In our latest Employment Law Briefing, our team offer Employment Law advice on ‘Fire and rehire’, fair dismissal, discrimination and recent HR issues.
‘Fire and rehire’ injunction overturned
In March we reported on the High Court case of USDAW and ors v Tesco Stores Limited. The High Court granted an injunction restraining Tesco from ‘from firing and rehiring’ employees in order to remove a ‘permanent’ contractual entitlement to enhanced pay. Tesco appealed to the Court of Appeal (‘CA’) which has now found that the High Court was incorrect in finding that, based on pre-contractual statements, both parties intended that the entitlement should be permanent in the sense that the contracts would continue for life, until normal retirement age, until closure of the workplace or that circumstances in which Tesco could terminate the contracts should be limited.
Between 2007 and 2009, USDAW and Tesco agreed arrangements for ‘Retained Pay’, which become a contractual entitlement. This was accepted by USDAW as an alternative to a lump sum redundancy payment and as an incentive to staff to relocate. The Retained Pay was protected in that Tesco made it clear that the individual entitlement to Retained Pay would remain for as long as they were employed in their current role, that it could not be negotiated away, and that it would increase each year in line with any general pay rise.
A 2010 collective agreement stated that the Retained Pay would be a permanent feature of an employee’s contractual entitlement and could only be changed through mutual consent, on promotion or in the case of an employee-requested change to working patterns.
In January 2021, Tesco offered a lump sum payment in return for giving up the entitlement, failing which employees would be dismissed and offered new terms excluding the Retained Pay. USDAW sought an injunction preventing Tesco from doing this and the High Court granted it. Tesco appealed to the CA. The CA held that the mutual intention of Tesco and USDAW was not that the contracts would continue for life, or until normal retirement age, or until the closure of the site concerned, or that the circumstances in which Tesco could bring the contracts to an end should be limited.
There was a lack of clarity around what both parties intended by the word ‘permanent’ at the time of introducing the Retained Pay and the CA found that the express terms of the contract should be interpreted in accordance with its natural and ordinary meaning, being that Tesco would have the right to give notice in the ordinary way.
The CA further held that this was not a case in which an injunction was justified and there was no prior precedent for this under the circumstances of the case.
This case is reassuring for employers who wish to change the terms and conditions of employees and, certainly for the time-being, there would seem to be no or limited potential for employees to obtain an injunction preventing such action. There are however other factors that an employer will need to take into account before considering making changes to the terms and conditions of employees.
Fair dismissal for failure to disclose bankruptcy
In Pubbi v Your-Move.co.uk, the Employment Appeal Tribunal (‘EAT’) has held that an employment tribunal was correct to find that a financial consultant was fairly dismissed by for failing to disclose his bankruptcy, despite the fact that he was not expressly required to do so. The employment tribunal considered whether the financial consultant should have appreciated that there would be an expectation to disclose such a thing and found that he should have due to his experience within the industry.
P was employed by YM, an estate agency, as a financial consultant. YM represents FC Limited which sets terms for the work that it will permit YM’s advisers to carry out. P took a period of unpaid sick leave which led to him having to declare bankruptcy. He did not disclose this to YM but a member of the HR team identified this. FC Limited terminated P’s authorisation to carry out work on its behalf which led to P being dismissed by YM for gross misconduct, due to his failure to notify YM of this. P claimed unfair dismissal.
The employment tribunal dismissed the claim, finding that YM ought to have been aware that he knew, or should have appreciated, that YM would regard his bankruptcy as a serious matter and would have expected him to disclose this. P appealed to the EAT and the EAT upheld the decision of the employment tribunal.
This case, which offers some assurances for employers under similar circumstances, falls on its own facts and employers need to be mindful that it will not always be considered reasonable for employees to be required to disclose personal information to their employer or for an employer to dismiss an employee for their failure to disclose such information.
Doctor not discriminated against for refusing to use preferred pronouns
In Mackereth v Department for Work and Pensions and anor, the Employment Appeal Tribunal (‘EAT’) has held that a Christian doctor’s belief that a person cannot change their sex/gender at will, and his lack of belief in ‘transgenderism’, were protected under the Equality Act 2010 but that the employment tribunal was entitled to find that the employer’s response to his refusal to use transgender service users’ preferred pronouns, was not discriminatory.
M is a Christian doctor and he commenced employment with the DWP as a health and disabilities assessor of benefits claimants. This required him to conduct face-to-face assessments and then to prepare a report. During his induction training, M explained that, due to his beliefs, he would not agree to use transgender service users’ preferred pronouns, which was required by DWP. The DWP decided that it could not offer him a non-customer facing role and that he could not assess only non-transgender service users as they may not present as transgender until the assessment itself.
Before the DWP could complete its investigation into the matter and determine how to proceed, M resigned and claimed direct discrimination, harassment and indirect discrimination, due to his philosophical and biblical belief that people are created either male or female and cannot change their sex/gender at will, his belief that it would be irresponsible for a health professional to accommodate and/or encourage a patient’s impersonation of the opposite sex and his lack of belief in transgenderism.
The employment tribunal dismissed his claims, finding that his beliefs did not satisfy one or more of the criteria required in order to amount to a philosophical belief, including the criteria that the belief must be worthy of respect in a democratic society and not conflict with the fundamental rights of others.
The tribunal also found that if it did consider his beliefs to be protected under the Equality Act 2010, he had not been treated less favourably or harassed as a result. Any indirect discrimination was a proportionate means of achieving a legitimate aim which, it found, was to ensure that service users were treated with respect and in accordance with their rights under the Equality Act 2010.
M appealed to the EAT and the EAT held that the tribunal had made a number of errors in its approach to the criteria. Primarily that it had imposed too high a threshold in relation to the fifth criteria. In accordance with the case law, in a pluralist democratic society it is necessary for the threshold to be set at a low level so as to allow for protection not just of beliefs held to be acceptable by the majority but also of minority beliefs, even when those beliefs might offend others. It held that M’s biblical belief and lack of belief in transgenderism were protected under the Equality Act 2010.
However, the EAT did uphold the employment tribunal’s findings that M had not suffered any form of discrimination. M was not put under pressure to renounce his beliefs, the DWP had not made a final decision to dismiss M and the reason for DWP’s conduct was to treat service users in the manner of their choosing.
No unlawful age discrimination when PHI scheme ceased at age 65
In Pelter v Buro Four Project Services Limited, the Employment Appeal Tribunal (‘EAT’) has upheld an employment tribunal’s decision that an employer who provided access to a permanent health insurance (‘PHI’) scheme did not discriminate against an employee whose payments under the PHI scheme ceased when he reached the age of 65.
P was an employee and director of BFPS Limited. Under his Director’s Service Agreement, BFPS Limited was required to provide P with access to the benefit of a PHI scheme. In March 2011, FPS Limited entered into a PHI policy with an insurer that specifically provided that the benefits payable on incapacity are determined by the terms and conditions in place immediately prior to a member’s incapacity.
The policy schedule stated that the payment would cease when a member became 65 years of age. P went on sick leave in July 2011 and payments under the PHI scheme commenced. P stopped receiving payments under the PHI scheme when he turned 65 and he issued a claim for direct age discrimination.
The employment tribunal dismissed P’s claim finding that BFPS Limited’s obligation was to provide access to the PHI scheme and that this obligation ceased when P became permanently incapacitated. The potentially discriminatory act was that of the insurer, not BFPS Limited.
In any event, BFPS Limited would be able to establish a justification defence because, at the time it entered into the scheme, it fell within the exemption from age discrimination contained under Schedule 9 of the Equality Act 2010. P appealed to the EAT.
The EAT dismissed P’s appeal and commented that the Director’s Service Agreement stated that the provision of access to that benefit was subject to the PHI scheme rules. Once the employee has become incapacitated for work, the payment of benefits become a matter for the insurer, not the employer.
Imposition of pay award unlawful
In Ineos Infrastructure Grangemouth Limited v Jones and ors & anor, the EAT has upheld an employment tribunal’s decision that an employer’s imposition of a pay award amounted to an unlawful inducement under section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992 (‘section 145B’).
Following collective bargaining, Ineos made the trade union, which was Unite, a ‘final and best’ pay offer, which was rejected. Members authorised Unite’s negotiating team to return to talks and seek an improved offer. Ineos then unilaterally announced a pay rise and terminate the collective bargaining arrangements, taking the view that it had done all that it could and that Unite had acted in an unsatisfactory way in conducting the negotiations.
Affected employees brought ‘unlawful inducement’ claims under section 145B which makes it unlawful for an employer to make an offer to union members where acceptance of the offer would have meant that employees’ terms and conditions would no longer be determined by collective agreement. Ineos argued that the pay rise was simply an enforceable ‘unilateral promise’ and not an offer breaching section 145B. They further argued that collective bargaining had ended and their purpose was not to by-pass collective bargaining.
The employment tribunal upheld the claims and Ineos appealed to the EAT. The EAT upheld the employment tribunal’s findings that there had been a breach of section 145B. There had been an offer which had the result of bypassing collective bargaining. The parties had been close to an agreement and the purpose of the offer was to dispose of the union. The EAT stated that collective bargaining does not end simply because an offer said to be ‘final’ is rejected and the proper approach is to objectively ascertain whether negotiations are at an end.
For advice on any of the Employment and HR issues detailed above please contact Tom Evans at tom.evans@dtmlegal.comor Elizabeth Judson at elizabeth.judson@dtmlegal.com
