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Employment Law Newsletter - November / December 2016


In this issue ...

  It's been a funny old year   Statements  
  Gig economy under Uber scrutiny   Need a rest? No need to ask  
  A warning – no imagination allowed   A rod for your own back? – 'tick box' redundancy consultation  
  Save the punch-ups till later  

It's been a funny old year

That's almost it then – another year nearly over. So here's the last newsletter of 2016.

This time, we have no reflections for you on the state or turbulence of employment law - you know it's always there and won't stop evolving. In any case, alongside the departure from this world of too many iconic or semi-iconic musicians and entertainers, 2016 will only be remembered by most for the double shocks of Trump and Brexit, which, of course, has implications for the law in the workplace (see the May 2016 and October 2016 issues for our previous contributions on this subject).

The question of whether Brexit materialises at all and, if so, the form it will take depends on the interplay of judicial and political dynamics, probably soon to be given even more vigour by the Supreme Court's ruling in early January on the necessity for Parliament to authorise the Government's triggering of 'Article 50' negotiations with the European Union (EU). If its content is as expected, do not be fooled by current assertions that Parliamentary approval still only involves a two-line Bill or a resolution following a quick debate. Similarly, take a load of salt with many politicians' protestations that they will not 'stand in the way of the people's will' by blocking Article 50: many will, at least unless and until they have from the Government a Brexit blueprint that matches their perceptions of what is acceptable.

And the effect may well be about more than simple delay of an inevitable withdrawal from the EU (on some basis or other). Time is a great healer, as 'they' say. Even if Richmond does not have a representative social class or Remain/Leave demographic that can readily be used to extrapolate its recent by-election result countrywide, it may yet become the harbinger of a much broader national sentiment. A growing awareness of the apparent or likely economic consequences of Brexit with changing political party affiliations and louder urgings from a cross-party group of senior politicians prompted by Tony Blair's new political foundation might yet kick it into the long grass ...

But 2017 can wait for now. A Very Merry Christmas to you all!


Gig economy under Uber scrutiny

The 'gig' economy is that sector of the labour market in which organisations engage nominally independent workers to perform short-term engagements without further commitment (a bit like the musical gig). Although many old-timers are sceptical about the need for a new label for what is basically the longstanding tendency of certain businesses to rely on casual labour, the growth and institutionalisation of that activity seems to have warranted a successful rebranding. In any event, the gig economy is the talk of the town. More importantly, it is well and truly in the crosshairs of official scrutiny.

In Aslam v Uber, an employment tribunal has found that Uber's drivers are 'workers', operating under a contract personally to provide work or services, and so entitled to protection by Working Time Regulations, National Minimum Wage and some others. Uber's argument was that the car drivers using its banner enter a contract with each passenger and that, in any event, it had insufficient control over how and when the drivers operate to make them its workers – in essence, that Uber simply gave drivers business opportunities.

However, the tribunal was much more impressed by the measures that Uber applies in practice to ensure a good service to customers or prospective customers and to protect 'the brand'. Taken in conjunction with the imbalance in bargaining power between Uber and a driver, these effective control mechanisms were indicative that the drivers are workers and entitled to the two statutory protections, on leave and pay, that they claimed.

Given the stakes involved, an appeal by Uber will almost inevitably be heard, with some commentators betting on the argument running all the way to the Supreme Court. However, it has to be questioned whether there is much on which a successful appeal can bite, given the prevailing environment. Following the well-publicised travails of Sports Direct, reported concerns about the practices (amongst others) of Hermes, Asos and Deliveroo and with the Prime Minister's inaugural words about an economy that 'works for all' needing substantiation, there are now underway three separate inquiries into aspects of the gig economy by HMRC, the Department of Business, Energy and Industrial Strategy and a Commons Select Committee. Even with Brexit occupying centre stage for the foreseeable future, some regulation (linking to the wider reform of corporate governance) is likely to come out of all this.


A warning – no imagination allowed

Quite a long time ago (in the March 2013 issue, on Davies v Sandwell Council), we touched on the limited scope for an ex-employee, dismissed at the final stage of a disciplinary procedure for cumulative offences, to argue that an earlier stage disciplinary warning was invalid and so made that later dismissal unfair.

What about the different situation, involving summary dismissal for a single act of gross misconduct where the dismissal decision is nevertheless taken with the employer's stated awareness and consideration of a final warning (typically, to decide whether or not leniency should be exercised)? If the employment tribunal subsequently finds that warning to have been excessive, should the employer be allowed to 'retreat' to reliance on a hypothetical first written warning that would have been proportionate to the seriousness of that earlier misconduct?

According to the Employment Appeal Tribunal (EAT) in Bandara v BBC, this extension of the old 'no difference' principle in redundancy consultation is a step too far. The correct approach for the tribunal is to assess the extent to which the employer took into account the inappropriate final warning in opting for dismissal and to decide whether the dismissal nevertheless falls within the band of reasonable responses.

No radical change is needed here, provided managers understand and consistently apply the organisation's standards. If final warnings are justified and findings of gross misconduct are credible, then it is quite possible to continue taking the former into account when deciding on the sanction for the latter. Indeed, tribunals broadly condone a practice of considering whether or not a lesser penalty is appropriate for an employee guilty of gross misconduct (which, almost by definition, entails taking account of extant warnings).



There were some employment law snippets in the Chancellor's Autumn Statement late last month.

From next April, the National Minimum Wage's hourly rates will increase as follows:

for 21 to 24 year olds: from £6.95 per hour to £7.05
for 18 to 20 year olds and those aged 21 or over who are within the first six months of work under an accredited training scheme: from £5.55 per hour to £5.60
for 16 to 17 year olds: from £4.00 per hour to £4.05
for apprentices aged under 19 or in the first year of apprenticeship: from £3.40 per hour to £3.50

The headline rate for those aged 25 or over (the National Living Wage) will increase from £7.20 per hour to £7.50.

Next, the current exemption from liability to income tax and National Insurance Contributions (NICs) on termination payments up to £30,000 will continue. However, from April 2018, Employer NICs will be due on termination payments above £30,000. Other changes that have been mooted recently might yet appear in a forthcoming Finance Bill.

Finally, Employee Shareholders are on their last legs (in fact, you have probably already forgotten about this exotic breed, far less encountered one of its number). First, any employee shareholder agreement made on or after Thursday 1st December will not attract income or capital gains tax relief on the shares acquired. And, while the few agreements made before then remain valid and will continue to benefit from the reliefs, the Government is committed to abolishing the prospect of new employee shareholder agreements 'at the earliest opportunity'.

Meanwhile, the Department of Work & Pensions says that, next April, the statutory weekly rates for maternity, paternity, shared parental and adoption pay will rise to £140.98 and for sick pay will become £89.35.


Need a rest? No need to ask

In Grange v Abellio London, a worker who was contracted for shifts of 8.5 hours including 30 minutes for lunch was told instead to work continuously for 8 hours and go home earlier.

When he claimed that he had been 'refused' his right to a rest break under the Working Time Regulations (WTR), the EAT found that the initial instruction by the employer was effectively that 'refusal' and, therefore, that the absence of a request by the worker for a rest break was not fatal to the claim. This approach is in broad line with that taken, most notably in NHS Leeds v Larner (see the August 2012 issue), under another aspect of the WTR: carrying over leave accrued during sickness.


A rod for your own back? – 'tick box' redundancy consultation

Redundancy dismissals are, quite legitimately, laden with procedural requirements. The jewel in the crown is consultation before a decision is taken to proceed. Intellectually, most employers and managers understand, or can be persuaded of, the purpose and justification for consultation. But in practice, there is often resort to approaches that risk nullifying the benefit of initiating consultation.

In Thomas v BNP Paribas Real Estate, the EAT questioned two measures the employer adopted during consultation that are quite common – sending the employee home (sometimes called 'garden leave', even when the contract does not provide for it) and instructing him to contact neither clients nor colleagues. With other, less dramatic errors (in turn, more likely to be complained of once fundamental failings have occurred), they made consultation 'perfunctory and insensitive' and, although they would not inevitably make a redundancy unfair, they certainly required specific justification.

So, the message seems to be – impose absence or isolation on those at risk of redundancy only in rare cases, according to circumstances and not as part of a standard policy, because it is often no more than an over-cautious measure that impedes and pre-empts proper consultation.


Save the punch-ups till later

Let's end with some Christmas cheer for all you directors and senior managers.

If you organise the Christmas party so that it finishes nice and early, your business won't be vicariously liable for injuries arising from any assaults by employees that occur at drinking sessions later in the evening. Such is the effect of the High Court's recent decision in Bellman v Northampton Recruitment (where, unfortunately, the assault in question, at 3.00 am, was actually committed by a director).

So, if you can manage it, keep the official part of the night teetotal and then cut them loose early!

Enjoy your break.


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.