This employment law roundup considers several important issues looked at by the Employment Tribunals in the last few months in relation to:
- compensation levels for direct discrimination;
- calculating holiday pay for part-year workers;
- obligations to produce records in TUPE transfers;
- properly pleading defences in constructive dismissal claims;
- the working hours entitlement of agency staff;
- the vicarious liability of employers; and
- employer constructive knowledge of disability.
What is the determining factor in compensating injury to feelings for direct discrimination?
Employment Law Roundup – Komeng v Creative Support
Mr Komeng, who described himself as a Black African, had worked as a Waking Night Care Worker for Creative Support since 2011. He had succeeded before the Employment Tribunal (ET) in a claim for unlawful direct race discrimination. The ET found that his Employers had unfairly failed to enrol him on a professional development course, as well as requiring him to work every weekend. Comparable employees of a different racial origin had been treated more favourably.
Compensation awards are based on the Vento Guidelines (from the landmark 2003 case of Vento v Chief Constable of West Yorkshire Police) which provides a framework for assessing the amount. This case set low, medium and high bands of award based on the level of the discrimination and the effect it has on the claimant. In the case of Komeng V Creative Support, the ET awarded compensation for injury to feelings in the lower Vento band and Mr Komeng appealed to the Employment Appeal Tribunal (EAT).
The EAT ruled that there was nothing wrong in the ET’s decision to place the compensation award at the top of the lower Vento band. The ET properly focused on the actual harm suffered by Mr Komeng and not the seriousness of the conduct of the Employer.
Despite acknowledging that the ET may have decided that issue differently, the EAT chose not to overturn the decision of the ET. The original Tribunal had heard evidence directly from Mr Komeng who continued to work for the Employer and though he had displayed a resilience in dealing with the situation that others may not have, an award at the top end of the lower band was found to be the appropriate remedy.
What this means for employers
Ensure the application of your policies and procedures, including access to training and development, is consistent and fair across all employees within your organisation. Consider training your managers in the Equality Act, as well as key employment policies such as Equal Opportunities and Dignity at Work.
Note also that this case suggests that the most important factor in determining the level of compensation for injury to feelings in a discrimination case, is the effect the behaviour has had on the employee.
What’s the right approach to calculating holiday pay for term-time workers?
Employment Law Roundup – The Harper Trust v Brazel
This important case tackled the complicated subject of how to calculate holiday pay for what are known as ‘part-year workers’. These are employees engaged on a contract that requires them to work only for certain weeks or months e.g. during school term time.
Ms Brazel, a music teacher, was employed on a permanent year-round contract but was only paid for the period spent working. For significant parts of the working year, i.e. the school holidays, she had no work to do.
She usually worked 32 weeks a year, over three terms, with some variation. Her zero hours contract entitled her to the regular full-time equivalent of 5.6 weeks’ annual leave, which she had to take during the school holidays.
Her employer calculated the holiday entitlement using a method recommended by ACAS in its guidance booklet ‘Holidays and Holiday Pay’. This meant her employer calculated her earnings at the end of each term paying her one-third of 12.07% of that figure – equivalent to 5.6 weeks
Every worker is entitled to 5.6 weeks paid annual leave under the Working Time Regulation (WTR).
Ms Brazel argued that her employer’s approach was incompatible with that required by the Working Time Regulations, producing a lower figure than taking the average weekly pay for the twelve weeks prior to the calculation date and multiplying it by 5.6. She argued that there should not be a different approach where the worker does not work a full year. The ET disagreed but this was overturned by the EAT. The Harper Trust appealed.
The Court of Appeal dismissed the employer’s appeal, ruling that the WTR did not allow for pro-rating holiday pay. Even though using the method based on weekly pay would result in a holiday pay entitlement of 17.5% of her earnings, compared to 12.07% for employees working year-round, the Court determined the right approach was to identify a week’s pay and multiply that figure by 5.6.
The Court conceded that this could significantly favour an employee, acknowledging that someone working one week per year could claim 5.6 weeks holiday, but was clear that this was the right method to utilise. The Court was not persuaded that it was unprincipled or unfair for part year workers to receive more holiday pay than full year workers.
The Court of Appeal acknowledged that this method might produce strange results in some extreme circumstances, where the role required the employee to work for a few weeks each year. However, the Court observed that it would be more usual for staff in this position to be engaged on a freelance basis rather than, for example, on a zero hours contract.
What this means for employers
This is a particularly important case for those engaging employees on permanent contracts where they are not required to work year-round. Identifying the right method of calculating holiday pay for these part year workers is essential. Applying a holiday pay cap at 12.07% is not appropriate for employees working parts of the year. The correct method is to take a 12-week average and multiply by 5.6.
Which party should maintain minimum wage records in a TUPE transfer?
Employment Law Roundup – Mears Homecare Limited v Bradburn and others
This case considered the question of whether, following a TUPE transfer, the “transferor” continues to be bound by the duty to maintain wage records in respect of a transferred employee.
Section 9 of the National Minimum Wage Act 1998 requires that employers must keep pay records and makes clear that this obligation continues when the employment ends. Workers have the right to serve a production notice (under s.10 of the same Act) on their employer. This notice requires the employer to produce the pay records if they reasonably believe they have been paid less than the minimum wage.
Ms Bradburn had been transferred under TUPE to a new employer. Some months later she and others served production notices on Mears Homecare (MH), the “transferor”, asking for wage information for the previous 12 months. For nine months of that time period, Mears Homecare was her employer before she transferred to the new employer.
Mears Homecare did not respond to the production notice within the 14-day time limit and Ms Bradburn brought a tribunal claim against them. Initially, she succeeded at the ET stage and was awarded compensation. Mears Homecare appealed.
The employer’s appeal was allowed. Under TUPE, the EAT ruled that employment does not cease for the purposes of the national minimum wage legislation but continues with the transferee.
Liability to keep relevant pay records, and to produce them, therefore also transfers to the transferee. On the transfer, the transferor ceases to have any obligation to maintain or produce the records.
The EAT found no reason why a transferee should not ensure as part of the TUPE process, that all records kept by the transferor for the purposes of the minimum wage legislation are provided to it.
As the EAT pointed out, a transferee can always seek to include indemnities in the transfer to protect it from future potential liability.
Ms Bradburn did not cease to be employed at any stage and the transferee took on the responsibility to produce the records.
What this means for employers
The effect of TUPE is that there was no termination of employment and therefore the liability to keep pay records transfers from the transferor to the transferee.
If your organisation is the transferee in a TUPE situation, ensure you obtain and keep all pay records. It will be your responsibility to produce these if an employee serves a production notice under the National Minimum Wage Act.
How should an employer defend a constructive dismissal claim?
Employment Law Roundup – Upton-Hansen Architects v Gyftaki
This case highlights two important aspects of dealing with a constructive dismissal claim:
- the appropriate use of suspension as a response to alleged gross misconduct; and
- the care employers and their advisors must take in drafting responses to constructive dismissal claims.
Ms Gyftaki had been employed as a senior architect for four years. She needed to travel to Greece for urgent family reasons but had no annual leave entitlement remaining. She requested additional leave which she wrongly believed had been granted. However, her employer emailed the evening before she was due to travel refusing the request.
Ms Gyftaki replied stating that she had to travel and proposed to take the period as unpaid leave. On her return to work she was suspended on full pay pending an investigation into her alleged gross misconduct.
Ms Gyftaki became unwell as a result of the suspension and her employer’s investigation and had been signed off sick. She raised a grievance with her employer. She resigned just before the grievance and disciplinary hearings.
She lodged claims at the ET for constructive unfair dismissal and wrongful dismissal, alleging that the suspension (and a separate introduction of issues relating to a previous period of leave) was a breach of the implied term of mutual trust and confidence.
The ET upheld her claims and awarded an amount for wrongful dismissal, a basic award for unfair dismissal, and a compensatory award. It found that the suspension was not warranted for the reasons given by her employer, which stated it was necessary to protect the integrity of any investigation and/or its business.
The ET also ruled it was wrong to try and rely on the previous alleged misconduct. For these reasons, the employer had conducted itself in a manner that was objectively likely to seriously damage or destroy the implied term of trust and confidence, i.e. there had been a fundamental breach of contract. The employer appealed.
Among the employer’s arguments on appeal was that the tribunal had wrongly decided that there was no potentially fair reason for Ms Gyftaki’s dismissal. Rejecting this, the EAT held that the tribunal was entitled to find that there was no fair reason for dismissal, because the employer had not pleaded any such reason.
In its response to the claim, the employer had made a generic denial of the claims made but not stated what the ‘fair’ reason for a dismissal might be.
What this means for employers
You must plead the reason for dismissal in a constructive unfair dismissal claim if you’re arguing that the dismissal was fair. A two-stage defence can be adopted, firstly that there is no dismissal and secondly, if the Tribunal finds there is, that it was for a fair reason, explicitly set out.
Additionally, suspension of an employee is a step which should be carefully considered so as not to give rise to a breach of the implied term of mutual trust and confidence. Take care not to routinely suspend an employee in a misconduct case as it is not considered to be a neutral act.
Is an agency worker entitled to the same working hours as an employee?
Employment Law Update – Kocur v Angard Staffing Solutions Limited
In this case the Court of Appeal has provided clarification on the ‘working hours’ an agency worker is entitled to after twelve weeks of working in the same role with the same company. It provides useful guidance on the application and meaning of the Agency Worker Regulations 2010 (“AWR”).
The Regulations protect the rights of Agency Workers so that they are not treated differently to directly employed workers in defined circumstances.
After a 12-week qualifying period working for the same company in the same role, an agency worker acquires an entitlement to the same ‘relevant terms and conditions’ as comparable employees.
The AWR define ‘relevant terms and conditions’ as: pay; holiday entitlement; duration of working time; rest periods; and rest breaks. The case of Kocur v Angard concerned the meaning of ‘duration of working time’.
The Agency Worker in this case argued that he was entitled to the same working hours as a comparable employee. Mr Kocur was supplied to the Royal Mail by a recruitment agency. After the qualifying period he claimed that the Royal Mail had breached the AWR by not allocating him the same number of hours of work as direct employees. He failed in his argument before the ET and on appeal to the EAT, before bringing his case to the Court of Appeal.
The Court of Appeal upheld the decision of both the ET and the EAT for two main reasons.
Firstly, it concluded that Agency Workers were often used by employers to provide flexibility in the workforce to reflect seasonal demands. This would be frustrated if the employer was required to provide the same working hours as permanent employees.
Secondly, the Court concluded that ‘duration of working time’ meant the maximum length for any period of working time, meaning that an agency worker should not be required to work a longer shift than an employee.
What this means for employers
There is no requirement to offer agency workers the same number of working hours as a comparable employee.
Can an employer be held responsible for an employee’s personal Facebook post?
Employment Law Update – Forbes v LHR Airport Limited
This case concerned an appeal against the ET’s decision to dismiss a complaint of harassment, victimisation and discrimination.
Mr Forbes was employed as a security officer. Another employee in a similar role had posted onto her own private Facebook page a potentially racially offensive message. This was shown to Mr Forbes by another employee who was friends with the poster. Mr Forbes was not in the distribution list for the original post or the friends list of the poster.
A grievance was raised that racially offensive material was being circulated in the workplace. The employee posting the message was issued a final written warning for breaching the employer’s Dignity at Work Policy.
Mr Forbes was later scheduled to work alongside the employee. He raised a concern with his Union and was moved to another location. He then brought a claim of harassment, victimisation and discrimination before the ET.
The ET dismissed his complaint ruling that the post was not an act done in the course of employment and was therefore not one for which the employer could be liable. Mr Forbes appealed.
Dismissing his appeal, the Court reaffirmed that section 109(1) of the Equality Act 2010 makes an employer liable only for the acts of an employee done “in the course of employment”. That is a question of fact for the Tribunal to determine having regard to all the circumstances.
The Employer had treated the matter seriously, having disciplined the employee, and could not have been reasonably expected to do more to prevent the behaviour occurring. Just because the employer chose to act did not mean the act was done in the course of employment.
The post was to a private Facebook account, it was shared amongst the employee’s Facebook friends, one of whom happened to be a work colleague, who then showed the image to Mr Forbes at work.
The outcome of the complaint might have been different if the person who showed him the image had been the subject of the harassment claim, as this was done in the workplace and might be said to have been done “in the course of employment”.
What this means for employers
In this case, the posting of a potentially racially offensive image on a personal Facebook account was not done ‘in the course of employment’. For this reason, it’s not something for which the employer could be held vicariously liable.
However, the person who showed the Facebook post to Mr Forbes may have been viewed as doing so, “during so the course of employment”. Had the harassment claim been brought against this individual, the outcome may have been different. Each case will be decided on its merits.
Having an effective social media policy in place is essential. You’re advised to review this and also to ensure your staff have training in equal opportunities and dignity at work.
Constructive knowledge of disability – the Equality Act 2010
Employment Law Roundup – A Ltd v Z
In the case of A Ltd v Z, the EAT overturned a decision of the ET which had allowed a claim for disability discrimination.
‘Z’, who was employed as a part time finance co-ordinator, suffered from serious long-term mental health impairments and was considered disabled for the purposes of the Equality Act 2010.
At the time of commencing her employment she didn’t tell her employer about her mental health issues. She was dismissed by her employer after 14 months due to lateness and a poor record of attendance.
‘Z’ suffered from stress, depression, low mood and schizophrenia but had provided different reasons for absences from work to her employer.
Even when hospitalised for a period due to poor mental health, she told her employer that she was suffering from a variety of physical complaints.
Although the ET found that the employer did not have actual knowledge of the disability, it decided more enquiries should have been made and the employer was found to have constructive knowledge for the purposes of applying the Equality Act. The Employer appealed.
An employer has a defence to a disability discrimination claim brought under s.15 of the Equality Act, if it can show that it did not know and could not reasonably have been expected to know of the disability. This means having actual knowledge of it or what is known as ‘constructive knowledge’. The means: “could the employer have reasonably concluded there was a disability from the circumstances?”
The EAT found that the ET had erred in ruling that the employer had constructive knowledge just because they could have done more to find out the reasons for absence.
Even if the employer could reasonably have been expected to do more, it could not reasonably have been expected to have found out about the disability.
The EAT found that, in this case, the employee would have continued to hide the disability. Although an Employee might be reluctant to disclose mental health issues, and in this case the employer could have made more enquiries, that was not the same as saying that the employer should have known.
The fact that the employee was determined to conceal the true reasons for absence meant the employer would not have found out about the disability.
What this means for employers
Employers should consider carefully whether or not there is a possibility that an employee’s absence might be disability related prior to taking a decision to dismiss an employee for high levels of absence.
However, if you don’t have any evidence that an employee’s absence is related to a disability (despite investigations into this), you may be able to successfully argue that you did not have, and could not reasonably have had, ‘constructive knowledge,’ should an employee bring a claim for disability discrimination.
If there’s any information in this employment law roundup that you would like advice on in relation to your own employment practices, please contact our team.
