Archive for January, 2014
Happy New Year – and welcome to another twelve months of legal developments for HR professionals and employers.
The next few months promise excitement in the form of the new-look TUPE (more on this later), fines for employers who make mistakes with employment rights, mandatory Acas conciliation for tribunal claims, and extended rights to request flexible working.
That comes on top of last year’s changes, including tribunal fees, employee shareholders, changes to whistleblowing and of course the re-branding of compromise agreements as settlement agreements.
It looks like it is going to be a busy 2014 in the employment law world.
BS v Dundee City Council
Employee ill-health is one of the thorniest issues facing employers. It demands empathy and patience, balanced against commercial realities and the needs of the business. Perhaps the biggest challenge of all is in recognising when the end of the road has been reached and the employment relationship must be terminated.
The Court of Session in Scotland has given some useful guidance to help employers address this properly. When an employee has been on sick leave for some time, the sort of questions a reasonable employer should consider include:
- Could we be expected to wait any longer before dismissing? If so, how much longer? Relevant here is the size of your organisation, whether or not the employee has exhausted their sick pay, and whether you could call on temporary staff to cover.
- Have we consulted with the employee and taken their views into account? How do these views sit alongside any medical opinion?
- Have reasonable steps been taken to find out about the employee’s medical condition and the likely prognosis? This does not mean that you have to commission a specialist examination. Relying on the available medical advice should be enough, provided the right questions are answered.
It may be instinctive to take length of service into account (and it can be important to do so), but it is not automatically relevant. What really matters is whether the employee’s length of service, and the way in which they delivered that service, leads you to conclude that they are likely to return to work as soon as they can.
Mba v London Borough of Merton
The Court of Appeal has reminded employers that minority views matter. Even where an employee’s religious beliefs are not commonly held, they should not be disregarded. You need to be confident that you can justify instructions on good business grounds, if those instructions cause difficulties to those of specific religious convictions, and that there are no practical alternatives which achieve the same aim without causing difficulties for the employee.
Ms Mba, a practising Christian, was employed by the Council as a care assistant in a children’s home. She has a deep and sincere belief that Sunday is a day for worship and not for working.
Staff hours were set out in a shift rota which included weekends, bank holidays and sleeping duties. At first Ms Mba was not required to work on Sundays. That changed and, after failing to turn up on a rostered Sunday, she was disciplined and given a final written warning. She resigned and brought a claim for constructive unfair dismissal and indirect religious discrimination.
The employment tribunal accepted that the requirement to work on Sundays was indirectly discriminatory (it put Christians at a disadvantage), but Ms Mba’s claim was unsuccessful when it came to the question of proportionality. The requirement was a proportionate means of achieving the employer’s legitimate aims, the tribunal held, adding that a belief that Christians should not work on Sundays was not a core part of Christianity.
The Court of Appeal partly disagreed with the tribunal’s approach. It was not fatal to Ms Mba’s claim that not every Christian felt as she did about working on a Sunday. In fact, it was wrong to look at whether others shared that belief. What mattered was whether her belief was sincerely held and whether her treatment was justified.
But what the Court of Appeal gave with one hand it took away with the other. It was proportionate for the Council to demand Sunday working because of the need to provide round-the-clock care, coupled with health and safety requirements. None of the alternatives were viable and practical, the judges said, and they rejected Ms Mba’s appeal.
The Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) – the notoriously complex rules which require employers who take over a business, or take over certain contracts from another employer, to take on the employees who worked in the business or the contract acquired – are changing again.
At the end of January, some long-awaited amendments to TUPE come into force. The main changes are:
Service provision changes
For TUPE to apply, the activities carried on after a “service provision change” must be “fundamentally or essentially the same” as before. This codifies recent case-law and re-opens the door to potentially being able to avoid the application of TUPE where the contracted services are provided in a different way.
Employee liability information
The “transferee” – the new employer will have more time to consider the liabilities it will be taking on. “Employee Liability Information” (details of the transferring employees’ terms, contracts of employment, details of grievances and claims, etc) will normally have to be handed over by the transferring employer (the “transferor”) at least 28 (as opposed to the current 14) days before the transfer.
Businesses employing 10 or fewer employees will be able to inform and consult with affected employees directly, rather than holding elections for employee representatives, as is currently required. The obligations to inform and consult itself, however, remains.
A new employer will only be bound by collective agreements that were in place at the time of the transfer. They cannot be bound by later changes which they were not involved in negotiating.
Also, terms agreed in a collective agreement can be renegotiated by the employer. That is as long as the new terms are, overall, no less favourable to the employee and do not take effect until at least one year after the transfer.
Automatically unfair dismissal and variations to terms
Dismissals will now only be automatically unfair where the transfer was the reason for the dismissal (and not as before, also where dismissal was for a reason connected with the transfer”), unless an “economic, technical or organisational reason” applies.
It is fair to say that this change is obscure, even by TUPE standards.
There could be more scope for employers to make changes to employees’ contracts after a TUPE transfer. Currently, changes cannot be made if the reason for them is the transfer itself or a reason connected with the transfer. The italicised wording will no longer apply. You might think that this is a distinction without a difference. We couldn’t possibly comment.
Redundancies and relocation
A change of location, post-transfer, can now be an “economic, technical or organisational reason entailing changes in the workforce”.
This should make it easier, where a business sale involves a relocation, to make redundancies as a result of the relocation without acquiring liability for unfair dismissal.
Also, in certain circumstances, consultation carried out before the TUPE transfer could count towards any overall 30 or 45-day collective redundancy consultation period (i.e. where 20 or more redundancies are planned).
BIS has published guidance on the amended Regulations here, which will be of great interest mainly to TUPE anoraks and insomniacs.
ZJR Lock v British Gas
Holiday pay continues to be one of the most convoluted area of employment law.
Commission does not form part of holiday pay. Or does it?
An opinion from Europe has set the ball rolling towards resolving conflicting decisions on this.
The case involved a salesman who was paid basic salary and commission. Commission varied from month to month, based on the sales he achieved. When he took a fortnight’s leave (during which time he unable to make any sales) his employer calculated his holiday pay simply by reference to basic salary.
The Advocate-General’s view is that this was the wrong approach. Commission was intrinsically linked to the salesman’s work and so should have been included in the holiday pay calculation. If it was not included, then he could be deterred from taking annual leave.
The European Court usually follows the Advocate-General’s recommendation. If it does, it may prompt employers to review their approach to remuneration and perhaps alter their pay structures. The UK courts would then be required to decide how the commission element of holiday pay should be calculated, but it could be based on an average yearly commission (even where an element of commission has not actually been earned).
This is important (and annoying) for anybody who pays commission. We will keep you informed and, once the European Court of Justice decides the case, you can talk to us about ways of dealing with the fallout.
Whittlestone v BJP Home Support
Sleeping on the job has kept employment tribunals occupied for years. Employees working night shifts have long argued that even where they are not tending to clients, they are still ‘working’ and are therefore still entitled to be paid the National Minimum Wage (‘NMW’).
That is what happened in Ms Whittlestone’s case. She was a care worker who visited clients in their homes. For sleepover shifts between 11pm and 7am she was paid £40 (so less than the NMW), and was allowed to sleep when she was not needed. There was no evidence that Mr Whittlestone was required to attend to clients during those night shifts.
The Employment Appeal Tribunal (EAT) agreed that she should have been paid the NMW for the whole time spent sleeping over because it was ‘time work’ under the Working Time Regulations. That was regardless of whether her sleep was broken or not. The EAT held that she was also entitled to be paid the NMW for the time spent travelling between clients’ homes.
For employers in the care sector, in particular, this case should trigger a review of contracts and payments made for sleepover shifts. It is a complex legal area, and each case is different. However, those employers who get it wrong and do not pay the NMW, when they should do, could face substantial sanctions and adverse publicity.
Boss Projects v Bragg
Cases concerning employment status arise regularly, and all employers need to be aware that they could be next. The key message to take from these cases is usually the same: parties’ declarations about employment status are rarely worth the paper they are written on. Whether someone is a worker (and entitled to employment law protections) or not depends on the work they do day-to-day, and the true nature of their relationship with those they provide a service to.
Mr Bragg was a scaffolding supervisor who worked under a chain of contracts. He was paid by Boss which, in turn, contracted with another company (and it with another) for the provision of subcontractors.
The words of Mr Bragg’s contract were pretty clear on his status – he was an independent subcontractor and not an employee. He did not have to provide personal service, instead having complete discretion to substitute or delegate the work. He could carry out other work before, after, or at the same time as he worked for Boss, and was responsible for his own tax and national insurance.
Nevertheless, the Employment Appeal Tribunal found that Mr Bragg was a ‘worker’, and not self-employed (albeit that he was not an employee either). This meant his claim for holiday pay could proceed. As with all worker status cases, it boiled down to the nature of the relationship between the parties. Relevant here was the fact that Mr Bragg did not use his own tools while working for Boss, and that although he could provide someone else to do his work, neither he nor Boss intended for that to happen; he had been personally selected for the role.
We all remember those feelings, do we not? A child’s desperation to cling onto the tail end of the festive period; the sadness at packing away the baubles; the gut-wrench of going back to school.
Well, it can be tough for grown-ups too. But for those suffering from the debilitating effects of Seasonal Affective Disorder (SAD), these winter months are far more than a time for just feeling a little downbeat. A form of depression, SAD affects disposition and energy levels. It can have a knock-on effect for employers, reportedly costing the UK 9.6 million workdays each year (Epson report).
In an Opinium survey of more than 1,000 UK workers, 20 per cent said they had called in sick because of SAD, taking an average of four days off a year. Many others reported a dip in motivation.
On the bright side, it seems there are things that can be done in the workplace to combat SAD. Better lighting, more colourful work spaces and more creative visuals are all on the list of things employees would like to see, saying that these would improve their mood.
So it is out with gloomy grey and in with sunshine-inspired hues. Injecting life and positivity into the workplace could well be the answer for some employees, and for employers too.
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