Employment Law Top Ten of 2020

The year 2020 has been a tumultuous year in many respects. How will employers and HR professionals remember 2020? Coronavirus, lockdown, furlough, “unprecedented”, “Teams/Zoom/Google Meet”, a raft of new terms and simply mountains of work?

HR professionals have certainly been rushed off their feet, trying to help with working from home arrangements or keeping up with changing guidance to facilitate COVID-secure workplaces, understanding and implementing furlough, as well as generally trying to maintain staff morale in perhaps the most difficult year we have faced in most of our lifetimes. They certainly deserve a big pat on the back even if they have only just “coped”. Whilst there will still be massive challenges ahead, at the end of the year we take a moment to look back at some of the most important Employment law cases and legislation from 2020 which, with all the other demands on your time, may have been forgotten!

This year, our countdown to number one is brought to you in the form of well-known books. Sit back, relax, congratulate yourself for your huge efforts and grab a glass or mug of something comforting…

Atonement

At number ten is an interesting case[1] where the Employment Appeal Tribunal (“EAT”) held that a claim could not be struck out simply because there was no prospect of a claimant receiving a monetary award. A deputy head teacher was dismissed for gross misconduct for financial mismanagement. He had received unauthorised overpayments from the school and allowed unauthorised overpayments to a third party.

As a result, he was ordered by the High Court to repay over £46,000 to the school (£200,000 was irrecoverable due to limitation issues). Nevertheless, the teacher brought an unfair dismissal claim against the school and, somewhat unsurprisingly, an Employment Tribunal (“ET”) struck it out. The ET found no reasonable prospects of success, and any compensation would be zero as a result of the High Court’s ruling, even if the dismissal had had procedural failings.

However the EAT disagreed. Just because a finding of procedural unfairness could not lead to a financial award, the EAT held it was not in the interests of justice for the employer not to be held to account for them. The case is a reminder that even when a case for dismissal seems bulletproof, it must still be procedurally fair. Without offers of settlement, a claimant is still entitled to their “day in court” to hold the employer to account for any failings, even if monetary compensation is not likely. A pyrrhic victory perhaps…or an important principle.

Michael Rosen’s Sad Book

At number nine, we had the long-awaited new right to Parental Bereavement Leave and Pay. It began in Parliament in 2017, became an Act in 2018, but only in 2020 were the Regulations made, finalising the details and bringing the right into force for the death of a child under 18, or stillbirths after at least 24 weeks’ gestation, occurring on or after 6 April 2020. The right to leave (“PBL”) is for one or two whole weeks that may be taken at any time within 56 weeks of the death.

Parents are entitled to PBL in respect of each child. Whilst restricted to employees (i.e. not “workers” or agency staff), it is a “day one” right with no qualifying service. “Bereaved parent” is widely defined to include adopters, surrogacy arrangements, foster carers and partners of parents in an “enduring family relationship” amongst others. Notice only needs to be given more than 56 days after the death.

Employees with at least 26 weeks’ service and earning over the Lower Earnings Limit may be entitled to Statutory Parental Bereavement Pay at the same statutory rate as other family friendly pay (currently £151.20 per week and increasing to £151.97 in April 2021). As with other rights, there is also protection against dismissal and no qualifying period of service for an automatically unfair dismissal. In 2017 the Government found that 1 in 4000 employees were affected, so many will have welcomed this perhaps overdue statutory right. Is it sensible to say that would-be parents are only entitled to PBL if their child is stillborn after 24 weeks of “gestation”? Maybe, but it means many excited would-be parents may miss out on this right, despite suffering a bereavement just as greatly.

Crime and Punishment

At number eight are a couple of large costs awards that sound a note of caution both for employers and employees. Ms Giwa-Amu[2] was awarded £42,809 by an ET for injury to feelings compensation alone, as part of a £386,000 award for race and age discrimination, harassment and victimisation. She had been working for the employer for just a month before being signed off for stress and depression following a number of acts undertaken in an insulting manner, deliberately to humiliate her and deliberately creating a racist hostile environment. Managers also breached her confidence when she reported being bullied.

The case attracted attention because the injury to feelings award was very close to the upper limit of the top bracket (called “Vento” bands) including aggravated damages. The highest of the three brackets for injury to feelings awards increased in April to £27,000-£45,000. Conversely, an employee recently[3] had one of the largest costs awards ever by an ET made against him of £432,000 when he produced hundreds of hours of covert recordings of conversations (some of which the ET described as “deceitful” and “duplicitous”) and 3000 pages of documents. When put at risk of redundancy, he made numerous claims of discrimination, harassment, victimisation, whistleblowing detriment amongst others.

The ET found that the redundancy dismissal was fair and dismissed the other claims. Costs orders in the ET are the exception, with each party bearing their own costs. The claimant had had to pay deposits to continue with what were ultimately unfounded claims, and given the opportunity to withdraw them. One can only assume the ET found his conduct so vexatious, abusive, disruptive or unreasonable to have made such a high award against an individual.

NB: an important note for employers is that changes have been made to Employment Tribunal procedural rules in order to increase the volume of claims that can be dealt with and the way they are handled especially in light of the Coronavirus pandemic. Whilst most of these are fairly technical, employers do need to be aware that the time period for Early Conciliation (“EC”) has now been extended from one month to six weeks, but, unlike before, there is no scope to extend that period, so EC must be addressed as soon as it is known about.

The Rainmaker

A small yet significant change came in this April at number seven, namely the liability to pay employer’s Class 1A National Insurance contributions on the balance of termination payments over £30,000. This change to align taxation of termination payments with the national insurance position had been on the horizon for some time, but was delayed from April 2018 until this April. It is a significant cost to employers: a payment of £10,000 over the £30,000 threshold will produce an NIC bill for the employer (not the employee) of £1,380, and could of course be significantly more depending on the size of the payment and the number of employees receiving a payment.

Employers are not allowed to pass this cost on to the employee by deducting it from any payment made under Settlement Agreements, but it may be something they bear in mind when deciding how much to offer an employee in settlement. The NIC charge is reported to and collected by HMRC at the time the liability arises, not the end of the tax year. With a record number of redundancies made in recent months, and more on the horizon, employers need to remember this potential additional cost when making their calculations.

Becoming

At number six we have the first interesting ET decision on non-binary/gender fluid rights[4]. Ms Taylor had been an engineer with Jaguar Land Rover for more than 20 years. In 2017, Ms Taylor changed the way she presented herself by wearing women’s clothes and becoming gender fluid/non-binary. She suffered from insults and abusive jokes and suffered with difficulties using toilet facilities. She brought claims for harassment, discrimination and constructive unfair dismissal at the ET.

The employer argued that Ms Taylor did not fall within the definition of gender reassignment, (a “protected characteristic”) under section 7 of the Equality Act as she was gender fluid/non-binary and she had to show that she was “proposing to undergo, is undergoing or has undergone a process (or part of a process) for the purpose of reassigning the person’s sex by changing physiological or other attributes of sex”. However, in this case the judge ruled that it was “clear that gender is a spectrum” and that it was “beyond any doubt” Ms Taylor was protected.

The judge said gender reassignment “concerns a personal journey and moving a gender identity away from birth sex”. It will be interesting to see whether, if appealed, this decision is upheld as there are clearly arguments about what amounts to “changing physiological or other attributes of sex”.

Nineteen Eighty-Four

Although somewhat late in the day, more than 18 months after the GDPR came into force (and right before we will start calling it the “UK GDPR” from 1 January 2021), at number five we finally have guidance from the Information Commissioner’s Office about Data Subject Access requests under the GDPR. At 81 pages, it’s not a quick read but it should prove useful to employers increasingly receiving subject access requests.

The guidance makes clear that personal data is not restricted to information which is easy to retrieve. However, if something has already been deleted from an employer’s system to the extent possible before the request was made, the fact that technical experts could retrieve it does not mean the employer has to. It states that for emails where there is no personal data of the individual (e.g. they have simply been copied in) it would be sufficient to give the individual that information, not provide them with all the emails where they are only a recipient and nothing more. Perhaps more importantly though, it clarifies a few new points:

1. Whilst you can already let the individual know that you are extending the timeframe for responding by two months if a request is complex or you have received a number of requests from that individual, you can also now “stop the clock” if you have requested further information from the individual and not yet received it. You should only seek clarification if it’s genuinely required and you hold a large amount of information.
2. It sets out that a request is manifestly excessive when it is “clearly or obviously unreasonable”. This includes taking into account a number of factors such as the context of the request, your relationship with the individual, whether it largely repeats or overlaps with previous requests. You do need to have strong justifications though – not simply that a lot of information is involved.
3. If a request is manifestly unfounded (e.g. if the individual has no real intention of wanting the information but is using the request as leverage, or it is specifically intended to cause disruption in the way it is done) or excessive, and you can charge a reasonable fee, the guidance gives examples of what those fees might include, for instance, the costs of the controller’s staff time, copying and postage and expenses in transferring the data of the individual such as the costs of discs and USB devices.

First Among Equals

At number four is a case decided by the Court of Appeal[5] where the employer established that it had a “material factor” defence to an equal pay claim brought by Mrs Walker, who had been promoted to executive level in early 2014 during a period of financial crisis. In February 2015, a job evaluation study rated her work as at least equivalent to, and/or of equal value to that of her male colleagues who were paid significantly more.

When she was dismissed in 2017, the employer succeeded in establishing non-sex-related reasons why she had been paid less, including that: unlike Mrs Walker, her male colleagues were seen as fundamental to the employer’s survival in view of their historic involvement; they had experience at executive level; and were seen as a flight risk, having close connections to the recently departed CEO. Initially an ET determined that these reasons no longer existed by the time of the job evaluation study in 2015.

However the EAT and Court of Appeal disagreed, and found that at least one of the “material factors” explaining the difference (not related to sex) remained in each case. Whilst the employer was successful, it is a good reminder that ETs will look carefully at the employer’s reasons at every stage. Over time, a “material factor” may disappear, leaving the employer open to a successful equal pay claim. This will become increasingly relevant with progressively more private sector equal pay claims.

Much Ado About Nothing

At number three we have the changes made to Statements of Employment Particulars under Section 1 of the Employment Rights Act 1996. The headline changes which came into effect for new starters from 6 April 2020 are not rocket science – but the devil is most definitely in the detail of the legislation. Particulars for new staff must be given on day one. Some newly added particulars must be included in the initial statement (not supplementary additions), whilst some can be in a separate document, but must still be given on day one. Some may be in a separate document, which may be given later – within two months.

“Workers” now have the right to a statement even though the statement includes matters such as disciplinary and grievance processes which may not apply to workers. Existing employees do not have to be given a new statement, except in certain cases including if they ask for it. However, existing workers do not have the right to be given a statement even if they ask for it, if they were taken on before 6 April.

Confused? Whilst the idea may be laudable, especially to help workers be sure of the terms they are engaged on, the legislation has been made much more complex than was needed and it is likely that many employers will still not be compliant. They may well have had other things on their mind this particular year, with these changes taking effect in April. Failure to comply could result in an award of 2-4 weeks’ pay (subject to the statutory cap) if the employee is successful in another claim – but perhaps more importantly the ET can make a declaration as to what the terms should have been if they are not specified clearly.

Tinker Tailor Soldier Spy

Is an employer liable for deliberate data breaches by a disgruntled employee? No, held the Supreme Court[6] which is this year’s number two.

Andrew Skelton had intentionally leaked the personal data of thousands of his Morrisons’ colleagues – should Morrisons have been held vicariously liable for his actions? Employers can be liable for torts committed by an employee if there is a sufficient connection between the employment and the wrongdoing. Skelton was an IT internal auditor and in the course of his duties transferred payroll information in respect of nearly 100,000 employees to the company’s auditors, and also downloaded a copy for personal use onto a USB stick.

Early in 2014, Skelton uploaded, in his own time, the payroll data to a public file sharing website. The data disclosed included employees’ names, addresses, telephone numbers and bank details. He then sent the same information to newspapers, one of which contacted Morrisons, which took immediate action to remove the online data and inform the police. Skelton was imprisoned and Morrisons spent over £2.26m dealing with the aftermath of the breach.

A number of employees brought a claim under the then Data Protection Act 1998 against Morrisons, alleging that it was either directly or vicariously liable for Skelton’s actions. Morrisons lost in the lower courts, but the Supreme Court overturned their decisions and unanimously held that Skelton did not act in the ordinary course of his employment. The fact that his employment gave him the opportunity to commit wrongdoing was not sufficient to make Morrisons vicariously liable.

An employer would not usually be vicariously liable where the employee is pursuing a personal grudge outside their field of activities for the employer rather than pursuing their employer’s business.

The Lion, the Witch and the Wardrobe

And so to this year’s number one. It must be the most talked about issue this year – the Government’s Coronavirus Job Retention Scheme,(“CJRS”) or “Furlough”. Introduced in March in a huge upside-down hurry, starting with the HMRC Guidance then followed by the legislation (Treasury Directions).

Employment lawyers have lost count of the number of iterations of the Guidance, the clarifications, the errors that sent us into a spiral and were then tidied up when raised with HMRC. When the Job Support Scheme was announced, to replace the CJRS, then a “closed” version of that, HR professionals must have been left scratching their heads, trying to keep up with it all. The Government’s decisions firstly to extend the scheme from May 2020 to October 2020 and then to March 2021 and in a surprise announcement today (17 December) by the Chancellor, the scheme will be extended by another month to 30 April 2021 and the Government contribution to wages remains at 80%; secondly to introduce “flexible furlough” in July; and thirdly to drop the Job Support Scheme in favour of the extended CJRS which everyone had finally got to grips with, can only be welcomed.

It is as if, strangely, whilst firefighting and keeping pace with all the changes, we have come out of the wardrobe, where time has stood still. Nevertheless, the purpose of the CJRS, to save jobs in what may be a huge recession (who knows how Brexit will interplay with this), will have made a huge difference for many organisations and staff alike. Perhaps what we might have thought to be the bain (or adventure?) of employers and HR professionals’ working lives this year has also in many ways been a saving grace that none of us should underestimate. HR professionals can take satisfaction in how they have made a difference in 2020.

Appendix

[1] Evans v London Borough of Brent, EAT 2020

[2] Giwa-Amu v DWP, ET 2020

[3] Tan v Copthorne Hotels Ltd, ET 2020

[4] Taylor v Jaguar Landrover, ET 2020

[5] Walker v Co-Operative Group Ltd, Court of Appeal 2020

[6] WM Morrison Supermarkets plc v Various Claimants, Supreme Court 2020