Top 5 recent workplace developments - February 2023

This is our selection of recent developments which we think will impact on HR practice.

1. Redundancy: Pool of one

The Employment Appeal Tribunal (EAT) has found it was wrong to assume that a redundancy dismissal was inevitable and that nil compensation should have been awarded.

Whether a redundancy dismissal is fair depends on an employer carrying out a procedure which is fair and reasonable in the circumstances for the particular employer, and includes a fair selection process (including identifying redundancy “pools”). Even if an employer does not carry out a fair process, a Tribunal can decide that the compensation payable to an employee is nil because dismissal would have happened either way.

Mr Teixeira was employed as a “tandoor chef” working for a London restaurant in a team of 10 chefs. Mr Teixeira was a “helper” in all five departments of the kitchen but did not have the skills to run any of them. The other nine chefs employed at the restaurant had over 10 years’ service with the restaurant.

In the early days of the Covid pandemic, Mr Teixeira was dismissed by reason of redundancy. No procedure was followed. The Tribunal decided that although no consultation process had been followed, Mr Teixeira was not entitled to compensation because there was a 100% likelihood that he would have been dismissed either way. The reason for this was that either (1) Mr Teixeira was in a “pool of one” and would have been made redundant on that basis as he was the only affected employee, or alternatively (2) if a selection process had been carried out with the other chefs, Mr Teixeira would inevitably have scored lowest and been selected for redundancy.

The EAT disagreed and found that his dismissal was not inevitable and compensation was not automatically nil. It needed to be considered what would have happened if there had been adequate warning and genuine consultation including how any selection criteria would have been applied before dismissing him.

Practical point

When a decision to make one particular individual redundant feels like an obvious choice, it is tempting for employers to reduce a consultation process to the bare minimum, and/or argue that there is a pool of one rather than carrying out a full selection process. However, this case shows that in the absence of consultation a Tribunal will need to think through each element of a hypothetical process to decide what the likely outcome would have been if a fair process had been followed. This includes giving the employee a chance to challenge the redundancy pool. Where possible, and where an employee has more than two years’ service, we would advise attempting to carry out some consultation, and working through the rationale for the pooling process if it is a pool of one. When taking decisions it is worth being aware that the more that is done, the more scope there is for a Tribunal to find that dismissal of an individual was likely or inevitable and reduce compensation accordingly.

Teixeira v Zaika Restaurant Limited

2. Disability discrimination: Dismissal for long-term sickness absence

The Employment Appeal Tribunal has found that dismissal for poor attendance arising from disability was objectively justified.

Mr McAllister worked for HMRC as an administrative officer from May 2011. He suffered from anxiety and depression and had a lot of lengthy periods of sickness absence. HMRC considered that his absences were impacting on productivity and staff morale and that all reasonable adjustments had been exhausted. Mr McAllister was dismissed in December 2018. He received a payment under the Civil Service Compensation Scheme (CSCS), which was reduced by 50% because of his disruptive behaviour whilst off sick. The CSCS provides for payments for loss of employment on redundancy or certain other terminations including dismissal on grounds of efficiency.

Mr McAllister brought claims for discrimination arising from disability under section 15 of the Equality Act in relation to his dismissal and HMRC's reduction of the Civil Service Compensation Scheme payment. For such a claim to succeed the employer must treat the employee “unfavourably” because of “something arising in consequence of the employee’s disability”. It is a defence for the employer to show that the treatment is a proportionate means of achieving a legitimate aim (the objective justification defence).

The Tribunal found that Mr McAllister had been dismissed due to something arising in consequence of his disability (his poor attendance record/absence from work). However, the dismissal was objectively justified because HMRC was able to show that its decision to dismiss for long term sickness absence was a proportionate means of achieving a legitimate aim – its aim being to maintain a fair, effective and transparent sickness management regime, and the efficient use of resources. The EAT agreed stating that the Tribunal had made a permissible finding that the aim of ensuring that staff were capable of demonstrating satisfactory/a good standard of attendance was legitimate and corresponded to a real need on the part of HMRC. In reaching its decision, the Tribunal had effectively balanced the reasonable needs of HMRC against the discriminatory effect on the Mr McAllister.

As regards the compensation scheme payment, the EAT said that any reduction made to payments under the CSCS for dismissal on grounds of efficiency due to disability related absence will not constitute discrimination arising from disability as entitlement to payment under the scheme is not unfavourable – in this case it was a benefit to which Mr McAllister would not have been entitled had he not been disabled.

Practical point

Disability discrimination claims frequently arise out of absence management scenarios such as dismissal for long term sickness. Where an employer has provided the employee with considerable support over a long period and followed a reasonable process such as in this case, there is a good chance that a dismissal can be objectively justified. However, every case turns on its merits and employers should tread extremely carefully when handling these sorts of cases.

McAllister v Commissioners of HMRC 

3. Privacy: Misuse of employee’s private WhatsApp messages

The High Court has considered whether there can be a reasonable expectation of privacy in private WhatsApp messages found at work.

After her dismissal for misconduct, FKJ brought a tribunal claim against her former employer, including on the grounds of sex discrimination and alleged sexual harassment by the managing partner, RVT. She lost that claim after the employer used in evidence some 18,000 private WhatsApp messages (some being “of the most intimate kind”) between her and her partner and her best friend, obtained after her dismissal but before she brought a claim. Although the employer said some were obtained by accessing her work laptop and other were received printed out from an anonymous source, FKJ maintained the employer had “hacked” her WhatsApp account to gain access to these messages.

FKJ didn’t seek to exclude these messages as evidence in the tribunal claim and brought a High Court claim in tort for misuse of private information. The High Court refused RVT’s application to have this claim struck out.

As to whether an individual has a legitimate expectation of privacy, this will depend on the circumstances, including the nature of their relationship with the message recipients. The Court noted that given the nature of the messages, with day-to-day information about FKJ’s professional, social and private life, including about her health and sex life to her partner and her best friend:

• there was clearly an expectation of privacy, which was not altered because the messages may have been on a work laptop, and
• the employer should have immediately notified FKJ and returned these messages to her, even if there had been tribunal proceedings on foot at that time.

Practical point

This case confirms that because private information is downloaded on a work laptop, this does not necessarily mean the employee’s right to privacy can be ignored. If the information is clearly private employers owe a duty to return the private information immediately.

In addition, this decision shows the potential risks to employers of using private WhatsApp messages in evidence in tribunal or court proceedings, as substantial damages may be awarded in High Court claims for misuse of private information.

FKJ v RVT and Others

4. New government consultations

In January 2023, the government launched both (i) a consultation on calculating holiday entitlement for part-year and irregular hours workers, and (ii) a consultation on a new draft Statutory Code of Practice on Dismissal and Re-engagement, where it is used as a means of imposing changes to terms and conditions of employment.

The government has launched a consultation on calculating holiday entitlement for part-year and irregular hours workers. This consultation is in response to last year’s Supreme Court decision in Harpur Trust v Brazel in which it was held that, under the Working Time Regulations, holiday entitlement for permanent part-year workers should not be pro-rated so that it’s proportionate to that of a full-time worker. Read our summary of the decision here. The government is proposing to introduce a holiday entitlement reference period for both part-year and irregular hours workers to ensure holiday entitlement and pay is directly proportionate to time spent working.

The government has also published a consultation on a draft Statutory Code of Practice on Dismissal and Re-engagement, so called “fire and re-hire”, applicable in the context of changing terms and conditions of employment. The Code sets out a step-by-step process that employers should follow to explore alternatives to dismissal and to engage in meaningful consultation with trade unions, employee representatives or directly with the affected employees to find an agreed solution. Read our summary of the key background issues here.

Practical point

The government review on calculating holiday entitlement for part-year and irregular hours workers is in effect looking at reversing the decision in Harpur Trust v Brazel which will be very significant – and welcomed by employers, particularly those in the education sector. This consultation closes on 9 March 2023.

Although the consultation on a Statutory Code of Practice on Dismissal and Re-engagement won’t impose any legal obligations on employers, tribunals must take this into account, and may increase compensation awards by up to 25% if the employer has unreasonably failed to comply with the Code. The consultation closes on 18 April 2023, and the Code will come into force when Parliamentary time allows.

5. Menopause and the workplace – government rejects call to make menopause a new protected characteristic

The government has rejected a call to make the menopause a new protected characteristic under the Equality Act 2010. This and other conclusions are set out in the government’s response to the Women and Equalities Committee’s report on menopause and the workplace.

The government has also confirmed that it does not intend to introduce a new duty to make reasonable adjustments for menopausal women at this time or develop a model menopause policy to help employers, as had been recommended. It has also rejected a call to allow dual discrimination claims at employment tribunals relating to a combination of protected characteristics, eg age and sex.

The government has, however, decided to accept some of the Women and Equalities Committee’s recommendations and will make some changes, including:

• introducing a new ‘Menopause Employment Champion’ who will be appointed in due course and will work with employers on menopause workplace issues and report to DWP ministers at regular intervals
• developing ‘strengthened guidance that will give a set of clear and simple ‘principles’ that employers would be expected to apply, to support disabled people and those with long term health conditions in the work environment.’ The guidance, which could also apply where workers are experiencing symptoms that may occur in the menopause, is expected to be published by the Health and Safety Executive.
• updating flexible working laws. The government has restated its commitment to make flexible working a day one right, allow employees to make two flexible working requests within a 12-month period (rather than only one) and reduce the time employers have to respond to two months (from three months).

Practical point

It seems there are no imminently planned changes to the employment rights of menopausal women specifically. This means that where employees are impacted at work by symptoms of the menopause, they will need to continue to rely on existing legal protections - such as protection from sex, age and disability discrimination, the right to request flexible working and sick leave and pay.

Separately, the government has announced that £1.97 million has been awarded to support women experiencing reproductive health issues in the workplace. The award will be shared between 16 charities following successful applications to this year's Voluntary, Community and Social Enterprise Health and Wellbeing Fund. It is hoped that this money will help women who are experiencing or have experienced pregnancy, pregnancy loss, menopause, fertility problems and other gynaecological conditions to remain in and return to the workplace.