Employment Law Alert UK - April 2023

Diversity and inclusion and ESG

Parker review publishes update on ethnic diversity of FTSE 350 boards. On 13 March 2023 the Parker Review Committee published an updated report providing details of the results of its 2022 voluntary census together with new targets for companies. The Parker Review was set up in 2015 with the aim of improving the representation of individuals from ethnic minorities on FTSE 350 boards. The initial targets set in 2017 were to have one director on FTSE 100 boards by 2021 and on FTSE 250 boards by 2024.  The voluntary census has shown that 96 FTSE 100 companies met this target by December 2022, and 67% of FTSE 250 companies have ethnic minority representation on their boards. To build and capitalise on current progress the Review Committee has recommended that each FTSE 350 company should by December 2023 set a target for the percentage of its senior management team who identify as being from an ethnic minority which they should aim to reach by December 2027. This target should be reported to the Review Committee and included in annual reports together with plans for creating a diverse and inclusive management team. Please see our Insight.

Enhanced obligations for employers to prevent harassment on the horizon. The Worker Protection (Amendment of the Equality Act 2010) Bill, which will make employers liable for harassment of their employees by third parties and will introduce a positive duty on employers to take reasonable steps to prevent the sexual harassment of their employees had its second reading in the House of Lords on 24 March 2023. The Bill provides that its main provisions will come into force one year after it is passed.

Claimant's aggressive behaviours did not arise from his disability. The EAT has held that an Employment Tribunal was entitled to consider that the Claimant's aggressive behaviour was not because of his disabilities, but rather arose from the Claimant having a short temper and resenting being told what to do. The Claimant suffered from dyslexia, Asperger's Syndrome, neurodiversity and left sided hearing loss (disabilities within the meaning of the Equality Act 2010). He worked as a registration officer for a regulator of optometrists and opticians. From April 2015 to 2019, when his employment ended he had a series of confrontations and "meltdowns" with colleagues. The Claimant's appeal concerned the dismissal of his claim for discrimination arising in consequences of his disabilities under section 15 of the Equality Act 2010. The Claimant argued that the Employment Tribunal had applied too strict a test of causation for the section 15 claim. Although the EAT noted that the judgment of the ET was "difficult to understand and interpret" (largely by the way it was structured), the EAT agreed with the ET's underlying reasoning, specifically that once it had determined that the Claimant's disabilities did not have any effect of his conduct on the relevant occasions the section 15 claim failed. The EAT's judgment included useful guidance for structuring the analysis of future section 15 cases, suggesting that the following four questions should be considered: (i) what are the disabilities; (ii) what are their effects; (iii) what unfavourable treatment is alleged in time and proved and; (iv) was that unfavourable treatment "because of" an effect or effects of the disabilities. The decision will also be welcomed by employers generally as an indication that Tribunals may be prepared to adopt a narrower approach to section 15 claims. (McQueen v The General Optical Council).

IKEA UK reaches agreement with EHRC to improve its policies, practice and response to complaints of sexual harassment. Following in the footsteps of McDonalds (see our March alert), on 23 March 2023 IKEA UK entered into a legal agreement with the EHRC to improve its policies and practices. The agreement comes in the wake of a complaint of sexual harassment and assault and its subsequent handling by a former IKEA employee.  IKEA UK has committed to reviewing the way that it deals with sexual harassment and specifically to: communicate a zero-tolerance approach; work with an external law firm to review its policies and procedures and improve its response to complaints and provide training to HR and line managers.

Vento bands updated. The updated Vento band guidelines (for awards for injury to feelings in discrimination cases) have been published. In keeping with the adjustments made to compensation limits to reflect inflation, the Vento bands have been adjusted as follows: a lower band of £1,100 to £11,200 (for less serious cases); a middle band of £11,200 to £33,700 (for cases that do not merit an award in the upper band); and an upper band of £33,700 to £56,200 (for the most serious cases), with the most exceptional cases capable of exceeding £56,200.

European Parliament approves EU Directive on Pay Transparency. On 30 March 2023 the European Parliament formally approved the pay transparency directive which aims to address the gender pay gap across Europe using measures to ensure pay transparency and to improve access to justice for pay discrimination. Once the text of the Directive has been formally approved by the European Council, there will be a three-year implementation period for Member States.

Autism employment review launched. On 2 April 2023 the Department of Work and Pensions launched an autism employment review. This review will consider how employers can better support autistic staff already in the workplace, how to support those entering or re-entering the workplace and means of reducing stigma around, and improving the productivity of autistic staff.

Litigation process

Strike-out of all claims a necessary and proportionate measure. The EAT has upheld the decision of the Employment Tribunal to strike out the Claimant's claims in their entirety where the Claimant failed to comply with directions relating to part of her claim. On the termination of her employment, the Claimant brought claims alleging unfair dismissal, race, pregnancy or maternity and/or sex discrimination. The Claimant failed to attend two Preliminary Hearings convened in connection with her case, and failed to comply with the directions to provide further particulars of her claims of race discrimination and to provide a statement of all remedies claimed. She also failed to comply with the deposit order imposed in respect of her claim of sex and/or pregnancy and maternity discrimination on the basis that it had no reasonable prospect of success. In reaching its conclusion to uphold the strike out of the claims, the EAT was mindful that an unless order should not be used as an "instrument of punishment", and that particular care must be taken when the proceedings concern two separate claims, but that doing so in the circumstances was proportionate. (Rojha v Zinc Media Group plc).

ET incorrectly adopted punitive rather than a facilitative approach by converting case management order to unless order. The EAT has overturned the decision of the Employment Tribunal to strike out multiple claims for failure to comply with an unless order. The Claimant and 36 others brought claims that the Respondent had withheld pay for strike days and failed to identify deductions in their pay slips. At a preliminary hearing the Claimants were ordered to serve 'a schedule of loss and damage claimed for each claimant', including any compensatory or mitigating sums received by the claimants from their trade union, and a list of all relevant documents. When the Claimants' failed to comply with this order by the original deadline it was converted into an unless order. When on the last date for submission the Claimant's representatives submitted a single spreadsheet showing pay deducted and amounts received from the union for each claimant the Employment Judge struck out the Claimants' claims. The EAT found that the ET had not given due consideration to whether there has been material non-compliance, and the judge's "irritation" with the Claimants' solicitors had led to a punitive rather than facilitative approach.  In reaching its conclusion the EAT set out a summary of key points which should be taken into account when making an unless order, giving notice of non-compliance and in relation to relief from sanction which will serve as a useful reference points when considering applications for an unless order. (Minnoch and ors v Interserve FM Ltd).

Employment Tribunal cannot require employers to give a former employee access to their email inbox and calendar.  The Claimant worked for the Respondent as a Product Management Director from January 2013 until his dismissal on 13 January 2021, after which he brought claims of unfair dismissal, whistleblowing detriment and race and disability discrimination. Various case management orders were made in connection with the Claimant's case. The Claimant requested an order to allow him to have access to his emails and outlook calendar from 1 January 2015 until his dismissal to assist him with carrying out further and better particulars for his claim. The EAT did not agree with the Claimant's assertion that Rule 29 gave the Employment Tribunal powers to make such an order - giving access to property for the purpose of obtaining documents is distinct from ordering the disclosure of documents - and upheld the decision of the Employment Tribunal not to make the order. Whilst the outcome may be different for Claimant's who remain in employment, this decision acts as a welcome reminder that when employment has come to an end individuals will have to rely on standards disclosure obligations and the ability to apply for specific disclosure beyond that. (Khakimov v Nikko Asset Management Europe).

Lay member recused from hearing for association with union. The EAT has recused a second lay member from the appeal hearing in the case of Higgs v Farmor's School and anor (No.2) due to the danger of appearance of bias caused by the lay member's membership of the National Education Union (NEU). The underlying claim concerns the dismissal of the Claimant (a teacher) after she posted articles on her Facebook page which criticised the teaching of 'gender fluidity' in schools. Around the time of the events giving rise to the Claimant's claim the NEU took a strong public position in favour of making relationship and sex education mandatory in primary schools and encouraging teaching children about same-sex relationships and transgenderism. The EAT held that although the lay member had not expressed their own view on the subject matter, the association with the union could still give rise to the appearance of bias, applying the test of the fair-minded and informed observer. (Higgs v Farmor's School and The Archibshops' council of the Church of England).

Tribunal compensation limits increase from 6 April 2023. Increased compensation limits for employment tribunal claims come into force from 6 April 2023. £643 will be the new cap used for the calculation of a week's pay (increased from £571) and unfair dismissal compensatory awards will be capped at £105,707 (up from £93,878). The significant increases reflect the significant increase in the retail prices index of 12.6% from September 2021 to September 2022. Compensation limits are available here.

Whistleblowing

The government has launched a review of Great Britain's whistleblowing framework. On 27 March 2023 the Department of Business & Trade launched a review of the effectiveness of the current whistleblowing framework. The review will focus on how the whistleblowing framework facilitates disclosures and protects workers; the wider benefits and impacts of the whistleblowing framework; and what best practice looks like. The evidence gathering stage of the review is expected to conclude in autumn 2023.

Regulatory

HM Treasury launches call for evidence on SMCR. On 30 March 2023, the Treasury published a Call for Evidence, alongside a separate Discussion Paper by the PRA/FCA. The call for evidence is intended to be an information gathering exercise that seeks views on the key features of the SM&CR as expected following the announcement of the Edinburgh reforms in December 2022. The call for evidence will consider how effectively the regime is working considering its underlying objective of ensuring greater responsibility and accountability in the financial service sector. It is also expected to consider concerns with the operation of the regime with a view to considering future reforms.   The deadline for responses to the Treasury Call for Evidence is 29 May 2023, and for responses to the PRA/FCA Discussion paper, 1 June 2023. We will be submitting a response on behalf of our clients. See our Insight and set of questions asked in both papers.