Articles | Employment bulletin July 2016

This month we report on the employment implications of the Brexit vote, the treatment of migrant workers, the scope of the ACAS Code of Practice and conducting settlement discussions.


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David Clay

David Clay

EU referendum – Brexit

What are the actual employment law implications?

EU referendum – Brexit


The internet is currently awash with articles on the possible impact of Brexit on employment legislation.


So what will be the actual impact on employment law?


In short, there are currently three main unknowns, that make any predictions speculative:


  • Timing - Article 50 of the Lisbon Treaty envisages exit two years after it is triggered, but it also allows for an earlier or delayed exit by agreement and it is not yet known when it will be invoked.
  • Terms of exit – It is possible that we may still be required to comply with certain EU regulations in exchange for favourable trading terms.
  • Government – The decision as to which regulations we retain on exit will rest with the government in power at that time. The decision will no doubt differ depending upon the party (and leadership) in control.


The only certainties are that we currently remain an EU member, bound by its regulations, and that EU nationals still have the right to work in the UK.


What do employers need to do now?


Employers will be assessing the likely impact on their business and should take legal advice in the normal manner on any reorganisations or structural changes.


They should ensure that a hostile or intimidating atmosphere is not created for any employee following the referendum despite feelings running high. Claims could arise from:


  • EU nationals being subjected to unlawful harassment in the workplace, including, for example, being asked when they are “going home”.
  • Ageist comments blaming “baby boomers” or older voters for the vote to leave.
  • Aggressive confrontations over the result. An employee with a strongly held belief in remaining or leaving the EU could qualify for protection from harassment on grounds of a philosophical or political belief.


We will report on any concrete developments over the coming months to ensure that all of our contacts continue to have a source of reliable information.


If you have any concerns (or if you really do want us to speculate on possible outcomes), then don’t hesitate to get in touch with us.


Migrant workers suffered horrendous conditions…

But did their treatment amount to race discrimination?

Migrant workers suffered horrendous conditions…


All UK workers benefit from protection against discriminatory treatment on the grounds of their race, which includes colour, nationality and ethnic or national origins.  In a recent case, the Supreme Court has considered whether two severely mistreated migrant workers had suffered direct or indirect race discrimination.


The case concerned two Nigerian employees, Ms Taiwo and Ms Onu, who each had a domestic worker’s visa for the UK.  Both employees were in vulnerable positions and were taken advantage of.  Ms Taiwo was starved, subjected to mental and physical abuse, denied rest breaks and was not paid the minimum wage. Ms Onu suffered similar abuse and was told if she were to escape she would be arrested and sent to prison.  Both employees eventually managed to flee and brought claims alleging that their treatment amounted to direct or indirect race discrimination.


The Court dismissed the direct discrimination claim.  It acknowledged that immigration status is a function of nationality, but was not persuaded that the two were so closely related that less favourable treatment due to migrant status would automatically constitute race discrimination.  It found that the workers were treated poorly because of their vulnerability arising from their immigration status and their dependence on their employers for the right to work in the UK.  They had not suffered abuse because they were Nigerian.  The Court noted that many non-British migrants are not vulnerable and that the Equality Act did not include immigration status as a ‘protected characteristic’.


The Court also dismissed the indirect discrimination claim.  The employees’ legal team ultimately conceded that the case was not an indirect discrimination case and the Court found that the mistreatment of vulnerable migrant workers was not a practice that could amount to indirect race discrimination.


Although both employees had previously received significant awards in respect of their employers’ breaches of the National Minimum Wage Regulations and Working Time Regulations, the Court expressed its unease at the inadequacy of the law in compensating vulnerable migrant workers for non-financial loss.  Although a person convicted of a criminal offence under the Modern Slavery Act 2015 can be ordered to pay compensation to victims of slavery or human trafficking, there is currently no jurisdiction for employment tribunals to grant similar compensation.

The ACAS Code of Practice

What is it and when does it apply?



The ACAS Code of Practice


The ACAS Code of Practice on Disciplinary and Grievance Procedures (the Code) provides employers and employees with practical guidance on how to handle disciplinary and grievance matters. If an employee succeeds in a tribunal claim and the employer has unreasonably failed to follow the Code, the value of any award may be increased by up to 25%.


Although the Code expressly states that it does not apply to dismissals by reason of redundancy or the non-renewal of a fixed-term contract, it does not clarify whether it applies to dismissals for ill-health or for some other substantial reason (SOSR). However, two recent cases in the Employment Appeal Tribunal (EAT) offer useful guidance.


The first case concerned Mr Holmes, a security guard for Qinetiq. After suffering with numerous physical problems Mr Holmes was dismissed on grounds of ill health. Qinetiq failed to obtain an up-to-date medical report before dismissing and Mr Holmes successfully claimed for unfair dismissal. However, his argument that he should receive an uplift for Qinetiq’s failure to follow the Code was rejected. The EAT held that the Code applies to cases “where an employee’s alleged actions or omissions involve culpable conduct or performance… requiring correction or punishment”. Mr Holmes had done nothing to warrant disciplinary action and, save for health reasons, had no difficulty performing his role. Accordingly the Code did not apply.


The second case involved Ms Stockman, an accountant at Phoenix House. Ms Stockman had brought a grievance after failing to secure a new role and was issued with a warning for misconduct after interrupting a meeting. After a period of absence she was later dismissed by Phoenix House on the basis that the employment relationship had irretrievably broken down. The EAT found her dismissal was both substantively and procedurally unfair, but again held the Code did not apply. It noted that, while elements of the Code could and should be applied in such circumstances (for instance giving Ms Stockman the chance to demonstrate that she could return to work without undue disruption), the Code did not include sufficiently clear wording to authorise a punitive uplift for SOSR dismissals.


The EAT’s decisions will provide employers with some comfort, but it remains best practice to follow the Code wherever commercially practical. There is still some conflicting EAT case law regarding the Code’s application to SOSR dismissals, and the Code will apply wherever performance or conduct matters interact with ill health reasons. Complying with the Code also helps employers demonstrate a commitment to fair process, which is relevant to the overall fairness of any dismissal decision.

Settlement discussions

Do you know your ‘without prejudice’ from your ‘protected conversation’?

Settlement discussions


Under the ‘without prejudice’ rule, details of settlement offers made to employees are normally inadmissible in a court or tribunal. However, the rule only applies when the parties are already in dispute and does not assist employers who wish to negotiate an amicable exit.


In an effort to tackle this problem, the last government introduced ‘pre-termination negotiations’ (also known as ‘protected conversations’), allowing parties to hold settlement discussions before a dispute has arisen which cannot be referred to in ordinary unfair dismissal proceedings (unless there is ‘improper behaviour’).


A recent case in the Employment Appeal Tribunal (EAT) highlighted some important distinctions between the two rules.


Mrs Bailey, a part-time secretary at FFT surveyors, feared that FFT would no longer permit her to work part-time, and initiated settlement discussions. Various correspondence about settlement was exchanged, but an agreement was not reached and constructive unfair dismissal and sex discrimination claims were issued. Mrs Bailey and FFT both referred to the settlement discussions in their respective claim and response forms.


The EAT considered the extent to which the settlement discussions could be considered in determining the case.


It concluded that all of the correspondence fell under the ‘protected conversation’ rules. This meant that both the fact that discussions had taken place and the details of any discussions or offers made were inadmissible in respect of the constructive dismissal claim, but could be referred to in the sex discrimination claim. It also held that the parties could not change their mind at a later date and subsequently seek to rely upon such settlement discussions (or the fact that they took place) in unfair dismissal proceedings.


This differs from the ‘without prejudice’ rule, where it is permissible to disclose the fact that discussions have taken place (but not the details), and it is open to the parties to waive that protection and disclose the details of the discussions in subsequent litigation if they agree. In this case the EAT decided that the conduct of FFT and Mrs Bailey after a dispute had arisen implicitly waived their ‘without prejudice’ protection.


The EAT’s findings show that ‘protected conversations’ can be a useful tool, but employers should bear in mind that the protection provided only applies in respect of ordinary unfair dismissal claims. Employers will also not be able to change their mind at a later date and seek to rely upon protected conversations in subsequent unfair dismissal proceedings. They therefore need to keep any open communications that they may wish to rely upon very clearly separate from any protected conversations.


Employers should take advice on the nature and content of any planned protected conversations and avoid ‘improper behaviour’, such as pressuring an employee to reach an agreement quickly.