Our legal team has come together to compile a rundown of employment law cases – including the background and decisions made – that HR and employee relations (ER) professionals should be aware of.
Fa Carillion Services Ltd (In compulsory liquidation) and others v Benson and others EA-2021-000269-BA
Facts:
The Respondent began to suffer financial difficulties in July 2017 and went into liquidation in January 2018. After this, the Claimants were dismissed. The Claimants comprised of around 1000 employees who brought claims seeking protective awards for the Respondent’s failure to comply with section 188 of Trade Union and Labour Relations (Consolidation) Act 1992 requiring the Respondent to consult with representatives about its proposals to make more than 20 employees redundant within 90 days or less. The Respondent submitted that they had “special circumstances which render it not reasonably practicable” for an employer to comply with the statutory requirements for consultation under section 188(7). The Respondent relied on the fact that it was faced with the sudden and unexpected decision by board members not to approve short-term lending arrangements having previously believed that it would be financially supported and would be able to trade solvently. Without this, the company faced an unprecedented liquidation meaning that redundancies were unavoidable.
The Employment Tribunal accepted that duty was triggered in 2018, not 2017 as the intention to enter liquidation was not sufficiently clear on the earlier date. However, the Tribunal rejected that the Respondent had special circumstances within the meaning of section 188(7). The Respondent appealed.
Held:
The EAT rejected the appeal. Special circumstances did not apply in this case. The case law made a distinction between a “sudden disaster” and a gradual financial decline, the latter of which will not generally be “special circumstances”. However, what will constitute special circumstances will depend on the facts of the case. It was submitted that the Respondent believed that it was too big and too important to the government through its role in public sector contracts, to be allowed to fail. However, there was no evidence that suggested that the government had given the Respondent cause to believe that support was more likely than not to be provided. Nor was there evidence that this belief reflected the belief of the Respondent as a whole rather than individual board members. In any event, this would not have made the circumstances special. The EAT held that the refusal of the government to support them, the refusal to fund administration and the refusal by the banks to support them was not uncommon or surprising. There was no history of the government providing this help. The EAT also noted that the compulsory liquidation was considered before the government had confirmed its position.
The EAT also added that the fact that a compulsory liquidation inevitably results in dismissals meaning that the Respondent could not have complied with the requirement to consult did not mean that special circumstances existed. The impact of such a ruling would be to allow a defence to employers to point to a factor that made it difficult or impossible to consult. Even in circumstances where dismissals are inevitable, consultation can be effective in mitigating the consequences of this and an employer can still comply with its requirements to provide employees with information to assist them with the redundancy process.
The Respondent also submitted that the Tribunal had erred in limiting its analysis to the causes of insolvency rather that the contextual and consequential surrounding circumstances. The Respondent submitted that now insolvency doesn’t necessarily always result in job losses due to administration and TUPE and that there may be consultation. Because of this, circumstances beyond the cause of insolvency should be considered. The EAT disagreed. The changing insolvency context does not necessitate a change in approach and the issue for a Tribunal remains whether or not the circumstances were uncommon or out of the ordinary.
Rooney v Leicester City Council EA-2020-000070-DA and EA-2021-000256-DA
Facts:
The Claimant worked for the Respondent as a childcare social worker until her resignation in 2018. The Claimant brought claims for constructive dismissal and unpaid holiday pay, overtime and expenses. The claim form prepared by her solicitors said that she was not claiming she had made a protected disclosure and that she accepted that work-related stress and menopause did not amount to a disability. The Claimant was not aware of this. The Claimant, acting in person, then presented a second claim in the Tribunal for disability and sex discrimination, harassment and victimisation based on the Respondent’s treatment of her menopausal symptoms. The Claimant had suffered with insomnia, memory loss and hot flushes among other symptoms. She claimed that her employer had not obliged her request to be seen by a female doctor and that she had experienced difficulties talking to her male colleagues about this, including at an appeal hearing following a written warning. She also claimed that her male manager dismissed her symptoms.
The Claimant applied to amend the first claim to remove the statement that she was not disabled. The Claimant was ordered to provide further particulars. The Claimant duly sent a Scott Schedule to the Respondent and the Respondent responded to them. A preliminary hearing held that the Claimant was not disabled in relation to her menopausal symptoms meaning that her disability discrimination, harassment and victimisation claims were dismissed. The Claimant’s sex discrimination was struck out for having no reasonable prospects of success. The Claimant appealed.
Held:
The EAT allowed the appeal and remitted the claim to be considered by a newly constituted tribunal. The EAT held that the Tribunal had erred in holding that the Claimant was not disabled at the time of the alleged conduct. In relation to the disability discrimination claim, the Tribunal had carried out a balancing exercise of what the Claimant could and could not do which was an error of law. The Tribunal also failed to direct itself as to the definition of “long-term” or conduct an analysis of the case law surrounding it when considering the statutory definition of disability. The Tribunal came to the conclusion that the menopausal symptoms were no more than trivial or minor despite the extensive evidence from the Claimant as to how the Claimant’s day to day activities were impacted and the outstanding application to amend the claim which contained a statement that she was not disabled. This was incorrect. The Tribunal had also failed to give adequate reasons for dismissing the claim.
The EAT also upheld the appeal in respect of the sex discrimination, harassment and victimisation claims which were struck out. The EAT held that the Tribunal did not consider the sex discrimination claims as set out in the Claimant’s Scott Schedule and failed to give reasoning as to the dismissal of the harassment and victimisation claims.
Stott v Railli Limited Case No: EA-2019-000772-VP
Facts:
The Claimant worked as a paralegal for the Respondent. She was dismissed during her probationary period due to poor performance. Following her dismissal, she raised a grievance following her dismissal claiming, amongst other complaints, that she had been discriminated against due to her mental health issues and that she had informed the Respondent of this. The Respondent accepted that the Claimant had a disability at the time of the dismissal, but the Respondent denied that it had knowledge of the disability at the time of the dismissal and that the Claimant’s disability had only been raised following the dismissal.
The Claimant brought a claim of discrimination arising from a disability. The Tribunal rejected her claim. It found that the Respondent did not have knowledge of the Claimant’s disability at the time of dismissal. The Tribunal did not consider whether the subsequent grievance and grievance appeal, based on the pleadings. In any event, the Tribunal found that the Respondent had a legitimate aim in looking to maintain the standards of the work it produced and the supervision and attempts to correct mistakes made were proportionate means of achieving that aim. The Claimant appealed.
Held:
The EAT rejected the appeal. The EAT did find that the Tribunal had erred in failing to make a specific finding on whether the “something” which led to the dismissal (i.e. the poor performance) arose from the disability as required by section 15 of Equality Act 2010. However, The Tribunal had not erred in failing to consider the grievance and grievance appeal. The EAT held that while it was open to a Tribunal to look beyond the particulars, the Tribunal had considered the scope of the claims at various points. The Claimant’s appeal in respect of the justification finding was also unsuccessful as the Tribunal had made sufficient findings and had directed itself correctly in making its conclusion. The EAT did clarify that while the wording of the section 15 and section 19 is equivalent, they are different in that section 19 (dealing with indirect discrimination) is concerned with disparate group impact whereas section 15 is concerned with the impact on an individual.
Stuart Delivery Ltd v Augustine [2021] EWCA Civ 1514
Facts:
The Respondent developed a platform to connect couriers with clients. The couriers could undertake individual jobs or could sign up for time slots. This required a courier to be available within a certain area at a certain time, getting paid £9 per hour. Those that signed up for slots could choose not to perform it and make it available to other couriers but if no other courier took up the job, the original courier was liable to perform it or would incur a penalty for failing to perform it. The Claimant worked for 5 months and presented a claim for unfair dismissal, notice pay and other payments. He claimed that he was an employee, or in the alternative a worker. The Tribunal found that he was a worker, but not an employee. It held that the release procedure did not amount to an unfettered right of substitution. Having signed up to the slot, he was obliged to perform the work personally. The EAT agreed with the Tribunal. The Respondent appealed to the Court of Appeal.
Held:
The appeal was dismissed. The Court reiterated that the issue was whether there was an obligation to personally perform the work or provide the services. The Respondent made two submissions to negate the contention that the Claimant was a worker. The Court agreed with the Tribunal that the release procedure did not remove the obligation to perform work personally. The Claimant would not know, if he released the slot, if anyone else would be available. The ability to appoint a substitute with a significant limitation did not negate the existence of personal performance.
Secure Care UK Ltd v Mott EA-2019-000977-AT
Facts:
The Claimant was employed as a logistics manager by the Respondent which provides transport services for NHS Trusts with patients suffering with mental health problems, including those detained under the Mental Health Act. The Respondent dismissed the Claimant in a redundancy exercise along with the human resources manager and the operations managers. The Claimant submitted that he had made nine protected disclosures which tended to show that the Respondent was in breach of a legal obligation or that a person’s health and safety was endangered. The Claim was that he had been selected for redundancy because of his protected disclosures and that this was automatic unfair dismissal. The Tribunal found that three of the protected disclosures were qualifying disclosures. The Tribunal held that the qualifying disclosures had “materially influenced” the Respondent’s selection of the Claimant. The Tribunal upheld the claim. The Respondent appealed.
Held:
The EAT upheld the appeal. The Tribunal had erred in two respects. Firstly, the claim was for automatic unfair dismissal, but had applied the “material influence” test that is applied in an action for detriment under section 47B Employment Rights Act 1996. The correct test was whether the protected disclosures were the “sole or principal reason” for the dismissal. Secondly, when considering the reason for dismissal, the Tribunal had not distinguished between the impact of the three protected disclosures, but had considered the impact of all nine of the Claimant’s communications in its consideration of the reason for dismissal.
A v Burke and Hare EA-2020-SCO-000067-DT
Facts:
The Claimant worked as a stripper at the Respondent’s strip and lap dancing bar. She made a claim for holiday pay arrears, claiming that she was a worker. The Respondent claimed that the Claimant was self-employed. The Claimant performed this role as a student and claimed that as a result of working for the Respondent had risked physical abuse and experienced verbal abuse as well as threats from customers. While working for the Respondent she performed under a stage name and took steps to conceal her identity. She never intended to return to work as a stripper and wanted to pursue a career in IT or finance. The Claimant made an application for an anonymity order which was considered at a preliminary hearing. The Claimant submitted a witness statement arguing that publicising her name would lead to her risking stigmatisation and sexual violence. The employment judge refused to make an order on the basis that the Claimant should have been aware that the proceedings would be in public, that the Claimant had willingly taken the risk of abuse and violence while she worked as a stripper and there was no evidence that she had ever suffered said violence. Now she was not a stripper, that risk had receded. Furthermore, any adverse consequences of publicising the ruling should be regarded as a consequence of choosing that line of work.
The Claimant appealed on the basis that strippers are stigmatised by society and that her right to privacy entailed the protection of her honour and reputation which would be damaged if her name was published. It was also submitted that her choice to work as a stripper was irrelevant to her right of privacy and that it was perverse for the judge to find that there was a public interest in the decision as this decision could be found by anyone and as the Claimant wanted to leave this part of her life behind her this decision if made public would jeopardise her employment prospects.
The Claimant indicated she would withdraw proceedings if the order was not granted. She was granted a temporary anonymity order pending the outcome of her appeal.
Held:
The EAT dismissed the appeal. The EAT did make an anonymity order in respect of the judgments in making the application as the Claimant indicated her intention to discontinue her claim.
The EAT reiterated the principle that stigmatisation without more will not be sufficient for anonymity. Reputational damage and embarrassment were ordinary consequences of litigation. Based on the case of Roden, where an anonymity order was refused in a case involving allegations of sexual misconduct, the stigmatisation in this instance could not outweigh the principle of open justice.
The EAT had considered that the stigmatisation could lead to other harms which may have justified an anonymity order. However, the Claimant had not appealed the finding from the judge that there was insufficient evidence that any harm had been suffered by the Claimant. In the absence of clear and cogent evidence that harm would be done, open justice should prevail. There was little chance of the Claimant’s past becoming known or of those who discovered she had been a stripper causing her the harm feared. EAT and Tribunal claims do not attract much media attention and the Claimant’s name was not so distinctive to lead to a definite association.
The EAT did find that the judge had been incorrect in that the Claimant’s choice to work as a stripper did not negate Article 8 protection and that the significance of her steps to conceal her identity were relevant to this protection. The EAT did comment that if it had data that suggested that recruiters and employers use the register of Tribunal and EAT judgments when considering applicants, this could sway the balance in favour of anonymity. However, no such evidence was available in this case.
The Claimant had submitted that it was perverse to conclude that the principle of open justice outweighed her right to privacy in circumstances where there was no public interest in exposing her as a stripper. However, the EAT held that the judge was bound to consider the question on the presumption that open justice conventionally took primacy. The question was whether there was a reason she should not be identified as a stripper not whether there was a reason that she should. The Claimant had said that she would not continue with her claim without anonymity which would impede her access to justice. However, the EAT held that the law did not exist to provide access to justice whatever the cost.
Kostal UK Ltd v Dunkley and others [2021] UKSC 47
Facts:
Kostal UK Ltd (Kostal) concluded a recognition agreement with Unite the Union (Unite). The agreement gave Unite “sole recognition and bargaining rights”. It was not legally binding, but “binding in honour”. The agreement provided for annual formal pay negotiations and that any changes proposed to employee’s terms and conditions would be negotiated with Unite. Kostal made a proposal that all employees would receive a 2% increase in basic pay, 2% pay to be paid in a lump sum as a Christmas bonus and a further 2% increase to basic pay for any employee earning under £20,000. It was also proposed that sick pay would be reduced for new starters, the Sunday overtime rate would be reduced and two 15-minute breaks would be consolidated into one 30-minute rest break. This proposal was rejected in a ballot of union members. Before the disciplinary procedure was used, Kostal made direct offers to its workforce and said they would not receive the Christmas bonus if they did not accept the offer within a timescale set by Kostal. 90% of the workforce accepted the offer. Kostal then made a further offer to those who had not accepted the previous offer, without the Christmas bonus, but warned that refusal may lead to dismissal. Eventually, a collective agreement was reached on the changes to pay and the terms and conditions. A large group of employees brought claims that their rights under s145B of the Trade Union & Labour Relations (Consolidation) Act 1992. This is the right not to receive offers which would have the result that one or more terms of their employment will not be determined by collective bargaining (the “prohibited result”). The claim encompassed both offers made by Kostal. Liability can only be established if the employer’s sole or main purpose is to achieve the prohibited result.
The Tribunal and EAT has upheld the claims of the employees, finding that Kostal had sought to bypass Unite and had breached the employees’ rights under s154B. The EAT held that the prohibited result would occur if at least one term would, as a consequence of acceptance, be decided by direct agreement rather than collective agreement. It was not required that the offer would take the future determination of terms out of the collective bargaining process.
The Court of Appeal upheld Kostal’s appeal. The basis of the Court’s decision was that a prohibited result did not occur when there was a one-off direct offer. There would only be an unlawful inducement in two circumstances. Firstly, when an independent trade union is seeking to be recognised and the employer makes an offer with the sole or main purpose of taking employment terms out of the determination of collective agreement. Secondly, where an independent trade union is already recognised and a collective agreement already exists where an offer is made for the sole or main purpose of taking terms or a term outside of the scope of collective bargaining permanently. The employees appealed to the Supreme Court.
Held:
The Supreme Court unanimously allowed the employees’ appeal and held that the offers contravened s154B. However, the Court was split in its reasoning. The Court was unanimous in respect of when a prohibited result occurs. This would occur in situations where the effect on collective bargaining would be indefinite or short. There was no minimum length of time needed for a prohibited result to occur.
Whether an offer would have a prohibited result is a question of causation. There must be a real possibility that if the offer was not made and accepted it would be governed by a collective agreement. Therefore, where a union is not recognised but is seeking recognition, an employer can make direct offers and an employer can make a direct offer even when there is a recognised trade union and the offer concerns an area covered by a collective bargaining agreement provided that it has followed and exhausted the collective bargaining procedure. In both cases there is no causation for a prohibited result to exist.
Applied to this case, Kostal had not exhausted collective bargaining and the offers had contravened the collective agreement made and the processes it contained.
The minority disagreed and held that an employer should not be able to escape liability just because collective bargaining had been exhausted. This would mean that an employer could thwart the process. Rather, an employer would need to show that its sole or main purpose was not the prohibited result but a genuine business purpose.
Stone v Burflex (Scaffolding) Ltd EA-2019-001183-RN
Facts:
The Claimant made a grievance about his level of pay not being as much as promised verbally. The Claimant was dismissed following a meeting with management. The Claimant brought a claim for automatic unfair dismissal for asserting a statutory right, namely the right to not suffer unauthorised deductions from pay. The Respondent’s argument was that the Claimant had resigned. The Tribunal rejected this argument, but also found that the Claimant had not asserted a statutory right either. The Tribunal found that the Claimant had been dismissed but that this was not principally because of his pay, but because of the availability of work and the withdrawal of a concession to provide alternative work. Therefore, the reason was redundancy or some other substantial reason. The claim therefore was dismissed. The Claimant appealed.
Held:
The EAT allowed the appeal. It held that the Tribunal judge had been incorrect to find that the dismissal was based on redundancy or something like redundancy. Neither party had submitted that this was the reason the Claimant’s employment terminated. No warning had been given to the parties of the potential of this finding and the Claimant’s representatives submitted that if it had been, they would have made submissions as to why this is incorrect and would have made a representation that any selection for redundancy was based on a prohibited reason, namely, the assertion of a statutory right. Moreover, the Tribunal judge had not asked any questions as to why the concession was removed as there was no evidence of a change in circumstance. The EAT substituted a finding that the Claimant has asserted a statutory right and remitted the decision to the Tribunal to consider.
London Borough Of Hammersmith And Fulham v Keable EA-2019-000733-DA
Facts:
The Claimant worked for the Respondent as a Public Protection and Safety Officer within the Environmental Health Department. The Claimant’s post was not politically restricted and was free to attend political meetings and demonstrations. He had gone to a demonstration outside Parliament when he was not working. During the demonstration he exchanged words with another individual. This conversation was filmed without the Claimant’s consent. The conversation concerned anti-Semitism, Nazis and the Holocaust. The clip was shared with the caption ” Anti-Semitism Didn’t Cause the Holocaust and Zionists Collaborated with the Nazis.” The Claimant was identified by the MP for Hammersmith and the Labour leader of the Council. The Claimant was suspended and disciplinary proceedings were commenced. He was subsequently dismissed for serious misconduct.
The Claimant brought proceedings for unfair dismissal. The Tribunal found that the dismissal was procedurally and substantively unfair. Nothing in the video identified the Claimant as a council employee, nor that he was speaking for the Council. The Claimant did not seek to publish the video. He was expressing his beliefs in a lawful manner, even if this caused offence. The dismissing manager had failed to give the Claimant the opportunity to comment on what the average person would think of his remarks, which was the basis for the decision to dismiss. The Tribunal also found that the dismissing officer had not given him an opportunity to comment on a warning as an alternative to dismissal. An order was made for the Claimant’s reinstatement. The Respondent appealed.
Held:
The EAT dismissed the appeal. The EAT found that the Tribunal was entitled to find that the dismissal was substantively and procedurally unfair. One of the reasons given for the decision was that the Claimant had not been told by the Respondent why the comments made would bring them into disrepute or how they would be interpreted. This was not substitution, but reference to the principle that an employee should know the case against them. The dismissing officer, by not asking for the Claimant’s views nor identifying this as an issue in the investigation report meant that the belief in the misconduct was not reasonable. The decision to not give the Claimant the chance to comment on sanction also deprived the dismissing officer of the chance to reflect upon his view of the matter and it deprived the Claimant of the chance to raise his opinion on the matter.
The EAT did accept that the Tribunal judge had not drawn the parties’ attention to the case of Smith v Trafford but concluded that the failure to do so did not prejudice the parties nor would it have led to a different conclusion if it had been raised.
The EAT also refused to allow the appeal on the reinstatement remedy. The EAT reiterated that even in cases of misconduct, where the dismissing officer has a genuine belief that misconduct occurred, it did not immediately follow that reinstatement was impracticable, particularly in a large organisation such as the Respondent and where evidence existed that the Respondent had not lost trust and confidence in the Claimant.
Augustine v Data Cars Ltd EA-2020-000383
Facts:
The Claimant was employed by the Respondent as a taxi driver. Drivers were required to provide a vehicle. Initially, the Claimant used the car that he leased but subsequently started renting a vehicle from a company associated with the Respondent. He also rented a uniform so he could perform “gold driver” work. This was optional. When the Claimant’s employment ended, he brought various claims, including that he had not been paid the National Minimum Wage. The Tribunal found that while fuel and insurance payments fell to be deducted from his salary, the car and uniform costs were not deductible because they were optional. The Tribunal found that the Claimant could have used his own vehicle and did not need to rent the uniform as he did not need to undertake “gold driver” work. The Claimant appealed.
Held:
The EAT allowed the Claimant’s appeal. A payment is deductible if it was made “in connection with the employment” and not reimbursed by the employer. It was not required that the payments be a requirement of employment. They neither had to be necessarily incurred, nor wholly or exclusively incurred. The test was whether the expenditure was in connection with the employment. The fact that the Claimant could use his own car was irrelevant. In addition, the Claimant’s payment for his uniform was clearly in connection with employment, which is why he rented it. Both payments were deductible in calculating whether the Claimant had received the National Minimum Wage. The EAT subsisted a decision to this effect.
