Frontline UK Employment Law Update Edition 8 2020 - Case updates

1. Mr C H Tan v Copthorne Hotels Ltd: 2200986/2017

2. Mrs K Higgs v Farmor’s School: 1401264/2019

3. O’Eachtiarna and ors v City Sprint (UK) Ltd 2301176/2018

4. Chell v Tarmac Cement and Lime Ltd [2020] EWHC 2613

5. Ryan v South West Ambulance Services NHS Trust UKEAT/0213/19

6. Hopkins v Commissioners for Her Majesty’s Revenue and Customs

7. Alta Trading UK Limited v Bosworth

1. Mr C H Tan v Copthorne Hotels Ltd: 2200986/2017  (LINK)

In this case, the Employment Tribunal (“ET”) awarded substantial costs to the ex-employer Respondent, ordering the Claimant to pay just over £432,000. This is a significant departure from the norm, in ET proceedings, for each party to bear their own costs and shows that in ‘exceptional’ cases, tribunals are prepared to make significant cost awards. 

The Claimant worked for the Respondent as a Senior Vice President for almost 5 years until his employment was terminated by reason of redundancy in early 2017. He then brought a range of claims against the Respondent including: unfair dismissal, automatic unfair dismissal, victimisation, harassment, whistleblowing detriment, unlawful deduction of wages and discrimination on the grounds of age, race and sexual orientation. 

Prior to the hearing, the Claimant withdrew some of the claims and deposit orders were made in respect of some of the other heads of claim, requiring the Claimant to pay a deposit as a condition of proceeding with claims the tribunal considered had little reasonable prospect of success. The Claimant declined to withdraw any of the claims for which deposit orders were made.

The hearing took place over 9 days and more than 3,000 pages of evidence were assessed, including transcripts of covert recordings that the Claimant had made of other employees and a 61-page witness statement which included irrelevant evidence related to claims that had already been withdrawn. The ET dismissed all of the Claimant’s claims, finding that he was fairly dismissed by the Respondent.

In a separate costs hearing, the ET ordered the Claimant to pay the Respondent’s costs, which it assessed at just over £432,000. The ET did not provide reasons for the large costs award however it is safe to assume that the Claimant’s conduct of the case, bringing a series of frivolous claims, making many hours of covert recordings of co-workers, providing excessive volumes of evidence covering claims that had been previously withdrawn and not giving any consideration to withdrawing the claims that were subject to deposit orders, played a significant role in the ET making such a substantial award.

This decision is a helpful reminder that notwithstanding the general rule that parties will bear their own costs in ET proceedings, the ET is empowered to make costs orders in appropriate circumstances and may choose do so when faced with vexatious, abusive, disruptive or otherwise unreasonable conduct on the part of a claimant (or indeed, a respondent) or the pursuit of claims which have no reasonable prospect of success.

In this case, the Employment Tribunal (“ET”) held that a Christian school assistant was not unlawfully discriminated against on the ground of religion after she was dismissed for gross misconduct for sharing two Facebook posts openly criticising the teaching of LGBTQ+ relationships and the LGBTQ+ community at her son’s Church of England primary school.

Following the sharing of the Facebook posts, an anonymous complaint was made about the Claimant, alleging that she had demonstrated homophobic and prejudiced views against the LGBTQ+ community. The Claimant was subsequently suspended by the Respondent school, and then dismissed following a disciplinary process. The Claimant brought a claim for discrimination and harassment on grounds of religion or belief, arguing that her dismissal breached freedom of speech and religion. 

The ET found that the Claimant’s dismissal “was the result of a genuine belief on the part of the School that she had committed gross misconduct” and that the posts she had made might reasonably lead people to conclude that she was homophobic and transphobic, rather than being merely a temperate and rational expression of her Christian beliefs. Interestingly, the ET held that the Claimant’s beliefs that gender cannot be fluid and that someone cannot change their biological sex or gender were capable of protection under the Equality Act 2010, however it found that she had not been discriminated against or harassed because of those beliefs.

As with previous cases relating to religion or belief discrimination, which have found beliefs in ethical veganism, climate change, anti-fox hunting and the higher purpose of public service broadcasting to be capable of protection, this case again demonstrates the wide range of philosophical beliefs capable of protection under the Equality Act 2010.  In doing so, it illustrates the potentially difficult task employers may face in navigating a path which balances the rights of employees who hold particular beliefs against those of other employees who may find those beliefs to be offensive or contrary to their own strongly held beliefs, which may be equally capable of protection.   

In this case an Employment Tribunal (“ET”) held that a group of cycle couriers were workers rather than self-employed contractors both before and after their contractual terms were updated following the ET’s 2017 decision in Dewhurst v CitySprint UK Ltd. 

In Dewhurst, the ET held that a cycle courier engaged by CitySprint was found to be a worker, despite his contract describing him as a self-employed contractor.  CitySprint then updated its courier terms of engagement in November 2017, in an apparent attempt to ensure that the couriers could properly be categorised as self-employed, notwithstanding the Dewhurst decision, “paying particular emphasis to the degree of flexibility and lack of control and direction that self-employed cycle couriers enjoy”.  

The Claimants in O’Eachtiarna argued that they were workers both before and after the change in their terms of engagement and as such, they were entitled to holiday pay.  The ET agreed that given the Dewhurst decision, the Claimants were workers prior to November 2017, and then considered whether they remained workers after the update to their contractual terms. 

The ET held that the majority of the new terms were consistent with the reality of the working relationship between CitySprint and the cycle couriers but that, although there was a contractual right of substitution, which in principle can be a factor pointing away from a requirement for personal service (and therefore worker status), it was a theoretical right only, and had never been exercised. In practice, personal performance was necessary, and none of the Claimants used a substitute. The Claimants did have flexibility as to their working patterns but once they had indicated they were ready to start work, they were expected to accept instructions and perform the work assigned to them personally until the end of the day.  Finally, the Claimants did not provide courier services elsewhere or market such services to other potential clients or customers. 

It followed that, even after 12 November 2017 when their contract was updated, the Claimants were workers when working ‘on the circuit’ (i.e. their worker status was limited to specific engagements). As the ET found the cycle couriers were workers, they therefore held the Claimants were entitled to paid holiday. While Citysprint had paid “rolled-up” holiday pay alongside the Claimants’ pay for their services and the contract provided for this, the payment of “rolled up” holiday pay is unlawful and such payments can only be set off against a claim for holiday pay where the “rolled up” pay it is paid in a transparent manner, identifying the specific sum and the way in which it is calculated.  Citysprint’s arrangements did not meet this requirement.  

The key takeaway from this case for employers is that even contractual terms are clearly consistent with self-employed status are not fatal to a finding of worker status and the way the relationship operates in practice is of key importance.  However this is only a first instance decision.  It is hoped that the Supreme Court’s imminent decision in the Uber litigation will give much-needed guidance and clarity for both businesses and gig economy workers in this difficult area. 

4. Chell v Tarmac Cement and Lime Ltd [2020] EWHC 2613 (LINK)

In this case the High Court held that an employer was not negligent or vicariously liable for the actions of an employee whose practical joke unintentionally caused injury to a contractor in the workplace. The incident was outside the scope of the ordinary course of employment and it would not be fair to hold the employer liable for such an act.

The Claimant was employed as a site fitter by Roltech Engineering Limited ("Roltech") and his services were contracted out to the Defendant ("Tarmac"). Tensions allegedly arose between the Tarmac fitters and Roltech fitters. The Claimant bent down to pick up a length of cut steel whilst working in the workshop. Mr Heath, one of the Tarmac fitters, had placed pellet targets close to the Claimant's right ear and then, by way of practical joke hit them with a hammer, causing a loud explosion. The Claimant suffered a perforated right eardrum, noise-induced hearing loss and tinnitus.  He brought a claim against Tarmac, alleging that as Mr Heath’s employer, it was vicariously liable for the injury caused by Mr Heath’s actions. 

The High Court confirmed that one of the key requirements of vicarious liability in the employment context was that the wrongful conduct must be closely connected to the activities of the employee. This was not satisfied, as Mr Heath’s conduct was unconnected to any instruction given to him in the ordinary course of his employment and his actions did not further the objectives of the employer. 

The High Court also confirmed that even if (which was not the case here) the risk of injury to the Claimant had been reasonably foreseeable, so as to give rise to a duty of care on Tarmac’s part to take reasonable steps to prevent it, Tarmac did not breach its duty of care to the Claimant on the basis that:

• existing site health and safety procedures, which included a section on general conduct stating "no-one shall intentionally or recklessly misuse any equipment" were sufficient given the different ways in which employees could engage in horseplay, ill-discipline or malice, and nothing more specific could reasonably be expected; and
  
  
• increased supervision to prevent horseplay, ill-discipline or malice was not a reasonable step to expect this employer to have identified and taken.

Tarmac had extensive General Site Rules which showed the organisation took health and safety matters seriously. The High Court held it would be expecting too much of an employer to devise and implement a policy or site rules which descend to the level of horseplay or the playing of practical jokes. While the claimant had previously made the defendant aware of tensions between the two sets of employees, this did not create a foreseeable risk of injury to the claimant at the time.

Although the first instance judge did not have the benefit of the Supreme Court decision in Morrisons v Various [2020] UKSC 12, had he done so, the High Court observed this would have only fortified his conclusions.  See our report on Morrisons here.  

The question of whether the acts or omissions of employees are done “in the ordinary course of employment” (and therefore whether the employer can be held vicariously liable for them) is a highly fact-specific one.  This case is a helpful reminder that not everything that an employee does at work is done in the course of employment.  

5. Ryan v South West Ambulance Services NHS Trust UKEAT/0213/19 (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) held that an employer's talent pool, set up to identify, develop and retain high-performance staff, and predominantly consisting of employees aged under 55, indirectly discriminated against an employee on grounds of age and that the Employment Tribunal (“ET”) had wrongly decided that such discrimination was justified.

The Claimant was 66 or 67 years old.  The Respondent Trust used a recruitment tool called the “Talent Pool” to identify and develop existing employees and to retain senior staff. Employees were admitted to the Talent Pool following appraisal by their line manager as "exceeding expectations". They had the right to appeal the grading decision made in their appraisal and to self-nominate for inclusion in the Talent Pool.

In March 2017, the Claimant's appraisal concluded that she was "meeting expectations". She did not contest this and did not self-nominate for inclusion in the Talent Pool. Later, she sought to apply for a promotion opportunity but was told that candidates for the role were being sourced from the Talent Pool and that she could only apply if the role remained vacant, which it did not.

The Claimant alleged that the failure to allow her an opportunity to apply for the role because she was not in the Talent Pool amounted to indirect discrimination on grounds of age.  This was because the Talent Pool disproportionately favoured staff aged under 55: although 12% of the Trust's employees were aged between 55 and 70, only 6% of the Talent Pool fell into this age bracket.

The ET found that employees below the age of 55 had a one in 34 chance of being in the Talent Pool, while employees aged 55 or above only had a one in 73 chance of being in the Talent Pool. There was, therefore, a group disadvantage affecting employees aged 55 and above. However, the ET held that because the Claimant had failed to self-nominate for the Talent Pool any personal disadvantage she suffered was caused by her own inaction rather than the application of a provision, criterion or practice by her employer.  It also held that the policy of recruiting from the Talent Pool was justified as a proportionate means of achieving a legitimate aim of appropriate succession planning, by providing partially pre-approved candidates for short-term appointments and secondments which were likely to be necessary in an emergency response organisation.  

The EAT held that the ET was wrong to find that any disadvantage suffered by the Claimant was not caused by the policy.  She was disadvantaged because she was not a member of the Talent Pool.  She therefore had prima facie case of discrimination.

The EAT also held that although there were legitimate reasons for a policy of recruiting from the Talent Pool, the effect of this policy was particularly discriminatory for older employees and the ET’s had failed to consider why the positions needed to be filled quickly, what the discriminatory effect of the policy was generally and on the Claimant and whether less discriminatory steps could have achieved the same aim.  The ET’s decision on justification was therefore wrong.    

This case provides a helpful illustration that it is crucial for employers to consider how measures they may take for good business reasons impact on different groups of employees, and whether they may have discriminatory consequences.  If there is a discriminatory impact, it is essential to consider whether there are alternative, less discriminatory means of achieving the relevant business objective.

6. Hopkins v Commissioners for Her Majesty’s Revenue and Customs  (LINK)

In this case, the High Court found that HMRC (the employer) had lawfully processed an employee’s criminal convictions data in accordance with the General Data Protection Regulation (“GDPR”) and the Data Protection Act 2018 (“DPA”).

The Claimant employee was arrested on suspicion of having carried out serious criminal offences. Pursuant to her employment contract, she disclosed some information about the arrest to HMRC. Her line manager then passed this information to HMRC’s internal governance and HR teams and the press office. The Claimant was suspended on full pay pending a disciplinary investigation.  

The Claimant brought numerous claims against her employer, including for breach of the GDPR and the DPA. She complained, inter alia, that the processing of data regarding her arrest was unlawful because HMRC had failed to acknowledge it was a special category of personal data (namely, criminal offence data) under Article 10 GDPR and s.11(2) DPA; had failed to establish a lawful basis for processing under Article 6 GDPR; and had breached its obligations under Articles 15 (rights of access to personal data) and 18 (right to restrict processing) of the GDPR.

In order to process criminal convictions data lawfully, the processing must:

• fall within one of the six lawful grounds (gateways) for processing personal data in Article 6 of the GDPR;
  
  
• meet one of the conditions in parts 1, 2 or 3 of Schedule 1 of the DPA.

In certain cases, the employer must also have an "appropriate policy document" and put additional safeguards in place in respect of the processing.

The High Court held that GDPR did not create any obligation on HMRC to acknowledge that the data in question was criminal offence data.  The High Court also found that there was no realistic prospect of the Claimant establishing that using her personal data for the purposes of disciplinary proceedings, including the decision to suspend, was unlawful for the purposes of GDPR.  HMRC had a lawful ground for processing under Article 6, as the processing was necessary for the performance of a contract to which the data subject was a party – in this case, the employment contract.

HMRC also met one of the conditions in part 1 of Schedule 1 of the DPA, namely that the processing is necessary for the purposes of exercising rights conferred by law in connection with employment. In order to rely on this condition, the data controller is required to have an appropriate policy document in place which explains the controller’s:

1. procedures for securing compliance with the data protection principles in the GDPR (in relation to the processing of criminal convictions data in this case); and
2. policies as regards retention and erasure of that personal data, giving an indication of how long it is likely to be retained.

The High Court held that HMRC had an “appropriate policy document” in place as it had a staff privacy notice that had been provided to employees, and which included the statement that HMRC would use information about criminal allegations.  It also set out the lawful basis on which HMRC would process personal data and, in the examples of situations in which the personal data would be used, there was a statement saying that it would be used for grievances and disciplinaries and making decisions about continued employment. 

This case underlines the importance for employers of ensuring that they have robust and detailed staff privacy notices and data protection policies in place, identifying a lawful basis for the processing of personal data.  It is also essential to maintain records of processing activities and of how they help the employer to comply with the GDPR and the DPA. It is noteworthy that HMRC’s staff privacy notice was deemed sufficient to cover the requirements for an “appropriate policy document” in the DPA. Usually a more comprehensive approach, comprising a privacy notice and a separate data protection policy, would be advised. 

In this case the High Court held that the Defendants (a former CEO and CFO) could be sued for conspiracy and fraud in the English courts by their former employer’s group of companies, despite being domiciled in Switzerland.  Although they had been engaged under contracts of employment, they could not establish the necessary subordination to their former employer to engage the provisions of the Lugano II Convention, which require employees to be sued in the courts of their country of domicile in relation to matters relating to individual contracts of employment. 

The Claimants brought a number of claims against the Defendants in the English High Court. The Defendants both had contracts of employment, which had been drafted at their direction.  They challenged the jurisdiction of the English Court on the basis that the claims against them were “matters relating to individual contracts of employment” for the purposes of Article 18 of the Lugano II Convention, meaning that the claims against them were required to be brought in the court of their domicile (Switzerland).  In 2015 the High Court ruled that the English courts did have jurisdiction (on the basis that the claims were not matters related to individual contracts of employment), but this was appealed through the Court of Appeal and Supreme Court to the Court of Justice of the European Union (“CJEU”).  In the course of these appeal proceedings, the Claimants sought to argue that the Defendants were not in fact employees at all for the purposes of Article 8.

The question referred to the CJEU was about the extent to which it was necessary for there to be a relationship of subordination between a company and an individual for a contract to constitute a contract of employment for the purposes of Article 8. The CJEU held that subordination was necessary, and that a contract between a company and a person performing the duties of a director did not create a relationship of subordination between them and therefore could not be treated as a contract of employment “where,  even  if  the shareholder(s) of that company have the power to procure the termination of that contract, that person is able to determine or does determine the terms of that contract and has control and autonomy over the day-to-day operation of that company's business and the performance of his own duties”.

Following the CJEU judgment, the case came back before the High Court, to decide on the facts whether a relationship of subordination existed, in the sense used by the CJEU, between the Defendants and the Claimant group companies. The High Court held that the Claimants had a good arguable case that there was not a relationship of subordination, in that the Defendants had a more than negligible ability to influence the companies.