The latest news on employment law matters from Richard Gvero.
Unfair dismissal – Gwynedd County Council v Barrett
Indirect associative discrimination – Chez Razpredelenie Bulgaria & Follows v Nationwide Building Society
Joint Senior Partner, Head of Employment and Commercial
Gwynedd County Council v Barrett
The opportunity to appeal against dismissal is usually considered to be an essential element of a fair dismissal. In the recent case of Gwynedd County Council v Barrett, the Court of Appeal said that this is not necessarily the case in a redundancy dismissal.
The employees were teachers who worked at a community school. School provision was reorganised, and the local authority decided to close that school and replace it with a new community school at the same location. The authority told staff that all employment contracts would be terminated and that the new staffing structure for the new school would be decided by application and interview. Unsuccessful candidates would be made redundant unless they could be found suitable alternative employment. The employees applied for jobs but did not get them. They were not given an opportunity to make representations to the school or appeal the position prior to their dismissal. The employees brought unfair dismissal claims. The tribunal said the dismissals were unfair because of the lack of consultation, the way they had to reapply for their jobs and because they were denied the right to appeal. On the failure to provide the right to appeal, the tribunal noted that an employer required ‘truly exceptional circumstances’ to refuse the right to appeal, which did not exist in this case. The EAT agreed. The local authority appealed to the Court of Appeal, in part on the basis that applying the ‘truly exceptional circumstances’ test had been wrong in law.
The Court of Appeal confirmed that failing to allow an appeal in a redundancy case did not necessarily make the dismissal unfair. If the employer had followed a fair procedure in terms of the selection process then the lack of any appeal was not necessarily fatal. However it was one of many factors to be considered when deciding whether a dismissal was fair. The Court of Appeal said the tribunal’s approach had been sound. They had not applied a blanket rule that the dismissals must be unfair because there had been no appeal. They had looked at the procedure in the round, including the absence of any opportunity for the employees to raise a grievance about the process or be consulted about the dismissals. The tribunal had applied a test of fairness and considered whether the employer’s approach in this case fell within the band of reasonable responses. They found it did not based on the procedure as a whole.
This case confirms that denying an employee an appeal against a redundancy dismissal will not necessarily result in a finding of unfair dismissal. However, it is clearly best practice to do so. In this case, the redundancy process as a whole had been generally unfair. Had there been an appeal, there would have been another opportunity for the employer to put matters right. Rather than an extra annoying hurdle, employers should consider appeals processes as an opportunity to ensure that their own house is in order. Much better to do that internally than in the public environment of an employment tribunal hearing.
The government has published a consultation document – Making flexible working the default – which proposes various changes to the existing rights for employees to request flexible working. This consultation document comes hot on the heels of the widespread flexible working that business and workers have had to adopt in the wake of the Covid-19 pandemic. Homeworking has increased exponentially and been shown to work in many fields where it was previously rare. The pandemic has also created more awareness of the importance of work-life balance and caring responsibilities for children and family members who are unwell. Although some of this flexible working may not be sustainable in the long term, our eyes have been opened to what is possible and the government is seeking to capitalise on this opportunity.
The proposals do not set out an automatic right to flexible working. However they do propose to remove the 26 weeks’ qualifying service to make the right a ‘day 1’ right. The proposals retain the important basic system of a conversation between employer and employee about what will work in their individual situation in terms of balancing the employee’s aims and desires with the needs of the business. The other proposals include:
- Potentially making changes to the eight business reasons for refusing a flexible working request if they are no longer reasonable in 2021.
- Requiring an employer to suggest alternatives to the arrangements requested by the employer if the flexible working request is rejected, in order to promote compromise.
- Changing some of the administrative process, for example exploring whether to allow employees the right to make a statutory request more than once in a 12-month period.
- Raising awareness of the existing right to request a temporary flexible working arrangement which the government believes is under-utilised at the moment.
The consultation is open until 1 December 2021. Make your contribution to the debate here:
Indirect associative discrimination
Chez Razpredelenie Bulgaria
Follows v Nationwide Building Society
Direct discrimination can occur when the reason for the less favourable treatment is the protected characteristic of someone with whom the employee associates, for example a parent’s association with their disabled child. Indirect discrimination is different. In order to establish indirect discrimination, section 19 of the Equality Act 2010 says that an employee must suffer the disadvantage and have the protected characteristic in question. In a case called Chez Razpredelenie Bulgaria, the ECJ said that the concept of associative discrimination could extend to indirect race discrimination. As the definition of indirect discrimination is almost identical in the Equal Treatment Directive as the Race Directive, the question has arisen about whether indirect associative discrimination applies in relation to other protected characteristics. An employment tribunal has now looked at this issue in a case involving the treatment of an employee with caring responsibilities for her disabled mother.
In Follows v Nationwide Building Society, the employee was a Senior Lending Manager (SLM) who had a homeworking contract. She worked from home because she was the main carer for her disabled mother, something management were aware. Despite being on a homeworking contract, she attended the office 2 or 3 days a week. She had always scored highly in her appraisals and had a history of excellent supervision of team members. The Bank decided to reduce the number of SLMs from 12 to 8, who would all be office based. The Bank cited a greater need for staff supervision and feedback from junior staff that they were dissatisfied with supervision. The Bank asked for volunteers and received more than enough. Despite this, it asked some of those volunteers to stay and instead dismissed the employee, who didn’t want to leave. Another homeworking employee, Mr Gregory, who was not disabled and not a carer, was also dismissed. The employee brought many claims, including ones for direct and indirect associative discrimination.
The employment tribunal said that the direct associative discrimination claim failed. The right comparator was a homeworking employee who was either not disabled or not associated with a disabled person. Mr Gregory fitted that description but was treated the same as the employee. The reason for the treatment was not the employee’s caring responsibilities, but her homeworking status. However, her claim of indirect associative discrimination succeeded. The tribunal said that the provisions of indirect discrimination should be construed with the Chez case in mind. The relevant policy which was applied to everyone was the requirement that SLMs could no longer work at home on a full-time basis. Carers of disabled people are less likely to be able to meet the requirement to be office based. The requirement put the employee at a substantial disadvantage because of her association with her mother’s disability as her main carer. The Bank knew about her mother’s disability and her caring responsibilities. The Bank hadn’t discussed alternatives with the employee and ignored her protestations that the role could continue on her usual terms. As such they had not taken reasonable steps to avoid the disadvantage. The legitimate aim relied on by the Bank was a need to provide effective onsite supervision and support for junior staff following a reduction in headcount. The tribunal said the need to provide on-site supervision contained a discriminatory element and so could not be a legitimate aim. Even if it were a legitimate aim, the means of achieving it were not proportionate bearing in mind the employee’s excellent history of supervision and her view that it could be done on her own terms. There were other ways to achieve that aim, including maintaining the employee’s existing split site working arrangements.
This case is not binding on other tribunals but shows that the concept of associative discrimination now applies to indirect discrimination. Employers must ensure that employees who care for disabled people are not disadvantaged unless it can be justified. Although ECJ cases are no longer binding following Brexit, Chez was relevant here because tribunals must continue to interpret cases in line with EU law. That said, the Supreme Court and Court of Appeal may choose to depart from EU case law ‘when it appears right to do so’. The current wording of section 19 on indirect discrimination does not include associative discrimination. Watch this space to see if domestic courts close this avenue of claim down or embrace it fully by amending the Equality Act 2010.
Unlike most forms of direct discrimination, direct age discrimination can be justified as a proportionate way of achieving a legitimate business aim. Employers must now justify any retirement policy which requires employees to retire at a certain age, by showing it is a proportionate way of achieving a legitimate business aim. The EAT has recently looked at two cases brought against the University of Oxford, challenging its ‘justified retirement age’ of 67, where the employment tribunals came up with different answers based on the same policy.
Professor Pitcher was an associate professor of English Literature. The University refused to allow him to work beyond 67 and his employment terminated when he reached 67. He brought unfair dismissal and age discrimination claims. The employment tribunal said his retirement was less favourable treatment based on age, but said the policy was justified. The University was pursuing the legitimate aims of promoting inter-generational fairness (including opportunities for younger academics to progress), facilitating succession planning and promoting equality and diversity (the employer said providing opportunities for younger academics was likely to increase diversity). The tribunal said these aims were legitimate and the retirement age was a proportionate way of achieving them. Professor Ewart was an associate professor in Atomic and Laser Physics. He had been granted a two-year extension beyond 67 but was refused a further extension. He brought similar claims. The employer relied on very similar legitimate aims. However, in this case there was evidence that the retirement policy did not create a significant number of vacancies, something that had not been before the tribunal in Pitcher. A different employment tribunal said in Ewart that the retirement policy was not a proportionate way of achieving legitimate aims. The losing party in each case appealed and it was left to the EAT to work out whether there was a single answer to the same question about whether the retirement policy was discriminatory.
The EAT refused to interfere with either judgment. The only reason an appeal court can change a judgment is if the employment tribunal has made an error of law which creates a perverse outcome. The EAT noted that it wasn’t desirable to have two different outcomes on the same policy. However, in these cases, different evidence was before each of the tribunal panels. If each of the tribunals reached a conclusion that was open to it based on the evidence, the fact that another tribunal reached a different decision does not give the EAT the right to interfere.
This case shows that employment tribunal claims are all about the evidence. In the Ewart case, statistical evidence was available which undermined the employer’s aims and the proportionality of its ways of achieving them. The tribunal in Pitcher did not have the benefit of seeing this evidence. That may explain the different outcomes. But as the EAT noted, different tribunals may come to different decisions provided that the decisions they make are not perverse. Employers must be careful in relation to compulsory retirement ages and ensure that the legitimate aims they are pursuing are properly met and pursued in a proportionate way. If the policy doesn’t actually bring about the aim you are seeking, the means of achieving it are unlikely to be considered proportionate when balanced against the very clear detriment to an employee of losing their job.
Most employers have long been alive to issues of diversity in business in terms of protected characteristics such as race, sex and disability. But what about class? Socio-economic grouping is not a protected characteristic, so is seeking to ensure a certain percentage of ‘working class’ employees a hurdle too far?
Not for KPMG, who have announced a new target that 29 per cent of partners and directors should come from a ‘working class’ background by 2030. Employees with parents in manual jobs, such as plumbers, electricians, butchers and van drivers, will meet the definition of ‘working class’ for this target. The firm told Personnel Today that 23 per cent of its partners and 20 per cent of its directors currently meet this definition. The firm said that those from lower socio-economic backgrounds were paid on average 8.6 per cent less than those whose parents worked in management or professional jobs. The firm also plans to train all its staff on the invisible barriers that exist to those from less affluent backgrounds. The Chair of KPMG comes from a working class background herself and says she is a passionate believer that greater diversity improves business performance, brings fresh thinking and a wider perspective on decision making, all of which deliver better outcomes for clients.
KPMG is not alone in recognising that talent lies in every demographic but that people from lower socio-economic groups often have less opportunity to seek out those professional roles. This is unfair for job seekers but also denies business the widest pool from which to seek the very best talent. Creating targets means that the impetus for providing that opportunity lies with the business, levelling the playing field and creating more opportunity for those who need it. Seeking out new pools of talent from potentially untapped sources good for diversity and diversity is good for business. Our differences are often our strengths.
Associate Solicitor specialising in Employment law 01992 305212
Joint Senior Partner, Head of Commercial and Head of Employment 01992 305210
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