In this month’s instalment, our team discuss the government’s response to the consultation on the draft statutory Code of Practice on Dismissal and Re-engagement and the Employment Tribunal’s findings that an employer was entitled to reject an employee’s flexible working request to work remotely full-time. We also discuss two decisions of the Employment Appeal Tribunal – a finding that an employee was not discriminated against because of his stammer and the dismissal of an indirect age discrimination claim brought by a retired employee following changes made by his former employer's parent company to a long-term incentive plan.

1. The government’s response to the consultation on the draft statutory Code of Practice on “fire and rehire.”

• “Fire and rehire” occurs when an employer changes employment terms and conditions by way of dismissal and re-engagement.
• The government has taken significant steps to address concerns over ‘fire and rehire’ practices and has released its response to the consultation on the draft statutory Code of Practice on Dismissal and Re-engagement.
• The Code will be laid before Parliament for approval and if approved, a commencement order will bring the Code into effect.

Key Changes to the Draft Code

• The Code does not apply in redundancy situations. However, it will apply where both redundancy and fire and rehire are being considered.
• Employers must contact Acas at an early stage, before raising fire and rehire with employees.
• Employers are required to consult with employees for as long as reasonably possible although there is no minimum period of consultation.
• An employer must provide the relevant employees or their representatives with as much information regarding the proposals as early as reasonably possible so the employees/representatives can engage in meaningful consultation. Further, the Code states that it is good practice for employers to provide this information in writing.
• Fire and rehire should only be used as a last resort.

Key Takeaways

• There is no stand-alone claim for failure to follow the Code.
• However, if an employer unreasonably fails to follow the Code, Employment Tribunals will have the ability to uplift compensation to an employee by up to 25%.

2. The Employment Tribunal found that an employer was entitled to refuse a full-time remote working request.

In Wilson v Financial Conduct Authority, the Employment Tribunal held that the respondent was entitled to refuse an employee’s request to work entirely remotely, despite the fact that she was an “excellent” performer and had worked efficiently from home during the Covid-19 pandemic.

Facts

• The claimant worked as a senior manager at the Financial Conduct Authority (FCA).
• The claimant had been working remotely since early 2020 due to the Covid-19 pandemic. Following the easing of the pandemic restrictions, the FCA required staff to split their working time between the office and remote working. The claimant made a flexible working request to work entirely remotely.
• The FCA rejected the request on the basis that working entirely remotely would have a detrimental impact on her performance and quality of work. This decision was given to the claimant 21 days after the three-month statutory decision period time limit had expired. The claimant appealed but the FCA did not uphold the claimant’s appeal.
• The claimant brought a claim in the Employment Tribunal alleging that the FCA had failed to deal with her request within the statutory time limit. The claimant also claimed that, in reaching its decision, the FCA relied on incorrect facts, namely that if she worked entirely remotely, it would have a detrimental impact on her quality and performance.

The Employment Tribunal’s Findings

• The Employment Tribunal held that the FCA breached the statutory decision period time limit and ordered it to pay the claimant one week’s pay as compensation. While the maximum compensation for such a breach can be up to eight weeks’ pay, one week’s pay was deemed appropriate given that the delay was not excessive.
• The Employment Tribunal further held that the FCA’s decision to reject the request was valid. It found that the FCA had genuinely considered the merits of the request and set out specific reasons why it would have a detrimental impact, whilst balancing those factors against the claimant’s ‘excellent’ performance record while working remotely.

Key Takeaways

• Although Employment Tribunal decisions are not binding, this case demonstrates that an employer can, in certain circumstances, successfully defend a decision to refuse an employee’s request to work entirely remotely. Nevertheless, employers should consider each flexible working request on a case-by-case basis and not adopt a blanket approach to responding to requests.
• This case also serves as a helpful reminder that employers must consider flexible working requests within the statutory time limits. If an employer needs more time to respond, then it must agree an extension with the employee. Otherwise, the employer may have to pay the employee up to eight weeks’ pay.
• Flexible working will no doubt continue to be a hot topic. From 6 April 2024, employees will have the statutory right to request flexible working arrangements from day one of their employment and employers will have two months to respond to any request and consider any appeal (as opposed to the current three-month time limit).

3. The Employment Appeal Tribunal held that an employee with a stammer was not discriminated against in a job interview.

In Glasson v The Insolvency Service, the Employment Appeal Tribunal held that an employer did not discriminate against a claimant by conducting oral interviews via video conference.

Facts

• The claimant commenced employment with the respondent in 2005.
• The claimant had a stammer which amounted to a disability under the Equality Act 2010 and the respondent was aware of this.
• The claimant applied for a promotion in 2020, for which there were two vacancies. On his application form, he indicated he might need extra time to complete his answers during the oral interview because of his stammer. Due to the Covid-19 pandemic, oral interviews were carried out via video conference.
• The claimant performed well in the interview but scored one point behind the second-most-successful candidate and was not promoted.
• The claimant brought a claim in the Employment Tribunal alleging that the respondent had failed to comply with the duty to make reasonable adjustments arising from his disability. He alleged that, as a result of the oral video interview, he went into “restrictive mode” and gave shorter answers to some questions to avoid stammering. However, he had not raised this effect of his disability before or during the interview process.

Findings

• The Employment Tribunal held that the respondent did not have constructive knowledge that the interview process would put the claimant at a disadvantage. It also dismissed the claim that the employer failed to make reasonable adjustments.
• The Employment Tribunal further held that the claimant had not been treated unfavourably because of his disability when he was not offered the promotion. Instead, the Employment Tribunal held that the oral interview was justified, noting that oral communication skills were needed for the role and that the recruitment process had taken place during the pandemic. The claimant appealed to the Employment Appeal Tribunal.
• The Employment Appeal Tribunal upheld the Employment Tribunal’s decision. Indeed, it found that the claimant had performed well at the interview and the extent of any disadvantage was insufficient to put the interviewers on notice that his disability affected the way he answered questions.

Key Takeaways

• This case serves as reminder of the duty to make reasonable adjustments but also highlights that the duty will only arise where an employer knows, or could reasonably be expected to know, of the disability and the substantial disadvantage at which the job applicant or employee is placed as a result.
• It is also important to note that the Employment Tribunal’s decision might have been different if the claimant had been unable to answer questions adequately. In that case the interviewers might have been expected to make further inquiries into whether his disability affected his performance in the interview, and if so, take reasonable steps to avoid the disadvantage.

4. The Employment Appeal Tribunal upheld the dismissal of an indirect age discrimination claim from a retired former employee about changes to a long-term incentive plan.

In Fasano v Reckitt Benckiser Group Plc, the Employment Appeal Tribunal upheld the Employment Tribunal’s dismissal of an indirect age discrimination claim brought by a retired employee following changes his former employer's parent company made to a long-term incentive plan (LTIP) which deprived him of shares and options.

The Law

• An indirect discrimination claim arises where a provision, criterion or practice (PCP) is applied across the board but causes a particular disadvantage to persons with a relevant protected characteristic.
• Indirect discrimination can be justified if the PCP can be shown to be a proportionate means of achieving a legitimate aim.

Facts

• The claimant was a former senior employee of Reckitt Benckiser Health, a wholly owned subsidiary of the Reckitt Benckiser Group.
• The claimant was entitled to participate in Reckitt Benckiser Group’s LTIP. The claimant retired in 2019 and remained entitled to a pro-rated amount of the 2017 award, which would ordinarily vest at the end of 2019, subject to the financial performance of Reckitt Benckiser Group’s shares.
• During 2019, the performance of Reckitt Benckiser Group’s shares meant that the 2017 award would not vest at the end of 2019. To offer a staff retention incentive, Reckitt Benckiser Group changed the rules of the LTIP to allow a proportion to vest despite the poor share performance.
• As the claimant was not an employee at the relevant date, he did not benefit from the rule change and received nothing in respect of his 2017 award.
• The claimant brought a claim for indirect age discrimination against both his former employer and Reckitt Benckiser Group.

The Employment Tribunal’s findings

• The Employment Tribunal dismissed the claim. It identified the PCP as the requirement that LTIP participants had to be employed on 18 September 2018 to benefit from the amended terms. It found that the PCP did put the claimant at a disadvantage, but it was a justified, proportionate means of achieving a legitimate aim - to retain staff.
• The claimant appealed to the Employment Appeal Tribunal.

The Employment Appeal Tribunal’s Findings

• The Employment Appeal Tribunal dismissed the appeal but disagreed with the Employment Tribunal’s findings in relation to the PCP. Indeed, it held that the PCP was not the changes to the LTIP (which were done to retain staff).
• Instead, the Employment Appeal Tribunal found that the PCP was the use of a random cut-off date which former employees could not benefit from, and that the only real justification for the PCP was to avoid unnecessary payments to those who could not be retained.
• The Employment Appeal Tribunal noted that the respondents could have chosen to address the aim of retaining staff through alternative means such as a free-standing scheme involving straightforward retention payments to existing staff.

Key Takeaways

• In an indirect discrimination case, it is important to focus on finding a legitimate aim to justify the PCP, not the overall scheme of which the PCP is part of.
• In this case, the aim of the changes to the LTIP was to retain existing employees. Since the decision not to allow the awards held by former employees to vest made no difference to the retention of the existing employees, it could not be a proportionate means of achieving a legitimate aim.
• Had the respondents argued that the legitimate aim was to avoid making unnecessary payments to former employees, the justification argument might have succeeded in the Employment Appeal Tribunal.