ELA Briefing - May 2025

VOLUME 32 NUMBER 4

BRIEFING May 2025 MARC JONES Marjon Law

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EDITORIAL

CASPAR GLYN KC 2 ELA NEWS Cloisters CLIVE HOWARD Keystone Law

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IN BRIEF

NICK HURLEY and RACHEL HEARN 6 MAHMOOD v STANDARD CHARTERED BANK: CRS A LANDMARK DECISION IN DISCRIMINATION AND VICTIMISATION SAM WHITAKER 9 FORFEITURE FOR COMPETITION CLAUSES: ARE Debevoise & Plimpton LLP THEY RESTRAINTS OF TRADE?

CHARLES CROW 13 PLATFORM: DISCRIMINATION THAT ‘ARISES FROM’ No.5 OR IS ‘RELATED TO’ BELIEF

KERENZA DAVIS 17 THE RISKS OF INTERNAL SOCIAL MEDIA Blackstone Chambers SAPAN MAINI-THOMPSON and CHARLOTTE ELVES Outer Temple

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FOR WOMEN SCOTLAND v SCOTTISH MINISTERS

Editor MARC JONES Marjon Law marc@marjonlaw.co.uk Editorial committee NATASHA ADOM Littler KATHLEEN BADA Dentons UK and Middle East LLP CLARE FLETCHER Slaughter and May

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a word from the editor

This month marks a historic milestone as employment tribunals turn 60 on 31 May. For those members who are slightly long in the tooth, tribunals were previously known as industrial tribunals and were established by the Industrial Training Act 1964. Initially, tribunals determined appeals against training levy assessments imposed on employers by Industrial Training Boards. Oh, how tribunals ‘the majority of have changed, and beyond recognition since 31 May 1965. companies appear For those members who might have missed it, from content to keep to the 21 May, the Presidential Practice Direction Presentation DEI status quo’ of Claims, Responses and Statutory Appeals to the Employment Tribunals in England and Wales and in Scotland takes effect. What this means in practice is that there will be four methods to present an ET1 or enter an ET3: (i) using the online portals ‘MyHMCTS’ for represented parties and the ‘Citizens’ portal for unrepresented parties; (ii) by post to the Employment Tribunal Central Office, PO Box 11225, Loughborough, LE11 9PX or Employment Tribunals Central Office (Scotland), PO Box 27105, Glasgow, G2 9JR; (iii) by hand to an offices listed in the Practice Directions; and (iv) in exceptional circumstances (where there is a fault with the portals and evidence has been provided) to etsubmission-engwal@justice.gov.uk or etsubmission-scot@justice.gov.uk Our ELA Chair has written an article with Olivia-Faith Dobbie on UK organisations rolling back on diversity, equity and inclusion (DEI) policies in the media, and in particular LinkedIn, which is well worth a read. Thankfully, solicitors I have recently spoken with who have received enquiries about DEI policies from companies, especially those with a US parent, have reported that the majority of those companies appear content to keep to the status quo (for now, at least).

A case caught my eye in the Nursing Times about an employment tribunal claim brought by Mr McGuiness, a community nurse, against the Mersey Care NHS Foundation Trust for failure to make reasonable adjustments to support him after he returned to work in May 2018 after suffering a brain haemorrhage (Mr A McGuinness v Mersey Care NHS Foundation Trust ET2409186/2021).

Mr McGuiness successfully claimed that the failure to make reasonable adjustments had caused a recurrence and exacerbation of depression and anxiety. He was absent due to sickness from October 2019, due to difficulties with memory loss and returned to work in February 2020. However, the Trust took until August 2020 to begin implementing some of the adjustments, with further adjustments not being made until December 2020. In April 2021, Mr McGuiness suffered a mental health crisis because the Trust failed to remove him from case load holder and coordinator duties. In September 2023, the tribunal concluded that the Trust had failed to provide reasonable adjustments. In a recent remedy judgment, Mr McGuiness was awarded £202,452 for personal injury, financial loss, care costs, injury to feelings, pension costs and other losses.

A reminder to our readers that the ELA Annual Conference is on 15 May, which I will be attending, so please say hello.

If you would like an article to be considered by the editorial committee, please send this to me at ELABriefingEditor@elaweb.org.uk by 9 am on 2 June.

I sign off this month with a quote from US aviation pioneer Amelia Earhart: ‘The most difficult thing is the decision to act. The rest is merely tenacity. The fears are paper tigers. You can do anything you decide to do. You can act to change and control your life and the procedure. The process is its own reward.’

MARC JONES, Marjon Law

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ela news

ELA’s Support For Equalities and DEI Policies Hardly a day goes by now without a business announcing that it is rolling back its diversity, equity and inclusion (DEI) initiatives in the UK. In my view, this increases the legal risk for a business. DEI policies, properly set up and implemented, have numerous legal benefits such as minimising the risks of indirect discrimination, discharging the ‘ELA supports the legal positive duties under ss.40 and 40A of the Equality case for DEI policies Act (which will be expanded next year), allowing and will be getting its the statutory defence to be run under s.109 of the message out’ Equality Act and also demonstrating both to a tribunal and the EHRC that a business is engaging with equalities and should control the risk of adverse findings. However, the climate is more sceptical of such policies. Businesses, therefore, should carefully consider the legitimate basis for such a policy under ss.158-159 of the Equality Act and be ready to demonstrate that evidence. Secondly, the policy should be necessary and proportionate to meet that aim.

As an apolitical but legal body, the central intellectual reason that ELA is committed to equality is because it supports two tenets of the rule of law, namely (i) that the law of the land should apply equally to all, save to the extent that objective difference justifies differentiation and; (ii) that the law must provide for the protection of fundamental human rights. Thoughtful DEI policies powerfully support the rule of law’s demand for equality and for the protection of fundamental rights – such policies bring the rule of law to the workplace and ELA strongly supports them because as lawyers we are committed to the rule of law.

ELA supports the legal case for DEI policies and will be getting its message out. However, not only are strong DEI policies good for the rule of law but they holistically support a business with research supporting higher retention rates, greater engagement from candidates, increased productivity and better reputation. At ELA, I reaffirm our commitment for ensuring equal opportunities for all. I do that not just because they support the rule of law, not just because they bring benefits to a business and its employees but also because it is the right thing to do.

Annual Conference This edition of the Briefing will come out before our Annual Conference. It sold out last year, and I am sure that it will sell out again this year. If there are any spaces left, I would encourage you to book for yet another fantastic conference which has been programmed by our fabulous Training Committee under the superb leadership of David Regan.

Recent activities • Training Committee webinars included ‘Tribunal Practice and Procedures: Acas and time limits’, 3 April and Employment in Hospitality, 30 April. An online ‘Discrimination: The law and strategy’ course took place on 23-24 April.

• The Pastoral Committee organised a webinar on ‘Vicarious Trauma’ on 2 April.

• The regions: a social lunch took place in Guildford on 30 April.

Looking ahead • Forthcoming Training Committee webinars include ‘Employment in Education’, 5 June. The ELA Annual Conference will be held in London on 15 May. • There will be an ELA Summer Drinks event in London on 11 June.

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• In June, the Legislative & Policy Committee will respond to the open consultation on the Equality (Race and Disability) Bill on mandatory ethnicity and disability pay gap reporting.

• The Pastoral Committee has organised a webinar on ‘Digital Wellbeing’ on 19 June.

• The regions: in Leeds, ‘An Introduction to Advocacy for Junior Employment Lawyers’ will take place on 8 May. Social lunches are planned in Newcastle (8 May) and Winchester (19 June), and a quiz has been organised in Manchester (22 May).

CASPAR GLYN KC, Cloisters

ELIPS Online has been running successfully for over four years now, having received full approval from HMCTS to be a permanent scheme. It also has the support of the judiciary and has been endorsed by the President of the Employment Tribunals (England & Wales), Judge Barry Clarke.

ELIPS is extremely grateful to all of its valued volunteers who give up their time in order to help with the clinics (we couldn’t run this scheme without you!).

We are currently seeking new volunteers who would be interested in being involved with our online clinics.

If you would like to volunteer (or would like to know more about the scheme), please contact the Pro Bono Administrator (elips@elaweb.org.uk). (To be eligible, barrister volunteers must be tenants at a set of chambers, solicitor volunteers must have a minimum of two years’ PQE and hold a current practising certificate. All volunteers must be a member of ELA).

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in brief

Whistleblowing on the rise Whistleblowing reports and claims are significantly increasing. The software provider Safecall in its annual Benchmark Report confirmed reports of workplace concerns increased by 16% in 2024. Most such reports related to discrimination and bullying rather than fraud or corruption. The Financial Conduct Authority (FCA) also reported that, in the last quarter of 2024, there ‘more employers have was a significant increase in reports of wrongdoing. whistleblowing policies Both the Benchmark Report and the FCA identified in place and at least that a significant number of the whistleblowers chose aim to publicise them’ to remain anonymous.

The number of reports feeds into legal claims and this is demonstrated by the number of whistleblowing claims in the employment tribunal increasing by 92% between 2015 and 2023.

Various explanations for the increase in whistleblowing reports and claims can be put forward. Safecall identified the increased confidence of employees in whistleblowing procedures and the channels available to raise concerns. The rise can also perhaps be explained by the increased awareness of employees about the available legal protections. There is also the increased prevalence of a ‘speakup’ culture.

Certainly more employers have whistleblowing policies in place and at least aim to publicise them. Combine this with the wide reporting of whistleblowing cases, and that an individual who wishes to raise concerns is likely to be more ready and willing to start the process.

The publicity attached to the arena of whistleblowing may well increase this year with legal debates. The Employment Rights Bill 2024-2025 is making its way through the House of Lords and one reform included is to add sexual harassment as a new category of wrongdoing for whistleblowing disclosures. While reporting sexual harassment has always been capable of being a qualifying disclosure, this could encourage more victims of sexual harassment to speak up. The Private Members’ Bill covering the Office of the Whistleblower is also making progress in the House of Commons. It proposes to establish an independent Office of the Whistleblower to enforce standards for the management of whistleblowing cases, provide disclosure and advice services and direct whistleblowing investigations. Whether the Bill ever becomes law, the debate could further raise the profile of whistleblowing.

Omission in whistleblowing protection Despite the increase in awareness of protections for whistleblowing, one recent case is a reminder of the limitations of the relevant law. In Sullivan v Isle of Wight Council [2024] EAT 3, the claimant applied for a job with the council. Miss Sullivan subsequently argued that she had made protected disclosures and that, because of the protected disclosures, had suffered a detriment. The case, surprisingly, went all the way to the Court of Appeal, which confirmed that there was no protection for job applicants (other than those making applications for NHS positions which was specifically provided for in the legislation).

The Court of Appeal did consider whether Article 14 of the European Convention on Human Rights applied. This provision can secure protection against discrimination due to any ‘other status’. Even if it did apply, the court considered that any difference in treatment was objectively justified.

Campaigning groups have long argued that job applicants should have protection under the whistleblowing legislation. It is not unusual to see whistleblowing claimants, even those successful in their claims, subsequently face

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significant obstacles in resuming their employment due to the perception that they could be regarded as a troublemaker. A failure to provide any protection in the job market is probably a factor in deterring individuals from making protected disclosures, so defeating the purpose of the legislation.

Application for anonymity made easier F v J [2025] EAT 34 has given a helpful clarification of the test to apply in respect of an application for anonymity. The claimant was disabled and had Asperger’s Syndrome. He pointed out to the tribunal that he kept this diagnosis private from many including some members of his family. He was concerned that should his diagnosis become public during the tribunal proceedings, this would adversely affect him in subsequent employment. Accordingly, he applied for anonymity under Rule 50 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (SI 2013/1237). The application was rejected by the tribunal.

The EAT found that the tribunal had applied the wrong test when considering the application, by focusing on the need for medical evidence to support the argument that the claimant would face stigma in his future employment. The EAT identified that there would be no medical evidence that could specifically deal with this question. Essentially, it was guesswork as to the future adverse effect. Instead, the EAT set out the correct test which was whether the claimant had a reasonable foundation for his belief that he would be facing adversity if his condition was made public. Here, the EAT concluded that the concerns were genuinely held, had an objective foundation and were reasonable. Furthermore, anonymity was not contrary to the public interest and should be granted.

The case is a helpful reminder that while the principle of open justice is a starting point, and is strongly applied, there are ways to obtain anonymity which should be considered at the outset of proceedings.

Tribunal guesswork in compensation calculation In Goulay v West Dunbartonshire Council [2025] EAT 29, the EAT had to overturn a decision of the tribunal where various assertions without evidence had been made by the tribunal leading to a significant reduction in compensation.

The first mistake was reducing future losses on the basis that there was a likelihood that if the claimant had not been dismissed, the employment relationship would have come to an end lawfully within a few years. However, here the future losses were based on the circumstances of the unlawful dismissal and the consequent effect on the claimant’s health. There was no evidence provided that any later lawful dismissal would have had the same effect on the ability of the claimant to mitigate his loss.

Secondly, the tribunal reduced the future losses on the basis that there was a likelihood the health of the claimant would have resulted in ill-health retirement in any event within a short period. However, there was no evidence to support this view.

Parties should focus on the evidence when seeking to recover or reduce potential future losses. It is not adequate to rely on speculation as to what might have happened if there had not been the unlawful dismissal.

CLIVE HOWARD, Keystone Law

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Mahmood v Standard Chartered Bank: a landmark decision in discrimination and victimisation NICK HURLEY and RACHEL HEARN, CRS

What does the first-ever discrimination and victimisation case decided under Dubai International Financial Centre employment law mean for discrimination claims in the future?

Background The Dubai International Financial Centre (DIFC) is one of a growing number of independent, financial free zones located within Dubai in the United Arab Emirates. Officially launched in 2004, the DIFC was conceived as part of Dubai’s strategic vision to diversify its economy. Since its inception, the DIFC has become one of the major global hubs for financial services, including banking, asset management, insurance and capital markets, attracting many of the world’s leading financial services institutions.

The DIFC has its own independent financial regulator (the Dubai Financial Services Authority) and independent court system. Its judiciary is made up of a mix of Emirati judges and judges from other common law jurisdictions (including the UK and Australia).

For employment lawyers in England and Wales, the DIFC is a jurisdiction that is of particular interest because it operates under a legal system which is distinct from the rest of the UAE. It also has its own codified laws on a range of matters (including corporate, commercial, employment and trusts, to name but a few) which are influenced by or directly adapted from the laws of England and Wales. Moreover, the common law jurisprudence of England and Wales can be persuasive in the DIFC courts. This means that the DIFC legal framework is, in many places, familiar to lawyers qualified to practise in England and Wales, as well as to international businesses and investors. However, there are some key and important differences as we explain in this article.

Shiraz Mahmood v Standard Chartered Bank Mahmood was heard last year in the Court of First Instance in the DIFC and was the first ever case to tackle the issues of discrimination (on the ground of race) and victimisation under Part 9 of the Employment Law DIFC Law No 2 of 2019 (the Statute). Practitioners based in the UK considering the discrimination aspects of the Statute would be forgiven for assuming that the main aspects of the Equality Act 2010 (the Act) were cut and pasted into the Statute. While all doppelgängers bear a strong resemblance to their comparator they also have subtle differences.

This is also true of the Statute when compared with the Act. The case was heard by Chief Justice Wayne Martin, an Australian Judge with a strong commercial law background. His voluminous and detailed 188-page judgment provides invaluable guidance on the judicial approach in the DIFC to some of the key discrimination concepts, in particular, the burden of proof, the drawing of inferences and causation.

It is axiomatic that, in nearly all cases of discrimination in the modern workplace, it is rare to find concrete overt evidence of less favourable treatment when considering the effect of direct discrimination. In UK employment tribunals, employment judges are skilled in (and used to) probing under the skin of the facts and evidence as presented. It is well-established law in the UK that where the facts point to less favourable treatment without good explanation, the burden of proof shifts from the claimant to the respondent to show that discrimination was not at large. Case law in the UK tells us that motivation in discrimination can be conscious and subconscious with prejudices applying and informing behaviours.

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Mahmood v Standard Chartered Bank: a landmark decision in discrimination and victimisation ‘in Mr Mahmood’s case there was a litany of poor treatment that he relied on and asserted as less favourable’

On causation, Nagarajan and Igen are the benchmark cases and a discriminatory reason does not need to be a sole exclusive factor in causation or even the dominant one. It could be one of a number of factors and provided its effect on the treatment was significant and more than trivial, a claimant should still succeed in their case, notwithstanding the existence of concurrent and competing factors.

Alleged discriminatory treatment of Mr Mahmood In Mr Mahmood’s case there was a litany of poor treatment that he relied on and asserted as less favourable.

This included: • being regularly shouted at by his seniors in the Islamic banking team; • a negative focus on Mr Mahmood’s nationality and mockery of his British accent; • suffering a downgrading on his annual performance rating; • attempts to manage out Mr Mahmood under a settlement agreement; • initiation of a disciplinary procedure against Mr Mahmood after he described himself as ‘disappointed’ with senior management at the bank; • being ostracised in having his desk moved off the floor in which his business line was located; • the imposition of a written warning and a short-shrift dismissal of Mr Mahmood’s appeal of this sanction; • removal of Mr Mahmood’s variable compensation; and • finding his way on to a redundancy list and being dismissed by the bank.

In addition, and unusually for discrimination cases, there was contemporaneous circumstantial written evidence of discrimination in documents which referenced Mr Mahmood as a ‘cop of the colonial era’ and an ‘English scholar’ in anonymous complaints raised during his employment and at the relevant time.

Discrimination cases are often won and lost on the credibility of the witnesses. In this case, Martin CJ, plainly took a dislike to Mr Mahmood’s evidence preferring the evidence given by witnesses for the bank. The case appears to have hinged on these judicial evaluations as the judge was unprepared to draw adverse inferences that the treatment complained of was due to Mr Mahmood’s race or nationality and instead put this down to his behaviour and communication style.

Key differences of law between the Act and the Statute Burden of proof In discrimination cases in the UK, the burden of proving the case starts with the claimant but often shifts to the respondent employer if they are unable to advance a credible alternative (non-discriminatory) reason for the treatment complained of. In Article 61(1)(a) of the Statute, the burden, stubbornly, remains with the claimant throughout. This is somewhat sclerotic and will make it harder for claimants to make out their cases in the DIFC. Drawing of inferences Inferences of discrimination in UK employment tribunals are often drawn where there are primary findings of less favourable treatment on the facts, which are inadequately explained by the respondent. Martin CJ held in his judgment that ‘the failure of the employer to provide an explanation may support the drawing of an inference’. Taken together with the burden of proof, the position under the Statute seems to be the same position as applicable in the UK before the law changed to permit the shifting of the burden. It seems likely, therefore, that the same alacrity to draw inferences in UK cases will not be available in the DIFC court. This is another potential hurdle for claimants to jump.

Causation Martin CJ, held that the UK authorities on causation were good law and seemingly adopted these in the judgment (paras 44-52). He did, however, noting the danger of introducing another paraphrase for the test,

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Mahmood v Standard Chartered Bank: a landmark decision in discrimination and victimisation ‘we would expect the decision in Mahmood to have a chilling effect’

hold that if the prohibited ground made a ‘material contribution’ to the alleged detriment then causation would be established. It therefore seems that the DIFC court has adopted and developed a slightly evolved test for causation. Whether this makes it harder to establish causation may be a matter of semantics only, although instinctively this feels like a higher bar than an influence which is ‘more than trivial’.

There are a host of other notable differences between discrimination law in the UK and the DIFC, including: • a more generous time limit of six months from the act complained of in the DIFC (cf three months in the UK); • more restricted protected characteristics in the Statute (for example, not including sexual orientation and gender re-assignment); • no room for associative or perceptive discrimination in the Statute; and • a capped compensation of a year’s annual wage in the DIFC (with the possibility of multiplying this to the power of three where there is egregious or offensive conduct, Article 40(2) of the Law of Damages and Remedies DIFC Law No 7 of 2005).

Perhaps the main difference is that, in the DIFC court, costs will generally follow the event with the loser expected to meet the successful party’s costs (or at least most of them). This risk in costs to claimants will, in many cases on its own, act as a brake on them being prepared to exercise their rights and challenge alleged discrimination.

Conclusion The impact of the Mahmood judgment on the appetite of prospective claimants to launch proceedings based on allegations of discrimination will be interesting to observe. Contrary to some of the commentary on the case we have heard predicting an increase in claims, we would expect the decision in Mahmood to have a chilling effect. Only those would-be claimants equipped with strong hearts, deep pockets and possessed of strong inculpatory evidence of discrimination are likely to be prepared to exercise the rights conferred on them by the Statute. Whether this effectively deters litigants and becomes a barrier to justice remains to be seen.

CRS represented Mr Shiraz Mahmood.

KEY: Mahmood

Mahmood v Standard Chartered Bank CFI 044/2021, 1 October 2024

The Statute

Employment Law DIFC Law No 2 of 2019

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The Act

Equality Act 2010

Nagarajan

Nagarajan v London Regional Transport [1999] IRLR 572 HL

Igen

Igen v Wong [2005] IRLR 258 CA

Forfeiture for competition clauses: are they restraints of trade?

SAM WHITAKER, Debevoise & Plimpton LLP

Can ‘forfeiture for competition’ clauses be categorised as restraints of trade under English law? And how does this position compare to that in other jurisdictions?

Background Whether a restriction on an ex-employee following termination of employment will be a restraint of trade is often obvious; for example, express restrictions prohibiting the ex-employee from commencing employment with a competitor or soliciting certain clients/employees will obviously be subject to the restraint of trade doctrine.

There are, however, other restrictions (sometimes called ‘indirect’ or ‘atypical’ restrictions) where it is less obvious. One particular form of such restriction is a ‘forfeiture for competition’ clause, which essentially provides that, although the ex-employee is not prohibited from joining a competitor in a defined period following termination, if he/she chooses to do so, he/she will forfeit payments or benefits which might otherwise have vested or been payable. Such clauses are increasingly common in deferred remuneration and other incentive arrangements for senior management, particularly in private equity, fund management and other financial services areas.

Pension/commission forfeiture cases There have been several older English law cases which have examined whether forfeiture provisions would amount to a restraint of trade. Most of these older cases concerned forfeiture provisions in the context of pension and commission arrangements. In broad terms, the theme of most of these older cases is that, in deciding whether such provisions should be seen as a restraint of trade, the courts will look at their substance and practical effect rather than its form.

Pension cases Wyatt concerned an agreement by an employer to pay a pension by monthly instalments to an ex-employee, provided he did not compete with the employer. The Court of Appeal held that this provision was a restraint of trade. Similarly, Bull concerned a rule in a pension scheme which provided that a retired employee’s pension rights would be cancelled if the individual engaged in competitive activity. The High Court followed Wyatt and held that the provision was a restraint of trade and unenforceable. Both cases emphasised that there was, in practice, little distinction between an express covenant prohibiting competitive activity and one under which certain benefits would be discontinued if the employee chose to take up such work.

Commission cases Stenhouse concerned an insurance agent whose employment contract provided for continuing commissions following the termination of employment but which would cease to be payable if he provided services to competitors. Following Wyatt and Bull, the High Court held that the provision was a restraint of trade since, to receive the post-termination commission, the employee had to give up some freedom which he would have otherwise had, namely the freedom to commence employment in whatever field he chose. The provision was therefore a direct financial incentive to limit his activities and a restraint of trade.

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Forfeiture for competition clauses: are they restraints of trade? ‘more recent UK decisions also strongly indicate that English courts are likely to follow the older case law’

Phillips concerned a settlement agreement under which an ex-employee agreed that, for five years following termination, he would pay 50% of any commission he received from doing business with clients of his former employer. The Privy Council noted, that although there was no express prohibition on competition, the provision would be likely to cause the employee to refuse business which he might otherwise take and was held to be a restraint of trade. Similarly in Marshall, a (self-employed) agent’s right to ongoing renewal commission payments following termination was conditional on not competing with the company for one year. The High Court held this to be a restraint of trade, as it was a financial incentive not to carry on business in specified fields. Again, the court held that there was no relevant difference between a provision prohibiting someone from engaging in competition and one which, if the individual does not do so, he will receive some benefit to which he would not otherwise be entitled.

The above cases were also followed in the Irish High Court decision in Finnegan, in which part of an employee’s remuneration was deferred for a year, but it was specified that he would forfeit the deferred portion if he left to join a competitor during that period (but he would remain entitled to it if he left to join a noncompeting employer). The Irish High Court held this was a restraint of trade, on the basis that it tied him to the employer and effectively prevented him from commencing with a competitor during that period.

More recently, the case of X-R Touring concerned a commission arrangement of an employee of X-R Touring LLP, a concert booking agency for music artists. His employment contract contained a provision under which he agreed, following termination, to pay all sums obtained on certain bookings being made (by him or any entity with which he was then associated) to X-R, and to ensure that such bookings were instead made with X-R. The High Court held that this arrangement was a restraint of trade as it operated as a strong disincentive to him to work for any employer that had clients in common with X-R. In contrast to the above was the case of Sweeney which concerned a salesman who was entitled to commission on business he placed for the employer. Commission payments were stated to be payable to him only if he was in employment with the employer at the end of the month when the commission payments would normally be payable by the client. The EAT held that, in contrast to Marshall, this was not a restraint of trade. In Marshall, it was clear that the commission payments ceased if the individual worked in competition with the employer. In this case, however, there was no such condition, and the individual was free, on leaving the employer, to work for whomever he wished (despite the financial disincentive to leaving employment) and, accordingly, it did not amount to a restraint of trade.

More recent English case law More recent UK decisions also strongly indicate that English courts are likely to follow the older case law.

Tullet concerned provisions which provided that the employees would be required to repay all or some of a sign-on bonus if they did not commence employment or left employment within a certain period. The High Court rejected the argument that these were effectively restraints of trade, relying heavily on the decision in Sweeney. It noted that the provisions did not affect the employees’ ability to work after leaving and that they were substantial sums paid to highly paid employees for loyalty.

The recent case of Steel concerned a bonus arrangement under which the employee’s discretionary annual bonus was conditional on remaining in employment for three months from the date of payment and not having given or received notice of termination during that period. The contract gave the employer a right of clawback if the employee gave or received notice during that period. The EAT held that, although the bonus clawback provision operated as a disincentive on the employee to resign, nonetheless that did not turn such a provision into a restraint of trade. As was the case in Sweeney and Tullet, the provision did not impose any restriction on where the individual might work following termination and, accordingly, could not be seen as a restraint of trade. The Steel decision did not of course concern a forfeiture for competition provision but nonetheless it remains relevant because of how it contrasted ‘payment for loyalty’ provisions (such as in the Steel case itself and in Tullet and Sweeney, where such provisions where found not to be restraints of trade) as against cases

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Forfeiture for competition clauses: are they restraints of trade?

‘Marshall, Finnegan, Tullet and Steel strongly suggest that a forfeiture for competition clause would be treated by UK courts as a restraint of trade’

such as Marshall (where the fact that the commissions were stated to be conditional on not providing services to a competitor meant it effectively restricted the individual’s freedom to carry on a trade after termination of employment and was therefore a restraint of trade).

Marshall, Finnegan, Tullet and Steel consequently strongly suggest that a forfeiture for competition clause would be treated by UK courts as a restraint of trade. Nonetheless, to date there have been no cases in the UK which have analysed whether a forfeiture for competition provision in a share or incentive plan would be categorised as such and there remains a significant degree of uncertainty as to how UK courts would treat such provisions.

Cases in other common law jurisdictions It is, however, worth noting a Singapore case (Singh) which directly concerned a forfeiture for competition provision in a management incentive plan. The plan provided that any deferred incentives which had been awarded but not yet distributed would be forfeited if the individual engaged in competing activity in the two years after termination. At first instance, the court held that this provision was not a restraint of trade and applied the US ‘employee choice’ doctrine (see below), concluding that the provision was not in restraint of trade as it did not prohibit the ex-employee from competing but merely provided a financial disincentive against doing so.

On appeal, this decision was overturned by the Singapore Court of Appeal (SCA). The SCA undertook a thorough analysis of the relevant case law relying in particular on English case law such as the decisions in Wyatt, Marshall, Peninsula, Bull and Tullett (and the Irish decision of Finnegan) referred to above. In their view, the provision was a restraint of trade as it effectively governed what the employee could and could not do following termination (as was the case in Wyatt and Marshall), whereas a ‘payment for loyalty’ clause (of the type in Sweeney and Tullet) did not provide any such restriction and was not categorised as a restraint of trade.

The SCA was also influenced by whether the rights that were being forfeited were vested rights or not, a point that was not particularly the focus of the prior English case law. The Singh decision is, of course, not binding on UK courts but, given its heavy reliance on English case law, may be seen as persuasive.

Nonetheless, it remains uncertain how a UK court would treat such a forfeiture for competition provision, particularly in contexts such as private equity and fund management. For example, the Scottish case of Greck concerned an LLP agreement under which a member who left and joined a competitor would be deemed to be a bad leaver and forfeited rights to future carried interest. Although the Outer House of the Court of Session (OHCS) was not required to decide whether that provision was a restraint of trade (as the case was confined to the issue of whether a good leaver provision had been triggered factually) it indicated that: (i) it might be arguable that such a forfeiture provision would not be a restraint of trade if the new employer (particularly in an area such a private equity) would be willing to pay the employee a ‘make whole’ signon payment to cover the forfeited compensation (on the basis that such a make whole payment would effectively negate any restrictive effect); (ii) there might be ‘considerable difficulties in applying a two-dimensional view of restraint of trade principles to a multi-party agreement’ such as an LLP agreement; and (iii) it was possible that, in considering whether the provision was a restraint of trade, a different conclusion could be reached with respect to individual carried interest partners, depending on their individual circumstances.

The United States The position under English law set out above can be contrasted to that in many US states. For example, in Delaware, the Delaware Supreme Court recently confirmed in Cantor Fitzgerald that a forfeiture for competition provision in a limited partnership agreement (under which certain post-termination payments to a departing partner after leaving were conditional on the partner not competing) was not a restraint of trade but was

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Forfeiture for competition clauses: are they restraints of trade? ‘it is odd that there are no reported English law decisions on the use of forfeiture for competition provisions in the context of management incentive arrangements’

instead subject to the ‘employee choice’ doctrine (under which an employee has the choice to either abide by post-employment covenants and maintain their contractual rights to post-employment benefits or to compete and forfeit such rights).

More recently, the Delaware Supreme Court confirmed in LKQ Corporation that the principle established in Cantor Fitzgerald is not confined to partnership agreements only and could apply to forfeiture for competition provisions in a range of agreements, including restricted stock award agreements. In doing so, the court emphasised that Delaware law does not review forfeiture for competition provisions for reasonableness so long as the employee voluntarily terminates their employment. A similar position exists under New York law, where the courts generally recognise the employee choice doctrine if the employee leaves voluntarily and the employer is willing to continue the employment. Other US states, such as Florida, treat a forfeiture for competition clause as only applying to unvested benefits, while the same clause would be reviewed under the traditional reasonableness standard when applied to vested benefits.

Conclusion It is odd that there are no reported English law decisions on the use of forfeiture for competition provisions in the context of management incentive arrangements. Perhaps the reason for that is that, in practice, in many cases, the new employer of the employee that has forfeited the benefit in question may simply make the employee whole for the loss which he/she has incurred so the issue is never litigated. Despite that, as set out above, the case law suggests that, if and when the issue is decided on by a UK court, such forfeiture for competition clauses are likely to be viewed as indirect or atypical restraints of trade.

KEY: Wyatt

Wyatt v Kreglinger and Fernau [1933] 1 KB 793

Sweeney

Peninsula Business Service v Sweeney [2004] IRLR 49

Bull

Bull v Pitney-Bowes Ltd [1967] 1 WLR 273

Steel

Steel v Spencer Road LLP [2023] EWHC 2492 (Ch)

Stenhouse

Stenhouse and Sadler v Imperial Life Assurance Co of Canada Ltd [1988] IRLR 388

Singh

Mano Vikrant Singh v Cargill TSF Asia Pte Ltd [2012] SGCA 42

SCA

Singapore Court of Appeal

Philips

Stenhouse Australia Ltd v Phillips [1974] AC 391

Greck

Greck v Henderson Asia Pacific Equity Partners [2008] CSOH 2

Finnegan

Finnegan v J & E Davy [2007] IEHC 18

OHCS

Outer House of the Court of Session

X-R Touring

X-R Touring LLP v Javor [2024] EWHC 562 (KB)

Cantor Fitzgerald

Cantor Fitzgerald LP v Ainslie 312 A.2d 674 (Del. 2024).

Marshall

Marshall v NM Financial Management Ltd [1996] IRLR 20

Tullet

Tullet Prebon v BGC Brokers LP [2010] EWHC 484

LKQ Corporation

LKQ Corporation v Robert Rutledge No 23-2330, slip. op (Del. 18 December 2024)

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Platform: Discrimination that ‘arises from’ or is ‘related to’ belief CHARLES CROW, No.5

There is no overt reference in the Equality Act to the protection that exists (per Article 9.1 ECHR) for those seeking to manifest their religion/belief. In light of the recent decision in Higgs, the question arises: is it time for a new form of religious/belief discrimination, equivalent to the protection that is provided to those with a disability pursuant to s.15 EqA?

The need for s.15 EqA The decision in Malcolm significantly reduced the protection that it had been believed was provided by ‘disability related discrimination’ under the Disability Discrimination Act 1995 (DDA 1995). In essence, Mr Malcom’s defence to possession proceedings failed because, whether or not his act of sub-letting the premises (which was not permitted per his tenancy agreement) ‘related’ to his disability, a non-disabled person who had sub-let would have been treated in the same way. The requirement for a comparator approach meant that this form of disability discrimination protection added little to that provided by the prohibition of direct discrimination.

As a result, the Government inserted s.15 into the EqA: a new form of ‘discrimination arising from disability’ in which there was no requirement for a comparator approach. It prevents employers from subjecting employees to unfavourable treatment because of ‘something arising from their disability’ unless the treatment can be objectively justified as a ‘proportionate means of achieving a legitimate aim’. The explanatory notes confirmed that this new form of protection was ‘aimed at re-establishing an appropriate balance between enabling a disabled person to make out a case of experiencing a detriment which arises because of their disability and providing an opportunity for an employer or other person to defend the treatment’.

Relevant to the subject matter of this article, the legislature opted to provide this balance by way of a new form of discrimination, rather than by stretching, re-defining or providing exceptions to s.13 direct disability discrimination (treating someone ‘less favourably because of their protected characteristic’).

The problem, vis-à-vis religion/belief Something not wholly dissimilar to the Malcolm difficulty has arisen in the area of direct religious/belief discrimination; in cases where the adverse treatment complained of is said to be because of a manifestation of religion/belief.

Per Articles 9.1 and 10.1 ECHR, an individual has a fundamental right to ‘manifest’ their religion/belief (bearing witness in words and/or deeds) and a fundamental right to exercise freedom of expression, albeit these rights are ‘qualified rights’ because they are subject to the potential for lawful limitation/interference by virtue of Articles 9.2 and 10.2. Any such interference must be (i) prescribed by law; and (ii) justified (necessary and proportionate) by reference to legitimate interests specified in Article 9.2, including the ‘protection of the rights and freedoms of others’. By this means, there has to be a balancing between the rights of one individual (to manifest/express) with the rights of others (individually or collectively) who may be affected by the way in which a belief is manifested.

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Platform: Discrimination that ‘arises from’ or is ‘related to’ belief ‘there has to be a balancing between the rights of one individual (to manifest/ express) with the rights of others (individually or collectively) who may be affected by the way in which a belief is manifested’ While s.13 EqA (combined with ss.4 and 10) does not explicitly refer to/protect ‘manifestation of belief’, it is to be read as prohibiting less favourable treatment on such grounds (Higgs para 54). There can be no doubt this is important: for many adherents, manifestation of the belief is an integral part of the religion/belief itself (Eweida).

The more controversial or unpopular the belief being manifest, the greater the need for protection. As with freedom of speech, ‘freedom only to speak inoffensively is not worth having’ (Redmond-Bate) and exceptions therefore must be narrowly interpreted and their necessity ‘convincingly established’ (Vajnai). The dividing line between objecting to the expression of a controversial belief (which is protected) and objecting to the reaction it draws from others (which is not) may be a fine line indeed. If the right to manifest a belief is to be properly protected, it is required that any interference with that right satisfies the test for such limitations (per Article 9.2) and thereby is ‘convincingly established’.

The question has arisen: how are those qualified rights (to manifest belief/to express) protected by way of s.13 EqA where an employer is able to prove that the treatment complained of (often dismissal) was not because of the belief or its manifestation by the employee, but was because of the way in which the religion/ belief was manifested and/or expressed, or the effect that the manifestation had or might have on others; in other words, where the reason for the treatment was something ‘related to’ or ‘arising from’ the religion/belief rather than the religion/belief itself?

Jurisprudentially, how is the requirement that any interference with the fundamental right to manifest a belief should be no greater than is allowed by Article 9(2) and 10(2) ECHR to be imported into the test for direct discrimination? More specifically, how should a tribunal factor into s.13 the requirement that the interference with the right to manifest must be ‘necessary in a democratic society’, which has been confirmed to include the application of the four-stage test of proportionality in Bank Mellat? That is a test which can be summarised as considering whether the interference is a ‘proportionate means of achieving a legitimate aim’, the component parts of which are familiar to those dealing with the justification defence of s.15(2) EqA. The current solution (the test of ‘objective justification/proportionality’ per Page) In areas of law where conduct by an employee attracts legal protection (for example, protected disclosures, protected acts) it has been recognised that tribunals may be required to decide whether the real cause of the way the employee was treated by the employer was the protected conduct itself or some ‘properly separable feature of it’ (Higgs para 57, the ‘separability principle’).

If the reason for the dismissal is something not truly separate from the protected conduct of the employee (ie, it is so closely connected with the protected conduct that a distinction cannot fairly and sensibly be drawn), then the employer’s action against the employee will be found to be because of the protected conduct.

Tribunals are encouraged to be ‘slow to recognise a distinction between the complaint and the way it is made save in clear cases’ (Martin).

Applying the ‘separability’ principle to s.13 religion/belief discrimination cases, employers often successfully contend that the real reason for the impugned treatment (often dismissal) is not the religion/belief or the manifestation of it, but rather a separable feature – usually, the way it is expressed, the fact that some will be offended by it, and the risk of damage to the employer’s reputation. If this, without more, were sufficient to defeat a s.13 claim those expressing/manifesting controversial and unpopular beliefs may often find their Article 9.1 rights unprotected.

Page confirmed that the separability principle/approach applied to s.13 claims (and, by extension, to harassment cases, Higgs para 79): but it also clarified the ‘something more’ that is required. It held that a s.13 claim will be defeated where it can be proved that the reason for the act complained of/dismissal was the fact that the employee had manifested their belief ‘in some particular way to which objection could justifiably be taken’ (Page para 68). The Court of Appeal confirmed that the employer’s action against the employee (for example, dismissing them) had to be justified in the circumstances: if not justified, then the employer’s objection to the way the belief was manifested by the employer ‘cannot sensibly be treated as separate from an objection to the belief itself’.

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Platform: Discrimination that ‘arises from’ or is ‘related to’ belief ‘Page confirmed that the separability principle/approach applied to s.13 claims, but it also clarified the “something more” that is required’

In Higgs (para 73) Underhill, LJ confirmed that the ratio of Page is that; ‘adverse treatment in response to an employee’s manifestation of their belief was not to be treated as having occurred “because of” that manifexstation if it constituted an objectively justifiable response to something “objectionable” in the way in which the belief was manifested: it thus introduced a requirement of objective justification into the causation element in s.13 (1).’

At paras 86-7 of Higgs, it characterised this, as permitting ‘a defence of objective justification substantially corresponding to the terms of Article 9.2 of the Convention’ and stated that ‘where the act complained of was objectively justified it should not be treated as being done “because of” the manifestation in question’.

By way of further clarification (at para 75), in deciding whether the action taken against the employee was because of the manifestation of belief (protected) or alternatively what was perceived by the employer to be the objectional way in which it was manifested, it is best practice for tribunals to consider each of the four steps of the Bank Mellat ‘proportionality’ test, albeit there is a considerable overlap between each step.

As to the jurisprudential basis for the ratio of Page (the importation of the objective element, from Article 9(2) of the Convention, into s.13 EqA), the Court of Appeal considered that such importation is necessary so as to render s.13 compatible with Convention rights. It considered that it is ‘not necessary to identify a precise means of re-drafting the Act to achieve that result’. A number of ways of ‘re-drafting’ the Act were considered.

However, the Court of Appeal went on to find that, in any event, the ratio of Page was justified on ordinary principles of construction.

Various parties in Higgs raised fundamental objections to the Page approach/ratio. The Court of Appeal recognised that, generally speaking, justification of direct discrimination is not permitted but noted that ‘direct discrimination in manifestation cases is (uniquely) different from discrimination on the ground of other protected characteristics (and indeed from simple belief discrimination) because it is based … not on the possession of the characteristic as such but on overt conduct, which thus has the potential to impact on the interests of society and the rights and freedoms of others’. That put this type of case, it found, ‘in a special category which requires a more flexible approach’.

The parties in Higgs suggested three alternatives to the Page approach – all of which were rejected because they were inconsistent with Page and because none of them were found to be ‘obviously preferable’ to the ratio in Page. Those alternatives were: (1) require claimants to rely on a s.19 EqA claim of indirect discrimination ie, proving that the employer’s actions amounted to a discriminatory Provision, Criterion or Practice (PCP) that could not be justified. However, Underhill LJ pointed out that direct and indirect discrimination claims are mutually exclusive, and not all PCPs in this context could be sensibly described as ‘apparently neutral’. It is also, perhaps, unclear what the jurisprudential basis is for requiring proof of a PCP as a pre-condition to protection under Article 9.1; (2) stick with the ‘conventional severability approach’ (without reference to objective justification), but it was accepted that this would not afford protection in cases where the treatment complained of was genuinely because of the way the employee had manifested their belief but was a disproportionate reaction by the employer. This would fail to import the ‘proportionality’ limitation (in Article 9.2) to the ability of the employer to interfere with the employee’s right to manifest a belief; and (3) alter the definition of the protected characteristic, so that an objectionable manifestation of a belief would not be protected. However, this would still fail to afford protection against disproportionate reactions by the employer (as per alternative (2) above).

Another alternative?

There is clearly some unease with the current situation/solution (Page). Manifestation of belief cases introduce unique difficulties into the s.13 test, because of the requirements of Article 9.2 and the fact that that which is protected is the conduct of manifesting, which may have a direct impact on others. The jurisprudential basis of the ratio in Page is not clear/straightforward and ultimately requires a highly ‘purposive’ interpretation. Applying the ratio of Page is not necessarily easy in the absence of clear statutory wording.

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Platform: Discrimination that ‘arises from’ or is ‘related to’ belief ‘with careful drafting, it should be possible to ensure that employees are protected from unfavourable treatment because of their manifestation of religion/belief’

Another alternative would be the introduction of an equivalent of s.15 EqA in relation to the manifestation of religion/belief. This would, of course, have to be the work of Parliament not the courts. However, with careful drafting, it should be possible to ensure that employees are protected from unfavourable treatment because of their manifestation of religion/belief, while ensuring that employers are able to defend such cases on the basis that their action against the employee was justified as a proportionate means of achieving one of the legitimate aims (‘interests’) specified in Article 9.2. This would give employees obvious and clear Article 9.1 protection by way of express statutory language, whilst also giving statutory prescription for the ability of employers to interfere with the right to manifest. That latter statutory prescription would also avoid any doubt about the ‘prescribed by law’ requirement in Article 9.2.

(Underhill LJ was forced to reference ‘the employer’s rights under the employment contract’ as providing the necessary legal framework to satisfy this requirement of the Article 9.2, para 76, which is perhaps not an obvious answer because ‘prescribed by law’ might more naturally be read to refer to something prescribed by legislation, rather than private agreement/contract.)

Doubtless there may be some unforeseen (at least by this author) downsides to such a solution; but query whether they would be worse than the current state of affairs whereby s.13 direct religious/belief discrimination seems to mean much more than appears on its face.

KEY: EqA

Equality Act 2010

Redmond

Redmond-Bate v DPP [1999] EWHC Admin 733

ECHR

European Convention on Human Rights

Vajnai

Vajnai v Hungary [2010] 50 EHRR 44

Higgs

Higgs v Farmor’s School [2025] EWCA Civ 109

Bank Mellat

Bank Mellat v HM Treasury (No 2) [2013] UKSC 39

Malcolm

Lewisham v Malcolm [2008] UKHL 43

Martin

Martin v Devonshires Solicitors [2011] ICR 352

DDA 1995

Disability Discrimination Act 1995

Eweida

Eweida v United Kingdom (48420/10) [2013] IRLR 231

Page

Page v NHS Trust Development Authority [2021] EWCA Civ 255

PCP

Provision, Criterion or Practice

16 BRIEFING Vol. 32 No. 4

The risks of internal social media KERENZA DAVIS, Blackstone Chambers

Employers are now generally aware of the risks public social media platforms can pose to their businesses in the form of controversial posts, complaints, reputational damage and disputes between colleagues. Less discussed are the risks posed by internal social media ie, messaging systems like Slack, the Teams and Zoom chat functions, interactive intranet pages and internal message boards.

Many employers embraced these platforms in the expectation they would be straightforward tools for facilitating communication and engagement. This was particularly appealing in the context of remote working and global teams with colleagues in different offices and countries. For certain employers, internal social media also fit with their ‘employment as a lifestyle’ approach to workplace culture, going hand in hand with beanbags in the breakout room and senior execs in trainers.

However, internal social media can give rise to problems and recently, these have started spilling over from the to-do lists of HR advisors to the inboxes of employment lawyers and from there into Tribunal claims.

What are the risks of internal social media?

Something that is more of an irritant to employers than a legal concern is employees spending time chatting and posting on message boards when they could be focusing on their work. If this becomes excessive it could become a performance issue (if it is detected, it is something that could easily fly under the radar) but it is less likely to be a trigger for grievances or tribunal claims than the other matters considered below.

A step up from this risk-wise is employees sending inappropriate messages. These can range from a bit of embarrassing oversharing, to offensive jokes and rude remarks, to serious instances of bullying, harassment and sexual harassment, whether through the nature of the comments made or through excessive unwanted contact.

Sometimes harassment and bullying will be deliberate, with internal social media just providing a new forum for these behaviours. Often though, the ‘offender’ will not have intended any harm. The informality of internal social media and its similarity to the platforms people use to message friends and families can lull employees into making comments to colleagues they would never dream of making face-to-face.

Similarly, the lack of social cues (such as facial expression and body language) over internal social media means employees do not get the same warning signals they do in real life if their interlocutor is getting uncomfortable or not joining in with the joke. The absence of tone in written communications can also increase the risk of misinterpretation and misunderstanding.

Another common problem is posts about polarising political issues. These can quickly spiral into heated arguments with furious accusations of hatred and discrimination on all sides. While the specifics will vary, the overall contours of such dramas will be familiar to many employers in relation to subjects such as gender identity and the Middle East.

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The risks of internal social media ‘posts about polarising political issues can quickly spiral into heated arguments with furious accusations of hatred and discrimination on all sides’

The recent judgment of Wilkins, in which the claimant successfully sued his former employer for discrimination and harassment on the grounds of gender critical beliefs, provides a perfect case study of this issue. Much of the relevant unlawful conduct in that case took place on, or arose out of, internal social media.

Blogs and comments which criticised prominent gender critical figures, including by comparing them to white supremacists, were posted on the respondent’s internal communication platform. Mr Wilkins complained that these posts created a hostile environment for those with gender critical beliefs. Moderators attempted to speak to the original posters who responded by accusing Mr Wilkins of discrimination and harassment and claiming the moderators were engaging in ‘a wider pattern of suppression of the LGBTQ+ community and trans non-binary elements’.

Managers tried to intervene but only ended up making things worse, including by (wrongly) telling Mr Wilkins that he was entitled to hold gender critical beliefs, but it was ‘not OK to express such views in the workplace’.

Crucially, this was a markedly different approach from the one the respondent took towards views on the other side of the gender identity debate.

Mr Wilkins subsequently commented (anonymously) on an external website that the respondent was not a welcoming place for those with gender critical views. Other employees found this remark and posted numerous comments on internal social media in response, equating gender critical beliefs with bigotry and implying it would be unsafe to work alongside anyone who held such beliefs. Indicative examples of the comments included: • ‘I don’t feel I can bring myself to work but actually to the point of panic attacks, because some person or people who work at [the respondent] thinks this is acceptable behaviour … I’m genuinely afraid that the altright and actual Nazis and death threats will target me and mine’; • ‘Gender critical people are claiming victimhood, but they’re not entitled to it’; and • ‘What sad, pathetic, little lives these people must lead to be so fuelled with hate that they make the time to write and submit this.’

The last of these comments was made by a close colleague of Mr Wilkins. This illustrates another risk with internal social media. Employees who are kind and respectful to their colleagues in real life can quickly descend into hyperbolic invective on internal social media in a manner reminiscent of perfectly polite people suddenly exhibiting apoplectic road rage whenever they get behind the wheel.

A final, ancillary problem to all the above is the time and resources employers are expending on policing posts, moderating message boards and arbitrating fights about political issues, rather than running their businesses or, in the case of the respondent in Wilkins, improving the technological capabilities of the Ministry of Defence ‘for the benefit of the nation’.

What can employers do?

So what can employers do about these risks? One option that may seem unthinkable (in the sense that it has not occurred to most employers to even consider it) is to shut it all down.

Raising this idea tends to be met with astonishment, followed by insistence that it is simply not viable. But pointing out to clients that it is within their power to shut things down can be useful, even if only to remind them that having these platforms is a choice they are making and consequently something over which they can exert control.

It is worthwhile asking employers to really consider: • What is the benefit they hoped to get from internal social media?

• Are they seeing that benefit in practice?

• If so, does that benefit continue to outweigh the associated risks?

Depending on the answers to these questions, the advice on how to proceed will vary.

Removing all internal social media is unlikely to be an option most employers will want to pursue, but some may want to reduce the number of platforms and/or purposes for which employees are permitted to use those platforms, refocusing on uses that genuinely advance the organisation’s aims.

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The risks of internal social media ‘now may be the time to revisit and reign in social media to recapture their original purpose of engagement and communication’

There may be other unexpected positives (beside reducing risk) that arise from this. It is clear from the proliferation of ‘return to the office’ policies post-pandemic that employers recognise the benefits of having employees working together in the same physical space, even if core work tasks can be effectively completed remotely. Similarly, there are benefits of employees engaging in more face-to-face interactions and calls, rather than relying on internal social media as the sole source of communication.

In addition to considering tailoring internal social media platforms to organisational needs, employers should ensure they have a very clear policy on the use of internal social media. This policy should be in writing and should be included as part of onboarding training for new starters and referenced in regular reminders to existing employees.

The policy should explain precisely what internal social media should and should not be used for. Delineating this can be tricky, but placing the focus on work, ie specifying that internal social media is only to be used for work related posts/messages, will give the employer a boundary they will find easier to define and police.

Greater care is needed if permitted use extends beyond core work to diversity and inclusion topics or more social purposes, as it currently often does. Employers may think that prohibiting posts on controversial or political topics is an easy way to reduce risk if such wider use is allowed, but such policies can quickly run into difficulties.

For example, is expressing support for Ukraine controversial or political? Arguably not in the UK, but increasingly yes in the US. And if that is allowed, what about expressing support for Palestine? Would an employer feel confident explaining the distinction between posting ‘Slava Ukraini’ and ‘Free Palestine’ to an aggrieved employee?

Similarly, if the policy focuses on avoiding offensive or inappropriate posts, the employer will have to adjudicate on what falls within these categories. Again, that may sound straightforward, but it can be fiendishly complicated and hotly contested. Consider for example the phrase ‘Woman = Adult Human Female’. Some would view that as an uncontroversial dictionary definition; some as a respectfully expressed manifestation of gender critical beliefs; some as a provocative transphobic dog whistle. An employer making a call over whether it is offensive will consequently undoubtedly anger or upset someone.

Wherever the boundary is set, there will need to be some monitoring and enforcement. Careful thought needs to be given as to who will undertake that monitoring.

If the relevant policy does not draw the line at work-related content, those monitoring will ideally have a detailed knowledge of equality law, including as it interacts with freedom of belief and freedom of expression. They will also need to be able to remain neutral and even-handed when dealing with posts relating to contentious topical issues.

This may sound like a thinly veiled description of an employment lawyer in a bid to generate new work for ELA members, but it is drawn from the salutary lessons of the case law, which show moderators and managers getting into serious difficulties, up to and including being named and shamed in tribunal judgments, for getting these things wrong (see, for example, Fahmy where comments by a senior leader were held to have ‘opened the door’ to harassment and Wilkins where the management’s failure to remain objective was central to the claimant’s successful claim).

It may be that no one internal has the time or relevant skills to perform that role. As a result, some employers now employ staff specifically to focus on this task. But if things have got to that stage, again it may be worth reflecting on whether the benefit of the platforms that are requiring the most moderation still outweigh their costs.

Conclusion While employers may not wish to call time on internal social media, now may be the time to revisit and reign them in, to recapture their original purpose of engagement and communication.

KEY: Wilkins

Wilkins Unreported, The Times 21 March 2025

Fahmy

Fahmy v Arts Council England ET/6000042/2022

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For Women Scotland v Scottish Ministers SAPAN MAINI-THOMPSON and CHARLOTTE ELVES, Outer Temple

In a landmark decision, the Supreme Court has ruled that the protected characteristic of ‘sex’ in the Equality Act has a biological definition and the acquisition of a Gender Recognition Certificate under the Gender Recognition Act 2004 does not change a person’s sex in equalities legislation.

For the purposes of protection from discrimination, a trans woman retains male sex and a trans man retains female sex irrespective of whether they have formally changed their gender in law. Below, we explain the main conclusions reached by the court and the practical implications of the decision for employers when providing single sex services.

Relationship between the GRA and the EqA The Supreme Court’s decision centred on the interaction between two statutes with contrasting purposes: the Gender Recognition Act 2004 (GRA) and the Equality Act 2010 (EqA). The GRA provides a framework for recognising a person’s reassigned gender. The statute has major implications for the registration of births, marriage law, the acquisition of social security benefits and the receipt of pensions. The EqA, by contrast, is concerned with protecting individuals and groups from discrimination.

To understand the practical consequences of the GRA for changes to an individual’s legal sex, the court explored the legislation which preceded its passage into law, namely the Sex Discrimination Act 1975 (SDA), which adopted a biological definition of man and woman and the Sex Discrimination (Gender Reassignment) Regulations 1999, which recognised the status of gender reassignment without modifying the definition of sex within the SDA. Section 9(1) of the GRA states that: ‘Where a full gender recognition certificate is issued to a person, the person’s gender becomes for all purposes the acquired gender (so that, if the acquired gender is the male gender, the person’s sex becomes that of a man and, if it is the female gender, the person’s sex becomes that of a woman.’

Section 9(3) includes a carve out clause: ‘Subsection (1) is subject to provision made by this Act or any other enactment or any subordinate legislation.’

A central issue on appeal was the correct interpretation of this carve out clause. The Scottish Court of Session previously held that s.9(1) had the effect of changing a person’s sex under the EqA and that the carve out clause in s.9(3) could not apply to the EqA in the absence of express wording. In the Supreme Court’s judgment, however, the carve out clause is not limited to express statutory provision excluding the application of s.9(1) or to circumstances where that is a ‘necessary implication’ (para 101). The court held such requirements were superfluous because this was not a case where the court was being asked to override a basic tenet of the common law or constitutional rights (para 102). Accordingly, the absence of express wording in the EqA to limit the GRA’s scope of application was not determinative of the issue.

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For Women Scotland v Scottish Ministers ‘the Supreme Court referred to the “comprehensive and impressive” judgement of the EAT in Forstater’

The Supreme Court also held the wording ‘any other enactment’ in s.9(3) had both prospective and retrospective effect which meant it was permissible to look to the definitions of man and woman in previous legislation such as the SDA to ascertain Parliament’s intention when enacting the GRA (paras 103-108).

Furthermore, in light of the many statutes referring to men and women, whether enacted before or after the GRA, the court held it was ‘likely to be unhelpful for the coherence of the law to impose a stringent test for the application of s.9(3) (para 108)’.

Indeed, to demonstrate that the wording ‘for all purposes’ could not have universal application, the Supreme Court referred to the ‘comprehensive and impressive’ judgement of the EAT in Forstater in which Choudhury P addressed whether the presence of s.9(1) meant that the claimant’s gender-critical views were not worthy of protection under s.10 EqA and Article 9 of the European Convention on Human Rights (ECHR) (para 110). The judgment in Forstater showed that the phrase ‘for all purposes’ could not be construed in absolutist terms: ‘the effect of a Gender Recognition Certificate (GRC), whilst broad as a matter of law, does not mean that a person who, like the claimant, continues to believe that a trans woman with a GRC is still a man, is necessarily in breach of the GRA by doing so; the GRA does not compel a person to believe something that they do not’ (para 99 of the EAT’s judgment quoted at para 110). The endorsement of the EAT’s judgment in Forstater additionally confirms gender-critical beliefs are protected in law.

The need to ensure coherence and workability The court determined that to give ‘man’ and ‘woman’ any other definition than biological sex for EqA would introduce unacceptable incoherence and impracticability into the legislation, complicating its application and undermining the rights protection that the Act set out to afford. In rejecting an interpretation of man and woman predicated on certificated sex, the court identified a range of hazards which would follow from such an interpretation, including, inter alia: (i) trans persons with a GRC being afforded greater rights than trans persons without a GRC, despite both sets of persons belonging to a single cohort sharing the protected characteristic of gender reassignment (paras 198-203); (ii) pregnant trans men would be denied the raft of protections aimed at preventing discrimination because of pregnancy (para 178); (iii) protections given to those with the protected characteristic of sexual orientation would be seriously weakened (lesbian-only spaces and associations would become unworkable) (paras 204-209); (iv) provision of separate spaces and single-sex services would become impracticable (paras 210-228); and (v) that statutory provisions relating to, inter alia, single-sex characteristic associations and charities, women’s fair participation in sport and the operation of the public sector equality duty (PSED) would be unworkable (paras 229-246).

Protection of trans people from non-discrimination In its judgment, the Supreme Court was adamant to stress that a biological definition of sex in the EqA did not materially deprive trans people – with or without a GRC – of any existing protections from discrimination. In this regard, the court explained how the concept of ‘associative discrimination’ ensured trans people remain protected from discrimination on grounds of sex, irrespective of their gender reassignment status.

In Coleman, the European Court of Justice (ECJ) established that direct discrimination and harassment because of a protected characteristic encompasses cases where the discriminator perceives that the complainant has the characteristic, or in some other way associates the complainant with the protected characteristic (PC). In Coleman, the claimant suffered discrimination on grounds of disability because of her caring responsibilities for her disabled son. By extension of principle, where a trans-woman is the victim of discrimination by virtue of association with a biological woman (perhaps by way of appearance), there would be a viable claim for direct discrimination on grounds of sex even despite not having the PC of sex (para 251).

BRIEFING May 2025 21

For Women Scotland v Scottish Ministers ‘a biological definition of sex in the EqA did not materially deprive trans people – with or without a GRC – of any existing protections from discrimination’

Furthermore, following the passage of s.19A EqA, which preserves the decision of the ECJ in CHEZ, the principle of associative discrimination also applies to claims for indirect discrimination under s.19 EqA. Hence where a trans woman is put at a particular disadvantage by association with biological women impacted by a provision, criterion or practice (PCP), there is a viable indirect discrimination claim irrespective of GRC status (para 259).

The Supreme Court’s decision is also important in the realm of Equal Pay claims (paras 262-263). A perverse implication of the argument that ‘sex’ be read as ‘certificated sex’ is that trans men with a GRC could be deprived of the ability to make valid claims for equal pay. Given the requirement for a comparator of the opposite sex, a trans man with a GRC who is biologically female but legally male ran the risk of losing important employment rights for want of comparison to a higher-paid male employee. The Supreme Court recognised this position as ‘anomalous’ and surely contrary to the intention of Parliament. By ensuring ‘sex’ is read as ‘biological sex’, therefore, trans people with or without a GRC will be unimpeded in bringing claims for equal pay.

Single-sex provisions The decision of the Supreme Court has clearly established that trans people with a GRC do not have an entitlement to access services provided on a single sex basis for the opposite sex under Schedule 3 of the EqA. Commentators have been quick to say that whatever FWS’s implications for the provision of single sex services under Part 3 EqA, that does not provide a definitive guide to employers’ duties in relation to single-sex facilities for their staff.

The Supreme Court emphasised that the EqA protects not only individuals from discrimination but the interests of groups as a whole with group-based protections aimed at achieving substantive equality of results for groups with a shared protected characteristic (paras 142-150). It has oft been argued that employers and service providers should conduct individualised, case-by-case assessments before deciding to exclude trans people from single-sex spaces. The Supreme Court’s ruling, however, gives greater support for a more generalised approach to the achievement of legitimate aims. Generalised assessments require uniform and consistent standards. The practical implications of these divergent approaches are well illustrated by the example of toilet provision in the workplace. Four employer approaches to provision of toilets following FWS are canvassed below.

Option 1: on the basis that the EqA does not itself require employers to provide single sex toilets, do away with them altogether; rebadge toilets and changing facilities as ‘uni-sex’.

Option 2: adopt a workplace policy which permits access to men’s and women’s toilets on the basis of gender identity.

Option 3: adopt a workplace policy which permits access to men’s and women’s toilets on the basis of sex.

Option 4: create ‘gender neutral’ provision additional to men’s and women’s toilets for use by trans people.

Indeed, Baroness Falkner has said the Equality and Human Rights Commission will be publishing new guidance for organisations operating single sex spaces such as hospital wards and changing rooms, which, based on various of Baroness Falkner’s public comments thus far, looks likely to advocate for the provision of third spaces.

Analysing the options Options 1 and 2 are, for our purposes, analytically identical; they create a policy of mixed-sex provision. In favour of mixed-sex provision, it is said that if all are permitted entry and none are denied there can be no ‘less favourable treatment’. While that analysis bears an appealing simplicity, it is legally flawed. Not only does it assume that relevant less favourable coheres around conditions of entry (excluding any analysis of treatment or conditions within that space once entry has been settled), it overlooks the fact that like treatment is capable of constituting less favourable treatment; that was the judgment of the Court of Appeal in Al-Hijrah.

Considering that analysis in the context of toilet provision specifically, in Miller HH Judge Tayler addressed whether providing a mixed-sex facilities amounted to less favourable treatment of female users because of sex, HH Judge Tayler noted at para 16:

22 BRIEFING Vol. 32 No. 4

For Women Scotland v Scottish Ministers ‘trans people with a GRC do not have an entitlement to access services provided on a single sex basis for the opposite sex’

‘In this case it might be said that the same toilet facilities were provided to men and women and so the treatment was the same. However, if the treatment is assessed as being the provision of toilet facilities that are appropriate to a person’s requirements the analysis may differ.’

Thus, like treatment of men and women will be indirect discrimination if it operates unfavourably towards one sex for a reason which correlates with (but is not coterminous with) sex: for example, a minimum height requirement or a professional qualification in engineering. If its unfavourable operation on one sex is because of sex then, depending on the facts, it can be analysed as direct discrimination.

Options 1 and 2 therefore, leave employers at risk of a direct sex discrimination claims from women (or indeed men). Likewise, employers run the risk of indirect discrimination claims setting out group-based disadvantage.

Secondly, employers should be advised that the EqA is not the sole source of their obligations. Quite unlike duty-bearers occupying the role of ‘service provider’ for the purpose of the Schedule 3 exceptions, employers are bound by the Workplace (Health, Safety and Welfare) Regulations 1992 too.

Regulation 20 requires employers to provide separate sanitary conveniences (toilets) for men and women, unless the available facilities comprise single lockable rooms (not stalls). As such, employers are subject to an obligation, originating from outside of the EqA, to provide separate men’s toilets and women’s toilets. The question then is ‘How do the 1992 Regulations define “man” and “woman”?’.

There is ample reason to think that the 1992 Regulations mean the same by ‘man’ and ‘woman’ of man and woman as the EqA, ie that they are defined by biological sex. First, the 1992 Regulations were chronologically situated between the SDA 1975 and the GRA 2004. Accordingly, insofar as Lord Hodge confirms at (paras 36-51) ‘woman’ for the purposes of the SDA referred to biological sex, there is no reason to supply any other meaning to the 1992 Regulations, nor is it clear what other meaning could have reasonably been in the mind of the drafter in a conspicuously pre-Goodwin, pre-GRA era.

Secondly, if s.9(1) GRA did nothing to amend the meaning of woman in the SDA, it would be difficult to imagine that it had, nonetheless, modified the meaning of woman in the 1992 Regulations. That conclusion would, necessarily, leave the definition of ‘woman’ for the purpose of separate sanitary conveniences under the 1992 Regulations at odds with the definition ‘woman’ for the purpose of single sex services under the EqA. That would be an especially surprising conclusion when, in many cases, the facilities made available by employers to their employees are the very same facilities available by employers qua service providers.

Thirdly, FWS explicitly recognises that sex-based rights underpinning single sex or separate provision crystalise around values of privacy, dignity and autonomy (para 211) which values are, or can be undermined by mixed-sex provision. The 1992 Regulations are directed at the value ‘propriety’ which might reasonably be taken to encompass privacy, dignity and autonomy. As such, it would be a further oddity if the umbrella value of ‘propriety’ for the 1992 Regulations could survive the implementation of mixed-sex provision, whereas the better specified values underpinning the Part 3 exceptions in the EqA could not.

What follows is that employers who respond to FWS by doing away with toilets accessed on the basis of sex will (i) be exposed to the risk of direct and indirect sex discrimination claims; and (ii) will be in breach of obligations under the 1992 Regulations. With respect to the latter, that in turn incurs the risk of enforcement action by the Health and Safety Executive.

What then of option 3 – employers that adopt a policy providing for access to toilets on the basis on biological sex alone? Commentators have indicated that such an approach leaves employers at residual risk of litigation by transgender employees who, denied access to their preferred toilets (ie those provided for the opposite sex), bring a claim for indirect discrimination on grounds of gender reassignment. So far, little ink has been spilt in suggesting that there might be a viable direct discrimination claim on the same grounds, presumably in recognition of the fact that a trans persons exclusion from their preferred toilet is because of their sex and not their protected characteristic of gender reassignment.

While indirect discrimination claims might well be brought, the prospects of those claims succeeding are remote. Insofar as the 1992 Regulations impose the duties described above, the employer’s justification

BRIEFING May 2025 23

For Women Scotland v Scottish Ministers ‘FWS explicitly recognises that sex-based rights underpinning single sex or separate provision crystalise around values of privacy, dignity and autonomy’

defence will point directly at compliance with a statutory obligation requiring precisely the conduct the claimant complains of. A more robust justification defence is hard to imagine.

In all likelihood, employers most at risk from indirect discrimination claims will be those who (i) adopt the single sex provision policy referred to above (ie option 3); and (ii) despite having ample space and resource to do so, choose not to implement a third space for employees with the protected characteristic of gender reassignment (ie option 4). In that specific case, the 1992 Regulations will likely not provide a complete defence, because the employer has the option of adopting a provision additional to that prescribed by their obligations under those regulations.

Of course, the feasibility of option 4 and the creation of third spaces is largely affected by the availability of resources, and oftentimes, the very fabric of the buildings businesses operate in. Employers facing resource constraints may be unable to implement option 4, thus relying exclusively on the policy of sex-based access to facilities as per option 3. Accordingly, in addition, pleading the 1992 Regulations, such practical limitations will form the basis of a justification defence to a claim of indirect discrimination.

KEY:

FWS

For Women Scotland v Scottish Ministers [2025] UKSC 16

EqA

Equality Act 2010

GRC Gender Recognition Certificate GRA Gender Recognition Act 2004 SDA

Sex Discrimination Act 1975

Sex Discrimination Regulations

Sex Discrimination (Gender Reassignment) Regulations 1999 (SI 1999/1102)

Forstater

Forstater v CGD Europe [2023] 6 WLUK 478

ECHR European Convention on Human Rights

ECJ

PC Protected characteristic PCP Provision, Criterion or Practice CHEZ

CHEZ Razpredelenie Bulgaria AD v Komisia za zashtita ot diskriminatsia (C-83/14) [2015] IRLR 746

Al-Hijrah HM Chief Inspector of

Education, Children’s

Services and Skills v Interim

Executive Board ff Al-Hijrah School (2017) EWCA Civ 1426 Miller Earl Shilton Town Council v Miller [2023] EAT 5

PSED

Public sector equality duty

1992 Regulations

Coleman

Coleman v Attridge Law (C-303/06) [2008] ICR 1128

Goodwin

24 BRIEFING Vol. 32 No. 4

European Court of Justice

Workplace (Health, Safety and Welfare) Regulations 1992 (SI 1992/3004) Goodwin v United Kingdom (1996) 22 EHRR 123

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