Holiday Rights

We all love holidays.  I am personally about to go on a particularly long one.  I would be extremely annoyed if my employer said no - you’re not allowed to go, but not only that, come 1 January when my new holiday year starts, your entitlement is lost. 

It is a good job therefore that the European Court of Justice steps in to make sure holiday rights are upheld. 

In 2 recent cases in the German courts, which I will simply refer to as Kreuziger and Shimizu, the German employers refused to allow employees to receive a payment in lieu of untaken annual leave when they had not taken it all during their employment.  In both cases, neither employee had actually requested paid annual leave - they had simply sat tight and waited for their employment to end, following which they asserted a right to a payment in lieu of untaken leave.  Mr Shimizu in particular asked for 51 untaken days’ leave dating back 2 holiday years.  The question was, if the individuals were entitled and had time to take their leave, should they still be allowed a payment in lieu when their employment ends?  This was referred to the ECJ.

The ECJ decided that a worker does not automatically lose accrued but untaken holiday entitlement at the end of the holiday year just because they failed to seek to take that entitlement.  Good news therefore for those who would rather work and receive payment in lieu. 

However, if the employer provides ‘sufficient information’ to the worker to encourage them to take holiday before the end of the reference period it might then be lawful to refuse to make a payment in lieu. 

We are not aware of any cases in the UK where it has been argued a worker should lose the right to payment in lieu because they did not try to take their leave before termination, but in theory the situation could arise.  Thank goodness I have booked all my holiday for the rest of the year. 

Daniel Kindell - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Fairness: with knobs on

There is a really interesting report this week of a decision by the Employment Appeal Tribunal that looks at a number of current issues about fairness both in general terms and procedurally, the approach of the ETs in making decisions about what is fair and the relevance of the right to be accompanied at a disciplinary/grievance hearing.  Some useful guidance and all worth thinking about.  The case is Talon Engineering v Smith.

Mrs Smith was dismissed because of an email exchange in which she described an “unnamed” colleague as a “knob” and a “knobhead”.

General unfairness

The Employment Tribunal took the view that the derogatory reference to a colleague was essentially “venting to a close friend”.  The colleague was unnamed.  The course of email correspondence between the Claimant and her friend showed that the two of them shared “lots of personal information in very chatty and informal emails”. 

The Judge said “it is not clever and it is not funny… but the Tribunal was entitled to conclude that it did not amount to serious gross misconduct that puts the business reputation of the Respondent at risk”. 

I think that is a pretty sensible conclusion given the context.

Substitution mindset

The Respondents argued on appeal that the Tribunal had failed to judge reasonableness by the standard of the reasonable employer.  Instead, they said, the Tribunal had substituted its own view for the views of the employer.  Tribunals are not allowed to do that. 

The Tribunal had thought that dismissal was a “gross overreaction” – bearing in mind, not least, that the Claimant had 21 years’ service with an unblemished record.  

The Judge quoted an earlier authority (Kefil) to this effect: “substitution mindset is all too easy to allege… employers who do not like the result which a Tribunal has reached… seek to argue that the very fact of the result… must indicate a substitution”. 

It is refreshing to see that here EAT was clear: “the Tribunal has been punctilious in assessing matters by reference to a reasonable employer and not their own views”. 

This is a reminder to employers that not every decision on fairness that goes against them is going to be appealable to EAT on the basis of “substitution mindset” – a useful and indeed refreshing reminder. 

The right to be accompanied

The Respondent had adjourned the disciplinary proceedings on one occasion because the Claimant was ill. 

The Claimant sought a further adjournment, for two weeks, because her trade union official was unable to attend on the new date. 

The Respondents declined the second request.  The ET took the view that the Respondents had acted in a manner that was “entitled and hasty”. 

It seems that the mere fact of this failure to adjourn would have rendered the dismissal unfair in and of itself.

That is also a useful decision for Claimants and Trade Unions – it gives real teeth to the right to be accompanied.  I think one has to have regard to all surrounding circumstances and I think that here the fact that the adjournment was sought for a relatively short period (a fortnight) was relevant.  The Judge in the EAT made it clear: sometimes the employer simply cannot be expected to wait any longer.  Nevertheless, some useful guidance on adjournments in this decision.

There is also something in the case about “Polkey” reductions but I have probably said enough for now. 

An interesting, robust and straightforward decision that tackles quite a few of the practical issues that we see in our employment team on behalf of Claimants on a day to day basis. 

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

World Cup 2018 – How to support your team whilst staying on-side

With the largest sporting event in the world less than a month away, now seems an apt time to address how to avoid falling foul of your employer’s polices during the World Cup.

On the off chance you haven’t already seen them, the match times have already been released this year and the majority of them fall within normal working hours - starting at 13:00, 15:00, 16:00 and 19:00.  This is obviously not ideal for football fans, but gives the possibility of watching the match in working hours. This can be seen as both a blessing and a curse, and I’ll discuss some of the reasons why below:

1.     Do I have a right to watch my country’s team play?

The short answer is no (unless your contract states otherwise – highly unlikely!). Although some employers will let their employees watch certain games you do not have an express right do to so. However, if, for instance, your employer allows England fans the afternoon off to watch the match but doesn’t give the same offer to supporters of other countries when their teams are playing this could potentially be seen as race discrimination under the Equality Act.  

2.     Can I be disciplined for my behaviour on a staff social?

It’s a fact that a lot of staff social events involve alcohol and sometimes there can be a tendency towards inappropriate behaviour when drinking is involved.  I would suggest this is especially true during the World Cup given the excitement of the event and the high emotions (usually disappointment, for England fans) involved. This gives rise to the question of whether or not your employer can sanction you for your behaviour during a staff social? The answer to this question is yes, they can. If your employer organises an outing or event their normal rules on appropriate behaviour will apply to staff who attend it. There are many examples of staff members acting inappropriately at work events and facing disciplinary proceedings because of this, so it is worth bearing in mind!

3.     Can I show support for my country’s team at work?

The World Cup is one of the largest sporting events in the world, bringing together 64 countries who fight for a spot in the final 32. Many different nations with their own customs and traditions, it is a great chance for employees to share their culture with one another. However, due to the competitive nature of the event some supporters can tend to get a little carried away. It goes without saying that it is a good idea to be respectful about the other countries in the competition. Negative comments and stereotypes are often found to be discriminatory in law, whether they are intended to be or not, and can lead to disciplinary action or even dismissal. It is also worth mentioning that some employers have a “neutrality policy” which may prohibit employees displaying flags and various other national symbols in the office; if in doubt, ask your employer before doing so.

James Battle - Legal Assistant

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Sexual Harassment at Work – How to Start Fixing the Problem

Last year, a BBC survey revealed that half of British women and a fifth of men have been sexually harassed at work. And with momentum generated by the #MeToo campaign, sexual harassment has been in the spotlight in recent months.

The Equalities and Human Rights Commission has now published its new report, on 27 March 2018. 

The report shares evidence gathered from around 1,000 individuals and employers between December 2017 and February 2018 and shows that some employers simply aren’t protecting their employees from sexual harassment at work. 

The report looks at how sexual harassment is dealt with by employers and recommends several improvements.

The report found a lack of consistent, effective action on the part of too many employers and the EHRC is now calling on the UK Government to show clear leadership and implement their recommendations to eliminate sexual harassment in every British workplace.

So how do they propose that sexual harassment at work is eliminated? They suggest that through transforming workplace cultures, promoting transparency and strengthening legal protections, sexual harassment can be eliminated.  

The key recommendations made by the EHRC for the government to consider are as follows:

• Introduce a statutory code of practice on sexual harassment and harassment at work, with employment tribunals to have the power to apply an uplift to compensation in harassment claims of up to 25% for a breach of any mandatory element of this new code;

• Employers should all have and should publish their sexual harassment policy in an easily accessible part of their external website;

• Legislation should be introduced making any contractual clause which prevents disclosure of future acts of discrimination, harassment or victimisation void;

• Safeguards should be implemented to restrict the use of confidentiality clauses preventing disclosure of past acts of harassment;

• The limitation period for harassment claims in an employment tribunal should be extended to six months from three;

• If a claim is brought out of time, the burden of proof should be on the employer to state why the deadline should not be extended, rather than on the employee as it is currently;

• Interim relief provisions for harassment and victimisation claims should be introduced, similar to those for protected disclosure dismissals;

• Employment tribunals should be allowed to make recommendations about the wider workforce, rather than solely about the employer's treatment of the individual claimant;

• Reinstatement of protection from third party harassment though without the requirement to show two previous incidents;

• Re-introduction of the statutory questionnaire.

The Government has responded to the EHRC's report by condemning all forms of workplace harassment and promising to keep matters under review. 

But will they fix the problem? Or at least try? The recommendations above are a good start however the Government is rather busy at the moment and the EHRC’s recommendations may tumble down the list of priorities. It’s therefore doubtful whether any regulation or other action will come from this report. 

Hannah Boynes - Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Carillion ‘ruined my life’- The secret blacklisting war with union activist

The UK's second-largest construction company, employing around 20,000 people in the UK, buckled under the weight of a whopping £1.5bn debt pile.

Dave Smith, a successful Engineer who had the pick of engineering jobs throughout London, was employed by Carillion.  In 1998 he was driving a 4 x 4 vehicle but by 2000 he could not even get a job as an Engineer, despite the longest building boom this country has ever known. He even stopped receiving calls from employment agencies.

All this because he was brave enough to complain about the dangers of asbestos on construction sites and attempted to improve health and safety conditions through union activism. Sadly, for Dave this resulted in selling personal belongings, defaulting mortgage payments and borrowing from friends and family.

The Carillion blacklisting scandal was aired on BBC Radio 4. The company had been paying The Consulting Association to keep files on Dave and circulate a blacklist, with his name, among 40 construction companies. The blacklist had thousands of names on it, meaning Carillion had been complicit in one of the biggest industrial scandals in British history. Dave was one of the “lucky” ones to be affected - unfortunately for others this outrageous scandal left hundreds of workers homeless, without family and some sadly took their own lives.

Dave’s ongoing battle with Carillion meant he was able to help found the Blacklisted Support Group and take Carillion to Court but following the demise of Carillion Dave and many others who suffered at the hands of the company may never see the directors face legal action.

Not a penny of public money should be given to the bosses of Carillion -if the government has another magic money tree hidden away somewhere it should bail out the NHS - not Carillion or their bankers.

http://www.bbc.co.uk/news/business-42853895

Rizzwana Bashir - Trainee Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Lizards, bats and workers' rights

This week’s House of Commons debate on the EU (Withdrawal) Bill illuminates the danger of the current government scrapping or watering down employment laws once we exit the EU. 

Post-exit, there will most likely be a degree of “cherry picking” of employment laws, with the government changing or scrapping many especially where doing so might be seen as “business-friendly” (TUPE anyone?). Without the European Court of Justice or EU to prevent this, it will be down to the government of the day, possibly using Henry VIII-style autocratic power with limited oversight in Parliament.

An unlikely event?  Why?  Whilst Theresa May says she respects workers’ rights, we know many Conservatives don’t and after all who’d bet on Theresa May still being PM in 2019?

Like Kenneth Clarke said in the House of Commons as part of the debate, concerning animal rights and employment protection, “there are members of the present government who are not excessively fond of lizards and bats, or workers’ rights”. He argued for the government to limit what he interprets as a power grab by them for the Henry VIII powers. 

Whatever the outcome of the Bill, workers’ rights need to stay.  In terms of the main world economies, the UK already has the fewest employment law protections of all except for the US and Canada.  Let’s not dumb ourselves down further and let’s look after our lizards, bats and workers.

David Sorensen  - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Mental Health at Work

Sadly, I deal with many workplace disability discrimination cases and a high proportion of those involve mental health issues. In my experience, employers find it much more difficult to understand and manage mental health issues in the workplace, in contrast to other disabilities.  

I therefore welcomed Theresa May’s announcement in January this year that an independent review was to be undertaken into how employers can better support all individuals in employment with mental ill health or poor well being to remain in and thrive through work. Last month, the government’s report was released.

As you may have seen in the headlines, the review uncovered some staggering facts and figures:

• 300,000 people with a long term mental health problem lose their jobs each year.
• 15% of people at work have symptoms of an existing mental health problem.
• Poor mental health of employees is costing employers between £33 billion and £42 billion a year, stemming from sick leave, staff turnover and individuals being less productive in their roles (“presenteeism”).
• The cost of poor mental health to the government is between £24 billion and £27 billion, resulting from costs of providing benefits, falls in tax revenue and costs to the NHS.
• And the cost to the economy as a whole from lost output?...between £74 billion and £99 billion a year!   

The “inescapable conclusion” was that it was massively in the interests of both employers and the government to prioritise and invest far more in improving mental health. I wholeheartedly agree with that conclusion.

But what can employers do about it?

The report proposes “mental health core standards”, a framework for a set of actions which could be implemented across all workplaces quickly and at little or no cost. It recommends the following:

• Implement and communicate mental health at work plans;
• develop mental health awareness among employees;
• encourage open conversations about mental health and the support available;
• provide good working conditions and a healthy work-life balance;
• promote effective people management through line managers and supervisors;
• routinely monitor employee mental health and wellbeing.  

Personally, I think the recommendations are a very good start.

So many of my cases result from a serious lack of appreciation and understanding of mental health issues and how to balance them against the employer’s need to achieve results, deal with absenteeism and address perceived performance issues. I therefore believe that implementation of the framework would give employers a very different perspective on these types of cases and, if well managed and well informed, I expect many employers will realise just how much those with mental health issues can thrive at work, as much as anyone else.   

Daniel Kindell  - Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Supreme Court rules tribunal fees are unlawful

On 26 July 2017, one of the most important judgments in the past 50 years of employment law was handed down. Yes, in an age of gloomy economic forecasts and disgruntlement in the workplace from squeezed workers, news reached us last Wednesday that restored our faith in the justice system.

The Supreme Court in R (on the application of Unison) v Lord Chancellor declared that employment tribunal and EAT fees are unlawful under both domestic and EU law. The Court’s view is that the Fees Order that introduced the fees was unlawful from the outset and must be quashed because it has the effect of preventing access to the tribunal system. Well, this is what critics of the fees have been saying since their introduction and they no doubt did a double take after the judgement. Fake news? Nope, a sensible ruling on the backdrop of research that revealed a 70% drop in the number of cases brought in the employment tribunal, since the fees were introduced.

It was Unison who waged a four year legal battle to get the fees scrapped, arguing that they prevented workers from seeking justice and were discriminatory towards women. To those who say trade unions are for bygone eras, think again!

The Supreme Court unanimously decided against the Government and found it was acting unconstitutionally when it introduced the fees. The immediate consequence of this decision is that the Fees Order is quashed meaning that tribunal and EAT fees cease to be payable and fees paid in the past must be reimbursed.

The fees were introduced under the Employment Tribunals and Employment Appeal Tribunal Fees Order on 29 July 2013, by the then Lord Chancellor Chris Grayling, in a bid to reduce costs and free up clogged courts. Under this Order, employment tribunal claimants and EAT appellants were liable to pay a fee of up to £1200 in order to bring and pursue claims and appeals, unless they qualified for fee remission on the basis of their disposable capital and gross monthly income.

In the main judgment, the Supreme Court noted that there is a difference between the level of the fees in the tribunal and those fees in the small claims court, where it is much cheaper to bring a small value claim. In addition Baroness Hale concluded that it was indirectly discriminatory to charge higher fees for type “B” claims (which include discrimination claims) than type “A” claims.

So what will happen next?

Firstly, this is a fantastic result for Claimants as it means individuals who have been treated badly by their law-breaking bosses can now take action without worrying about whether they can afford to finance a claim at the Employment Tribunal. However, it is unlikely the fees regime will disappear for good. It is possible the Government will bring in reduced fees under a new regime.

In a further victory for those who had to pay fees since 2013 the Supreme Court has confirmed that they will need to be refunded (approx £32 million). The immediate impact can already be seen as it is understood that employment tribunals are now refusing to take fee payments when hard copies of ET1 claim forms are presented in person.

Unfortunately, we will never know exactly how many people missed out or were put off taking action against their employers for unlawful actions in the workplace. However, it seems that the principles of fair access to justice have prevailed and this case is a significant step in the right direction towards balancing employer-employee rights in the workplace.

Kamran Sadiq - Solicitor

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

The key to any employment rights is the ability to enforce them

So, we have an election coming up.

From an employment law perspective, and specifically from a worker's focus, which of the two main parties will make a real difference to employment law protections, should it win?

Both Labour and Conservative parties promise the protection of existing employment rights and propose the implementation of new ones. In fact, the Conservatives are trying to show themselves to be the worker's party.

There's many differences between the two in terms of proposals but one huge difference  overall - Tribunal fees. Picture a female employee who is on average earnings and has just been dismissed because she's pregnant - to bring a claim against her employer and go to hearing, she has to pay £1,200 in ET fees. That's right - £1,200 - with a new baby and no job. If she wins, she may get those ET fees repaid by the employer but it's not guaranteed. Not much of an option is it?

Labour have committed to ending ET fees. The Conservatives have committed to keeping them. Both parties offer new rights - however, as long as we have crippling ET fees, any new rights may be unenforceable in reality. The key to any rights is the ability to enforce them - ultimately, if needs be, to go to Tribunal.

From a Claimant lawyer's viewpoint, then, abolition of ET fees is the key difference. 

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Controversial Blanket-Ban Policy Receives CJEU Clarification

With the Court of Justice of the European Union’s opinion in the case of Achbita v G4S Secure Solutions recently announced, now seems to be an apt time to address religious freedoms at work and the possible impact of this case on them.

In this case a Muslim woman employed as a client-facing receptionist announced to her employer that she would be starting to attend work wearing a religious headscarf. Her employer objected to this stating that there was an unwritten rule requiring all client-facing staff to dress neutrally and avoid wearing “political, religious or similar signs”.

The woman insisted on wearing her headscarf and was dismissed; as a result she subsequently brought a claim of direct discrimination. This case was then referred to the CJEU by the Belgian Courts for clarification on whether or not an employer’s blanket requirement for its workforce to dress “neutrally” could constitute direct discrimination.

The CJEU has now returned its verdict on this case stating that the circumstances did not amount to direct discrimination as all customer facing employees were subject to the same requirements and it prohibited “all religious and political signs” not simply the signs of one faith or political group. The CJEU have left it to the Belgian courts to decide on indirect discrimination but have offered their view on the matter which seems to indicate they may find the policy legally sound.

Indirect discrimination, unlike direct discrimination, is defendable if it is objectively and reasonably justified. The CJEU seems to believe the Respondent met the threshold of objective justification in this case by citing that the Respondent’s aim to produce an image of neutrality was a legitimate aim as it only applied to customer facing roles. The judgment has, however, left the decision on reasonableness for the Belgium courts to decide by indicating the possibility of reinstatement of the Claimant in a non-customer facing role instead of dismissal.

Looking at the wider implications of this judgment it is important to consider what kind of impact allowing businesses to use this policy would have on workplace diversity. If this policy did become wide-scale practice, then it would arguably lead to a fall in people of faith working in customer facing roles. It is worth considering that for many people of faith wearing religious dress is not optional, it is often an important if not integral part of their faith. This would effectively make customer-facing roles unsuitable for some people of faith and seems to be a very restrictive precedent.

I personally find the company’s reasoning in this case troubling, and fail to see how independent religious or political beliefs of individuals working at a company offend neutrality. The idea that a person may see an employee respectfully expressing their belief through their dress and then attribute that particular faith or organisation to the employer of said employee seems to require some rather large assumptions. It would seem logical that neutrality is best shown, not in restricting all forms of religious and political expression for fear of association, but in having equal indifference towards them all.

The final judgement of the Belgian courts on the issue of indirect discrimination is still awaited.

James Battle - Legal Assistant

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

When Christmas parties get out of hand

It is the season for Christmas parties and many workplaces will hold events in pubs or hotels where alcohol is likely to fuel the proceedings.

That is the context for the latest in a series of court decisions concerning the liability of employers for the actions of their employees. 

When I was first in practice my clients would often find that an employer argued that they ought not to be liable for what other employees had (negligently or wilfully) done – on the basis that such employees were “on a frolic of their own”.  The employer’s defence would be that they ought not to be held responsible for things that were not done in the ordinary course of employment.  So a bouncer using more than reasonable force to eject someone from a nightclub might result in a successful claim against the employer – since the bouncer was doing something that he was employed to do, even if he overdid it.  But the weaker the link between work and an employee’s conduct, the more likely the employer’s defence would be to succeed.

This all changed fairly dramatically in the Morrisons case this year when the supermarket was held liable for catastrophic injuries suffered by a customer following a very violent and quite unprovoked attack upon him by an employee at the supermarket’s petrol station.  It was just, said the Supreme Court, to hold the employer liable because of the “connection” between the employee’s work and the assault.  But that connection appears to have been little more than the fact that the employee was physically present at the place of work and inevitably going to come into contact with customers.

So it is somewhat surprising, then, to see the latest case – Bellman v Northampton Recruitment - taking a rather different tack in relation to an incident of violent behaviour at a Christmas party.

Mr Bellman was assaulted by the owner/manager of the company for which he worked, following an argument at a social event. 

Now, it is commonly accepted that the “workplace” does not end at the office door.  An employer can end up liable for, say, sexual harassment that happens when colleagues go together to the pub after work. 

In Bellman the Claimant and colleagues had been to a Christmas party and thereafter an impromptu drinking session took place until the early hours. 

Tragically Mr Bellman suffered a brain injury following an assault upon him by his manager.  He will not work again.

The High Court has held that the company is not liable to compensate Mr Bellman. 

The Judge took the view that there was not a sufficiently close connection between the “after party” and the Claimant’s employment.  This despite the fact that this event immediately followed the Christmas party, involved the Claimant, his boss and their colleagues, and the violence was the upshot of an argument that at least in part related to the manager’s assertion of his absolute authority at work. 

Since the manager himself is uninsured and not in a financial position to meet a substantial compensation payment if a claim against him succeeds, Mr Bellman’s main hope for a remedy has to lie in a claim against the employer – which of course has the benefit of employer’s liability insurance.

So Mr Bellman at present is without a remedy against the firm; and his remedy against his manager is not worth pursuing.

I find the decision in Bellman surprising, having regard to the Supreme Court’s view in Morrisons.  It seems to me that there was here altogether just as much of a “close connection” – indeed, arguably a greater one (bearing in mind the context of the argument that erupted) – than in the earlier case.

Claimant will, rightly, look for “deep pockets”.  It seems to me not unreasonable that an employee facing career ending injuries ought to have the opportunity to take advantage of insurance that can spread the cost of compensation across the community of employers generally.  That’s the whole point of insurance: so that the many can help the few.  If the Supreme Court’s view – rightly, in my opinion – is that a “connection” with work needs be made out in only pretty general terms, then that has to be a good thing for deserving Claimants in the general scheme of things and is not going to put the cost of employer’s liability insurance through the roof.  I will revisit the point if, as I suspect, Bellman is pursued on appeal.

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

"Employee Shareholder” regime

The Autumn Statement sees  the Chancellor phasing out the “employee shareholder” regime – initially by removing the tax advantages associated with it; but in due course it is expected to disappear altogether.

This is no great surprise.

We blogged about the scheme when it was introduced in late 2013.  You can read our reservations here:  http://morrishsolicitors.blogspot.co.uk/2013/09/employee-shareholders.html

Not for the first time in the last few years, dogma has overcome common sense – until the stark weight of reality sets in.

We predicted the scheme would be short-lived, but even in April of 2016 some tinkering had been required.

It turns out, unsurprisingly, that the idea of selling your employment rights was not terribly attractive – save for a few who saw tax advantages associated with it – and it’s those loopholes that were limited in April, and are now being closed as a precursor to abolition of the scheme entire.

Ironic then, that a proposal driven by the ideology that entrepreneurs don’t need rights but will trade them for a business share, ends up being a tax avoidance mechanism for the well off.

We’ve blogged before, too, about governments and their attitude to consultations (i.e. that they don’t tend to listen to the experts – or indeed anyone).  A classic example, we think.  No-one wanted the ES regime, no-one thought it was needed or desirable or likely workable.  A few wasted tax pounds later, and back to square one it is.  We know that “experts” don’t seem to be flavour of the month this year, but really?

Paul Scholey - Senior Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Future world of work and rights of workers inquiry

The Business, Energy and Industrial Strategy Committee has launched an inquiry into the ‘future world of work’ and in particular, the 'gig economy' – agency workers, zero-hours work, the use of ‘self-employment’, worker status, low pay and poor working conditions. They refer to the recent Sports Direct scandal and also other organisations with similar poor working conditions.

This is good news. Hopefully, whatever its outcome, turning the lamp onto these types of employers can bring some heat on these organisations with more public attention drawn to the growth of the ‘precariat’ – individuals who work in poor conditions with weak terms and conditions, be it low pay, the absence of paid holiday, sick pay and the like.

My view is that the rise of the ‘precariat’ is nothing new – this country has a history of shoddy employers treating working people poorly and of governments legislating to either counter this, with increased protections (the introduction of redundancy pay in the 1960s, unfair dismissal in the 1970s and the recent(ish) minimum wage in the 1990s) or to aid it, by reducing employment rights (the scrapping of wages councils, the introduction of ET fees of up to £1,200, limits on compensation – all within the last 3-4 years). Since 2010, the move has been to reduce employment protection and to restrict trade unions. My view is that this has encouraged shoddy employers and weakened the position of employees.

Evidence suggests that as a result of the reduction in protections, the equal pay gap is now growing and certain sectors of the workforce, such as disabled people and pregnant women or women on maternity leave, are suffering more, not less, discrimination. I also believe that it has encouraged the growth of the ‘gig economy’ – individuals working in sham ‘self-employment’ situations or in weak zero-hours roles with little control or say about the number of hours they work. This causes illness, harms the economy and damages lives, not least children of adults who work for low pay, on horrendous hours and with uncertain futures.

I’m pleased that the Committee have this on the agenda. Let’s hope for all concerned, not least our children and grand-children, that whatever recommendations are made, they are followed by those in power and a more secure workforce results with more (not less) permanent, well-paid jobs. After all, apart from shoddy employers and obscenely profitable multinationals, how do we as a nation benefit from the rise of the precariat?

The Committee is seeking comments – please do so at:

http://www.parliament.uk/business/committees/committees-a-z/commons-select/business-energy-industrial-strategy/news-parliament-2015/the-future-world-of-work-and-rights-of-workers-launch-16-17

David Sorensen - Partner

For further information on Employment Rights please visit our website or call 0033 3344 9603 and ask to speak with our Employment Rights team.

Exit payments in the public sector

Exit payments (or severance payments) in the public sector have been the subject of much media scrutiny in recent months.

As employment lawyers acting for private and public sector employees, we regularly come up against these issues when it comes to trying to advise on and negotiate settlements or agree termination packages. As trade union lawyers, we are also opposed in principle to any government attempts to water down employee rights.

On 26 September 2016, HM treasury issued its response to a consultation on reforms to public sector exit payments. The proposed changes will affect the civil service, the NHS, teachers, police, firefighters, members of the armed forces and employees of local authorities.

The government proposals are as follows:

1. Setting a maximum tariff for calculating exit payments at three weeks' pay per year of service.
2. Introducing a cap of up to 15 months' salary on all redundancy payments.
3.  Setting a maximum salary for the calculation of exit payments.
4. Tapering the amount of lump sum compensation an individual is entitled to receive as they get close to the normal pension age or target retirement age of the pension scheme to which they belong, or could belong, in that employment.
5. Requiring employer-funded early access to pensions to be limited or ended, denying access altogether by increasing the minimum age requirements or introducing more flexibility (which I interpret as ‘restrictions’) as to the circumstances in which pension top ups are available.

The government says these reforms could achieve savings of up to £250 million a year and bring public sector exit terms in line with those in the private sector.

And let’s not forget, the changes proposed above are in addition to two other recent initiatives:

1. Imposing a cap of £95,000 on the total aggregate value of most public sector exit payments.
2. High-earning employees leaving the public sector to repay some or all of their exit payments if they return to public sector employment within 12 months of their departure.

The government received around 350 responses to the consultation on public sector exit payments. The majority opposed the proposals. However, despite that opposition (and as is commonly the case these days) the government has suggested that it will nevertheless be going ahead with some or all of the changes. I begin to wonder whether responding to these consultations is at all worthwhile.

Aside from the obvious attack on public sector pay and benefits, two major issues were raised in opposition to the proposals:

1. What about collective agreements?

The public sector has the benefit of numerous workplace collective agreements, carefully negotiated between employers and trade unions, often over decades, and which afford employees significant redundancy benefits. Those collective agreements are industry-specific, balancing the needs of the employee and employer. Imposing restrictions that cut across these agreements will be damaging, have a disproportionate impact on particular groups of employees and could have a serious impact on staff morale.

2. What about discrimination?

Might employer-funded early retirement and tapering payments for those close to retirement age be age discriminatory? There are certainly cases where it has been argued and questions of ‘justification’ and ‘proportionality’ are surely going to come into play, depending what form the final changes take.  It is understood that the government will consider the case for applying elements of the framework flexibly, for example, where it can be demonstrated that a particular option may not lead to significant cost savings, where there is an alternative approach that may lead to costs savings, or where a particular option may have an unwarranted impact on equality. However, just how much leeway there is for this remains to be seen.  

The government wants departments to begin restructuring their exit terms immediately and to produce proposals for reform by the end of 2016. Departments should consult on the proposals and follow the normal process of discussions and negotiations with trade unions and other workforce representatives, to try to seek agreement to them. The government would like the entire process to be concluded by the end of June 2017.  Should it not be possible to achieve meaningful reform within this timescale, the government will consider options for primary legislation to take forward reform.

So it is not so much a question of “if” these changes come in we need to be prepared for them, it is a question of “when” they do but I think we can count on continued strong opposition from trade unions. 

Daniel Kindell - Associate Solicitor

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