Insights Worked Up, your monthly employment law lowdown – April 2022

Welcome to the April edition of Worked Up – host to a veritable bonanza of employment and immigration law titbits!

With the tax year-end having just passed, Chancellor Rishi Sunak has delivered his mini-budget which, to our dismay, was not delivered in a mini-red briefcase. Sadly, none of the Chancellor’s key announcements brought much joy to employers, with the only notable employment changes impacting employee take home pay as a result of the pledge to cut the basic rate of tax income from 20p to 19p by 2024 and increase the National Insurance threshold by £3,000 to £12,570 from July. In other news, fit notes can now (finally) be issued digitally without a wet signature from the issuing doctor, which we suspect will excite literally no one apart from GPs!

While the tragic situation in Ukraine continues, a group of 45 large businesses (including Marks & Spencer, Asos and Robert Walters) have banded together to create a consortium to help Ukrainian refugees with gaining employment in the UK, alongside finding accommodation and obtaining language skills. For Ukrainian citizens unsure on how to legally enter the UK, a new legal advice service ‘Advice Ukraine’ has been set up where qualified lawyers provide free legal advice on UK immigration, visas and asylum – further details can be found here.

In this month’s jam-packed edition, we touch on whether mutuality of obligation is a pre-requisite for worker status, lift the lid on P&O’s recent mass redundancy ‘exercise’, examine a significant sex discrimination case that has resulted in one of the first Tribunal equal pay audit orders, explore the recent changes to right to work checks and analyse the impact of the open justice principle on document disclosure and the effect of caring responsibilities on working carers.

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Nursing and Midwifery Council v Somerville [2022] EWCA Civ 229

In the recent case of Somerville, the Court of Appeal held that an “irreducible minimum of obligation” (that is, an obligation on one party to accept and perform a minimum amount of work and an obligation on the other party to offer or pay for that work) is not a prerequisite for worker status.

Mr Somerville had been appointed by the Nursing and Midwifery Council as a panel member and committee chair. Under his services agreements, the Council was not obliged to ask Mr Somerville to provide services and, equally, Mr Somerville was not obliged to provide his services (if requested to do so). Despite his engagement terms stating that he had the status of an independent contractor, Mr Somerville brought a claim for unpaid holiday pay on the basis that he was a worker and was therefore entitled to paid holiday under the Working Time Regulations 1998 (WTR).

Confirming the findings of the ET and EAT, the Court of Appeal held that an “irreducible minimum of obligation” is not a prerequisite for establishing worker status under the WTR. Such status will exist when an individual undertakes to do work personally for someone who isn’t a client or customer. Therefore, the fact that there was no obligation to offer or accept future work was irrelevant in the context of deciding whether a specific agreement to provide services on a particular occasion amounted to a worker’s contract. In reaching its conclusion, the Court of Appeal followed the decision of the Supreme Court in Uber (see our 3 March 2021 edition for more information on this case).

This decision acts as a stark reminder that issues of worker status are not limited to those in the gig economy. Individuals who provide irregular services without any obligation to do a minimum amount of work may still be classified as workers, and therefore will be entitled to holiday pay, pension contributions and other associated rights. It is yet another example of how the ‘independent contractor’ label, even for those undertaking ad hoc assignments, will not preclude a finding of worker status by an employment tribunal.

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Most of you will already be aware of the recent announcement by P&O Ferries that it will make around 800 seafarers redundant. While such news is always depressing, it’s never a massive shock – many large companies have made mass-redundancies over the last few years as a result of covid and market pressures. Where the controversy lies, however, is in the manner that P&O actioned its decision.

In what former Shadow Chancellor John McDonnell labelled “the worst behaviour of a nineteenth century mill owner“, P&O dismissed 800 staff members without notice via a three-minute pre-recorded video, with the (alleged) intent to replace these seafarers with cheaper agency staff. While P&O’s apparent attempt to cut and run in respect of its employer obligations does not appear to be above board, the decision itself has not yet been conclusively held to be unlawful as P&O allege that those affected were not UK employees. If it’s determined that the affected employees were engaged under English law contracts, P&O’s decision would be in breach of their employer obligations as it evidently failed to collectively consult the affected employees, which is required when 20 or more dismissals at one establishment are contemplated within a 90 day period.

From a PR perspective, P&O’s actions have had disastrous consequences. Fierce public backlash has been levied against the company and Transport secretary Grant Shapps has indicated that P&O could face “criminal prosecutions and unlimited fines” for their method of redundancy. Labour’s calls for a complete ban of the practice of fire and re-hire have also been re-ignited as a result of P&O’s actions, which may prompt to Government to finally keel over and legislate in this area.

The shipping company appears to have taken on board some of the criticism levied against it and has made an offer of £36.5 million (in total) to the affected employees. While most have accepted this offer (with the exception of a one former employee, who has brought a claim for discrimination and unfair dismissal against the company), whether P&O’s attempt to rectify the situation will sink or swim is still up for debate.

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Macken v BNP Paribas London Branch [2021] 10 WLUK 640 

In this case, the ET ordered a bank to carry out an equal pay audit and pay compensation of over £2 million to a female employee who had brought successful claims for equal pay, sex discrimination and victimisation.

Ms Macken worked as a female banker at BNP Paribas in London. During her employment she had been paid less than a male comparator doing the same job (both in terms of equal pay and bonuses) and had been the victim of sex discrimination whilst at work. One of her managers repeatedly responded to her questions with “not now, Stacey” and, on one occasion, a witch’s hat was left on her desk. At the remedy hearing in March 2021 (the judgment of which was published last month), the ET ordered compensation in excess of £2 million. Aggravated damages were awarded on the basis that there had been a discriminatory motive behind her treatment; the conduct had been spiteful and vindictive and the bank’s subsequent conduct in dealing with a grievance raised by Ms Macken had made matters worse. The ET also took into account the bank’s failure to apologise.

Notably, this is believed to be one of the first cases in which an equal pay audit was ordered by the ET. The ET noted that they had no discretion in this matter as the Equality Act 2010 (Equal Pay Audits) Regulations 2014 require such an order to be made where there has been a breach of equal pay law, unless an exemption applies (which was not the case for BNP). The purpose of the audit is to enable a comparison of pay to explore whether BNP is paying men and women equally where required and must set out a plan to avoid equal pay breaches occurring in the future. It applies to all remuneration, including base pay, pension contributions and discretionary bonus payments.

This decision highlights the repercussions employers may face if they fail to address inherently sexist behaviour and gender pay issues in the workplace. As well as the reputational harm and financial burden involved in producing an equal pay audit, the results must be made public. Competitors will therefore have access to commercially sensitive information and the report may trigger further equal pay claims from employees, who will be able to see what their colleagues are earning in comparison to them. This case aligns with the growing trend towards substantial tribunal awards and may give scope for equal pay audits to become more commonplace going forward.

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From 6 April right to work checks have changed, with a new published guidance document. The most significant change is the end of manual checks for holders of Biometric Residence Cards (BRC), Biometric Residence Permits (BRP) and Frontier Worker’s Permits (FWP). Now BRC, BRP and FWP holders will evidence their right to work using the Home Office’s online service only.

It is no longer possible to rely on a physical document to confirm a right to work for holders of most types of time limited visas. It must be done online, although employers are not required to carry out retrospective online checks for existing employees.

The new guidance also describes the new facility to confirm the identity (and therefore the right to work) of a British or Irish national online via a certified Identity Service Provider or IDSP. There will be a fee for the service, though employers can elect to carry on using the manual check for British and Irish nationals. There remains significant administrative obligations on the employer even if an IDSP is being used, and it may be that the service does not make much commercial sense for SMEs.

The guidance also confirms the extension of adjusted checks until 30 September 2022, which were introduced as a result of the pandemic. These allow the use of video calls and digital copies of documents, though this is primarily relevant to British and Irish nationals and those third-country nationals who have indefinite leave to remain endorsed on a passport since everyone else will use the online check service.

Right to work checks can be complex and burdensome; however, if they are done correctly and in accordance with the guidance, they can provide a statutory defence to an illegal workers penalty.

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Frewer v Google UK Limited and others [2022] EAT 34

For anyone who has ever indulged in a bit of ego surfing or is familiar with the concept of surveillance capitalism, the idea of Google having privacy concerns may seem slightly ironic. This was indeed the situation in the recent whistleblowing case of Frewer v Google UK, in which Google made an application for the anonymisation of all its clients’ names and the redaction of all its commercially sensitive information within its disclosure related to the case.

The Employment Tribunal granted this application and issued an order for the anonymisation and redaction of documents that Google considered “commercially sensitive” and/or “irrelevant”. However, on appeal, the Employment Appeal Tribunal held that the ET had erred in its decision to grant this application. In its ruling, the EAT held that the tribunal had failed to properly consider the open justice principle (which included the importance of naming names) and should take a step-by-step approach when determining applications for redaction and anonymisation. This approach should consider (1) the relevance of the material, (2) if the material is relevant, whether it is necessary for the fair disposal of the proceedings, and (3) if both those criteria are met, whether an order under Rule 50 of the ET Rules should be made.

The redaction of documents, whether it be for disclosure or a data subject access request, has always been a difficult tightrope to walk. On one side, there are considerations around the commercial sensitivity and the relevance of certain information and, on the other, there lies the principles of open justice and respecting the privacy of their parties. While this decision is by no means ground-breaking, it does provide an important reminder that relevance (rather than redaction) is the first port of call when disclosing documents. In whistleblowing and discrimination cases particularly, parties should consider whether naming individuals and entities may be in the public interest as soon as possible before entering into litigation, as potentially having to disclose this information may impact some respondents’ appetite for litigation.

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Caring responsibilities and the impact of these responsibilities on women’s careers has been a hot topic over the last few years. Research by Business in the Community and Ipsos has found that the challenge of working while maintaining caring responsibilities during the pandemic has had a significant impact on women’s careers – three in five women (and particularly those from ethnic minorities) have avoided applying for jobs or promotion due to concerns over managing this carefully balanced equilibrium.

Of course, men too can be impacted by caring responsibilities (indeed, a growing number of men are taking on more and more caring responsibilities), though the difficult juggling act of managing career progression and providing care to older or disabled loved ones continues to primarily impact women between the ages of 40 to 65. Increasingly, many of those with caring responsibilities find themselves in the so-called “sandwich generation” (in other words, those who care for ageing parents while supporting their own children) and are facing the tricky task of balancing parental and caring responsibilities alongside their work commitments.

While there are plenty of moral arguments for why employers should provide the best support they can for working carers, there are also substantive legal and business reasons that support the view that employers should foster a carer friendly workplace. From a legal perspective, employers have obligations under the Equality Act relating to disability that could apply to carers. In addition, employers must also comply with the regulations governing flexible working requests and, when dealing with flexible working requests from carers, employers should manage such requests in a reasonable manner and should genuinely consider whether there is an actual business reason for denying these requests. Equally, from a business perspective, showing that your company cares about carer welfare is not only positive from a reputational perspective but, importantly, will likely help retain staff and reduce costs associated with staff sickness and stress.

As more and more employees take on caring responsibilities, employers should think carefully about how to foster a more carer-friendly workplace and whether providing carers’ leave, creating peer support networks and/or issuing a carer policy would be appropriate for their business. If you require advice in this area, please do get in touch.

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