Welcome to this month’s edition of our Newswire. We’ve got the usual selection of articles on various topics related to HR and employment law. If you want to discuss any of the issues raised in more detail, just pick up the telephone and give me a call. I look forward to hearing from you.
What’s in this month’s newsletter?
✔ Employment Tribunal fees regime ‘quashed’ by Supreme Court
✔ ‘Taylor Review of Modern Working Practices’ – what’s it all about?
✔ Whistleblowing and the ‘public interest’ test – a new development
✔ Parental Bereavement Leave in the pipeline
Employment Tribunal fees regime ‘quashed’ by Supreme Court
Over the last few years, UNISON (the union) has been making repeated efforts to have the existing Employment Tribunal fees regime declared unlawful. Until now, it has enjoyed little success. However, the landmark decision of the Supreme Court, published on 26 July 2017, has changed all that.
The seven Supreme Court justices who heard UNISON’s case unanimously concluded that the current Employment Tribunal fees regime is unlawful and should be quashed. This means that with immediate effect, Employment Tribunal fees are no longer payable. It also means that the Ministry of Justice will be obliged to facilitate the repayment of all ET fees paid over the last 4 years. The total bill is likely to amount to about £32 million. All in all, it was not a good day for the MoJ.
Lord Reed, who gave the leading judgment in the UNISON case, concluded that the ET fees regime has unfairly denied people access to justice through the Employment Tribunal system. At the same time, it has raised relatively little money for the public coffers and has done nothing to discourage ‘unmeritorious’ ET claims. To add insult to injury, Lady Hale found the fees regime to be indirectly discriminatory as well, tending to disadvantage more women than men.
Precisely how the Government will react to this decision remains unclear. There is the prospect that the MoJ will move to introduce an alternative fees regime. They may set fees at a lower level and/or increase the range of circumstances in which no fee is payable. My own view is that they should give up the whole thing as a bad job. The uncertainty created by any new fees system would be considerable, bearing in mind the prospect that it too would be challenged. Furthermore, the Supreme Court judgment placed so much emphasis on the importance of access to justice that it begs the question of whether any fee is appropriate in cases such as these.
It’s fair to say that Employment Tribunal fees have never been particularly popular with employment lawyers (regardless of whether they predominantly act for employers or employees). Many will say that this is because of the impact it has had on our workload and our livelihoods. There is bound to be a degree of truth in this; I won’t pretend otherwise. Nevertheless, I like to think that our collective view is primarily formed on the basis of a more principled conclusion that access to justice is a cornerstone of our legal system and that tribunal fees have created an unfair impediment. No doubt, you will form your own view on whether you believe this to be true.
‘Taylor Review of Modern Working Practices’ – what’s it all about?
Towards the end of last year, Theresa May appointed Matthew Taylor (a former adviser to Tony Blair) to head up a review of modern working practices. He was asked to consider whether our current laws are ‘fit for purpose’, having regard to the modern, flexible and diverse way in which people earn a living.
Mr Taylor’s report was published, to some fanfare, on 11 July 2017. In an effort to save you the job of reading all 115 pages yourself – surely life’s too short – I have put together this thumbnail sketch of what it’s all about.
What’s he trying to achieve?
In a nutshell, Mr Taylor’s ambition is to ensure that all work in the UK economy is “fair and decent”. Who could possibly disagree with such an admirable ambition? Of course, a report of this nature needs to come up with concrete proposals, as well as high-minded ideals. In the remainder of this article, I will set out some of the more significant policy ideas that Mr Taylor advocates.
Clarity of status
It might seem strange, but lawyers and judges can still struggle to agree on who is an employee and who is not. Add into the mix the fact that as well as ‘employees’ and the ‘genuinely self-employed’, we also have the intermediate legal status of ‘worker’, and it can all become very confusing. If employers categorise people wrongly, the implications for both the business and individual can be significant. Look no further than the high-profile claims recently brought against Uber, CitySprint and Pimlico Plumbers for evidence of this!
Having considered submissions from a wide range of interested parties, Mr Taylor is inclined to retain the 3-tier status system currently in place. However, he recommends introducing:
✔ a new and more detailed statutory definition of what amounts to ‘employment’ (to be supplemented by regulations and guidance, where appropriate);
✔ the term ‘dependent contractor’, as an alternative to ‘worker’; and
✔ a definition for ‘dependent contractor’ that focuses on the level of control exercised over the person concerned, reducing the potential for businesses to wrongly categorise people as self-employed.
Mr Taylor has also recommended unifying the way in which we categorise people for both employment law and tax purposes.
Where disputes arise regarding a person’s status, Mr Taylor suggests that Employment Tribunals should be in a position to make swift determinations, without the claimant having to pay a fee. The burden of proof should be on the business to substantiate the status of the individual.
Clarity of terms
Mr Taylor has recommended that businesses should be required to provide a written statement of main terms and conditions to both employees and ‘dependent workers’ from day one of their engagement. Businesses that fail to provide such statements would open themselves up to claims for financial compensation.
Mr Taylor has suggested that the Low Pay Commission consider whether employees on ‘zero hours’ contracts (or contracts with few guaranteed hours) should be entitled to a higher national minimum wage. He has also advocated looking at novel ways in which fair rates of pay can be calculated for workers in the ‘gig economy’. For example, could their pay be calculated by reference to their output, rather than the time spent working (so-called piecework)? There are already provisions within the national minimum wage legislation that allow for this. However, they may require some tweaking, in order to apply them to the novel working arrangements that we see nowadays.
Mr Taylor has recommended allowing businesses to provide casual workers with a ‘rolled-up’ rate of pay, inclusive of their normal basic pay and any accrued holiday pay. In this way, they would receive holiday pay as they go along, rather than when they actually take their leave. This is a practice already widely used in relation to casual workers; the problem is that it does not currently comply with the provisions of the Working Time Regulations 1998.
New ‘rights to request‘
Mr Taylor suggests that agency workers who have worked on the same ‘assignment’ for 12 months or more should be entitled to request a direct contract of employment with the business for which they work. In a similar vein, ‘zero hours’ workers should be entitled to request a contract with guaranteed hours after 12 months’ service. Mr Taylor is not the first person to suggest such measures; will he succeed where others have failed?
So what now?
Many organisations have been quick to criticise Mr Taylor’s report. Unsurprisingly, business groups have suggested the measures go too far, whilst trade unions feel they do not go far enough. Of course, reports of this nature are only as good as the efforts made to implement their findings. Some commentators are already questioning whether Mr Taylor will garner sufficient political support to turn his ambitions into government policy. When politicians of all persuasions are so distracted by ‘Brexit’, what are the chances of Theresa May (and friends) finding the time or the inclination to roll out the sorts of policies that Mr Taylor has in mind?
I remain unconvinced about the chances of many (if any) of the Taylor recommendations being put into practice any time soon. However, I would be very happy to be proved wrong!
Whistleblowing and the ‘public interest’ test – a new development
You may already be aware that the laws relating to whistleblowing have changed quite a lot over the last few years. One particularly important development is that, nowadays, an employee will only be protected from dismissal or detrimental treatment if they can show that they have ‘blown the whistle’ whilst reasonably believing that they were doing so in the ‘public interest’.
Cases under the new law are now gradually coming before the tribunals and appeal courts, giving our judges the chance to work out which disclosures are reasonably to be regarded as in the ‘public interest’ and which are not.
Chesterton Global Ltd v Nurmohamed
In one recently decided case, Mr N worked for a firm of estate agents. He became concerned that his employers were manipulating financial information in order to reduce the apparent profitability of the company. In turn, this reduced the commission payments due to up to 100 employees, including Mr N. He raised his concerns with senior managers on a number of occasions, but without success.
After the company decided to terminate his employment, Mr N claimed that his dismissal was automatically unfair and a result of him ‘blowing the whistle’ on the alleged manipulation of commission calculations.
The Court of Appeals’ decision
When this case came before the Court of Appeal, the appeal judges had to consider whether the Employment Tribunal had been right to find that Mr N had made a ‘protected disclosure’. Were his concerns about the commission calculations and the impact they had on him and his colleagues reasonably to be regarded as having been raised in the public interest?
The company argued that it was not enough for an employee to raise concerns regarding himself and his colleagues; he had to raise an issue that concerned the interests of people outside the business. However, the Court of Appeal agreed with the Employment Tribunal and found in Mr N’s favour. The judges took account of factors including the number of people affected by the disclosure and the nature and seriousness of the alleged wrongdoing. They said that in the right circumstances, disclosures of the sort raised by Mr N could be ‘protected’. However, they also concluded that tribunals should be slow to find a ‘public interest’, where a disclosure only affects members of a given workforce and where the group of affected workers is relatively small.
More guidance still required
The decision in the Chesterton case is certainly useful. However, we probably need a few more judgments in this area before we can get a real feel for where the line is drawn. In the meantime, if you want to discuss your concerns regarding a potential whistleblowing issues, please get in touch.
Parental Bereavement Leave in the pipeline
Knowing what to do when a member of staff suffers a death in the family can be very difficult. Of course, most employers will greatly sympathise and will want to give their employee the time they need to deal with the loss. However, people react to these situations in different ways. How much time off work should employees be given? Should it be paid? These are difficult and sensitive questions to answer.
The current statutory position
Currently, employees have the statutory right to receive ‘reasonable’ time off work to deal with family emergencies, including the death of some family members. However, this existing right is not intended to provide people with time to grieve. It is more about giving them the time required in order to take practical steps such as planning the funeral and registering the death. It is also worth noting that this leave is unpaid, unless the employer exercises its discretion to do otherwise.
Over the last few years, there have been a number of attempts to introduce a new statutory right to time off work specifically to grieve for the tragic loss of a child. To date, these attempts have proved unsuccessful. However a Private Members Bill recently introduced by Kevin Hollinrake MP might stand a better chance of making it into law. The important difference this time around is that the bill enjoys the support of the Government.
The Bill intends to give employees the right to receive paid leave specifically to grieve for the loss of a child. The precise ambit of the potential right (e.g. duration of leave, level of pay etc) has yet to be confirmed. The Department for Business, Energy and Industrial Strategy will be consulting various interested parties over the coming months, before the Bill receives its second parliamentary reading in the autumn.
Watch out for further developments
We will keep our eye on the situation and update you when there is anything more to report.
Let us know how we can help you.
Head of Employment