Working Relations January 2019

Click on the sections below to jump to the relevant section:

HighlightsKey developmentsKey casesFuture developmentsRecent changesEvents


Highlights

January’s highlights include the Government’s proposals to strengthen redundancy protection for women and new parents, and a focus on gender pay gap reporting with two new publications which look at the effectiveness of the current regime. There have also been some useful authorities in discrimination cases in relation to comparators (direct discrimination) and constructive knowledge in disability cases.

Key developments

Pregnancy and maternity protection to be strengthened

The Government has launched a consultation on improving the legal protections for women who are pregnant or on maternity leave. The Government is proposing that the priority that employees receive whilst on maternity leave in relation to suitable alternative employment is extended so that it applies during pregnancy, whilst on maternity leave and for a period of six months after the employee’s return from maternity leave. The consultation will also consider the impact of extending the protections afforded to mothers on maternity leave to other groups who are taking extended leave for similar purposes, such as adoption leave, shared parental leave and other parental leave.

Dr Anne Sammon details the proposed changes for employers in this consultation in her latest blogpost available here.

Government response to BEIS Committee GPG Report published

On 15 January, the Government published its response to the BEIS Committee’s Report on Gender Pay Gap (GPG) reporting (published August 2018), which contained an extensive list of recommended changes to the regime.

The Government response confirms:

  • the qualifying threshold will remain at 250 employees
  • it will not be a mandatory requirement to publish an action plan
  • the Government will not extend the GPG reporting requirements to partners.

The response highlights that should there be appetite for further changes to the regulations, the Government would consult with employers before doing so, and that changes would be communicated before the start of the next reporting year. The response also recommends that the Government consults upon introducing requirements to report pay gap data in respect of disability and ethnicity (the consultation on mandatory ethnicity pay reporting has already taken place and the Government response is awaited).

GEO publishes research on employers’ actions and understanding of GPG

The Government Equalities Office has published a research report on a survey of 900 large employers (with over 250 staff) regarding their understanding of the gender pay gap, their experiences in complying with the regulations and the actions they are taking to close the gap. The research was conducted soon after the first deadline for reporting (April 2018) and can be compared to similar research conducted the year before.

The figures tell a largely positive story. 82% of respondents felt that they had a good understanding of what the GPG is and how it is calculated, up on 48% in 2017. There has been an increase in the number of employers who have developed a strategy to reduce their GPG (21% - 34%), particularly those with a high GPG, including offering flexible working, promoting parental leave policies, cultural changes and gender-specific recruitment or mentoring schemes.

FCA consults on optimising SMCR and excluding legal function from SMR

On 23 January 2019, the FCA published a further consultation paper (CP19/4) on optimising the SMCR. The publication has been of particular interest for banks, insurers and Enhanced firms with regard to the question of whether management of the legal function should fall within SMCR, but there are wider points relevant to Core firms too, for example in relation to the client dealing function. The key proposals are detailed in our elexica article.

The consultation is open until 23 April 2019. Rules and guidance will follow in a Policy Statement in Q3 2019, with the intention that the changes will take effect before 9 December 2019. We will be submitting a response to the consultation which will incorporate client input. Please contact your normal Simmons contact or SMCR@simmons-simmons.com if you would like to feed into our consultation response.

Law Society guidance on confidentiality/NDAs

On 7 January 2019, the Law Society published its practice note, Non-disclosure agreements and confidentiality clauses in an employment law context. The note sets out good practice on the use of confidentiality provisions in either a settlement agreement or COT3, particularly where the clause is aimed at preventing disclosure of conduct or other circumstances which may have led to the dispute or breakdown of relationship. Solicitors drafting these types of clauses should familiarise themselves with this guidance, in addition to the SRA’s Warning Notice (published back in March 2018).

EU whistleblowing proposals continue to progress

In April 2018, the European Commission proposed new legislation to strengthen whistleblower protection across the EU. This continues to move towards agreement. The European Council adopted its position on the proposed directive on 25 January and intends to start negotiations with the European Parliament with the aim of reaching an agreement before the end of the parliamentary term (April 2019). Further detail is available in the Council’s press release here.

Brexit: Government outlines no deal immigration requirements for EU citizens

The Government has announced the arrangements that will apply to EU citizens coming to the UK after 29 March 2019 if there is a no deal exit.

If Britain leaves the EU without a deal, the government will seek to end free movement as soon as possible, and has introduced an Immigration Bill to achieve this. For a transitional period, EEA and their family members (including Swiss citizens) will be able to come to the UK for up to three months without applying for any immigration status. However, to stay longer than three months they will need to obtain European Temporary Leave to Remain, which is valid for a further 3 years. EU citizens wishing to stay for longer than 3 years will need to make a further application under the new skills-based immigration system, which comes into force on 01 January 2021.

This does not affect those living in the UK before 29 March 2019 who can apply for settled status under the EU settlement scheme up until 31 December 2020 in the event of no deal.

BEIS publishes new guidance on itemised payslips

In The legislation extending the right to itemised payslips for all workers comes into force on 06 April 2019. It requires all employers to provide payslips to all workers and show hours on payslips where pay varies by the amount of time worked. BEIS has now published guidance on the new legislation, which aims to help employers with the new rules, complete with illustrative case studies.

Key cases

Direct discrimination: decision-maker in comparator's case need not be the same as the claimant's

Olalekan v Serco Ltd – Employment Appeal Tribunal

The Claimant, a Prison Custody Officer, was dismissed following an assault on a prisoner committed whilst the prisoner was restrained. He alleged that his dismissal was unfair and discriminatory on grounds of race because other white PCOs had not been dismissed for similar assaults on prisoners while three black officers had been. The principal ground of appeal was that the Tribunal failed to make findings of fact in relation to the comparators relied upon and should have constructed a hypothetical comparator.

Serco argued that there were material differences between the Claimant and those comparators. In particular, it was submitted that one relevant difference was that none of the comparators cases was decided upon by the decision-maker in this case, so there was limited value gleaned from considering how other situations were treated by different decision-makers. However, the EAT disagreed, stating that the existence of a different decision-maker would not necessarily amount to a material difference for the purpose of identifying a comparator. The employer could be liable for discriminatory treatment meted out to different employees in similar circumstances even though different decision-makers were involved.

Nonetheless, the EAT held that the Tribunal was right to dismiss the Claimant’s case. The circumstances of the comparator cases were not truly similar and the Tribunal did engage with his case on hypothetical comparators to a sufficient extent.

Disability discrimination: constructive knowledge

Lamb v The Garrard Academy – Employment appeal Tribunal

The Claimant was a teacher at a school. She went off sick from February 2012 with depression and alleged bullying at work and raised a grievance. The grievance was upheld, but then set aside for being inadequate by the School’s chief executive. In July 2012, the Claimant met with the chief executive and told her that she was suffering with PTSD, which could be triggered by difficult experiences. She was subsequently assessed by Occupational Health in November 2012.

The EAT has overturned the Tribunal’s decision that the school had no knowledge of the Claimant’s disability until 21 November 2012. The school ought reasonably to have known that she was a disabled person from July 2012 when she had been off work for four months, and had actual knowledge of her disability from when she informed the school that she was suffering from PTSD. As a result, the duty to make reasonable adjustments arose at this point. This is a reminder to employers that they cannot fail or delay referring a matter to occupational health and then claim not to know of an employee’s disability.

Whistleblowing: allegation of defamation can amount to qualifying disclosure

Ibrahim v HCA International Ltd - Employment Appeal Tribunal

The Claimant was an interpreter for HCA International, an operator of private hospitals. He raised concerns that rumours were circulating that he was responsible for breaches of patient confidentiality and asked for an investigation because he wanted to ‘clear his name’. When he was later dismissed, he sought to bring a whistleblowing claim on the basis that this was a protected disclosure. In the first instance, this was dismissed by the Tribunal.

The EAT has held that an allegation of defamation is capable of amounting to a qualifying disclosure, on the basis that it tends to show that a person has failed to comply with a ‘legal obligation’. The provision is broad enough to include tortious duties including defamation. The Claimant’s complaint of damaging false rumours about him that he had breached patient confidentiality was an allegation that he was being defamed. However, the Tribunal had correctly concluded that the disclosure did not meet the public interest test – he was seeking to protect his personal interest – and therefore failed.

Online judgments: principle of open justice overrides claimant's right to privacy

Ameyaw v Price Waterhouse Coopers Services Ltd – Employment Appeal Tribunal

Since 2017, all employment tribunal judgments and written reasons entered on the public register have been published online.

In this case, the Claimant had brought claims against her former employer, PWC. PWC applied to strike out her claims due to alleged scandalous and vexatious conduct at a preliminary hearing, but this was dismissed. The strike-out judgment appeared online and made reference to the alleged scandalous and vexatious conduct. The Claimant’s claims were subsequently dismissed at a final hearing. The Claimant applied for an order under Rule 50 of the ET Rules that the strike-out judgment be removed, the final hearing judgment be excluded from the register, or for an anonymity order. However, her application was refused on the basis that Rule 50 did not provide any basis to override the principle of open justice.

The Claimant appealed on the basis that the online publication breached her right to privacy Article 8 of the European Convention on Human Rights (right to respect for private and family life), having prevented her from securing new employment. The EAT held that the Tribunal was entitled to find that the principle of open justice and the rights to a fair trial and freedom of expression outweighed the Claimant’s right to privacy in this case.

Post-employment restrictions on scientists

Invista Textiles (UK) Ltd & Anor v Botes & Ors – High Court

Invista, a large group owning the Lycra trademark, brought proceedings against three ex-employees who were formerly employed as scientists in biotechnology. Two of the defendants started work on a new biotechnology venture (the other for an IT company). Invista discovered that the defendants had retained confidential documents and sought an injunction. The defendants agreed to an extensive forensic search process and delivery up of any material belonging to Invista. Thousands of files were found, many of which had been deleted. There remained a dispute over costs and the case proceeded to a hearing.

Interestingly in this case, the sympathies of the Court lay with the defendants. The Court found that only a small number of documents had been wrongfully retained and that these were technical breaches rather than deliberate wrongdoing. In particular, it considered that the confidentiality obligations were too wide (specifically, the definition of confidential information) and that the non-compete was an unreasonable restraint of trade, despite the fact it was a relatively short period (3 months). This case provides useful insight into the difficulties in enforcing post-termination restrictions against specialists working in high-tech companies, such as life sciences. The case may be appealed.

Equal pay: Asda decisions

There have been two key decisions in relation to the Asda equal pay claims handed down this month. The claims brought against Asda are brought by approximately 30,000 claimants (mostly women), who contend that their customer-facing roles in store are undervalued compared to male-dominated warehouse jobs.

Brierley & ors v Asda Stores Ltd – Court of Appeal

In this decision, the Court of Appeal has confirmed that the lower paid supermarket employees can compare themselves to the higher paid warehouse employees for the purposes of an equal pay claim. Although employed at different establishments, both classes of employees had common terms and conditions that would apply wherever they worked and had a single source because they were set by the same employer, so their claims could proceed.

Brierley & Ors v Asda Stores Ltd, Ahmed & Ors v Sainsbury's Supermarkets Ltd, Fenton & Ors v Asda Stores Ltd – Court of Appeal

In this separate decision, the Court of Appeal confirmed that multiple equal pay claimants are permitted to submit their claims on the same ET1, provided that their roles are similar and can properly be said to be on the same set of facts. The roles need not be identical. However, it may be more appropriate to submit separate ET1s and ask for the cases to be joined at the case management stage. It was made clear that the claims of male claimants could not be based on the same set of facts as the female claimants.

Disclosure of criminal records scheme ruled disproportionate

R (on the application of P) v Secretary of State for the Home Department – Supreme Court

The Supreme Court has held that the statutory scheme for disclosure of criminal convictions is disproportionate in two respects. First, it was considered disproportionate that all previous convictions should be disclosed (however minor) where the person has more than one conviction, and second that warnings and reprimands issued to young offenders be disclosed to potential employers. The Court held that the disclosure of criminal records in these ways was incompatible with Article 8 of the European Convention on Human Rights (right to respect for private and family life). The Government will therefore need to consider appropriate reforms.

Future developments

  • Anticipated key changes to employment law in England and Wales are available here.

Recent changes

  • An overview of the recent changes to Employment law in England and Wales is available here.

Events

  • All other training materials relating to Employment, Pensions and Incentives across the European Union are available here.