Monthly Highlights - UK Employment Law - September 2022

September.26.2022

In a new series of monthly updates, members of our London Employment team bring you the latest decisions and developments in UK employment law. In this month's update, we outline the new guidance issued by Acas regarding employee suspension, highlight learnings from the Data Protection Commissioner v Doolin decision, discuss takeaways from the Bailey v Stonewall gender discrimination case and set out HMRC's latest published concerns in relation to the use of umbrella companies. 

  1. The Advisory, Conciliation and Arbitration Service (Acas) has issued new guidance regarding suspending employees

    • Acas has provided updated guidance for: (i) deciding whether to suspend someone, (ii) the process for suspending someone, (iii) supporting an employee’s mental health during suspension and (iv) pay and holidays during suspension.  The guidance covers the below points but should be referred to directly for further detail:

      1. Deciding whether to suspend someone: Acas suggest employers should carefully consider if suspension is reasonable in the surrounding circumstances.  If it’s not reasonable, there’s a risk the employer could be in breach of the employment contract.  Therefore, suspension should only be utilised where it’s necessary to protect an investigation, the business or staff.  Consequently, it may be necessary for an employer to deploy alternatives to suspension, such as limiting an employee’s access to certain customers or IT systems or requesting that they work from home during an investigation.
      2. The process for suspending someone: if suspension is necessary, the employer should inform the employee that the suspension does not mean they have done something wrong and make the suspension as brief as possible.  The employer should also ensure that they provide as much detail as possible about the suspension without scuppering the chance of a fair investigation.  It is also important that, where possible, the suspension is kept confidential and the employer continues to support the suspended employee. 
      3. Supporting an employee’s mental health during suspension: an employer has a ‘duty of care’ to protect an employee during suspension.  The employer should therefore prevent mental health issues arising or getting worse by keeping communication channels open throughout the period of suspension and limiting the suspension to the time necessary to carry out the investigation.
      4. Pay and holidays during suspension: during suspension, an employee should continue to receive their usual pay and any benefits under the contract such as entitlements to a bonus, gym membership and holidays.  If the employee wants to limit such pay or benefits they should seek legal advice as this can result in legal action even where the employment contract entitles the employer to limit the employee’s pay and benefits during periods of suspension.

    • Whilst Acas guidance is not legally binding, it is considered best practice and employers should therefore carefully review this updated guidance if and when considering suspending an employee or updating any policy dealing with suspension.

  2. The Data Protection Commissioner v Doolin [2022] IECA 117: employers are reminded of the importance of maintaining their data protection policies

    • This case concerns a business that used CCTV security footage to substantiate allegations that an employee had (i) graffitied the business’ property and (ii) taken ‘unauthorised breaks’.  The purpose of the CCTV footage was expressly for “the purpose of health and safety and crime prevention”.  Consequently, the employee argued under the Data Protection Act 1998, the footage was used for monitoring employees and disciplinary processes and this was contrary to the business’ processing policy.
    • After numerous appeals, the Court of Appeal determined that:

      • Processing: the employee’s personal data was processed when it was viewed by the business and when the business recorded the ‘unauthorised breaks’ for the purpose of the disciplinary investigation.
      • Purpose: the business’ investigation into the unauthorised breaks was not for the purpose of security, but “manifestly for a different purpose”.
      • Compatibility: the employee had not been notified of the purpose of processing their personal data and therefore the personal data could not be treated as being processed fairly. 
    • Although this case pertains to the DPA 1998, it emphasises the importance of maintaining an up to date processing policy; it also gives an indication of how the courts will approach the UK General Data Protection Regulations / Data Protection Act 2018.
    • Employers, in their capacity of data controllers, should ensure that data subjects captured by CCTV are made aware of all purposes for which such footage may be used.  Therefore, all data processing policies (and even signage accompanying CCTV) should reflect all the potential purposes of processing personal data e.g., disciplinary proceedings, crime prevention and health and safety.
  3. Bailey v Stonewall and others ET/2202172/2020: it was held that Garden Court Chambers discriminated against a gender critical barrister

    • An employment tribunal has found that a barrister was the victim of direct discrimination and victimisation based on her gender critical views.  The tribunal held that the Equality Act 2010 protected the barrister’s right to believe that women are defined by their biological sex as opposed to their gender identity.
    • The tribunal therefore awarded £22,000 in damages for injury to feelings and £2,000 in aggravated damages.
    • This case serves as a reminder that employers may incur liability for penalising their employees for seemingly controversial views and a reminder that even where there are conflicting transgender rights and rights relating to religion or belief, there is a fine balancing act and obligations owed to both parties.
  4. Use of umbrella companies

    • On 25 August 2022, HMRC published Spotlight 60 which sets out some of HMRC’s concerns in relation to umbrella companies using disguised remuneration schemes and being vehicles for tax avoidance.  This is not the first time that HMRC has published concerns in relation to the use of umbrella companies.
    • Whilst this guidance is aimed at individuals who are employed by umbrella companies, employers who make use of umbrella companies in their supply chain should be aware that umbrella companies continue to be an area of interest for HMRC and may wish to review this guidance in more detail along with their arrangement and need to use umbrella companies.