Employment Law Update February 2017
Employment Law Update
Welcome to the February 2017 issue of
Employment Law Update
This month we cover the Court of Appeal decision in the widelyreported Pimlico Plumber case, which is the first appeal-level
decision in the recent flood of employment status and ‘gig
economy’ cases.
We also look at some interesting recent decisions from the Employment
Appeal Tribunal on religious discrimination, the definition of a ‘disability’
and reliance on a mobility clause during a redundancy situation.
Did you know that employment tribunal judgments are now publically
accessible (and searchable) online? Might this affect your decision on
whether or not to seek settlement of a claim against you? This and other
recent employment law developments of note are covered in our ‘quick
fire’ items. We also include our monthly Immigration Update.
SAVE THE DATE for our next Birketts employment law conference, which
will be held on Thursday 12 October 2017, at Wherstead Park near
Ipswich. Further details to follow.
In this issue
Pimlico Plumber was a
‘worker’
Holiday requests and religious
discrimination
Quick fire: Tribunal judgments
now online!
Reliance on a mobility clause
during redundancy
Quick fire: National Minimum
Wage – new rates
Type II diabetes and disability
Quick fire: New guidance on
gender pay gap reporting
Cambridge | Abigail Trencher
[email protected]
01223 326622 | 07983 385842
Chelmsford | Kevin Palmer
[email protected]
01245 211254 | 07771 517547
Quick fire: Trade Union Act
2016 in force from 1 March
2017
Ipswich | Catherine Johnson
[email protected]
01473 299174 | 07786 265654
Norwich | Jeanette Wheeler
[email protected]
01603 756427 | 07983 519812
Quick fire: Employment
tribunal fees review published
Liz Stevens
Professional Support Lawyer
01603 756474
[email protected]
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
Immigration Update February 2017
LinkedIn
Birketts’ HR Hub
Twitter
@birkettsllp
www.birketts.co.uk/employment
Employment Law Update February 2017
Pimlico Plumber was a ‘worker’
The Court of Appeal has handed down its decision in the case of
Pimlico Plumbers Ltd & Anor v Smith, in which Pimlico Plumbers
(PP) was appealing against the decisions of both the employment
tribunal and the EAT that Mr Smith was a ‘worker’ rather than being
self-employed.
Pimlico Plumbers Limited and Anor v Gary Smith, Court of Appeal
Facts
S worked solely for PP for a period of almost six years. He signed a “Self-employed
Operative” agreement with PP in 2009, which contained detailed provisions relating
to the performance of the services by S. It provided that he would comply with
all reasonable rules and policies of the company, including those contained in the
company manual. The manual set out a requirement to work a normal week of 40
hours. S was required to wear a PP uniform and had to drive a van leased from PP,
although he provided his own tools and professional indemnity insurance.
“The Court was
satisfied that the
arrangement between
the parties was based
on a requirement for
‘personal performance’
of the services by S,
meeting the test to
establish worker status.”
The agreement also contained no less than eight covenants restricting his business
activities after the agreement was terminated, most of which were expressed as lasting
for a period of 12 months post-termination. The agreement did not include any express,
unfettered right for S to send a substitute in his place.
Following a heart attack, PP terminated the agreement with S. He brought a number
of claims that depended upon him establishing that he was in fact an employee of
PP, including for unfair and wrongful dismissal. He also brought claims for unlawful
deductions, unpaid holiday pay and disability discrimination, for which he needed to be
a ‘worker’.
Both the employment tribunal and the Employment Appeal Tribunal (EAT) determined
that S satisfied the criteria for establishing worker status, although not employee
status.
Court of Appeal decision
The Court has dismissed PP’s appeal and confirmed that S was correctly categorised
as having ‘worker’ status.
The Court was satisfied that the arrangement between the parties was based on
a requirement for ‘personal performance’ of the services by S, meeting the test to
establish worker status. The degree of control exercised by PP over S was inconsistent
with PP being a customer or client of S, which would otherwise have defeated his
claim.
Consequences
This decision by the Court of Appeal provides us with useful guidance, if not
establishing any new legal principles, on the question of worker status following several
recent tribunal decisions on the issue and against the background of a number of
ongoing reviews and inquiries into worker and employment status.
“The decision
emphasises once again
the close scrutiny that
tribunals and courts will
apply to the contractual
documentation entered
into by the parties, as
well as examining the
reality of the working
arrangement.”
The decision emphasises once again the close scrutiny that tribunals and courts
will apply to the contractual documentation entered into by the parties, as well as
examining the reality of the working arrangement. In this case, Pimlico Plumbers was
somewhat hampered in its argument that the individual was self-employed by some
rather onerous contractual restrictions.
The case also reminds us that an individual who is categorised as self-employed for
tax purposes will not necessarily fit neatly into the same category for the purpose of
establishing an entitlement to the statutory protections enjoyed by workers.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/employment
Employment Law Update February 2017
Holiday requests and religious
discrimination
The Employment Appeal Tribunal (EAT) has upheld a decision that
an employer’s refusal to grant an employee five weeks of consecutive
holiday did not amount to discrimination on the grounds of religion
or belief.
Gareddu v London Underground Ltd, EAT
Facts
G was a practising Roman Catholic who, between 2009 and 2013, was permitted by
his employer to take five consecutive weeks of holiday during the summer, when he
returned to his native Sardinia. In 2013, he was informed that he would no longer be
permitted to take five consecutive weeks of holiday and that leave during the summer
would be restricted to a maximum of 15 continuous working days. His pre-exiting
arrangements for 2014 were honoured, but his request for five weeks in 2015 was
refused.
“What amounts to a
religion or belief, and
an individual’s chosen
manifestation of that
religion or belief, is
broadly construed in
order to qualify for
protection.”
G claimed that attendance at various religious festivals with his family in Sardinia was
part of his religious belief and that refusal of his holiday request amounted to unlawful
indirect religious discrimination. His claim was dismissed by the employment tribunal,
which held that the religious belief he asserted was not genuine. There was no religious
requirement for G to take five weeks’ holiday to attend religious festivals.
EAT decision
The EAT dismissed G’s appeal. The tribunal had reached conclusions on the facts that it
was entitled to reach. The tribunal had rightly focused on whether or not the asserted
requirement to attend the series of festivals over a five-week period was genuine. G
had not attended festivals of the same saints each year, and had not attended the
same number of festivals each year. The tribunal had concluded that the real reason
for G wanting to take five weeks’ holiday was the desire to be with his family.
Consequences
This is perhaps an unsurprising decision, given that the claimant’s evidence about his
previous attendance at religious festivals was found by the tribunal to be unreliable.
What amounts to a religion or belief, and an individual’s chosen manifestation of that
religion or belief, is broadly construed in order to qualify for protection. Attendance at
the festivals as a manifestation of G’s religious belief was not in question; it was just not
found to be the genuine reason for the extended holiday request.
Quick fire: Tribunal judgments now online!
The Ministry of Justice has launched an online database of employment
tribunal decisions, which will be updated with all new judgments when
they are handed down. It also includes some older judgments dating
back to 2015 and 2016, which had not been previously anticipated. The
site is reportedly still in the ‘beta’ stage of testing, with decisions still
being uploaded. It is not yet clear how many previous decisions will be
added and how far back they will go.
Tribunal decisions have already been publically accessible on application to the central
register (located in Bury St Edmunds) but this is the first time that all judgments
will be available online and fully searchable. This may result in an increased risk of
adverse publicity for employers, particularly in cases where the judge is critical of the
employer’s actions and in cases that involve particularly salacious witness evidence.
The database is accessible here: https://www.gov.uk/employment-tribunal-decisions
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/employment
Employment Law Update February 2017
Reliance on a mobility clause during
redundancy
The Employment Appeal Tribunal (EAT) has considered whether
two employees were dismissed for redundancy, when they refused to
comply with a contractual mobility clause.
Kellogg Brown & Root (UK) Ltd v Fitton and Ewer, EAT
Facts
The two employees in this case (F and E) both worked in their employer’s Greenford
office. The employer, Kellogg, decided to close the Greenford office and transfer the
employees to the company’s Leatherhead office. Employees were offered a six-month
compensation scheme to cover the additional travel costs, as well as a reduction in
their core hours.
“The dismissals
took place against
the background of a
redundancy situation,
but this was not the
reason for dismissal...”
Kellogg relied on a mobility clause in the employment contracts, allowing the company
to require employees to work at a different location on either a temporary or
permanent basis. Employees with caring responsibilities were allowed to depart with a
redundancy payment due to ‘exceptional circumstances’. Both F and E refused to move
to the new office due to the additional travel requirements. They were both summarily
dismissed for misconduct and brought claims for unfair dismissal and a statutory
redundancy payment. The employment tribunal upheld their claims, finding the reason
for the dismissals to be redundancy.
EAT decision
The EAT upheld the tribunal’s decision that the dismissals were unfair, but substituted
a finding that the dismissals had been by reason of alleged misconduct, rather than
redundancy.
The dismissals took place against the background of a redundancy situation, but this
was not the reason for dismissal; it was the failure on the part of the employees to
comply with what the employer considered to be a reasonable instruction. However,
the EAT agreed with the tribunal’s conclusion in both F and E’s case that the employer’s
instruction was not reasonable and that they were entitled to refuse to comply.
Consequences
This decision is a useful reminder that reliance on a contractual mobility clause, even
a well-drafted one (which this one was not), is not necessarily straightforward and
that individual circumstances should always be taken into account when seeking to
enforce them. The existence of such a clause, however, may allow an employer to avoid
dismissing employees by reason of redundancy.
“...a useful reminder
that reliance on
a contractual
mobility clause …
is not necessarily
straightforward
and that individual
circumstances should
always be taken into
account when seeking
to enforce them.”
Quick fire: National Minimum Wage (NMW) – new
rates
The draft National Minimum Wage (Amendment) Regulations 2017
were published on 1 February 2017, setting out the new rates of the
national minimum wage coming into force on 1 April 2017:
•
•
•
•
•
The national living wage (workers aged 25 and over) increases from £7.20 to
£7.50.
The standard adult rate (workers between 21 and 24) increases from £6.95 to
£7.05.
The development rate (workers between 18 and 20) increases from £5.55 to
£5.60.
The young workers rate (workers aged 16 and 17 who are not apprentices)
increases from £4.00 to £4.05.
The apprentices rate increases from £3.40 to £3.50.
New rates of the NMW previously took effect from 1 October each year; this is the first
year that increases to all rates (including the national living wage) will be aligned from
1 April.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/employment
Employment Law Update February 2017
Type II diabetes and disability
The Employment Appeal Tribunal (EAT) has considered whether a
tribunal was correct to find that an employee with type 2 diabetes
was not disabled under the provisions of the Equality Act 2010.
Taylor v Ladbrokes Betting and Gaming Ltd, EAT
Facts
T, who suffers from type 2 diabetes, brought claims for unfair dismissal and disability
discrimination following his dismissal by his employer, Ladbrokes.
As a preliminary issue, the employment tribunal considered whether T was disabled
for the purposes of the Equality Act 2010. Relying on written medical evidence by a
consultant specialist, the judge found that T’s diabetes was controlled by medication.
Even without taking the medication, the consultant considered that the condition
would have no adverse impact on his ability to carry out normal day-to-day activities
and could be easily controlled through lifestyle, diet and exercise.
“The consultant’s
evidence had focused
on the effect of his
condition on his existing
ability to carry out
normal day-to-day
activities, rather than
the likely effect in the
future.”
The judge took the view that there was only a small possibility of the condition
progressing, provided T followed the advice about lifestyle, diet and exercise. He
therefore concluded that T was not suffering from a progressive condition that
amounted to a disability.
EAT decision
The EAT allowed T’s appeal and remitted it to be reheard. The employment Judge
had not properly addressed the question of whether he suffered from a progressive
condition. The consultant’s evidence had focused on the effect of his condition on his
existing ability to carry out normal day-to-day activities, rather than the likely effect
in the future. Even if there is only a small possibility of deterioration, the EAT has
suggested that it might be sufficient to make it ‘likely’ that the individual suffers from a
progressive impairment for the purposes of the Act.
Consequences
Previous case law has established that a sugar-free diet should not be disregarded
when assessing whether type 2 diabetes is a disability, as it is not a ‘medical treatment’.
This case suggests instead that type 2 diabetes could be regarded as a progressive
condition that amounts to a disability. However, neither type 1 nor type 2 is listed as an
example of a progressive condition in the statutory guidance to the Equality Act 2010.
It is by no means clear that sufferers of type 2 diabetes will be covered by the Act, and
medical evidence will be of critical importance in such cases.
“It is by no means
clear that sufferers of
type 2 diabetes will
be covered by the Act,
and medical evidence
will be of critical
importance in such
cases.”
Quick fire: New guidance on gender pay gap
reporting
Acas and the Government Equalities Office (GEO) have jointly
published new guidance on the duty to report on the gender pay gap,
which takes effect from 6 April 2017.
The guidance is aimed at both private and voluntary sector employers with 250
or more employees. It will be updated to include the public sector reporting
requirements once the final regulations for this have been approved.
The guidance provides a step-by-step guide to complying with the statutory
requirements, including worked examples of how to carry out the necessary
calculations. It encourages employers to publish a supporting narrative to explain why
any gender pay gap is present and what actions the employer intends to take to close
the gap.
The guidance states that the Equality and Human Rights Commission (EHRC) has the
power to enforce any failure to comply with the regulations, although the regulations
themselves are entirely silent on the subject of enforcement and sanctions.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/employment
Employment Law Update February 2017
Quick fire: Trade Union Act 2016 in force from 1
March 2017
It has been confirmed that the main provisions of the Trade Union Act
2016, introducing new minimum threshold requirements for ballots and
other new requirements for lawful industrial action, will take effect from
1 March 2017.
Separate regulations have been published on what constitutes “important public
services” for the purposes of the new 40% ballot threshold under the Act. The
Government has also published new guidance on these regulations.
Quick fire: Employment tribunal fees review
published
The Ministry of Justice (MoJ) has finally published its long-awaited postimplementation review of the introduction of fees in the employment
tribunals and Employment Appeal Tribunal.
This review was originally expected to be published at the end of 2015. Many
respondents who submitted evidence to the review, together with inquiries conducted
separately by the House of Commons Select Committee and the Women and
Equalities Select Committee, were highly critical of the impact of fees on access to
justice.
Not unsurprisingly, however, the review has concluded that the fees regime is working
well and broadly meeting its original objectives. The MoJ has decided that certain
claims under the national insurance fund will be exempt from fees with immediate
effect. It is also consulting further on proposals to widen access to the remission
scheme.
UNISON’s appeal against the introduction of tribunal fees is due to be heard by the
Supreme Court on 27 and 28 March 2017.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/employment
Employment Law Update February 2017
Immigration Update - February 2017
Be prepared - Immigration Skills Charge coming into force 6th April 2017
UK Visas and Immigration (UKVI) have produced new Sponsor Guidance which provides
detail on the Immigration Skills Charge that will be implemented in April. The charge
will apply to an employer at the point that a Certificate of Sponsorship is assigned in the
‘General’ or ‘Intra-company Transfer’ route to an individual who will be applying from:
•
•
•
outside the UK for a visa
inside the UK to switch to this visa from another category
inside the UK to extend their existing visa (see exemptions below).
The Charge will be levied at £1000 per year of the visa for large companies and £364
per year of the visa for small companies or charities. There are a few exemptions:
•
•
•
•
“Any employer
considering taking
on a new hire should
therefore, wherever
possible, seek to apply
for the initial visa before
6th April 2017.
a non-EEA national who was sponsored in Tier 2 before 6 April 2017 and is applying
from inside the UK to extend their Tier 2 stay with either the same sponsor or a
different sponsor
a Tier 2 (Intra-company Transfer) Graduate Trainee
a worker to do a specified PhD level occupation
a Tier 4 student visa holder in the UK switching to a Tier 2 (General) visa.
Any employer considering taking on a new hire should therefore, wherever possible,
seek to apply for the initial visa before 6th April 2017. Where advertising would be
required for the role, this should be undertaken as soon as possible to ensure it can
run for the necessary 28 days before any visa application can be considered. Visa
extensions for existing employees should not be affected.
Concern has been expressed that the charge, intended to encourage employers to train
and develop ‘home grown’ talent will hit employers just at the time when skilled labour
from within the European Union (EU) is also being threatened.
Immigration Health Surcharge
Just a reminder that the Immigration Health Surcharge will apply to applicants applying
under Tier 2 Intra-Company Transfer from April 2017. The charge will be £200 per year
of the visa.
Shortage Occupations
The latest Migration Advisory Committee (MAC) review highlighted teacher shortages
and found there is still a shortage of maths and physics teachers, although the situation
for chemistry has somewhat improved. They have identified a shortage of computer
science and science teachers. They also found a shortage of teachers of foreign
language but only recommend adding teachers of Mandarin to the shortage list, on the
basis the rest should come from Europe.
EU News
A report from the CIPD and The Adecco Group has expressed concern that labour
and skills shortages are starting to bite in UK sectors that employ a high number of EU
nationals following Britain’s decision to leave the EU.
“The latest MAC review
highlighted teacher
shortages and found
there is still a shortage
of maths and physics
teachers...”
The official data (ONS: Jan 2017) shows that low-skilled sectors that typically employ
a large number of non-UK nationals from the European Union are facing particular
recruitment challenges with vacancies in retail and wholesale, manufacturing, health
and accommodation, and food services making up almost half (45%) of all vacancies.
The report also shows that as many as one in four employers (27%) have seen
evidence to suggest that non-UK nationals from the European Union were considering
leaving their organisation and/or the UK in 2017.
Official data also suggests that the number of non-UK nationals from the European
Union almost halved from an average of more than 60,000 per quarter in the nine
months to June 2016 to just 30,000 in the three months to September 2016.
This is likely to bring significant challenges to employers who have traditionally relied
upon EU workers who will need to look at both staff retention, training and recruitment
as a long term strategy.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/immigration
Employment Law Update February 2017
European Economic Area (EEA) Applications
With the Government reluctant to provide assurances to EEA citizens currently resident
in the UK, we have seen a huge increase in the number of applications for residence
permits and Permanent Residence made by EEA nationals and their families.
Traditionally such applications involved a lengthy application form and strict
documentary requirements. However in recent weeks the UKVI have introduced a
number of measures that have eased that process:
1.
Online application forms. There have been several revisions to these, each one
making the form briefer and easier to use.
2. Family members can now be included on the online form.
For more information
on any of the matters
covered in this
update, please contact
Clare Hedges or
Janice Leggett in our
Immigration Team.
3. Submission of the application using the Passport Return Service has proved
popular. Early indications are that applications submitted through the service are
being dealt with in around 8 -12 weeks, rather than the six months for normal
postal applications.
4. Documentary requirements appear to have been eased. The UKVI are asking
for five years of P60s to evidence employment rather than a full list of multiple
documents. We have yet to see how this works in practice.
Birketts are able to offer support and advice to employers affected by the issues raised
in this update. For further information please contact Janice Leggett or Clare Hedges.
Clear Legal Advice
Cambridge Chelmsford Ipswich Norwich
www.birketts.co.uk/immigration