eBrief: Gordons Legal Employment Update – 21 October 2016

Employment tribunal opens £100m floodgates

The Manchester Employment Tribunal have ruled that Asda’s distribution depot workers are comparable with store staff, paving the way for more than 7,000 potential equal pay claims to be brought against the supermarket. The case of Brierley and others v Asda Stores Ltd will now determine whether the store workers, who are predominantly female, undertake work of equal value to that carried out by the predominantly male depot workforce.

In order for an equal pay comparison to be made, there are a number of criteria that need to be met. These include establishing that the employees have the same employer and place of work, or failing that, the same employer and ‘common terms’ of employment. The tribunal found that the Retail and Distribution divisions of Asda generally fit these criteria in specific relation to the broadly similar common terms.

The tribunal then considered the ‘single source’ argument relating to pay, put forward by previous case law, and found that Asda’s Executive Board exercised budgetary control and oversight over both Retail and Distribution. Consequently, this ‘single source’ had the power to introduce pay equality despite Asda’s arguments that pay-setting powers had been delegated to separate bodies.

Asda, who continue ‘to strongly dispute the claims’, state that this ruling is on a ‘technical’ issue. However, potential liability has now been expanded and they will have to contest test claims as early as next year. The decision will have a wider effect on the retail market with other companies also likely to face claims of a similar nature now there is further guidance on comparability. Asda’s liability alone could back-date over 14 years and total more than £100 million if the claimants are successful.

Comment: As Asda rightly point out, this ruling is on a “technical” issue and it does not determine the eventual decision of the claims being brought. There are a number of factors that, if proved, will work in Asda’s favour. If they can show the tribunal, for example, that the demands of the work justify the pay gap or that they have paid the applicable market rates then they should theoretically stand a good chance of defending the claim.

Overqualified was found not to be an act of age discrimination

In the case of Jones v Care UK Clinical Services Ltd, the ET found there were no acts of age discrimination against a candidate who was unsuccessful after interview on the basis that he was overqualified.

Upon rejection, the Claimant (Mr Jones) brought a claim for direct age discrimination on the ground that he was treated less favourably because of his age (51), compared to the successful candidate (29). However, the tribunal found that the decision not to recruit Mr Jones had been based on the comparative interview responses and scores.

In particular, the interview notes highlighted that Mr Jones’ skills were beyond what was needed and the expectations of his development in the job could not be met because of role constraints. Therefore, the decision had not been based on the claimant’s age and there was no contravention under the Equality Act 2010. The employment tribunal therefore rejected his claim.

Comment: If an employer bases their reasoning for not employing an older candidate on factors other than their age, then so long as it is not because of some other protected characteristic, there will be no claim for discrimination. However, overqualified should not be used as a bypass to skirt around age discrimination. Tribunals take an in-depth view of the broader rationale behind decisions with alleged discrimination; therefore care should always be exercised and, as in this in this case, detailed notes for decisions taken where possible.

Limits of flexible working requests highlighted

Two recent tribunal cases have indicated limits on flexible working requests:

Whiteman v CPS Interiors Ltd and others

In this case, a designer’s request to work from home, have limited office visit time and do most of her work after 6pm was refused by her employer. The employer argued that the nature of their business required collaborative working on technical designs and the ability to change plans at short notice. The employee’s request would therefore be detrimental to their ability to carry out effective work without disruption.

CPS Interiors had already accepted the employee’s request to reduce her hours and acted reasonably throughout the flexible working application. Their reasons for refusal were valid and acceptable under the ERA 1996. As a consequence, the tribunal threw out the employee’s claims for breaches of flexible working legislation, indirect sex discrimination and constructive dismissal whilst emphasising that there is no right to work flexibly, only a right to request to work flexibly.

Smith v Gleacher Shacklock LLP

An executive secretary requested to work three days a week followed by homeworking on a Thursday on her return from maternity leave. However, the employer reasonably rejected her request, instead suggesting a compromise for her to leave early for nursery runs and initially return on a part-time basis.

Their rationale for refusal included the exertion of disproportionate pressures on their small team, unpredictability of her role, inability to meet tight timescales and a negative impact on the firm’s ability to cater for clients. The employer also included a recent example of a “highly important” phone call from the Financial Conduct Authority that would have been difficult to deal with had the employee been granted her flexible working request.

The employment tribunal therefore held that the employer’s stance was justified as the needs of the business outweighed the disadvantages caused to the claimant.

Comment: An employer is well within their rights to reject a flexible working request if they can justify that the impact of granting the change will be detrimental to their business. In both of these cases, the employer attempted to make reasonable compromises to the request. If the employer does so and only refuses the application on the basis of one of nine reasons set out in the ERA 1996, then there should be no problems. Quick reminder: the nine reasons are as follows:

• the burden of additional costs
• detrimental effect on ability to meet customer demand
• inability to re-organise work among existing staff
• inability to recruit addition staff
• detrimental impact on quality
• detrimental impact on performance
• insufficiency of work during the periods the employee proposes to work
• planned structural changes
• such other grounds as the Secretary of State may specify by regulations

Presidential Guidance on early judicial case assessment

The President of the Employment Tribunals for England and Wales has published Presidential Guidance and a protocol on judicial assessment of employment tribunal cases at any early stage. The Guidance is issued under Rule 7 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013. It allows tribunals to encourage parties to resolve their disputes by agreement. If both parties consent to the protocol it creates an independent, confidential and provisional assessment of liability and remedy by an employment judge as part of a preliminary case management hearing.

The key principals of the protocol are:

Parties;

• must consent to Judicial Assessment
• are encouraged to inform the Tribunal in advance of the case management discussion that they wish to have Judicial Assessment in their case

Judicial Assessment;

• provides an impartial and confidential assessment of the strengths, weaknesses and risks of the parties’ respective claims, allegations and contentions at an early stage
• must only be conducted after the issues have been fully clarified and case management orders made in the usual way at the case management hearing
• will usually take place at the initial case management hearing and in appropriate cases, will be listed in person for up to two hours
• aims to encourage parties to resolve their dispute by agreement, but contemplated that settlement discussions will occur during the assessment itself

The Employment Judge;

• will remain impartial
• must make it clear that they are assessing the case on the state of the allegation and not evaluating the evidence, as well as assessing provisionally the risks as to liability and brackets of likely compensation on remedy
• who conducted the Judicial Assessment will not normally be involved in final hearing, but may be involved in day to day case management of the proceedings
• the Employment Judge’s views must be kept strictly confidential and may not be disclosed to third parties other than advisers.  It can be referred to in ‘without prejudice’ discussions between the parties or in a Judicial Mediation

Comment: It will be very interesting to see whether judges speak their minds! It could potentially have some very positive impacts. As the Guidance indicates, it will be ‘particularly helpful, but not exclusively so, where a party to a claim is not professionally represented at the preliminary hearing’. It should allow individuals with no experience of how to bring a claim to be provided with a realistic early indication of the strength of their arguments. However, it could also be a potential minefield for allegations of bias for instance if a judge were to suggest to one or other party how their case might read so much better if put in a different way thereby improving their chances of achieving their desired outcome. Only time will tell.

Legal Updates

Public Interest Disclosure (Prescribed Persons) (Amendment) Order 2016

The below changes come into effect on 1 November 2016:

To ensure whistleblowers’ disclosures are protected, amendments have been made to include further specific bodies in the list of prescribed people to whom whistleblowers may disclose information to.

Potential implications for employment law following Brexit

A briefing paper has been produced by the House of Commons Library on what the potential implication for employment law might be following Brexit.  The briefing paper discusses the relationship between UK and EU employment law and the impact of Brexit. The briefing paper can be accessed here.

If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.