Employment law Top 10 of 2015

Posted by Max Craft on
How will employers and HR professionals remember 2015? The year the new Government decided to step back from Employment law and take a break from changing it? Or the year that the law on holiday pay was clarified definitively? Perhaps not, although there have been tiny steps in the right direction. At the end of 2015, we look back and pick out our top ten most important cases and legislation. This year, our countdown comes in the form of TV's much-loved (or otherwise) "Christmas Specials"…

Mock the Week

It sounds more appropriate for a Mock the Week round of "Arguments you'd never hear in court" than an Employment law case. At number ten is the claim by a lady in Bulgaria that her electricity supplier indirectly discriminated against her because of the height of its electricity meters [1]. She lived in an area, populated mostly by people of Roma origin, where the electricity company had set all meters 6m high, because they were regularly tampered with and illegal connections were made to the network. In other areas the meters were 1.7m high, allowing people to check electricity usage. She succeeded in the European Court of Justice (ECJ), which ruled that, although she was not of Roma origin, she had suffered less favourable treatment because the policy was based on ethnic origin. This means the Equality Act 2010 is potentially wrongly implementing EU law. For an indirect (as opposed to direct) discrimination claim under the Act, the claimant must actually have the 'protected characteristic' and cannot rely on simply being 'associated' with it. And the next round is called: "Issues unlikely to be resolved by the Government…"

One Foot in the Grave

At number nine is the whistleblowing case of Chesterton [2] which may be the first nail in the coffin for the 'public interest' test introduced in 2013. The law was changed to prevent whistleblowing cases being based on breach of an individual's employment contract. The person making the 'qualifying disclosure' must now have a reasonable belief that it is 'in the public interest'. Mr Nurmohamed was a senior manager who believed that his employer's accounts were being manipulated, which adversely affected his commission income. He challenged this, and was dismissed. The Employment Appeal Tribunal (EAT) accepted that, because the allegations affected not just Mr Nurmohamed, but also 100 other managers, his disclosure could be 'in the public interest' even if it concerned a small section of the public. The finding of automatically unfair dismissal was upheld. In another case, an issue affecting just 4 employees[3] was found to be 'in the public interest'. Has the new test been all but buried? Chesterton goes before the Court of Appeal in October 2016.

My Family

Adoption rights had a small overhaul this year, coming in at number eight. Who'd have thought it would only take 12 years to align adoption leave and pay with maternity leave and pay? There is now no qualifying period of service to be eligible for adoption leave, although 26 weeks' service is still required for statutory adoption pay. Additionally, the first 6 weeks' statutory pay are now at 90% of average earnings, rather than the previous flat rate. New 'adoption appointments' were created for prospective adopters to have contact with the child, which allow paid time off for up to 5 appointments for the primary adopter (or person adopting on their own), and unpaid time off for up to 2 appointments for the secondary adopter. An attempt was also made to catch up with 21st-century parenting, with adoption leave now available in surrogacy and 'Fostering for Adoption' situations.

Only Fools and Horses

They say only fools and horses work for a living. So are you entitled to notional commission when you're on holiday, if you have 'normal working hours'? (Del Boy would surely approve of that.) We all had high hopes for the certainty that Lock [4] might bring, at number seven, which returned to the Employment Tribunal (ET) in February. Either the ET's decision didn't get us much further, or it gave us a reference period for calculating commission without appearing (or perhaps even meaning) to do so. In 102 paragraphs, the ET concluded that the Working Time Regulations 1998 (WTR) could be stretched to include commission in holiday pay following Mr Lock's successful challenge in Europe (not particularly surprising). In just 6 paragraphs the ET produced wording which appeared to classify Mr Lock's commission as pay which 'varies with the amount of work done', therefore averaged over 12 weeks. Did it mean to? Find out in next year's instalment (this one's likely to run and run) when the EAT should also rule on whether or not the 2014 overtime cases have anything to do with commission, and whether they were wrongly decided…

Downton Abbey

With the prospect of downsizing at Downton, no doubt they will be wondering whether collective redundancy consultation is needed. Well, at least number six has resolved the EAT's controversial 'rewriting' of our familiar laws in the so-called 'Woolworths' case [5]. The ECJ restored the previous interpretation, namely that employers only have to collectively consult when 20 or more redundancies (including collective dismissals) are proposed within a period of 90 days 'at one establishment', rather than across a whole business. 'Establishment', said the ECJ, means the 'unit' where the individual is assigned to carry out their duties (i.e. in this case the local store). The Government escaped footing the bill for thousands of protective awards, as well as being inundated with needless HR1 forms (which is also good news for employers in light of BIS's newfound willingness to prosecute for failure to comply).

Call the Midwife

Was it really only this year? It seems like a lifetime since Shared Parental Leave (SPL) – this year's number five – made its debut on the Employment law scene in April. Maybe it's because many of us spent hours preparing and drafting policies and procedures, only to put them on the shelf and never have reason to dust them off. The concept is simple and flexible; the details are a minefield. There's no need to 'share' the leave; requests for discontinuous leave may be refused (except if they're submitted in a certain way); some notices aren't binding and others are (except in certain cases); and if you've returned to work after maternity leave you don't need to serve a notice of 'curtailment' (except if you want to receive Shared Parental Pay). At least that's clear then. The Government apparently believes that you can never have too many regulations on this (more than 20 at the last count), since it now proposes extending SPL to working grandparents by 2018.

Open All Hours

As predicted last year, 2015 did provide us with a case on whether voluntary overtime should be included in the holiday pay of those who have 'normal working hours', coming in at number four. Why not number one? As a ruling of the Northern Ireland Court of Appeal, and with some issues not fully argued, Patterson [6] is 'persuasive' but not binding. Importantly, the Court agreed that the employer's lawyers had "correctly conceded that in principle there is no reason why voluntary overtime should not be included" in the calculation of holiday pay. Employers who are hoping for a different outcome closer to home might want to rate their chances along the lines of England winning the World Cup. (Rugby or football? Take your pick). Attention might be better focused on changing overtime arrangements or considering whether overtime is sufficiently regular and long-standing to be considered part of 'normal pay'.

Keeping Up Appearances

Number three caused waves in the HR world and is a stark warning about improper HR involvement in disciplinary proceedings [7]. A manager was appointed to investigate apparent discrepancies in Mr Ramphal's expense claims and asked HR for clarification on disciplinary procedures, misconduct, gross misconduct, and possible sanctions. So far so good. Mr Ramphal was dismissed, but the unfair dismissal proceedings revealed drafts of the manager's investigation report, which showed that his conclusions and recommendations had apparently been significantly changed and influenced by HR. On appeal, the EAT was critical of HR straying beyond law, procedure and process into questions of culpability. This potentially made his dismissal unfair. In disciplinary proceedings, employees are entitled to assume that a decision-maker has not been 'lobbied' by others in the process. Although Ramphal is being appealed, it's an important reminder to HR about the nature of their involvement and the potential for behind-the-scenes influence to be questioned in legal proceedings.

Doctor Who

Perhaps one of the most talked-about decisions this year, at number two, is the ECJ ruling in Tyco [8] that for workers with no fixed or habitual workplace, travel between home and the first and last assignments of the day counts as 'working time' for the purposes of the Working Time Directive. Ok, so it's a very tenuous link, but I'm sure the Doctor is wondering if time travel is also 'working time'. At first there was delight throughout the country as many assumed it entitled everyone to be paid for travelling to work. Then the realisation dawned that all commuters are equal, but some commuters are more equal than others. The decision only applies to those with no fixed workplace, and, perhaps more confusingly for the layman, more 'working time' does not necessarily mean more pay. For the time being this somewhat technical legal distinction has saved some employers significant sums of money, but it may be only a matter of time before the pressure comes for the Government to change the National Minimum Wage rules or to make the logical link between 'working time' and pay.

In Sickness and in Health

And so, to our 2015 number one. Will it be holiday pay again this year? Unsurprisingly, yes, but this year for the opposite reason – because we nearly fell off our seats when at last Plumb [9] gave a little clarity to a long-standing issue for employers. Mr Plumb's employment ended after nearly 4 years' absence following an accident. He claimed 4 years' holiday pay, but his employer, perhaps not unreasonably, only agreed to pay one. At the EAT the stunning revelation was made that the Working Time Regulations 1998 (WTR) already limit the carryover of holiday for those unwilling or unable to take holiday through sickness absence: the 'use it or lose it' principle. However, to interpret the WTR compatibly with European law on the EU minimum 4 weeks' holiday, the EAT ruled there should be a limit on carryover to 18 months after the end of the holiday year. As helpful as this ruling undoubtedly is, employers in these circumstances still have to decide whether or not to distinguish between 4 weeks' 'Euroleave' and the UK's additional 1.6 weeks, plus any additional contractual holiday. It might not be the most dramatic episode in our countdown, but this year we may be rather grateful that the EAT has stepped in where the Government clearly feared to tread.

[1] CHEZ Razpredelenie Bulgaria AD v Komisia za Zashtita ot Diskriminatsia

[2] Chesterton Global Ltd  v Nurmohamed , EAT

[3] Underwood v Wincanton plc, EAT

[4] Lock v British Gas Trading Ltd, ET

[5] USDAW and B. Wilson v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and the Secretary of State for Business Innovation and Skills, ECJ

[6] Patterson v Castlereagh Borough Council, NI. Court of Appeal

[7] Ramphal v Department for Transport, EAT

[8] Federación de Servicios Privados del sindicato Comisiones Obreras v Tyco Integrated Security SL and another, ECJ

[9] Plumb v Duncan Print Group Ltd, EAT

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Max is a Consultant in our employment team.

Max Craft
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