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Employment Law Newsletter - May 2018


In this issue ...

  Are you ready for the World Cup?   It's not easy employing people  
  Another gig economy worker   How should you process employee health information?  
  Should all contracts of employment contain restrictive covenants?  

Are you ready for the World Cup?

We don't mean have you contacted your local wine merchant and road-tested the barbecue? The Russia 2018 football World Cup runs from 14th June and ends on 14th July. We don't yet know when England will get knocked out on penalties. But as many of the games kick off during normal working hours, you will need to tell staff members what you expect from them to minimise disruption.

Create a policy or memo dealing with the arrangements. Decide whether it will be business as usual or whether introducing some flexibility will boost morale and prevent serious misconduct.

What your policy should say.

Watching matches. Subject to the nature of your business and your staffing arrangements (and how your team is performing), you may wish to show some matches at work. This may avoid lateness and unauthorised absence. Set out whether employees will be permitted to drink alcohol, who will approve their attendance and whether they will need to make up their time.

Annual leave. Approach requests for annual leave to watch matches in the way that you normally handle high demand for annual leave at certain times, such as Christmas. If your system will be 'first come, first serve' then explain that you will try to accommodate requests, but it may not be possible to grant them all because the business must keep operating normally.

Fairness. Allow flexibility for those not interested in football in the same way but explain that these measures are temporary and that they are not a contractual right.

Banter. Matches can be a breeding ground for banter. National rivalries can lead to offensive comments or behaviour. Remind employees that any behaviour that constitutes harassment or unlawful discrimination will be addressed as a disciplinary matter.

Unauthorised absence. Warn employees that absences during the tournament will be closely monitored. Unauthorised absence or sickness that you have reason to believe is not genuine will lead to a disciplinary investigation. Return to work interviews are useful as employees are less likely to lie about being ill if they know they will need to justify their absence to their manager.


Another gig economy worker

In the latest in a line of gig economy decisions, the EAT decided in Addison Lee Ltd v Gascoigne that a cycle courier was entitled to holiday pay because he was a worker rather than self-employed. Although Mr Gascoigne's contract said that he was an independent contractor rather than an employee or a worker, that did not reflect the reality of the relationship. When logged into the system, he was generally expected to accept delivery jobs that had been allocated to him. This reminds us that courts will remove the corporate veil, revealing what lies behind written terms, to examine how the relationship operates in practice.


It's not easy employing people

Even Acas finds it difficult. Members of the Public and Commercial Services union (PCS) working as Acas conciliators have been participating in industrial action since 25 April 2018 when they first refused to take on new employment tribunal cases or work on fast-track early conciliation cases. Around 25% of the staff participated.

They took part in a one-day strike on Friday 11th May 2018, after raising concerns about the downgrading of conciliation work, mounting workloads and lack of suitable resources. The union has said further strike action can be expected on 6th and 7th June 2018 if discussions with Acas are not productive.

Acas says that it is recruiting additional people to manage the shortfall, and to cope with the sharp increase in tribunal claims following the abolition of employment tribunal fees.


How should you process employee health information?

The General Data Protection Regulation (GDPR) came into force on 25th May 2018. Many of you will have terms in your contracts or sickness absence policies that require employees to consent to a medical examination.

The problem. You will need to differentiate between consent to a medical examination and your lawful basis for processing personal data in medical reports. Obtaining a medical report amounts to processing personal data for the purposes of GDPR and information about an employee's health is one of several special categories of data (sensitive personal data under the Data Protection Act 1998). The GDPR and official guidance clearly state that if there is an imbalance of power between the parties (giving the example of employer and employee) then consent will not be valid.

What you should do

When seeking to obtain medical reports, identify a legal basis for processing the data and processing 'special categories' of data.

Legal bases could include:

being necessary for the performance of a contract;
to comply with legal obligations; or
for the employer's legitimate interests.

The GDPR says that you can rely on processing being 'necessary for the purposes of carrying out the obligations and exercising the specific rights of the controller of the data subject in the field of employment law.'

Often the bases will overlap. So, it may be necessary to process a medical report to fulfil contractual obligations such as paying sick pay but also to comply with your obligation not to discriminate against a disabled employee, identify reasonable adjustments and assess fitness to return to work.

Review and update employment contracts, sickness policies and associated letters you use to obtain consent for the examination and release of the report but not for processing the data.


Should all contracts of employment contain restrictive covenants?

No, not if you want them to be effective.

The problem. If your business has ever been damaged by a former employee joining a competitor, it may be tempting to place a restrictive covenant in all employment contracts to prohibit working for a competitor.

The law. The purpose of a restrictive covenant is to protect the business from harm. However, they have their limitations and they must be precisely drafted. Courts apply a literal rather than a flexible approach. If you get it wrong, the court will not enforce it. The covenant must pass two tests:

1 Is it genuinely required to protect your legitimate business interests?
2 Are its scope, intention and duration fair and reasonable?

If you don't truly need it or it is considered excessive, it will fail.

Ten things you should do

Don't subject every employee to a restrictive covenant. Instead identify those who can seriously harm your business. Typically, this will be directors, senior employees, those with specialist or technical skills and those with access to important information.

Draft a covenant for each person. One size will not fit all. Tailor it specifically to the employee's job.

Ensure the covenant is part of the contract from the outset. If you introduce it after employment has started, ensure that the employee consents.

Identify the business interest(s) you are seeking to protect.

Decide whether the clause should cover competition during employment or after employment. If the latter, then decide for how long it should continue.

If the contract contains a garden leave clause, consider how that clause might affect the reasonableness of the restriction you seek.

Consider whether you require a payment in lieu clause. Failure to give proper contractual notice would breach the contract and preclude you from enforcing the covenant.

If there is no pay in lieu clause, ensure that you dismiss the employee with proper contractual notice.

Err on the side of caution. Courts are more willing to enforce a narrowly drafted restrictive covenant than a wide one.

Express each restriction separately so that if any cannot be enforced, it will not render the whole covenant useless.


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

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.