Is the Menopause a disability?

Posted on February 22, 2024 by Darren Newman

The front page of the Times on Thursday carried the headline:

Respect the menopause or be sued for disability discrimination, firms told

Employers could be sued for disability discrimination if they fail to make “reasonable adjustments” for menopausal women such as allowing them to work from home or lowering the temperature in the office, the equalities watchdog has said.

After an eventful Wednesday in the House of Commons I was a little surprised that this story merited front-page treatment. In the employment law world this has been an issue that has been discussed for some time – what has changed? How dramatic is the intervention from the Equality Commission?

Not much and not very as it turns out.

The newly published Equality Commission guidance on the menopause says:

If menopause symptoms have a long term and substantial impact on a woman’s ability to carry out normal day-to-day activities, these symptoms could be considered a disability. 

Well yes. I agree with that. A disability is defined in S.6 of the Equality Act as a physical or mental impairment which has a ‘substantial and long term adverse effect’ on someone’s ‘ability to carry out normal day to day activities’. So what the Equality Commission is saying here is that menopause will amount to a disability – if it meets the definition of disability. Almost anything could amount to a disability if it meets the definition (there are actually some interesting exceptions in the Meaning of Disability Regulations including pyromania and exhibitionism but we needn’t go there). A stubbed toe could amount to a disability if it turns out to have a long term and substantial effect on the victim’s ability to carry out normal day to day activities.

I’m not getting at the Equality Commission here. There is increasing awareness of the issues that women going through menopause may encounter in the workplace and guidance on how best employers should engage with those issues is to be welcomed. But useful guidance from the Equality Commission on handling a potentially tricky issue does not normally get the front page treatment, even on a quiet news day.

I was heartened to read that the article is not the sort of ‘woke nonsense’ rant that we would expect from the Daily Telegraph. It seems to be a fair and accurate account of the guidance that has been issued. One clue to the approach the Times takes is that it is welcomed in particular by Mariella Frostrup, Times Radio presenter and Chair of Menopause Mandate. This is obviously an issue that many people at the Times feel strongly about – so good for them.

In terms of case law, a good analysis of menopause in the context of disability is given by the recent Employment Tribunal decision in Chan v Stanstead Airport Ltd In a detailed analysis Employment Judge park held that the claimant was disabled as a result of the symptoms of the menopause, explaining:

The menopause is not in itself an impairment. It is a normal stage in a woman’s life. However, women can experience a wide range of symptoms when going through the peri-menopause and menopause. The severity of those symptoms varies and in some case the impact may be such that the woman meets the definition of being disabled under the Equality Act 2010.

The Judge concludes:

Based on my findings of fact the menopause symptoms did have a substantial adverse effect on the claimant’s ability to carry out normal day to activities at times between July 2017 and when she was dismissed. Some of the symptoms were a lack of concentration, memory loss and fatigue. As a result of these the claimant forgot information that she usually was able to recall easily. She also found it difficult to concentrate on reading, which included being unable to read a book. As described by the claimant, these effects are more than minor or trivial. The claimant needed to set up systems to help her remember everyday information that she usually recalled without difficulty. She was unable to read a whole book for several years, having previously done so regularly.

In that case stress and anxiety were a key feature of the symptoms the employee was complaining about and the Tribunal found that they should be treated as being symptoms of the menopause. Viewing the impact of the symptoms as a whole the conclusion was that the claimant was disabled.

As the Employment Judge made clear, however, all cases need to be assessed individually. There is no assumption that a woman experiencing the menopause will be regarded as disabled. Indeed employers need to be careful not to make any assumptions about how women will react to the menopause. It would obviously be sex discrimination to treat women in their forties or fifties as though they are likely to suffer from fatigue or be unable to concentrate.

Oh – and if anyone wants to argue that because this involves two protected characteristics – sex and age – a discrimination claim is somehow more difficult should read this.

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Indirect discrimination – squandering our Brexit freedoms?

Posted on February 19, 2024 by Darren Newman

The Sunday Telegraph reports concern among Tory MPs that Rishi Sunak is “squandering Brexit Freedoms by approving more EU rules”. The headline refers to new Regulations amending the Equality Act 2010. With its usual calm understatement when dealing with discrimination law the Telegraph says:

New regulations, driven through Parliament without fanfare, “gold-plate” judgments by the European Court of Justice (ECJ) and create a “carte blanche” for companies to be sued for “unlimited damages”, Conservative MPs have warned.

The changes amount to a significant expansion of New Labour’s Equality Act, which Mr Sunak once claimed had “allowed every kind of woke nonsense to permeate public life” and “must stop”.

Now before looking at what the new Regulations actually do can I first of all whinge about the phrase “New Labour’s Equality Act”? There is a distressing tendency among journalists and politicians of both the right and left to talk of discrimination law as if it was invented by Harriet Harman in 2010. In fact the Equality Act 2010 mainly reorganised and consolidated laws that were already in place, with many of the key provisions dating back to the 1970s. There were some new rules of course, but I suspect that most of the people who complain about the pernicious effects of the Act (looking at you Jacob) could not actually tell you what they were. And of course, anyone who refers to the “Equalities Act” loses all right to comment on the issue.

These new Regulations come about as a result of the Retained EU Law (Revocation and Reform) Act 2023 which remove the interpretive effects of EU Law. Previously UK courts, when interpreting domestic law, would accord supremacy to any EU Law that it was designed to implement. As Catherine Barnard pointed out on the platform formerly known as Twitter, the Retained EU Law Act included the power to issue Regulations that restate laws derived from the EU and that is what the new Regulations do. It is a little rich for MPs to quibble about the lack of Parliamentary scrutiny that such Regulations receive when that lack of scrutiny was a key part of the Act that they were so keen to see passed.

What the Regulations do in broad terms is to codify principles of discrimination law that have been settled by the European Court of Justice but which were never actually written into domestic legislation. The provision that draws particular criticism is the new right for ‘anyone’ to claim indirect discrimination. The Telegraph says:

One of the additions to the Equality Act allows people to sue for “indirect discrimination” if they find themselves subject to the “same disadvantage” as, for example, gay people or members of particular religions, even if the claimants themselves are not gay or religious.

This is indeed an interesting change which is now found in Section 19A of the Equality Act.

Indirect Discrimination

Indirect discrimination covers situation where an employer has a practice or a policy (the technical term is a “provision criterion or practice” often referred to as a “PCP”) which it applies equally regardless of any protected characteristic individuals may have but which causes people who share a protracted characteristic a “particular disadvantage”. Think of a job advert specifying that applicants must be at least six foot tall. On average, men are more likely than women to meet that requirement so women are placed at a particular disadvantage by it. There are of course many women who are six foot tall and many men who aren’t – but it is the overall statistical impact that counts. I freely admit that I am assuming this difference for the sake of coming up with a clear example and have not researched it. Please don’t correct me If I’ve got this wrong.

So under S.19 of the Equality Act a woman who is less than six foot tall would be able to claim indirect discrimination as she suffers the same disadvantage as those with which she shares the protected characteristic of sex. The employer could defend the claim by arguing that the height requirement was a “proportionate means of achieving a legitimate aim”. But this is a high bar for an employer to clear and it’s difficult to think of a justification for that sort of requirement – which is perhaps one reason why we never see it in job advertisements (the police dropped minimum height requirements in the early 90s)

The new rule – S.19A – is that someone can claim indirect discrimination even if they do not share the protected characteristic of the disadvantaged group. So in my example a man who is less than six foot tall would be able to claim indirect discrimination even though it is women who are most likely to be disadvantaged. Or to take a real-life example you could think of a test that employees have to pass in order to be promoted. If statistics show that one racial group is disadvantaged by that test – and the employer can’t show that it is a proportionate means of achieving a legitimate aim – then under S,19A anyone who failed the test could claim indirect race discrimination whatever their own particular ethnic background might be.

Bulgarian Electricity Meters

The new section derives from a 2015 decision of the European Court of Justice concerned with the placement of Bulgarian electricity meters. In CHEZ Razpredelenie Bulgaria AD v Komisai Za Zashtita to Diskriminatsia (we tend to just call it the CHEZ case) a grocer complained that her local electricity company placed electricity meters in her district on concrete pylons at a height of six or seven feet. In other districts they were placed at head height and were easier to read. This placed her at a disadvantage because it was harder for her to check her electricity consumption.

She argued that the practice amounted to race discrimination. She claimed that the electricity company only placed meters at a height in areas with larger Roma populations. Lying behind the decision was a prejudiced view that Roma people were more likely to try to interfere with the meters if they were easily accessible. She herself however was not part of the Roma community. The European Court of Justice did not decide the issue but in the guidance it gave to the Bulgarian courts it said:

In that regard, the Court’s case law, already recalled in paragraph 42 of the present judgment, under which the scope of Directive 2000/43 cannot, in the light of its objective and the nature of the rights which it seeks to safeguard, be defined restrictively, is, in this instance, such as to justify the interpretation that the principle of equal treatment to which that Directive refers applies not to a particular category of person but by reference to the grounds mentioned in Article 1 thereof, so that that principle is intended to benefit also persons who, although not themselves a member of the race or ethnic group concerned, nevertheless suffer less favourable treatment or a particular disadvantage on one of those grounds

I was never much of a fan of the prose style of the European Court of Justice.

What this rather heavy paragraph seems to be saying is that what makes an act discriminatory is not the identity of the person claiming discrimination, but the act itself. We are used to this principle in the case of direct discrimination – less favourable treatment “because of a protected characteristic”. If an employer refuses to promote an employee because her husband is Black then that would be direct race discrimination whatever her ethnic identity might be. The less favourable treatment is because of race. It does not need to be because of the individual employee’s race.

But in the paragraph above the Court seemed to be talking about both direct and indirect discrimination. It spoke of people who suffer “less favourable treatment or a particular disadvantage” and the latter phrase is very much something we associate with indirect discrimination. The case itself was brought as a direct discrimination claim but the Court accepted that even if the electricity company was not motivated by race, the placing of electricity meters at a height in areas with a large Roma population was capable of amounting to indirect discrimination. It did not suggest that since the individual bringing the claim was not Roma herself, an indirect discrimination claim would not be open to her.

Applying CHEZ to the Equality Act

There is no authoritative interpretation of just what CHEZ meant and what its impact on the interpretation of the Equality Act should be. You could certainly argue that the Court was not seeking to make any definitive statement about who could claim indirect discrimination. But CHEZ has been considered by some Employment Tribunals as significant. In Follows v Nationwide Building Society the Tribunal found that an employee who made redundant because of her status as a homeworker was indirectly discriminated against because she was caring for a disabled parent. The Tribunal held that Chez meant that indirect discrimination could be claimed by people who were “associated with” those who shared a protected characteristic – disability in this case – even if they did not have that characteristic themselves.

It is probably this case that prompted this paragraph from the Telegraph:

Lawyers believe the laws could, for example, allow workers who care for disabled family members to sue firms for “indirect discrimination” on grounds of disability if they are barred from working from home.

I’m not sure which lawyers believe that, because the reasoning in Follows is clearly wrong. CHEZ has nothing to do with being “associated” with people. The point of the case was that the placing of the meters was potentially unlawful because it was indirectly discriminatory against people who were Roma, not people who were associated with them. If it was unlawful, then there was no reason why the practice should not challenged by anyone was was affected by it irrespective of whether or not they were Roma themselves. The individual’s relationship with people who were Roma was neither here nor there.

The reasoning in Fellows was rejected by a Tribunal in Rollett v British Airways plc. However Employment Judge Anstis did go on to accept that CHEZ meant that indirect discrimination claims could be brought by people who were not part of the group that was subject to the “particular disadvantage”:

Given that, I must read s19 of the Equality Act without the requirement for the claimant to share the protected characteristic of the disadvantaged group. CHEZ-type associative discrimination is unlawful. The tribunal has jurisdiction to consider indirect discrimination claims under section 19 of the Equality Act 2010 where there is a PCP applied by an employer that puts people with a particular protected characteristic at a disadvantage. The claimant in such a case must also suffer that disadvantage but it is not necessary for them to have the same protected characteristic as the disadvantaged group. Of course, it remains the case that the respondent may then justify the PCP as a proportionate means of achieving a legitimate aim.

That seems like sound reasoning to me – but it is only a Tribunal decision. There is no higher authority requiring Tribunals to interpret the Equality Act in line with what the European Court of justice said in CHEZ. With the new S19A, however, there is no need for one. It is now written into the Equality Act that if something an employer does amounts to indirect discrimination then any employee who is disadvantaged by that can bring a claim. So – to give another example – a man refused flexible working options can now claim indirect discrimination provided he can show that the employer’s approach to the issue places (or would place) women at a particular disadvantage.

I am a bit surprised to see the Government carving this new right into the stone of the Equality Act. But ultimately employers should already be avoiding doing things that amount to indirect discrimination – so I don’t think S.19A requires them to do anything new. If the pool of potential claimants has increased somewhat then that should not make the sky fall in. Frankly, if I were a Tory MP there would be other things that I’d be worried about.

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Labour’s plans for discrimination law

Posted on February 4, 2024 by Darren Newman

(Please note: I wrote this on a Sunday night just after seeing the Guardian’s report. I reserve the right to amend it in the clear light of day when I’ve had a chance to think a bit more and see what it is that Labour actually announces on Monday)

I think I’m going to spend a good part of this year looking at Labour’s plans for employment law should it win the next general election. There are a lot of proposals that have been made – some modest and some radical; some workable and others rather less so. But we (probably) have plenty of time to look at them over the course of the year.

But I was a bit taken aback by the Guardian headline tonight: “Labour plans to extend equal pay rights to black, Asian and minority ethnic staff”. I have to say my heart sank.

The story opens:

“A Labour government would extend the full right to equal pay that now exists for women to black, Asian and minority ethnic (BAME) workers for the first time under radical plans for a draft race equality act seen by the Guardian.”

I mean – why? Is Labour under the impression that paying people less because of their race is currently legal?

One of the anomalies of discrimination law – that should perhaps have been corrected when the Equality Act 2010 was introduced – is the separate treatment of contractual terms when it comes to sex discrimination. For complaints about pay (or any other contractual terms) women (or men) have to bring an equal pay claim rather than a more straightforward discrimination claim. This means finding an actual comparator – rather than a hypothetical one – employed on “equal work”. We have decades of case law on what equal work means and it is not a straightforward question. Equal pay is an all or nothing claim. Your work is either equal or it isn’t. If your job is worth 80% of that of your chosen comparator then you lose. It doesn’t matter if the comparator’s pay is more than twice what you are earning. No matter how disproportionate the differential, the fact that the two jobs are not equal defeats the claim.

It is true that in an equal pay claim there is no need to prove discrimination – but that doesn’t matter much in practice. In reality, the employer will usually defend the claim by putting forward a ‘material factor’ defence. That just means there needs to be a reason for the difference in pay. If the reason is genuine then the question is whether it is discriminatory – either directly or indirectly. Most equal pay cases eventually boil down to the question of whether the pay is discriminatory. If the claim is won the claimant can get up to six years’ back-pay and there is no award for injury to feelings.

Suppose – under current law – an employer discriminates on the grounds of race when it comes to pay? Just as in an equal pay claim the question will boil down to whether the difference in pay is due to direct or indirect discrimination – but there will be no need to find a real-life comparator and the Tribunal could take into account a disproportionate difference in pay between two technically unequal roles. if the claim succeeds there is no cap on compensation and an award will be made for injury to feelings.

The Guardian says:

“The change, which would also cover disabled people, would mean that equal pay claims on the basis of ethnicity and disability were treated the same as those made by women who, under the existing law, have more stringent protections.”

I don’t think they do have more stringent protections. It is not at all clear that an equal pay claim is better than a discrimination claim. It is however undoubtedly more complex. Just try having a read of chapter 3 of Part V of the Equality Act – go on, I dare you!

I can see the point of merging discrimination and equal pay across the board, but that doesn’t seem to be the proposal here. They seem to want to keep the distinction between equal pay and discrimination – but make more people subject to it. I really thank that’s a bad idea.

Dual Discrimination

Oh and there’s more:

“The proposals, which the party will announce on Monday, would enact protections against “dual discrimination”, where people face prejudice because of a combination of protected characteristics, that were originally in the Equality Act brought in by Harriet Harman in 2010.”

A black woman who faces sexism and racism or a Muslim woman abused for wearing a headscarf, for example, would be able to bring one discrimination claim, rather than one for each protected characteristic.

Labour said this would have broader benefits for different groups of people, including women experiencing discrimination during the menopause, as well as easing backlogs in the tribunals system.”

This is just silly. Absolute nonsense on stilts.

Section 14 of the Equality Act is a bit embarrassing really. It has never been brought into force but it says that it is direct discrimination to treat somebody less favourably because of a combination of two protected characteristics. So if I treat you less favourably because you are a black woman then that would be discrimination.

But we don’t need S.14 to tell us that. It is already direct discrimination to treat somebody less favourably because they are a black woman – or a white man, or an older gay person, or a Muslim woman. Of course it is – how could anybody think otherwise?

Does anybody suppose that if a Muslim woman were to be refused employment the employer could defend a religious discrimination claim by saying “oh no, its only Muslim women we object to, Muslim men are fine”? That would be the wrong comparator. If a Muslim woman is treated less favourably than a non-Muslim woman would be treated then that will be direct religious discrimination. Just think about it. If, when choosing between two women, the employer would choose the one that is not a Muslim then OF COURSE that is religious discrimination. It will also be direct sex discrimination if a Muslim man would have been recruited. This isn’t difficult. Dual discrimination is not a problem. There has never been a case where it has been a problem.

The idea that a claimant in these circumstances has to bring two separate Tribunal claims is gloriously wrongheaded. There is only one act of discrimination and only one claim even if it can be expressed in two different ways. As for the point about easing the backlog – bless them – this is not going to replace the need for some proper investment in our courts and tribunal system so I hope nobody has been building Labour’s hopes up about that.

There are all sorts of things that a new Government could do to tackle structural racial inequalities in our society. In the employment sphere ethnic pay gap reporting seems an inevitable development (I’m sceptical but that’s another story). I’d also be in favour of having a good look at the Equality Act and seeing what we can do to improve it. But these two proposals show a worrying lack of understanding of how discrimination law works. I hope that what we have from the Guardian is just a garbled report of some initial ideas that will be refined and improved as the time that Labour forms a government (presumably) draws closer.

This is going to be an interesting year.

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Simplifying the rules on annual leave?

Posted on November 21, 2023 by Darren Newman

On 8 November the Government published The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (catchy title). Among other minor measures these make amendments to the right to annual leave and holiday pay in the Working Time Regulations 1998. Amendments are needed by the end of the year because the change in the status of EU law brought about by the Retained EU Law Act would otherwise leave considerable uncertainty about how the Regulations would work. The Government also wanted to address the perceived problems caused by The Supreme Court decision in Harpur Trust v Brazel which concerns the holiday pay of term-time only workers. 

These Regulations are only in draft form, but they are not being released as part of a consultation – in fact they are the response to two separate consultations (here and here) that took place earlier this year. 

The point is, the draft Regs are not a ‘work in progress’ they are intended to be ready to go and are about to be laid before Parliament. The Explanatory Memorandum accompanying the draft says that one aim of the measure is “Simplifying annual leave and holiday pay calculations under the WTR” and that:  

“The aim of these changes is to minimise unnecessary bureaucracy for businesses (and so make compliance easier) without reducing workers’ overall level of entitlement and protection.”

Para 7.9

The idea that these Regulations simplify the current regime is just laughable. I’ve spent the past week with a wet towel over my head trying to make sense of them. 

Where to begin? 

I’m not going to explain the Regulations as a whole – it would take far too long. Explaining how these Regulations work (or don’t) is probably going to be one of my main activities for the coming year and each part of the Regulations throws up its own issues. In this post I want to look at one new category of worker that the Regulations create. 

The new category is that of ‘irregular hours worker’ and their holiday entitlement under the new Regulations is changing. For holiday years starting on or after 1 April 2024 (!) they are no longer entitled to the four weeks’ annual leave and 1.6 weeks’ additional leave that workers with regular hours will get. 

So as a starting point it is obviously important to know who counts as an ‘irregular hours worker’ and who doesn’t. The new Regulations give us a definition:

a worker is an irregular hours worker, in relation to a leave year, if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable 

New Reg 15F(1)(a) WTR 1998

What does ‘mostly variable’ mean?

If a worker always works at least 30 hours a week but then always works between 1 and 10 hours overtime are their paid hours mostly variable? In most weeks their paid hours vary, but most of their paid hours do not vary. Where is the dividing line? Note as well that it is the terms of the contract that matter here rather than the actual hours that are worked. If a worker has a zero hours contract they will be an irregular hours worker even if in practice they consistently work a 40-hour week. 

I have trouble picturing the meeting where civil servants came up with the phrase ‘mostly variable’ and decided that it was clear enough and didn’t need any further definition. How does a phrase like that make it into the final draft? 

But this isn’t my main problem with irregular hours workers.

My main problem is the way in which we calculate the holiday entitlement and holiday pay for an irregular hours worker. Under the old regime we know that they would be entitled to 5.6 weeks’ leave – because everyone was. We would say that over the course of the year there must be 5.6 weeks’ when the worker is not required to work, but still gets paid as normal. We would then get into the question of how we work out a week’s pay and we would see that it is made up of an average of their earnings in the previous 52 working weeks. It’s not necessarily straightforward, but it sort of works. 

Under the new Regulations irregular hours workers are no longer entitled to 5.6 weeks’ leave. Regulation 13 (four weeks annual leave) and Regulation 13A (1.6 weeks’ additional leave) will no longer apply to them in relation to leave years starting on or after 1 April 2024. Instead, their annual leave will be calculated in accordance with a new Regulation – 15B. 

Under Regulation 15B there is no fixed entitlement to annual leave. Rather, the worker ‘accrues’ annual leave over the course of the leave year.

According to new Reg 15B(3)(b) they accrue annual leave:

On the last day of each pay period at the rate of 12.07% of the number of hours that they have worked during that pay period 

If you’re new to this, the figure of 12.07% may seem unusually specific. Here is where it comes from.

If there are 52 weeks in a year, and all workers are entitled to 5.6 weeks’ leave then that means they will be working for 46.4 weeks. 12.07% of 46.4 is 5.6, so if an employee is paid an additional 12.07% on top of what they have earned over 46.4 weeks they will have been paid an additional 5.6 week’s leave. And if a worker works for 46.4 weeks, then the idea is that 12.07% of the hours that they have worked will average out at an additional 5.6 weeks’ of work. So the intention behind accruing leave at the rate of 12.07% is that the holiday entitlement overall will stay the same. The only difference is that instead of 5.6 weeks being the fixed entitlement in each holiday year it has to be accrued as the holiday year progresses. 

But there is a problem with this.

If the holiday year starts on 1 April and the worker has no holiday entitlement to carry over from the previous holiday year (that is a whole other thing) then the worker starts with no holiday entitlement in the current year. It has to be earned.

Reg 15B makes it clear that the leave accrues on the last day of each pay period. Take an employee who on average has been working a 40-hour week and is paid monthly. At the end of each month they will accrue 19 hours of holiday. If their leave year runs from the start of April, that would mean that on the last day of March they will accrue their final instalment of 19 hours of leave. When are they supposed to take that? They have no right to it before it is accrued and they have no right to carry it over into the next holiday year. Do they just lose it as soon as they accrue it? It baffles me that the Regulations do not address this rather obvious point. 

Here’s another problem. 

It is clear (I think) that the holiday entitlement of an irregular hours worker is measured in hours. It accrues at the rate of 12.07% of the number of hours that have been worked in the pay period. So if an irregular hours worker works 60 hours in a week then they will accrue 7.2 hours of leave. After 10 weeks they will be entitled to 72 hours of leave. Suppose at that stage they want to take a week off. 

How many hours is that? 

Common sense might tell you it is 60 hours, but there is nothing in the Regulations to say that. And I’ve used an example where the working week is, in practice, stable and predictable. For most real-world irregular hours workers that will not be the case. How can a worker take a period of annual leave – whether a day, a week or a fortnight – measured in hours when under their contract the amount of hours they are required to work is ‘mostly variable’? 

What Regulation 15B does tell us is that the maximum amount of leave that can be accrued for an irregular hours worker is 28 days (Reg 15B(4)). How many hours would that be? Again there is no way to tell. 

If we can’t work out the physical time that they can take off, can we at least work out how they are paid? Regulation 16 of the 1998 Regulations covers holiday pay and Reg 16(1) is amended by these new Regs to make it clear that any period of leave taken under Reg 15B must be paid at the rate of a week’s pay for each week of leave. So it appears that we are back in the realm of measuring holiday pay by the week. 

Or are we? The new Regulations insert Reg 16(1A) which talks about calculating the hourly rate of pay in respect of which a worker under Reg 15B should be paid. This is the only mention of an hourly rate in the whole Regulations. Does this mean that an irregular hours worker’s holiday pay also has to be worked out in hours? The Regulations don’t actually say that but I don’t see why else you would need to work out an hourly rate. 

You might think that the hourly rate of the worker is straightforward? Heavens no!

Reg 16(1A) gives us a formula to work out the hourly rate. We start with working out what a week’s pay is for that worker and we then divide that figure by the average number of hours worked by the worker in each week used to calculate that figure. 

So the hourly rate is not the hourly rate the worker enjoys now, but the hourly rate they have been paid on average over the previous 52 weeks. If, in that period, our worker was given a pay rise then this will drag the average hourly rate over the preceding 52 weeks to below the current hourly rate. 

To an extent this has always been a problem since the 52-week reference period was introduced in 2020. But under the current regime we don’t use a 52-week reference period to work out an hourly rate – only the total amount of a week’s pay for a worker who is taking holiday in blocks of a week or a proportion of a week. There are swings and roundabouts. A lower hourly rate may result in a lower figure for a week’s pay, but working additional hours will result in a higher figure. For our irregular hours worker however, we are working out their hourly rate of pay – even though that is clearly expressed in his contract – by looking back over the preceding 52 weeks irrespective of whether the rate of pay changed in that time.

There are ways to work around some of these problems. The Regulations allow employers to pay rolled-up holiday pay to irregular hours workers which could bypass a lot of the issues I have set out. But that is no excuse for whoever drafted these Regulations. If Government is going to create a new category of worker, the least we can expect is that:

  • The new category is clearly defined
  • The amount of holiday they are entitled to in any holiday year is clear enough for them to understand how much holiday they are using up when they take a week off 
  • The method for accruing their holiday gives them a fair opportunity to take the holiday they have accrued
  • When they take holiday they are not penalised by being paid at a rate below their current hourly rate

As far as I can tell, the draft Regulations that have been presented fail on each of these points. They do not simplify the law – they complicate it. I look at this sort of thing for a living – I actually enjoy it. If I am struggling to make sense of these Regulations then how on earth are people with proper jobs to do going to understand what the new rules are?

These new Regulations are not good enough and need to be amended before they are laid before Parliament. 

Of course, I may have missed something. If anyone knows of a paragraph buried somewhere in these Regulations that I have not seen and which solves all of the problems I have identified, or even if I’ve just misread a paragraph, then please let me know. I would be genuinely delighted if it all suddenly made sense!

I’m going back under my wet towel now.

Posted in Working Time and Annual leave | Tagged , , , | 4 Comments

Sacked for your beliefs? A balancing act for Tribunals.

Posted on October 11, 2023 by Darren Newman

One of the issues I talk about a lot with clients is the extent to which employees with beliefs that might conflict with the values of the employer need to be accommodated – and how employers should deal with potential tensions arising from differing belief systems among employees. 

On social media I try to stay away from these debates, particularly in relation to transgender rights. I stay away not because the issue is unimportant but because the debate on social media is so polarising and, frankly, exhausting. It is easy to get locked into interminable discussions that seem to turn on rather obscure points of terminology that arouse intense feelings on both sides. Use the wrong phrase and it feels like you get shouted at by strangers for days on end. 

But over the weekend I found myself in an interesting Twitter discussion about an employment law question to do with the rights of someone who is ‘gender critical’ (I’m not falling into the trap of trying to define that – google it if you like) and whether they could be compelled by their employer to refer to a colleague as a woman when they believed that colleague to be a man. I asked for a specific scenario and promised to give a proper legal analysis of how I thought such a case would go. 

Here is the scenario I was given: 

“A person is told they *must* refer to a male colleague as “she/her” and they say no. They say they will use names where possible. They are dismissed and are suing for belief discrimination. They haven’t said anything else to the colleague and haven’t “misgendered” them. They have simply refused to submit to compelled speech.”

In this post I’m going to pick apart the legal issues and look at how discrimination law would currently approach such a case.

Protected beliefs 

I am going to assume that the employee’s refusal stems from beliefs that can be called ‘gender-critical’ and that following the case of Forstater v CGD Europe, those beliefs would count as philosophical beliefs under the Equality Act. It is worth bearing in mind, however, that it is quite possible for someone to refuse to comply with this sort of instruction in the absence of any clear philosophical beliefs. They may refuse out of spite or prejudice in which case their actions would certainly not be protected. 

I am also going to assume that this person has less than two years’ service and cannot claim unfair dismissal. So the question is not whether the employer has behaved reasonably in dismissing the employee. The only question is whether the dismissal amounts to discrimination.

Direct Discrimination

In a direct discrimination case (I’m leaving indirect discrimination out of the equation here) what must be shown is that the dismissal amounts to less favourable treatment “because of a protected characteristic” – the protected characteristic in this case being the employee’s belief. 

So the question is we ask is: why has the employee been dismissed? If the dismissal is because of the protected characteristic, then discrimination is established. If there is some other reason (good or bad) and the protected characteristic plays no part in the decision then there is no direct discrimination. 

The employer might start off by arguing that the employee has not been dismissed because of their beliefs at all. It is the employee’s conduct that they are concerned with. The reason for the dismissal is the employee’s refusal to obey their instructions to refer to a colleague using their preferred pronouns. Anybody who behaved that way would be treated just the same irrespective of whether their behaviour was prompted by their beliefs or simply a lack of consideration. 

I have some sympathy with this approach but it seems that this is not the right analysis. This is because the Equality Act has to be interpreted in order to give effect to the rights guaranteed by the European Convention on Human Rights. Article 9 of the Convention guarantees freedom of religion and belief and specifically says that everyone has the right to “manifest” their belief in “in worship, teaching practice and observance”

Manifesting a belief 

To understand the next step in the argument we need to look at what it means to ‘manifest’ a belief. The case that tells us what manifesting means is Eweida v UK – the case of the British Airways employee who claimed the right to wear a visible silver cross in breach of the employer’s dress code. When looking at the question of what manifesting meant, the Court said this:

In order to count as a “manifestation” within the meaning of Article 9, the act in question must be intimately linked to the religion or belief. An example would be an act of worship or devotion which forms part of the practice of a religion or belief in a generally recognised form. However, the manifestation of religion or belief is not limited to such acts; the existence of a sufficiently close and direct nexus between the act and the underlying belief must be determined on the facts of each case. In particular, there is no requirement on the applicant to establish that he or she acted in fulfilment of a duty mandated by the religion in question

para 82

This means that for our employee’s behaviour to amount to a manifestation of their beliefs it does not have to be an obligation imposed by those beliefs, but it does have to have an intimate link with them. There must be a ‘sufficient close and direct’ link between the conduct in question and the underlying belief. 

This is a question of fact for the Tribunal to decide, but I would think that an employee refusing to act in a way that is inconsistent with their beliefs is almost certainly a manifestation of those beliefs. 

Objectionable manifestations

The reason we need to decide this point is that to decide whether our example amounts to direct discrimination we have to ask whether the employer could reasonably object to the way in which the employee manifested their belief. 

We get this from the Court of Appeal decision in Page v NHS Trust Development Authority which concerned a Trust Director who repeatedly gave interviews about his views – derived from his Christian beliefs – about same sex relationships.  Lord Justice Underhill said

In the context of the protected characteristic of religion or belief the EAT case-law has recognised a distinction between (1) the case where the reason is the fact that the claimant holds and/or manifests the protected belief, and (2) the case where the reason is that the claimant had manifested that belief in some particular way to which objection could justifiably be taken. In the latter case it is the objectionable manifestation of the belief, and not the belief itself, which is treated as the reason for the act complained of. Of course, if the consequences are not such as to justify the act complained of, they cannot sensibly be treated as separate from an objection to the belief itself. 

para 68

I think the law has taken a wrong turn here. Concepts of reasonableness and justification belong in the realm of indirect rather than direct discrimination. I think the Court of Appeal in Page was overstating the strength of the case law from the EAT (the key cases to look at are Wasteney v East London NHS and Grace v Places for Children) But we are where we are. 

Following Page then, the question to be asked is whether our employee’s conduct was a manifestation of their belief “to which objection could justifiably be taken”. If it is then the dismissal was because of the conduct and not the belief. If objection could not justifiably be taken to the employee’s behaviour then the dismissal was because of the belief and the dismissal will amount to direct discrimination. 

So can the employer reasonably object to an employee refusing to use the preferred pronouns of a trans colleague?

Which side are you on?

At this point I suspect my readership divides. Those who instinctively support the employee will say that no objection could justifiably be taken to them referring to a colleague by reference to their biological sex. Those on the other side will say that of course an employer can object to an employee refusing to obey an instruction designed to be inclusive towards trans colleagues. 

But how will a Tribunal approach this, given that they cannot take sides in that debate? (anyone whose instinctive response is “it’s not a debate!” go back three places and miss a turn)

Article 9(2)

A recent case that attempts to answer the question is Higgs v Farmor’s School. The EAT was considering the case of an employee dismissed from a school because of Facebook posts – based on her Christian beliefs – criticising education on issues such as same sex relationships and trans rights.  Having found that the Tribunal had taken the wrong approach, the EAT sent the case back with guidance about how the issue needed to be tackled. 

The EAT relied on Article 9(2) of the Convention. Having set out the freedom to manifest beliefs in Art 9(1), Article 9(2) says that:

Freedom to manifest one’s religion or beliefs shall be subject only to such limitations as are prescribed by law and are necessary in a democratic society in the interests of public safety, for the protection of public order, health or morals, or for the protection of the rights and freedoms of others.

So Article 9 does envisage some limitation on the right to manifest a belief – but only if it is “prescribed by law” and “necessary in a democratic society” to protect the rights and freedoms of others (to pick the grounds most relevant to the case we are considering case)

In Higgs the EAT said  “there can be nothing objectionable about a manifestation of a belief… that would not justify its limitation or restriction under [Article 9(2)]”. (Decision para 82). In other words, you can only object to the manifestation of a belief if it would be permissible to restrict it under Article 9(2).

A Balancing Act

This is important – and rather smart. The EAT has given some objective basis to the otherwise subjective question as to whether objection can reasonably be taken to something. In doing so they have set the bar quite high. It is not good enough that some people would object to what the individual is doing – it is not even good enough if most people would strongly object. What we have to ask is whether restricting the employee’s manifestation of their belief was ‘prescribed by law’ and “necessary” to protect the rights and freedoms of others.

The immediate issue that might occur to you is whether you can say that what the employer has done is ‘prescribed by law’. There is certainly no law that requires employers to dismiss people who refuse to use the pronouns that the employer thinks they should use. But as the EAT points out the phrase is wider than that:

It is well established that “law” in this sense has an extended meaning, requiring that the impugned measure should have some basis in domestic law and be accessible to the person concerned, who must be able to foresee its consequences, and compatible with the rule of law.

para 51

I would take from this that if the employer gave a clear instruction to the employee and was acting in accordance with its own policies on equality and diversity, that would probably be enough. Let’s take that box as being ticked as I think a Tribunal would be keen to gloss over this question and move to the next one.

The next question is whether the instruction given by the employer is necessary in a democratic society to protect the rights of others. The EAT in Higgs made it clear that this required a balancing exercise between the interference with the fundamental rights of the employee and the rights and freedoms of others. It seems that here it is the employer’s actions we must look at rather than what the employee was being asked to do. We have to look at the employer’s decision to dismiss the employee and weigh up its reasons for acting that way.

So why is the employer insisting on employees using the preferred pronouns of trans colleagues to the extent that it dismisses those who don’t comply? The argument, presumably would be that gender reassignment is a protected characteristic and that the employer is obliged to ensure that trans employees are accepted and treated with respect. There is no question that it is upsetting for a trans woman to be referred to using male pronouns and the employer is seeking to protect them from the distress that the employee’s behaviour is likely to cause. 

That is, I think, a reasonable objective for an employer to have. The question is whether it is a sufficient reason to justify dismissal.

My view is that it is not – and that the dismissal of the employee in the circumstances given would amount to direct discrimination. 

The first reason is that the EAT in Higgs emphasised that the starting point needed to be a recognition of the ‘essential nature’ of the right of freedom of belief (para 83). We have to accept that the expression of a belief may be protected even if that causes offence to others – and that any attempt to restrict the manifestation of a belief will only be justified in limited circumstances. In the example given, the employee’s behaviour is not overt. There is no abuse directed at a fellow employee and the employee is attempting to refer to the colleague without resorting to pronouns at all when possible. While some might find this conduct offensive, the extent to which it intrudes on the rights of others is limited and the price imposed on the employee – dismissal – is high. 

Different circumstances might lead to a different conclusion. I am given a scenario where an employee, in conversations with colleagues, seeks to avoid using the preferred pronouns of another colleague. The answer might be different if, for example, that employee was speaking to a client and constantly referred to a trans colleague as ‘he’. It would certainly be different if the employee refused to refer to customers or service users using their preferred pronouns (see Mackereth v DWP). 

It all just depends…

One of the problems with this issue is that many people approach it with a passionate intensity where the right answer just appears to them to be glaringly obvious. You may feel that – obviously – an employee should be free to refer to a trans woman as a man because that reflects the biological reality. You may feel that – obviously – a refusal to respect the gender of a trans woman equates to a denial of their whole identity and is necessarily a form of unlawful harassment. But when we are looking at discrimination case we have to accept that the law may protect people we fundamentally disagree with. A Tribunal cannot (or at least should not) just pick a side, it must strike a balance between competing rights. 

There is of course an artificiality in scenarios as straightforward as the one I have been looking at. In any real case the Tribunal would have actual incidents to look at and a whole context of the detail and tone of what was said and done. As the EAT said in Higgs, these cases are very ‘fact-sensitive’. Different scenarios would have different outcomes. In employment law that is often the most we can say.

Posted in philosophical belief, Uncategorized | Tagged , , , , | 4 Comments

Qualifying for Unfair Dismissal

Posted on September 5, 2023 by Darren Newman

The right not to be unfairly dismissed is absolutely central to UK employment law – and the question of who qualifies for that right is something of a political football. Put simply, how long should an employee have to work for an employer before the employer should be required to act reasonably in choosing to dismiss? At the moment, that period is two full years. 

It is worth being clear about what this means – because this is often glossed over. An employee who has been continuously employed for less than two years can be dismissed – provided the employer gives notice – on a whim and for no good reason at all.  The employee can claim discrimination if the reason for dismissal is a protected characteristic (race, sex, religion etc) or because of something arising from a disability. There are also some grounds for dismissal which will always be regarded as unfair and which do not require a qualifying period (whistleblowing, trade union membership, asserting a statutory right and more). But those exceptional cases aside, the employer does not have to justify a decision to dismiss an employee with less than two years’ service. The employer might suspect the employee of misconduct without any evidence, or wrongly blame the employee for a mistake. Frankly the employer just might not like the way the employee sips their coffee. Inside two years, the employee has no right to complain no matter how unfair the decision to dismiss is. The qualifying period for unfair dismissal is a licence for an employer to act wholly unreasonably. 

Two years does seem quite a long time for an employee to have to wait for the right to be treated fairly – and the qualifying period has not always been so long. While it was 104 weeks when the right not to be unfairly dismissed was introduced in the Industrial Relations Act 1971, the incoming Labour Government reduced it to 26 weeks when it came to power in 1974. The Conservatives returned in 1979 and increased the qualifying period to one year in 1980 and then to two years in 1985. It remained that way until the New Labour Government of 1997 reduced the period to one year. Then, when the Conservative led coalition began in 2010, the qualifying period was put back up to two years.

Spot any patterns here? Conservatives go for a longer qualifying period and Labour favours a shorter one – and that has been the pattern for half a century. 

But with a general election due in the next year, and Labour currently looking likely to form the next Government, the question is whether – this time – they might abolish the qualifying period altogether. That is certainly current Labour Party Policy. The policy paper “A New Deal for Working People” says that Labour will ‘end this arbitrary system and scrap qualifying time for basic rights such as unfair dismissal’. Whether that policy will make it into the manifesto remains to be seen and there is some suggestion that Labour might be rowing back slightly from this position. Back in August, the Financial Times reported that Labour would still allow employees to be dismissed during a proper probationary period. 

Unfair Dismissal was first proposed as a right by the Royal Commission on Trade Unions and Employers Associations 1965-1968 (The Donovan Commission). They considered whether there was a need for a qualifying period of two years as there was for the recently introduced right to a redundancy payment. They concluded:

“We see no justification however for limiting protection form unfair dismissal to those with at least two years’ service, since the fact that he has been dismissed after a short period of employment could in some circumstances have a serious effect on an employee’s future prospects. When the terms under which an employee was engaged provide for a probationary period of service this is a factor of which due account must be taken”

Donovan Commission, para 555, page 149

I think that is rather well put and stands the test of time. If your CV shows that you worked for an employer for just a few months before moving on, then that will not generally look good. You may also have left secure employment on the promise of the new job and to have it unreasonably taken away from you is no less upsetting or unjust simply because you have been in the role for less than two years. And if we did abolish the qualifying period, then Tribunals would develop case law that set out a fair way to deal with employees who fail their probationary period. 

But while that case law developed there would be considerable uncertainty about what employers were expected to do. The Government could set out a fair way to manage probation in legislation, but in reality that would just lead to uncertainty about how the new rules would be interpreted. It is also a change that would require primary legislation – an Act of Parliament – taking up precious parliamentary time. 

I suspect that what will happen in the end is that the Government will set a six-month qualifying period. That change only requires a Statutory Instrument and can be done quickly and with little fuss. Indeed, one of the reasons that a change in the qualifying period takes place so predictably when there is a change in Government is that the change is quick and easy to make. Since most probationary periods are six months long anyway, I suspect a new Government would rather make the simple change quickly rather than take longer to do something more complicated. 

Posted in Uncategorized, Unfair Dismissal | Tagged , , , , | 2 Comments

The Strikes (Minimum Service Levels) Bill

Posted on January 11, 2023 by Darren Newman

Last autumn the Government introduced the Transport Strikes (Minimum Service Levels) Bill. That Bill never even made it as far as its first debate in the Commons because yesterday it was replaced by the Strikes (Minimum Service Levels) Bill. Can you spot the difference?

The first Bill applied to ‘specified transport services’ (without actually specifying them), but the new Bill is much wider. As well as transport, it also applies to health services, fire and rescue, education, the decommissioning of nuclear installations (and management of radioactive waste and spent fuel) and border security.

What does the Bill do? It gives the Secretary of State at BEIS the power to issue regulations specifying minimum service levels that will apply in the event of a strike taking place in any one of those sectors. An employer facing a strike covered by those regulations can then give a ‘work notice’ to the union identifying the employees that it needs in order to meet the service levels required. When a work notice is given the union must then take all reasonable steps to ‘ensure that all members of the union who are identified in the work notice comply with the notice’. If it fails to do so, then the strike is unlawful.

This Bill is less complex than the Transport Strikes Bill it is replacing. The Transport Strikes Bill had provisions allowing employers and unions to agree minimum service levels – with the Central Arbitration Committee required to step in and make a determination if no agreement was reached. The Secretary of State could issue regulations, but these would not apply if there was an agreement or a CAC determination.

In the new Bill, all that has gone. The Secretary of State has to consult before issuing Regulations and the implication is that he may not feel the need to do so in relation to services where an agreement is in place – but the power to make the Regulations is not limited.

The Secretary of State can issue Regulations relating to minimum levels of service but there are no criteria or guiding principles setting out how that minimum level of service is to be determined.  The Bill refers to minimum – as opposed to minimal – service levels. There is nothing whatsoever in the Bill that indicates what a minimum service level will be.

While the Government has been emphasising the need for minimum safety levels to be in place when there are strikes affecting key public services, there is no mention of safety anywhere in the Bill. I suspect that there would be some public sympathy for a rule that some level of emergency service should still be maintained when ambulance workers or firefighters go on strike. I’m not sure how volatile industrial relations in the world of decommissioning nuclear power plants is, but I can get behind the idea that a strike that led to an actual meltdown would be undesirable. Nothing in the Bill itself, however, limits the restriction on the right to strike to these emergency situations. The fact that the Bill also covers education makes it clear that the Government is thinking about more than public safety when it comes to limiting industrial action.

So regulations could be made in relation to teachers’ strikes aimed at making sure that schools retain a skeleton staff so that vulnerable children are taken care of. But they could also go much further than that – for example, preventing any interference with GCSE assessments or even the cancellation of classes. Similarly there is nothing to stop the Secretary of State from preventing any transport strikes that interfere with rush hour or result in any hospital appointments being cancelled.

This is bad lawmaking. The Government is granting itself sweeping powers while claiming that it only intends to use them for a limited purpose. This allows it to sidestep any debate about how the tension between the right to strike and impact that strikes have on public services should be navigated. The Bill has yet to be debated and there are many opportunities to amend it as it progresses through its Parliamentary stages. Surely a key issue that needs to be addressed is the criteria that will be used when setting out minimum service levels. The Bill currently gives a blank cheque to the Secretary of State and I don’t see how that can be sustainable.

Posted in Industrial action, trade unions | Tagged , , , | 1 Comment

The problem with P&O – when ignoring employment law is ‘worth it’

Posted on March 23, 2022 by Darren Newman

I think most employment lawyers would have had the same reaction as me when they saw the news about P&O sacking 800 ferry workers without notice or consultation. First you see it as an outrageous breach of even the basic requirements of employment law. Then you think ‘Oh hang on, isn’t there something in the legislation excluding people who work on ships? Is it next to that bit about share fishermen?”

As it turns out I think that the ferry workers are going to be covered by UK employment law. The exclusion of mariners applies only to British registered ships where the employees do not have a close connection with the UK. If crew members essentially work out of Dover or Hull I think it is pretty clear that UK employment rights apply to them. There might be more room for them to argue that the duty to inform the Secretary of State of the redundancies does not apply if the employees’ work on ships registered to other countries, but that is a matter between P&O and the Government – it doesn’t affect the position of the employees who have lost their jobs.

The truth is that P&O has chosen not to even try to comply with UK employment law. Mass dismissals for redundancy without notice or consultation will mean that individuals with more than two years’ service will have been unfairly dismissed. There will also have been a breach of the obligation in S.188 of the Trade Union and Labour Relations (Consolidation) Act 1992 to consult with employee representatives at least 45 days in advance of any dismissals taking effect. Of course in some cases an employer can argue that the urgency of its position means that such consultation cannot take place and that the dismissals are fair. But there is no serious suggestion of that being the case here. The fact that P&O had begun lining up replacement crew before announcing the redundancies is basically enough on its own to scotch that defence.

P&O know this. They knew when they took the decision to behave in this way that they would have to pay out compensation to employees. Clearly they have decided that the amount they save as a result of this exercise will outweigh by some margin the amount of compensation they will have to pay. I am sure that settlement agreements will already be in the pipeline.

A lot of the commentary I have seen is that this case emphasises the need to ‘ban’ the practice of fire and rehire – a much more catchy phrase than “dismissal and reengagement” which is what I was brought up calling it. In particular many have referred to the private members Bill proposed by MP Barry Gardiner – the Employment and Trade union Rights (Dismissal and Reengagement) Bill. This shared the fate of almost all private members bills in that it was “talked out” in Parliament and failed to get a second reading in the Commons.

But that Bill would not really have changed the calculus for P&O in this case. Remember that what P&O did was already illegal under out current law – and they did it anyway. Barry Gardiner’s Bill was focussed on employers seeking a variation of contract backed up by the threat of dismissal. P&O missed that stage out and went straight to the dismissal itself. They aren’t even, as I understand it, offering reengagement.

The P&O situation highlights a feature of UK employment law that is often under appreciated, but is striking for many who come to the UK from some other jurisdictions. UK employment law seeks to punish employers who act in breach of it – but does not stop them from doing so. If an employer makes the calculation that the financial consequences of ignoring the law are outweighed by the business benefits of doing so then it is free to go ahead.

Sometimes of course an employee can get an injunction preventing the employer from acting in breach of a contract of employment. We sometimes see cases from NHS consultants who are enforcing particularly tightly drafted disciplinary or conduct procedures, but this is not really an option available to ‘normal’ employees. More recently we have seen an injunction obtained by the Trade Union USDAW preventing Tesco from dismissing a number of employees and offering them new contracts on less favourable terms. I can’t stress enough however how unusual the facts of that case were. In a previous deal Tesco had awarded those workers an additional payment as an incentive to agree to a restructuring programme and had given them assurances that this would be a permanent entitlement – a benefit ‘for life’. When Tesco sought to terminate the contracts of those workers and offer them new contracts without that payment, the High Court granted an injunction preventing the dismissals. Tesco’s guarantee that the payments would be ‘for life’ created an implied term that the contracts would not be terminated in order to get around that obligation. I don’t think we can really use the USDAW case as a spring board for injunctions preventing employees from being dismissed in breach of their statutory rights.

The problem of employers calculating that they can afford to disregard employment protections is not a new one and is not confined to the UK. In 1997 the closure of a Renault factory in Belgium caused major controversy. It was announced by the French Chief Executive in a press conference at the same time as the Works Council were informed – making it clear that there was no room for negotiation. The fact that there was no mechanism for preventing the closure led to a proposed EU directive on informing and consulting employees which had at its heart a provision which rendered business decisions null and void if they were implemented in breach of the obligation to consult. This met fierce resistance from the employer’s lobby (I’m speaking from memory here, as I was part of that lobby at the time). A blocking minority was marshalled against the directive – led by the UK under a labour government. Deadlock was only broken when the provisions on remedy were dropped. As a result we now have the Information and Consultation of Employees Directive 2002 which only requires ‘adequate sanctions’. That is implemented in the UK by the Information and Consultation of Employees Regulations 2004 which are so weak that they are largely ignored. They don’t even attempt to implement the basic requirements of the Directive and it was always a puzzle to me that they were never legally challenged. I’m sure the trade union movement had its reasons.

Anyway, the result is that UK employment law concentrates on providing some compensation to employees whose rights have been ignored, rather than ensuring that employers comply with the law in the first place. The only real way of preventing employers from occasionally choosing to ‘do a P&O’ is either to provide punitive remedies that are linked to the amount the employer hopes to save by the exercise, or to require major job losses to be cleared in advance by, for example, the Central Arbitration Committee – with any dismissals being deemed to be ineffective until that clearance is given. The current Government is obviously going to do nothing in that direction.

In the meantime, the best we can do is bear in mind, when making our travel arrangements, that other ferry services are available. Maybe we can show that P&O’s calculations were flawed after all.

Posted in Compensation and Remedies, Redundancy Consultation, trade unions, Uncategorized | Tagged , , , | 3 Comments

End of the Road for Uber?

Posted on February 21, 2021 by Darren Newman

One of the things I like about the Supreme Court is its lack of grandeur. People often associate the English legal system with all manner of flummery – wigs, gowns, archaic language, soaring rhetoric  and elaborate ceremony. You get none of that in the Supreme Court. Even when it is sitting in its building on Parliament Square it takes a refreshingly down-to-earth approach. In lockdown, with  arguments being conducted from the various homes and offices of the participants, it is even more low key. You get clever people debating the law in a respectful and civilised manner – followed by a carefully reasoned decision. It’s lovely.

Take the announcement of the Uber decision on Friday. No fanfare, just Lord Leggatt sitting in front of what appear to be his dining room curtains saying ‘welcome to the Supreme Court’ – it makes you proud.

Despite the low production values, Friday’s decision in the Uber case was a real blockbuster. There is often a risk with much anticipated Supreme Court decisions that they will shy away from the big questions we are all interested in and focus on something that is specific to the case in front of them. My worry in this case was that it would end up turning on some aspect of agency law. But no. this is the new leading case on how you determine worker status. It gives the new starting point for that assessment and will now be quoted every time a Tribunal has to look at the issue.

The headline point is that when you are deciding whether a particular individual is a worker or not, you do not start with the contract and see whether that is the sort of contract a worker would have. Instead you start with the statutory provision – for example the right to the minimum wage – and see whether they fall into the statutory definition of a worker ‘irrespective of what had been contractually agreed’. Whether or not an individual is a worker is primarily a question of statutory interpretation not contractual interpretation.

Lord Leggatt points out that the modern approach to statutory interpretation is to look at the purpose of a particular provision and to interpret it, so far as possible, in the way which best gives effect to that purpose. In this case the purpose of the legislation being considered was to

‘protect vulnerable workers from being paid too little for the work they do, required to work excessive hours or subjected to other forms of unfair treatment (such as being victimised for whistleblowing).’

It is the vulnerability that is key. Some contractors are in a position to negotiate their own terms with their clients. Others are in a more subordinate position – dependent on the client for whatever work is offered to them. Given the statutory need to protect these individuals, it is clear that you cannot take the written contract as the starting point in determining whether they fall within the definition of “worker”. It is the very fact that the employer is in a position to dictate the terms of the contract that means that a statutory right to a minimum wage, a limit on working time or a right to paid annual leave is needed. Here’s a good bit from Lord Leggatt’s decision:

‘The efficacy of such protection would be seriously undermined if the putative employer could by the way in which the relationship is characterised in the written contract determine, even prima facie, whether or not the other party is to be classified as a worker. Laws such as the National Minimum Wage Act were manifestly enacted to protect those whom Parliament considers to be in need of protection and not just those who are designated by their employer as qualifying for it.’

I don’t know how you work, but If I’d written that paragraph I’d have taken a break and had a biscuit afterwards to reward myself.

The key overarching issue in determining whether or not the drivers were workers was whether they were in a position of subordination and dependence in relation to Uber. Lord Leggatt emphasised that the ‘touchstone’ of that subordination and dependence was the degree of control exercised by Uber over the work and service of the drivers – the greater the control, the stronger the case for classifying the drivers as workers.

Lord Leggatt then set out the factors that indicated that the extent of the control exercised by Uber did indeed create the subordination and dependence that justified that the Tribunal’s conclusion that the drivers were workers. I won’t go through them. But it strikes me that what was going on here was that Uber was trying to have its cake and eat it too. On the one hand it needed to ensure that those who took a ride with them enjoyed a good experience, that the price was appropriate, the driver behaved well, the car was of a certain standard and the route taken was efficient. On the other hand it wanted to pretend that it wasn’t providing this service at all – it was just acting as an intermediary giving individuals running a driving business the opportunity to find customers. Trying to hold these two contradictory approaches together led to some extraordinary contortions in the documentation it produced. And of course occasionally – particularly when it wanted to boast to regulators about how many ‘jobs’ it was creating – the mask slipped and the true nature of the relationship between Uber and its drivers became clear.

Throughout this case we have seen that the various contractual documents drafted by Uber have done them no favours at all. They were just too clever by half. Intricate and impenetrable, they set out a relationship between the parties that bore no relationship to reality. Asking the Supreme Court to give primacy to such documents was always a losing strategy (easy to say that now of course, but still, it’s true).

The result was that Uber drivers were workers. They were entitled to paid annual leave and – most importantly – to be paid the national minimum wage. Lord Leggatt’s judgment is now the first place to go when considering worker status. Could the same approach also apply when considering whether someone is an employee rather than just a worker? Maybe – though a contract of employment was a recognised ‘thing’ before statutory employment rights were created. Rights given to employees might still need to start with an analysis of whether the individuals relying on them were employed under that sort of contract – but that is an issue for a future case.

Working Time and the sheer scale of Uber’s arrears

Back to Uber. Crucially the Supreme Court, as well as finding that the drivers were workers, also upheld the Tribunal’s finding that a driver who logged on to the app was working even before a job was allocated. Uber had claimed that having the app switched on implied absolutely no obligation on the driver’s part to accept work – but were not helped by the fact that their Welcome Pack for drivers referred to logging on as ‘going on duty’. It was clear that Uber regarded drivers who had the app switched on as under some sort of obligation to accept trips – even if they could decline individual requests.

The finding on working time is, surely a killer blow. It means that every time one of Uber’s 40,000 or so drivers has had the app switched on, they have been entitled to be paid the minimum wage for however long they remained logged on. The potential for back-pay claims must be enormous.

Uber’s reaction so far has been almost nonchalant. The Guardian quotes Janie Heywood of Uber as saying:

“We respect the court’s decision which focused on a small number of drivers who used the Uber app in 2016. Since then we have made some significant changes to our business, guided by drivers every step of the way. These include giving even more control over how they earn and providing new protections like free insurance in case of sickness or injury.”

The idea that this case was all about a small number of drivers on an old set of terms and conditions just won’t wash. Uber did not lose this case on some technicality about their 2016 documentation. The Courts have found that Uber’s business model means that its drivers are workers. That position isn’t going to change by tweaking the wording of their policies. And quite what difference a free insurance policy is supposed to make is beyond me. Are they really going to brazen this out? Pretend that they can carry on as normal and see how many drivers actually have the nerve – and the resources – to take them on?

Surely HMRC must step in. Now that we know for sure that Uber drivers are workers, compliance officers can set about the task of assessing whether or not Uber has complied with their obligations (shouldn’t be tricky – they clearly haven’t) in respect of the minimum wage and set about calculating the amount of arrears that are due. They should then issue what might be their biggest ever Notice of Underpayment – plus a penalty of up to £20,000 per worker. There should be no excuses. This is a massive breach of the minimum wage law. If HMRC doesn’t act, then how will it explain its decision to pursue smaller employers making genuine mistakes about how the minimum wage is calculated?

One argument that must not be allowed to gain traction is that Uber’s liability has arisen as a result of some unexpected legal quirk – that they are victims of a complex or unclear law. Uber lost this case in 2016 and it is only their repeated appeals that have kept the process going this long. The complexity of the case arises from their own practice of shrouding a straightforward worker relationship in a mesh of overcomplicated legal verbiage bearing no relation to the facts on the ground – and clearly intended to dodge the obligations that other employers have to bear.  Their legal arguments have reached the end of the road.

Time to pay up.

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Is the Government about to rip up workers’ rights?

Posted on January 15, 2021 by Darren Newman

Last night the Financial Times reported that the Government is planning a post-Brexit overhaul of the labour market that would involve ‘ripping up’ workers’ rights ‘enshrined in EU law’. Specifically:

The main areas of focus are on ending the 48-hour working week, tweaking the rules around rest breaks at work and not including overtime pay when calculating some holiday pay entitlements, said people familiar with the plans.

Before we get carried away, we should remember what stage these proposals are at. We are overdue an Employment Bill and officials in BEIS are clearly working out some proposals to put to Ministers. It seems that they have been trying to gauge reaction in the business community to some of the possible changes – presumably that is where the FT is getting its information. There is no formal government proposal as yet.

However I have written before about the particular significance that some Tory MPs attach to the Working Time Regulations. Essentially they feel that the EU duped them by pretending that the Working Time Directive was a health and safety measure when in reality it was about (the horror!) improving employment rights. We don’t need to revisit that debate, except to acknowledge that if the next Employment Bill did include a measure ‘ending the 48 hour week’ there would be lots of Conservative MPs who would be enthusiastic about that.

But is such a change even possible? Didn’t the Government, in its deal with the EU, sign up to ‘level playing field provisions’ preventing them from reducing employment rights in this way?

Well, up to a point.

In fact, when it comes to employment law the EU-UK Trade Agreement is not very prescriptive. It specifically acknowledges that both parties are free to set their own policies and priorities when it comes to employment law. Then, at Article 6.2, it says this:

3. A Party shall not weaken or reduce, in a manner affecting trade or investment between the parties, its labour and social levels of protection below the levels in place at the end of the transition period, including by failing to effectively enforce its law and standards.

So a change in employment law is only prohibited if affects ‘trade or investment’. A change that doesn’t clear that bar is perfectly fine – even if it would not have been possible while we were actually bound by EU law.

Even if you take the view that a particular reform would affect trade, this doesn’t affect the legality of the measure in the way that we were used to when the UK was subject to EU law. To cause an issue, the change would have to be serious enough that the EU Member States thought it was worthwhile to invoke the dispute resolution mechanisms set out in the Treaty. What is more, when it comes to labour rights, that mechanism is limited to consultations involving an independent panel of experts (see Article 6.4) There is no recourse to the arbitration tribunal.

As it happens, I think the wholesale repeal of the Working Time Regulations probably would be a big enough step to cause difficulties with the EU. I don’t think that is a realistic option. But excluding overtime from the calculation of holiday pay strikes me as just the sort of change we can expect. And I really don’t see the EU kicking up a fuss if the record-keeping requirements in the Working Time Regulations are dispensed with. As far as I can tell, they are largely ignored anyway.

The Government has been swift to deny that it is planning to undermine workers’ rights. Business Minister Kwasi Kwartang Tweeted in response to the FT article denying any intention of rowing back on workers’ rights.

Well, of course, he would say that. When Labour was in power it always insisted that any improvements to workers’ rights were not a burden on businesses but were designed to help them be more competitive. I’m sure any change introduced by the Conservatives will employ the same sort of sleight of hand. Overall, the reforms will be pitched as improving the freedom for both sides to organise work in the way that suits them best. And it might well be that any rowing back of EU employment rights will be set off against improvements elsewhere. The Conservative manifesto promised more leave for carers and redundancy protection for new parents. It’s perfectly possible that the Employment Bill, when it comes, will be seen as a net improvement in workers’ rights.

But we have to acknowledge that we are in a different system now. Changes to employment law can no longer be legally challenged on the basis that they are not consistent with a Directive. This gives the Government quite a lot of scope to make important changes to employment law that will be significant for us here in the UK, but not dramatic enough to trigger a dispute with the EU. What we will see when the Employment Bill is eventually published is how far the Government is willing to test the boundaries of the trade deal.

Buckle up.

(Oh and as it happens, I am holding a webinar on 21 January looking at the prospects for employment law in 2021. I’ll be looking at the impact of Brexit, the Government’s outstanding employment law commitments and some of the key cases coming before the Supreme Court – you can buy tickets here)

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