Annual Employment Law Update December 2017
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In 2017 there have been numerous significant developments in employment law and there are also major changes on the horizon. The Employment Team at Taylor& Emmet have brought these changes together in a useful overview of what you need to know about 2017 and what to look out for in 2018. The session will include the following: The latest on Employment Tribunal fees The Taylor Review and the gig economy Case law update What to look for in 2018 including the General Data Protection Regulation
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Annual Employment Law Update December 2017
- 1. Annual Employment Law Update 2017 Tom Draper, Partner Kelly Gibson, Chartered Legal Executive Emma Patchett, Legal Assistant “ the material for this seminar has been prepared solely for the benefit of delegates on this seminar. It should not be relied upon for giving advice and Taylor&Emmet LLP accept no responsibility for loss or consequential losses incurred as a result of reliance on this material”.
- 2. Overview
- 3. Employment status and the gig economy Pimlico Plumbers & Charlie Mullins v Gary Smith
- 4. Holiday pay (1) Dudley Metropolitan Borough Council v Willetts
- 5. Holiday pay (2) King v Sash Window Workshop Ltd & another
- 6. Employment Tribunal Fees R (on the application of UNISON) v Lord Chancellor
- 7. Direct discrimination Bougnaoui v Micropole Achbita & another v G4S Secure Solutions
- 8. Indirect discrimination Essop & others v Home Office Naeem v Secretary of State for Justice
- 9. Breach of contract and suspending employees Agoreyo v London Borough of Lambeth
- 10. National Minimum Wage and sleeping at work Focus Care Agency v Roberts
- 11. TUPE update (1)
- 12. TUPE update (2)
- 13. General Data Protection Regulation – GDPR
- 15. Annual Employment Law Update 2017 • Employment Law Advice • HR Training • T&E Complete – all inclusive HR support • Corporate Finance • Commercial Law advice • Commercial Litigation • Commercial Property • Property Litigation • Debt Recovery • Social Housing
Editor's Notes
- TD: 8.30am
- TD Gig economy: temporary work on short term contracts of one off assignments as opposed to permanent jobs. For some this represents “flexibility” or “exploitation”, depending upon your point of view. Employment status: employee, worker or self-employed. Controlled, personal service, obligation to provide and undertake work. Other factors (integration into the business, provision of tools and equipment, the wearing of uniform and the payment of tax). Different employment rights, depending on employment status. Uber, Deliveroo, City Sprint and Addison Lee cases have all hit the news however, the leading Court of Appeal case of Pimlico Plumbers and Charlie Mullins v Gary Smith & others summarises the legal position and recent direction of travel in the cases involving the gig economy. Pimlico Plumbers: a plumber engaged by Pimlico Plumbers was required to provide personal service on a full-time basis, was required to wear PP uniform and drive a van with a PP logo on the side, had only limited right to provide a substitute and was subject to highly restrictive covenants. The plumber had to raise invoices in order to be paid, was VAT registered and personally accounted for tax and national insurance. The plumber’s contract stated he was an independent contractor. The Court of Appeal ruled that the claimant was a worker. Substitution clauses: unfettered right to use a substitute is consistent with self-employed status, conditional right to use a substitute (excluding specific qualification) is consistent with worker status. This case is a reminder that substitution clauses and what it says in a contractor’s agreement will not necessarily determine the status of the individual and ETs will look behind carefully drafted contracts to determine the reality of the situation on the ground. Taylor review: New category of employment status proposed: dependent contractor rather than worker. Requirement to perform personal services to be removed Main focus on control Harder to hide behind a substitution clause Burden on respondent to show individual is not an employee or dependent contractor Dependent contractor is given the right to written statement at the start of engagement Overall effect would be to make it easier for ETs to find claimants to be independent contractors/workers. Where people are engaged as contractors it would be worth revisiting whether they are in fact workers as a result of this case and the direction of travel it represents in respect of the gig economy.
- TD Dudley MBC v Willetts: the most recent case in a line of cases about the calculation of holiday pay. Lock v British Gas: commission should be used as part of the calculation of holiday pay where it is part of the employee’s normal or contractual remuneration. Fulton v Bear Scotland: non-voluntary overtime should also form part of the holiday calculation because it is part of the employment contract. Dudley MBC v Willetts: the EAT found that regular payments for voluntary overtime should be included in the holiday pay calculation. Decisions underpinned by the EU Working Time Directive which states that workers should not be deterred from taking annual leave. Permission to appeal in Lock v British Gas to the Supreme Court refused. Clear picture has developed, which is unlikely to be changed unless the government changes the law. Difficult to see how the Government could change the law and still comply with the EU Working Time Directive but could be changed after Brexit? Claims for backdated holiday pay can only go back two years. A gap of three months before deductions breaks a series of potentially unlawful deductions and limits liability. Three month time limit means that if employers change the way they calculate holiday pay can include commission and regularly worked overtime employees would be out of time for claim after three months.
- TD ET fees introduced in 2013. £1,200 to run most claims to a hearing, including unfair dismissal and discrimination. 70% drop in claims. Prevented access to justice for discouraged spurious claims? Supreme Court ruled in the case of UNISON v Lord Chancellor: Access to justice was prevented Indirectly discriminatory Fees no longer payable Government setting up a refund process for claimants but unclear whether employers will be reimbursed where ET has ordered a fee repayment. Employers unlikely to be unlikely to reclaim fees paid through ACAS COT3 or settlement agreements Time limits to be extended for claimants who were “prevented” not “deterred” from bringing claims. One ET case has confirmed this concept in practice. As this Supreme Court decision was made in the summer many prospective claimants are likely to be out of time Jump in case load (70-80%) more cases meaning that claims will take longer to hear
- KG: 8.55am Two ECJ cases where both claimants removed to remove Islamic headscarves for religious reasons. Both brought claims of direct discrimination. Direct discrimination: less favourable treatment on the grounds of a protected characteristic (race). B successful and A failed. B was asked to remove a headscarf as a result of a customer complaint but A was dismissed after her failure to comply with a secular dress code which prevented overt religious expressions. This was a neutral policy applied to all. Care should still be exercised over dress codes and their implementation as there is still potential for indirect discrimination. These were Belgium and French cases and there is a particular tradition of division between religious and secular society in these countries. A could have been successful with an indirect discrimination claim because religious employees were likely to have been placed at a particular disadvantage as a result of what was on the face of it a neutral dress code. It is worth considering dress codes and their application as a result of these cases and whether the unintentional effect on employees with particular protected characteristics can be objectively justified as a “proportionate means of achieving a legitimate aim”.
- KG Indirect discrimination is the application of apparently neutral policies, decisions or practices which are not intended to treat anyone less favourably but have this affect in practice. Indirect discrimination: where an employer applies a PCP to all but the PCP puts employees with a protected characteristic at a particular disadvantage and the PCP puts the claimant at that disadvantage. The disadvantage is then capable of objective justification as a “proportionate means of achieving a legitimate aim”. Essop: core skills assessment test for promotion within the Home Office was statistically more difficult for black and ethnic minority candidates and those aged over 35 to pass. Supreme Court: a causal link is necessary between the PCP and the disadvantage suffered. The reason a PCP puts a group to a particular disadvantage does not have to relate to the protected characteristic as this is too close to the test for direct discrimination. Naeem: claim brought by a Muslim prison chaplin complaining that because the Department for Justice only employed Muslim chaplins from 2002 his paid had not increased in line with Christian prison chaplins who had been employed before this date. Pivotal issue in this case was the correct “pool of comparison” and therefore who had suffered the disadvantage. Was this all prison chaplins or all prison chaplins employed after 2002? Supreme Court: all those affected by PCP. This allows for assessment of the PCP against individuals with the protected characteristics and those without the protected characteristics. Removing Christian chaplins employed prior to 2002 would remove the disadvantage. SC also ruled that there was no shame in providing an objective justification to the less favourable treatment and therefore if employers can show that a PCP which puts a protected group to a particular disadvantage is justified as a proportionate means of achieving a legitimate aim then this does not amount to unlawful discrimination. These cases make it slightly harder to defend indirect discrimination claims but there is still the ability to objectively justify the disadvantage and if NGB is concerned about any PCP placing protected groups at a disadvantage then consideration should be given to how these PCPs can be justified.
- KG The case considered suspending employees, whether this amounts to a neutral act and in the alternative if it could amount to a breach of contract. The initial County Court made reference to the fact that the school were “bound” to suspend Ms Agoreyo on grounds of its overriding duty to protect children. The High Court held that the suspension was not a neutral act at least in this context. The reason given for the suspension was not the protection of children, but to “allow the investigation to be conducted fairly” and therefore the school were not bound in the manner the County Court had suggested that they were. There were various other issues within this case as to the use of suspension, namely: there was no evidence of any attempt to ascertain Ms Agoreyo's version of events, or Ms Alder's knowledge of the events, prior to Ms Mulholland taking the decision to suspend; there was no evidence of any consideration of alternatives to suspension; and the letter did not explain why an investigation could not be conducted fairly without the need for suspension. These factors led to the conclusion that suspension was adopted as the “default position” and was largely a “knee-jerk” reaction. Suspension against this background was therefore sufficient to breach the implied term of trust and confidence, particularly given that Ms Alder had previously investigated two of the incidents and had not considered them worthy of disciplinary action. Consequences of this decision? There is likely to be more thought considered in respect of suspending employees rather than suspending employees immediately on allegation of wrongdoing. To alleviate this issue the following tips may assist: Consider the purpose of the suspension; Make a memo of the rationale behind the reasons for suspending employees’; Ensure proper use of the investigation meeting in order to fully consider whether suspension is in fact necessary; and Ensure suspension of employees is permitted within the contract of employment (although this does still not confer an unfettered right to suspend)
- EP: 9.15am For the last few years, care workers have been in the spotlight regarding the national minimum wage. Focus – has recognised this and has attempted to amalgamate the position on this by emphasising there is a multi-factorial case but there is no specific weight to be given to each specific factor. Purpose? For example a safeguarding or legal obligation to have a person present on the premises at all times, which would be more conclusive of the individual of working by being present. How restricted is the individual? For example if the worker would face possible disciplinary sanctions if they were to leave the premises at any point throughout the shift. Immediacy of requirement to respond is relevant as if it is simply calling the emergency services then this is not their requirement to respond. Enforcement HMRC can impose enforcement against businesses for failing to pay NMW –issuing notice of underpayments and “naming and shaming” exercises. However, due to the string of recent cases they have suspended enforcement activity (was until 2 Oct but may be longer and not yet confirmed) as many businesses (mainly charities) are struggling to pay individuals’ back pay for up to 6 years in addition to the other above named enforcement activities. There have been discussions regarding arranging a repayment scheme in order to compensate individuals for back pay without bankrupting the care sector, however this too has not yet been confirmed. Currently, this does not prevent individuals from their ability to bring a claim themselves for back pay.
- TD: 9.25am There have been a few changes in respect of TUPE and some new cases. Recap: TUPE can be established broadly in two ways (although a transfer can be both). These two types are: A business transfer (a buyer and seller); and A service provision change (change of contractor, contracting out work or bringing work back in-house from a contractor) (“SPC”). In order for there to be a SPC there has to be “an organised grouping of employees…which had at is principal purpose the carrying out of the activities concerned on behalf of [a] client.” That organised grouping must exist “immediately before the service provision change.” The grouping should not be by mere happenstance. Tees Esk & Wear Valleys NHS In Tees there was a group of employees working to provide care to a patient with sever learning difficulties. The need for care steadily reduced. Eventually there were 11 employee who would provide care to the patient but they were all also expected to take on other duties. The provision for care was then contracted out to another company. The question was whether there was an “organised grouping” in order to consider whether the employees transferred. The ET and EAT considered there was an organised grouping of employees, however that was no longer true immediately before the alleged SPC. At that point, the provision of care for the patient had diluted and was merely one of the duties, not the principal purpose. Therefore TUPE would not apply and the employees would not transfer. Salvation Army An SPC can occur where one business ceases to carry out the work and another business carries out these duties instead. This will only apply where the activities are “fundamentally the same.” This assessment is not always straightforward. The new business is likely to want a narrow interpretation of activities if they are intending to argue the SPC has not occurred. In the Salvation Army (‘SA’) case the Council set up a new “hub” providing a single point of referral for the homeless and ex-offenders. It replaced the contracts for dispersed accommodation with a single contract with the SA. The SA provided accommodation in large hostels, there was a change of age group and a change in the maximum length of time the user could remain in supported accommodation. The question was whether these differences resulted in the services provided being fundamentally different. The ET and EAT decided that they did not and that the service had retained its identity. The guidance given in this case was to define the services (not too specifically or generically) and then consider whether the services were still the same. For example here, the services being provided were “the provision of long-term dispersed accommodation based support for homeless men and women.” Therefore the above subtle changes to how the activities were being provided were not fundamentally different and therefore TUPE would apply.
- TD ICAP This case involved TUPE and restrictive covenants. The facts concerned an individual employee working for ICAP with restrictions in his contract, he wanted to work for a competitor and whilst he was on a period of garden leave the shares in one of IGBB’s parent company were sold to another competitor. The individual argued there had been a TUPE transfer, to which he objected, with the effect his employment came to an end without a termination and he was released from garden leave. The High Court decided that the sale of shares does not involve a change of employer, so there is no room for TUPE to operate. There is a specific test for whether there has been a change of employer, as established from previous cases as whether the party: Has become responsible for carrying on the business; Has incurred the obligations of employer; and Has taken over day-to-day running of the business Essentially, “has the new party stepped into the shoes of the employer?” Born Under TUPE there is a requirement to provide the receiving business with employee liability information of any person employed by them who is assigned to the organised grouping of resources or employees that is the subject of a relevant transfer. Employee liability information, very simply will include the employment particulars the employer is required to give the employee (e.g. information pertaining to hours of work, pay and pension entitlements). This case concerned an SPC that occurred when there was a change of firm for printing their catalogues. The new business received information about what remuneration the transferring employees received, but was separated into “contractual” and “non-contractual” remuneration. The new business complained that by including a particular bonus incorrectly under the “non-contractual” column, the previous catalogue printers had breached their duties under the employee liability information. The EAT determined there had been no breach as the requirement to provide employee liability information doesn’t require information to be given about whether an element of pay is contractual or not. Although an employer is required to provide “the scale or rate of remuneration or the method of calculating remuneration” a requirement to distinguish between contractual and non-contractual cannot be read from this.
- TD: 9.45am The GDPR will replace the Data Protection Act and has been implemented through EU law. Brexit is unlikely to have a big impact on the implementation of this because if the UK fail to implement the GDPR it is likely to cause issues with the UK’s trade including that there must be compliance with the GDPR if we wish to trade with another EU member state. A big impact on employers will be methods of recruitment and the employment of your employees. As an employer you will be considered to be a data controller and data processor, which will have different implications. “Personal data” is data that relates to a living individual whereby that individual is identifiable from it
- 9.55am