Articles | Employment bulletin April 2017

In a recent case before the Employment Appeal Tribunal (EAT) an employee brought claims for indirect sex discrimination and part-time worker detriment after being required to work beyond 5pm by her employer.

Ms Lancaster worked as an engineer for Fidessa, which provides software for financial services companies. As part of her role she was required to ‘delete connections’ after the end of trading on UK markets at 4.30pm. This would sometimes involve staying at work after 5pm. Following a period of maternity leave, Ms Lancaster moved from full-time hours to a four day week, striking an agreement with her line manager, Ms Nosal, that she could leave work at 5pm (subject to a degree of flexibility) and complete her duties at home due to childcare commitments.

When the head of Ms Lancaster’s department later found out about the arrangements he refused to maintain this degree of flexibility. Fidessa also later reorganised Ms Lancaster’s team, reducing headcount from three to two. Ms Lancaster was not offered the more senior post and refused to apply for the junior role, in part because it would have required her to attend work after 5pm.

The EAT held that Ms Lancaster was entitled to compare her part-time terms with her previous full-time terms of employment and that Fidessa’s failure to afford Ms Lancaster the flexibility it had previously agreed to was less favourable treatment on account of her part-time status. The EAT also held that Fidessa’s requirement that employees remain at work after 5pm was indirectly discriminatory, as it put both Ms Lancaster and women in general at a particular disadvantage (due to childcare responsibilities falling more often on women than men) and was not justified.

The case is a reminder that employers must be able to justify policies that require employees to attend work at certain specific times of the day. If appropriate workaround options are available then it will be prudent both to implement and then abide by these in order to avoid claims of indirectly discriminatory practices. When an employee moves from full-time to part-time hours then they must not be subjected to any detriment for doing so.

While most employment contracts will stipulate the notice period required to terminate employment, some fail to specify the point at which a notice sent in writing will start to run. This can have unwanted implications for employers, as demonstrated in a recent case in the Court of Appeal.

Mrs Haywood was employed by an NHS Trust and was selected for redundancy in April 2011. Her contract of employment entitled her to 12 weeks’ notice. Timing for service of the notice was paramount, as Mrs Haywood’s 50th birthday fell on 20 July. If her employment terminated on or after this date, her pension entitlement would increase significantly.

The NHS Trust sent a recorded delivery letter to Mrs Haywood on 20 April purporting to terminate her employment on 15 July. Mrs Haywood travelled to Egypt on holiday on 19 April and only read the letter when she returned on 27 April (after her father-in-law had collected it from the post office and left it at her home the previous day). Mrs Haywood argued that notice did not start running until she read the letter on 27 April.

In a majority decision, the Court of Appeal held that, in the absence of any relevant contractual term, notice took effect when Mrs Haywood personally took delivery of the letter on 27 April (and not the date the letter was posted or the date it arrived at her home). Consequently, her employment did not terminate until her 50th birthday and she was entitled to the enhanced pension.

While the differing views and reasoning of the Judges in this case means that the underlying legal analysis may be challenged in future, it is clear that failing to include an express contractual term setting out when notice will take effect leaves employers exposed to unwelcome findings such as this one.

For certainty on when notice starts to run, best practice is to give an employee notice in person. If this is not practical, contractual terms stating how notice may be served and when it will be deemed received are essential. Contracts should also include a well-drafted payment in lieu of notice clause to allow for a speedy dismissal where necessary. If you would like us to health check your current contract please get in touch to arrange a free review.

The definition of disability is set out in the Equality Act 2010. Employees are protected from unwanted conduct related to disability if it has the purpose or effect of violating their dignity, creating an intimidating, hostile degrading, humiliating or offensive environment as this is considered harassment. They are also protected from victimisation - suffering a detriment because they have asserted they have a disability. Furthermore an employer can potentially be liable for discrimination or harassment carried out by an agent acting on its behalf. The Employment Appeal Tribunal (EAT) considered the extent of these protections in the recent case involving Mr Baker and his employer Peninsula.

Mr Baker informed Peninsula that he had dyslexia and provided a psychologist’s report supporting this. Peninsula referred him to its occupational health provider who recommended adjustments and said Mr Baker was likely to be considered to be disabled. A few weeks later Peninsula instructed a third party to carry out covert surveillance on Mr Baker stating this was because they believed he wasn’t devoting all his time to his work for them. This surveillance was subsequently disclosed to him as part of a disciplinary process. Mr Baker claimed the surveillance was a response to his assertions that he was disabled and issued claims against Peninsula for harassment and victimisation related to disability.

The EAT decided that in order to bring a harassment claim Mr Baker had to show he was disabled within the definition in the Equality Act 2010. Mr Baker was relying on his own assertions that he was disabled as the basis for his harassment claim and this was not sufficient. The EAT also confirmed that providing the surveillance report to Mr Baker could not be considered an act of harassment as it was evidence provided in accordance with the ACAS Code of Practice on Disciplinary and Grievance Procedures. In addition Peninsula had not victimised Mr Baker by requesting the surveillance. It could only be liable if the agent’s actions had themselves been a breach of the Equality Act. The agent had not breached the Equality Act as it had no knowledge of Mr Baker’s assertions that he was disabled.

This case highlights to employers the benefit of ensuring that any claims where they do not accept the employee has a disability are referred to a preliminary hearing to determine this issue. This allows costs to be kept to a minimum in cases that have no prospect of success.

A recent decision of the Supreme Court has provided welcome guidance on the test for indirect discrimination. The Court’s judgment concerned religious belief discrimination but applies to discrimination on other protected grounds such as sex or disability.

The claimant in the case was Mr Naeem, a Muslim chaplain who worked for the Prison Service. The Prison Service had a policy of linking chaplains’ pay to length of service. Mr Naeem argued this put himself and other Muslim chaplains at a disadvantage as compared with Christian chaplains (since the Prison Service only employed Muslim chaplains full-time from 2002) and brought an indirect discrimination claim.

In broad terms, an employer will indirectly discriminate where it applies a policy to both Muslim and non-Muslim employees, but that policy puts both the Muslim employee in question and Muslims in general at a particular disadvantage, and the policy cannot be justified.

The Supreme Court held that although the Prison Service’s policy had put both Mr Naeem personally and Muslim chaplains generally at a particular disadvantage, there was no unlawful discrimination because the linking of pay to length of service was justified to retain and reward employees. In reaching its decision it explained that:

• it was not necessary for Mr Naeem to show the reason why the Prison Service’s policy put Muslim chaplains generally at a disadvantage, just that it did;
• the reason why the policy put Muslim chaplains at a disadvantage was a ‘context factor’ that need not be unlawful or the employer’s fault;
• not every Muslim chaplain had to be disadvantaged in order for Muslims chaplains as a group to be disadvantaged;
• Mr Naeem had to show a causal link between the Prison Service’s policy and the disadvantage he personally suffered; and
• it was open for the Prison Service to show that its policy was justified as a proportionate way of achieving a legitimate aim, and there should be no stigma attached to this.

The decision provides helpful clarity for both employers and employees. While the Supreme Court has quashed any suggestion that employees must show why an employer’s policy caused a disadvantage, it has confirmed that it is perfectly acceptable to justify policies which do cause group disadvantage. If you are concerned that any of your policies may have a discriminatory impact then please contact us for advice.

The Regulations requiring large employers to publish certain gender pay gap information came into force on 6 April 2017. The Regulations apply to all private and voluntary sector employers with 250 or more employees.

In broad terms, the Regulations require employers to take an annual snapshot of pay data on 5 April each year (starting in 2017) and then publish the overall mean and median gender pay gap figures, the number of men and women in each quartile of their pay distribution, and details of bonuses paid to men and women. For more information please review our articles from March 2016 (read more) and January 2017 (read more).

Employers affected by the Regulations should now start to undertake their gender pay gap calculations and be ready to publish the results on their website (in a manner which is readily accessible to the public) on or before 4 April 2018. The gender pay gap figures must be accompanied by a written statement of accuracy and the information must remain on the employer’s website for a minimum period of three years. The data must also be uploaded to a Government portal.

As we have previously noted, many employers will want to take the opportunity to publish a narrative alongside their pay gap data to explain the figures and place them in a broader context (perhaps making reference to specific industry averages, recent trends or planned improvements).

Although there appears to be a limited risk of sanctions for failure to publish gender pay gap data as required by the Regulations, we expect the adverse publicity this could generate will be enough to persuade the vast majority of affected employers to comply fully with their obligations.

Any employers who are unsure whether they will be caught by the Regulations, how to calculate certain figures or how to draft an accompanying narrative that presents their business in the best light should seek advice well in advance of next April’s publication deadline.

Separately, it will be interesting to see whether any employers not caught by the Regulations choose to publish their gender pay gap data in any event, with the aim of generating good publicity and/or attracting more job applications from talented women.