November 8, 2022
Welcome to November’s edition of Worked Up – your one-stop shop for the latest on all things employment law!
It was only last month that we were covering the new budget and the expected Liz Truss shake-up to some key employment rights. Now, a brand-new PM and a cabinet shuffle later, the government’s priorities and budget are far from certain. A new financial statement is expected to be released on 17 November 2022 and we’ll be keeping an eye out for any signs of future employment law direction.
One parliamentary development we do know about is the Carer’s Leave Bill, which has now passed its second reading. The Bill introduces a day-one right to one week’s unpaid leave per year for employees who are providing or arranging care. The government has also backed the Protection from Redundancy (Pregnancy and Family Leave) Bill which would extend the right to be offered a suitable alternative vacancy (where one exists) during a redundancy process to pregnant woman and new parents returning from leave. Employers may need to watch out for this if they intend to restructure their businesses in the upcoming recession. We’ll report on the practical implications of these Bills once (and if) they come into effect.
This month has also seen the Office for National Statistics publish its annual statistics on the differences in pay between men and women. While the gender pay gap for full time employees was reported to be 8.3% (up 0.6% from last year), the gender pay gap for senior officials has fallen to 10.6%, down from 16.3% (reported in April 2019) which is certainly a step in the right direction. That said, all these figures should be taken with a pinch of salt, as the data is arguably less reliable in respect of demonstrating true change due to the pandemic and the impact of furlough during 2021.
In this month’s edition, we consider the enforceability of settlement agreements in relation to unknown future claims, explore whether employers need to consider consulting employees prior to selecting a redundancy pool, look at whether the merit of a claim can be considered in an extension of time application, ponder what the government’s approach to immigration might be and wax lyrical over the latest ICO guidance for monitoring employees and collecting health data.
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This month’s headlines
Uncertain future equals unsettled past: settlement agreements held not to be enforceable against unknown future claims
Bathgate v Technip UK Ltd and ors
The recent EAT decision in Bathgate v Technip is a timely reminder of the limitations of settlement agreements and the importance of drafting such agreements with care.
The relevant facts in this case are as follows: the Claimant (a seafarer) took voluntary redundancy by way of a settlement agreement in 2017. The agreement included a term which erroneously provided that a future payment would be calculated in accordance with a collective agreement that stipulated that payments were prohibited for those over the age of 61. This was in breach of the latest age discrimination regulations, which the collective agreement had failed to account for. At the time of signing the settlement agreement, the Claimant was unaware of the discriminatory provisions.
In its judgment, the EAT held that section 147 of the Equality Act 2010 (EqA 2010), which allows for discrimination claims to be compromised by way of a settlement agreement, would not cover the settlement of a future claim that was unknown to the parties when the agreement was signed. The EAT held that s147 EqA 2010 would only apply where it related to a “particular complaint” and a settlement agreement cannot, therefore “seek to exclude potential complaints that have not yet arisen on the off-chance that they might be raised; it cannot, in other words, be used to sign away all the employee’s tribunal rights”.
While this judgment isn’t ground-breaking, it does confirm the importance of particularising any specific complaints that the settlement agreement seeks to address rather than waiving a long list of claims which are not truly in the minds of the parties when they are signing the settlement agreement. In the current climate, there is perhaps a particular risk here with mass redundancies which involve numerous settlement agreements. In these situations, employers should take legal advice and carefully consider whether there are any additional claims, aside from those related to the redundancy itself, that each individual employee may bring against the employer at a future date.
No meaningful consultation means that “pool of one” might as well be “pool of none”
In this case, the Employment Appeal Tribunal (EAT) has held that individual redundancy consultations should mirror the fair process principles of collective consultations. This means that employee consultations should be meaningful, genuine, and take place at a stage where the employees’ views have the potential to affect the outcome of the redundancy exercise.
Mrs Mogane was a nurse who had worked for the respondent NHS trust on a series of one-year fixed term contracts since 2016. She was employed alongside another nurse at the same level, who started work on a two-year contract in early 2019. When the trust decided to reduce headcount to save on costs in March to April 2019, it selected Mrs Mogane for redundancy on the basis that her contract was due to be renewed the soonest. Mrs Mogane argued that the redundancy process was unfair because the trust had based its decision on a criterion which put her in a redundancy pool of one without consulting her or considering alternative processes. The trust defended its decision on the basis that, unlike in collective redundancies, there was no principle in individual redundancy that indicated that consultation should take place at the start of the process.
At appeal, the EAT upheld Mrs Mogane’s position. Notably, the EAT ruled that the principle of fair process applies to individual redundancy consultations as well as collective consultations and that choosing, without prior consultation, selection criteria that immediately determined that it would be Mrs Morgane who would be dismissed rendered the redundancy dismissal unfair. The EAT further held that the trust’s decision to narrow down to a pool of one employee before consulting with Mrs Mogane led to an arbitrary choice which was not in line with established case law and noted that the trust had no explanation as to why it was reasonable to select an employee for redundancy due to their contract being first due for renewal.
With many businesses likely to be contemplating redundancies in the short to medium term, there is a real prospect that this case could raise serious alarm bells for established HR processes. To address these concerns, even greater strategic planning of restructuring proposals is likely to be required to mitigate the risk of future unfair dismissal claims in this area.
Timing isn’t everything as EAT holds that merit is relevant to extension of time application
In another EAT decision, it has been held that an employment tribunal may consider the merits of a claim when determining whether to extend the limitation period or allow a claim to be amended.
Miss Kumari brought claims of unfair dismissal and race discrimination, which included vague references to various incidents and allegations, against the respondent outside the three-month limitation period. The Tribunal ordered that Miss Kumari provide detailed descriptions of her complaints and listed a preliminary hearing to determine whether the limitation period should be extended on the ‘just and equitable’ basis, under s123(1)(b) of the Equality Act 2010.
When Miss Kumari provided her detailed particulars, she added a further allegation of race discrimination. The tribunal decided that an application to amend Miss Kumari’s claim was required if she wanted to advance this further allegation.
At the preliminary hearing, the tribunal ultimately held that it wasn’t just and equitable to extend time and refused to amend the claim. The tribunal stated that the claim appeared to be “very weak” and suggested that the new allegation was also a “weak claim”. Miss Kumari appealed the decision to the EAT on the basis that the tribunal was wrong to take account of the merits of her claims.
The EAT dismissed Miss Kumari’s appeal. While the tribunal’s assessment of the merits of her claim wasn’t based on the full evidence that would be available at a final hearing, it was acceptable for the tribunal “to take account of its assessment of the merits at large, provided that [the tribunal] does so with appropriate care, and that it identifies sound particular reasons or features that properly support its assessment, based on the information and material that is before it.” As such, it held that the tribunal had considered the merits of Miss Kumari’s case appropriately and adequately taken them into account when considering whether to extend the limitation period or allow her to amend the claim.
Moving forward, we expect that Kumari will be referenced in many extension of time applications. While this case is helpful to employers where the claimant’s prospects of success are low, merit will be only one of various considerations that the tribunal will contemplate when considering an extension of time application. Indeed, even if the respondent takes the view that the claimant’s claim is weak, there’s no guarantee that the tribunal will take the same view on when considering the merits of the claim.
Reading the tea leaves on immigration policy
As will have escaped no one’s attention, UK politics is in a state of some disarray. Immigration policy is at the forefront of public debate, yet the direction of travel of Rishi Sunak’s government is quite difficult to predict.
There is an inherent tension between the desire, expressed by the Home Secretary Suella Braverman, to reduce net migration to the UK to the tens of thousands against an ongoing labour and skills shortage across multiple UK industries.
Recent government pronouncements on immigration have reiterated the desire to be ‘tough‘, yet at the same time, PM Sunak has effectively torn up his manifesto of pledges from the leadership contest, including his ten-point plan for immigration.
So, where might we be headed? Our feeling is that the need to stimulate economic recovery will ultimately trump arguments for restrictive immigration policies relating to migrant workers. Liberalisation efforts could focus on the sponsored ‘Skilled Worker’ visa route, already significantly expanded post-Brexit to include many more occupations that can be sponsored. This route has seen a surge in applications from prospective sponsors post-Brexit. The viability of the route for employers could be further enhanced by reducing some of the inbuilt financial disincentives and the prohibitive standard of English language required of a visa applicant.
Of course, it’s also entirely possible that we may see the introduction of further bespoke routes, following the familiar government mantra of attracting the ‘best and brightest‘, adding to the number of existing routes such as the ‘Global Talent’ visa and ‘High Potential Individual’ visa.
There’s no doubt though, that in the context of the UK’s approach to refugees, the current government will likely seek to project an image of toughness. This makes it less likely that refugee claimants might be afforded the right to work in the UK whilst their claims are processed. This has been a long argued for concession that could potentially provide a significant pool of skilled workers, reduce the burden on the public purse and increase the well-being of asylum claimants facing long waits to have claims resolved. However, it remains a controversial proposal that would likely face significant political opposition.
Backlash against Big Brother-esque workplace in latest ICO Draft Guidance published on monitoring employees and processing health information
The Information Commissioner’s Office (ICO) has published its draft guidance on monitoring employees at work and processing worker health information. The monitoring employees guidance covers numerous (panopticon-esque) issues, ranging from when it’s acceptable to monitor workers continuously through their webcams (spoiler alert: almost never) to whether employees should be informed of how they may be monitored (another spoiler: yes, they should), and is open for consultation until 11 January 2023.
Given the importance of this guidance, we’ll be looking to provide a response to the consultation and will be providing more details of how you can get involved soon, so keep an eye on your inboxes. In the meantime, you can learn more about both consultations and read the draft guidelines here and here.