Welcome to the February edition of the ESP Solicitors monthly newsletter. In this update, we explore recent employment cases, offering key takeaways and insights for HR professionals, particularly around preventing sexual harassment in the workplace. To receive this update directly in your inbox, please sign up via the box on the right.

1. Government support for banning NDAs for sexual harassment allegations

Overview: Non-disclosure agreements (“NDA”s) are used when parties seek to settle disputes confidentially and avoid court litigation. The accused party generally wants some form of assurance that the allegations raised against them will not re-surface at an employment tribunal, other court or in the media. In return, the person raising the complaint generally receives some form of financial compensation. Employment related NDAs are generally documented as settlement agreements.

Some types of complaint cannot be silenced by NDAs. For example, whistleblowing or criminal allegations. Until now, nothing in UK law has prevented sexual harassment allegations forming part of an NDA. 

Debate: Public opinion is changing and there are growing calls for legislative to ban sexual harassment allegations from being covered by NDAs. Similar bans are already in place in Ireland, Canada and the US. A government spokesman said: “we are aware of concerns about the misuse of NDAs to intimidate and silence victims of crime, or other types of misconduct such as harassment, discrimination, and bullying, and are taking a fresh look at these issues to identify the right approach.”

Expected measures: It may be that the government amends the Employment Rights Bill adding express words banning such NDAs. However, it may not need to. Currently the bill seeks to amend whistleblowing legislation to add a new item to the list of qualifying disclosures: “that sexual harassment has occurred, is occurring or is likely to occur”. If this change is enacted, sexual harassment allegations will amount to qualifying disclosures which its is unlawful for NDAs to ban. 

2. Employer who failed to provide private space for breastfeeding mother guilty of harassment

Overview: Harassment occurs where an employee is subjected to unwanted conduct with the purpose or effect of violating the employee’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for the employee. Harassment must be related in some way to a relevant protected characteristic. 

In Gibbins v Cardiff and Vale University Local Health Board, a failure to provide a lock for a room in which a breastfeeding employee was expressing milk was held to be sex-related harassment.

Facts: When the Claimant returned from work after having her first child, the Respondent failed to provide her with access to a lockable room to express milk. On one occasion, a colleague had walked in on her. The Respondent had told her to prop a chair against the door to stop anyone else coming in and to place a ‘do not disturb’ sign on the door. The Respondent apologised and a lock was eventually provided. However, when the Claimant had her second child, she was told that the lockable space would only be available at certain times. She brought a claim of sex-related harassment. 

Decision: The tribunal held that the actions of the Respondent related to her sex in that they related to breastfeeding. The Claimant had been left feeling worried and anxious as a result of the Respondent’s failure to provide a lock. She also felt belittled. The Claimant’s claim of sex-related harassment was successful.

3. Discrimination without discrimination? How victimisation claims work

Overview: At their root, most successful claims under Equality Act 2010 have an act or acts of discrimination related to a protected characteristic. The exception is the claim of victimisation, which can succeed even where someone has demonstrably not been treated differently because of a protected characteristic. 

A victimisation claim under the Equality Act 2010 arises when an employee is treated unfairly because they have done, or are believed to have done, a ‘protected act’. Protected acts include complaining about discrimination, supporting someone else’s discrimination claim, or giving evidence in related proceedings. Even if the initial complaint of discrimination is unfounded, the employee can still succeed in claiming victimisation if treated unfavourably for having complained. 

This was illustrated in the recent case of Blackwell v Smart Tax and Accountancy. 

Facts: The Claimant worked as a payroll executive. She raised a complaint against her line manager alleging that, amongst other things, she had been treated badly for race-related reasons. Her complaint was not upheld and, two days later, she was called to a disciplinary hearing and dismissed. She claimed direct race discrimination and victimisation. The tribunal held that, although she was treated less favourably than her colleagues, this was not because she was white British. Her direct race discrimination claim failed. However, the tribunal went on to find that she had been subject to victimisation. After raising the issue of race discrimination, she had been treated badly by her employer and eventually dismissed. Even though the tribunal found that the initial allegation she had raised was not well-founded, she was protected from less favourable treatment because of having raised it. She received compensation amounting to over £40,000.

Take-away: This case serves as a reminder to employers that, even when an employee raises an allegation of discrimination which is not well founded, they should be treated fairly and with respect. Any form of employer retaliation risks a claim of victimisation. 

4. New stricter rules for employers passing on costs of sponsor licences

Overview: Worker sponsor licences allow UK-based employers to employ non-settled workers to work for them in the UK. There are several different worker routes under which an employee can be ‘sponsored’ including: Skilled Worker, Global Business Mobility and International Sportsperson.  

Applying for, and obtaining, a sponsor licence can be a costly process for employers – stretching into thousands of pounds. Each sponsored migrant must also have a Certificate of Sponsorship which comes with a fee of £239 for most workers. The upfront cost is considerable. 

The Immigration Skills Charge is payable on most applications for a Skilled Worker, or Senior or Specialist Worker visa. This Charge has never been recoverable from the worker. 

Understandably, employers often seek to pass on some of these burdensome costs to the worker themselves. The migrant employee often agrees to repay the costs incurred (or a proportion of them) if they leave employment within a certain period of time. If they choose to move on, then the employer wants to recoup what it can of its wasted investment. 

Changes: The Home Office has now further restricted what costs a sponsor can pass on to its sponsored workers. Since 31 December 2024, it is now expressly prohibited for a sponsor to recoup (or attempt to recoup):

• any part of the Certificate of Sponsorship fee from the sponsored migrant; and/or

• skilled Worker sponsor licence fees or associated administrative costs. 

Employers who fail to comply with the new restrictions on recoupment face losing their sponsor’s licence. 

Take-away: Employers who currently use any form of immigration cost recovery agreement should review its terms and amend to make sure that no prohibited repayment provisions are included.

5. The lesser-spotted unfair dismissal remedy options: reinstatement and re-engagement 

A dismissed employee bringing an unfair dismissal claim in the employment tribunal has the following potential remedies available to them:

• compensation

• reinstatement; or

• re-engagement.

Understandably, once an employee has been dismissed unfairly they do not usually want to return to work for that employer. Therefore, compensation is overwhelmingly the most popular remedy sought (and awarded) in such cases. However, it is open to the employee to request re-instatement or re-engagement. 

What are these forms of remedy? How do they work?

Comment: Reinstatement and Re-engagement are intrusive remedies which interfere with an employer’s right to choose who it employs and in what role. For this reason, tribunals must take the following into account before making any order: 

• the claimant’s wishes; 

• the practicability of the arrangement; and 

• where the claimant caused or contributed to some extent to the dismissal, whether it would be just to order the arrangement.  

The EAT recently had cause to review the correct approach to reinstatement and reengagement in the case of Sellers v The British Council. 

Facts: In this case, the Claimant was dismissed for gross misconduct following an allegation of sexually inappropriate conduct. The tribunal found that he had been unfairly dismissed as the investigation into the allegation was inadequate. Reinstatement was not available as the Claimant’s role had already been filled but re-engagement was ordered. The Respondent appealed this order. 

On appeal: The EAT held that the Claimant should not be re-engaged because, having conducted a subsequent further investigation into the circumstances which had led to his dismissal, the Respondent had a rational belief that he had committed misconduct, such that it would not be practicable for him to be re-engaged. Practicability had to be decided from the employer’s perspective. 

6. New Leave for every Loss Campaign launched 

Overview: Since April 2020, employees have had the right to parental bereavement leave and pay. The right is to 2 weeks’ leave following:

• the death of a child, if they die under the age of 18;

• a child who is stillborn after 24 weeks’ pregnancy; and

• an abortion after 24 weeks – in very limited circumstances an abortion can take place after 24 weeks if the mother’s life is at risk or the child would be born with a severe disability.

Statutory parental bereavement leave can be taken at any time in the 56 weeks following the child’s death and is paid at the same rate as Statutory Maternity Pay (currently £184.03 per week).

New campaign: Back in December, the Miscarriage Association launched its “Leave for Every Loss” campaign, calling for a change in the law so that women and their partners who experience a pre-24 week pregnancy loss have the legal right to take bereavement leave from work. Statutory bereavement leave currently only applies after 24 weeks of pregnancy, leaving those who experience miscarriage or other pre-24-week loss to rely on sick leave or the goodwill of their employers. 

The campaign has high profile support from, amongst others, the TUC and Co-op and the Women and Equalities Committee (“WEC”. In a recent report, the WEC stated that it intends to table amendments to the Employment Rights Bill to extend these rights to employees who experience pregnancy loss before 24 weeks. 

Next steps: The Employment Rights Bill does not currently include a specific proposal to expand parental bereavement leave in this way, although it does propose to extend the ambit of leave to cover not just the loss of children but other ‘loved ones’ as well. This extended concept has yet to be defined and could, in principle, be drafted to include loss through miscarriage before 24 weeks.

7. Drugs and alcohol testing in the workplace: key points from case law

Workplace policies on drugs and alcohol can be complex, requiring careful consideration of legal, health, and disciplinary issues. Taking our cue from caselaw, here are our top tips for handling these matters.

(i) Drugs and alcohol policy

Review or introduce a robust drugs and alcohol policy with employee consultation. It should contain:

• Disciplinary measures: specify that being under the influence, failing a test, or refusing a test can constitute gross misconduct.

• Search rights: include reasonable rights to search bags, lockers, and desks if there’s evidence of substance possession.

• Policy scope: address alcohol/drug use versus dependency, offering support for medical issues and distinguishing disciplinary actions accordingly.

• Employee testing: outline consent requirements, processes, and consequences for refusal.

(ii) Testing: reasonableness and privacy

Drug and alcohol testing must be reasonable, particularly in safety-critical roles. Testing should only be conducted when justified by a well-documented risk assessment. Employers should:

• Use less intrusive methods before resorting to tests.

• Obtain employee consent, backed by a contractual agreement.

• Carry out a risk assessment and ensure testing is proportionate and justified on health and safety grounds.

• Treat refusal to test as potential misconduct if the policy explicitly states this.

• Consider data protection: test results are classed as sensitive data. Handle them transparently and in compliance with strict privacy rules.

(iii) Acting on positive test results

Employers must act reasonably when a test result is positive. Approach positive tests and related incidents with fairness, considering individual circumstances and dependency or health issues. In such cases, employees should receive support to resolve any issues.

(iv) Specific scenarios

• Smelling of alcohol: In McElroy v Cambridgeshire Community Services NHS Trust, dismissal for smelling of alcohol without evidence of impaired performance was found to be unreasonable.

• Drug possession: possessing illegal drugs at work, as in Asda Stores v Coughlan, typically justifies dismissal for gross misconduct.

8. Failure to comply with the early conciliation requirements did not mean Tribunal had no jurisdiction to hear claim

Overview: Section 18A(8) Employment Tribunals Act 1996 states that claimants must complete early conciliation via Acas before presenting certain claims. If the employee fails to do this, then any claim is usually rejected (under the Employment Tribunal Rules) without ever being accepted by ET. The claim is simply returned to the claimant without being issued. If the early conciliation error isn’t spotted straightaway, and a claim is allowed to proceed, then Pryce v Baxterstorey indicated that such claims would be ‘nullities’ with the tribunal lacking jurisdiction to hear them. 

This decision has now been criticised as “manifestly incorrect” by the EAT in Reynolds v Abel Estate Agents.

Facts: In Reynolds, the Claimant failed to undergo Acas Early Conciliation before issuing her claims. However, this omission was initially overlooked by both the tribunal and the Respondents, allowing the case to proceed. 

Months later, the Respondents highlighted the oversight, leading the tribunal to reject the claim under Rule 12 of the Employment Tribunal Rules (ETR) (which sets out the procedure for rejecting claims for failure to undertake Early Conciliation). The tribunal then allowed the Claimant to amend her claim to recommence identical claims, limiting the practical impact of the rejection. 

On appeal: The Respondents appealed, arguing that the tribunal erred by rejecting the claims under the early conciliation rules rather than striking them out for lack of jurisdiction. The Employment Appeal Tribunal agreed that the tribunal should not have rejected the claims under the early conciliation rules once the claim had been accepted, and that the claims should not have been re-commenced as they were.

However, the EAT also found that the Claimant’s failure to complete early conciliation did not strip the tribunal of jurisdiction to hear the claims. 

Comment: Section 18A(8) states that a person who is required to undertake early conciliation: “may not present an application to institute relevant proceedings without a certificate”. The prohibition against presenting a claim is directed to the prospective claimant. It says nothing as to the employment tribunal’s competence to act if a claim is received.

9. New bill proposes additional health and safety obligations on employers preventing workplace harassment

Overview: The Health and Safety at Work etc. Act 1974 (Amendment) Bill proposes to expand employers’ health and safety duties under the Health & Safety at Work Act 1974 to include preventing workplace harassment. Currently, the act requires employers to ensure the health, safety, and welfare of employees as far as reasonably practicable. 

Proposed bill: The Bill, scheduled for a second reading on 7 March, adds specific obligations to employers to address violence and harassment in the workplace, with a focus on sexual harassment. It provides examples such as: gender-based violence; sexual harassment; stalking; and psychological abuse. 

If passed, employers would be required to:

• Conduct risk assessments to identify potential harassment risks;

• Implement policies and procedures to eliminate these risks; and

• Provide employee training on recognising and preventing harassment.

Comment: The proposed provisions largely overlap with employer’s current obligations to prevent sexual harassment in the workplace under Worker Protection (Amendment of Equality Act 2010) Act 2023. 

The difference lies in the enforcement mechanisms in the event of breach. If the Bill becomes law, then defaulting employers could face enforcement action by HSE, including criminal liability and unlimited fines (rather than the uplifts to tribunal awards and enforcement action by Equality and Human Rights Commission found under the 2023 Act).

Due to the overlapping obligations on employers, we consider its implementation unlikely.

10. And finally, could an air kiss be regarded as sexual harassment?

Not according to the employment tribunal in the recent case of Chen v Cut Your Wolf Loose. 

Facts: The Claimant worked behind the bar at the Respondent’s whisky bar. She alleged that the Respondent’s general manager had kissed her on the neck on two occasions after walking her home from work. She brought a claim of sexual harassment. The general manager alleged that these had been ‘air-kisses’ only. 

Decision: The tribunal preferred the evidence of the general manager and held that an air kiss is not unwanted conduct of a sexual nature. Even if it was sexual, it was not reasonable for it to have the effect of harassing the Claimant. 

Take-away: In cases of harassment, when deciding whether conduct has had the effect of harassing the employee, a tribunal must take the following into account:

• the employee’s perception;

• the other circumstances of the case; and

• whether it is reasonable for the conduct to have that effect.

Here the third element was not established. It was not reasonable for an air-kiss to have the effect of harassing the Claimant.