EMPLOYMENT LAW UPDATE APRIL 2016
Employment law is a fast moving area. This update should be read alongside the other updates that have been written – they are produced every April and October.
In this update we summarise the recent changes to law, proposed changes and also important rulings in recent cases.
National Living Wage
The National Living Wage (NLW) is introduced on 1 April 2016. This will be at the rate of
£7.20 per hour for those aged 25 years and over. The National Minimum Wage rates remain unaltered at:
Age

Rate per hour

21+

£6.70

18-20

£5.30

16-17

£3.87

Apprentice

£3.30

Gender Pay Reporting
The draft Equality Act (Gender Pay Gap Information) Regulations 2016 have now been published. These Regulations set out the requirements for private and voluntary sector organisations with at least 250 employees in England, Scotland and Wales to report information about the differences in pay between men and women.
Mean and median rates of pay for men and women across the workforce will have to be reported. In addition, there will be a requirement to report the number of men and women in each quartile when the employees are ranked according to ascending levels of pay.
There will also be a requirement to report on bonuses, but this will be a report of bonus payments over a 12 month period rather than a ‘snapshot’ at 30 April each year.
The report will be due on 30 April each year. It is expected that the Regulations will come into force in October 2016, with the first reports to be complied on 30 April 2017 and reported by 30 April 2018.
The reports will have to be placed on the company website, accompanied by a written statement saying that the information is accurate. The information will also have to be
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uploaded to a government website. The government intends to ‘name and shame’ organisations that do not comply, and there is the possibility of criminal or civil sanctions for non-compliance being introduced.

Exclusivity clauses in zero hour contracts
As reported in the last update, exclusivity clauses in zero hour contracts (clauses that prohibit an employee from working for another employer whilst under a zero hours arrangement) became unlawful from 26 May 2016.
The Exclusivity Terms in Zero Hour Contracts (Redress) Regulations 2015, came into force on 11 January 2016 and add penalties to the uses of exclusivity clauses.
If an employee on a zero hour contract is dismissed because of breaching a contractual clause that did not allow him/her to work for another employer the dismissal will be automatically unfair. There will be no qualifying period required to bring a claim of unfair dismissal. If the individual is a worker and working under a zero hour contract then it will be unlawful to subject that individual to a detriment because they have worked for another employer.

Statutory rates
Each April statutory rates are reviewed. The government has made the following announcements: 
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

The lower rate for Statutory Maternity/Adoption/Paternity Pay and Shared Parental
Pay will not increase. It remains at £139.58 per week.
The rate for Statutory Sick Pay does not increase, remaining at £88.45 per week.
The statutory definition of a week’s pay (used for such calculations as statutory redundancy pay) increases from £475 to £479.
The maximum compensatory award increases from £78,335 to £78,962.

Leave for grandparents
The government has announced the intention to extend Shared Parental Leave to cover working grandparents who are involved in the care of their grandchildren. This is due to be introduced in 2018. No details of how this will work have been released.

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Fines for not paying Employment Tribunal and related awards
As explained in the last update, the Small Business Enterprise and Employment Act 2015 introduced fines for not paying Employment Tribunal awards, and amounts agreed in arrangements such as Settlement Agreements. The government has now indicated that it plans to introduce this from April 2016.
As a reminder, at first, the employer who has not paid the agreed amount will receive a warning notice. If the amount is still not paid a fine which is equal to 50% of the unpaid amount (with a minimum of £100 and a maximum of £5000) will be imposed. If the employer pays the fine and the outstanding amount within 14 days of receiving the penalty notice it will be reduced by 50%. The fine will be paid to the Secretary of State, not to the employee.
Postponements in Employment Tribunals
Again, we informed you in the last update that limitations were to be imposed on the use of postponements in Employment Tribunal hearings. This was also brought about as a result of the Small Business Enterprise and Employment Act 2015. The government has now consulted about the proposals, with the majority of those who responded to the consultation being against the proposed changes. The main reason given for being against the change was that the Employment Tribunal already has case management powers to address improper use of postponement requests. However, the government has stated that it will press ahead with the changes regardless, although no date has been given for the introduction of this.
As a reminder, the proposed changes are to limit the number of postponements in an
Employment Tribunal to two. If any further requests for a postponement are made, or if a request is made within seven days of the hearing, it will only be given if there are exceptional circumstances. If a postponement is given in this situation the Employment Tribunal will have to consider whether it is appropriate to make a costs order against the party requesting the postponement. Relevant bills
Some important bills, in relation to employment matters, are still progressing through parliament. The Trade Union Bill, which will make significant changes to the management of industrial action, and the Enterprise Bill, which will define apprenticeships, are two bills of particular importance. There is no indication at present what the final content of the proposed legislation will be, or when it might be introduced.

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Calculating holiday pay
In the last update we reported the Employment Tribunal ruling in the case of Lock v British
Gas Trading Ltd [2015]. This was appealed to the Employment Appeal Tribunal, and hence we now have the ruling in British Gas Trading Ltd v Lock [2016].
Lock worked in sales for British Gas. He was paid a basic salary plus commission. When he took annual leave he was not paid commission, and hence his pay dropped. He argued that this was a breach of the EU Directive, and a disincentive to take annual leave.
The Employment Appeal Tribunal has dismissed the appeal, and therefore has ruled in favour of Lock. When calculating payments to be made during annual leave commission should be included.
This comes soon after the ruling in Bear Scotland v Fulton [2015] in which it was ruled that non-guaranteed overtime should be included when calculating payment during annual leave.
The use of trigger systems
Another long awaited ruling from the appeal courts comes in the case of Griffiths v
Secretary of State for Work and Pensions [2015]. Here the Court of Appeal had been asked to consider the use of a trigger system in managing absence, and the possible impact on disabled employees.
The employer operated a ‘trigger’ system whereby an employee received a disciplinary warning when levels of absence reached a specified level. Griffiths was disabled (suffering from post-viral fatigue and fibromyalgia) and had some significant periods of absence. As a result, she was given a disciplinary warning. She argued that the employer was required to make reasonable adjustments due to her disability, and specifically asked for two adjustments. The first was to exclude one long period of absence (which would bring her below the trigger point) and the second was to increase the number of days she could be absent before a disciplinary warning was issued. The employer refused and she claimed disability discrimination.
The Court of Appeal has rejected her claim. It agreed that she was able to show that the trigger system was a disadvantage to her, but it did not accept that her requested adjustments were reasonable.

Can an employer ‘snoop’?
A case that was widely reported in the popular press, with some rather inaccurate explanations of the ruling, was that of Barbulescu v Romania [2016]. This was a ruling from the European Court of Human Rights.
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The employee had been asked to set up a Yahoo Messenger account which could be used by customers who had queries. The company had a strict rule that no photocopier, fax machine, computer or telephone could be used for personal reasons. However, Barbulescu used the Yahoo Messenger account to send personal messages to his girlfriend and brother.
When the messages were transcribed they amounted to around 45 pages.
He was dismissed. He took a claim that his right to a private life had been breached when his employer accessed and read his private messages. However, he was unsuccessful. It was a company account, and hence the company had the right to access the account and to read what was there.
However, this ruling does not mean that employers can now ‘snoop’ on anything that their employee is doing. It does suggest that an employee who is using a company account to send personal emails might find that those emails are accessed. It does not allow an employer to access a personal email account.
In all situations, an employer should have an email and internet policy in place, explaining what is allowed and what information it might access.

Using demotion as a punishment
The range of punishments which can be given in the workplace is quite limited, with disciplinary warnings being the primary tool that employers can use. It is quite common for disciplinary policies to include an option of demotion which can be used if the employee has done something which might warrant dismissal, but the employer wants to be more lenient.
The case of British Airways v Higgins [2015] reminds us of the importance of applying all policies reasonably. Higgins was a team leader, working in aircraft maintenance. One of his team did some maintenance work wrongly and he corrected it. However, his correction was actually wrong as well. It was decided to demote him three grades instead of dismissing him, but he resigned arguing that this demotion was a breach of contract and hence claimed constructive dismissal.
He was successful. A demotion of three grades was a disproportionate reaction to what had happened, and hence this was a breach of contract.

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Accepting a bribe can be gross misconduct
An unusual case is worthy of note because it reminds us of the importance of ensuring compliance with the Bribery Act 2010. In Blake v Home Office [2015] the employee was an
Immigration Officer and she accepted a £200 bribe from an immigration offender. Soon after she accepted the bribe she re-thought her actions, returned the bribe and reported what had happened. However, she was dismissed for gross misconduct.
This was found to be a fair dismissal. Her actions were a breach of the Bribery Act 2010, and the employer was entitled to react strongly to such a breach.

Calculating pro-rata benefits
If an employee moves from one working pattern to another, how should you calculate their annual leave entitlement? A judgment from the Court of Justice of the European Union in
Greenfield v The Care Bureau [2015] gives some guidance on this.
The employee worked one day per week. During that time she took seven days of annual leave, which the employer calculated as being equivalent to seven weeks of annual leave.
She then changed her working pattern to work 12 days on and 2 days off each fortnight. She took no leave during this period, but at the end she argued that she was entitled to pay in lieu of the leave that she had not taken. Her employer disagreed.
The Court of Justice has ruled that annual leave should be calculated at the end of each working pattern. If one period of working pattern ends any outstanding leave should be paid, and then the accrual starts again for the new working period.

Taking care when giving references
It has long been known that care needs to be taken when giving a reference, and this has been emphasised again in the case of Pnaiser v NHS England and another [2015].
The employee was disabled and had had some long periods of sickness absence. She was made redundant from Coventry City Council and as part of a settlement agreement the wording of a reference was agreed. She then applied for a job with the NHS which she was offered, subject to references. The agreed reference was sent to the NHS, with her manager adding a note that she was prepared to give additional information if this was required.
The NHS contacted the employee’s manager at Coventry City Council who gave the opinion that the employee would struggle with the work due to her disability and the nature of the
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responsibilities in the job. The job offered was withdrawn and Pnaiser claimed disability discrimination. The claim was successful. The NHS did not consider whether any reasonable adjustments could be made to the job, and Coventry City Council had treated her less favourably due to her disability.

Understanding reasonable adjustments
There have been two cases recently relating to disability discrimination which are worthy of note. The first case concerns the definition of a reasonable adjustment.
In Corry v Merseyrail Electric 2002 Ltd [2015] an employee was offered a job subject to a medical report. 90% of the job involved working by railway track. The employee suffered from epilepsy and the medical report suggested that reasonable adjustments might be to always work with someone else, and to be based in larger stations where there was help available. The employer argued that it was not possible to put these adjustments in place, and withdrew the offer of employment. The employee claimed disability discrimination.
The claim was unsuccessful. The adjustments which had been suggested were not reasonable, due to the cost and inconvenience of putting them in place.

Defining a disability
A disability is defined in the Equality Act 2010 as a physical or mental impairment which has a substantial and long term adverse effect on a person’s ability to carry out normal day to day activities. The Equality Act 2010 does not include a list of ‘normal day to day activities’, which was included in the Disability Discrimination Act 1995.
The case of Banaszczyk v Booker [2016] has questioned what can be included in ‘normal day to day activities’.
The employee suffered from a back problem. He worked in a warehouse where he was required to lift and carry items of up to 25kg in weight. There was a target of moving 210 items per hour, which he consistently missed. He was dismissed, and claimed disability discrimination. The employer argued that he was not disabled. Although he did have a physical impairment the employer argued that it did not have an adverse effect on his ability to carry out normal day to day activities. They argued that he could lift and carry ‘every day’ items, and that

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lifting and carrying 25kg items was not a normal day to day activity. The Employment Appeal
Tribunal (EAT) has disagreed.
In giving their ruling the EAT has referred to the EU Equal Treatment Framework Directive.
To define disability in accordance with this Directive the Court of Justice of the European Un ion has said that the disability must be an impairment which limits the participation of an individual in professional life on an equal basis with other workers. Lifting and carrying 25kg weights was part of his professional life, and hence this was a normal day to day activity.
This ruling does seem to contradict the previous approach to normal day to day activities, when the focus has been on what the ‘average’ person does on a ‘normal’ day. In addition, it seems to contradict the Equality Act 2010 guidance notes which suggest that the ‘inability to move heavy objects without assistance or a mechanical aid, such as moving a large suitcase or heavy piece of furniture without a trolley’ would not be a day to day activity.
Although it is important to take note of this ruling it is suggested, therefore, that it needs to be applied, with some care.

Addressing a request for leave to attend a religious festival
An issue that employers do need to address carefully is when an employee requests an extended period of leave to attend a religious festival. A recent case shows the importance of thinking carefully through a possible indirect discrimination claim when considering a request. In Gareddu v London Underground Ltd [2016] the employee was a Catholic from
Sardinia. He typically went to Sardinia for five weeks in the summer to join his family in religious festivals. However, in 2014 he was told that he would not be allowed the leave in future because taking the extended leave had a detrimental on the small team in which he worked. He claimed indirect religious discrimination but was unsuccessful. To understand why he was not successful we need to go back to the definition of indirect discrimination.
Firstly, there needs to be a provision, criterion or practice applied to all – in this case it was the requirement not to take more than two weeks of annual leave at any one time.
Secondly, a group with a particular protected characteristic needs to show that this causes them a disadvantage. Gareddu was not able to show this. There was no requirement for
Catholics to attend the religious festivals, and hence he was not able to show this ‘group disadvantage’. As a result his claim failed.

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If he had been able to show that all Catholics were required to attend the festivities he would then have had to show that it was to his disadvantage, and that refusing him the leave was not a ‘proportionate means of achieving a legitimate aim’. In situations where employees are expected to attend religious festivals due to their religion it is this argument that is typically debated. An employer would have to show, for example, that the organisation could not operate efficiently if an employee took an extended period of leave.
Managing lay offs
A case which reminds us two important points is that of Craig v Lindfield and Son Ltd
[2016]. The employee was laid off for just over four weeks. There was a contractual term in his contract that allowed his employer to lay him off indefinitely. However, he resigned and claimed that the extended lay off was a breach of contract and hence he claimed constructive dismissal. He was unsuccessful.
Firstly, it is important to note that an employee who has been laid off for four consecutive weeks, or a total of six weeks in a thirteen week period, can claim a redundancy payment.
Given that there is this provision in law it seems unlikely that it would be possible to argue that a lay off of four weeks amounted to a breach of contract.
Secondly, there was a contractual entitlement for the employer to lay off indefinitely. It is not possible to argue a breach of contract when the action taken is in line with the contractual provisions. Mobile workers are working whilst travelling
In the last update, we had the Advocate General’s opinion in the case of Federación de
Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL
[2015] and now we have the ruling from the Court of Justice of the European Union.
This case was questioning whether mobile workers are working whilst they travel from one job to another. The employees bringing the claim installed security systems. Each day they would be allocated jobs, and would travel to the first, then onto the next and so on until they had completed their allocated jobs and returned home. There was no requirement on them to go to an office or other fixed place of work. They argued that they were working from the moment that they left their home, to when they returned. Hence, they argued that they were not getting sufficient rests and were sometimes working in excess of the limit on the working week. Their argument has been successful. If an employee does not have a fixed place of work, and can be classed as a mobile worker, the employee is working whilst travelling.

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It is important to note that this case only addressed the issue of working time in the Working
Time Regulations 1998. It did not address the definition of work in terms of the National
Minimum Wage.
Working whilst sleeping
It has been accepted for some time that an employee is working whilst under the control of the employer when calculating the National Minimum Wage. However, the case of Shannon v Rampersad and Rampersad t/a Clifton House Residential Home [2015] has raised some interesting points.
The employee was provided with a home at a residential home. In return for being provided with a home he had to agree to be on the premises each night between 10pm to 7am. He was required to help the night staff if he was needed, although in reality this rarely happened. During the days he had his own job which was not at the residential home.
He argued that he was working whilst he was required to be on the premises because he was under the control of the employer. Hence, he claimed back pay of £239,940 in unpaid
National Minimum Wage payments. He was unsuccessful.
Regulation 16(1A) of the National Minimum Wage Regulations 1999 states that those who sleep at or near a place of work, and who are provided with suitable facilities for sleeping, will only be working if they are awake for the purpose of working. As Shannon was provided with a home on the premises the Employment Appeal Tribunal agreed that he came under this exception set out in Regulation 16(1A) and hence his claim failed.
Again, some care needs to be taken when applying this case. This was a very fact-specific situation, where he was staying in his own home. Other cases where employees have been allowed to sleep, but not at their own home, have concluded that the employee is working even if s/he is allowed to sleep.
Transfer of an employee absent due to long term sickness
In a transfer of undertaking situation any employee who is assigned to the work that is transferring is part of the transfer. However, what happens if an employee is absent due to long term sickness. Does that employee transfer, even if they are not actually working?
In BT Managed Services Ltd v Edwards [2015] the employee had been ill for five years and had not worked during this time. He was assigned to a unit of BT which transferred to
Ericsson. However, as he was not able to work due to his illness the Employment Appeal
Tribunal ruled that he did not transfer.
The EAT found that he was not assigned to the unit transferring. To be assigned, the EAT argued that the employee ‘will generally require some level of participation or, in the case of temporary absence, an expectation of future participation in carrying-out the relevant activities on behalf of the client’.
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Dismissal due to a third party
Pressure from a third party to dismiss could potentially be ‘some other substantial reason’ when dismissing, and a recent case has shown how this could occur. In Masini v Compass
Group UK and Ireland Ltd [2015] the employee worked for Compass managing a catering unit on a business park. The business park owners were unhappy with the catering sales and told Compass that they wanted another manager brought in. Compass asked the owners to allow them more time to work with Masini, but they refused.
Compass did identify some other opportunities within the organisation for Masini, but she refused them all either due to the drop in status, or the travelling time involved. As a result she was dismissed.
This was found to be a fair dismissal for ‘some other substantial reason’. There was no other option open to the employer but dismissal, and hence it was fair.

KATHY DANIELS
March 2016

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