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HighlightsKey developmentsKey casesFuture developmentsRecent changesEvents
This April, we have seen the European Parliament approve two proposed directives which will increase protections for workers with regard to whistleblowing and transparency of terms and conditions, alongside new UK legislation to bring into force the increased protections under the Good Work Plan. There has been a continued focus on culture and governance in the FCA Business Plan 2019/2020 and BEIS report on executive remuneration. We have also seen a number of highly topical cases, which cover sexual harassment, fitness and propriety for regulated people, and IR35.
EU whistleblowing directive approved by European Parliament
On 16 April 2019, the proposed new EU whistleblowing directive was formally adopted by the European Parliament. Much of the content of the directive is already covered under UK whistleblowing law, which is deemed to provide comprehensive whistleblower protection, but there are some additional requirements under the directive. For example, there will be an obligation on private companies with more than 50 employees to implement internal reporting channels and to respond to reported concerns within three months (or six months in complex cases). Whistleblowers will also have the right to make disclosures to competent national authorities, and in limited circumstances, to the public/press.
The new directive now awaits final approval by EU ministers, following which member states will have two years to implement and comply with the rules. For further information, see the press release from the EU Parliament and our elexica article.
EU directive on transparent and predictable working conditions
On the same day (16 April 2019), the European Parliament also formally adopted the proposal for a directive on transparent and predictable working conditions. The proposed directive provides for revised obligations to inform workers of the key terms of their employment relationship and defines a set of minimum rights for those who meet the criteria (including a threshold of at least 3 hours per week). It is intended to benefit workers without fixed or guaranteed hours, such "gig economy" workers for companies like Uber and Deliveroo.
Some of the new requirements already form part of the UK Government’s Good Work Plan (see below), such as the right to a section 1 statement, although some further legislation would be required to ensure that UK law fully complies with the directive. Approval is awaited from European Council, and then member states will have three years to put the rules into practice. For further information, see the press release from the EU Parliament.
Good Work Plan: new regulations
On 28 March 2019, new regulations were made which will bring into force more of the commitments set out in the Good Work Plan, including:
- an increase in the maximum financial penalty that a tribunal may order in respect of an employer’s aggravated breach of employment law from £5,000 to £20,000 (with effect from 6 April 2019)
- extending the right to a written statement of particulars of employment (a section 1 statement) to all workers, not just employees (with effect from 6 April 2020)
- lowering the threshold required for employees to request the establishment of an information and consultation body from 10% to 2% (subject to a minimum of 15 employees) (with effect from 6 April 2020), and
- in relation to agency workers, the abolition of the Swedish derogation provisions, meaning that all agency workers will have the right to pay parity after 12 weeks (with effect from 6 April 2020)
See our elexica article for further information.
FCA publishes Business Plan for 2019/2020
On 17 April 2019, the FCA released its Business Plan for 2019/20, in which it sets out its key priorities for regulating the financial services industry over the next 12 months. Consistent with the SMCR (which will be extended to all regulated firms this year), there is a continued focus on culture and governance of the firms the FCA regulates. There is a focus on promoting healthy cultures where the driving purpose leads people to take personal responsibility for consumer and market outcomes, to do the right thing competently and to speak up and listen to others.
See our elexica article on the FCA’s key priorities in relation to culture and governance from its 2019/20 Business Plan here.
Corporate governance: BEIS Committee report on executive remuneration
The Business, Energy and Industrial Strategy Select Committee has published a report on executive remuneration which examines progress on the Government’s attempts to address the gap that it acknowledges between the pay of chief executives on the one hand and company performance and employee pay on the other.
The report concludes that companies have continued to share the rewards of their success with shareholders and senior management, rather than sharing the proceeds more evenly among the workforce – and that huge differentials in pay between those at the top and the bottom remain the norm. The committee supports the new requirements under the Corporate Governance Code, particularly to publish pay ratios, and recommends the establishment of a new regulator to monitor compliance. The Committee's full conclusions and recommendations can be found here.
Vento bands increased
The Presidents of the Employment Tribunals have issued an addendum to the Presidential guidance on Vento bands (which apply to injury to feelings awards in discrimination and whistleblowing claims), setting out the following increases:
- lower band: £900 - £8,800
- middle band: £8,800 - £26,300
- upper band: £26,300 - £44,000.
The increases apply to claims presented on or after 6 April 2019.
Sexual harassment: departure from confidentiality clauses?
Abildgaard v IFM Investors - Employment Tribunal
Abildgaard alleged that an executive director at the firm, Michel-Verdier, made sexual advances towards her when they were in a Madrid night club for a work celebration, and repeatedly invited her back to his hotel room afterwards. After she complained, IFM conducted an investigation and decided not to suspend or dismiss the director, instead taking action by cutting his bonus and banning him from drinking alcohol at work events for 12 months. The claimant subsequently resigned and brought claims for sexual harassment, constructive dismissal and victimisation. She also claimed that IFM failed to respond appropriately to her complaint.
The case is considered unusual in that it reached a hearing at the Central London Employment Tribunal. However, a settlement was reached (shortly before a further legal hearing of the case was scheduled) for a payment of around £270,000 (which was in excess of the sum claimed on her schedule of loss of £236,000). Interestingly, under the terms of the settlement, Abildgaard retained the right to speak about the case, which may indicate a move away from the strict confidentiality clauses (or non-disclosure agreements) which have recently come under scrutiny in these types of cases. Abildgaard has since set up a charity to raise awareness and help others who suffer from workplace harassment.
Fitness and propriety: dismissal based on lack of witness credibility
Radia v Jeffries International Ltd - Employment Appeal Tribunal
Radia was an equity research analyst and then managing director at Jefferies International, an FCA-regulated financial services firm. He brought a disability discrimination claim against the firm, which was dismissed by the Tribunal after finding that his evidence was “not credible in many respects” and that he had “misled” the Tribunal. The Tribunal went further to say that this was of “grave concern” given that he was a regulated person.
After the judgment, Jefferies suspended Radia on full pay, pending an investigation. He was given the opportunity to defend himself at a disciplinary hearing, but subsequently dismissed on the basis that his behaviour was incompatible with his regulated role. Jefferies took account of the Fit and Proper test in the FCA Handbook, which states that all matters should be taken into account when assessing staff including whether a person has been criticised by a court or tribunal. (Note the rules relating to ‘fit and proper persons’ will remain the same under the SMCR.) Radia brought claims of victimisation and whistleblowing in the Tribunal, which were dismissed, and a subsequent appeal. The EAT agreed with the Tribunal that it was reasonable for Jefferies to rely on the Tribunal’s credibility findings without conducting further investigation. However, his appeal was ultimately successful on the basis that he should have had an appeal hearing.
Reasonable adjustments: need to focus on particular disadvantage
Linsley v Revenue and Customs Commissioners - Employment Appeal Tribunal
Linsley suffered from ulcerative colitis, a disability under the Equality Act 2010, which could make her need to go to the toilet urgently and is exacerbated by stress. An OH report stated that she would benefit from a dedicated car parking space close to where she worked to avoid the stress of having to look for a parking space (which would in turn aggravate her disability). In line with HMRC policy to give priority to staff requiring a parking space as a reasonable adjustment, Linsley was initially provided with a dedicated parking space. When she moved to a different site, her request for a dedicated parking space was refused, and instead she was permitted a space near the toilets on a first come, first served basis.
At first instance, the Tribunal found that HMRC had made reasonable adjustments in the alternative parking arrangements made for Linsley and that these were sufficient to discharge its obligations under the Equality Act. However, the EAT disagreed, finding that the Tribunal was mistaken in its approach by failing to give due weight to HMRC’s parking policy and it had failed to focus on the particular disadvantage suffered by the employee, namely the stress of needing to look for a parking space.
Disciplinary investigations: parallel proceedings
North West Anglia NHS Foundation Trust v Gregg - Court of Appeal (Civil Division)
Dr Gregg, a consultant anaesthetist, was suspended on full pay following the death of two patients in his care, pending an investigation. The medical regulatory body (MPTS) issued a temporary suspension order against Gregg, resulting in his medical licence being withdrawn for 18 months. The police were also notified and became involved. The Trust then sought to stop his pay and decided to proceed with disciplinary proceedings whilst the police investigation was ongoing. Dr Gregg sought an injunction from the High Court to prevent the Trust from continuing with the disciplinary proceedings and from not paying him, which was granted.
The Trust appealed. The Court of Appeal agreed that it was a breach of contract to withhold his pay during the interim suspension. However, it held that it was not a breach of contract for the Trust to pursue its internal disciplinary process in parallel with the police investigation, and it is open to an employer to do so. It stated that in this case the injunction amounted to “micro-management” by the court of the Trust’s employment procedures. Nonetheless, such parallel proceedings remain a tricky area, and whilst employers have a wide discretion, must give careful consideration in each case.
Data subject access requests (DSAR): third party data
Rudd v Bridle - Queen’s Bench Division
Dr Rudd, a leading cancer doctor with expertise in asbestos-related cancers and often providing expert evidence in asbestos-related claims, was subjected to a campaign by a lobbyist for the asbestos industry, Mr Bridle. Bridle took a number of steps against Dr Rudd in an attempt to smear his reputation and get him struck off by the General Medical Council, including a complaint alleging that Rudd worked with others to fraudulently misrepresent data on asbestos in a conspiracy to help personal injury claimants win damages.
Dr Rudd submitted a DSAR to Bridle under the Data Protection Act 1998 to seek information about which individuals or companies were behind the complaint. Bridle’s initial response to the subject access request was limited to his name and email address. Dr Rudd sought court orders compelling Bridle to revisit the DSAR.
In this decision, the Judge found that Bridle had still not complied with the DSAR and he was ordered to provide certain additional information. In particular, the Judge considered that Bridle’s decision to withhold all third-party data was misconceived. He then took an expansive view of what might be considered personal data, finding that the personal data of those who allegedly conspired with Dr Rudd was also Dr Rudd’s personal data because it is information that “focuses on him and is biographically significant”.
IR35: TV presenter cases
Atholl House Productions Ltd v Revenue and Customs Commissioners - First-tier Tribunal (Tax Chamber)
This is the third case in a series of cases involving presenters accused of not complying with the IR35 tax rules in respect of contracts performed through their personal service companies (Ackroyd and Lorraine Kelly). In this case, involving Kaye Adams of Loose Women, the First-tier Tribunal held that IR35 did not apply to her providing services to the BBC through her personal service company. The central issue was whether a hypothetical contract between Adams and the BBC had the attributes of an employment contract or a contract for services (to which IR35 would not apply).
Despite there being contractual terms to the contrary, the Tribunal identified that the BBC had no first call on her time, or extensive control over her other engagements, and the right of substitution was impractical and discounted. Due to a long history of freelance work, the presenter’s professional identity and remuneration were connected more closely to her engagements that did not involve the BBC. Accordingly, it was concluded that there was no employment relationship and IR35 did not apply, highlighting the fact-specific nature of such cases.
Employer not liable for injuries to staff member at Christmas party
Shelbourne v Cancer Research UK - High Court (Queen’s Bench Division)
The High Court upheld a County Court decision that an employer was not liable in negligence for an injury sustained by an employee at a Christmas party, and nor was it vicariously liable for the actions of the person who caused the injury.
A fellow partygoer had attempted to lift the claimant on the dancefloor but dropped her, resulting in serious back injury. The Court considered the nature of the occasion and concluded that the employer had undertaken sufficient preparations and risk assessment. Furthermore, the Court ruled that the claimant had no ground to claim against the employer on the basis of negligence or vicarious liability because there was insufficient connection between the incident and the nature of the wrongdoer's work, and the accident was not reasonably foreseeable. The Judge agreed with a comment made during the hearing, that the average person would consider the strict policing of Christmas parties as “health and safety gone mad”.
PHI benefits: employee entitled to PHI until he could return to same job
ICTS v Visram - Employment Appeal Tribunal
After a lengthy absence from work due to illness, Mr Visram successfully claimed for unfair dismissal and disability discrimination when his employment was terminated on capability grounds by ICTS following a TUPE transfer. Regarding compensation for loss of long term disability benefits until death or retirement, the Tribunal held that ICTS was contractually obliged to continue to provide Mr Visram with the long-term disability benefits until he became fit to return to work in the position he had held before he went on sick leave.
ICTS appealed to the EAT, arguing that it was only obliged to continue to provide Mr Visram with the benefits until such time as he became fit enough to return to work in any suitable full-time position. Based on the wording of the relevant policy documents, the EAT held that ‘return to work’ meant return to the work from which Mr Visram had left when he went off sick, not just any work, and dismissed the appeal. As there was no prospect that Mr Visram would ever be able to do that, the Tribunal had been correct in deciding that he was entitled to be compensated for loss of benefits until death or retirement.
Interestingly, Mr Visram also successfully counter appealed on the basis that he should have been awarded aggravated damages because ICTS subjected him to covert surveillance, causing him anxiety. This issue has been remitted to the Tribunal.
- Anticipated key changes to employment law in England and Wales are available here.
- An overview of the recent changes to Employment law in England and Wales is available here.
- All other training materials relating to Employment, Pensions and Incentives across the European Union are available here.
This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.