Top 5 recent workplace developments – January 2020

This is our selection of the recent developments which we think will have the most significant impact on HR practice.

1. Discrimination – An employment tribunal rules that ethical veganism is a protected belief under discrimination law

In a landmark decision, an employment tribunal judge has ruled that ethical veganism is a philosophical belief that is capable of protection under discrimination law. This means that ethical vegans may be entitled to similar legal protections in the workplace as those who hold religious and other philosophical beliefs.

Mr Casamitjana claims that he was dismissed by his employer the League Against Cruel Sports (LACS), an animal welfare charity, after he raised concerns that the charity's pension fund invested in companies involved in animal testing. He brought claims of discrimination, harassment and victimisation by reference to his belief in ethical veganism (amongst other claims). LACS alleges that Mr Casamitjana was dismissed for gross misconduct for reasons unconnected with his ethical veganism.

Before deciding on the lawfulness of Mr Casamitjana's dismissal and whether he had been unlawfully discriminated against, the Employment Tribunal first had to decide whether ethical veganism amounts to a philosophical belief that is protected under UK discrimination law. LACS did not contest that Mr Casamitjana's beliefs were protected in this way, but the employment tribunal needed to satisfy itself on the point.

For a belief to be protected, it must meet a number of requirements including that it: is a belief as to a weighty and substantial aspect of human life and behaviour; attains a certain level of cogency, seriousness, cohesion and importance; and that it is worthy of respect in a democratic society,  compatible with human rights and does not conflict with the rights of others. Mr Casamitjana's claim about why he was dismissed and whether his treatment was lawful will be heard at a later date, and we will have to watch this space to see what the outcome is.

Practical point

This case is significant because it establishes for the first time that ethical vegans should be entitled to protection from discrimination. However, as it was decided by an employment tribunal, it does not have binding effect on other tribunals, and each case will have to be looked at on its own facts. It does mean, though, that others with similar beliefs to Mr Casamitjana are likely to have the same legal protections.

The tribunal's ruling in the preliminary hearing was given orally, and at the time of writing no written reasons are available.

Casamitjana v League Against Cruel Sports

2. TUPE - An employment tribunal considers whether workers qualify for protection under TUPE

In a potentially significant decision for service providers and other employers acquiring businesses, an employment tribunal decides for the first time that "workers", rather than just traditional employees, qualify for protection under the Transfer of Undertaking (Protection of Employment) Regulations 2006 (TUPE).

Citysprint provided courier services to HCA Healthcare.  R took over the provision of those services when Citysprint lost its contract.  Three cycle couriers working for Citysprint claimed that they transferred to R under TUPE, notwithstanding the fact that they were engaged as "workers" and not traditional employees.  The cycle couriers brought employment tribunal claims against both Citysprint and R for outstanding holiday pay and failure to inform and consult under TUPE. 

Under TUPE,  the transferee effectively "steps into the shoes" of the transferor so that any potential claims (such as any rights to holiday pay) that the employee had against the transferor can be made against the transferee.   The tribunal had to consider whether TUPE also applied to the intermediate class of "workers" who, unlike traditional employees, only benefit from limited employment rights (such as holiday pay and discrimination protection).

TUPE implements the EU Acquired Rights Directive (ARD) which provides for the transfer of rights and obligations arising from an employment contract or "employment relationship".  UK employment law provides levels of protection to both traditional employees and so called "workers".  Take, for example, the Equality Act, which provides discrimination protection to both.  The judge reasoned that since the purpose of the ARD is to preserve rights under national employment law, it cannot be in accordance with the ARD, or discrimination law, for workers to be entitled to discrimination protection but not to be entitled to preserve those rights as against a transferee. Accordingly, the UK class of employee known as "workers" must come within the term "employment relationship" in the ARD.

The judge then looked at what this means under domestic law.  TUPE defines "employee" as any individual working under a contract or service or apprenticeship "or otherwise", but excludes the genuinely self-employed.   The judge reasoned that the words "or otherwise" shows that TUPE was intended to confer rights on a broader class of employee than those just employed under an employment contract.  The tribunal was required to interpret TUPE in accordance with the ARD so the words "or otherwise" had to include "workers".

Practical point

This decision is potentially highly significant, particularly for those businesses which engage contractors and zero hours workers who are not regarded as traditional employees. It potentially also reopens the debate about partners, given they are workers. However, it is only an employment tribunal decision so is not binding on other tribunals or the courts.  Employers should therefore wait until this decision is confirmed by an appeal court before making any changes to their practices on the transfer of an undertaking or change in service provision.

Dewhurst & others v Revisecatch Limited t/a Ecourier(1) and City Sprint (UK) Ltd (2)

3. Discrimination – "no beards" policy is religious discrimination

An employment tribunal rules that a recruitment agency had indirectly discriminated against a practising Sikh when it refused to keep him on its books because he would not shave his beard for religious reasons.

Elements Personnel agency recruited staff to five star hotels, working in front of house food and drinks roles, and adopted a "no beards" policy as part of their "professional appearance standards". Mr Sethi, a practicing Sikh who follows Kesh (the requirement that no hair on the body can be cut) refused to shave his beard for religious reasons. Following the agency's refusal to admit Mr Sethi onto their books, he brought a claim for indirect religious discrimination.

The tribunal rejected the justification of the legitimate aims of hygiene, appearance requirements and client requirements because the agency failed to provide evidence supporting its aims, and noted that the agency had not properly considered potential exceptions for religious reasons and that some five star hotels do not enforce a "no beards" policy. It also observed that in practice a "no beards" policy is likely to amount to a "no Sikhs" policy

Practical point

A dress code is permitted as long as it does not discriminate against anyone.

Employers should consider exceptions to their dress code if this is requested by employees who feel disadvantaged because of a protected characteristic, such as sex, religious belief or disability. Refusing an exception won't necessarily be unlawful discrimination – this will depend on whether the requirement can be objectively justified based on a legitimate business or health and safety reason.

Sethi v Elements Personnel Services Ltd

4. Employment reforms and Brexit

The revised Withdrawal Agreement Bill, which paves the way for the UK's exit from the EU, contains some changes which may have an impact on future employment law. First, the Bill no longer contains clauses which were aimed at safeguarding existing EU-derived workers' rights. Second, whilst the original Bill gave ECJ decisions the same status in law as a UK Supreme Court decision, the new Bill goes further by allowing ministers (by making regulations) to allow  tribunals to override ECJ and domestic cases on EU derived rights. This could potentially affect the rules around holiday pay under the Working Time Regulations.

 In the Queen's Speech, delivered on 19 December 2019, it was announced that the Government is proposing to introduce a new Employment Bill which would cover:

  • A single labour market enforcement agency – having a single agency would support business compliance, and would ensure workers are aware of, and can exercise, their rights. A consultation on these proposals closed in October 2019.
  • A right to request a more predictable contract - a right for all workers to request a more stable contract after 26 weeks' service and "other reasonable protections"
  • Making flexible working the default position – this proposal, which will be the subject of a consultation, would encourage flexible working and seek to make flexible working the default position unless employers have good reason to refuse
  • Extended redundancy protection to prevent pregnancy and maternity discrimination - extending the period of redundancy protection from the time employees notify their employer of their pregnancy, until six months after the end of their maternity leave
  • Extended leave for neonatal care - a new right to neonatal leave and pay to support parents of premature or sick babies. A consultation on these proposals closed in October 2019
  • A week's leave for unpaid carers - This proposal was made in the Conservative party's election manifesto (see Legal update, General election 2019: Conservative Party employment law policies: Equality and diversity in the workforce).
  • Tips in full for workers - all tips and service charges tips to be distributed on a fair and transparent basis, and passed to workers. This provision would be supported by a statutory Code of Practice

Other Government proposals include a national disability strategy with measures to encourage employers to employ disabled people and people with health conditions.  Detailed proposals will be made later this year in light of feedback to its consultation “health is everyone’s business”, which closed in October 2019.

Practical point

The changes made to the Withdrawal Bill do not necessarily mean that worker rights will be watered down post Brexit because if any future UK-EU trade deal contains a "level playing field" clause, the UK could effectively be prevented from watering down UK employment laws so that it does not gain a trade advantage.

It is not clear when the Employment Bill will be published - but since some of the proposals are still subject to consultation or a government response to consultation, it's unlikely to be imminent.

5. IR35 – Government to review the proposed changes to the off-payroll working rules

Three months before the new rules are due to come into effect, the government has launched a review into changes to the off-payroll working rules for the private sector to address concerns about how they will be implemented.

The off-payroll working rules, known as IR35, were introduced in 2000 to ensure that someone working like an employee, but through a company, pays similar taxes to other employees.

The reforms are designed to tackle non-compliance with off-payroll working rules by shifting the responsibility for determining the tax status of contractors to medium and large organisations in the private sector who are using their services. They are due to come into force on 6 April 2020. Similar rules have been in force for the public sector since 2017.

The review will run until mid-February and will consider whether any further steps are needed to ensure the new rules are implemented smoothly.

Practical point

What is clear from the Government's announcement is that the review is focussed on the implementation of the planned reforms. There is no suggestion at the moment of any delay or change of course by the Government. It seems likely that the rules will come into force as planned on 6 April 2020 and businesses should continue to prepare for the changes.

Government Review

For more information, see IR35 - Government to review the proposed changes to the off-payroll working rules