Welcome to the first employment bulletin of 2019. Now the festive season is well and truly behind us, many of us are making plans for the year ahead and this month's bulletin will hopefully provide some useful food for thought.
To help you keep quickly up to date with employment law, we summarise the key developments arising from cases, guidance, legislation and consultations for this month.
In this bulletin:
In the courts...recent case updates:
Uber drivers are workers, not self-employed
In Uber BV v Aslam and others, the Court of Appeal (CA) upheld the decision of the Employment Appeal Tribunal (EAT) that Uber drivers are workers, not self-employed. Our article on the EAT decision can be found here.
The CA held (by a 2-1 majority) that the drivers have worker status as they are personally performing work for Uber. The CA reasoned that although the terms of the contract between Uber and its drivers suggest that Uber is simply an intermediary, connecting self-employed drivers to customers, the contract should be disregarded as it does not reflect reality (as in Autoclenz Ltd v Belcher). The parties' relationship should instead be characterised based on the practical reality of their circumstances.
In this case, the fact that Uber interviews and recruits drivers, withholds key information about customers (such as surnames, contact details and intended destination) from drivers and prohibits drivers from cancelling trips were just some of the factors that led the CA to conclude that the practical reality of their relationship is that Uber exerts a degree of control over its drivers and they are personally performing work for Uber.
The majority of the CA also agreed with the tribunal that the drivers should be deemed to be working when they were within their territory, had the Uber app switched on and were ready and willing to accept trips.
In his dissenting judgment Lord Justice Underhill did not agree that the written terms did not accurately describe the relationship. He considered the arrangement as similar to self-employed taxi or minicab drivers who use an intermediary company but contract with the passenger.
Uber has been given permission to appeal to the Supreme Court. We will report on developments in this case in future bulletins.
Employees who have worked for at least one month have the right to a statement of employment particulars
In Stefanko and others v Maritime Hotel Limited, the EAT confirmed that employees who have worked continuously for at least one month are entitled to a statement of employment particulars.
The Claimant was employed for six weeks before she was dismissed. At the Employment Tribunal, she successfully claimed automatic unfair dismissal and sought to increase her award under section 38 of the Employment Act 2002 on the basis that she had not been given a statement of employment particulars during her period of employment. The Tribunal declined on the basis that section 1(2) of the Employment Rights Act 1996 (ERA) gives employers two months to provide employees with the statement and the Claimant had not been employed for at least two months. The Claimant appealed to the EAT.
The EAT disagreed with the Tribunal's interpretation of the legislation: section 2(6) of the ERA confirms that the right to a statement does exist if the employee's term of employment is at least one month. As the Claimant had been employed for six weeks, she was entitled to a statement and so her award should have been increased.
This decision confirms that, at present, an employer must provide every employee with a statement of employment particulars if they have been employed continuously for at least one month. Please note, however, that as part of the Government's Good Work Plan (discussed here), every employee and worker will have the right to a statement from their first day of employment from 6 April 2020.
Application to remove or anonymise a judgment published on the online register is rejected
In Ameyaw v PriceWaterhouseCoopers, PwC sought to strike-out the Claimant's claims against it on the basis of allegedly 'scandalous and vexatious conduct' at a preliminary hearing. In dismissing the strike-out application, the employment judge considered that the Claimant had acted disruptively at the initial hearing and this judgment, alongside the final decision, was published online. The Claimant later applied for an order that these judgments should either be removed from the public register or that she should be anonymised as the publication breached her right to respect for privacy and family life under Article 8 of the Convention.
This application was rejected by both the ET and the EAT on appeal on the basis that Rule 50 in Schedule 1 of the Employment Tribunals (Constitution and Rules of Procedure) Regulations 2013 (concerning privacy and restrictions on disclosure) does not give judges the discretion to decide whether or not judgments should be published. The starting point for their publication is open justice, a fundamental aspect of the rule of law.
The limited power of the ET to restrict public disclosure is discussed in our previous article on the impact of first instance Employment Tribunal Judgments being easily accessible on the gov.uk website.
The right to use a substitute worker when a contractor is unable to work is consistent with employee status
In Chatfeild-Roberts v Phillips & Universal Aunts Limited, the Claimant was a live-in carer for the first Respondent's uncle whilst the second Respondent was the agency which introduced the Claimant to the role. The Claimant performed the job for three years and after the initial six months stopped preparing invoices and was paid by standing order.
In considering that the Claimant was the first Respondent's employee, the tribunal accepted that there was mutuality of obligation and sufficient control between the Respondents. On certain occasions the Claimant approached the second Respondent to arrange a substitute, rather than providing a substitute herself. The first Respondent appealed.
At appeal, the Employment Appeal Tribunal considered the question of substitution (which had only happened on her days off each week, for a period of jury service, and for periods of annual leave where she was paid for the absence). Following the principle in the Pimlico Plumbers case discussed here in 2017, it was held that the right of substitution only when a contractor is unable to work can be consistent with personal performance, and so with employee status.
Age discrimination is not justified without evidence of a legitimate aim
In The Lord Chancellor v McCloud and others, the Court of Appeal (CA) considered transitional provisions of judges' and firefighters' pension schemes which allowed those ten years or closer to receiving their pensions to be given the benefit of remaining on a more favourable scheme when new less favourable terms were being introduced. The Government accepted that these provisions treated younger scheme members less favourably because of their age, however sought to argue that there was objective justification.
The CA upheld the decision from the Employment Tribunal (ET) that the ten year criterion was established with no research or analysis and there was therefore no sufficient legitimate aim which could justify the discrimination. Judge Williams in the ET found that the argument that those in the bracket of ten years prior to retirement would have less time to prepare for the effects of reform could have, in principle, been justified if there was evidence that this caused financial difficulties. However with no evidence, this justification was not demonstrated.
The Government has a margin of discretion to use a moral or political aim to justify an apparently discriminatory effect. However, to use this approach the Government has to show that their measures are a legitimate aim of social policy.
Any employers intending to implement a policy which may discriminate against younger workers, will therefore need clear evidence to back up the aim they are pursuing.
Short-time working does not reduce a worker's minimum holiday pay under EU Law
In Hein v Albert Holzkamm GmbH, the Court of Justice of the European Union (CJEU), held that taking periods of short-time working into account when calculating annual leave pay breached the Working Time Directive.
The case involved a German construction worker whose holiday pay was calculated under a collective agreement on the basis of an average of 13 weeks' pay, and which also allowed for periods of short-time working to be taken into account in the calculation. Short-time working is a period where there is less work and therefore less pay for workers. Following 26 weeks of short-time working, the calculation for the construction worker's pay for the annual leave amounted to less than his normal pay and, importantly, less pay for the four weeks' paid leave guaranteed by EU law. The CJEU held that pay for the minimum annual leave provided by the Directive must not be less than the average normal remuneration received by a worker during periods of work. The CJEU also confirmed that annual leave does not accrue during times when on short-time working when no work is done.
Key development in the supermarket equal pay claim
There has been a further development in the supermarket equal pay claims we have previously reported on. In Asda Stores Limited v Brierley, the Court of Appeal has held that female supermarket staff can compare themselves against men working in warehouses and distributions centres so the claims can proceed. To make an equal pay comparison, Claimants need to show that they are either working at the same establishment as their comparator or at establishments where 'common terms are observed'. In this case the Court held that common terms were observed between the warehouses and supermarkets. The Court considered the test for establishing common terms in the hypothetical. It did not consider it necessary to have evidence about the actual terms on which the comparators were employed here. This decision highlights that the court's focus is on how different the employment terms would be if employees from one site were moved to the other site to continue their job (as opposed to looking at how different the employment terms are between these two sites). The Court also held that claimants could draw a comparison under European law as there was a single source for the terms but it did not decide whether European law had direct effect here.
We will provide a more detailed analysis of this development in a future update but if you have any questions in the meantime, please speak to Karen Bates, Partner in the employment team.
National Minimum Wage (NMW) Consultation
The Government launched a consultation at the end of 2018 on salaried hours work (one of the four types of work in the NMW Regulations) and salary sacrifice schemes, looking at whether these aspects of the NMW legislation are inadvertently penalising employers. Some reported issues include that the rules on salaried hours work are complex and restrictive, and employers are not offering salary sacrifice schemes to low-paid workers to avoid non-compliance with the NMW. The consultation closes on 1 March 2019 and we will report on any outcomes later in the year.
The Law Society publishes a practice note on non-disclosure agreements and confidentiality clauses in an employment context.
In 2017 the use of non-disclosure agreements (NDAs), hit the media following the Harvey Weinstein allegations, and they were subject to a media stir again in 2018 with allegations against Sir Philip Green. The Law Society has responded by publishing a practice note on the use of NDAs and confidentiality clauses in an employment context. It has also been reported that the Government is considering a ban on the use of NDAs for allegations of workplace sexual harassment and introducing a new onus on employers to make it absolutely explicit to their staff that these agreements cannot be used in cases where a potential crime has been committed.
It is important to remember that there are legitimate reasons why parties want to incorporate confidentiality and non-disclosure clauses in settlement agreements and employment contracts. They are useful for protecting the reputation of the parties and preventing commercially sensitive information from being shared inappropriately. The practice note observes that a clause attempting to prevent: (a) the reporting of any criminal offence; or (b) the reporting of information that is relevant to regulating a sector, is legally unenforceable.
It is important to ensure, going forward, that any agreement including non-disclosure clauses are clearly understood by all parties. Anyone signing an NDA should be given sufficient time to consider the implications of the proposed agreement and obtain independent legal advice.
Consultation on extending redundancy protection in the workplace for women and new parents
The Government has published a consultation paper on pregnancy and maternity discrimination which proposes extending redundancy protection for women and new parents. The current position is that women on maternity leave must be given priority over other employees where their employer offers a suitable alternative during a redundancy situation. The new proposal is to extend this right and protection to include: (a) women who have told their employer that they are pregnant; and (b) women who have returned from maternity leave in the previous six months. The consultation will close on 5 April 2019 and we will report on the outcome in future bulletins.
The position on whether a deal will be reached with the EU on Brexit varies considerably and seems to change on an hourly basis. It is difficult to predict on what terms the UK will leave the EU, and whether this will take place on 29 March 2019. Please see our article on the key developments in 2019 for further discussion on the current status of Brexit.
"Right to work" checks to be modernised
The free to use "Right to Work Checking Service" launched in April 2018 and has enabled employers to check whether a person has the right to work in the UK or whether they are subject to any restrictions. However, currently paper documents must also be obtained. From 28 January 2019 employers can rely solely upon this online service provided that the prospective employee has an immigration status that can be checked using the service. Please contact Karen Bates, Partner for further guidance.
Relationship between UK Sport and athlete found not to be akin to employer/employee relationship
A former GB cyclist, Jess Varnish, has lost her Employment Tribunal case, where she was arguing that she was either an employee or worker of British Cycling and UK Sport due to the level of control they exerted over her. She therefore will not be able to pursue her claims of wrongful dismissal, whistleblowing and sexual discrimination which she raised after being dropped from the UK's elite cycling programme in 2016.
British Cycling maintains that its relationship with athletes is that of a service provider, not an employer, and UK Sport is therefore able to continue with its £25,000 a year tax-free grants without offering benefits such as holidays, sick pay and pensions, which it argues allows it to support more athletes in their development.