Worked up, your monthly employment law lowdown – September 2020

Welcome to the September edition of Worked Up. This month’s update summarises some notable recent cases on various topics including constructive dismissal, redundancy selection, worker status and when it may be fair to dismiss someone without following a ‘fair’ procedure. It also provides an update on the new regulations on the calculation of redundancy payments and notice payments for furloughed employees.

If you would like to discuss any of the below updates, please do get in touch. Alternatively, if you would like to receive these updates directly to your inbox, please subscribe here.

This month’s headlines:

Notice Pay and Furlough Leave

Extension of Statutory Sick Pay

CitySprint cycle couriers found to be workers…again

Dismissing without any procedure – can it be fair?

Constructive Dismissal – the last straw

Redundancy Selection – when is it fair to interview?

Notice Pay and Furlough Leave

Following reports that some employers were making their furloughed staff redundant and basing their redundancy and notice payments on their furlough pay rather than their normal salary, the Government has introduced regulations to prevent this from happening. In summary, the Regulations require employers to calculate an employee’s statutory redundancy pay and statutory notice pay using their normal contractual pay rather than their reduced furlough pay.

However, due to a slightly odd provision within the Employment Rights Act 1996, the position is different for furloughed employees whose contractual notice period is at least one week longer than their statutory minimum notice period. As a result, furloughed employees with longer contractual notice periods may not be entitled to have their furlough pay topped up during any redundancy notice period.

The above provisions only apply to employees. Therefore, any freelancer on furlough can simply be paid their furlough pay during their notice period.

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Extension of Statutory Sick Pay

Statutory Sick Pay has been extended to cover employees who are self-isolating prior to undergoing a surgical or other hospital procedure, provided that they are doing so in accordance with a relevant notification issued by a medical practitioner or any other person or body permitted to issue such a notification.

This will only apply if the employee cannot carry out their work from home. If they can work from home (and are otherwise fit to do so) they should receive their usual pay during such period of self-isolation.

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CitySprint cycle couriers found to be workers…again

O’Eachtiarna and others v CitySprint (UK) Ltd ET/2301176/18

The vexed question of employment/worker status is the gift that keeps on giving (to lawyers at least!). Over recent years, we’ve seen a series of cases in which individuals – from Uber drivers and cycle couriers to plumbers – have been found to be ‘workers’ despite signing up to supposedly self-employed contracts. This latest case appears to take things one step further – even an unfettered right to provide a substitute may not be sufficient to preclude someone from acquiring worker status.

In 2017 an Employment Tribunal held that Max Dewhurst, a former CitySprint cycle courier, was a worker. Following this judgment, CitySprint required all couriers to agree to new terms, which clearly stated that the individuals were engaged on a self-employed basis and gave them the right to use substitutes.

The revised terms (which were agreed by all couriers in November 2017) were written in plain English and sought to clearly set out the arrangements between the parties, notably that the couriers were engaged on a self-employed basis and were therefore not entitled to holiday pay, sick pay or any other employee benefits.

However, the Employment Tribunal found that, despite the change in contractual terms, the couriers were still ‘workers’ as the dominant feature of their contracts remained personal performance. The new contracts did contain a contractual right of substitution, but the couriers did not consider this right to be practical or financially viable and it had never been exercised in practice.

Given that it’s a first instance decision, it will not be binding on other Tribunals. However, it serves to illustrate yet again the fact that Tribunals are willing to look past the terms of the contract if they do not reflect the reality of the relationship. It remains to be seen whether CitySprint will be appealing. In any event, we continue to await the judgment of the Supreme Court in the Uber case – perhaps that could finally provide definitive guidance on the worker status conundrum once and for all? Don’t hold your breath.

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Dismissing without any procedure – can it be fair?

Gallacher v Abellio Scotrail Ltd [2020] 2 WLUK 691

In this case, the EAT considered whether it was reasonable for an employer to have dismissed an employee without having carried out any prior procedure.

The employee was a senior manager who was dismissed at her appraisal meeting following a breakdown in relations with her manager. The Tribunal concluded that the dismissal was for “some other substantial reason”; the reason being a lack of trust and confidence between two employees at a senior level which was a barrier to delivering the objectives of the business.

Given the issues between the managers, the Tribunal did not consider that any procedure would have served a useful purpose. The Tribunal therefore held that given the particular circumstances of the case the decision to dismiss was substantially and procedurally fair.

This decision was upheld by the EAT, though the EAT noted that “the fact that no procedure is followed prior to dismissal would in many cases give rise to the conclusion that the dismissal was outside the band of reasonable responses and unfair….and it would be an unusual and rare case where an employer would be acting within the band of reasonable responses in dispensing with such procedures altogether”.

Like us, you may be relieved to hear that in some (albeit probably rare) cases it may therefore be possible to dispense with a procedure prior to dismissal. However, this case does not detract from the general importance of following a ‘fair’ procedure prior to dismissal which the EAT noted is usually “fundamental to notions of natural justice and fairness”.

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Constructive Dismissal – the last straw

Williams v Governing Body of Alderman Davies Church in Wales Primary School UKEAT/0108/19

The “last straw” doctrine is often cited in constructive dismissal cases. It enables an employee to rely on the cumulative effect of a series of acts or omissions when claiming that there has been a breach of the implied term of trust and confidence. But what if the last straw is relatively innocuous in itself? Will this prevent the employee from relying on it in support of an unfair dismissal claim? In this case, the EAT has confirmed that it will not.

Mr Williams (a school teacher) had resigned following two disciplinary proceedings being instigated against him and his grievance and appeal about the conduct of the first disciplinary not being upheld. The “trigger” for Mr Williams’ resignation appeared to be the fact that his solicitor had informed him that the other employee implicated in the second disciplinary was not allowed to contact him. However, a few days before his resignation, Mr Williams had also written to the school complaining about his treatment more generally and asserting that he had lost all faith in his employer to treat him properly.

Although the Employment Tribunal initially rejected Mr Williams’ claim of constructive dismissal on the grounds that the “last straw” on which he relied (the discovery that the other employee was not allowed to contact him) was not an unreasonable action on the part of the school given the ongoing disciplinary proceedings, the EAT reversed this decision for three main reasons:

(1)    Even if the last straw was innocuous, the Tribunal should have considered whether there had previously been a fundamental breach of contract which had not been affirmed and which had also contributed to Mr Williams’ decision to resign;

(2)    By focusing on the “last straw” the Tribunal had not considered other reasons for the resignation; and

(3)    By finding that the prohibition on the other employee contacting Mr Williams was “innocuous” as it was reasonable conduct on the part of the school, the Tribunal had erred in law.

The EAT therefore upheld Mr Williams’ appeal on this point and substituted a finding that Mr Williams was constructively dismissed due to the school’s prior conduct which contributed to his decision to resign and which amounted to a breach of the implied term of trust and confidence.

This decision is not altogether surprising given that it is in line with a previous Court of Appeal decision on the same point. Nevertheless, it provides a helpful reminder that a constructive dismissal case can succeed even where, taken on its own, the last straw may appear to be innocuous.

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Redundancy Selection – when is it fair to interview?

Gwynedd Council v Barratt and another UKEAT/0206/18/VP

When faced with a redundancy situation, is it fair to decide which employees should be selected by requiring all those in the pool to apply for the roles that are remaining? The answer, it seems, depends on how similar the new job is to the role that is being made redundant.

In this case the EAT considered whether it was unfair for two teachers to have been dismissed following a redundancy process during which they were required to interview for the available alternative roles.

The teachers had worked at a school which had closed down and been replaced by a new school. They had been required to interview for the available roles at the new school, which the Tribunal found were “either an identical job or a substantially similar job” to those that they had previously carried out at the old school.

The Tribunal found that this approach to alternative employment was unfair and this conclusion was upheld by the EAT which held that where an employee is being recruited for the same or substantially the same role as the role the employee carried out previously, the exercise must not involve “forward-looking” criteria (such as an interview) but should instead be something closer to selection from within a pool.

This case emphasises the importance of determining a fair selection process which should take into account the nature of the roles available and, in particular, whether the roles are substantially similar to the employees’ current roles. There may be circumstances where a competitive interview process will be appropriate, but before applying such an approach, you should think carefully about whether this would be actually be reasonable and fair.

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