August 4, 2017

UK - CABLE: Current Awareness Bulletin

Clyde & Co's UK employment team brings you CABLE, a monthly bulletin keeping you up to date with recent legal developments.

Tribunal Fees

R (on the application of UNISON) (Appellant) v Lord Chancellor (Respondent) [2017] UKSC 51 - Supreme Court quashes employment tribunal fees

The introduction of employment tribunal and employment appeal tribunal (EAT) fees has seen a dramatic and persistent fall in the number of claims brought.  UNISON, the trade union, has successfully challenged the lawfulness of the fee regime by way of judicial review.

The Supreme Court found that such a sharp drop in the number of claims warranted the conclusion that a significant number of people have found the fees to be unaffordable.  Further, the fees charged could, in some cases, make it futile or irrational to bring a claim, given that some claimants seek modest or no financial awards.  The Supreme Court concluded that the fee regime effectively prevented access to justice, and although there were legitimate aims that supported the introduction of the regime, it had not been shown that the fees charged were the least intrusive means of achieving those aims.  As a result, the fee regime was unlawful from the outset and the law imposing it should be quashed. 

Fees are no longer payable in employment tribunals and the EAT and the government has announced that fees paid since their introduction in 2014 will be reimbursed. It remains to be seen whether a new fee regime will be introduced in the future, but until then, fees cannot be imposed.
Click here for a detailed update on this decision.

Pension benefits

Walker v Innospec Limited and others [2017] UKSC 47 - Supreme Court equalises pension benefits for same sex spouses.

The Supreme Court has ruled that same sex couples in marriages or civil partnerships should be granted the same survivor pension benefits as heterosexual spouses.

Same sex unions were legalised on 5 December 2005, and subsequently same sex marriages were recognised by the Marriage (Same Sex Couples) Act 2013.  However, an exemption in the Equality Act 2010 provided an exception to the prohibition on sexual orientation discrimination that allowed benefit accrual for a survivor's benefit for a same sex spouse to be based on service from 5 December 2005 onwards.

A scheme member wanted reassurance that his partner, who he had entered into a civil partnership with after he retired in 2003, would receive his pension in the same way as a heterosexual spouse would have done if he died. The claimant's salary and pension payments were identical to those of a heterosexual man and if the claimant had been married to a woman the scheme would have to pay the full spousal pension. Therefore, it would breach EU law to treat the claimant's marriage differently on the basis of its partners being of a particular sexual orientation. As a result, the relevant section of the Equality Act 2010 should be dis-applied.

practical point
Trustees should check whether their scheme has applied a restriction on same sex survivor benefits in reliance on the Equality Act exemption and re-assess their approach in light of this decision.  In practice, many schemes have "equalised" such benefits already.  However, this judgment may be of greater concern to public sector pension schemes.  In 2014, a report from the DWP, Review of Survivor Benefits in Occupational Pension Schemes, revealed that the capitalised cost of removing differences in survivor benefits between opposite sex surviving spouses, same-sex surviving spouses and surviving civil partners in the public service pension schemes was estimated at around £2.9 billion.
Click here for a detailed update on this decision.


Chesterton Global Ltd & Another v Nurmohamed [2017] EWCA Civ 979 - Court of Appeal gives guidance on the public interest test

An employee was dismissed following a complaint to his employer that they were deliberately misstating the internal accounts; to the effect of lowering the employee's and other employees' commission earnings. The employee claimed that his dismissal was automatically unfair as he had been dismissed for making a protected disclosure.

The Court concluded that the disclosure was in the public interest, despite being personal to the claimant, and gave guidance as to the factors that should be considered when determining if a disclosure is in the public interest.  This includes:

  • number of persons affected;
  • whether the subject of the disclosure if important or trivial;
  • whether the wrongdoing was deliberate or inadvertent; and
  • the identity of the wrongdoer
This decision establishes a low hurdle for workers to overcome to establish a protected disclosure. It clarifies that individuals are still able to make a disclosure about their own contract, provided they believe it has wider public interest implications. Note that it does not matter if the disclosure is ultimately not in the public interest, but the relevant test is whether the worker believes that it was in the public interest.
Click here for a detailed update on this decision.

International collective redundancies

Seahorse Maritime Ltd v Nautilus International (A Trade Union) UKEAT/0281/16/LA - EAT considers the territorial scope of UK collective redundancy consultation rights

A Guernsey company employed crew which it supplied to specialist ships owned and operated by other companies.  The UK domiciled crew were stationed all over the world (mainly at fixed locations, such as oil rigs) for 4-6 weeks at a time. The employer made more than 20 crew members from four ships redundant, without following collective redundancy rules.  However, less than 20 crew members were lost on each ship.

The EAT confirmed that the employees had a strong enough connection with the UK so that the tribunal had jurisdiction to consider their claims for failure to inform and consult under collective redundancy rules. Key factors in this were that they were domiciled in the UK, their employment contracts were governed by English law and a UK company managed their administration.  The EAT agreed that all the ships of the fleet on which the employees were employed were one "establishment" for the purposes of collective consultation rules, meaning collective consultation obligations did apply, and rejected the argument that the individual ships were separate establishments for collective redundancy purposes.

This case clarifies that, depending on the facts, individual employees working outside the UK who have a sufficiently strong connection with the UK, may have the right to be consulted if their employer proposes to dismiss as redundant 20 or more employees at any one establishment, anywhere in the world, within a 90 day period. Employers should consider this risk factor when planning their operations initially or making workforce changes and take appropriate advice.
Click here for a detailed update on this decision.