Welcome to Walbrook Law’s September 2016 Employment Bulletin.  This month we’ve highlighted some recent updates, including cases on religious discrimination, whistleblowing-related unfair dismissal, the preparation of investigation reports in disciplinary matters, and job applications made with an intention of claiming discrimination.

In July we reported the Advocate General’s opinion in Achbita v G4S Secure Solutions NV. It was not direct discrimination for an employer to ban a Muslim employee from wearing a headscarf at work if that ban was not based on stereotypes or prejudice against a particular religion, or religions, or against religious beliefs in general. Any indirect discrimination may be justified by the legitimate need to enforce religious and ideological neutrality. 

This month, there’s a new case and a new Advocate General opinion that says something different. The French case of Bougnaoui v Micropole SA involved a Muslim woman who refused to remove her headscarf, following a customer complaint about her wearing it. She was dismissed. 

She lost her claim for religious discrimination, but her appeal has led her to the European Court of Justice (ECJ). So far, we have the Advocate General’s opinion (not a binding judgment) that there was direct discrimination. Ms Bougnaoui was dismissed because she had manifested her belief by refusing to remove her headscarf; a colleague who had not chosen to manifest their religion would not have been dismissed. It was less favourable treatment on religious grounds. And that direct discrimination could not be excused as a genuine occupational requirement - the headscarf didn’t hinder her ability to do her job. Nor could financial loss justify the discrimination. 

What about indirect discrimination? The Advocate General thought it unlikely that the employer’s ban would be proportionate. 

We shall have to wait and see what becomes of this conflict of Attorney General opinions. The formal Court decision in both cases is expected toward the end of this year. 

It is automatically unfair to dismiss an employee for making a protected disclosure (known as a ‘whistleblowing’ dismissal). This case looked at the knowledge element of that. In particular, what if the person who makes the decision to dismiss doesn’t know all the facts about the disclosure or about the bigger picture? 

Ms Jhuti had been working for Royal Mail for a year when she was dismissed. In the lead-up to that, she had suspected that a colleague had breached rules. But when she had given details of the suspected breach to her team leader, he had advised her to retract the allegation. She did that, fearing that she would otherwise lose her job.

From that point, Ms Jhuti came under increased pressure at work. Unachievable goals were set, for example. She complained of harassment and bullying and went on sick leave. 

Another manager took control of her case, but not her grievance. That manager – the dismissing officer - wasn’t given all the information about what had occurred; in particular, she wasn’t shown any of the emails relating to the disclosures Ms Jhuti had made. The manager accepted the team leader’s explanation that Ms Jhuti had made an allegation of misconduct but had retracted it because she had misunderstood the situation. 

The tribunal held that although Ms Jhuti had made protected disclosures and had suffered detriments, she had not been automatically unfairly dismissed. The dismissing officer was not motivated by the protected disclosures; they weren’t the reason for the dismissal. Ms Jhuti was genuinely believed to be a poor performer. 

That was overturned on appeal. The Employment Appeal Tribunal held that the team leader’s motivation was relevant. It was significant, for example, that he was in a managerial position responsible for Ms Jhuti. He had realised that the protected disclosures made to him were serious and significant, and had lied to the dismissing officer about them. It was also relevant that he had set up a ‘paper trail which set her to fail’.

This should sound warning bells for employers. It won’t be enough to plead a dismissing officer’s ignorance of the facts. If their decision was manipulated by, as here, a manager who knew the true situation, employer liability will surely follow.   
 

On 6 April 2017, an apprenticeship levy will come into effect. If you are an employer operating in the UK with an annual wage bill of more than £3 million, you will be required to invest in apprenticeships. 

The levy will be charged at 0.5% of your annual wage bill. And there’s a levy allowance of £15,000 to take into account, which is why only those employers with a pay bill in excess of £3 million (less than 2% of all UK employers, according to the Government) will have to pay up. It’s a new way of helping to fund apprenticeships. 

The government has published a guide to apprenticeships, including the levy. 

Doctor Dronsfield was dismissed by the University for failing to disclose his sexual relationship with a student. His unfair dismissal case brought into question the involvement of HR and legal teams in the disciplinary process. In particular, what was the effect of the investigation report having been altered after matters were discussed with them?

A case called Ramphal v Department for Transport had considered a similar point and emphasised that ultimately, it’s for the disciplining officer to make their own decision. The Employment Appeal Tribunal (EAT) echoed that in this case. The final version of the investigation report contained significant amendments – notably, opinions favourable to Dr Dronsfield were removed following discussions with HR and in-house legal teams. Although there was no reason to doubt that that final version represented the disciplining officer’s genuine conclusions after receiving honest and unbiased advice, the simple removal of those opinions was problematic. 

The tribunal ought to have asked whether or not the report included all conclusions reached as a result of the investigation and, if not, why not. It is now for a new tribunal to decide the fairness or otherwise of the dismissal.  

Legal and HR advice is routinely sought in disciplinary situations, and rightly so. But this case shows that employers and their advisors must tread carefully in supporting the investigating officer, whose decision and reasoning must stand up to scrutiny. 

The EAT made some important observations: 

1.    As set out in the Ramphal case, HR advice should only be about the law, procedure and process. It shouldn’t stray into questions of culpability or of appropriate sanctions.  

2.    It would have been good practice for the person with whom Dr Dronsfield had engaged in the sexual relationship to be contacted as part of the investigation and asked if they wished to contribute to it. 

 

Quite an unusual case, this one. Mr Kratzer was a job applicant who, as it turned out, appeared to have only applied for the job in order to gain job applicant status and, therefore, eligibility to bring a claim for compensation. 

After being rejected, he demanded €14,000 as compensation for for age discrimination. The employer invited Mr Kratzer to an interview, saying that the rejection had been wrongly triggered by its automated system. Mr Kratzer didn’t take up the offer, instead pursuing his claim and adding a sex discrimination element. 

The question referred to the European Court of Justice (ECJ) by the German court was whether a person in that position is protected by discrimination legislation and, if so, is it an abuse of rights?

The ECJ held that there is no such abuse of rights and that where a person makes a job application  purely to entitle them to claim discrimination, they are not protected by discrimination law and are not be entitled to compensation. That is because:

1.    the Equal Treatment Directive protects people who are ‘seeking employment’;
2.    someone in that position would not be a ‘victim’ of discrimination, nor could they be said to have been injured, or to have sustained damage or loss;
3.    people must not use EU law for abusive or fraudulent ends. 

A rare scenario, no doubt, and in all but the most blatant of situations it would take a brave employer to take issue with the genuineness of a job application. Useful to know about, nonetheless. 

When you order your chimichanga at the touch of a few buttons, your delivery rider’s contract may well be the last thing on your mind. 

But restaurant delivery company, Deliveroo, is just one business to have found itself in the news on the issue of the status and rights of the people working for it. The latest story is about a clause in its cyclists’ contracts that reportedly tries to stop them bringing a court or tribunal claim in which they contend that they are workers or employees, as opposed to being self-employed. There is also said to be a clause requiring the cyclist to indemnify the company against its costs, if the legal action is taken. 

Terms like these always raise big questions around enforceability. But, on a broader note, it’s worth remembering that status is what it is. Where there is a difference of opinion between an employer and an employee/worker/self-employed contractor about employment law entitlements and protections, it’s the reality of the situation that counts. How does the relationship actually work? Who is in control of what? These sorts of things determine status, irrespective of the labels the parties may have applied. 

As different types of working arrangements fast become the norm in some industries – often providing significant benefits to both sides - the challenge for employers is in achieving as much certainty as possible about employment status from the outset. That’s key to ensuring fair treatment, and there can be no substitute for that.  

Walbrook Law is a specialist employment law firm based in the City of London, acting for employers and senior executives.

We advise employers across a range of sectors on all employment issues affecting their businesses. We are highly experienced in advising on restructuring, redundancy, performance management and disciplinary/termination issues. We are also experts in conducting employment tribunal litigation and dealing with complex areas of employment law such as restrictive covenants and employee competition, whistleblowing, FCA and other regulatory employment issues, and the Transfer of Undertakings Regulations (TUPE).

We also have a thriving practice acting for senior executives, including board directors of both private and publicly listed companies, partners/LLP members of professional services firms and senior employees working in all industry sectors, including banking, financial services, insurance and media. We have an established reputation in the City as leading advisers on the negotiation of senior executive service agreements and exit terms, partner/LLP member appointment/retirement terms and other contractual matters such as employee bonuses, commission arrangements and restrictive covenants.

Address: 150 Minories, London EC3N 1LS

The information and any commentary contained in these bulletins is for general information purposes only and does not constitute legal or any other type of professional advice. Walbrook Law LLP does not accept and, to the extent permitted by law, excludes liability to any person for any loss which may arise from relying upon or otherwise using the information contained in these bulletins.

If you have a particular query or issue you are strongly advised to obtain specific, personal advice about your case or matter and not to rely on the information or comments in this bulletin.