Read on for our monthly digest for employers on upcoming employment law changes and key, recent employment tribunal cases.
Equal Pay
Thandi and Others v Next PLC
A group of predominantly female store-based workers brought a claim for equal pay against their employer, Next, arguing their roles were of equal value to those of predominantly male warehouse operatives and should be compensated similarly.
After six years, the Employment Tribunal (ET) has ruled in the employees’ favour, finding that certain pay differences between the two roles could not be justified. The tribunal identified indirect discrimination, noting that the disparity disproportionately affected women, particularly given that the retail workforce was largely female.
The ET rejected Next’s justifications for paying its warehouse workers more, such as market forces and business viability, concluding that these reasons were primarily cost-saving and therefore insufficient.
The tribunal did uphold some pay differences related to specific bonuses and premiums that were tied to legitimate business needs, such as productivity and staffing challenges in the warehouses.
As a result of the decision, Next may be liable for up to £30 million in compensation. However, the retailer has confirmed it will be appealing the decision.
Employer Takeaways
Importantly, this ruling is not binding on other cases as it is an Employment Tribunal decision. However, the case highlights the risks for UK employers, particularly in retail, of relying on market forces and cost-saving measures to justify pay disparities between different roles. The decision underscores the importance of ensuring that any pay differences are tied to legitimate, non-discriminatory business needs and are proportionate. Employers should also be cautious of continuing historical pay discrimination, especially where there is a clear gender disparity in roles.
Employers should regularly review their pay structures to ensure compliance with equal pay legislation and avoid potential costly claims.
Whistleblowing
Treadwell v Barton Turns Development
The claimant, Ms Treadwell, was dismissed and brought a claim for automatic unfair dismissal. She argued that her dismissal was due to her making protected disclosures to one of the company directors, and that her dismissal was automatically unfair under section 103A of the Employment Rights Act (ERA).
During a preliminary hearing, the claimant sought to amend her claim, including an attempt to add a whistleblowing detriment claim under section 47B of the ERA. She did not seek to bring a case against the director individually, but focused her claim solely against the employer.
The tribunal judge allowed some of the amendments requested but denied the amendment related to the whistleblowing detriment claim. The claimant subsequently appealed this decision to the Employment Appeal Tribunal (EAT).
The EAT allowed the appeal, on the basis of being bound by the Court of Appeal’s decision in Timis and Sage v Osipov. Under Osipov, an employee is permitted to bring a claim under section 47B(1A) against an individual co-worker for subjecting them to the detriment of dismissal, i.e., for participating in the decision to dismiss. The employee may also bring a claim of vicarious liability against the employer for that act under section 47B(1B). The only exclusion under section 47B(2) is a claim against the employer for its own act of dismissal.
Employer Takeaways
The specific facts of a case typically influence whether a claimant chooses to pursue a whistleblowing detriment or dismissal claim. However, there are instances where a claimant may decide to pursue both types of claims based on the same facts.
Indirect Discrimination
Rollett v British Airways
A group of claimants raised allegations of indirect discrimination following changes to their schedules after restructuring by the respondent. The claimants argued that the new schedule, which constituted a provision, criterion, or practice (PCP), disproportionately disadvantaged non-British nationals, who were more likely to commute from abroad, thus amounting to indirect race discrimination. Additionally, they claimed that the schedule disadvantaged women, who were more likely to have caring responsibilities, thereby constituting indirect sex discrimination.
Among the group of claimants was a man who was a carer and claimed that he experienced the same disadvantage as the group of women. Another claimant, a British national residing abroad, argued that she faced the same disadvantage as the non-UK nationals. However, neither of these claimants possessed the protected characteristic on which the claims were based.
The tribunal found that section 19 of the Equality Act 2010 did not explicitly allow for claims of associative indirect discrimination. Nevertheless, the tribunal concluded that the provision had to be interpreted in accordance with EU law principles as far as possible.
In the case of CHEZ Razpredelenie Bulgaria AD v Komisia za zashita ot diskriminatsia, the Court of Justice of the European Union (CJEU) ruled that a person could claim indirect discrimination even if they did not have the relevant protected characteristic, provided they suffered the same disadvantage as the group with that characteristic. The tribunal therefore upheld the claimants’ arguments under the CHEZ case, which was directly incorporated into UK law as section 19A of the Equality Act 2010 from 1st January 2024.
The respondent appealed, arguing that the tribunal had overstepped the boundary between permissible interpretation and impermissible amendment in its attempt to align section 19 of the Equality Act with the principles established in CHEZ. However, the Employment Appeal Tribunal (EAT) dismissed the appeal, concluding that the tribunal had not committed any legal error.
Employer Takeaways
Since 1 January 2024, the EU case law position has been formally incorporated into UK law with the addition of section 19A to the Equality Act 2010, which provides a statutory foundation for claimants to pursue indirect associative discrimination claims when they experience the same disadvantage as a group of people who share a protected characteristic. This case therefore offers valuable insight into how EU case law aligns with the UK’s domestic legal framework, confirming that the two systems are compatible, allowing for claims of indirect associative discrimination.
Disability Discrimination
Cairns v Royal Mail Group
The claimant, Mr Cairns, was employed as a postal delivery worker, primarily responsible for outdoor duties. Due to a knee injury and osteoarthritis, which qualified as a disability, he was no longer able to perform outdoor work. As a temporary measure, he was moved to an indoor role that was not part of the regular workforce. The respondent then initiated a consultation process to dismiss him on the grounds of ill-health retirement, as he could no longer fulfil his outdoor job responsibilities and there were no available indoor vacancies at the time. Consequently, the claimant was dismissed.
The claimant brought a claim of unfair dismissal, arguing that the respondent’s failure to wait for the imminent merger of his postal centre with another, which would have created indoor roles, amounted to a failure to make reasonable adjustments and constituted discrimination arising from his disability.
The employment tribunal dismissed all of the claims, reasoning that there has to be a point at which a surplus position must be terminated.
The claimant appealed the tribunal’s decision on the grounds of discrimination. The Employment Appeal Tribunal (EAT) allowed the appeal, finding that the original tribunal had placed too much emphasis on the circumstances at the time of the dismissal, and failed to consider that the respondent should have retained the claimant in employment to allow for his reassignment to following the merger – as contended by the claimant.
As the tribunal had failed to address that aspect of Mr Cairns’ case, including whether the dismissal was a proportionate means of achieving a legitimate aim given the reorganisation, the claim had to be reheard.
Employer Takeaways
This ruling demonstrates that terminating an employee due to a disability is not justified if the employer has alternative options available. Employers are advised to thoroughly explore other potential roles before deciding to dismiss an employee on the grounds of capability and to reassess their decision during the appeal process.
Additionally, this case serves as an important reminder to apply common sense during an appeal. If the circumstances have changed since the initial dismissal, these changes must be taken into account.
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Author
Founder and Managing Director Anne Morris is a fully qualified solicitor and trusted adviser to large corporates through to SMEs, providing strategic immigration and global mobility advice to support employers with UK operations to meet their workforce needs through corporate immigration.
She is a recognised by Legal 500 and Chambers as a legal expert and delivers Board-level advice on business migration and compliance risk management as well as overseeing the firm’s development of new client propositions and delivery of cost and time efficient processing of applications.
Anne is an active public speaker, immigration commentator, and immigration policy contributor and regularly hosts training sessions for employers and HR professionals
