Sintons Employment Law E-Bulletin – Issue 61


  • Employers cannot have ‘a reasonable and proper cause’ for breach of the implied term of ‘trust and confidence’ where they impose a significant pay cut which also amounts to a breach of an express term – Mostyn v S and P Casuals Ltd UKEAT/0158/17
  • Context is key when considering whether a comment is discriminatory – Bakkali v Greater Manchester Buses (South) Ltd (t/a Stage Coach Manchester) [2018] UKEAT/0176/17
  • Unfair dismissal and extension of limitation periods – DHL Supply Chain v Fazackerley UKEAT/0019/18
  • Workers now entitled to itemised pay statements – Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order

Employers cannot have ‘a reasonable and proper cause’ for breach of the implied term of ‘trust and confidence’ where they impose a significant pay cut which also amounts to a breach of an express term – Mostyn v S and P Casuals Ltd UKEAT/0158/17

The Claimant was employed as a sales executive and between 2012 and 2016 his sales figures fell quite significantly. In February 2016, the Respondent asked him to accept a significant pay cut, from £45,000 to £25,000, although he would continue to receive a small commission. The Claimant complained, which was subsequently treated as grievance and was rejected by the Respondent. The pay cut was confirmed and the Claimant resigned with immediate effect and claimed constructive unfair dismissal based on a breach of the implied term of mutual trust and confidence.

The Employment Tribunal (“Tribunal”) held that the Respondent had acted in way that was likely to destroy or seriously damage the relationship of trust and confidence. However, it concluded that the Respondent had reasonable proper cause for asking the Claimant to take a pay cut; due to the dwindling sales figures and how the Claimant did not take steps to improve sales performance or suggest alternative proposals. The Tribunal was of the opinion that the Claimant had not proved there to be any breach of a fundamental term of his contract of employment and therefore could not claim constructive or wrongful dismissal. The Tribunal also directed that even if a dismissal had been established, it would have been found to be fair on the grounds of capability and would have been within the range of reasonable responses

The Claimant was successful on appeal to the Employment appeal Tribunal (“EAT”), submitting that the pay cut was a breach of an express contractual term and the implied term of trust and confidence. Whether the breach was repudiatory was not a question of reasonableness where conduct amounting to a breach of the implied term was also a breach of an express term relating to salary; there could be no reasonable and proper cause for repudiating the contract. The Tribunal had erred concluding the contract had not been repudiated and thus it was held the Claimant had been constructively and wrongfully dismissed. The EAT also held that the Tribunal’s conditional decision that any dismissal could not be found to be unfair, could not stand.

The case has been remitted to another Tribunal to decide if the Claimant was unfairly dismissed. In considering varying salary terms which may have significant impact, Employers should be alert to this view that Employees may be able to claim constructive dismissal in these circumstances. However, it is not yet established whether this dismissal will be considered unfair.

Context is key when considering whether a comment is discriminatory – Bakkali v Greater Manchester Buses (South) Ltd (t/a Stage Coach Manchester) [2018] UKEAT/0176/17

The EAT held that asking a Moroccan Muslim colleague whether he ‘still supported Islamic State’ did not amount to direct discrimination nor harassment related to race or religion.

The Claimant was employed as a bus driver and was a Muslim.  In October 2015 he had a conversation with another employee about a report involving Islamic State (IS) fighters. The comments made in the report, which the Claimant relayed to his colleague, could reasonably have been understood as being of a positive nature.  A few days following this conversation, on 19th October the other employee asked the Claimant whether he was still ‘promoting IS’. The Claimant was upset and a heated dispute followed resulting in the Claimant being dismissed for gross misconduct because of his aggressive response. He brought claims for direct discrimination on the grounds of religion or race and for harassment related to religion or race based on the comments about IS.

The Tribunal dismissed the claims. However, it did note that without context, the remark on 19th October could have supported an inference of discrimination, potentially suggesting a link between the Claimant being a Muslim and supporting IS. However, the Tribunal was satisfied the remark was made because of the prior conversation and not ‘because of’ nor ‘related to’ the Claimant’s religion or race. The Claimant appealed to the EAT arguing the Tribunal failed to apply the correct test for harassment.

The EAT refused the appeal and held the Tribunal was entitled to rely on the direct discrimination finding when deciding the harassment claim as both were based on same facts. It did observe that conduct ‘related to’ a protected characteristic, for the harassment test, is wider than conduct ‘because of’ a protected characteristic for direct discrimination. Nonetheless, the Tribunal was correct in its finding and had properly considered if the conduct was ‘related to’ religion or race and took into account the context.  The EAT noted that another Tribunal may have made a different conclusion, however this decision was correct in law.

Employers should ensure equality policies and staff training are kept up to date as unlawful harassment may cover more unfavourable treatment than that originally considered to amount to direct discrimination. However, whether a comment is discriminatory will always be dependent on the specific facts of the case.

Unfair dismissal and extension of limitation periods – DHL Supply Chain v Fazackerley UKEAT/0019/18

The EAT held where erroneous ACAS advice caused a delay in an employee presenting an unfair dismissal claim in time to the Tribunal, it was not reasonably practicable for the claim to have been brought within the three month, less one day, statutory period.

The Claimant was dismissed by DHL, Respondent, on 15th March 2017 and in order to bring an Employment Tribunal claim he would have needed to initiate ACAS Early Conciliation before 14th June 2017. He contacted ACAS via the helpline and was advised to appeal and exhaust the internal appeal process before beginning Early Conciliation or Tribunal proceedings; he was not informed about the limitation deadline and did not take any further advice.

The Claimant appealed but the meeting did not take place until 22nd June 2017; after which he lodged the ET1 on 19th July 2017, which was out of time. The Tribunal allowed the claim on the basis that it was not reasonably practicable for the claim to be brought in time as the Claimant had been advised by ACAS to wait until after the appeal process (which was slow to conclude), without any regard to limitation periods. The Respondent appealed.

The EAT agreed with the Tribunal as the Claimant had been advised by a free governmental agency and not a trained solicitor, although it did point out that a different judge may have taken an alternate view. Once the Claimant realised his rights, he took further advice and lodged his claim promptly.

Employers should be aware that where appeals are lengthy and result in timing out an Employee’s limitation period, if the Employee has taken advice from a government agency and presented a claim out of time, it does not automatically mean the claim cannot proceed.

Workers now entitled to itemised pay statements – Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order

The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) Order (“Order”) has been made; amending the Employment Rights Act 1996 (“ERA”) to provide all workers, as defined under sections 230(3) of the ERA, with a right to be given a written itemised pay statement at or before the time any payment of wages or salary is made to the worker.

The written statement must include the gross amount of wages or salary, amounts of any variable, any fixed deductions including the purpose they are made, the net amount payable, and the amount and method of payment (if different parts are paid in different ways). Furthermore, where wages or salary varies by reference to time worked, the statement must also contain the total number of hours worked in respect of the variable amount of wages or salary.

The Order comes into force on 6 April 2019 and will not apply to wages or salary paid for periods of work prior to this date. Employers must ensure they take necessary steps to be able to comply and provide all workers with an itemised pay statement that includes all the required information, as the Order entitles workers to enforce this right at an Employment Tribunal.


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