Employment law update, January 2018

Annual employment law updateJanuary 2018

Today’s sessionReview of the last year:1. Tribunal fees and refund scheme2. Gig economy and employment status3. Holiday pay update4. Case law update – vicarious liability and “a week’s

pay”5. Discrimination case update6. Sexual Harassment7. Hidden disabilities

Today’s session

Looking forward:1. Gender pay gap reporting2. Taxation Changes3. Data protection4. Brexit

1. Tribunal fees and refundscheme

Tribunal fees and refund scheme

- Tribunal fees ruled unlawful from theoutset by Supreme Court

- Refund scheme now open- Govt will repay £27 million in fees

previously paid- Fee re-introduction?

What next for employers?

- Opening of the floodgates?- Reimbursement of fees made by

employers- Tribunal’s buckling- Risk of previous claims being re-opened- Watch this space

2. Gig economy and Employmentstatus

Uber (again…)

- Last year we covered the ET decision in Aslam &Farrar v Uber

- The EAT dismissed Uber’s appeal in November 2017

- Uber will appeal to the Court of Appeal

- Decision fact sensitive, but…

Deliveroo’s turn

Independent Workers Union of Great Britain vRooFoods Ltd (t/a Deliveroo) (CAC)- CAC held that riders were NOT workers- Bucks trend of gig economy cases- Major difference between Deliveroo and Uber is

right to substitution was genuine and used inpractice

- Not strictly binding

Taylor ReviewThe Taylor Review report was published in July 2017and recommended:

– Renaming “worker” to “dependent contractor” andre-clarifying distinctions

– Additional rights for dependent contractors such aswritten statement of terms

– Expedited hearings for determining status– Right to guaranteed hours after 12 months on a ZHC– “Rolled up” holiday pay for dependent contractors– But…

BUT….

- The Government announced recently that reformshave been put on hold until 2019

- For now, watch this space

3. Holiday Pay Update

Recap

- The EU guarantees workers a minimum of 4weeks’ paid leave

- British government goes further and guaranteesa total of 5.6 weeks

- Divergence between EU and domestic law –based on “a week’s pay” or “normalremuneration”?

Recap

• Last year we covered…– British Gas Trading Ltd v Lock (CA) –

commission ought to have been factored intoholiday pay for Mr Lock

– Fulton v Bear Scotland (No. 1) (EAT) – non-guaranteed compulsory overtime must beaccounted for

Developments

Dudley MBC v Willetts (July 2017)– EAT held that voluntary overtime pay, out-of-hours

standby payments and call-out payments should beincluded in holiday pay IF they are part of “normalremuneration”

– But what does “normal” mean?– This case shows danger of underpaying holiday – 56

potential claims

Back pay?- Claim must be made within 3 months of last

deduction going back a total of two years. But…

King v Sash Window Workshop Ltd (ECJ)– Commission only salesman took no paid holiday for

13 years– ECJ held that under EU law, he is entitled to a back

payment in lieu for the entire period– Not directly applicable to underpayment – argument

yet to be raised

So what?

- Do you have a lot of employees who:– Undertake voluntary overtime; or– Work on results based commission?

- Consider reviewing working arrangements andreviewing holiday pay calculation formulae

- Although each case turns on its own facts, compareyour situation with that in the cases

4. Case update

Vicarious liability

Various claimants v Wm Morrisons Supermarket PLC(HC)- Mr S published personal details of 100,000

employees on internet – sentenced to 8 years inprison

- High Court held that employers can be vicariouslyliable for employee breaches

“A week’s pay”

University of Sunderland v Drossou (EAT)- “A week’s pay” under ERA 1996 includes employer

pension contributions- Impact on compensation under TUPE and unfair

dismissal compensatory awards- Defined benefit schemes?

5. Discrimination case update

Developments in religiousdiscriminationAchbita v G4S Secure Solutions NV (ECJ)- Belgium company dress code banned wearing of

visible signs of religion or belief- Ms A was dismissed for refusing to removal Muslim

head scarf

Developments in religiousdiscriminationAchbita v G4S Secure Solutions NV (ECJ)- ECJ held NOT direct discrimination, but could be

indirect discrimination- No particular religion or belief treated differently- Ban can be justified providing it is a proportionate

means of meeting a legitimate aim

Developments in religiousdiscriminationBougnaoui v Micropole SA (ECJ)- Decision released on same day as Achbita- Customer complained about Ms B’s head scarf- M asked Ms B to remove. Dismissed her when she

refused

Developments in religiousdiscrimination

Bougnaoui v Micropole SA (ECJ)- ECJ held direct discrimination and no occupational

requirement- Difference between Bougnaoui and Achbita?

Developments in disabilitydiscriminationPeninsula Business Service Ltd v Baker (EAT)- Mr B claimed his dyslexia constituted a disability

but did not prove it- P subjected Mr B to surveillance- Mr B claimed harassment on basis that decision to

conduct surveillance was linked to his dyslexia- EAT held NO protection from harassment for

alleged disability

Associative/perceiveddiscrimination summaryType of claim Protection from DD, ID and

harassment under EqA?

A has a protected characteristic (“PC”) Yes

A does not have a PC, but is closelyassociated with C who does

Yes

B knows that A does not have a PC Yes

B wrongly perceives A to have a PC Yes

A alleges to have a PC No

6. Sexual harassment

How prevalent is it?

0 5 10 15 20 25 30 35 40

Displays of pornography

Sexual comments about women/another woman

Unwated messages of sexual nature

Unwelcome sexual advances

Sexual assault

Unwanted touching

Unwelcome sexual jokes

Sexual comments about body and/or clothing

Serious sexual assault/rape

%

The lawSection 26(2) – Sexual harassment

A engages in unwanted conduct of a sexual nature

which has the purpose or effect of either violating

B’s dignity or creating an intimidating, hostile,

degrading, humiliating or offensive environment for

B

The law

Section 26(3) – Less favourable treatment forrejecting or submitting to harassment

Sexual harassment + less favourable treatment due

to B’s rejection or submission to the conduct = s26(3)

claim

The law

Are employers liable for the harassment of theiremployees?- General rule is YES, but subject to some

exceptions:- In the “course of employment”?- “Reasonable steps” defence- Liability for third-party harassment?

What can employers do?

- Comprehensive anti-harassment policy

- Follow a stringent investigation procedure

- Regular compulsory training for all staff

- Policy should be re-iterated before harassment“hot-spots”

7. Hidden disabilities

What do we mean by “hiddendisability”?- Not always self-evident

- Can include anything from mental healthdifficulties to autism or Crohn’s disease

- According to WHO, how many people live with adisability worldwide?

Impact

Thriving at work report (October 2017):- 300,000 people with long term mental health

problems lose jobs each year- 15% of people at work exhibit symptoms of existing

mental health condition- Poor mental health costs employers between £33

and £42 BILLION per year

The law on reasonableadjustments- Duty only arises where employee (A) disabled for

EqA purposes- Ignorance not always an excuse- Is A placed as substantial disadvantage compared

to non-disabled person?- What can constitute a “reasonable” adjustment?

Recent case example

Government Legal Service v Brookes (EAT)- Job applicant with Asperger’s required to sit

multiple choice test- GLS refused to adjust test- EAT upheld indirect discrimination and failure to

make reasonable adjustment claims

Practical tips

- Break the culture of silence

- Give employees/applicants a chance to disclose

- Err on the side of caution

- Provide employees with good working conditions

Looking forward…

1. Gender pay gap reporting

Gender pay gap reporting

Private sector employers mustpublish their first reports by

4 April 2018

Gender pay gap reporting

Who does it cover?- Private or voluntary sector employer with 250 or

more employees on 5 April each year- Reporting obligations only for “relevant

employees”Where must it be published?- Own website- By Government

Gender pay gap reporting

What should you do?- Are you a relevant employer?- Identify any uncertain areas- Which pay needs including?- Calculate the gap before the deadline- Action plan?- If in doubt, take advice

Non-compliance

EHRC Adversepublicity

Reputationaldamage Unlawful

2. Taxation changes

• From 6 April 2018:

– ALL PILONS are taxable and subject to class 1 NICs

– Termination payments above £30,000 now subject toemployer NICs rather than just income tax

3. A brief look at GDPR- New regime for data protection coming into force

25 May 2018- Significant enhancements to protection- Examples of some of the changes:

– Tougher sanctions – up to 4% annual worldwideturnover

– Higher bar for lawful processing– One month to comply with SARs rather than 40 days

4. Brexit

Where are we now?

- “Phase 1” negotiations complete

- EU nationals to apply for settled/temporary status:

Settled Status applications

- Digital, streamlined and user friendly

- Cost of a passport

- Minimal supporting documentary evidence

- Decision in 2 weeks

The future?- Biggest annual reduction in net migration

- Mass exodus of EEA workers

- Government committed to reducing migration tothe tens of thousands

- Home Office leaked paper – new work permitsystem?

What should employers do now?

- Audit

- Communicate

- Review recruitment and trainingstrategies

What should employers do now?

- Get a Tier 2 Sponsor Licence?

- Update Right to work checks

- Lobby, Lobby, Lobby

Speak to us…

Ray SilversteinRaymond.Silverstein@brownejacobson.com+44 (0)20 7337 1021

Gemma Steelegemma.steele@brownejacobson.com+44 (0)20 7871 8516

Helen Taylorhelen.taylor@brownejacobson.com+44 (0)115 908 4897

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All information correct at time of production.

The information and opinions expressed within thisdocument are no substitute for full legal advice. It is forguidance only and illustrates the law as at the publisheddate. If in doubt, please telephone us on 0370 2706000.

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