Quarterly Case Law Update - July 2023

In this article we highlight the most significant employment law cases since April 2023 and the lessons that employers should take from them.

Pregnancy discrimination

In dismissal situations, the motivation of the decision-maker to dismiss is key rather than the motivation of other employees who may be indirectly involved, as the case of Alcedo Orange Ltd v Ferridge-Gunn demonstrates.

Mrs Ferridge-Gunn had been spoken to by her manager about issues surrounding her performance and was placed on a probationary period as a result. The following week, she informed her manager that she was pregnant. She then took two days’ sick leave due to morning sickness, during which her manager discovered that she had failed to process some documents. The manager reported this to the managing director but didn’t explain that the failure was due to Mrs Ferridge-Gunn’s absence. The director then dismissed Mrs Ferridge-Gunn. The Tribunal upheld Mrs Ferridge-Gunn’s claim of pregnancy discrimination and considered that the director had relied on the views of her manager and a report from the manager that were significantly influenced by Mrs Ferridge-Gunn’s pregnancy and related absence.

On appeal, the Employment Appeal Tribunal (EAT) disagreed with the findings of the Tribunal as they had failed to separate the role of the decision-maker and the manager who provided the information. The case was remitted to the Tribunal for an analysis of whether the decision was made solely by the director or whether in fact it was a joint decision. 

Holiday pay on termination

It is common for employers to have an agreement in place that provides for the calculation of any accrued but untaken holiday by an employee at the end of their employment, but what happens if this agreement provides for a lower payment than they would be entitled to under the Working Time Regulations 1998 (WTR)? In the case of Connor v Chief Constable of South Yorkshire Police, the EAT held that any ‘relevant agreement’ cannot result in payment which is lower than what would be calculated using the method set out in the WTR. 

Mr Connor was dismissed following a lengthy period of sickness absence and his employment contract provided for holiday pay on termination to be calculated based on 1/365th of his annual salary. This calculation meant that Mr Connor received a lower payment for his accrued holiday than his salaried rate of pay, he brought a claim for unlawful deduction of wages to recover the shortfall. The Tribunal held that Mr Connor had not suffered any unlawful deduction because his holiday pay had been correctly calculated in accordance with the 1/365th formula under the ‘relevant agreement’. 

On appeal, the EAT decided that although a ‘relevant agreement’ can alter the approach to calculating accrued holiday pay, it cannot provide for a calculation that results in the employee receiving less than they would be entitled to in accordance with the WTR and awarded him the shortfall of £53.90. 

Employers need to ensure that where an employee’s holiday is governed by regulations 13 and 13A of the WTR, the correct calculation for accrued but untaken holiday pay is followed, even if this means departing from a ‘relevant agreement’, to ensure that the employee is receiving what they would be entitled to under the WTR. 

Harassment

The Tribunal decision in Greasley-Adams v Royal Mail Group Ltd will bring some comfort to employers trying to navigate the complexities of harassment claims. 

Mr Greasley-Adams has Asperger’s Syndrome and an autism spectrum disorder and was employed as a part time MGV driver. It was accepted that Mr Greasley-Adams was disabled for the purposes of the Equality Act 2010. Mr Greasley-Adams was the subject of two bullying and harassment complaints which were upheld during an investigation.

Mr Greasley-Adams subsequently became aware of the comments made against him as part of that investigation process and argued in the Tribunal that he had suffered harassment in relation to his disability because of those comments. 

However, the EAT held that it was not possible for Mr Greasley-Adams to have perceived himself as suffering from harassment as although the conduct that he complained of was proven, these incidents did not violate his dignity before the time he was aware of them. Mr Greasley-Adams’ claims therefore failed. 

This is a helpful decision for employers as it clarifies that a person cannot be harassed under the Equality Act 2010 if they are not aware of the unwanted conduct at the time it takes place. 

Another case involving allegations of harassment is Fahmy v Arts Council England, which further solidifies the view that gender critical beliefs are a protected philosophical belief under the Equality Act 2010 and that employers need to take care when handling such beliefs in the workplace. 

Ms Fahmy was employed by the Arts Council England (ACE). Following the ACE’s decision to suspend a grant due to the alleged transphobia of the recipient charity, ACE hosted a virtual drop-in session for all staff to discuss the decision. During this drop-in session Ms Fahmy challenged the view that the recipient charity was anti-trans and questioned how gender critical views were protected at ACE. After this internal meeting, an employee emailed all staff of ACE which referred to the homophobic and anti-trans views of others and a petition was circulated with further hostile and intimidating comments about those who held gender critical beliefs. Ms Fahmy felt these comments were directed at her and brought a claim for harassment related to gender critical beliefs which was upheld by the Tribunal. 

Bills that have received recent Royal Assent

Significant progress has been made regarding new legislation that will provide employees with greater rights, with the following Private Member’s Bills receiving Royal Assent: 

• the Carer’s Leave Act 2023;
• the Employment (Allocation of Tips) Act 2023; 
• the Neonatal Care (Leave and Pay) Act 2023; and 
• the Protection from Redundancy (Pregnancy and Family Leave) Act 2023. 

At this stage, we are awaiting implementing regulations to be published to confirm the specific details of these rights. Although no immediate action therefore needs to be taken at this stage, employers should start to prepare for these new rights and consider updating their policies and procedures.