Zero Hours, Zero Tolerance?

Anna Moyle

Zero Hours, Zero Tolerance?

There has been unease for some time over the use by employers of a “zero hours contract”.

Now, for the first time, employees and workers working under these contracts have some proper redress against employers who try to enforce provisions aimed at prohibiting their zero hour employees or workers from working for other people.

The term “zero hours contract” is used to cover various types of flexible or informal working arrangements.  Typically however it refers to a contract where the employer is under no obligation to provide the employee or worker with work.

Contractual provisions that try and prevent zero hours workers from working for others are known as “exclusivity clauses” and, although often included in zero hours contracts, they have been void since 26 May 2015.

Penalising this practice is what the government is now clamping down on:  following its consultation exercise in 2015:

–          From 11 January 2016 any dismissal of a zero hours employee will be automatically unfair if the principal reason is that he/she breached a clause in their contract prohibiting them from working for another employer.  There is no qualifying period of continuous employment required before such a claim can be brought.

–          Likewise, it is also unlawful to submit a zero hours’ worker (so not just an employee) to a detriment if they breach an exclusivity clause and work for another employer.

Click here for a link to The Exclusivity Terms in Zero Hour Contracts (Redress) Regulations 2015.

The new regulations are consistent with the government’s stated positon that zero hours contracts in themselves are not an issue, as they can serve a very useful and proper purpose in allowing flexibility where it is needed for both employers and individuals.

However, “they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable“.

Employers who use zero hours contracts should check their contracts and remove any exclusivity provisions in order to avoid the suggestion that any termination of employment or treatment of workers that could be might be viewed as detrimental is in some way connected to an attempt to enforce an exclusivity clause.


Feeling furtive?


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…


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.

George Michael, Faith and Final Warnings


Have faith – final warnings are useful.

They are easily given, difficult to appeal and can be relied on.  A tribunal can’t generally look behind a final warning and if an employee with a final warning steps out of line again, even in a relatively minor way, they can legitimately be dismissed for misconduct.

But what happens if the final warning was given in bad faith?  Surely, the process is unfair?

The answer is:  yes, it is.

However it took two appeals and for the matter to come before the Court of Appeal in Way v Spectrum Property Care Ltd  for this principle to be applied.

The facts are not particularly interesting.  All we need to know is that a final written warning had been given by a lone manager looking to hide his own misdemeanour, where the final warning was, on its face, valid and Mr Way had not appealed it.  This is what happened afterwards:

–     When Mr Way was later dismissed for another case of misconduct, which on its own would not have justified his dismissal, the employer refused to accept that the earlier final warning decision was unfair.

–     The Tribunal itself also chose not to investigate the issue, because Mr Way had not appealed the decision at the time and had accepted, in his second disciplinary hearing when he was dismissed, that the employer had genuinely believed that there had been no bad faith in relation to the earlier final warning.

–     The EAT too agreed that the employer could rely on the final warning.  They said that even if the Tribunal had considered evidence which had demonstrated that the final warning was given in bad faith, the decision would have been the same because, given the particular circumstances of the case, the employer could rely on a final written warning.

There are good reasons why both tribunals did not want to look behind the final warning:  deciding whether an employer’s decision to dismiss is fair is already time consuming, but having to consider the fairness of earlier warnings adds another level of complexity and time, which the tribunal system would prefer to avoid.

But the Court of Appeal disagreed with taking shortcuts.  It said that if the final warning was needed in order to justify the dismissal, then the tribunals needed to be satisfied that the final warning was given in good faith.  If there is any doubt, then it is for the Tribunal to investigate this and make a determination.  It made no difference whether the employer, when it reviewed the decision later, thought the final warning was made in good faith.   So the case has been sent back to the Tribunal, to review both the original final warning and the later dismissal decision.

The practical (rather than legal) mistakes in this case were that Mr Way’s representative did not press the bad faith point sufficiently with the Tribunal when it first heard the case and, because the employer had no interest in pressing this point, the Tribunal did not pursue it either.  So the lessons are:

–    If you as an employer want to rely on a final warning, then make sure that you are satisfied it was given in good faith.  Don’t bury any concerns.  Deal with it.

–    If the employee challenges the final warning in tribunal but does not follow through, don’t bury the allegation.  Still deal with it.

The temptation is not to look for trouble, and ignoring things does work some of the time, but if you have a determined employee (especially if they are supported by a union), cutting corners is a false economy.

Or, as George Michael put it in his 1980s lyrics:  “Well it takes a strong man baby, But I’m showing you the door, ‘Cause I gotta have faith, faith, faith”.

When is a decision to make redundancies not a decision?


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.