employment law update 2016, london
TRANSCRIPT
Annual employment law update
January 2016, London
Annual employment law update
2016
Ray Silverstein, Elish Kennedy and
Gemma Steele
Today’s session
1. TUPE Update
2. Collective redundancies
3. Working Time Regulations
1998
4. Changing employment
contracts
5. Right to be accompanied
6. Small Business, Enterprise
and Employment Act 2015
7. Parental leave
8. Privacy in the workplace
9. Social media update
10. Whistleblowing
11. Discrimination
12. Modern Slavery Act 2015
13. Apprenticeships
14. Tribunal fees update
15. Key updates for 2016
1. TUPE Update
Brief Recap – what is TUPE?
TUPE applies to a "relevant transfer", which means either or both of the following:
• Business Transfer - A transfer of a business, undertaking or part of a business or undertaking
where there is a transfer of an economic entity that retains its identity. This involves three
elements:
– an economic entity;
– a transfer of that economic entity; and
– the economic entity retaining its identity following the transfer.
• Service provision change - A client engaging a contractor to do work on its behalf, reassigning
such a contract or bringing the work "in-house". This can, therefore, encompass an initial (or
first generation) outsourcing, a subsequent (or second generation) outsourcing or an in-
sourcing. However, the supply of goods and "one-off buying-in of services" are excluded.
Activities carried on after a change in service provider must be "fundamentally or essentially
the same" as those carried on before it.
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 change
Transfers 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 Cases
Rynda (UK) Ltd v Rhijnsburger
When 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
grouping
An organised grouping can be a single individual
TUPE – Key 2015 Cases
Organised Grouping?
Inex Home Improvements Ltd v Hodgkins & others
• Inex - painting and decorating services
• Nov & Dec 2013 – staff temporarily laid off
• January 2014 – contract was awarded to another contractor
• ET: not an “organised group” because the staff were laid-off
• EAT disagreed
• Despite temporary cessation of work staff still an organised group
• Purpose, nature and length of cessation is relevant
TUPE – Key 2015 Cases
Is the employee assigned to the organised grouping?
BT Managed Services Ltd v Edwards
• Mr Edwards permanently unable to return to work
• Not assigned to organised grouping
• Connection to business was administrative (entitlement to health
insurance)
• 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.
TUPE – Key 2015 Cases
Other cases of interest
• 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 – Summary
• When 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
• Is the employee assigned?
• An organised grouping can be a single individual
• 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 1992
• Directive is implemented into UK law by Trade Union and Labour
Relations (Consolidation) Act 1992 (TULRCA)
• Collective redundancies will arise (and the information and
consultation requirements will be triggered) where an employer is:
“proposing to dismiss as redundant 20 or more
employees at one establishment within a period
of 90 days”
• Ongoing issue over what is meant by “establishment”
TULCRA
Where an employer fails to comply with its collective
consultation obligations, a complaint may be made to
an employment tribunal, which can make a
protective award of up to 90 days’ pay for each
affected employee
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 s.188 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 Appeal
Court 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
• Hot off the press – it was reported yesterday that
Court of Appeal agreed with the ECJ’s
interpretation
3. Working Time Regulations
1998 (WTR)
WTR - Topics
a) Holiday pay calculations (commission and
overtime)
b) Relationship between sickness absence and annual
leave entitlement
c) Is travel working time for peripatetic (mobile)
workers?
WTR - Overview
• Derived from European legislation - Implements
European Working Time Directive
• Key rationale behind the Directive is protection of
workers’ health through ensuring adequate rest
periods are taken
• Case law further developed in 2015
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
Lock v British Gas Trading Ltd (EAT)
• EAT heard the appeal December 2015 - judgment is currently awaited.
• The appeal concerned whether Bear Scotland Limited –v- Fulton and another
(EAT) should have any bearing on this case given that Bear Scotland concerned non-
guaranteed overtime and Lock relates to commission.
• British Gas is also arguing that Bear Scotland was incorrectly decided when it
concluded that domestic legislation could be interpreted purposively to give effect
to EU Law
• Some holiday pay cases remain stayed pending the outcome of Lock (particularly
claims against private sector employers and/or in respect of commission
payments). Others are proceeding.
• A further tribunal decision is expected in the Lock litigation - this will deal with the
correct reference period and the level of holiday pay to which Mr Lock was
entitled.
a) Holiday Pay: Overtime
Patterson v Castlereagh Borough Council
• Northern Ireland Court of Appeal – not binding
• But – may be cited in English and Welsh tribunals
• Key question – should purely voluntary overtime be included in
calculation of holiday pay?
• Answer – will depend on facts
NB. 1 July 2015 - Deduction from Wages (Limitation) Regulations 2014
– 2 year backstop on wages claims
b) Holiday entitlement and sick leave
Plumb v Duncan Print Group Ltd
• 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
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
c) WTR – Travel and Working Time
Federacion de Servicios Privados del Sindicato
Comisiones Obreras v Tyco Integrated Security
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
Working Time
Edwards and another v Encirc Ltd
Is time spent attending union/health and safety meetings “working
time”?
• Potentially, yes
Practically what do employers do in the meantime?
• You may wish to err on the side of caution and treat all union and
health and safety meetings as part of working day
4. Changing employment contracts
Sparks & others v Department for Transport
Clause purported to give the employer the right to
make unilateral changes to contractual terms
Acceptable to use if:
• Clear
• Unambiguous
• Sufficiently broad to cover requirements
5. Right to be Accompanied
Revised Acas guidance
• Absolute right to choose either colleague or trade union
representative/official
• A worker can change their companion
• Good practice to give an employer 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 2
Stevens v University of Birmingham
• Does an employee have a right to be represented by
someone other than colleague or union representative?
• Held: breach of trust and confidence not to allow employee
to be accompanied by individual of his choice
• Refusal could be sufficiently severe to constitute a
constructive dismissal
Point to note:
• Consider why the request has been made and the effect of
refusal
6. Small Business, Enterprise and
Employment Act 2015 (SBEEA)
• Two areas of note:
Penalty for underpayment of the National
Minimum Wage
Zero Hours Contracts
Penalty for underpayment of
National Minimum Wage (NMW)
• National Minimum Wage Act 1998 amended –
penalty for non-payment of NMW now maximum of
£20,000 per worker
• Previously was £20,000 per notice (regardless of
the number of affected workers)
• Government currently names and shames offending
employers
Zero hours contracts – exclusivity clauses
• Exclusivity clauses that seek to restrict a worker’s
ability to work under another contract or require
authorisation from the employer to do so are
unenforceable
• Employees protected from unfair dismissal
• Workers and employees protected from detriment
• Came into force 11 January 2016
7. 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
• From 5 April 2015
• Allows mother to share or split maternity leave
• Must be taken before child’s first birthday
• To be extended to working grandparents by 2018
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
8. 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 employee
Chairman & Governors of Amwell View School v Dogherty
Covert recordings by the employee:
• Usually only admissible in evidence if the recording
relates to time when the employee was present
“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”
Monitoring Emails
Barbulescu v Romania [2016]
• ECtHR decision
• Dismissed for personal internet use at work
• Employer accessed private messages sent to the
employee’s friends and family relating to personal
matters
• Dismissal upheld – proportionate interference with
Article 8 rights
Covert recording by employee 2
Punjab National Bank (International) Ltd v Gosain
• Employee recorded panel discussions when she was not
present
• Recording included allegedly discriminatory comments
not relevant to grievance or disciplinary hearings
• Could be distinguished from Dogherty
• Interests of justice supported its admissibility due to
nature of comments
Enforced Subject Access Requests
• It is now a criminal offence 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
• Risk potentially unlimited fine
• Employers can still use DBS checks where relevant
9. Social Media Update
Social Media Dismissal
“on standby tonight so only going to get half
p****d, 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
• Discovered employee sent pornographic email from
his work account in 2008
• Dismissal held to be fair
Williams 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
10. Whistleblowing
Protected Disclosures
Employees have right not to be dismissed or
subjected to a detriment for making a protected
disclosure
Protected Disclosures
Barton v London Borough of Greenwich
• Concerned an employee’s disclosure to Information
Commissioner’s Office (ICO) in breach of employer’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
Protected Disclosures & Self Interest
Chesterton Global Ltd v Nurmohamed
Underwood v Wincanton Plc
• Two cases involving individual contractual disputes
• Held these can be protected disclosures and within the
public interest
• “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
11. Discrimination
Indirect discrimination by association• 2008 – a claim of direct discrimination 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 Attridge Law)
• 2010: Equality Act prohibits direct discrimination by
association
• 2015 - a number of cases seem to show an extension of this
trend:
– victimisation by association (Thompson v London Central
Bus Company Ltd)
– indirect discrimination by association (Chez Razpredelenie
Bulgaria AB (CRB) v Komisia za Zashtita ot Diskriminatsia)
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
• ET fees update
12. Modern Slavery Act 2015
Modern slavery - slavery, servitude,
forced/compulsory labour and human trafficking
World’s fastest growing organised crime worth USD
38-50 billion a year
ILO estimate: 21 M men, women and children work in
modern slavery conditions today
12. Modern Slavery Act 2015
Slavery and Human Trafficking statement
From 29 October 2015, any organisation who:
• is a body corporate or partnership
• supply goods or services in the UK, and
• has a total annual turnover of more than £36 million
must prepare a slavery & human trafficking statement for
each financial year
Turnover includes any subsidiary and excludes trade
discounts, VAT and some other taxes.
12. Modern Slavery Act 2015
Slavery and Human Trafficking statement
• Transitional arrangements pre and post year end
31st March 2016
• Content
• Senior approval
• Publication on your website
• Enforcement
13. Apprenticeships (not Wales)
• From 26 May 2015 new scheme of “approved
English apprenticeships” introduced
• A contract of service NOT a contract of
apprenticeship
• Transitional provisions:
– Existing apprenticeships
– New apprenticeships where there is no approved
apprenticeship standard
Note: Approved apprenticeship standards can be found on gov.uk
14. Tribunal fees statistics (total
claims)
191,541
105,803
61,306
0
50,000
100,000
150,000
200,000
250,000
2012/13 2013/14 2014/15
ET 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
• Commons’ Select Committee held in November
• Scottish Government “intends” to abolish fees
• Reduction in fees next 12 months?
15. 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
• Check-off
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 NICs
6 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
Gender pay gap regulations
• 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 migrant
workers:
• 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.
• Bill is currently making its way through the House of Lords
Enterprise Bill 2015-16
Cap of £95,000 on exit payments/clawback made to
public sector workers.
Speak to us…
Gemma Steele| 020 7871 8516
Elish Kennedy| 020 7337 1033
Raymond Silverstein| 020 7337 1021