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AZ of Employment LawJuly 2018
A-Z of Employment Law
Employment Timeline 2018-2019
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Contracts of Employment
Data Protection
Disability Discrimination
Executive Pay
Financial Services
Gig Economy
Pay
Immigration and Illegal Working
Religious Discrimination
Sex Discrimination
Tax
Trade Secrets
Unfair Dismissal
Whistleblowing
£
A-Z of Employment Law
Contracts of Employment
April 2019
Case: Rock Advertising Ltd v MWB Business Exchange Centres Ltd
In May 2018 the Supreme Court held that a no oral modification (NOM) clause was legally effective. This judgment confirms that where a contract contains a clause stating that it can only be varied by agreement in writing this will prevent an oral variation of the contract from taking effect.
This ruling was significant following the Court of Appeal's judgment in the same case that a valid variation of a contract by oral agreement would take effect notwithstanding the presence of a NOM.
Itemised payslips
The Employment Rights Act 1996 (Itemised Pay Statement) (Amendment) (No.2) Order 2018 has been made and will take effect on 6 April 2019.
The Order requires employers to provide itemised payslips to all workers, not just employees. For workers paid by the hour, the
payslip must state what hours the worker is being paid for. This is designed to help low paid workers check they are being paid correctly.
Our insight
The Rock Advertising judgment provides reassurance to employers that, where a NOM has been used, they can rely on the wording of the contract. If there is to be a valid variation it will have to be in writing and agreed by the employer. Employers will not, for example, be faced with employees claiming that the terms of their employment contract were verbally varied.
As for the legislation regarding itemised payslips, employers now have time to ensure payroll systems are prepared to comply with these requirements. Employers may wish to start providing payslips to all workers as soon as they are ready to, rather than waiting for the April 2019 deadline.
'In May 2018 the Supreme Court held that a no oral modification
clause was legally effective. This judgment confirms that where a
contract contains a clause stating that it can only be varied by
agreed writing this will prevent an oral variation of the contract
from taking effect.'
A-Z of Employment Law
Data Protection
May 2018
The European General Data Protection Regulation (GDPR) applies to all EU member states and came into effect on 25 May 2018. As the UK is still a member of the EU, the GDPR also applies to the UK.
The GDPR brings various changes for employers, including changes to data subject access request rights and the ‘consent’ to data processing that can be given by employees.
The Data Protection Act 2018 received Royal Assent in May 2018. The Bill repealed the Data Protection Act 1998 and incorporated the GDPR into UK law in preparation for Brexit.
Case: Various claimants v VM Morrisons Supermarket PLC
In December 2017, the High Court found that Morrisons was vicariously liable for the deliberate and criminal disclosure of personal data belonging to nearly 100,000 co-workers by a rogue employee. Morrisons has appealed to the Court of Appeal, which is due to hear the case on 9 October 2018.
Monitoring employees' email and internet usage
The Investigatory Powers (Interception by Businesses etc. for Monitoring and Record-keeping Purposes) Regulations 2018 came into force on 27 June 2018.
These are one of four sets of regulations introduced to implement the Investigatory Powers Act 2016 and specifically address the
rules governing how employers monitor their employees' communications.
Our insight
Employers should now be familiar with the implications of the GDPR for their data protection practices.
Of key importance is a GDPR compliant privacy notice setting out how personal information is collected and used. Employers must provide this to their employees, workers and contractors at the point of data collection. In addition, employers should review the data protection provisions within their existing employment contracts and policies to ensure compliance.
Employers should follow what happens in the Morrisons appeal case. As it stands, the decision suggests that even where a data controller has done as much as is reasonably possible to prevent the misuse of data, they may still be found to be vicariously liable for any employee misusing data. This is a worrying development for employers.
The Investigatory Powers Regulations have accompanying explanatory memorandums which were published in January of this year. Employers should familiarise themselves with the memorandum for the 'Interception of Businesses' regulations.
'Of key importance is a GDPR compliant privacy notice setting out
how personal information is collected and used. Employers must
provide this to their employees, workers and contractors at the
point of data collection.'
A-Z of Employment Law
Disability Discrimination
February 2019
Case: City of York Council v Grosset
In May 2018, the Court of Appeal held that employers can be liable for discrimination arising from disability when they dismiss employees for misconduct and it turns out that the misconduct was due to their disability. It is no defence for the employer to argue it did not know the misconduct was caused by the disability.
Employers can be found liable even where they have investigated and reasonably concluded that there is no link between the employee's misconduct and their disability.
Case: Chief Constable of Norfolk v Coffey
In December 2017, in the first case to address perceived disability under the Equality Act 2010, the EAT upheld a claim for direct discrimination.
The case involved an employer who rejected a job application because it perceived that the candidate had a progressive disability. As a result of the employer's perception, the candidate was treated less favourably than the employer would have treated a person with the same abilities but who was not perceived to have the same condition.
This decision is being appealed to the Court of Appeal. It is due to be heard on 19 or 20 February 2019.
Case: Gallop v Newport City Council
In March 2016, the EAT upheld the employment tribunal's decision that an employee’s dismissal was not direct disability discrimination because the decision-maker did not know that the employee was disabled.
The EAT held that the employer’s occupational health department's knowledge of the employee’s disability could not be imputed to the decision-maker in the disciplinary process.
In a direct disability discrimination case the focus should be on the mental thought process of the decision-maker and not that of those providing information to that person, unless it could be considered a joint decision.
The decision was appealed and was heard by the Court of Appeal in July 2017. We are still waiting to hear the judgment and it is now presumed that the delay is due to an out of court settlement having been reached.
Our insight
When making recruitment decisions, employers should bear in mind the risks of perceived discrimination. It is sensible to ensure that employees making such decisions are fully up to speed on discrimination law.
Grosset is not a favourable decision for employers. It should serve as a reminder of the importance of identifying the extent and consequences of an employee's disability and ensuring these are taken into consideration before subjecting that employee to any "less favourable treatment" (e.g. disciplining or dismissing them).
'When making recruitment decisions, employers should bear in
mind the risks of perceived discrimination.'
A-Z of Employment Law
Executive Pay
January 2019
The government has introduced legislation which would require companies to report annually on the difference in pay between their CEO and the average UK worker.
The reporting threshold is similar to the gender pay gap reporting – all UK-listed companies with more than 250 UK-based employees will have to report.
Companies will be required to report three different ratios. These will relate to worker pay in the 25
th percentile, the 75
th percentile, and
the overall median pay.
The legislation is due to come into effect from 1 January 2019 with the first ratios due to appear in 2020.
Our insight
Gender pay gap reporting will have helped prepare employers for these requirements. An interesting point to note is that the legislation gives employers the choice of three different ways of calculating average worker pay. Employers will have to report the reason for the option chosen.
Financial Services
December 2019
Senior managers and certification
regime
In March 2016 the senior managers and certification regime (SM&CR) came in to replace the "approved persons" regime for individuals working in "relevant firms". "Relevant firms" included banks, building societies, credit unions, investment firms regulated by the Prudential Regulation Authority, and foreign banks operating in the UK.
On 9 December 2019, the SM&CR is due to be extended to all firms authorised under the Financial Services and Markets Act 2000.
The SM&CR has three parts: (1) the 'senior managers regime' which lays out the approvals required for and responsibilities of the most senior people working for firms subject to the regime (2) the 'certification regime' under which firms are responsible for annually certifying the fitness and propriety of their staff (3) the 'conduct rules' laying out the standards of behaviour expected of most individuals working in firms subject to the regime.
Our insight
Firms affected by the extension of the regime should ensure that they are familiar with its requirements and how it will apply to them. Sensible steps will include reviewing your governance structure, briefing affected senior managers and certified persons, and ensuring the readiness of your HR and Compliance function.
'Firms affected by extension of the regime should ensure that they
are familiar with its requirements and how it will apply to them.'
A-Z of Employment Law
Gig Economy
October 2018
Case: Pimlico Plumbers Ltd and Anor v Smith
In June 2018, the Supreme Court upheld the Court of Appeal's judgment that a plumber was a ‘worker’ despite being self-employed for tax purposes and his contract labelling him as an independent contractor.
Key to the decision was that the limited right of substitution in the contract (under which another Pimlico plumber could be brought in) was not sufficient to defeat the dominant purpose of the contract being the personal service of Mr Smith. There were also features which militated against Pimlico being a client or customer of Mr Smith. These included the control that Pimlico had over him in terms of requiring him to wear a branded uniform, carry an ID card, drive a branded van and follow Pimlico's administrative instructions. Case: IWGB v Deliveroo
In November 2017, the Central Arbitration Committee held that Deliveroo's riders are not workers, due to a genuine right of substitution. This is a non-binding decision and it would have been interesting to see what treatment it received in employment tribunal claims brought by the IWGB on behalf of Deliveroo riders, which were due to be heard this month.
However, the Tribunal claim is now reported as settled. This related to forty riders and, although Deliveroo are attempting to draw a line under this dispute, it will be interesting to see if other drivers now bring claims in the wake of this settlement.
Case: Aslam and others v Uber BV and others In relation to the employment status claim brought by some of its drivers, Uber appealed to the EAT and judgment was delivered in November 2017, upholding the original tribunal's decision favouring the drivers. Uber has appealed again – its attempt to leapfrog to the Supreme Court was refused and the Court of Appeal is now due to hear the appeal on 30 October 2018.
Case: Addison Lee Ltd v Gascoigne
In May 2018, the EAT found that an Addison Lee cycle courier was a worker and not
genuinely self-employed. A key factor in their decision was that, when logged on to Addison Lee's app, the courier had to accept work that was offered and did not have the choice to refuse it.
Taylor Review
The Taylor Review, commissioned by the Conservative government, published its report in July 2017. It contains various recommendations aimed at improving working practices, with a focus on employment status and atypical workers.
The government provided its full response to the report in February 2018 and four consultations were launched to consider employment status, agency workers, enforcement of employment rights and how to increase transparency in the labour market. We await the outcome of these consultations, however there may be some delay due to Brexit negotiations taking precedence.
Our insight
Businesses using a "gig economy" type model or engaging consultants should be alert to the possibility of employment tribunals looking beyond the contract to determine the actual agreement between the parties in practice. Where possible, the true relationship should be captured within the contract to reduce the risk of litigation.
The key factor when determining whether a staff member is self-employed or a worker is whether the employer requires 'personal service' i.e. whether the staff member can send someone else to do the job. Pimlico Plumbers attempted to get round this by providing approved lists of substitutes. Recent judgments have strongly indicated that this approach will not be sufficient to keep staff in the self-employed category.
The government consultations arising out of the Taylor Review should be followed in view of the potential changes to the law that may result.
A-Z of Employment Law
£ Pay
July 2018
Case: Flowers v East of England Ambulance Trust
In July 2018, the EAT considered what overtime should be included in the calculation of holiday pay.
There were two questions before the Tribunal:
(1) whether non-guaranteed and voluntary overtime were required to be included in the calculation under the employees' contracts; and
(2) whether non-guaranteed and voluntary overtime were required to be included as a matter of law for the purposes of the 4 weeks' statutory holiday entitlement under the Working Time Regulations.
The EAT held that the wording of the contracts provided for all overtime in the three months (or any other reference period agreed) prior to contractual holiday to be included in the calculation. Whether it was non-guaranteed or voluntary was beside the point.
As a matter of law, the EAT held that overtime should be included where its payment was "sufficiently regular and settled", in accordance with the previous EAT decision in Dudley Metropolitan Borough Council v Willetts and others.
Case: Mencap v Tomlinson-Blake
In July 2018, the Court of Appeal held that national minimum wage legislation does not require care providers to pay their staff NMW during sleep-in shifts.
Sleep-in shifts involve carers staying the night at or near their place of work so that they can provide support if needed. The Court of Appeal held that during that time they were available for work rather than actually working. This meant they were not entitled to be paid the national minimum wage for the whole of the sleep-in shift, but only for the time when they were required to be awake for the purpose of working.
Our insight
The Flowers case provides further confirmation that, where not dealt with expressly in the contract of employment, all 'normal remuneration' is to be included for the calculation of holiday pay.
Although it would be simpler for employers to presume all overtime paid should be included, the prohibitive cost of doing so means many would prefer to judge what overtime is paid sufficiently regularly and what is only occasionally paid. This is not a simple judgement and the EAT stated that this will be determined on a case by case basis.
The Mencap decision comes as an enormous relief for care providers who are extremely short on funds and could have been facing a huge bill for back-pay. The claimant in that case was supported by Unison who have indicated that they may appeal the judgment to the Supreme Court.
'The Mencap decision comes as an enormous relief for care
providers who are extremely short on funds and could have been
facing a huge bill for back-pay.'
A-Z of Employment Law
Immigration and Illegal Working
March 2018
Brexit
The European Union (Withdrawal) Act 2018 received Royal Assent on 26 June 2018. The UK's withdrawal from the EU is scheduled for 29 March 2019 and the 2018 Act establishes the legislative framework for this to take place.
In August 2017, the Migration Advisory Committee (MAC) launched a call for evidence on the economic and social impacts of Brexit. It closed on 27 October 2017 and an interim update was published in March 2018. The MAC's final report is due in autumn 2018, with its recommendations expected to shape the post-Brexit immigration policy.
Right to work checks
In July, the Home Office updated its guidance on the right to work checks employers should carry out if they want to have a statutory defence to having employed illegal workers.
The updated guidance includes the steps employers should take in relation to Windrush
citizens, the grace period in TUPE transfer cases and ends restrictions on Croatian nationals.
Our insight
The government will now begin amending primary and secondary legislation to prepare for the UK's departure from the EU.
The recent White Paper 'The Future Relationship between the United Kingdom and the European Union' states that there is to be no regression in employment laws. This indicates that we can expect no EU employment laws to be unwound.
It is anticipated that immigration and illegal working will remain high on the agenda with the Brexit negotiations ongoing. The outcome may impact greatly on employers reliant on EU workers. This is an area to watch for those whose workforce may be affected.
Religious Discrimination
May 2018
Case: Bakkali v Greater Manchester Buses
In May 2018, the EAT agreed with a tribunal that neither direct discrimination nor harassment had occurred when an employee asked a Muslim colleague if "he still supported Islamic State (IS)".
The EAT agreed that the remark had been made with reference to an earlier conversation during which the claimant had expressed some understanding of the motivations of Islamic State fighters. The remark had been made as a result of this conversation rather than as a result of the claimant's religion.
Part of the test for direct discrimination is whether the conduct was "because of" a protected characteristic. The test for harassment asks whether the conduct was "related to" a protected characteristic. The EAT
held that the conduct was neither "because of" nor "related to" the claimant's religion.
Our insight
This decision confirmed that the "related to" test for harassment has a wider scope than the "because of" test for direct discrimination. It is therefore easier for employers to distinguish the reason for conduct in relation to discrimination claims than harassment claims.
The best defence for employers is to encourage a tolerant workplace; implement strong anti-harassment and equal opportunities policies; and put staff and managers through Equality Act training. These approaches should be preventative but can also constitute a defence to claims where the employer can show they have taken "reasonable steps" to prevent the discriminatory conduct.
A-Z of Employment Law
Sex Discrimination
May 2018
Workplace dress codes
In January 2018, the Petitions Committee and Women and Equalities Committee published a report regarding dress codes generally and, specifically, whether women can be required to wear high heels in the workplace. It made a number of suggestions including the application of discrimination law to this area.
On 17 May 2018, the Government Equalities Office responded by publishing new guidance on dress codes and sex discrimination. The guidance highlights the importance of consulting with employees regarding dress code policies, considering the health and safety implications of these policies, and the risk of discrimination claims if employers get their policies wrong
Our insight
The new dress code guidance has been criticised as vague and lacking in detail. However, it does give useful general guidance as to how employers should approach the setting of a dress code.
The guidance focuses largely on the rights of employees and not the wider category of 'workers' covered by the Equality Act. This is a missed opportunity to provide some clarity on how far the government thinks the 'worker' category extends.
'The new dress code guidance has been criticised as vague and
lacking in detail.'
Tax
October 2018
Off-payroll working in the private sector
In the 2016 Autumn Statement, the government announced that from 6 April 2017 all payments made by public sector organisations to workers supplied by personal service companies would be treated as employment income in relation to which income tax would have to be accounted for.
In its Autumn 2017 Budget, the government announced that it was considering extending these reforms to the private sector. Research regarding such a change is due to be published in 2018 and will be followed by a consultation on the proposals.
In tandem with the above, the Treasury launched a consultation on 18 May 2018 to discuss how the government could increase compliance with the legislation governing off-payroll working in the private sector.
Childcare schemes
Regulations made in March 2018 have set 4 October 2018 as the date by which new entrants to employer-supported childcare schemes must have sacrificed salary and received their childcare vouchers in order to qualify.
Our Insight
If the government extends the off-payroll reforms to the private sector then this will constitute a significant reform. A large number of self-employed staff use personal service companies to reduce the tax they pay.
In relation to the last date for childcare scheme enrolment, employers should make sure this is communicated to employees as soon as possible if they have not done so already.
A-Z of Employment Law
Trade Secrets
June 2018
On 9 June 2018, the Trade Secrets (Enforcement etc.) Regulations 2018 came into force. These Regulations incorporated the EU Trade Secrets Directive into UK law.
The Regulations include a statutory definition of "trade secret", provide for trade secret cases to be held in private, provide for confidentiality of documents in such cases, set out factors to consider when awarding compensation and impose limitation periods.
Our insight
These Regulations provide protection against acquisition, use and disclosure of businesses' undisclosed know-how and business information. It provides important support for businesses but should also be borne in mind by employers taking on staff who have had access to information at their previous employer that could fall under the "trade secrets" definition.
Unfair Dismissal
May 2018
Case: Mbubaegbu v Homerton NHS Trust
In May 2018, the EAT held that a hospital trust had acted fairly in dismissing a consultant orthopaedic surgeon for misconduct. No single act by the consultant had constituted misconduct and he had a previously perfect disciplinary record.
The EAT held that it was possible for a series of acts to demonstrate an overall pattern of conduct of sufficient seriousness to undermine the relationship of trust and confidence between the employer and the employee. The EAT held that it is not a requirement of a fair conduct dismissal that any single act constitute gross misconduct.
Case: Lancaster & Duke v Wileman
In July 2018, the EAT held that an employee summarily dismissed for misconduct could not
add the statutory notice period to their date of dismissal. Doing so would have given them the necessary qualifying service to bring an unfair dismissal claim.
The EAT confirmed that, when calculating the date of dismissal, the employer did not have to add the statutory notice period in cases where they have summarily dismissed the employee.
Our insight
Employers should bear in mind that, in this case, the consultant had a very high responsibility job. This influenced the EAT in holding that a dismissal, without any prior warnings being given, was fair.
Wherever possible, an employer should not consider dismissing for misconduct, falling short of gross misconduct, without having followed a thorough and transparent disciplinary process in advance.
A-Z of Employment Law
Whistleblowing
June 2018
Case: Kilraine v London Borough of Wandsworth
In June, the Court of Appeal considered under what circumstances allegations may amount to a protected disclosure for the purposes of Whistleblowing claims.
Part of the definition of a protected disclosure, under the Employment Rights Act, requires that it be a disclosure of information. The case law has often distinguished disclosure of information from mere 'allegations' that, arguably, do not attract whistleblowing protections.
The Court of Appeal held that statements can sometimes be characterised as both allegations and information. The key test is whether the disclosure has sufficient factual content and is sufficiently specific. Claimants will need to clearly state how this requirement has been satisfied when bringing their claim.
Our insight
This judgment clarifies that context is key when determining whether a statement constitutes a disclosure of information for the purposes of whistleblowing protections.
As a general point, employers should make sure they have a comprehensive whistleblowing policy in place and that this is well communicated to managers and staff.
'Employers should make sure they have a comprehensive
whistleblowing policy in place and that this is well communicated
to managers and staff.'
A-Z of Employment Law
Get in touch
As the year progresses, we will be keeping you up to date with developments as and when they happen.
If you would like direct updates on a particular area of the law, please contact our senior business development executive, Kay Bhatti, or another member of the employment team.
Stuart McBride Partner and Head of Employment (Bristol)
T +44 (0)333 006 0329 [email protected]
Esther Smith Partner (Bristol)
T +44 (0)333 006 0966 [email protected]
Siobhan Fitzgerald Partner (Bristol)
T +44 (0)333 006 0381 [email protected]
Robert Bourns Consultant (Bristol)
T +44 (0)333 006 0266 [email protected]
Ed Cotton Partner (Manchester)
T +44 (0)333 006 0492 [email protected]
Paula Cole Partner (Manchester)
T +44 (0)333 006 1221 [email protected]
Jonathan Rennie Partner (Glasgow)
T +44 (0)333 006 0757 [email protected]
Mark McQuillan Partner (London)
T +44 (0)333 006 1472 [email protected]
Amy Whiting Associate, Professional Support Lawyer (Bristol)
T +44 (0)333 006 0997 [email protected]
