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Employment Law Newsletter - February 2017

 
 

In this issue ...

  The party's over?   Gender pay gap reporting – a footnote  
  No change in sight   An uplifting moment  
  Being (seriously) careless is enough   Did I say too much?  
  You're avin' a larf  

The party's over?

If, despite features in our November/December 2016 (the Uber tribunal decision is now heading to the Employment Appeal Tribunal) and January 2017 issues, anyone out there still doubted that the law's guns are firmly trained on the working arrangements now commonly associated with the 'gig' economy, here are the clinchers.

In Pimlico Plumbers v Smith, the Court of Appeal (CA) has in effect held that companies cannot 'have their cake and eat it', presenting to customers/clients as employees those doing work in its name while laying down a formal contractual relationship with those same work providers under which they are classified as self-employed people 'in business on their own account'. Key features of the detailed working arrangement between Smith and Pimlico, such as controlled working hours, the use of Pimlico's uniforms and logo-dressed vans and an undeniable emphasis on Smith's individual skills, outweighed the freedom suggested by a contractual declaration of self-employment and the requirement for him to submit invoices to Pimlico to obtain payment. Therefore, he was engaged to do work personally and was a 'worker'.

The judgment was quite specific on the extent to which a so-called 'right of substitution' (whether written or, as in Smith, not), under which it is alleged the work-provider can appoint another to do the work instead of them, can determine status. The CA acknowledged that any supposed substitution facility must ultimately be assessed for its extent and likely effect and, therefore, took care to consider different restrictions 'by way of example'. Nevertheless, it covered most variants usefully as follows:

An absolute right to substitute will always be inconsistent with personal performance and, so, preclude 'worker' status. And such a right qualified only by the need to show that the replacement is equally qualified/skilled will generally also have that effect.

Conversely, a right of substitution (i) only when the contractor is unable to do the work or (ii) only subject to the other party's absolute discretion to consent will almost always be compatible with personal performance and worker status.

This might be taken as a blueprint of sorts for drafting contracts in the future, although it would still be subject to two riders. First, the CA, using 'only' at relevant points, confined itself to describing substitution provisions with single limitations rather than multiple or composite ones (so, for example, what is the effect of substitution featuring both the qualification/skills and consent conditions?). Secondly, as before, any form of substitution that is not absolute does not operate in isolation. The other terms and realities of the relationship still have to be examined to determine an individual's status.

Meanwhile, the review of employment status by the Department of Business, Energy and Industrial Strategy (BEIS) has been published. It mentions some options for change in the treatment of atypical workers (the most dramatic being a rebuttable presumption of employment status, bringing everyone within the ambit of full employment protection unless and until proved otherwise) but avoids recommendations, observing that, given the complexities, they might take years to effect and create their own difficulties. It could be that BEIS felt able to relax and allow the more extensive brief of the Taylor Review to do the hard work. A panel, headed by Matthew Taylor, Chief Executive of the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA), is examining how employment practices (including methods of engagement) and their treatment must change to keep pace with new business models. It is due to produce its report with recommendations later this year.

 

No change in sight

The long-awaited Government review has concluded that the system of tribunal fees is not in need of major surgery, there being little evidence that the requirement of a fee prevented (as opposed to discouraged) the bringing of claims. Thus, beyond limited extensions of the remission system (the details are now out for consultation) and an immediately effective exemption for claims for payment of redundancy and certain other payments from the National Insurance Fund (when an employer becomes insolvent), no change is envisaged.

 

Being (seriously) careless is enough

Just as gross misconduct generally undermines trust and confidence to justify summary dismissal for the single offence, so does gross negligence, even though it lacks the equivalent component of deliberation. That is the decision of the CA in Adesokan v Sainsburys Supermarkets, where a Regional Manager, having become aware of an e-mail, which HR issued to store managers, with content damaging to the quality of an important employee engagement exercise, failed to counter it or take steps to secure its withdrawal. Trust and confidence goes beyond simple integrity and into the realms of judgement and reliability.

 

Gender pay gap reporting – a footnote

The January 2017 edition briefly revisited the new rules. Whilst public sector employers were specifically excluded from the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017, the government's consultation on draft regulations that impose similar reporting obligations on public sector employers in England has now concluded. The notable differences are that the snapshot date for reporting the data will be 31st March (the normal year end for public sector purposes) rather than 5th April and public authorities will be required to publish information that demonstrates compliance with the public sector equality duty. Parliament has yet to approve the regulations but they are expected to follow the same timescale.

Welsh and Scottish public sector organisations will have separate duties under regulations imposed by the devolved governments.

Acas, working with the Government Equalities Office, has published guidance – it is at acas.org.uk/genderpay.

 

An uplifting moment

It's the time of year for updating payroll and associated systems. The November/December 2016 issue laid out the increases that will apply to the National Minimum Wage and National Living Wage from this April. In the same month:

Statutory Sick Pay increases to £89.35 per week; and
The weekly rate for Statutory Maternity, Paternity, Adoption and Shared Parental Pay becomes £140.98.

At the same time, the maximum value of a 'week's pay' will become £489, making the maximum statutory redundancy payment and basic award for unfair dismissal £14,670. The top-end unfair dismissal compensatory award, the bit that purports to reflect actual losses, will rise to £80,541. And the cap on the daily rate for a guarantee payment (receivable during a lay-off) goes to £27.

 

Did I say too much?

The judgment in the Pimlico case ran to 33 pages containing a total of 147 paragraphs, many of considerable length. We are not sure if this satisfies the recent urgings of both the Master of the Rolls (Sir Terence Etherton) and the head of the Supreme Court (Lord Neuberger) for judgments to cut out verbiage in order to avoid a 'waste of time and space' or, worse still, 'confusion and uncertainty'.

We shall let you know when standards/measures/KPIs/parameters/benchmarks/limits/criteria (please delete as preferred, leaving only one) have been published. However, Adesokan came in at 'only' 7 pages or 34 paragraphs and one CA judge, Lady Justice Rafferty, has recently put an early marker down with her 'short judgment' of just 24 paragraphs (or 1200 words).

 

You're avin' a larf

Given the facts, it is tempting to wonder why the EAT's judgment in Gareddu v London Underground occupied as many as 36 paragraphs. Gareddu, a Catholic, was denied permission to take five weeks' consecutive summer leave in Sardinia (where family members just happened to live), the purpose of which was, as he maintained, to attend a series of religious festival events that he had enjoyed in previous years. He claimed that this denial, although in accordance with London Underground's normal leave rules, amounted to indirect discrimination against his expression of his religious beliefs.

Without having to resort to consideration of the usual facets of indirect discrimination – identifying the relevant 'provision, criterion or practice', group disadvantage and justification – the EAT confirmed the employment tribunal's dismissal of the claim. It found that, on his previous trips, Gareddu had not attended most of the religious events and that his principal motivation for wanting extended leave was to join his family in Sardinia (where, we understand, the summer weather is quite pleasant for a lengthy period…..).

And...

Just a quick reminder that Collinson Grant does a lot more than advise clients in all sorts of organisations about the complexities, constraints and opportunities presented by employment law. Our consultants also provide support regularly on: employee relations, reward, restructuring, recruitment, leadership and HR strategy. And we have well-honed skills in operations: managing and reducing costs, organisational design, process improvement, procurement and managerial controls. Do ask if you would like to know more.

 
 
 

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

www.collinsongrant.com/hr

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.