Our March update covers recent developments in employment law, including cases on religious and race discrimination and early conciliation. We also outline other points of note, including the Banking Standards Board’s consultation and guidance on regulatory references, upcoming statutory pay increases and the Government Equality Office’s recently published guidance on gender pay gap reporting.

No direct discrimination where dismissal is based on the religion or belief of the employer

The EAT has held that it was not discrimination on the grounds of religion or belief for a nursery to dismiss a teacher for refusing to lie about cohabiting with her boyfriend.

In this case, the employee was a Jewish teacher employed at an orthodox Jewish nursey. The nursery discovered that the employee was cohabiting with her boyfriend, which was contrary to the nursery’s Jewish beliefs that cohabitation outside of marriage is wrong. She was invited to a meeting with the nursery’s management who suggested that the employee tell them that she was no longer cohabiting, even though that would be untrue. This was so that the nursery could then say to any concerned parents that the employee had now told the nursery that she wasn’t cohabiting. The employee refused to do this and was dismissed.

On appeal, the EAT overturned the Employment Tribunal’s finding that the employee had been discriminated against on grounds of religion or belief. Applying recent Supreme Court guidance on this area, the EAT confirmed that an employer acting because of its own religion or belief does not discriminate. It is only if the treatment is because of the employee’s religion or belief – in this case, her lack of belief that cohabitation outside of marriage was wrong – that her direct religious discrimination claim could be well founded. The EAT did, however, uphold the Employment Tribunal’s ruling that the employee had suffered sex discrimination because the answers she’d given to questions about her plans for marriage and children were a significant influence on the nursery’s decision to dismiss her.

Why this matters?

In what is now becoming an increasingly settled area of discrimination law, this case emphasises that a direct religious discrimination claim cannot be made on the basis of the employer’s religion or belief, but must be made on the basis of the alleged victim’s.

Claimant and comparator’s decision-makers need not be the same person in direct discrimination

The EAT has held that a person who is otherwise a suitable comparator is not necessarily unsuitable just because a different decision-maker is involved.

When selecting a comparator for the purposes of a direct discrimination claim, the circumstances of the employee and the comparator cannot be materially different. In this case, a police custody officer was dismissed for using excessive force on a prisoner. He alleged that his dismissal was race discriminatory, pointing to examples involving white custody officers who hadn’t been dismissed for similar assaults on prisoners.

The EAT said that the comparators relied on by the claimant were in materially different situations, so his claim failed on that ground. However, the EAT dismissed the employer’s argument that another relevant difference was that none of the comparators' cases were decided by the same decision-maker who had dismissed the claimant. The EAT held that, while there may be cases where the difference in the decision-maker amounts to a material difference - for example where one decision-maker was operating under a different policy from another decision-maker - if the only difference is the decision-maker’s identity, that would unlikely constitute such a difference.

Why this matters?

Identifying and formulating comparators in discrimination claims can be tricky, but this case is a helpful reminder to employers that they cannot argue that a difference in decision-maker renders a comparator unsuitable if in all other regards the comparator and claimant’s circumstances are similar.

Time limit only recommences after early conciliation if certificate is sent to valid email address

To make allowance for the requirement that claimants usually have to go through an early conciliation (“EC”) process before they can file an Employment Tribunal claim, the EC provisions ‘stop the clock’ on the time limit to bring a claim whilst early conciliation is ongoing. In this case, the EAT held that a claimant’s email address to which an EC certificate is sent at the end of the EC process must be valid, for the time limit for bringing Employment Tribunal proceedings to recommence.

Under the EC rules, where a claimant includes an email address on their EC form, ACAS will send the EC certificate to that email address. The certificate is deemed received on the day that it is sent and restarts the clock for the purposes of lodging a claim. In this case, the claimant provided an email address that unintentionally had a mistake in it. As a result, the claimant’s representative didn’t receive the EC certificate and the claim was out of time by the time that the error was spotted.

The EAT held that the certificate must be sent to a valid email address which is registered to a user. The effect of the EAT’s interpretation is that, where an EC form is lodged with an invalid email address, the time limit for bringing a claim remains suspended. Interestingly, the EAT held that if the email address provided is a valid one, but wrong insofar as it means that the email is sent to the wrong individual, the time limit will recommence and a claimant would have to rely on a tribunal’s statutory discretion to extend time in the event that the claimant files their claim out of time.

Why this matters?

This case emphasises the importance of claimants providing the correct details on their EC form. Helpfully for employers, where a claimant provides a valid email address but one that doesn’t belong to them, the clock for bringing a claim starts ticking again. However, based on this ruling, an invalid email address will be of no help to employers when it comes to counting down the clock.

Regulatory references: The Banking Standards Board (“BSB”) has launched a consultation on its proposed good practice guidance on regulatory references under the Senior Managers and Certification Regime (“SMCR”). As a reminder, the purpose of regulatory references is to establish a framework that requires financial services firms governed by SMCR to share relevant information on certain individuals’ prior conduct and fitness and propriety to support their assessment of potential new recruits as fit and proper. The BSB’s good practice guidance is intended to help firms implement regulatory references effectively and is based on the principles of fairness, proportionality and consistency. It covers good practice when providing and obtaining regulatory references and the type of information to include in a reference. The BSB’s consultation asks four questions on its guidance and the deadline for responses is 20 March 2019.

Statutory pay increases: From 7 April 2019, statutory maternity, paternity, adoption and shared parental pay and maternity allowance will increase to £148.68 a week (up from £145.18). From 6 April 2019, the weekly rate of statutory sick pay will be £94.25 (up from £92.05). From 1 April 2019 the national living wage for workers aged 25+ will increase to £8.21, the standard adult rate for workers aged 21-24 will be £7.70, and the development rate for workers aged 18-20 will be £6.15.

Increases to Employment Tribunal compensation: Tribunal compensation limits are due to increase from 6 April 2019. Of particular note are the increases to the compensatory award for unfair dismissal (rising from £83,682 to £86,444) and the limit on a week's pay (rising from £508 to £525).

Gender pay gap reporting: The Government Equalities Office has published two sets of guidance to help employers close their gender pay gap. The first piece of guidance helps companies identify the potential causes of the gender pay gap in their organisation. It does this through asking companies to identify potential areas of development such as whether individuals who are employed on a part-time basis are being supported to advance in the company and whether women tend to enter the company in lower paid positions than men. The second piece of guidance is a four-step guide to help employers develop an effective gender pay gap action plan.