UK Employment Law Update - March 2025 | Perspectives

27 March 2025 Reed Smith Newsletters

Home Perspectives UK Employment Law Update - March 2025

Our March 2025 update provides the usual round-up of interesting recent cases, including on the protection of philosophical and religious beliefs in the workplace, and an employment tribunal decision with potentially far-reaching implications for all unlawful deductions from wages claims. We also provide an update on the Labour government’s employment law reforms, with particular focus on the recent publication of an Amendment Paper in relation to the Employment Rights Bill.

Authors: Robin B. Jeffcott David Ashmore Carl De Cicco Jo Powis Alison Heaton

Case law updates

Unlawful deductions from wages: In an influential decision, which is likely to be appealed, an employment tribunal (ET) held that the current two-year backstop on all claims for unlawful deductions from wages is void. The ET noted that the two-year backstop was implemented using regulations made under the (now repealed) European Communities Act 1972 (ECA). The ET accepted that the government was authorised to apply a two-year backstop on the enforcement of the EU-derived right to holiday pay, but ruled that it was not Parliament’s intention for section 2(2) ECA to be used to interfere with primary domestic rights, especially those as fundamentally important as the right not to suffer unlawful deductions from wages. The ET held that it would have required primary legislation to lawfully apply the two-year limit to all claims, and therefore that the two-year backstop was ultra vires and of no effect, opening the door to the claimant claiming multiple years of deductions rather than being limited to only two years (Afshar v. Addison Lee Ltd).

Participation in the activities of trade unions: The Court of Appeal (CA) has ruled that it is unlawful to blacklist an employee for merely taking part in the activities of trade unions. In this case, the appellants were airline pilots and members of an independent trade union (BALPA). In 2019, the employer withdrew the pilots’ concessionary travel benefits for 12 months after they participated in a strike organised by BALPA. Under an earlier ruling by the Employment Appeal Tribunal (EAT), the employer was free to blacklist all the employees who had taken part in the strike. The CA found that the natural meaning of “activities of an independent trade union” for the purposes of section 146 of the Trade Union and Labour Relations (Consolidation) Act 1992 included organising industrial action, in line with the judgment of the Supreme Court in Mercer v. Alternative Future Group Ltd. It followed that regulation 3 of the Employment Relations Act 1999 (Blacklists) Regulations 2010 should be given its ordinary meaning so that it is unlawful to blacklist an employee for the simple act of taking part in the activities of trade unions, including industrial action organised by a trade union (Morais v. Ryanair DAC).

Injury to feelings awards: The EAT has provided useful guidance on compensatory awards for injury to feelings in discrimination cases, with insight offered into the application of the different Vento bands (Vento v. The Chief Constable of West Yorkshire Police). The EAT noted that, while there must be some evidence of injury to feelings before an award could be made, claimants would normally suffer some degree of injury to feelings in discrimination cases. Therefore, when evidence of injury to feelings is sparse, the EAT suggested that the manner of discrimination could indicate the level of injury, provided that the tribunal keeps in mind that it is compensating the claimant for the injury and not the manner of discrimination. The EAT noted that there was a significant gap in the factual scenarios encompassed by the Vento bands and concluded that, apart from the frequency and duration of the claimant’s exposure to discrimination, other relevant considerations could include: (1) whether the discrimination was overt; (2) the existence of ridicule or exposure; and (3) whether the discrimination showed an imbalance of power, influence and information. The EAT stated that the parties could contribute positively by giving it more direct evidence, with the burden being on the claimant to show that their feelings were injured and, importantly, to what extent (Eddie Stobart Ltd v. Graham)

Expression of philosophical belief: Was a pastoral administrator and work experience manager, who was dismissed for gross misconduct after someone complained to the school she worked at about Facebook posts she had made criticising the teaching of sex education, and specifically “gender fluidity”, in schools unlawfully discriminated against by her employer? Yes, concluded the CA in a case that was widely reported in the press. The Facebook account was in the employee’s maiden name and contained nothing that suggested any connection with the school. The CA held that it is necessary to judge an employee’s statement by what is actually said, rather than by what some readers of the statement (in this case the parents of children at the school) might choose wrongfully to read into it. He noted that this is particularly important in the realm of social media posts, where messages are often read hastily and without any consideration as to the meaning. The CA concluded that, although the school may have been entitled to object to the language used in the Facebook posts, its decision to dismiss was a disproportionate response. There were multiple factors which contributed to this finding, including the fact that: (1) the language used of “the LGBT crowd” may be objectionable, but is not grossly offensive and did not incite hatred; (2) the language did not come from the employee, but from reposts of others’ messages; (3) there was no actual evidence that the reputation of the school had been damaged; and (4) even if the readers feared that the employee would let her views influence her work, neither the employer nor the tribunal believed that this was truly the case (Higgs v. Farmor's School).

Unfair dismissal: In order for an employer to successfully defend an unfair dismissal claim, it must initially show it had a potentially fair reason for the dismissal. One such reason is “some other substantial reason” (SOSR). In this recent decision, the EAT looked at a scenario where an employer genuinely, but mistakenly, believed that an employee had resigned. The EAT ruled that in such a scenario it is open to the ET to conclude that the dismissal was for SOSR and that the employer had a potentially fair reason for dismissal. In assessing the fairness, the ET should then go on to consider whether the person who mistakenly believed that the employee had resigned had taken the steps that any reasonable employer would take to ascertain whether the employee had in fact resigned, prior to acting upon that belief (Impact Recruitment Services v. Korpysa).

Desk move treated as demotion: An employee is entitled to resign and claim constructive dismissal in circumstances where their employer has breached the implied term of trust and confidence. In this case, an ET concluded that a branch manager at an estate agents had been constructively dismissed when, after he transferred to a new branch, he was told that he would be sat in the middle of the office, rather than at the back. The ET noted that the desk at the back of the office had a “symbolic significance” as it was where the branch manager would traditionally sit. The ET held that the desk move was perceived as a demotion and breached the implied term of trust and confidence (Walker v. Robsons (Rickmansworth) Ltd).

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UK Employment Law Update - March 2025

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