Monthly Highlights – UK Employment Law – March 2023

In this month’s instalment, our team highlight key updates to UK Gender Pay Gap Reporting, provide an overview of the increased limits on tribunal awards and the new “Vento Bands”, both coming into effect on 6 April 2023. We also delve into some recent case law developments surrounding termination and without prejudice communications and consider how employers can best deal with incidents involving employees with disabilities.

1. Update to UK Government Guidelines on UK Gender Pay Gap Reporting:

   In late February 2023, the Government Equalities Office (“GE Office”)  released a detailed overview of UK employers' gender pay gap reporting obligations and best practices. The guidance was updated to make it clearer and simpler and to remove any unnecessary duplication. There have been no changes to factual content. As a refresher for employers:

   Who should report

   The gender pay gap reporting requirements apply to public authorities and private and voluntary sector UK employers with 250 or more employees.

   When to report

   • Most public authority employers must gather data on the snapshot date, 31 March, and report and publish gender pay gap information by 30 March of the following year.
   • Private and voluntary sector employers (and the remaining public authority employers) must gather data on the snapshot date, 5 April, and report and publish by 4 April of the following year.
   • The GE Office recommends reporting and publishing as close to the time of data collection as possible to address any pay gaps in the timeliest manner.

   What to report

   • Gender Pay Gap Figures
   • Written Statement (Optional for most public authority employers)
   • Supporting Narrative (Optional)
   • Action Plan (Optional)

   Where to report

   • Submit gender gap figures to the government gender pay gap service.
   • If applicable, submit a written statement to the government gender pay gap service.
   • Publish the report and written statement, if applicable, in a prominent place on the company’s public-accessible website for three years from the publication date.
   • If the employer has no website, then the report may be published on the company intranet or parent company’s website.^[1]

      

2. Increase of limits on tribunal awards:
   
   

   The Employment Rights (Increase of Limits) Order 2023 has been laid before Parliament and comes into force on 6 April 2023. 

   The Order includes the following new figures:

   • The statutory cap on a week’s pay for the purposes of calculating statutory redundancy pay and unfair dismissal basic award increases from £571 to £643 - with a limit of £17,130 for 30 weeks’ pay;
   • the maximum compensatory award for unfair dismissal increases from £93,878 to £105,707; and
   • the minimum basic award for certain unfair dismissals (including health and safety dismissals) increases from £6,959 to £7,836.

   Further information about the changes can be found here.



3. “Vento bands” increase announced in respect of claims presented on or after 6 April 2023:
   
   
   • a lower band of £1,100 to £11,200 (less serious cases);
   • a middle band of £11,200 to £33,700 (cases that do not merit an award in the upper band); and
   • an upper band of £33,700 to £56,200 (the most serious cases), with the most exceptional cases capable of exceeding £56,200.

      

4. Meaker v Cyxtera Technology UK Ltd [2023] EAT 17: the Employment Appeal Tribunal (the “EAT”) held that a letter that was marked ‘without prejudice’ still had the effect of dismissing an employee with immediate effect.

   The facts:

   • Mr Meaker (the “Employee”) was employed by Cyxtera Technology UK Ltd (the “Employer”) in a manual role that involved heavy lifting and lone working.
   • The parties held conversations in which the Employer indicated that it was considering ending the Employee’s contract as the Employee was suffering from back injuries and it was considered that he would no longer be able to do the heavy-duty work that the role required.
   • On 5 February 2020, the Employer sent a letter to the Employee marked ‘without prejudice’; the letter was received by the Employee on 7 February 2020. The letter offered an ex gratia payment in addition to the Employee’s other entitlements if he signed the settlement agreement.
   • On 7 February the Employee wrote to the Employer rejecting the settlement offer. On 14 February payment of both the PILON and pay for untaken holiday was received in the Employee’s bank account. The Employee then brought an unfair dismissal claim.

   Issue:

   The central issue was whether the letter was an effective letter of dismissal or whether it was a continuation of the negotiations leaving the Employee free to look for better terms.  

   The Employment Tribunal (the “ET”) and EAT’s findings:

   The ET held that the letter was indeed an effective termination letter. They found that, notwithstanding the ‘without prejudice’ heading, it was sufficiently clear that the intention was to terminate the Employee’s employment unilaterally. This finding was upheld by the EAT.

   Key takeaways:

   Although in this case it was found that the language in the letter terminating the Employee’s contract was sufficiently clear, the ‘without prejudice’ heading and settlement terms in the letter created some confusion and gave rise to the claim.

   Employers should take care to keep separate and distinct any without prejudice settlement negotiations from dismissal or termination communications, which can be dealt with in open communications.




5. McQueen v General Optical Council [2023] EAT 36: The EAT had to determine whether an employee’s disabilities had an effect on his conduct following incidents of inappropriate behaviour.

   The facts:

   • Mr Philip McQueen (the “Employee”) was employed as a registration officer by the General Optic Council (the “Employer”) and it was accepted that the Employee suffered with dyslexia, symptoms of Asperger’s syndrome, neurodiversity and left sided hearing loss, which had ostensibly caused some difficulties in his workplace interactions.
   • On two separate occasions, the Employee had meltdowns at work. After the Employee experienced his first meltdown at work, the Employer referred the Employee to occupational health, a psychologist and a psychiatrist and this resulted in suggested changes to his working methods to accommodate him.
   • It was decided that the Employee should be emailed with instructions in future if he was being asked to change how a task needed to be done and he was given a ‘recording pen’ so that he could revisit conversations after they had happened.
   • Following a number of further incidents after the recommendations had been put in place, the Employee was issued a written warning and was disciplined further for performance issues.
   • The Employee brought a claim for detriment arising in consequence of his disability as a result of the disciplinary action taken against him and claimed that his behaviour was a consequence of his various disabilities. On the facts, the EAT found that the Employee’s behaviour was found not to be a consequence arising from his disabilities. Furthermore, even if the Employer's actions had arisen as a consequence of the Employee's disabilities, the action taken by the Employer was objectively justified in the circumstances; the reasonable adjustments madeprovided a solid defence for the Employer; it was found that the Employer had taken reasonable steps to accommodate the Employee’s disabilities and made a genuine attempt to alleviate tensions between the Employee and other staff members.

   EAT finding:

   The EAT upheld a finding in the ET, that the Employee’s incidents of inappropriate behaviour were not linked to or as a result of his disabilities but that ‘he behaved as he did because he had a short temper, resented being told what to do and had lost his temper’. They also agreed that in any event, the Employer's actions would have been objectively justified.

   Key takeaway:

   In this case, incidents kept occurring and eventually led to a protracted grievance process and subsequent (unsuccessful) disability discrimination claims, however, this highlights that employers should, as a matter of best practice, obtain medical advice before taking any disciplinary action that could be attributed to any disability and consider reasonable adjustments – if such steps are taken, it may assist an employer in justifying its actions and give them stronger grounds to defend any claim in accommodating employees with disabilities to find reasonable adjustments.  

For further advice on any of the issues raised above, please contact a member of the London Employment team.

^[1] For more detailed information on gender pay gap calculations, please visit: https://www.gov.uk/government/publications/gender-pay-gap-reporting-guidance-for-employers/making-your-calculations.