Employment Law Newsletter February 2017

In this newsletter, we outline updates which will take effect from April, summarise the government's recent review of Employment Tribunal fees and look at 2 recent cases dealing with Rest Breaks and Redundancy Consultation, plus a brief mention of a recent case on employment status.

Updates from 6^th April 2017

National Living Wage

• For workers age 25 and over   £7.50 per hour
• For workers age 21 - 24          £7.05 per hour
• For workers age 18 - 20          £5.60 per hour
• For workers age under 18        £4.05 per hour
• The apprenticeship rate           £3.50 per hour

Parental payments (Provisional figures)

Statutory maternity Pay (after the first 6 weeks), paternity pay and adoption pay will rise to £140.98 per week.

Statutory Sick Pay (Provisional figures)

SSP will rise to £89.35 per week.

Government Review of Employment Tribunal fees

On 31st January, the government published is review of the introduction of fees in the Employment Tribunal. It concludes that the fee system has succeeded in raising just under 20% of the cost of the Employment Tribunals, and that the fees have discouraged but not prevented people bringing claims (there has been a decline of about  62% in the number of claims being brought).

The proposal is to leave the system in place but to make more people eligible for a reduction or exemption from fees by raising the income thresholds to qualify for help with fees. The requirement to pay fees for claims for payments from the National Insurance Fund (where the employer can't pay redundancies or has gone into liquidation) is to be abolished immediately.

The government is consulting on its proposals and the review asks a number of questions for consultation. The consultation closes on 14th March.

The 90-page report is at:-

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/587649/Review-of-introduction-of-fees-in-employment-tribunals.pdf

The Right to a rest break

Regulation 12(1) of the Working Time Regulations 1998 states that where a worker's daily working time is more than 6 hours, he is entitled to a rest break of at least 20 minutes and the worker is entitled to spend it away form his workstation if he has one.

The EMPLOYMENT APPEAL TRIBUNAL held in the case of Grange v Abellio London Ltd that an employer is in breach of the working time regulations regarding rest breaks if they make it impossible for an employee to take a 20 minute break even if they don't expressly prohibit this. In other words the employer has an obligation to afford the worker the ability to take a rest break. However, as long as the employer takes active steps to ensure working arrangements enable the worker to take the requisite rest break it cannot force workers to take the rest break.

The employee had an 8.5 hour working day which included a half hour lunch break. However the nature of his work made it difficult to fit his lunch break into the working day. The employer emailed the Claimant and told him to work through his break but to finish half an hour early at the end of the shift, instead. 2 years later the employee submitted a grievance complaining that he had been forced to work without a break which had contributed to a decline in his health.

The original Tribunal found that as the employer had specifically provided for the break in the employee's terms & conditions, the employee didn't actually make a specific request for a break and therefore the employer had not actually refused.
The appeal was allowed because the judge said if an employer practically prevented an employee taking a rest break  an employee should be able to enforce their right without having to demand the break in order  to prompt the employer to explicitly refuse.

It was not enough for employers to simply permit the taking or rest breaks, but employers should proactively ensure working arrangements allow for workers to take those breaks.

http://www.bailii.org/uk/cases/UKEAT/2016/0130_16_1611.html

Redundancy Consultation

Consultation with employees is a fundamental requirement of a redundancy process and a failure to properly consult can result in a genuine redundancy being found to be an unfair dismissal.

In the case of Thomas v BNP Paribas a longstanding employee who had worked for the Respondent for 41 years, was identified as being "at risk" of redundancy when the employer conducted a strategic review.

After being called to a consultation meeting, he was immediately put on paid leave and told that he should not contact clients or colleagues. During the process the employer made a number of errors, getting the employee's name wrong in a letter and failing to revise the termination date when the final meeting was delayed by a week.

The Employment Tribunal recognised that proper consultation involved consulting when proposals were at a formative stage, providing adequate information on which an employee could respond, adequate time to respond and conscientious consideration in response to the consultation.

It found that, "for a valued employee with 41 years service, the process was handled in a perfunctory manner with a lack of sensitivity" but was satisfied that the consultation was not unreasonable, and the dismissal was fair.

When the matter was first considered by a Judge at the Employment Appeal Tribunal it expressed surprise that a long serving employee would be put on gardening leave with no work and no contact with clients or fellow employees before the consultation process had started.

The Employment Appeal Tribunal did not make a finding that the dismissal was unfair, but there was no explanation why, despite its criticisms, the original Employment Tribunal did not find the consultation unreasonable. The original judgment that the dismissal was fair could not be allowed to stand and the case was remitted to another Tribunal to consider the unfair dismissal claim.

The case illustrates the risk to employers who conduct redundancy consultations saying that they are carrying out an open minded consultation process, but acting as if the decision has already been made.

The reality is that most employers will consider very carefully their options before warning employees that they are at risk of redundancy, for obvious reasons. However, unless employers  are genuinely open minded as to the possibility that an employee  might  come up with a suggestion that could avoid redundancy and still achieve the employer's objectives, they risk falling into the trap of the consultation appearing "perfunctory" or even a "sham," resulting in  a finding of unfair dismissal.

http://www.bailii.org/uk/cases/UKEAT/2016/0134_16_0310.html

Employment Status

The case of RS Dhillon & GP Dhillon Partnership v HMRC is another illustration of the danger of engaging staff on a self employed basis without a written agreement.

Working under arrangements which might appear to be consistent with being self employed, in the absence of a written agreement, a Tribunal analysed the working arrangements and concluded that this was in fact an employment contract despite it looking similar on its facts to an earlier decided case in relation to a different company with similar arrangements, which upheld the self employed status.

The apparent inconsistency and "fact sensitive" nature of decision on employment status can be quite worrying for businesses who have engaged staff on a self employed basis. The risk of a claim by one of them or by HMRC could result in a large liability on the part of the business to HMRC, the employees or both.

Perhaps the most important issue here is the lack of a written agreement. In general, Courts or Tribunals will accept a written contract at face value, unless evidence points to it being a sham. If, however, there is no agreement, then an analysis of the way in which the work is done and the staff are paid, could easily result in a finding that the relationship is in reality one of employer/employee.

If there is one lesson to be drawn from this case, it is to ensure that anyone who is engaged on a self employed basis should have a written contract which is clearly a contact for services and not an employment contract.

http://www.bailii.org/uk/cases/UKFTT/TC/2017/TC05583.html

NB. This newsletter does not provide a full statement of the law and readers are advise to take legal advice before taking any action based on the information contained herein.

Published: February 2017

Contact us:

For advice if you have any queries on these changes or you would like us to help you update your policies, please contact Gillian Reid on 01904 716000 or 01937 583210 or email Gillian.Reid@warekay.co.uk.