Legal Update – What to Expect in 2017

Brexit Fallout – employment law

The High Court has held that Parliament needs to vote on the Government invoking article 50 and triggering the Brexit process. The reason for this is that the referendum is not a legally binding act, simply ‘guidance’. This decision is being appealed and due to be heard in early December by the Supreme Court (leapfrogging the Court of Appeal.)

A reminder that as the UK has to give two years’ notice that they are leaving the EU then it is unlikely that anything will happen immediately. Many laws such as unfair dismissal, minimum wage, the right to strike and some family friendly policies such as shared parental leave, have no European basis as they are ‘home grown’ laws.

Theresa May has indicated that she will implement the ‘Great Repeal Act’ which essentially takes all legislation which comes from the European Communities Act 1972 (such as the Working Time Regulations) and enshrines it into UK legislation. The big question mark is what will happen to the decisions of the European Court of Justice which have influenced the interpretation of UK law, the most recent example being the ECJ decision in Lock v British Gas which concluded that results based commission must be paid when a worker is on holiday.

Brexit fallout – immigration

Advice from Jonathan Beech, Managing Director of Migrate UK, is that all EU nationals should keep evidence of their employment in other EU countries, apply for UK residency as soon as they can if it is not automatically granted and to keep a very careful eye on negotiations to ensure that they do not exit the UK for any reason and then discover that they cannot get back in.

Tribunal Fees

The TUC have said that the imposition of fees has let workplace abuse flourish unchecked, as figures released show that Tribunal claims have gone down by 9000 a quarter since the fees were introduced. Unison’s challenge to fees is being heard by the Supreme Court on 27/28 March 2017.

Taxation of Termination Payments

The Government issued its response to the consultation on taxation of termination payments and much to everyone’s surprise they are not going to change the £30k tax free allowance but the changes they are making from April 2018 are:

  1. All payments in lieu of notice will be taxed, irrespective of whether there is a payment in lieu of notice clause.
  2. An employer will have to pay employer national insurance payments on any sum over £30,000.
  3. Injury to feelings compensation will definitely not be tax free.
  4. The foreign service exemption will be removed.

Inquiry into the Future World of Work

The Business, Energy and Industrial (the new name for BIS, now known as BEIS) Strategy Committee has launched an inquiry into the future world of work. They have said that the inquiry will look at the rapidly changing nature of work together with the status of workers and rights of agency workers, the self-employed, and those working in the so-called ‘gig’ economy where workers ‘gig’ from employer to employer.

No doubt prompted by the decision in Uber, it will also consider the definition of “worker”, whether the balance of benefits between workers and employers, flexible contracts, zero-hour contracts, the role of the Low Pay Commission, minimum wage enforcement and the role of trade unions in providing representation.

Shared Parental Leave

A consultation paper on sharing maternity leave with grandparents was expected soon but nothing has been issued as yet, presumably as they are too busy with Brexit.

Gender Pay Gap Reporting

The Equality Act 2010 (Gender Pay Gap Information) Regulations 2016 were expected to come into force on 1 October 2016 but have been delayed. They will require all private and voluntary sector employers with 250 or more employees to publish prescribed information about their gender pay gap by 30 April 2018.

New Data Protection Laws

On 14 April 2016 the European Parliament voted in favour of a new General Data Protection Regulation, although this will not come into effect until 2018. Although we have voted to leave the EU, if we want to do business in Europe or have employees there then employers must comply.

The Information Commissioner’s Office has published guidance for data controllers on ‘12 steps to take now’ in preparation for the coming into force of the Regulation.

The focus is going to be on ensuring that employees are aware of their obligations, that throughout the organisation all employees are ensuring that data is not kept for longer than is necessary and that there are clear policies in place to deal with breaches.

There is more emphasis on obtaining consent from individuals; privacy notices should be in clear language and there has to be a genuine reason for transferring data outside of the EU protection otherwise a fine of 4% of worldwide turnover could be imposed.

Cases of Interest

Should Holiday Pay include Commission?

British Gas v Lock

 The Court of Appeal has confirmed that the Working Time Regulations 1998 should be interpreted so as to conform with the requirements of EU law to include results-based commission in statutory holiday pay derived from the Working Time Directive.

It is understood this is being appealed to the Supreme Court. The landscape in relation to holiday pay has now changed significantly since the ECJ decision in Lock. Now that the country has decided to leave the EU, without any confirmation of what will happen to the ECJ decisions, there is a chance that the ECJ decision in Lock will not apply or that the Supreme Court will decide that UK law cannot be interpreted so as to conform with the requirements of EU law. Therefore, in light of this political shift, employers might not rush to include commission in holiday pay until there is some certainty.

Are Uber Drivers Self Employed?

In a case in Central London Employment Tribunal brought by two drivers, supported by the GMB union, the Tribunal has concluded that drivers are workers (not employees, as reported by the BBC). This means that they are entitled to paid holiday, minimum wage, daily rest breaks, the right not to be dismissed or suffer a detriment for whistleblowing and they must be enrolled in a pension scheme.

Uber have confirmed they will be appealing and as this is only a decision of the Tribunal it is not binding on other Tribunals. It is understood that one of the drivers has already applied for paid holiday and has been refused on the basis that Uber are appealing and that the driver is ‘welcome to switch his app off’.

What Can be Said About a Protected Conversation?

Faithorn Farrell Timms LLP v Bailey

The EAT has confirmed that evidence of protected conversations under s.111A of ERA 1996 extends not only to the nature and the content of the conversations, but also the fact that such a conversation has taken place at all.  It also confirmed that unlike “without prejudice” conversations, privilege under s.111A cannot be waived.

No Uplift for SOSR Dismissals

Phoenix House Ltd v Stockman

The EAT has decided that ACAS Code of Practice does not apply to dismissals for “some other substantial reason” (“SOSR”). Therefore, the uplift of up to 25% for failing to follow the ACAS Code of Practice on Disciplinary and Grievance Procedures does not apply.

ACAS Code of Practice Does Not Apply to Ill Health Dismissals

Holmes v Qinetiq

The Claimant was dismissed on the grounds of ill health and his employers conceded that the dismissal was unfair because of the failure to obtain an up to date occupational health report. However, the Claimant also argued that the ACAS Code of Practice applied to his dismissal and should have been followed. Because it had not and there were no reasonable grounds for doing so, he was entitled to an uplift of up to 25% of compensation.

The Tribunal said that the ACAS Code did not apply and the EAT agreed with them. What they said was that the ACAS Code applies to all cases where an employee’s alleged act or omissions involve culpable conduct or performance on their part that requires correction or punishment e.g. misconduct and poor performance. Given this, it was difficult to see how a dismissal due to the employee’s ill health fell into this category.

The Banning of a Headscarf Was Direct Discrimination on Grounds of Religion

Bougnaoui v Micropole SA

In a decision which is the complete opposite to the one in Achbita v G4S, the Advocate General for the Court of Justice for the European Union (CJEU), formerly the ECJ, has said that it was unlawful to ban a Muslim employee from wearing her Islamic headscarf when in contact with clients.

In this French case Ms Bougnaoui was a practising Muslim who wore a hijab at work. Her head was covered but her face visible. She worked as a design engineer and was required to visit clients. A client complained and asked that there should be “no veil next time”. As a result Ms Bougnaoui was asked not to wear her headscarf when visiting clients. She refused to do so and was subsequently dismissed.

This is only the Advocate General’s opinion and may not be followed by the CJEU.

Easyjet Fails to Offer Adequate Facilities to Breastfeeding Employees  

In a claim brought by Easyjet cabin crew in the Bristol Employment the Tribunal concluded that the Employment Rights Act 1996 (‘ERA’) requires employers to provide breastfeeding mothers with the opportunity to work reduced shifts or take on alternative roles and if that is not possible they should suspend their contracts on full pay whilst in the early phases of parenthood.

After the case was submitted to Bristol Tribunal, EasyJet did apparently provide breastfeeding employees with 12 hour standard shifts and also agreed to provide them with new roles for six months. However, Bristol Tribunal did not think that this was enough to escape the consequences of a discrimination claim. Their view was that breastfeeding was not a choice that could be ‘limited to a six month period’. Easyjet have been ordered to review its working practises as a result.

Shared Parental Leave Policy Paying Female Employees More than Male Was Discriminatory  

Snell v Network Rail Infrastructure Limited

Mr Snell argued that Network Rail’s policy on shared parental leave and pay directly discriminated against men on the basis that mothers were entitled to enhanced shared parental leave pay but fathers were only entitled to the statutory level of shared parental leave pay.

Network Rail had originally tried to justify its policy, first of all, on the basis that the correct comparator for the Claimant was a female partner and not a mother or primary carer. Their secondary argument was that even if the policy was discriminatory, Network Rail could objectively justify it as a proportionate means of achieving its legitimate aim of recruiting and retaining women in a male dominated workforce. By the date of the Tribunal they conceded discrimination and there was an award of £6,000 injury to feelings and £16,129 for loss of earnings. Network Rail have allegedly removed enhanced shared parental pay for all staff, whether they are female or male.

This update does not attempt to give comprehensive advice. For advice on any particular employment situation, please contact us directly as individual situations vary and may affect the advice given.