HR Two Minute Monthly: 2016 employment law developments; TUPE; disability discrimination

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Summary: In our January update we look at employment law developments in the pipeline for 2016 as well as recent important case decisions on topics including religious discrimination, disability discrimination and TUPE.

Employment law developments to watch out for in 2016

Modern Slavery Act

Larger businesses with 2015/16 financial year ends falling on or after 31 March 2016 are required to publish a slavery and human trafficking statement.

Holiday Pay

Lock v. British Gas was heard in the EAT on 8 and 9 December 2015. We are waiting for judgment to be given in this case. BLP attended the hearing, and whatever the outcome it seems likely that the case will be appealed to the Court of Appeal.

National Living Wage

The National Living Wage is being introduced in April 2016. This introduces a new higher rate under the National Minimum Wage (NMW) legislation for workers aged 25 and over. The initial National Living Wage rate is set at £7.20 per hour. The government’s aim is to increase this to £9.00 per hour by 2020.

From 1 April 2016 the penalty payable by employers who underpay the NMW will also increase from 100% to 200% of the underpayment due to each worker.

Gender Pay Gap Reporting

We are still waiting for the government’s formal response to its initial Gender Pay Gap Reporting consultation. However, in the meantime the government has indicated that bonuses, and not just basic pay, will need to be included in employers’ gender pay gap calculations. The gender pay reporting legislation is currently expected to be finalised in 2016, although the government has said it will give businesses time to prepare before the law is brought into force

Employment Tribunals Fees Review

We are still waiting for the outcome of the UK government’s review of Employment Tribunal fees. Separately The Scottish government has outlined plans to abolish fees in the Scottish employment tribunals.

Statutory Payments

There will be no increase in statutory maternity pay and other statutory family rights payments for 2016/17. These payments will therefore remain at £139.58 per week. Statutory Sick Pay will likewise remain unchanged at £88.45 per week.

Zero Hours Contracts

Exclusivity clauses in zero hours contracts have been unenforceable since May 2015. From 11 January 2016 new Regulations give employees the right not to be unfairly dismissed and employees and workers will have the right not to be subjected to a detriment for failing to comply with an exclusivity clause.


Events following a transfer may be relevant as to whether a task was intended to be of “short term duration” and so outside the scope of TUPE

In ICTS UK v Mahdi the EAT held that events occurring after an alleged transfer could be relevant when considering whether it was intended that the service provision change was for a task of short-term duration to which TUPE would not apply.

In this case, a university changed its security provider at a vacant site pending a planned redevelopment. The new security provider refused to take on the outgoing provider’s staff. They argued that their appointment was intended for a task of short-term duration and that TUPE therefore did not apply. However, by the time of the Tribunal hearing, planning permission for the redevelopment had still not been granted and no building works had begun.

Although the assessment as to whether a task is short-term is based on the client’s intention at the time of the transfer, the EAT found that the Tribunal should have taken these subsequent factual circumstances into account. Evidence as to the state of the site at the time of the hearing may, for example, have been relevant to help determine whether the university genuinely intended at the time it appointed the security provider that the appointment would be of short-term duration, rather than this merely being the university's hope or wish.

There is conflicting case law on this issue, which highlights the importance of including tightly-worded TUPE provisions in commercial contracts and of agreeing in advance which employer has responsibility for employees who may transfer under TUPE.


Length of service criterion in pay scale did not indirectly discriminate against a Muslim prison chaplain

In Naeem v Secretary of State for Justice the Court of Appeal held that a length of service criterion in a prison pay system did not indirectly discriminate against a Muslim chaplain on grounds of religion or race.

The average pay of Muslim chaplains was lower than that of Christian chaplains. This was because they hadn't been employed for as long, and so had less time to move up the pay scale. Their shorter length of service was due to the fact that the Prison Service had no need to employ Muslim chaplains before 2002, because there was not sufficient demand before 2002 for their services.

The Court of Appeal concluded that the only reason for the disparity was because of the Muslim chaplains’ more recent start dates, which did not reflect any characteristic specific to Muslims. The Muslim chaplain claimant in this case had therefore suffered no indirect discrimination.

This case is a good example of how indirect discrimination cases can be defended by focusing on the Claimant’s need to demonstrate why a criterion disadvantages a particular group.


Job offer withdrawn after negative verbal reference was discrimination arising from disability

The decision in Pnaiser v NHS England and Coventry City Council is a reminder to employers of the potential dangers of straying from standard form references, particularly where these form part of an agreed settlement.

In this case the employee’s previous manger verbally elaborated on a written reference and warned the prospective new employer about the employee’s sickness absence record. The manager implied that the employee’s sickness history meant she would not be suitable for the new job. The prospective employer decided to retract its job offer.

The employee’s sickness absence was connected to her disability and she successfully claimed that the conduct of both employers amounted to discrimination arising from disability. The EAT held that the employee did not need to prove that discrimination had taken place, merely that the unfavourable reference was provided partly in consequence of the sickness absences, which were a consequence of the disability. The onus then shifted to the employer to disprove the claim of disability discrimination. Neither employer was able to do so, and so her claims were upheld against both of them.


Failure to make reasonable adjustments to the interview process for alternative employment in a redundancy situation

In Waddingham v NHS Business Services Authority an employee was undergoing cancer treatment whilst at risk of redundancy. As part of his application for an alternative internal post, the employee agreed to attend a competitive  interview. His performance at interview was adversely affected by his medical condition and he was made redundant.

The Employment Tribunal held that requiring the employee to attend the competitive interview was both discrimination arising from disability and a failure to make reasonable adjustments. The employer should have assessed the employee’s application without a competitive interview using other material (such as appraisals) that were available from his long service.

In relation to the discrimination arising from disability claim, the employer tried to objectively justify its decision to pass the disabled employee over in favour of a better candidate by arguing that its legitimate aim was to find the best candidate for the job. The Employment Tribunal doubted, however, whether this could be a legitimate aim. A more appropriate aim might be to find a candidate who could perform to the required standard, even if they were not the best for the job. In any event, requiring the employee in this case to attend a competitive interview was not a proportionate way of achieving the employer's stated aim.

Whilst Employment Tribunal decisions are not binding, this case is a useful reminder of the importance of considering and making all reasonable adjustments to deal with disadvantages that disabled employees may otherwise face in the workplace. The fact that this disabled employee had agreed to attend the competitive interview did not absolve the employer from its reasonable adjustments obligations. An employer’s failure to make reasonable adjustments also makes it difficult to defend an employee’s discrimination arising from disability claim.


Reasonable adjustments to sickness absence policy

The recent Court of Appeal decision in Griffiths v Secretary of State for Work and Pensions offers some comfort to employers regarding the scope of the duty to make reasonable adjustments in the context of sickness absence.

The Court confirmed that employers need to bear in mind the duty to make reasonable adjustments when operating their sickness absence policies. The duty is not satisfied by treating all employees alike; additional steps must be taken to remove any substantial disadvantage for a disabled employee where it is reasonable to do so. However, on the facts of this particular case the Court of Appeal said the employer was not obliged either to postpone the trigger point at which disciplinary action could be taken under its attendance management policy or to disregard periods of sickness absence. It would not have been reasonable for the employer to take either of those steps, given the likelihood of further periods of potentially lengthy absence.

This decision provides welcome clarification that, whilst absence policies and ‘trigger dates’ for action are subject to the duty to make reasonable adjustments, employers need not make unreasonable changes or make exceptions to their policies where, for example, the changes would make no difference. However, especially in the sickness absence context, employers also need to be mindful of potential liability for discrimination arising from disability. A key way of avoiding liability for this latter type of claim is to ensure that employers can objectively justify their absence management treatment of disabled employees.

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