Employment & Pensions E-Bulletin Article
As highlighted in our previous retail newsflash, the Chancellor announced in his "Summer Budget" earlier this month that the government will consult over devolving the power to relax Sunday trading laws to elected mayors or local authorities.
Under the Sunday Trading Act 1994, shops with a net retail sales area of over 280 square metres are currently limited to trading for 6 hours between 10:00 and 18:00 on Sundays. There are no such restrictions for smaller shops. However, in the run up to the budget the Chancellor George Osborne pointed to the fact that, as a result of the increase of online shopping, which people can do around the clock, "retailers want to be able to compete by opening for longer at the weekend."
The lobby group Open Sundays has claimed the reforms will bring in £20.3bn over 20 years to the British economy. When trading laws were temporarily relaxed during the London 2012 Olympics and Paralympic games there was a relatively significant surge in sales. However, the prospect of permanent changes at that time was met with resistance from the other political parties and small business associations who thought that small shops would struggle as a result.
Shopworker unions are also resistant to the move and, since the budget was announced, General Secretary of Usdaw, John Hannett has said “extended Sunday trading is not good for business, because it spreads the same customer spend over a longer period. It isn’t good for staff, who frequently tell us that Sunday is often the only day they get to spend quality time with their family…..we will be participating in the consultation and opposing the proposal.” However, shopworkers do currently have the right to opt out (see below) and, although the detail of the proposal is yet to be determined, it is assumed that this will remain in place.
The budget policy paper provides that "to ensure that local areas have a greater say over their own economies, the government will be looking to allow mayors or councils to extend Sunday trading for additional hours within parameters that they would determine." It will be interesting to see how Sunday trading will be taken forward at a local level. It is possible that elected mayors or local authorities may decide to make no changes to the current restrictions although the changes are likely to be welcomed by large retailers. However, there is a concern that devolving the power to relax Sunday trading laws could result in a postcode lottery for consumers and an extra administrative burden on national retail businesses having to deal with regulation in different regions.
The detail of how this proposal will be rolled out will be the subject of consultation and future legislation. In the meantime, though, we have set out some of the current key practical and legal employment issues retailers may need to be alive to when considering whether or not to extend Sunday trading hours in particular areas:
- To extend or not extend hours – balancing the costs. Whilst increased hours may be an opportunity for more sales this will need to be balanced against increased overheads including staffing costs
- National or local approach? Retailers will need to consider if they take a national approach to Sunday trading or extend hours in areas where this has been adopted by the elected mayor or local authority. Also, there may be an increased administrative burden on employers managing the different approaches in different regions
- Reviewing and amending policies, contracts and rotas. Depending on the approach adopted, employers may need to review their contracts and policies at the local level to determine whether they provide sufficient flexibility to require workers to cover additional hours on Sundays. Where contractual amendments are required, employers will need to consider the best approach to achieving this consulting with staff to obtain agreement. Potentially, if dismissal and re-engagement of more than 20 staff at one establishment is envisaged and proposed within a 90 day period, collective consultation will be necessary. Employers will also need to be alive to the fact that unions are likely to resist such changes and negotiation with the unions may be necessary. Retailers should also note that Shopworkers have the right to opt out of Sunday trading (see below)
- The right of "Shopworkers" to opt out of Sunday working
Currently, unless they were specifically employed to work only on Sundays, "Shopworkers" (and some "betting workers") have the right to opt out of Sunday working where they are or maybe required to work on Sundays. It is not yet clear whether there will be amendments to the opting out regime or whether there will provision for allowing workers who work on Sunday to not agree to work the additional extended trading hours proposed in the budget announcement. However, we have set out below some of the main points to note under the current regime in relation to shopworkers (for more information on how this applies to betting workers please contact us):
- "Shopworkers" are employees (not workers) who, under their contract of employment, may be required to do "shop work". This is work that is in or about a "shop" on a day on which the shop is open for the serving of customers. A shop is any premises where retail trade or business is carried on and includes hairdressers, auction houses and hire companies (except those that hire to trades or businesses). It does not include catering businesses (which catches the sale of meals, refreshments or alcohol for consumption on premises or immediate consumption off premises). Quite specifically it also does not catch the sale of programmes or similar items at theatres or places of amusement. It will be interesting to see if these exemptions will be amended as part of the devolving of powers
- An opt out notice must be in writing, signed, dated and state that the employee does not wish to work on Sundays. The notice can be provided at any time but takes effect after three months. Shopworkers who started their employment before 26 August 1994 have the right to not work on Sundays without a notice
- Employers must give Shopworkers who have the right to opt out of Sunday working a written statement in a prescribed form explaining the steps that they must follow to opt out within two months of them becoming entitled to so. If employers fail to do this then the opt out takes effect within one month
- Employers cannot refuse a worker's right to opt out because of a business need, even if all employees opt out leaving it unable to do business. However, there are practical ways around this being an issue that we would be happy to discuss
- Shop workers are protected from dismissal, selection for redundancy and detrimental treatment as a result of their decision to opt out from Sunday working. Notably, though, paying other workers who work on Sundays a higher rate or providing them with other benefits and not paying Shopworkers for Sundays that they do not work will not be a detriment
- Employers also need to remain alive to the general risk of indirect religious discrimination claims where they have a policy of requiring staff to work on Sundays. Outside of the retail context, this has been considered by the Court of Appeal where it was found that a requirement for a Christian care officer to work on Sundays was not indirect religious discrimination as, in that case, it was objectively justified due to the staffing and service requirements of the care home (please see our previous article for more information). However, this decision was not the green light for all employers to impose Sunday working. The question of whether such policies amount to unlawful discrimination will depend on the requirements of the business and whether the approach to Sunday working is a proportionate means of achieving a legitimate aim.
For more information or advice on how these employment issues can be managed in practice please contact Helen Dallimore on +44 (0) 1392 685289 or firstname.lastname@example.org or Patrick Howarth, partner on +44 (0)1752 675058 or email@example.com.
In addition to the employment issues mentioned here, retailers will also need to consider whether there are any planning constraints affecting their premises. Our planning team has considered in further detail how retailers can deal with planning constraints affecting their premises. Please click here for a more detailed article on the planning implications or contact Dan Cuthbert, partner on +44 (0)117 915 4932 or firstname.lastname@example.org