Case law updates

Equality – definition of ‘sex’: On 16 April, the UK Supreme Court ruled that the definition of ‘man’, ‘woman’ and ‘sex’ in equality legislation refers to the person’s biological sex, and a gender recognition certificate (GRC) will not alter that. It follows that it is not unlawful to exclude a transwoman from a woman-only space (provided this can be objectively justified). In making its ruling, the Supreme Court emphasised that this did not undermine existing rights of trans people (with or without a GRC) who continue to be protected from discrimination under the gender reassignment provisions of equality legislation, and that many of the sex discrimination protections extended to perception or association with a particular gender. (For Women Scotland Limited v. Scottish Ministers)

Non-competes: The High Court (HC) has provided useful guidance on when non-compete and non-dealing restrictive covenants are enforceable, acting as a reminder that restrictions should be carefully drafted. In this case, an account director left a marketing agency to work in-house for a long-standing client that subsequently terminated its contract with the agency. The agency sought to enforce both non-compete and non-dealing covenants against the employee, arguing that the client had effectively become a competitor by internalising the marketing services. The HC first considered whether the client was in competition with the agency. While the services provided were similar, the HC found the two companies did not actually compete in the same area. The client had exited the external marketplace by bringing work in-house, meaning no third-party provider could realistically compete for that business. The HC also rejected the idea that the agency had a legitimate proprietary interest to protect, as any knowledge the employee had was already in the hands of the client. The wording of the covenant was also fatal to enforceability. The six-month non-compete clause was drafted broadly, with no sector or geographical limitations, and was framed in general terms to cover any business “in competition” with the agency. This was held to be unreasonably wide, especially considering the employer’s later admission that it only intended to apply the clause to small marketing companies in the dental sector. The 12-month non-dealing clause was also found to be excessive when measured against the employee’s salary and the industry’s ‘fluid’ job market (Kau Media Group Ltd v. Hart).

Whistleblowing – job applicants: In a significant judgment on the limits of protection for whistleblowers, the Court of Appeal (CA) held that an external job applicant could not bring a claim for detriment arising from protected disclosures. The claimant, who had applied unsuccessfully for a role with the respondent, alleged that she had been subjected to a detriment on account of whistleblowing. However, as an external applicant, she fell outside the statutory definition of a ‘worker’ or ‘employee’ under the Employment Rights Act 1996. The CA rejected the argument that external applicants were in an analogous position to workers or NHS job applicants (the latter being granted protection under specific regulations). The CA also rejected arguments that a job applicant should be protected under the European Convention on Human Rights, finding that the exclusion of applicants from whistleblowing protection was objectively justified. The legislation pursued a legitimate aim, and the differential treatment was a proportionate means of achieving that aim (Sullivan v. Isle of Wight Council).

Discrimination – interviews: The Employment Tribunal (ET) found in favour of a claimant who was asked why she wanted to work when her husband had a good job, concluding that this was a discriminatory and sexist question amounting to direct sex discrimination. The ET found that the question would not have been asked of a man and reflected stereotypical assumptions about gender roles and caregiving responsibilities. It rejected the employer’s defence that the question had been asked out of genuine concern, concluding that the discriminatory nature of the question could not be neutralised by good intentions. The ET noted that the question had caused the claimant to feel undermined and embarrassed and awarded compensation for injury to feelings (Pereira v. Wellington Antiques Ltd and J M Wellington).

Unfair dismissal: In a case turning on its facts and highlighting the importance of having clear policies, the CA has found that it was unfair to have dismissed an employee, a school inspector, for a one-off incident of touching a pupil during an inspection visit. The school inspector had brushed water off the hair of a 12-year-old pupil and put his hand on the pupil’s shoulder, resulting in his dismissal for gross misconduct when it was reported. Whereas the ET found the dismissal to have been fair, this was overturned by the Employment Appeal Tribunal (EAT), a decision that was supported by the CA. In the absence of a ‘no touch’ policy or relevant training, it would not have been obvious to the inspector that he had done anything wrong or that he could expect to be dismissed for touching a student in the manner he had, and it was unreasonable of Ofsted in such circumstances to treat it as conduct which amounted to gross misconduct. Although the inspector showed little remorse for his behaviour, this in itself did not justify dismissal. The CA ruled it was inappropriate for an employer to bump up the seriousness of conduct not itself capable of justifying dismissal because an employee fails to show proper contrition. In the CA’s view, that placed the employee in an impossible situation by preventing them from defending themselves at the disciplinary hearing. The CA also upheld the EAT’s decision that the dismissal was procedurally unfair, as the inspector had not been shown the school’s complaint letter or the pupil’s statement during the disciplinary proceedings (Ofsted v. Hewston).

Vicarious liability – trade unions: The EAT has clarified the scope of an employer’s liability for harassment where the alleged incident arises in a trade union context. The claimant, a trade union branch secretary, brought a claim of racial harassment against a fellow employee following a heated argument about union fee deductions. The EAT found that although the comment was made during working hours and on the employer’s premises, it was not “in the course of employment” but rather in the context of union activity between two union members, and so the employer was not vicariously liable. The EAT also found that the employer had taken all reasonable steps to prevent harassment, including mandatory equality, diversity and inclusion training, a values-based induction programme, annual performance assessments and visible promotion of their ‘PROUD’ values. No further steps were identified that could have prevented the incident (Campbell v. Sheffield Teaching North Hospitals NHS Foundation Trust & Hammond).

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