Review of Important Employment Case Law Decisions from 2017

Posted in : Supplementary Articles NI on 11 January 2018
Mark McAllister
Labour Relations Agency

Mark McAllister, Employment Relations Manager at the Labour Relations Agency and Scott Alexander, Head of Learning & Development at Legal-Island review their 10 most important employment law cases from 2017 and discuss the ramifications for Northern Ireland employers.

The transcript covers 4 main areas:

  1. Whistleblowing Laws
  2. Gender Pay Gap Reporting
  3. Bereavement Leave
  4. Case Law Reviews

The cases covered in this webinar recording include:

 

Transcript

Scott: Good afternoon, everybody. Scott Alexander here from Legal-Island. This is a webinar. I'm joined by Mark McAllister from the Labour Relations Agency.

Mark: Hello.

Scott: We're going to take you through, in effect, his presentation with relevant updates from the 2017 Annual Review of Employment Law. We've three main parts, I suppose. We're going to look at the employment law changes and the differences between GB and Northern Ireland in the first part. Then we'll look at his top 10 cases, the bottom 10, if you like, the higher numbers, and then we'll go down to number one.

If you want to ask any questions, there's a little chat box on your screen. You can send those in, and we'll take those live.

Just as we're waiting on a few people coming in just looking at the number of listeners that are just joining us, I'll tell you about we do have other webinars coming up as well. We've got Employers for Childcare. They'll be looking at vouchers, childcare vouchers and the abolition thereof or the variations anyway from April. That's on the 22nd of January. The 23rd, we have a GDPR event. On the 31st, we've a Republic of Ireland employment law, so the equivalent of Mark's in the south, and on the 2nd of February, we have our regular monthly update that we do with O'Reilly Stewart, and that's at 11:00 on the first Friday of every month.

Whistleblowing Laws

We've quite a few listeners now. We're going to just start off chatting to Mark with the changes that have come, and one of the key changes, Mark, is whistleblowing law. Northern Ireland got a commencement order and caught up with GB. So tell us about that.

Mark: Yeah, on the first of October of 2017, the law effectively in Northern Ireland changed to reflect the GB whistleblowing legislation. The first commencement order effectively brought Northern Ireland law from 2013/2016 reforms that were made in GB into line, and there were some significant reforms that caught a few people on the hop because it was the 1st of October and it was a permanent secretary who pushed the button on the legislation to commence. So a few people were blindsided by it, but it is now in legislation, and so we are now more or less in line with GB as far as whistleblowing law is concerned.

Scott: What are the key changes that have now come in?

Mark: The key changes include that a worker who is making a public interest disclosure must ensure that the disclosure they're making is in the public interest. This is effectively to close a loophole in the legislation that occurred as a result of a case in 2002 called Parkins and Sodexho. This means that an individual worker is no longer able to use the whistleblowing legislation to blow the whistle about a legal obligation that relates only to their contract of employment. It has to be much wider and in the public interest.

Scott: That's a genuine belief it's in the public interest, but I think, as we'll see the first case that we're going to deal with in the case law review, it's not really a high bar what's in the public interest.

Mark: No indeed, and practitioners have been curious to see how the courts will interpret what the public interest is, and the courts, as you've quite rightly said, are more interested in the objective test of what the worker reasonably believed was in the public interest rather than have this very black and white test about what the public interest is and how many people have to be affected by that for it to be in the public interest. That's not how the courts have gone with it. The number of people affected by it is not really the core consideration of the courts.

Scott: Okay, and what other changes have come in, Mark?

Mark: Other changes include the removal of the good faith requirement. If a worker is making a public interest disclosure, they are no longer barred from the protection of the courts if they make the disclosure in bad faith. They may be motivated by revenge or malice or compensation. It doesn't matter. They'll still be able to have their case heard. However, any compensation that they win will be reduced by a percentage to reflect the bad faith which was their predominant motivation in making the disclosure.

Scott: Okay, and they were too minor for most people but major for people in the NHS. They've been brought on board and so on.

Mark: That's right.

Scott: But the other big change is in employer vicarious liability.

Mark: Absolutely. When the original legislation was passed there was a gap or, as lawyers call it, a lacuna in the law that meant that there was no provision for employers to be vicariously liable for the harassment of the whistleblower by fellow workers. That loophole has now been changed.

This has major policy ramifications for employers because, much in the same way as there is in our anti-discrimination legislation, there's now a requirement on the employer to show what reasonably practicable measures they have taken in order to protect whistleblowers from being harassed from fellow workers.

Scott: That leads into other issues, and I know that there has been case law now in GB, but if you're protecting the person who's blowing the whistle and then you have another employee who has allegedly broken the law in some way and that's why you blow you whistle, that person has a right to a fair hearing.

Mark: That's right.

Scott: And it's useful if you know who it is that's saying that you've done something wrong if you go to defend yourself, but that makes it very difficult.

Mark: It does. It does, and HR practitioners are really in the crosshairs here because, in effect, there will always be a question about which takes precedence – the grievance procedure, the discipline procedure, or the whistleblowing procedure – and there are lots of questions surrounding things like natural justice, about knowing your accuser, the ability for somebody to make an anonymous whistleblowing complaint.

So a lot of it's to do with the mechanisms in the internal organisations, and HR practitioners need to be careful because, as we'll see in some of the other cases we're about to look at, it's not within the gift of HR, for example, to categorise whether something is a whistleblowing complaint or is not. It's really within the gift of the whistleblower to determine how the subject matter that they're disclosing, how it's categorised.

Scott: And it has this genuine belief. So even if sometimes it's not really whistleblowing, that's going to cause some certain problems if you genuinely believe it's whistleblowing.

Mark: It is.

Scott: The courts will ultimately determine it.

Mark: Absolutely, and there is a degree of subjectivity on the individual and objectivity as far as the court's concerned, and it can put HR in a very nebulous position because they are not in a position to second-guess the reasonable belief of the employee or the worker. It is purely within the gift of that individual employee or worker.

HR might be tempted to categorise a whistleblowing complaint as a run-of-the-mill grievance, and in actual fact they shouldn't be doing that because, as we'll see in the Croydon NHS case, that's not with their gift. That's a test that the courts or tribunals have to employ.

Scott: Okay. Now, you could ask questions out there in internet land if you like, or you can hold them back, and we'll deal with them, I'm sure, at the O'Reilly Stewart webinar on the 2nd of February.

Certainly, in the Republic of Ireland, we've had similar whistleblowing legislation for quite a bit. It does cause issues with when you get a complaint, when you get a grievance, do you ask the question, "Is this a whistleblowing complaint?" because it brings extra protections and extra costs, unlimited rewards and such like that you would get in Northern Ireland and five years' compensation of your annual salary in the Republic of Ireland. So it's a different beast, a different category.

Mark: It is a different beast, but from a practitioner's perspective, you would always say you need to err on the side of caution. If it walks like a whistleblowing complaint and quacks like a whistleblowing complaint, invariably treat it as a whistleblowing complaint, and if you need to verify that with the individual, so be it, and treat it at face value. Don't make assumptions that it's just a standard grievance, because that will come back to bite the practitioner.

Scott: Okay. We're going to move on to another area of law. If you've just joined us – I can see quite a few people are just joining us now – don't worry too much. You'll get a podcast of this broadcast. It's being recorded, and you'll get that in about an hour or so after this broadcast is completed. We're going to last about 45 minutes. That will be subject to how many questions you decide to put in. If there are none, that might be a bit shorter.

Gender Pay Gap Reporting

Anyway, another area which is concerning people is coming in GB. It's on a statute. We're expecting it in Northern Ireland. Nothing's happened, but in GB, we have gender pay gap reporting. It's all over the press. Tell us about what's happened in GB, and then we'll look at the differences that should apply in Northern Ireland.

Mark: Yeah, it's certainly the hottest topic given the BBC revelations. The first thing to say is that the media coverage with regard to the BBC presenters' pay has meant that the public are now conflating equal pay with gender pay gap reporting, and they're completely different constructs.

Gender pay gap reporting is very much a numerical almost accounting-type exercise where organisations are obviously obliged to produce a report in terms of the median rates of pay, etc., whereas equal pay is much more a 48-year-old legal construct that seems to be employers are still getting to grips with.

One of the big difficulties in recent months has been the perceived lack of enforcement ability on the Equality and Human Rights Commission in GB to enforce the gender pay gap reporting provisions.

In effect, what's happening now is some commentators across the water are saying it's a bit of a toothless tiger. There is no real sanction to be faced by an employer who doesn't produce the report on their gender pay gap.

Scott: That's up for debate at the moment.

Mark: It is.

Scott: There's lots of stuff on the internet at the moment and CIPD reports and so on about whether the Equality Commission over in GB have the authority to ask for unlimited fines or whether it has any authority at all.

Mark: And that's different in Northern Ireland because the commencement order number 2, which contains the gender pay gap reporting provisions for Northern Ireland make it very clear that there's provision for a fine of up to £5,000 per employee in the organisation. That's very clearly stipulated, and that's what's garnered most of the headlines here.

That together with the fact that it's not just gender pay gap reporting, it's reporting ethnicity and disability, and the fact that we don't know what the threshold's going to be in Northern Ireland. Is it going to be 250 like across the water, or is it going to be 150 or 100 employees?

Scott: It's 50 in the Republic, and their drafted gender pay gap legislation is only 50 employees, and you wouldn't expect it to be much higher in Northern Ireland. You wouldn't capture anybody.

Mark: No indeed, and so this is very much an unknown. I mean, the mandatory obligation to produce an action file and work with your trade unionists is very, very interesting because some people have said if you're conflating gender pay gap reporting and equal pay, then what's the action plan going to look like? What structural amendments can you make in the organisation to ensure that the gender pay gap is eliminated?

Well, if women are still taking off to have kids and raise their kids and then come back into the organisation at the same level of pay as they were on when they left, that gender pay gap is going to perpetuate.

So we need to be looking at things to encourage men, for example, to be going off and taking their shared parental leave provisions, and that's another kettle of fish, but there has to be more done in order to eliminate that gender pay gap.

Scott: Well, it's a bit like some of the ones that were published in the last week in the Airlines where nearly all the pilots were male.

Mark: That's right. EasyJet is an example.

Scott: Yeah, so of course there's going to be a big gender pay gap where the highest paid jobs are all men.

Mark: Yeah. If you have 1,000 pilots on £92,500 per year and they're male and you have 76 and they're female, there's going to be a disparity in pay just because of the gender breakdown. It's nothing to do with equal pay.

Scott: No.

Mark: It's to do with the makeup of the workforce, and that's the important distinction to make. Just because an organisation has a gender pay gap percentage that looks startling on paper doesn't mean they necessarily have an equal pay problem, and that's why it's necessary to look at them as two different constructs.

At the minute in Northern Ireland, in the absence of an assembly and a minister and any public consultation on it, it's very much up in the air. So the differences between GB and Northern Ireland are significant. There's a question mark over the draftsmanship and the enforceability provisions in GB and in Northern Ireland. As with most things, everything is on hold.

Scott: Okay, but it's still good advice, I think, to start looking at it. It's going to come. Eventually, we're going to get something out of direct rule or something for gender pay gap reporting given that it's being pushed through in the Republic of Ireland. It's already there in GB. It's inconceivable that whoever takes over and takes charge and that it was approved by Stormont before the hiatus. Then you're going to have it coming in.

Mark: Yeah, I think there will probably be a public consultation on it, and I think some of the anomalies will certainly be flagged up, but you're absolutely right. There's nothing to prevent an employer who, in principle, may be covered by the threshold to engage in what effectively is a number-crunching exercise. It might not even be HR that are doing it. It might be payroll who are doing it in order to get the statistical component of it ready. The other parts will fall into place naturally after that.

Scott: Okay. We've still got some people joining this broadcast here. Don't worry if you've arrived a bit late. You will be getting a recording of it about an hour after we have completed the recording, which should be in about half an hour's time. We'll be finishing at 12:45.

Bereavement Leave

There's a third area of difference that's coming up in GB this year that they're certainly looking at that you would have expected to be brought into Northern Ireland had we had a Stormont assembly because they tend to follow those family-friendly things, and that's bereavement leave.

Mark: Yeah.

Scott: What are the changes in GB that you're looking at around bereavement or potential changes?

Mark: Yeah, there are more potential changes at this stage because there's nothing in the legislation that's carved in stone. At the minute, the provision is a consultation and a call for evidence for a potential change in the law to allow parental bereavement leave following very much the sort of statutory provisions. For example, the qualification period of 26 weeks and the amount of money for the 2 weeks' leave will be based on the statutory formula that exists for statutory parental pay, etc.

Yes, you're absolutely right. This is the latest in a line of family-friendly amendments that we've seen with shared parental leave, etc., but given the political situation here it relates only to Great Britain.

Carer's leave has been an issue that was a hot topic at the assembly prior to the suspension of the assembly, so it will probably come as a big shock if it's implemented in GB and not here.

Case Law Reviews

Scott: Okay. So we're going to move on to the case law reviews.

Mark: Yeah.

Chesterton Global Limited v Nurmohamed

Scott: We have your, I suppose, 10 to number 6 cases that we're looking at, and the first one we're looking at alluded to anyway, it's the Chesterton Global Limited v Nurmohamed case. That is a whistleblowing case, and it's the one that, I suppose, reflects the fact that it's not that onerous, the public interest test itself.

Mark: No indeed. A lot of practitioners, like we said, were looking at this case to say, "Okay. The courts are now going to give us a definitive definition of what the public interest is," and the court simply shied away from that and said, "Well, no. The focal point here is what is the objective, reasonable belief of the individual who is blowing the whistle? Did they reasonably believe that the subject that they were blowing the whistle about was in the public interest?" That's the focal point.

In this particular case, it related to a bit of creative financial accounting alleged by the whistleblower to bring the profits of the organisation down, which meant that the commission payments to hundreds of senior staff in the program would have been affected, and he genuinely, reasonably believed that that was in the public interest.

It didn't affect a great swathe of the populace. It wasn't on the news headlines, and therefore, when the decision came from the Court of Appeal and he'd won his case and they said this was a protected disclosure and it warranted the protection of the legislation, a lot of practitioners raised an eyebrow because it was only about 100 staff affected by it, and it wasn't necessarily an issue that's affected the great swathe of the populace.

So that sort of set the bar quite low from a judicial perspective in terms of where the protection kicks in for whistleblowers.

Scott: Of course, because the laws changed in Northern Ireland, that case doesn't set a precedent. It's an English case.

Mark: No.

Scott: But it would be persuasive now under the new legislation in Northern Ireland.

Mark: It would. It's a Court of Appeal decision, so it will kind of have sway here because that's the interpretation that a superior court in GB has given to a piece of legislation that has now been brought in. So yes, from a jurisprudential perspective, absolutely.

Lidl v Central Arbitration Committee

Scott: Okay. The number nine case as far as you're concerned is Lidl against the CAC, the Central Arbitration Committee, and that was a trade union case there. So tell us about that.

Mark: Yeah. The central point here about the Lidl case was whether or not a bargaining unit for the purposes of trade union recognition consisting of 1.2% of the entire U.K. workforce was too small to be considered to be appropriate for the bargaining unit to be recognised by the CAC and by the employer, ultimately.

What happened was the equivalent legislation in Northern Ireland is the Employment Relations in Northern Ireland Order of 1999, and what the Industrial Court in Northern Ireland would take into consideration would be issues such as proliferation, issues of fragmentation, the bargaining unit being too small and not being compatible with effective management. Traditionally, the viewpoint would have been that if you have 1.2% of the workforce, it's too small. It would be, by definition, fragmented and not commensurate with effective management.

What the Court of Appeal said in this particular case was, "No, what the key issue was there was a clearly defined bargaining unit albeit it consisted of 1.2%, but there was no risk of proliferation," and the key issue then ultimately was the legislation, to quote the judge, was not designed to address a situation where you had a small island of recognition in a sea of derecognition.

Therefore, that dispelled the myth that small meant fragmented, meant incompatible with effective management and therefore wouldn't be recognised as a bargaining unit.

Scott: In that case, you could have, for instance, let's say a bargaining unit is you've got 100 stores, and only 1 store seeks recognition. That would count as far as . . . or you could take a small grouping of employees across those 100 stores and provided it was, if you like, a niche enough grouping, that would constitute a bargaining unit because it wasn't going to spread to the others, and if the employer didn't want to recognise some hard lines, they would still have the right to go through the statutory recognition procedures that apply both in Northern Ireland and in the rest of the U.K.

Mark: Yeah, absolutely, absolutely. So the key issue being how uniquely pigeonholed the bargaining unit is either across the board or across space geographically where the organisations are based in the U.K. or simply within a single organisation, yeah.

Beatt v Croydon Health Services

Scott: Okay. We have a second whistleblowing case that's come up. That's number eight in your list, and that's Beatt v Croydon Health Services. Now, we alluded to that as well. It's about who considers whistleblowing a whistleblower thing.

Mark: Yeah. I mean, I think the lesson or takeaway from this particular case is that it's not within HR's gift to determine whether or not something is a genuine protected disclosure as set out in the statute. There are six categories under the original legislation that say, "This is a protected disclosure."

What happens if a worker makes a complaint and effectively labels it as whistleblowing? It's not within the gift of HR, for example, to say, "No, we're going to treat that as a run-of-the-mill grievance. We don't believe it is a protected category." The court made it very, very clear. The Court of Appeal made it very clear that it's the job of the court to determine whether or not the subject matter at the heart of the whistleblowing complaint is a protected disclosure. It's not for the employer to categorise one way or the other.

Again, as we said, if the employee or the worker presents with a whistleblowing complaint, you should take it at face value and let the courts decide, not the HR department to say, "No, you've been confused here. That's not really a whistleblowing complaint. It's just a grievance."

Scott: It's not a very practical thing, though, for employers because it's not dissimilar to TUPE. It's only a tribunal that can determine whether it was actually a transfer. Employees don't know whether they're covered and protected by TUPE protections. Effectively, the employee doesn't entirely know whether they're protected subject to the fact that they have a genuine belief, but there must be some situations where it's so clearly not . . .

Mark: No indeed.

Scott: …a whistleblowing thing.

Mark: And similarly, you're going to have situations where a grievance has effectively a crossover between the whistleblowing complaint and a run-of-the-mill grievance, and the question then is, "Should HR extract the relational component, for example, in a grievance and the subject matter at the core of the grievance, which is a whistleblowing complaint, and treat them in a sort of twin-track approach?"

Whistleblowing will cut across discipline. It will cut across grievance, and it's that interaction and that cross-fertilisation, if you like, between the policies that needs the focal attention, and that's clearly about HR making sure that employees know the difference between a standard grievance and a whistleblowing complaint.

Scott: Now we've had a question in here on the chat box. Can HR challenge the individual's assertion that it is a whistleblowing complaint at the point the complaint is made? That's not dissimilar . . .

Mark: No, it's not.

Scott: . . . to the legislation which protects people who are enforcing statutory rights. They say, "Well, you can't get rid of me. It's a health and safety complaint because the toilets are dirty," or whatever. It does cause problems.

Mark: It does cause problems.

Scott: But you seem to be saying that if somebody says it's whistleblowing, unless it's really blatantly obviously not and it's just a smokescreen, you have to take it at face value because the courts will rap you over the knuckles and say, "You're not the person who determines whistleblowing," or, if it were a health case, "You're not the one that determines whether somebody's fit. You need a doctor's advice." In this case here, it's almost like, "Go and get legal advice because it's too dangerous and see whether they think it’s really whistleblowing."

Mark: Yeah, certainly, that is a problem. There's no doubt about it. There will be overlaps between ordinary grievances and whistleblowing contexts. So an employer needs to be very, very careful about challenging the authenticity, if you like, of a whistleblowing complaint and the belief that they think it's a run-of-the-mill grievance.

If it presents as a whistleblowing complaint, I think the best thing to do is treat it at face value as a whistleblowing complaint provided you have a whistleblowing policy that pays due regard to your grievance and discipline procedures, etc., so that in the event that it does go to tribunal, you can say, "We treated it as this, but the reason for the treatment that the employee suffered was not as a result of making a protected disclosure. It was something completely different."

Scott: Yeah, because ultimately, if it is a protected disclosure, all those other changes apply.

Mark: That's right.

Scott: And the employer is held vicariously liable for not protecting the employee who might be harassed who has allegedly made a whistleblowing complaint.

Mark: That's right.

Scott: There are different categories.

Mark: That's right.

Ali v Capita

Scott: We'll move on to your fourth top case, if you like, Ali v Capita. That was a case about enhanced parental leave pay.

Mark: Yes.

Scott: So tell us about that.

Mark: And we've moved on from the annual reviews for Legal-Island in November in the sense that this case went to the Employment Appeals Tribunal. We're still waiting for a decision here, but at the core, at the core of this case, there's a question that if a man is off on a period of shared parental leave, why would he be entitled to just receive the statutory flat rate of pay rather than occupational maternity pay that a woman would have being off for the same period of time?

The key thing here is that the ethos of the shared parental leave legislation is that once you go beyond the two weeks compulsory maternity leave, the role of the man and the woman is exactly the same. It's about rearing the child, care and responsibility for the child. The biological link between the mother and the child, etc., is really irrelevant for the purposes of the employment law. So could you justify the man having a flat rate of £140.98 a week and the woman doing exactly the same role on enhanced occupational maternity pay?

Scott: Because she worked for an employer who used enhanced maternity pay, and now men get rights to look after children. That flies in the face of the surrogacy cases that went through the European court which found that the maternity protections were for the birth mother, not for the surrogate mother, who, as far as you're concerned, is doing exactly the same purpose, i.e. looking after a child, but there's a recuperation element in maternity that you certainly don't get in shared parental leave for the man.

Mark: Absolutely, and the key issue here is there are some focal differences. Obviously, shared parental leave can't kick in until after the child's born. The woman can go off on maternity leave if she doesn't have a partner.

At the minute, there's an Employment Tribunal case, Hextall v. Leicestershire Constabulary. It will be brought into the equation one way when we see the appeal decision come out in Ali, and we're really waiting to see what happens here because some employers have seen the writing on the wall, as they see it. For example, Aviva have decided to give equal pay in terms of the contractual enhancements for men and women who are off on shared parental leave so there's no difference.

Scott: But if it were one couple in the one workplace, they wouldn't get both. One of them would get the parental leave or the maternity leave.

Mark: Yes.

Scott: The difficulty is if you have an employee who is off on maternity and then another one comes along and says, "I want to take shared parental leave. Therefore, I would get it if I were an employee, and I should have the right to full pay to go look after my child, and I'm a man."

Mark: That's right. There's very little case law on this. Snell v. Network Rail, which was last year, the Ali case, and the Hextall case are really the only three things that we have. At the centre point of the case you'll probably find in the EAT is who the comparator is, who the proper comparator is, because that will be central to it and the distinctions in the Hextall case. It will be interesting to see what the EAT have to say about that.

Scott: So watch this space.

Mark: Watch this space.

Focus Care Agency v Roberts

Scott: Okay. The bottom of the top six, the last one for this group that we're dealing with, is Focus Care Agency v Roberts. It's about on-call and sleepovers. Very expensive case, this, for some people in the care industry. So tell us about that.

Mark: Yeah. The whole notion of someone who has sleepover responsibility, especially in the private independent health care sector where a great deal of the focus has been on here because of the financial ramifications, the cases and the subject matter of someone being on-site on-call has been rumbling on for years.

Now, for the first time in the Focus case, the courts have started to really grasp [inaudible 00:26:44] and say, "Look. There is a multifactorial approach that needs to be taken here," and the clear direction of travel is if the multifactorial approaches are met by the individual, then for all of the time that they're on-site on-call, even if they're asleep, they're entitled to the national minimum wage.

For example, organisations like Mencap have said, "Look. The back-pay provision for this alone is going to cost £400 million." The government have set up a scheme to allow employers to absorb the economic impact. This is up for an appeal in March, but there seems to be a clear pattern of thought that the appeal is not going to be successful.

Scott: Working time is working time. We had a case this week where the courts have determined that you need a 20-minute break, a full 20-minute break.

Mark: Yes, not an aggregated 20 minutes.

Scott: No.

Mark: That's right.

Scott: If you're off on a shift and you get four five-minute breaks, that's not compatible with working time rules. So those breaks, the annual leave, everything is driving towards these being immutable rights for workers.

Mark: And the European courts have gone really back to basics, especially in areas such as holiday pay. If you're a worker, you're entitled to be paid holidays. That means being away from work and getting the pay that you'd be entitled to including overtime, etc., and there is a provision for pay to carry over. The European courts seem to be going really back to basics, giving it a very literal interpretation of what the working time regulations say.

Scott: And that sleepover case is very much the same.

Mark: Absolutely.

Scott: It's just going in that same direction.

Mark: Yeah.

Scott: It’s just moving them all the one way. Okay. We'll move on to the top five, if you like. Number five is Stratford v Autorail.

Stratford v Autorail

Mark: Yes. The central issue here is about warnings, and warnings are a particularly contentious subject matter in the workplace because they have an apparent shelf life, an apparent lifespan, and certainly, with the Labour Relations Agency and its code of practice, it's decided that, for example, if you have a live warning, it stays on record, for example, 12 months, and 12 months is usually the standard. After that it becomes what's referred to as expunged or spent or expired and cannot then be used to be resuscitated, if you like, in any future cases.

In this particular case, the pattern of behaviour – and it was a clear pattern of behaviour – was such that the employer was allowed and it was deemed to be reasonable for the employer to effectively resuscitate an expired warning to say, "This is indicative of a pattern of behaviour that has been occurring for a long period of time, so we're resuscitating it in order to effect the dismissal of this employee."

So at face value, it looks quite contentious on these, but as with many things in employment law, there are fact sensitivities attached to it, so you have to be aware that there was a very definitive pattern of behaviour here. In this particular case, it was appropriate for the employer to resuscitate an expired warning and use it.

That's not to say that this gives an employer a green light to do this. There is limited case law in this. The Airbus and the Diosynth case in 2006/2008 would indicate that it's not good practice, but fact sensitivity may determine that you need to resuscitate an expired warning on occasion.

Scott: So if you've got real chancer out there working for you, well, you employed them, but if you've got somebody that's really pretty bad, you might get away with it. But in general terms, if they're expired, they're gone.

Mark: That's right. That's right.

Agoreyo v London Borough of Wandsworth

Scott: Okay. Your number four case is Agoreyo v London Borough of Wandsworth. Again, that was another disciplinary issue, if you like. So tell us about that case, Mark.

Mark: Yeah. Again, this goes back to things that are very relevant in the workplace. The last case was about warnings. This case was about suspensions. Suspensions are commonplace in the workplace because an employer will say, "We have to invoke the precautionary suspension process in order to ensure that an employee is off-site and that they can't perhaps interfere with witnesses or the investigative process."

The difficulty is if the culture in the organisation is a kneejerk one to suspend as just the default mechanism, then this raises questions about the breach of the implied duty of trust and confidence that's owed to the individual.

What the high court said here very, very clearly . . . and it was very clear that it actually attacked the terminology used by the employer in this instance. The employer had written to this employee – a teacher – to say that the suspension was a neutral act, and the high court seized upon those words and said, "No, no. Suspension is not a neutral act." An inappropriate suspension where other options aren't considered such as redeployment or working from home or whatever it happens to be could breach the implied duty of trust and confidence and put this sort of stigma and Sword of Damocles above the head of this employee.

Scott: But everyone can get that. I've been working for Legal-Island for, what, I don't know, 14 years or something like that. I worked at the Labour Relations Agency for a number of years. You've been here a number of years. If we were to be suspended, the word would go around like wildfire, right? And beyond.

Mark: Yes, yes.

Scott: And no smoke without fire. It's not a neutral act.

Mark: It's not. The employer tried to indicate it in the letter too to say, "Look. We're not prejudging the case. It's not an indication of guilt. It's simply a precautionary measure."

The difficulty is if the culture in the organisation is that that's the default position to suspend first and then ask questions later, that could fundamentally destroy the implied duty of trust and confidence owed to the employee, especially the employee in this particular case, who was a teacher who had responsibility for young children. That reputational harm caused to her may never be repaired. So whether or not the employer paid due cognisance to that is a focal issue here.

The key issue is be very careful about suspension as a first course of action if there are alternatives given the size, niche, and resources of your organisation. Contemplate them first or implement them first rather than go straight to suspensions.

It's been established in common law since Gogay and Hertfordshire County Council that this could be a breach of the implied duty of trust and confidence, fundamentally destroying the contract and giving the employee the right to resign and claim constructive dismissal.

Scott: Okay. Just going back to the Stratford v Autorail case, we had a question come in on the chat window there. Was it related to absence? I can't remember if it was or not.

Mark: No, it was misconduct. It was behaviour.

Scott: Right.

Mark: Behaviour. It was using the mobile phone on the shop floor and the behavioural indiscretions.

Scott: Right.

Mark: Of which there many.

Scott: Okay, but it would be easier to maybe go back to look at a pattern if there is something like absence. So that might give the employers a little bit of succor there, if you like.

Mark: Yeah. There would have to be a clear pattern, and the obvious one is absence. Also bullying behaviours. Where there’s an employee who effectively, and to use the term that's being bandied about now is gaming the system, keeping their nose clean until such times as the warning becomes spent and then engaging in the behaviour again either from an absence perspective or from a behavioural perspective, yes, there's an argument there that you'd be able to show the pattern, and the only way to show the pattern is to resuscitate the latest of the live warnings or the expired warnings to show that the individual was clearly gaming the system.

King v Sash Windows

Scott: Okay. Thank you very much, Mark. We're on to your top three. We have King, which might become even bigger, I don't know, but King against Sash Window that we have here. It goes back to working time. It's a big working time case, this. Tell us about King v Sash Windows.

Mark: Absolutely. This has the potential to be the biggest case. Had I to do this over again, it may have been my number one case, but in November at Legal-Island, it was an Advocate General opinion. It has now since the 29th of November been a European Court of Justice decision, and they followed the Advocate General opinion, and the key issue here taps into working time. It taps into the gig economy. It taps into this whole notion of classification of the individual.

This individual was classified as an independent contractor for 13 years when in actual fact he was for all intents and purposes a worker, and under the working time regulations, he didn't take his holidays. He didn't take his 5.6 weeks or his basic 4-week holidays primarily because they were discouraged to do so and he wasn't going to be paid if he had taken them.

So there are a lot of issues here, a lot of issues that the questions were posed to the European Court of Justice, but effectively, what the court said was that if an individual is wrongly classified as an independent contractor and they're actually a worker, they're entitled then to the four-week paid holiday, and there's no backstop provision for that. Theoretically, they can go back now very shortly to 20 years, back to when the working time regulations came in, and claim.

That has massive ramifications. In this particular case, it went back 13 years for £24,500 worth of unpaid holiday pay, and now there's . . .

Scott: And all of his colleagues as well all have claims, yeah.

Mark: And the question mark now hanging over it in GB, although not applicable in Northern Ireland, is, "Does the two-year backstop legislation stand up to scrutiny based on the European jurisprudence?" Arguably, the answer to that is, "No, it doesn't stand up to scrutiny." So people who have been incorrectly classified as independent contractors who are actual workers can go back 20 years with the same employer, etc., for unpaid holidays. It has massive ramifications.

Scott: Now, the two-year rule in GB, I can't see how that would stand up against the European right because you'd be opting out of statutes, aren’t you?

Mark: That's right.

Scott: But it's only the four weeks.

Mark: It is. It is.

Scott: It's not all contractual holidays.

Mark: No, it's not.

Scott: It's not even the statutory holidays under the working time regulations, you could argue here, the 28 days, if you like, and the 5.6 ones. It's the four-weeks holidays . . .

Mark: It's the four weeks.

Scott: ...under European law.

Mark: That's right, but that follows the direction of travel that exists in working time cases prior to this anyway, so it was never going to be the 5.6 weeks, but regardless of it, if someone has been wrongly classified for 20 years as an independent contractor, that's 4 weeks of back-paid holiday over 20 years for 1 individual.

Scott: It's 80 weeks' pay.

Mark: It's a significant sum. It's a significant sum.

Aslam and Others v Uber

Scott: That's not bad. We'll look forward to those ones coming through. I'm sure there are many, many cases in the system in Northern Ireland alone over holidays and such like, and we'll come to that in another second with the Dudley and Willetts case, but before we do that, we have the Uber case, Aslam and Others v Uber, and you've put that in. It's a U.K. EAT case.

Mark: Yes.

Scott: You put that in. Tell us about that and why it's at number two.

Mark: It's at number two because this case has the potential to undermine the gig economy as we know it. It has been very, very highly publicised in the media. It's one of around 10 gig economy cases that have happened in the last sort of 18 months or so. In nine of those cases the workers have been successful, and in one they haven't been. That's Deliveroo, and we can talk about that.

Scott: The union one, yeah?

Mark: That was the union one, and it's quite different for different reasons, but the focal point about Uber was the app, the platform, the digital platform for the drivers, was deemed to exert enough control over the drivers and how they did their job to warrant them to be considered to be workers under the law and not independent contractors, and between the Legal-Island annual reviews, the EAT had come out on the side of the workers. It's now being appealed. Uber initially said they were going straight and leapfrogging straight to the Supreme Court.

Scott: That's been refused.

Mark: That's been refused. They've been told now it's the Court of Appeal that they have to go to, and that's it. So in around March, April we should see that being listed for a hearing because it has the ability to fundamentally undermine the basis of any digital-platform, gig-economy workers, the focal point being the amount of control exercised by the employer over the drivers.

The Deliveroo case is different because Deliveroo riders had the ability to effectively subcontract out their work, so that meant in their contract they had a very definitive substitution clause that they could exert. Workers can't do that. Independent contractors can effectively subcontract out, and because Deliveroo drivers or riders had that in their contract and effectively do subcontract out their work, the existence of that substitution clause distinguished them from, for example, Uber drivers, and that's why they are classified as independent contractors.

Scott: Now, if they lose that and they lose the fact that they are workers, then those workers obviously have all those other rights.

Mark: That's right.

Scott: Like the holiday pay. I'm looking at the previous case of King. They're going to have holiday pay going back for as long as they have continuously been employed or at least deemed to be workers.

Mark: That's right.

Dudley v Willetts

Scott: Our final case that we have today is Dudley. And it's yet another holiday-pay, working-time-type case. That could have huge ramifications. So tell us about Dudley v Willetts.

Mark: Well, in the tail end of 2016 we saw the clear direction of travel for cases involving calculation of holiday pay. There's no doubt that contractually-guaranteed overtime is factored into holiday pay calculation. We knew through the raft of other cases in 2016 that contractually-non-guaranteed overtime that's regularly worked and regularly achieved has to be factored into holiday pay calculation.

The last domino to fall, really, and the one that we've been waiting on in 2017 was whether or not voluntary overtime that was regularly worked had to be calculated into holiday pay calculation. The EAT has now made a decision on that and said, "Yes, they do." So all forms of overtime, effectively, that are regularly worked attract the calculation of holiday pay into that.

Scott: So they're going to be expensive. We've just got a couple of questions coming in here. I am just going to move this laptop so that I can actually read it in front of me here. “Five months ago, we introduced holiday pay calculated over a 12-week average to include overtime. A query arose from an employee who was off sick for six weeks and then took a week's holiday on return.

The employee's average total pay was lower in total than the holiday pay she expected based on the old hourly rate. The employee is querying that we were incorrect that it's in her contract for employment that she would earn £X per hour including holidays and is arguing that we pay her £Y. £Y rate was well above the national minimum wage. Her query is, "Are we in breach of contract?" Surely there is no merit in this.”

Well, is there merit? That's quite complex, that one, actually. You might need to get in touch individually with Mark on that one, but what do you think?

Mark: Yeah. At face value, you would say that the ethos and the direction of travel with regard to holiday pay calculation would infer that any premia that's achieved regularly worked and regularly achieved over, for example, that 12-week referencing period has to be factored into the holiday pay, so there may well be an argument there. The sickness aspect complicates things slightly, but I'd maybe come back with a fuller response.

Scott: Okay. We've another couple of questions coming in. This seems to have struck a nerve for some reason. I don't know what it is. “Has the Employment Appeal Tribunal given any indication as to the calculation to be used regarding voluntary regular overtime and holiday pay, so the periods to be used? What does "normal" or "regular" mean?”

Mark: Well, that's a good question because none of the case law has given us an indication there. They common approach being taken by employment lawyers for the 12-week period that exists under the working time regulations is that I've seen other employers who simply look at their annual overtime rates and the overtime that's worked and simply say, "If there is a degree of consistency in the pattern of people doing the overtime, then that will indicate regularity." Unfortunately – and that's the holy grail of working time and overtime pay holiday pay calculation – the term "regular" isn't given a definitive definition.

Scott: Okay. I think we only have time for one more question. If you do have those questions and you want to send them in, that's fine. We'll try and deal with them, and we'll cover them tomorrow. We'll either get a question and answer email out to you, but you can also link into the webinar on the 2nd of February with O'Reilly Stewart. We'll pass those ones on.

I'll give you one last one here. “We have recently dismissed an employee who has been on sick leave for six years. When we contacted our payroll, they said there was no holiday paid owed. Are we obliged to pay a certain amount of holiday pay even if he hasn't worked for six years?”

Mark: My gut reaction there is no primarily because after six years there would be a question mark over the status of the contract of employment actually existing any longer. Why would an individual still be effectively on the books after six years?

Scott: There could be a number of reasons. It could be that they're on pay protection. It could be that nobody's done anything about it. It could be they're on what we used to call the dead list where they leave them until they die because you don't want to pay them notice and pay them off. Chances are the contract could be frustrated, but you'd have to have a look at that. I certainly wouldn't go out paying whatever it is, 24 weeks' pay, as a result of someone being on sick.

Mark: No, I don't think so. I don't think so.

Scott: Those employees, had they still been on the books, could apply for leave. You can still take your holiday even if you're on sick.

Mark: That's right, and one of the difficulties here is employers are caught in a very, very invidious position primarily because the ethos of the legislation – for example, in the working time regulations – is use it or lose it, but contextually in, for example, long-term sick, as we know, there's an automatic right of carryover.

So the legislation says one thing, the case law says another thing, and unless an employer is well-versed in the differentiation between the two, they can often find that they end up owing people payments that they were automatically entitled to.

Scott: Okay. We're going to have to leave it there. You might hear the sirens, folks, if you're listening. They're coming to take us away. So we'll leave it there. You will be getting a survey. You'll also be getting a podcast. I am told that the sound quality today wasn't as good as it normally is. I think that's the shape of the room here. I think they’re trying to disguise any sounds here in the Labour Relations Agency in case people are listening in.

But we will send you that survey. If you have other questions, send them in. We'll forward them on to Mark. I'm sure he'll have a chance to look at them at some stage. We'll circulate something to you, but if you want to follow those up, we'll take them up with O'Reilly Stewart.

Don't forget. On the 22nd of January, we have the Employers for Childcare webinar. We also have the GDPR going on the 23rd of January if you're interested. The Republic of Ireland is on the 31st of January, and our regular one with O'Reilly Stewart every first Friday of every month at 11:00 for a little half-hour chat to deal with all your questions.

So thank you very much for listening, and I hope to see you soon. Bye-bye.

Mark: Bye.

This article is correct at 11/01/2018
Disclaimer:

The information in this article is provided as part of Legal-Island's Employment Law Hub. We regret we are not able to respond to requests for specific legal or HR queries and recommend that professional advice is obtained before relying on information supplied anywhere within this article.

Mark McAllister
Labour Relations Agency

The main content of this article was provided by Mark McAllister. Contact telephone number is 028 9033 7403 or email Mark.McAllister@lra.org.uk

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