It's a trap!

Employment Law Newsletter - April 2015


In this issue ...

  Much ado about zero (hours contracts)   Tough medicine  
  And while we're about it...   The eternal triangle  
  But we might have more by June!   Being politic  
  Locked out for now   Back to the drawing board  
  Predictability doubled  

Much ado about zero (hours contracts)

The coalition partners, and particularly the Conservatives, are now making much of the 'fact' that they have made 'exclusivity clauses' in zero hours contracts (ZHCs) unenforceable. Well, sort of… The Small Business, Enterprise and Employment Act (SBEEA) is now on the books, having received the Royal Assent on the last day of business before Parliament was dissolved for the general election campaign. And it contains provisions to this effect. But they need a commencement order before they can have any legal force. A minister is needed to make a commencement order. And, for that purpose, there is no minister until the dust has settled after the general election.

As we have said previously (see our June 2014 issue), they are probably barking up the wrong tree anyway with the fixation on the supposed problem of these clauses. And, if Labour forms the next government, it has promised to go farther, confronting the real issue of the legitimacy of open-ended arrangements of this type, by giving those who achieve 12 weeks of 'regular' work under a ZHC the right to pursue its conversion to a 'regular contract'.


And while we're about it...

All the other notable employment features of the SBEEA – about transparency on equal pay, financial penalties for not paying tribunal awards, restrictions on requests to postpone tribunal hearings, application of the £20,000 financial penalty for each employee subject to a national minimum wage breach (Labour has talked of increasing the penalty to £50,000 for deliberate breaches) – also await a commencement order and/or subsequent regulations to provide detail.


But we might have more by June!

So, if you haven't already done so, why not register for one of our annual updates on employment law. They are on Tuesday 9th June (at the Malmaison Hotel, Manchester) and Thursday 11th June (at the Novotel London City South)? If that appeals, click here.


Locked out for now

The eagerly-awaited tribunal decision in Lock v British Gas (see February 2015), confirmed that historic commission payments need to be factored into the calculation of holiday pay and provided another example of judicial 'writing in' to the original words of the Working Time Regulations to achieve this result. But it proved disappointing on points of wider application to the 'recalculation of holiday pay' debate prompted by Bear v Fulton. In particular, the question of the applicable reference/averaging period(s) for non-basic payments was not addressed. Of course, Lock was only a first instance decision anyway, but, even if susceptible to challenge on appeal, it would have been good to get a 'starter for ten' on this subject. Instead, it seems that, at or subsequent to the substantive hearing in February but before the tribunal produced its judgment, the parties came to some agreement on this matter which meant it was no longer necessary for the tribunal to decide.


Tough medicine

Under the Equality Act, a person's condition is a disability if it would be likely to have a substantial adverse effect on his or her ability to carry out normal day-to-day activities were it not for the effects of measures taken to treat or correct it. In Metroline Travel v Stoute, the claimant had Type 2 diabetes and maintained that, had he not followed a specific diet regime, there would have been substantial adverse effects. So, he said, he was disabled. The EAT disagreed. It did not accept that a diabetic diet amounted to a 'measure to treat'. Therefore, for legal purposes, the diet did not have to be disregarded and the claimant's ability to carry out daily activities had to be assessed by reference to his condition as corrected or mitigated by the diet.


The eternal triangle

We've been here before, but they keep trying! Can a contract of employment be implied between a hired out 'agency worker' and the client (or 'end-user') because of the former's integration into the latter's business and operations? In Smith v Carillion, the Court of Appeal, following its similar rulings in James v Greenwich LBC (in 2008) and Tilson v Alstom Transport (see our January 2011 issue), said not. So, that should be that – for a few years at least.


Being politic

Now here's a topical one with the election approaching – is there harassment on account of philosophical belief in an accusation of 'being too left wing'? Or right wing? Or fascist? Well, it could spice the hustings up a bit. But, according to the EAT in Henderson v GMB, even in an employment context, such a comment would generally be too trivial or passing to give rise to a sound legal claim.

Of course, given that a person's real or perceived political leanings can amount to a protected characteristic, persistent, antagonistic jibes about them might amount to harassment. And unfavourable treatment in recruitment, employment or termination based on such attributes would be capable of giving rise to a direct discrimination claim.


Back to the drawing board

In 2013, legislation reversed the effects of Parkins v Sodexho, so that an internal disclosure or assertion related to an individual contractual grievance or dispute could not come under the whistleblowing protections. A reasonable belief that the disclosure was in the public interest then became necessary. But have we ever been wise to doubt the ingenuity of the judges? In Chestertons v Nurmohamedi, a director at an estate agent's London office complained that the company was exaggerating the costs of running that office and thereby reducing the amount of money available for bonuses for him and about 100 senior colleagues. When he was dismissed, he sought to rely on the whistleblowing provisions.

The EAT said that the purpose of the 2013 introduction of the public interest requirement was simply to eliminate purely individual contractual issues and that the interest of even a relatively small group of colleagues could allow the claimant to satisfy that requirement. In other words, as long as you accept that 'public' does not mean 'community', 'wider society' or 'public group' but does mean a set of employees with a common interest in securing more money from their common employer, the necessary 'reasonable belief' can take care of itself.

Unless soon reversed on appeal, this will surely be revisited by legislation to 'get it right second time' – although Parliament can hardly be faulted for failing to foresee this turn of events.


Predictability doubled

Two bits of news on tribunals and fees. First, claims are still very low compared with the 'pre-fee era'. The latest statistics, for the quarter October to December 2014, say 4,386 single claims were received, a small increase on the preceding quarter but some 12% down on the equivalent quarter of 2013 (itself several months after the introduction of fees).

Then again, things may soon change. Labour has come out boldly to say that it will abolish the fees system – or does it/will it? Its document A better plan for Britain's workplaces says that a Labour government would abolish 'the Government's employment tribunal fee system' but then talks of making reforms to the system following a process led by the CBI and the TUC and overseen by ACAS. We suspect that, if any meaningful consensus at all is possible between those protagonists, it will be based around a reduction of fees and an increase in thresholds for remission.

And if that's what Labour really means, perhaps its promise could even be the cornerstone of a coalition with the LibDems and the Greens, both of whom have explicitly committed to an adjustment of the current provisions with a view to better access to justice. After all, who needs common ground on such trivial issues as economic policy, taxation, the NHS, public spending and the environment?...


If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Jo Hale on 0161 703 5600

Although care has been taken in the preparation of this Newsletter, Collinson Grant cannot accept responsibility for errors, omissions or advice given. Readers should note that only Acts of Parliament and Statutory Instruments have the force of law and only the courts can authoritatively interpret the law.