Our June update includes cases on religious harassment, discrimination arising from disability, constructive dismissal, shared parental pay and employment status. We also outline other points of note including the coming into force of the GDPR and a consultation on changing the IR35 rules in the private sector.

GDPR comes into force

The Data Protection Act 2018 received Royal Assent and came into force on 25 May 2018. This means that the wide sweeping changes to data protection law introduced by the General Data Protection Regulation (GDPR) now apply.

In the lead up to 25 May, the Information Commissioner’s Office published further supporting documentation, including:

Why this matters?

The new data protection regime introduces material changes which businesses must comply with in relation to the data of their employees and in relation to any other personal data which is processed, for example data of candidates, clients and customers. Given that the penalties which can now be imposed are significantly higher (in the case of certain breaches, up to EUR20 million or 4% of the undertaking's total annual worldwide turnover in the proceeding financial year, whichever is higher and for other breaches, up to EUR10 million or 2% of annual worldwide turnover), it is vital that all employers take steps to ensure compliance. It is also worth noting that further ICO guidance is still being issued and the area continues to evolve.

Our blog on Subject Access requests under the GDPR regime also gives further guidance on one area where changes to the legal regime may have an immediate impact on employers.

Disability discrimination – employer does not need to know disability caused the issue

For discrimination arising from disability (DAFD) claims, an individual’s disability must result in “something” and the employee must be treated less favourably because of that “something”. The Court of Appeal has confirmed that an employer is not required to have knowledge that the employee’s disability caused the “something” which led to the less favourable treatment.

In the case in question, a teacher suffered from cystic fibrosis. He was put under stress as a result of an increased workload and, in an error of judgement, he showed an 18 rated horror film to a class of 15 and 16 year olds. He was dismissed. At the time of the tribunal hearing, there was evidence that his lack of judgement had arisen as a result of his disability but the employer did not know this when the decision to dismiss was taken. The Court of Appeal confirmed that the employer’s lack of knowledge was irrelevant. Provided the employer knows that the employee is suffering from a disability, it does not need to know that the disability led to the issue in question. It is also interesting that the employee’s dismissal in this case was held to be fair, but this did not prevent it amounting to discrimination: the employer could not justify the treatment as it ought to have addressed the teacher’s workload. Had it done so, the error of judgement would arguably not have arisen.

Why this matters

This decision makes it difficult for employers to conclude that disability is not relevant when taking disciplinary action against an employee whom it knows to be suffering from a disability. Even where there appears to be no link between the disability and the misconduct, there will always be a risk that the employee will argue that such a link does exist at a later stage. It is also important to note that the link between the disability and the behaviour was an indirect one. The behaviour arose because the employee was suffering from stress and it was the stress that was caused by the disability. It is possible that many employees could deploy similar arguments in relation to the impact of stress on behaviour where they are suffering from an underlying disability.

Religion or belief discrimination – context is key when considering harassment

There are three elements to a harassment claim: (1) was the conduct complained of unwanted; (2) did the conduct have the effect of humiliating the Claimant; and (3) was the unwanted conduct related to the relevant protected characteristic.

In this EAT case, a Muslim employee was asked by a colleague whether he was “still promoting IS”. His reaction to the comment led to disciplinary proceedings resulting in his dismissal. The Tribunal found that the comment did not amount to either direct religious discrimination or harassment. The EAT agreed. Although the test for harassment is wider – was the conduct “related to” the protected characteristic as opposed to “because of it” (the test for direct discrimination), the fact finding from the Tribunal supported both conclusions. The EAT confirmed that context was key – here the comment was made following a previous conversation between the employee and Mr Bakkali during which Mr Bakkali had quoted an article about IS in a way that suggested he held a positive opinion.

Why this matters

This is a helpful case which confirms that, when assessing whether a comment amounts to harassment, it is permissible (and in fact vital) to consider the wider context. Here, this meant that the employee was not able to make out harassment. However, in other cases, the context could support a finding of harassment in circumstances where the comment, viewed in isolation, may not appear to be related to a particular characteristic.

It is also interesting that the employee who made the comment did not give evidence, despite still being employed by the Respondent. This led to arguments that the an adverse inference should have been drawn. This point was not pursued on appeal, but it is worth noting that this tactical decision could have had serious consequences for the employer.

Bakkali v Greater Manchester Buses (South) Ltd (t/a Stage Coach Manchester)

Constructive dismissal

Two cases this month highlight some of the difficulties for employers in dealing with constructive dismissal cases.

(1) – Is reasonable and proper cause relevant to a breach of the implied term of trust and confidence

Trust and confidence is a term which is implied into employment contracts and its breach often forms the basis of a constructive dismissal claim. Case law confirms that the employer must not act in a way which destroys or seriously damages the relationship of trust and confidence. Less often focused on, however, the test requires that in doing so, the employer must be acting without reasonable and proper cause.

In the first case, a sales employee claimed constructive unfair dismissal when his employer threatened to unilaterally reduce his pay. The Tribunal found that, given his poor performance, the employer did have reasonable and proper cause to do so. The EAT disagreed: it held there could never be reasonable and proper cause to reduce an employee’s salary, nor could it be reasonable and proper to act in breach of an express clause (i.e. the employee’s contractual entitlement to receive his salary).

(2) – Constructive dismissal for “last straw” following affirmation

A constructive dismissal claim is often founded on one act which breaches the employee’s contract. The last straw doctrine also permits an employee to resign if the final in a series of acts, taken cumulatively, amount to a repudiatory breach. However, an employee can affirm a contract and elect not to resign following a breach.

The second case considered whether an employee could rely on a final event in a series, having previously affirmed the contract. It held that it could. If there was a series of acts and an earlier one could have formed the last straw but the employee remained in employment, then further act had the effect of reviving the cumulative conduct.

Roundup of other developments

Supreme Court holds that a clause prohibiting oral variation of a contract is effective: The Supreme Court has held that a non-oral modification clause in a contract is valid. Where a contract contains this clause and a variation was subsequently made orally, it was not valid even though both parties agreed to it. The Supreme Court did acknowledge that the doctrine of estoppel could apply in certain circumstances. This was not an employment case but this type of clause is often contained in an employment contract, so in future we could see litigation on the validity of oral variations in an employment context.

Employment status: In a further employment status/gig economy case, the EAT held that a cycle courier working for Addison Lee was a worker and was therefore entitled to statutory holiday pay under the Working Time Regulations. When logged on, the courier was under an obligation to accept work offered, so there was mutuality of obligation.

Shared parental pay: Following up on the decision reported in May’s employment update, the EAT has considered whether a policy of enhancing maternity pay but not shared parental pay amounts to indirect sex discrimination. It held that a tribunal was wrong to conclude that the policy was not indirectly discriminatory because both men and women can take shared parental leave and the case has been remitted to a fresh tribunal. The key issue to be considered is whether men wishing to take leave to care for their new-born children are placed at a disadvantage in comparison to women in similar circumstances.

A series of acts can amount to gross misconduct: The EAT held in Mbubaegbu v Homerton University NHS Foundation Trust that a dismissal for gross misconduct could be fair where it was based on a series of acts which demonstrated a pattern of misconduct, even where the employer was unable to point to one single act which was sufficiently serious on its own to justify dismissal.

Trade Secret Regulations: The Trade Secrets (Enforcement etc.) Regulations 2018 come into force on 9 June 2018. These regulations do not replace the current regime for post-termination enforcement of restrictive covenants but potentially provide employers with a further avenue of redress in relation to the misuse of information which amounts to a trade secret.

IR35 consultation published: HM Treasury has published a consultation on measures to increase compliance with off payroll working (or IR35) in the private sector. This follows changes to the regime in the public sector. The consultation runs until 10 August 2018.