Quarter 4: Employment Case Law Update

Continuing our quarterly case law series we look back at some of the key cases since July 2019 and the lessons which we can learn from them.

Holiday Pay

In Harpur Trust v Brazel, the Court of Appeal (“CoA”) considered whether holiday pay for ‘term-time’ workers should be capped at 12.07% of pay under the Working Time Regulations (“WTR”).

Mrs Brazel was a visiting music teacher at a school run by the Harpur Trust (“the Trust”) employed under a permanent contract on a zero-hour basis and under which the Trust was not obliged to provide a minimum amount of work.  Mrs Brazel was only paid for the amount of work she carried out and she worked mainly during school term-time.  Term-time varies from year to year but is between 32 – 35 weeks.  In effect, this meant Mrs Brazel was a part-time worker in two senses:

• she didn’t work a full working week.
• for large parts of the year, such as school holidays, she did not work for the Trust at all. 

The case before the CoA centred on the second type of part-time working.

Under the WTR, every worker is entitled to 5.6 weeks paid annual leave.  This was reflected in Mrs Brazel’s contract of employment and she was required to take her holidays outside of term time. The Trust paid Mrs Brazel 12.07% of her annualised periods of annual leave which was paid in three instalments at the end of each term. Mrs Brazel argued that this calculation was not correct.

She submitted a claim stating her holiday entitlement should be paid according to her average earnings over the 12-week period immediately before her holiday was taken. This would mean, as a term-time employee only, she would receive a higher percentage of annual earnings as holiday pay, e.g. if she worked 32 weeks a year, this would equate to 17.5% of her annual earnings.  The Tribunal dismissed Mrs Brazel’s claims and found there had been no unlawful deduction of wages as a result of the 12.07% calculation.

Mrs Brazel appealed and the EAT overturned the original decision, finding in her favour. The EAT held that there was no requirement under the WTR to pro-rata holiday pay for part-time employees to ensure full-time employees comparably in the circumstances.

The Trust appealed to the CoA asserting it was necessary to reduce Mrs Brazel’s holiday entitlement to reflect the fact she only worked for part of the year. It was further submitted that Mrs Brazel’s interpretation of the law would lead to greater anomalies in the case of permanent zero-hour contracts who work for lesser proportions of the year.

The CoA dismissed the Trust’s appeal and acknowledged that under the WTR, odd results in extreme cases where workers who only work part of the year were entitled to a greater proportion of their earnings as holiday pay than workers who worked all year around might occur. In this case, Mrs Brazel was on a permanent contract and the use of the 12-week average method of calculating annual leave meant the amount of holiday she received would reflect her actual working pattern.  This approach was more sensible then simply applying a blanket approach of paying 12.07% of annualised hours or attempting to work out pro-rata holiday entitlement in comparison to a full-time employee.

The CoA decision confirms that the correct approach for employees who do not work regular hours of work is to calculate the worker’s average pay in the 12-week period prior to holiday being taken rather than adopting the approach of simply paying 12.07% of annualised hours as holiday.

With effect from April 2020, the reference period for determining average pay in relation to statutory holiday will increase from 12 weeks to 52 weeks.  This will ensure that those who work variable hours will not be disadvantaged by taking holiday at a quieter time of year.

Discrimination

In Stacey Macken v BNP Paribas London Branch, the Tribunal found in favour of Ms Macken, who raised a claim for sex discrimination, victimisation and unequal pay against, BNP Paribas.  Ms Macken was an experienced high-level banking professional, who was recruited on an annual salary of £120,000.  Several months later, a male colleague was employed under the same job title for £160,000.  Over a five-year period, this co-worker took home a bonus seven times more than what was offered to Ms Macken.

Ms Macken claimed that she had experienced various instances of sexist behaviour, including intentionally leaving a witches’ hat on her desk and colleagues repeatedly saying to her “Not now, Stacey”, every time she asked a question.

Ms Macken made repeated internal complaints about her treatment which culminated in her raising a claim in the Tribunal.  The Tribunal upheld Ms Macken’s claims of sex discrimination, unequal pay and victimisation but her claim for harassment was dismissed. Ms Macken is seeking £4 million in damages from the bank and the level of compensation is still to be decided.

This case serves as a reminder to all employers, of the significance of addressing differences in pay, the risks and consequences of not thoroughly and impartially investigating complaints and allegations of discrimination and victimisation.

In the case of Conisbee v Crossley Ltd and others Mr Conisbee, who was employed five months before he resigned after being told off for not wearing an ironed shirt, alleged discrimination on the ground of religion or belief in relation to his belief of vegetarianism. At a preliminary hearing, the Tribunal held that his belief in vegetarianism did not qualify for protection under the EqA. Whilst genuinely held, it failed to meet the other legal hurdles for protection. The Tribunal held that vegetarianism was a lifestyle of choice which Mr Conisbee believed would make the world a better place. This belief did not attain a certain level of seriousness and importance; the reasons for being a vegetarian differ greatly between individuals for example: lifestyle, health, diet and personal taste. Finally, the Tribunal found that the belief in vegetarianism did not have a similar status to religious beliefs.

This case is not binding on other Tribunals but is an example of how a Tribunal will approach religion or belief claims.

Investigations

In Dronsfield v The University of Reading, the EAT found that changes to an investigatory report made on the advice from an in-house lawyer did not make a disciplinary process unfair.

Dr Dronsfield was an associate professor at the University of Reading. An allegation was made that he had failed to report a sexual relationship that he was having with a student, whom he was also responsible for supervising. Another professor was appointed to investigate the allegation, with support from HR. They produced a joint investigation report. Initial drafts were subject to review by the University's HR department and in-house lawyer. The final version of the report omitted a number of the initial findings that would have been favourable to Dr Dronsfield. Notwithstanding that finding, the report concluded that there was evidence Dr Dronsfield breached his duty of care towards students, and he was subsequently dismissed.

Dr Dronsfield raised a claim in the Tribunal which found his dismissal to be fair. He then appealed to the EAT who remitted the case back to a fresh Tribunal to consider if the deleted comments were removed because the investigating professor had changed his opinion. The Tribunal was asked to consider the professor’s reasons for amending the final report.

The new Tribunal also held that it was objectively fair and reasonable for the University to have their solicitor advise the investigators, and that it was sensible given the scope for legal error. It was reasonable for the investigator and HR to act on that advice and change the focus of their conclusions in the report. The report fairly set out the investigators' position and the amendments did not mean that a false or incomplete position was set out.

Dr Dronsfield appealed stating that the Tribunal had not adequately addressed the arguments he had put forward as to why amending the investigation report rendered his dismissal procedurally unfair.

The EAT dismissed the appeal and found that, read as a whole, the Tribunal’s decision adequately addressed Dr Dronsfield’s argument.  The draft investigation report had been amended on the advice of the University’s solicitor that it should not contain conclusions that were based on potential future admissions from Dr Dronsfield.  Such judgments should properly be left to an appointed disciplinary panel. The investigator had not been subjected to improper pressure nor had he withheld evidence from his report. There was no suggestion of serious impropriety in the way the investigatory process had been handled and the academic had addressed the changes to the report during his appeal hearing.

This case highlights the importance of focusing on the facts and reporting the evidence in an unbiased way when conducting investigations into an employee’s misconduct. Making judgments on the seriousness of an employee's conduct should usually be left to the disciplinary officer or panel. Suggesting that an investigator amends their report will not necessarily render any subsequent dismissal unfair provided that the substance of the investigation remains, and the independence of the investigator is not jeopardised.