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abolition by the Slavery Abolition Act 1833 and other legislation in the 19th century (most of which has since been repealed and replaced with its modern equivalent in the form of the Human Rights Act 1998, which prohibits slavery).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

 

Tips for Employers: getting your own way and how to stop making stupid mistakes

WynLewis

Varying a contract of employment should be one of the simplest tasks.  Apparently it isn’t.  It seems that there’s no limit to the number of ways to get it wrong.

Hot on the heels of my last comment on this topic in Wess v. Science Museum Group – where the employer got it right – are three more cases that focus on the same topic, but where employers seem to have ignored their basic contract law and public sector employers have wasted public funds by having their decisions proved wrong:

In Sparks v. Dept for Transport the DfT introduced a new trigger for the number of absences that sparked an official absence management process.  But the court found that the current trigger was incorporated into the employees’ contracts of employment (i.e. it wasn’t in a variable policy) so the DfT could only make changes if that change was not detrimental.  In fact the new figure would have been detrimental to the employees, so the old trigger was reinstated.

In Norman v. National Audit Office the NAO reduced paid sick leave and privilege leave by relying on a general flexibility clause and on the words “They are subject to amendment”.  The Tribunal agreed that the NAO could do this, because there had been extensive negotiations before the changes had been made.  But the EAT disagreed and said the words weren’t precise enough to cover the methodology for making any change that was then notified to employees.

In Hart v St Mary’s School (Colchester) Ltd  the school imposed a change to Ms Hart’s working hours that required her to spread her hours over 5 days, not 3 days.  This was done by relying on a contractual provision that required staff to work at such times as necessary for the proper performance of their duties and that working hours of part time staff were “subject to variation, depending upon the requirements of the school timetable”.  But neither of these provisions worked, and the EAT found that the school had breached Ms Hart’s contract.

So in each of these three cases, the employer lost; and should have known better.  Was this due to being inept?  Was the change a calculated try-on?  We’ll never know. But what we do know is this: 

  1. Employers who state in an employment contract that terms in a staff handbook are part of the employment contract should clarify which terms are intended to be contractual and which are not.  Generally it’s better to use a completely non-contractual staff handbook, which will be easier to vary;
  2. Employers will find it difficult to rely on a general right to vary clause; and
  3. General flexibility clauses tend to be used only to make minor administrative changes, or to vary contractual provisions with which the employer is required to comply.

When will these lessons be learned?  When will public sector employers not waste public money by having their decisions proved wrong in the tribunal system? The answer is easy:  if you want to avoid getting it wrong, come to us at Golden Leaver; we know what we’re doing.

Compensation (and shared parental things) made (slightly) easy(ier)

WynLewis

For those of you who like to know such things, these are the new rates for the main statutory payments and for the new capped amounts for compensation from 6th April 2015 onwards.

The exception – one wonders why, but let’s thank the Government anyway for this extra layer of complexity – is that the SMP, SAP and ShPP rates apply from 5th April 2015 (i.e. one day earlier).

             

SMP/SAP/ShPP:

up to £139.58 (from £138.18) per week.
MA:

up to £139.58 (from £138.18) per week.
SSP:

       

up to £88.45 (from £87.55) per week from 6 April 2015.
National Insurance:

the lower earnings limit applying to NICs, below which employees are not entitled to SSP, SMP, SPP, SAP and ShPP, will increase to £112 (from £111) per week.
Week’s Pay:

up to £475 (from £464) (maximum)
Basic Award:

up to £14,250 (from £13,920) (maximum)
Compensatory Award:

up to £78,335 (from £76,574) (maximum)

                                       
And, for those of you who are puzzled (who isn’t?) by the Byzantine rules of Shared Parental Leave and Pay, you’ll be pleased to know that BIS has published an online calculator to help work out the entitlements to time off and pay on the birth of a child, taking account of existing maternity and paternity leave rights under the new shared parental leave scheme which will apply to babies due on or after 5 April 2015.
It’s here:  https://www.gov.uk/government/news/calculate-your-leave-and-pay-when-you-have-a-child   Enjoy.

 

Too many tweets …

CarolineLeaver

.. made for a fair dismissal in the case of Game Retail Ltd v Laws – although it was the content and context of Mr Laws’ tweets that were the problem, not their number.

This was one of them:

This week I have mainly been driving to towns the arse end of nowhere… shut roads and twats in caravans = road rage and loads of fags smoked’.

“Not so bad”, you might say.  “I’ve heard worse on daytime TV”, you might also say.

And an Employment Tribunal seems to have taken a similar view, when it decided that Mr Laws’ more offensive and expletive laden tweets (28 of them) were misconduct, but not gross misconduct, so Game Retail’s decision to summarily dismiss Mr Laws fell outside the band of reasonable responses.

The Tribunal’s reasoning was:

  • The tweets were posted for private use and it had never been established that any member of the public or employee of Game Retail had access to Mr Laws’ tweets or associated him with Game Retail.
  • Game Retail’s disciplinary policy did not state that inappropriate use of social media could result in dismissal without notice.

It seems, however, that the Employment Tribunal had failed to understand how Twitter works.  The point was that, although Mr Laws’ Twitter account was a personal account, he had no privacy settings, so his tweets were visible by default, he could be seen by staff and potential customers, and 65 Game Retail stores were following Mr Laws (although whether an employer should be following a member of staff is another issue…).

As a result the Tribunal were criticised for asking the wrong question.  Instead of asking whether the tweets had offended anyone, the correct question was whether Game Retail had been entitled to reach the conclusion that the tweets might have caused offence.

The answer to that question (based on the above example of one of Mr Laws’ tweets) was “yes”.   The factual points were (i) the Tribunal had found that the tweets were offensive, (ii) a manager had reported them, and (iii) 65 stores had access to them.  Therefore, it was inconsistent for the Tribunal to conclude that the reputational risk to the business was only theoretical.

Consequently Mr Laws’ dismissal was fair – which will be welcome news for those employers who invest considerable time and money in reputational management and CSR, and who will prefer not to have those efforts undermined by careless tweeting.

So is Facebook the same?  Interestingly, Mr Laws’ case was decided differently to a previous High Court ‘Facebook’ case (Smith v Trafford Housing Trust) in which an employer had not been entitled to characterise the posting of views about gay marriage on an employee’s Facebook wall as misconduct.   This may be because Twitter has a more public nature than Facebook, making dismissals relating to offensive tweets easier to defend for employers than a similar Facebook status.

This case is a reminder that businesses should review their social media policies and ensure that Twitter is included and that their staff understand what is acceptable and what will be misconduct.

A word of warning – if any business believes that Twitter isn’t relevant, consider this: in Q1 of 2007, 400,000 tweets were posted, whereas in 2012 over 100 million users were posting some 340 million tweets per day.  If you are an employer or an employee don’t get caught out…

Collective Redundancies and the Ghost of Woolworths

WynLewis

Finally we have (almost) official confirmation that the 20+ trigger for collective redundancies isn’t relevant until the number of redundancies at individual sites each meets that threshold.

But as the Ghost of Woolworths exits stage left (no doubt muttering “Collective redundancies – to consult, or not to consult: that is the question”) – is the farce over?

Possibly not…  So it may just be sensible to summarise what an employer needs to know when deciding whether to inform and consult individually or collectively:

The legal bit:  if you’re contemplating 20 or more redundancies at one establishment (think of it as a “unit”) over a 90-day period, you have to inform and consult collectively (with employee representatives) for at least 30 (and sometimes 45) days before the first redundancy takes effect.

The facts:  six or so years ago, Woolworths went into administration and closed all its UK stores.  There wasn’t any consultation and about 25,000 staff brought claims for protective awards (for failure to consult).  The Employment Tribunal followed the one establishment test and found that staff who worked at shops with 20 or more staff should get an award, but that staff who worked at smaller shops shouldn’t.  But the Employment Appeal Tribunal (“EAT”) weighed in and applied the 20+ test to the entire undertaking (i.e. it lumped all of the Woolworths shops together).  This meant that all of the staff should get a protective award.  This has caused major problems for multi-site employers, who had previously treated each site separately under the one establishment test and had only consulted collectively where they had 20 or more staff at risk of redundancy at each individual site.

The fly in the ointment:   the effect of the EAT in the Woolworths case disregarding the one establishment test and replacing it with a one undertaking test was that the 20+ threshold was triggered even if you had lots of units (shops, in the Woolworths case) with fewer than 20 redundancies at each of them, but your overall business exceeded the 20+ redundancy threshold.

The consequences:  since then, many redundancies that might not have involved any collective consultation (and so could have been carried out quickly on a small scale) were “collectivised” and caused employers to incur a lot more risk and worry, as well as (possibly) pay their employees less redundancy pay, due to the need for a contingency to deal with the cost of external advisers and potential claims by those same employees and their representatives.

The commentaries:  many people thought that the EAT was correct and that the UK had failed to implement the relevant EU legislation properly; others thought it was curiously impractical.

It’s all over now:  it may now be time to ring out the bells.  Why?  Because the Advocate-General (“A-G”) of the European Court of Justice (“ECJ”) has opined that:

The UK can now limit the need to consult collectively on redundancies to cases in which the proposed job losses are at the same site (i.e. the place where people actually work) rather than look at the overall number of proposed redundancies.

Hurrah:  well, maybe…  But there are at least three further flies in the A-G’s ointment:

  1. there’s still scope to argue about the meaning of “establishment”:  what if (say) Prèt à Manger or Costa Coffee operates several stores, but in one shopping centre?  Would each store be treated separately, or would they be lumped together and have to be regarded as one establishment?
  2. the opinion of the A-G is limited to the UK, so the ECJ may come to a different conclusion if it decides similar issues that come to it from other countries.
  3. there’s also a risk that the ECJ itself, which isn’t bound to follow the opinion of the A-G, may go its own way (not for the first time) and not follow the A-G’s opinion.

Watch this space.  Many a drama involves a character leaving through one door and re-entering through another; the Ghost of Woolworths may well do the same.

Varying terms and conditions – A salutary lesson to all

CarolineLeaver

Re-Use Collections Limited (Re-Use) v Mr Keith Sendall (1) and May Glass Recycling Limited (May Glass) (2) deals with some important issues that employers need to know about:

What can be considered specific consideration (i.e. “value given by the employer”) for the purposes of accepting new terms and conditions?

Whether an employer can enforce restrictive covenants against a former employee where there has been no specific consideration given?

Re-Use is a glass recycling business and had originally been a family run business (set up in 1922 by Mr Sendall’s grandfather).  The business left family ownership and was transferred into the ownership of Re-Use.  Mr Sendall joined the family business in 1980 and remained an employee until his employment ended on 1st May 2013.   He was manager of the depot at Dagenham, Essex.

Mr Sendall become embroiled in legal action with his former employer, because whilst employed by Re-Use he had directly been involved in setting up a competing business (May Glass) in breach of his duty of fidelity and good faith to Re-Use.

This case deals with a number of legal issues, including whether Mr Sendall owed a fiduciary duty to Re-Use (which it was decided he did not).  But for the purposes of this commentary, I am focusing on whether the express restrictions – confidentiality and restrictions in relation to post-termination conduct, including non-solicitation and non-dealing with restricted clients and prospective clients – in Mr Sendall’s contract of employment, could be enforced against him.

Mr Sendall was given a new contract in October 2012 (five months before he resigned) which included a number of new restrictions on him.  Mr Sendall debated the changes but eventually signed and returned a copy of the contract of employment to Re-Use on 22nd February 2013.

This issue centred not on whether there had been acceptance of the terms, but on whether consideration had been given (i.e. what had the employer given to Mr Sendall in exchange for him agreeing to new terms and conditions).

When restrictions are entered into after the start of employment, this is a variation to the existing contractual relationship and requires express consideration (i.e. something of value) in order for the restrictions to be enforceable.

Re-Use’s position was that consideration had been given since the new terms were introduced as part of a package under which benefits were conferred upon Mr Sendall, including a pay rise. Alternatively,  they argued that continuing to employ Mr Sendall after the contract was produced was good consideration.

The Court rejected Re-Use’s position on the following grounds:

  1. When the Court looked at the ‘package of benefits’ in detail it materialised that Mr Sendall had already enjoyed these benefits before the introduction of the new contract terms, or in the case of the life assurance cover being increased from 2x to 4x salary the Court found no evidence to link this change to the introduction of the new contract.
  2. Mr Sendall had received an increase in salary in January 2013 but on the evidence there was nothing to show that the salary increase was linked to entering the new contract (there were pay increases at that time company-wide rather than only for those entering the new contracts) and there was nothing to make it clear that the pay increase was conditional on accepting the new terms.
  3. Finally, in relation to the continuing employment point, the Court found that there was no evidence to link a continued willingness to employ Mr Sendall with his willingness to sign the contract of employment.  In particular, there was no evidence (expressly or implicitly) to show that a refusal to sign would or might lead to dismissal or another lesser sanction.

The Court found that no consideration had been given and the post-termination restrictions were unenforceable.  This could be potentially very damaging for many employers in similar situations.

So what do employers need to consider when introducing new restrictions during employment?

  1. Give consideration for the restrictions and ensure that this consideration is ‘new’ consideration and not just rehashing an employee’s existing benefits.
  2. The consideration needs to have value to the employee if it is going to incentivise them to accept the new terms – for example, a one off cash payment or John Lewis gift vouchers.
  3. You need to make clear in correspondence dealing with the introduction of the new changes that the consideration being offered is in return for the acceptance of the new terms and conditions.  Make the link.
  4. You need to ensure that the contractual documentation and letters dealing with the proposed changes support the business’s position and do not undermine it.  In this case, the new contract referred to the old salary rather than the new increased salary that the employee was supposed to be receiving in return for accepting the new terms. Another error was to refer in the pay increase letter (sent in December 2012) that aside from the salary increase all other terms and conditions remained the same.
  5. Finally, if you are going to look to rely on the ‘continued employment is good consideration’ defence then make sure that somewhere in the documentation you refer to the consequences of not accepting the new terms i.e. if you do not accept the terms, then your employment may be brought to an end.

Whilst these may seem to be “techie” points, this is the latest in a line of cases dealing with variations.  See our December blog here dealing with another case.

 

Increases to the National Minimum Wage

Anna Moyle

There is growing pressure from many quarters to introduce a living wage. All of the main parties at their recent conferences made promises aimed at improving the financial position of those on the national minimum wage (“NMW”).

In line with Vince Cable’s speech to the Liberal Democrats, BIS has already announced that the government is to propose to the Low Pay Commission that there should be a single NMW rate for apprentices and 16-17 year olds, with the apprenticeship rate rising as a result by just over £1 to match the rate for 16-17 year olds.

Ed Milliband said that the Labour Party will increase the NMW to £8.00 an hour, which is just under the amount calculated as being the London Living Wage of £8.80. However, the introduction of a living wage is clearly not going to happen soon and in the meantime the NMW has increased from 1 October 2014 as follows:-

  • Adult rate – increased 19p from £6.31 to £6.50 per hour

  • Rate for 18-20 year olds increased 10p from £5.03 to £5.13 per hour

  • Rate for 16-17 year olds increased 7p from £3.72 to £3.79 per hour

  • Rate for apprentices increased 5p from £2.68 to £2.73 per hour