Employment legal update #64 | June 2023

Our Employment & HR team brings the second part of June's review of new legislation, guidance and case law.

News: 

The government has announced a number of important changes that it is proposing to make in various areas of employment law, including working time, TUPE, and restrictive covenants. The announcement covers consultation on the following proposals:

• Removing reporting requirements under the Working Time Regulations
• Introducing “rolled up holiday pay”
• Merging the basic and additional holiday entitlements under the Working Time Regulations into one
• Removing the requirement to elect employee representatives for the purpose of TUPE consultation for businesses with fewer than 50 employees and transfers affecting less than 10 employees, allowing businesses to consult directly with the affected employees
• Limiting non-compete clauses to a maximum of 3 months

The Update will keep readers abreast of these developments.

The Labour Party has announced that, if it comes into government, it will introduce a requirement for employers with over 250 employees to publish and implement a “menopause action plan”. This will set out how employers plan to support their employees who are going through the menopause and will cover paid time off, working environments which help those with menopause symptoms and, where uniforms are worn, alterations to these. It anticipates using the same online portal as with the gender pay gap to upload the results. It will also introduce guidance for employers in supporting those with menopausal symptoms.

The second reading of the Protection from Redundancy (Pregnancy and Family Leave) Bill in the House of Lords took place in March. During the debate, the government's support for stronger redundancy protections for pregnant women and those returning from parental leave, which would be provided by the Bill, was emphasised. It seems increasingly likely that this will become law at some point.

The Home Office has announced the launch of a new Electronic Travel Authorisation (ETA) scheme due in October 2023. An ETA is a digital permission to travel, similar to the US ESTA scheme. It will be required by all non-visa nationals (those who do not require a visa to visit the UK) coming to the UK for up to six months as a visitor, including transit visitors and some creative workers. Those with a UK visa or permission to live, work or study in the UK will not need one. ETAs will last for two years and can be used to make multiple visits to the UK. However, they do not guarantee entry to the UK and anyone refused an ETA will need to apply for a visa. Applications will be submitted online or via an app and decisions are expected within 3 working days.

With effect from 6 April 2023, certain statutory payments and compensatory limits have increased as follows:

• The statutory limit on a week's pay increases from £571 to £643
• The maximum compensatory award for unfair dismissal increases from £93,878 to £105,707
• The minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £6,959 to £7,836

These apply where the effective date of termination is on or after 6 April 2023.

The government has published its statement of changes to the immigration rules. Most of these changes were implemented on 12 April 2023. They:-

• Replace the Innovator and Start-up routes with a new Innovator Founder route
• Introduce the new Electronic Travel Authorisation (ETA) scheme (see above)
• Increase the minimum salary requirements to sponsor a worker in the UK under the Skilled Worker and Global Business Mobility routes
• Change the evidential requirements for applications under the Global Talent route, following feedback from the relevant endorsing bodies.

The annual increase to employment tribunal awards for injury to feelings (the Vento Guidelines) has been issued. It applies in respect of all cases presented on or after 6 April 2023 as follows:-

• a lower band of £1,100 to £11,200 for less serious cases;
• a middle band of £11,200 to £33,700 for cases that do not merit an award in the upper band;
• an upper band of £33,700 to £56,200 for the most serious cases, with the most exceptional cases capable of exceeding £56,200.

A reminder that other statutory payments increased in April 2023 as follows:-

• Statutory maternity, paternity, adoption, shared parental and parental bereavement pay increased from £156.66 to £172.48 from 2 April.
• Statutory sick pay increased from £99.35 to £109.40 from 6 April 2023.

And from 1 April the following payments increased: -

• The NLW for workers aged 23 and over increased from £9.50 to £10.42 per hour.
• The NMW for 21- to 22-year-olds increased from £9.18 to £10.18 per hour.
• The NMW for 18- to 20-year-olds increased from £6.83 to £7.49 per hour.
• The NMW for 16- to 17-year-olds increased from £4.81 to £5.28 per hour.
• The apprentice rate increased from £4.81 to £5.28 per hour.
• The accommodation offset rate increased from £8.70 to £9.10.

Commentary:

Effective date of termination

In Meaker v Cyxtera Technology UK Ltd the EAT upheld a tribunal decision regarding the effective date of termination for the purposes of an unfair dismissal claim, meaning that the claim had been brought out of time. It confirmed that where an employee is summarily dismissed, the EDT is the date of dismissal, regardless of whether the employer made a payment in lieu of a period of notice. The EAT confirmed that the approach set out in another EAT case still stood.

The EAT also upheld the tribunal decision that a "without prejudice" letter, which wrongly referred to the employee's employment terminating by mutual agreement and enclosed a settlement agreement, was clear enough to dismiss the employee for the purposes of unfair dismissal in the ERA. Even though the letter referenced mutual agreement, there was a clear termination date set out in the letter, along with the payments which the individual would receive and information regarding issue of the P45. It was clear that the employee’s employment was terminating regardless of whether or not he signed a settlement agreement.

The difficulties of strikeout applications

In Mohammed v Guy's and St Thomas' NHS Foundation Trust the EAT has examined the law and practice surrounding strikeout applications in a case which demonstrates how difficult these are to achieve if an application is made to strike out the entirety of the claim.

The EAT found that a tribunal had erred in law in making an unless order that required a claimant to provide additional information about some of her claims, in terms which meant that, if she did not do so, the entirety of her claim would be struck out.

The EAT commented on Rule 38 of the ET rules which distinguishes between orders where non-compliance will result in the dismissal of the whole claim, and those where only a part of it will be struck out. Furthermore, the EAT found that the tribunal had failed to look at the relevant authorities which emphasise that care should be taken before making an unless order where the whole claim could be struck out. In this case, the tribunal had not taken into consideration the fact that any material breach of the order would strike out the whole claim, even parts of it where no additional information had been requested. The Unless order would thereby have had a Draconian effect on aspects of the claim which were not the subject of the request for further information and should not therefore be at risk of being struck out if the order was not complied with.

The EAT stressed that proportionality and the interests of justice should be considered in issuing an unless order because, if it is not complied with, the strikeout is automatic and these points are not taken into consideration. This could be a disproportionate action, especially where, as in this case, there were parts of the claim which were unaffected and the unless order only applied to certain aspects of the claim. There should been with making an order that the whole claim is dismissed if the failure to comply with several requests for additional information related to different aspects of the claim. However, proportionality would generally dictate limiting the dismissal to any aspect of claim where there was a material breach of an order to provide information in respect of it. In other words, any request for an unless order should be limited to the aspect of the claim where there is non-compliance and not also include other causes of action where there is no such complaint.

Strikeout application upheld

In contrast to the case above, Rojha v Zinc Media Group plc is an example of where an application to strike out the entirety of the claimant’s claim for failure to comply with an order was upheld by the EAT. The employment tribunal, in a case management hearing, made an unless order requiring further particulars of some of the claimant’s claims but providing that non-compliance would result in all the claims being struck out.  The tribunal concluded, correctly in the view of the EAT, that the claims were interrelated and her failure to provide a remedy statement applied to all her claims, not just the ones where further particulars were required. Furthermore, it considered that the claimant’s failure to progress the proceedings might well jeopardise the final hearing.

The claims were in respect of unfair dismissal, race discrimination, and sex and/or pregnancy and maternity discrimination; also a redundancy payment, arrears of pay and other payments. She failed to attend a case management preliminary hearing or pay the deposit which was ordered. As a result there was a further preliminary hearing , which again she did not attend, at which the unless order was made. When she again failed to comply, the claim was automatically struck out and she appealed to the EAT, which upheld the tribunal decision. In this situation it was considered that the tribunal’s unless order was proportionate to the position of the parties given the claimant ‘s conduct evidenced that she was clearly not properly pursuing the claims that she had brought.

16 points to consider with strikeout applications

‘Tis the season of strikeout applications. In yet another decision concerning an unless order striking out multiple claims for non-compliance, the EAT has issued a judgment in which it sets out 16 points to consider when looking at whether an unless order to strike out all or parts of the claim is justified. In Minnoch and ors v Interserve FM Ltd  the EAT issue the following directions:-

At the making of the unless order:

• the Draconian consequences if the order is not complied with should be carefully considered in the decision to make the order
• converting a previous general case management order into an unless order is often unwise - question whether the order will be fit for purpose as an unless order
• it should be drafted in such a way as to easily to identify whether there has been material compliance
• the consequence of material non-compliance mut be clear; it does not necessarily have to result in striking out the entire claim but a failure to comply with the order can result in parts of the claim being struck out
• the order can provide for a lesser sanction such as the claimant being limited to relying on the facts as set out in their claim form, even though rule 38 of the Tribunal Rules does not expressly provide for this
• if an unless order covers more than one requirement, careful thought should be given as to how it is drafted to avoid a situation where even partial compliance will still result in all the claims being struck out as this could be disproportionate

Once non-compliance of the order is established:-

• the employment tribunal is given notice of whether there has been compliance – it is not concerned with revisiting the terms of the order
• particularly if there has been some asserted attempt at compliance, careful thought should be given to whether an opportunity should be given for submissions, in writing or at a hearing, before the decision is taken
• look at whether there has been material compliance
• the test is qualitative rather than quantitative
• the approach should be facilitative rather than punitive
• any ambiguity in the drafting of the order should be resolved in favour of the party who was required to comply.

And when relief from the sanction is sought:-

• a broad assessment of what is in the interests of justice should be undertaken
• the factors which may be material to that assessment will vary considerably according to the circumstances of the case
• the factors generally include the reason for the default (in particular whether it was deliberate); the seriousness of the default; prejudice to the other party; and whether a fair trial remains possible
• and the catch-all – that each case will depend on its own facts.

The EAT has held that the above principles should be applied at the various stages of considering an unless order and its implications.

Vicarious liability - Supreme Court decision

The Supreme Court has given judgment in an important case on vicarious liability, in Trustees of the Barry Congregation of Jehovah's Witnesses v BXB.

The respondent, the appellant in the lower courts, had brought proceedings against the appellant asserting that the appellant was vicariously liable for the rape and assault suffered by her from a former elder of the appellants. The individual concerned and the respondent and his wife began attending the appellant’s services and became friends. However the individual became depressed, his behaviour changed, and their friendship was under strain, sustained only by the respondent speaking to the individual’s father, also an elder of the appellant, who advised her that the continued friendship was essential to his mental well-being. But for that, the friendship would have been terminated by the respondent. Eventually an incident took place in which the respondent was raped, and the individual was convicted.

The respondent issued proceedings for damages for personal injury and psychiatric damage against, among others, an organisation which supports the charitable acts of the appellant; and succeeded. She also succeeded when the appellant appealed to the Court of Appeal and the appellant then took its case to the Supreme Court.

The Supreme Court unanimously allowed the appeal, holding that the organisation was not vicariously reliable for the rape of the respondent. It held that, in the unusual case of vicarious liability, there is a 2-stage test, both stages of which have to be satisfied for vicarious liability to be found.

The first test was whether the relationship between the claimant and the individual who committed the tort is one of employment or a relationship akin to employment. The Supreme Court, agreeing with the lower courts, held that the relationship was akin to employment in that the individual was carrying out works for and on behalf of the appellant.

The second stage was whether the wrongful conduct was so closely connected with acts that the individual was authorised to do by the appellant in the course of the relationship being akin to employment, that he could properly be considered to have been carrying these out on behalf of the appellant in the context of that relationship.

In this respect the Supreme Court held that the second stage of the test was not met. The offence took place while the individual was not carrying out any activities for and on behalf of the appellant. Furthermore, the individual abused the friendship between him and the respondent and that was the primary reason the offence took place. In addition, the offence itself was not an obvious progression from what had previously taken place between the individual and the respondent. As a result, the appeal was upheld.

Unfavourable treatment not for disability reason

In McQueen v General Optical Council, the EAT has upheld an employment tribunal decision that the treatment of the claimant was not for something arising in consequence of disability and that no section 15 claim arose. Although the tribunal had apparently drafted its judgment in strange wording, nonetheless the EAT held that the decision was not wrong in principle and was allowed to stand.

The claimant suffered from partial deafness, some Asperger’s symptoms, dyslexia and neuro diversity, together with various associated behavioural issues. He crossed swords with colleagues on a number of occasions as a result of the way in which he conducted himself and his confrontational behaviour, and brought what turned out to be a very protracted grievance. He was disciplined for performance -related issues including a failure to follow management instructions by refusing to desist from standing up at his desk to speak which was found to be disruptive. An occupational health referral resulted in changes to his ways of working, but these had limited effects. In the end he brought employment tribunal proceedings claiming that he had been subjected to unfavourable treatment because of something arising in consequence of his disability under section 15 of the Equality Act.

The tribunal found the reason for his disciplinaries was for behaviour which was not as a result of his conditions. The specific areas where he had been disciplined were in a refusal to sit down when speaking and creating a disruptive environment for other colleagues, and his apparent requirement not to be approached in a seemingly confrontational manner. The tribunal found that these behavioural traits were habit, rather than arising from his condition. Consequently, his claim failed and the EAT upheld the tribunal decision.

This is an interesting case which has filtered out behavioural consequences as a result of a condition which amounts to disability, from those which do not, and it was these reasons which were why the claimant was disciplined. Consequently, his claim failed. However, it is endorsement of the fact that those with disabilities can be justifiably performance managed and even dismissed if the reason is not connected to their disability and this can be demonstrated.