As #MeToo continues to shine an uncomfortable light on many industries, Anna Cole-Bailey looks at how its influence on employment litigation in firms is likely to come into full swing in 2019
For Sarah Henchoz, a partner in Allen and Overy’s employment team who has hailed 2019 ‘the year of culture’ for big employers, her department has seen a spike in advisory work following the emergence of the #MeToo scandal in late 2017: ‘The first week back in January 2018 we received six separate new matters all relating to sexual harassment or misconduct,’ she says.
For Lewis Silkin’s divisional managing partner and employment specialist James Davies, an active caseload – stemming not just from #MeToo but from the abolition of fees for employment tribunals – coincided with the employment team growing 50% over two years and 20% last year.
In 2017, the Supreme Court ruled in favour of Unison against what it deemed ‘unlawful’ fee charging introduced by the government in 2013 in efforts it said were to reduce weak cases.
Davies describes the impact #MeToo has had on employment issues ‘profound’ and believes more claims and investigations are emerging because victims, usually of sexual harassment, are now emboldened to do something about it.
According to Davies, a ‘huge spike’ of sexual misconduct cases following the Harvey Weinstein revelations are often below the radar, with a significant number in law firms themselves: ‘We get a new investigation every week and these can be big matters for us, whereas it might have been one every month a couple of years ago.’
‘#MeToo claims are going to be here for a while,’ reiterates Peter Frost, partner and head of employment disputes at Herbert Smith Freehills.
‘The next 12 months may well accelerate a process that could see 45 years of British employment legislation overhauled within five.’
Henchoz says sexual misconduct cases are appearing across all sectors but more frequently in financial services. However, she notes: ‘We see more in the financial services sector because we have a greater number of clients in this sector than others but that doesn’t mean it’s unique to that sector at all.’
Lawyers are also likely to see more whistleblowing cases come their way, Henchoz predicts: ‘That’s just something that gets linked up to the culture. Whistleblowing will take many different forms.’
While individual claims have progressed through the tribunal more quickly since fees were removed, the overall volume of cases now is slowing the process down. Henchoz notes: ‘[Fee abolition] certainly had a big impact for our pro bono clients. There was obviously a system where you could apply to not have a fee but people were deterred by it, so when the number of claims went down, our clients’ cases were progressing more quickly through the tribunal.’
The advent of #MeToo, GDPR and gender pay gap reporting has driven more employment work towards firms, with the stakes much higher now regarding the reputational risk to companies facing litigation. In a competitive corporate world where winning is generally considered to be the end goal, it may be surprising to hear Davies say: ‘When you have an employment dispute that’s not a routine tribunal claim, the reputational issues often outweigh the risk of losing and paying.’
Henchoz says the next 12 months may well accelerate a process that could see 45 years of British employment legislation overhauled within five. ‘I don’t even think it would take five years. What we’ve seen in a year has been pretty significant in terms of changing culture and really increasing that level of accountability, with companies taking a very different view on issues around diversity and sexual misconduct. The word that is coming out at the moment isn’t connected to legislation – there has been not very much employment legislation in the last 12 months, which is quite consistent with the norm.’
Anthony Fincham, head of UK employment at CMS, adds: ‘I can think of an example recently where I doubt the client would have thought it necessary to take legal advice, or indeed reputational advice, a year or two ago.’ Efforts by employers to follow procedures and to be seen to be doing the right thing can become the subject of litigation itself. ‘Litigation could come from a number of different avenues,’ says Henchoz. ‘It may be that an individual has raised a concern around sexual misconduct and they feel that they haven’t been properly heard, that the process was predetermined, so there is bias in favour of the person who has been accused. That could then result in the individual bringing a claim while still in employment, or they resign and claim that their employment has been terminated as a result of the company’s failures, as well as a claim of discrimination.’
While she says she does not see all that many individual equal pay claims, there have been some high-profile collective equal pay claims against major supermarket outlets in the last few years. At the end of January, shop workers from Asda – advised by Leigh Day – won a landmark victory in the latest stage of a long-running equal pay dispute with the supermarket giant, which could see it making an £8bn payout. The Court of Appeal ruled that Asda’s predominantly female, lower-paid store staff can compare themselves to higher-paid warehouse workers, mainly male, in pay claims.
‘The last year has been pretty significant in terms of changing culture and really increasing that level of accountability, with companies taking a very different view on issues around diversity and sexual misconduct.’
Sarah Henchoz, Allen & Overy
‘[The female claimants] are trying to compare themselves with blokes in the depots, and there are various arguments as to whether they can do that. So far, Leigh Day have been successful in their arguments,’ says Frost.
Such cases will have significant reverberations across the grocery sector because supermarkets have similar pay structures. Tesco is facing a record £4bn worth of equal pay claims from workers on gender pay differentials for comparable jobs, while Morrisons faces fresh claims from existing and former workers who say they have been paid less than colleagues for doing similar jobs. ‘We’re acting for Tesco in that particular issue and we’re facing several thousand claims,’ says Frost.
Mainstream employment cases aside, more complex issues – like cross-border claims – are on the up. ‘You’re now seeing solicitation of teams across borders as a by-product or consequence of globalisation,’ says Frost. ‘I’m advising in a case at the moment where a client had a whole team, worldwide team, poached by one of its competitors and that’s presently involving proceedings in England, the US, and Hong Kong. Normally when you have multiple poachings you use a recruiting sergeant to recruit people. That recruiting sergeant, in most cases, will be acting in breach of their duties to the current employer.’
Meanwhile, Fincham says CMS has seen a higher number of gig economy cases over the last 18 months, albeit not as a ‘big slew of litigation’. ‘It’s unsatisfactory that people have to go to the courts to find out what their rights are working in the gig economy – the problem being that the legislation that’s being applied dates from before anybody had heard of the gig economy.’
‘The law is always behind innovation in the sense that it’s always playing catch up,’ notes Henchoz.
Last June the Supreme Court unanimously ruled in favour of heating engineer Gary Smith, represented by TMP Solicitors, in his claim against Pimlico Plumbers, represented by Mishcon de Reya, establishing that Smith was a worker and not self-employed, affording him holiday pay rights. Despite claims there are cobwebs in the legal system when it comes to gig economy disputes, Frost says: ‘At the moment it certainly looks as if decisions are pretty much going all one way, and that we are looking at a gradual, but inexorable spread of employment rights.’
Elsewhere, Lewis Silkin represented online fast-food company Deliveroo last year when it won a High Court dispute against riders trying to gain union recognition. Davies reflects: ‘Because we’ve had quite a lot of publicity from the success of Deliveroo, we do get other gig economy employers coming to us, with quite a few of the smaller ones saying: “Can you help us?” It’s become quite a big practice area.’
He notes that Lewis Silkin is trying to structure itself to take on ‘reputationally important’ litigation, while dealing with routine claims cost-effectively as a separately branded service. ‘We can do the routine stuff cost-effectively. Other law firms are probably trying to do the same, although we have the benefit of scale in doing this. You are not providing a one-size-fits-all approach to supporting employers with their litigation, but you are providing a differently resourced, differently structured approach to the high-value, high-reputation, risky stuff from the routine stuff that employees face regularly.’
See ‘Allen & Overy horizon scans to the workplace of the future’ by Allen & Overy