Employment Law Update - April 2023

Welcome to our latest employment law update bringing you up to speed with this month’s key cases and developments.

In this month’s update, we review some more cases on Unless Orders and strike-outs, as well as a case on discrimination arising from disability with a neurodiverse claimant, and a case on calculating losses where there has been a failure to mitigate. We also flag recent  increases in a number of statutory rates.

Unless Orders and strike-outs (part 2)

We reported in last month’s update on an EAT decision finding that it was too punitive for a Tribunal to order that unless a Claimant provided further information about some of her claims, all of her claims would be struck out.

This month, we have seen a further two EAT decisions on similar issues.In Rojha v Zinc Media Group, the EAT upheld a Tribunal’s decision to strike out all of the Claimant’s claims for a failure to comply with an Unless Order.

The Claimant had raised claims for discrimination on grounds of race, sex and pregnancy and maternity, along with claims for unfair dismissal, redundancy payment and other arrears of pay. The Claimant failed to attend a case management hearing, and the Tribunal ordered her to provide further information about her race discrimination claim and a remedies statement (Schedule of Loss) in relation to all of her claims. She failed to attend a subsequent case management hearing and an Unless Order was made, requiring her to comply with the directions, failing which all of her claims would be struck out.

The Claimant appealed on the basis that her unfair dismissal and redundancy claims were properly pleaded and capable of being litigated, so it was not fair for them to be struck out.

The EAT upheld the strike-out of all the claims, finding that it was a delicate balancing act, but concluding that the Unless Order in this case was not disproportionate. The EAT took into account:

• The Order required a remedies statement in relation to all claims, which did impact on the unfair dismissal and redundancy claims;
• There was a connection between the unfair dismissal claim and the claim for race discrimination, so it was not the case that they were entirely independent of each other;
• The Claimant’s conduct of the proceedings generally (eg her failure to attend the case management hearings)

In Minnoch and others v Interserve FM Ltd and others, the EAT overturned a decision to strike out all claims following an Unless Order.

There were 37 Claimants making claims in relation to withheld pay for strike days. The Claimants were ordered to serve a “Schedule of loss for each Claimant” and did not comply. The Tribunal issued an Unless Order that unless there was compliance by a certain date, the claim of any claimant who had not complied with the order would be struck out.

On the scheduled date for compliance, the Claimant’s solicitor sent a spreadsheet showing amounts of pay deducted. The Tribunal struck out all claims on the basis that the Claimants had been required to submit a separate schedule of loss for each claimant and had not done so. They also considered that the schedule of loss that had been produced in spreadsheet form was inadequate, as was the list of documents provided.

The Claimants appealed against the decision to strike-out their claims.

The EAT upheld the appeal, commenting that Unless Orders were “too large a part of the diet of the EAT” and attempted to set out guidelines for the Tribunals and parties, including:

1. Making an Unless Order
   • It should rarely be a case of just converting a current directions order into an Unless Order; care needs to be taken to identify the particular issues that need to be addressed
   • The consequence of non-compliance must be made clear, including consideration of the consequences of partial compliance
2. Giving notice of non-compliance
   • The approach should be facilitative rather than punitive
   • Any ambiguity in the drafting should be resolved in the favour of the party who was required to comply
3. Relief from sanction
   • Where an appeal is made and relief from strike-out sought, factors to be considered include:
     • The reason for the default (e.g. was it deliberate?)
     • The seriousness for the default
     • Prejudice to the other party
     • Whether a fair trial is still possible

These recent cases are a reminder of the importance of ensuring that applications for Unless Orders are proportionate and how the party applying can seek to help by ensuring that the terms on which an Unless Order is made are sufficiently precise to avoid a decision that is subsequently appealed.  

Inappropriate conduct and whether it “arises in consequence of disability”

In McQueen v General Optical Council, the EAT explored an issue that is familiar to a number of employers: the difficult question as to when misbehaviour/poor conduct is claimed to be linked to a disability.

The Claimant had a number of conditions amounting to disabilities (described by the EAT as dyslexia, symptoms of Asperger’s syndrome, neurodiversity and left-sided hearing loss). It was accepted that he was a disabled person within the meaning of the Equality Act 2010.

The appeal issue revolved around two “meltdown” incidents. In the first, the Claimant was said to have responded to an instruction in a way described as “rude, disrespectful and wholly inappropriate, with aggressive gestures and body language that was wholly out of place”. The second incident left his colleague in tears. Further incidents occurred and the Claimant was challenged about his habit of standing up at his desk and speaking loudly to colleagues, which was seen as disruptive. The Claimant raised claims of disability discrimination and complained that his treatment based on these events was “discrimination arising from a disability”.The Tribunal found that the incidents did not arise from the disabilities but arose because the Claimant had a short temper and resented being told what to do.

The EAT was critical of the Tribunal’s structuring of its decision, but did not overturn the decision. The EAT recommended that Tribunal’s approach these issues in a structured fashion, asking themselves:

1. What are the disabilities?
2. What are their effects?
3. What unfavourable treatment is alleged and proved?
4. Was that unfavourable treatment “because of” an effect or effects of the disabilities?

The EAT reminds us that for treatment to be “because of” something arising in consequence of the disability, it does not require the disability to be the main or sole reason for the “something”, but the question is whether the disability plays more than a trivial part in the “something”. In this case, therefore, the issue was not whether his disabilities were the sole or main cause of his behaviour, but whether they played more than a trivial part in his behaviour.

This can be a difficult question to answer in the case of many conditions, including neurodiverse conditions, and will normally require medical evidence to determine the extent, if any, to which the condition contributes to the behaviour in question.  

Reduction of awards due to failure to mitigate

The EAT’s decision in Edward v Tavistock and Portman NHS Trust is a good reminder of the principles to be followed by the Tribunal where an employer who has failed to defend a claim argues that the compensatory award to the Claimant should be reduced because they have failed to take reasonable steps to mitigate their loss.

Mr Edwards succeeded with a claim of race discrimination (victimisation). He was employed as a NHS Band 5 Data Officer. He was downgraded to Band 4 and dismissed on the grounds that there were no Band 4 vacancies. He was out of work for 2.5 years, during which he had not applied for any Band 4 roles. The Tribunal considered that by a certain time, it would have been reasonable for him to apply for Band 4 roles and therefore reduced his compensation for the remaining period of his loss by 50%.

The EAT held that the Tribunal’s “percentage reduction” approach was wrong and not in line with the case law in this area.

The Tribunal should instead have identified the point in time at which he would, had he made reasonable efforts, have found a Band 4 role.

The EAT added the following remarks:

• In relation to arguments about failure to mitigate losses, the burden of proof is on the Respondent at all times.
• The Tribunal should consider the following questions:
  • What steps was it unreasonable for the Claimant not to have taken?
  • When would those steps have produced an alternative income?
  • What amount of alternative income would have been earned?

There may be cases where a percentage reduction approach is appropriate, but this was not one.  

April rate increases

Below are details of key rate increases from April

National Minimum Wage (from 1 April 2023)

• NLW for those aged 23 and over: £10.42 per hour
• NMW for those aged 21 – 22: £10.18 per hour
• NMW for those aged 18 – 20: £7.49 per hour
• NMW for those aged 16 – 17: £5.28 per hour
• Apprentices: £5.28 per hour

Statutory limits (from 6 April 2023)

• A week’s pay (for the purpose of redundancy payments and a basic award for unfair dismissal) increases to £643
• The maximum compensatory award for unfair dismissal increases to £105,707

Vento Bands (claims presented on or after 6 April 2023)

The Vento bands for injury to feelings awards in discrimination cases have been increased, and the new bands to take effect in relation to claims presented on or after 6 April 2023 are:

• Lower band: £1,100 to £11,200 (less serious cases)
• Middle band: £11,200 to £33,700 (cases which do not merit an upper band award)
• Upper band: £33,700 to £56,200 (the most serious cases)
• Above £56,200: the most exceptional cases

 

Holiday Consultation closed

The Government’s consultation on calculating holiday entitlement for part-year and irregular hours workers closed on 9 March 2023. The government proposed making changes to the current law in order to avoid some of the anomalous consequences of the Supreme Court’s decision in Harpur Trust v Brazel. If you are interested in the current and potential future law in relation to holiday pay, you may want to view our recent webinar here.

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If you have any queries on these topic areas, make sure to get in touch with Matt McBride and Rena Magdani.