Quarterly employment case law update – Lexology

In this article we take a look back at some of the key cases from the past three months and the lessons which we can learn from them.


There have been a number of interesting discrimination cases this quarter.

In Williams V Trustees of Swansea University Pension and Assurance Scheme, Mr Williams suffered from various conditions, including obsessive compulsive disorder, Tourette’s and depression. Having worked full-time for ten years, Mr Williams agreed with his employer to decrease his working hours to part-time due to these conditions. He was subsequently granted ill-health early retirement which included immediate payment of his accrued pension and an enhanced pension calculated on his salary received at the time of retirement. Mr Williams argued he had been unfavourably treated contrary to Section 15 of the Equality Act 2010 as he had received the enhanced pension based on his part-time salary rather than full-time salary. He contended that he was at a “substantial financial disadvantage” by reducing his work hours, whereas someone who had to retire suddenly would have had a pension calculated on their full-time salary. The Supreme Court unanimously dismissed Mr Williams’s appeal. Had he been able to work full time, this would have meant that he was not entitled to his ill-health early retirement and therefore he had not received “unfavourable treatment” contrary to Section 15. This will be a welcome decision for employers offering early retirement packages.

The case of Wood V Durham County Council provides an interesting example of the distinction between a health condition covered under the Equality Act 2010 and those which are specifically excluded. Mr Wood was caught shoplifting outside of work and was issued with a penalty notice for disorder (PND). Sometime after the incident, Mr Wood’s police vetting clearance was declined and when asked by the council, Mr Wood failed to disclose the PND. The council was informed of Mr Wood’s conviction by the police and suspended Mr Wood while conducting a disciplinary hearing. Mr Wood was subsequently dismissed on the grounds of his criminal conduct outside of work, his clearance being withdrawn and damage caused to the council’s reputation. Mr Wood brought a claim for disability discrimination arguing that his post-traumatic stress disorder (PTSD) also led to amnesia, causing him to forget to pay for the items. The EAT upheld the ET’s decision, ruling that although Mr Wood’s PTSD was a recognised disability, his dismissal was due to him receiving a PND as a result of his ‘tendency to steal’ and this condition was expressly excluded under the Equality Act 2010.

In Awan V ICTS, Mr Awan was an employee of American Airlines (AA) and while employed was entitled to a long-term disability benefit plan. Mr Awan suffered from depression and went on long-term sick leave for approximately two years. During this time, AA outsourced Mr Awan’s role to the respondent and Mr Awan transferred to the respondent. The respondent dismissed him based on ill-health capability. Mr Awan brought a claim on the grounds that his dismissal was unfair and discriminatory, as it arose from his disability and occurred whilst he was entitled to long-term disability payments. The EAT ruled that there is an implied term in an employee’s contract of employment restricting the employer from dismissing an employee on grounds of ill-health capability where this would stop the employee’s long-term disability benefits. The complaint was referred to a new tribunal to focus on whether, taking into account this implied term, the dismissal was deemed a fair and proportionate means of achieving a legitimate aim. However, this serves as a timely reminder for those employers offering long-term disability benefits of the difficulty in dismissing employees in receipt of such benefits.

The case of British Airways V Pinaud also provides a reminder to employers to carefully check any pro rata arrangements in place to ensure they properly reflect the part time hours of the employee. Ms Pinaud was employed full-time by British Airways (BA) as a cabin crew member and her contract required her to work or be available for work 243 days per year. Following her maternity leave, Ms Pinaud reduced her hours to part-time. Her full-time salary was decreased by 50% despite her being required to work or be available to work 53.5% of her full-time hours (130 days per year). Consequently, she brought a claim against BA on the grounds that she received less favourable treatment as a part-time employee. The Court of Appeal ruled that even though the employees had the same hourly rate, it was less favourable to pay a part-time employee 50% of a full-time salary when they worked more than 50% of full-time hours.

Employment status

The focus on employment status has also continued this quarter, with the EAT again holding that someone engaged within the so-called “gig economy” was a worker in Addison Lee V Gascoigne. The cycle couriers’ contracts included a provision stating there was no obligation on a courier to provide delivery services for a minimum number hours and no obligation on Addison Lee to provide a courier with a minimum amount of work. The cycle couriers were allocated delivery jobs when logged into the Addison Lee app. However, while the courier could contact the controller in limited circumstances, there was no other option for a courier to reject a job once logged on. The EAT concluded that there was “mutuality of obligation” due to the fact when the courier was logged-in to the app there was a general contractual obligation on Addison Lee to offer work and for the couriers to accept work. Therefore, the courier in this case was a “worker”.

Questions surrounding the gig economy and employment status continue to make headlines and the recent ET ruling in Jess Varnish v British Cycling & UK Sport finding that Ms Varnish was not an employee demonstrates the complexities and intricacies of applying the law to individual circumstances. Employers faced with similar issues should seek specific advice on the facts of their particular situation.

Working time

Another familiar complex area is that of holiday pay. In the German case of Max-Planck-Gesellschaft zur Forderung der Wissenschaften e.V. V Shimizu, Mr Shimizu was reminded to use his outstanding annual leave prior to his employment ending in two months’ time. Mr Shimizu used only two days’ annual leave and subsequently claimed for payment in lieu of 51 days’ unused holiday for the period 2012-2013, which was rejected by the employer. The ECJ subsequently ruled that a worker does not lose the right to either use annual leave or to receive payment in lieu of any unused annual leave on termination of his employment unless employers have acted “specifically and transparently” in providing workers with an opportunity to use their annual leave. This ruling provides a timely reminder to employers of their obligation to encourage employees to use their annual leave and to ensure employees have a genuine opportunity to do so. For example, it may be helpful for an employer to regularly remind its employees of their remaining holiday entitlement and to reiterate its “use it or lose it” policy.

On the horizon…

Look out for our upcoming articles where we will be focussing on legislative developments including the legacy of the #MeToo campaign in terms of recommendations on handling sexual harassment in the workplace, implementing the measures of the ‘Good Work Plan’ and, of course, the impact of Brexit.

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