Latest UK EmpLaw Newsletter

‘Pre-termination negotiations’ inadmissible in tribunal

There are two ways in which conversations between an employer and employee about agreeing to part ways can be held to be inadmissible in later legal proceedings:

1. Where there is a dispute between the parties, and the discussions are a genuine effort to resolve that dispute (the without prejudice principle); and
2. Where there is no dispute, but the parties wish to discuss ending the employment relationship on agreed terms (pre-termination negotiations).

The rule on pre-termination negotiations (often referred to as ‘protected conversations’) is set out in section 111A Employment Rights Act 1996. Provided there is no ‘improper behaviour’, an employer is able to hold conversations with an employee about ending their employment on agreed terms even where no dispute has arisen. These conversations (both the fact that they have taken place and their content) will not then be admissible in any flowing ordinary unfair dismissal claim.

In the recent case of Gallagher & McKinnon Auto and Tyres, the Employment Appeal Tribunal agreed with the employment tribunal that pre-termination negotiations between the Claimant and the Respondent were not admissible in evidence as support for the Claimant’s unfair dismissal claim.

The Claimant worked for the Respondent as a branch manager. Following a period of absence due to ill health, the Respondent determined that the business no longer required a branch manager. The Respondent held a meeting with the Claimant and offered the Claimant a settlement sum under proposed settlement agreement terms. The Respondent confirmed that, if the offer were not accepted, the Respondent proposed to commence a redundancy process. The meeting was described by the Respondent as being ‘off-the-record’ and the Claimant was given 48 hours to consider the offer made. The Claimant did not accept the offer and was dismissed for redundancy. He wanted to refer to the settlement discussions before the tribunal. The Claimant contended that he had been placed under “undue pressure”, but this contention was rejected by the tribunal.  The employment tribunal concluded that the conversation formed pre-termination negotiations and there was no improper behaviour – the fact and content of the negotiations was inadmissible.

The Claimant appealed to the EAT, arguing that the tribunal’s decision in this regard was perverse. He argued there was improper behaviour as:

1. He was told the meeting was a ‘return to work’ meeting and was taken by surprise;
2. He was only given 48 hours to consider the offer; and
3. He was told he would be made redundant if the offer was not accepted.

The EAT, dismissing the appeal, held that 1 and 2 did not represent improper behaviour in the circumstances. This is despite the ACAS Code recommending that employees are given 10 days to consider any offer made. In respect of 3, the EAT held that it was important to distinguish redundancy situations from disciplinary situations. The ACAS Code does state that a form of undue pressure can be telling an employee that, if they do not accept the offer, they will be dismissed. However, this guidance specifically refers to a disciplinary situation. In this case, a redundancy situation had arisen. It was accepted that the Respondent had told the Claimant that his role was redundant. However, this did not mean that dismissal was inevitable as there was still the possibility of alternative employment.

Disability discrimination: definition of disability

Whether or not an employee is a disabled person is a foundational point in any case of disability discrimination. Usually, an employee must be a disabled person in order to claim disability discrimination.

The definition of disability is found in s6 Equality Act 2010 and requires that an employee suffers from a physical or mental impairment which has a substantial, long-term, adverse impact on his/her ability to carry-out day to day activities.

The definition of disability was considered by the Employment Appeal Tribunal recently in the case of Zagorski v North West Anglia NHS Foundation Trust. The Claimant was a consultant radiologist. He was a carer for his wife and children. He was exhausted and began to suffer with migraines approximately two times per week during which: he could not focus on a computer screen, it was impossible for him to undertake his job, he was unsteady on his feet and would need to lie down and, when the symptoms were severe, he could not read, write or use screens at all. Much of his role as a consultant radiologist required him to use screens to interpret scans.

The employment tribunal concluded that, although the Claimant suffered with an impairment, the effects on day-to-day activities were not substantial. The tribunal held that the Claimant could be expected to modify his behaviour to prevent or reduce the effects of the impairment, so he was not a disabled person. The EAT disagreed. The Claimant had been off work sick for six months, during which time the modifications in behaviour that might reduce migraines had been in effect. The migraines had continued even during this time. The Claimant was a disabled person. The EAT made it clear that normal day-to-day activities can include work activities. The EAT’s judgment contains the following useful guidance on the application of the definition of disability:

• The emphasis should be on the things that the employee either cannot do or can only do with difficulty, rather than on the things that the person can do. In Ahmed v Metroline Travel Limited, it was emphasised that it is not a question of weighing up what the claimant can do and what the claimant cannot do. One should focus on what the claimant cannot do.
• The fact that symptoms ‘come and go’, and that the substantial adverse effects are not present all the time, does not prevent there being a substantial adverse effect on day-to-day activities. This was the case here even though there were more periods when the Claimant did not have a migraine than periods when he did.
• The fact that an impairment results from exhaustion does not prevent it from being an impairment or from it having substantial adverse effects on day-to-day activities.

Driver using black cab app was not a worker

In the UK, there are three distinct types of employment status:

1. Employee – a person who enters into or works under a contract of employment
2. Worker - an individual working under a contract to perform work or services personally for another party, in circumstances where the other party is not a client or customer of the individual's business
3. Self-employed – anyone who does not fall within the definition of employee or worker and is in business on their own account.

There are statutory definitions for the first two categories, but the current position has been substantially defined through case law. An individual who is neither an employee nor a worker will be self-employed for employment law purposes. Often it is entirely clear which camp a person belongs to. Sometimes it isn’t.

There has been a substantial amount of litigation in recent years surrounding the employment status of those working in the ‘gig economy’ - in which people engage in short-term, flexible, and often freelance or contract work, characterised by the use of online platforms and apps that connect workers with clients or customers.  People working in this area are often treated as self-employed. A series of cases, culminating in the Supreme Court’s decision last year in Uber v Aslam, indicate that the situation is not so clear cut. In Uber itself, drivers were held to be workers (and therefore entitled to benefits including holiday pay) and not self-employed.

The Employment Appeal Tribunal recently had cause to apply the principles established in Uber in the case of Johnson v GT Gettaxi. The Respondent operated an app which allowed members of the public to order black cabs, rather than hailing a black cab on the street. Licensed black cab drivers could sign up to the driver app.

The Claimant was a qualified black cab driver. He used the Respondent’s app between April 2015 and 2017. When he re-applied to use the app in 2020, his application was refused. He contended that this was because he had made protected disclosures. This gave rise to a preliminary issue as to whether the Claimant was a worker.

Both the employment tribunal and EAT found that the Claimant was not a worker of the Respondent and that the Respondent’s drivers more generally were not workers. They were in business on their own account as black taxi drivers. The use of the Respondent’s app was just a way to increase their business. The following points were relevant to this conclusion:

• No penalties were imposed by the Respondent for rejections of rides offered. This indicated that the Claimant was in business on his own account.
• The Claimant was free to follow the routes he considered best and there was no penalty for not following the GPS route (unlike in Uber).
• The Claimant was given limited details about passengers on accepting fares. There was nothing stopping the Claimant from making arrangements direct with passengers for other trips.

Drivers were able to increase their earnings by plying for hire in the traditional way as a black cab driver or by signing up to other apps. This was different to Uber, as Uber drivers could not ply for hire in the same way as a black taxi can.

Holiday pay underpayments: a gap of over three months between deductions will not break chain of deductions

If an employee has been underpaid by their employer in any way, then they are able to bring a claim for unlawful deductions from wages in the employment tribunal. Such claims must be brought (or, to be clearer, ACAS early conciliation commenced) within three months less one day of the date of deduction. If the deduction is one of a ‘series’ of deductions, then early conciliation must commence within three months less one day of the last in that series. There is a long-stop date of two years when looking back in a series. How do you decide whether several deductions amount to a ‘series’ such that they are brought in scope of any claim?

In Bear Scotland v Fulton, the Employment Appeal Tribunal, when looking at an underpayment of holiday pay, held that a series of deductions would be broken if there was a gap of more than three months between underpayments. This approach was held to be wrong by the Supreme Court in Chief Constable of the Police Service of Northern Ireland v Agnew, where gaps of over three months were not found to have broken a series of holiday pay deductions.

The position has been looked at again in the recent case of Deksne v Ambitions Ltd. In this case, the Respondent conceded that it had paid the Claimant’s holiday pay incorrectly. The Claimant claimed unlawful deductions from wages. The employment tribunal held that the deductions were out of time as they were not a ‘series’ of deductions, as there were gaps of over three months between some underpayments. This decision was reached before Agnew in the Supreme Court.

The Employment Appeal Tribunal, overturning the tribunal’s decision, held that whether deductions of wages constitute a series is essentially a question of fact, answered by taking account of all relevant circumstances including the similarities, differences, frequency, size and impact of the deductions, as well as how they came to be made and applied and what linked them together. The tribunal had fallen into error by taking account of the fact that the interval between the payments was, from time to time, in excess of three months. All the underpayments of holiday pay, based on the same calculation, formed part of a series of deductions– all the Claimant’s holiday pay shortfalls back to the beginning of the two year backstop in section 23(4A) of the Employment Rights Act, were part of a series of deductions and within the jurisdiction of the tribunal.

This case serves as a reminder to employers that claims for historic underpayment of holiday pay remain a risk so long as a claim is commenced (through early conciliation) within three months less one day of the final deduction. Making a correct payment in an attempt to ‘break the chain’ will not work. Neither will any totting up of the gaps between underpayments – three months no longer has any relevance. What is important is that the underpayments are of the same character, not how frequently they are made.

Workplace issues in winter weather

When winter weather hits in the UK we are faced with the usual disruption to roads, transport and schools. Disruptions can extend to workplaces, raising questions about employer responsibilities. Here’s a guide for HR to navigate these challenges effectively:

1. Commuting to work

Employers are not generally legally responsible for employees' commutes, but they should prioritise employee safety. Forcing employees to travel in dangerous conditions might breach the implied duty of trust, risking constructive dismissal claims. Employers should consider alternatives like remote work, flexible schedules, or allowing holiday leave to ensure employee safety and maintain good relations.

2. Temperature in the workplace

The Workplace (Health, Safety, and Welfare) Regulations 1992 require employers to maintain a “reasonable” temperature at work —ideally at least 16°C (13°C for physically demanding jobs). Employers should monitor temperatures during cold weather and relax uniform policies to let employees wear warmer clothing if necessary.

3. Workplace closures

If a workplace closes due to severe weather but employees are ready to work, they should generally be paid in full unless contracts specify otherwise. Other options include:

• Working from alternative locations or home.
• Lay-offs - if the right to lay off is included in contracts, employers can place them on lay-off for the duration of the workplace closure.  Employees receive guarantee pay (currently £38 per day) instead of full wages, minimizing financial strain on the business.

4. School closures

Employees unable to work due to school closures can take unpaid time off under the legal right to time off for dependants. Some workplaces offer this as a paid benefit, so ensure policies are followed correctly.

5. When employees can’t get to work

If employees are unable to get to work due to weather, consider alternative work arrangements, like remote work. If this isn’t possible and contracts don’t address pay for such situations, employers often take the position that they aren’t obligated to pay. However, the position is not clear-cut. Gregg v North West Anglia NHS Trust held (in the context of pay during interim regulatory suspension) that, if an employee is unable to work owing to an ‘unavoidable impediment’, then, unless the contract says otherwise, they should receive pay. Given the uncertainty as to whether bad weather would be regarded as an ‘unavoidable impediment’, employers should consider offering discretionary pay or the option to make the time up at another time or to take paid holiday.

It’s a good idea for employers to put down their business position and plans for winter weather in an Adverse Weather Policy. This can be used to help manage weather-related disruptions. Proactive planning and flexibility can help employers and employees navigate winter challenges smoothly.

Man City star succeeds in claim for unpaid wages

Employment tribunal cases rarely involve high-profile figures, but Benjamin Mendy’s £11 million wage claim against Manchester City Football Club is a remarkable exception. The case revolved around whether Manchester City’s suspension of Mr. Mendy between September 2021 and June 2023, during which he was unpaid, constituted unlawful deductions from wages.

Mendy signed with the club in 2017 but was suspended in 2021 following criminal charges and a subsequent Football Association (FA) prohibition from football activities. Man City withheld wages during this period, claiming he was unable to fulfil his role. Mendy argued he should have been paid throughout this period.

Key legal considerations

Under the common law ‘wage–work’ principle, an employee ready, willing, and able to work is generally entitled to payment. Employers may only deduct wages if authorised by statute, contractual terms, or prior employee consent.

The tribunal examined several factors:

1. Contractual entitlement: Mendy’s contract lacked any provision allowing non-payment during suspension.
2. Implied terms: No implied terms justified withholding wages.
3. Being ready, willing and able to work: There was no dispute that Mendy was both ready and willing to work. A key issue was whether he was actually ‘able’ to work. The case of Gregg v Northwest Anglia NHS Trust held that, if regulatory suspension is an ‘unavoidable impediment’, then wages should continue to be paid even if the suspension means that the employee is unable to work. The tribunal held that the FA suspension (prompted by safeguarding concerns as one of the alleged victims was under 18) was an unavoidable impediment, meaning wages should have been paid. The five months that Mendy was unable to work owing to being held in police custody was found to be partly his responsibility (as one of the reasons for denying bail was his previous breaches of bail conditions), justifying non-payment for that period.

Lessons for employers

This case underscores the importance of clear suspension terms in employment contracts. Had Mendy’s contract specified non-payment during FA suspensions, the dispute could have been avoided entirely. Employers should ensure robust contractual provisions to mitigate such risks.

Holiday pay for part-year workers

The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 introduced significant changes for part-year and irregular hours workers, applicable to holiday years starting on or after 1^st April 2024. These new rules ensure holiday entitlement reflects hours worked, impacting an increasing number of businesses.

Under the new system, holiday leave accrues at a rate of 12.07% of hours worked, calculated in hours and treated as one composite pot of leave. For workers on sick leave or statutory leave (e.g., maternity or paternity leave), leave continues to accrue based on 12.07% of average hours worked over the 52 weeks prior to the absence, excluding weeks where no work was done due to leave.

Employers can pay rolled-up holiday pay if:

• It is calculated at 12.07% of pay and itemised separately on payslips.
• Payslips clearly record the holiday pay amount for each pay period.

During sick or statutory leave, rolled-up holiday pay is averaged over the 52 weeks prior to the absence.

To qualify as a ‘part-year worker,’ an employee must have a year-round contract stipulating periods of at least one unpaid, work-free week. For instance, seasonal workers on permanent contracts are clear examples.

School staff are more difficult. Although their main commitments are during term-time, they may also be expected to perform some work during the school holidays. In this case, to qualify as ‘part-year’ workers, there would need to be at least one week carved out in the contract as work-free and unpaid. 

It gets even trickier when such staff are paid their salary in equal instalments throughout the year. However, the government guidance says it’s possible. They can receive pay during a period of time (such as the school holidays) and still be a part-year worker - so long as there is no expectation of them working during that period and they do not receive payment in respect of that period. In other words, it has been averaged out for administrative purposes only.

End of the road for the Christmas party?

Since 26^th October, all employers have been under a positive duty to prevent sexual harassment ‘in the workplace’.

The definition of the ‘workplace’ extends beyond physical premises to include employer-hosted events like Christmas parties. Misconduct at such events could result in claims of vicarious liability for harassment and breach of the positive duty against employers. This heightened responsibility has prompted some to question whether hosting a party is worth the risk. However, with proper planning and clear policies, employers can still celebrate the festive season while complying with their legal duties.

Here are 5 top tips for employers wanting to safely host a Christmas party:

• Carry out a risk assessment: The Equality and Human Rights Commission have emphasised the central importance of effectively assessing the risk of sexual harassment to demonstrating compliance with the new positive duty. A risk assessment of the planned event should be carried out. Mitigating steps should be taken in respect of each risk area identified. All documentation should be retained.
• Set clear expectations: In advance of any event, remind employees that workplace policies on behaviour, including harassment and alcohol consumption, apply to all work-related events.
• Provide training: Make sure all employees and managers have up-to-date anti-harassment training before the event.
• Control alcohol consumption: Consider limiting free-flowing alcohol by offering drink tickets or a cash bar to reduce the risk of intoxicated behaviour. The risk of sexual harassment is significantly heightened where alcohol is involved, and inhibitions are lowered.
• Follow up promptly: Encourage employees to report any issues and investigate complaints swiftly and fairly.

By implementing these measures, employers can mitigate risks while still celebrating the season responsibly.

And finally,

the wholesale and delivery business, Booker, recently discovered the perils of deciding to take a stand on a specific incidence of workplace behaviour when your whole workforce behaves badly.  In the recent case of Ogden v Booker Limited, Booker dismissed Mr Ogden for referring to a colleague as a “f**king mong”. The tribunal found that Mr Ogden had made this comment but, nevertheless, had been unfairly dismissed. In the circumstances, the comment was no worse than what others said in the workplace. The tribunal said that Mr Ogden had been “left without a chair when the music stopped”. The office he worked in was a ‘free-for-all’. The tribunal held that “this was a dysfunctional and seemingly toxic office, with many participants in this unprofessional behaviour including [Mr Ogden] and [his] victim”. Booker should have taken this into account when investigating the allegation against Mr Ogden. It was relevant to the fairness of dismissal as the sanction. This case serves as a reminder to employers that workplace standards must be consistently applied. Inconsistency risks singling out employees unfairly, as was the case for Mr Ogden.