Welcome to the September edition of Vista's InView Newsletter
September's edition of InView follows a summer of success at the Olympic and Paralympic games. Our state of sporting euphoria is thanks to some truly ground-breaking achievements by team GB as our place on the medal table climbed to an all-time high. Now, as the athletes take a well-earned break from the pressures of their careers, we can use their energy and commitment to drive our own organisations. Achieving gold-medal status in the employment law arena will depend on staying ahead of the game. As always, this month's newsletter will update you on all the key decision and changes that have taken place over the last few months.
This month has also seen the EAT decision for G4S Cash Solutions v Powell
. This case has hit the headlines as it suggests that a reasonable adjustment could be to increase an employee's pay.
The case is however fact specific and the EAT were quick to point out that this will not be an "everyday" event. The Claimant, Mr Powell, worked for G4S as an ATM engineer before his disability restricted him from carrying out this role. Mr Powell then took on the lesser role of the Key Runner, but the Company agreed to continue to pay him at the rate of pay from an ATM engineer which was around 10% higher than the Key Runner salary. After over a year of this arrangement, the Company decided that Mr Powell should no longer be paid a higher rate of pay but should receive the lesser salary that was commensurate to the Key Runner position. Mr Powell refused and was dismissed. The EAT held that, based on the specific facts of the case, the higher rate of pay amounted to a step which should have been taken under their obligation to make reasonable adjustments. In light of this decision, protecting an employee's pay should not be discounted. the EAT has perhaps been more explicit in this case than it has previously and confirmed that pay protection is not outside the realms of what may be reasonable. However, as in every case, the reasonableness of potential adjustments must be assessed on a case-by-case basis, taking account of the factors set out in the EHRC Code, including the costs of making the adjustment and the financial and other resources available to the employer.
The recent decision in the case of Royal Mail Group v Jhuti
has reinforced an employer’s obligations around dismissal.
In this case the Clamant, Mrs Jhuti, had made a protected disclosure to her team leader. However, the Claimant later retracted the allegation on the basis of the advice of the team leader. From the point of making her disclosure, Ms Jhuti was set a number of unachievable goals and was put under increased pressure to maintain performance at work. Ms Jhuti was eventually dismissed on the basis of poor performance. The EAT held that, whilst the dismissing officer had no knowledge of the protected disclosures, the Claimant’s team leader had manipulated the situation and lied to the dismissing officer. The Claimant was held to have been automatically unfairly dismissed.
The people involved in an investigation report
were brought under scrutiny in Dronsfield v University of Reading
. The Claimant was dismissed for gross misconduct after failing to disclose his sexual relationship with a student. However, the EAT were concerned with the investigation report, which had been significantly amended by HR. The EAT emphasised that HR/legal advice should only be about the law, procedure and process and not about accountability in the given case.
The European Court of Justice have this month decided that where an individual makes a job application purely so that they can make a discrimination claim
, they would not be entitled to Compensation. In the case of Kratzer v R & V Allgemeine Vericherung AG
the Claimant was not “seeking employment” but hoping to make a claim from the application process. The ECJ held that this was inconsistent with the Equal Treatment Directive and consequently discrimination protection could not apply.
Much anticipated further guidance has been published in relation to the Apprenticeship Levy due to take affect from April next year. Employers with a pay bill of more than 3% will be required to pay a levy of 0.5% to help fund apprenticeship programmes. The government have published further guidance which can be found at: www.gov.uk/government/collections/apprenticeship-changes
As always, should you have any questions about the cases and updates, please do not hesitate to contact a member of the Vista team who will be more than happy to help.
Reasonable adjustments and increases in pay - G4s Cash Solutions v Powell
Mr Powell worked in central London as an ATM Engineer. He was responsible for traveling across London to undertake the maintenance of the ATM’s owned by the Respondent. He had worked in this role for a number of years but developed a back condition which eventually prevented him from being able to carry out this job. In the summer of 2012, G4S created the new role of Key Runner. The Key Runner role involved assisting the engineers by delivering tools and parts or running other errands to assist the engineers in maintaining the ATM’s. Mr Powell began to work in the key runner role as his back condition did not stop him from carrying out this job. However, the Respondent agreed to continue to pay Mr Powell at his original rate of pay as an ATM engineer, this was about 10% higher than the salary of the Key Runner. Crucially, when agreeing the higher rate of pay with Mr Powell, the Respondent did not explain that this was a reasonable adjustment being made due to his back complaint and Mr Powell was led to believe that this would be a permanent arrangement.
Around a year later, G4S proposed organisational changes within the business and Mr Powell was told that his Key Runner role was not permanent and that this role was being removed. Mr Powell raised a grievance and stated that he had always been led to believe that the role was a permanent position in the Company. G4S responded to Mr Powell’s grievance by offering to make the role permanent on the condition that Mr Powell’s pay was lowered to the rate of pay for a Key Runner. G4S stated that the higher rate of pay that Mr Powell had been receiving was actually the rate of an ATM engineer and that, as the Key Runner role was not commensurate to the engineer role, Mr Powell could not continue to receive the higher rate of pay. Mr Powell refused to accept the reduction in pay and argued that his contract terms were such that he undertook the Key Runner role at the rate of pay of an engineer. When Mr Powell refused to accept the Company’s changes he was dismissed.
Mr Powell brought claims of unfair dismissal and disability discrimination to the Employment Tribunal. He claimed that his contract had been varied to include the Key Runner role at his original rate of pay. However, the tribunal found that there was no valid variation of contract and this was upheld by the EAT. This was due to the fact that, in the past, the Respondent had always been explicit when making changes to the Employee’s role and the Claimant had always agreed. Given that no such procedure had been followed in these circumstances, both the ET and the EAT were satisfied that variation of the contract had not taken place.
Mr Powell also claimed that G4S had failed to make reasonable adjustments by refusing to allow him to work permanently as a key runner at the salary rate of an engineer. The tribunal agreed and so did the EAT. They found that G4S had failed in its duty to make reasonable adjustments as continuing to pay Mr Powell at his higher rate of pay would, in the circumstances, have been considered a reasonable adjustment and one that should have been made. The EAT held that the provision, criterion or practice (the PCP) in this case was the requirement to be fit to carry out engineer role. Due to the Claimant’s disability, he was not able to meet this requirement. The options available were therefore for Mr Powell to leave his employment or to offer him in a role with lower a pay rate. Either of these options would have caused the Claimant a disadvantage. Therefore, in order for the Respondent to take steps to overcome this disadvantage, something would have to give.
The EAT held that pay protection is no more than another form of cost for an employer, analogous to the cost of providing extra training or support, and there is no reason in principle why one should be a "step" within section 20(3) of the Equality Act, but the other should not. The question will always be whether it is reasonable for the employer to have to take that step. In this case, the EAT found that it the adjustment was reasonable given that:
- G4S were creating a new role and therefore had the freedom to set the salary wherever they wanted
- Mr Powell had been receiving a higher rate of pay for over a year
- Mr Powell was led to believe that the arrangement would be permanent
- The actual pay increase between the key runner role and the engineer role was only small (£2,000)
- The Company had plenty of financial resources and were able to pay the higher rate as it was easily affordable
The Company's argument for not allowing the increased pay to stay was the reaction of other employers. The EAT disagreed on the basis that a)no other employee had complained and b) even if they had of complained, the Company could have responded by saying that it was simply fulfilling its duty to make a reasonable adjustment.
The EAT did state that it will not be an "everyday event" for an employer to provide long-term pay protection. However, going forward, cases can be envisaged where this may be a reasonable adjustment as part of a package to get an employee back to work or to keep an employee in work. The financial considerations will always have to be weighed in the balance by the tribunal. The EAT also noted that, in changed circumstances, an adjustment may eventually cease to be reasonable, for example if the need for a job were to disappear or the economic circumstances of the business changed.
Dismissal where true facts not known - Royal Mail Group v Jhuti
It is automatically unfair to dismiss an employee for making a protected disclosure (known as a ‘whistleblowing’ dismissal). This case looked at the knowledge element of that. In particular, what if the person who makes the decision to dismiss does not know all the facts about the disclosure or about the bigger picture?
Ms Jhuti had been working for Royal Mail for a year when she was dismissed. In the lead-up to that, she had suspected that a colleague had breached rules. But when she had given details of the suspected breach to her team leader, he had advised her to retract the allegation. She did that, fearing that she would otherwise lose her job.
From that point on, Ms Jhuti came under increased pressure at work. Unachievable goals were set, for example. She complained of harassment and bullying and went on sick leave.
Another manager took control of her case, but not her grievance. That manager – the dismissing officer - wasn’t given all the information about what had gone on; in particular, she was not shown any of the emails relating to the disclosures Ms Jhuti had made. The manager accepted the team leader’s explanation that Ms Jhuti had made an allegation of misconduct but had retracted it because she had misunderstood the situation.
The tribunal held that, although Ms Jhuti had made protected disclosures and had suffered detriments, she had not been automatically unfairly dismissed. The dismissing officer was not motivated by the protected disclosures; they weren’t the reason for the dismissal. Ms Jhuti was genuinely believed to be a poor performer.
That was overturned on appeal. The Employment Appeal Tribunal held that the team leader’s motivation was relevant. It was significant, for example, that he was in a managerial position responsible for Ms Jhuti. He had realised that the protected disclosures made to him were serious and significant, and had lied to the dismissing officer about them. It was also relevant that he had set up a ‘paper trail which set her to fail’.
This should sound warning bells for employers. It won’t be enough to plead a dismissing officer’s ignorance of the facts. If their decision was manipulated by, as here, a manager who knew the true situation, employer liability will surely follow.
A different take on the headscarf issue - Bougnaoui v Micropole SA
In July we reported the Advocate General’s opinion in Achbita v G4S Secure Solutions NV. It was not direct discrimination for an employer to ban a Muslim employee from wearing a headscarf at work if that ban was not based on stereotypes or prejudice against a particular religion, or religions, or against religious beliefs in general. Any indirect discrimination may be justified by the legitimate need to enforce religious and ideological neutrality.
This month brings with it a new case and a new Advocate General opinion that says something different. The French case of Bougnaoui v Micropole SA involved a Muslim woman who refused to remove her headscarf, following a customer complaint about her wearing it. She was dismissed.
She lost her claim for religious discrimination, but her appeal has led her to the European Court of Justice (ECJ). So far, we have the Advocate General’s opinion (not a binding judgment) that there was direct discrimination. Ms Bougnaoui was dismissed because she had manifested her belief by refusing to remove her headscarf; a colleague who had not chosen to manifest their religion would not have been dismissed. It was less favourable treatment on religious grounds. And that direct discrimination could not be excused as a genuine occupational requirement - the headscarf did not hinder her ability to do her job. Nor could financial loss justify the discrimination.
What about indirect discrimination? The Advocate General thought it unlikely that the employer’s ban would be proportionate.
We shall have to wait and see what becomes of this conflict of Attorney General opinions. The formal Court decision in both cases is expected toward the end of this year.
The role of others in an investigation report - Dronsfield v University of Reading
Doctor Dronsfield was dismissed by the University for failing to disclose his sexual relationship with a student. His unfair dismissal case brought into question the involvement of HR and legal teams in the disciplinary process. In particular, what was the effect of the investigation report having been altered after matters were discussed with them?
A case called Ramphal v Department for Transport
had considered a similar point and emphasised that, ultimately, it’s for the disciplining officer to make their own decision. The Employment Appeal Tribunal (EAT) echoed that in this case. The final version of the investigation report contained significant amendments – notably, opinions favourable to Dr Dronsfield were removed following discussions with HR and in-house legal teams. Although there was no reason to doubt that that final version represented the disciplining officer’s genuine conclusions after receiving honest and unbiased advice, the simple removal of those opinions was problematic.
The tribunal ought to have asked whether or not the report included all conclusions reached as a result of the investigation and, if not, why not. It is now for a new tribunal to decide the fairness or otherwise of the dismissal.
Legal and HR advice is routinely sought in disciplinary situations, and rightly so. But this case shows that employers and their advisors must tread carefully in supporting the investigating officer, whose decision and reasoning must stand up to scrutiny.
The EAT made some important observations:
- As set out in the Ramphal case, HR advice should only be about the law, procedure and process. It shouldn’t stray into questions of culpability or of appropriate sanctions.
- It would have been good practice for the person with whom Dr Dronsfield had had the sexual relationship to be contacted as part of the investigation and asked if they wished to contribute to it.
Sexual harassment still an issue
A report by the TUC, in collaboration with the Everyday Sexism project, has revealed that more than half of women surveyed said that they had experienced sexual harassment at work.
The study also showed that in nearly one in five cases, the harassment was said to have been carried out by the woman’s line manager or someone with direct authority over them. Worryingly for businesses, of those who said they had been sexually harassed, four out of five did not tell their employer. Reasons for this included:
- they thought it would impact negatively on their relationships at work or on their career prospects;
- they were too embarrassed to talk about it;
- they felt they wouldn’t be believed or taken seriously.
The report highlights the various forms that this sort of harassment may take, from sexual jokes, to comments about body or clothes, to unwanted touching and sexual advances. And it can extend, for example, to overhearing comments of a sexual nature being made about colleagues.
For employers, the message is to be alert to the signs of harassment. Prevention being better than cure, there is no substitute for educating staff and having a robust policy on a zero-tolerance approach to harassment in all its forms.
The report can be found at: https://www.tuc.org.uk/sites/default/files/SexualHarassmentreport2016.pdf
The job applicant who did not want the job - Kratzer v R + V Allgemeine Versicherung AG
Quite an unusual case. Mr Kratzer was a job applicant who, as it turned out, appeared to have only applied for the job in order to gain job applicant status and, therefore, eligibility to bring a claim for compensation.
After being turned down, he demanded €14,000 for age discrimination. The employer invited Mr Kratzer to an interview, saying that the rejection had been wrongly triggered by its automated system. Mr Kratzer did not take up the offer, instead pursuing his claim and adding a sex discrimination element.
The question referred to the European Court of Justice (ECJ) by the German court was whether a person in that position is protected by discrimination legislation and, if so, is it an abuse of rights?
The ECJ held that, no, where a person makes a job application purely to entitle them to claim discrimination, they are not protected by discrimination law and they would not be entitled to compensation. That’s because:
- the Equal Treatment Directive protects people who are ‘seeking employment’;
- someone in that position would not be a ‘victim’ of discrimination, nor could they be said to have been injured, or to have sustained damage or loss;
- people must not use EU law for abusive or fraudulent ends.
A rare scenario, no doubt, and in all but the most blatant of situations it would take a brave employer to take issue with the genuineness of a job application. Useful to know about, nonetheless.
New levy on apprenticeships
On 6 April 2017, an apprenticeship levy will come into effect. If you are an employer operating in the UK with an annual pay bill of more than £3 million, you will be required to invest in apprenticeships.
The levy will be charged at 0.5% of your annual pay bill. And there’s a levy allowance of £15,000 to take into account, which is why only those employers with a pay bill in excess of £3 million (less than 2% of all UK employers, according to the Government) will have to pay up. This is a new way of helping to fund apprenticeships.
The government has published a guide to all things apprenticeship, including the levy. You can find it here:
Gender pay gap still hitting hard
The Institute for Fiscal Studies (IFS) has found that women’s pay is, on average, 18% less than men’s – and it gets worse after childbirth.
Fast-forward 12 years from the date a woman has her first child and her hourly wages will be (on average) a third less than a man’s. The gradual widening of the pay gap post-children may be related to the accumulation of labour market experience, the report says. By the time the first child is 20, women have been in paid work for, on average, four years fewer than men and they have spent nine years less than men in paid work of 20 hours per week or more.
When women return to work after taking time out, they get on average 2% lower hourly wages for each year they have been away. It’s a different picture for the lowest-educated women, however. Their wage progression is generally less and so they don’t suffer a similar percentage drop, and they have fewer skills to depreciate. In fact, it is only among the lowest-educated that the gender wage gap has continued to fall over the last 20 years. For graduates and women with A-levels, the gap has not shrunk.
We’ll soon see the introduction of gender pay gap reporting. It’s an obligation on large employers (those with 250 or more employees) to publish annual information about the amount they pay their employees, from April 2017. Whether you are caught by that reporting requirement or not, we’d recommend a look over the IFS’s report: