Frontline UK Employment Law Update Edition 27 2024 - Case Updates

1. Plastic Omnium Automotive Ltd v Horton (EAT) 
2. Miller v University of Bristol (EAT) 
3. Humby v Barts Health NHS (EAT) 
4. Sean Pong Tyres Ltd v Moore (EAT) 

Plastic Omnium Automotive Ltd v Horton (EAT) (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) held that the Claimant was not a worker of the Respondent in circumstances where he provided his services via a personal service company.

The Claimant was contracted by the Respondent, a subsidiary of a multinational automotive components manufacturing group, through his service company ProMan Design Ltd, later rebranded as ProManOne Ltd (“ProMan”). The contract between the Respondent and ProMan did not expressly allow ProMan to provide a substitute for the Claimant, though ProMan did briefly supply another individual to work for the Respondent over a period of around nine months in 2011-12. The contract explicitly stated that it did not establish a contract between any individual provided by ProMan and the Respondent, with all liabilities for employment related issues falling on ProMan. Additionally, the contract specified that ProMan would not receive compensation for holiday, sickness, or other absences.

Through ProMan, the Claimant served as the Respondent’s Programme Manager across various projects from 2011 to 2019. The Claimant’s responsibilities and privileges during his tenure included:

• receiving necessary tools like a laptop and access card;
• reporting to the Respondent’s Programme Director;
• adhering to a typical Monday to Friday work schedule, and participating in training sessions funded by the Respondent.

The Claimant was treated similarly to the Respondent’s directly employed Programme Managers but was exempt from certain administrative tasks like clocking in or out, undergoing appraisals, and disciplinary procedures. Additionally, he had the ability to request holidays, taking a comparable amount to regular employees, with his daily fee including a sum in respect of holiday pay.

The Claimant did not receive direct payment from the Respondent; instead, ProMan invoiced for his services, and he received income from ProMan in the form of dividends and salary. ProMan also disbursed dividends to another shareholder, Ms Cotton, who also contributed to the company's work.

During his tenure as a contractor, the Respondent proposed employment to the Claimant, which he declined, preferring his existing arrangement due to its perceived advantages. On termination of the contractor arrangement the Claimant issued claims against the Respondent in the Employment Tribunal (“ET”), arguing that he had been an employee, or if not an employee, a worker, for the purposes of the Employment Rights Act 1996 (“ERA”).

The ET held that the contract between the Respondent and ProMan accurately reflected the agreement between the parties, but determined that whilst the Claimant was not an employee engaged under a contract of service, ’he was classified as a worker (defined in ERA as an employee or a person who has entered into or works under any other contract (express or implied) whereby they undertake to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual). This was on the basis that the Claimant was deeply integrated into ’the Respondent’s operations and held a position of subordination or dependency. The Respondent appealed to the EAT.

The EAT overturned the ET’s decision and found that the Claimant was not a worker. The ET had found that the agreement between the Respondent and ProMan reflected the true agreement between the parties, and they acted in accordance with it, but had failed to consider that the Claimant was not a party to that agreement; it was between two companies, and this was a real issue. The finding that the Claimant was subordinate and dependent on the Respondent as his main client did not mean that the ET could simply step around this issue. The Claimant had been offered the opportunity to become employed by the Respondent and had declined; ProMan could have provided more staff to the Respondent if needed; Ms Cotton was a shareholder of ProMan and received both a salary and dividend and worked for ProMan. These issues were relevant to the question of whether ProMan was a business, and the Respondent a client of that business. The ET had failed to consider these issues and come to the wrong conclusion as a result. To help avoid this, the EAT recommended that when considering employment status, ETs should:

• Adopt a structured approach to the application of the words of the statute:
  • Has the individual entered into or do they work under a contract with the other party?
  • Has the individual agreed to personally perform work for the other party?
  • Does the individual carry on a profession or business undertaking?
  • Is the other party the individual’s client or customer?
• Conduct thorough fact-finding.
• Assess the significance of various factors indicating worker status or otherwise. It is crucial for the ET to examine the actual circumstances rather than solely relying on legal formalities.
• Recognise that different factors might be pertinent to individuals with diverse professional levels and pay grades. This includes considering how the job is likely to be carried out and the accuracy of the written contract in reflecting the actual agreement between the parties.

This case highlights the difficulties that ETs can encounter when attempting to determine issues of employment and worker status, arising from the highly fact-specific nature of the analysis. Parties entering into arrangements of this type need to be mindful of the legal uncertainty surrounding this area and the difficulty of eliminating the risk of worker and/or employment status claims altogether.

Miller v University of Bristol ET/1400780/2022 (LINK)

In this case, the Employment Tribunal (“ET”) found that the dismissal of a university professor for expressing anti-Zionist beliefs was unfair and amounted to discrimination because of religion or belief.

The Claimant was employed by the Respondent university as a Professor of Political Sociology. Throughout his 20-year career, his academic work has been controversial and political. He has publicly expressed contentious views on various issues. The Respondent described the Claimant as an “investigative researcher” focused on power concentrations in society and their democratisation and accountability. His work, including his stance on the Zionist movement, was well known.

The Claimant taught undergraduate courses titled "Harms of the Powerful" and "Understanding Terrorism." During one lecture, he proposed a theory that Islamophobia in the UK was influenced significantly by five “pillars”, one of which he identified as the Zionist movement.

The Respondent subsequently received a complaint from the Community Security Trust (“CST”) regarding the lecture. Two Jewish undergraduates alleged that the Claimant had attributed blame to CST and other UK Jewish organisations for fostering Islamophobia. The complaint stated that associating CST with Islamophobia was false and defamatory.

Additional complaints were made by the President of the Bristol Jewish Society (“JSoc”) and the President of the Union of Jewish Students (“UJS”). John Mann MP, Chair of the All-Party Parliamentary Group against Antisemitism, also raised concerns about anti semitism at the Respondent. Media outlets such as The Sunday Telegraph and The Jewish Chronicle covered the controversy.

The Respondent appointed a barrister to investigate the complaints. She concluded that there was no formal case for the Claimant to answer regarding the matters investigated. However, he subsequently spoke at an event and published articles, including one in which he suggested that Jewish students were being used as “political pawns by a violent, racist foreign regime engaged in ethnic cleansing”. This led to further complaints against him.

The Respondent again appointed a barrister to investigate whether the Claimant’s language in February 2021 exceeded the boundaries of acceptable speech. She concluded that it did not breach legal or academic freedom principles but acknowledged employers' rights to set reasonable standards of behaviour.

The Respondent also appointed another professor to investigate the Claimant’s conduct. He concluded that the Claimant’s statements breached the University's Rules of Conduct for Staff, the Acceptable Behaviours Policy, and the Freedom of Speech Code of Practice. Following a disciplinary hearing, the allegations were upheld. Although acknowledging the importance of freedom of speech and academic freedom, the Claimant was criticised for abusing his significant power differential by singling out students and their societies. The Claimant was summarily dismissed for gross misconduct and brought ET claims of unfair dismissal and discrimination because of a philosophical belief.

He framed his belief as one that political Zionism is inherently racist, imperialistic, and colonial, and should be opposed. He stated that he considered this belief fixed and identified with a global community of anti-imperialist anti-Zionists. However, his anti-Zionism did not extend to opposition or animosity towards Jews or Judaism.

The ET found that the Claimant’s anti-Zionist beliefs amounted to a philosophical belief as defined by section 10 of the Equality Act 2010 (“EqA”). As the reason for the Claimant’s dismissal had been his belief, the dismissal was directly discriminatory.

The ET considered the following when coming to its decision:

1. The Claimant’s deeply held belief regarding Zionism was found to be genuine and significant in his life, influencing his teachings and writings, despite the Respondent's argument that it was merely an opinion based on research. While the Respondent contended that the belief lacked coherence, the ET found it to meet modest threshold requirements. Additionally, the belief was deemed not incompatible with the rights of others in a democratic society, as it did not oppose Jewish self-determination but rather “the exclusive realisation of Jewish rights within a land inhabited by a significant non-Jewish population”. Moreover, the Claimant's stance against violence in opposing Zionism was acknowledged.
   
   
2. The ET, guided by the recent case of Higgs v Farmor's School and another [2023] EAT 89, determined that the Claimant’s dismissal stemmed directly from actions linked to his underlying belief. Considering the restrictions on manifesting beliefs and freedom of expression, the ET weighed the Respondent's aims of safeguarding its reputation and others' rights against the severe impact of dismissing an academic, which could hinder research and teaching, affecting societal discourse. While fault was acknowledged in the Claimant's actions, the investigations found no antisemitism, incitement to violence, or threat to safety, suggesting a lesser disciplinary sanction would have been proportionate without compromising the Respondent's aims.
   
   
3. The ET ruled the Claimant’s dismissal was unfair on two grounds: firstly, due to direct discrimination, as the Respondent's reason for dismissal was tainted by discrimination. Secondly, even without direct discrimination, the dismissal was unjustified because the Claimant’s actions did not amount to gross misconduct, and the Respondent had not adequately considered a lesser sanction. Despite this, both basic and compensatory awards were reduced by 50% due to the Claimant's conduct, particularly his aggressive discourse towards students and student groups, which could have been avoided. The ET also held that there had been a 30% chance of a fair dismissal two months after his dismissal taking into account further comments he had made on social media after his dismissal.

The ET recognised the conflicting opinions surrounding the Claimant’s beliefs but emphasised the principle that beliefs should not be questioned for validity. Despite acknowledging the Respondent's operational challenges due to backlash, it asserted that academic institutions should withstand criticism resulting from academics' lawful expression of their expertise. Following principles outlined in Higgs, the ET deemed dismissal disproportionate, again highlighting the significance of considering context, a tailored approach to issuing sanctions and implementing a proportionate view.

This decision is just one in a string of recent judgments relating to employees who have been sanctioned by their employers for expressing views that others have considered to be offensive. Whilst it relates to a professor in an academic institution, meaning that the ET placed particular weight on academics’ rights to think and speak freely about matters related to their area of expertise, it highlights the potential legal, reputational and employee relations difficulties faced by all employers when employees express beliefs that others find to be unacceptable.

Humby v Barts Health NHS Trust (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) found that the Employment Tribunal (“ET”) had been wrong to conclude that the Respondent employer had not breached the Claimant’s employment contract when reassigning him from a Band 6 role to a Band 5 role in the Respondent’s job banding system.

The Claimant was employed in a Band 6 role at the Respondent NHS Trust.

In 2018, the Claimant submitted a grievance and brought an ET claim against the Respondent, alleging breaches of the Equality Act 2010. The Claimant’s management duties were subsequently removed, in light of concerns including the Claimant’s health, performance and behaviour at work, including the grievance and the ET claim.

The Respondent then carried out a restructuring process, which involved proposed reductions to the number of Band 6 roles. After a lengthy process, the Claimant was informed that he would be reassigned to a Band 5 role, effective from 24 February 2020. The Claimant alleged that the Respondent was not entitled to unilaterally reassign him to a Band 5 role and on 23 March 2020, he informed the Respondent by email that he was leaving, but that he was possibly willing to work longer than his six-week notice period. He subsequently left within his notice period and brought a claim of constructive unfair dismissal (as well as other claims).

The ET held that the Respondent had not fundamentally breached the Claimant’s employment contract by unilaterally reassigning him to a Band 5 role. Reasons included that the Claimant’s Band 6 role no longer existed, no alternative Band 6 role was available to the Claimant after the restructure, the Band 5 role was suitable alternative employment due to its broad similarities with the Clamant’s Band 6 role, and the Claimant’s pay was to be protected for 18 months. Even if there had been a fundamental breach, the ET held that the Claimant had affirmed the employment contract by indicating his willingness to work longer than his six-week notice period.

On appeal, the EAT ruled that the ET had incorrectly focused on whether there had been a breach of the implied term of trust and confidence, and not, as it ought to have done, whether there had been a breach of an express term of the Claimant’s employment contract. The Claimant’s contract expressly stated that he was employed in a Band 6 role, with a Band 6 salary. As there was unlikely to be an express term allowing the Respondent to demote the Claimant to Band 5 and reduce his pay accordingly, the Respondent had breached an express term of the Claimant’s contract. This breach was unaffected by the Respondent offering 18 months’ pay protection. The EAT therefore found that the ET had made an error of law when deciding that there was no repudiatory breach of contract.

The EAT further held that, the ET should have considered whether the Respondent’s actions constituted an unfair dismissal on the basis that the extent of the changes being made unilaterally meant that the Claimant’s existing employment contract was, in practice, being terminated by the Respondent.

On affirmation, the EAT held that the ET had been wrong to conclude that the Claimant had affirmed his contract by offering to work slightly longer than his six-week contractual notice period. The EAT considered that the proposition that an employee could be taken to have affirmed their contract when they give more notice than as required under their contract was not an absolute rule, and that the ET should have considered all the circumstances of the case. Relevant circumstances here included that the Claimant was uncertain about the actual length of his notice period and was concerned about the implications of the first COVID-19 lockdown, which had just been announced. Moreover, the Claimant had only offered to work a few extra days. In the end, the Claimant had left during his notice period, and so did not ultimately remain employed for longer than the contractual notice period.

This case serves as a reminder that the unilateral imposition of significantly different terms of employment on an employee can, of itself, amount to a dismissal. When considering changes to an employee’s terms, employers should take into account the express terms of the employment contract, as well as implied terms such as the duty of trust and confidence, to determine whether the changes will involve a fundamental breach of contract, or even amount to a dismissal, if not agreed with the employee. A fundamental breach will entitle the employee to resign and treat themselves as constructively dismissed. The fact that an employee remains employed for their contractual notice period or even beyond does not, of itself, prove that the contract has been affirmed; all of the circumstances of the employee’s departure must be taken into account.

Sean Pong Tyres Ltd v Moore [2024] EAT 1 (LINK)

In this case, the Employment Appeal Tribunal (“EAT”) held that the Respondent employer remained liable for the Claimant’s claim for harassment under the Equality Act 2010 (the “EqA”). This was the case even though the harassment had been perpetrated by an employee who had subsequently transferred to a new employer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”), whilst the Claimant had not.

The Claimant brought a claim against his employer, the Respondent for unlawful harassment and discrimination suffered due to the acts of a fellow employee (“O”), together with claims of constructive and unfair dismissal. Under the EqA, an employer is liable for acts of harassment and discrimination committed by an individual in the course of employment.

O subsequently transferred to another employer (“C”) under TUPE. The Respondent sought to argue that because of this, any liability of the Respondent for the Claimant’s harassment and discrimination claims had also transferred to C and applied for C to be added as a party to the proceedings. This argument fell to be considered by the EAT on an appeal by the Respondent against the ET’s decision refusing permission to amend the Grounds of Resistance to include it.

The Respondent argued that, under the EqA, its liability to the Claimant was a “transferor’s liability” under or in connection with O’s contract of employment, and therefore had transferred to C along with O’s contract of employment under regulation 4(2)(a) of TUPE, even though the Claimant had not transferred. The Respondent relied on an unreported County Court decision in Doane v Wimbledon Football Club Ltd in 2007 in which it was held that a transferor's vicarious liability for the negligence of a transferring employee could pass, under TUPE, to the transferee.

The EAT held that the Respondent’s liability under the EqA did not transfer in these circumstances. The County Court’s decision in Doane applied only to transfers of an employer’s vicarious liability in tort, and not its (separate) primary liability to the employee for discrimination and harassment under sections 39 and 40 of the EqA.

In addition, the EAT held that this primary liability for discrimination or harassment arose “in connection with” the employment contract of the victim (in this case the Claimant, who had not transferred), and not that of the perpetrator. To interpret regulation 4(2)(a) of TUPE in this way was to stretch its meaning. Both the employer’s and perpetrator’s liability under the EqA is completely dependent on the employer’s contractual relationship with the complainant and does not always depend on the employer’s contractual relationship with the perpetrator. The purpose of TUPE was to deal with the complex of rights and obligations connected with a transferring employee’s contract of employment, not with those of a non-transferring employee. Finally, to interpret TUPE so that liability had transferred to C, would have meant that the Claimant would have needed to bring a claim against C, when the Claimant had no employment relationship with C (as required for claims under the employment provisions of the EqA).

This case highlights the legal complexity that can arise in the context of a TUPE transfer. Where discrimination is perpetrated by an individual in the course of employment, the employer is liable under the EqA, even where that individual has subsequently ceased to be employed by them. The employer will not be able to divest itself of this primary liability simply because the perpetrator is no longer its employee. In the reverse situation, where the complainant has transferred to a new employer, the transferor’s liability under the EqA will transfer to the new employer under TUPE as a liability “in connection with” the complainant’s contract of employment.