Annual employment law updateJanuary 2016, Exeter

Topics1. TUPE Update2. Collective

redundancies3. Working Time

Regulations 19984. Contracts of

employment5. Privacy in the

workplace6. Social media update

7. Whistleblowing8. Discrimination 9. Modern Slavery Act 201510. Apprenticeships 11. Tribunal fees update12. Key updates for 2016

1. TUPE Update

Brief TUPE Recap

European legislationIntended to protected employment of employees where businesses change hands

Two main scenarios:a) Transfer of an undertakingb) Where an outsourced contract is transferred

on, or brought back in house

What is a service provision change?3 conditions must be met:• Organised grouping of resources which must

have, as its principal purpose, the provision of services to a particular client.

• Not a single specific or task of a short term duration

• Not wholly or mainly the supply of goods

2014 Regs: service provision changeTransfers on or after 31 January 2014:

• Activities: “fundamentally or essentially the same”

• Change reflects existing case law on the meaning of ‘activities’

TUPE – Key 2015 CasesWhen attempting to establish whether a service provision change arises:• Identify the services provided• List the activities performed • Identify the employees carrying out those activates• Consider whether these employees form an organised

groupingAn organised grouping can be a single individual

Rynda (UK) Ltd v Rhijnsburger

TUPE – Key 2015 Cases

When looking at cessations of work prior to a TUPE transfer, the purpose, nature and length of the cessation is key to determining whether the employees are still part of the organised grouping

Inex Home Improvements Ltd v Hodgkins & Others

TUPE – Key 2015 Cases

Is the employee assigned to the organised grouping? • No – not assigned• Connection to business was administrative

Distinguished between: long-term sick/maternity leave/ lay-off

• Question of fact- the reason, nature and length of the cessation is relevant, as is the likelihood that the employee will return to work in the future.

BT Managed Services Ltd v Edwards

TUPE – Key 2015 CasesOther cases of interest• Ottimo Property Services Ltd v Duncan - a service provision

change can, in principle, involve a group of clients

• Jakowlew v Nestor Primecare Services Ltd (t/a Saga Care) – instruction to a service provider to remove a particular employee did not, in itself, mean that employee is no longer assigned

• ICTS UK Ltd v Mahdi and ors - Subsequent events may be relevant to whether a task was intended to be of "short-term duration"

TUPE – SummaryWhen attempting to establish whether an SPC arises:

– Identify the services provided– List the activities performed - are they

“fundamentally or essentially the same”

– Identify the employees carrying out those activates

– Consider whether these employees form an organised grouping

TUPE – SummaryIs the employee assigned?• An organised grouping can be a single

individual• Conversely, there can be more than one

client in an SPC but the transferor should not be one of them

Where appropriate ensure agreements have clauses dealing with removal of employees, setting out the procedure and authority for such removal• Consider contractual indemnities

2. Collective Redundancies

S.188 Trade Union and Labour Relations (Consolidation) Act 1992Collective redundancies will arise (and the information and consultation requirements will be triggered) where an employer is:

“proposing to dismiss as redundant 20 or moreemployees at one establishment within a periodof 90 days”

Ongoing issue over what is meant by “establishment”

USDAW v WW Realisation 1 Ltd• Thousands of people lost their jobs when

Woolworths and Ethel Austin went into administration.

• Should the consultation provision apply to employees at stores of less than 20 people?

• ET said no – staff at establishments of less than 20 received no award

Decision appealed to EAT

EAT held:• UK failed to implement original Directive by

including words “at one establishment” in TULRCA

• Those words should be deleted• Outcome - those working in shops with fewer

than 20 employees should have been collectively consulted with and would get protective award

Further appeal to Court of AppealCourt of Appeal referred a question to European Court of Justice (ECJ):

Does the phrase ‘at least 20’ in the Directive refer to the number of dismissals a) across all or some of an employer’s

establishments in which dismissals are effected within the 90 day period, or

b) in each individual establishment?

ECJ answer• “Establishment” means the unit to which the

workers made redundant are assigned

• Case referred back to Court of Appeal for judgment but not likely to be favorable for employees

• Watch this space…

3. Working Time Regulations 1998 (WTR)

WTR - Overview

• Derived from European legislation • Key rationale behind the Directive is

protection of workers’ health through ensuring adequate rest periods are taken

• Case law further developed in 2015

WTR - Topics

a) Holiday pay calculations – what is included?

b) Relationship between sickness absence and annual leave entitlement

c) What activities can be considered working time?

WTR Provisions – Holiday • Workers are entitled to statutory 4 weeks basic annual

leave

• The UK provides an additional 1.6 weeks statutory annual leave

• A worker is entitled to be paid at the rate of a “week’s pay” in respect of each week of annual leave

• ERA 1996 set out methods for calculating a week’s pay according to terms of remuneration package

a) Holiday Pay: Commission• Commission payments should be taken into

account for calculation of holiday pay• Calculation method is to take an average of

the worker’s total remuneration over a 12-week period, including any commission or similar payment which varies in amount

Lock v British Gas Trading Ltd

Holiday Pay: Overtime• Key question – should purely voluntary overtime

be included in calculation of holiday pay?• Answer – yes, but will depend on facts

• Is there an “intrinsic link”?NB. 1 July 2015 - Deduction from Wages (Limitation) Regulations 2014 – 2 year backstop on wages claims

Patterson v Castlereagh Borough Council

b) Holiday entitlement and sick leave• Sick leave is intended to enable an individual to

recover from illness• Annual leave is intended to enable a worker to

enjoy periods of rest and relaxation for reasons of health and safety

• It is inconsistent to compel a worker absent on sick leave to take annual leave at the same time

• 18 month limit on carry over of unused annual leave

Plumb v Duncan Print Group Ltd

c) WTR – Travel and Working Time“Working time” is defined as:

– any period during which a worker is working, at his employer's disposal and carrying out his activity or duties;

– any period during which he is receiving relevant training;

– any additional period which is to be treated as working time for the purpose of these Regulations under a relevant agreement.

“Rest period” – any period that is not working time

Working Time• Where there is no fixed office base or location,

working time starts when they leave home and not when they attend their first job

• This is relevant to calculation of working hours, rest periods and possibly holiday entitlement (if accrued according to hours worked)

• Pay not affected as not governed by WTR but check employment contracts for enhanced terms

Federacion de Servicios Privados del Sindicato Comisiones Obreras v Tyco Integrated

Security

Working Time• Time spent attending union/health and safety

meetings can be working time • Employers may wish to err on the side of caution

and treat all union and health and safety meetings as part of working day

Edwards and another v Encirc Ltd

WTR – Next steps• Particularly of relevance to organisations with

mobile workers; sales, healthcare

• Review your holiday pay calculations and policies on holiday pay

• Bear in mind your contract terms may also need review in light of these cases

4. Contracts of employment

Contracts of Employment - Topicsa) Changing terms and conditions of

employmentb) Right to be accompanied at disciplinary

hearingsc) Small Business, Enterprise and Employment

Act 2015d) Changes to parental leave

a) Unilateral change clausesContract clause included to give the employer the right to make unilateral changes to contractual termsAcceptable to use if:• Clear• Unambiguous• Sufficiently broad to cover requirements

Sparks & others v Department for Transport

b) Right to be AccompaniedRevised Acas code• Absolute right to choose either colleague or trade

union representative/official• A worker can change their companion• An employer should to be given enough time to

make arrangements to allow a chosen companion to attend

• The employee should provide the name of the representative and specify whether a colleague or union rep/official

Right to be Accompanied

• The case looked at the right to be represented by someone other than colleague or union representative

• Employers should consider the effect of a refusal to allow outside support – Why was the request made?

• Refusal could be sufficiently severe to constitute a constructive dismissal

Stevens v University of Birmingham

c) Small Business, Enterprise and Employment Act 2015 (SBEEA)• Contains various employment provisions• Two areas of note:

Penalty for underpayment of National Minimum Wage

Zero Hours Contracts

Penalty for underpayment of National Minimum Wage (NMW)• Amends National Minimum Wage Act 1998 –

penalty for non-payment of NMW now maximum of £20,000 per worker

• Previously was £20,000 per notice• Government already naming and shaming

offending employers

Zero hours contracts

• Exclusivity clauses in zero hours contract unenforceable

• Can no longer include clauses that seek to restrict a worker’s ability to work under another contract or require authorisation from the employer to do so

• Employees protected from unfair dismissal • Workers and employees protected from

detriment• Came into force 11 January 2016

d) Changes to parental leave• Statutory pay increase: £138.18 to £139.58 per

week• From 5 April 2015:

– Parental leave now available up to child’s 18th birthday

– Antenatal appointments – fathers and partners can take unpaid leave for up to two appointments

– Adoption leave and pay – primary adopters can take paid time off for up to 5 adoption appointments and secondary adopters for up to 2 appointments

– Surrogacy – primary adopter can take adoption leave

Shared Parental Leave• Allows mother to share or split maternity

leave• To be extended to working grandparents by

2018• Policy rationale – intended to redress the

balance of childcare responsibilities between men and women

• Same rationale - Compulsory gender pay gap reporting to be introduced – 26th March 2016

New Shared Parental Leave Continuity of employment

Grant or refuse SPL

Entitled to statutory SPL

(52 weeks) –(maternity

leave taken)

26 weeks service

Economically active

Parental responsibility

Main responsibility with named

partner

5. Privacy in the Workplace

Privacy in the Workplace• Increasing complexity of technology• Greater use of iPads, laptops, smartphones• What issues arise now that employees can

record images/conversations in the workplace so easily?

Covert Recording: By EmployeeCovert recordings by the employee:• Usually only admissible in evidence if the

recording relates to time when the employee was present

Chairman & Governors of Amwell View School v Doherty

“No ground rule could be more essential to ensuring a full and frank exchange of views…than the understanding that their deliberations would be conducted in private and remain private”

Covert recording: confidentiality The employee recorded panel discussions when employee was not present• Balance of public policy issues of confidentiality

with the interests of justice• Could be distinguished from Dogherty• Interests of justice supported its admissibility –

nature of commentsPunjab National Bank (International) Ltd

v Gosain

Enforced Subject Access Requests (SAR)• Now a criminal office for employers to force

applicants and employees to obtain and disclose a copy of their criminal record through a subject access request under the Data Protection Act 1998

• Already a scheme of criminal records checks (DBS) in place where required by law

6. Social Media Update

Social Media Dismissal

“on standby tonight so only going to get half p*****, lol”

British Waterways Board v Smith

Social Media Dismissals• Failure to take timely action once aware of

misconduct; and

• Searching for evidence against an employee…

…does not necessarily make a dismissal unfair!

British Waterways Board v Smith

Why was the dismissal fair?

• The derogatory remarks about the employer; combined with

• The reasonable perception of a H&S risk

Resulted in a reasonable conclusion that trust and confidence had been broken

British Waterways Board v Smith

Misuse of email dismissal

• Employer actively sought evidence of gross misconduct as way of avoiding paying notice pay

• Employee sent pornographic email from a work account

• Dismissal held to be fairWilliams v Leeds United Football Club

What made the dismissal fair?

Court looked at all the circumstances of the case including:• Position held by the employee • Nature of the contract and the employer’s

business• Consequences of the breach

Williams v Leeds United Football Club

Summary• Cases highlight the view the tribunals are taking

with dismissals• Treat with caution• Prudent employers should:

– maintain effective policies on use of social media and electronic communications; and

– ensure that those policies are properly implemented and that staff are aware of them

7. Whistleblowing

Protected Disclosure• Employees have rights not to be dismissed or

subjected to a detriment for making a protected disclosure

• After a number of disasters eg Zeebrugge it was recognised that employees should be protected to encourage them to raise concerns – health & safety, criminal offices, etc.

Protected Disclosures• Concerned an employee’s disclosure to Information

Commissioner’s Office (ICO) in breach of employee’s instruction

• Although employee had made a qualifying disclosure it was not a protected disclosure

• Management instruction not to contact ICO was reasonable as specific to the particular investigation

• This case does not mean management can stop employees contacting prescribed persons

Barton v London Borough of Greenwich

Protected Disclosures & Self Interest• Two cases involving individual contractual disputes

can be held as being within the public interest and protected disclosures

• There will need to be some form of public interest element but “public” can be a small section of society

• Cases suggest a low hurdle of what may be a protected disclosure made in matters of self interest

• Chesterton is being appealed to the Court of Appeal but is not due to be heard until November 2016

Chesterton Global Ltd v NurmohamedUnderwood v Wincanton Plc

8. Discrimination

Is a trend developing?• 2008 – claims of direct discrimination or victimisation

on grounds of disability can be brought by someone who is not disabled but had been discriminated against because of some else’s disability (Coleman v Aldridge Law)

• In 2015 a number of cases seem to show an extension of this trend. Victimisation by association (Thomson v London Central Bus Company Ltd)

• Direct and indirect discrimination may be possible (Chez Razpredelenie Bulgaria AB (CRB) v Komisia za Zashtita ot Diskriminatsia)

Discrimination by Association• Employers do not have a duty to make

reasonable adjustments in respect of working arrangements of a non-disabled employee in order that they can better provide for the needs of a disabled dependent

• Duty limited to assisting disabled employees• But bear in mind – flexible working requests

and sex discrimination Hainsworth v Ministry of Defence

Is type 2 diabetes a disability?Metroline Travel Ltd v Stoute• Tribunal held yes, but EAT held no• Employee followed diabetic diet avoiding

sugary foods• Held: abstaining from sugary drinks was not a

“diet” and therefore could not constitute a “treatment”

Other areas to note…

Other areas to note…• Modern Slavery Act 2015

• Apprenticeships

• Tribunal fees update

9. Modern Slavery Act 2015Relevant to businesses who:• supply goods or services, and• have a total annual turnover of more than £36

million

As of 29 October 2015:• prepare a slavery & human trafficking statement

for each financial year with steps taken to eliminate slavery and trafficking from supply chains

10. Apprenticeships • New scheme of “approved English

apprenticeships”

• Such schemes will still be classes as contracts of service

• Introduced 26 May 2015

11. Tribunal fees statistics (Total claims)

2012/13 2013/14 2014/150

50,000

100,000

150,000

200,000

250,000

191,541

105,803

61,306

Tribunal fees update• Introduced to encourage settlement outside of

tribunal system and reduce operational costs of the system

• Unpopular with unions and employee groups• Court of Appeal dismissed UNISON’s challenge to

fees• UNISON have applied for permission to appeal• In June, Government began review of fees• Scottish Government intends to abolish fees

13. Key Updates for 2016

Trade Union Bill 2015/2016• Ballot thresholds• Ballot results• Notice of industrial action• Expiry date of industrial action• Supervision of picketing• Facility time

Apprenticeship levy• Expected to come into force in April 2017• All employers will pay 0.5% of their paybill

However…• All employers will receive £15,000 annual

allowance against the levy• In effect only employers whose paybill exceeds

£3m per year will contribute (fewer than 2% of employers)

NLW and NICs6 April 2016• National Living Wage• £7.20 per hour- working people 25 and over • Greater impact on the regions versus the South

East

National Insurance Contributions • Employer NICs abolished for apprentices under

the age of 25

• Government due to publish regulations by 25 March 2016

• All employers with more than 250 employees will be required to publish information about their gender pay gap

• Government intends to include bonus information

• Government has pledged to work with business to eliminate all-male boards in top 350 companies

Gender Pay Gap Regulations

Immigration Bill 2015-16 • Contains proposals to curb illegal working and protect

the exploitation of migrant workers by:• Extending the existing criminal offence of knowingly

employing an illegal migrant from two years to 5 years;

• Creating a new offence of illegal working which will enable the earnings of illegal workers to be seized;

• Giving the secretary of state the power to introduce an ‘immigration skills charge’ on certain employers who sponsor skilled workers from outside the EEA; and

• Requiring public authorities to ensure that public sector workers in customer-facing roles speak fluent English.

Speak to us…

Daniella Glynn| 01392 458767Daniella.glynn@brownejacobson.com

Rachel Billen| 01392 458737Rachel.billen@brownejacobson.com