January 25, 2017

How seven recent developments in employment law will affect employers in 2017

Employment law is a constantly moving feast, so to help employers stay ahead here’s an easily digestible summary of the recent changes worth paying attention to.

1. The UBER case, and the impact on employment status
2. Brexit and EU employment law
3. How the Asda equal pay claim will affect future cases
4. Widening the scope of public interest on Whistleblowing
5. Uncertainty surrounds holiday pay as Lock v British Gas rolls on
6. Supreme Court Ruling on tribunal fees due in March
7. Decision on religious dress discrimination left to European Court of Justice

1. The UBER case, and the impact on employment status

We reported on the high profile case of UBER in previous editions of our Employment Law Guide.

The ‘gig’ economy is the colloquial term used to describe those types of business where workload is either sporadic or of limited term duration. Many businesses who provide ‘gig’ type work use workers on a self-employed basis. In the case of UBER, a tribunal decided that the drivers were ‘workers’ and hence entitled to basic employment rights such as holiday entitlement and the minimum wage.

Although UBER has appealed the judgment, similar cases have been decided against other ‘gig’ type businesses.

The most recent concerns courier firm CitySprint, in which a bicycle courier successfully argued that she was a worker and not self-employed. More cases are due to be heard this year against Addison Lee, ECourier and Excel.

The UBER and CitySprint cases represent a growing trend for tribunals to find worker status in businesses operating in the ‘gig’ economy. It will be disappointing for the businesses concerned, since it will remove the flexibility that self-employed status brings. Of equal concern if this trend continues is the risk of substantial claims for back pay.

Employers will no doubt await, with interest, the outcome of UBER’s appeal.

2. Brexit and EU employment law

On 24/1/17, the Supreme Court delivered its judgment on the Government’s appeal against the High Court’s decision that they must consult MPs before triggering Article 50.

It is important to bear in mind that this decision is unlikely to mean that Brexit will be stopped. The UK’s departure from the EU has already been decided by the British public in last summer’s referendum, and the Government is committed to leaving the EU and ending the supremacy of the European Court of Justice and open borders.

Importantly, the Supreme Court rejected arguments from the devolved Parliaments of Scotland, Northern Ireland and Wales, that they should have a say in the triggering of Article 50. A decision otherwise might have had the effect of blocking Brexit, but the Supreme Court turned down the devolved Parliaments’ arguments.

Theresa May has now announced that the Government is to deliver a White Paper which will set out its exit plans for Brexit. This will be an interesting document which may give employers some insight into the Government’s negotiating strategy on Brexit, what a post-EU Britain might look like, and may hint at some of the EU derived employment laws which could be subject to change.

Clearly these are turbulent times in the European business and social world, and employers will watch these developments with eyes wide open.

3. How the Asda equal pay claim will affect future cases

In one of our earlier Employment Law Guides we reported on the equal pay case brought by workers of retail giant Asda. The workers had successfully argued that female check-out employees could compare themselves to male distribution workers for the purposes of an equal pay claim.

This was a preliminary argument only and the case still needs to consider whether the differentials in pay rates (between £1 and £3 per hour) are justified, which will include looking at whether there are genuinely different market rates between the two jobs.

Cases like the Asda one are probably going to increase when the Mandatory Gender Pay Gap Reporting Regulations come into force, as it will make gender pay gap information publicly available and hence more transparent.

The Regulations apply to private and voluntary sector organisations with 250 or more employees who must, for the first time, report gender pay gap information for the period April 2017-April 2018.

4. Widening the scope of public interest on Whistleblowing

Whistleblowing law has been around since 1998 in the UK and 2014 in the Republic of Ireland and has seen some interesting developments in recent years.

In Ireland, there have been several cases where injunctions orders have been made against employers, effectively restraining them from dismissing employees where it is suspected that the reason for the dismissal is because they have raised a protected disclosure.

It will be interesting to see how this trend develops, which can be a costly exercise for the employers involved.

In the UK, the Court of Appeal is set to decide in June 2017 the case of Chesterton Global v Nurmohamed. In that case, the EAT has to decide whether a group of approx. 100 of the employer’s managers subject to a bonus scheme was sufficiently large to be said that a whistleblowing complaint could be in the public interest.

Chesterton’s appeal is that this does not represent a complaint which is in the public interest. If the Court of Appeal rules in favour of the employees it will represent a widening of the scope of the UK’s Public Interest Disclosures Act 1998.

5. Uncertainty surrounds holiday pay as Lock v British Gas rolls on

Unfortunately for employers, the holiday pay saga rolls on. In the British Gas case, the Court of Appeal held that British Gas workers were entitled to have their holiday pay calculated to include average commission.

This judgment has a potential impact on any employer who pays staff by way of commission, however British Gas has signalled its intention to appeal to the Supreme Court. The judgment affects another 1,000 or so cases currently lodged against British Gas, hence its motivation to take the matter to the Supreme Court.

No date has been set for a hearing as yet, but commentators believe the case may be fasttracked given the potential implications not just for British Gas, but for other affected employers. Unfortunately, there is still no certainty in this troubled area of the law as we await the judgement.

6. Supreme Court Ruling on tribunal fees due in March

When employment tribunal fees were introduced for the first time in 2013, the number of cases brought to tribunal reduced by around 70%.

Very welcome news for employers at the time, but employees’ organisations attributed this drop directly to the introduction of the fees, which they say represented a barrier to justice, discouraging employees who had genuine claims to make.

Unison and others challenged the fees regime, their most recent case being rejected by the Court of Appeal. Unison has now appealed to the Supreme Court and the case is expected to be heard in March 2017.

Employers fear a return to the pre-2013 system which some say encouraged frivolous claims, or those with little merit.

On the other hand, the unions say that the figures speak for themselves, citing the dramatic 70% drop in claims and arguing that genuine claims are not being pursued because of the relatively high cost involved (up to £1,200).

Separately, the Scottish Government previously signalled its intention to abolish tribunal fees in Scotland, and employers should keep tabs on how these issues progress north and south of the border.

7. Decision on religious dress discrimination left to European Court of Justice

In 2016 an EU Advocate General in the Belgian case of Achbita v G4S Secure Solutions indicated that an employer can ban a Muslim woman from wearing an Islamic headscarf on the grounds of maintaining its religious and political neutrality.

However, a different Advocate General in the French case of Bougnaoui decided the opposite; namely that it was not permissible for an employer to have a blanket ban on religious dress purely because of a neutrality policy or simply because a customer or client objects.

Advocate General opinions are of course just that, an opinion, and are not binding on the European Court of Justice, albeit the ECJ does tend to follow the opinions given. In this case, the ECJ will need to decide which of the two conflicting opinions to follow. That announcement is expected sometime in 2017.

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About the author

Tom Muirhead

Tom has represented clients across the UK, both at Employment Tribunal and in the Employment Appeal Tribunal. With a strong background in HR at senior level, Tom is adept at explaining the legal framework to clients in a practical way.