Protected Conversations

Thanks to Ed McFarlane of Deminos HR for preparing this case summary

Can the privilege that covers 'protected conversations' under section 111A ERA be waived?

No, held the EAT giving the first appellate judgment on 'protected conversations' in Faithorn Farrell Timms LLP v Bailey.

The Claimant, a secretary in a firm of surveyors, brought claims for constructive dismissal and indirect sex discrimination. An issue arose over admissibility of evidence under common law 'without prejudice' principles, and, for the first time on appeal, 'protected conversations' under s111A ERA for Unfair Dismissal claims.

The EAT noted that case law on 'without prejudice' discussions was not applicable to the 'protected conversations', the statute had to be read on its own terms. In this case, claims other than Unfair Dismissal not covered by s111A, the admissibility of evidence was determined under 'without prejudice' principles. Evidence may be admitted for a discrimination claim, but remain excluded regarding Unfair Dismissal.

The EAT held that the protection of s111A extends not just to the content of protected conversations, (e.g. an offer) but also the fact of them taking place, a protection broader than with 'without prejudice' discussions. Furthermore, an employer's internal discussions about a protected conversation (e.g. between management and HR advisers) could also be protected.

The Claimant's cross-appeal on waiver of privilege partially succeeded, the EAT holding that privilege had been waived under 'without prejudice' principles, but not under s111A, as that did not allow for waiver of privilege. The EAT noted that s111A can be dis-applied where there is 'improper behaviour', which gives employment tribunals a broader approach to admitting evidence that the limited 'unambiguous impropriety' required to admit in evidence without prejudice discussions. The issue of the applicability of s111A because of alleged improper behaviour was remitted for re-consideration.

The case is important for practitioners and illustrates the complicated scenarios that may arise when without prejudice and protected conversations overlap, along with issues over express or implied waiver of privilege for without prejudice discussions in proceedings.

Discrimination: Work Placements

Thanks to Will Young of Outer Temple Chambers for preparing this case summary Does section 56(5) of the Equality Act 2010 prevent a claim being brought in the employment tribunal against the provider of vocational training in respect of discrimination in the provision of that training? No, held the Court of Appeal in the case of Blackwood v Birmingham & Solihull Mental Health NHS Trust. The Claimant was assigned a work placement with the Defendant Trust as part of her University Course in Mental Health nursing. She was not able to work the shift pattern offered because of her childcare commitments, and her placement was withdrawn. The Claimant brought a claim against the Trust in the employment tribunal, relying on section 55 of the Equality Act, but the employment tribunal dismissed the claim on the basis that it was precluded by section 56(5), which, in summary, was thought to prevent claims being brought by students of universities (et al) in relation to training to which their university had the power to afford access, even where no claim could in fact be made against the university. The Court of Appeal held that section 56(5) needed to be interpreted in line with the EU Directive, reading into the subsection that a claim could not be brought in the employment tribunal against an education service provider concerning training for university students but only "to the extent that the student is entitled under [section 91] to make a claim as regards that discrimination." Thus a lacuna in the law was removed in that if a Claimant cannot, in the circumstances, bring a claim against the university arranging the vocational training under section 91 Equality Act (in the County Court), she is now entitled to bring a claim against the training provider in the employment tribunal.

Equal Pay Claims: No Power to Stay Claims in Employment Tribunal

Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary

Should the Asda equal pay claims in the employment tribunal be stayed, in effect compelling the Claimants to pursue High Court proceedings?

No, held the Court of Appeal in Asda Stores v Brierley.

There are currently over 7,000 equal pay claims against Asda. The claims allege the work the Claimants do is of equal value to their comparators, and yet their comparators are being paid substantially more than they are. The claims are being defended.

Asda made an application, in effect, to stop the claims proceeding in the employment tribunal. It was accepted that the employment tribunal had no power directly to transfer the claim to the High Court. But Asda contended that the employment tribunal had the power to stay proceedings indefinitely and, if it exercised that power, the Claimants would be compelled to go to the High Court if they wanted to pursue their claims.

The employment tribunal rejected the application, concluding that it had no power to impose a stay for the purpose sought and even if it did, it would not be appropriate to exercise that power in the present case. Asda's appeal to the EAT was rejected.

Asda appealed to the Court of Appeal. Asda's case was that, although, in most cases, the employment tribunal is well suited to hear an equal value claim, the present litigation was exceptional. It said that this was the most important, complex and financially significant equal pay claim ever pursued in the private sector with ramifications, not only for Asda, but the retail trade generally. It also submitted that there were very complex points of law which would need to be resolved, and a High Court Judge would be better suited to decide them than an Employment Judge.

The Court of Appeal rejected the appeal. It was true there was power to stay proceedings, even indefinitely; but this should not happen in the present case. It would be prejudicial to employees. They would have to start proceedings again with additional stress, court fees, limitation issues and the risk of costs if they lost. Finally the Employment Judge had exercised his discretion properly, and had considered all the issues. He was entitled to take the view that an employment tribunal was perfectly capable of handling the claims and it would not be appropriate to "transfer" them.

Elias LJ expressed the view that the assumption that Employment Judges would not be up to the task did less than justice to the quality of some outstanding judges who sit in the employment tribunals.

Abuse of Migrant Workers not Unlawful Discrimination

Does abuse of migrant domestic workers, on grounds of their status as vulnerable migrants, amount to unlawful discrimination? No, held the Supreme Court in an important judgment (Taiwo v Olaigbe and another and Onu  v Akwiwu and another) handed down this morning. Two Nigerian nationals, both in the UK under domestic migrant visas, were mistreated and abused by their employers (see paras 3, 4 and 8 of the judgment for the description of how they were treated). After escaping, they brought successful claims under the minimum wage (and other similar) legislation. They also sought compensation under the Equality Act, asserting they had been directly or indirectly discriminated against on grounds of their nationality. The Supreme Court disagreed. It was not direct discrimination because the mistreatment was due to their vulnerable migrant status, not because of their nationality. Nor was it indirect discrimination, because there was no ‘provision, criterion or practice’ applied by the employers to their employees. Baroness Hale suggested, in a concluding paragraph, that Parliament might consider whether employment tribunals ought to be given jurisdiction to award compensation under section 8 of the Modern Slavery Act to grant recompense for ill-treatment meted out to vulnerable migrant workers.

Acas Code does not apply to Ill Health Dismissals

Thanks to Jamie Anderson of Trinity Chambers for preparing this case summary

Does the Acas Code of Practice on Disciplinary and Grievance Procedures apply to ill health dismissals?

No it does not, held the EAT in Holmes v QinetiQ.

The Claimant was dismissed on the grounds of ill health. It was conceded that the dismissal was unfair because of the failure to obtain an up to date occupational health report. At the remedy hearing, the Claimant contended that the Acas Code applied and that due to the unreasonable failure to follow the code he was entitled to an uplift under s.207A TULR(C)A 1992.

The EAT agreed with the employment tribunal that the Acas Code did not apply. Rather, the Acas Code applies to all cases where an employee's alleged act or omissions involve culpable conduct or performance on their part that requires correction or punishment e.g. misconduct and poor performance. It was difficult to see how ill health fell into this category.

The position would be different where the ill health leads to a disciplinary issue such as a failure to comply with sickness absence procedures. In that situation the disciplinary procedure is invoked to address alleged culpable conduct.

Employment Tribunal Fees Review

The House of Common Justice Committee has published its review into Court and Tribunal Fees.  Note this is not the government review which was completed in 2015 but has not been published, about which the report is deeply critical at paras 58 and 59.

These are the key findings of the report:-
 

•  there has been a significant drop in the number of employment tribunal claims
   
• the government's assertion that the drop is largely attributable to the success of Acas Early Conciliation is "even on the most favourable construction, superficial" (para 69)
   
• fees "have had a significant adverse impact on access to justice for meritorious claims" (para 69)
   
• the 'type A' and 'type B' claim distinction did not relate to the complexity or length of cases (para73)
   
• the level of fees should be a "substantially reduced" (para 79)
   
• the remission system should be overhauled, with only one application needed (to cover both issue and hearing fees)

The report also recommends special consideration - and a review of the three month time limit - in pregnancy discrimination cases (para 79).

This report is embarrassing for the government, but has little political impact (especially as the timing of the report, three days before the Brexit vote, means it will receive very little press attention).

Supreme Court: Reinstatement after Unfair Dismissal

Thanks to Neil Addison of New Bailey Chambers for preparing this case summary

Before making an order for reinstatement, does an employment tribunal have to be satisfied that reinstatement would be acceptable to both parties?

No, held the Supreme Court in McBride v Scottish Police Authority.

The Claimant was a fingerprint officer who had been involved in a notorious Scottish Criminal case which had led to a Detective, Shirley McKie, being charged and then acquitted of perjury concerning a contested fingerprint at a murder scene. The case had generated intense media and political criticism in Scotland.

The Claimant was subsequently unfairly dismissed following a reorganisation.  The employment tribunal ordered her reinstatement under s114 Employment Rights Act, but impliedly accepted that she would be employed in a non- court going role. The employer appealed on the basis that the Claimant would not accept such a restriction.

The Supreme Court held that the only obligation under s114 was that a Claimant be restored to their contractual employment. On the facts it would be practicable to restrict the Claimant to non- court employment and there was no evidence such a restriction would be in breach of contract

A decision on very specific facts, but the judgment is a useful analysis of the principles of reinstatement and redeployment.

TUPE: Service Provision Change

Thanks to Dr John McMullen of Wrigleys Solicitors LLP for preparing this case summary

For a service provision change TUPE transfer, there must have been, prior to the change, an organised grouping of employees, the principal purpose of which was to carry out the relevant activities for the relevant client.

In Amaryllis Ltd v McLeod the EAT considered that the principal purpose of any organised grouping of workers must be assessed at the point immediately before the change of provider, and not historically.

Millbrook Furnishings Ltd carried out work for the Ministry of Defence (MoD) for many years renovating wood and metal furniture. Between 2003 and 2008 it did so as a sub-contractor to Amaryllis. From December 2012 the MoD awarded new contracts under a framework agreement. In 2014 the furnishings renovations contract was retendered among four contractors on the framework agreement. Millbrook was unsuccessful on the retender and, instead, the contract was awarded to Amaryllis.

The question was whether there was an organised grouping of employees in place prior to the transfer to work to Amaryllis, the principal purpose of which was to carry out the activities concerned on behalf of the MoD.

It was accepted that Millbrook's employees were spending just shy of 70% of their time on the MoD renovations contract. Nonetheless the Employment Judge considered that it was appropriate to consider evidence relating to the past. The Employment Judge was satisfied that the department had originally been set up with the specific purpose of servicing the MoD contracts, and although that grouping now serviced other customers, the MoD was still the largest customer. He found TUPE applied.

Amaryllis appealed. The EAT upheld the appeal. It was not sufficient that a department carries out significant work for a client. It must be organised for the principal purpose of carrying out that work for the client. The relevant time is immediately before the transfer.

The Employment Judge was wrong to look at the matter on an historic basis. And it was incorrect to take into account work done on furniture renovation by Millbrook between 2003 and 2008 when Millbrook was a subcontractor of Amaryllis. During this time the MoD was not a client of Millbrook. Millbrook's client for this work was Amaryllis. That period could not be taken into account since, even if there were, during that period, an organised grouping of employees, the grouping concerned was not dedicated to carrying out the activities for the relevant client.

Unfair Dismissal: Procedure and Polkey

Thanks to James Medhurst of Hill Hofstetter for preparing this case summary

Can a dismissal be found to be procedurally unfair without specifying the breach of procedure?

No, held the EAT in Express Medicals v O'Donnell.

The Claimant was the minority shareholder in a company. There were discussions with the majority shareholder to negotiate an exit, after a falling out between them, but he was dismissed while the process was still continuing. The employment tribunal noted that there was an "ongoing discussion and dialogue" but found the dismissal unfair because "no particular procedure" had been followed.

The Respondent argued that this was a dismissal for some other substantial reason but neither party addressed the issue of whether the ACAS Code of Practice would apply, and nor did the employment tribunal make a finding on the point. In circumstances where there had already been some dialogue between the parties, it also failed to specify what further steps the Respondent ought to have taken.

It was a further error not to make a Polkey deduction where there had been a finding of fact that the relationship had "seriously deteriorated and could not necessarily be considered to remain tenable".

Age Discrimination and National Minimum Wage

The House of Commons library has produced a debate pack (ie briefing note for MPs) on the interaction between bands of the national minimum wage and age discrimination.

It is intended to inform intelligent discussion in a forthcoming Westminster Hall debate about the introduction of the National Living Wage alongside a new 21-24 year old age band, which has led to renewed interest in the rationale behind minimum wage age-banding, fears that workers over 25 would be discriminated against in favour of younger, cheaper, workers and concerns that workers aged 21-24 are now ineligible for the full minimum wage.

The rationale for minimum wage age banding has typically been that younger workers occupy a more vulnerable position in the labour market, with a greater need to acquire experience, and that if younger workers were eligible for the full minimum wage they might be priced out of the labour market.

Consultation: Changes to IR35 in the public sector

HMRC has issued a consultation document.

It proposes that where individuals offer services to public sector 'employers' through an intermediary, such as a limited company, it will become the public body's responsibility to operate the IR35 regime and pay the tax, rather than the individual/intermediary. This is intended to crack down on what is seen as widespread abuse of the IR35 system and resultant non payment of tax.

These proposals will not affect the operation of IR35 in the private sector.

The closing date for comments is 18 August 2016.

Muslims, headscarfs and direct discrimination

Thanks to Miranda de Savorgnani of Outer Temple Chambers for preparing this case summary

Is it direct discrimination for a private employer to prohibit a Muslim employee from wearing a headscarf in the workplace?

Not if the prohibition stems from a general neutrality policy, opines Advocate General Kokott ahead of the European Court of Justice's first judgment on religious discrimination under the Equality Directive, Achbita v Centrum voor gelijkheid van kansen en voor racismebestrijding.

Three years into her employment at a Belgian security company, a Muslim employee began to wear a headscarf at work despite a company rule which prohibited the wearing of any visible signs of political, philosophical or religious beliefs. She was dismissed and appealed through the courts to the Belgian Constitutional Court which posed the question to the ECJ.

AG Kokott considers that as the neutrality policy is not limited to religious beliefs, it could at most amount to indirect discrimination. Even then, it may be objectively justified as an occupational requirement, subject to a proportionality assessment based on the size and conspicuousness of the symbol, the nature and context of the employee's activity, and the national identity of the Member State concerned.

AG Kokott distinguishes this case from the finding of religious discrimination by the European Court of Human Rights in Eweida v United Kingdom, where a similar neutrality policy had not been applied consistently to individual employees.