Employment Law Round-Up – July 2024

Click the links below to read more about the changes in employment law in July: 

• Retracting job offer from Christian applicant with negative views on homosexuality was direct discrimination
• Guidance on the new duty to prevent sexual harassment at work
• AI skills gap widens as workplace usage rises
• Teacher’s ECHR rights under Articles 9 and 10 were lawfully qualified by professional obligations
• Co-op pioneers socioeconomic pay gap reporting, reveals 5.2% disparity
• EAT reinforces National Minimum Wage compliance: holiday savings scheme ruled non-compliant

 

Retracting job offer from Christian applicant with negative views on homosexuality was direct discrimination

A mental health charity, Touchstone Leeds (Touchstone), withdrew a job offer from Mr. Ngole, a Christian social worker, after discovering his negative Facebook posts about homosexuality and same-sex marriage. This was in the context that Touchstone undertakes a significant amount of work with people in the LGBTQI+ community.

Mr. Ngole filed claims for harassment and direct and indirect discrimination based on religion and belief. The tribunal considered Mr. Ngole’s rights under the Equality Act 2010, alongside his rights under the European Convention on Human Rights (namely, the right to freedom of thought, conscience and religion and, secondly, the right of freedom of expression).

The tribunal concluded that the initial withdrawal of the job offer was direct discrimination, as it was not proportionate and limited Mr. Ngole’s freedom of expression excessively.

However, the tribunal held that the rest of Mr. Ngole’s claims should fail. It applied a four-stage proportionality test from a previous case (Bank Mellat v HM Treasury [2013] UKSC 38) to reach its decision that Touchstone’s subsequent actions (conducting a second interview and not reinstating the offer) were proportionate, given their objective of protecting staff and vulnerable service users.

The case highlights the challenges of balancing competing rights in the workplace, emphasising the need for proportionate actions when limiting freedom of expression or religious beliefs.

Guidance on the new duty to prevent sexual harassment at work

The Equality and Human Rights Commission (EHRC) has launched a consultation on draft guidance for the preventative duty regarding sexual harassment in the workplace.

The duty is “anticipatory,” requiring employers to take proactive steps to prevent sexual harassment before it occurs. Employers should anticipate potential scenarios of sexual harassment and take reasonable steps to prevent them. In addition to the prevention of worker on worker sexual harassment, the preventative duty includes a duty to prevent sexual harassment by third parties. Although part of the proposed legislation which would have made employers liable for the harassment of employees by third parties in the course of employment was removed, it was noted that a Labour government could revisit these issues in future.

The guidance outlines reasonable steps employers can take and the consequences of non-compliance.

Consequences include EHRC enforcement action and the possibility of tribunals increasing compensation by up to 25% in successful sexual harassment claims if the employer failed to comply with the preventative duty. However, an individual cannot bring a claim for a breach of the preventative duty alone.

The draft guidance will be incorporated into the existing technical guidance on sexual harassment, with some restructuring expected. This guidance aims to strengthen employers’ responsibilities in preventing sexual harassment and provides clearer enforcement mechanisms, including for third-party harassment cases.

AI skills gap widens as workplace usage rises

A recent global survey by consultancy firm BCG has revealed insights into the usage of AI in the workplace.

The survey exposes a stark AI skills gap, with senior employees far ahead in AI training: 50% of business leaders have receiving training compared to a mere 28% of frontline employees.

When asked about the top challenge they currently face, business leaders said it was the lack of AI and generative AI (GenAI) literacy among non-tech workers. Regarding the top challenge they think they would face in the next five years, they cited the costs of implementing and running GenAI.

On a positive note, employee confidence in GenAI has surged, jumping from 26% to 42% since 2023. Regular GenAI use is on the rise across all levels, bringing tangible benefits. An impressive 85% of users report time savings, with 58% gaining at least five hours weekly. Moreover, 81% note improved work quality.

However, the AI revolution isn’t without its anxieties. Fear of job loss has climbed to 42%, up 6% from 2023. A staggering 79% believe AI will profoundly transform their jobs, and 42% worry their roles might vanish within a decade. Frequent GenAI users are more likely to fear its impact, suggesting that familiarity breeds both appreciation and apprehension.

Teacher’s ECHR rights under Articles 9 and 10 were lawfully qualified by professional obligations

A recent High Court decision balanced a teacher’s rights to freedom of expression and religious belief against their professional obligations to treat pupils with dignity and respect.

The case involved a teacher (S), an evangelical Christian, who deliberately misgendered a transgender pupil and expressed views on homosexuality that caused distress to students. A Teaching Regulation Agency panel found S guilty of unacceptable professional conduct, leading to a prohibition order barring him from teaching work.

The High Court rejected S’s appeal, finding that the panel correctly focused on whether S had failed to treat pupils with dignity and respect, and safeguard their wellbeing, in line with the Teachers’ Standards.

While acknowledging S’s rights under Articles 9 and 10 of the European Convention on Human Rights (ECHR), the court held that these rights were lawfully qualified by professional obligations. The court emphasised that treating pupils with dignity, respect, and celebrating their personal autonomy is a professional obligation for teachers, regardless of personal beliefs.

The decision highlights that actions not necessarily unlawful (such as misgendering) can still constitute professional misconduct in certain contexts. This case can be compared with the employment tribunal decision in Forstater v CGD Europe, where an employee’s expression of gender-critical beliefs was protected.

Co-op pioneers socioeconomic pay gap reporting, reveals 5.2% disparity

Co-op has become the first UK retailer to publish a socioeconomic pay gap report, shedding light on pay disparities based on employees’ socioeconomic backgrounds.

The report, published on 10 July 2024, analysed voluntary data from 48% of Co-op’s 57,000 UK employees, collected between April 2023 and April 2024. A 5.2% pay gap was identified between employees from lower and higher socioeconomic backgrounds.

Employees from lower socioeconomic backgrounds were found less likely to progress into senior positions, with women from lower socioeconomic backgrounds experiencing the most significant pay gap.

Co-op has called on the Government to add socioeconomic background as the tenth protected characteristic under the Equality Act 2010. This initiative by Co-op represents a significant step in addressing workplace inequality beyond the current legally mandated reporting requirements. It highlights the potential impact of socioeconomic background on career progression and pay equity.

Employers should take note of this development, as it may signal a growing trend towards socio-economic pay gap reporting. While not currently a legal requirement, companies may wish to consider conducting similar analyses to identify and address potential socioeconomic disparities within their own workforce.

EAT reinforces National Minimum Wage compliance: holiday savings scheme ruled non-compliant

The Employment Appeal Tribunal (EAT) has recently overturned a tribunal decision, reinstating HMRC’s notice of underpayment to an employer operating a holiday savings scheme that inadvertently breached National Minimum Wage (NMW) regulations.

Lees of Scotland Ltd operated a voluntary employee holiday savings scheme, which allowed staff to voluntarily pay into a ‘holiday fund’, to allow them to save up to go on holiday. This resulted in their wages falling below the NMW, which the EAT has ruled violated minimum wage rules.

The EAT said that the tribunal was mistaken in focusing on the actions of Lees being in good faith; instead, the key consideration was whether Lees could use the deducted funds without legal limitation, whilst it was kept in the fund. Indeed, Lees held the contributions in its main account where they could access the funds and benefit from the interest and cash flow.

This ruling underscores the strict interpretation of NMW regulations, even in cases where employers act in good faith. Employers should review any wage deduction schemes, ensuring they do not inadvertently breach NMW rules. Particular attention should be paid to how deducted funds are held and managed. The case highlights the potential benefits of using third-party accounts for employee savings schemes to maintain NMW compliance.