UK Employment Law Coffee Break: Employment Law Reforms, Disability As A Cause Of Unfavourable Treatment, And May's HR Pensions Spotlight

A general election has now been announced for 4 July; should a Labour government be elected, we will see significant changes to employment law.
UK Employment and HR
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Employment law reforms

A general election has now been announced for 4 July; should a Labour government be elected, we will see significant changes to employment law. We will be closely watching the commitments from all parties in the run up to the election.

We looked at the implications of a change in government in our latest Eating Compliance for Breakfast webinar which you can watch here.

Our webinar also looks at the new employment laws which came into force in April, as well as those which are still set to come into force over the coming months, including:

  • For TUPE transfers taking place on or after 1 July 2024, an extension of the existing exemption for micro-businesses (those with less than 10 employees) which allows information and consultation to take directly with employees where there are no existing representatives in place to employers with fewer than 50 employees, or employers of any size but where the transfer involves less than 10 employees.
  • The new duty on employers to prevent sexual harassment in the workplace set out in the Worker Protection (Amendment of Equality Act 2010) Act 2023 which is due to come into force on 26 October 2024. We are currently awaiting a consultation on amendments to technical guidance from the Equality and Human Rights Commission which will support this new right.

At the end of last week, the government also announced a new consultation on other proposed amendments to TUPE; clarifying that the definition of employee in TUPE does not capture "limb b workers" (as defined in the Employment Rights Act 1996) and that where a service transfers to multiple transferees, an employee's contract cannot be split and will only transfer to one transferee as agreed by those multiple transferees (although the consultation is silent on what mechanism would be in place should the parties be unable to agree).

The consultation also looks at repealing the legal framework for European Works Councils in the UK. The consultation closes on 11 July and in light of the general election on 4 July, these changes are unlikely to be a priority.


Employee's anxiety and depression was an effective cause of their unfavourable treatment

Treating an employee unfavourably because of something arising in consequence of their disability is discriminatory. To succeed with a claim, there must be a connection between the unfavourable treatment and the disability, but the employee is not required to show that the employer knew that the "something" arose in consequence of the disability. An employer has a defence to a discrimination arising from disability claim if it can show that the unfavourable treatment is justified because it is a proportionate means of achieving a legitimate aim.

The Employment Appeal Tribunal has recently considered whether a minor contributing factor to the reason for unfavourable treatment arising from disability was sufficient to establish discrimination.

In this case, the employee's behaviour in an investigatory meeting, which was due to her disability of anxiety and depression, was a minor contributing factor in the decision to progress to disciplinary hearing and her ultimate dismissal.

The employee was an activities coordinator at a care home and following a number of unusual incidents, including paper towels stuck down the staff lavatories, written reports being soaked in water, staff posters vandalised and staff photos being defaced by the addition of facial hair, the employee attended an investigatory meeting. At this meeting, the employee was short and evasive in her responses. This contributed in part to the employer's decision to proceed to a disciplinary hearing, following which she was ultimately dismissed.

At the time of the investigatory meeting the employee was disabled with anxiety and depression, although this was not known to the investigating officer and he later accepted that "had he been told that the claimant was suffering from a mental health challenge he would not have taken the fact that her answers were sometimes brief and not to the point, as part of his reasoning as to why it was appropriate to proceed to a disciplinary proceedings".

The employee brought various claims in the Employment Tribunal, including claims of unfair dismissal and discrimination arising from her disability and these were dismissed by the Employment Tribunal. It considered that the employee's demeanour was a factor taken into account in determining to refer the matter to a disciplinary hearing, but it was not a substantial matter; "It was trivial. It was not the 'effective cause'" and the tribunal was satisfied that the manner in which the employee answered questions at the investigative meeting did not play any significant part in the decision to dismiss.

On appeal, the Employment Appeal Tribunal considered the Employment Tribunal's reference to the employee's demeanour at the investigatory meeting not being "the" effective cause, and found this was the wrong approach – the employee's demeanour need only have been an effective cause; "the Employment Tribunal erred in holding that the decision to refer the claimant to a disciplinary hearing was not because of her demeanour in the investigatory interview because on its own findings of fact it was a contributing factor in the decision, albeit a minor one".

Considerations for employers

While the employee's claim here ultimately failed, as the treatment was found to be justified as a proportionate means of achieving a legitimate aim, the finding in relation to the employee's demeanour at the investigatory meeting is significant and underlines the importance of considering whether a disability may be contributing to an employee's behaviour, conduct or ability to properly represent themselves.

It is not always readily apparent when a disability is impacting on an employee's behaviour or conduct. It could be that pain from a physical disability is making an employee lose their patience or focus or that a mental health condition is impacting on an employee's judgement or processing.

An employer can be liable for unfavourable treatment because of something arising in consequence of a disability including, for example, disciplinary action, a poor review score, withholding of a bonus or reassigning of work opportunities even if they are not aware of the connection between the behaviour/conduct and the disability.

Given the close scrutiny applied by employment tribunals assessing the link between an employee's disability and any unfavourable treatment, it is essential that employers thoroughly investigate any connection, whether significant or minor, and fully record their findings. Training should be in place to ensure that managers are aware of how disabilities may impact on performance and behaviour and that the connection between the two is not always readily apparent.

Creating a culture of openness and support can encourage disabled employees to share their difficulties and reduce the likelihood of the impact of physical and mental health conditions being overlooked during company processes.


Our HR Pensions Spotlight for May: Discretionary pension increases in final salary pension schemes: if not now, then when?

Once a final salary (or defined benefit) pension scheme starts to pay a pension to a member, there is usually a process for increasing that pension each year. These annual pension increases can help to protect the value of a member's pension against the impact of inflation. We say "can" because the protection provided may be limited.

Members who earned all or the majority of their pension before April 1997 may have little or no entitlement to annual increases, and the legal minimum increase rates for pension earned after 5 April 1997 are capped at 5% for some periods of service and 2.5% for others. As a result many members, particularly those who earned all or the majority of their pension before April 1997, have seen the value and buying power of their pension dwindle. In this article we look at the power employers and trustees have to address this problem by awarding discretionary increases. We look at employer and trustee duties and suggest that, if a power to award discretionary pensions increases is to have any purpose and meaning, it is becoming a case of "if not now, then when" will you award a discretionary increase?

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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