REWARD
would in fact be part of the claimant’s normal day-to-day activities, sufficient to bring it within the definition of disability. While it accepted that this was a matter of factual interpretation, and it was open to the ET to decide either way on this, the reasoning was essential for a decision to be made on whether it had erred in law. As a result of these findings, the EAT ordered that the case go back to the ET to consider whether discrimination took place. Mueller v Utopia Leisure Ltd The ET had to consider whether a bespoke pay cut arrangement was discriminatory and contrary to the law on equal pay. As a result of the significant impact of the restrictions resulting from the Covid pandemic on the hospitality industry in March 2020, to maintain its business and retain its staff, one solution that was decided upon was a pay cut, as opposed to job losses. The respondent organised its business so that in-house spas were arranged as separate companies, with separate accounts. This was to manage the finances of the business in a particular way. It was decided by the respondent that the pay cut would affect different groups of employees differently. Partly, this was to ensure no employee’s wages fell below minimum wage. Additionally, it was applied to avoid lower-paid staff being disproportionately hit in relation to their basic living needs. Larger cuts were therefore reserved for higher paid staff, on the following basis. l 20% pay cut for those earning under £30,000 l 25% pay cut for those earning £84,999 l 33% pay cut for those earning £85,000 and above. The claimant’s annual salary was £90,000. Two male members of staff also earned around £90,000 each. Before the ET, the respondent explained that the male managers earned more than £85,000 in total, but this was because they both held two roles: general hotel manager and spa manager. The respondent stated that they were paid separately for those roles. The male managers were only issued with one contract of employment by the respondent and there was no documentation that detailed the separate work needed to manage the spa and to manage the hotel. Applying the above percentage cut, the claimant, a woman, had her pay cut by 33%.
As the above meant the male managers’ separate earnings were below £85,000 for each role, the respondent cut their pay by 25% for the general hotel manager role and 20% for the spa manager role. As a result, their pay cuts were less than that of the female manager. The decision to apply the pay cuts in this way was a conscious choice by the respondent, and not a result of an automatic accounting decision made in isolation of the other salary. These cuts were imposed without consultation and no timeline was given for the reinstatement of full pay. discrimination and an equal pay claim, due to the difference in this pay cut” The claimant brought a sex discrimination and an equal pay claim, due to the difference in this pay cut. The ET was tasked with considering whether the different pay cuts imposed on the male managers and the female manager were because of less favourable treatment by reason of sex. The ET could find no evidence that the roles of the male managers differed in any significant way to that of the claimant, and certainly not to justify the pay disparity. As such, the ET held the male managers were appropriate comparators. It was also argued that because of the two roles the male managers had, their salary should be treated as two separate salaries, both of which fell below the 33% cut rate. However, again this was rejected by the ET, which found that the male managers had only one employment contract with the respondent and received only one payslip in which one wage was detailed. This led the ET to conclude that the division of the employment of the male managers into two separate roles being hotel manager and spa manager was a paper distinction only in place for internal accounting purposes. Rejecting the respondent’s argument, the ET couldn’t find a reasonable explanation for the difference in pay cut received by the male managers and the claimant. In evidence, the respondent had said the pay cut was based on ensuring those who earned the most had the biggest cut; however, this was at odds with the dual “The claimant brought a sex
income argument for the lesser cut, as overall all the managers earned roughly the same. Both claims therefore succeeded. Joseph De Bank Haycocks v ADP RPO UK Ltd The EAT had to consider whether the ET were correct in finding that the dismissal on the grounds of redundancy was fair, even though consultation didn’t take place in the formative stages. The claimant was in a team in the UK employed to recruit employees for a single client company. In March 2020, Covid reached the UK and demand for new employees to be recruited for the client diminished to around 50% of what it was beforehand. At the end of May 2020, the decision was taken to reduce the recruitment workforce. The team were scored 1 to 4 on each of 17 entirely subjective criteria. The criteria came from the US parent company and when the scoring took place, the claimant came last in the markings. After the scoring took place, the respondent set a timetable for the redundancy process and decided at that point how many employees would need to be made redundant. After the initial meeting a 14-day consultation period then took place. In the consultation meetings, the claimant wasn’t told what scores he had achieved and at the end of this consultation period, he was informed he was being made redundant. The claimant lodged an appeal but when this upheld the original decision to dismiss him on the grounds of redundancy, he then brought an unfair dismissal claim. He asserted that he had been scored too low and that the dismissal was procedurally unfair. After the ET found that the dismissal was fair, he appealed to the EAT. The EAT explained that it’s an important principle that consultation in a redundancy situation should take place at a formative stage where an employee or representative is given adequate information and time to respond. In this case, the EAT found that consultation took place much later than the formative stage and the ET were incorrect in concluding that the consultation was reasonable. The internal appeal didn’t correct the failure to meaningfully consult at the formative stage and so the EAT found that the dismissal was unfair. The case has now been remitted back to the ET for a decision on remedy. n
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| Professional in Payroll, Pensions and Reward |
Issue 97 | February 2024
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