Employment update | Top three in 3 minutes

Written on 5 Dec 2019

1. Manager’s good-faith decision to dismiss was unfair due to protected disclosure concealed by another

A dismissal will be deemed automatically unfair if the reason (or principal reason) for the dismissal falls within a statutory list, which includes a dismissal made in connection with the making of a protected disclosure. The Supreme Court has found that a dismissal was automatically unfair where the manager had made the decision to dismiss in good faith on the basis of performance but another manager had hidden from him the fact that the employee had “blown the whistle”.

The employee had made a protected disclosure to her line manager, who then subjected her to allegations of poor performance, essentially setting her up to fail. She was subsequently dismissed by another manager who made his decision in the genuine belief that her performance was inadequate. Evidence about the disclosures and an email she had sent to HR expressing her concerns had been withheld from the manager that dismissed her. The Supreme Court found that the reason or principal reason for her dismissal was the earlier protected disclosures. But was the employer liable? Holding that the court had a duty to look through “the invention” and determine the true reason for dismissal, the Supreme Court held that it was.

Action

The Supreme Court noted that situations where a line manager has dishonestly constructed a state of affairs to manipulate another into making a decision to dismiss are rare. However, it is not inconceivable that such a state of affairs could be orchestrated. Although this was a whistleblowing-dismissal claim (where there is no qualifying period of employment required to bring a claim and potential compensation is uncapped), employers should assume the Supreme Court’s decision applies just as equally to normal unfair dismissal claims. Employers should always take care to ensure the reasons for any termination are clearly explored and understood, with the employee being given an opportunity to make representations.

2. Are workers now covered by TUPE? 

The Employment Tribunal (ET) has handed down a potentially significant decision on Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and “workers”, including those engaged via an intermediary such as a staffing company. TUPE should be interpreted to protect “workers” and not just employees, the ET has found. Although ET decisions are not binding on other tribunals and it is likely the case will be appealed, the case is of particular importance as businesses move away from traditional employer/employee structures. 

The ET ruled that regulation 2(1) TUPE, which defines “employee”, should be interpreted in line with the purpose of the implementing European directive, the Acquired Rights Directive (ARD), to include a worker (as defined in section 230 Employment Rights Act 1996 which is essentially reflected in regulation 2(1) Working Time Regulations 1998). The ET found that the purpose of the ARD was not limited to a specific class of individuals but, instead, was “to preserve” on a transfer “the different types and levels of employment rights and protections” that a Member State may provide, “whatever they may be”. Not to bring workers within the protection of TUPE would in the ET’s view lead to “absurdity”. The ET also expressly stated in paragraphs 27 and 39 of its decision that the ARD covers persons engaged by one entity but working for another entity. This appears effectively to mean that agency workers are covered by the decision.

Action

We are anticipating that the decision will be appealed. In the meantime, organisations acquiring a business or taking on a service must take particular care to understand who is engaged in that business or provides those services and on what terms. While genuine independent contractors remain out of scope, potential litigation around employment status (with individuals seeking compensation for holiday pay and other worker rights around working time and pay) remains a real concern, particularly in the gig economy. A successful claim for failing to inform and consult under TUPE brings a potential award of 13-weeks’ pay. 

3. Seasonal shopping brings modern slavery into focus 

As the Christmas shopping season gathers pace, the retail sector faces the challenge of tackling modern slavery in its supply chains amid increased attention given to the provenance of what we buy. Retail is not the only sector coming under scrutiny, however, with the media raising concerns about exploitation of “jobbing” construction workers, where cheap labour – often from a migrant population without the correct documentation to work in the UK – as well as long and complex supply chains make the problem difficult to address. The Modern Slavery Act 2015 goes some way towards tackling the problem. It requires companies or partnerships carrying on business in the UK with a turnover of at least £36 million to prepare a slavery and human trafficking statement each financial year. This should set out the steps taken to ensure slavery and human trafficking are not taking place in their operations or supply chains. 

There has been a well-publicised government agenda to provide good jobs for all within a flexible framework that can respond to the changing nature of work. The government has also recognised that workers need to be able to enforce their rights effectively. This was the focus of the consultation ‘Good Work Plan: Establishing a new Single Enforcement Body for employment rights’ that closed on 6 October 2019. The consultation put the case for a single labour-enforcement body with new powers and sanctions to tackle non-compliance. With a general election next week, the published manifestos make it clear that this is an issue which will remain on agendas whatever the outcome. While we wait to see what reforms are ultimately introduced with Matthew Taylor now at the helm as the Director of Labour Enforcement, we can expect definitive action to address poor employment practices. 

Action

Many employers will have some parts of their operations or supply chains at risk of modern slavery. This risk is one of the challenges posed by increasingly globalised businesses that have less visibility as to where services have originated. Employers should map out their supply chains and consider where any risk might sit. Training should be provided to increase employee awareness of what the risks are, how to identify problems and how to report any concerns. If you are interested in the role your business can play in tackling modern slavery in supply chains, this short video with Carrie Brassley of Unseen UK and Dipika Keen, Head of Knowledge for the Business Transactions Group at OC, discusses the key actions you can take.

Did you miss last week’s top three? Read the latest developments and please do contact us or your usual OC Contact for any further details.