National living wage

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From 1 April the new National Living Wage (NLW) is payable to workers aged 25 and over. The introductory rate is set at £7.20 an hour and is expected to rise to over £9 by 2020. BIS guidance on ‘Calculating the minimum wage’ has been updated to reflect the new wage. The Low Pay Commission will continue to advise the government on appropriate increases annually.
The government announced in February that over 90 employers had been ‘named and shamed’ for not paying the NMW. From 1 April the penalty for underpaying the minimum wage will double to 200 per cent of the arrears owed to each worker if the debt is not cleared within 14 days.
Just before the Budget in March, Chancellor George Osborne announced the following increases to the National Minimum Wage (NMW) from 1 October 2016:
•    Workers aged 21-24 rate rises from £6.70 to £6.95 an hour
•    Workers aged 18-20 rate rises from £5.30 to £5.55 an hour
•    Workers aged 16-17 rate rises from £3.87 to £4.00 an hour
•    Apprentices under 19 (or in first year of apprenticeship) rate rises from £3.30 to £3.40 an hour.
From 2017 both the NLW and the NMW will change on 1 April.
Phil Allen, employment partner at law firm Weightmans, commented that the size of the NMW increases was “something of a surprise”, and pointed out that from October they “will narrow significantly this age-related minimum pay gap”.
Chris Rowley, professor of human resources at Cass Business School predicted that the NLW would have a greater effect on small businesses, the accommodation, food services, retail and agriculture sectors, and on employers providing administrative and support services. “Worryingly, some firms have already looked at ways around the NLW, such as cutting benefits and perks, taking on younger workers, using apprenticeships and self-employment as convenient fig-leaves,” he said.
Kristie Willis, an employment solicitor at law firm BTMK, warned that employers attempting to minimise the NLW’s effects by recruiting younger employees “may amount to age discrimination.” She also thought that any businesses trying to engage contractors rather than employees in order to avoid paying it “should seek careful advice before doing this to ensure that any contractors are not actually considered workers under the NMW rules. If employers fail to comply, the overall maximum penalty is £20,000 per worker.”
Angela Wright, senior lecturer in human resources management at Westminster Business School, said there was a concern that a rise in the lowest pay rate could “trigger pay claims from others in the organisation, particularly those paid just above the new rate. Companies may find it beneficial to move to pay structures which use pay ranges, rather than the single point or spot pay rates used by some large retailers, so they can manage the introduction and development of the NLW more effectively.”

Recent case law on monitoring, dismissal and references

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Recent case law on monitoring, dismissal and references
A Romanian case on Yahoo messaging at work prompts a flurry of press reports, constructive dismissal is tested in the EAT, and an adverse verbal reference leads to successful disability discrimination claims against both former and prospective employers
Online monitoring
A recent decision of the European Court of Human Rights, Barbulescu v Romania, caused a sensation in the UK press. Headlines such as The Telegraph’s ‘Bosses can snoop on workers’ private emails and messages, European court rules’, were typical of the press coverage. But this is not the whole story.
The case involved an engineer in charge of sales for a Romanian company who was caught by his employer using a Yahoo Messenger account, set up to enable him to answer client enquiries, for his own purposes. He was messaging his girlfriend and his brother and some of the messages related to his sexual health. Using the account for personal messages breached company policy but Barbulescu claimed his employer had infringed Article 8 (right to respect for private and family life, home and correspondence) of the European Convention on Human Rights by ‘snooping’ on his messages and using these as a reason to dismiss him.
The court decided it was reasonable for Barbulescu’s employer to check the Yahoo account, especially since its original search was for client-related communications, and employees were aware such accounts were not for personal use.  It ruled in the employer’s favour, deciding on balance that the employee’s privacy rights had not been breached.
Andrew Dyson, a partner in DLA Piper’s data protection and privacy group, said the case clarifies that monitoring employees’ online activity is legitimate if employers have concerns about employee behaviour, but that it has to be carried out “in a proportionate manner and in line with a clearly articulated policy set out to all members of staff”.
Employment partner at law firm CMS Sarah Ozanne, said the decision “doesn’t mean that UK employers are able to freely pry on their employee’s personal communications. The facts of this case are very specific. But it is a warning to employees that they cannot assume that their personal communications at work won’t be monitored, and a salutary reminder to employers that they cannot do so unfettered.” Employers had to act with “reasonableness and proportionality,” she said. She also pointed out that while the decision must be taken into account by UK courts, they are not bound by it..
Sue Kelly, a partner in the employment team at Winckworth Sherwood, said this area of law was a “minefield” for employers, and while it was possible to limit the risks by using written policies, “there is a limit on how far employers can go, and a blanket ban on any private emails or messages being sent at work, or routine scrutiny of all such communications, is likely to be a disproportionate interference with employees’ right to privacy under the Human Rights Act.”
Richard Fox, head of employment at law firm Kingsley Napley, said the facts in the case dated back to 2007 so it did not necessarily strike at the heart of the main problem for employers in this area now, which concerned employees using their own phones and tablets for work purposes during working hours.
“What can employers do to ensure that employees remain focused on their work?” he asked. “Are they able to check personal devices to see that electronic exchanges taking place in work time are genuinely of an emergency nature, and are not excessive in terms of time? That, I suspect, will be the next issue to be clarified for employers.”
Constructive dismissal
A case in the Employment Appeal Tribunal (EAT), Frenkel Topping v King, has confirmed that it’s not easy for employees to establish they have been constructively unfairly dismissed. The claimant in the case did succeed in this but failed to prove her treatment was a reaction to her ‘whistleblowing’, for which compensation is uncapped. Her allegations of poor treatment included unfair criticism of her performance in front of colleagues and threats to increase her working hours.
The EAT emphasised that the employer’s actions in such cases must be “really serious” and amount to “conduct with which an employee could not be expected to put up”. Charles Wynn-Evans,‎ a partner at Dechert, said for a claim to succeed, the employer must have behaved ‘in a manner calculated or likely to destroy or seriously damage the relationship of confidence and trust’ between employer and employee.
“Some employer treatment will obviously constitute constructive dismissal,” he said, “such as failing to pay agreed remuneration or reducing an employee’s status without reasonable or proper cause. But in other cases, such as generalised poor treatment, a change of reporting lines and so on, the situation may be far from clear cut.”
References
The case Pnaiser v NHS England and Coventry City Council involved a disabled candidate who had a job offer withdrawn when her former line manager told her prospective employer over the phone that she had had significant time off work and might struggle with pressure in the new role. An agreed reference had been part of the employee’s settlement terms with her previous employer. The EAT found both employers had discriminated against her because of her disability.
Dechert partner Charles Wynn-Evans said the case demonstrates the risks for employers deviating from agreed references and that a disabled employee may still have a claim even if disability is not the only reason for an adverse reference. He said prospective employers receiving comments related to a candidate’s sickness absence “may need to consider what further investigations are necessary before a decision is made to withdraw a job offer”.

Landmark cases for HR in 2016

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Landmark cases for HR in 2016
The following cases are due to be considered by the UK courts and at a European level during 2016. They deal with current HR issues such as calculating holiday pay correctly, religious dress and discrimination at work, whistleblowing and unfair dismissal claims, the transfer regulations, collective redundancy consultation requirements, and the introduction of tribunal fees.
Calculating holiday pay
The case Lock v British Gas questions whether holiday pay calculations should include commission or similar payments which vary according to work done or sales achieved. The case was referred to the Court of Justice of the European Union (CJEU) in 2014, which held that the EU’s working time directive does require statutory holiday pay to take those payments into account. When the case returned to the UK last April, a tribunal decided it was necessary to add wording to the UK’s Working Time Regulations 1998 to comply with the directive.
In December, the Employment Appeal Tribunal (EAT) heard an appeal against this decision. The EAT’s judgment, expected early this year, should say whether the regulations can be altered in this way, or whether a change to legislation is required. Unfortunately this may not totally resolve the issue as the case must go back to the tribunal to determine how to actually calculate commission for statutory holiday pay purposes.
Religious and racial discrimination
A French court has referred a case called Bougnaoui v Micropole Univers SA to the CJEU over the ‘genuine occupational requirement’ rules of the equal treatment directive. The case concerns an employer whose client said it no longer wished to have the IT services the company provided delivered by an employee wearing an Islamic headscarf. Bougnaoui was dismissed after she refused to remove the scarf when visiting the customer’s premises. The case questions whether a ‘no visible signs of religious belief’ dress code can be a legitimate and proportionate occupational requirement and not discrimination.
A Belgian court has also asked the CJEU whether prohibiting a female Muslim from wearing a headscarf at the workplace constitutes direct discrimination if the employer’s rules prohibit all employees from wearing outward signs of political, philosophical and religious beliefs at work. The employer in the case Achbita v G4S Secure Solutions NV seems to be arguing that there can be no discrimination when all employees are treated in the same way and a non-Muslim would not be allowed to wear any outward sign of religious belief.
In the UK the case, Home Office v Essop, is to be heard in the Supreme Court. In it black and minority ethnic (BME) employees aged over 35 are arguing they were disadvantaged by a core skills assessment test as statistics showed older BME candidates were less likely to pass.
The Court of Appeal decided last year in the case that it was necessary for indirect discrimination claimants to show not only that a provision, criterion or practice (PCP) has disadvantaged both a group and the individual claimant sharing a protected characteristic (religion or belief, disability, age and so on) but also how it has done so. This sets a double hurdle for claimants: for example, a female employee claiming that a PCP disadvantages women employees as a group must not only prove why that is so, but also that the same disadvantage applies to her.
Tupe service provision changes
In BT Managed Services v Edwards, the claimant had been off work for over five years due to ill health. He had no prospect of ever returning to work and played no part in the activities being carried out for a client at the time the work in question transferred to another company under the Tupe ‘service provision change’ rules. Edwards did not transfer and both an employment tribunal and the EAT decided in September this was the right outcome.
The EAT pointed out that while employees would transfer if they were part of an organised grouping carrying out the work even if they were on temporary long-term sick leave or maternity leave, permanent absence was different. On the other hand, Edwards was still ‘on the books’ in order to receive permanent health insurance payments and Tupe is designed to protect employees when a contract transfers. The Court of Appeal will now take the case forward.
Collective redundancy consultation
The case USA v Nolan, last heard in the Supreme Court in November, is going back to the Court of Appeal to determine when an employer’s duty to consult in collective redundancies is triggered. The court will have to decide whether ‘in good time’ in the Trade Union and Labour Relations (Consolidation) Act 1992 means consultation must start once an employer suggests a course of action which might lead to redundancies, or only once a strategic decision resulting in jobs being put at risk has been made.
Whistleblowing ‘in the public interest’
The Court of Appeal is to consider the EAT’s April 2015 ruling in the case Chesterton Global v Nurmohamed. The EAT found that the unfair dismissal claimant made his disclosure alleging manipulation of figures used to calculate his own and over 100 other managers’ sales commissions ‘in the public interest’. Clarification is needed on whether a disclosure which affects a whistleblower personally and others, but not the general public, meets the legal test introduced in 2013.
Tribunal fees
The Supreme Court is to hear the challenge to the introduction of tribunal fees, R (on the application of Unison) v Lord Chancellor. In August the Court of Appeal rejected the trade union’s claim that the fees made it practically impossible to enforce employment rights, were indirectly discriminatory, and in breach of the public sector equality duty.

Prominent cases in 2015

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Discrimination law has been growing in scope, while travel to work time, holiday pay, employee misdemeanours on social media, and collective consultation obligations have all featured in claims before courts and tribunals this year – and some of these are still running.
Working time
The Court of Justice of the European Union decided in the case Federación de Servicios Privados del sindicato Comisiones obreras v Tyco that workers without a fixed place of work were on ‘working time’ when travelling to and from their homes to the first and last appointments of the day. The technicians were working on security installations in homes and commercial premises and had previously operated out of regional offices – but when these were closed the workers could be travelling up to three hours to get to that day’s calls. The employer had not previously counted the travelling time to and from the regional offices as working time.
The case has implications for employers of mobile workers with no fixed or usual place of work and employers will need to check these workers’ hours against the requirements of the Working Time Regulations 1988. The European court made it clear that whether this time should be paid or not is a matter for member states. In the UK, travel to and from the first and last appointments of the day does not count as working time for national minimum wage purposes, but case law has established that travel between appointments does.
Holiday pay
The case Lock v British Gas Trading is being heard by the Employment Appeal Tribunal this month and a decision is expected early in 2016. The appeal is challenging this year’s employment tribunal judgment that the UK’s working time regulations can be read to give effect to the European court’s judgment that holiday pay should include commission where this is part of normal pay. If successful, the government may be under pressure to amend the regulations. The appeal will not challenge the three-month gap rule established in the Bear Scotland v Fulton case which limits employers’ liability for underpaid holiday when there is a gap in a series of underpayments of more than three months. Since July claims for back pay for incorrectly calculated holiday pay are limited to two years under the Deduction from Wages (Limitation) Regulations 2014.
Social media
Two cases this year highlighted disciplinary measures arising from employee’s social media use. Biggin Hill Airport v Derwich involved the bullying of a temporary supervisor, first by being ‘unfriended’ by colleagues on Facebook, and then by having witch images placed on her computer as screensavers. The ringleader was nearly successful in her subsequent unfair dismissal claim because the employer had not followed its disciplinary procedure closely enough. Scottish Canals v Smithconcerned a waterways worker who made offensive remarks online about his managers and bragged about drinking while on standby (he claimed he believed his Facebook settings prevented the posts becoming public). The EAT found his subsequent dismissal fair and said such cases would need to be judged on their facts and by the ‘band of reasonable responses’ test.
Discrimination
Case law has been pushing the boundaries of discrimination law. The issue in the case Griffiths v DWPwas whether trigger points in an absence management procedure should be adjusted to take account of a 62-day disability-related absence. Both the employment tribunal and the EAT decided that the trigger point could not be continually extended as this would not help a disabled employee return to and remain in work. The case was heard again by the Court of Appeal in September, and judgment on it is expected early in 2016.
In EAD Solicitors v Abrams, the Employment Appeal Tribunal decided that a company set up by a retiring partner of the law firm to receive his profit share and supply a fee-earner (usually himself) to the firm when required, could bring an age discrimination claim. The Equality Act 2010 prohibits discrimination by one person against another, and in law ‘person’ can include companies.
In Tirkey v Chandock, the EAT decided the provisions on race in the Equality Act 2010 were broad enough to encompass characteristics determined by descent, which could include caste. The case went back to the employment tribunal where the claimant was awarded £183,773 for unpaid wages. The award for discrimination has yet to be determined.
In Chez Razpredelenie Bulgaria v Komisia, the Court of Justice of the European Union decided it was possible for someone to bring a claim for less favourable treatment because of a discriminatory measure arising from race, even though the claimant was not of the race concerned. The case involved a Bulgarian shopkeeper who complained that electricity meters were placed at an inconvenient height in an area that was prone to tampering. Her shop was in a predominantly Roma district of a city. She was not of Roma origin herself, but was able to claim indirect discrimination ‘by association’ with a protected characteristic.
Collective consultation
In May the European court revived the status quo on the meaning of ‘establishment’ in a collective consultation context. The case, USDAW v WW Realisation 1, was brought by ex-Woolworth employees who missed out on a protective award for the lack of consultation when the retailer closed because they were working in shops with fewer than 20 workers. The Employment Appeal Tribunal decided the words ‘at one establishment’ in the regulations should be disregarded and that the number of redundancies across the whole business should be considered. The liquidators appealed and won – but the Court of Justice of the European Union has warned that what is and is not ‘an establishment’ will depend on the facts of each case.

Human resources must up their act if UK is to succeed

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When Wolfson, the Edinburgh-based maker of advanced silicon chips, announced yesterday that it had received a takeover bid …

 

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