Welcome to the second edition of The Employment Edit – a summary of the most important recent cases and news affecting employers in the UK. We hope you find this newsletter helpful and informative.
In this edition we look at:
- Recent whistleblowing cases and developments;
- Whether employers always need to offer appeals against redundancies;
- The special circumstances exception to collective consultation obligations;
- Whether menopausal symptoms can amount to a disability under the Equality Act;
- Anonymity Orders in the Employment Tribunal;
- The Government's proposal to introduce a right to carers’ leave;
- The Government’s consultation on changes to flexible working; and
- Acas' advice on making changes to employment contracts – and avoiding fire and rehire
Correct test for a qualifying disclosure in a whistleblowing claim
In Martin v London Borough of Southwark, a teacher had raised a number of concerns with his employer that he and other teachers were working excessive hours. He brought a whistleblowing claim arguing that he had suffered a detriment as a result of making his disclosures.
For a disclosure to be a qualifying disclosure which potentially gives the employee whistleblower protection:
- The worker must make a disclosure of information;
- The worker must believe that the disclosure is made in the public interest;
- The worker’s belief in 2 must be reasonably held;
- The worker must believe that the disclosure tends to show one of the statutory list of matters which can be the subject of whistleblowing protection (e.g. that a criminal offence has been committed, that a person has failed to comply with a legal obligation or that a person’s health and safety is in danger); and
- The worker’s belief in 4 must be reasonably held.
The Employment Appeal Tribunal (EAT) found that the Employment Tribunal (ET) had failed to apply the five-step test correctly to the disclosures made by Mr Martin. It had not adopted the structured approach necessary to determine whether each disclosure amounted to a qualifying disclosure. In some cases it had elided a number of the steps of the test, and in other places had missed steps entirely. The EAT remitted the case to a new ET.
Takeaway: This case is a useful reminder that not all disclosures made by an employee will attract whistleblower protection – disclosures need to satisfy all the elements of the test set out above.
Dismissal not linked to whistleblowing
In Kong v Gulf International Bank (UK) Limited, Ms Kong was Head of Financial Audit at the respondent bank. She made a protected disclosure about the suitability of a legal document relating to a new investment product. The Head of Legal (Ms H), who had responsibility for the document, disagreed with Ms Kong’s view. She went to Ms Kong’s office in an agitated state, and they had a heated discussion followed by an exchange of emails. Ms H was upset and complained to the Head of HR and the CEO, who dismissed Ms Kong.
The EAT agreed with the ET that the reason that Ms Kong was dismissed was not her protected disclosure but her personal attack on Ms H’s legal abilities, which demonstrated poor interpersonal skills, which had been an ongoing issue. Ms H was not the decision maker who dismissed Ms Kong. Consequently, her detrimental behaviour towards Ms Kong (going to Ms Kong’s office in an agitated state), which was motivated by Ms Kong’s protected disclosure, could not be attributed to the bank as the reason for Ms Kong’s dismissal. Furthermore, the principal reason for Ms Kong’s dismissal (her conduct in relation to Ms H) was accepted to be separate from Ms Kong’s whistleblowing (raising her concerns about the legal document).
Takeaway: The fact that an employee has blown the whistle does not mean that their subsequent dismissal is automatically unfair – the sole or principal reason for dismissal needs to be the whistleblowing. By dealing with the conduct issue and the whistleblowing separately, the employer here was able to establish that the whistleblowing and the dismissal were not sufficiently linked to lead to an automatic unfair dismissal claim, with unlimited compensation.
The EU Whistleblowing Directive
The EU Whistleblowing Directive provides a minimum level of protection for whistleblowers across the EU. Member States have until 19 December 2021 to transpose the Directive into national law. As the UK is no longer an EU Member State the Directive does not apply to the UK. However, organisations with a presence in the UK and the EU may wish to consider implementing a single policy.
The key provisions of the Directive include:
- A requirement on Member States to ensure that legal entities in the public and private sector with 50 or more workers establish channels and procedures for internal reporting and follow up.
- The procedures for internal reporting and follow up include:
- Acknowledgement of receipt of the report within seven days of receipt;
- The designation of an impartial person or department for following up on reports and maintaining communication with the reporting person, asking for further information and providing feedback;
- Following up on the report;
- Providing feedback to the reporting person on the action envisaged or taken as a result of the report. The organisation should provide such feedback within a reasonable timeframe, not exceeding three months from the acknowledgement of receipt;
- Ensuring that the identity of the reporting person is kept confidential unless with explicit consent; and
- Keeping records of every report received.
- A requirement on Member States to take all the necessary measures to prohibit any form of retaliation against reporting persons including threats or attempts of retaliation. The Directive sets out a list of examples of retaliation including suspension, lay-off, dismissal, demotion, transfer of duties and discrimination.
Takeaway: As a first step, organisations should review their whistleblowing policies in jurisdictions where the Directive will apply. They may also want to consider whether to implement a single whistleblowing policy across their network. However, the Directive is significantly more prescriptive than the relevant provisions of the Employment Rights Act 1996, and also extends protection to a wider category of individuals, including facilitators who assist a reporting person. Therefore, if an organisation does wish to implement a single whistleblowing policy this will be likely to result in substantial changes to any existing UK-specific policy.
An employer does not always need to offer an appeal against a redundancy dismissal
In Gwynedd Council v Barratt, the employer Council announced that a school would be closed and replaced with a new school nearby. All affected staff were invited to apply for jobs at the new school. Those who were unsuccessful would be dismissed for redundancy. B and H were PE teachers who applied for jobs at the new school but were unsuccessful and were made redundant. They claimed unfair dismissal for various reasons including that they had no opportunity to appeal the decision to make them redundant. There had been no meaningful consultation beyond the job interview for the new school. The Court of Appeal found that a redundancy dismissal would not be unfair only because the employer had failed to give the employee an opportunity to appeal. This was just one of a number of factors to consider in determining the overall question of whether a dismissal was fair. However, in this case the ET had correctly considered the situation as a whole, including the lack of any meaningful consultation. The ET was correct to conclude that the failure to give the right of appeal, in these particular circumstances, took the decision to dismiss outside the band of reasonable responses and that the redundancy dismissals were therefore unfair.
Takeaway: This case is helpful to employers in confirming that a failure to give a potentially redundant employee the right to appeal will not in itself make a redundancy unfair. However, we would generally advise employers planning a redundancy process to offer an opportunity to appeal. An appeal gives an aggrieved employee the opportunity to air and possibly resolve any concerns with the employer at that stage, potentially avoiding or mitigating any disputes further along the line. It also gives the employer a chance to remedy any mistakes in the initial process.
'Special circumstances' exception to collective consultation obligations
In Carillion Services Limited (in compulsory liquidation) v Benson, Carillion, which employed over 18,000 employees, faced serious financial difficulties from mid-2017 and went into liquidation in January 2018. A significant number of employees were dismissed, some of whom brought claims in respect of Carillion’s failure to conduct collective consultation with appropriate representatives of the affected employees regarding the dismissals, in breach of s.188 Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA). This requires an employer proposing to make 20 or more employees at one establishment redundant within a period of 90 days or less to consult for 45 days where the employer is proposing to dismiss 100 or more employees, or otherwise for at least 30 days. The consultation should cover a number of matters, including ways of avoiding the dismissals, reducing the numbers of employees to be dismissed and mitigating the consequences of the dismissals.
TULRCA provides that, if there are special circumstances which render it not reasonably practicable for an employer to consult collectively with its employees, it is only required to take such steps as are reasonably practicable in the circumstances. Carillion argued that ‘sudden intervening events’ which arose in relation to its business (namely that short term lending arrangements had not been approved by its financial stakeholders), amounted to such special circumstances because there had been no alternative to compulsory liquidation which meant that it was inevitable and unavoidable that Carillion’s employees would ultimately be dismissed by reason of redundancy.
The ET rejected this argument relying on prior case law holding that:
- the circumstances must be ‘out of the ordinary’ or ‘uncommon;’ and
- whether or not insolvency would constitute special circumstances would depend on the cause of the insolvency, but that a gradual decline of a business over a six month period, culminating in liquidation of the company, was unlikely to qualify.
Carillion’s appeal to the EAT was dismissed on the basis that the fact that a circumstance has an effect on an employer’s ability to comply with its consultation obligations does not of itself render it special.
Takeaway: This case builds on previous case law which suggests that it is very difficult for an employer to be able to rely on the special circumstances defence. Furthermore, the fact that dismissals cannot be avoided does not justify a failure to consult, as there may still be benefit to the employees in consulting about ways of mitigating the consequences of dismissal.
Menopausal symptoms can amount to a disability under the Equality Acts
In Rooney v Leicester City Council Ms Rooney, a childcare social worker, brought claims against her former employer, including disability and sex discrimination relating to the way she had been treated while suffering from menopausal symptoms. Ms Rooney’s evidence was that she had experienced the physical, mental, and psychological symptoms of the menopause for two years, which had a negative impact on her quality of life. She was under the care of a specialist menopause clinic and had suffered from insomnia, light-headedness, confusion, stress, depression, anxiety, palpitations, memory loss, migraines, and hot flushes. From that evidence the ET concluded that Ms Rooney was not a disabled person for the purposes of the Equality Act 2010 (EqA) on the basis that her menopausal symptoms were not sufficiently long term and did not have a substantial adverse effect on her ability to carry out normal day to day activities.
The EAT allowed Ms Rooney’s appeal. In particular, the ET had wrongly carried out a balancing exercise comparing what Ms Rooney could and could not do, for example, noting that that she cared for her husband and mother. This was the wrong approach – many people, including those with disabilities, have caring responsibilities. The correct approach is to consider what a claimant cannot do, and whether this meets the statutory test of a substantial adverse effect on their ability to carry out normal day to day activities. In addition, having accepted Ms Rooney’s evidence about her symptoms, the EAT considered that it was inexplicable that the ET had concluded that these were only minor or trivial.
Takeaway: This is one of the first appeal cases confirming that menopausal symptoms can potentially amount to a disability under the EqA. The House of Commons’ Women and Equalities Committee is currently holding an inquiry into existing discrimination legislation and workplace practices around the menopause, including whether menopause should be added to the list of protected characteristics in the EqA. To support women going through the menopause, employers could consider introducing a menopause policy and offering specific menopause support.
Applying for an anonymity order in the ET
Two recent cases have addressed applications for anonymity orders under Rule 50 of the ET Rules pursuant to which the ET can restrict public disclosure of any aspect of ET proceedings. In determining whether to make an anonymity order the ET must carry out a balancing act between the relevant human rights considerations including the individual’s right to privacy on the one hand, and the general right to freedom of expression, the right to a fair trial, and the common law principle of open justice on the other.
In TYU v ILA Spa Limited, the applicant for an anonymity order was neither a party to nor a witness in the relevant ET proceedings but was named in the ET’s judgment in connection with allegations of serious and criminal misconduct. The judgment was published (as all judgments have been since 2017) on the online ET Decisions website and was one of the first search engine hits when searching for the applicant’s name. The ET refused to anonymise the applicant’s name in its judgment on the basis that her right to privacy was not engaged, because the allegations against her had been discussed in an open hearing, and as a non-party she had no greater or lesser rights than a party to anonymity. The EAT disagreed: just because a matter had been heard in public did not preclude the right to privacy from being engaged. For example, in this case the right to private life might engage in relation to the future reputational damage on the applicant of the judgment and the impact of the repetition of the relevant material. The fact that an applicant did not choose to be part of proceedings may also be a relevant factor to consider. The EAT upheld the appeal and returned the case to the same ET to reconsider its decision in relation to the requested anonymity order.
In A v Burke and Hare, the EAT upheld the ET’s decision not to grant an anonymity order sought by a former stripper who had brought a claim for arrears of holiday pay against her former employer on the basis that she was a “worker”, not self-employed. It held that stigmatisation as a form of reputational damage was insufficient to outweigh the principle of open justice and that social embarrassment would not justify an anonymity order. The EAT held that an anonymity order might be appropriate in circumstances in which the claimant might be at risk of more serious harm, or if the publication of the claimant’s name might harm her career prospects – which the ET found was not the case in relation to this particular claimant. The claimant’s threat to abandon her claim if an anonymity order was not made was not a good reason to make an anonymity order.
Takeaway: These two contrasting decisions serve as a reminder that the default position is that open justice should prevail, and judgments should be published in full. This can affect the rights of all individuals named in a judgment, not just the parties and the witnesses. Whether or not any application to anonymise a judgment will succeed is highly fact-sensitive but should be considered by all parties at an early stage of litigation including before any claim issued.
Government proposal to introduce a right to carers’ leave
The Government is consulting on various possible changes to the flexible working legislation. The Government’s objective, according to the consultation paper, is to encourage “a better discussion” between the parties. It is important to note that despite the title of the consultation – Making flexible working the default – there is no proposal to change the current mechanics of the legislation. Accordingly, a request would still need to be made by an employee wishing to work flexibly, and the employer would then consider such a request. The consultation paper highlights (as a reason for maintaining the status quo on these matters) that the pandemic has made apparent that introducing a one size fits all approach is unlikely to be appropriate.
The main proposals being considered by the consultation are whether to:
- Make the right to request flexible working a day one right;
- Require employers who wish to turn down requests for flexible working to consider or propose alternatives to the requested arrangement;
- Increase the frequency with which requests can be made (currently once every 12 months); and
- Amend the eight business reasons for which an employer can currently turn down a request.
The proposals seem unlikely to make any significant changes to the substance of employees’ current entitlements, particularly in the light of the relatively limited scope employees have to enforce their rights under flexible working legislation if there is no separate discrimination claim.
Takeaway: Whether Whether or not changes are made to the flexible working legislation, employers may wish to consider taking the initiative in providing a more flexible work environment (and many have already begun introducing “hybrid” working arrangements) which is likely to be key for employee satisfaction and retention as is highlighted in this recent article, from FT Ignites.
Acas advice on making changes to employment contracts – and avoiding "fire and rehire"
Employers may seek to introduce changes to employment contracts using a practice known colloquially as fire and rehire – whereby, if employees refuse to agree to the changes, they are served with notice of termination and offered, on expiry of that notice, re-engagement on the revised terms and conditions. This approach is generally only deployed as a last resort where attempts to introduce changes through consultation and agreement with employees or their representatives have failed. It has the potential to damage employee relations significantly and also comes with the risk of unfair dismissal claims if employees reject the opportunity to be re-employed on the revised terms. In addition, if more than 20 employees are dismissed at one establishment in a 90 day period, a fire and rehire process will trigger the obligation to conduct collective redundancy consultation with appropriate representatives of the affected employees requiring minimum time periods for consultation.
High profile cases of fire and rehire during the COVID-19 pandemic (used, for example, by British Airways and Centrica (British Gas)), led to calls by Members of Parliament for the practice to be made unlawful, and to the Government commissioning a fact-finding report by Acas. Responding to the Acas report in June 2021, the Government confirmed that it did not intend to make the practice unlawful but would instead ask Acas to produce guidance to help employers explore all options before considering fire and rehire, and to encourage good employment practice. Acas has now published that guidiance. Making changes to employment contracts – employer responsibilities.
Takeaway: The new Acas guidance gives employers a best practice path to follow with a view to reaching agreement with employees before fire and rehire becomes necessary, and minimising claims where it is unavoidable.
