Equal treatment, PCP, redundancy
12 April 2018
This article was featured in the May 2018 issue of the magazine.
Nicola Mullineux, senior employment specialist for Peninsula, reviews the decisions in three cases
Kocur v Royal Mail Group Ltd
Agency workers are entitled to ‘the same’ basic working and employment conditions as a direct hire of the end-user after completing twelve continuous weeks’ engagement in the same role with the end-user. The equal treatment principle relates to terms and conditions including pay, duration of working time, rest breaks and annual leave. The Employment Appeal Tribunal (EAT) has considered whether a breach in equal treatment can be compensated for by providing the agency worker with higher pay.
The worker commenced employment with an employment agency from 26 January 2015 and was supplied to the end-user to carry out work at a mail centre. By June 2015, the agency worker had completed twelve continuous weeks in the role entitling him to equal treatment under the Agency Worker Regulations (‘the Regulations’). In October, the worker raised a grievance with both the agency and the end-user about various working conditions, including the complaint that he was provided with shorter breaks. On conclusion, the worker’s entitlement to breaks was amended but his other concerns went unresolved.
The worker made a claim to the employment tribunal (ET), alleging the end-user had breached the Regulations. The ET found his rights as an agency worker had been breached in relation to two grounds of his claim: he had not been provided with a swipe card to access the work premises; and had not been entitled to become a member of the on-site fitness centre provided by the end-user.
Turning to employment conditions, the ET found the agency worker was entitled to a one-hour rest break when working an eight-hour night shift and was paid for thirty minutes of the break; comparable direct recruits received the same length rest break but were paid for the hour. Additionally, the agency worker had a contractual entitlement to 5.6 weeks’ annual leave whereas comparable direct recruits had 6.1 weeks’ leave. The tribunal noted the disparities but concluded there was no breach because these were compensated for by the worker receiving a higher hourly pay of £10.50 whilst direct recruits were paid £9.60 per hour.
On appeal, the EAT highlighted that the entitlement to ‘the same’ basic conditions means the agency worker must receive ‘at least’ the conditions of comparable direct employees, providing for a minimum not a maximum level of entitlement. When determining whether an agency worker’s rights are met, tribunals should take a term-by-term approach and there is no right to offset a failure to provide the same entitlement for one condition with a higher entitlement for a different condition.
Therefore, the EAT held the Regulations had been breached as the worker did not receive at least the same entitlement to annual leave or payment for his rest breaks when compared to a comparable direct hire.
...must receive ‘at least’ the conditions of comparable direct employees...
United First Partners Research v Carreras
The duty to make reasonable adjustments under the Equality Act 2010 arises where a disabled person is placed at a substantial disadvantage by a ‘provision, criterion or practice’ (PCP) which operates in the workplace.
The employee worked for a brokerage firm as an analyst, regularly working long hours, often staying until 9pm each evening. He was involved in a bike accident in July 2012 which left him with symptoms including headaches and fatigue. On returning to work, the employee found he struggled with concentration and could not work late evenings. In late 2013, his employer started making requests for the employee to work later which led to an assumption he would work late. The employee felt he might lose his bonus, or be sacked, if he didn’t work later hours. He raised a complaint with his employer but was told he could leave if he was unhappy. The employee resigned and made a claim for constructive unfair dismissal and a failure to make reasonable adjustments.
The ET deemed the employee was disabled because of the continuing effects of his bike accident. When deciding whether there was a PCP which placed the employee at a disadvantage, the ET found the employer’s progression from requesting the employee to working late to assuming this would happen created an expectation. This, however, the ET held was not a requirement and therefore not a PCP.
On appeal, the EAT judged the ET had erred by adopting too narrow an approach as a ‘requirement’ is less flexible than a PCP. The EAT determined an expectation or assumption placed on an employee could constitute a PCP as, especially in the workplace, employees can feel obliged to work in a particular way even if this is damaging towards their health. The EAT allowed the appeal and found the expectation could be classed as a practice operating in the workplace.
On appeal, the Court of Appeal highlighted that the question for a tribunal to look at was whether the pattern of requests to work late, and the later expectation that the employee would work later evenings, constituted a PCP. This was different to looking at whether the employee was ‘coerced’ or ‘forced’ to work by a requirement.
The Court found the pattern of repeated requests made it clear the employer expected the employee to work late evenings which created a pressure on him to agree to the requests sufficient to create a ‘practice’ within the meaning of a PCP.
...changed the charity’s position as it brought everything to an end
Keeping Kids Company (in compulsory liquidation) v Smith and others
Under the Trade Union and Labour Relations (Consolidation) Act 1992, employers are required to carry out collective consultation where they are proposing to dismiss as redundant twenty or more employees at one establishment within a period of ninety days. Though there is a ‘special circumstances’ defence where there are special circumstances which make it not reasonably practicable for the employer to carry out consultation, the employer is still required to take reasonably practicable steps to attempt to comply with the obligation.
Employers that breach the consultation obligation can be liable for a protected award of up to ninety days’ pay per employee. The EAT considered whether the company which was in financial difficulties that led to compulsory insolvency had breached the consultation obligation.
Keeping Kids Company (KKC) was a children’s charity reliant on substantial donations from individuals and corporate sponsorship. After suffering financial difficulties in late 2014, the government made a conditional grant of £4 million to help the charity stabilise itself in early 2015. The charity made a further application for a one-off grant of £3 million on 12 July 2015, which included a business plan outlining company restructure. The restructure proposed closing Bristol operations, making staff redundant at a number of groups in London and reducing staff costs by 58%, although there was no specific identification of which roles would become redundant. The grant was approved on 29 July 2015 to allow KKC to reorganise and transform.
On 30 July 2015, a police investigation into allegations against KKC relating to safeguarding issues was publicised. The government informed KKC the grant agreement was terminated on 3 August and demanded immediate repayment of any unspent grant money. The Chairman sent an email to all staff on 5 August 2015 stating KKC was closing with immediate effect and all employees were dismissed by reason of redundancy from this date. Employees in Bristol and London made a claim for a protective award due to KKC’s failure to carry out collective consultation.
The ET had to determine whether the obligation to collective consultation arose, whether there was a special circumstances defence and, if not, the extent of the protected award to be ordered. By a majority, the ET decided there were sufficiently firm proposals to make staff redundant by 12 June which triggered the obligation to consult promptly from this date. The proposal affected any or all of KKC’s employees as it depended on whether the grant application was successful or not but, as a minimum, 58% of employees were affected. The fact that KKC did not know which employees were affected did not mean the obligation did not arise. Even though there was no guarantee of solvency, and the financial circumstances were precarious from 30 July, this did not form a ‘special circumstance’ defence for KKC in relation to the pre-existing failure to consult, although it may have prevented further consultation taking place. The ET awarded a protective award of ninety days’ pay per employee. KKC appealed.
The EAT reiterated that the obligation to collectively consult arises when the employer is proposing to dismiss the required number of employees by reason of redundancy. The EAT considered the ET had correctly determined the obligation to consult was triggered by 12 June 2015 as the funding proposal, which contained redundancy proposals, only had two possible outcomes: immediate insolvency where all employees were at risk, or large-scale redundancies to dismiss over half the staff. As consultation is required to be carried out ‘in good time’ by looking ahead at the realistic time-scale to allow this to be a meaningful process, the ET was also correct to conclude that this meant promptly from 12 June 2015.
The EAT also dismissed arguments that KKC had a special-circumstance defence in relation to the outstanding grant application and the circumstances of 30 July 2015. Although the July events were an unexpected and sudden disaster, the EAT commented that this did not apply a defence to the breach of obligations but rather applied a defence in respect of any continuing obligation from that date.
The EAT upheld KKC’s appeal against the protective award of ninety days’ pay as the ET had failed to take in to account that the events of 30 July might prevent further consultation and had changed the charity’s position as it brought everything to an end. The assessment of the protected award was remitted back to the tribunal.