UK Employment Hub 

The Court of Appeal has delivered its judgment in the recent whistleblowing case of Chesterton Global Ltd and another v Nurmohamed, the first case of its kind to reach the Court of Appeal.

This is a significant case that sets out the approach to be taken by tribunals when deciding if a disclosure is “in the public interest”, a requirement for statutory whistleblowing protection. This “public interest” test was introduced in June 2013 in order to prevent workers from using whistleblowing protection laws to bring claims where they make disclosures about a breach of their own employment contract.

Mr Nurmohamed, an estate agent, had successfully brought a claim in the employment tribunal for dismissal and suffering detriment as a result of making a protected disclosure. He had raised a concern that there were misstatements in Chesterton Global’s management accounts, which he alleged were designed to reduce the amount of commission paid to around 100 senior managers, including himself.

The Employment Tribunal decided that his disclosures were in the public interest. The tribunal’s decision was upheld by the Employment Appeal Tribunal. The employer appealed to the Court of Appeal. The Court of Appeal heard arguments on behalf of the employer and Mr Nurmohamed as to alternative meanings on what constitutes a public interest.  The court rejected the arguments of Public Concern at Work and the arguments on behalf of the employer. These were  that the interests affected by the disclosure should extend beyond the employer’s workforce.

The Court noted that the issue is not whether the tribunal thinks that the disclosure was in the public interest, but whether the whistleblower thought so, and whether that belief was objectively reasonable at the time. There are no “absolute rules” about what it is reasonable to view as being in the public interest. The number of people affected by the issue is a relevant factor although tribunals should be cautious about treating this as determinative. There will usually be other relevant factors such as the nature and extent of the interests affected, the nature of the wrongdoing (particularly where it is alleged to be deliberate), and the identity of the alleged wrongdoer. Therefore, whilst employers and employees may consider the scope of the public interest test to be somewhat limited by this ruling, the Court of appeal has not given whistleblowers a blank cheque.

The much anticipated independent review of modern working practices by Matthew Taylor, Chief Executive of the Royal Society of Arts, was published this week (11 July 2017).

The review suggests a national strategy to provide good work for all “for which government needs to be held accountable”.  It takes the following into consideration when it talks about “good work”: wages, employment quality, education and training, working conditions, work life balance, consultative participation and collective representation. Its key message is that everyone should enjoy a “baseline” of protection and be given routes to enable progression at work.

The full review can be accessed via the following link:

https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices

Some of the key recommendations are set out below. It remains to be seen whether and when the government might implement any of them:

Worker status

• Updating legislation to lay out exactly the legal tests for types of worker; this should no longer be by reference to case law.
• Keep the distinction between employees and workers but rename workers who are not employees ‘dependent contractors’.
• In relation to ‘dependent contractor’ status, the requirement that someone perform work ‘personally’ for an employer should not be relevant.
• Place more emphasis on control in the definition of dependent contractor status. This should be “not simply in terms of supervision of day-to-day activities”.

Terms of employment

• All employees and dependent contractors should receive a written statement of employment particulars at the outset of their job. This must cover their entitlements, how these are calculated,  and the method of payment.
• Failure to provide such a written statement should entitle  all employees or dependent contractors to bring a claim for compensation.
• Workers on zero hours contracts should have a right to request a contract that guarantees their hours after 12 months in the job.

Wages

• The National Minimum Wage should be increased for hours that are not guaranteed.
• The government should explore ways in which workers can negotiate for more guaranteed hours.
• The twelve week reference period for holiday pay should be extended to 52 weeks;  to be fairer for those who have inconsistent work patterns.
• Workers should have greater flexibility with their annual leave entitlement, including being able to receive ‘rolled-up’ holiday pay in real time.

Employment rights

• It should be made easier for gig workers to demonstrate continuous service in respect of employment rights which demand a period of continuous employment before an individual is eligible.
• Statutory sick pay (SSP) should become an employment right for all workers, and should accrue in the same way as holiday pay.
• Returning from time off for sickness should be given the same protection as returning from maternity. This is conditional on the individual having engaged in the Fit for Work service.
• The government should decide whether temporary changes to contracts could be requested by individuals, in particular where they have caring requirements.

Agency workers

• Agency workers who have worked for the same hirer for 12 months  should have the right to request a direct employment contract with the hirer.
• ‘Swedish derogation’ contracts should be banned.

Platform working

• Companies using technology to commission work should use data so that workers can be given a guide as to their potential earnings. In this way workers can freely choose lower paid jobs knowing what they are likely to earn.
• Piece-rate legislation should be altered so that workers who are rewarded on output should earn at least 20% more than the National Minimum Wage.

Employee voice

• There should be a review of information and consultation regulations. These should be extended to include all types of worker and the threshold for implementation reduced from 10% to 2% of the workforce making a request.
• Companies over a certain size should have to disclose their employment model. This would include information such as their proportion of zero hours contracts.

Tribunals and enforcement

• Individuals should be able to have their working status determined by an employment tribunal without having to pay any tribunal fees. In addition, the burden of proof should be on the employer, rather than the worker.
• Where employers have repeatedly ignored law, tribunals should be required to consider imposing “aggravated breach” penalties and cost orders.

Tax and national insurance

• National insurance contributions for employed and self-employed workers should be moved “closer to parity”.
• An increase in National insurance contributions from the self-employed should be accompanied by an associated improvement in both pension provisions and family-friendly rights for the self-employed.
• Electronic platforms (e.g. Paypal) should replace cash-in-hand payment for jobs.

Career progression

• The government should endeavour to work alongside employers who employ a high proportion of gig economy workers to see how they can benefit from the apprenticeship levy.
• More workers in the gig economy should use ‘digital badges’ or other forms of accreditation in order to carry verified approval ratings with them if they work for someone else.

The UK government’s policy paper setting out its offer to EU citizens and their families in the UK has been published. The offer is different depending on how long a person has been in the UK.

People who have been continuously living in the UK for five years will be able to apply to stay indefinitely by getting “settled status”. A settled status residence document will prove an individual’s permission to continue living and working in the UK. Those already with an EU permanent residence document will be required to apply. The application process should come online before the UK leaves the EU, and hopefully in 2018. The government has pledged to make the application process as streamlined and user-friendly as possible.

A “cut-off date” will be relevant for other people. The “cut-off date” will be the date after which EU citizens will no longer automatically be entitled to stay in the UK. The date is still to be negotiated, but may fall at any point between 29 March 2017, the date that Article 50 was triggered, and the date that the UK leaves the EU.

People who arrived in the UK before the cut-off date, but will not have been here for five years when the UK leaves the EU will be able to apply to stay temporarily until they have reached the five year threshold. They can then also apply for settled status as set out above.

People who arrive in the UK after the cut-off date will be able to apply for permission to remain after the UK leaves the EU, under the future immigration arrangements for EU citizens. We do not yet know what the arrangements will be. The government has said that there should be no expectation by this group of people that they will obtain settled status.

Please see our newsletter at the end of the month for more information on this development.

From April 2013, as a result of the Court of Appeal case Simmons v. Castle, there was a 10 per cent increase in general damages for non-monetary losses. This was the Court of Appeal’s implementation of one of the Jackson reforms, namely the recommendation from Lord Justice Jackson that there should be such an uplift in order to help claimants meet the additional costs and risks as a result of his other recommendation to abolish recoverability of conditional fee agreement success fees and after-the-event insurance premiums.

Up until De Souza v. Vinci Construction (UK) Ltd it was not clear whether such an uplift should apply to employment tribunal cases, given that the rationale for the uplift does not apply in the Employment Tribunal. However, employers should take note that the Court of Appeal yesterday decided in De Souza that such an uplift should indeed apply in the Employment Tribunal. The Court noted that s124(6) of the Equality Act 2010 requires that compensation awarded in the County Court and the Tribunals should be consistent. Therefore, compensation for employment discrimination should be the same as that which could be awarded for a non-employment discrimination claim (e.g. discrimination in an educational context) in the County Court.

The Court of Appeal provided some guidance in De Souza as to how the uplift should be applied. Unfortunately it does not appear that it is always as simple as adding 10 per cent. Notably the court stated that in relation to psychiatric injury, the current Judicial College Guidelines already incorporate the 10 per cent uplift, so there would be no change in this regard. However, in relation to injury to feelings the position is more complicated. The Vento bands of compensation for injury to feelings could have a 10 per cent uplift applied to them. However, we will not have any certainty until new bands are published (the Court of Appeal suggested that the President of the Employment Appeal Tribunal publish guidance setting out new bands for clarity, given that the bands were recently updated to reflect inflationary changes).

In March 2017, five cyclists, motorcyclists and van drivers who carry emergency blood to hospitals and samples to laboratories launched a claim challenging their self-employed status, backed by the Independent Workers Union of Great Britain (IWGB).

Last week The Doctors Laboratory (TDL) conceded that these five couriers are in fact workers, however notably did not confirm whether they would repay holiday pay owed to the workers. This concession of worker status follows a similar concession by eCourier, which recently admitted to wrongly classifying couriers as self-employed contractors rather than workers.

This is the latest development in the increasing number of gig economy employment status cases. The recent moves by eCourier and TDL in conceding worker status show the momentum that is gathering behind such cases and that companies are now seemingly prepared to pre-empt a tribunal ruling of worker status. The general secretary of IWGB, Jason Moyer-Lee, went as far as saying that it shows that “worker status is an inevitability in the gig economy”. Interestingly IWGB is going to continue its case against TDL and will argue that the couriers are in fact employees, not just workers, in an attempt to secure them the guaranteed additional benefits (such as protection against unfair dismissal) that such a classification would bring.

Mr Gnahoua was a bus driver at Abellio London Ltd (Abellio). He was dismissed for gross misconduct at a disciplinary hearing. On appeal, Mr Gnahoua told Abellio that he wished to be accompanied by two brothers, who had formed the PTSC union, of which Mr Gnahoua was also a member. Abellio refused this request stating it had banned the brothers from representing its staff at hearings due to their “threatening behaviour” and “dishonesty”. Therefore, Mr Gnahoua attended the appeal unrepresented and the decision to dismiss him was upheld.

Mr Gnahoua subsequently brought various claims in the tribunal, which included that Abellio had denied him the opportunity to be accompanied at his disciplinary appeal hearing. The employment tribunal accepted that, by refusing to allow the two brothers to attend the appeal, Abellio was in breach of Mr Gnahoua’s statutory right to be accompanied. Notwithstanding this finding, the tribunal accepted that Abellio had “strong grounds” for refusing Mr Gnahoua’s choice of companion. It also appreciated that Mr Gnahoua had not suffered any loss because of the breach because Abellio had conducted the appeal hearing in a fair and thorough manner. Therefore, the tribunal considered that a nominal award of £2 was appropriate in the circumstances.

The full case report can be found here: Mr M Gnahoua v. Abellio London Ltd 

The Home Office has sent a communication to interested parties following the government’s publication of a paper outlining its offer to EU citizens in the UK. The government has reiterated its position that no action need currently be taken. “The UK will remain a member of the EU until March 2019 and there will be no change to the rights and status of EU citizens living in the UK, nor UK nationals living in the EU, during this time. So, EU citizens do not need to apply for documentation confirming their status now.”

The government’s policy paper sets out that the government will be asking EU citizens to make an application to the Home Office for a residence document demonstrating their new settled status. It aims to make the process as “streamlined and user-friendly as possible for all individuals, including those who already hold a permanent residence document under current free movement rules”. It is expected the new application system will be up and running in 2018.

In the recent decision of Farmah & ors v. Birmingham City Council & ors, the EAT held that claimants could not bring equal pay claims on the same ET1 form where they were carrying out different work. Rule 9 of the Employment Tribunal Rules 2013 (the Rules) states that two or more claimants “may make their claims on the same claim form if their claims are based on the same set of facts”.

Three of the appellants were retail staff doing different jobs in supermarkets and claiming that they were performing equal work to men working in distribution centres. The women all included their claims in the same claim form. Some of the affected men argued in the same ET1 that, if the women were successful, they did equal work with the female claimants. The remaining two appellants undertook different jobs in local government and claimed their work was equal to that of men performing a variety of jobs. The respondents argued that the claims should be struck out on the basis that they did not comply with Rule 9 of the Rules.

The EAT found the fact that the claimants were performing different work and, even if based on the same comparator, did not satisfy the definition under Rule 9 of the Rules. Therefore, the use of a single claim form was in breach of Rule 9. Under Rule 6 of the Rules, wrongly including claims by two or more claimants in the same claim form is an irregularity and the Tribunal is a permitted to “take such action as it considers just” as a consequence, up to and including striking out the claims.

The full case report can be found here: Farmah & ors v Birmingham City Council & ors.

It may not have been accompanied by the usual pomp and circumstance, but the Queen’s speech yesterday did give us some further clues as to what the government has planned for EU nationals post-Brexit. In her speech, the Queen confirmed that there were plans for an immigration bill which would enable the government to end the free movement of EU nationals into the UK, but still allow the country to attract “the brightest and the best”. She also stated that the bill would require EU nationals and their families to be “subject to relevant UK law”. This seems to suggest that we can expect to see a skills-based immigration system for EU workers following Brexit. Reading in between the lines, it also seems we can expect those EU nationals already working in the UK to be allowed to remain, if they choose to do so. However, those who choose to do so will be subject exclusively to UK law, and not enjoy the protections afforded by the European Court of Justice. Presumably this would work along the lines of Norway’s membership of the single market.

Currently EU nationals in the UK are advised to apply for permanent residency if they meet the qualifying criteria. The thinking being that this may be sufficient to secure their stay in the UK after Brexit. Theresa May is in Brussels for Brexit talks today, where she is set to address EU leaders on her plans for those 3 million EU nationals currently residing in the UK, and the 1 million UK citizens currently residing elsewhere in Europe. We understand that full details of her plans will be published on Monday, ending the uncertainty that currently hangs over those who have exercised their right to freedom of movement, and over their employers.

In Ali v. Capita Customer Management Ltd, the employment tribunal upheld a father’s claim of sex discrimination on the basis that his employer’s policies gave fathers on shared parental leave fewer rights to full pay than mothers on maternity leave.

Under Capita’s family-friendly policies, female employees were entitled to the option of 14 weeks’ full pay on maternity leave, while fathers were entitled to two weeks’ full pay on paternity and shared parental leave. This created particular difficulties for Mr Ali. His wife, who had intended to take maternity leave, suffered from post-natal depression and was advised by her doctors to return to work in order to recover from it.

Mr Ali asked Capita whether he could take leave to look after their child instead. Capita responded that he could take shared parental leave but would only be entitled to statutory pay, not full pay. As a consequence, Mr Ali decided not to take shared parental leave, but took other types of leave instead. His problems were then compounded by a line manager who did not appreciate how to appropriately handle an employee in a sensitive situation such as that of Mr Ali.

The tribunal held that Mr Ali was subjected to direct sex discrimination, since a female comparator in the equivalent situation would have been entitled to full pay. Capita plans to appeal the case to the EAT, referring to other cases where the EAT has supported enhanced payment rights for female employees over male employees while on leave.

As a first instance tribunal decision, this is not binding. We would recommend that employers await some appellant authority on the issue before making any changes to their existing shared parental leave policies.