As we start 2023, we look back on a selection of employment law cases from the last 12 months which have brought to light key employment issues.
1. Smith v Pimlico Plumbers
In his previous long-running court case, Mr Smith had successfully established that he had worker rights despite being engaged as a ‘self-employed’ plumber. He subsequently claimed he was due accrued holiday pay stretching back over six years even though he had taken time off and had never brought claims for non-payment. Was his claim out of time?
No. The Court of Appeal held that he could claim the backdated holiday pay. His claim was not time-barred as where there had been no facility provided to take paid leave the time limits were not triggered. Instead, the right to the holiday pay accrued and carried over from year to year until the contract came to an end.
The decision should serve as a warning to any business which regularly engages ‘self-employed’ contractors that there is a risk of substantial claims for backdated statutory holiday pay. Steps should be taken to minimise that risk by assessing whether contractors could qualify as workers for example where they may not provide a substitute.
2. Finn v The British Bung Manufacturing Company Ltd and Mr J King
When Mr Finn had been shouted at and threatened by a colleague who had called him a “bald [expletive]” he brought claims in the Employment Tribunal that included unlawful harassment on the grounds of sex. Could his claim succeed?
Yes. It was held that there was a connection between the word “bald” on the one hand and the protected characteristic of sex on the other which was sufficient to uphold a claim of unlawful harassment. The remark was intended to be offensive and met all the statutory requirements of being conduct that was unwanted, a violation of his dignity, and intimidating.
This decision highlights the need to educate employees about what is acceptable use of language in the workplace.
3. Burke v Turning Point
Mr Burke had been absent from work with Long Covid for nine months when he was dismissed. He brought a claim of disability discrimination. Could Long Covid amount to a disability?
Yes. An Employment Tribunal held that his condition had a substantial adverse effect on his ability to carry out normal day-to-day activities and it could well last for 12 months or more. This met the definition of disability under the Equality Act 2010.
This decision confirms that those with Long Covid could be classed as disabled. Each case will need to be considered on its own facts taking into account any relevant medical evidence to assess its impact on the individual.
4. Forstater v CGD Europe and others
Ms Forstater had posted comments on social media relating to her belief that a person’s sex is a material reality and cannot be changed. These were reported to her employer as offensive and her contract was not renewed. Could this amount to discrimination on the grounds of her beliefs?
Yes. Her posts were statements of her gender-critical beliefs which were protected under the Equality Act 2010.
The decision highlights that unfavourable treatment because a person holds gender-critical beliefs can amount to direct discrimination even if those beliefs might be offensive to some. However, it will be important to make clear to employees that those manifesting beliefs in a manner that is unreasonable and offensive may still result in action being taken against them as that will not be protected.
5. Brazel v Harpur Trust
Mrs Brazel complained that the 12.07% allowance she received for holiday pay was unlawful given that she was a term-time worker. Should her holiday pay have been based on her average pay before her holiday was taken?
Yes. It was held that the practice of paying a 12.07% allowance did not accurately reflect the holiday pay entitlement of a worker who was permanently employed but worked only part of the year. The 12.07% was based on a presumption the work would be carried out throughout the year. A worker had a statutory entitlement to 5.6 weeks’ paid holiday leave per year at their normal pay rate.
The decision highlights that the principle of applying a pro-rata reduction to the accrual of holiday entitlement will only apply in respect of the hours worked over a week not the weeks worked over a year. The practical impact is that paying an additional 12.07% wages may lead to an underpayment for part-year workers.
6. Kong v Gulf International Bank (UK) Ltd
Ms Kong had raised concerns relating to a potential regulatory breach regarding the terms on which the bank was offering its investment services. She subsequently questioned the professional awareness of the Head of Legal for not spotting this issue sooner. The offensive remarks to the Head of Legal led to Ms Kong being dismissed. She claimed that her dismissal was automatically unfair as it was due to her having made a public interest disclosure. Was her dismissal automatically unfair?
No. The decision to dismiss Ms Kong was because of her conduct towards her colleague in that she had been found to have unfairly questioned a colleague’s professional competence. This was distinct and properly separable from the act of making a protected disclosure.
The decision shows that the conduct of an employee who has made a protected disclosure may be regarded as separate to the protected disclosure itself. The real reason for the decision to dismiss must be identified and if that is not the disclosure the dismissal will not be automatically unfair.
7. Richards v 1) Waterfield Homes Ltd 2) Unity Build and Repairs Ltd
Mr Richards, worked under the Construction Industry Scheme (CIS) as a self-employed contractor. He had been working exclusively for the same company since 2010 working regular hours from Monday to Friday. In 2018 he was told that the contractors were to be given employment contracts to regularise the working relationship. Could Mr Richards claim that his employee status should be recognised as applying before the new contracts were introduced?
Yes. While HMRC had accepted that under the CIS he was self-employed for tax purposes, it was only one of the factors that had to be considered to assess his employment status.
The decision shows that while the CIS is based on self-employment it will not be sufficient to prevent someone having employee status where there are other factors supporting such a conclusion. The fact that in July new guidance was issued to help identify employment status may help but there will be many situations like this where the individual’s status for tax purposes may be looked at differently for employment purposes.
8. R v Andrewes
Mr Andrewes had made several false claims on his CV, including having degrees and post graduate qualifications and having been previously appointed in very senior roles in the public and private sector. As a result, he was able to obtain roles as a Chief Executive Officer, Non-Executive Director and a Chair of a Health Trust. Over a 10-year period he received earnings based on his “series of staggering lies”. When discovered he was dismissed and prosecuted. Could he also be ordered to repay the wages he had received?
Yes. A confiscation order was made in respect of the earnings he had received over the 10-year period subject to credit being given for the value of the work he had carried out over that period of time.
The decision highlights that obtaining work through a fraudulent CV is a crime and that wages received as a result are proceeds of that crime. In addition to the sentence imposed for the crime the guilty party may be ordered to repay the earnings received so there would be no ‘profit’ from the lies.
9. Ponticelli UK Ltd v Mr A Gallagher
Mr Gallagher’s new employer had inherited the rights and liabilities of him and other staff under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). His request that he be given access to a similar Share Incentive Plan as prior to the transfer was rejected as it was voluntary and did not arise either “under” or “in connection with” the contract of employment. Was Mr Gallagher entitled to have an equivalent scheme after his employment transferred?
Yes. It was held that Mr Gallagher was entitled, after the transfer, to participate in a scheme substantially equivalent to that operated by the transferor. While the obligations in question did not arise “under” the contract, they plainly arose “in connection with” the contract.
The decision highlights the importance of understanding what terms and conditions are in place prior to a TUPE transfer. Even where benefits are not contained in the contract of employment they may still need to be provided post-transfer in a similar manner.
10. Mogane v Bradford Teaching Hospitals NHS Foundation Trust and another
Mrs Mogane was one of two nurses on fixed-term contracts. When a redundancy situation arose, she was selected as her contract was ending first. Had the Trust followed a fair redundancy process?
No. Mrs Mogane had been unfairly dismissed as the Trust had failed to carry out any meaningful consultation. The consultation should have taken place before deciding to dismiss the employee whose contract was terminating first.
The decision shows that where there is no consultation, and the one criterion applied necessarily leads to one person being selected, the redundancy process will likely be unfair. Consultation at an early stage is the key message.