The top five employment cases that will shape 2024

Rebecca Denvers identifies the cases which will have a big impact on employment law and HR policies and practices over the next 12 months.

These cases cover: 

• Serial complainers
• Protection from detriment for participating in trade union activities
• Dismissal and re-engagement (“fire and rehire”)
• Religious or belief discrimination
• Holiday pay and entitlement

1. When can you dismiss a serial complainer?

At what stage can an employer safely decide that 'enough is enough' and ignore the latest in a long line of unsuccessful grievances and/or dismiss the employee?

The EAT in Hope v British Medical Association held that the employer had acted within the range of reasonable responses after it dismissed an employee who had raised seven grievances over 13 months. He had refused to co-operate with the grievance process and this had undermined his relationship with his manager. 

The Court of Appeal is due to hear the case later this year.

Why this matters

With luck, the Court of Appeal will provide guidance to help employers decide how to deal with an employee who bring grievances in bad faith as a means of avoiding disciplinary action, or as a way of causing trouble.

2. What steps can employers take to dissuade employees from going on strike and remain within the law?

An employee who takes part in a lawful strike is protected against being dismissed for that purpose. But, the position is less clear where they are suspended or disciplined in an attempt to prevent or deter them from going on strike. Can they rely on s146 TULRCA 1992 (which protects employees against detriment because they are a member of a trade union or have taken part in activities linked to a trade union) to protect them? 

In Mercer v Alternative Future Group Limited, the Court of Appeal held that an employee who was subjected to a detriment (short of being dismissed) for taking part in industrial action couldn't bring a claim under s146. It went on to say that this may put the UK in breach of Article 11 of the European Convention on Human Rights, which gives people the right to join a trade union and prevents disproportionate and unjustified action taken against them for doing so, but that it couldn't re-write the law to comply with this. 

The Supreme Court heard the case on 12 and 13 December 2023 and we await the judgment.

Why this matters

From January to October 2023, almost 2.5 million working days were lost due to strikes (ONS data). These high levels look set to continue into 2024.

It's not unusual for employers to remove discretionary benefits from workers and/or subject them to other detriments in an attempt to deter them from taking part in strike action. If the Supreme Court rules that s146 can be interpreted in line with Article 11, employees will be able issue claims in the employment tribunal to obtain compensation for their losses as a result of being subjected to detriments.

3. Fire and rehire: can you dismiss and re-engage an employee for refusing to agree changes to contractual benefits?

If an employer can’t persuade an employee to accept new terms and conditions, it has the option of dismissing them and offering to re-engage them on new terms. This will, usually, only be done as last resort because of the risks involved. You must follow a fair dismissal process to avoid an unfair dismissal claim and be able to evidence a clear business reason for the change.

In 2021, Tesco gave notice to all staff in receipt of a particular benefit (Retained Pay), offering a lump sum in exchange for removing it. If an employee did not accept this offer, Tesco threatened to dismiss them and offered to re-engage them on new terms.

Retained Pay was an enhanced pay package that had been offered to employees facing redundancy, as an incentive for them to relocate rather than take redundancy. It was referred to by Tesco in negotiations with its recognised union USDAW, and in a subsequent collective agreement, as a “permanent” entitlement and could only be changed through mutual consent, promotion, or due to a contractual change in working patterns.

USDAW brought a successful claim against Tesco in the High Court to stop the “fire and rehire” process via an injunction. The High Court found that the parties’ intended to keep Retained Pay for as long as each employee was employed in their role. As such, the High Court concluded a term should be implied into the contract preventing Tesco from giving notice to terminate it.  

The decision was appealed and subsequently overturned by the Court of Appeal. The Supreme Court will hear the appeal on 24 and 25 January 2024.

Why this matters?

If the Supreme Court agrees with the High Court’s original decision, employers will need to be very careful about threatening to dismiss employees where the benefits they want to remove are permanent (or could have acquired that status).

Employers will also need to use clear language when offering any benefits as an incentive (or otherwise), to avoid those benefits being interpreted as “permanent” if you don’t intend them to be. For example, by clearly stating that benefits could be subject to change or withdrawal at a future point in time.

More generally, the case is of interest due to increasing criticism of fire and rehire as a practice. Although there have been calls to ban the practice outright (particularly following the 2022 P&O ferries headlines), it currently remains lawful in the UK and can be a useful mechanism in the right circumstances. Nonetheless, large employers looking to make changes to terms and conditions via a dismissal and re-engagement route may want to think carefully about the risks of adverse publicity.

4. Religious or belief discrimination cases

It’s not easy to deal with fundamental difference in values or beliefs that emerge between colleagues, particularly where there are strong feelings on both sides. This can often lead to grievances and claims. 

Workers have an absolute right to hold their beliefs at work, but do not have the same absolute right to express those beliefs. Employers can impose restrictions on what workers can say, but these must be reasonable and they must be able to justify this. This is a difficult balance to strike.

Over the last few years, we’ve seen a sharp increase in these types of claims including by claimants who alleged they had been dismissed, undermined and/or treated unfairly for expressing, so called, gender critical beliefs. 

We’re expecting more cases to be decided in 2024, which may provide further useful guidance for employers on this tricky area, including:

• Higgs v Farmor’s School – You can read our earlier blog post on the case here. It concerned a Christian employee who was dismissed for expressing beliefs that gender cannot be fluid and that an individual cannot change their biological sex or gender. Permission to appeal the EAT’s decision to the Court of Appeal has been sought. 
• Bailey v Stonewall Equality Ltd & ors – You can read our earlier blog post on the case here. It concerned a lesbian barrister who was found to have been discriminated by her chambers because of her gender critical beliefs and views about Stonewall, albeit the tribunal found that Stonewall itself had not discriminated against her. This part of the decision has been appealed and is due to be heard by the EAT on 14 May 2024. 
• Randall v Trent College & ors – the decision concerned a school chaplain who delivered a controversial sermon on an LGBT issue. The ET found that the college’s treatment of the chaplain had not been due to his beliefs per se, but due to the objectionable way in which he had manifested those beliefs. The case has been appealed to the EAT and is due to be heard later this year.

Why it matters?

This is a hot topic for employers and, because many of the cases turn on their own facts, it is difficult to draw firm conclusions which can be applied to a different scenario. The EAT’s judgment in Higgs v Farmor’s School did, however, set out some useful general principles for employers on the types of considerations that must be made when seeking to limit an employee’s right to express their beliefs in the workplace in any way (which we detail in our blog linked above). It will be interesting to see if that employer guidance changes, should permission to appeal be granted.

In terms of Bailey, Randall and more, we may also see further useful guidance emerge as cases of this type make their way through the tribunal system and into the higher courts (which bind the lower courts/tribunals). Watch this space.

5. Holiday pay and entitlement cases

This is another key area where we are expecting to see increased litigation in 2024. 

Significant changes to holiday pay and entitlement came into force on 1 January 2024 (with some of the changes taking effect for holiday years that start on or after 1 April 2024). 

Key changes include: 

• Defining a new class of workers: “part-year workers” and “irregular-hours workers”. New rules set out how holiday accrues for these workers. Employers will now also be able to roll up holiday pay for these types of workers
• Providing clarity on when workers can carry holiday from one year to the next
• Defining “normal pay” to include overtime, commission and other payments
• Changes to record keeping rules

You can read more detail on these changes here. 

Whilst the purpose of the new regulations was to simplify the law in this area and codify principles of EU law, the new rules have been widely criticised as creating further uncertainty for employers. 

Uncertainty in the law will undoubtedly lead to an increase in the number of claims being brought.

Why it matters?

Where there are uncertainties, employers will need to take a view as to how they deal with these issues practically until further case law emerges. We’re currently helping our clients to grapple with these issues and decide on the best approach. 

To give one example, the definitions of part-year and irregular hours worker set out in the regulations contain some ambiguity. It’s not currently clear whether a worker with fixed hours, but who picks up ad hoc overtime is classed as an “irregular hours worker” under the given definition. The same uncertainty applies to casual workers who have a guaranteed minimum number of set hours, but may work additional hours over and above these. If an employer has wrongly classified a worker as part-year/irregular hours and, for example, rolled up their holiday pay it’s not clear if they can offset these payments in the event of a claim. 

Rebecca Denvers is an Associate Solicitor at Irwin Mitchell.

Irwin Mitchell is running a free update webinar on Tuesday 30 January 2024 to discuss upcoming legislative changes for 2024. You can sign up to attend here.