Here is a look at recent developments in UK employment law:

1. The Employment Appeal Tribunal ruled in the case of claimants who do not share a relevant protected characteristic as those with that protected characteristic but who do share the same disadvantage are entitled to bring a claim for indirect discrimination under Section 19 of the Equality Act 2010.
2. The Employment Appeal Tribunal held that an Employment Tribunal erred in finding that a Claimant needed to exhaust all internal grievance processes before it was entitled to find that the Claimant was entitled to resign and claim constructive unfair dismissal.
3. The High Court dismissed an application for an interim injunction aimed at preventing a former employee from breaching restrictive covenants.
4. The Employment Tribunal held that withdrawing a job offer could amount to direct discrimination.
5. The Solicitors Regulation Authority updated its warning notice on non-disclosure agreements.

The Recent Developments in More Detail

1. In Rollett v British Airways, the Employment Appeal Tribunal ruled in the case of claimants who do not share a relevant protected characteristic but do share the same disadvantage as those with that protected characteristic. The Tribunal found that they are entitled to bring a claim for indirect discrimination under Section 19 of the Equality Act 2010.

The Facts

• The claimants argued that the scheduling changes the respondent introduced had the following effects, which they argued amounted to indirect discrimination:
  • It put employees who lived abroad (predominantly non-British) at a disadvantage compared to those who lived in the UK.
  • It put employees with caring responsibilities (predominantly women) at a disadvantage compared to those without such responsibilities.
• The claimants included some individuals who did not share the same protected characteristics, but who claimed to suffer the same disadvantage as those who did. For example, one claimant was a British national who lived in France. Another was a male employee with caring responsibilities.
• The Employment Tribunal held that Section 19 of the Equality Act 2010, which contains the indirect discrimination provisions, should be read in line with EU law principles established in the case of CHEZ.
  • In that case, the Court of Justice held that an individual could claim indirect discrimination if the individual lacked a relevant protected characteristic but suffered the same disadvantage as people with that characteristic.
  • The Employment Tribunal upheld the claims.
• In an appeal, the respondent argued that Section 19 of the Equality Act could not be read compatibly with CHEZ, and that the Employment Tribunal's decision goes against the grain of the Equality Act.
• The Employment Appeal Tribunal dismissed the appeal. It found that the Employment Tribunal had jurisdiction to hear the indirect discrimination claims and made no error of law in its decision.

Key Takeaways

• When making decisions about things such as changing terms and conditions of employment, employers must examine the impact and disadvantages the decision may have on all employees, including those who do not have a protected characteristic.
• Employers should be aware that a potentially wider pool of employees without any protected characteristics may now be able to bring claims under the Equality Act if they suffer the same or similar disadvantage as those employees with a protected characteristic.
• Since January 2024, the principles in CHEZ have been enshrined in the Equality Act.

2. In Nelson v Renfrewshire Council, the Employment Appeal Tribunal held that an Employment Tribunal erred in finding that a respondent's conduct did not amount to a repudiatory breach of the implied term of mutual trust and confidence, entitling the claimant to resign and claim unfair constructive dismissal.

The Facts

• The claimant alleged that a colleague behaved in an aggressive and intimidating manner towards her.
• The first stage of the grievance procedure found in favour of the colleague, despite firsthand witnesses corroborating the claimant's account.
• The claimant appealed to a second stage hearing, where her grievance was rejected again. The second stage outcome letter reminded the claimant of her right to appeal to a third and final stage of the grievance procedure. However, the claimant did not exercise her right to appeal, having lost faith in the grievance procedure.
• The claimant resigned and brought a claim in the Employment Tribunal for unfair constructive dismissal. She argued that her colleague's behaviour and the way her grievance was handled amounted to a repudiatory breach of the implied term of mutual trust and confidence.
• The Employment Tribunal dismissed the claimant's unfair constructive dismissal. It found that the respondent had not exhausted her appeals when she resigned. As a result, the Tribunal concluded, the relationship of trust and confidence had not been damaged seriously enough to support a claim for constructive dismissal. The claimant appealed.
• The Claimant's appeal was successful. The Employment Appeal Tribunal found that the Employment Tribunal had unreasonably attached weight to the claimant's failure to follow all the stages of the grievance procedure. The Employment Appeal Tribunal held that the Employment Tribunal should only consider the employer's conduct when considering a constructive dismissal claim. The case was remitted back to the Employment Tribunal.

Key Takeaways

• Employees are not necessarily required to exhaust all steps in the grievance process before a breach of the implied term of trust and confidence can arise.

3. In Literacy Capital Plc v Webb, the High Court dismissed an application for an interim injunction aimed at preventing a former employee from breaching restrictive covenants.

The Facts

• The claimant acquired the defendant's 25% shareholding in Mountain Healthcare Limited, with consideration payable partly in cash and partly by way of a deferred loan.
• In 2021, the defendant resigned from Mountain Healthcare. The parties entered into new investment and loan note agreements.
• The restrictive covenants in the investment agreement sought to prevent the defendant from competing with the claimant's subsidiaries in the UK and the Channel Islands within:
  • 12 months of ceasing to be a director or employee of all such subsidiaries.
  • The period commencing when she became a loan note holder and ending 12 months after she ceased to be such (potentially 10 years, after the longstop redemption date was renegotiated to 2030).
• The claimant brought a claim for breach of covenant and sought an interim injunction to prevent the competing activities from continuing.
• The High Court refused the injunction on the grounds that the covenants were void and unenforceable. Indeed, the continuing application of the covenants during the period in which the defendant would hold the loan notes and for the 12 months afterwards was a key factor in the court finding the covenants to be excessive. In addition, the court found that the claimant had failed to justify the 10-year restriction.

Key Takeaways

• Employers should ensure that restrictive covenants go no further than reasonably necessary to protect the relevant interest to include terms of duration, geographical extent, and scope of business.
• Even outside of the employment context (where due to the perceived inequality of bargaining power, restrictions extending beyond 12 months in duration are unlikely to be enforced), the general principles on enforceability still apply.
• In the light of the above, there should be some logic when tying the duration of the covenant to the interest being protected.

4. In Ngole v Touchstone Leeds, the Employment Tribunal held that withdrawing a job offer could amount to direct discrimination.

The Facts

• The respondent is a charity providing mental health services, including members of the LGBTQI+ community.
• The respondent made a conditional offer of employment to the claimant, a Christian social worker.
• The respondent withdrew the offer after finding that the claimant made derogatory comments on Facebook about individuals in the LGBTQI+ community.
• The claimant challenged this decision and was offered a second interview to discuss the respondent's concerns. The respondent did not reinstate the offer.
• The claimant brought a number of claims in the Employment Tribunal, including for direct discrimination.
• The Employment Tribunal held that withdrawing the offer constituted direct discrimination on the grounds of religion or belief. Whilst the respondent's objective was safeguarding vulnerable individuals, the Tribunal concluded, withdrawing the job offer before the second interview went beyond what was necessary to protect those individuals.

Key Takeaways

• Job applicants can bring discrimination claims – and employers face a difficult balancing exercise when a person's strongly held beliefs conflict with an organisation's ethos and purpose.
• Employers should weigh the right to freedom of expression and religious beliefs against the need to maintain a safe and inclusive environment for staff and clients.
• Employers should exercise caution when conducting pre-screening background checks online and consider the risk of relying on any such information.

5. The Solicitors Regulation Authority has updated a warning on non-disclosure agreements.

• The SRA warns that companies should not routinely use NDAs and that "from the outset firms and clients should consider carefully if an NDA is necessary given the specific circumstances of the case."
• Employers should seek legal advice on NDAs on a case-by-case basis.