Is Work-Related Stress a Disability?
Stress is one of the most common cause of absence for workers and stress-related employee illness is a very significant issue for many employers. But does “stress” count as a disability for the purposes of the discrimination legislation?
As the recent case of Herry v Dudley Metropolitan Borough Council illustrated, the answer is “not necessarily”.
Mr Herry brought a large number of allegations of race and disability discrimination against his employer. He claimed two disabilities: dyslexia and stress – conditions that many employers will recognise as being both common and difficult to assess in practice. The employment tribunal dismissed the claims and imposed a heavy costs award against Mr Herry as he had repeatedly been warned that his claim had no reasonable prospect of success. The disability discrimination claims were rejected as he had failed to show that either his dyslexia or his stress had “a substantial adverse effect on his ability to carry out day-to-day activities” – this is one of the key requirements for a condition to qualify as a disability under the relevant legislation.
Mr Herry appealed – unsuccessfully – to the Employment Appeal Tribunal (EAT). The EAT noted that the Mr Herry’s stress was “very largely the result of unhappiness about what he perceived to be unfair treatment of him” rather than an illness that would qualify as a disability. It also said that “unhappiness with a decision or a colleague, or a tendency to nurse grievances or a refusal to compromise, are not of themselves mental impairments”.
Every case will turn on its facts, and with a few exceptions such as cancer (where the Equality Act deems the condition to be a disability) it is not a case of whether someone has a particular condition, but the effect that the condition has on their ability to participate in professional life.
Nonetheless, this case should give some real comfort to employers who recognise the situation where an unhappy employee incurs a lengthy absence, or brings internal procedures to a halt, citing stress as the underlying reason. As the EAT found, the fact that an employee had been certified unfit for work by reason of stress for a long period does not necessarily mean he is “disabled”. The focus should always be on the real-life impact of the individual’s condition. Of course, even in the absence of disability discrimination claims a stressed employee can be difficult to deal with from an HR perspective, but at least the risk of disability discrimination claims is reduced.
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Rocky Times Ahead For The Gig Economy?
There has been a lot of attention in the media recently about the so-called gig economy, that is, the method of working in which temporary positions are common and organisations contract with independent workers for short-term engagements, as opposed to the traditional employment model. Two recent news items have highlighted the considerable unrest and legal uncertainty in this sector.
App-based taxi provider Uber hit the headlines at the end of October when an employment tribunal held that two of its drivers were not self-employed contractors as Uber claimed, but were ‘workers’. This meant they are entitled to the national minimum wage, paid annual leave and whistleblower protection. Uber’s arguments that it is merely a technology platform as opposed to a transport provider and that its drivers are self-employed contractors offering their services to passengers via the Uber app were rejected comprehensively.
The tribunal was clearly unimpressed with Uber, saying that it resorts in its documentation to ‘fictions’, such as fake invoices that it generates on behalf of its drivers but that are never sent to passengers, and ‘twisted language’ in its contracts with drivers. The tribunal considered that Uber’s case – that the driver enters into a contract with each passenger directly to provide the transportation service – did not accord with reality. Uber exerts a great deal of control over its drivers, which helped tip the balance towards worker status. Uber is appealing, and strictly the judgment applies only to the two Claimants, although it may encourage some of its 40,000 other drivers to make similar claims, with inevitable cost to Uber.
More recently, it was also announced that the Independent Workers Union of Great Britain has written to Deliveroo, the app-based takeaway delivery service with over 3,000 people working for it, asking for recognition in respect of a number of its riders working in a section of London. Whilst there is no suggestion that Deliveroo’s arrangements are anything like as enigmatic as Uber’s, they do treat individual delivery riders as independent contractors, rather than workers.
The novel aspect here is that a union can only be recognised in relation to a group of people if they are workers or employees. If Deliveroo declines to recognise the union, the application will (the union says) be taken to the Central Arbitration Committee (CAC), the body which is empowered to decide these matters. Since the union could not be recognised if the riders are independent contractors (and not workers or employees) the CAC would have to decide what category the riders fall into – potentially bringing a large number of Deliveroo riders into the protection of worker status in one fell swoop – arguably a more far-reaching tactic than in the Uber case, where the judgment strictly applied only to the two drivers who brought the claims.
Since workers are entitled to the minimum wage and holiday pay, this could have a significant impact on Deliveroo’s business model, and other companies who utilise this labour model will be very concerned to see how things progress.
The services offered by the likes of Uber and Deliveroo are very popular, in part because of their convenience – which comes from technological innovation – and also because they are inexpensive, which is in part because of the costs-savings involved in utilising the gig economy model, which is now under threat. Whether customers would pay the extra in order to pay for the employment rights of the ‘workers’ is yet to be seen. It is unlikely that we have seen the end of such activism in this sector.
MH Contact Bob Cordran
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Welcome to the latest MH employment bulletin. In a change to the proceedings, this week we focus on one case, dealing with the vexed issue of holiday pay…
Holiday Pay Must Include Commission
Those of you who keep an eye on developments in employment law will be all too aware of the long-running saga of how to calculate holiday pay.
The Court of Appeal’s decision in British Gas Trading Ltd v Lock and anor gives some clarity, but it is not welcome news for employers.
Under the Working Time Regulations 1998 (WTR), where an employee has “normal working hours” and their remuneration varies with the amount of work done, holiday pay is calculated using an average of remuneration over the previous 12 weeks. Previously it was understood that commission is not included in this calculation, since it does not vary with the amount of work done, but rather the success of the work.
This interpretation has now been found to be inconsistent with the EU Working Time Directive, with the European Court of Justice saying the holiday pay should reflect “normal remuneration” which would include commission.
Mr Lock was an energy trader for whom commission represented a very substantial part of his earnings – about 60% of his basic pay. When he went took holiday, he continued to receive his basic pay and commission based on his earlier sales. However, since he had not been generating sales while on holiday, his commission payments were lower during the period that following the holiday. So, should his holiday pay reflect that he usually earns commission?
Eventually, after going up to the European Court of Justice and back, the Court of Appeal has said that yes it should. In short, when calculating the basic four weeks’ annual leave under the WTR, results-based commission payments can and should be included in the calculation.
The manner of the decision is controversial, since it involved not so much “interpreting” the UK legislation as effectively rewriting it – inserting an entirely new provision so as to make the WTR consistent with the Working Time Directive.
The outcome may seem sensible at first glance – so that holiday pay reflects “normal” pay. However, it does lead to the odd concept of receiving commission in respect of sales that the employee did not actually complete (and indeed, did not occur) and could create significant extra cost for the employer.
The Court of Appeal did leave some other loose ends – for example, it remains unclear whether this would apply to, say, an employee who receives a results-based annual bonus, or a “worker” who receives commission only when a particular level of turnover or profit is achieved. The uncertainty in this area is therefore likely to continue for some time. For now, though, if you have workers who receive commission, you should be revisiting your holiday pay policy to check that it is compliant.
If you have any concerns regarding holiday pay, do contact us.
MH Contact Bob Cordan
Well, that was an uneventful summer wasn’t it? We’re back for another round-up of employment cases and I promise not to mention Brexit at all (apart from then).
There has been a rash of discrimination cases recently so this month’s bulletin is something of a discrimination special. If you like this (albeit accidental) themed approach, let us know, and we might make it a regular thing…
Employers are required by the Equality Act 2010 to make “reasonable adjustments” to assist disabled employees in certain circumstances. One common reasonable adjustment is the provision of alternative work. The disabled employee may no longer be able to do ‘job A’, but if he or she is capable of doing ‘job B’ then offering that alternative work might well be a reasonable adjustment. But what if ‘job B’ is paid at a lower rate? Does the employer have to continue paying the higher salary?
In G4S Cash Solutions (UK) Ltd v Powell the employee was employed as an engineer fitting and maintaining cash machines. He developed a chronic back condition that meant that he was no longer able to perform that work and so an alternative role was created for him as a ‘key runner’. This involved driving important components (and keys) to engineers working on various sites and was much less strenuous.
The employer gave the impression that this role would be long-term and at first the employee’s pay continued at the same rate as before. After some months however the employer decided that it could only continue to provide the role on a reduced salary (the work did not involve any actual engineering). A ten per cent pay cut was proposed and when the employee refused to accept this he was eventually dismissed. The Tribunal found that this amounted to – among other things – a failure to make reasonable adjustments.
A key issue on appeal was whether a failure to maintain the pay of an employee when he or she is transferred to alternative work can be a failure to make reasonable adjustments. The employer argued that the employer should be able to pay the employee the proper rate for the job actually done by the employee. However the Employment Appeal Tribunal held that there was nothing in principle to prevent a Tribunal from finding that the duty to make reasonable adjustments included a duty to maintain the pay of an employee even if he or she is transferred to what would otherwise be lower paid work. It has, after all, always been accepted that the duty to make reasonable adjustments may involve some cost to the employer. Ultimately, it came down to what it was reasonable in the circumstances to expect the employer to do. In this case the Tribunal had been entitled to find that the employer could reasonably be expected to have maintained the employee’s original salary.
This is one of those decisions that is much less earth-shattering than it appears at first glance. It is not saying that employers must maintain pay but that doing so can be a reasonable adjustment. Be prepared for employees to try to insist on this, though.
One of the greatest obstacles facing anyone claiming discrimination is that very few employers are prepared to state their prejudices openly – making direct evidence of discrimination very difficult to come by. The Equality Act attempts to redress the balance by switching the burden of proof onto the employer if the employee can put forward enough evidence to support the inference that discrimination may have occurred. This means that an employer will sometimes have to prove that it is innocent of discrimination – provided that there is enough evidence to suggest that it might be guilty.
A common issue is how much evidence is needed to switch the burden of proof in this way. In Fennel v Foot Anstey LLP Mr Fennell was a partner in a solicitors’ firm who argued that he was the victim of age discrimination when he was not offered a new partnership following a restructuring. There had been concerns expressed about his performance in the past, but he argued that what really held him back was the fact that he was over 45.
He pointed out that of the candidates for partnership, all but one of those who were under 45 had been made an offer. On the other hand, only one of those who was over 45 had been successful. The tribunal accepted that statistically the prospect of being offered a partnership diminished with the age of the candidate but went on to hold that this was not sufficient evidence to place the burden of proof on the employer. The issue was why Mr Fennell had not been offered a partnership, and he was in a different position from the other candidates in part because of the concerns expressed about his performance in the past. The tribunal accepted that the reason Mr Fennell was not offered the partnership was based on the firm’s concern about his ability to generate business.
Mr Fennell argued that the tribunal had made the mistake of evaluating the whole of the evidence and deciding what the reason for the employer’s decision was instead of considering whether there was enough evidence to place the burden of proof on the employer. The Employment Appeal Tribunal disagreed. The tribunal had simply decided that the statistical evidence was not enough to shift the burden of proof to the employer and it was entitled to reach that conclusion. The burden of proof could only shift if there was some direct evidence of discrimination – and the fact that older candidates were less likely to be offered a partnership was insufficient given the lack of any evidence that age was one of the factors taken into account by the employer.
Claims for indirect discrimination often involve a request for flexible working to allow the employee to balance work and family life. Statistically, women are overwhelmingly more likely to want to adjust their working hours in order to accommodate their caring responsibilities than men, so any refusal of a flexible working request opens up a potential indirect discrimination claim. In technical terms the employer is applying a ‘provision criterion or practice’, which places women at a particular disadvantage. What the tribunal has to decide is whether the employer’s refusal of the request is a ‘proportionate means of achieving a legitimate aim’. In many workplaces employers themselves see the benefit of flexible working arrangements. But there remain many roles where accommodating the needs of individual employees can be difficult.
In XC Trains v CD the employee was one of a very small number of female train drivers. She was also a single parent with two young children. The normal working pattern of a train driver can be very complicated and includes work both at the weekends and late into the evening. The employee sought on numerous occasions to agree a working pattern that avoided such unsocial hours and the employer was in principle willing to accommodate such requests. However in order to do so it had to obtain the agreement of the other train drivers as part of the local bargaining framework. The problem was that the other drivers would have had to work more unsocial hours as a result of the employee working less. No permanent agreement could be reached at the employee claimed indirect discrimination.
The tribunal upheld the claim. It noted that the overwhelming majority of train drivers were men and that the need to obtain the agreement of the predominantly male workforce to allow a female employee to work flexibly had the effect of maintaining that imbalance.
On appeal, the Employment Appeal Tribunal held that this was an irrelevant consideration. The tribunal had to balance the needs of the employer against the needs of the employee but seemed not to have done so. Instead it had given priority to the social policy objective of ending gender segregation. Further, it was legitimate for the employer not only to seek to run an effective railway service, but also to preserve good employee relations. The impact of flexible working request on other employees was a legitimate matter for the employer to take into account. The case was sent back to a fresh tribunal for reconsideration. This does raise some tricky employee relations questions, as one of the factors was the other (male) employees’ objections.
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The shockwaves of the decision taken on 23 June will be felt for years, if not decades, to come. We already have a new Prime Minister and a –ahem- controversial Foreign Secretary, and Brexit has the potential to transform our economic and legal landscape in profound ways. But will employment law be affected by all this?
As with so much at the moment, it is not certain, and much depends on the sort of relationship with the EU that the UK ends up enjoying. If, as some advocate, the UK becomes a member of the European Free Trade Association and remains within the single market as part of the European Economic Area (like Norway, Iceland and Lichtenstein) then it is possible that very little will change. EFTA countries are automatically bound by the Directives passed by the EU relating to employment law and are equally subject to decisions made by the European Court of Justice – albeit through their own EFTA Court.
Even if EFTA turns out not to be a tenable option, it is likely that any agreement that involves the UK enjoying any of the benefits of the Single Market will come with some employment law strings attached. By way of analogy, Switzerland has its own deal but compliance with EU employment law is an inherent part of that.
Still, the process of leaving the EU is going to take two years – and possibly considerably longer. In the meantime, the UK remains a full member of the EU – and the UK courts will continue to apply EU law in the same way. It is possible that in the long term a post-Brexit Government might alter certain rights. These could credibly include imposing a cap on compensation for discrimination claims and abolishing the Agency Workers Regulations – two relatively unpopular laws. Some commentators are predicting wide-ranging reforms to TUPE and the Working Time Regulations, but despite what some areas of the press might have you believe, businesses are not generally opposed to these laws overall. That said, I’m sure most of us would welcome a chance to clarify the more abstruse bits of TUPE and the chance to make some sense of the law on holiday pay would be warmly welcomed in most quarters. However, such changes, if they ever happen, are years down the line, so don’t hold your breath….
The Supreme Court has taken a restrictive view of what constitutes direct discrimination in two disturbing cases involving the abuse and exploitation of migrant domestic workers.
In Onu v Akwiwu and Taiwo v Oaigbe the two claimants were each employed as domestic servants. They were both Nigerian and were recruited abroad to work for Nigerian families who then moved to the UK. They entered the UK on domestic worker visas – the terms of which make it difficult for employees to leave the family that employs them without losing the right to remain in the UK. In both cases the employing family exploited the vulnerability of the employees in truly shocking ways. They were made to work oppressively long hours, had serious restrictions imposed on their personal freedom and subjected to verbal and physical abuse.
They eventually escaped and brought separate employment tribunal claims under a number of different headings – including race discrimination. The common thread in each discrimination claim was that the mistreatment of the employee was the consequence of her vulnerable migrant worker status. The employers would not have treated an employee who was not subject to this sort of immigration control in such an unpleasant way. However the two separate employment tribunals reached different conclusions as to whether this amounted to direct discrimination. In Ms Taiwo’s case the tribunal dismissed the direct discrimination claim, but the Tribunal in Ms Owu’s case found that direct race discrimination had been established.
The cases reached the Supreme Court where it was argued that the immigration status of the two employees was a ‘function’ of their nationality so that less favourable treatment on the basis of it was less favourable treatment because of race.
The Supreme Court rejected this. Parliament could have chosen to include immigration status as a protected characteristic but had not done so. It was true that non-British nationals coming to the UK were subject to immigration control, but there was a wide range of potential immigration statuses – immigration on a domestic worker visa was just one. There were many non-British nationals who did not share the vulnerability associated with such visas – including many Nigerians. The reason for the less favourable treatment was not therefore race, but the particular vulnerability of the employees which arose from the specific nature of the visas they had been granted.
The Supreme Court ended by urging Parliament to improve the remedies available under the Modern Slavery Act 2015 so that victims of abuse such as Ms Taiwo and Ms Onu could claim appropriate compensation in the Employment Tribunal.
The award for the most optimistic appeal of the year so far must surely go to Asda Stores Ltd who are facing equal pay claims brought by some 7,000 store workers. A mainly female group of employees are claiming that they are doing the same job as (mainly male) warehouse workers and should be entitled to equal pay with them. It is believed that this is the biggest – and potentially most expensive – equal pay claim ever brought against a private sector employer. At a preliminary hearing Asda asked the Employment Tribunal to delay the case, essentially forcing the workers to bring their case in the High Court instead.
Equal Pay has always had what is known as ‘dual jurisdiction’ with claimants having the choice to bring proceedings in either the Employment Tribunal or the civil courts. In practice, however, they always choose the ET unless they are outside the strict six month time limit, in which case a civil court claim is the only option. Indeed, the Equality Act provides that the court can transfer the proceedings to the ET if that is ‘more convenient’ – and it is almost universally assumed that it would be.
Asda, however, believed that the case it was facing was so complex and important that it should be heard by the High Court rather than the Employment Tribunal. It accepted that the Tribunal had no power to actually transfer the case to the High Court but argued that if the cases were ‘stayed’ the claimants would be forced to take out High Court proceedings. The Tribunal refused to stay the claims and Asda appealed to the EAT, which refused to hear the case because the appeal was clearly hopeless. Asda appealed that decision to the Court of Appeal.
In Asda Stores Ltd v Brierley and others, their appeal was dismissed. The Employment Tribunal had no power to stay proceedings in order to force the claimant to seek a remedy elsewhere. Even if such a power did exist the Tribunal had been entitled to refuse to exercise it in this case. Asda had argued that the case was a highly complex one with many different roles being compared and a number of complex legal issues to be resolved. Asda argued that only a High Court judge would have the expertise and experience to deal with such weighty matters but the Court disagreed saying that there were many experienced Tribunal judges who were well up to the task. In fact, Tribunal judges are surely more likely to have the relevant experience, since that is where nearly all equal pay claims are heard.
It is fair to say that it would have been amazing if the appeal had succeeded, and it perhaps says a lot about Asda’s approach to these claims that it was willing to push such an unlikely point so far.
Now for some welcome good news for employers in connection with dismissal procedures. The Acas Code of Practice on disciplinary and grievance procedures is important not just for the guidance that it gives employers in how to follow a fair procedure when dismissing an employee, but also because an unreasonable failure to follow its provisions can result in an ‘uplift’ of compensation of up to 25 per cent.
In Homes v Qinetic, Mr Holmes was dismissed from his role as security guard on the grounds that he was no longer capable of performing the role. He had had a number of extensive absences caused by chronic pain to his back, hips and legs but the employer had failed to obtain an up-to-date report from occupational health before deciding to dismiss. As a result the employer failed to take into account a recent operation he had had which had substantially improved his condition and which meant that future absences were less likely. As a result the employer conceded that the dismissal was unfair – the only dispute was the amount of compensation to be awarded.
One key issue was whether compensation should be increased to reflect the fact that the employer did not comply with the Acas Code of Practice in dismissing Mr Homes. The Tribunal held that the Code did not apply because it dealt only with dismissals based on misconduct or poor performance. Poor performance was limited to a culpable failure to perform duties adequately rather than poor performance arising from sickness absence.
The EAT dismissed Mr Homes’s appeal. While the Code did cover cases of poor performance, it did so only where they could be seen as ‘disciplinary situations’. That required an allegation of some sort of culpable conduct on the part of the employee. Poor performance could involve culpable conduct but where it was the result of sickness or injury it was inappropriate for the employer to treat it as a disciplinary matter. The Code of Practice did not therefore apply and the tribunal was right not to increase Mr Homes’s compensation to reflect the employer’s failure to follow it.
A difficult issue for many employers is when it may be appropriate to conduct a disciplinary hearing in the employee’s absence. On the one hand it is important to give the employee a proper opportunity to be heard, but on the other, allowing a hearing to be repeatedly postponed can make the process both expensive and time consuming – not to mention frustrating! It can also cause a disruption and stress for the other employees affected by the process.
In Nabili v The Norfolk Community Health and Care NHS Trust, Dr Nabili was employed by the Trust as a paediatrician. She was suspended in October 2009 over concerns about her performance and patient safety. In July 2010, however, it came to the Trust’s attention that she had been performing work for another hospital while she was suspended. In an investigatory meeting she admitted to doing this, though she argued that she was not aware that she was doing anything wrong. In April 2011 she was invited to a disciplinary hearing to take place on 19 April. However, Dr Nabili had by that time already booked flights to visit her sick mother in Iran at that time and asked for a postponement of the hearing. After initially agreeing to a postponement the employer changed its mind and the hearing went ahead in Dr Nabili’s absence. She was invited to make written submissions or to authorise a representative to attend in her place but did not do so. At the conclusion of the hearing she was dismissed for gross misconduct.
The Tribunal held that the dismissal was fair. Although the employee had not been given a fair disciplinary hearing, the Tribunal held that this was not enough to render the dismissal unfair given that Dr Nabili had admitted to the misconduct in the investigation meeting.
The EAT accepted that a fair procedure could be dispensed with if following it would clearly be futile. But that was not the situation here. While Dr Nabili had admitted to doing work for another hospital while suspended, she had not admitted that this amounted to wrongdoing that necessitated her dismissal. Furthermore, what mattered was not the view of the investigating officer as to Dr Nabili’s honesty and culpability, but the view of the disciplinary panel – after hearing Dr Nabili’s explanation for themselves. The case was remitted to a fresh Tribunal for proper consideration of whether the decision to go ahead with the hearing in Dr Nabili’s absence was a fair one.
This case does not mean that the employer can never conduct a disciplinary hearing in the absence of the employee – but it does emphasise that a decision to do so should be a last resort. Here the employer had initially agreed to the postponement and there was obviously a good reason for it. The case had already taken many months and it was not clear why the employer was now in a hurry to conclude the process. Finally, and perhaps most importantly, there was no reason to think that this would be an ongoing delay. The employee’s absence was pre-arranged and was for a fixed duration. There was no reason not to believe that she would be able to attend a disciplinary hearing when she returned.
The Government has announced that by the Autumn, Employment Tribunal decisions will be made available online – for free. Anyone who is interested will be able to search through cases to see who is suing who – and which employers are being found to be in breach of employment law. There is reason for both sides to feel some concern at this development. Employers will worry that having their dirty linen displayed so publicly will increase the reputational damage that a tribunal case can cause. Employees will be concerned at being identified as trouble makers by potential employers who might be tempted to vet job applicants by searching for them by name on the Employment Tribunal website.
The only consolation might be that as this is essentially a Government-run IT project, experience suggests that it might take a long time to be implemented. In the meantime the only way to access most decisions is by visiting the public reading room at the tribunal offices in Bury St Edmunds, where the decisions are stored in cardboard boxes with 250 to each box. Not exactly hi-tech…
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