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….
Vulnerable migrant workers
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.
Acas and ill-health dismissals
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.
Conducting a hearing in the absence of the employee
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…