Welcome to our latest e-update on items of interest to HR Professionals and Managers with responsibility for employment practice within the workplace.
Should you wish to contact us in relation to any items mentioned within our updates please use the contact numbers and email addresses on the bottom of the update.
Care Workers launch claim against Council for failure to pay National Minimum Wage
17 care workers submitted a claim in the Employment Tribunal against Council contractor Sevacare for its failure to pay the National Minimum Wage. The case was heard at the London Central Tribunals in September 2016 and received significant media coverage.
Since 2010 Sevacare have contracted with local authorities to provide services to 9,600 people across England per week.
Workers of Sevacare contend that because they were not paid for travelling between clients, their pay amounted to £3.27 per hour falling short of the current Living Wage of £7.20 per hour. Sevacare say in its defence that its workers were paid £550.00 per week which in total amounts to £7.85 per hour and exceeds the National Minimum Wage and living wage provisions.
Earlier this year the Resolution Foundation Think Tank published a report stating that over 160,000 care workers in England and Wales did not receive the National Minimum Wage. In light of the report, HMRC has announced an investigation into the working practices of the largest care providers in England.
A key question being asked in this case is when, exactly, are Care workers considered to be working? Are they only working when they are carrying out their scheduled shifts, or are they also working at other times, such as when they are travelling from one client visit to another or when they are asleep at a care setting but still expected to be “on call”?
The 17 care workers, with the backing of Unison, allege that if all of these hours are taken into account the amounts they are being paid as wages, spread across all of these hours, fall short of the minimum wage levels.
The carers claim to have been on duty 24 hours a day, with one Claimant working 7 days in a row, sleeping at her elderly patient’s home and waking through the night to look after her. Sevacare has denied this.
This is a case that has significant implications for many employers and we await developments with interest.
National Minimum Wage Rates from 1 October 2016
The Government has fully accepted the Low Pay Commission’s recommendations for this year. The following hourly rates of National Minimum Wage will apply from 1 October 2016:
• Workers aged 21 – 24: up 3.7% to £6.95.
• The development rate (workers aged 18 – 20): up 4.7% to £5.55.
• The young workers rate (non-apprentices aged under 18 but above compulsory school age): up 3.4% to £4.00
• The apprenticeship rate: up 3% to £3.40
• The accommodation off set limit: up to £6.00.
From 1 April 2016, the National Living Wage for workers aged 25 and over came into force at a rate of £7.20 an hour and this will not change on 1 October. It has also been confirmed that all National Minimum Wage rates, including the National Living Wage, will be uprated from April 2017.
More Companies move away from zero hours contracts
With a combined total of over 400,000 workers on zero hours contracts, Suffolk Brewer, Greene King, pub franchise JD Weatherspoon and Cinema chain Everyman Cinema are the latest companies to provide its workers with the opportunity to switch from zero hours contracts to permanent contracts. Staff being moved onto permanent contracts will be guaranteed a minimum number of hours.
Figures from the Office for National Statistics show that in November 2015 a quarter of companies in the accommodation and food services sector said they made some use of zero hours contracts. Earlier this year McDonalds said it would expand a pilot scheme offering workers a choice on zero hours or permanent contracts with a view to rolling it out across the UK in 2017.
ACAS issues new guidance for Line Managers
ACAS has issued new guidance for Line Managers to develop business productivity and efficiency. The guide provides Line Managers with various methods to improve their people management, leadership and organisational skills.
ACAS is calling on small businesses and larger companies to use the guidance to ensure that line managers are equipped to manage and care for their teams. The guidance is available on the ACAS website www.acas.org.uk
New EHRC Initiative to support pregnancy and paternity rights
On 14 September 2016, the Equality and Human Rights Commission (EHRC) announced that a number of employers, including Barclays Royal Mail and BT, have joined the EHRC’s initiative working for-supporting pregnancy and maternity rights. The aim of the initiative is to eradicate discrimination against pregnant women and mothers. The founding members will encourage other businesses to follow their example by sharing their knowledge, experience and good practice with businesses which sign up.
On 31 August 2016, The Women’s and Equalities Committee published a report on pregnancy and maternity discrimination showing that the number of expectant and new mothers forced to leave their jobs has almost doubled since 2005.
In the UK, pregnancy and maternity is one of the 9 protected characteristics covered by the Equality Act 2010.
12% of employees stop work due to ill health or disability
On 5 September 2016, the Trade Union Congress (TUC) published research showing that 12% of men and women are forced to stop working before retirement age due to ill health or disability. The analysis also shows that those who have worked in the lowest paid jobs are twice as likely to stop working before retirement age due to sickness and disability compared with managers or professionals.
The analysis also reveals a stark North/South divide. In the South West of England, sickness and disability is cited by just 1 in 13 of those who have left work in the run up to state pension age, followed by 1 in 11 in the South East and in the East of England. This rises to 1 in 7 in Yorkshire and the Humber, the North East, the North West, Wales and Scotland and 1 in 4 in Northern Ireland, reflecting wider health inequalities across the regions and nations of the UK.
Workers aged over 59 make up 1 in 3 of the workforce, up from less than 1 in 4 in 2000. The report finds that nearly half of 60 to 64 year olds stop working before their official retirement age.
12 million in illegal working fines issued in the first quarter of 2016
UK Visas and immigration have published a quarterly report showing the total number of fines for illegal working given to employers in the UK. It shows that 1,195 illegal workers were found across the UK between 1 January and 31 March 2016. This is an increase of 26% compared with the same quarter in 2015. 55% of illegal workers were found in London and the South East of England. As a result, over £12 million were issued in fines to employers as illegal working penalties across the UK.
Employees taking time off for caring responsibilities
A study of more than 1,000 people by Willis PMI Group has found:-
• 16% of people have taken time off or worked irregular hours because of caring responsibilities.
• 39% of those have taken annual leave to meet their responsibilities.
• 34% took sick leave.
• 32% took compassionate leave.
• Only 21% of those with caring responsibilities were granted flexible working arrangements by their employer to help them to balance their work and caring responsibilities.
Court of Appeal Uphold Employment Appeal Tribunal Decision in British Gas Trading Limited –v- Lock & Another
That statutory holiday pay must include a representative element of results based commission. This is only in respect to the four weeks of statutory holiday derived from article 7 of the Working Time Directive and not the more generous 5.6 weeks of statutory holiday provided for in the UK under the Working Time Regulations 1998.
Frustratingly the Court of Appeal expressly opted out of addressing the practical question for employers of the appropriate reference period to calculate the commission element of statutory holiday pay. It is understood that British Gas intends to apply for leave to appeal to the Supreme Court and it is hoped that the Supreme Court will take the opportunity to provide greater clarity for employers on this issue.
The background to this case is that Mr Lock was employed by British Gas Trading Limited as an Internal Energy Sales Consultant. He received a basic salary plus commission on the sales he achieved. The commission made up approximately 60% of his remuneration and was based on results only; it did not depend on how much work was done. During a period of statutory annual leave, Mr Lock was paid his basic salary as holiday pay plus the commission for previous sales that happened to fall due during the period. The commission he received in the months following his holidays was lower because he was not in a position to secure sales generating commission while he was on holiday. Mr Lock argued that the reduced income he suffered following periods of leave amounted to a breach of the Working Time Regulations 1998 and to address this disadvantage his holiday pay should not be limited to basic pay only but be an average of his earnings in the preceding period. His claim was selected as a lead claim for a large number of results based commission cases (60 claims in the East Midlands and 918 claims in the rest of the country).
The case was referred by the Tribunal to the European Court of Justice following which it was remitted back to the Employment Tribunal and subsequently British Gas appealed to the Employment Appeal Tribunal and most recently the Court of Appeal.
Unfortunately this latest decision in this long running saga leaves employers wrestling with the same practical difficulties in calculating the commission element of statutory holiday pay as previously. The practical difficulty is around how long the reference period should be to calculate a worker’s “normal pay” with the suggested length of the reference period at various stages in this litigation ranging from 12 weeks to 12 months. Pending clarification on this from the Supreme Court employers are basically paying their money and making their choice as the old saying goes.
Tesco workers file discrimination claim against company
Tesco workers are taking legal action against their employer on grounds of age and gender discrimination after the supermarket cut pay rates for night and weekend shifts for pre dominantly young male workers employed to work such anti social shifts.
Tesco announced the changes in February 2016 and agreed them in consultation with the shop workers Trade Union, USDAW, and staff representatives. The company awarded a 3.1% pay rise to £7.62 per hour which they say make it one of the highest pay rates in the retail industry but to fund this they cut the premiums for staff working evening and weekend shifts by 25%. A hearing date for the dispute has not been set down yet.
Agency Staff offered higher wage to stay well during Christmas
Argos has offered its agency workers an additional 80 pence per hour if they are able to work without being off sick over the Christmas season. Agency workers have been informed that they will not be entitled to the premium if they call in sick at any stage over the Christmas period. This could amount to disability related discrimination or indirect disability discrimination whereby an apparently neutral measure would impact workers with disabilities more than others. To avoid breaching the law Argos will have to review the circumstances of individuals who do not get the uplift and ensure that the reason they are not getting the payment is not their disability.
HMRC investigate Hermes after low pay allegations
HMRC has decided to investigate delivery company Hermes, after its workers complained of low pay and the misclassification of their status as self-employed. In a parallel move, the treasury has indicated that HMRC will create a new employment status and intermediaries team which will put the spotlight on false self-employment designed to evade employment or worker rights.
So called Gig Economy under the spotlight
A report issued by the McKinsey Global Institute has suggested that some workers are unwillingly part of the gig economy due to the absence of long term opportunities for employment. The report confirmed that although the majority of the surveyed workers freely chose to participate in the emerging economy, 30% of workers had no other alternative. The study also recognised the difficulty in defining the term gig economy. Defining workers in the gig economy as independent workers that work flexibly, while having low job security, the report acknowledged the absence of a consensus on the term. For example, although included in the gig economy bracket, agency workers are usually employees of their agencies and would therefore not seem to fit within the definition. The European Parliament has recently issued an in-depth analysis of the gig economy, which they define as the collaborative economy.
Uber drivers are workers
In Aslam and Others –v- Uber BV and Others (labelled as a case about the so called gig economy) an Employment Tribunal considered whether certain taxi drivers were workers for the purposes of national minimum wage and working time rights and found that the drivers were indeed workers.
Ubers’ case was that it is simply a technology platform which puts drivers in touch with passengers and that it is in no way a provider of taxi services. Uber had complex contractual documentation that purported to unpin the relationships between it, drivers and passengers. The Tribunal decided that the contractual documentation did not correspond with reality and, accordingly, it disregarded it.
The reality, in the Tribunal’s conclusion, was that Uber is in the business of providing taxi services and engaged the drivers as workers to deliver its business. The drivers were engaged as workers for as long as they were in the territory in which they were authorised to work, they were signed into the Uber and were ready and willing to accept bookings. This same period of time counted as working time under the WTR 1998 as well as the number of hours worked for the purposes of the national minimum wage provision.
Commentators have been eagerly awaiting this decision as a test of the so called “gig economy” model of working. As discussed in the preceding article there is no single definition of the term “gig economy”. In short, it seeks to describe a self-employment, or freelancing, model of working, where individuals sell their skills and services, possibly on an adhoc basis. Increasing, it is being associated with online forms of transacting for this type of work (for example, individuals selling online translation services on a piece by piece basis).
The Judgment will clearly be of significant interest to practitioners advising workers and employers in the gig economy. The more a particular a model resembles Uber’s model, the more this Tribunal decision will be of interest or concern depending upon which side of the fence the practitioner is on. However this is a first instance Tribunal decision and not binding on future cases coming before Tribunals. Furthermore, the decision is highly fact sensitive. Following the Judgment Uber messaged its account holders stating its intention to appeal. In remains to be seen what grounds of appeal will be pursued. Much of the commentary on the case is focussed on the social policy implications of the gig economy. Some consider that it creates opportunities for individuals who desire a high degree of flexibility in their working lives whilst others see the gig economy as an attack on employment protections with vulnerable workers being most at risk of abusive practices. Parliament has responded to the social commentary. The business, energy and industrial strategy select committee has launched an enquiry into the future world of work, including gig economy issues.
Deliveroo Couriers seeking in recognition and workers’ rights
Continuing on the same theme the Independent Workers Union of Great Britain (IWGB) has threatened to bring legal proceedings against Deliveroo if they refuse their riders requests for union recognition and employment rights. Currently, as self-employed contractors, Deliveroo are not required by law to provide its riders with employment rights, which include paid leave, sick pay and the national minimum wage. However in light of the recent decision that Uber drivers are workers the IWGB has vowed to commence recognition proceedings against the company if it fails to accept the proposals.
Deliveroo previously made the news for including clauses in the contracts of riders which prevent them from taking the company to a Tribunal.
Police ordered to pay £450,000.00 after race discrimination claim succeeds
Cleveland Police has been ordered to pay over £450,000.00 by an Employment Tribunal after being found guilty of racially discriminating against a former employee. PC Nadeem Saddique was an Asian Police Officer who served in the VIP Protection Unit. However after being described by senior officers on a night out as “just a paki” and a “black cunt” and subjected to other discriminatory treatment, PC Saddique was forced to leave the VIP unit that undertook protection services for the royal family and heads of state. In the first instance, Saddique settled his dispute with Cleveland Police on the condition that he could regain his VIP Protection status. However after senior colleagues failed to honour the agreement he launched a claim for £628,000.00 against his employers on the grounds of racial discrimination and was awarded £457,664.00 at an Employment Tribunal hearing in November 2016.
1 in 5 people diagnosed with cancer discriminated against at work
The Charity, Macmillan, has published the results of a recent survey that suggests that 1 in 5 people diagnosed with cancer experience discrimination at work. According to the results of the survey of 1,009 cancer patients who were still at work when diagnosed, 15% claimed that they had returned to work before feeling well enough to do so, where others suggested that they felt guilty for taking time off for medical treatment. A spokesperson for the working through cancer programme at Macmillan Cancer Support claims that many cancer patients who still work are not aware that they have rights under the Equalities Act 2010 to ask their employer for adjustments to be made.
Forthcoming legislative changes
Early 2017 – tax free childcare scheme.
The government plans to remove the current system of child care vouchers and introduce a new tax free childcare scheme under which working families will be able to claim 20% of qualifying childcare costs for children under 5 and children with disabilities under 17.
April 2017 – the apprenticeship levy is scheduled to come into effect. The levy will apply to all UK employers in both the private and public sectors which have annual pay bills of more than £3,000,000.00 and will replace the current system, enabling employers to choose and pay for the apprenticeship training they want.
April 2017 – Gender pay gap reporting regulations expected to come into force. It was originally expected that the final regulations would be published in the summer of 2016 and come into force on 1 October 2016. However, it is now envisaged that the regulations will be laid before parliament in the autumn but will still commence in April 2017. The first gender pay gap reports will still be due by the end of April 2018.
Case Law roundup
The European Court of Justice held that EU discrimination laws do not protect a job applicant who applies for a job purely seeking compensation – Kratzer v R + V Allgemeine Versicherung AG C-423/15
This judgment bolsters an earlier decision of the Employment Appeal Tribunal in the UK, Keane v Investigo & Others UKEAT/0389/09, that job applicants who would not be interested in accepting the role if they were offered it cannot claim discrimination if the application is not successful. However, it highlights that employers should be cautious of applying automated selection criteria to bulk job applications as unintentional discrimination against applicants could occur.
While sham applications in order to bring claims do occasionally occur, such job applicants are rare and employers should be wary of raising any suspicion that an applicant is not genuine unless there is compelling evidence otherwise.
In Bougnaoui and another v Micropole SA (Case C-188/15) Advocate General Sharpston considered whether a French employer’s ban on the wearing of Muslim headscarves by staff amounted to direct and/or indirect discrimination under the Equal Treatment Framework Directive (2000/78/EC).
The Advocate General found that an employee’s dismissal for wearing an Islamic headscarf (hijab) at work, in breach of a direct instruction, was directly discriminatory on grounds of religion or belief. The prohibition on direct discrimination in the EU Equal Treatment Framework Directive (2000/78/EC) extends to manifestations of religion or belief, and it was clear that the employee had been treated less favourably on the ground of her religion than a comparator would have been treated. An employee who had not chosen to manifest their religious belief by wearing particular apparel would not have been dismissed.
The discrimination could not be defended on the ground of “genuine and determining occupational requirement” under Article 4(1) of the Directive. The Advocate General thought it was difficult to envisage circumstances, other than those related to serious health or safety concerns, in which a blanket ban on religious apparel could be justified. The hijab did not affect the performance of the employee’s work and the employer in this case appeared to be relying purely on commercial interests based on the preference of its clients. Direct discrimination could not be justified on the ground of financial loss. The Advocate General also gave her opinion as to whether the ban could be prima facie indirectly discriminatory, and whether it could be justified. While it may be legitimate for an employer to place restrictions on dress, she saw it as unlikely that the ban in this case could be seen as proportionate.
Advocate General Sharpston’s conclusions in this case appear in stark contrast to the opinion given recently by Advocate General Kokott in Achbita and another v G4S Secure Solutions NV (Case C-157/15), which involves similar facts. The ECJ is due to give judgment in both cases towards the end of the year.
mfoster@jacksons-law.com 01642 873 727
jdalzell@jacksons-law.com 01642 356 510
swest@jacksons-law.com 01642 873 758
pclark@jacksons-law.com 0191 206 9626
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