the Employment Appeal Tribunal (EAT) has now made its decision in the keenly awaited case of Hextall v Leicestershire. Like the Ali case, Hextall also concerned the question of whether it is indirectly discriminatory to provide enhanced maternity pay to women on maternity leave, without matching that entitlement for men. However, the EAT in Hextall has gone the opposite way to Ali and found that it is potentially indirectly discriminatory to provide different rates of pay for men on shared parental leave compared to women on maternity leave. It will now be for the employer to show that the pay differential was justified. And it might have started with a kiss, but it's unlikely to end with this: appeals may well be lodged in both cases, so this may not be last we have heard on this issue.

NHS whistleblowing news

• NHS whistleblowers – new protections in force this month
  New regulations protecting NHS whistleblowers from being subjected to a detriment in recruitment came into effect on 23 May 2018. The Employment Rights Act 1996 (NHS Recruitment – Protected Disclosure) Regulations 2018 prevent NHS employers from discriminating against job applicants who appear to have made a 'whistleblowing' protected disclosure. This reform to the whistleblowing framework is being made in response to research which has shown that some NHS employees feel that they are 'blacklisted' within the NHS as a consequence of making a protected disclosure.

 

• Health Education England has 'employment' status for whistleblowing 
  Health Education England (HEE) has conceded that it has 'employer status' for the purpose of whether junior doctors in England could be protected from detriment by HEE when they raised a whistleblowing concern at work. At a preliminary hearing, HEE conceded that it was the employer of 'postgraduate trainees' (defined as doctors who have been appointed by HEE to a contract of employment and have a training number) for the purposes of the extended definition of an 'employer' under whistleblowing provisions. This development means that the agreement reached between HEE and the British Medical Association, to provide protection for junior doctors who raise concerns in the workplace, will come to an end.

Grievance procedures and councillors' misconduct

The High Court has recently considered the case of R (Harvey) v Ledbury Town Council, regarding local authority staff grievance procedures and their relationship with the Code of Conduct regime under the Localism Act 2011. The court held that a council cannot run a grievance procedure alongside, or as an alternative to, a standards regime procedure under the Localism Act 2011, and that complaints regarding a councillor's conduct have to be dealt with under the authority's standards arrangements. Please click here to read our full commentary on this case.

 

New guidance published

• New dress code / sex discrimination guidance 
  New guidance on Dress Codes and Sex Discrimination has been published by the Government Equalities Office. The guidance is short, and is aimed at both employers and employees. It reminds employers of how the law might apply in cases of sex discrimination where an employer requires female staff to wear, for instance, high heels, make-up, hair of a particular length or style, or revealing clothing. It also covers, briefly, the somewhat complex question of dress codes in the context of health and safety, disabled employees, religious freedoms and transgender employees.
• New Acas guidance on religion or belief discrimination
  Acas has published new 'key points for the workplace' on religion or belief discrimination. The guide explains how to reduce the chance of religion or belief discrimination happening in the workplace, how it might still occur and how it should be dealt with if it does happen. It covers equalities policies and dealing with complaints.

Important new labour market enforcement strategy published

The government's first Director of Labour Market Enforcement, Sir David Metcalf, appointed in January 2017, has published his first full Labour Market Enforcement Strategy. The Director of Labour Market Enforcement was appointed the by the government to oversee, and co-ordinate, the government's focus on enforcement of workplace regulation. The director's remit covers the Gangmasters and Labour Abuse Authority, the Employment Agency Standards Inspectorate, and the National Minimum Wage (NMW) / National Living Wage. In his enforcement strategy, the director makes thirty seven recommendations, which include the following key points for employers.

• NMW guidance should be revisited by government and HMRC should develop a more supportive approach towards companies that ask for advice in order to be compliant.
• There should be a substantial increase in penalties for NMW non-compliance, together with more pro-active enforcement, including more prosecutions.
• Holiday pay enforcement should be bolstered. The director has concluded, from the evidence presented to him in consultation, that workers are entitled to billions of pounds of unpaid holiday. He points out that there is no state body enforcing holiday pay, and suggests that HMRC, or another appropriate state body, should be provided with the powers and remit to take responsibility for the enforcement of holiday pay for all workers, including mechanisms to recover holiday pay arrears.
• There should be joint responsibility for labour regulation enforcement in supply chains, utilising the "power leverage" of the brand name at the top of the chain. This would see the brand initially taking responsibility to correct non-compliance in the chain.

In terms of next steps, it is now for the government to consider the recommendations, and this is very likely to dovetail with the current consultations being undertaken in the wake of the Taylor Review.

IR35 reform for private sector / impact on public sector

The Treasury has launched a new consultation this month, aimed at increasing compliance with the legislation governing off-payroll working in the private sector (IR35).

The Treasury has also published the results of research into the impact of the reform of off-payroll working in the public sector. For more information on off-payroll working in the public sector, please see our March 2017 briefing.

The consultation considers how the public sector IR35 reforms have worked in practice, and looks at options for reform of IR35, including extending the public sector changes to the private sector.

The consultation closes on 10 August 2018.

 

Pensions News

Regulator Watch – more guilty pleas, fines and consequences

We've been following a number of Pension Regulator prosecutions over the past few months. There have been some developments in relation to automatic enrolment and other prosecutions.

The Samuel Smith Brewery and its chairman Humphrey Smith have admitted failing to hand over information to the Pensions Regulator. This was in relation to its final salary occupational pension schemes (not auto-enrolment) and was requested because the Regulator wished to understand better how the company would support the schemes. The Pensions Act 2004 requires employers and connected individuals to co-operate with requests for information from the Regulator. Sentencing will take place on 6 June.

Finally, we've noted before that Stotts Tours (Oldham) Limited has now been fined for its failure to provide appropriate pension provision. There's been a further consequence this month – as a result of its criminal conviction, and concerns as to the behaviour of some key managers, the company has had its licence to operate reduced from 40 to 31 vehicles. So auto-enrolment failures can have wider commercial consequences as well as the criminal proceedings themselves.

 

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Events and training

Limbering up for increasing employment tribunal claims    

The statistics speak for themselves: steep rises in employment tribunal claims are being logged, as the fallout from the abolition of fees becomes apparent. Now is, therefore, the time to brush up on your dispute resolution and employment tribunal management skills and knowledge.

We are running free training sessions in June 2018, which will take a look at the full range of issues around dealing with increased litigation risk, from preventing claims getting off the ground, through to strategies for dealing with claims that go through to a full hearing. We will cover 'tips and traps', and will include practical questions for delegate discussion. 

Key topics

• Dealing with retrospective claims and fee refunds.
• Reputational risks – new public portal for tribunal decisions.
• Without prejudice rules / protected conversations.
• Acas Early Conciliation and COT3 agreements.
• Analysing merits and litigation risk – fight or settle?
• Disclosure obligations and avoiding disclosure traps.
• Witness statements and giving evidence.

This event will be of interest to anyone involved in employee relations and managing employment tribunal claims, including HR professionals and in-house legal advisers.

The training will take place over the course of a morning on Wednesday 6 June in Leeds and Bristol, and on Wednesday 13 June in Birmingham.

Please click here for further information and booking details.

If you would like to discuss any of these topics, or any other aspect of Employment Law, please contact Head of Employment, Jodie Sinclair.

This article may contain information of general interest about current legal issues, but does not give legal advice.