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Be Aware review of the year 2015

Adam Hartley, Partner and UK Employment Group Head, highlights the most important legislative and case law developments from 2015 and identifies the key developments to watch out for in 2016 in the annual Be Aware review of the year.

 

2015 LEGISLATION ROUND UP
Employment tribunals
5 April 2015 Cap on a week’s pay increased from £464 to £470.
5 April 2015 Unfair dismissal compensatory award increased from £76,574 to £78,335 (or 52 weeks’ pay whichever is the lower).
28 October 2015 HMCTS has developed a simpler and faster fee remission process in the employment tribunals. Under the new scheme, which is called “Help with Fees applicants self-assess their eligibility for fee remission and are no longer required to submit paperwork in support of their application. Instead, HMCTS check directly with the Department for Work and Pensions whether an applicant is eligible for fee remission. .
Family friendly
5 April 2015 Shared parental leave came into effect in respect of parents expecting a baby, or matched for adoption, on or after 5 April 2015. It allows employees to share up to 50 weeks of leave.
5 April 2015 Statutory maternity, adoption, paternity and shared parental pay increased from £138.18 per week to £139.58.
Increased rights for adopters: Removal of 26 service requirement for adoption leave, statutory adoption pay brought in line with statutory maternity pay. Adoption rights extended to adoptions from outside the UK.
5 April 2015 Age of child for the purposes of entitlement to unpaid parental leave increased from 5 to 18.
Modern slavery
29 October 2015 The government made two sets of regulations relating to the Modern Slavery Act 2015 (MSA). Their combined effect is to require commercial organisations to prepare an annual slavery and human trafficking statement for each financial year ending on or after 31 March 2016 in which their total turnover is above £36 million. The regulations are:The Modern Slavery Act 2015 (Transparency in Supply Chains) Regulations 2015: Section 54 of the MSA requires commercial organisations to prepare a slavery and human trafficking statement for each financial year in which their total turnover is above the prescribed amount. These Regulations set the amount of total turnover at £36 million. They also provide that total turnover will be determined by taking into account the global turnover of the organisation and its subsidiary undertakings (see section 1162 of the Companies Act 2006 for the meaning of “subsidiary undertaking”). The total turnover includes the amount derived from the provision of goods and services falling within the ordinary activities of that organisation and its subsidiary undertakings, after deducting trade discounts, value added tax and other taxes.The Modern Slavery Act 2015 (Commencement No. 3 and Transitional Provision) Regulations 2015: These bring section 54 into force on 29 October 2015. There is a transitional provision which provides that the requirement only applies in respect of financial years ending on or after 31 March 2016.The Home Office has also published guidance on the content of the slavery and human trafficking statement.For more information see our Be Aware alert.
National minimum wage
26 May 2015 Maximum penalty per worker for failure to pay the NMW increased to £20,000.
Zero hours contracts
26 May 2015 The Small Business , Enterprise and Employment Act 2015 brought into force a ban on exclusivity clauses in zero hours contracts. For more information see our Be Aware alert.

 

2015 CASE LAW ROUND UP
Agency workers
Coles v Ministry of Defence (EAT) The EAT upheld a tribunal’s decision that the scope of regulation 13, Agency Workers Regulations 2010 is limited to providing agency workers with a right to be informed of vacancies within the end user company. It rejected arguments that agency workers were entitled to be afforded equal status with comparable permanent employees in being considered for a vacancy. In dismissing the appeal, the EAT declined to make a reference to the European Court of Justice regarding the interpretation of the Temporary Workers Directive.
Annual leave
Lock v British Gas Trading (ET) The week’s pay provisions of the Employment Rights Act 1996 should be re-written for the purposes of the WTR and that commission and other similar payments are included in holiday pay.
Patterson v Castlereagh Borough Council (NICA) The Northern Ireland Court of Appeal held that there is no reason in principle why voluntary overtime should not be included in statutory holiday pay for the purposes of the Working Time Regulations (Northern Ireland) 1998 (which are substantively the same as the Working Time Regulations 1998). It will be a question of fact for each tribunal to determine whether or not overtime is “normally” carried out and whether overtime pay can properly be described as forming part of “normal remuneration” for these purposes. The court did not reach a decision on whether voluntary overtime should have been included in this particular case.
Plumb v Duncan Print Group Ltd   (EAT)  The Working Time Directive does not require workers on sick leave to demonstrate that they are physically unable to take annual leave in order to carry over accrued unused statutory holiday to a subsequent leave year. It is sufficient that they are absent on sick leave and do not choose to take annual leave during that period. However, the EAT also held that the right to carry over leave is not unlimited; the Directive only requires (at most) that workers on sick leave can take annual leave within a period of 18 months of the end of the leave year in which it accrues. The parties have been given leave to appeal to the Court of Appeal.
Data protection
Schrems v Data Protection Commissioner (ECJ) The ECJ gave its preliminary ruling to the Irish High Court that a decision adopted pursuant to Article 25(6) of the Data Protection Directive, like the Commission Decision on the EU-US Safe Harbor framework, does not prevent a national supervisory authority of a member state from examining the claim of a person concerning the protection of his rights and freedoms in regard to the processing of personal data relating to him, which has been transferred from a member state to a third country when that person contends that the law and practices in force in the third country do not ensure an adequate level of protection. The ECJ has also declared Safe Harbor invalid. For more information see our Be Aware alert.
Discrimination
Doran v Department for Work and Pensions (EAT) Employer’s duty to make reasonable adjustments not triggered where such employee had not given any sign she would be returning to work.
Land Registry v Houghton (EAT) An employer discriminated against disabled employees by operating a bonus scheme which did not pay out to employees who had received a warning for high levels of sickness absence, where the warning led to automatic disqualification.
Begum v Pedagogy Auras UK Ltd (EAT) The EAT upheld an employment tribunal’s judgment, that a nursery did not discriminate against a job applicant when it made clear at interview that its uniform policy meant that any garment worn should not present a tripping hazard. This was not a provision, criterion or practice which indirectly discriminated against Muslim women who wore jilbabs (a garment which covers the body from neck to ankle). The nursery allowed women to wear ankle-length jilbabs, so long as they did not present a tripping hazard.
Mbuyi v Newpark Childcare (Shepherds Bush) Ltd (ET) An employment tribunal held that a Christian nursery employee was directly and indirectly discriminated against by her employer on the grounds of her religion or belief when it dismissed her for expressing negative views about a colleague’s homosexuality. However, the employee’s claim of harassment was not upheld because the tribunal found no evidence that the conduct was unwanted by the employee, who welcomed the opportunity to discuss her religious beliefs.
Home Office (UK Border Agency) v Essop and others (CA) The Court of Appeal gave guidance on how a tribunal should approach the requirement in indirect discrimination claims for claimants to show not only group disadvantage caused by application of a provision, criterion or practice (PCP), but also that this caused their personal disadvantage. In doing so, the court disagreed with the EAT’s decision that claimants do not have to prove the reason why they have suffered disadvantage from a PCP.
Metroline Travel Ltd v Stoute UK (EAT) The EAT allowed an appeal against a finding that an employee with Type 2 diabetes was disabled for the purposes of the Equality Act 2010. The employee followed a diabetic diet designed to avoid sugary foods such as fizzy drinks. The tribunal held that this was equivalent of a medical treatment, and that without the treatment, the employee’s condition would meet the definition of a disability. The EAT disagreed, finding that mere abstention from sugary drinks could not be regarded as a “diet” and therefore could not constitute “treatment”. As such, Type 2 diabetes, in itself, does not amount to a disability under the Equality Act 2010.
CHEZ Razpredelenie Bulgaria (ECJ) A person may claim indirect discrimination under the Race Directive even though they do not possess the protected characteristic which has given rise to the discriminatory practice in question. An individual may suffer disadvantage alongside a disadvantaged group without sharing the characteristic of the group. This is contrary to the UK position.   Although the decision relates to the supply of goods and services, it has far-reaching implications for discrimination in an employment context. The concept of “associative discrimination” established after Coleman can no longer be regarded as confined to direct discrimination law. For more information see our Be Aware alert.
Thompson v London Central Bus Company Ltd (EAT) The EAT considered a claim of victimisation based on protected acts performed by a third party. It held that the tribunal had erred in conducting an assessment of the degree of connection or association between the individual and the third party. The appropriate test was whether the employer subjected the claimant to a detriment by reason of the protected acts of others. For more information see our Be Aware alert.
FOA, acting on behalf of Karsten Kaltoft v Billund Kommune (ECJ) The ECJ held that there is no general principle prohibiting discrimination on the grounds of obesity but obesity may fall within the definition of disability if it entails a limitation resulting from long-term physical, mental or psychological impairments which, in interaction with various barriers, hinder a worker’s full and effective participation in their professional life. For more information see our Be Aware alert.
Employment Status
Stack v Ajar-Tec Ltd (CA) A shareholder and director who provided work to a company informally and received no remuneration was an employee.
Employment tribunals
(R (Unison) v Lord Chancellor (CA) The Court of Appeal dismissed the challenge brought by Unison against the introduction of fees in the employment tribunals and the EAT. For more information see our Be Aware alert. Unison has sought permission to appeal to the Supreme Court. In the meantime, a formal review on the impact of tribunal fees by the Ministry of Justice is underway with completion of the review expected later in the year.
Redundancies
USDAW and Wilson (the ‘Woolworths’ case) (ECJ)Lyttle and others v Bluebird UK Bidco 2 Ltd/Cañas v Nexea Gestión Documental SA (ECJ) The ECJ held that “establishment” means the local unit or entity to which the redundant workers are assigned to carry out their duties.
University College Union v University of Stirling (SC) The dismissal of fixed-term employees on expiry of their contracts falls within the definition of redundancy for collective redundancy consultation purposes. While dismissals related to the individual concerned fall outside the ambit of the obligations in TULRCA, these dismissals did not relate to the individual so were within scope. This judgment overturns the Court of Session’s decision, which agreed with the EAT that the dismissals were not for redundancy. As a result of the EAT’s decision, the law in Great Britain (but not Northern Ireland) was amended to expressly exclude employees on fixed-term contracts from collective consultation obligations so the decision is mostly of academic relevance.
United States of America v Nolan (CA) The Supreme Court upheld the decisions of the EAT and Court of Appeal finding that section 188 of TULRCA applied to redundancies at a US military base in the UK. The Court of Appeal had previously ordered a further hearing to determine the key point which arose in the case: whether the obligation to consult collectively arises when an employer is proposing to make a strategic business or operational decision that will foreseeably lead to collective redundancies, or whether that obligation only arises once the employer has made that strategic decision and is proposing consequential redundancies. That issue has now been remitted back to the Court of Appeal.
Territorial scope
Lodge v Dignity & Choice of Dying (EAT) An American citizen employed by a British company who worked remotely in Australia for family reasons was entitled to pursue unfair dismissal and whistleblowing claims in an English employment tribunal.
TUPE
E Ivor Hughes Educational Foundation v Morris and others (EAT) The EAT upheld a tribunal’s decision to make a 90 day protective award in circumstances where no consultation was undertaken because the employer was unaware of its legal obligation to consult. The EAT agreed with the tribunal that there were no special circumstances rendering it not reasonably practicable to comply with consultation requirements. It held that circumstances which may hypothetically have existed, but which were not in fact taken into account by an employer when considering the duty to collectively consult, were not capable of constituting “special circumstances”.
BT Managed Services Ltd v Edwards and another (EAT) An employee who had been off work for six years and had no prospect of returning to work was not “assigned” to an organised grouping for TUPE purposes. The employee’s only connection with the grouping was administrative: he remained “on the books” so that he could continue to receive permanent health insurance.
Unfair dismissal
Ramphal v Department for Transport (EAT) The EAT allowed an appeal against the decision of an employment judge that an employee had been fairly dismissed in circumstances where the investigating officer’s recommendations had been heavily influenced by input from HR. The investigating officer’s report originally recommended a finding of misconduct and a sanction of a written warning, but after numerous comments and amendments by HR, the final report found the employee to have committed gross misconduct, and recommended immediate dismissal. HR’s advice should be limited essentially to matters of law and procedure, as opposed to questions of culpability, which are reserved for the investigating officer.
Whistleblowing
Underwood v Wincanton plc (EAT)       A dispute between an employer and a group of four employees relating to their terms and conditions of employment was capable of being a protected disclosure, entitling them to seek protection against unfair dismissal under whistleblowing legislation. The employees had raised a collective complaint regarding the allocation of overtime. The EAT overturned a tribunal’s decision to strike out the claim and held that a dispute between employer and employee as to terms of employment is a matter capable of being in the public interest. For more information see our Be Aware alert
Working time
Federacion de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL (ECJ) The ECJ followed the Advocate General’s opinion by finding that the time spent by workers, who do not have a fixed or habitual place of work, on travelling each day between their homes and the premises of the first and last customers designated by their employer is “working time” for the purposes of the Working Time Directive. For more information see our Be Aware alert.

 

 

2016 LEGISLATION ON THE HORIZON
Apprenticeships
The Enterprise Bill will regulate use of the word “apprenticeship” to cover only government-accredited schemes and increase the number of public sector apprenticeships offered.An apprenticeship levy of 0.5% of payroll will be imposed on employers with an annual pay bill of more than £3 million but not until April 2017.
Equal pay
Mandatory gender pay gap reporting to be introduced. The Equality Act 2010 contains a power for the Government to introduce regulations which require employers of 250 or more employees to publish information showing whether there are differences in the pay of their male and female employees. In July 2015, the Government consulted on its proposals to introduce these regulations. The consultation closed in September 2015, and a response is expected imminently.The Government sought views on how the gender pay gap should be reported. It suggested, by way of example:

  • One overall gender pay gap figure that captures the difference between the average earnings of men and women as a percentage of men’s earnings;
  • Calculating separate gender pay gap figures for full-time and part-time employees;
  • Showing the difference in average earnings of men and women by grade or job type.

The Government also sought views on the frequency of reporting (which will be no more than annual) and on where the information should be published.

Rates and limits
National minimum wage

As part of the July 2015 Budget, the government announced that it would introduce a premium, over and above the NMW, for workers aged 25 and over. This is known as the National Living Wage. The government will set the first premium in April 2016 at 50p which will effectively result in a higher NMW of £7.20 for older workers.

SMP and other statutory payments

The Department for Work and Pensions has published proposed benefit and pension rates for the tax year beginning on 6 April 2016, including figures for Statutory Maternity, Paternity, Adoption and Shared Parental Pay, Maternity Allowance, and Statutory Sick Pay. Because of a 0.1% fall in CPI in the year to September 2015, there will be no increase to those payments (or the qualifying earnings thresholds) for 2016-17 and so the figures will remain the same as the current tax year.

Scottish devolution
The Scotland Bill 2015-16 will amend the Scotland Act 1998 and devolve various powers to the Scottish Parliament, including in relation to the administration and management of employment tribunals. The devolved powers will be limited to ensure that consistency in the practice and procedure between the Scottish tribunals and the tribunals in England and Wales is maintained, but it will potentially give the Scottish Parliament power to change tribunal funding or abolish tribunal fees altogether.
Termination payments
The Government is proposing substantial changes to the tax treatment of payments made on termination of employment. The key parts are:

  • Removal of the distinction between contractual and non-contractual payments – all payments will be taxable, subject to specific exemptions;
  • Alignment of the tax and NIC treatment; and
  • Getting rid of the £30,000 tax free allowance.
The Enterprise Bill will also impose a £95,000 cap on exit payments made to public sector workers.
Trade unions
The Trade Union Bill aims to reform various aspects of the law on industrial action and trade union obligations and activities. The proposed reforms include increasing ballot thresholds, extending the notice of industrial action required to be given to employers, introducing time limits on ballots and changes to facility time. The Bill would also introduce more stringent requirements for unions to supervise picketing. The Government is also proposing to remove Regulation 7 from the Conduct of Employment Agencies and Employment Businesses Regulations 2003, which prevents employers hiring agency staff during industrial action. The Bill is currently before the House of Lords.
Zero hours contracts
The draft Exclusivity Terms in Zero Hours Contracts (Redress) Regulations 2015 were laid before Parliament in October 2015. The Regulations will give employees the right not to be unfairly dismissed or subjected to a detriment because they have breached a provision or purported provision of the zero hours contract to which section 27A(3)(1) of the Employment Rights Act 1996 applies – ie a provision which prohibits the worker from doing  work or performing services under another contract or arrangement.  Zero hours contracts are defined under the ERA as a contract of employment or other worker’s contract under which (a) the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker and (b) there is no certainty that any such work or services will be made available to the worker. There will be no qualifying period for the unfair dismissal claim. The Regulations will come into force 28 days after they are made – so the commencement date is not yet known.
Human Rights Act
On 17 October 2015, the Independent newspaper reported that the government intends to proceed with its introduction of a British Bill of Rights to replace the Human Rights Act 1998. A 12-week consultation is expected to start in December 2015 with a view to the new law receiving Royal Assent by the summer of 2016.

 

 

2016 CASES ON THE HORIZON
Annual leave
Lock v British Gas Trading Ltd (EAT) The EAT will hear the appeal on 8 and 9 December on whether the WTR can be read to provide that the calculation of statutory holiday pay includes commission where that forms part of a worker’s remuneration. Judgment is expected in early 2016.
Atypical workers
Moran and others v Ideal Cleaning Services Ltd and another (CA)  Whether the Agency Workers Regulations 2010 apply to a group of agency workers who were assigned to one hirer for periods ranging between six and 25 years.To float on 2 or 3 March 2016
Collective employee relations
British Airline Pilots’ Association v Jet2.com Ltd (CA) Whether an airline, on which the specified method of collective bargaining had been imposed by the CAC, was not required to negotiate with a recognised trade union over pilots’ rostering arrangements. To float on 9 or 10 November 2016.
R (Boots Management Services Ltd) v Central Arbitration Committee and others (CA) Whether the statutory union recognition scheme in Schedule A1 to the Trade Union and Labour Relations (Consolidation) Act 1992 is incompatible with the Human Rights Act 1998. To float on 22 or 23 November 2016.
Discrimination
Hainsworth v Ministry of Defence (Supreme Court) Can a reasonable adjustments claim be advanced by an employee who is not herself disabled, but is associated with someone who is disabled, in circumstances where the adjustment sought would enable the associated person with disabilities to undergo training/education?
Griffiths v Secretary of State for Work and Pensions (CA)  Whether the reasonable adjustments duty arises where a sickness absence procedure contained discretionary provisions which were more favourable to disabled employees. Judgment reserved on 22 September 2015
Whistleblowing
Chesterton Global Ltd (t/a Chestertons) v Nurmohamed (CA)  Appeal from the EAT which held that it is not necessary to show that a disclosure was of interest to the public as a whole, as only a section of the public will be directly affected by any given disclosure and that a small group may be sufficient. To float on 11 or 12 October 2016.

 

 

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