Frontline UK Employment Law Update Edition 23 2023 - Case Updates

1. Charalambous v National Bank of Greece [2023] EAT 75
2. Garcha-Singh v British Airways plc [2023] EAT 97
3. EasyJet plc v EasyJet European Works Council [2023] EWCA Civ 756
4. United Taxis Ltd v Comolly [2023] EAT 93

Unfair dismissal

Charalambous v National Bank of Greece [2023] EAT 75 

In this case, the Employment Appeal Tribunal (“EAT”) confirmed that the Claimant's dismissal for misconduct was fair, despite the manager who took the decision to dismiss not having conducted the disciplinary hearings himself.

The Claimant was suspended after sending an email with an attachment containing a highly confidential breakdown of the Respondent’s private clients to recipients who were not employed at the company, including her trade union representative, her solicitor and her brother who was employed at a competitor. The unauthorised disclosure of personal customer data was so significant it had to be reported to the Financial Conduct Authority. The Claimant also failed to disclose the full list of recipients of the data to the Respondent until late in the investigation.

The initial investigation was carried out by her line manager, Mr Vathis. The Respondent’s disciplinary procedure required that decisions to dismiss be taken by the Country Manager, who in this case was also Mr Vathis. However, the subsequent disciplinary meetings were chaired by another manager, Mr Hood. Mr Hood sent his notes and gave advice to Mr Vathis, who also sought input from the Respondent’s Data Compliance Officer and Internal Audit. On the basis of the material in front of him, Mr Vathis took the decision to summarily dismiss the Claimant for gross misconduct.

The dismissal decision was upheld at an internal appeal hearing, attended by the Respondent’s HR Director (who was more senior that Mr Vathis) and the Claimant, who was accompanied and had the chance to make representations. The Claimant then brought a claim for unfair dismissal.

The Employment Tribunal (“ET”) found the dismissal was fair, even though the manager who made the decision to dismiss the Claimant had not attended the original disciplinary hearing. The ET noted that the process was ‘less than ideal’ given the ambiguity in the roles undertaken by Mr Hood and Mr Vathis. However, the Claimant had attended two separate meetings with Mr Hood at which she had the opportunity to set out her case, comment on the evidence, and put forward mitigation arguments. While Mr Vathis had not attended those meetings, he had the benefit of the notes when he took the decision to dismiss.

The Claimant appealed arguing that a dismissal must be unfair if the manager making the decision to dismiss does not hear directly from the employee, citing Budgen & Co v Thomas [1976] ICR 344. In reaching its decision, the EAT confirmed that although the facts of Budgen were such that the refusal to speak to the employee face-to-face rendered the dismissal unfair, there is no universal duty to hold such a meeting. The case instead establishes that the employee has to have the opportunity to “say whatever he or she wishes to say” to the person dismissing. This does not preclude (in principle) such communication being made “in writing or by way of a report to the dismissing officer".

The EAT concluded the decision to dismiss the Claimant was within the range of reasonable responses that were open to the Respondent. The EAT noted that it is best practice for the employee to meet with the decision maker, but on this occasion, it recognised that the Claimant did have two meetings with the investigating manager (Mr Hood) accompanied by her trade union representative, and had the opportunity to fully discuss the allegations made against her. The EAT also noted that the Claimant had appealed the decision and had attended this appeal hearing.

The facts of this case were unusual, but the decision is a reminder that the fairness of a dismissal demands that the employee has to have the chance to state their case during the disciplinary process. However, this decision is not authority that the manager who decides upon the dismissal does not need to meet the employee during the disciplinary process. In general it is advisable for the decision-maker to conduct the relevant disciplinary hearing, so that there can be no doubt that they have heard the employee’s representations and taken them into account in any subsequent dismissal decision.

Garcha-Singh v British Airways plc [2023] EAT 97

In this case, the Employment Appeal Tribunal (“EAT”) considered whether it was unfair for an employer to give notice of dismissal to an employee but then postpone the effective termination date on several occasions.

The Claimant was employed by the Respondent as cabin crew and began a period of absence in August 2016. The Respondent’s absence management policy (“AMP”) was incorporated into the Claimant’s contract of employment and set out the procedure to be followed in the event of an employee’s medical incapacity. It provided for a right of appeal against a decision to terminate an employee’s employment but was silent on whether termination dates could be postponed.

On 31 August 2017, the Respondent gave the Claimant notice of the termination of his employment, to take effect on 5 January 2018. However, he was told that the date was not “set in stone” and he would be supported in the interim. The termination date was then postponed on seven occasions, eventually taking effect on 21 December 2018. The Claimant appealed against the decision to terminate his employment, but this appeal was rejected on 24 October 2018. The appeal decision noted that the extensions to the termination date had caused the Claimant additional stress but found that they had been made in an attempt to accommodate management of his ongoing issues and medical conditions and support his return to work. The Claimant issued various proceedings in the Employment Tribunal (“ET”) including for unfair dismissal.

The ET found that the dismissal was fair, noting that while the approach followed by the Respondent in setting a termination date and then postponing that date to allow the Claimant a further opportunity to return to work had been unusual, it could not be said this approach was one that no reasonable employer would adopt. Further, while the AMP was contractual, the fact it did not expressly provide for the extension of a termination decision did not mean that doing so was a breach of contract. The Claimant subsequently appealed to the EAT.

The EAT rejected the Claimant’s argument that the process adopted by the Respondent involved a breach of his contract. The EAT looked at the wording of the AMP in detail, noting that it envisaged a decision (in the singular) to terminate an employee’s employment and identified the relevant steps to be taken before making that decision. However, it did not attempt to cover every eventuality, identify every step a reasonable manager might take, or deal with how a manager should react to circumstances arising after a termination decision had been made. It therefore did not prevent a manager from subsequently deciding to postpone the date on which a termination took effect. Importantly, even if this had amounted to a breach of contract, it would not necessarily follow that the dismissal was unfair. The ET then had to ask whether the procedure adopted was within the range of reasonable responses. It was clear from the ET’s findings that each of the extensions were in fact intended to allow the Claimant a further opportunity to return to work, and were therefore to his advantage.

Further, the EAT rejected the contention that failure to afford the Claimant an appeal against the 21 December 2018 dismissal was contrary to the AMP and a breach of contract. Under the AMP, the Claimant was entitled to an appeal from the “decision to terminate employment” i.e. the decision that was taken on 31 August 2017, in respect of which the Claimant had already been given a full and fair appeal. The decision taken on 21 December 2018 was simply a decision not to further postpone the Claimant’s termination date and did not fall within the meaning of a “decision to terminate employment” under the AMP.

This is a useful reminder that if policies are incorporated into contracts, this can give employees the ability to claim breach of contract where they are not followed. In general it is sensible for employers to expressly state in contracts of employment and the relevant policies themselves that they are non-contractual and capable of amendment at any time. While the successive postponements of the termination date in this case were unusual and will not be the norm, this case suggests it will be difficult for an employee to argue that postponement to a termination date renders the dismissal unfair.

Collective matters/EU law

EasyJet plc v EasyJet European Works Council [2023] EWCA Civ 756 

This Court of Appeal judgement to clarifies the jurisdiction of the Central Arbitration Committee (“CAC”) and the role of European Works Councils (“EWC”) following the UK’s exit from the European Union (“EU”).

As brief background, European legislation requires large employers, namely those with at least 1,000 employees in the European Economic Area (“EEA”) and at least 150 employees in each of at least two EEA countries, to set up an EWC if they receive a valid request to set one up. The CAC is an independent tribunal in the UK with statutory powers relating to trade unions and employers.

EasyJet plc (“EasyJet”) announced plans in May 2020 to reduce its workforce by up to 30%, impacting at least two EEA countries in which it operated. EasyJet initially worked with its EWC, which was already in place and had been established under the UK’s Transnational Information and Consultation of Employees Regulations 1999 (“TICER”). However, by late 2020, the EWC felt that EasyJet had stopped properly engaging and submitted a complaint to the CAC in March 2021 under TICER about the operation of the information and consultation process.

EasyJet disputed that the CAC had jurisdiction to hear that complaint based on the effect of the amendments to TICER made by the Employment Rights (Amendment) (EU Exit) Regulations 2019 (“2019 Regulations”). They relied on Reg 4 and 5 of TICER as amended by the 2019 Regulations. Reg 4(1) applies the relevant provisions of TICER “only where, in accordance with regulation 5, the central management is situated in the United Kingdom”. Reg 5(1)(b) and (c) of TICER set out situations in which a central management outside the UK is “deemed” to be situated in the UK for the purposes of TICER. However, Reg 5(1)(a), which covered the situation where the central management is in fact in the UK, was removed by the 2019 Regulations. EasyJet argued that this meant that that TICER no longer applied to employers whose central management was situated in the UK, with the result that the EasyJet EWC had ceased to exist from 31 December 2020 (the end of the Brexit transition period). The CAC rejected this argument, as did the Employment Tribunal and the Employment Appeal Tribunal (“EAT”). Eventually, the Court of Appeal was asked to consider the issues raised.

The EAT had held that the proper interpretation of Reg 4(1) meant that TICER not only applied in cases where central management is deemed to be in the UK, but also where central management is in fact situated in the UK, and thereby dismissed EasyJet’s appeal. While the Court of Appeal agreed with this conclusion, it was not persuaded that it was possible to interpret Reg 4(1) in that way simply by reference to the words of the provision. As noted by the CAC, the provision was poorly drafted and, with reference to the words only, was capable of being read in the way argued by EasyJet.

However, the Court of Appeal highlighted that it was clear from other provisions of TICER that the government’s intention was not for the EWC system to cease to exist entirely after Brexit. For example, Reg 18 (as amended) assumes that an existing EWC will continue to operate, and Reg 23(6) would be entirely redundant if existing EWCs were to cease to exist; given the detailed amendment of other parts of TICER, it was reasonable to assume its retention was deliberate. In addition, the Explanatory Memorandum to the 2019 Regulations was entirely consistent with the proposition that existing EWCs continue to be within the ambit of TICER.

In light of the above, the Court of Appeal held that an interpretation of Reg 4(1) which provides for the continued existence of EWCs was not inconsistent with the words of the provision. It therefore rejected EasyJet’s appeal and confirmed that the CAC had jurisdiction to deal with the March 2021 complaint and (in absence of any legislative change) any subsequent complaints by the EasyJet EWC.

The Court of Appeal also addressed another issue raised by EasyJet, that it now operated two EWCs – one in the UK and one in Germany. EasyJet argued that, if the EAT’s decision was upheld, it will be obliged to operate two EWCs which would be burdensome on the company and its employees. Although the Court accepted that practical difficulties may arise from the existence of two EWCs operated by the same undertaking, it did not consider that the position would be wholly unworkable.

This decision provides clarification for larger employers with existing EWCs set up under TICER on the continuing need to engage with existing EWCs and the jurisdiction of the CAC to resolve disputes under TICER. It remains to be seen if the government will seek to make further changes regarding EWCs, to further clarify the position of UK EWCs post-Brexit.

Employment status

United Taxis Ltd v Comolly [2023] EAT 93 

In this case, the Employment Appeal Tribunal (“EAT”) confirmed that it is not possible for an individual to simultaneously be an employee of one employer and a worker of another in respect of the same work.

The Claimant was a registered driver with United Taxis Ltd (“United Taxis”) a limited company and co-operative which was licensed to operate private hire vehicles. The vehicles were provided by drivers who were shareholders in United Taxis. The Claimant, who was not a shareholder himself, provided driving services through a shareholder’s taxi (the “Shareholder”) which was affiliated with United Taxis.

When his working relationship ended, the Claimant brought claims in the Employment Tribunal (“ET”) against United Taxis and the Shareholder (together, the “Respondents”) for a number of claims including unfair dismissal, age discrimination, wrongful dismissal and unpaid wages and holiday pay. The primary issue to be determined by the ET was whether the Claimant was an employee or worker of United Taxis, of the Shareholder, of neither, or both?

The ET found that the Claimant was both a worker of United Taxis and an employee of the Shareholder for the purposes of s.230 Employment Rights Act 1996 and s.83 Equality Act 2010, referencing the recent Uber decision in the Supreme Court. Both Respondents appealed to the EAT.

The EAT held that the ET had erred in its finding that the Claimant was a worker of United Taxis. It was not necessary for the ET to imply a contract of employment between the Claimant and United Taxis to give the arrangements business efficacy. The working relationship was instead more akin to a collateral contract, under which the Claimant agreed to abide by United Taxis’ rules and byelaws as a condition of working as a sub-contractor for the Shareholder. In essence, United Taxis contracted out the task of transporting its passengers to the Shareholder, who in turn sub-contracted the task to the Claimant. The Claimant was therefore not a worker of United Taxis.

The EAT then addressed the challenges and potential issues surrounding the concept of dual employment, that is, the ET’s finding that the Claimant could simultaneously be an employee and worker of two different employers in respect of the same work. The EAT commented that dual employment was a “problematic” concept, and that it could lead to inherent difficulties in terms of obligations and responsibilities. While the EAT in Cairns v Visteon UK Limited [2007] ICR 616 observed these problems may not be insuperable, the EAT in this case could not see how such problems could be overcome. Further, the EAT had not been referred to any authority that dual employment was legally possible. There was no basis on which the ET could have found that the Claimant was, in respect of the same work at the same time, a worker (whether or not also an employee) of both United Taxis and the Shareholder.

The EAT also disagreed with the ET’s finding that the Claimant was an employee of the Shareholder. The Shareholder did not exercise a sufficient degree of control over the Claimant for the relationship between them to qualify as employment. The availability of the taxi was down to the Shareholder, however, he had no particular control over what the Claimant did during the time the taxi was available; the Claimant was free to do as much or as little taxi work as he wanted. The Shareholder also had no control over the rates charged to passengers, dress code or signage. On the above basis, the EAT held that the Claimant was neither a worker nor an employee of United Taxis and that he was a worker, rather than an employee, of the Shareholder.

This decision reinforces the importance of correctly establishing employment status, as this affects the employment rights that an individual is entitled to benefit from. In practice it can be difficult to establish where the line falls between worker and employment status; this case emphasises that distinguishing between the two requires a thorough examination of the individual facts and circumstances, in particular the level of control exercised by the “employer” and the terms of the contract between the parties.