Exclusivity Clauses in Zero Hours Contracts Banned

Clock 1The first commencement order made under the Small Business, Enterprise and Employment Act 2015 has banned exclusivity clauses in zero hours contracts with effect from 26 May 2015.

Specifically, Section 153 of the Act inserts a new section 27A into the Employment Rights Act 1996 that renders unenforceable any provision in a zero hours contract that prohibits a worker from doing work or performing services under another contract or under any other arrangement, or any provision that prohibits the worker from doing so without the employer’s consent,

Further proposed measures (included in The Draft Zero Hours Workers (Exclusivity Terms) Regulations 2015) intended to prevent employers sidestepping the ban are expected to follow.

In addition, from 26 May 2015, the financial penalty payable for failing to pay the National Minimum Wage is set at 100 per cent of the arrears owed to each worker to whom the notice of underpayment relates, subject to a maximum of £20,000 per worker.

Immigration Officer’s Unfair Dismissal Claim Wrongly Struck Out

A former immigration officer, who delayed nearly six years before lodging an unfair dismissal complaint against the Home Office, has had her compensation claim reinstated after the Employment Appeal Tribunal (EAT) accepted that she may have been too mentally unwell to take action any earlier.

The woman resigned in circumstances which she claimed amounted to constructive unfair dismissal. She should have lodged her claim within three months, but did not do so for nearly six years. In those circumstances, her claim was struck out summarily by an Employment Tribunal (ET) as an abuse of process.

In upholding her challenge to that decision, the EAT noted that, shortly before her resignation, the woman had been admitted to a psychiatric unit after suffering an acute psychotic episode. There was evidence from a consultant psychiatrist that, for several years, she had been too unwell to conduct legal proceedings. In those circumstances, the ET had been wrong to take the ‘drastic’ step of dismissing her claim without giving her the opportunity to make representations. The matter was sent back to the ET for reconsideration.

Open Justice Principle Prevails in Employment Case

In a guideline decision, which involved the balancing of freedom of expression rights against an individual’s entitlement to privacy, the Employment Appeal Tribunal (EAT) has ruled that a former BBC producer who faced unsubstantiated claims of sexual misbehaviour was not entitled to the benefit of an anonymity order.

The BBC had declined to renew the man’s contract after he was accused of carrying out a number of sexual assaults. His complaints of unfair dismissal and other wrongs were dismissed by an Employment Tribunal (ET) on the basis that he had made false statements which had misled his superiors about events in his past.

The allegations of sexual misconduct had not been fully investigated or proved and the ET took the view that it would be wrong for him to be identified in reports of the case. It ordered that he should be referred to only by initials on the basis that the public was likely to misunderstand his position and that revealing his name would have a devastating impact on his private life and future career.

In allowing the BBC’s appeal, however, the EAT found that it was inimical to the principle of open justice for the man to be shielded from publication of the ET’s decision in full. The mere publication of embarrassing or damaging material was not a good reason for placing restrictions on the reporting of the case.

The BBC was entitled to tell the world that its position had been vindicated and its right to freedom of expression had not been given sufficient weight. The EAT also noted that the man’s future employers would have an interest in knowing that he had been dishonest and misled the BBC about his past.

Church of England Rector ‘Not An Employee’

A Church of England rector who claimed to have been unfairly dismissed and penalised for whistleblowing was neither an employee nor a worker within the meaning of the Employment Rights Act 1996, the Court of Appeal has ruled.

The rector had lodged his complaints against the Bishop of Worcester; however, an Employment Tribunal (ET) ruled that there was no contractual or employment relationship between them and that it therefore had no jurisdiction to hear his case. The bishop had not nominated him to his parish, was not responsible for paying his stipend and had very limited control over the way he went about his work.

That decision was later overturned by the Employment Appeal Tribunal. However, in allowing the bishop’s appeal, the Court of Appeal found that the ET’s conclusion was correct. Whilst expressing sympathy for the rector’s arguments that ministers of religion ought to be regarded as employees and afforded modern employment rights, the Court found that they could not prevail on the facts of the case.

Pay Deductions on Strike Days – Court of Appeal Rules

In a decision which will be required reading for employers, trade unions and their members, the Court of Appeal has ruled on the thorny issue of exactly how much pay can be withheld from workers when they go on strike.

Three teachers argued that the amount of pay referable to a day on which they were on strike should be calculated as 1/365 of their annual salary. Their employer said that the correct fraction was 1/260, on the basis that that was the number of week days in each year. The sums of money at stake were small but, if the teachers won, the cost to the education sector as a whole would be £300,000 per strike day.

The employer’s arguments were upheld by a judge; however, the teachers appealed. The issue hinged on the terms of their contracts and the correct interpretation of the Apportionment Act 1870, which established the principle that monies are apportioned on the basis that payments accrue daily.

The Court accepted that, in principle, the Act applied to the teachers’ contracts. In dismissing their appeals, however, it rejected arguments that, by operation of the Act, their pay accrued at an even rate from day to day. The terms of their contracts in any event excluded any assumption that their pay accrued by equal amounts on each of the 365 days of the year.

Where Do Globe-Trotting Employees Hang Their Hats?

In an age of easy travel and global companies, it can be hard to say where some employees ‘hang their hats’. In one case, a globe-trotting worker – who confined his time in the UK to less than 90 days each year in order to maintain his non-domiciled status for tax purposes – paid the price for his peripatetic lifestyle when an Employment Tribunal (ET) refused to hear his unfair dismissal claim.

The Danish national lived in Switzerland and was employed by a worldwide shipping company based in Bermuda. His employment contract was governed by the laws of Bermuda and, although he worked in Britain for more time than anywhere else, he was never in the country long enough to be subject to UK taxation.

He claimed that he had been unfairly dismissed for whistleblowing. However, the ET ruled that it had no power to consider his complaint because his employment was not sufficiently closely connected to the UK.

In rejecting his appeal against that decision, the Employment Appeal Tribunal found that the ET was plainly and obviously right to decline jurisdiction to hear the case.

Holiday Pay and Unearned Commission – British Gas to Appeal

As anticipated, British Gas has lodged an appeal against the decision of the Employment Tribunal (ET) in Lock v British Gas Trading Limited and Others that the Working Time Regulations 1998 could be interpreted ‘purposively’ in order to achieve compliance with the EU Working Time Directive (WTD). This followed the decision of the Court of Justice of the European Union that Mr Lock’s holiday pay should include commission as any reduction in a worker’s remuneration in respect of his paid annual leave that would be liable to deter him from exercising his right to take that leave is contrary to the objective pursued by Article 7 of the WTD.

In reaching its decision, the ET expressed the view that there was no difference in principle between payment for non-guaranteed overtime (Bear Scotland Limited v Fulton) and payment in respect of commission so far as holiday pay was concerned, and was confident that its decision was in line with the underlying intention of Parliament to accurately transcribe the WTD into UK law.

The grounds for appeal against the ET’s decision are:

  • The ET was wrong to conclude that the decision of the Employment Appeal Tribunal (EAT) in Bear Scotland v Fulton had any bearing on the decision in Lock; and
  • The EAT had in any case erred in Bear Scotland in concluding that domestic law could be interpreted purposively in order to give effect to EU law.

For the time being, uncertainty on this issue prevails, therefore.

We will keep you informed of any developments on this important matter.

Meanwhile, employers affected by recent decisions on what constitutes ‘normal remuneration’ for the purposes of calculating holiday pay are recommended to seek advice on their individual circumstances.

Need Skilled Migrant Workers for Your Business? Be Careful!

Many businesses rely on skilled workers from abroad, but the immigration rules which apply to them are both complex and strict. In an illustration of the point, the owners of a care home were left wishing that they had taken professional advice after a Home Office swoop put their livelihood in jeopardy.

The home held a licence to sponsor entry into the UK by skilled workers from outside the European Economic Area. One such worker had been registered by the home as a public relations professional. However, following a site inspection by immigration officers, suspicions were raised that he was in fact employed as a senior carer, a post which did not meet the required skill level.

The home’s sponsorship licence was revoked despite its owners’ plea that losing access to migrant workers would ruin the business. In dismissing the home’s appeal against this decision, the High Court found that the Home Office had rationally concluded that the worker’s role was inconsistent with his declared job description.

Union at War with Airline in Collective Bargaining Row

plane landingThe bad old days in which company bosses were constantly at odds with trade unions have largely been consigned to history. However, in one case, the relationship between an airline and a union representing its pilots was so acrimonious that High Court intervention was required.

The airline had been required by the government’s Central Arbitration Committee (the CAC) to recognise the union for the purposes of collective bargaining. The CAC also laid down a specified method by which negotiations in respect of pilots’ ‘pay, hours and holidays’ were to be carried out annually.

The union launched High Court proceedings, arguing that the airline had failed to meet the obligations imposed by the CAC. The Court observed that it was clear that the airline wished to minimise the union’s involvement in its business and that the union was equally determined to maximise the extent to which the airline was required to negotiate with it.

Rejecting the union’s arguments, the Court found that, whilst the airline was required to bargain in respect of contractual terms affecting pay, hours and holidays, that did not encompass shift and rostering arrangements which did not relate to the core terms of employment. The airline was also entitled to communicate with its staff about proposed pay increases before negotiating such matters with the union.