Brexit and data protection – an ongoing saga.
Many businesses who either transfer personal data from the UK to the EU, or in the other direction, have been concerned that the post-Brexit data protection landscape is unclear or more complex than before. The particular concern has been than doing business across borders would require extra steps or additional contracts to be entered into.
When the Brexit transition period ended on 31 December 2020, the UK became a “third country” for GDPR purposes, meaning that transfers of personal data from the EU to the UK would be treated as transfers out of the EU. Those transferring data from inside the EU to the UK would have an obligation to ensure that adequate protections for data subjects were in place before a transfer could be made. This means that transfers or personal data into the UK would require additional mechanisms to protect individuals, such as “standard contractual clauses”, with which business in the UK would only be familiar if they were previously transferring personal data to non-EU countries.
However, the trade and co-operation agreement of 24 December 2020 includes an interim provision dealing with personal data transfer from the EU to the UK. This bridging mechanism provides that during the interim period, the UK will not be deemed a third country, and personal data transfers from the EU to the UK can continue without additional safeguards. The interim period lasts for four months, but is automatically extended for another two months unless either the EU or the UK objects to an extension.
GDPR has been adopted wholesale into UK law in the Data Protection Act 2018, which means that data transfers from the UK to the EU can continue seamlessly, as long as the EU has been given a finding of adequacy by the UK authorities – the UK has already made that decision, so for the time being, and unless the UK position changes in the future, data transfers out of the UK into the EU are dealt with as before.
In the short term, therefore, for most purposes it is business as usual for data transfers in both directions between the UK and the EU. However, this only applies until the end of the interim period referred to above, unless the EU Commission makes a finding of adequacy in respect of the UK’s data protection environment.
Regarding the longer term picture, on 19 February 2021, the European Commission made a draft finding of adequacy in respect of the UK. The Commission issued a press release, stating that it had considered UK law and practice and had concluded that the UK provides an “essentially equivalent” level of protection to that available in the EU.
The finding of adequacy is not yet binding, as it must be approved by the European Data Protection Board and ratified by EU member states. If the finding is adopted, it will last for a period of four years and will be subject to ongoing review of the UK’s continuing data protection environment.
It cannot be guaranteed that the European Data Protection Board and member states will approve the finding of adequacy, and they may ask for additional safeguards in the UK (particularly around the access to personal data by public authorities, such as law enforcement agencies), but the draft findings are a step in the right direction which, if ratified, will ensure that data can continue to flow smoothly between the UK and EU.
If you have any questions and/or would like advice on any Commercial Law matter, please speak to Ben Habershon at: firstname.lastname@example.org or to your usual Dixcart contact.
Employment Law Newsletter – January 2021
A review of 2020’s biggest employment law issues and a look at what we should expect from the bright and glittery 2021.
Employment Law Newsletter – January 2020
We give you a round up of some of the big issues of 2019 in employment law, and what to expect in 2020, including a brief look at what’s likely to be covered by the Employment Bill 2020 and what happens next when the UK leaves the EU.
What were the big issues in 2019?
Equality, sexual harassment and discrimination
Looking back over the course of 2019, in amongst the omnipresent Brexit headlines (we got a new prime minister and a Brexit date was finally agreed, let’s just leave that there for now), several linked issues kept arising. The #MeToo movement has put a spot light on the treatment of women in the workplace and so it is not surprising that the topics of equality, sexual harassment and sexual discrimination should have continued to surface. In June, The Women and Equalities Committee published a report on ‘The use of non-disclosure agreements in discrimination cases’ tackling the perceived ‘cover up’ culture, which was followed by the Law Society publishing NDA guidance summarising both the things employers cannot stop workers from doing and explaining the restrictions commonly imposed on workers prior to signing the NDA. The government responded that it would review this as well as opening a consultation to address sexual harassment in the workplace.
The government also produced ‘Gender equality at every stage: a roadmap for change’. The plan is to financially empower women from school to retirement, by including measures such as improved information for parents around family friendly entitlements. This seems much needed after UNICEF published a report last year showing the UK is one of worst countries in Europe for paid parental leave, and yet figures gathered by the ONS show the number of mothers in the workforce is up by 75%. The Gender Roadmap also includes a consultation on strengthening measures to tackle sexual harassment, and a review of the enforcement of the equal pay legislation and the effectiveness of the gender pay gap reporting system. In fact, the gender pay gap figures from 2019 (for 2018) show a widening gap in favour of men. Perhaps naming and shaming is simply not enough, who would have guessed that?
Meanwhile ACAS produced guidance for employers on the sensitive handling of menopause symptoms whilst at work. The government also backed a ‘Lead the Change’ board which was set up to encourage business leaders to promote diversity and inclusion – it is an independent review board to ensure that talented women at the top of business are recognised, promoted and rewarded.
Mental Health and Stress
Quite rightly, mental health and stress are key areas that are really starting to occupy people’s focus, after all, an unhealthy workforce leads to sickness, absence, low morale, and inefficiency. In July, the government launched a consultation entitled ‘Health is everyone’s business: proposals for reducing ill health-related job loss.’ There were various reports published in 2019 looking at mental health: the CIPD reported on the increasing number of stress-related absences from work; Nuffield reported on the impact of flexible working and working from home on workers’ health and how it should be carefully managed; and a TUC report that showed that Britons have some of the longest working hours in Europe.
Modern working practices
In the gig economy and with more focus on mental health and family life, the way we work is changing rapidly, with the CV-Library reporting last year that the number of remote workers has doubled in the last 4 years, which is challenging the government to keep pace. In 2018, the Supreme Court finally ruled the Pimlico plumbers were workers rather than independent contractors. Having received that decision, one of them made a claim to the tribunal for holiday pay, only to be told it was out of time, however given he didn’t know at the time he was entitled to it, he will likely be appealing this decision. After a number of holiday pay dispute cases in recent years, BEIS published online guidance and a calculator to help calculate holiday pay for workers whose hours or pay are not fixed. Meanwhile, the government seems to be trying to clamp down on the tax aspects of flexible working arrangements by announcing changes to the so-called ‘IR35 rules’ (those which affect the private sector are due in April 2020) concerning those individuals who provide services to clients via a service company. Whilst this may indeed lead to an increase in income tax and National Insurance payments for the government, it may simply lead to more inventive ways to get around the tax rules, whilst the tribunals and courts are left to battle it out over the true meaning of what constitutes a worker, an employee or an independent contractor.
What should we expect in 2020?
Employment Bill 2019-20
This is expected to apply in the main to England, Wales and Scotland and include the following measures:
- A single enforcement body for the labour market. As recommended by the Good Work Plan, a single enforcement agency to be set up dealing with non-compliance in the labour market, to replace the enforcement functions of the Employment Agency Standards Inspectorate (EASI), the Gangmasters and Labour Abuse Authority (GLAA), HM Revenue and Customs (HMRC) and the Health and Safety Executive (HSE). A consultation on these proposals closed on 6 October 2019; a response is awaited.
- Protecting tips and service charges for workers. Employers to be required to pass on all tips and service charges to workers and, supported by a statutory Code of Practice, to ensure that tips would be distributed on a fair and transparent basis.
- The right to request a more predictable contract. The government previously indicated its intention to legislate to introduce a right for all workers to request a more predictable and stable contract after 26 weeks’ service as part of the Good Work.
- Extending redundancy protection to prevent pregnancy and maternity discrimination. The Pregnancy and Maternity (Redundancy Protection) Bill 2017-19 was not granted Royal Assent in the 2017-19 Parliamentary session. The Bill was designed to extend the existing redundancy protection, effectively making it harder to make employees redundant during pregnancy and afterwards, until six months after they have returned from maternity leave. The Bill was believed to have cross-party support and the government is now intending to implement this measure through the Employment Bill.
- Extended leave for neonatal care. The government’s consultation on a new right to neonatal leave and pay, to support parents of premature or sick babies, closed on 11 October 2019; a response is awaited.
- A week’s leave for unpaid carers. This proposal was made in the Conservative Party’s election manifesto.
- Making flexible working the default. As set out in the Conservative Party’s election manifesto, the government intends, subject to consultation, to make flexible working the default position unless an employer has a good reason.
- Brexit-related provisions. The Employment Bill may contain provisions designed to safeguard workers’ rights derived from European legislation, after similar provisions were removed from the European Union (Withdrawal Agreement) Act 2020.
The Good Work Plan
A number of changes set out in the government’s Good Work Plan, published in December 2018, will come into effect on 6 April 2020:
- The right to a written statement of terms for all workers (not just employees) on or before the first day of employment.
- Additional information will need to be included in written statements of terms for employees and workers, including information on the length of time a job is expected to last, the notice period, eligibility for sick leave and pay, other rights to leave, any probationary period, all pay and benefits, and specific days and times of work.
- The removal of the “Swedish derogation” in the Agency Workers Regulations 2010, which allows employment businesses to avoid pay parity between agency workers and comparable direct employees where the agency workers receive pay between assignments.
- The introduction of a Key Information document for agency work-seekers, including information on the type of contract, the minimum expected rate of pay, how they will be paid and by whom.
- The threshold to request workplace information and consultation arrangements under the Information and Consultation of Employees Regulations 2004 (SI 2004/3426) will be lowered from 10% to 2% of employees, subject to the existing minimum of 15 employees.
- The increase of the reference period for determining an average week’s pay (for the purposes of calculating holiday pay) from 12 weeks to 52 weeks.
The Conservatives’ manifesto did not mention resolving the complex issue of employment status and there has not yet been any response to the 2018 consultation on this, suggesting that it is not a high priority for the current government.
Off-payroll working rules
In order to address non-compliance with IR35 in the private sector, the government confirmed at the Autumn 2018 Budget that the off-payroll working rules would be extended to the private sector from 6 April 2020, but that small entities would be excluded from the scope of the new rules. This means that payments to workers supplied to large and medium-sized companies by personal service companies will be treated as payments of employment income and so subject to income tax and NICs. This shifts responsibility for tax compliance from the personal service company to the client or intermediary. However, as the legislation has not yet been passed, this measure remains subject to any further changes. During the election campaign, Sajid Javid, the Chancellor of the Exchequer, spoke about wanting to ensure that the proposed changes to off-payroll working were “right to take forward”. Some have suggested that there could therefore be a delay in implementation.
Taxation of termination payments
From 6 April 2020 all termination payments above £30,000 will be subject to employer’s NICs. This measure is implemented in the National Insurance Contributions (Termination Awards and Sporting Testimonials) Act 2019 which received Royal Assent on 24 July 2019.
Parental bereavement (leave and pay)
The Parental Bereavement (Leave and Pay) Act 2018, which entitles all working parents to two weeks’ paid statutory leave if they lose a child under the age of 18 (including a still birth after 24 weeks of pregnancy), is expected to finally come into force in April 2020, after a long wait. Secondary legislation is also awaited to implement the details of the scheme.
In July 2019, the government published its proposals to prevent the misuse of confidentiality clauses or non-disclosure agreements (NDAs) in the settlement of workplace harassment or discrimination complaints. The government reiterated that confidentiality clauses can serve a legitimate purpose in both employment contracts and settlement agreements but confirmed its intention to bring forward new legislation “when Parliamentary time allows”.
The government has also stated that new requirements will be introduced for the limitations of a confidentiality clause to be clear to those signing them, as well as for mandatory independent legal advice on a settlement agreement to include the limitations of any confidentiality clause. Clauses that do not follow these new rules will be void.
In July 2019, the government launched a consultation on measures to address sexual harassment in the workplace. The consultation includes proposals such as introducing a mandatory duty on employers to prevent harassment in the workplace and increasing the time limit for bringing a discrimination claim from three to six months. The Equality and Human Rights Commission (EHRC) statutory code of practice on preventing sexual harassment in the workplace is also awaited and may well be published in 2020.
Ethnicity pay reporting
In 2018, the government launched a series of measures to tackle barriers facing ethnic minorities in the workplace, including a consultation on the introduction of mandatory ethnicity pay reporting, based on the model of mandatory gender pay gap reporting. A response to this consultation is still awaited and as there was no mention of this measure in the recent Queen’s Speech, it may be that this is no longer a priority for the current government. It is notable that the Conservative Party’s recent manifesto included a pledge to further investigate pay disparity in the UK, yet this manifesto did not refer to the possibility of introducing mandatory ethnic pay reporting.
The Conservative Party pledged in its manifesto to increase the National Living Wage (NLW) to two-thirds of average earnings (£10.50 an hour) by 2024 and to extend the NLW to over-21s.
On 12 and 13 February 2020 the Supreme Court will hear the appeal in Royal Mencap Society v Tomlinson-Blake, considering whether the correct approach to determine whether employees, who sleep-in in order to carry out duties if required, engage in “time work” for the full duration of the night shift, determining if they are therefore only entitled to the national minimum wage when awake for the purposes of working.
On 22 and 23 July 2020 the Supreme Court will hear the appeal in Uber BV and others v Aslam and others. The court will decide whether to uphold the Court of Appeal’s majority finding that Uber drivers are workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998.
We are currently awaiting the judgment in Various claimants v Wm Morrisons Supermarket which was heard in the Supreme Court on 6 and 7 November 2019. The court considered the High Court’s ruling that Morrisons are vicariously liable for a data leak by one of their employees. The breach resulted in around 5000 staff members having their personal data stolen and shared with the public.
A hearing date for the Supreme Court hearing of Ali v Capita Customer Management Ltd; Hextall v Chief Constable of Leicestershire Police is currently awaited. The court will consider whether it was direct or indirect sex discrimination, or a breach of the equal pay sex equality clause, for two employers to fail to pay two male employees enhanced shared parental pay.
The hearing date for another Supreme Court hearing, Asda v Brierley, is also awaited. The court will decide whether workers in retail stores were employed under comparable terms and conditions to those working in separate distribution depots for the purposes of equal pay claims under the Equality Act 2010 and the Equal Pay Act 1970.
This will come as no surprise to you, but, yes, we are expecting the UK to leave the European Union at 11.00 pm (UK time) on 31 January 2020. Whilst we cannot be sure what the long-term impact of Brexit on employment law will be, there are unlikely to be any significant changes happening in 2020. The UK will be in a post-Brexit transition period and most EU law (including as amended or supplemented) will continue to apply to the UK.
The European Union (Withdrawal Agreement) Act 2020 was recently given royal assent, implementing the withdrawal agreement into UK law. Under the withdrawal agreement, a post-Brexit transition period will run from exit day until 31 December 2020, during which time the UK will be treated for most purposes as if it were still an EU member state, and most EU law (including as amended or supplemented) will continue to apply to the UK. The transition period could be extended for up to one or two years, but only if the joint UK-EU committee agrees to an extension before 11.00 pm (UK time) on 30 June 2020. The Act includes a provision that prohibits the UK government from agreeing in the joint committee to an extension.
In the unlikely event that the UK and the EU do not conclude a withdrawal agreement by exit day (and there is no further extension of the Article 50 period, and the Article 50 withdrawal notice is not revoked), the UK will leave the EU on exit day with no agreement to govern the terms of withdrawal, and no transition period.
Once the UK leaves the EU, with or without a deal, formal negotiations on the future UK-EU relationship can start under Article 218 of the Treaty on the Functioning of the European Union. (Trade agreements are also governed by Article 207.) Assuming the UK and the EU agree a political declaration before withdrawal (in tandem with the withdrawal agreement), this declaration will form the basis for their post-Brexit negotiations on the future relationship. If the UK leaves the EU with a withdrawal agreement and transition period, the future relationship would ideally come into effect at the end of the transition period to minimise disruption, as many aspects of a no-deal scenario would again arise if relevant future relationship agreements are not in force by the end of the transition period.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com.
Employment Law Newsletter – September 2019
- Unfair Dismissal: Employee Shareholder Status not altered by subsequent service agreement
- Holiday pay: Part-year workers not subject to pro rata reduction
- Worker status: Out of hours GP is a worker despite using limited company
- Disability Discrimination: Tribunal must address all four limbs of the definition of disability
- Harassment: Conduct that creates an offensive or humiliating environment
- Legal Advice Privilege: Waiving privilege does not mean you can cherry-pick what you disclose
- Information Commissioner’s Office: Brexit hub
- Data Protection: Subject Access Requests and Individual Rights – timescales changed
- Modern Slavery: Updated guidance, referral and assessment forms available from Home Office
- Non-Disclosure Agreements: Law Society publishes new guidance
- Upskilling: Give me the chance to save my job
Unfair Dismissal: Employee Shareholder Status not altered by subsequent service agreement
In Barrasso v New Look Retailers Limited UKEAT/0079/19 the EAT had to consider how ‘employee shareholder status’ is terminated, as it is not provided for under the Employment Rights Act 1996 (‘ERA’). The concept of ‘employee shareholder status’ was introduced in 2013. It applies to those who are employed by a company in which they are issued £2,000 worth of fully paid up shares, having first agreed to be an employee shareholder and received information about the status, its rights and independent legal advice. Having the status means they retain some key employment rights but give up others (in return for the shares), such as the right to claim unfair dismissal or receive a statutory redundancy payment. S.205A of the ERA prescribes how one achieves this status but it silent on how it is terminated.
Mr Barrasso was employed as UK Managing Director by New Look until it was sold to another company and he was offered 7,000 shares in the parent company if he signed an Employee Shareholder Agreement (and met the criteria under the ERA), which he did. He was reassured by side letter (signed as a deed between the parties) that he would receive contractual benefits equal to the statutory employment rights he was giving up. He subsequently signed a new director’s service agreement (to standardise terms for all the directors) as a deed. This agreement contained a ‘complete agreement clause’ which purported to preserve the effect of the side letter (not mentioning the Employee shareholder agreement), whilst superseding all other agreements.
Believing that his employee shareholder status had been terminated by the service agreement when Mr Barrasso’s employment was terminated he brought a claim for unfair dismissal. The tribunal dismissed his claim on the basis that the service agreement made no reference to the employee shareholder status – therefore did not supersede it – and the side letter meant the statutory rights had been removed in favour of his contractual rights. He appealed to the EAT, who agreed with the tribunal’s findings. They also looked at how the status could have been terminated practically-speaking, given that the ERA is silent on this, citing examples such as: a new contradictory contract, or an agreement to sell back the shares. It was clear to the EAT however, that the intention of the parties was not to alter Mr Basrrasso’s employee shareholder status by signing his service agreement.
Holiday pay: Part-year workers not subject to pro rata reduction
The Court of Appeal has overturned the decision of an employment tribunal (Harpur Trust v Brazel  EWCA Civ 1402), finding that it should not have read words into reg.16 of the Working Time Regulations 1998. The tribunal had been wrong to read it as if it meant the annual leave entitlement of ‘part-year workers’ (people who work only part of the year) on permanent contracts should be capped at 12.07% of the annualised hours. The Court accepted that ECJ rulings may allow employers to use the Working Time Directive to pro rate the annual leave entitlements of part-year workers to that of full-year workers, but member states may implement better arrangements. There is no requirement in the Working Time Regulations to pro rate holiday pay for part-time employees to ensure that full-time employees were not treated less favourably, it is simply a protection for part-time workers to not to be treated less favourably than full-time workers.
There is a lesson here: employers who employ the 12.07% approach to pay holiday to staff on zero hours permanent contracts should consider their potential exposure and their options. The calculation exercise required by regulation 16 of the WTR 1998, which involves identifying a week’s pay and multiplying it by 5.6 weeks, is straightforward and should be followed, even if it results in part-year workers receiving a higher proportion of their annual earnings as holiday pay (in this case, 17.5%). How the 5.6 weeks’ holiday entitlement itself should be calculated for part-year workers remains unclear, however. As a direct result of this case, BEIS has removed its holiday pay calculator from its holiday pay guidance for workers without fixed hours or pay. BEIS are currently reviewing this.
Worker status: Out of hours GP is a worker despite using limited company
In Community Based Care Health Ltd v Narayan UKEAT/0162/18, Community Based Care Health Ltd (‘CBCH’) provided out of hours GPs to the NHS (each of whom had to be fully qualified and competent), and Dr Narayan provided her services as a GP through CBCH for a number of years. She worked a regular shift pattern but did not need CBCH’s permission to take leave or work elsewhere so there was no mutuality of obligation. She did provide her own equipment and indemnity insurance, and had to work personally for the company and could not send a preferred substitute instead. CBCH audited the services of the GPs it provided to comply with its NHS contracts. Dr Narayan began to use a limited company of her own to receive her payments but never informed CBCH of this fact, merely updated her bank details.
Following an issue with some telephone advice Dr Narayan had provided and a claim that she had unjustifiably swapped duties on short notice, CBCH decided it was no longer going to offer her work. Dr Narayan brought claims of unfair dismissal, race and sex discrimination, breach of contract and unpaid holiday pay. CBCH claimed she was self-employed and neither an employee nor a “worker”. The tribunal disagreed.
The judge found that Dr Narayan was a worker under s.230(3)(b) of the Employment Rights Act 1996, despite the fact that she had used a limited company to receive payments for over a year without CBCH’s knowledge. CBCH had tried to argue that this had led it to unwittingly become one Dr Narayan’s company’s clients under the ‘undisclosed principal’ doctrine (i.e. if A makes a contract with Z in A’s own name, it is open to B at a later date to assert that the contract was made by A on B’s behalf and that B is the contracting party. This means that the resulting contract is between B and Z.) CBCH claimed that therefore it was contracting with Dr Narayan’s company, and not her. This was dismissed from the appeal because it had not been argued at first hand, but in any event the fact that the contract required a competent and suitably qualified doctor precluded a company from being the contracting party. Further, the judge found that the decision in Suhail v Herts Urgent Care UKEAT/0416/11 was not a good precedent he was bound to follow in this case, distinguishing it on the basis that Dr Suhail positively marketed his services to other clients. Dr Narayan, on the other hand, worked for one provider for a number of years on a regular shift pattern. The judge also found the evidence suggested Dr Narayan had been integrated into CBCH’s business. The EAT upheld the tribunal judge’s decisions and found no error of law.
Disability Discrimination: Tribunal must address all four limbs of the definition of disability
In Parnaby v Leicester City Council UKEAT/0025/19/BA Mr Parnaby suffered depression brought about by work-related stress and was dismissed because of his long-term sickness absence due to work related stress (a capability issue). Mr Parnaby claimed this dismissal was in fact disability discrimination and/or potentially unfair. The tribunal found him not to be a disabled person for the purposes of the Equality Act 2010 (“the Act”) though it did accept that he suffered an impairment that had a substantial adverse effect on his ability to carry out normal day to day activities but held this was not long-term. In particular, the tribunal noted that Mr Parnaby had suffered work related stress for six months, but that it had ceased following his dismissal, therefore the effect was not ‘long-term’ (i.e. 12 months or more) for the purposes of paragraph 2 Schedule 1 of the Act. Mr Parnaby appealed.
The EAT allowed the appeal. It held that the tribunal had erred in not addressed all four limbs of the definition of disability contained in the Act. Mr Parnaby had suffered depression brought about by work-related stress which affected his ability to carry out his day-to-day activities – his impairment. The act of discrimination claimed was the dismissal. At that time, his impairment had not lasted for 12 months (s.2(1)(a) of Sch1 to the Act) and was therefore not ‘long-term’. However, the tribunal considered that by removing the source of his impairment (his job) then the likely future impairment and its impacts would cease. The EAT held that the tribunal should have looked at whether it was likely to last twelve months or might recur in the future (i.e. could well happen = more probable than not). It was not for the tribunal to make assumptions about the time-limited nature of his impairment. On this basis the claim was remitted back to tribunal to be reheard.
Harassment: Conduct that creates an offensive or humiliating environment
In Raj v Capita Business Services Limited & Ward EAT0074/19/LA the EAT considered the first tribunal’s dismissal of Mr Raj’s claims of unwanted conduct either of a sexual nature or unwanted conduct relating to his sex, pursuant to s.26 of the Equality Act 2010 (the “Act”). The issue was that the claimant had felt uncomfortable when his female manager massaged his shoulders in their open plan office. Whilst the tribunal found this to be unwanted conduct which created an offensive environment for him, it found that on balance, the evidence provided brought them to the conclusion that whilst the conduct was unwise and uncomfortable but not related to gender, but more likely due to misguided encouragement. This part of the claim failed.
On appeal, the EAT considered the two-stage burden of proof test set out by s.136 of the Act and explained in Igen v Wong  ICR 931. The first stage is that the claimant prove facts from which the tribunal could decide, in the absence of any other explanation, that the respondent committed an unlawful act of discrimination. The second part is only applicable if the first stage is met, and then puts the burden of proof onto the respondent who must prove he/she did not commit that unlawful act. The EAT agreed with the tribunal’s finding that in this case, the claimant fulfilled stage one – it was agreed that there was conduct that was unwanted, thereby producing “an intimidating, hostile, degrading, humiliating, or offensive environment for him”. However, the remaining issue for stage two was whether this conduct related to the claimant’s gender. The tribunal found the evidence to show a prima facie case that this conduct related to his gender to be very limited. The appeal was on the basis that the tribunal had erred in law by not approaching the test properly but the EAT did not agree; the burden of proof had not shifted to the respondent and, in any event, the explanation given by the respondent had been accepted.
Legal Advice Privilege: Waiving privilege does not mean you can cherry-pick what you disclose
This is a warning case to employers involved in litigation. In Kasongo v Humanscale UK Ltd UKEAT/0129/19 the claimant brought claims of unfair dismissal and discrimination related to pregnancy and maternity. Part of the employer’s strategy was to waive its legal advice privilege (i.e. communications between a client and their solicitor which are confidential and come into existence for the purpose or giving or receiving advice about what should prudently or sensibly be done in the relevant legal context) because certain documents arguably demonstrated that it did not know about the claimant’s pregnancy at the time it was considering dismissing her. The documents comprised a draft dismissal letter prepared by the solicitors from which the solicitors notes and comments had been redacted (it was agreed that the letter itself was not legally privileged, but the redacted parts were) and two earlier documents. The issue was whether the disclosure of the two earlier documents meant that the redacted parts were no longer protected by privilege, and therefore if the tribunal had erred in its decision as to which documents were protected by legal advice privilege.
The EAT held that the tribunal had erred in failing to address or rule on one of the three documents. All three documents were part of the same transaction of providing legal advice about the dismissal of the claimant and, given the nature and purpose of the disclosure, the EAT held that fairness required that the redacted part of the letter concerning the reason for the claimant’s dismissal also be disclosed. The reason being that it would be unfair to allow the respondent who had waived privilege in relation to the other two documents not to reveal those redacted parts of the dismissal letter which related to the reason for dismissal. Cherry-picking the parts one discloses is therefore impermissible. The appeal was allowed and the EAT ordered that the redactions be removed and the full letter be included in the trial bundle for evidence at the hearing.
Information Commissioner’s Office: Brexit hub
The ICO has put together a ‘Brexit hub’ containing checklists, FAQs and guidance to help organisations of every size in case prepare for a no-deal Brexit. A good place to stay up to date with how your business manages its data protection duties. You can also sign up to their service to receive regular emails which will let you know about any updates to the guidance.
Data Protection: Subject Access Requests and Individual Rights – timescales changed
In August, the Court of Justice of the European Union ruled on a Dutch case which considered timescales under Regulation No 1182/71. Following this ruling, the Information Commissioner’s Office has updated their guidance on timescales for responding to subject access requests (SAR), and other individual rights requests.
The effect of the ruling is that the timescale has now changed to reflect the day of receipt as ‘day one’, as opposed to the day after receipt. For example, a SAR received on 3 September should be responded to by 3 October.
Modern Slavery: Updated guidance, referral and assessment forms available from Home Office
Following recent reforms made to the National Referral Mechanism (NRM) (a government framework for identifying and referring potential victims of modern slavery and ensuring they receive the appropriate support), the Home Office issued new Modern slavery victims: referral and assessment forms. The forms allow staff at designated First Responders Organisations to refer potential victims of modern slavery or human trafficking to the NRM.
The recent reforms to the NRM include:
- The Home Office created a single, expert unit to handle all cases referred to it to handle decision making about whether somebody is a victim of modern slavery. This replaces (and is completely separate from) the case management units in the National Crime Agency and UK Visas and Immigration.
- All negative Conclusive Grounds decisions will now be reviewed by an independent panel of experts, to increase the scrutiny such cases receive.
- The NRM process will be supported by a new digital system, enabling easier referrals, data capture and analysis, aimed at improving prevention and law enforcement.
For more details on which organisations form part of the First Responders list, see the government website.
Non-Disclosure Agreements: Law Society publishes new guidance
Following our reporting of the Women and Equalities Committee’s review of the use of Non-Disclosure Agreements in discrimination cases, the Law Society has now published a brief guidance leaflet called ‘Non-disclosure agreements: what you need to know as a worker’. This is just as helpful to employers as it summarises both the things employers cannot stop workers from doing and explains the restrictions commonly imposed on workers prior to signing the NDA.
This has been published as part of the Law Society’s new legal education initiative to assist the public understand their rights.
Upskilling: Give me the chance to save my job
PwC has recently published a new study called ‘Upskilling Hopes and Fears’, based on a survey of 22,000 people globally, of whom 2,004 were UK adults in the age range 18-65 (retirees were not included). Their findings show that 73% of workers would welcome the opportunity to expand their knowledge of new workplace technology while 54% of those questioned said they would be happy to learn new skills or completely retrain in order to improve their future employability. But many UK workers say their employers are not offering opportunities to upskill. People fear automation in a growing digital world will lead to fewer jobs and this lack of investment in the workforce is breeding mistrust of employers among workers.
The research also highlights disparities in upskilling opportunities by gender, education, and age:
- Over half (54%) of men surveyed say their employer is giving them the chance to learn new skills, as opposed to only 45% of women. Over half of women (55%) say they are offered no opportunities at all.
- 56% of university graduates say they are offered them, whereas only 41% of those educated to school leaver level say the same.
- 64% of workers aged 18-34 say they are offered opportunities, compared with 48% of 35-54 year olds and 41% of ages 55 and over.
These results highlight the need for organisations to look seriously at offering upskilling opportunities for staff – particularly in the UK where three-quarters (73%) of workers would take the opportunity to better understand or use technology if they were given the option by their employer.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: firstname.lastname@example.org.
Employment Law Newsletter – March 2019
- TUPE: Dismissal due to difficult working relationship may be automatically unfair
- Contract: When ‘Bad Leaver’ provisions may be considered a penalty or an unlawful deduction from wages
- Employment Status: Is a quarterly ‘exclusivity’ payment evidence that an individual is an employee?
- Worker Status: Pimlico plumber ‘worker’ loses holiday pay claim
- Equality Act: Is it unfair to send woman on maternity leave an important email she cannot access?
- Indirect Discrimination: Justification of rule more important than application of rule to individual
- Data Protection: ICO and Insolvency Service work together to disqualify directors in new record
- BREXIT: ICO website contains SME Brexit preparation tools
- Data Protection: Vote Leave Ltd fined £40,000 by ICO
- Immigration: Seasonal workers pilot opens
- Modern Slavery: Annual anti-slavery audit will result in naming and shaming the non-compliers
- Holiday Pay: BEIS publishes guidance and online calculator for workers without fixed hours/pay
- Wages: National Minimum Wage and National Living Wage set to increase from 1 April
TUPE: Can a dismissal due to difficult working relationship be automatically unfair?
In Hare Wines Ltd v Kaur  EWCA Civ 216 the question before the Court of Appeal was whether the Claimant’s dismissal for purely ‘personal reasons’, was a sufficient reason to prevent the dismissal from being automatically unfair as it related to a TUPE transfer. In this case, Mrs Kaur was a cashier for a wine wholesaler, which had been run by several different businesses during the time she had worked there, with common directors/shareholders. In 2014, the business was transferred under TUPE to Hare Wines Ltd. Mrs Kaur and Mr Chatha were colleagues with a strained working relationship. Mr Chatha became a director of Hare Wines Ltd. On the day of the transfer, Mrs Kaur was dismissed, and all the rest of the employees transferred under TUPE to Hare Wines Ltd. Mrs Kaur claimed this was automatically unfair as it was related to the transfer, and the tribunal agreed.
Hare Wines Ltd argued that Mrs Kaur had objected to the transfer because she did not wish to work with Mr Chatha, who was to become a director. However, the tribunal held that this was not the case, and that the real reason was that the business did not want her because it may have continuing difficulties between the individuals. On appeal to the EAT and then the Court of Appeal, the tribunal’s finding that she had not objected was upheld and that the reason for the dismissal was not that she had been dismissed because of her difficulties with Mr Chatha with the transfer being coincidental, it was that the employer did not want her because she and Mr Chatha did not get on. This was the principal reason. The relationship had been strained for some time and she had not been dismissed until the transfer was to happen, therefore the two were linked. The Court of Appeal noted that dismissals for economic, technical or organisational (aka ‘ETO’) reasons connected with transfers can be fair, but the law does not recognise any category of ‘personal’ reason for dismissal as preventing a transfer-related dismissal from being automatically unfair.
Contract: When ‘Bad Leaver’ provisions may be considered a penalty or an unlawful deduction from wages
In Nosworthy v Instinctif Partners Ltd UKEAT/0100/18, Miss Nosworthy had entered in to a Share Purchase Agreement and Articles of Association with the company, which contained some common bad leaver conditions. The conditions meant that a shareholder who is also an employee who voluntarily resigns is considered to be a bad leaver . In this case, the bad leaver provisions meant that when Miss Nosworthy resigned she was forced to forfeit deferred earn-out shares and loan notes – i.e. transfer her shares – with the value of the shares being determined at the acquisition cost (which was £143 for her 2% share). Miss Nosworthy claimed this forced transfer was a contract connected with employment and therefore could be considered to be unconscionable, a penalty or an unlawful deduction from wages
The tribunal disagreed, and this finding was upheld by the EAT. The criteria for setting aside an agreement as unconscionable were not satisfied – there had been no serious disadvantage. It was not a penalty as a result of a breach of contract, because it was a term of the Articles of Association which applied to any bad leaver, regardless of breach, and was not a breach of contract. Furthermore, the company’s remuneration committee, which had the power to reclassify her as a good leaver, had not failed to exercise its discretion in good faith because there were no exceptional circumstances for it to take into account. Lastly, it was not an unlawful deduction from wages, because the definition only covers payments made in respect of her capacity as a worker, whereas the shares were provided to her as a shareholder.
Employment Status: Is a quarterly ‘exclusivity’ payment evidence that an individual is an employee?
In Exmoor Ales Ltd & Another v Herriot UKEAT/0075/18/RN theEAT Mrs Herriot had provided accountancy services for Exmoor Ales, a brewery, for nearly three decades, submitting invoices from her partnership. Since 2011, the brewery had paid her £1,000 each quarter, which Mrs Herriot claimed was an exclusivity payment, but which the respondents denied. In 2017 Mrs Herriot brought claims against the brewery just before her work relationship with it ended. The claims were for unfair dismissal, age discrimination, holiday pay, failure to provide a statement of written particulars of employment, harassment and victimisation.
The tribunal found, on the evidence, that the quarterly payment did indeed change the nature of the relationship from that point onwards and that she did in fact, stop working for other clients. The brewery had also given her allocated seating in their premises, she was fully integrated into their business, and exercised a high level of control over her whilst at work. It was also noted that there was mutuality of obligations between the parties from April 2011 onwards, and she had no right to appoint a substitute. The tribunal therefore held that until that time, Mrs Herriot had been an independent contractor providing accountancy services to the brewery but after the quarterly payments started, she was in actual fact an employee.
The brewery appealed arguing that the tribunal had not looked at all the relevant factors on employment status, including her tax arrangements, and that she had prepared employment contracts for other staff but not herself, and was not a member of the employee share scheme. These were rejected by the EAT, however, because the tribunal had considered these elements but found the factors highlighted by it had overridden those identified by the Respondents. In this instance, the quarterly exclusivity payment had been an influencing factor although in reality it was the effect it had on their respective behaviours that led the tribunal and EAT to find her to be a de facto employee.
Worker Status: Pimlico plumber ‘worker’ loses holiday pay claim
Last year the Supreme Court ruled in Pimlico Plumbers Ltd & Another v Smith that the plumbers had been employed by Pimlico Plumbers as workers rather than being hired as independent contractors. As workers, this meant they were entitled to some basic employment rights such as the right to be paid the national minimum wage and holiday pay. At the end of his successful seven year battle with Pimlico Plumbers, Mr Smith began proceedings in the Croydon employment tribunal for backdated holiday pay. However, the tribunal ruled that he had not filed his claim quickly enough – the regulations state that claims for missed pay should be filed within 3 months of each holiday period, dating back to 2005. His claim amounted to £74,000. He is going to appeal this decision because he did not know he was entitled to paid leave while he was employed by Pimlico Plumbers so did not bring a claim until after his contract was terminated in May 2011.
Equality Act: Is it unfair to send woman on maternity leave an important email she cannot access?
In South West Yorkshire Partnership NHS Foundation Trust v Jackson UKEAT/0090/18/BA the claimant was on maternity leave when she became part of a number of staff at risk of redundancy who were then sent an email by the HR department to their work email addresses, which the claimant could not access, setting out redeployment opportunities. She was not able to open the email for several days but this in itself did not cause her substantial harm. However, it raised a legitimate concern that such behaviour was unfavourable treatment (s.18(4) of the Equality Act) because she was exercising her right to take maternity leave, and it is on this ground that she made a claim.
The tribunal upheld her claim. However, the EAT found that the tribunal had erred in its approach to the causation test. Although the unfavourable treatment would not have happened “but for” the fact that the Claimant was on maternity leave, the tribunal had not considered whether this was the “reason why” she had been treated unfavourably. There was no finding by the tribunal as to why the Claimant was not able to access her emails, as she had in fact attended a meeting a few days before despite being on maternity leave.
Mr Justice Shanks said, the “ET must ask itself the standard “reason why” question in relation to why the unfavourable treatment took place and that it is not sufficient for the “but for” test to be satisfied for there to be a finding of discrimination under section 18.” He went on to say that it did not seem as if the tribunal had found that the characteristic of being on maternity leave had been on anyone’s mind, nor had the tribunal decided that an inherently discriminatory rule had been applied in this case. It seems to have been pure administrative error and therefore the test used by the tribunal was that ‘but for being on maternity leave, the Claimant would not have been disadvantaged’, which was not sufficient for a finding of discrimination. As a result the case was remitted back to the tribunal for further findings.
Contract: Suspending an employee does not always breach the implied term of trust and confidence
In The Mayor and Burgesses of the London Borough of Lambeth v Agoreyo  EWCA Civ 322 a primary school teacher was accused of using excessive force with two pupils with special educational needs, and suspended pending investigation as a result. The teacher, Ms Agoreyo, resigned the same day. She claimed that the suspension had been a knee-jerk reaction and that an investigation did not require suspension. The suspension was a repudiatory breach of contract – a breach of the implied term of mutual trust and confidence between them, and she was entitled to resign and claim constructive dismissal.
At first instance, the County Court found that the school had reasonable and proper cause for her suspension. The claim was dismissed. Ms Agoreyo appealed. The High Court allowed the appeal on the basis that suspension should not be the default option – an individual should be suspended only if there is no reasonable alternative. The school had said the suspension was a neutral act but the High Court disagreed and said that it is never a neutral act. Ms Agoreyo’s resignation letter neither negated nor undermined the case on breach of the implied term as to trust and confidence.
On further appeal however, the Court of Appeal agreed with the County Court, and held there was no breach of trust and confidence. It found the High Court had erred in its test of whether it was necessaryto suspend was setting the bar too high and the correct legal test was whether the school had had reasonable and proper cause to suspend Ms Agoreyo. The County Court judge was entitled to hold that it did and Ms Agoreyo’s claim that her suspension was a breach of contract failed.
Indirect Discrimination: Justification of rule more important than application of rule to individual
In The City of Oxford Bus Services Limited t/a Oxford Bus Company v Harvey UKEAT/0171/18/JOJ a bus company had instituted a rule in the rostering system that bus drivers had to work 5 out of 7 days, including Saturdays or Sundays. Mr Harvey was a Seventh Day Adventist who asked not to work between sunset on Friday and sunset on Saturday so that he could observe the Sabbath. The bus company had given him a service that was able to take this into account but it was not a permanent arrangement and so he subsequently had to swap shifts or call in absent from work on the days when he was required to work a shift on Friday evening or Saturday daytime. They had also offered him flexible working but in the meantime he had brought a claim of indirect discrimination on the grounds of religion or belief.
The bus company argued that it feared that if it agreed to this as a permanent arrangement, more drivers would ask for time off for other religious reasons, particularly events and festivals, and this might result in industrial unrest. At tribunal it was accepted that the bus company’s working arrangements imposed a ‘provision, criterion or practice’ (“PCP”) that placed Mr Harvey at a disadvantage. So, the question then was, whether the PCP was a proportionate means of achieving a legitimate aim. The tribunal found that the bus company had established legitimate aims of ensuring efficiency, fairness to all staff, and recruitment and retention. In upholding Mr Harvey’s claim, however, the tribunal ruled that the PCP was not justified becausethere was insufficient evidence to support one of the legitimate aims – maintaining a ‘harmonious workforce’.
On appeal to the EAT the decision was overturned the decision. It was incorrect of the tribunal to focus on the particular application of the rule on the claimant rather than the general justification for the rule. The tribunal had recognised that the bus company’s problems arose not from granting the Mr Harvey’s request, but from granting many such requests, and in doing so meant it had failed to balance the general aims of the bus company with the potentially discriminatory impact of the rule. The judge remitted the case back to the original tribunal to reconsider this issue.
Data Protection: ICO and Insolvency Service work together to disqualify directors in new record
The Information Commissioner’s Office (ICO) has carried out investigations into nuisance marketing which, by working with the Insolvency Service, has led to 16 company directors being banned from running a company for more than 100 years in total. One of the worst offenders was Richard Jones who has been barred from being a company director for eight years after his two companies, Your Money Rights Ltd and Miss-Sold Products UK Ltd were responsible for 220 million automated nuisance calls, most of which were in respect of PPI claims. The companies’ breaches resulted in total fines of £700,000 in 2017, which Mr Jones then tried to avoid by applying to wind up the companies. This was blocked by the ICO which then referred the case on to the Insolvency Service.
New legislation which came into force in December 2018 means that the ICO now has powers to make company directors and other company officers personally liable for the fines imposed for illegal marketing.
BREXIT: ICO website contains SME Brexit preparation tools
Who knows what the next few weeks have in store, but that’s not very helpful for businesses. Whilst most businesses may well be more prepared than the government, the ICO has produced guidance and practical tools to help organisations prepare in terms of their data, including: Data Protection and Brexit Law enforcement processing: Five steps to take, Data protection in the event of a no-deal Brexit, aimed at UK based businesses or organisations to which the GDPR or Part 3 of the Data Protection Act 2018 currently applies to their processing of personal data.
Data Protection: Vote Leave Ltd fined £40,000 by ICO
Vote Leave Limited has recently been fined £40,000 by the Information Commissioner’s Office (ICO) for sending out thousands of unsolicited text messages run up to the 2016 EU referendum. An ICO investigation found that Vote Leave sent 196,154 text messages promoting the aims of the Leave campaign with the majority containing a link to its website. Vote Leave claimed the contact information it had used to message people was obtained from enquiries which had come through their website; from individuals who had responded via text to promotional leaflets; and from entrants to a football competition. However, the organisation said that following the conclusion of the referendum campaign it had deleted evidence of the consent relied upon to send the messages. Also deleted were details of the phone numbers the messages were sent from, the volume of messages sent, and the volume of messages received. Being unable to provide evidence that the people who received the messages had given their consent (a key requirement of electronic marketing law) made them liable for this fine.
This latest fine is part of the ICO’s ongoing investigation into the use of data in political campaigns. As a result of the investigation the ICO has taken action against a number of different organisations engaged in campaigning for breaches of direct marketing and data protection laws.
Immigration: Seasonal workers’ pilot opens
In September 2018, the Home Secretary and Environment Secretary announced that, having listened to farmers, they were introducing a nationwide pilot scheme seasonal workers to bring seasonal migrant workers to UK farms. The pilot opened on 6 March meaning that UK fruit and vegetable farmers will be able to employ migrant workers for seasonal work for up to 6 months. Subject to recruitment and visa application processes, the pilot, which runs until the end of December 2020, will allow up to 2,500 workers from outside the EU into the UK each year. Concordia and Pro-Force are the two scheme operators who have been licensed to manage the pilot. It is their responsibility to identify suitable workers who they will then match to UK farmers, as well as ensuring the welfare of the workers whilst they are in the UK.
The aim is to test the effectiveness of the immigration system at alleviating labour shortages during peak production periods.The pilot will be reviewed before any decisions are taken on running a future scheme.
Modern Slavery: Annual anti-slavery audit will result in naming and shaming the non-compliers
In October 2018, the Home Office was moved to action following pressure from numerous groups frustrated by what they see as ‘blatant compliance failures’. It began with the Home Office writing directly to the chief executives of 17,000 businesses telling them to open up about modern slavery in their supply chains, or risk being named as in breach of the Modern Slavery Act. The letter gave the companies a grace period to comply – which ends on 31 March 2019.
Those businesses which do not comply by the deadline date will be “named and shamed” in a public report. The ‘naming and shaming’ is seen as a prelude to strengthening the reporting requirements under the legislation and, possibly, introducing sanctions for non-compliance.
The government reports that:
Businesses with a turnover of more than £36 million must publish annual transparency statements, known as a Modern Slavery Statement, setting out what they are doing to stop modern slavery and forced labour practices occurring in their business and supply chains. At the moment, it is estimated that 60% of companies in scope have published a statement. Whilst there are many examples of good practice, some of these statements are poor in quality or fail to even meet the basic legal requirements.
Holiday Pay: BEIS publishes guidance and online calculator for workers without fixed hours/pay
The Department for Business, Energy and Industrial Strategy (BEIS) has published guidance and an online calculator on how to calculate holiday pay for workers whose hours or pay are not fixed. This guidance is intended to help employers pay the correct amount of holiday pay for all their workers.
In simple terms, the Working Time Regulations 1998 mean that almost all workers are legally entitled to 5.6 weeks’ paid holiday per year, with the pay being calculated based on the amount of hours they work and how they are paid for those hours. For workers who do not work fixed or regular hours, and therefore do not receive the same amount of pay each week, month or other pay period, it can be more complicated. This guidance helps employers calculate holiday for such workers, using the holiday pay reference period (a worker’s previous 12 week paid period) and gives examples of what to do if you don’t have 12 weeks of data, when the reference period starts, what the definition of week is, etc.
Wages: National Minimum Wage and National Living Wage set to increase from 1 April
In the Budget 2018, in response to the Low Pay Commission’s recommendations the Chancellor, Philip Hammond, announced new National Minimum/Living Wageincreases from 1 April 2019 as follows:
- from £7.83 to £8.21 for workers aged 25 and over (the National Living Wage)
- from £7.38 to £7.70 for 21-24 year olds
- from £5.90 to £6.15 for 18-20 year olds
- from £4.20 to £4.35 for 16-17 year olds
- from £3.70 to £3.90 for apprentices aged under 19 or in the first year of their apprenticeship.
If you would like any additional information, please contact Anne-Marie Pavitt or Sophie Banks on: email@example.com.