The latest top five employment law developments that may affect your business - what they are, and what you can do about them.

1: Can online recruitment tests be discriminatory?

Are job applicants with Asperger's Syndrome discriminated against by online multiple choice recruitment tests? Potentially, yes.

A quick recap on indirect discrimination -it is broadly concerned with an apparently neutral provision, criterion or practice ('PCP') which is not intended to treat anyone less favourably, but which in practice has the effect of disadvantaging a group of people with a particular protected characteristic compared with others who do not share that protected characteristic ("group disadvantage"). Where a PCP disadvantages an individual with that characteristic, it will amount to indirect discrimination unless it can be objectively justified.

In Government Legal Services v Brookes, the Tribunal had to consider whether the Government Legal Services (GLS) had discriminated against Ms Brookes, who had Asperger's syndrome, in requiring her to take a multiple choice situational judgment test (SJT) as the first stage in a competitive process to become a trainee solicitor. Ms Brookes asked GLS in advance of the deadline to adapt the test to allow her to provide short narrative answers, as a reasonable adjustment. She was told that she would be allowed extra time, but that an alternative format test was not available.

In this case, it was agreed that the requirement for all applicants to take and pass the SJT amounted to a PCP. The Tribunal found on the basis of the medical evidence given that there was group disadvantage to those with Asperger's. It also found - on balance as the medical evidence was inconclusive - that Ms Brookes was put to a particular disadvantage. The tribunal accepted GLS' case that requiring all applicants to sit and pass the SJT was a legitimate aim, as it tested their ability to make effective decisions under pressure. However, the GLS fell down at the last hurdle. The SJT without the adjustment requested was not a proportionate means to that end.

GLS witnesses said that there was a continuous link between answers to the SJT and performance of trainees in post, meaning it was certain that the SJT showed whether the applicant demonstrated the competency required. They added that adapting the test to allow for narrative format would be expensive and cause logistical issues. It was also argued that the method of testing and the competency itself were inseparable.

The Employment Appeal Tribunal (EAT) endorsed the Tribunal's view that whilst it would not be ideal to run two methods of assessment and there may be difficulties in comparing responses, these factors did not outweigh the prejudice to Ms Brookes of not adapting the process. The EAT appear to have simply accepted the Tribunal's dismissal of this case as being one where the method of testing and competency itself were inseparable

Two interesting points arise from the EAT judgment (which upheld the Tribunal judgment completely):

  • Inconclusive medical evidence as to the impact of the SJT on Ms Brookes didn't prevent the Tribunal from finding individual detriment to Ms Brookes. The Tribunal was right to also consider Ms Brookes' demeanour, experience and background relevant to whether she suffered a personal disadvantage.
  • It was sufficient for the Tribunal to find the PCP made it substantially more difficult to pass the test, but the Tribunal was not criticised for going further and finding the reason Ms Brookes failed the test was because of her Asperger's (on the balance of probabilities).

SJT's are used by many employers in recruitment, as they are an efficient, computer based way to filter down volumes of applications. But are they still the best way to do that? This case is a useful reminder to stress test your recruitment process to enable equal opportunity:

  • Might any part of your recruitment process put people have disabilities at a disadvantage? Consider 'invisible' conditions which may affect social reasoning, concentration, use of computer software, as well as more obvious physical conditions.
  • Are the tests or stages of the process equally accessible to everyone?
  • Does using an SJT bring real value to the assessment of skills and aptitude necessary for the role?
  • Can you still assess the same skills and ability using an adapted test?
  • If not, would it be reasonable to adapt the pass rate, or to allow the entrant to the next level without taking the test?

2: Employer gets an embarrassing lesson on how not to handle a job application

This month, an environmental services company faced a barrage of unwelcome publicity after committing a recruitment blunder.

Anna Jacobs applied for an office administrator post with the company. When responding to her application, the company accidently attached some of the recruiter's rather regretful internal comments. The email contained disparaging remarks about Ms Jacobs, referring to her as a "home educated oddball", a "biscuit short of a packet" and a "left-wing loon tree hugger". It concluded saying Ms Jacobs was "worth an interview if only for a laugh".

Ms Jacobs, left understandably upset and angry, took her story to the BBC and social media. After the story broke the company reportedly had to suspend its Twitter feed and website for a period in the wake of the backlash of damning comments. The company subsequently offered Ms Jacobs an apology and an interview which she unsurprisingly declined.

Lesson for recruiters:

  • Not all publicity is good publicity. This sorry incident is likely to have a negative impact on existing employee engagement, future talent attraction, as well as the company's employer brand.
  • Managers involved in recruitment should receive training on the recruitment process including how to conduct a selection and appointment process fairly without bias. Everyone can potentially be affected not only by obvious bias as in this case, but also because of subconscious bias.
  • Remember, the e-mail faux-pas of an unintended attachment is not the only way a job applicant could learn of inappropriate and/or potentially discriminatory comments being made about them. All applicants (successful and unsuccessful) can make a subject access request to the employer as the Data Controller to see the personal data held about them under section 7 of the Data Protection Act 1998. Bear in mind that 'personal data' specifically includes:
    • any expression of opinion about an individual; or
    • an indication of the intentions of anyone in respect of that individual.

This will include any notes made by an assessor during the recruitment process if these are filed against the applicant's name or otherwise logically filed.

3: Whistleblowing - Employer's lack of belief that a disclosure was protected irrelevant

Under section 103A Employment Rights Act 1996, dismissal of an employee will be automatically unfair if the reason, or principal reason, is that they have made a public interest protected disclosure.

Section 103A will not apply unless the protected disclosure was the reason (or, if more than one, the principal reason) for the dismissal. In Bolton School v Evans [2007] the Court of Appeal held a teacher did not enjoy the protection of the whistleblowing provisions when he hacked into his employer's computer system in order to expose its vulnerabilities. The Court held that even if a protected disclosure could be established, the principal reason the teacher was disciplined was for hacking into the school's computer system.

In Panayiotou v Kernaghan [2014], the EAT accepted that, in some cases, it might be possible to distinguish between the fact of a disclosure and the manner in which it is made, a dismissal for the latter not attracting protection under section 103A.

But what is the position where the employer dismisses an employee for a reason it wrongly but genuinely believes does not constitute a protected disclosure? The Court of Appeal has overturned the EAT in Beatt v Croydon Health NHS Trust stating that to determine whether a dismissal is automatically unfair under section 103A two questions must be answered:

  1. Was the making of the disclosure the reason (or principal reason) for the dismissal?
  2. Was the disclosure in question a protected disclosure within the meaning of the ERA 1996?

Question one requires an enquiry into what facts or beliefs caused the decision-maker to decide to dismiss. Was the reason the protected disclosure or something else as in the cases of Mr Evans and Mr Panayiotou? In contrast, for question two the belief of the decision-maker is irrelevant. If the reason (or principal reason) for the dismissal was the protected disclosure, it does not matter that the employer genuinely believed that the disclosure did not amount to a protected disclosure. The Court of Appeal commented that the scope of the protection afforded by the whistleblowing provisions would be enormously reduced if the belief of the decision-maker was relevant for question two

While the principle sounds straight forward, this is not always easy to apply in a complex factual scenario. The Court concludes that the moral of this case is:

"it is all too easy for an employer to allow its view of a whistleblower as a difficult colleague or an awkward personality (as whistleblowers sometimes are) to cloud its judgement about whether the disclosures in question do in fact have a reasonable basis or are made (under the old law) in good faith or (under the new law) in the public interest. … if the employer proceeds to dismiss it takes the risk that the tribunal will take a different view about them. I appreciate that this state of affairs might be thought to place a heavy burden on employers; but Parliament has quite deliberately, and for understandable policy reasons, conferred a high level of protection on whistleblowers. If there is a moral from this very sad story…it is that employers should proceed to the dismissal of a whistleblower only where they are as confident as they reasonably can be that the disclosures in question are not protected or…that a distinction can clearly be made between the fact of the disclosures and the manner in which they are made".

4: Holiday pay - EAT reconfirms the three-month gap rule

Back in 2014, the EAT in Fulton and Baxter v Bear Scotland combined with Wood v Hertel and Laws v Amec confirmed that in a deduction of wages, claims for underpaid holiday pay, where more than three months has elapsed between the alleged "deductions", will not form part of a "series of deductions". This can significantly limit the potential value of such back claims (although in any event, such claims are now limited to two years for claims brought on or after 1 July 2015). Just when you think the position as regards overtime payments has settled down…

Despite not appealing the EAT's 2014 judgment, Mr Fulton and Mr Baxter have attempted to challenge the three month gap principle following their case having been sent back to the tribunal in 2015 purely to assess their loss. They were both unhappy with their awards as due to breaks of more than three months between deductions, Mr Fulton was only able to recover £2,146 of his £10,060 claim. Likewise Mr Baxter who claimed underpayments of £15,170 was only able to recover £1,796.

The EAT - this time sitting in Scotland - comprehensively rejected this latest challenge which can only be described as a last ditch "Hail Mary" play. Given the history of this litigation, the outcome is not surprising: it was always going to be hard to convince the EAT that a key finding in the landmark judgment of Bear Scotland (No. 1) was not part of the binding main findings of that judgment. Mr Fulton and Mr Baxter attempted to argue that the three month rule was merely a presumption rather than a hard and fast rule. Mr Fulton and Mr Baxter's task was made even harder because they were asking the EAT to revisit a decision in the same case. If they wanted to appeal the 2014 judgment they should have done so at the time. It is rather inexplicable why they chose this route which from the outside seemed doomed to fail.

Mr Fulton and Mr Baxter could try to appeal to the Court of Session in Scotland, but their prospects of success appear negligible as they failed to appeal the 2014 judgment in their own case. That is not to say that the three month rule could not be challenged in future in another case. At the end of April, the President of Employment Tribunals (Scotland) stated there are around 17,000 holiday claims pending in the Scottish employment tribunal system alone which were waiting on the outcome of this case before being allowed to proceed. The very large number of claims may, however, be as a result of the need for claimants to issue a fresh claim every three months where there are ongoing deductions, in order to avoid being out of time.

5: Trade Union recognition - small bargaining units possible

Trade Unions who want collective bargaining rights have to first obtain recognition from the employer. If the employer declines a request for voluntary recognition, the union can apply to the Central Arbitration Committee (CAC) to impose statutory recognition. However the CAC will do so only if satisfied that the request for recognition has been made in respect of what is an "appropriate bargaining unit" and that the majority of employees in the unit are in favour of collective bargaining.

The Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA) sets out the test the CAC must consider when deciding whether a bargaining unit is appropriate taking into account "the need for the unit to be compatible with effective management" which includes "the desirability of avoiding small fragmented bargaining units within an undertaking".

The GMB sought recognition from Lidl Ltd in relation to a group of warehouse operatives constituting 1.2% of Lidl's total UK workforce. Lidl opposed the request as only a very small proportion of staff at the same grade and location was in the bargaining unit and so not an "appropriate bargaining unit" as would require fragmented bargaining from the vast majority of the workforce. However, the CAC disagreed and granted recognition.

The Court of Appeal has held that the CAC had correctly applied the statutory test when granting statutory recognition. The requirement to avoid fragmentation is aimed at avoiding employers having to negotiate with more than one union, rather than prevent a situation where a union is recognised in respect of only a small pool of employees and no union is recognised in respect of the remainder.

This decision highlights the limitations of a fragmentation objection. A union's chosen 'bargaining unit' does not have to be the most suitable in order to be appropriate. Even if inconvenient for the employer, it may still be concluded that it's compatible with effective management.