Read on for our monthly digest for employers on upcoming employment law changes and key employment cases that have recently been decided.
Fire & rehire
Tesco v USDAW & others
In 2007, Tesco planned to restructure and expand its distribution centre network. To incentivise workers to move to other distribution centres and avoid losing experienced warehouse staff through redundancy due to the changes, Tesco offered affected workers a relocation package, with a permanent pay premium—known as “retained pay”—and agreed to be outside of collective bargaining, as long as the warehouse staff were not fired for misconduct or promoted.
Tesco sought to end retained pay in 2021. All employees who were receiving retained pay were notified by the company that it planned to ask for their consent to remove the retention pay provisions from their contracts in exchange for an advance payment equal to 18 months of retained pay. Tesco intended to terminate an employee’s contract and then reengage them on new terms if they refused to accept this change.
Employers may use dismissal and reengagement, also referred to “fire and rehire,” when changing the terms and circumstances of employment; employees who reject the new terms are let go and rehired under the new conditions.
A legal challenge was led by USDAW.
Earlier this year, the High Court issued an injunction prohibiting Tesco from firing and rehiring workers in order to eliminate a permanent contractual right to enhanced pay.
The Court of Appeal has now overturned this injunction. In doing so, it has reestablished the more widely accepted stance that Tesco would be allowed to give notice in the usual manner and that the rights to enhanced compensation would only exist for the duration of the specific contract, permitting reengagement on other terms and conditions.
USDAW have stated they are seeking permission to appeal to the Supreme Court.
While the courts have acknowledged this case involved “extreme” facts, there is some reassurance for employers that the previous position has been restored; under UK employment law, it is uncommon to see an injunction barring an employer from using a contractual right to provide notice of termination.
As such, depending on the facts of a case, fire and rehire strategies may still have a cost associated with them. Employers should also continue to be mindful of the risk of unfair dismissal claims from qualifying workers.
Fire and rehire remains under scrutiny and the government is devising a new code of practice for employers. Employers should alos refer to ACAS guidance published in 2021.
Ahmed v Department for Work and Pensions
The claimant was disabled and by the end of December, had missed 22 days of work in the previous 12 months. This pattern of absences would typically have triggered the respondent (DWP) to take action under its absence policy, which set an 8-day absence in a rolling 12-month period as the threshold for consideration of action. However, in a letter to the claimant, the DWP advised the threshold had been raised to 11 days. The letter did not specify whether the prior 22 days of absence would be written off. The claimant argued that even if they were, he would still be at a disadvantage because the new 11-day absence threshold had already been reached.
In addition to absences, there were also issues relating to the claimant’s flexible working breaks and block-booking off time in his diary.
Mr Ahmed brought a claim for disability discrimination.
At first instance, the ET dismissed Mr Ahmed’s claims that the respondent had not made reasonable adjustments.
The claimant appealed.
The EAT held that the ET had failed to consider the extent to which the claimant’s actions were a result of his disability in the widest meaning (Risby v London Borough of Waltham Forest). The tribunal at first instance was also found to have misidentified the impact of the claimant’s disability – any unfavourable treatment could not also be a consequence of the disability.
The appeal was allowed.
This case highlights the importance of employers taking a measured and informed approach when dealing with disability-related absence.
Mackereth v DWP & anor
The claimant, a doctor, was a practising Christian who felt that God created man and woman as stated in the Bible and that this could not be changed. This conviction dictated that he would not use a person’s preferred pronoun or refer to them using their preferred style or title.
As part of his role as a Health and Disabilities Assessor for the DWP, the claimant was required to use the preferred pronouns of transgender clients. During his induction, he opposed, claiming his specific Christian convictions and his lack of belief in “transgenderism.” The employer looked into ways to work around his objection, but found no solution. The claimant quit and filed a tribunal claim, citing harassment and direct and indirect discrimination based on his beliefs and lack of beliefs.
The tribunal rejected his complaints and he brought an appeal.
The appeal was then rejected by the EAT.
The EAT held the first tribunal had made an error in concluding that some of the claimant’s beliefs did not fall under the purview of the Grainger criteria, finding that the claimant’s beliefs were respectable in a democratic society, not in conflict with the rights of others, and compatible with human dignity (Forstater).
The tribunal dismissed the claimant’s argument that the Equality Act protects him regardless of Grainger for not believing in transgenderism, and it underlined that the context of a given job cannot determine whether a belief satisfies the Grainger requirements.
The employer tried to make accommodations for the claimant and get a better understanding of his position before taking action against him, therefore the accusations of direct discrimination and harassment were rejected on the facts.
The DWP’s objectives were to ensure that transgender service users were treated with respect and without discrimination, as well as to promote equal opportunities. The indirect discrimination claim related to PCPs, which required the claimant to use service users’ pronouns and confirm his willingness to do so. The tribunal’s determination that the measures were appropriate and required was valid, as such the appeal was denied.
This case serves as a reminder to employers that, even though a belief is sincerely held and a part of a larger accepted belief, the way the believer expresses that belief might still be problematic. As a result, in order to preserve their employees’ dignity and strike a balance between opposing convictions, employers should act proportionately and collaborate with individuals to find a solution that minimises offence and unfair treatment.
The EAT also stated that its role is to determine if the tribunal has made an error in law, and not to comment or contribute to any wider, related debate on the matter.
If you have a question about employment case law and the impact of tribunal and court decisions on your business, DavidsonMorris’ experienced employment lawyers can help. Working closely with our specialist human resource colleagues, we offer a holistic advisory and support service for employers encompassing both the legal and people risks of workforce management. Speak to our experts today for advice.
Last updated: 25 July 2022