UK People Reward and Mobility Hub 

The government has launched a consultation on ways in which government and employers can take action to reduce ill-health-related job loss in the UK.

Despite low unemployment figures, it remains the case that those who suffer from ill health face barriers entering and remaining in work. The government reported that although around 8 in 10 non-disabled people are employed, only five in 10 disabled people are in work, and disabled people are 10 times more likely to leave work following long-term sickness absence than non-disabled people.

The government is seeking views on a number of proposals which aim to encourage early action by employers to engage with and support employees with long-term health conditions, including:

• A right for employees to request work(place) modifications on health grounds. Under the Equality Act 2010, employers are currently under a duty to make reasonable adjustments where an employee with a disability and is placed at a substantial disadvantage as a result of a provision, criterion or practice imposed by the employer, a physical feature of the employer’s premises or a failure by the employer to provide an auxiliary aid. The proposed change would allow employees to request that modifications are made even where the employee doesn’t meet the definition of disabled under the 2010 Act. The employer, unlike under the duty to make reasonable adjustments, would be able to refuse a request for workplace modifications on legitimate business grounds.
• Reform of Statutory Sick Pay (SSP). The proposed changes would enable an employee returning from a period of sickness absence to have a flexible, phased return to work while still receiving some SSP and would see those who do not qualify for SSP (as they earn below the Lower Earnings Limit) receive a proportion of their wage as SSP. Additionally, there are proposals to increase the fines for failure to pay SSP where it is due, and the inclusion of the enforcement of SSP within the remit of a proposed new, single labour market enforcement body (see further commentary on the consultation in relation to this new body here.
• Ways of improving the use of Occupational Health (OH) services by employers. The government is seeking views on ways to reduce the costs, increase market capacity and improve the value and quality of OH services.

The proposed measures aim to recognise the role that employers play in assisting employees with disabilities and health conditions to stay at work, and the importance of the employer taking early action. The consultation looks to measure the impact of the proposals on businesses, individuals and the occupational health profession. The views gathered during the consultation will inform government policy in this area. The consultation will run until 7 October 2019 and is available here.

Since the publication of the 2017 Taylor Review of Modern Employment Practice and the government’s subsequent Good Work Plan, we have been keeping you up to date with new regulations and proposals for implementing recommendations (earlier updates here and here).

The Good Work Plan news this week, against a backdrop of record levels of employment and growing wages,  is that the government has launched a consultation to consider the case for a new single labour market enforcement body.

The reason for the consultation and the potential new enforcement body arises out of the government’s recognition that “effective enforcement plays a vital role in giving individuals the confidence to challenge employers where they are denied their rights and it creates a level playing field between businesses”.  The proposed focus would be on protecting the most vulnerable workers’ employment rights.

The government’s vision is that a new single enforcement body could deliver extended state enforcement, a strong recognisable single brand, better support for businesses, pooled intelligence, co-ordinated enforcement action, more effective use of resources and closer working with other enforcement partners.

The government points out in the consultation briefing that other countries have taken steps to establish more streamlined inspectorate bodies, and in fact this type of body is recommended by the International Labour Organisation. International case studies are referred to and provide an interesting comparison. 

The proposal is that a new single labour market enforcement body would deal with the National Minimum Wage (currently enforced by HMRC); employment agency regulations (currently enforced by the Employment Agency Standard Inspectorate); umbrella companies; licences to supply temporary labour in high risk sectors e.g. agriculture and the fresh food chain (currently enforced by the Gangmasters Labour Abuse Authority); labour and worker exploitation; and holiday pay for vulnerable workers.  The government is also interested to hear views on whether the new body should play any role in the enforcement of Employment Tribunal awards.

The consultation closing date is 6 October 2019. The consultation can be accessed here. As usual responses are welcome online, via email or in writing.

In the case of George Mantides Ltd v. HMRC [2019] TC07202, a personal services company (the Company) appealed against tax and NIC assessments under the IR35 rules. The First Tier Tribunal (FTT) determined that there were sufficient differences between two engagements for the provision of services for IR35 to apply to one engagement and not the other.

The Company was providing the services of its director, George Mantides, to two hospitals – Royal Berkshire Hospital (Royal) and Medway Maritime Hospital (Medway). At both hospitals, Mr Mantides was a locum urologist. He saw patients according to a rota, ordered and reviewed x-rays, carried out minor surgical procedures and used facilities and equipment provided by the hospitals. Mr Mantides had sufficient expertise to carry out the work with minimal direct supervision and was only required to attend one regular meeting. Both engagements were for a consecutive period of three months, although both were terminated early. There were no agreed provisions for sickness, pension, holiday pay or travel expenses – other than between sites. The Company invoiced hourly and paid for professional indemnity insurance.

In its judgment, the FTT noted the following decisive factors:

• Substitutes: The Company had a written contract with Medway detailing the right to supply a suitably qualified substitute for Mr Mantides. Medway had no right of veto over this. In contrast, there was no written contract between the Company and Royal. The “Locum Booking Confirmations” provided in relation to this engagement made no mention of substitutes.

• Notice: The contract between the Company and Medway could be terminated on one day’s notice. The FTT inferred a requirement of one week’s notice from Mr Mantides’ comments about holiday absences at Royal.

• Hours: Medway was under no obligation to provide Mr Mantides with any hours. The FTT inferred (referring to the Locum Booking Confirmation documentation) that Royal would endeavour to provide Mr Mantides with 30-40 hours of work each week.

Under IR35, it is necessary to consider the terms of a hypothetical contract between the worker and the end client. The question was whether, under each of these hypothetical contracts, Mr Mantides would be considered employed by the relevant hospital or self-employed. The court held that the hypothetical contract with Royal had the characteristics of employment, and the hypothetical contract with Medway, self-employment. Consequently, the Medway contract was not caught by IR35, but the Royal contract was. This case provides an important illustration of some of the factors which will be considered by a court or tribunal in determining the scope of IR35. In this case, it worked in Medway’s favour that there was an express contract detailing the terms of engagement more specifically than the documentation detailing the relationship between the Company and Royal.

In order to be protected against detriment or dismissal under whistleblowing law, a worker must have made a “qualifying disclosure”. A qualifying disclosure is any disclosure of information which:

• is, in the reasonable belief of the worker, made in the public interest; and

• tends to show that one or more of six specified types of wrongdoing has taken place, is taking place or is likely to take place. The six specified types of wrongdoing include a “failure to comply with a legal obligation”.

As long as the worker reasonably believes that the wrongdoing has occurred it does not matter if that belief later turns out to be wrong.

In Elysium Healthcare No 2 Ltd v Ogunlami UKEAT/0116/18 the Employment Appeal Tribunal (EAT) took a look at the ingredients of this test.

Mr Ogunlami was employed by Elysium as a health care assistant, working on one of its specialist programmes for patients detained under the Mental Health Act. He brought a whistleblowing claim, arguing that he had suffered a number of detriments as a result of having made a series of complaints regarding his supervisor, Ms Miles. The complaints concerned Ms Miles’ conduct in relation to certain patients.

Mr Ogunlami was successful in his claim at first instance. Elysium appealed to the EAT, arguing that the complaints did not amount to qualifying disclosures because Mr Ogunlami had not provided sufficient evidence that his complaints tended to show a breach of a legal obligation. In addition, Elysium argued that the public interest element of the test was not satisfied.

The EAT dismissed Elysium’s appeal. In the EAT’s view, it was apparent that Mr Ogunlami’s complaint amounted to an allegation that Ms Miles was guilty of a breach of a legal obligation – notwithstanding the fact that he had not said this in express terms. It was clear on the evidence that he viewed her behaviour as more than morally wrong or contrary to guidance. He had referred to Ms Miles’ conduct as being a disciplinary matter, a breach of company policy and a safeguarding issue. Not all breaches of policy will amount to breach of an employment contract but, in the EAT’s view, typically they will do so. The evidence was therefore enough to establish a belief on the part of Mr Ogunlami that the information in his complaints tended to show a breach of a legal obligation, namely the breach of an employment contract. The EAT was also concerned to emphasise that whistleblowers should not be expected to use precise legal terminology.

Looking at the public interest element of the test, the EAT was again unpersuaded by Elysium’s arguments. It determined that the mistreatment of vulnerable members of society readily satisfied the public interest requirement.

The public interest test was introduced in order to address the perceived problem of employees bringing whistleblowing claims based on alleged breaches of their own employment terms. The precise boundaries of the public interest test continue to develop. This case is an important reminder that anything capable of amounting to a breach of an employment contract, which also has a public interest element, may still amount to a qualifying disclosure. Where there is the potential for this protection to be triggered it will be important for employers to be particularly careful about how they manage and treat employees who have blown the whistle.