HR briefing - July 2021

30 July 2021

Welcome to this month's briefing for HR teams and in-house employment counsel – bringing you this month’s employment law highlights in an easy-to-read package.

In the courts


Businesses make decisions that affect their employees every day: should Kofi be awarded a bonus; does Jack’s appraisal warrant a performance management process; should Jemima’s grievance be upheld; is Yumiko a good leaver or a bad leaver, and so on. Each of these types of decision engages a number of legal duties, but the precise scope of the decision-maker’s obligation varies depending on which type of decision is being taken. The landscape was fundamentally changed in 2015, when the Supreme Court decided that most contractual discretions needed to be exercised rationally, taking into account only relevant factors, and following a proper process. Since that decision, the principle has been applied in a number of different factual scenarios, most recently with regard to the allocation of profits to an LLP member. The LLP’s governing document allowed the senior partner to make recommendations as to profit share – it was this process which the court determined had to be done in a rational manner. Read our full note on the case.

Discrimination: damages

Readers will be aware that one of the fundamental differences between unfair dismissal claims and discrimination claims is the level of potential damages that can be awarded: capped (in most cases) for unfair dismissal, but uncapped for discrimination.  The amount awarded is typically calculated by estimating how long it will take for the claimant to find alternative work at a similar salary, taking into account what the courts term "the viccisitudes of life" – the chance of being dismissed absent the discrimination, the risk of illness or death etc. In most cases, the Tribunals will expect claimants to find other work relatively swiftly, perhaps after 24 to 36 months at most. Occasionally, however, awards for career-long loss are made – where the claimant can show they will never be able to find a similar position. In a recent case, the EAT has upheld just such an award, finding that a prison officer who suffered from severe mental health problems after years of abuse from colleagues who believed he was gay was unlikely to be able to return to meaningful work. 

Discrimination: burden of proof

When the Equality Act 2010 was introduced, consolidating the various pre-existing pieces of anti-discrimination legislation, a number of wording changes were also made. One has proved particularly problematic, only being resolved very recently by the Supreme Court.  It involved how Tribunals assess evidence of discrimination, and whether the change in wording brought about a change in the law.  The Supreme Court has now confirmed that no change has in fact been made. The position remains (i) that Tribunals must examine all the evidence; (ii) if, from that evidence, the Tribunal finds facts that could show unlawful discrimination has taken place, ignoring for the time being any explanation from the employer, then; (iii) the burden shifts to the employer to show that discrimination played no part in the relevant act or decision; (iv) if it cannot do so, the claim must succeed.

In the news

Sexual harassment

The Government has been under pressure for some time, from the House of Commons Women and Equalities Select Committee, amongst others, to take legislative action in response to the #metoo movement. The Government’s three main proposals have now been released.

  • To place a new duty on employers to prevent sexual harassment: the duty would be subject to a defence if the employer can show it took all reasonable steps to prevent the harassment in question. The duty would be supplemented by guidance, which is likely to be similar to the Equality and Human Rights Commission’s technical guidance.
  • To reintroduce an explicit prohibition on harassment by third parties: the provisions in the Equality Act 2010 that made employers liable in some circumstances for harassment of their employees by third parties were repealed in 2013. It remains to be seen whether the Government simply re-enacts those provisions, or finds a different way to protect employees.
  • To reconsider whether the time limit for bringing claims should be extended from three to six months: the response states that any such change would extend the time limit for all claims under the Equality Act 2010, not simply those for sexual harassment. It could therefore create a potentially very significant increase in the workload of the Employment Tribunals, which is why the Government has committed only to keeping this under review, rather than definitively making the change now.

Read the Government's full report on the case.

New Graduate Visa route provides more flexibility to employers

On 1 July 2021, a new visa route opened to international students who have graduated from a UK university.

The Graduate Visa is granted for two years (three years for PhD graduates) and allows the visa holder to live and work in the UK without restriction. It is an unsponsored route and the migrant does not need to have a job offer.

To qualify, applicants must be in the UK with a valid Student (or older Tier 4 (General)) visa and successfully complete a degree level course.

The Graduate Visa cannot be extended, so workers will eventually need to switch into another immigration category (most likely the sponsored Skilled Worker visa) before the end of the two or three years.

The Graduate Visa does not count towards the residence period of Indefinite Leave to Remain, so employers may want to consider switch workers to Skilled Worker sooner to start the clock ticking towards settlement.

This is good news for employers as it provides an alternative, flexible work permit without the need to sponsor. This also means that it is much cheaper than the Skilled Worker visa.

Covid: Step 4

If you haven’t already seen our note on the employment law implications of the move to Step 4 for England, read our full note.