In our final quarterly case law update of 2022, we discuss four of the most significant employment law cases since August 2022 and the lessons that employers should take from them.

Whistleblowing

In the case of Kong v Gulf International Bank, Ms Kong made protected disclosures to the Head of Legal, Ms Harding. In a discussion about those disclosures, Ms Kong questioned the suitability of a financial compliance document put forward by Ms Harding and, in doing so, questioned Ms Harding’s legal awareness.

Following various internal discussions, Ms Kong was dismissed. The employer relied on conduct as the reason for dismissal, namely the way in which Ms Kong had made the protected disclosures and, in particular, how she had spoken to Ms Harding.

Several claims were brought by Ms Kong, but of most significance was the claim for automatic unfair dismissal by reason of protected disclosures, which was not accepted by the Employment Tribunal (ET) or the Employment Appeal Tribunal (EAT).

Ms Kong subsequently appealed to the Court of Appeal, who dismissed the appeal based on the ‘separability principle’. The Court found that the reason for Ms Kong’s dismissal was not that she had made protected disclosures, but her ‘unreasonable’ behaviour in questioning the legal awareness of Ms Harding.

The Court explained that there is “no objective standard against which behaviour must be assessed to determine whether the separability principle applies in a particular case” and the reason for the dismissal in the mind of the decision maker is key.

This case is helpful to employers faced with employees who make protected disclosures in an inappropriate manner. Although a disclosure may be protected, the separability principle makes it possible for an employer to act fairly based on the whistle-blower’s conduct in relation to that disclosure.

TUPE

The transfer of rights and liabilities under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), can have significant consequences for employers, as demonstrated in the case of Ponticelli UK Ltd v Gallagher. Mr Gallagher’s contract of employment transferred to Ponticelli UK Ltd under a TUPE transfer on 1 May 2020. Prior to the transfer, Mr Gallagher had been a member of a Share Incentive Scheme (SIP) operated by his previous employer. Following the transfer of his employment Mr Gallagher requested that Ponticelli provide him with an equivalent scheme, which was denied.

Mr Gallagher brought a claim before the ET arguing that under Regulation 4(2)(a) of TUPE his right to participate in a SIP, on terms equivalent to the SIP he had participated in under his previous employer, transferred to Ponticelli. The claim was upheld by the ET and Ponticelli submitted an appeal to the EAT.

The EAT upheld the ET’s decision, finding that the obligations created by the agreement under which Mr Gallagher was a member of the SIP transferred to Ponticelli. The EAT stated that even though membership of the SIP “did not arise “under” the contract of employment, they plainly arose “in connection with” that contract for the purposes of Regulation 4(2)(a) of TUPE.”

The case underlines the need for companies to conduct thorough due diligence regarding the terms of employees’ contracts and any rights connected to their employment, when considering a perspective purchase or risk facing a potentially costly penalty.

COVID-19

Cases relating to the COVID-19 pandemic continue to be dealt with by the Tribunal and Quinn v Sense Scotland is the latest of these.

While employed by Sense Scotland, Ms Quinn contracted COVID-19 (Covid) in/around 11 July 2021 and remained in isolation until around 20 July 2021. She was dismissed on 27 July 2021.

After contracting Covid, Ms Quinn’s symptoms continued and on 22 August 2021 she was warned by her GP of the risk of Post-COVID-19 Syndrome (Long Covid). On 12 September 2021, she was declared unfit for work as she was suffering from Long Covid.

Ms Quinn brought a claim for direct disability discrimination. To progress with the claim, Ms Quinn needed to establish that she was disabled within the meaning of Section 6 of the Equality Act 2010 (EQA 2010) at the time of the alleged discrimination being the 27 July 2021, the date on which she was dismissed (the relevant time).

Taking each of the provisions of Section 6 in turn, the ET found that Ms Quinn was suffering from an impairment, Covid, and that this did have a substantial adverse effect on her ability to carry out normal day-to-day-activities. However, the ET found that the requirement for the effect to be long term was not satisfied at the relevant time, that is the date of her dismissal.

Schedule 1 paragraph 2(1) of the EQA 2010 stipulates that for an impairment to be long term it must have lasted or be likely to last for at least 12 months. The phrase ‘likely to’ was determined to mean ‘could well happen’ by the House of Lords in SCA Packaging v Boyle.

Applying the above to the facts of the case, when Ms Quinn was dismissed, she did not have Long Covid, but the ET accepted that developing Long Covid is an associated risk of having Covid. However, as most people who suffer from Covid do not subsequently develop Long Covid, the ET found that “it cannot be said that the risk could well happen”. Ms Quinn was therefore found not to have been disabled under Section 6 of the EQA 2010 at the time of her dismissal, and accordingly could not bring a claim for direct disability discrimination.

Although Long Covid can be considered a disability under the EQA 2010, this case serves as a reminder that the facts and knowledge as at the relevant date are crucial to whether or not an employee will succeed in coming within the legal definition of disability to enable them to continue with a claim of disability discrimination.

Redundancy

The case of Mogane v Bradford Teaching Hospitals is a timely reminder of the need to take care when considering a redundancy pool of just one employee.

Ms Mogane was employed from 2016 on various 1-year contracts as a Band 6 nurse by Bradford Teaching Hospitals in a research unit. The unit also employed another Band 6 nurse who had recently entered a 2-year contract. In 2019 the research unit was operating at a loss which caused a redundancy situation to arise.

On the 21 March 2019 Ms Mogane attended a meeting at which she was told about the financial difficulties facing the unit. Soon after, the decision-maker determined that as Ms Mogane’s employment contract was due for renewal before her colleague’s, it was appropriate for her to be in a redundancy pool on her own and therefore selected for redundancy.

Various meetings were scheduled, but did not occur, prior to and immediately after Ms Mogane went off on sick leave on 30 May 2019, from which she did not return, before a meeting was held between the parties on 12 June 2019. The ET found that by this date the decision-maker had concluded that Ms Mogane’s job would be made redundant. Following a period in which the employer tried, and failed, to find suitable alternative employment for Ms Mogane, her employment was terminated on 31 December 2019.
Ms Mogane brought a claim for unfair dismissal, which was dismissed by the ET and this led to her submitting an appeal to the EAT.

Upholding the appeal, the EAT found that the “ET had overlooked aspects of the issue of consultation in its deliberations, conflating consultation on alternative employment with the broader consultation required in a redundancy situation.”

The EAT relied on the principles established by Williams v Compare Maxam Ltd and Polkey v A E Dayton Services in reaching its conclusion, stating that for a consultation to be “genuine and meaningful” it is a requirement “that consultation takes place at a stage when an employee or employee representative can still, potentially, influence the outcome”.

The pool and criterion for redundancy were based on the expiration date of the employee’s contract. This impeded Ms Mogane’s ability to potentially influence the outcome of any consultation held, since the decision to select her had already been taken. Therefore, the consultation should have occurred before the decision on the pool and criterion to adopt were made.

Employers facing a redundancy situation should therefore be careful to consider both the pooling and selection criteria to be applied and, where there is a pool of one, ensure that consultation on the potential pool is carried out before any final decisions are taken.