Key employment law developments: dress codes; subject access requests; regulatory references


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Summary: Our blog outlines the five key employment law developments over the last month. These include recent cases on religious discrimination in the context of dress codes, subject access requests, and the coming into force of the new regulatory reference regime for UK banks, building societies and insurers. We also outline other points of note this month including an update on Brexit and a reminder of the new compensation limits.

Dismissal for wearing an Islamic headscarf may constitute discrimination

There have been two recent ECJ cases on whether the dismissal of an employee for wearing a hijab amounted to religious discrimination.

  • In Achbita and another v G4S Secure Solutions NV, the ECJ held that the prohibition on wearing a hijab as part of a rule prohibiting the visible wearing of any political, philosophical or religious sign in the workplace, was not direct discrimination. The rule covered any manifestation of such beliefs without distinction, requiring all workers to dress neutrally.

    The ECJ agreed that the prohibition may constitute indirect discrimination, but that the employer’s policy of neutrality would be a legitimate aim, particularly where it only affected those workers with customer facing roles.
  • In Bougnaoui and another v Micropole SA, a customer complained about the wearing of a veil by one of Micropole’s employees and requested that there should be “no veil next time”. The employee was dismissed for refusing to agree to this.

    The ECJ found that an employer’s willingness to take into account the wishes of a customer could not be a genuine and determining occupational requirement (as this was a subjective consideration and not based objectively on the nature of the activities). The dismissal of the employee amounted to direct discrimination.

Why this matters? Employers should be cautious before concluding that a dismissal for wearing the hijab (or other religious signs) will not amount to discrimination. In Achbita, it is difficult to see how the policy was not directly discriminatory, being only of relevance to those with political, philosophical or religious beliefs. In any event, employers may have difficulty objectively justifying an indirect discrimination claim in this context, bearing in mind the European Court of Human Rights’ decision in Eweida, which found that the employer’s dress code in that case placed too much weight on the employer’s interest in its corporate image over the employee’s wish to manifest her religious belief by wearing a crucifix.

Achbita and another v G4S Secure Solutions NV

Bougnaoui and another v Micropole SA

No claim for harassment based on disability if the disability is asserted, but not proven

The EAT has held that there can be no claim for harassment based on a disability if the disability is asserted, but not proven.

In a harassment claim, it is the protected characteristic which causes the harasser to act. Where the disability has not been proven and not accepted by the employer, the EAT held that it would be problematic to conclude that the unwanted conduct related to the disability. The difficulty flows from the fact that whether someone has a disability for the purposes of the Equality Act 2010 is a legal test based on various factors.

Interestingly, even if the disability was proven, the EAT stated that informing an individual of the surveillance as part of the disciplinary process would not amount to harassment, as concealing that the employer had conducted surveillance would go against the requirements for fairness and best practice set out in the Acas Code.

Why this matters? This is a positive decision for employers, although it leads to an odd conclusion - an individual is protected from harassment if they are attributed with a protected characteristic (even if they do not have it) or if they are perceived (wrongly) to have a protected characteristic, but are not protected in circumstances where they allege a disability but haven’t proved that their condition satisfies the strict legal definition for a disability.

Peninsula Business Service Ltd v Baker

Employer’s search in responding to a data subject access request is limited to that which is reasonable and proportionate

The Court of Appeal has followed its recent decision in Dawson-Damer and others v Taylor Wessing LLP by holding that proportionality applies to limit the scope of the efforts that an employer must make in responding to a data subject access request. Interestingly, the Court confirmed that a first search may be considered adequate even if a further and more extensive search would reveal some more personal data.

The Court also gave some useful guidance on when it will exercise its discretion to require an employer to comply with a subject access request. A court will be less inclined to exercise its discretion to order this if there is any abuse of rights by the data subject (for example, where the individual brings the claim merely to put pressure on the employer) or where the real quest is to get hold of documents rather than their personal data.

Why this matters? This case reaffirms that proportionality applies to the scope of the search carried out by an employer. However, while employers can take greater comfort when pushing back on the scope of a wide ranging data subject access request, a proportionate search may still require a lot of effort for the employer.

Ittihadieh v 5-11 Cheyne Gardens RTM Company Ltd and Others 


Extension of time limits does not apply to period of Acas early conciliation occurring before start of limitation period

A Scottish Employment Tribunal has decided that the early conciliation ‘stop the clock’ time limit provisions do not apply where the time limit for bringing a claim has not yet started. Accordingly, on the facts, where the employee spent a month in early conciliation, but only the last three days of early conciliation fell after the effective date of termination, the time limit for the employee’s claim for unfair dismissal was only extended by those three days.

Why this matters? Whether an employee has brought their tribunal claim in time is an important preliminary issue. This Scottish decision runs contrary to the approach taken by recent English Employment Tribunal decisions, but is arguably is more in keeping with the intention behind the early conciliation provisions. Pending clarification from the EAT, employers should remain live to this time limits issue and may wish to consider arguing it in appropriate cases.

Fergusson v. Combat Stress

New regulatory references regime in force since 7 March 2017

As part of the Senior Managers and Certification Regime and the Senior Insurance Managers Regime, large financial services institutions (mainly UK banks, building societies and insurers) now have additional obligations in respect of regulatory references for candidates moving into materially regulated staff positions.

In brief, references need to cover the candidate’s employment history for the previous 6 years; and for any references given on or after 7 March 2017, there is an obligation on employers to update references given in the past 6 years if any new relevant information comes to light that means the reference is no longer accurate.

Why this matters?  Employers caught by the new regime will have to do more to satisfy themselves that the individual is fit and proper before moving into the relevant position. There will now also need to be increased rigour around the updating of references given by firms if new information comes to light which affects the accuracy of the reference. An employer’s need to meet their regulatory obligations may mean increased exposure to litigation from former employees where a regulatory reference is updated negatively.

Round up of other developments

Brexit: On 29 March 2017, the UK government triggered Article 50 of the Treaty on European Union by issuing notice to the European Council of the UK's intention to leave the EU. The UK now has two years in which to negotiate its exit.

The government’s approach will be to convert the body of European legislation into UK law at the point of Brexit. Any changes to the law will then be made after careful scrutiny and proper debate.

On 30 March 2017, the Secretary of State for Exiting the European Union (David Davis) presented to Parliament the government's White Paper: Legislating for the United Kingdom's withdrawal from the European Union.

April 2017 employment law changes include:

  • the Gender Pay Gap Reporting Regulations for private and voluntary sector employers come into force.
  • the Apprenticeship levy for larger employers comes into force.
  • Compensation limits: the cap on unfair dismissal compensatory awards rises to £80,541 and a week’s pay rises to £489 (making the maximum statutory redundancy payment £14,670).
  • the National Living Wage increases to £7.50ph.

Spring 2017 Budget: Key points to note from an employment perspective:

  • Legislation to abolish the foreign service relief is not being introduced at this stage and will be covered instead by the Finance Bill 2017-2018.
  • Legislation is being introduced to remove the tax and NICs advantages when certain benefits are provided via a salary sacrifice arrangement.

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