Employment Case Law Update May 2025

Read on for our monthly digest for employers on upcoming employment law changes and key, recent employment tribunal cases.

 

HR Consultants as Agents

 

Handa v Station Hotel (Newcastle) Ltd and Others 

 

Mr Handa brought employment claims against his former employer, The Station Hotel (Newcastle) Ltd, arising from his dismissal. Central to the case was the involvement of two external HR consultants: one was appointed to conduct an investigation into grievances raised by Mr Handa, and the other was instructed to preside over his disciplinary hearing. Mr Handa argued that these HR consultants should be held jointly liable as agents of the employer for their role in the dismissal process.

The employment tribunal initially rejected this argument, finding that it was not reasonably arguable that the HR consultants were acting as the employer’s agents in a way that could make them liable for the dismissal. Mr Handa appealed to the Employment Appeal Tribunal (EAT), which partially disagreed with the tribunal’s reasoning and found that the agency argument could not be dismissed so lightly.

The matter then proceeded to the Court of Appeal to determine the legal limits of liability for external HR consultants involved in disciplinary and grievance procedures.

The Court of Appeal upheld the EAT’s core finding: external HR consultants appointed to conduct grievance investigations or disciplinary hearings may, in principle, act as agents of the employer while performing those roles. The Court acknowledged that engaging an external party to conduct internal procedures does not inherently remove the possibility of agency.

However, the Court concluded that agency status alone is not sufficient to establish co-liability for the employer’s dismissal decision. The HR consultants in this case were not the decision-makers. Although their work and reports contributed to the employer’s decision to dismiss Mr Handa, they did not themselves exercise the authority to dismiss, nor did they instruct the employer to do so.

The Court rejected the argument that merely being a necessary part of the decision-making process renders an individual or firm legally responsible for the outcome. The employer retained discretion and responsibility for the final decision, and reliance on reports or findings prepared by consultants did not amount to delegation of that decision-making power.

As such, the Court dismissed the claim that the HR consultants were jointly liable for the dismissal, clarifying the scope of agency in the employment law context.

 

Employer Takeaways

 

The decision in Handa v Station Hotel (Newcastle) Ltd provides important clarification for employers engaging external HR professionals. It confirms that consultants appointed to conduct disciplinary or grievance procedures may be regarded as agents of the employer while carrying out those functions. However, unless they make or directly influence the decision to dismiss, they could not be held liable for the employer’s actions. Even where an investigation or hearing report heavily influences the outcome, legal responsibility for the dismissal rests solely with the employer.

The fact that a consultant’s work forms part of the chain of events leading to a dismissal is not sufficient to establish legal liability; there must be evidence of control or delegated authority.

To avoid confusion or exposure to unnecessary risk, employers should ensure that the terms of engagement for external consultants clearly define the scope of their role, specifying that their role is limited to providing investigatory or procedural support and confirming that all decision-making authority remains with internal management.

 

Part-Time Working

 

Augustine v Data Cars Ltd

 

In Augustine v Data Cars Ltd, the claimant, Mr Augustine, worked as a part-time private hire taxi driver. He was required to pay a flat weekly “circuit fee” of £148 to the respondent, Data Cars Ltd, for access to the company’s booking and dispatch system. The same fee was charged to all drivers, irrespective of how many hours they worked or how much income they earned.

Mr Augustine brought a claim under the Part-Time Workers (Prevention of Less Favourable Treatment) Regulations 2000, arguing that this flat-fee arrangement amounted to less favourable treatment when compared to full-time drivers. He contended that, because he worked fewer hours, the financial burden of the fee had a disproportionately negative impact on him as a part-time worker.

The Court of Appeal dismissed the appeal, upholding earlier decisions that found no breach of the Regulations. The key legal issue was whether the claimant’s part-time status was the reason for the alleged less favourable treatment.

In reaching its conclusion, the Court relied on the Scottish authority McMenemy v Capita Business Services, in which it was held that for treatment to be discriminatory under the Regulations, the part-time status must be the sole reason for that treatment. Applying this principle, the Court found that the flat-fee model used by Data Cars Ltd was applied to all drivers and was not implemented because Mr Augustine was part-time. Therefore, his part-time status was not the sole cause of the fee, and no unlawful discrimination had occurred under the current legal framework.

While the Court of Appeal acknowledged serious reservations about the reasoning in McMenemy, a majority of the judges accepted that it would be inappropriate to depart from it unilaterally, given that the relevant statutory provisions apply throughout Great Britain. The Court emphasised the importance of consistent interpretation between jurisdictions.

However, the Court did express unease with the state of the law. Bean LJ noted that limiting claims to cases where part-time status is the sole cause of less favourable treatment creates an overly narrow and arguably unjust approach to protecting part-time workers. He described the law as being in an “unsatisfactory state” and granted the claimant permission to appeal to the Supreme Court.

 

Employer Takeaways

 

The Court of Appeal’s decision offers some reassurance to employers that applying uniform charges or policies such as flat fees to all workers, regardless of hours worked, is unlikely to breach the Part-Time Workers Regulations, so long as part-time status is not the sole reason for the treatment.

However, legal uncertainty remains.

The Court’s decision to follow the Scottish authority in McMenemy reflects a desire for consistency, but also highlights unresolved ambiguity in the law. Employers should monitor any future Supreme Court ruling that may redefine the legal test for part-time worker discrimination.

In the meantime, even if such fee models are currently lawful, employers would be advised to review their pricing structures to assess whether they place a disproportionate burden on part-time or low-hour workers, particularly in roles where working patterns vary significantly. Policy design should be approached with care; until the legal position is clarified, employers should consider the proportionality and potential indirect impact of seemingly neutral rules, to reduce the risk of future challenge.

 

Victimisation

 

Kokomane v Boots Management Services

 

In Kokomane v Boots Management Services, the claimant brought a claim of victimisation under the Equality Act 2010. She relied on several grievances as her alleged “protected acts.” These included an initial grievance alleging she was treated differently from colleagues in relation to an incident where she was accused of shouting, a follow-up grievance, submitted months later, complaining that the original grievance had not been addressed, and allegations of bullying arising during this period.

Importantly, none of her complaints explicitly stated that she believed the differential treatment or bullying was linked to her race. Nevertheless, she was the only Black employee in the team, and during the grievance process, discussions had touched on how perceptions of shouting could carry negative racial undertones, specifically, stereotypes associated with Black women.

The Employment Tribunal rejected her victimisation claim, ruling that her complaints did not amount to “protected acts” under the Equality Act 2010. It held that her grievances did not make any express allegation of race discrimination, and so could not trigger protection under the relevant provisions.

The Employment Appeal Tribunal overturned the ET’s decision, holding that the tribunal had adopted too narrow an approach to what can constitute a protected act. The EAT reaffirmed that a protected act does not require the claimant to explicitly allege discrimination and it is enough for the complaint to assert facts which, if proven, could amount to discrimination under the law.

In this case, the EAT emphasised that tribunals must evaluate the wider context, especially how the employer would have reasonably understood the complaint at the time it was made. Key contextual factors in this case included the claimant being the only Black employee; the nature of her grievance alleging differential treatment and the discussion at the grievance meeting involving stereotypes about Black women and shouting.

The EAT concluded that these were not peripheral but central to understanding the nature of the complaints and how they would reasonably have been interpreted by the respondent. Accordingly, the tribunal had failed to adopt the correct legal test and had not given sufficient weight to the context.

The case was remitted to a different tribunal for reconsideration.

 

Employer Takeaways

 

The Court of Appeal’s judgment reinforces that employees do not need to use explicit terms like “race discrimination” to gain protection from victimisation. It is enough if the facts they describe could legally amount to discriminatory treatment.

As such, employers and tribunals will need to assess the broader context in which a grievance is made, including the employee’s identity, the nature of the complaint, workplace dynamics and any relevant stereotypes or patterns of behaviour.

Even where a complaint appears vague or indirect, employers must carefully consider how it could reasonably be understood, especially when protected characteristics are involved.

Grievance procedures should therefore be approached with care and sensitivity. Failing to properly investigate concerns that may relate to discrimination, even implicitly, can give rise to a valid victimisation claim.

To mitigate risk, employers should ensure that managers and decision-makers are adequately trained to recognise potential protected acts and handle complaints appropriately, regardless of how clearly the allegations are framed.

 

Territorial & International Jurisdiction

 

Cable News International Inc v Bhatti

 

In Cable News International Inc v Bhatti, the Court of Appeal addressed the territorial scope of UK employment protections for an individual employed by a foreign company while working partly overseas.

The claimant, Ms Bhatti, was a British journalist employed by CNN, a US-based global media organisation. Between 2015 and early 2017, she was based in Bangkok, where she worked across Asia. However, in March 2017, she relinquished her Bangkok base and relocated to London.

Although Ms Bhatti continued to be employed under the same contract, her role changed significantly. From March 2017 onward, she had no work responsibilities in Asia and made herself available to CNN’s London bureau. She only carried out one day of work in London before CNN informed her in August 2017 that her contract would not be renewed.

Ms Bhatti brought various employment claims in the UK Employment Tribunal, including claims for unfair dismissal and discrimination. CNN challenged the tribunal’s jurisdiction, arguing that her employment lacked sufficient connection to Great Britain and that her place of work and employment relationship remained international in nature.

The Court of Appeal upheld the earlier rulings of both the Employment Tribunal and the Employment Appeal Tribunal, confirming that Ms Bhatti was entitled to bring her claims in the UK. The court endorsed the EAT’s finding that, from March 2017 onwards, Ms. Bhatti had established a sufficiently strong connection to the UK.

The Court reiterated that territorial jurisdiction in employment cases is not determined by rigid rules, but by a factual and evaluative assessment of all circumstances. In this case, once Ms Bhatti had relocated to London and was no longer working or assigned duties in Asia, her only real link with her employer was through the London bureau. Her work location, professional base and point of contact had all shifted to the UK.

Despite the fact that she carried out only one day of work in London, it was the employer’s decision not to allocate further work that ultimately led to her departure.

The court also distinguished this case from others where employees were posted abroad temporarily or where their ties to the UK remained marginal. In contrast, Ms Bhatti had made a definitive shift to the UK and severed her operational ties with Asia prior to the termination of her contract.

 

Employer Takeaways

 

This decision clarifies that UK employment protections can extend beyond national borders. Employers based outside the UK should be aware that British employees working overseas may still fall within the scope of UK employment law if they re-establish a work base in the UK, even for a limited period.

Crucially, tribunals will look past formal job titles or international contract terms and focus on the substance of the employee’s connection to the UK at the relevant time.

Jurisdictional challenges must be rooted in current realities rather than historic arrangements; unless the employee’s role continues to have a genuine international character at the point of dismissal, tribunals are likely to assert jurisdiction over their claims.

To mitigate risk, employers should manage any transfer or relocation with legal precision, documenting changes to the employee’s role, base and reporting lines, particularly where dismissals, redundancies or contract terminations may follow.

 

TUPE

 

ABC v Huntercombe (No 12) Ltd and Others

 

In ABC v Huntercombe (No 12) Ltd and Others, the claimant, referred to as ABC, brought High Court proceedings seeking damages for abuse she alleged occurred while she was an inpatient at a hospital operated by Huntercombe (the transferor). ABC claimed that two hospital employees had committed wrongful acts against her during their employment with Huntercombe, prior to a transfer of the hospital services to another provider, Active Young People Ltd (AYP), under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE).

After the TUPE transfer, the employees alleged to have committed the abuse became employed by AYP. ABC argued that liability for their actions (specifically, Huntercombe’s vicarious liability) had transferred to AYP along with the employees. The core legal issue was whether vicarious liability for torts committed before the transfer passed from the transferor to the transferee under Regulation 4 of TUPE.

The High Court held that the transferee, AYP, could not be held vicariously liable for torts committed by the transferring employees prior to the TUPE transfer. It found that Regulation 4 of TUPE, which provides for the automatic transfer of “rights, powers, duties and liabilities under or in connection with” a transferring employee’s contract of employment, did not extend to vicarious liability towards third parties for past torts.

The Court distinguished between contractual and vicarious liabilities. While TUPE can transfer liabilities arising from an employment relationship (e.g. breach of contract or discrimination claims), vicarious liability concerns the employer’s relationship with third parties. In ABC’s case, the alleged torts were committed before the transfer and were entirely unrelated to any contractual obligation between the employer and employee that continued post-transfer.

The Court also declined to follow the County Court’s earlier decision in Doane v Wimbledon Football Club, which had suggested that vicarious liability could transfer under TUPE. Instead, it emphasised the statutory purpose of TUPE: to protect the employment rights of employees, not to transfer liabilities owed to third parties for pre-transfer conduct.

 

Employer Takeaways

 

The High Court ruling draws a clear boundary around the extent of liability transferred under TUPE. Employers acquiring staff through a TUPE transfer are not automatically exposed to vicarious liability for torts committed by those employees before the transfer; such liabilities remain with the original employer.

The decision also reinforces the important distinction between contractual obligations, which do transfer under TUPE, and broader liabilities to third parties, such as personal injury claims, which do not. TUPE is not a vehicle for transferring all historic liabilities, and transferee employers can take some comfort in knowing that they will not inherit tortious liabilities unless expressly agreed.

That said, due diligence remains essential. Transferees should thoroughly assess any potential claims arising under employment law or related contracts that may follow the employees across.

Although this case provides clarity, the seriousness of the underlying issues could attract future appellate scrutiny, particularly at Supreme Court level. For now, however, the High Court has firmly limited the scope of TUPE’s reach.

 

Need Assistance?

 

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