The Labour and Employment Disputes Review: United Kingdom
In the UK, employment tribunals are the principal forum for determining employment disputes. The Employment Tribunals Act 1996 sets out the claims over which tribunals has jurisdiction. However, typically, many employment-related contractual disputes are dealt with in the civil courts; for example, disputes relating to restrictive covenants and high-value bonus disputes.
Employment law is heavily influenced by European Union law, so it will be interesting to see what the impact of Brexit will be on UK employment law.
i Employment tribunals
From 6 May 2014, a mandatory early conciliation (EC) procedure with the Advisory, Conciliation and Arbitration Service (Acas) came into force to give the parties the opportunity to resolve disputes without resorting to a tribunal. As a result, a claimant must contact Acas prior to presenting a claim to a tribunal. Conciliation is intended to be confidential, impartial, independent and free. Acas takes a fairly light-touch approach to EC, and the parties are not compelled to engage in the process. The Acas conciliation officer has one month to attempt to resolve the dispute, which may be extended by up to two weeks by agreement.
If EC is refused by one of the parties or attempts at a resolution are unsuccessful within the applicable time frame, an EC certificate is issued confirming that Acas conciliation has been complied with. The claimant can then proceed to issue a claim.
Employment tribunal proceedings
All tribunal proceedings are regulated by the Employment Tribunals Rules of Procedure 2013 (as amended up to 8 October 2020) (the Tribunal Rules). To commence proceedings, a claimant must present a completed claim form, known as an ET1 form, to the tribunal. There is no need to pay any fee to bring or defend a tribunal claim.
Generally, the claimant has three months, beginning with the date of the relevant event, to bring a claim. However, during the EC period, time is paused, and it resumes the day after the parties have received the EC certificate. In addition, in limited circumstances, a claimant may apply for an extension of time to submit a claim.
If the respondent wishes to defend the claim, an ET3 form must be completed within 28 days of the date on which the respondent received a copy of the ET1 from the tribunal.
If no response is filed within the time limit, an employment judge can determine the substance of the claim without a hearing. Alternatively, the employment judge can fix a hearing to determine the claim. The respondent will only be entitled to participate in the hearing to the extent permitted by the employment judge.
The Tribunal Rules permit the tribunal to make case management orders at any stage of the proceedings. Case management orders typically provide for disclosure, the preparation of the hearing bundle and simultaneous exchange of witness statements, but the tribunal has a wide discretion to make such case management orders as it considers appropriate. Tribunals also have the power to list a preliminary hearing to deal with any preliminary issues that may arise.
The main hearing is either heard by an employment judge sitting alone, or by a panel of three individuals, made up of an employment judge and two lay members chosen from a panel of lay members. One lay member comes from an employer background (e.g., a human resources professional) and the other from an employee background (e.g., a trade union official). Unlike other courts, and in accordance with the Tribunal Rules, the tribunal seeks to avoid undue formality and may itself question the parties or a witness, so far as appropriate, in order to clarify an issue or elicit evidence. The hearing is open to the public.
At the end of the hearing, the tribunal will try to reach a unanimous decision on the issues if it was heard by a panel and will give a judgment. In some instances, judgments can be reached by a majority of the panel. The judgment can either be announced orally or it can be reserved to be given in writing as soon as practicable. In either case, the tribunal must give reasons for its decision.
A successful party does not automatically obtain an order for payment of its costs. In the tribunal, unlike the civil courts, costs do not 'follow the event'. The tribunal does have the power to make a costs order, preparation time order or a wasted costs order (the latter being against a party's representative). However, these are awarded to the successful party in relatively limited circumstances.
A tribunal judgment can be challenged by either seeking a reconsideration or making an appeal to the Employment Appeal Tribunal (EAT). However, an appeal to the EAT can only be made on a question of law. An EAT judgment can be challenged by either:
- applying for a review;
- making an appeal to the Court of Appeal of England and Wales; or
- where the appeal involves a point of law of general public importance and satisfies certain conditions, making a 'leapfrog' appeal to the Supreme Court.
An appeal to the Court of Appeal has to be on a question of law. It is necessary to obtain leave to appeal from the EAT or the Court of Appeal to pursue an appeal. A further appeal from the Court of Appeal on questions of law of general public importance can be made to the Supreme Court but leave to appeal must be obtained from the Court of Appeal or the Supreme Court. Only a handful of cases each year are appealed to the Supreme Court.
ii Civil court
A claim that arises from a breach of an employment contract can be brought in either the tribunal or civil court. However, as a claimant can only claim up to £25,000 for a breach of contract claim in the tribunal, such claims are often brought in the civil court.
A claimant has six years from the date on which the cause of action occurred to bring a claim in the civil court. However, in relation to a claim for an injunction, for example, due to breach of restrictive covenants, any delay can seriously damage the claimant's prospects of success.
Before commencing proceedings in the civil court, a claimant must be aware of the cost involved with doing so. In the civil court, there is a fee for bringing a claim, and the unsuccessful party is usually liable for a significant proportion of the other side's costs (as well as all of their own costs). The civil court is also governed by the Civil Procedural Rules, which are far more formal than the Tribunal Rules.
The covid-19 pandemic has posed an enormous challenge to employment tribunals. When the pandemic struck, there was already a large backlog of cases. The tribunals' caseload, generally speaking, is counter-cyclical to the economy, and as a result since then the number of cases has risen, with the result that by late 2020, it was standing at an all-time high.
To address this, the tribunals have embraced new ways of working, in particular the use of a web browser-enabled video hearing system called the Cloud Video Platform. This is used to provide either a fully remote setting, or a partly remote (hybrid) setting, whereby part of the hearing is conducted in person with social distancing. Developments to this are in the pipeline, and more advanced technology is being piloted.
In addition, the tribunals now have portable document format (PDF)-reading software that enables electronic bundles to be used, albeit recognising that some tribunal users do not have access to this softwar, and, in those cases, paper bundles remain necessary.
The Tribunal Rules have been amended to take account of these developments, and guidance has been issued on conducting remote and in-person hearings, and preserving the important principle of open justice when hearings are conducted remotely.
A dispute in a tribunal can be settled at any point, whether before or after proceedings have been instigated. This can be achieved through Acas or private negotiations. If an agreement is reached through Acas, agreements do not have to be in writing to be legally binding. However, the terms of the agreement will generally be recorded on a standard form known as a COT3, which contains all the agreed terms and is signed by the parties as proof of the agreement. If settlement is reached via private negotiations, this will be recorded by way of a settlement agreement which must satisfy the statutory requirements. The claimant must be advised by a relevant independent adviser as to the terms and effect of the settlement.
Private or judicial mediation is available but is not commonplace.
Types of employment disputes
i Unfair Dismissal
Under the Employment Rights Act 1996 (the ERA 1996), employees who have the requisite two-year qualifying period of service have a right not to be unfairly dismissed. However, in general, this qualifying period does not apply if the dismissal is for an automatically unfair reason.
A dismissal will be deemed unfair unless the employer can show that the reason for dismissal was due to one of the five potentially fair reasons, which are: lack of capability or qualifications; misconduct of the employee; redundancy; statutory requirement; or some other substantial reason to justify dismissal. The employer will also need to show that the dismissal was reasonable and that it was carried out using fair procedures.
Unfair dismissal awards usually consist of a basic award and a compensatory award.
As of 1 January 2020, a basic award is capped at £16,140, and a compensatory award is capped at £88,519. Individuals can be awarded up to the compensatory award cap or 52 weeks' gross salary, whichever is lower. The caps are increased every 6 April each year.
The ERA 1996 protects employees or workers from being dismissed or suffering any detriment at work if they have made a 'protected disclosure'. To qualify as a protected disclosure, an individual must have disclosed information that they reasonably believe relates to one of the six categories set out in the ERA 1996 (e.g., breach of any legal obligation or a criminal offence). The individual must also have a reasonable belief that the disclosure is in the public interest. The disclosure must also be made internally within the employer's organisation or externally to one of the 'prescribed persons' set out in Section 43d to 43h of the ERA 1996, (e.g., to an industry regulator). There are additional requirements that must be complied with if the disclosure is being made to a prescribed person.
The dismissal of an employee will be automatically unfair if the reason, or principal reason, is the qualifying disclosure. It is not necessary to have a minimum period of service to bring such a claim. A detriment claim can be brought by a worker, which is defined more widely than it is in relation to other employment rights. It includes, among others, agency workers, freelance workers and trainees as well as employees. Detriment can include unfair treatment or threats or pursuance of disciplinary action or performance management owing to an individual having blown the whistle.
Compensation for whistle-blowing, whether an unfair dismissal or detriment claim, is uncapped.
There are four different forms of discrimination claims under the Equality Act 2010 (the EqA 2010) that an employee or a worker can bring, namely, direct discrimination, indirect discrimination, harassment and victimisation.
Direct discrimination is where an individual is treated less favourably because of a protected characteristic. The protected characteristics are: age; disability; gender reassignment; marriage and civil partnership; pregnancy and maternity; race; religion or belief; sex; and sexual orientation. Generally, direct discrimination is not justifiable; however, age discrimination can potentially be justified if it is a proportionate means of achieving a legitimate aim.
In relation to the protected characteristic of disability, an employer has a duty to make reasonable adjustments. Failure to do so can result in an employee bringing a claim for failure to make reasonable adjustments under the EqA 2010.
Indirect discrimination is where a provision, criterion or practice (PCP) is discriminatory in relation to a relevant protected characteristic of an individual, and the employer cannot show that its actions were a proportionate means of achieving a legitimate aim.
Harassment is any unwanted conduct relating to a protected characteristic (excluding marriage and civil partnership, and pregnancy and maternity) that has the purpose or effect of either violating an individual's dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment for an individual.
Victimisation occurs where an individual is subjected to a detriment because either the individual has carried out a protected act or it is believed that they have done or may do a protected act, such as making a complaint about alleged discrimination.
Compensation for all forms of discrimination claims is uncapped. In 2019/2020, the highest discrimination award was in relation to a disability discrimination claim for £265,719.3
iv Employment status
Whether an individual is an employee, worker or self-employed is of key importance in determining any employment benefits or rights that they may have. In addition, the tax treatment of an individual will depend on their employment status.
In general terms, an employee is someone who has entered into or works under a contract of employment. An individual is self-employed if they are in business on their own account. In contrast, a worker is an individual who has entered into or works under a contract of employment, or any other contract whereby the individual performs the work personally for another party to the contract, but the individual is not carrying out business on their own behalf.
In determining employment status, the courts, the tribunals and Her Majesty's Revenue and Customs (HMRC) will look at a number of factors relating to the arrangement between the parties. There is no single conclusive test as to an individual's employment status.
v Other disputes
Other common disputes heard in tribunals are in relation to holidays and wages. Holiday disputes usually involve employees or workers claiming they have been underpaid or prevented from taking annual leave, whereas wage disputes usually relate to an employer making an unauthorised deduction from a worker's wages.
vi High Court disputes
Employment claims issued in the High Court are typically either high-value breach of contract claims (e.g., in relation to notice periods or bonus issues) or claims relating to restrictive covenants (e.g., where an employer seeks to restrain an employee from acting in breach of their covenants). Breach of contract claims valued at over £25,000 must be issued in the civil courts as the tribunal does not have jurisdiction to hear such claims.
Where there is a dispute relating to post-termination restrictions, it may be appropriate for the employer to ask the High Court to grant an injunction against the former employee to protect the employer's interests. An injunction is an equitable remedy granted at the discretion of the court and the court will consider the competing interests of the parties when exercising its discretion and may be applied for on an interim or a final basis.
Year in review
i Anticipated employment law disputes arising out of the covid-19 pandemic
The UK's employment market was, like many other countries, severely adversely affected by the covid-19 pandemic throughout 2020.
Furlough and the Coronavirus Job Retention Scheme
The UK government sought to support employers and employees by introducing a novel furlough scheme with effect from 1 March 2020, which has most recently been extended until 30 April 2021.
Throughout most of the application of the furlough scheme, the government committed to paying 80 per cent of employees' basic wages up to a maximum of £2,500 a month. Employers (and their advisers) had to grapple with legal implications of the scheme while relying only on non-binding, frequently altered guidance from the government and sometimes contradictory Treasury directions. The principal guidance to employers4 was updated frequently and we have reached the sixth Treasury direction on the subject.
One of the points that was clear from the outset was that employers would need individual consent. The number of employment tribunal claims has increased considerably and we consider it is likely that there will be claims for breach of trust and confidence arising out of the manner in which staff were placed on furlough leave as well as discrimination claims arising out of an employer's choice as to which staff were furloughed while others were allowed or required to continue working.
It was clear that employees would continue to accrue holiday during furlough. Government guidance has now clarified that employees could ask to take holiday and indicated that employers could require employees to take holiday during furlough.
The furlough scheme did not change employees' entitlement to receive holiday pay at the rate of 100 per cent of their normal weekly pay rather than the 80 per cent furlough pay. The government introduced specific legislation (Working Time (Coronavirus) Amendment Regulations 2020 (SI 2020/365)) to allow employees to carry over up to four weeks' unused holiday into the next two holiday years where it had not been reasonably practicable for them to be able to take their holiday from 26 March 2020 owing to the effects of the pandemic.
The government introduced specific legislation (Employment Rights Act 1996 (Coronavirus, Calculation of a Week's Pay) Regulations 2020 (SI 2020/814)) with effect from 31 July 2020 to require employers to calculate statutory notice, holiday and redundancy pay by reference to the employees' normal wages before they were placed on furlough.
Working during furlough
Initially, employees were not allowed to undertake any work for their employers while they were on furlough leave; this later became known as full furlough when the concept of flexible furlough (i.e., furloughing an employee for some of their normal hours of work while they continue to work the remainder) was introduced from 1 July 2020.
The constant remained that, during the hours while they were on furlough leave, employees were not allowed to work for their employer. There is considerable anecdotal evidence of employees being required by their employers to work during furlough, which is leading to fraud investigations by HMRC. This may also lead to an increase in whistle-blowing claims in employment tribunals where such employees have reported or threatened to report their employers to HMRC and are subjected to a detriment or dismissed as a consequence.
We anticipate that there are likely to be numerous unfair dismissal and discrimination claims arising out of the decisions to make redundancies, particularly if employers did not follow standard pooling and selection requirements. There may be challenges in the event that the same selection criteria were used to determine furlough and later redundancies (on the basis that the employee may allege that the decision to make them redundant was pre-determined when they were selected for furlough).
It will be interesting to see how much weight the tribunals place on the availability of the furlough scheme when considering whether dismissals were fair.
Working from home
During the first lockdown, the British public was generally required to work from home where possible. Because of the speed of the imposition of the first lockdown, many employers did not have time to prepare properly for their workforce suddenly working from home. However, their legal obligations did not change.
We anticipate seeing claims arising out of employers' failure to ensure that their employees' homes were suitable work environments and failure to provide appropriate equipment to facilitate homeworking. In addition, employers needed to be mindful that employees' mental health can obviously suffer because of the lack of social interaction and potential isolation arising from homeworking. Employers should have been taking active steps to support their workforce's mental health.
After the initial period of lockdown, employers had to consider whether it was appropriate to reopen their businesses and, if so, to ensure that workplaces were not going to pose a health risk to their employees. The government published extensive guidance.5
A key part of those obligations was conducting risk assessments both generically and specifically for staff who are clinically vulnerable or extremely vulnerable. Employers had to consider a range of challenging issues including whether to allow clinically vulnerable or extremely vulnerable employees to return to the workplace and whether they could demand employees to return to work after the employer had complied with government guidance as to how to make the workplace safe.
All employees have a statutory right not to be subjected to any detriment or dismissed if they refuse to attend the workplace or took steps to protect themselves in circumstances where the employee has a reasonable belief that they would be in 'serious and imminent danger'. This is set out in Section 44 and Section 100(1)(d) of the ERA 1996
Noticeably, the danger to health is not just danger to the employee's own health. We, therefore, expect to see cases of detriment and unfair dismissals where employees have refused to attend work saying that the workplace is unsafe either for themselves or for members of the household and it remains unclear how employment tribunals will apply the relevant sections of the ERA 1996 to the covid-19 pandemic.
ii Other employment cases
Health and safety
The Independent Workers' Union of Great Britain (IWGB) received evidence that many of its members were not being provided with personal protective equipment and were being asked to work in conditions where social distancing had not been properly implemented. The IWGB challenged the Secretary of State, claiming that the UK had failed to implement properly the EU Health and Safety Framework Directive (89/391/EC) in terms of protection from detriment on health and safety grounds as Section 44 of the ERA 1996 only applies to employees and not workers. The High Court agreed with the IWGB in November 2020. Although national law has not yet been changed, the Health and Safety Executive has updated its guidance confirming that those who owe health and safety duties have an obligation to protect workers.
The Collective Redundancies Directive (98/59/EC) requires employers to consult with employee representatives where the employers are contemplating large-scale dismissals. The Directive was implemented into UK law by the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), which obliges employers to consult where they propose to dismiss 20 or more employees within a 90-day period for reasons other than capability or conduct. This captures some other dismissals such as reorganisations which fall short of being a redundancy. However, in UQ v. Marclean Technologies SLU (C 300/19), the Court of Justice of the European Union (CJEU) held that the reference period must be calculated taking into account any period of 30 or 90 consecutive days during which the individual dismissal took place and during which the greatest number of dismissals carried out by the employer occurred for one or more reasons not related to the individual workers concerned.
The effect of the CJEU's decision imposes consultation obligations in relation to a dismissal that has already occurred if that plus later ones make a total of 20 dismissals.. The practical consequence of the CJEU's ruling is that employers proposing redundancies must look both back and forward from an individual dismissal to determine whether there are 20 or more proposed dismissals and, if there are, to ensure that its obligations under TULRCA are complied with. This is likely to create difficulties for employers who make redundancies in successive phases. Furthermore, an employer is obliged to notify the Secretary of State via an HR1 form of all the proposed dismissals caught by the collective consultation obligations. Failure to comply is a criminal offence.
The Acquired Rights Directive/TUPE
The Acquired Rights Directive is an EU directive implemented into UK law by the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). It protects the employment rights of employees on a sale or merger of a business (or part of a business) by transferring the contracts of employment from the old owner of the business (the transferor) to the new owner of the business (the transferee).
In the case of ISS Facility Services v. Govaerts6, the CJEU considered what should happen to the employment contract of an employee where part of the business in which she was working was transferred to one entity and the other parts of the business in which she was working were transferred to another entity. The transferor (ISS) had concluded that Ms Govaerts' contract of employment had transferred to the business (Atalian) that had taken over the majority of the old business. The CJEU sought to balance the rights of employees (being the purpose of the Acquired Rights Directive) with the rights of transferees (not to receive a full-time employee where they have only acquired part of the business in which the employee formerly worked). The CJEU concluded that this was best achieved by a transfer of the employment contract to each transferee pro rata to the tasks performed by the employee, so long as the employee's working conditions were not worsened. If the division of the contract of employment proves impossible or results in a deterioration in the working conditions and rights of the employee, the contract may be terminated. However, that termination must be regarded as being the responsibility of the transferees, even if it is initiated by the employee.
The CJEU's decision will obviously lead to transferees taking over the majority of the business seeking only to take a pro rata proportion of the employee's contract of employment. As the CJEU has confirmed that an employment contract can be terminated where a contract is divided between multiple transferees, its decision may in fact lead to more dismissals than would have been the case under the previous legal case. Clearly, transferees will need to be mindful that any such termination of an employee with two years' service may still be automatically unfair under TUPE unless the transferee can show that there is an economic, technical or organisational reason for the dismissal which entails changes to the workforce.
Another TUPE case from 2020 is worth noting. It has long been established that any attempt to worsen terms of employment on a TUPE transfer is void if the sole or principal reason for the change is the transfer itself. That remains the case even where the employee agrees to the transfer and the less favourable change is offset by other advantageous improvements, so the contract as a whole is no worse for the employee.
The EAT considered the question as to whether solely advantageous changes introduced because of the transfer are enforceable in the case of Ferguson and others v. Astrea Asset Management Ltd UKEAT/0139/19 and concluded that they too were not binding, despite the fact that this meant employees lost benefits they had been promised. However, the facts of the case were not helpful to the argument. The case was brought by four employees who, being the directors in the business, had sought to materially improve their own employment contracts shortly before the loss of a management contract to another estate management company (Astrea), which was the service provision change resulting in the TUPE transfer.
The EAT's decision is a victory for certainty and clarity as there is now no need to seek to assess whether a purported change is beneficial to the employee, but it runs contrary to the current understanding under UK law that purely beneficial changes were enforceable by the employees. We hope that a case will make its way to the Court of Appeal sooner rather than later to test this unhelpful development in the law.
Post-termination restrictive covenants: new employer's duties
Where an ex-employee is believed to have acted in breach of their obligations owed to their former employer, the former employer often seeks to bring claims against both the ex-employee, for breach of contract, and against the new employer, for the tort of inducing a breach of contract. To be guilty of the tort of inducing a breach of contract, the new employer must have knowingly and intentionally induced or procured the breach without reasonable justification, and the old employer must have suffered economic loss. In Allen t/a David Allen Chartered Accountants v. Dodd & Co7, the Court of Appeal concluded that the new employer will not be guilty of the tort of inducing breach of contract where the new employer has relied on legal advice that the restrictions were probably unenforceable. Although that advice had not been categoric about the covenants not being enforceable, this did not help the old employer, as liability for inducing a breach of contract requires the new employer to know that the act that it was procuring would have the effect of breaching the contract with the old employer.
This means that more cases will be brought against the ex-employee only, to avoid the challenge of proving that the new employer knew it was procuring a breach of the old contract.
Employers have a number of obligations with regard to personal data relating to staff that they hold. One of the obligations on employers is to ensure that staff personal data is kept secure and the financial consequences of breaching this obligation can be very severe since the introduction of the General Data Protection Regulation (GDPR).
Employers could breathe a sigh of relief at the Supreme Court's decision in Wm Morrison Supermarkets plc v. Various Claimants  UKSC 12, which overruled the Court of Appeal's finding that Morrisons had been vicariously liable for the actions of an internal IT auditor who posted the payroll data for the entire workforce on the internet (and, in doing so, sought to frame a colleague) as 'pay back' for a verbal warning that he had been given. The Supreme Court went back to the principle of vicarious liability as set out in Dubai Aluminium Co Ltd v. Salaam  UKHL 48:
the wrongful conduct has to be so closely connected with acts the employee was authorised to do that, for the purposes of the liability of the employer to third parties, it might fairly and properly be regarded as done by the employee while acting in the ordinary course of their employment.
While the IT auditor was entitled to have access to the payroll data as part of his duties, that was for the purpose of sending the data to the external auditors, not posting it on the internet, which was not an act he was authorised to do. The motive of the employee is highly relevant as to whether he or she was acting on his or her employer's business or for purely personal reasons and, in this case, it was clearly the latter. Therefore, Morrisons was not held liable for his actions.
However, the facts in this case were extreme and the Supreme Court expressly decided that the wording of the Data Protection Act 1998 did not preclude an employer from being vicariously liable for the actions of its employees. The current Data Protection Act (2018) has only become more onerous and despite Brexit, data protection obligations in the UK are likely to remain closely aligned to the GDPR, so employers need to ensure that their processes are GDPR-compliant.
Outlook and conclusions
i Discrimination case law
Although much of 2020 was focused on immediate employment law implications of the pandemic such as furlough and homeworking, there were a number of important developments in discrimination law.
The case of Casamitjana Costa v. League Against Cruel Sports ET/3331129/18 expanded on the growing body of case law as to what qualifies as a philosophical belief under the Equality Act 2010. In short, the case held that ethical veganism was such a qualifying belief, the tribunal being clear that such a belief had the necessary cohesion, cogency and importance and it did not offend society.
However, the case should be approached with some caution, as it does not mean that any vegan would have the same protections of Mr Costa. The case was very fact-specific in that Mr Costa's belief had an obviously weighty and substantial effect on his everyday life and behaviour. For example, as well as his 100 per cent vegan diet, he avoided relationships with non-vegans, would not allow any food or product containing animal products into his home, avoided using products tested on animals, wearing animal-derived products and walked rather than used public transport to avoid accidental crashes with wildlife. Veganism for non-ethical reasons might not be covered.
Taylor v. Jaguar Land Rover Limited ET/1304471/2018 is a first instance decision only, but is notable as being the authority that a gender fluid or non-binary employee was covered by the definition of gender reassignment in the Equality Act. This means that employers need to be alert to the possibility that the legislation will protect individuals in far more situations than originally envisaged.
In Heskett v. Secretary of State for Justice  EWCA Civ 1487, the tribunal had to look at what could legitimately amount to justification for age discrimination. It is trite law that discrimination cannot be justified on the basis of costs alone. The Heskett case arose because, in 2010, the Treasury imposed a pay freeze across the public sector. This meant that Mr Heskett would take 23 years to progress from the bottom to the top pay band, rather than seven to eight years as would have been applicable before the pay freeze. Mr Heskett brought a claim for indirect age discrimination on the basis that the pay policy placed younger employees at a significant disadvantage. It was accepted that the policy was prima facie discriminatory and thus it would be unlawful if it was not legally justified. The Court of Appeal held that to be a valid justification, there had to be more than just a saving of costs (the 'costs plus' rule) but if the reason was more than just a desire to save costs, then the whole of the aim had to be considered. Where the aim was to reduce expenditure to balance the books, this was capable of being a legitimate aim. The need to observe the Treasury pay freeze was a legitimate aim and, in the circumstances, the employer's pay policy was also a proportional way of achieving that aim. This case does not remove the need for an employer to show that a policy is based on more than a desire to save costs, but clearly the case makes it easier for the employer to find additional factors to rely on.
In the field of disability discrimination there were three important cases. In Ishola v. Transport for London  EWCA Civ 112, the Court of Appeal gave such much-needed guidance on the test for indirect discrimination. It is necessary for the claimant to identify a PCP and the Ishola case looks at what can be treated as a PCP. In 2015 and 2016, Mr Ishola raised a number of complaints against his employer. He was absent from work on sick leave from May 2015 and did not return to work. He was eventually dismissed in June 2016 on the grounds of incapacity. Mr Shola brought a number of claims in the tribunal, including that his employer's requirement for him to return to work without a proper and fair investigation into his grievances was a PCP, even though it was a one-off act.
The Court of Appeal did not agree on the facts. However, it did find that in some circumstances a one-off act could be capable of being a PCP. Although the term PCP was suggestive of some level of repetition, it did not automatically follow that the PCP had to have been applied to another individual. If the act was likely to be applied in the future should such a situation arise, then a singular act could amount to a PCP.
Hill v. Lloyds Bank PLC UKEAT/0173/19 deals with a similar issue but in a way that will be troubling for employers. Mrs Hill had been an employee of the bank for 30 years. Between July 2016 and October 2017, she was absent on sick leave for stress caused by the alleged bullying by her colleagues. On returning to work, Mrs Hill sought an undertaking from the bank that she would not have to work with these colleagues and that, if that was not possible, that the bank would give her a settlement package equivalent to her entitlements on redundancy. The bank did not agree and Mrs Hill brought a claim that this was a failure to make reasonable adjustments. The EAT held that not giving such an undertaking was a PCP as although it was a one-off act, the bank had made it clear that it had a practice of not giving such undertakings. Further, it held that it was a reasonable adjustment to provide such a guarantee such that Mrs Hill could work without fear. This case should not be considered as an authority that such an adjustment would be reasonable for all employers. Mrs Hill had raised a grievance about her colleagues' behaviour and this had been (partiality) upheld; she did not work in the same office as the colleagues and the bank had the resources to make such adjustments. Indeed, the EAT conceded that an undertaking in such a form would be rarely required and informal steps would often be sufficient. However, the reasoning in this case is troubling and we expect to see a number of claimants running similar arguments in 2021.
Finally, Robinson v. Department of Work and Pensions  EWCA Civ 859 concerned the thorny issue of whether there had been a sufficient link between unfavourable treatment suffered by an employee, and that employee's disability. Mrs Robinson had a computer-based role. In 2014, the Department of Work and Pensions (DWP) changed its screen resolution and hardware, substantially impacting her ability to work. Following a risk assessment. Mrs Robinson was provided with new equipment, but this took some time and Mrs Robinson was absent from work due to sickness and she raised a grievance in March 2016. The gist of the grievance was that that the DWP had failed to protect her from stress and failed to provide her with suitable equipment. The grievance was upheld. Mrs Robinson wanted compensation and so she brought claims for discrimination arising from disability, arguing that the delay in providing the equipment was sufficiently connected to her disability. Although she was successful initially, the Court of Appeal allowed the employer's appeal. It would have been necessary to consider the employer's thought process and there was nothing to suggest that there was any tie-in to her disability. The delay in providing the equipment was deplorable but not discriminatory.
1 Emma Clark, Fiona MacDonald and Nicholas Robertson are consultant solicitors and Alexandra Carn and Rachel Tozer are partners at Keystone Law.
2 Information relating to the response of employment tribunals to the pandemic based on a presentation given by the President of the Employment Tribunals (England & Wales) on 23 November 2020.
3 'Employment Tribunal and Employment Appeal Tribunal Tables 2019 to 2020'.
6 ISS Facility Services v. Govaerts (Case C-344/18) EU:C:2020:239.
7 Allen t/a David Allen Chartered Accountants v. Dodd & Co  EWCA Civ 258.