Employment status
Having made significant changes to the way employment status cases are determined in the Uber litigation, the Supreme Court has now re-examined the area in the context of trade union rights and collective bargaining. As Constance Shaw’s in-depth article explains, the ability of Deliveroo riders to delegate their deliveries to substitutes was the critical factor in deciding that they were not workers for the purposes of the collective bargaining legislation. That ruling will be of importance to all clients who engage contractors and consultants, not just to those in the gig economy.
Redundancy
Many of you will be all too familiar with the statutory consultation requirements whenever mass redundancies are proposed. Those extensive obligations are not typically replicated in non-collective redundancy exercises – where fewer than 20 redundancies are proposed in the statutory 90-day reference period. In a significant development, a recent EAT decision threatens to undermine that relatively clear demarcation. The basic facts were straightforward: the employer was the UK subsidiary of US entity, providing recruitment services to a major bank. The UK team comprised 16 people, and it was determined that two roles would need to be deleted. The UK manager was given a scoring matrix by the US parent company, and scored her team accordingly. The criteria were all subjective, but the manager approached her task fairly. The claimant in this case was informed that he had come at the bottom of the scoring and had therefore been provisionally selected. There were then two further meetings before his dismissal was confirmed. A volunteer came forward, so that the claimant was the only person compulsorily made redundant.
The EAT found a number of failings of note, reflecting what it held to be good industrial relations practice. In particular, it criticised the adoption of the US scoring matrix and, most significantly, the lack of “general workplace consultation”. The judgment concluded that a fair process will normally mean that:
- the employer will warn and consult either the employees affected or their representative;
- fair consultation occurs when proposals are at a formative stage and where adequate information and adequate time in which to respond is given along with conscientious consideration being given to the response;
- whether in collective or non-collective consultation, the purpose is to avoid dismissal or ameliorate the impact;
- a redundancy process must be viewed as a whole and an appeal may correct an earlier failing making the process as a whole reasonable;
- the tribunal should consider the whole process, also considering the reason for dismissal, in deciding whether it is reasonable to dismiss;
- whether consultation is adequate is a question of fact and degree, and it is not automatically unfair that there is a lack of consultation in a particular respect;
- any particular aspect of consultation, such as the provision of scoring, is not essential to a fair process;
- the use of a scoring system does not make a process fair automatically; and
- the relevance or otherwise of individual scores will relate to the specific complaints raised in the case.
Clients, especially those with international operations, will need to consider this ruling carefully if redundancies are in prospect.
Whistleblowing
Lawyers often emphasise that a proper process, while not essential in every case, can be immensely useful in demonstrating fairness and reasonableness. The flip side is even more true: little or no process puts employers on the back foot and can allow the courts and tribunals to find unfairness. A recent EAT decision demonstrates that point, as well as making some fascinating determinations on some unusual contractual drafting.
The facts were, in essence, that a senior executive became concerned during the Covid-19 pandemic that the employer, a well-known drinks manufacturer, was unfairly cutting his salary and bonus, as well as the salary and bonuses of other employees across the employer’s operations. He repeated those concerns in two meetings, at the end of the second of which the ultimate owner of the business told him in no uncertain terms that he was fired.
The EAT unsurprisingly found that the concerns amounted to whistleblowing, and the peremptory dismissal to have been unfair retaliation. As readers will know, compensation for whistleblowing is uncapped, and the claimant in this case was awarded £1.6m, which included an uplift on account of the failure to follow the Acas Code of Practice on Disciplinary and Grievance Procedures. The employer (and the ultimate owner, who was a second respondent in the case) appealed, asserting (i) that the uplift should not have been triggered because no formal grievance had been submitted, and (ii) that the award should have been capped at £270,000 because the claimant’s employment contract contained a clause stating that, in the event of termination, he would “be entitled to a payment in the net amount of £270,000 (which, for the avoidance of doubt, is inclusive of any amounts payable under English law and, provided that, such amount will be reduced by the amount of any other payments made”.
The original decision was upheld on appeal. The contractual attempt to limit recovery was (rightly in our view) held to be void. All HR professionals know that settlement agreements that waive claims require the employee to receive independent legal advice. If they do not, the waiver is void. The same applied to this drafting, as it sought “to exclude or limit the operation of” the statutory compensation mechanisms.
On the uplift, the EAT held (again, correctly in our view), that the Acas Code’s grievance provisions require a written grievance, but that this requirement had been satisfied by the claimant putting his concerns in an email between the two "whistleblowing" meetings. The Acas Code’s disciplinary provisions were then also engaged because the claimant was dismissed for something he had done. The uplift was therefore available to the EAT, and its decision to increase the award by 20% (the maximum being 25%) was open to it.
The facts of this case are obviously at the extreme end, but all clients should take care whenever procedural shortcuts are being contemplated.
New legislation
As Louise Pereira explored in our July podcast, a range of new family-friendly legislation was passed by Parliament over the summer but needed further statutory instruments to deal with the detail and to confirm the start dates. Those regulations have now been laid before Parliament in draft form, so that we can be reasonably sure that the following new rights will come into force from 6 April 2024.
- Flexible working will become a day one right.
- The new carer’s leave system will start. Carer’s will be entitled to a maximum of one week’s leave, which can be taken in half-day chunks. That can be tacked on to other forms of family leave, such as maternity leave, if they are relevant.
- Restrictions on redundancies during family leave are enhanced. The current system gives preferential treatment to women on maternity leave where redundancies are in prospect and a suitable alternative is available. That same protection will now apply during pregnancy, during maternity leave and for 18 months after the birth. Protection is also being extended to cover adoption leave in a similar way. No protection is being given to those taking paternity leave, but men and women taking at least six weeks shared parental leave will also benefit from protected status.
Immigration
Immigration continues to dominate the front pages. As Samir Abugideri’s article notes, the Government’s recent amendments to the immigration rules mark yet another wholesale change.
