Employment Law Update – November 2022
Welcome to our latest employment law update bringing you up to speed with this month’s key cases and developments.
In this bulletin, we discuss two notable Employment Appeal Tribunal decisions: it was held that a settlement agreement could not be used to settle future claims unknown to the parties at the time of the agreement, and an employee was found to have been unfairly dismissed due to a lack of meaningful consultation in a redundancy process.
The Protection from Redundancy (Pregnancy and Family Leave) Bill and its proposals, as well as new ICO guidance on monitoring at work are also discussed.
- ICO Consultation on monitoring at work practices
- Settlement Agreements cannot be used to waive claims which have not yet arisen
- Protection from Redundancy (Pregnancy and Family Leave) Bill receives Government support
- Requirement for genuine and meaningful consultation in redundancy process
ICO Consultation on monitoring at work practices
On 12 October 2022, the Information Commissioner’s Office (ICO) published draft guidance for employers on monitoring at work. This follows the ICO’s call for views between August and October 2021, which sought input from relevant stakeholders including workers, employees, and recruitment agencies. The draft guidance is now out for public consultation and sets out how employers can lawfully monitor workers in a way that is compliant with the provisions of the UK General Data Protection Regulation and the Data Protection Act 2018. It is intended that the guidance will provide greater regulatory certainty for employers and better protect workers’ data protection and privacy rights.
A variety of topics are covered, including:
- Types of monitoring and correct procedures to implement these
- Security and retention policies
- Data protection impact assessments (DPIAs)
- Covert monitoring
- Biometric data
The ICO have also produced an impact scoping document highlighting some of the potential impacts of the draft guidance which have been considered so far. It is expected that further practical tools such as checklists will be produced in due course to accompany the guidance. The public consultation seeking feedback on the draft guidance and draft impact assessment will remain open until 11 January 2023.
Settlement Agreements cannot be used to waive claims which have not yet arisen
The Scottish Employment Appeal Tribunal (EAT) has held that settlement agreements cannot be used by employers to waive employees’ rights to bring future claims which are unknown to the parties at the time of the agreement.
In this case, Mr Bathgate (the Claimant) had been employed by Technip Singapore PTE Ltd (the Employer) for nearly 20 years as a Chief Officer. For much of this time, he worked onboard a vessel which was registered in the Bahamas and operated outside of UK and EEA waters. However, his employment contract was governed by the Employment Rights Act (ERA) 1996 and relevant Scottish law. In January 2017, the Claimant agreed to the terms of a redundancy package and signed a voluntary redundancy agreement which settled his claims against the Employer. Importantly, the agreement included a specific waiver against claims for discrimination under the Equality Act (EA) 2010 as well as a general waiver against any future claims.
The Employer had introduced a policy that employees aged 61 and over would not be entitled to receive what was known as an Additional Redundancy Payment. However, the Claimant, who was 61 at the time of redundancy, was not told this until after he had signed the agreement and had been expecting to receive the Additional Redundancy Payment in June 2017. He consequently brought a claim of age discrimination against the Employer. The Employer submitted that under s147 of the EA 2010, which governs the conditions for a qualifying settlement agreement, the Claimant had forfeited his right to bring a claim post-termination of his contract. The Employment Tribunal ruled in favour of the Employer, finding that the Claimant had settled his claim for age discrimination and any other potential claims under the agreement.
The Claimant then appealed on the basis that s147 does not allow settlement of claims before they had arisen. One of the conditions under s147 is that the qualifying settlement agreement relates to the `particular complaint` brought. The Claimant contended that `particular complaint` only referred to claims known to parties at the time of the agreement and not to future unknown claims. The EAT agreed with this assessment, finding that the wording of s147 precluded the settlement of future claims unknown to parties at the time of the agreement. It stated that `particular complaint` suggested that “Parliament anticipated the existence of an actual complaint” and did not consider that it would be appropriate for it to refer to a potential future complaint. To do so would serve to undermine the purpose of the legislation and what Parliament had intended. This is significant in that it stands in contrast to the reasoning in some previous judgments, which had suggested that it was possible to use settlement agreements to waive claims that had not yet arisen.
Ultimately, however, the Claimant’s appeal failed on grounds of jurisdiction as he had worked outside UK and EEA territory for the majority of his employment and therefore was not entitled to raise an action under the EA 2010. Nevertheless, this case demonstrates that employers should note the potential unenforceability of provisions in settlement agreements that purport to have the effect of waiving future discrimination claims or potential future claims in general.
Protection from Redundancy (Pregnancy and Family Leave) Bill receives Government support
On 21 October 2022, the Protection from Redundancy (Pregnancy and Family Leave) Bill passed its second reading in Parliament after receiving Government backing. The Bill was proposed following Government consultation findings that new parents faced workplace discrimination, and that an estimated 54,000 women a year reported that they felt they had to leave their employment due to pregnancy or maternity discrimination.
The proposed legislation is intended to provide pregnant women and new parents with greater protection from redundancy during or after pregnancy or following periods of maternity, adoption, or shared parental leave. Under the current law, employers are already obliged to offer employees on maternity, adoption or shared parental leave suitable alternative positions before considering redundancy. The Bill will extend this redundancy protection to also include pregnant women in addition to new parents returning to work after taking leave. The extended period will cover the time from when a woman tells her employer that she is pregnant until 6 months after the birth. If the Bill is enacted into law, it will help to provide greater job security for those in more vulnerable positions and who would otherwise be at a greater risk of experiencing workplace discrimination. It is understood that the Government is working with the Pregnancy and Maternity Discrimination Advisory Board to provide guidance for employers on this subject.
Requirement for genuine and meaningful consultation in redundancy process
The Employment Appeal Tribunal (EAT) has found that a fixed term employee who had been made redundant was unfairly dismissed due to a lack of proper consultation and arbitrary selection criteria.
The Claimant had been employed by Bradford Teaching Hospital NHS Foundation Trust (the Employer) on a series of fixed term contracts as a Band 6 nurse. Shortly before her contract was due to expire, the Employer, which was in financial difficulty, took the decision to make redundancies. The Claimant and her colleague, another Band 6 nurse employed on a fixed term contract, were asked to attend a meeting to discuss this situation. Following this, the Employer decided to dismiss the Claimant and started the redundancy consultation process. Alternative employment was considered, and the Claimant was offered a Band 5 nurse position, but she did not take this, as it would effectively be a demotion. Her contract was not renewed, and she was dismissed on grounds of redundancy.
The Employer had used only one selection criterion to choose between the Claimant and her colleague for redundancy, this being that her fixed term contract expired first. In response to this, the Claimant brought a claim for unfair dismissal, arguing that the selection process had not been reasonable. The Employment Tribunal (ET) at first instance found in favour of the Employer, holding that the selection process was fair and appropriate in the circumstances. However, on appeal, the EAT concluded that the ET had been wrong to make such a finding and found that the Claimant had been unfairly dismissed. In its judgment, it was critical of the conduct of the Employer and the selection process used.
The first criticism was that no genuine or meaningful consultation had taken place prior to the Claimant being chosen for redundancy. The EAT stated that “the formative stage of a redundancy process is where consultation ought to take place” and found that for there to be a fair procedure, the consultation must occur at a stage when the employee still has the potential to affect the outcome. In this case, the decision that the Claimant should be dismissed was made long before any meetings regarding her selection or consultations took place. Secondly, the EAT highlighted that no consideration had been given as to whether the other Band 6 nurse should be put in the redundancy pool with the Claimant and no other selection criteria had been used. The sole criterion applied for selecting the Claimant for redundancy, that being the date of expiry of her contract, was held to be arbitrary and unreasonable. The EAT concluded that the “absence of meaningful consultation at a stage when the employee had the potential to impact the decision” was indicative of an unfair process.
This decision is important in that demonstrates there is a need for employers to carry out effective consultation before any decision is taken as to who to make redundant. Where possible, it is advisable that employers use multiple selection criteria to ensure that the redundancy process is fair and reasonable. It also serves as a reminder that, where employees are protected against unfair dismissal, the proper redundancy consultation procedure should still be used for fixed term employees whose contract is not being renewed.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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