After a short break over the summer, welcome back to our monthly briefing for HR teams and in-house employment counsel – bringing you this month's employment law highlights in an easy-to-read package.
Podcast: fire and rehire
In this month's podcast, Matthew focuses on the Supreme Court's decision to grant an injunction preventing Tesco from using dismissal and re-engagement (or fire and rehire as the tabloids term it) to remove a contractual pay element.
Employment status
The second Supreme Court judgment from this month looks at the employment status of a group of football referees. Since the seminal 1960s decision in a case called Ready Mixed Concrete, the courts have used three key criteria to determine whether an individual should properly be categorised as an employee or a genuinely self-employed contractor. The first is whether there is a bargain where the individual undertakes to work and the end user undertakes to pay (the wage/work bargain); the second is whether the end user has a sufficient degree of control over the individual; and the third is to work through any other factors pointing towards the contract being an employment contract, as against any other form of work contract. In a slightly confusing way, the first test is often called "mutuality of obligation", and what it essentially boils down to in many cases is whether the individual has to turn up themselves, or whether they can send someone else to perform the various tasks they have committed to.
To add a further layer of confusion, tax law recognises only two possible categories: employed or self-employed. Employment law recognises a third category: worker. This decision is a tax case, with HMRC seeking to impose income tax and national insurance on the referees' pay. The First-Tier Tribunal (the initial tax court hearing the claim) felt that there was no mutuality of obligation or a sufficient degree of control. It therefore did not spend time examining the third of the Ready Mixed Concrete criteria. The Supreme Court, in stark contrast, decided that the referees were clearly working under a series of employment contracts for each match in which they officiated, and because of the requirement to file a match report, which would be scrutinised and, if the company felt the referee has made poor decisions or was otherwise substandard, used to discipline or suspend the referee, control was clearly established. The case must now return to the First-Tier Tribunal to look at any other relevant factors pointing towards, or away from, employee status.
Belief as a protected characteristic
All readers will know that a person's religion or belief is a protected characteristic, so that it cannot form the basis of detrimental treatment in the workplace. The precise parameters of that protection have been debated in a series of cases, and the current position is that a belief will only be protected if it fulfils five criteria:
- it must be genuinely held;
- it must be a belief and not an opinion or viewpoint based on the present state of information available;
- it must relate to a weighty and substantial aspects of human life and behaviour;
- it must attain a certain level of cogency, seriousness, cohesion and importance; and
- it must be worthy of respect in a democratic society, must not be incompatible with human dignity and not conflict with the fundamental rights of others.
Litigation has focussed on the final criterion, most notably in a claim involving "gender critical" views, in which the EAT held that only the most offensive beliefs would fall outside the protection of the Equality Act. The judge in that case said: "only those beliefs that would be an affront to Convention principles in a manner akin to that of pursuing totalitarianism, or advocating Nazism, or espousing violence and hatred in the gravest of form" would not be covered. The Convention principles referred to are set out in the European Convention on Human Rights, under which a person's freedoms of expression and belief are enshrined, but not if they challenge the very functioning of a democratic pluralistic society.
In a recent case, the fifth element of the test has again come under scrutiny. The employee's belief – as he expressed it – was English nationalism, encompassing pride in the English language, its history and so on. According to the criteria above, this is unobjectionable. However, it became clear from a series of social media posts that the employee also held deeply anti-Islam views, expressed in extreme terms. Weighing this particular employee's beliefs in the round, the EAT found that they fell on the wrong side of the test, and did not benefit from statutory protection. This is unlikely to be the last case in this very challenging area of employment law.
US non-competes
We've flagged in previous editions the US Federal Trade Commission's introduction of a nationwide prohibition on the use of non-compete provisions, save in a very limited number of cases. The rule was due to come into effect in September 2024, but was blocked in August by a Texas court so that it will not – for the moment at least – come into effect at all. There is every prospect of appeals, so we will continue to monitor developments on the other side of the Atlantic closely.
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