Employment Law Update August 2017 - Case Law Round Up

Whistleblowing: How many people have to be affected before a whistleblower will satisfy the public interest test?

The Court of Appeal in Chesterton Global Ltd and another v Nurmohamed said that it was not simply a question of the numbers of people affected for a disclosure to be in the “public interest”. Other factors are also relevant such as the identity and seniority of the whistleblower and the nature of the wrongdoing.

Facts

In this case, the employee, Mr Nurmohamed (“Mr N”), worked for the estate agency Chestertons and brought a whistleblowing claim after it changed the way in which it paid commission to its estate agents from a system based on revenue to one calculated on actual profits.

Although Mr N reluctantly agreed to this change, he believed it would have a serious impact on his earnings and he monitored the new arrangement. Having done this, he believed that company profits were being artificially suppressed to reduce the level of commission payable by around £2-3 million.

Mr N complained to Chestertons and argued that about 100 other managers were affected by this and claimed that, as a result of the number of people involved, his complaint was in the “public interest”. Shortly after making his complaint, Mr N was dismissed and brought claims to the Employment Tribunal for unfair dismissal and whistleblowing.

The Employment Tribunal found in favour of Mr N and upheld his claims. It accepted that a group of 100 people was enough to meet the definition of “the public”. It stated that “the public” can mean a section of the public rather than the public en masse. Following an appeal by Chestertons, the Employment Appeal Tribunal upheld the Tribunal’s decision and Chestertons appealed further to the Court of Appeal which heard the case on 8 June 2017.

Decision

The Court of Appeal had to determine whether a disclosure which is in the private interests of the person “blowing the whistle” could be said to be in the public interest simply because it serves the private interests of other workers as well.

The Court rejected Chestertons’ argument that to meet the public interest test, others outside of the workplace must also be affected or would otherwise benefit from the disclosure. The charity Public Interest at Work also intervened and argued that if more than one person was affected by the wrongdoing, then that should be considered sufficient to be in the public interest. The Court also rejected that approach.

The Court of Appeal found that the Employment Tribunal were correct to find that Mr N’s disclosure was in the public interest because it affected a significant number of employees, the wrongdoing was said to be deliberate, the misstating of the accounts was significant and the organisation itself was a well-known national firm of estate agents.

Tip

The number of other people affected remains an important factor and the more people affected by a contractual breach, the more likely it is that there will be other features of the situation which will engage the public interest.

However, the identity and status of the whistleblower is also important as the more prominent the whistleblower, the more likely the disclosure will be in the public interest. Likewise, the nature of the wrongdoing is also relevant as something that is done deliberately is more likely to be in the public interest than if it was inadvertent even if it affects the same number of people.

Indirect discrimination: Does a claimant have to show why a provision practice or criteria puts them at a particular disadvantage?

Not according to the Supreme Court in Essop and Others v Home Office and Naeem v Secretary of State for Business. If the PCP causes a disadvantage to a protected group, tribunals should focus on whether this can be justified.

Facts of the two cases

In Essop and Others v Home Office, the claimants alleged that black and minority ethnic (“BME”) candidates over the age of 35 were less likely than non-BME and younger candidates to pass a core skills assessment, which was required in order to be promoted to the position of Higher Executive Officer or above.

The claimants argued that the requirement to pass the core skills assessment was a PCP applied by the Home Office that put older BME candidates at a disadvantage to others. They argued that although not all older BME candidates failed, there was a statistically significant difference between the success of older BME candidates and younger non-BME candidates sitting the core skills assessment and that the claimants themselves had failed the assessment with no identifiable personal characteristic to explain why.

The Employment Tribunal held that to prove personal disadvantage, it was not enough for the claimants to show that they were part of the group and had failed the assessment. They also needed to show a causal link between the disadvantage suffered by the group and that suffered by them as an individual. The claimants appealed and the Employment Appeal Tribunal (“EAT”) held that section 19 of the Equality Act 2010 did not require members of a disadvantaged group to show why they had suffered a disadvantage. The Court of Appeal overturned the EAT’s decision and held that a claimant did have to show the reason why the requirement to pass the assessment put the group at a disadvantage and that they had individually failed the test for that same reason. Mr Essop appealed that decision.

In Naeem v Secretary of State for Justice, the Secretary of State operated an incremental pay scheme which granted pay rises based on length of service. A Muslim Imam, Mr Naeem, working as a prison chaplain argued that the pay scheme was indirectly discriminatory because it had a disparate impact upon Muslin chaplains.

In the past, only Christian chaplains had been employed by the prison service and Mr Naeem argued that this meant that all of the Muslim chaplains that worked there had shorter service and were paid less.

In Naeem, the Court of Appeal held that the reason why the group suffered the disadvantage had to be something which was peculiar to the protected characteristic they shared. They said that it was not enough to show a disparate impact upon Muslim chaplains. It was also necessary to show that the reason for the disparate impact was something peculiar to the protected characteristic in question. Mr Naeem appealed to the Supreme Court.

Decision

The Supreme Court unanimously overturned the Court of Appeal and allowed both appeals. They held that there is no requirement for a claimant to prove the reason why a provision, criterion or practice puts or would put an affected group sharing a protected characteristic at a particular disadvantage; it is enough that it does.

Tip

The Supreme Court’s judgment provides welcome and clear guidance on the basic requirements of group and individual disadvantage.

It said that employers should not see justification as a dirty word. Indirect discrimination can be justified provided employers can show that it is a proportionate means of achieving a legitimate aim. Generally, all that is required is for employers to demonstrate that there is not a less onerous way of achieving the same objective.

Some other substantial reason dismissal/immigration: Is there a higher reasonableness test for an employer dismissing an employee for ‘some other substantial reason’?

No, according to the Employment Appeal Tribunal in Ssekisonge v Barts Health NHS Trust.

Facts

Mrs S was a nurse who came to the UK from Rwanda in 2010 and was given indefinite leave to remain under her former name. She was later granted British citizenship and changed her surname to Ssekisonge after marrying. The Home Office questioned Mrs S’s right to be in the UK and alleged that she was a different individual to that which had arrived in 2010; however, they did not immediately investigate or take any action against her. Mrs S joined the Trust in 2011 and presented her passport as evidence of her right to work in the UK, which was accepted.

The Home Office contacted Mrs S again in 2013 to confirm that her naturalisation was “null and void” and that her right to remain in the UK would be reviewed.

Mrs S did not inform the Trust of the issue and the Trust first became aware of it when Mrs S’s DBS certificate was revoked because her identity could not be verified. Mrs S was dismissed from the Trust with immediate effect as the Trust no longer had satisfactory evidence to confirm her identity.

Mrs S brought a claim for unfair dismissal to the Employment Tribunal. The Trust relied on the potentially fair reason to dismiss of “some other substantial reason”. The Employment Tribunal found that the issues with Mrs S’s identity and the DBS revocation raised substantial concerns which rendered the dismissal within the range of reasonable responses.

Mrs S appealed the decision to the Employment Appeal Tribunal.

Decision

In her appeal, Mrs S argued that a dismissal for “some other substantial reason” requires a higher threshold than would otherwise be applied. Mrs S believed that the Home Office investigation into her identity was prompted by false allegations made by her ex-husband and that a higher threshold should be applied because she was not at fault in any way.

The Employment Appeal Tribunal dismissed Mrs S’s appeal. They held that it was fair for the Trust to dismiss Mrs S for the reasons set out and the threshold for SOSR dismissals is not any higher than for other dismissals.

Tip

Employers can only lawfully employ individuals who can prove they have a right to work in the UK. The penalties for getting this wrong are significant; employers can be fined up to £20,000 per illegal worker and can face criminal sanctions in some circumstances.

If workers have a limited right to work, you must ensure that your diarise the date that right expires and contact the employee at least 60 days beforehand to recheck their documents.

If the employee does not produce relevant documents within a reasonable timescale (30 days), you should write to the employee and explain that if s/he cannot establish a continued to right to work in the UK they be dismissed. Then if the employee is still not able to produce relevant documents, he or she should be dismissed.

It seems that it may be better to rely on SOSR dismissals in these circumstances rather than illegality or misconduct. Misconduct is not appropriate to these types of cases and illegality can only be cited if you are absolutely certain that continuing to employ the employee would be unlawful (which can be very difficult to judge).

Please note: The ACAS code of practice does not apply to SOSR dismissals. Therefore whilst you should adopt a fair procedure, you do not have to offer the employee an automatic right to appeal (but you might want to offer this if the individual can establish a right to work in the UK).

If you are dismissing an individual in these circumstances, you should not allow the employee to work their notice (because of the risk of employing someone who does not have the right to work in the UK). Instead, you should make a payment in lieu of notice and pay all outstanding contractual payments due.

Sex discrimination: Do employers have to enhance shared parental pay if they enhance maternity pay?

The Employment Tribunal reached conflicting conclusions in Ali v Capita Customer Management Ltd and Hextall v Chief Constable of Leicestershire Police.

We await the outcomes in the appeals for further clarity.

Facts

Mr Ali was employed by Capita following a TUPE transfer from Telefonica in 2013. Under Telefonica’s family-friendly policies which transferred to Capita, transferring female Telefonica employees were entitled to enhanced maternity pay comprising 14 weeks’ basic pay followed by 25 weeks’ statutory maternity pay. Transferring male Telefonica employees were entitled to two weeks’ paid ordinary paternity leave and up to 26 weeks’ additional paternity leave at the statutory rates.

Mr Ali took two weeks’ paid leave immediately upon the birth of his daughter and wished to take further leave to care for his daughter after his wife had been diagnosed with postnatal depression and was advised to return to work.

Capita informed Mr Ali that he could take shared parental leave but told him that he would only be entitled to statutory pay when doing so. Mr Ali argued that he should receive the same entitlements as a female employee taking maternity leave. He submitted a grievance which was rejected and then issued proceedings in the Employment Tribunal, alleging direct and indirect sex discrimination.

Decision

The Tribunal upheld the direct sex discrimination claim and rejected the indirect sex discrimination claim.

In relation to the direct sex discrimination claim, the Tribunal held that Mr Ali could compare himself with a hypothetical female colleague that took leave to care for her child after the two weeks compulsory maternity leave period.

The Tribunal ruled that the denial of full pay amounted to less favourable treatment and the reason for this was Mr Ali’s sex. The Tribunal decided that the enhanced maternity pay was not special treatment in connection with pregnancy and child-birth but was special treatment for caring for a newborn baby, which is what Mr Ali was doing.

In relation to the indirect sex discrimination claim, the Tribunal held that the provision, criterion or practice that Capita had relied on was the Telefonica maternity policy and by definition, this policy was not gender neutral. As a result, the Tribunal were unable to find an indirect discrimination claim.

However, in the earlier decision of Hextall v Chief Constable of Leicestershire Police, decided on similar facts, an Employment Tribunal held that it was not discriminatory to offer enhanced maternity pay but only statutory shared parental pay. The Tribunal concluded that there was no valid comparison between a man on shared parental leave and a woman on maternity leave and the correct comparator was a woman on shared parental leave.

Tip

The government produced detailed technical guidance to employers when it introduced shared parental leave which stated that it was not necessary for employers to enhance shared parental pay even if they enhanced maternity pay. Many employers have relied on this to justify differences in their family leave policies. In the light of this, it seems that the decision in Ali is a strange one.

There is no need to change your policies at this stage. Both Capita and Mr Hextall are appealing the decisions of the Employment Tribunals and the EAT will hopefully provide some much needed clarity in this regard.

Published: 7 August 2017

Employment Law Update - August 2017

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