employment law update 2016, london

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


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


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.


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!


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


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


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


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.


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

[email protected]

Elish Kennedy| 020 7337 1033

[email protected]

Raymond Silverstein| 020 7337 1021

[email protected]