Sexual Stereotyping in the Workplace Exists – But How to Prove It?

Businesses in which women are under-represented in senior roles invite speculation that the imbalance results from discriminatory sexual stereotyping. However, as a case in the context of the banking sector showed, Employment Tribunals (ETs) are required to base their decisions not on surmise but on hard evidence.

The case concerned a female vice-president who worked in a multinational bank’s compliance department. She claimed, amongst other things, that she had been passed over for a promotion due to her sex. Her sex discrimination and harassment claims were upheld by an ET, principally on the basis that a senior manager’s decision to appoint a male external candidate to the role she had coveted was infected by sexual stereotyping.

In its decision, the ET noted that, whilst men in the workplace may be praised for their ambition, forceful personalities and commitment to their jobs, women in the same position may be criticised for their obsession with work. Another common stereotype is that women are more divisive, causing toxic relations by becoming too emotionally involved in office politics. Sexual imbalance in senior positions also tends to be perpetuated by the propensity of men to prefer the views and qualities of other men.

In upholding the bank’s challenge to the ET’s decision, however, the Employment Appeal Tribunal (EAT) noted that it had been no part of the woman’s pleaded case that the manager’s decisions were based on stereotypical sexual assumptions. That suggestion was not the focus of evidence in the case and had been raised for the first time in the ET’s ruling. The bank and its witnesses had thus been deprived of any fair opportunity to respond to the contention. The woman’s sex discrimination and harassment claims were sent back to a fresh ET for reconsideration.

The EAT, however, went on to dismiss the bank’s challenge to the ET’s finding that the woman had suffered maternity leave discrimination. Because of assumptions made as to what women should be doing whilst on maternity leave, she had been discouraged from attending a quarterly review meeting. Advantage of her absence had also been taken in sidelining her and passing significant elements of her role to another employee. There had been no real intention to reinstate those aspects of her work on her return.

Restrictive Covenants and Restraint of Trade – Supreme Court Guidance

Professionally drafted restrictive covenants in employment contracts are a legitimate means of protecting businesses from unfair competition – but only insofar as they do not amount to an unreasonable restraint on an individual’s freedom to work. In an important test case, the Supreme Court considered where the balance is to be struck between those two competing interests.

The case concerned a senior employee’s contract of employment with an executive search and recruitment company. It included a non-competition covenant which, for six months following her departure, forbade her from being engaged, concerned or interested in any competitor business. Shortly after her employment came to an end, she informed the company of her intention to start working for a competitor. She contended that the covenant was an unreasonable restraint of trade and void.

The company launched proceedings and obtained an interim injunction against the former employee, holding her to the terms of the covenant. That order was, however, subsequently overturned by the Court of Appeal on the basis that the covenant was unreasonable, in that the term ‘interested in’ was so wide as to prevent her from having even a minor shareholding in any competing business.

In ruling on the company’s appeal against that decision, the Supreme Court noted that the term ‘interested in’ has long been included in standard precedents used in the drafting of non-competition clauses. However, on the basis of its natural and ordinary meaning, the term sought to prohibit the former employee from any shareholding, large or small, in any competing business. That objective was too broad and amounted to an unlawful restraint of trade.

In unanimously upholding the appeal, however, the Court ruled that the offending words could be severed from the covenant, rendering the balance of its contents valid and enforceable. Applying a blue pencil to the term ‘interested in’ neither fundamentally changed the character of the contract nor did it generate any major change in the overall effect of the post-termination restrictions on the former employee’s conduct. Although those restrictions had long since expired, the Court formally reinstated the injunction.

Perceived Disability – Police Officer Discrimination Victim Wins Damages

Even those whose medical conditions or incapacities are not so grave as to amount to disabilities can win compensation if they suffer discrimination in the workplace. The Court of Appeal made that clear in upholding a substantial damages award made to a police officer whose hearing was mildly impaired.

Police carThe officer’s hearing loss had never caused her any problems in doing her job and it was agreed that it was not a disability within the meaning of the Equality Act 2010. However, her application to be transferred to a different force was rejected on the basis of the decision-maker’s perception that her hearing problem meant that she was, or might become, incapable of performing front-line duties.

After she brought proceedings, an Employment Tribunal found that she had suffered direct discrimination, contrary to Section 13 of the Act, and awarded her £26,616 in damages. The decision-maker treated her less favourably on the basis of an actual or potential disability, which amounted to a protected characteristic. That decision was subsequently upheld by the Employment Appeal Tribunal.

In dismissing the force’s challenge to that outcome, the Court found that, although the officer was not disabled, what mattered was the decision-maker’s perception that she was, or might become so. The decision-maker believed that she was suffering from a progressive condition that might have a substantial adverse impact on her ability to perform normal day-to-day activities.

The ET was thus entitled to conclude that the decision-maker’s refusal to engage her involved, perhaps subconsciously, a motive or mental process which was affected by a stereotypical assumption about the effects of her perceived disability. The officer had previously performed perfectly satisfactorily in a front-line role and the Court observed that its conclusions in terms of employment law had achieved a just outcome on the merits.

Circumventing a Collective Bargaining Process is Not Always Unlawful

Employers are generally barred from circumventing collective bargaining agreements by going behind trade unions’ backs and making direct offers to the workers they represent. In a ground-breaking decision, however, the Court of Appeal has ruled that that does not amount to trade unions having a veto over even the most minor changes to their members’ terms and conditions of employment.

The case concerned a technology company which had recognised the sole rights of a trade union to represent its workforce. After collective bargaining failed to achieve an accord in respect of workers’ pay, terms and conditions, a ballot resulted in 80 per cent of the union’s members voting to reject the company’s offer.

The company later made two offers directly to its employees. The first of those offers warned them that a failure to accept the company’s proposals would jeopardise their Christmas bonuses. The dispute was only finally settled, largely in the company’s favour, after the union called for an overtime ban.

In those circumstances, 55 workers launched proceedings under Section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992. An Employment Tribunal (ET) upheld their complaints that the offers had achieved the prohibited result that their terms and conditions would not, or would no longer be, determined by collective agreement, negotiated by or on behalf of the union. In a ruling that was later upheld by the Employment Appeal Tribunal, the company was ordered to pay each of the workers £7,600 in compensation, a total of £418,000.

In challenging that decision, the company explained that it had written to employees individually because it had no idea how many of them were union members and whether or not the union represented the majority. Direct contact with workers had been made for sound business reasons, not least the company’s desire that they should receive their Christmas bonuses.

In ruling on the company’s appeal, the Court noted this was the first time Section 145B had been considered at appellate level. Although no anti-union motivation on the company’s part had been established, the ET was entitled to find that its purpose in making the direct offers was to circumvent the collective bargaining process. However, it did not follow that that was a prohibited result.

If the union were correct in arguing that Section 145B imposes a complete embargo on any direct offers which circumvent collective bargaining processes, the effect would be to confer on unions an effective veto over any direct offer to any employee concerning any term of his or her contract, major or minor, on any occasion. Such an outcome would go far beyond curing the mischief addressed by Section 145B and was extremely unlikely to have been intended by Parliament.

The company’s offers had been made to all its workers, who had not been asked to relinquish, even temporarily, their right to be represented by the union in the collective bargaining process. All that had happened was that the company went directly to the workforce and asked whether they would accept a particular change to their terms and conditions on this occasion. The Court noted that its ruling did not render unions powerless: it remained open to them to ballot their members for industrial action, as in fact occurred in this instance.

Overtime Must Be Factored In To Calculating Holiday Pay – Guideline Ruling

Should voluntary overtime count as ‘normal remuneration’ when calculating a worker’s statutory holiday pay entitlement for the four weeks’ annual leave required under the EU Working Time Directive (WTD)? The Court of Appeal came to grips with that burning issue in a guideline case concerning a group of NHS ambulance service workers.

The workers were entirely free to choose whether or not to work voluntary overtime shifts, but argued that payments they received in respect of those shifts should be factored in when calculating their holiday pay. After achieving a mixed result before an Employment Tribunal, their arguments were upheld in their entirety by the Employment Appeal Tribunal (EAT).

In dismissing their NHS trust employer’s appeal against that ruling, the Court found that the EAT’s decision reflected a true interpretation of a collective agreement incorporated within their employment contracts. The trust’s obligation to take their voluntary overtime payments into account also arose under the WTD.

The Court noted that it had been repeatedly emphasised in European legislation and case law that paid annual leave is a fundamental right. The Court of Justice of the European Union had frequently stated that there must be no disincentive to workers taking such leave and that employers cannot satisfy obligations imposed by the WTD by paying the bare minimum under workers’ contracts.

The exclusion of voluntary overtime from the calculation of holiday pay would carry the risk of encouraging employers to reduce their holiday pay liabilities by setting artificially low levels of basic contractual hours and categorising any remaining working time as overtime. The prevalence of so-called zero hours contracts in the UK meant that such a risk was far from fanciful and provided a very real objection to the trust’s arguments.

Annual leave must, in principle, be determined in such a way as to correspond with the normal remuneration received by a worker, including any voluntary overtime payments or other supplements.

The Court also confirmed that, both under their contracts and the WTD, the workers are entitled to have guaranteed overtime – worked in order to complete ongoing tasks after the end of their shifts – taken into account when calculating their holiday pay.

Sleeping Employment Judge Caused Unfairness in Museum Curator’s Case

Judges spend long hours listening to dense evidence and argument, and they would be superhuman if they did not occasionally nod off. As an employment case showed, however, the consequences of sleepy-headedness can be grave if it affects the fairness of proceedings.

The case concerned a senior curator, employed by a group of museums, who was made redundant after 33 years’ service. Her claims of wrongful and unfair dismissal, age and sex discrimination were subsequently rejected by an Employment Tribunal (ET). Four years later, she sought a position as assistant curator in response to an advert placed by the group, but her application was rejected on grounds that she was over-qualified for the relatively junior position.

After she launched a further complaint against the group, another ET accepted that her rejection for the post amounted to victimisation, contrary to the Equality Act 2010. That was on the basis that the earlier proceedings – which constituted protected acts – had influenced the decision to sift out her application.

In upholding the group’s challenge to that decision, the Employment Appeal Tribunal (EAT) was in no doubt that, very unfortunately, the employment judge who presided over the ET hearing had twice fallen fully asleep whilst the woman was undergoing cross-examination. It was not a case of mere momentary inattention and the group’s legal representative had to deliberately make a noise more than once in order to alert the judge. In those circumstances, a fair-minded and informed observer would have detected a real possibility that the fairness of the hearing had been affected.

The EAT noted that it would have allowed the appeal in any event, in that the ET had failed to reach specific and clear conclusions in respect of the group’s plea that the woman’s over-qualification was the sole reason for her rejection. The EAT directed a rehearing of the woman’s claim and expressed a preliminary view that that should take place before a freshly constituted ET.

Come Up With a Brilliant Invention? Do You or Your Employers Own It?

If employees come up with brilliant ideas, do they have intellectual property rights in them or are they the sole property of their employers? The High Court considered that burning issue in the context of a computer software dispute.

A company applied for international, national and regional patents in respect of a novel and potentially very valuable piece of web-filtering software which could be used for, amongst other things, preventing children from viewing unsuitable websites and blocking unauthorised access to subscription-only sites.

Via his corporate vehicle, a man who formerly worked for the company as a senior systems engineer challenged its ownership of the patent applications on the basis that the software was entirely the fruit of his own inventiveness. He said that he had developed the core ideas on which the software relied at home, in his own time, and on his own computer.

In rejecting his arguments, however, the Court found that, although he had devised one of the primary inventive concepts that led to the software’s development, a colleague had made improvements and he was therefore not its sole inventor. His work on the software in any event fell squarely within the normal course of his duties as an employee, within the meaning of Section 39 of the Patents Act 1977.

The Court noted that he had been specifically employed to create innovative product capabilities for the company, in the knowledge that it was seeking to develop web-filtering software. He was bound to present all his ideas to the company’s product management team and the work he carried out on the software was precisely the kind of task he was paid to perform. He posted his ideas on the company’s intranet, which he knew was for use solely in connection with its business. The company’s ownership of the patent applications was confirmed.

Shared Parental Leave and Enhanced Maternity Rights

Is it directly or indirectly discriminatory that men are paid less when on shared parental leave than women on maternity leave? In a ground-breaking decision, the Court of Appeal has answered that burning question in the negative.

Women are entitled to 52 weeks’ leave after giving birth, 39 of them paid. The first six of those weeks are paid at a higher rate than the succeeding 33. Shared parental leave is available for both parents where a new mother sacrifices part of her maternity leave and splits the remaining period with her partner. Shared parental leave is, however, always paid at the lower of the two rates available in respect of maternity leave.

Two fathers argued that those provisions, and the way in which they were applied to them, amounted to either direct or indirect sex discrimination. Their claims failed after progressing through the tribunal system, but both men appealed.

The first case concerned a father whose employer granted new mothers full pay for the first 14 weeks of their maternity leave, an arrangement that was substantially more generous than the statutory minimum. The employer’s policy in respect of shared parental leave, however, mirrored the statutory scheme, with the result that the father could only qualify for leave at the lower rate of pay. The father submitted that that outcome discriminated directly against him because of his sex.

The second case concerned a police officer who worked for a force which afforded new mothers 18 weeks of maternity leave on full pay. The force’s policy again mirrored the statutory scheme in respect of shared parental leave. That policy was said to cause a particular disadvantage to men and to amount to indirect discrimination.

In ruling on the first case, the Court noted that, in order to succeed in his claim, the father had to establish that he had been treated less favourably than a comparable female employee on the basis of his sex. However, he faced a major hurdle in that Section 13(6)(b) of the Equality Act 2010 required the Court to disregard any special treatment afforded to mothers in connection with pregnancy or childbirth when comparing the father’s treatment with that of a hypothetical female co-worker.

The Court found that the father’s circumstances were in any event materially different from those of a mother on maternity leave. Where one of the primary purposes of maternity leave is to assist mothers in recovering from the physical and psychological impact of childbirth, the father was wrong to argue that its only purpose, after the first two weeks of compulsory leave, is to help with childcare.

The proper comparator for the purposes of a direct discrimination claim was therefore not a woman on maternity leave but a woman on shared parental leave. There was, on that analysis, no difference between his treatment and that of such a co-worker.

Turning to the second case, the Court found that the officer’s claim was not properly categorised as one of indirect discrimination. Rather, his argument was that his terms of work had been modified by the sexual equality clause which is implied by the Act into all terms of work. That, he submitted, entitled him to take leave to care for his newborn baby at the same rate of pay as a mother taking maternity leave.

The Court, however, found that that argument was bound to fail because the Act provides an exception, in that the implied sex equality clause has no effect in relation to terms of work which afford special treatment to women in connection with pregnancy or childbirth. The Court noted that, in any event, a claim for indirect discrimination cannot be brought where the claim is, in reality, an equal terms claim, even if the latter claim only fails due to the application of the statutory exception.

In dismissing both men’s appeals, the Court concluded that the different rates of statutory pay afforded to new mothers and their partners following the birth of a child do not constitute unlawful discrimination, whether direct or indirect.

Companies Collapse and Employees Suffer – But the Law Does Provide Protection

When companies collapse without warning, shocked employees can be left high and dry. However, as a case concerning a troubled package holiday company showed, those who swiftly take legal advice are not without Government-backed protection.

holiday sunsetThe company had encountered severe financial difficulties, in part due to the impact of terrorist attacks on some of its most popular holiday destinations and the falling value of sterling against other currencies. Within minutes of the company entering administration, 94 of its 151 staff were informed of their instant redundancy.

After proceedings were launched on behalf of one of those who lost their jobs, an Employment Tribunal (ET) noted that, by virtue of Section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992, the company was, at least 30 days before the redundancies took effect, required to consult with appropriate workforce representatives with a view to avoiding or reducing the number of dismissals.

In clear breach of that provision, there had been no consultation whatsoever before the redundancies were announced out of the blue. The company did not recognise any trade union so there was no workforce representative body that could be consulted. The company’s financial position had not deteriorated so sharply as to render consultation impossible and the likelihood was that employees had simply been kept out of the loop as its fortunes spiralled downwards.

In the circumstances, the ET found that the employee was entitled to a protective award, comprising 90 days’ remuneration. That was the maximum award permitted by Section 189(3) of the Act, but the ET could detect no grounds for reducing it. In the event that the company was insolvent, the award would be paid by the Secretary of State for Business, Energy and Industrial Strategy, subject to the maximum liabilities specified under Section 184 of the Employment Rights Act 1996.

Disability Discrimination – Employers Don’t Have to Shut Their Eyes to Reality

Discriminating against sick employees is obviously unacceptable, but that does not mean that employers have to ignore health difficulties in deciding whether someone is fit enough to perform a particular role. The Court of Appeal succinctly made that point in the case of a chemical engineer whose medical problems resulted in him being overlooked for an overseas posting.

The man had double below-knee amputations and suffered from type 2 diabetes, hypertension, kidney disease, ischaemic heart disease and morbid obesity. At a client’s request, his employer initially selected him to work on a project in the Middle East. However, following a medical assessment, that decision was reversed on the basis that his deployment to a remote location would give rise to a high risk of medical complications. The employer’s director of operations acknowledged that both he and its client would be disappointed, but said that the duty of care owed to him as an individual came first.

His complaints of direct and indirect disability discrimination, and a failure to make reasonable adjustments in order to cater for his health problems, were rejected by an Employment Tribunal (ET) and that decision was subsequently confirmed by the Employment Appeal Tribunal.

In dismissing his challenge to that outcome, the Court noted that an employee’s health is not always entirely irrelevant to their ability to do a particular job. The reality was that a hypothetical comparator at similar medical risk would have been treated in exactly the same way even if they did not share the man’s particular disability.