Frontline UK case updates - January 2019

Frontline case updates - January 2019

1. No disability discrimination where treatment could have been more favourable

2. Employees entitled to statement of particulars where they work for less than two months

3. Uber drivers hold 'worker' status

4. Individual ships within a fleet are each considered an 'establishment' for the purpose of collective consultations

No disability discrimination where treatment could have been more favourable

Williams v Trustees of Swansea University Pension (Supreme Court)

The Supreme Court has held that when considering the presence of "unfavourable treatment" for the purposes of claims of discrimination arising from disability under s.15(1) of the Equality Act 2010 ("EA 2010"), Tribunals should utilise a low threshold with reference to analogous concepts of disadvantage or detriment.

The Claimant was employed by the University of Swansea up until his early retirement due to his Tourette's syndrome, OCD and other psychological problems when he was aged 38.  The Claimant had gradually reduced his working hours during the period of ill-health as a reasonable adjustment accepted by his employer which was intended to be temporary to assist the Claimant in returning to work.  The Claimant was enrolled into the Respondent's pension scheme and had successfully applied for ill-health early retirement taking effect from 30 June 2013.  However, when the enhanced element of his early entitlement was calculated, it was done using the Claimant's part-time salary as a multiplier which was argued to be unfavourable treatment arising from a disability.  The Claimant contended that his pension multiplier should have been based on his full-time salary.

Following a string of appeals, the Supreme Court rejected the Claimant's arguments. It held that when assessing claims under s.15, two simple, objective questions of fact need to be considered: (i) what was the relevant treatment?; and (ii) was it unfavourable to the Claimant? Here, the relevant treatment was the award of a pension. However, the Court considered that the fact that ongoing payments were based on reduced working hours could not be considered to represent a detriment or specific disadvantage. Indeed, the Court confirmed that had the Claimant been able to maintain his work full-time with no disability, he would not have been able to claim his pension at all until he reached retirement age.  As such, the Court confirmed that notwithstanding the now relatively low threshold for s.15 EA 2010 claims, there was nothing intrinsically unfavourable about this treatment and nor could it reasonably be regarded as such.

This outcome confirms that, for the purposes of claims under the s.15 EA 2010, Tribunals should draw a distinction between "unfavourable" treatment, and treatment which could have been more favourable. However, employers should not forget that the threshold for findings of "unfavourable" treatment is low; anything which can reasonably be regarded as detrimental to an individual is likely to be caught.

Employees entitled to statement of particulars where they work for less than two months

Stefanko and others v Maritime Hotel Ltd (EAT)

The EAT has confirmed that employees who are engaged for more than one month, but less than two, are nevertheless entitled to a written statement of T&Cs of employment in line with s.1 of the Employment Rights Act 1996.  The statement must be provided within two months of the start date of their employment, even if this is terminated within those initial two months.

The Claimants in this case were employed as hotel staff by the Respondent, who summarily dismissed the Claimants when they complained of poor treatment - including one Claimant who had only worked for 6 weeks at the point of dismissal.  They all brought successful claims of automatically unfair dismissal (on the basis that they were dismissed for seeking to assert a statutory right against their employer failing to provide a section 1 statement) before an Employment Tribunal; but the aforementioned Claimant was denied further compensation (of up to 4 weeks' capped pay) for failure to provide initial particulars on the basis that her employment had lasted for less than two months.

On appeal, the EAT reversed this decision. It confirmed that all employers are – under current laws - required to provide a written statement of initial particulars, containing prescribed information, to all employees who have worked for at least one month, even if they leave the business within their first two months. Where such information is not provided, employees can claim additional compensation of between 2-4 weeks' capped pay for such a breach, provided that they are able to bring a substantive claim (such as unfair dismissal) alongside this.

This decision provides a timely reminder that employers must ensure they provide written statements to employees at the earliest opportunity, including those who leave the business quickly after one month, to avoid the risk of having to pay an uplift in any compensation due to a Claimant.  Indeed, while providing such a written statement does give clarity to the employment relationship generally, it is also good practice to ensure speedy compliance as from 6 April 2020 a written statement will need to be provided to all employees (and workers) from the first day of their employment. 

Uber drivers hold 'worker' status

Uber BV v Aslam & others (Court of Appeal)

Uber drivers have been found to be workers, and not independent contractors, by the Court of Appeal in a decision held by a majority of two.  Despite express contractual terms to the contrary, the Court of Appeal found that the reality of the commercial relationship between Uber and its drivers was such that the drivers provide the skilled labour force which enables Uber to deliver its services to passengers.

The contracts in place between Uber and its drivers state that the drivers are independent transport companies, and that Uber was a customer of those transport companies.  However, applying the leading case in this area - Autoclenz Ltd v Belcher – the majority found that the relationship set out in those contracts was a legal fiction out of touch with the commercial realities of the relationship, referencing Uber's handling of passenger complaints, its control over passenger ride information and the collection of driver performance metrics through its rating system.  

Indeed, such an ambiguity between the contracts and the commercial realities meant that the Court of Appeal could disregard express written terms, since the true reality of the arrangements could be determined by the circumstances of the case - of which the contracts were only a part.  As such, it held that the drivers are employed by Uber as 'workers' and therefore should be afforded workers' rights, including paid leave under the Working Time Regulations and National Minimum Wage entitlements, deciding in line with most other 'gig economy' cases currently or recently at court.

However, Lord Justice Underhill, in his dissenting judgment, disagreed with the application of the leading case.  In an analogy to a private hire car business, he suggested that the factual and contractual relationships between Uber and its drivers are in accordance with a well-recognised business model where it is common for minicab companies to act as a booking agent for a group of self-employed drivers, who then contract with the passengers as principals.

Since there was no ambiguity in the contracts and the relationship, Underhill said that the Tribunal could not interfere with the commercial practices between the parties and disregard the "contrary" contractual terms - as the terms were not contrary.  So while Underhill may be out of step with the direction of travel of the 'gig economy' case law, his analysis is convincing and could provide useful basis for analysis going forward.  It is notable that a recent case in the High Court, while factually different to the present case, found that Deliveroo riders were not workers.

The current climate can make it difficult for employers who offer blended workforces and flexible working relationships to conclude the employment status of their workers and contractors.  Worker status remains a topic of debate in the highest levels of Government, especially in the context of the Taylor reforms and the Good Work Plan which, among other things, seek to pin down the tests on employment status.  There may yet be further developments from the courts – so as Uber has been given permission to appeal, we will continue to  watch  for developments in this evolving area.

Individual ships within a fleet are each considered an 'establishment' for the purpose of collective consultations

Seahorse Maritime v Nautilus International (Court of Appeal)

Where a business' branch or unit has operational independence, it can still be considered an 'establishment' for the purposes of collective consultation. Here, each ship in a fleet was an 'establishment', and collective consultation obligations only applied where 20 or more employees were affected on an individual ship.

In 2015, Seahorse Maritime, the employer of crews on a fleet of ships, laid off some of the ships in the fleet, resulting in redundancies across the workforce. The trade union, Nautilus, claimed that collective consultation of the crews should have taken place prior to the laying off of ships as more than 20 employees were made redundant across the entire fleet. In response, the employer argued that each ship was a separate establishment and, as it was unlikely that 20 employees would have been made redundant on any individual ship, the threshold for collective consultation had not been triggered.

Initially, the Employment Tribunal and Employment Appeals Tribunal upheld the trade union's claim. However, the Court of Appeal overturned this in its unanimous decision, finding that each ship was a separate 'establishment' and there was therefore no requirement to consult with the employees. The judgment reasoned that each ship was a 'self-contained operating unit', as the functional work was unaffected by other ships, and that each employee was assigned to work on one particular ship for long periods of time. The Court drew an analogy between the ships and branches of retail shopping chains.

This important decision highlights that separate work places are capable of being establishments for the purpose of collective consultation under TULCRA - even where a branch or unit within a business has no legal, financial or managerial autonomy.  Further, it also provides useful guidance on the close connection to the UK.  Indeed, since the close connection can be determined by a work place and the common features of employment at that location, and not by the individual employees, in this way it may make it easier for individuals to come into scope for collective consultation.