Employment Law Top Ten of 2021

How will employers and HR professionals remember 2021? At the beginning of the year you would have been forgiven for thinking we would be through the Coronavirus pandemic and out the other side – but both the very first and very last few weeks of 2021 have proved just the opposite. The pandemic continued to keep HR professionals busy and 2021 is also the year that “hybrid”/”blended”/”smart” working really took off across numerous workplaces, with a glimpse of the working world to come (albeit with the “work from home” guidance now back in place across all of the UK).

At the end of the year though, we take a moment to look back at some of the most important Employment law cases and legislation from 2021 as a reminder that Employment law “waits for nobody” (or a pandemic)!

This year’s countdown is brought to you in the form of well-known sayings. Sit back, relax and give yourself a moment to take a trip down memory lane…

The end of the road

Some might have lost interest in an appeal for yet another gig economy case that has been going on since 2016. However, at number ten the Supreme Court ruling in Uber v Aslam[1] is not just another confirmation that Uber drivers and similar personnel are “workers”, with their accompanying rights. It is, in fact, a highly significant decision that turned the starting point for determining “worker” status on its head. The Supreme Court made it crystal clear that the interpretation of a “worker” set out in legislation, not contracts, comes first. Cleverly crafted contracts, whilst potentially providing some insight as to the agreement, are secondary to the way the work is carried out “on the ground”. Employment law is there to protect individuals from unscrupulous practices and unfair treatment.

The Supreme Court reminded us that it does just that, by noting that the category of “worker” exists to protect the individual from big business where there is little or no bargaining power. What’s more, the legislation in this case[2] prevents any “contracting out” of workers’ rights except under a Settlement Agreement. If the contract could be used as a starting point, it could (and you have to love the way the Supreme Court expresses it) “reinstate the mischief” which the legislation was designed to prevent, i.e. allow employers to try contracting out of those rights through the agreement. If you weren’t convinced Uber would be referred to in many status cases for years to come, we already have one[3], where, whilst accepting worker status for other reasons, the Court of Appeal stated that it did not need to decide on a contractual term, because Uber ruled that the focus should be on the way arrangements operated in practice. Uber and out.

Throwing the baby out with the bathwater

Shared Parental Leave (SPL) was designed to give both parents an opportunity to be involved in the first year of their child’s care and prevent women in particular having to choose between parenthood and a career. However, with Maternity Action estimating that take-up by men was between 3%-4% and calls from the TUC to scrap the policy as “deeply flawed”, at number nine is another Employment Appeal (EAT) decision[4] challenging the non-enhancement of Shared Parental Pay (ShPP), this time comparing it to enhanced adoption pay. Mr Price wanted to take SPL so his wife could return to work after two weeks. Powys Council paid enhanced pay to those taking maternity or adoption leave but not SPL. Mr Price argued in the Employment Tribunal (ET) that it was direct sex discrimination to pay a female either on maternity leave or on adoption leave more than a male on SPL. His comparison with maternity leave failed because, as had been established in 2019[5], maternity leave is for the health and wellbeing of the birth mother and to develop her special bond with the child, whereas SPL is for the care of the child.

On adoption leave, his claim failed because the ET found a number of differences between SPL and adoption leave. Mr Price appealed only the decision on adoption leave, alleging that its purpose was equally to provide childcare. The EAT rejected his appeal, although for slightly different reasons than those of the ET. On adoption, it noted, considerations to a child’s welfare go beyond the facilitation of childcare. Reasons for taking adoption leave include the forming of a parental bond and taking steps to prepare and maintain a safe environment for the adopted child and could include health and safety concerns. Adoption leave may commence prior to the placement, which also showed that its purpose cannot be the facilitation of childcare: rather, to enable the parents to prepare.

A Government evaluation of the SPL and ShPP regime was due in 2019, but a Ministerial statement in January 2021 said its findings will be published “in due course”. Not enhancing ShPP is a significant factor in the low take-up. Will any long-lasting difference be seen where some parents have had to take more responsibility than they normally would for childcare during school and nursery closures? Perhaps “Who’s left holding the baby?” below can answer that.

Playing by the rules

At number eight is a Supreme Court decision regarding when an employer can justifiably agree changes to terms and conditions directly with staff (including the threat of denying them a Christmas bonus) even though such terms are part of a collective agreement with a recognised trade union. Where terms are collectively agreed like this, TULR(C)A 1992[6] ensures an employer does not bypass its obligation to negotiate contract changes with the trade union. It prohibits employers from making offers to a group of union-member employees which would result in any terms not (or no longer) being determined by the collective agreement. Affected employees can claim compensation.

In Kostal[7], changes to terms and conditions were discussed between the union’s officer and Kostal’s HR Manager. There was to be give and take on both sides, with pay increases accompanied by a reduction in other terms. However, one involved a Christmas bonus, which the HR manager said could only be paid at Christmas to those who agreed. He therefore wrote individually to employees asking whether they accepted the package of changes. Those who did not accept in time were offered the other changes without the Christmas bonus. Kostal also implied that those who did not accept the change might have their contracts terminated. The ET ruled that Kostal had breached TULR(C)A 1992 by seeking to bypass the recognised union and agree changes to terms and conditions directly with staff.

The EAT agreed, but the Court of Appeal overturned the ruling, holding that an inducement to a one-off change to terms and conditions did not offend these provisions. The Supreme Court, however, allowed the employees’ appeal and ruled that the prohibition on such inducements applied whether the agreement not to bargain via the union was a one-off or permanent. Staff who had not agreed to the direct offer by Kostal were treated less favourably and were entitled to compensation. Nevertheless, the Supreme Court added a very important caveat: that there could be circumstances where an employer has both followed and completely exhausted a collective bargaining process. An employer cannot make direct offers to staff before this stage has been reached, but could build into a collective agreement clear boundaries of when the collective procedure is considered to have been exhausted.

Sleep tight

In an eagerly anticipated judgment for care homes and other residential settings needing overnight staffing, number seven is the Supreme Court’s decision[8] about “sleep-in” shifts and the National Minimum Wage (NMW). Ms Tomlinson-Blake was initially successful in the ET and EAT, but in 2018 the Court of Appeal overturned their decisions, and ruled that that those who have to be in attendance at or near their place of work overnight, but who are permitted to sleep unless any need arises requiring their attention, are not “working” for the purposes of the NMW. Mr Shannon brought a similar case but was unsuccessful because he simply (and rarely) provided assistance to the night care worker, his home was at the place of work and he was entitled to be at home throughout the night. The decision was widely welcomed in the sector.

This year, the Supreme Court upheld the Court of Appeal’s decision. Drawing heavily from the Low Pay Commission’s original aims concerning the NMW and comments on “sleep-in” workers, the Supreme Court confirmed that individuals are not entitled to the NMW for the time they are asleep at or near the workplace, only when they are awake “for the purposes of working”. Keeping a “listening ear” out for incidents was not enough; only when Ms Tomlinson-Blake had to get up and deal with a situation was she “working”. Nor was a regulatory requirement to have someone on the premises relevant to how the NMW was to be paid. In coming to its conclusion, the Supreme Court overruled a number of older conflicting cases, and has hopefully provided some much needed clarity for the care sector. Had it gone the other way, care providers faced an estimated £400m in back pay.

Bite the bullet

At number six, off-payroll working in the private sector (often referred to interchangeably with IR35) was finally introduced on 6 April this year. Yet with the public sector in scope since 2017, and its delay from April 2020, it is no wonder that reaction to its introduction was somewhat muted. The law now requires medium and large end users/clients of services via an intermediary, usually a Personal Service Company (PSC), to determine whether, but for the intermediary (the PSC), the status of the individual providing the services to the end user would be that of employment for tax purposes.

IR35 has been around for years – the change is that now the end user must determine tax status, not the PSC. It does not apply to individuals with no intermediary (PSC), i.e. working directly for the end user, nor to those where the intermediary is an agency (agency rules apply, although some “chains” will have both an agency and a PSC between the individual and the end client). However, where it does apply, it requires the end user to deduct PAYE tax and National Insurance regardless of any PSC, which previously may have been subject only to company taxes. Despite warnings and the long lead-in, many end users did not engage with the elements of the status test, and took a blanket approach: either placing contractors with PSCs inside the off-payroll regime (up to two in three according to some reports), or requiring them to use umbrella companies (which are themselves currently under the HMRC spotlight), or simply banning contractors entirely.

The Government’s online status tool, CEST, came in for significant criticism for its inaccuracy or inability to determine status, and significant reforms are being called for. However, as the new law has slowly bedded in, more recent reports suggest companies are beginning to realise that they have no choice but to go through the status determination process on a case-by-case basis in order to recruit and retain the contractor talent they need, rather than adopting blanket approaches.

Who’s left holding the baby?

Do women still bear the greater burden of childcare responsibilities than men, which can limit their ability to work certain hours? Yes, said the EAT[9], referring to this as “the childcare disparity”, at this year’s number five. At the end of 2020, men made up only 6.3% more of the UK workforce than women, the lowest gap since comparable records began in 1971. For certain claims, do ETs need proof that childcare is not shared evenly, especially with flexible working and parental leave rights available? Not necessarily. The EAT found that an ET was wrong not to take “judicial notice” of the childcare disparity, which has been noticed by courts at all levels for many years. Whilst not set in stone for all time, current evidence showed that, despite advancements, the childcare disparity still exists today.

Following her dismissal for not being able to comply with her employer’s change to more flexible working, Ms Dobson brought a claim for indirect sex discrimination. The EAT ruled she did not need to show evidence that a provision, criterion or practice (PCP) requiring community nurses to work flexibly without choice, including at weekends, puts or would put women at a particular disadvantage compared with men. Her case was later referred to in a pandemic-related claim[10]. A mother resigned and successfully claimed indirect sex discrimination when her request to work from home due to childcare issues was refused, and she was disciplined for refusing to attend work. Both cases are a reminder that, even in 2021, indirect sex discrimination claims will often succeed based on responsibility for childcare, and specific proof of “group disadvantage” may not be necessary.

Moving with the times

Following the end of freedom of movement on 31 December 2020, number four is the significance of 2021 for EEA and Swiss Nationals and their family members who had not already applied for settled or pre-settled status in the UK under the European Union Settled Status scheme (unless exempt). To be able to prove, amongst other matters, that they are entitled to work in the UK, EEA and Swiss Nationals were required to apply to the scheme by 30 June 2021 even if they had lived in the UK a number of years (and even if they had permanent residence cards or some similar documents). Not that they necessarily have to show that to their employer, if the employer had done the correct Right to Work Checks when the individual was first recruited (up to and including 30 June 2021 as a grace period).

Perhaps unsurprisingly, there remain individuals who have yet to apply and further grace rules apply to them. But Right to Work Checks to avoid a civil or criminal penalty have taken on a much greater significance for employers: they may have to be done regularly throughout employment (not just predominantly on recruitment) and involve very specific requirements. Employers should ensure they have kept up with the latest changes and have updated training for anyone carrying out such checks. With regard to COVID-19 adjusted Right to Work Checks (allowing documents to be checked remotely) employers were kept on their toes throughout 2021. While the Government concession was first due to be abolished on 16 May, then 20 June, then 31 August, the Government has now extended it until 5 April 2022 inclusive.

The dawn of a new age

At number three is the highly topical EAT decision concerning Ms Rooney[11] who alleged direct sex and disability discrimination, as well as constructive unfair dismissal, following treatment by her employer relating to her menopausal symptoms. A recent independent report commissioned by the Government shows that almost 1 in 4 women end up leaving the workforce, and 25% consider giving up work, as a result of the impact of the menopause. Women over 50 are the fastest growing section of the workforce, and nearly 4 million 45-55 year-old women are in work. Employers must be alive to the sometimes incredibly debilitating effects of the menopause: not only to avoid ET claims, but to retain vital talent when many are at the peak of their careers. Those discriminated against or harassed as a result of the impact of the menopause usually have to rely on sex, age or disability discrimination claims (although changes to the Equality Act 2010 are not being ruled out).

Ms Rooney sought to change an initial ET claim to include direct sex and disability discrimination. She alleged that she had suffered from the physical, mental and psychological effects of the menopause for two years, including insomnia (causing fatigue and tiredness), light-headedness, confusion, stress, depression, anxiety, palpitations, memory loss, migraines and hot flushes. The negative impact meant she had struggled physically and mentally to cope. She received a written warning for work-related stress absence where her appeal was heard by four men, Occupational Health were unable to provide her with a female doctor, and she felt she had no alternative but to resign.

The ET struck out her discrimination, harassment and victimisation claims, but the EAT allowed Ms Rooney’s appeal. The ET had not given any/sufficient reasons as to why it did not consider that Ms Rooney had a disability, and why her sex discrimination claims had no prospect of success. There were several undisputed aspects to her evidence which could lead to a finding that Ms Rooney had a disability, and the sex discrimination claims had impermissibly been limited by the ET to a couple of incidents rather than the extent of the actual claims made. A further hearing will look at these questions, but there is no doubt that claims of this nature will continue to increase.

A shot in the arm

Perhaps one of the most ideologically significant Employment law developments of 2021 (in England only) at number two is the requirement, introduced by Regulations[12] from 11 November, for those working or deployed in CQC-registered care homes to evidence that they have received the complete course of doses of an authorised vaccine against COVID-19, unless they are medically exempt. Whilst the pandemic in 2020 undoubtedly hit care homes incredibly hard with great loss of life, previously the requirement for anyone in the UK to be vaccinated against anything in order to have or keep their job was almost unheard of. Even in the NHS, until now, only Hepatitis B was mandatory for those performing certain types of surgery.

The fact that, at the time of writing, none of the other devolved nations of the UK have followed suit highlights the uncharacteristic nature of this measure. It was a complex process of being voted through Parliament; drafting regulations with a lead-in time to allow for two vaccinations; temporary template self-certifying exemption letters; slow and patchy Government guidance not properly updated until 19 October; and the formal evidencing process not published until 1 October. Some areas remain in doubt (such as what, exactly, may give rise to medical exemption). It is now law, such that a failure to evidence vaccination status, unless assessed as medically exempt, means that care home employers have had or will have to dismiss staff who fail to comply if they cannot redeploy them and there is no other alternative. The most likely grounds for dismissal would be breach of a statutory restriction and/or some other substantial reason. The law also applies to those entering these settings to provide services: tradespeople, occupational therapists, hairdressers and many more.

No doubt in next year’s Top Ten we will be referring to the equally significant decision to require evidence of vaccination from 1 April 2022 for those working or deployed in wider health and social care settings, again only in England, including, but not limited to, the NHS. In addition, other employers throughout the UK in different settings have been wondering whether they can introduce a similar mandatory requirement for their staff. To date, most UK employers have steered clear of this, but will we start to see ET cases involving employers who may have taken this significant step? Time will tell.

Pause for thought

“I may not agree with what you say, but I shall defend to the death your right to say it”[13]. This year’s number one is a case[14] where the EAT had to preface its judgment with a list of what it was not deciding and not saying. Widely misinterpreted by the press as potentially allowing transgender harassment, the case of Maya Forstater is above all important for establishing when a philosophical belief falls under the protection of the Equality Act 2010. Ms Forstater held “gender critical beliefs”, namely that biological sex from birth is real, important, unchangeable and not the same as gender identity. Having expressed these beliefs online, some colleagues alleged that they were transphobic, exclusionary or offensive.

After an investigation, Ms Forstater was offered no more consultancy work and her visiting fellowship was terminated. She alleged discrimination and/or harassment on grounds of her philosophical belief. Along with four other tests, a philosophical belief must also be “worthy of respect in a democratic society, be not incompatible with human dignity and not conflict with the fundamental rights of others”[15]. The ET accepted it passed the first four tests but not the one detailed above. The EAT disagreed. By law, legislation must be interpreted by reference to the European Convention on Human Rights. This includes both the right to freedom of thought, conscience and religion; and the right to freedom of expression. For both these, the bar is low. One can hold whatever belief one chooses, although manifestation of a belief which is wholly incompatible with a democracy, such as subjecting others to torture or inhuman treatment, would not be protected. Similarly, freedom of expression is fundamental to democracy and allows ideas that offend, shock or disturb subject to similar limitations.

The EAT judged that only beliefs akin to advocating Nazism, pursuing totalitarianism or espousing violence and hatred in the gravest forms should be capable of being not worthy of respect in a democratic society, and so would fail to qualify for protection. Ms Forstater’s belief in itself did not seek to destroy the rights of trans persons. The ET had also gone too far in balancing Ms Forstater’s rights with those of others in a preliminary hearing concerning only whether her belief (not its manifestation) was protected. The ruling generated a great deal of media interest: but it is key to remember that a hearing on whether she had suffered discrimination or harassment, or indeed had caused any, is still to come. Nevertheless, it shows a very low threshold for this final test as to when a belief may be protected. It is also a reminder of the very fine line employers have to tread when one belief has an impact on another: very few beliefs will not be protected, and it will be the way the employer deals with the manifestation of such beliefs that will be crucial in determining whether an ET claim is successful or not.

Our annual Top Ten countdown continues to shows the many challenges faced by organisations and their HR teams. Once again, it is “all change” – and drives a coach and horses through the idea that ignorance is bliss!

Footnotes

[1] Uber BV and others v Aslam and others, Supreme Court, February 2021

[2] The Employment Rights Act 1996; the National Minimum Wage Act 1998 and associated regulations; and the Working Time Regulations 1998 both in relation to breaks and holiday pay

[3] Stuart Delivery Ltd v Augustine, Court of Appeal, October 2021

[4] Price v Powys County Council, EAT, March 2021

[5] Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire Police v Hextall, Court of Appeal, May 2019

[6] The Trade Union and Labour Relations (Consolidation) Act 1992

[7] Kostal UK Ltd v Dunkley & others, Supreme Court, October 2021

[8] Royal Mencap Society v Tomlinson Blake; Shannon v Rampersad & another, Supreme Court, March 2021

[9] Dobson v North Cumbria Integrated Care NHS Foundation Trust, EAT, June 2021

[10] Bryan v Landmarc Support Services Ltd, ET, August 2021

[11] Rooney v Leicester City Council, EAT, October 2021

[12] The Health and Social Care Act 2008 (Regulated Activities) (Amendment) (Coronavirus) Regulations 2021

[13] Attributed to the French philosopher Voltaire

[14] Forstater v CGD Europe and others, the Equality and Human Rights Commission intervening EAT, June 2021

[15] Grainger PLC v Nicholson, EAT, November 2009

Season’s Greetings and wishing you a very Happy New Year from the Employment, Pensions, Benefits and Immigration law team at Blake Morgan.