Monthly Highlights - UK Employment Law - December 2022

In December’s UK Employment Law update, our team take a deeper look at the Employment Appeal Tribunal's (the “EAT”) determination in the Garrod v Riverstone Management discrimination case and explore the scope of “without prejudice” and “unambiguous impropriety”. We also consider how the government’s proposed reforms to the Flexible Working Time Regulations 2014 will affect both employers and employees and take a glance at the upcoming changes to statutory pay in 2023, published by The Department for Work and Pensions.

1. Garrod v Riverstone Management Ltd [2022] EAT 177: in this case, the EAT upheld a decision by Employment Judge Harrington (“EJ”) that:

   1. “without prejudice” discussions that took place during a grievance, and before a claim was issued, were within the scope of without prejudice privilege and could not be adduced as evidence in the subsequent claim because the grievance constituted an existing “dispute”; and
   
   
   2. an allegation that the settlement proposal was made with a discriminatory motive did not mean that the “unambiguous impropriety” exception to the without prejudice rule applied.
   
   

   The facts:

   • The Claimant, Ms. Garrod, was employed by Riverstone Management (the “Respondent”) as their Company Secretary.  On 30 October 2019, the Claimant submitted a grievance alleging pregnancy and maternity discrimination, harassment and bullying claims against three senior managers.
   • On 8 November 2019, the Respondent’s legal adviser held an initial without prejudice discussion with the Claimant.  During the discussion, the adviser described the employment relationship as “fractured” and “problematic” and proposed a termination-of-employment offer of £80,000 as suggested by her employer. The parties, however, did not reach a settlement and the grievance was dismissed by the Respondent on 16 January 2020. The Claimant resigned on 16 March 2020, without payment.
   • On 2 March 2020, the Claimant issued a claim before the Employment Tribunal making various references to the without prejudice discussions in her statements of case.

   The decision:

   • The Claimant, relying on BNP Paribas v Mezzotero,^[1] sought to argue that the without prejudice discussions were admissible because the existence of a grievance did not necessarily mean that there was a dispute.  However, the EAT noted that Mezzoterro was a very different case, where the allegedly without prejudice communications were also the alleged unlawful acts on which the claim was based and directed the nature of the grievance and the manner and circumstances in which it is raised must be considered.  Furthermore, according to Mezzoterro, the without prejudice rule will only be disapplied in “the very clearest of cases”. Accordingly, EJ determined that the without prejudice discussions during the grievance process were inadmissible, notwithstanding that a claim had not yet been initiated in the Employment Tribunal.  EJ was satisfied that there was an “existing dispute” at the time of the without prejudice negotiations because the parties contemplated, or might have reasonably contemplated, that litigation would ensue if the parties could not reach a settlement.
   • The Claimant, relying on Unilever PLC v Proctor & Gamble Co, sought to argue that the without prejudice rule could not be relied upon because of the existence of unambiguous impropriety.^[2] EJ dismissed the Claimant’s arguments on the basis that the adviser’s behaviour was polite and professional.

   Takeaways:

   • Whilst a grievance may count as a “dispute” and be used to initiate without prejudice discussions, to establish whether the matter is a dispute will depend on the contents of the grievance. In this case, Acas, early conciliation, and legal claims were mentioned in the grievance, and the employee had some legal knowledge and skills. A more generic grievance submitted by an employee without such skills may not qualify.
   • One of the reasons why the Claimant could not reference the termination offer was that she was not making a specific tribunal claim about it. The Claimant referred to the termination offer to strengthen her case that the employer had behaved unlawfully up to that point, rather than claiming that making the offer was another example of the employer’s discriminatory behaviour. There is still the risk that the without prejudice rule is displaced where the claims are based on the without prejudice meeting and what happened in it.
     
     
2. Potential reforms to flexible working regulations
   
   On 5 December 2022, the government issued its response to the consultation on flexible working and potential reforms to the Flexible Working Time Regulations 2014.  The response states that the government will:
   
   
   • give employees the right to request flexible working from the first day of their employment (currently, it is only available to employees with 26 weeks’ continuous employment);
   • require employers to consult with an employee and discuss alternative options if they intend to reject their flexible working request;
   • permit employees to make two flexible working requests within any 12-month period (currently, employees can only make one request in a 12-month period);
   • require employers to respond to flexible working requests within two months (currently, employers must respond within three months); and
   • remove the existing obligation on employees to explain what effect, if any, the change applied for would have on the employer and how such effect might be ameliorated.

   Notably, the eight business reasons for refusing a flexible working request remain valid.  Such reasons include, among other things, (i) additional costs, (ii) effects on work product’s quality and (iii) the business’ ability to meet customer demands. 

   The proposals will affect both employers who receive flexible working requests and individuals who are looking to change their contracted working arrangements within England, Wales and Scotland.  However, as primary and secondary legislation is required, it is not clear when the proposed changes will take effect.
   
   

3. Upcoming changes to statutory pay in 2023
   
   

   The Department for Work and Pensions has published the benefit and pension rates 2023 to 2024.  The following new rates of statutory pay will take effect from 10 April 2023:

   • sick pay will be increased from £99.35 to £109.40;
   • maternity pay will be increased from £156.66 to £172.48;
   • paternity pay will be increased from £156.66 to £172.48;
   • shared parental pay will be increased from £156.66 to £172.48; and
   • parental bereavement pay will be increased from £156.66 to £172.48.
     
     

For further advice on any of the issues raised above, please contact a member of the London Employment team.

^[1] BNP Paribas v Mezzotero [2004] IRLR 508 EAT.

^[2] According to Unilever PLC v Proctor & Gamble Co [1999] EWCA Civ 3027, the without prejudice rule cannot be relied upon if the exclusion of evidence would “act as a cloak for perjury, blackmail or other unambiguous impropriety”.