25 November 2022
There have been several employment law cases this year with important implications for employers – notably the case of Harpur Trust and Brazel. In this article we cover some of these key case decisions and highlight a number of action points for employers.
1. Holiday Pay
Harpur Trust v Brazel
The Supreme Court (SC) decided that annual leave entitlement cannot be pro-rated for part-year workers (employed under a permanent contract) in the same way as it can be for part-time workers under the Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000. The SC also held that the 12.07% calculation method for holiday pay, often used by employers calculating holiday pay for workers with irregular hours, is unlawful. We cover this case in detail in our article, ‘Part-year worker’s annual leave entitlement must not be pro-rated, Supreme Court rules’ from our July instalment of Employment Matters.
Actions for employers
- Ensure holiday for part-year workers (such as term-time only workers) is not pro-rated
- Review contracts of employment for workers with irregular hours (such as casual or zero-hour workers) to check if they are employed under permanent contracts of employment. Where appropriate, consider using other working arrangements such as fixed term contracts to avoid the accrual of holiday entitlement and pay.
- Consider any historic holiday pay liability arising from permanent employment of workers with irregular working hours.
- Ensure business processes are updated to calculate workers’ holiday entitlement in accordance with the Working Time Regulations 1998 and holiday pay in accordance with Employment Rights Act 1996.
2. Long Covid
Burke v Turning Point Scotland (TPS)
The Employment Tribunal decided that long Covid could be a disability under the Equality Act 2010 (EQA) if it meets all three elements of the legal test.
A person has a disability if they have a physical or mental impairment which has a substantial and long-term effect on their ability to carry out normal day to day activities. The effect is long-term if it has lasted or is likely to last for 12 months or more.
Mr Burke was diagnosed with long Covid prior to his dismissal and there was evidence to show that long Covid had adversely affected his ability to carry out normal day to day activities – for example, reading, sleeping and socialising with family and friends. His condition had also lasted 9 months so the tribunal felt it would be reasonable to assume it could last up to 12 months and therefore satisfy the long-term element of the disability test. We cover this case in our Employment Law Bulletin in June, ‘Long Covid is an Equality Act 2010 disability’.
Significantly, there were Occupational Health (OH) reports that the employer relied on which had concluded that Mr Burke’s condition was unlikely to be long-term and would not meet the disability definition under the EQA. The reports also stated that he was fit to return to work. Despite this medical evidence obtained by the employer, the tribunal gave more weight to Mr Burke’s witness evidence.
Actions for employers
- Employers must manage long Covid like any other established illness and consult with employees on their condition and the impact it is having on them.
- Medical advice should be obtained by the employer to explore whether the employee could be suffering from a disability under the EQA and, if they are, reasonable adjustments should be considered by the employer.
- Employers must be careful not to solely rely on their own OH reports when considering dismissing an employee. An OH report may only represent a snapshot of how an employee is doing at a particular time and consultation with the employee on the medical evidence is crucial.
3. Restrictive Covenants
Law by Design Limited v Saira Ali
The High Court (HC) enforced a twelve month non-compete restriction against a solicitor and former director of a niche service law firm. The solicitor joined a competitor as a partner during her restriction period and claimed that the non-compete restrictions in her service agreement were unenforceable.
The key considerations of the HC were as follows:
- The employer had a legitimate business interest that required protection. It held that the employee had access to key information relating to clients and pricing structures and her seniority and role as statutory director meant she was aware of sensitive and confidential information relating to the business. The HC also accepted that it would be difficult for the employer to protect the business interests via the non-solicitation of clients and confidentiality restrictions.
- The scope of the non-compete clause was reasonable and limited to parts of the business to which she had been involved the year before she left. It was held that 12 months was a reasonable restriction period as it could take the employer that long to replace her.
- The employee received a significant pay rise at the time she accepted the new non-compete restriction.
Actions for employers
This case is a useful example for employers that long non-compete clauses may be enforced by the courts in certain circumstances – particularly for senior executives’ who know sensitive business information. The case also highlights that such restrictions will only be enforceable if they are appropriately limited in scope and seek to protect a genuine and legitimate business interest of the employer that cannot be protected through non-solicitation of clients or confidentiality restrictions.
However, restrictive covenant enforcement cases are highly fact sensitive and employers seeking to enforce employee covenants should take legal advice on the specific circumstances.
4. Legal Advice Privilege
University of Dundee v Chakraborty (2022) EAT
The Employment Appeal Tribunal (EAT) recently decided that a document needs to have legal advice privilege when it is prepared for that privilege to apply. Sending a non-legally privileged document to a lawyer for legal advice will not give that document retrospective protection from disclosure. We cover this case in our recent Employment Law Bulletin in October, ‘Legal advice privilege cannot be retrospectively applied to documents’.
Actions for employers
A consequence of this case is that, in a tribunal claim, an employee’s lawyer could demand a copy of an original draft grievance or disciplinary investigation report (drafted without legal advice) and inferences could be drawn if the original draft is materially different from the final report later issued to the employee.
Employers who intend to seek legal advice on a disciplinary or grievance investigation before they issue the final report to their employee should consult with their lawyers early. Obtaining legal input on an investigation prior to preparing a first draft report should result in the first draft report not being materially different from the final version. If disclosure is later required, it is less likely to impact the defence replied upon.
Rooney v Leicester City Council
This case was decided towards the end of 2021 and has been followed by several reports this year relating to women’s health in the workplace. The case provides an example of how menopausal related symptoms can meet the disability test under the EQA.
The EAT held Ms Rooney’s menopausal symptoms amounted to a disability. She suffered from both physical and mental symptoms which included fatigue, confusion, stress, migraines, hot flushes, and depression. These symptoms affected her ability to carry out normal day to day activities and had also lasted 12 months.
Actions for employers
Employers should be aware that dismissing a woman suffering from menopausal related symptoms could amount to disability discrimination. If an employer is faced with an employee who appears to be suffering with menopause – medical advice should be obtained to determine any reasonable adjustment that should be made to support the employee.
Consider implementing a menopause policy to raise awareness of menopause in the workplace and train managers on how to deal with employees who may be suffering, so that staff feel more comfortable to discuss their condition. This has also been encouraged by the Government. We cover this in our Employment Law Bulletin in June, ‘Women’s health rises up in the workplace agenda’.
Employers should be aware that any health-related information that employees share will amount to special category data and is subject to stricter regulations under data protection laws.
If you are an employer and would like support on any of the actions highlighted in the cases discussed, please contact Jennifer Mansoor.