Canada: Employment Essentials: Top 5 Lessons From March 2019

1. Court of Appeal guidance on use of suspensions

In cases of alleged misconduct, an employer may wish to suspend the employee who is being investigated. This may be appropriate for example:

  • where there is a potential threat to the business or other employees;
  • where it is not possible to properly investigate the allegation if the employee remains at work;
  • where relationships at work have broken down.

In 2017, the High Court in Agoreyo v London Borough of Lambeth warned that suspension is a serious step and thought should be given to whether it can be avoided. As the High Court put it, "suspension was not a neutral act". However, this month the Court of Appeal has held "whether or not suspension is described as a 'neutral act' is unlikely to assist in resolving what is the crucial question". The crucial question is whether there has been a breach of the implied term of trust and confidence. That is a question of fact which requires consideration as to whether there was reasonable and proper cause for that suspension. This is a highly fact-specific question.

This case concerned the suspension of a teacher following complaints by two teaching assistants that Mrs Agoreyo, an experienced primary school teacher, mishandled two different 'difficult' students on three separate occasions. The High Court overturned a County Court judgment and held that suspension as part of the disciplinary process amounted to a breach of trust and confidence as it was a default positon imposed as a knee-jerk reaction and unnecessary.

The Court of Appeal has now restored the judgment of the County Court finding that an employer had reasonable and proper cause to suspend the teacher accused. In this case, complaints were made of the teacher's handling of the special needs students by two members of staff. They related to three separate incidents involving two different children. In the circumstances, the trial judge was entitled to reach the conclusion that the head teacher had reasonable and proper cause to suspend the teacher pending investigation. In the circumstances, there was no breach of the implied term of mutual trust and confidence.

The Court of Appeal also confirmed that it is not a question of whether suspension is necessary but whether it was reasonable. There may be cases where an act of suspension will not be reasonable and so may amount to a breach of contract. The court may consider the wider circumstances beyond the fact and manner of suspension, including events preceding the suspension and the extent to which the suspension was a 'knee-jerk' reaction without consideration of alternatives.

Where suspension is being considered, employers should remember:

  1. The period of suspension should be as short as possible and the suspension decision should be kept under regular review.
  2. Unless there is a clear contractual right to do so, which is very unusual, an employer will not be entitled to suspend without pay. Accordingly a suspended employee should normally continue receiving their pay and normal benefits.
  3. Care should be taken where the matter concerns possible criminal allegations as the employer will wish to avoid committing to keeping the employee suspended on full pay for months or even years pending a court hearing.
  4. Thought should be given to whether suspension can be avoided. Is suspension reasonable? Consider whether it is possible to place the employee in another area of the business whilst the investigation is carried out.
  5. Employees must be informed of the fact that they have been placed on suspension as soon as possible. Any conversation communicating the suspension should be followed up in writing. A letter should make it clear that the employee is suspended, the length of the suspension as anticipated by the employer and the employee's rights and obligations during the period of suspension. The employee should also be notified of a point of contact during their suspension.

2. Misconduct subject to police investigation

An employer investigating alleged misconduct which also amounts to a criminal offence will be facing a difficult situation and will need to proceed carefully. Although an act of alleged misconduct may also amount to a criminal offence, any resultant dismissal is an issue of employment and not a criminal matter. Criminal proceedings and police involvement in a case can have an important bearing on the timing of dismissal and the kind of investigation an employer can properly carry out. On the one hand, the employer must make its own enquiries into the alleged criminal acts. On the other hand, the fact that criminal charges have been made may limit what the employer can do due to the risk of prejudicing a subsequent criminal trial.

Should disciplinary action be put on hold pending the outcome of criminal proceedings? Can an employee insist disciplinary proceedings be adjourned on the basis that his response to questions could prejudice a pending trial or police interview?

Most employers will not usually wish to wait for the outcome of criminal proceedings before conducting the disciplinary hearing, particularly when the employee has been suspended on full pay, as this will usually take several months. Also, the non-statutory Acas Guide on discipline and grievances at work states that "where the matter requires prompt attention, the employer need not await the outcome of the prosecution before taking fair and reasonable action" and "where an employee, charged with or convicted of a criminal offence, refuses or is unable to cooperate with the employer's disciplinary investigations and proceedings, this should not deter an employer from taking action" (pages 35 and 36).

This month the Court of Appeal in North West Anglia NHS Foundation Trust v Dr Andrew Gregg considered whether the High Court was correct to grant an injunction holding that the employer would be in breach of the implied term of trust and confidence if it refused a request for an adjournment of its disciplinary inquiry into the deaths of two patients under his care pending a decision by the Crown Prosecution Service on whether to charge him in connection with the deaths.

The Court of Appeal has now held the High Court was wrong to equate the implied term of trust and confidence with a duty to act fairly. An employer does not usually need to wait for the conclusion of any criminal proceedings before commencing internal disciplinary proceedings. The court would only intervene if the employee could show that the continuation of the disciplinary proceedings gives rise to a real danger of a miscarriage of justice in the criminal proceedings (a notional danger will not suffice). In this case, Dr Gregg's concerns about the internal investigation prejudicing the criminal investigation were generic. There was no evidence that the effect of the internal investigation would have any effect on the criminal investigation let alone give rise to a real danger of a miscarriage of justice, as such the injunction was wrongly granted.

On a separate issue, the Court of Appeal agreed that the employer was not entitled to withhold pay during the period of suspension. The express terms of the doctor's contract did not permit the deduction of pay during an interim, non-terminatory suspension. In a situation where the contract does not address the issue of pay deduction during suspension, the default is that suspension should not attract the deduction of pay (see above).

3. Rest breaks under the Working Time Regulations

Under regulation 12 of the Working Time Regulations 1998 (WTR), most workers are entitled to a rest break away from their work station of not less than 20 minutes where daily working time is more than six hours. The employer can decide whether the break is paid or not.

This month we have had two notable judgments concerning rest breaks.

Personal injury damages available for failure to provide rest breaks

Back in 2016, the Employment Appeal Tribunal (EAT) in Grange v Abellio London Ltd held that a claim for 'refusal' to permit rest breaks can be brought where the employer fails to make provision for such breaks, even if the worker does not expressly request them. Employers must take active steps to ensure their working arrangements enable workers to take the rest breaks they are entitled to. Workers cannot be forced to take rest breaks but they are to be positively enabled to do so. As Mr Grange succeeded in his claim for failure to allow rest breaks under regulation 12, the tribunal could make an award of such compensation as is just and equitable in all the circumstances, having regard to the employer's default and any loss sustained by the worker as a result. But what was Mr Grange's loss and how far back could he claim?

This month we have the second EAT judgment in Grange v Abellio London Ltd, this time on remedy.

On the issue of how far back a worker can claim (Mr Grange sought to go back three years), the tribunal held that under regulation 30(2) WTR the three month time limit for bringing a claim runs from the date on which the worker should have enjoyed the rest break in question. The WTR does not provide for the concept of a 'continuous act' along the lines of section 123 Equality Act 2010 in relation to discrimination claims. Each time a worker does not receive a rest break, a fresh time bar period starts to run. Discounting days that Mr Grange was either on annual leave or sick leave there were only 14 instances when he was denied a rest break in that period. The EAT agreed that Mr Grange was only entitled to compensation for 14 instances of failure to allow rest breaks.

As to the level of compensation for those 14 days, the tribunal accepted that due to a medical condition (not amounting to a disability) Mr Grange needed to regulate his food intake. The lack of a regular rest break meant he could not do so causing him 'distress and discomfort' that was more than a minor inconvenience. On this basis, the tribunal considered that a just and equitable award was £750. But was the £750 awarded actually an award for injury to feelings which the Court of Appeal in Gomes v Higher Level Care Ltd [2018] held was not permissible in failure to provide rest break claims?

The EAT has upheld the award of £750 as a permitted award for personal injury. In this case, the reference to 'discomfort and distress' did not mean it was an award for injury to feelings, but rather directly linked to the physical discomfort Mr Grange suffered due to his medical condition. As the WTR is aimed at protecting the health and safety of workers, such compensation can be awarded. The EAT also rejected the notion that medical reports should have been obtained before making a personal injury award. Given the low value of the claim, the tribunal was entitled to assess the case on a common-sense basis without the need for expensive medical reports.

This case opens the door to claimants seeking personal injury damages where they have been denied rest breaks and can prove that they have suffered more than a minor inconvenience as a result of a medical condition.

Compensatory rest need not be an uninterrupted 20-minute break

Regulation 12 rest breaks do not apply to 'special case' workers such as some security guards, railway transport workers, offshore workers and workers where there is a need for continuity of service or production, e.g. in hospitals, prisons, airports, press, radio, television, and the production of gas, water and electricity (regulation 21). Instead under regulation 24, 'special case' workers must be given 'an equivalent period of compensatory rest' (in exceptional cases in which it is not possible for objective reasons to grant such rest, the employer must afford them such protection as may be appropriate to safeguard the worker's health and safety).

In Network Rail Infrastructure Ltd v Crawford, the Court of Appeal considered whether the obligation to provide 'an equivalent period of compensatory rest' requires an employer to:

  1. give an uninterrupted 20 minute break at another time? or
  2. is it sufficient that the worker is able to take a number of shorter breaks that add up to 20 minutes over the course of a shift?

Overturning the EAT, the Court of Appeal has confirmed that where the normal entitlement to an uninterrupted 20-minute rest break is excluded by the 'special case' exemption, the 'equivalent period of compensatory rest' need not be an uninterrupted 20-minute break. 'Equivalent' does not mean 'identical'. Whether the rest afforded in any given case is 'equivalent' will be a matter for the tribunal to assess on the facts.

The Court observed that there is no basis in principle for the proposition that only an uninterrupted break of 20 minutes can afford an equivalent benefit - there is no reason why, for example, two uninterrupted breaks of 15 minutes should not be equally beneficial. The Court also went onto confirm that as a period of compensatory rest need not be identical to a regulation 12 rest break, it is irrelevant that the employer could have organised the work to allow for a 20 minute break (for example by providing a relief worker to provide cover).

4. Discrimination arising from disability

'Discrimination arising from a disability' is still a relatively new concept; first introduced by section 15 of the Equality Act 2010. Over recent years we have been gathering a body of case-law on the intricacies of this concept which involves the employer treating the employee 'unfavourably because of something arising in consequence' of the employee's disability. Section 15 entails two distinct causative issues: The first involves examining the employer's state of mind: did the unfavourable treatment occur because of the employer's attitude to the relevant 'something'? The second is objective: is there a causal link between the disability and the 'something'?

Last year we had two important judgments revealing a broad approach being adopted when determining the second issue of whether the 'something' that led to the unfavourable treatment had arisen in consequence of the claimant's disability:

  • An employer can be liable even though the employer was unaware that the employee's actions were due to their disability. The causal link between the 'something' and the unfavourable treatment is an objective matter for the tribunal that does not depend on the employer's knowledge (City of York Council v Grosset - Court of Appeal).
  • The concept of 'something arising in consequence of disability' entails a 'looser connection' than strict causation and may involve more than one link in a chain of consequences (Sheikholeslami v University of Edinburgh - EAT).

While claimants benefit from a rather loose causation test, this month, the EAT reminds us that there must still be a connection between the disability and the 'something' that led to the unfavourable treatment.

In IForce Ltd v Wood, the EAT has held that an employee's mistaken belief that moving workstations would exacerbate her osteoarthritis - which led her to refuse to obey an instruction to do so, resulting in a written warning - did not establish unfavourable treatment because of something arising from a disability under section15.

Mrs Wood worked in a warehouse packing items at a fixed workbench. When the employer changed the working practice, requiring the workers to move between work benches, she refused to work at the end-benches nearest the loading doors because she believed it would be colder and damper there, thus exacerbating her osteoarthritis. Despite the employer carrying out testing and installing specialist thermometers showing that there was no material difference in temperature and humidity throughout the warehouse, she still refused to work from the end-benches. The employer considered her continued refusal to obey the instruction was unreasonable and issued her with a final written warning (downgraded on appeal to a written warning).

Mrs Wood issued a claim for discrimination arising from a disability. The tribunal upheld her claim, finding that the warning amounted to unfavourable treatment and that this arose in consequence of her disability: the warning was given because she refused to comply with an instruction to work on benches near the loading doors, which in turn arose because she believed that it would adversely affect her condition (albeit this was a mistaken belief).

On appeal the EAT overturned the tribunal. While a broad approach applies when establishing whether there exists a causal connection between the 'something' and the underlying disability, nevertheless there had to be some connection between the 'something' (here the refusal to work at benches near the loading doors) and the disability.

If, as a matter of fact, the requirement had been for her to agree to work in a colder and damper environment, her refusal based on her perception of how this would impact upon her health would seem to be something arising in consequence of her particular disability. But the employer was not requiring her to work in colder and damper conditions that might impact upon her disability. It was her continued erroneous belief that led to the 'something'. On the facts, it could not be concluded that this erroneous belief arose in consequence of her disability. Had the tribunal found that the pain or stress Mrs Wood suffered in consequence of her disability impaired her judgement to the extent that she was unable to accept the evidence that there was no difference in temperature or humidity at the different benches, the tribunal might permissibly consider that the requisite link was established. The inability to accept the evidence might be a linked consequence of the disability. But that was not the case here.

This case is an interesting one to contrast with last year's Court of Appeal judgment in City of York Council v Grosset. In that case, an error of judgment in showing an inappropriate film to students ('the something') was held to be a linked consequence to the disability as it arose from stress which arose in consequence of his disability (see Employment Essentials: 5 Lessons from May 2018).

5. The April legislative changes and numbers to know

April is the traditional month for employment legislative changes. This year we have changes to itemised pay statements and to the apprenticeship levy as well as the usual increases to the NMW, statutory pay rates, compensation limits and penalties. The changes and numbers to know are:


From 6 April 2019, employers are required to give every 'worker' (not only 'employees') a written itemised pay statement at or before the time at which any payment of wages or salary is made.

As is currently the case, the written itemised pay statement will need to include the gross amount of the wages or salary; the amounts of any variable and any fixed deductions from that gross amount and the purposes for which they are made; the net amount of wages or salary payable; and, where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment.

In addition, from 6 April, where the amount of wages varies by reference to time worked, the statement should include the number of hours worked in respect of the variable amount of wages or salary. This needs to be shown as a single aggregate figure, or separate figures for the different types of work or different rates of pay.

These changes will not apply in relation to wages or salary paid in respect of a period of work which commences before 6 April 2019.

Apprenticeship levy

On 13 March, the Chancellor of the Exchequer confirmed in the Spring Statement that from 1 April businesses liable to pay the apprenticeship levy will be able to invest up to 25% of the levy to support the training of apprentices in their supply chain. For smaller employers who are not liable to pay the apprenticeship levy, the "co-investment rate" for apprenticeship training will be reduced from 10% to 5%.


From 1 April the National Minimum Wage rates will increase:

  • rate for 25+ year olds (the national living wage) from £7.83 to £8.21 per hour
  • rate for 21 to 24 year olds from £7.38 to £7.70 per hour
  • rate for 18 to 20 year olds from £5.90 to £6.15 per hour
  • rate for 16 to 17 year olds from £4.20 to £4.35 per hour
  • rate for apprentices from £3.70 to £3.90 per hour

Statutory payments rates

From April:

  • the standard rates of statutory maternity, paternity, adoption and shared parental leave pay increase to £148.68 per week (currently £145.18) from 7 April; and
  • the standard rate of statutory sick pay increases to £94.25 per week (currently £92.05) from 6 April.

Tribunal awards

From 6 April, tribunal award limits increase including:

  • a week's pay - £525 (currently £508).
  • maximum basic award/statutory redundancy payment - £15,750 (currently £15,240).
  • maximum compensatory award - The lower of £86,444 (currently £83,682) or 52 weeks' pay

Note: The new rates apply where the "appropriate date" occurs on or after 6 April 2019 (e.g. for unfair dismissal the effective date of termination) not the date of the corresponding tribunal hearing.

Tribunal penalties

From 6 April, the maximum financial penalty (payable to the Exchequer) that Employment Tribunals can impose for 'aggravated breach' will increase from £5,000 to £20,000. The minimum penalty remains at £100. It will remain the case that where a financial award is made in favour of the claimant, the penalty will be 50% of the total award (subject to the minimum and maximum limits).

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