Employment Briefing – October 2014
Print newsletter14/10/2014

Employment case law round-up – October 2014
Withdrawal of Employment Tribunal claims – Drysdale v Department of Transport [2014] EWCA Civ 1083 […]
Withdrawal of Employment Tribunal claims – Drysdale v Department of Transport [2014] EWCA Civ 1083
When dealing with litigants in person or unqualified representatives, the Employment Tribunals has a wide margin of appreciation in terms of the amount of assistance or intervention it can give in any particular case. In this case, the Court of Appeal held that a Tribunal took adequate steps to ensure that a claimant, represented by his unqualified wife, had taken a properly considered decision to withdraw his claim. Importantly, it held as a general principle that Employment Tribunals are not required to adjourn proceedings in order to enable a claimant to reflect on a decision to withdraw.
The Court set out some principles which offer welcome clarification for respondents. Notably, it held that Tribunals should not ask why a claimant is withdrawing a claim unless there are exceptional circumstances justifying it. In addition to this, it stated:
- It is a long-established and desirable practice of Employment Tribunals to provide such assistance to litigants as may be appropriate in formulating and presenting their cases.
- What level of assistance or intervention is “appropriate” depends upon the circumstances of each particular case including whether the litigant is representing himself and, if not, whether his representative is legally qualified.
- The appropriate level of assistance or intervention is constrained by the overriding requirement that the tribunal must at all times be, and be seen to be, impartial as between the parties, and that injustice to either side must be avoided.
Walker Morris comment
This decision provides useful clarification on a point that can sometimes crop up in practice and, as in this case, part way through a hearing. It is helpful to be able to immediately refer to this decision if necessary.
Sex discrimination injury to feelings award too high – The Cadogan Hotel Partners Ltd v Ozog UKEAT/0001/14
The EAT has allowed an appeal against an Employment Tribunal’s injury to feelings award for sex discrimination in the middle ‘Vento’ band on the basis that the award was too high.
Ms Ozog was a waitress at the Cadogan Hotel. She was subject to sexual harassment by the head waiter which included:
- Touching Ms Ozog inappropriately by kissing her arms and touching her arms and back.
- Asking her if she had a boyfriend.
- Undoing a button on his trousers, taking off his belt and approaching Ms Ozeg and another female colleague saying “Do you want this body? Come on, you are a woman. You should want this body”.
- Threatening and bullying Ms Ozog.
Ms Ozog reported the behaviour to her supervisor but the Hotel failed to deal with it. Subsequently, Ms Ozog was suspended in relation to a dispute about her performance. She complained again about the sexual harassment and then resigned with immediate effect.
The EAT found that the Tribunal had erred by focusing on its own view of the respondent’s conduct in making an award of £10,000 for injury to feelings rather than looking at the effect the conduct had actually on the claimant who gave evidence that it had never gone beyond making her feel “very uncomfortable”. The EAT found that this should be classified in the lower Vento band, and substituted an award of £6,600.
The EAT also allowed the Hotel’s appeal against the Tribunal’s finding that the Acas Code of Practice on Disciplinary and Grievance Procedures had been engaged, which had resulted in a 25% uplift in the compensation awarded. The EAT found that Ms Ozeg had only made her grievances orally and not in writing, so the Acas Code did not apply.
Walker Morris comment
This decision provides a useful illustration of the correct assessment of injury to feelings awards for sexual harassment. The focus should be on the effect of the conduct on the claimant and not on how the Tribunal views the conduct. The decision is also noteworthy because it confirms that, following guidance produced by the President of the Employment Tribunals in March 2014, a 10% uplift will now be applied to all injury to feeling awards. Hence the substituted injury to feelings award of £6,000 was uplifted to £6,600. Employers need to be aware of this 10% uplift when dealing with discrimination claims as it obviously increases the potential value of the claim.
Less favourable treatment of fixed term employee caused by PHI insurance policy – Hall v Xerox UK Ltd UKEAT/0061/14
The EAT has confirmed that a fixed term employee did not suffer unlawful detriment under the Fixed Term Employees (Prevention of Less Favourable Treatment) Regulations 2002 (the ‘Regulations’) when he was excluded from benefits under the PHI policy provided by his employer, Xerox.
Xerox provided PHI insurance cover to all its employees who had been off sick for more than 26 weeks but this was specifically stated to be subject to the terms of the insurance policy between Xerox and the insurance company (UNUM). Xerox’s employment contracts expressly provided that the PHI benefit was subject to acceptance by the insurer, that Xerox was only liable to make payment to the employee if it had been paid by UNUM and that Xerox was not liable to provide any replacement benefit if no payment was made by UNUM. Under UNUM’s policy, fixed term employees were not entitled to benefit if their fixed term contract expired before the end of the 26 week qualifying period and, accordingly, Mr Hall was technically excluded from cover despite Xerox extending his contract.
Mr Hall claimed he had been less favourably treated by Xerox in breach of the Regulations arguing that Xerox were liable for UNUM’s acts because it was acting as an agent of Xerox.
The Tribunal and the EAT held that whilst Mr Hall had been treated less favourably under the Regulations this was not caused by any act or omission of Xerox. Rather, it was caused by the terms of the insurance policy supplied by UNUM who were not acting as Xerox’s agent. Moreover, the EAT found that even if there had been less favourable treatment by Xerox it is likely this would be justified because Xerox was bound by the ‘apparently universal approach’ of PHI insurers to fixed term contracts.
Walker Morris comment
Xerox’s employment contracts were well drafted and ruled out the possibility of Mr Hall bringing a breach of contract claim because they expressly provided that:
PHI benefit was subject to acceptance by the insurer.
Xerox was not liable to make payment to the employee if it had not received payment from the insurer nor was it liable to provide any replacement benefit if no payment was made by UNUM.
Employers who provide a PHI benefit as part of employees’ packages should check their contracts of employment to ensure the above points are included. Typically such clauses will state that the employer will only provide such cover on the basis that the employee satisfies the normal underwriting requirements of the relevant insurance provider and the premium is a rate which the Company considers reasonable.
It is also wise to include a clause to the effect that the employer reserves the right to discontinue, vary or amend the scheme (including the level of cover) at any time on reasonable notice.

Employment Tribunal fees – new UNISON judicial review hearing set for 21 & 22 October
UNISON’s judicial review challenge to Employment Tribunal fees was heard by the Court of Appeal […]
UNISON’s judicial review challenge to Employment Tribunal fees was heard by the Court of Appeal in September. The Court of Appeal decided to stay the appeal proceedings on the basis that, given the new evidence showing a huge drop in claims (in the form of official Employment Tribunal Statistics) it was appropriate for UNISON to issue a new judicial review claim in the High Court citing this evidence and to be heard as soon as possible.
The new judicial review is set to be heard by the High Court on 21 and 22 October 2014.
The latest Employment Tribunal statistics for the period April to June 2014 show that there were 70% fewer claims issued in that period than in the same period last year.
In the meantime, the Labour Party has announced that, if elected, it would abolish the current fees regime and replace it with an appropriate alternative.
And so the saga continues. Overall, employers have been experiencing a welcome decline in Tribunal claims as a result of fees but the question of whether fees are here to stay now hangs in the balance.

Employment Tribunal Procedure Update
Deposit Orders Most employers will recognise the frustration of having to defend a weak or […]
Deposit Orders
Most employers will recognise the frustration of having to defend a weak or groundless Employment Tribunal claim. Huge amounts of management time can be taken up dealing with the claim not to mention the legal costs involved. Employers will therefore welcome the news that, since an employer-friendly change to the Employment Tribunal Rules of Procedure Regulations last June, there has been a notable increase in the number of deposit orders being granted against claimants. Such orders can be made where the Tribunal accepts the employer’s representations (normally at the preliminary hearing stage) that the case has ‘little reasonable prospect of success’. This also follows a general trend for Tribunals to be more open to awarding costs against unsuccessful claimants.
In a nutshell, if the Tribunal considers that any specific allegation or argument in a claim or response has little reasonable prospect of success, it can make an order (or more than one order if appropriate) requiring the party to pay a deposit (or deposits) of up to £1,000 per order as a condition of being permitted to continue to advance that allegation or argument.
As with applications for costs at the conclusion of a case, the key point to note is that the onus is squarely upon the employer (or their representative) to apply for a deposit order at the preliminary stage of the claim. The employer needs to be proactive in seeing the opportunity for and making the application. As the old adage goes, “if you don’t ask, you don’t get”.
In conclusion, applications for deposit orders (often coupled with a cost warning) can be an effective and valid litigation tactic and in some cases can dissuade the claimant from pursuing an unmeritorious case.
A stricter approach to applications for postponements and adjournment
The Small Business, Enterprise and Employment Bill 2014-15 is currently making its way through Parliament. It proposes Regulations:
- Limiting the number of postponements or adjournments a party may apply for in an Employment Tribunal.
Requiring a Tribunal to consider making an order for costs against any party who makes a late application to postpone or adjourn a hearing.
This is a positive development given that late applications for postponement or adjournment are most typically made by claimants or badly prepared representatives. If enacted, this change will recognise the often significant cost and disruption caused to an employer (and indeed its witnesses) when a hearing is postponed at the last minute.

Equal Pay Audit Regulations
Employers may wish to take the opportunity check their pay arrangements and policies are in […]
Employers may wish to take the opportunity check their pay arrangements and policies are in line with equal pay law following the introduction of the Equality Act 2010 (Equal Pay Audits) Regulations 2014 which came into force on 1 October 2014. The Regulations effectively give existing equal pay law a new ‘set of teeth’ and are designed to tackle pay inequality in both the public and private sectors. They oblige Employment Tribunals to order an employer to carry out an equal pay audit where it has lost all or part of an equal pay claim, subject to certain exemptions.
The Regulations emphasise the importance of transparency and employers will be required to publish the results of the audit publicly on their website for no less than 3 years.
Whether the Regulations have any notable impact on closing the existing gender pay gap remains to be seen. That said, they are likely to influence the way in which equal pay claims are litigated. Claimants and their representatives may well perceive that they have greater leverage in settlement negotiations. Employers facing claims will have to factor in the increased risk of being ordered to conduct an audit, with the associated potential consequences for employee relations and additional cost and management time. We are seeing more equal pay claims being brought in the private sector and Unions will undoubtedly be keeping a look out for sections of the workforce ripe for group claims.
An exemption is available to employers who have already carried out a pay audit in the last 3 years (as some public sector employers may well have done). It is therefore well worth considering carrying out a pre-emptive audit to provide this assurance. It is crucial that any audit is carried out via professional legal advisors to ensure the contents of the audit are legally privileged. Failure to do this could result in a serious ‘own goal’ because without the benefit of privilege all documents relating to the audit (including the results and all pay data contained in it) would potentially be disclosable in any future equal pay claim.
The question of whether to carry out a voluntary audit now (or at least a review of pay arrangements and policies) or to adopt a ‘wait and see’ approach is a question that many employers will wish to consider further.
For further details on the Regulations please see our Business Insight Compulsory Equal Pay Audits – giving equal pay law more bite.

Immigration checking changes – new guidance published
As reported in our last newsletter, there have been a number of changes to immigration […]
As reported in our last newsletter, there have been a number of changes to immigration checking rules for employers together with an increase in the maximum civil penalty for employing an illegal worker from £10,000 to £20,000 per worker. The Home Office has now published two guidance notes for employers which are essential reading given that the rules are strictly applied to all employers regardless of size or resources. Importantly, the range of documents that are acceptable to establish the right to work has been reduced and partial right to work checks no longer provide any mitigation when calculating the penalty for employing an illegal worker.
Please see our update here for more details and guidance.

Public sector exit payments – October 2014
Plans have been announced as part of the Small Business, Enterprise and Employment Bill 2014-15 […]
Plans have been announced as part of the Small Business, Enterprise and Employment Bill 2014-15 to bring in rules requiring the recovery of exit payments from high earners working in the public sector if they return to the same part of the public sector within 12 months of leaving. High earners are defined as those earning more than £80,000 per year. Exit payments for these purposes will include redundancy payments, severance or ex gratia payments, pay in lieu of notice and compensation payable under a contractual term. Depending on how the rules are structured this may influence the way in which settlement and COT3 agreements are negotiated. There has been a public consultation which closed on 17 September 2014.

Shared parental leave
Requests for shared parental leave (SPL) can be made from December 2014 so employers who […]
Requests for shared parental leave (SPL) can be made from December 2014 so employers who haven’t already put in place new SPL policies and procedures need to do so. SPL is available for parents of children due to be born (or placed for adoption) on or after 5 April 2015. The current maternity leave regime will remain in place but, from 5 April, mothers can end their maternity leave early and opt to take SPL with their partner either separately or at the same time. The new procedure is complex but some of the biggest differences employers will have to prepare for are as follows:
- SPL can be taken in ‘blocks’. Employees can ask to stop and start their SPL and return to work in between these ‘blocks’ of SPL. If the employee requests one continuous block of leave it must be granted. If the employee requests discontinuous blocks of leave (i.e. two or more periods of leave interspersed with periods of time at work) then the employer does not have to agree to this although there is a procedure that must be followed.
- New notification and evidence rules will apply. Employers should adopt model forms and have these in place in good time.
- If both parents work for the same employer and are eligible to take SPL then employers may face a situation where both parents are off on SPL at the same time.
- Each parent taking SPL will be entitled to up to 20 ‘shared parental leave in touch days’ (SPLIT days) which are separate and in addition to the KIT days available under statutory maternity leave.
Shared parental pay (SPP) is paid for up to 37 weeks at the lower of the current statutory rate (£138.18) or 90% of the parent’s pay. There is no requirement to pay the first 6 weeks of SPP at 90% of the parent’s earnings as there is for statutory maternity pay. Some employers offer enhanced maternity pay during maternity leave and such employers will need to consider whether they wish to replicate this enhancement for SPP. It is conceivable that if such enhancements are not replicated in SPP a man on SPL may bring a claim for sex discrimination. Employers should give this point some consideration and be able to articulate the business reasons for any decision to enhance maternity pay but not SPP. Thought should be given to the employee relations angle of not matching the enhancements too.
It is important to ensure that line managers are made aware of the basics of SPL including the fact that employees (both male and female) are protected against dismissal or detriment for making or proposing to make use of the SPL regime. We also recommend scheduling ‘SPL – in practice’ as a topic for HR team training in advance of April 2015.
For further information on shared parental leave see our update Shared Parental Leave – fireworks or just a fizzle? If you would like assistance in preparing your shared parental leave policy and associated notification forms please contact Andrew Rayment. We will be discussing SPL at our forthcoming employment breakfast briefing on 27 November.

Time off for partners to attend ante-natal and adoption appointments
From 1 October 2014, expectant partners (male or female) are entitled to attend up to […]
From 1 October 2014, expectant partners (male or female) are entitled to attend up to two unpaid ante-natal appointments with their pregnant partner. Employers should update their policies to incorporate this new statutory right.
From 5 April 2015, there will be a new right for employees proposing to adopt a child to take time off to attend up to five adoption appointments. The time off must be paid where the employee is adopting the child on their own. If the employee is adopting jointly then one of the parents may elect to receive the time off as paid and the other will be entitled to take the time off as unpaid. Again, this change will require an update to employer’s adoption policies.

Zero Hours contracts – exclusivity ban consultation
Following the proposed ban on exclusivity clauses in zero hours contracts the Government is currently […]
Following the proposed ban on exclusivity clauses in zero hours contracts the Government is currently consulting on a range of potential measures to stop employers avoiding the ban. This is likely to include measures to prevent employers getting around the ban by, for example, offering minimum ‘one-hour’ contracts or by making it clear to employees that they won’t receive further hours if they are found to be working for other employers. Sector-specific codes of practice on the fair use of zero hours contracts including the thorny issue of how to calculate accrued benefits for zero hours workers are also planned.
It has been reported that group litigation is being brought by zero-hours workers against a large retailer following a decision to exclude such workers from participating in a bonus scheme. If you employ zero-hours workers on a regular and continuous basis they may be entitled to the same contractual benefits as workers with fixed hourly contracts.