Can you afford to ignore the Gender Pay Gap Regulations?

Actually, I think you can.


I mean what’s  the worst that can happen? While other large employers publish their gender pay gap information you simply sit back and say. “Not for us, thanks, we’re fine.”

Of course many people will be disappointed in you. Some may even be angry and there might be ‘damaging publicity’. But if you don’t care about those things, can anyone actually do anything about your failure to publish the information that is required?


The  Equality Act 2010 (Gender Pay Gap Information) Regulations 2017  don’t impose any sanction for failure to comply with their requirements. In fact, the Regulations don’t even seem to contemplate anyone not complying with them. There is nothing in the Regulations themselves to say what happens if an employer just chooses
to ignore them altogether.

The Government has, however, tried to create the impression that the Regulations have some teeth by making this  point in the explanatory notes:

Failure to comply with an obligation imposed by these Regulations constitutes an ‘unlawful act’ within the meaning of section 34 of the Equality Act 2006 (c. 3), which empowers the Equality and Human Rights Commission to take enforcement action.

So the Equality Commission can enforce the Regulations by taking action against employers who fail to comply?

I’m not convinced.

This is an assertion made in some explanatory notes. It is not part of the Regulations themselves.  This is important. The Regulations do not provide that a failure to comply is an unlawful act; the Government is merely asserting that. And I think they are wrong.

Section 34 of the 2006 Equality Act (this Act sets up the Equality Commission and should not be confused with the 2010 Act which actually contains the substantive law on discrimination) defines the word ‘unlawful’ as meaning ‘contrary to a provision of the Equality Act 2010’. So, for example, an act of direct or indirect discrimination will be an unlawful act. The Commission then has powers to investigate employers who are suspected of committing unlawful acts and issuing them with notices or ultimately taking legal action aimed at preventing them from committing further unlawful acts in the future.

Is a failure to comply wth the gender pay gap regulations an unlawful act? What provision of the Equality Act is it ‘contrary to’? The Gender Pay Gap Regulations are issued under s.78 of the Equality Act. But s.78 does not require an employer to do anything or prohibit an employer from behaving in a particular way. It merely gives the relevant Minister a power to issue regulations which require employers to publish information. If an employer doesn’t publish that information then they will be in breach of the Regulations – but they will not be in breach of a provision of the Equality Act. Section s.78 does not impose the requirement, the Regulations do.

Section 78 itself acknowledges this fact. Look at s.78(5):

(5) The regulations may make provision for a failure to comply with the regulations—
(a) to be an offence punishable on summary conviction by a fine not exceeding level 5 on the standard scale;
(b) to be enforced, otherwise than as an offence, by such means as are prescribed.

This shows that Parliament intended that the issue of the enforcement of Regulations should be set out in the Regulations themselves. It could have added that a failure to comply with the Regulations would be deemed to be an unlawful act within the meaning of the 2006 Act – but it didn’t.

When Parliament adopts the Regulations it will have chosen to make no provision for a failure to comply with them. This attempt to make out that the Equality Commission will nevertheless swoop in on any recalcitrant employers is just misleading. Even if the power were there, the Commission is hardly resourced to police the compliance of thousands of employers up and down the country.

Now I’m not arguing that employers should just ignore the Gender Pay Gap Regulations. That could cause all sorts of awkwardness. But in deciding how much resource and energy to devote to strict compliance with them it is perhaps worth bearing mind that there is no realistic way of challenging the figures that an employer comes up with.

Employment law is going through a bit of a lean patch at the moment and Regulations like these can be seized on with great enthusiasm by those of us with a living to make advising employers on how to comply with the law. But let’s not make more out of these Regulations than they deserve. They don’t create real legal obligations and (whisper it) will do little or nothing to reduce discrimination or increase equality. A sense of perspective is needed here, I think.

NOTE: All of the above applies in relation to the Regulations applying to employers in the private sector. Similar Regulations are also being introduced which will apply to public sector organisations with 250 or more employees. They will be much harder to ignore as they will form part of the employer’s equality duty under the Equality Act 2010. While that can’t be enforced by individuals per se, bodies could be vulnerable to judicial review procedures if they do not comply with their duty and the Equality Commission has specific powers to assess their compliance and take appropriate action.


Posted in Equal pay, Equality Act, gender pay gap | Tagged , , , , | 3 Comments

Can We Ban Christmas Travel Chaos?

screenshot-2016-12-18-16-58-13As we face a Christmas of discontent, Ministers are, according to the Sunday Telegraph,  coming under pressure from backbenchers to introduce laws to curb strikes in important public services. Which is odd really, because they already have.

The Trade Union Act 2016 will require strikes on public transport to be supported by at least 40 per cent of those entitled to vote in the industrial action ballot. The relevant section is not actually in force yet, ]but the Government has published draft regulations in preparation for it coming into force in March 2017. That can’t affect current disputes, however, because the new rules can only apply to new ballots. They can’t be applied to ballots that have already taken place. In any event, you might think that it’s a little early for the Government to come under pressure to take any further action. Surely they at least want to give the 2016 Act a chance to come into force before they start on the next one?

That seems to be The Government’s view. This morning the Guardian reports that No 10 is trying to distance itself from any suggestion of emergency legislation. Apart from anything else, this isn’t an emergency. A few one day strikes on a trainline in the south of England and disrupted air travel over the Christmas holidays is inconvenient if you happen to be affected. We should save the word ’emergency’ for rather more cataclysmic events. Nevertheless, the pressure from backbenchers does suggest that they don’t think that the Trade Union Act goes far enough. Or maybe there are signs that it won’t achieve the result they were hoping for.

screenshot-2016-12-19-07-53-37The stated purpose of the new rules on ballot thresholds was to ensure that industrial action in important public services had the democratic support of ordinary union members. The suggestion was that workers were being called out on strike when only a small proportion of union members had actually participated in the balloting process. But the strike ballots relating to the disruption over Christmas all seem to have had high turnouts and a high level of support for action. In fact if we look at those supporting strike action as a percentage of those entitled to vote (as opposed to actually voting) we get the following:

  • RMT/Southern Rail ballot: 77%
  • ASLEF/Southern Rail ballot: 67%
  • UNITE/BA ballot: 47%
  • PPU/Virgin ballot: 70%

So all of these ballots would meet the standard imposed by the Trade Union Act 2016. I can’t find the turnout figure for the Unite / Swissport ballot, but 62 per cent of those voting, voted yes so it would only take a turnout of about 67 per cent to meet the Trade union Act threshold.

(It is worth just pointing out – again – that the vote for Brexit was only supported by 37.4% of those entitled to vote, but you don’t see the Government questioning the democratic legitimacy of the referendum do you?) 

If  the point of the Act is to ensure that industrial action has proper democratic support, then surely these figures should be welcomed? Shouldn’t we say – ‘well its all very inconvenient, but its clear that this action has the support of union members, so perhaps the two sides just need to get together and reach a settlement?

It seems not. And that rather lets the cat out of the bag doesn’t it? The real point of the Trade Union Act was not to make strike action more democratic – but to make it harder to call. If the unions respond to this by ensuring that they actually have the support of their members – well that’s just cheating. Chris Grayling talked about the Southern Rail dispute on the Today programme last week and said:

“it is, unfortunately, a lawful strike’.

Telling, don’t you think?

So before the Trade Union Act 2016 has come into force we can already see the outlines of the next Trade Union Bill. The target now will not be the democratic mandate for strike action , but the taking of action itself. This from the Sunday Telegraph:

Dozens of Tory MPs favour tougher rules which would bar unions that represent “critical” industries from calling strikes unless they are “proportionate”. Many also want a “minimal requirement” that would force unions to run at least half of all usual services even when they are striking.

This gets us into the deep waters of international law – and that may be why the Government currently seems to be resisting the calls for further reform.

Banning strike action in essential public services is common practice across the world and well established. After all, the police cannot go on strike and neither can the army. But the International Labour Organisation has always taken a rather strict view of what counts as an essential public service, limiting it to those services the  “interruption of which would endanger the life, personal safety or health of the whole or part of the population”. It’s a struggle to see train drivers or baggage handlers being squeezed into that category.

However the ILO Committee of Experts has also countenanced rules requiring the maintenance of minimum levels of service in services of “public utility”. Any such requirement would have to be strictly limited, however. According to the ILO:

the service required must genuinely and exclusively be a minimum service, that is one which is limited to the operations that are strictly necessary to meet the basic needs of the population or the minimum requirements of the service, while maintaining the effectiveness of the pressure brought to bear

I don’t think such limited measures are quite what those agitating for new restrictions have in mind.

Of course,  the last Conservative Government was unconcerned by complaints that the UK was failing to comply with ILO conventions. But then, the last Government was not just about to leave the EU and face the prospect of the UK becoming a stand-alone member of the World Trade Association. The WTO has affirmed the importance of core labour standards and recognises the ILO as the appropriate body for determining what they are. If we run into trouble with the ILO there would be a clear risk of that spilling over into a dispute about our position in the WTO and that could turn into a very big deal indeed. Leaving the EU does not mean we can simply ignore international standards – not if we want to trade with the rest of the world. I think the Government knows that it needs to steer clear of this whole area until the dust from Brexit has settled.

Meanwhile, if you’re travelling the Christmas, comfort yourself that any disruption has more democratic support that our decision to leave the EU.

Happy Holidays.


Posted in BREXIT, Industrial action, Trade Union Bill | Tagged , , , , , | Leave a comment

Why Uber lost in the Employment Tribunal



Uber drivers are not employees and don’t let anyone tell you different.

On the other hand,  in Aslam & others v Uber BV and others the Tribunal did hold that they were ‘workers’.

Being a worker is different from being an employee. Employees have the right not to be unfairly dismissed as well as a bunch of other rights including maternity leave, redundancy pay and the right to request flexible working. To be an employee you have to be engaged under a contract of employment or apprenticeship and there is a whole series of factors to look at – the most important being the extent to which your activities are controlled by the employer. In this case, the huge flexibility that Uber drivers have about when they choose to work  – and the fact that they have to provide and maintain their own car  – would make claiming employee status very difficult. But, as it happens they are not even trying to. Instead, they say that they are workers.

Workers are a sort of hybrid. They can still be classified for tax purposes as self employed but are regarded as ’employed’ for the purposes of some key employment rights such as the right to be paid the minimum wage and rights under the Working Time Regulations (including the right to paid annual leave).  It is these rights that the Uber drivers are claiming, so it is worker status rather than employment status that is key.

What makes you a worker?

To find out whether an individual is a worker or not you basically have to ask three questions:

  • Is the individual working under a contract?
  • is that a contract under which they must personally provide work for the ’employer’?
  • is the ’employer’ best described as a client or customer of any profession or business undertaking being carried out by the individual

For an individual to be a worker the tribunal must answer ‘yes’ to the first two questions and ‘no’ to the third.

So how did the Tribunal reach the conclusion that Uber drivers were ‘workers’? Well, there was never any real doubt that there was a contract between Uber and the drivers and the Tribunal held that when the drivers turned on their Uber App they were working under that contract. Uber argued, however, that the drivers were working directly for the customer and that the app merely facilitated that work. They were not providing work for Uber as such.

Mark Littlewood of the Institute of Economic Affairs agrees with them. He put it this way:

“It’s a mistake to think of Uber as an employer – it is simply a platform that allows drivers and customers to meet and trade. By harnessing the power of the app, drivers are able to work for themselves; they set their own working hours and decide with whom they will do business.

“Uber is no different from the dozens of other sharing platforms, such as Airbnb and eBay. It would be laughable to suppose that those who run their business through eBay should expect sick pay and holiday leave from the tech firm”

It is not entirely clear that Mr Littlewood has actually read the Tribunal’s decision which deals very specifically and in some detail with whether Uber is simply a platform that allows drivers and customers to meet and trade. And it would indeed be laughable to think that those who trade through eBay would be held to be workers based on the Tribunal decision in this case. Nobody who read the decision itself would imagine for a moment that such an outcome was even possible.

Is Uber just a trading platform?

There are in fact two leading cases on (almost) this issue. In Chen Yuen v Royal Hong Kong Golf Club the Privy Council (House of Lords hearing a Commonwealth Case) held that a caddie working on a golf course was actually trading directly with individual golfers and was not working for the golf club itself. More recently in Stringfellows Restaurants Ltd v Quashie the Court of Appeal held that a table-side dancer was engaging directly with customers and that Stringfellows was merely facilitating that by administering the payments and providing a venue.

Uber naturally relied on these cases in arguing that they were merely acting as a ‘platform’ rather than an employer. However, the Tribunal dismissed that argument after a very detailed consideration of the relationship between Uber and its drivers (the possessive pronoun is important here).

A big part of the case comes down to how Uber projects itself to what world. When you use the Uber app as a customer do you really think that you are being put in touch with a driver with a view to negotiating a journey for an agreed price? The Tribunal said that, on the contrary, Uber makes it clear that you are booking a ride with one of ‘their’ drivers. Uber is not just a marketplace or platform, it is a service offered to the public. That service is delivered entirely by Uber drivers and Uber is very fussy about who those drivers are, what kind of car they drive, what route they take to their destination and how much they charge. Drivers are free to work whenever they want – but that is not in itself inconsistent with worker status. In any event, drivers are discouraged from rejecting jobs assigned to them or cancelling jobs where it turns out they don’t like the customer’s destination.

I’m sure if Mark Littlewood were to think about this he would see that there is a big difference between Uber and eBay or Airbnb. With both of those businesses the end product is something owned by individual provider and the actual work done by that provider is incidental to what is being sold to the customer. With Uber, the ride provided by the driver is the very product that Uber markets to its customers

As for Chen Yuen and Quashie, the Tribunal took the view that in those cases – both concerned with employee, rather than worker status – there was a main business operated by the employer (it turns out Stringfellows is actually a restaurant, who knew?) and the service provided by the individual was incidental to that business. In each case there was a real sense in which the business was offering the contractor an opportunity to come on to its premises in order to meet and deal with customers (personally I think that was a rather questionable finding in Quashie, but there you go).

Uber, by contrast, is not just giving customers the opportunity of finding drivers who happen to be in the area and available for hire. It is committed to providing an excellent rider experience – it says so itself – and it can only do that through its drivers. It undertakes to provide that service to its customers and does that by allocating a driver to them. It asks individual drivers to agree to take its customers to their destination and in that sense the drivers are performing work ‘for’ Uber.

Oh, Come Off It!

As for the third question,  the tribunal dismissed as completely unrealistic the idea that drivers are running their own business and Uber is one of their customers or clients. It really is worth reading the decision in full to see the full argument (which is rather elegantly written), but essentially the Tribunal says ‘Oh, come off it!’.

This is a good example of how a Tribunal will cut through the verbiage produced by an employer who is trying to convince everyone that they are not really an employer at all. Simply describing yourself as a software company or a trading platform will not be enough to persuade a Tribunal that that is indeed what you are. It is the reality of the situation that counts and surely the reality of working as an Uber driver is that you, well,  work for Uber.

As for what happens next, I am sure that this case will go to the EAT, the Court of Appeal and perhaps beyond that to the Supreme Court. That process will probably take well over a year, so we will be able to keep arguing about this for some time to come. There is every possibility of the decision being reversed (possibly more than once) but if I were Uber I would be figuring out how to build the calculation of holiday pay and the minimum wage into my driver app.





Posted in Employment status, Uncategorized | Tagged , , , , | 4 Comments

Theresa May is Reviewing the Situation

theresa-mayThis week sees the Conservative Party Conference and it is pretty clear that part of the PM’s strategy is to position the Tories as the natural home of those who care about fairness and social justice but think that Jeremy Corbyn’s Labour party is really not for them.

The speech that Theresa May gave in Downing Street when she first took office was clear initial grab for this market, with her talk of those who have a job ‘but don’t always have job security’ and her promise to make decisions in the interests of those for whom ‘life can be a struggle’. She repeated those phrases at her first speech at the Conservative Party Conference on Sunday and added that not only would workers’ rights be protected while she was Prime Minister, but they would actually be enhanced.

This last reference, it seems, was to her appointment of  Matthew Taylor – head of the Number 10 Policy Unit back in the days of Tony Blair and now Chief Executive of the RSA  – to carry out a Review.

Reviews are splendid things. Everyone loves a Review. Conducting a Review into something allows everyone to hope that good things will soon happen – but without you having to make any actual decisions or proposals. Best of all, for as long as the Review is ongoing you can bat away any questions on an awkward topic by saying ‘The Government takes [the thing being Reviewed] very seriously and is currently conducting a Review. Detailed proposals will be made in due course’. Make the Review sufficiently in-depth and you can keep this line going for a year or more.

Matthew Taylor’s review seems to be particularly wide-ranging. The RSA explains on its website that the review will look at

ways to ensure that the regulatory framework surrounding employment, and the support provided to businesses and workers, is keeping pace with changes in the labour market and the economy

Of particular interest to employment lawyers is the fact that the review will look at the extent to which the growth in ‘non-standard’ forms of employment has undermined key employment rights and whether the current definitions of employment status need to
be ‘updated’ to reflect new forms of working. This holds out the distinct prospect of employment rights being extended to workers in the gig economy and is a very welcome development.

But of course, employment status is something that has been looked at before. Back in 2014 Vince Cable, the then Business Secretary in the Coalition Government set up an internal review which looked at exactly this question. As far as I can see, however, nothing emerged. I’m sure a detailed review was conducted and found its way onto the Minister’s desk, but it was presumably put aside when the Conservatives won a majority in May 2015. If I were Matthew Taylor, I’d ask to see a copy.

I’m sure that Matthew Taylor – an interesting and serious figure – will do a good job and I have no  doubt that the Review will provide much food for thought and make interesting reading. I hope he finds a sensible way of delineating who should and should not enjoy the protections we currently give only to those who are engaged under the increasingly archaic arrangements we describe as a contract of employment (see more of my views on this here). I hope he comes up with some concrete proposals that will genuinely ensure that vulnerable workers who currently fall between the cracks of employment law get the protection they need.

But forgive me if my socks don’t roll up and down just yet. I am not convinced that the Government harbours any genuine ambition to extend the scope of employment law – that would run completely counter to their belief in cutting red tape. This review is more likely to be a clever piece of positioning at a time when the Labour Party is in disarray. Even if the Government is acting in good faith then getting around to actually changing employment law is going to take years. Frankly, the Government’s attentions are likely to be focussed elsewhere for the foreseeable future and I would be astonished to see anything other than cosmetic changes this side of a general election.


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Jeremy Corbyn’s Plan for Compulsory Collective Bargaining

The best job title I ever had was Head of Employment Law at the CIA. The novelty never wore off. The Chemical Industries Association (well what did you think?) was a really interesting place to work – and I was there at a really interesting time. Labour had just been swept to power and one of its key manifesto commitments was to introduce a right to union recognition ‘where a majority of the relevant workforce vote in a ballot for the union to represent them’.

I spent just over a year monitoring the legislation as it went through Parliament and lobbying (rather ineffectually) on behalf of employers in the chemical industry – many of whom were distinctly worried about being forced to deal with trade unions. There were lots of CBI committee meetings as we went over the proposed law line by line, proposing amendments along the way.

The law that emerged was deliberately dull and complicated. I challenge you to to read through it in one sitting! (seriously, don’t try to do that). The idea was that collective bargaining worked best when both the union and the employer reached a voluntary agreement that suited their particular situation and the procedure was designed to facilitate that at every stage – with the Central Arbitration Committee empowered to rule on areas of dispute.

There are certainly things that unions would like to change about the current scheme. A union has to work hard to convince the CAC that a majority of members are likely to support recognition before a ballot is
organised – and a recognition ballot is only valid if at least 40 per cent of the proposed  bargaining unit vote for recognition (sound familiar?). There is also a loophole for employers who can agree to recognise a sweetheart union and forestall a claim from one that will give them a less comfortable ride. On the other hand, employers have always been worried about the CAC ordering recognition without a ballot where union membership has reached 50 per cent of the bargaining unit.

In truth, the law was always a compromise between the interests of employers and the rights of employees and unions. The Labour Government went out of its way to design a system that employers could live with. They learned from the earlier trade union recognition scheme that collapsed under the fervent opposition of some employers and which was repealed almost as soon as the Thatcher Government came to power.

The statutory recognition procedure has now been up and running for more than 15 years (oh where has my youth gone?) and neither the Coalition nor the Conservative Government have shown any real interest in repealing or amending it. For some on the left, that in itself will be a damning criticism. The procedure chugs along nicely, rarely attracting much outside attention. The latest annual report of the CAC shows that so far there have been 955 applications for union recognition with the CAC ordering recognition in 281 cases.  To be clear, that is not 281 cases in the past year – that is counting since the scheme came in. So while the procedure has certainly resulted in an increased number of union recognition agreements, it has hardly been transformative. The level of collective bargaining coverage in the UK remains at just 29% – well towards the bottom of the EU table. Even that figure is kept artificially high by the relatively high proportion of recognition in the public sector (63%) compared with just 16 per cent in the private sector

So it is not surprising that Labour under Jeremy Corbyn would want to revisit the subject. Though it is fair to say that his policy still needs some work on the fine detail. In Saturday’s Guardian he wrote:

Unions such as the GMB are resisting the race to the bottom in the labour market by representing Uber drivers, for example, in their fight to win holiday and sick pay rights. But the best way to guarantee fair pay is through strengthening unions’ ability to bargain collectively. That’s why it should be mandatory for all employers wit
h over 250 staff to bargain collectively with recognised trade unions.

Let’s leave aside the fact that a law based on the number of staff you have can be a bit tricky when we really don’t know who counts as ‘staff’ – particularly when it comes to companies like jeremy-corbynUber. This is, on the face of it, a pretty radical proposition. The Guardian added this:

Aides to the Labour leader said a Corbyn government would “repeal” 1999 union legislation that was passed by a Labour
government to introduce a new French-style framework of union rights.

I’m not sure that emphasising the French experience would be a great way of winning over sceptical voters to this policy. But my main problem is the practicality of imposing a law along the lines Jeremy Corbyn appears to be suggesting.

The Fairness at Work Agenda pursued by the Blair Government was based on a form of industrial democracy. The idea was that the workforce should be represented by a union if that was what the majority of them wanted. That, in essence, is the organising principle of the whole scheme. If that is to be swept away then are we left with the idea that employees will be represented by a union whether they want to be or not? You may think it odd that employees might be against the idea. Workers are generally better off when collective bargaining is in place, so why wouldn’t they want it? But the truth is that many employees will be sceptical or think that they may as individuals lose out in favour of some of their colleagues. Will Labour really go to the polls suggesting that employers should be forced to recognise trade unions even where there is no support for the union within the workforce itself?

That is essentially the French experience where collective bargaining coverage is extremely wide but actual union membership is just 8% – one of the lowest in Europe. The key difference is that collective bargaining is part of the regulatory system in France, with legally binding sector-level agreements. It might be worth pointing out that a few years ago John Hendy QC and Professor Keith Ewing (leading employment lawyers of the left) proposed a manifesto for collective bargaining that focused very much on sector-level agreements. This doesn’t seem to be what Jeremy Corbyn is now proposing, but I wouldn’t be surprised to see his thinking move in that direction. That would still be an incredibly radical policy and a major departure from the voluntarist model of UK industrial relations that dominated the 20th Century.

So far, however,  all we have is a line in a newspaper column. There is a long way to go before a fully-fledged policy can emerge. Elsewhere in the Guardian article Corbyn references workplace 2020 which he describes as a ‘national conversation with the self-employed, business and the public, supported by the trade unions, to develop a new settlement for business and the workforce’. That sounds great, but as far as I can tell, Workplace 2020 hasn’t actually done anything yet – as you’ll see if you follow the link above.

Ultimately though, I just can’t see the UK adopting a system that divorces the rights of a trade union to recognition from its level of support within a a particular employer. And that is only one issue that will have to be addressed. Leaving aside the question of what the employees in the business actually want, introducing compulsory collective bargaining is far from straightforward. It is all very well telling an employer that it has to recognise a trade union – but which union? What if there are different unions representing different sections of the workforce? Will there need to be separate recognition agreements for each union or single table bargaining or will one union have to win out? Will the recognition have to cover the whole workforce? What about senior managers? What about non-unionised professionals? Will the employer be entitled to agree individual terms with individual employees or will it have to apply a collective agreement to the whole workforce? Could a group of employees demand to opt out of collective bargaining? How do you force an employer to bargain in good faith?

Any new Government is limited in what it can do in a subject like employment law – even the modest recognition scheme introduced under Blair took a huge amount of work and Parliamentary time. A completely new system of employment law and industrial relations might not be the best priority for a new Government given everything else that is likely to be going on.

And one final question. Is it really a good idea to adopt a policy that will allow the Labour Party to be painted as a 1970s throwback in hock to the trade unions? It is all very well playing fantasy employment law in left-wing think tanks – but the role of the Labour Party is surely to come up with practical proposals that might actually be implemented following a general election victory.

Basically this just isn’t the sort of proposal you make if you seriously expect to be in a position to have to implement it.

Which is quite telling, I think.


On Tuesday morning Owen Smith published his manifesto for employment rights. It is interesting that he makes rather more specific proposals than Jeremy Corbyn about amending the statutory scheme to make it easier for unions to gain recognition. In particular he places some emphasis on sectoral collective bargaining which suggests that he is at least aware of the Hendy/Ewing work on this area.

He does however set out an absolutely massive shopping list including full employment rights from day one of employment and a return to a Wages Council system to prevent exploitation in vulnerable sectors. There is more policy detail here than we have seen from Labour under Jeremy Corbyn’s leadership – which is presumably the deliberate point that he is making. However what he sets out is a huge reform program. If that was front and centre of the Labour manifesto then improved employment rights would need to be the issue that electorate cares about the most for Labour to stand a chance of winning. In a leadership election sweeping and radical proposals might be what is called for. But whatever the future Labour leadership, they will have to be a bit more focussed when it comes to formulating a plan for Government.

Posted in trade unions | Tagged , , , , , , | 4 Comments

Deliveroo, the ‘gig’ economy and employment rights

Can it really be that Deliveroo has a clause in its couriers’ contracts forbidding them from challenging their status in the Employment Tribunal? It seems that part of the agreement that a courier signs provides:

“You further warrant that neither you nor anyone acting on your behalf will present any claim in the employment tribunal or any civil court in which it is contended that you are either an employee or a worker,”

Deliveroo don’t seem to be denying the story as such – but are hiding behind the rather unattractive argument that the contracts were written with the help of ‘legal experts’. If that is so then I’m sure that the advice that went along with the draft was ‘well you can put this in the contract, but it won’t have any legal effect’.

Any employment lawyer worth his or her salt will tell you that s.203 of the Employment Rights Act renders any contractual clause void in so far as it purports to prevent an individual from bringing an employment tribunal claim (s.144 of the Equality Act does the same thing for discrimination claims). No competent lawyer would have failed to point out to Deliveroo that its proposed clause was likely to be totally unenforceable.

Presumably Deliveroo just didn’t care. The purpose of the clause is clearly to deter claims in the first place. But the fact that they think that they may need to do that seems telling. The press report that Deliveroo couriers are self employed. But are they really? If Deliveroo are really confident on the point, why are they so keen to ensure that it doesn’t get tested?

The truth is that the issue is a complicated one. The question of who does and does not enjoy employment protection rights is at the heart of what is effectively a decades old arms race being conducted between the courts and a certain kind of employer keen to avoid any legal obligations towards those whose work generates their profit.

Employment status and employment rights

Because if you can ensure that the people who work for you are not your employees, then you can avoid the irritating obligation to behave reasonably when dismissing them, as well as a host of other rights from redundancy payments to shared parental leave. If you can go further and show that they are not even ‘workers’ (someone contracted to perform work for you, but who is not in business on their own account) then you have the added bonus of not having to give them any paid annual leave or pay them the National Minimum Wage.

So there is clearly an incentive for employers to create relationships that don’t qualify for employment rights. But doing that takes a certain amount of ingenuity. You might think for instance that you could just insert a clause in the contract to say ‘you agree that you are not an employee or a worker’. But that won’t be enough. You can’t change the nature of something by calling it something else. As Lord Templeman famously said in Street v Mountford (a landlord and tenant case):

The manufacture of a five pronged implement for manual digging results in a fork even if the manufacturer, unfamiliar with the English language, insists that he intended to make and has made a spade.

I am writing this on an electronic device designed to process information at high speed. I can call it an ‘abacus’ if I want, but that won’t alter the fact that it is a computer. The computer is resting on a flat surface supported by four legs. It is a table, even if I put a big sign on it saying ‘this is a chair’ (and so on…).

So if you want to employ someone without any employment law strings attached, then you need to go beyond the label. You need to be able to point to some feature of the contract which means that it can’t be an employment contract.

The features to concentrate on are the obligation to provide personal service and a rather slippery concept called ‘mutuality of obligation’. This essentially amounts to a requirement that an employment contract must entail some obligation on the employer to provide work and some obligation on the employee to accept it. If there is insufficient mutuality then the individual will not be an employee. If there is no mutuality of obligation at all, then there will not even be a contract. The individual will not be a worker, but just someone who has occasionally done a bit of work around the place.

The trouble with mutuality is that it is too easy for the Tribunal to look at what happens in practice and discern an obligation from the way in which the parties have behaved. If your contract says ‘we are not obliged to offer any work and you are not obliged to accept any work that may be offered’ that is all very well, but if in fact you offer 35 hours a week which the employee invariably accepts then the Tribunal may well be tempted to find that the contract has at some stage morphed into an employment relationship.

The requirement for personal service can be more fruitful. If you give ’employees’ the right to provide a substitute instead of turning up and doing the work themselves then they are under no obligation to provide you with personal service. Jackpot! They are neither employees nor workers and you can treat them as appallingly as you like. Well done.

The downside is that the Tribunal might not believe that you really mean it when you say they can provide a substitute. They might find that the substitution clause is a sham in that neither side ever envisaged that it could really be invoked – and that it was simply placed there in an attempt to avoid even the most basic obligations to treat workers with some decency and respect.

Bogus self-employment

Because there really are employers out there who are engaging in a deliberate pretence that their employees are self employed simply to avoid their obligations as an employer. For every case that reaches the Tribunal and is exposed as a sham, there must many thousands of others where the employee simply accepts the employers assurances that they are self employed and do not qualify for employment rights.

You might detect a cynical tone to this post. But honestly, look at the Supreme Court decision in Autoclenz v Belcher and tell me that my cynicism is unwarranted. In that case Autoclenz argued (unsuccessfully) that people employed to valet cars were self employed sub-contractors even though everything about their day-today work screamed employment. Or take the case of Protectacoat Firthglow Ltd v Szilagyi where the employer went so far as to make employees form a ‘legal’ partnership with a friend before they were given any work – because the case law had said that partners in a firm were not employees (the ruse didn’t work in this case and the Court of Appeal held that the partnership contract was a sham).

But on top of this run of the mill ‘bogus’ self-employment, the ‘gig’ economy and the ‘uberisation’ of the workforce gives many more opportunities for employment law to be sidestepped. If you have a pool of ‘workers’ who can log into an app and choose from a range of work that the ’employer’ has made generally available then you really can avoid any mutuality of obligation. The case being brought by Leigh Day and Co on behalf of Uber drivers is therefore potentially very important. What will the courts make of these new working arrangements and can they be made to fit within our employment law system?

Employment rights in the new economy

If not, then we should revisit the whole idea of what it is to be an employee or a worker. Those concepts have been developed in an era of factories and office blocks with regular shifts and starting times, where individuals must do the work they are given. But the new generation of ‘gig’ workers are in no less need of protection than traditional employees. Indeed the precarious nature of their work means that they are even more vulnerable to sharp practice and unreasonable treatment.

These are issues that the government needs to grapple with. It is worth noting that under the coalition, a review of employment law status was undertaken to address these issues. As I understand it a lot of work was done and somewhere in the vaults of what remains of the Department of Business there will be a comprehensive piece of work looking at all of these problems and suggesting a way forward. Whether that will ever see the light of day, however, remains to be seen.

In her speech before entering 10 Downing Street, Theresa May said:

If you’re from an ordinary working class family, life is much harder than many people in Westminster realise. You have a job but you don’t always have job security…

I know you’re working around the clock, I know you’re doing your best, and I know that sometimes life can be a struggle. The government I lead will be driven not by the interests of the privileged few, but by yours.

If these words are to mean anything, then the Government needs to ensure that these new ways of working do not leave vulnerable workers unprotected against exploitation and unreasonable treatment. I’m sure Deliveroo want to treat their couriers well – but it is obviously hard to resist the temptation of creating a relationship in which they are not obliged to. Removing that temptation is one way in which Government can help this new sector develop in a way that benefits everyone.


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BREXIT and strike ballots.

This is not a post about the employment law implications of Brexit. Obviously there are plenty of those out there – and I’m sure I’ll be writing a few over the weeks months and years that follow. I suspect that it is a subject that will just keep giving.

This post is about a very specific point about the Government’s mandate to make Brexit happen – and a trade union’s mandate to call strike action.

Waiting for the Trade Union Act

The Trade Union Act received Royal Assent back in May – but it still hasn’t been brought into force. We are waiting for Commencement Orders which may bring different provisions in at different times. Some provisions are not yet ready to be brought into force because we need detailed Regulations setting out the details.

Take section 3 for example. That is the provision which requires industrial action ballots by those delivering ‘important public services’ to be supported by at least 40 per cent of those entitled to vote (as well as having the 50 per cent turnout required by S.2). The Act does not define important public services. That is left to Regulations which are yet to be drafted. All we know is that the specifies that the Regulations are limited to the areas of health, education, fire, transport, border security and the decommissioning of nuclear installations and management of nuclear waste and spent fuel.

If course it is likely that officials at the Department for Business are a bit preoccupied with other matters at the moment, so producing these Regulations will not be a huge priority for them.

But I think that there is a bigger problem. There is an awkward fact about this provision that, If I were a Minister, I would not want to draw attention to.

The 40 per cent threshold

Lets do some maths.

Suppose you are a union in an important public service and you hold a nationwide ballot to ask your members to support industrial action. Let’s say the ballot goes really well and gets a turnout of  – let’s pick figure at random – 72%.

But suppose the issue is quite controversial and not all members support it. Let’s say they support industrial action but not by that much. Perhaps with just – oh I don’t know – 52% of those voting ticking the ‘yes’ box to  support action.

To see whether strike action would be legal we need to see that 52% expressed as a percentage of those entitled to vote. What is 52% of 72%? Well its just 37.4 per cent.

So as far as this Government is concerned, a ballot where 52% support strike action on a turnout 72%  would not give sufficient democratic legitimacy to justify train drivers introducing a work to rule or teachers holding a one-day strike. However we are about to  put our economy, security and place in the world in jeopardy to give effect to a referendum where, on a 72% turnout, just 52% voted to leave.

Doesn’t that seem a bit ridiculous?

If I were a Minister, I would not be keen to introduce the Regulations that will give effect to s.3. In fact, I would want everyone to forget that s.3 even existed.  If the timetable for implementing the Trade Union Act were to slip somewhat, I wouldn’t be at all surprised.


Posted in BREXIT, EU law, Industrial action, Trade Union Bill | Tagged , , | 1 Comment