Mark McAllister from the Labour Relations Agency, and Scott Alexander from Legal Island will be discussing the top 5 employment cases of the year from NI and GB that impact on NI employers.

Each case review will cover:

• A short discussion on the facts and background in the case
• A short discussion on the decision and why it’s important to you
• Recommended actions as a result of the decision

The Recording

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Transcript

Scott: Good morning, everybody. Welcome to the second webinar of the year from Legal-Island. The last one was Seamus McGranaghan doing his usual update on all things employment related on the first Friday of the month, and he'll be back next month.

But today we have Mark McAllister with us. And Mark is the director of employment relations services at the LRA, a very good friend of ours and me. You'll know Mark if you've been to the Annual Review of Employment Law. If you haven't been to the Annual Review of Employment Law, why not?

But Mark starts off the day looking back at the year and what's happened, and then finishes the second day looking forward into 2022. And as well as that, he picks what he considers to be the top cases of the year that will impact on Northern Ireland employers, whether they be GB- or UK-wide cases. And that's what we're going to look at today.

We were due to be joined by Emma McIlveen, a barrister, but she's been delayed. We have rescheduled that webinar. It's going to be on 10 February, and it's going to be a lunch-and-learn session, 1:00 until 2:00, and she'll be looking at local cases that she's been briefed in largely. So she'll be looking at the NI tribunal cases and the impact or the importance that they will have for employers in Northern Ireland. So that's been rearranged.

As with all the webinars, you'll be able to find them on the Events page. So if you go to legal-island.com/events, then usually the first tab will be the webinars, and you can scroll down.

We've another one coming up, actually, that might interest everybody here, and it's Professor Siobhan O'Neill, who's the Northern Ireland Mental Health Champion, and she's doing a session on 1 February. And it's about the impact of COVID-19 on the mental health of children. So I think any parents out there might be interested in that one. It's mainly for educationalists and head teachers and so on, but you might be interested in that. Anyway, they're all on the website.

Now, before we bring in Mark on his first case of the year, let me tell you a little bit about our eLearning. We have an eLearning offer for you here today. It's on all our eLearning options that you have. There are things like workplace bullying, there's mental health and well-being, data protection, diversity and inclusion. We launched our HR eLearning Toolkit in November there at the Annual Review. So you've got a special offer there, and we will follow that up where we will send you a link to that offer.

Now, Mark, welcome. How are you?

Mark :I'm very well, Scott.

Scott: Yep. Have you many things planned for the LRA this year? You've been kept busy?

Mark: We're kept very, very busy with COVID and everything else, and COVID recovery. So we're in the process of just putting together our business plan for 2022, and it's pretty packed, yeah.

Scott: Yeah. When is it you're moving? You're moving to the Gasworks, aren't you?

Mark: The Labour Relations Agency moves in April of 2022, so not far away. I'm surrounded by moving boxes as we speak, so I suppose anybody who wants to visit our premises in the physical sense, and I know that'll be a bit of a new thing for people after two years with COVID and lockdown, we will be in James House in the Gasworks. And so we'll be doing a bit of a lead-in before that to let people know we are moving. We'll put signs all over the website and physically outside the building. So that's in James House, a stone's throw from the Tribunal Office.

Scott: Very handy for you. Very handy for them, too. And, of course, there'll be a new president to look forward to, as well.

Mark: Indeed.

Scott: Changes down there.

Mark: Lots of changes, yeah. And we're looking forward to it. It's a shiny, new office in the revamped James House. So it'll be well-signposted once you get into the Gasworks.

Scott: Okay. We're going to look at the cases now, folks. So if you have any questions, drop them into the little question box. You'll see that on your right-hand side. If you have any difficulties, there's a little chat thing there, so you can drop that in and Katie, who's working in the background, will get back to you.

5. Mercer v Alternative Future Group

Now, these cases are in reverse order, Mark. The first one that we've highlighted here is Mercer v Alternative Future Group, and it's about industrial action, freedom of assembly and association, and human rights.

So if you could maybe just give us a little bit of the background, the facts of the case, what happened to it, and why it's important to the listeners today who are Northern Ireland employers.

Mark: Okay. Thanks very much. This is a really interesting case because at the backdrop to this is Article 11 of the Human Rights Act, which is the freedom of association and the freedom of assembly. And trade unions in UK generally have had . . . It hasn't been a happy hunting ground for trade unions to be able to take a case via Article 11 to say, "The UK law on all things to do with collective labour law is deficient because it doesn't meet the requirements of Article 11".

And one of the areas that has loomed large in this is directly related to a detriment on the grounds of trade union activities. And one of those areas has been where someone suffers with some form of detriment as a result of taking industrial action after the event. And the key issue here is "after the event".

So, effectively, what we have, and you'll find this in . . . for the anoraks in the virtual room, you'll find this an Article 73(1)(b) of The Employment Rights Order (Northern Ireland) 1996 about trade union detriment.

And most HR practitioners and employment lawyers will know in the room that if you suffer a detriment in trade union grounds, for example, attending meetings or whatever it happens to be, you're asking for time off, etc., you're protected.

But it has been the common practice and sort of accepted dogma since around 1979 onwards that if you suffer after the event, a detriment related to the fact that you took industrial action, so action short of dismissal, you couldn't go down the detriment route.

And that was because of the wording of the legislation, because when you look at 73(1)(b), it talks about you being able to take the right and be protected where it's at an appropriate time. And that is the key form of words in Article 73.

As a result of a case back in 1980 called Drew v St Edmundsbury Borough Council, the court in that particular case said you're protected for all things apart from obviously taking industrial action, because no employer is going to consent to you taking industrial action. Most employers will consent to all the other trade union activities that you have time off for or you have the right to attend, but engaging in industrial action isn't one of those.

So, therefore, that meant that if you were then less favourably treated after the event for being a ringleader in some shape or form, and you lost, let's say, some form of privileges, or you were disciplined or suspended, or suffered some form of detriment because you had taken part or were a ringleader in industrial action, the interpretation back in 1980 in the Drew case effectively meant that you were left without a remedy.

And trade union lawyers for years have said, "Look, this is a yawning gap in the legislation, because surely the intention of the legislation in the first place would be to cover all aspects of trade union activities. And a central feature of a plank of trade union activities is engaging in industrial action. So why should that be an exemption?" It boiled down to this interpretation of the case law up until this point.

And this is the first case that really addressed it on the basis of the intention of Article 11 under the European Court of Human Rights and the articles. The legislative intention was to provide that protection in all of those contexts, including taking industrial action.

So trade union lawyers have been saying for years there's been a gap in the legislation for over 40 years. And now this case, the Mercer case, has effectively filled the gap.

So from HR practitioners' perspective and employment lawyers' perspective, if you were working under the assumption that you could maybe engage in that sort of . . . making an example of someone who was engaged in industrial action after the event, and that's the basis for it, not conduct or anything else, it's on the basis of that, this has closed that, as lawyers call it, lacuna in the legislation.

So you need to be very, very careful about any action you're taking against . . . especially around secretaries and people who are officials in the trade union in terms of maybe trying to make an example of them, etc.

So this was a gap that had existed, as I say, for 40-plus years. And it's only now, viewed through the lens of Article 11, that what the court had said was, "Look, the grain of the legislative intention is to protect in all of those contexts, including industrial action". And interestingly, as well, it doesn't say "protected industrial action".

So the question is now . . . there might be a question mark hanging over whether or not someone suffers a detriment after the event where they've engaged in wildcat or unofficial industrial action.

So it has opened up a real interest in the area of law because the reality is we're starting to see a marked increase in the amount of industrial action in Northern Ireland, especially in the current economic climate when you're talking yesterday, 5.4% inflation rate, and pay offers are coming in anywhere between 1.75% and 3%.

And trade unions are saying, "Well, look, that's not going to cut it. We're going to file for industrial action". If they go into an industrial action in 2022, and then come back in and then they're treated the less favourable treatment because they engaged in the industrial action, the gap has now been filled by the Mercer case. So employers would need to be very, very careful about treating people who engage in industrial action, subjecting them to any action short of dismissal.

Scott: Yeah. It sounds a logical decision to me because people who didn't take part in industrial action are protected against any kind of detriment by the union, and so on. And it seems to me that, certainly, if you've taken part in lawful industrial action, or you're organising lawful industrial action, that would be an activity. A trade union, clearly, that's one of the things that they do. So it would seem to me that protecting people against detriments would be an obvious outcome. But maybe it's not been so obvious over the years.

Mark: It hasn't been. That gap has existed for a long time. And it's purely to do with the wording in the legislation. So, when you look at 73(1)(b), it talks about "at an appropriate time". And "at the appropriate time" effectively means either outside the individual's normal working hours, in their own time, or within working hours at which they're permitted by the employer to take part in trade union activities.

But an employer will never consent or permit industrial action in that regard. So it has been the interpretation of that particular phrase, "at an appropriate time", that has acted as effectively a block to the protection of the legislation.

It's only now through the lens of Article 11 . . . And as I said at the outset, Article 11 has proved to be less than a happy hunting ground for trade unions in recent years. They've tried to have courts in the UK interpret it on the basis that it should provide for better law and trade union recognition, it should provide for better law on more wholesale recognition of collective bargaining, and things like that.

And based on what they call the margin of appreciation of domestic law and national law, the European Court of Human Rights has said, "Well, look, the provisions that exist in regard to domestic law are satisfactory".

So the RMT Union and Unison have lost some high-profile cases going back maybe 10, 15 years under the Article 11 route. It's now, with this case, Mercer, and later as we'll see in Kostal, that Article 11 has come back in.

And so there's a school of thought that says the tribunals, and the EAT in England in particular, are more willing to look at . . . in the same way as the Supreme Court did in Uber, look at the purpose of intention of what the legislation was there to do through the lens of Article 11.

And obviously, as you've just alluded to, Scott, it seems to make sense that this should be included because that would have been the original legislative template.

So it'll be interesting to see in 2022 any more trade union cases coming through where Article 11 is used as the basis or the prism in which the EAT is asked to look through this.

There are lots of academics and lawyers out there who are saying that the ILO, organisations like the International Labour Organisation and the European Court of Human Rights, in terms of Article 11, have not played a big enough feature in trade union law and UK decisions in recent years. And so we might see that there's a corner being turned in this particular case.

So it'll be interesting to see whether or not, because the backdrop to this, as we said, is industrial action. There's a marked increase in the amount of industrial action in the last six months, and that's continuing into 2022, and employers need to be very, very careful.

Obviously, employers in Northern Ireland need to be aware that things like the Trade Union Act 2016 don't apply in Northern Ireland. The law is notoriously complicated as it is. But in Northern Ireland, industrial action law is a place apart. We follow what would be effectively the old GB legislation pre-2016. Around 95% of it reflects what the old regime in GB was, so it's significantly different.

And it's incredibly hurdle-based in terms of you need to make sure that you get all your ducks in a row, and in terms of paperwork, and notification, and ballots, and all of that. So given that that's the sort of economic backdrop to it, we can probably expect more industrial action in 2022.

And any organisations that are listening today, employment lawyers or HR practitioners that do have recognised unions, it's time to dust down the old manual on industrial action.

Scott: Okay. Thank you very much, Mark. And if you've just joined us, folks, that's Mark McAllister speaking from the LRA. He's looking at these top five cases of the year that will impact in Northern Ireland, but they are either GB- or UK-wide.

That one was an Employment Appeal Tribunal case. It doesn't set precedent here. It will be persuasive, though.

4. Maya Forstater v CGD Europe, Centre for Global Development & Masood Ahmed

The next one, similarly, is a UK Employment Appeal Tribunal case, Mark, but it's to do with philosophical beliefs and discrimination. It's been widely covered. In fact, we have Maya Forstater lawyer, Peter Daly, speaking at the Annual Review of Employment Law in November.

So tell us about this case, and why is it important for employers?

Mark: It's really important. And I've had this discussion, funny, recently with employer bodies in the last number of months. You're quite right, Scott. It has got high profile because of . . . If you've been watching the media, you couldn't have failed but to notice this spat that's going on between J.K. Rowling and the trans community.

And that's because at the backdrop to it . . . and this is what the Maya Forstater case was about. This was about an individual whose contract wasn't renewed because she had expressed a belief that biological sex is immutable. And so, if a woman's born a woman, they're a woman, and a man born a man, they're a man, and you can't effectively have . . . She didn't believe in the trans issue. She had a particular belief that sex was immutable.

So the question at the core of all of this was whether or not that particular belief that biological sex is immutable is a protected philosophical belief under the antidiscrimination legislation in GB. In GB, it's Section 10 of the Equality Act 2010. But in Northern Ireland, it'll be covered under FETO. Everybody will be familiar with the Fair Employment and Treatment Order 1998, as amended in 2003. There's a slight anomaly there that the language of the legislation still talks about similar philosophical belief, but we'll not go down that route.

But effectively, around 11, 12 years ago now, an important case called Grainger v Nicholson was heard by the EAT. And effectively, Grainger has now set out . . . This was the philosophical belief that manmade climate change is a protected belief. And what the EAT did in that particular case is they set out five criteria to say, "Look, if a tribunal or a court is faced with this contention that this person's belief is genuinely philosophical and needs to be protected, it needs to effectively pass the five tests".

So the belief must be genuinely held. It has to be a belief, and not an opinion or a viewpoint based on the present state of information available. It has to be a belief that's weighty and has a substantial aspect in human life or behaviour. It must attain a certain level of cogency, seriousness, cohesion, and importance. And number five, which is the one that all of this pivots on, is it must be worthy of respect in a democratic society, and not be incompatible with human dignity and not conflict with fundamental rights of others.

Now, she lost the case at ET, and then won it on appeal on the grounds that the philosophical belief that sex is immutable is worthy of respect in a democratic society.

However, it recognised that that would jar completely with the trans community who say, "Well, look, we have things in society like gender recognition certificates. You can change gender, and you have the legal right to be recognised of having that gender changed".

And so what we have now is . . . And the potential is always there, whether it's Article 9, or Article 10 of the Human Rights Act in terms of freedom of thought, conscience, and religion against freedom of expression. You always have these competing rights.

And effectively, what the Forstater case has done . . . Now, it hasn't decided on whether or not she had suffered discrimination. The important thing about the decision is this: It said that that particular belief that she held is a protected philosophical belief. And that's a really important kernel, if you like, the central tenet of this.

From an HR practitioners' perspective and employment lawyers' perspective . . . and, Scott, you talked about it earlier on, about the EDI agenda, equality, diversity, and inclusion. The key issue here is if employers are saying to employees, "We want you to bring your whole self to work. We are an open employer. We don't believe you park your identity at the door of the workplace", that opens up the Pandora's box about, "Well, then how do you effectively manage respectful conversations, for example, between two employees in an organisation who have diametrically opposed views on some pretty substantially weighty issues that are related to society, but bring out into the workplace?"

And I think my view, and this is the reason why, is not so much because of the facts. It's because this has effectively opened the door now to say, when you're looking as an HR practitioner or as an employment lawyer and as part of the EDI agenda, "What's the framework within which you operate? How do you ensure that one person's rights aren't tramped under the feet of another person's rights?"

And you create a level playing field for having discussions. Someone says, "Well, look, my Christian beliefs don't allow me to believe that". Or somebody says, "Well, look, this is my protected social identity". There isn't a hierarchy of these. There is a level playing field.

The judiciary must remain neutral and impartial, and the ET fell into the trap of effectively labelling the views of Forstater as being absolutist in nature, and they also effectively focussed too much on the manifestation of the belief. The EAT said, "Well, look, that was wrong". The central question here is, "Is it worthy of respect in a democratic society?" It met all the other criteria, and at the EAT level, they said it is.

And effectively, in the body of the judgement, they said, "Look, when we look at the threshold about what's not worthy of respect, you're into the realms of Nazism, belief in totalitarianism, hate speech advocating violence". And that's where the bar has been set in terms of the Grainger criteria number five.

So other views that people have may well be offensive, may well even be on the lower end of the spectrum of what may be considered to be hate speech or certainly slanderous, but they will be protected as something that's worthy of respect in a democratic society.

And that means it is a minefield for HR practitioners and employment lawyers to try and regulate the working environment, because we're seeing things in the work environment that you would never have seen before.

I mean, if you had said to an HR practitioner four years ago, "What's your menopause at work policy say?" "Well, don't have it. It's not relevant to work. We park that at the door". Or domestic violence, many individuals say, "Well, look, that's a personal societal issue. We park that at the door". Those days are gone. The societal issues and identity politics are now squarely in the workplace.

And whether that's because COVID has given people a new perspective on work, or working life, or whatever it happens to be, the reality is that component part of the decision in Forstater has effectively said, "You know what? People will find that view very offensive, especially the trans community, but they're protected". The question is then whether or not someone suffers some form of discrimination as a result of holding that belief.

So it'll be interesting to see whether or not when the court . . . when it'll be remitted, obviously, the finding of discrimination, it'll be interesting to see whether or not discrimination is found there.

But my point to practitioners in the virtual room today is that decision, now as it stands at EAT, is really, really important because if people are now willing to bring their whole selves to work, you need to have the framework of protection around that.

And that will pose practical difficulties for HR practitioners to ensure that canteen conversations are respectful, and diverse, and should welcome them, and they should be harmonious. But they need to make sure that people don't engage in harassment and effectively step over the threshold. And that's going to be a difficult thing to manage in 2022.

Scott: Yeah. It'll be different for each employer as well, because nobody asked Maya Forstater to put stuff on social media.

Mark: No.

Scott: But at the same time, depending on the employer and whether they're in the public sector, what their stated aims are, whether you actually have trans people in the workplace, and so on, those factors will come in, and whether there's been any kind of argument or insulting behaviour.

So we do have a question here from Kristie. It said, "Do you think the five criteria in Grainger are robust enough to withstand anything and everything becoming a protected belief?"

Now, there was a case just out this week, Mark. I think I sent that along. An English tribunal found that an anti-vaxxer was not protected. It was a reasonable instruction of an employer, in a care home setting, obviously, to say, "We expect you to get vaccinated". She was dismissed, and not protected.

Now, what about this? If you're saying more or less anything that's reasonable, and not overly offensive, and this really high bar of Nazism and such like, employers are having to balance that. And it goes back to the white walls mentality. If you don't have the argument, if you bring your whole self,  you've got to . . . You get more done, and people are happier, and it's a recruitment thing, and you're inclusive, you leave yourself open to more arguments.

Mark: I think you do. And I think it would be a retrograde step to go back to the sort of white walls-type approach, because of the equality commissioner begins to point out, "Look, this sits comfortably with their promotion of harmonious work environments. This is just the context, and the social issues have shifted slightly".

I fully expect there to be, at ET level, everything. You'll appreciate this one, Scott. Even Scottish nationalism has been tested at ET level to see whether or not it's a protected philosophical belief.

And the question is quite valid in the sense that the criteria is quite open. There is no doubt about it. But I think you need to be . . . I think one of the issues that you'll find is sometimes some of these issues are quite fleeting. So when you talk about it has to be a belief, it can't be an opinion based on the present state of information available.

So, if you look at COVID as an example, some of that is . . . What we know now, compared to what we knew two years ago, has moved on. So the present state of information is in a constant state of flux. And if you chop and change on a contemporary basis, is that tantamount to a belief? I would argue not. You would be just basing it on the information that you had at that given time.

So I think what you'll find is there will be a raft of cases, and there already are at ET level. HR practitioners probably don't see a lot of them because they're not particularly well-publicised.

But I would say since around 2010, post-Grainger, to 2020, in 10 years, I've certainly come across around 17 or 18 different subject matters that have been tested under the Grainger criteria. And they range everything from ethical vegans through to Scottish nationalists, through to anti . . .

Well, I think the anti-vaxxer thing will become more readily apparent as time goes on, because we have about somewhere in the region of 25 to 30 ET decisions that have been processed since lockdown in 2020, that have now given us an indication of how the courts are interpreting COVID-related cases. So I think it's a matter of time before you see it. But you haven't heard the end of it. I think you will see this being tested on a variety of other grounds.

Is it robust enough? I think we've certainly got a bar now for Criterion 5. And to be honest with you, Criteria 1 through 4 can be met relatively straightforward. Whether or not they're contentious in the workplace, it's unlikely. So if you have someone who's in work who's an ethical vegan, ultimately, their views aren't going to be obviously that offensive to someone else who's a carnivore in work or whatever. So I think you need to look at these cases on its individual merits and facts.

Scott: Okay. Thank you very much. Somebody's asked, "What was the name of the anti-vaxxer ET decision this week?" I can't remember. But Christine in the background will know, and she can post it into the chat. I sent it around for consideration. We're thinking of doing a review on it today. It might well be just the opinion of one tribunal judge, so we'll find out.

3. Asda Stores Ltd v Brierley

The next case, though, moving on, Mark, Asda Stores v Brierley. It's a UK Supreme Court case. Therefore, it does apply in Northern Ireland. And it's about equal pay and comparators. So a bit of background, what happened? Why is it important over here?

Mark: This case, along with the Uber case, has probably taken on sort of "Star Wars" saga-type connotations because it's been going on for so long. And it eventually has arrived at the Supreme Court. The simple facts behind it are whether or not female shop assistants within the store could compare themselves for equal pay purposes with the primarily male counterparts in the distribution centres under the grounds of equal pay for work of equal value.

Now, it's an incredibly technical case. I have to say that before anybody starts going in to look at it. And it's important to point this out, that the case hasn't been won on the grounds that, yes, women now are entitled to equal pay. What this case is really important about doing is clarifying the hurdles that someone has to go through in order to make a comparison, certainly in this case, females with males. It has clarified the law with regard to the whole notion of common terms comparison.

And that's common terms between male counterparts at one current establishment and those that would apply if the male comparators were employed at the claimant's establishment.

The very important thing here is the term "establishment", which has always been a bit of a thorny one in employment law, but also with regard to what that means in terms of differentials in sites. Primarily, under this, and these are known as north competitors, this is primarily focussed on geography as opposed to anything else. So it has clarified the law in the sense of common terms are common terms across sites.

The Supreme Court said, "Hold on, let's cut through all of the technicalities here". The EAT decision and the Court of Appeal decision were completely confounded with technical arguments about the single source and who made the pay decision, and the fact that the female employees primarily worked in retail context, no trade union involved, no collective bargaining, whereas the GMB represented the male workers in the distribution depots, and they had a collective agreement, and had a pay deal, etc.

And so there were a lot of technical arguments about the fact why the women shouldn't be able to compare themselves with the males because they failed the north comparator test, or there wasn't a single source, or the geographic issue wasn't really the point.

And the Supreme Court cut through all of that and said, "No, look, the intention of the legislation . . ." Again, you're back to issues around it's equal pay for work of equal value. The central tenet of Article 157 of the Equal Treatment Directive is that men and women should be paid the same for work that's of a broadly similar nature. HR practitioners are well versed in this language, broadly similar nature, work rated as equivalent, or equal pay for work of equal value.

So there's a certain school of thought that would say, "Look, this case has been unnecessarily strung out because it was always going to come that the blockage would have been removed for retail employees who could use their terms and conditions of employment and those of the distribution employees as valid comparisons because the work that they did was of equal value".

What will be interesting to see when this case now returns is whether or not Asda and the board of Walmart, who are ultimately the decision makers with regard to the common terms, put forward a genuine material factor that says, "Okay, you can compare yourselves with the male distribution warehouse operatives. But we can now put forward a genuine material factor that's not tainted by sex, that can justify the reason why there's a difference in pay".

But I struggle to see that in 2022. In 1972, you could have said, "Well, it's more physically demanding, exertion. Males are . . . in terms of their ability to do this type of work. And that's the difference". In these days of forklift trucks and labour-saving devices, those traditional genuine material factor arguments won't be available.

So it'll be interesting to see whether or not the employer in this case tries to go down the genuine material factor route. I'm struggling to see what it will be.

But the reality is this is an important case because this case only relates to Asda. But that's 38,000 employees. It's exactly the same principle applied to all the other big-brand supermarkets. So you're talking about a very, very substantial number of employees throughout the UK, where this same argument will be.

So, effectively, what the Supreme Court have done is they have cleared the path for these individuals now to make the argument for their equal value claim. And that's why it's important.

Technically, a difficult decision to weed your way through. I don't recommend it. You could be asleep within 20 minutes of reading the decision. But importantly, the Supreme Court have effectively laid down some very, very useful guidance in equal pay cases.

For example, the starting point will never be comparing the two terms and conditions and working your way through it on a line-by-line, clause-by-clause . . . It's more core principles about, "Can you compare yourself to that person?" Yes, you can.

And it arguably has made it a lot easier for people to make equal pay cases where there are different terms and conditions, offs in different sites, and even where there are different bargaining and negotiation mechanisms, because this is non-unionised against unionised. This is one geographical site against the other, etc. Supreme Court cut through all of that.

Scott: Yeah. This probably comes down to the fact that trade unions work. You know what I mean? So they negotiate on behalf of staff. And you've also got people in critical parts of a business where if they go on strike in a distribution centre, there's nothing to sell in the shops, and all the stuff starts going off. So that probably comes down. But that doesn't necessarily make it, from an equal pay point of view, a genuine material factor. But we'll have to move on, Mark.

The case, by the way, is Allette v Scarsdale Grange Nursing Home. We'll send that to everyone after in the post-event thing. But it's Allette v Scarsdale Grange Nursing Home. That's the one where the anti-vaxxer was dismissed, and it was deemed to be a fair dismissal. It was also lawful insofar as they said it was gross misconduct not to get the vaccine.

2. Kostal v Dunkley

Anyway, the next one is Kostal, Kostal v Dunkley. It has been going around for a little while. It's terms, conditions, and collective bargaining again, Mark. So what happened here and why is it important?

Mark: Really, again, you're quite right, Scott. It has been knocking around for a while. Supreme Court came to final decision there this year. Really, really important, especially for practitioners in Northern Ireland who are maybe facing industrial action, and that's a real-life possibility at the moment given the febrile industrial relations climate we find ourselves in.

Effectively, the legislation in Northern Ireland and the rest of UK was amended in the area of what's referred to as an inducement, where the employer makes a payment effectively, or some form of inducement, to get individuals or a group of collective individuals to effectively surrender their trade union rights, either not for a union not to be recognised or, as happened in this case, making direct pay offers on bypassing the collective bargaining machinery.

Now, it's a complicated decision, 57 pages, hampered by a minority decision in the middle of it that has split various commentators, and there's a lot of ink being spilt on it. But the nuts and bolts of it are like this.

So you're a HR practitioner or an employment lawyer, and you have a client, or you have a managing director, and the senior management team are sitting down with the trade union, and the pay offers are going backwards and forwards, and the employer says, "Look, we don't believe you're representing the members' interests here. This is a really good offer. You're coming to us saying it should be X per cent. We're offering this. We think it's a very generous offer and should be accepted", and suddenly then walk out and say, "Well, look, we're going to our members directly".

It doesn't have to be categorised as an official contracting out of your collective bargaining process. But the minute that an employer effectively bypasses the collective bargaining process in a pay negotiation without exhausting exactly what it says in the recognition agreement about failure to agree, then the argument will be that by making that offer to the employees, that will have triggered what's referred to as the prohibited result, i.e. making the offer of the inducement. It doesn't have to be accepted. It just has to make the offer. And that was really at the central part of this case.

The argument in the Court of Appeal when they won, the employer side won in the Court of Appeal, was, "Well, this was a one-off, and we'll go back to collective bargaining machinery next year", and such and such. And a lot of it was about this temporal nature as it "will not" or "will no longer".

And the argument was it doesn't matter if it's a one-off or it's a permanent bypass of the collective bargaining machinery. The fact that it happens, even if it's a one-off, is enough to create the basis for the prohibited result.

This case was marred by things like offering Christmas bonuses and then taking the Christmas bonus away, and ultimately a group of holdouts effectively saying, "We'll contemplate the dismissal and rehire on new and less favourable terms. And these were all the measures that were taken".

It's important for HR practitioners in Northern Ireland to do this because we see it as the agency that facilitates collective conciliation of these disputes, where employers get increasingly frustrated by saying, "Look, we don't believe that . . . If we put this to members directly, we think that would be accepted".

It's a very, very dangerous move, because effectively if they're found to be in prohibition of this . . . It's Article, I think, 77 under the Employment Rights Order 1996. It's over £4,000 per employee punitive fine against the employer. That's a significant amount of money.

Just because someone senior enough in the management team throws a hand up and says, "You know what? We're going to talk to the employees directly. We'll make an offer to them directly, because we believe they'll accept that", based on the Kostal and Dunkley decision, that will infringe that particular component.

And although it's quite technical in nature and the causation issue is definitely controversial, the question now that really has come out as a result of the minority decision when you read the two parts of the decision together is, for example, when you examine a case, how can you know whether one of the parties isn't going through the motions?

So how do you determine that they've negotiated in good faith all along or simply gone through the motions until they get to the "failure to agree" component and say, "We've now exhausted the internal mechanism, and now we're free to make a direct offer to the employees"? That's what effectively the decision will allow an employer to do.

So you've got to this strange position where a tribunal might be required to second-guess what the thought pattern of the employer was, whether or not the negotiations were entered into in good faith, the collective bargaining was good faith. And what was the likely outcome of the dispute? That has complicated it.

In my view, Kostal and Dunkley, the second component of the decision leaves a very, very unsatisfactory position because it will put negotiations on sensitive pay deals into this sort of limbo about, "When is this exhausted? When is it not exhausted? Did they go into it in good faith? Is there evidence of bad faith?" and all of those sort of practical things.

But I think the key lesson for employers is this: Don't bypass the collective bargaining machinery when you're in pay negotiations and go directly to employees, because that will trigger the prohibited result. And that'll be the infringement of Article 77. So it's really, really important.

It's the first case since Wilson and Palmer case, which was consolidated into the legislation, that effectively addresses the issue of trade union inducement. And depending on who you ask . . . For example, you might say landslide victory, really landmark decision, very, very important. You'll have other employer lawyers who will say, "Well, it's very straightforward. We know now how to exhaust the bargaining process. And then once that has been clearly and definitively ended, we'll make direct offers to the employee".

So it raises more fundamental issues about good faith and collective bargaining. It raises issues around potential derecognition, because an employer might say, "Well, look, rather than go through this, we're just going to derecognise the trade union". And that brings with itself a whole raft of industrial relations problems.

So from my perspective, a really, really important case. And the reason why it's important for HR practitioners and trade union lawyers in Northern Ireland is the backdrop context of 2022, increased pay disputes. So you're looking at the context of 5.4% inflation rate, and the average offer that's going out at the minute could range from anywhere from 1.75% if you're in the public sector, 3% to 5% in the private sector. You have organisations across the water saying, "We have to pay our HGV drivers a 20% pay raise". Not somebody to address inflation, but also to address issues around labour shortage.

So the days of the very low percentages, there's a question mark hanging over this. And invariably, if there is at the core of the dispute the issue about what the percentage is . . . Forget about all the bells and whistles about strings attached, etc. Employers would need to be very, very careful about throwing their head up and bypassing the collective bargaining process and the negotiating process to make direct offers to employees, because they'll fall foul of the law.

Scott: Yeah, they should be working together anyway. I think if you build up the relationship, then there would be an element of trust. And of course, this case here, what will happen presumably with the bad faith employers is that trade unions will try and mark that. They'll put it in early and the evidence will be letters or emails going backwards and forwards saying, "You weren't negotiating in good faith. You're still in breach of . . ." So we'll see what happens on that one.

1. Uber v Aslam & others

We have one last case to discuss, folks, and it's Mark's number-one case, which is Uber v Aslam. Now, this week, another case came through about a taxi firm, which found that they weren't workers. So we'll have a look at that in a second just by comparison.

But tell us why Uber . . . because most people on this webinar today are not taxi drivers. They don't run a taxi firm. They maybe don't even have gig economy people. So why is this one important?

Mark: Everybody is well familiar with this case now because it has a long well-publicised history. I think the important thing to take out of the decision is that the Supreme Court probably caught everybody by surprise to say, "Hold on a second. Regardless of digital platforms and gig economy, whatever, when you're looking at employment status cases, the important thing is this: the intention of the statute. And that's secondary to what the contract says".

So employment lawyers in the room would have always been of the view that contract is king, and it's their quality draughtsmanship that is really central. That's what they're paid to do.

What the Supreme Court has said is, "No. Hold on a second. The purpose of intention in this particular area is to protect vulnerable workers. So, regardless of them being on digital platforms or being drivers in these taxi-type cases, irrespective of what has been contractually agreed, the purpose of intention of the legislation is to protect individuals".

And the two cornerstone principles and what that decision was based upon are of subordination and dependency. And subordination is really about control. You'll see that when we talk about this other case, about the MyTaxi case recently.

The clear direction of travel was that, in this instance, Uber exercised that degree of control by virtue of the fact that you had to log on to the app, and there were lots of criteria and hoops that drivers had to jump through. There was a lot of control that was exercised, so that subordination was clear and present. There was no question about that.

And dependency. A lot of these individuals depended on this particular contract. So that highlighted their need to have this as their main source of income and as their main job in cases.

So the Supreme Court effectively accepted the legislation is to protect individuals who are vulnerable, and the purpose of the contract should not be a master class in trying to effectively construct this falsehood that this individual is effectively an independent contractor, and the company is a booking agent, and there's no indication that there's a worker relationship.

The court recognised that central to it is unequal bargaining power. There's no question about that. But the contract cannot oust the jurisdiction of the legislation. It's not there to try and contract out of what the protections are.

So the starting point has to be the legislation. And the important thing to remember about Uber was this wasn't what we referred to as a personal service contract. That wasn't at the core of this. And that's what distinguishes it from the likes of Deliveroo.

I would say, in terms of what to watch out for, look at Deliveroo coming down, because Deliveroo is focussed on an unfettered rate of substitution and how often that was practised. That's the central plank of that particular case. And it's a trade union recognition case, whereas with Uber, it's about subordination and it's about dependency.

Even the existence of a substitution clause, which does exist in the contract, we now know that the common law position is just having a substitution clause in your contract, or the power of delegation, is not always a determinative factor to say, "Okay, that switches you from a worker to being an independent contract", because you have the ability to substitute. And that's really, really important.

There's a difference between the existence of a substitution clause and the regular practice of unfettered subcontracting. And I think that's really, really important to make that distinction.

So whether or not the personal performance is the central tenet or the dominant purpose of the contract is really, really important. The dominant purpose test is very important here.

But the irony of ironies is that the control test, which is a 19th-century-developed test for employment status, defeated a 2020 business model predicated on the existence of an app on a digital platform.

And one of the other interesting things with regard to Uber in that instance is there's very little human interaction. It is algorithmically based, and so a lot of the decisions to terminate contracts, etc., are based on performance algorithms as opposed to interacting with an HR individual who says, "On the grounds of capability or performance, your contract is terminated".

So I think you need to be conscious of the fact that there are a lot of other issues in Uber that need to be picked away. And although it sets a very important baseline principle, there are other cases out there, which look similar and they're in the similar industry, that will not have the same result. And that's really what we're talking about in the . . .

Scott: The other case is Johnson v Transopco, is it? Which is the . . .

Mark: Transopco. It's an EAT decision that's . . . I think it's only been publicised within the last matter of days. And the important thing to remember in that particular case, and how it distinguishes from the Uber case, is that in terms of control, there wasn't the same degree of control exercised by the organisation, and this was literally a side gig for this individual. They weren't dependent upon that as their primary source of income. They did it on top of their own main job, and it genuinely was a business-to-business relationship. So, because it was business to business, it didn't meet the definition of worker for the purposes of the employment rights legislation.

So there is a case in exactly the same context as in a digital taxi-hailing service. But the individual facts of it distinguished it from the Uber case because the principles of subordination and dependency weren't met. And so it's important to be aware of that.

So, in 2020, we saw around 10 decisions in this area, My Hermes. You saw [Allison Lee 00:49:49]. You saw all of these sort of courier-based organisations essentially saying, "No, these people are independent contractors". And they lost the case, and they were covered as workers. So they were entitled to national minimum wage, working time protection with regard to holidays, whistleblowing, and all of the other rights that workers have.

But the MyTaxi is a prime example where the facts determined under subordination and dependency meant that the individual was an independent contractor and not a worker. So you need to be careful not to make too many assumptions about business models and digital platforms being effectively all the same.

But there are a raft of these, Scott, happening in Spain, and Germany, and France at the minute, especially in areas of food delivery. And I think the issues are coming to a head.

We talked about this at the Annual Review where employment law hits a vacuum. So the unemployment bill that's been waiting for a long time, and the consultation that happened in GB regarding employment status, which has just disappeared into the ether, it's clear that you're crying out for a clarification to this.

Supreme Court decision have now set the bar and said, "Look, this is the purpose of intention. So, regardless of all your great draughtsmanship, and that's what you pay lawyers big bucks for, the intention of the legislation is to protect vulnerable workers. And these people were vulnerable workers. Therefore, it is of secondary importance to the contract". Legislation is king. And so that's a really important part of that decision.

So we'll see. In the absence of an unemployment bill and in the absence of any response to the employment status consultation in GB, you'll just see more cases like MyTaxi coming through. And Uber provides a contextual backdrop to core principles, but the facts have to be examined so you can't make assumptions.

Scott: Okay. Thank you very much, Mark. A question there, are we going to provide the cases mentioned in relation to that last case there? Yes, we will send you those EAT and tribunal decisions that we mentioned, the Allette case and the MyTaxi case as well. We'll send those on the post-event thing.

So thank you very much, Mark. Thanks, everyone, for listening.

Just before you go, a couple of things to mention. One of them is the Hub. So this thing is being recorded, and if you're a subscriber, you'll be able to watch it back or listen back. We'll also have a transcription up on the website on the Law Hub. So if you want to subscribe, you can get a free trial. If you go onto the website, you can pick your free trial there. Just go into the Employment Hub and take your free trial if you want.

You get 2,500 articles, all the cases, the case reviews that we do every week, and your weekly reviews are all held there, too. So you can search through hundreds and hundreds and hundreds of cases, plus all the webinar recordings. And everything else is down there, as well.

Now, we'll be back shortly. We do have our next webinars that we've got. 4 February, we've got "Employment Law@11" with Seamus McGranaghan. So you're all welcome to come to that, as well. Any questions, send them in, and Christine and Seamus will discuss those on that day.

I should be back on 10 February with Emma McIlveen. We'll be looking at local cases, NI cases, and why they're important. And again, with the NI Mental Health advisor, if you want to come along on that and see what COVID . . . the impact that's having on children's mental health. They're all on our website. Just go into Events at legal-island.com/events, and you'll find the Webinar tab there.

So thank you very much, Mark. Say hello to everyone.

Mark: Very welcome.

Scott: We will see you again shortly. Take care, folks. Bye-bye.

Mark: Thanks. Bye.