Author Archives: WynLewis

“All that glisters…” (in the gig economy)

WynLewis

 

… “is not [necessarily] gold”,

is something that employers, contractors and self-employed people will need to remember since it was decided recently that Pimlico Plumbers’ staff and Hermes’ couriers were all workers (not self-employed contractors) entitled to worker benefits.

“But what’s this all about?” you may be asking.

It’s to do with the situation when individuals who provide personal services, who have previously been excluded from employee status by being called “consultant” or “freelance”, are having their worker entitlements “upgraded” from few (or none) to better (or full) protection.

The winners are (1) oppressed individuals whose lot has been limited; and (2) HMRC, which will get more cash via PAYE.

The losers are (1) employers, for whom engaging staff will cost more; and (2) end-users, for whom services will cost more.

So if you thought Pimlico Plumbers were already expensive, don’t be surprised if they’ll be even more so in future.

Two case reported in June 2018 have again turned the spotlight on this issue:

Pimlico Plumbers’ operatives were treated as self-employed. This was because they could provide substitutes, could choose not to accept work and could offer themselves for assignments. So Pimlico was an operative’s client, not their employer.  This was even though they drove Pimlico vans, wore Pimlico clothing, were tracked, had Pimlico ID cards, were bound by post-termination restrictions, had fixed rates and were tightly controlled by HQ.  Then one operative claimed unfair dismissal, wrongful dismissal and compensation for discrimination.  The issue was this:  whether the control by Pimlico, as well as the extent to which its operatives provided personal services (as opposed independent services via the Pimlico brand) tipped the balance away from self-employed in favour of worker (but not employee) status.  The answer was:  it did.

Hermes’ courier operatives were treated similarly. An employment tribunal held that they had little autonomy, were controlled by Hermes, had an obligation to provide their services personally and couldn’t engage in a way that let them look after their own interests (Hermes’ interests came first) such as negotiating their rates.  The judgment will affect around 14,000 Hermes couriers and Hermes has decided not to appeal the decision.  So if you use couriers a lot, don’t be surprised if they get more expensive to fund Hermes’ increased worker costs.

One effect of these decisions may be that workers may eventually get holiday pay, sick pay, minimum wage, time-off and family-friendly rights, insured benefits, quasi-unfair dismissal rights and other termination (including redundancy pay) entitlements.  Many people will say:  “And why not?”.

The story continues, because (1) the 2017 Taylor Review, since subject to Government consultation, may result in a major re-think of employee, worker and self-employed status; and (2) the confusion and expense caused by worker status may increase if there is a shortage of personnel post-Brexit, where people will be more assertive about their status in a market where employers must vie more for the attentions of a smaller workforce.

Modern Slavery – your employer obligations

WynLewis

 

Slavery exists…

… despite its abolition by the Slavery Abolition Act 1833 and other legislation in the 19th century (most of which has since been repealed and replaced with its modern equivalent in the form of the Human Rights Act 1998, which prohibits slavery).

Of course modern slavery is different from the type of slavery that was abolished more than 180 years ago: ownership of people as chattels is hardly a live issue in modern Britain, although detecting and preventing the exploitation of people as workplace commodities remains an issue that exercises many people in an increasingly connected world.

So why is this post relevant now?  It’s because, in March 2017, we’re approaching the first full year (ending on 31 March 2017) in respect of which the requirements of the Modern Slavery Act 2015 (the “MSA”) have to be met by large commercial organisations.

Is your organisation successful enough to have to care?  The MSA applies to organisations that carry on business in the UK and have a global turnover of more than £36m per annum.  It requires you to prepare, sign and publish prominently an annual slavery and human trafficking statement for each financial year ending on or after 31st March 2016, stating what you have done (or not) to ensure that human trafficking isn’t happening in your supply chains or business.

But (in the same way as with the Gender Gap Reporting Regulations – see my blog here) there’s no formal sanction for not making a statement.  That said, drivers such as CSR, reputation, brand and employer-of-choice are bound to result in organisations doing what is required by the MSA.  Also the Government can get an injunction requiring compliance and if this is ignored it can give rise to an unlimited fine for contempt of court, for which individual directors may be liable.

The statements that are published will make for interesting reading.

I’ve prepared a more detailed analysis of the MSA on the Cube at Cubism Law, of which Golden Leaver is now a part.

BREXIT, strikes and industrial action ballots

WynLewis

 

Leaving the EU will be easier than going on strike…

From 1 March 2017 the Trade Union Act 2016 will impose new minimum voting requirements if a ballot in favour of a strike or other industrial action is to be lawful.

The background is that – despite the UK having signed up to several international conventions that protect the rights of employees to join unions and participate in industrial action – there is no right to strike or engage in industrial action.

Instead the mechanism is that, if industrial action ballot requirements are met, acts that would result in claims for damages against a union for inducing breach of an employment contract, or the lawful dismissal of employees for breach of contract in refusing to work, are protected.

The new minimum ballot requirements will be that:

  1. at least 50% of union members who are eligible to vote in a ballot must vote; and
  2. there need be no more than a simple majority of those who actually vote in a ballot for strike or industrial action to be lawful; but
  3. if a ballot for strike or other industrial action is in a sector that comprises “important public services” – the health service, teaching under-17s, the fire service, transport services, the nuclear industry and border security – then at least 40% of those eligible to vote in a ballot must also vote in favour of industrial action.

The “important public services” principle was in the 2015 Conservative Party manifesto’s aim to end “disruptive and undemocratic strike action” by introducing tougher thresholds when voting in a ballot for industrial action.

Applying the new post – 1 March 2017 industrial action voting rules for important public services to the (presumably?) important Brexit vote, in order for the Leave vote to have won:

–   under condition 1 above:  at least 50% of the 46,500,001 then eligible voters – so at least 23,250,001 – must have voted.  In the referendum, because 33,551,983 people voted, this threshold was passed easily;

–   under condition 2 above:  at least 50% of those who voted – at least 16,775,991 – must have voted Leave.  In the referendum, because 17,410,7423 people voted Leave, this threshold was also passed easily; but

–   under condition 3 above:  because of the (presumed) importance to the public of Brexit, at least 40% of those entitled to vote – so at least 18,600,001 – would have had to vote Leave.  In the referendum, only 17,410,742 voted for Leave, so the Leave vote would have failed.

So if the Trade Union Act 2017 principles had been applied to Brexit, the UK would not now be about to trigger legislation that will result in it leaving the EU.

The ironies are that the Brexit referendum methodology offered no proportionality of the type that characterises the new ballot requirements;  a strike ballot has a “use by” date, but the Brexit referendum doesn’t even have a “best before” date;  and whereas a failure to observe the new rules about voting for strike and other industrial action would render the trade union liable for damages and would make dismissals fair, there are no sanctions for the consequences to the UK electorate or to EU citizens settled in the UK, of leaving the EU.

What else does the Trade Union Act 2017 do?  It amends the Trade Union and Labour Relations (Consolidation) Act 1992 by increasing ballot thresholds; by introducing new information and timing requirements in relation to an industrial action ballot; by imposing requirements on unions for supervising picketing; and by anticipating (but introducing) regulations to abolish check-off of union subscriptions in the public sector.

Consequently it will be easier to leave the EU (affecting 64 million people) than it is to go on strike (affecting a much smaller cohort).

If you’re interested in more information then take this short cut to another blog about this in the Cube updates of  Cubism Law, of which Golden Leaver is now a part.

Got a Gender Pay Gap?

WynLewis

 

At last – something that’s NOT about Brexit:  the Gender Pay Gap Regulations

It’s time to stop ignoring what private sector organisations with 250 or more staff must do after the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 come into force on 6th April 2017.

Although the fact of a gender pay gap may not be rocket science, what’s interesting is that the gender pay gap isn’t a one-way gap.  Apparently it falls to about 9% for full time employees; it reverses to minus 6% for part time workers (where women tend to earn about 6% more than men); and it falls to quite a small % when men and women in their 20s and 30s are compared.  But remember that a gender pay gap isn’t an equal pay gap (which is unlawful if men and women are doing the same job).  Instead it’s an analysis of different rates of pay between men and women.

Three pieces of data have to be collected.  These are (1) the employer’s gender pay gap % as at 5th April in a particular year; (2) the organisation’s gender pay bonus gap over the last 12 months; and (3) the proportion of male and female staff who received a bonus in the same 12 month period.  This data then has to be available on the employer website for 3 years and on a government website.  Explanations for the reasons for any gap or of work being done to close the gap are encouraged.

Pay includes the gross monthly (if paid per month) or weekly (if paid per week) amount of basic pay, bonuses, allowances, holiday pay and shift premiums, but excludes overtime, expenses, benefits in kind, the value of salary sacrifices and payments made on termination of employment.

There are no sanctions (not yet) for not complying with the reporting obligations.  But there will probably be some effect on employers who routinely tender for public sector work and need to comply with procurement requirements that may favour tenderers with a smaller gender pay gap.  There may also be forum shopping by employees who choose to work for “employers of choice” that make a virtue of equal pay and of diminishing any gender pay gap: the name and shame game.

Some people think that, for the time being, the benefits of these regulations will be felt more by statisticians and accountants than the individuals who are at the lower end of any gender pay gap.

If you’re interested in more information then take this short cut to another blog about this in the Cube updates of  Cubism Law, of which Golden Leaver is now a part.

 

BREXIT = Bregulatory Meltdown?

WynLewis

 

We’re in a post-BREXIT employment law New World Order…

For some time now, the Government has been operating what’s known as the “one in, two out” regime when introducing new regulations.  People often think this means that for every new regulation to become law, two regulations must be abolished.

It’s not as simple as that.

In practice it means that, where there’s a need for a new regulation, and where there’s a cost to business of complying with that new regulation, the Government has to remove or modify existing regulation(s) to the value of £2 of savings for every £1 of cost imposed.

The regime came about as a result of businesses complaining about the time and cost of complying with the complexity and number of new regulations.  But, whilst the regime could mean the introduction of more (less costly) regulations, it’s resulted in fewer regulations overall.

So imagine the joy that businesses and Government might experience when EU-derived legislation and associated regulations melt away post-BREXIT!

Or not.

This is the thing:  much of the UK’s legislation, though deriving from EU directives, works well and matches current social trends and is likely to remain in place and/or influence our home-grown laws for some time to come.  So getting rid of this “good stuff” would be a retrograde step from the perspective of having a better society.  There’s also a certain amount of EU legislation that was already law in the UK before it became subsumed into EU law at a later date.  So we would probably want to retain that anyway.

In reality the range of EU-derived employment legislation is broad and includes agency regulations, collective consultation, discrimination, diversity and equality rights, family leave, TUPE and working time (including minimum holiday entitlements – the UK’s entitlement is actually more generous than required by EU law).  And although many aspects of these laws are unpopular, some of them have brought certainty (the service provision changes under TUPE) and a better deal socially (note that shared parental leave is a local, not an EU provision).

But what if, post-BREXIT, the Government imposed (even more of) a shock on business of having to deal with a sudden, fundamental change in the law by repealing everything EU-related…?  It would be too much.  Also we all (probably) recognise that, in order to access a free(ish) market, there will be a need to preserve certain minimum employment protection regimes.

So instead, the Government will take a drip-feed approach.  For that reason, the quantity of employment law likely to vanish is small; but our labour laws may approach Canada, Australia and New Zealand – independent trading nations we will now have to model ourselves on.

What are the candidates for being kicked out or changed?  Here are some that might be considered:

–       the right to accrue holiday when off sick?  Kick out entirely.

–       the whole of the agency worker regulations?  Kick out entirely.

–       the ban on capping bonuses in the financial sector?  Kick out or modify.

–       no cap on discrimination compensation?  Kick out and mirror the unfair dismissal cap.

–       no cap on whistle blowing compensation?  Kick out and mirror the unfair dismissal cap.

–       the right to carry over unused holiday entitlement for 18 months?  Kick out or modify.

–       ban harmonising terms and conditions after a TUPE transfer?  Modify to allow this.

Whatever happens, it won’t be immediate.  The two-year post-Article 50 negotiation period is probably only the beginning of the period before laws and regulations start to be changed – and even then the new BREXIT regime is likely to look pretty similar to the current regime.

So keep calm and carry on…

…but remember as well the effect on employment rights of not having free movement of people to do your work – have a look at my earlier BREXIT blog on this here.

 

Bothered by BREXIT

WynLewis

BREXIT – more about the labourers than the law?

Like it or not, we have to think about what employment law changes might occur over the next 2 years if UK voters decide, on 23 June 2016,  to “leave” rather than “remain”, when answering the question:  “Should the UK remain a member of the European Union or leave the European Union?”.

However just saying:  “The following laws don’t apply any more” isn’t a practical option.

The reasons are that unpicking 40+ years of jointly developed EU and UK legislation would be much more difficult than the development of UK legislation since joining the EU in 1973.

Why would it be difficult?

–  the 100s of EU-influenced primary UK legislation (e.g. the Equality Act 2010) could remain in place and could just be interpreted differently;

–  but  the 1000s of EU-required secondary regulations (e.g. the Transfer of Undertakings (Protection of Employment) Regulations 2006) were created by the European Communities Act 1972 to apply EU law locally – so repealing that Act would result in a vacuum with no UK legislation at all – the hook on which the regulations hang wouldn’t exist any more.

Preserving the existing legislation (but just interpreting it differently so as to sit more comfortably within a UK domestic business environment) seems the likely option.

However the fact that the Supreme Court:

–  would have to get out of the habit of referring things to the European Court of Justice if a decision were on the “difficult” side; and

–  would no longer have to make UK legislation conform with the spirit and intention of EU legislation or EU cases (but would still have to conform to international business partner requirements – see the recent data protection Safe Harbour problems for how even the employment-law “lite” US has to do that),

there would still be a recipe for chaos.

In that context, any changes might be minimal in practice, given that:

–  most of the EU laws we engage with have become workplace norms that seem to work in practice (possibly excluding shared parental leave and the question of agency workers…);

–  many UK entitlements already exceed EU minima, and

–  social conventions and expectations have changed immeasurably since EU employment law began its influence.

There are also two other factors:

–  first, from the moment a decision is taken to leave the EU, the answer “EU law requires it” will cease to be an acceptable response to queries about why something is or isn’t being done – so there will be a need for government to develop more cogent policy positions;

–  secondly, because the UK will still want to be a competitive and desirable place to live and work and will not want to be left behind by EU developments, there will still need to be a UK-specific (but EU sympathetic) approach to employment law and HR issues.  Otherwise (despite the UK potentially developing a less restrictive employment regime) EU multinationals might choose to headquarter or develop their businesses elsewhere; and UK multinationals might not be welcome in other host countries.

So – back to the original question – what (if anything) might change in employment law?

My prediction is:  initially, not much at all; later on, perhaps a gradual re-evaluation.  Even then, it’s sensible not to expect much change, because the UK’s habit of gold plating EU regulations was driven by the UK’s innate appetite for over-regulation, and if we look further afield to Australia (which is not beholden to Brussels, but is dependant on business standards), we find that much of its legislation is aligned with European concepts anyway.

But forget about the laws:  what about the labourers?   It’s possible that the much more relevant problem would be the effect of a BREXIT on the free movement of workers within the EU:  if the UK imposes barriers to this, many UK employers will find themselves having no, or a much reduced staff and will have to move into the sponsored work-permit regime (with the complexities that involves).

 

Feeling furtive?

WynLewis

Private emails at work – the latest twist

Furtive” is how many employers feel when they look at the private emails of a staff member who is the subject of a disciplinary investigation.

The reason is the tension between an employer’s wish to check on what their employees are doing, and what those employees regard as their right to privacy,  even when using a work-related email account for private messaging.

This tension was illustrated by the recent case of – Barbulescu v Romania  which shows that the position is still not crystal clear.

The story went like this:

–  Mr Barbulescu was dismissed for personal internet use at work, contrary to the employer’s strict rule against any personal use of its systems;

–  as part of its investigation, the employer accessed intimate messages sent by the employee to his fiancée and to his brother;

–  these messages were printed by the employer and used in the disciplinary proceedings as well as in Mr Barbulescu’s subsequent court challenge;

–  the Romanian courts held that Mr Barbulescu’s dismissal was lawful (it found the employer was entitled to check that work was being done properly and that Mr Barbulescu had been given notice of the rule against personal use of company resources and that surveillance would occur);

–  the European Court of Human Rights also held that the monitoring of Mr Barbulescu’s internet usage and the use of the Yahoo! messages in disciplinary proceedings was a proportionate interference in his “Article 8” rights.

The media:

–  interpreted this as a further encroachment on to workplace rights; and

–  gave the (misleading) impression that the decision gave employers carte blanche to snoop on employees’ personal emails.

They were wrong.

In fact the legal position is like this:

–  Article 8(1) of the European Convention on Human Rights states that “everyone has a right to respect for his private and family life, his home and his correspondence“;

–  this is a right to communicate (which means by letter, email and phone call) without interception or screening by a third party and amounts to a reasonable expectation of privacy;

–  but that right (and that expectation) vanishes if interference (1) is in accordance with the law, (2) is necessary in a democratic society, and (3) is in the interests of national security, public safety or the economic well-being of the country; for the prevention of disorder or crime; for the protection of health or morals; or for the protection of the rights and freedoms of others;

–  so there’s a lot of scope for sensible and proportionate (and lawful) monitoring – and, provided that the safeguards in the various guidelines set out in the data protection codes of practice for monitoring are followed – there should be no problems;

–  this is why the law is framed as a right to respect for privacy, not a right to actual privacy;

–  and in this case, the interference with Mr Barbulescu’s Yahoo! emails was appropriate, given the need to balance an expectation of privacy against an employer’s wish to verify that employees are working during working hours.

But what about real life?

–  isn’t a blanket ban on all personal internet use at work excessive?

–  how can people juggle longer working hours with outside activities if there is no “down time” to deal with those outside activities?

–  smartphones make personal use of the employers’ systems less of a necessity (and make monitoring of their workplace activities by employers harder);

–  the BYOD trend is leading to an even greater blurring between the private and the professional in many workplaces.

Pulling this together:

–  you can monitor workplace communications;

–  but you have to do it in a reasonable and balanced way;

–  any monitoring is unlikely to be reasonable or balanced if you haven’t warned your employees in advance what you may be doing;

–  so it helps (a lot) to have a policy in place that says what you’re entitled to do and what you will do if a need to monitor arises.

Whether governments abide by the laws they impose on their individual and corporate citizens is, of course, a different issue.

And here is the news from abroad…

WynLewis

Are you liable if you dismiss an employee working abroad?

Once again the Courts have gently moved the goalposts that determine whether someone working abroad can bring an unfair dismissal or discrimination claim in the UK Employment Tribunals.  Is the recent Olsen v. Gearbulk case below the final position (or just the latest nudge)?   Or will there be more nudging to come?  The last word probably hasn’t yet been written.

I advise quite a few UK organisations that have an international brand and a global reach.  This doesn’t mean that they export products to the rest of the world.  It means that their staff work abroad in different parts of the world, usually on UK contracts, but only rarely come to the UK, even though the UK is perceived by them (and the colleagues they work with abroad) as “home”.

Several of these organisations are charities or NGOs; the others are banks, insurers, law firms and other large commercial organisations.  Superficially they don’t have much in common.  But what they do have in common is that they never know if they’re at risk of having a UK claim brought against them after terminating the employment of an employee working abroad; nor is there a definite answer to that dilemma.

These were the main facts of the Olsen v. Gearbulk case:  Mr Olsen was Danish; he lived in Switzerland; he was an employee of a Bermudian company; he had been offered, but rejected a UK law contract that would have based him in the UK; instead he had a contract governed by Bermudian law to work in Switzerland; he managed about 100 employees internationally including up to 20 in the UK; he spent more time in the UK than in any other international office and was paid in Sterling; but he structured his time so that he worked for fewer than 90 days in the UK and so wasn’t resident for UK income tax.  Despite this, when he was dismissed (he said following a whistleblowing disclosure) he brought an unfair dismissal claim in the UK.  But the ET and the EAT held that there was an insufficiently strong connection with the UK and so his claim was rejected.

That’s a no-brainer” you might be thinking.  However no one set of circumstances is identical to the next.  So no one decision will necessarily be simpler or more difficult than the next.  Consequently employers need better guidance, even though there has been a string of cases that have developed different tests to decide whether a UK ET has jurisdiction to deal with dismissals or discrimination occurring abroad.  This blog is no place to analyse those cases in detail.  But here is a possible approach for starters:

–    the Lawson v. Serco tests: does the employee ordinarily work in GB?  Does a peripatetic employee ordinarily work / get paid in / pay tax in GB?  Can the employee’s work abroad be regarded as being in a British enclave (shades of Rupert Brooke’s “corner of a foreign field”); is there an equally strong connection with GB and with British employment law? (2006)

–    the Duncombe test:  does the employment have much stronger connections with GB and with British employment law than any other system of law? (2011)

–    the Ravat test:  does the employment relationship have a stronger connection with GB than with a foreign country where the employee works and is there a sufficiently strong connection with the UK that Parliament would have regarded it as appropriate to hear the claim? (2012)

–    the van Winkelhof test:  is it possible to identify factors that are sufficiently powerful to displace the territorial pull of the place or work abroad? (2012)

All of the above tests are, admittedly, a bit vague.  That said, they have a pragmatic “you’ll know an elephant when you see one” approach that most employers will be capable of applying.  So if the answer to any of the “abroad” tests outlined above is “yes” you should be assuming that there is a risk of a UK ET claim and head in the direction of a Settlement Agreement.

In passing, it’s also wise to ask another question:  are any “in-country” employment rights triggered abroad in the location where a terminated employee has been working?  If you get that wrong, an employer can end up paying substantial damages, because far more countries than you might imagine have highly developed employment law rights with compensation entitlements.  Don’t successfully avoid or minimise UK liability but end up being liable abroad.

When is a decision to make redundancies not a decision?

WynLewis

Collective redundancies just got more complicated… again.

It’s a shame, because they had become simpler after the Woolworths case confirmed that you only have to focus on establishments within a business (rather than on a business as a whole) when deciding whether to consult collectively in a redundancy situation.

Problem:  the trigger point for when an employer has to start consulting about collective redundancies may have been brought forward to a time that many employers would regard as being no more than an in-principle (not a final) decision. This brings uncertainty.

Facts:  the E. Ivor Hughes Educational Foundation operated a girls’ school. Due to a projected decline in the number of pupils, it was decided in February 2013 to close the school unless numbers increased. Due to the subsequent actual decline in the number of pupils, it was decided in April to close the school at the end of the 2013 summer term. All 24 staff were then given notice of dismissal on 29 April (4 days after the decision to close the school had been taken) to expire on 31 August. No collective information or consultation was carried out (apparently the Foundation had taken no legal advice and so didn’t know about the need to consult). The staff then brought claims for a Protective Award for failing to consult and won the maximum 90 days’ compensation. This was costly for the Foundation, whose appeal against the Protective Award failed.

Issue:  you might be forgiven for thinking: “Serves Them Right”, given that dismissal notices were served only 4 days after the decision to close had been given; and given also that the Foundation apparently took no legal advice. But the issue is this: should the Foundation have started consultation in February 2013 (when they took an in-principle decision to close the school if pupil numbers remained low); or could they have waited until April (when their in-principle decision was converted into an actual decision) before starting consultation?  Supporting this proposition are the follwoing points:  (1) an in-principle decision about having to make redundancies was only speculative and fell well short of the need to “propose” redundancies (the UK legislation trigger – which is more specific than the comparable EU legislation that refers to the broader need to “envisage” redundancies); and (2) the trigger for having to consult collectively should have been activated only after the need to make redundancies changed from being speculative to definite (when there would have been at least half a chance of avoiding liability for Protective Awards if dismissal notices had been delayed for 30 days’ consultation).

Judgment:  the Tribunal accepted that the final decision to close the school was deferred to April 2013, but that a decision had already been taken in February that, unless pupil numbers improved, the school would definitely be closed; and that this conditional decision amounted to a proposal to dismiss (because even though it was less than an actual decision, it was more than a possibility and compelled the School to plan for collective redundancies) that triggered the need to consult collectively. The Tribunal also decided that there were no special circumstances (such as the adverse effects on the school and on pupil numbers of a “leak” of its parlous state) that would have made consultation impractical (which would have reduced or diminished the Protective Award). All of these findings were endorsed by the Employment Appeal Tribunal.

Lessons:  when faced with the possibility of 20 or more redundancies either (1) make sure that no decision is made (whether an actual decision, or a conclusion that would have the effect of you acting in the same way as if a decision had been made), or (2) start the consultation process immediately (however vaguely and for at least the minimum 30 or 45 days) because criticism of your transparency will be cheaper than a Protective Award.