Working Relations November 2018

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Highlights

The headlines in November have of course been dominated by Brexit following the publication of the Government’s draft Withdrawal Agreement. However, there have been a number of other pertinent publications this month, including the FCA’s review of whistleblowing arrangements in wholesale and retail banks, the Government’s framework for Voluntary Reporting on Disability, Mental Health and Wellbeing and the ACAS research into the impact of #MeToo.

Key Developments

Brexit: Withdrawal Agreement and Political Declaration

On 14 November 2018, the UK and EU announced an agreement at negotiators level of a 585 page draft Withdrawal Agreement, alongside a Political Declaration on the future relationship between the UK and EU. At the time of writing, it remains uncertain as to whether the agreement will be approved by Parliament. From an employment law perspective, the key terms relate to citizens’ rights, the implementation period and the Government’s commitment to the non-regression of labour laws.

For detailed information, see our Brexit microsite.

The Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018: Brexit SI

The Government has now published a second draft employment-related statutory instrument (The Employment Rights (Amendment) (EU Exit) (No. 2) Regulations 2018), which is broadly intended to make a number of technical amendments to employment law in the event of a no-deal Brexit. The amendments ensure the legislation is clear by removing or amending language that is no longer appropriate once the UK has exited the EU. Neither makes any substantive changes to existing employment rights.

FCA publishes findings of review of wholesale and retail banks' whistleblowing arrangements

The FCA has published a review of how wholesale and retail banks have implemented the whistleblowing rules introduced in September 2016. Overall, the FCA found that the rules had helped to implement whistleblowing arrangements and manage concerns raised by employees in a fair and consistent way. The FCA highlighted that the appointment of non-executive directors to the role of Whistleblower’s Champion provided independent oversight and accountability, whilst also raising the profile of the role.

The FCA highlighted some areas for improvement, specifically in relation to whistleblowing training and the annual report which were both often lacking in detail. It also said that firms needed to better document the investigation process and the practical arrangements for protecting whistleblowers from victimisation.

House of Commons Library Briefing Paper on the Gender Pay Gap

The House of Commons Library has published a briefing paper which provides statistics on the size of the gender pay gap in the UK, looks at some of the reasons why the gender pay gap arises, discusses the current reporting obligations of in-scope employers and outlines enforcement approaches in the event of non-compliance.

Government framework: Voluntary Reporting on Disability, Mental Health and Wellbeing

The Department for Work and Pensions and the Department of Health and Social Care has published Voluntary Reporting on Disability, Mental Health and Wellbeing, which sets out a framework to support employers to report voluntarily on disability, mental health and wellbeing in the workplace. The framework is aimed at large employers with over 250 employees but can be used by smaller employers who are keen to drive greater transparency in their organisations. The 2-page framework recommends that employers produce a narrative to explain the employer’s activities in relation to the recruitment and retention of disabled people and to support the mental health and wellbeing of their employees.

Law Society publishes guidance on gender pay gap reporting

The Law Society has published non-binding guidance on gender pay gap reporting, encouraging law firms to go beyond the statutory reporting requirements. The guidance recommends that firms with fewer than 250 employees (for whom reporting is not mandatory) should voluntarily publish gender pay gap data, include partner remuneration, as well as a robust narrative report. The guidance also recommends that law firms collect data on disability, ethnicity and sexuality pay gaps, where possible.

Consultation on parental bereavement leave and pay: government response published

BEIS has published its response to the Government consultation on parental bereavement leave. The Parental Bereavement (Leave and Pay) Act 2018, which received Royal Assent in September, creates a statutory right to paid time off work for employed parents who lose a child under 18. The consultation sought views regarding the eligibility requirements for the new right and details of how the leave may be taken. The detail will be set out in new regulations, which are expected to come into effect in 2020.

Women and Equalities Committee launches inquiry into use of NDAs in harassment and discrimination cases

Following its recent inquiry into sexual harassment in the workplace, the Women and Equalities Committee has now launched a new, wider inquiry into non-disclosure agreements (NDAs) in harassment and discrimination cases. The inquiry focuses more broadly on the use of NDAs in circumstances where any type of harassment or discrimination has been alleged. The inquiry seeks written submissions on a number of questions, including where NDAs are most likely to be used, whether they should be banned or restricted, tendency to use them repeatedly in cases involving the same alleged perpetrator, potential disclosure obligations on firms and the role of boards and directors in this area. The deadline for submissions has been extended to 31 January 2019.

New research into the impact of #MeToo on workplace culture

Acas has published new research on sexual harassment in the British workplace. Acas commissioned a YouGov poll to find out whether the media outcry following the Weinstein scandal and the subsequent #Metoo movement has had an impact on workplace cultures. The survey found that only 30% thought that sexual harassment in the workplace had decreased and only 38% were "very likely" to report personal experiences of sexual harassment in the workplace. A more positive 58% believe their employer is doing about the right amount to reduce sexual harassment at work, whilst 60% thought that better training would be effective at reducing it.

Final PRA policy statement on extending SMCR to insurers

On 09 November 2018, the PRA published its final policy statement on implementing the extension of the Senior Managers and Certification Regime to insurers (PS27/18). The extended SMCR for insurers will come into effect on 10 December 2018.

Key cases

Implied term prevents dismissal of employee on long-term disability benefits

Awan v ICTS UK Ltd - Employment Appeal Tribunal

The EAT held that the Tribunal was wrong to conclude that an employer could dismiss an employee for incapability in cases where the employee was contractually entitled to long term disability benefit. This is even when the employer is contractually entitled to dismiss the employee with notice. In such cases, the courts may imply a term preventing the employee from being dismissed where doing so would deprive the employee of the benefits that he was otherwise entitled to. However, whether the courts will imply such a term will depend on the specific express contractual terms and an analysis of the parties’ intentions.

Dismissing bus driver for failing drugs test was unfair

Ball v First Essex Buses Limited - Employment Tribunal

A 61-year-old diabetic with high blood pressure who had been employed at First Essex Buses for 20 years was dismissed for gross misconduct after failing his employer’s routine saliva drug test. The Tribunal found that the Claimant was unfairly dismissed, holding that the employer approached its test results as if they were incontrovertible and had made up its mind that dismissal was inevitable in the circumstances. This was illustrated by the employer’s refusal to consider the employee’s own negative hair follicle drug test and its failure to engage with arguments that the drug test could have been contaminated. The employee had a long-standing clean record and it was therefore unreasonable for the employer to not conduct further inquiries (for example retesting the employee).

Litigant sanctioned for revealing ‘without prejudice’ offer in Court

Ogiehor v Belinfantie - Court of Appeal

The Court of Appeal held that it is not unfair to penalise a litigant who unilaterally discloses a without prejudice offer in court to a trial judge.

In this personal injury claim, the Claimant unilaterally disclosed to the judge the Respondent’s ‘without prejudice save as to costs’ settlement offer of £10,000, despite counsel expressly warning him not to reveal it and the judge’s efforts to warn him that the letter was without prejudice and he should not introduce it. As a result, the trial was adjourned and the judge ordered the Claimant to pay the costs of the two-day trial thrown away and to pay on account an interim sum of £10,000 within six months for the case to continue.

Redundancy: failure to comply with contractual obligation to offer trial period likely to be unfair

George v London Borough of Brent - Employment Appeal Tribunal

The EAT confirmed that a redundancy dismissal is likely to be unfair where the employer, in breach of contract, has failed to offer a trial period for an alternative role.

The Claimant was made redundant. She was offered an alternative role as a Customer Services Officer, which was of a lower grade and she would be supervised by someone previously her junior. The Claimant was not offered a trial period despite the fact that this was a contractual obligation under the employer's redundancy policy (in addition to the general statutory obligation to allow a trial period).

Holiday pay: no automatic loss of accrued but untaken holiday

Kreuziger v Berlin and Max-Planck-Gesellschaft zur Forderung der Wissenschaften eV v Shimizu - European Court of Justice

The ECJ has made a ruling under the Working Time Directive (and in one case, the Charter of Fundamental Rights of the EU) in respect of two German cases brought by employees whose employers had refused to pay them in lieu of leave that remained outstanding at the end of their employment. It held that, on termination, there can be no automatic loss of leave that a worker has accrued but not taken on the basis that the worker did not seek to exercise the right to take their leave, unless it can be demonstrated by the employer that they have enabled the worker to take that leave.

The burden is on the employer to prove that they have taken necessary steps to enable the worker to take the leave to which they are entitled - by providing accurate relevant information to their workers, in good time, including informing them of the risk that the holiday entitlement will otherwise be lost.

First Criminal sentence obtained by the Information Commissioner’s Office (ICO)

In a timely reminder that the ICO’s powers extend beyond merely fining individuals for data breaches, an individual working for a vehicle accident repair firm was recently sentenced to six months in prison. The individual used colleagues’ log-in details to access a significant number of customer records, even after he started a new job at a different car repair organisation. This is the first criminal prosecution brought by the ICO resulting in a custodial sentence.

Further details on this case and where it leaves us are available on elexica here.

EAT confirms that Addison Lee drivers were workers

Addison Lee Ltd v Lange & ors - Employment Appeal Tribunal

The EAT has upheld the Tribunal's finding that drivers working for Addison Lee were workers and not genuinely self-employed independent contractors. It agreed that during periods when the drivers were logged onto the system, they were workers since they were deemed to be available to provide work at any time. The regular offer and acceptance of work, so that the drivers worked almost continuously, supported this conclusion. The contractual documentation characterising the drivers as self-employed contactors did not reflect the reality of the agreement between the parties.

Further details on the Gig economy are available in our Get Ahead of the Curve page on elexica here.

Entire agreement statement does not exclude misrepresentation claims

Al-Hasawi v Nottingham Forest Football Club Ltd - High Court

Reversing the first instance decision, the High Court has held that an entire agreement clause in a share purchase agreement which did not have wording to negate reliance or exclude liability for misrepresentation was not effective to exclude misrepresentation claims. This decision, which would apply equally to employment contracts, confirms that clear words are needed to exclude misrepresentation claims and an entire agreement clause which simply states that the terms of the contract are confined to those set out in the written agreement will not generally have this effect.

Equal Pay: stable working relationship maintained through promotions

Barnard v Hampshire Fire and Rescue - Employment Appeal Tribunal

For the purposes of an equal pay claim, the EAT has held that the employee’s promotions did not break the “stable working relationship” even though there were a series of contracts which differed in terms of role, duties and pay.

In an equal pay claim, a claimant has six months to bring a claim in the Tribunal, but the start of that limitation period depends on how the case is classified. In a "stable work case", the six-month time limit commences with the day on which the "stable working relationship" ended, not when one contract is superseded by another. In this case, the EAT held that a "stable working relationship" was maintained notwithstanding that the Claimant was promoted (from business support officer to fire safety officer, and from fire safety officer to office manager on a series of different contracts), such that her equal pay claim would be in time.

Future developments

Recent changes

Events

All other training materials relating to Employment, Pensions and Incentives across the European Union are available here.

This document (and any information accessed through links in this document) is provided for information purposes only and does not constitute legal advice. Professional legal advice should be obtained before taking or refraining from any action as a result of the contents of this document.