01 March 2021

Nicola Mullineux, senior employment specialist for Peninsula, reviews the decisions in three cases

Chemcare Scotland Ltd v Ure
The Employment Appeal Tribunal (EAT) has held that an employee refusing to return to work following the end of her maternity leave amounted to her acceptance of a repudiatory breach, meaning that her claim for constructive dismissal could succeed.

This case concerned an employee who had gone on maternity leave and was due to return to her role but did not. This was because, during her leave period, her employer had varied her pay without informing and consulting with her, switched her to a different payroll, and failed to provide her with statutory maternity pay on time, due to a personal issue between her and a shareholder (who was also her father). The employee not only refused to return to work but, crucially, did not communicate her intention to resign from her position to her employer. She instead went to the Employment Tribunal (ET), citing constructive dismissal.

The ET upheld her claim, finding that the acts committed by her employer had served to breach the mutual term of trust and confidence between both parties. They also held that her failure to return to work amounted, for the purposes of the law, to a communication that she had decided not to return due to these breaches. This meant that she had accepted the breach and had therefore been free to pursue the claim of constructive dismissal.

Her employer appealed against this decision arguing that because she had failed to communicate her acceptance of the changes to her contract, by failing to communicate with them at all, her claim should have been struck out. The EAT dismissed the appeal, finding that the ET had reached their conclusions correctly.

In forming their decision, the EAT accepted that her failure to communicate with her employer may, under normal circumstances, have meant that her claim could not succeed. However, they also addressed the circumstances surrounding her claim. It was clear that the employee had chosen not to return to work because of the way her employer, and in particular her father, had treated her.

The EAT went further to say that the ET had correctly determined that this was the reason for her actions. The ET had therefore gone on to correctly conclude that, as a result of this, her non-appearance had amounted to her acceptance of the breach.

This meant her constructive dismissal claim could succeed.

...chosen not to return to work because of the way her employer, and in particular her father, had treated her.

Ikejiaju v British Institute of Technology Ltd
The EAT has ruled that the imposition of a new contract was a one-off event, not a continuing act, for the purposes of whistleblowing detriment.

This case concerned a senior lecturer who made a protected disclosure, accusing the organisation he worked for of tax evasion. Following this disclosure, the organisation had introduced a new contract, something that ultimately broke down the relationship between the two parties. Nearly two years later, the claimant made a second protected disclosure, and this time was dismissed from his role the following day.

He later brought numerous claims to the ET, including automatic unfair dismissal on the grounds of making a protected disclosure. He also claimed that he had been subjected to a detriment due to his previous protected disclosure that had continued from the imposition of the new contract to his eventual dismissal.

The ET agreed that his dismissal had been automatically unfair on the grounds of the second protected disclosure made a day before his dismissal. They also agreed that he had been subjected to a detriment following the first disclosure due to the imposition of a new contract. However, they did not uphold the claim for detriment, saying it had been presented out of time.

The ET went on to explain that the time limit provisions outlined in the Employment Rights Act 1996 meant that the new contract had been a ‘one-off act’ and not an act which extended over a period of time. Considering whether it would have been reasonably practicable for a claim to be brought in time, the ET concluded that it was; there was no issue, from what they could see, that would have prevented such a claim. They also reluctantly declined to provide an uplift for failure to follow the ACAS (Advisory, Conciliation and Arbitration Service) code of practice, arguing that the code does not specify that it should apply in dismissals relating to a protected disclosure.

The claimant appealed against both rulings. The EAT dismissed the appeal against the detriment ruling, but upheld that concerning failure to uplift the award.
In forming their decision, the EAT outlined that it was important to differentiate between an ‘act’ and the detriment which follows it. Here, the act in question had been the imposition of a new contract and the claimant had not demonstrated that any additional various allegations against the organisation were related to his original protected disclosure. On that basis, this new contract had been a one-off event with lasting consequences but did not constitute a ‘continuing act’.

Turning then to the ACAS uplift claim, the EAT held that the tribunal had failed to consider if the second protected disclosure, made the day prior to dismissal, could have been interpreted under the grievance section of the ACAS code. This is because the code refers to ‘concerns, problems or complaints’ raised by employees. To this end, they remitted this point back to the ET for reconsideration.

Heskett v Secretary of State for Justice
The Court of Appeal (CoA) has held that indirect age discrimination can potentially be justified on the basis of saving costs to balance company books.

Previously, a number of cases have addressed whether a discriminatory policy can be justified on the basis of saving costs. Generally, such a reason is not held to be legitimate; however, the EAT held in the case Cross and others v British Airways plc that whilst cost saving cannot on its own amount to a legitimate aim, it may be taken into account alongside other factors. This is known as the ‘cost-plus’ rule.

In this case, the employee had worked in the public sector for some time as a probation officer. Due to pay rise limitations implemented by the Treasury in 2010, the organisation he worked for introduced a new pay progression policy. Whilst in the past probation officers could progress three points up the pay scale per year, the new policy meant that they could only progress one pay point per year.

From the employee’s perspective, this meant that it would take him 23 years to progress to the top of his pay band. Meanwhile, colleagues who had already attained this, or were nearer to the top than he was, started to earn significantly more than those below them. As individuals in this position tended to be over the age of fifty, the employee claimed indirect age discrimination, arguing that employees under age fifty, in his position, were being placed at a disadvantage by the new policy.

...indirect age discrimination can potentially be justified on the basis of saving costs to balance company books.

In the first instance, the ET agreed that the policy had served to indirectly discriminate against the claimant on the basis of his age. However, they dismissed the claim because the organisation’s actions had amounted to a proportionate means of achieving a legitimate aim.

The ET explained that although the respondent’s aim had been to cut costs, there were also other factors to consider. The policy had been designed to enable them to ‘live within their means’ and was only intended to be temporary. Whilst it could not be justified on a long-term basis, it was a proportionate short-term response to the financial situation the respondent was facing.

The claimant appealed to the EAT, which dismissed the appeal. In forming their decision, the EAT held that it was legitimate for an organisation, such as the respondent’s, to seek to break even.

The employee appealed again to the CoA, arguing that the respondent’s defence was purely based on saving costs, contrary to the law, and that there was no evidence that this policy was short-term, meaning the ET had erred by relying on this in their judgment. The CoA also dismissed the appeal.

Considering previous case law on the ‘cost-plus’ principle, the CoA agreed that a respondent cannot justify discrimination in pay purely on cost-saving grounds. Therefore, what needed to be determined was if their actions were simply to save money, or if they had other aims that they wished to achieve. The CoA held that the ‘cost-plus’ label, whilst not incorrect, could serve to turn attention from this key question.

Agreeing with the EAT, the CoA held that the need to balance company books could be considered a legitimate aim, so the ET had been correct to place weight upon the situation facing the organisation. The CoA also rejected the idea that there was no evidence that the policy would be temporary, as it had come about as a direct result of the financial situation of the Treasury which was not expected to be a permanent issue.


 Featured in the February 2021 issue of Professional in Payroll, Pensions and Reward. Correct at time of publication.