Hiring Agency Workers? Do You Understand Your Legal Responsibilities?

Engaging agency workers offers ease and flexibility, but employers who believe that they thereby divorce themselves from all legal responsibility are sadly mistaken. In a guideline case on point, a transport company was ordered to compensate agency workers who were paid less than their directly employed colleagues.

For a period of almost two years, the company failed to comply with its duties under the Agency Workers Regulations 2010 to afford equal pay to workers it had hired from an agency. After acknowledging its error, the company equalised the agency workers’ pay and remitted sums to the agency which covered the previous underpayments. Those sums were, however, retained by the agency and not passed on to the workers before it went into involuntary liquidation.

After complaints were lodged by two of the agency workers – who acted as lead claimants – an Employment Tribunal (ET) found that the agency and the company, as hirer, each bore 50 per cent responsibility for the breaches of the Regulations. The ET declined to order the company to pay compensation to the workers on the basis that it would not be just and equitable to do so. That ruling was, however, subsequently reversed by the Employment Appeal Tribunal.

In dismissing the company’s challenge to that decision, the Court of Appeal noted that the agency workers’ rights to equal pay were enforceable against both the agency and the company. They suffered an actionable loss on each and every occasion that they were underpaid. The agency’s failure to pay the sums due, even when put in funds to do so by the company, did not break the connection between the workers’ losses and the company’s breaches: it simply meant that they continued.

The company had chosen to use agency workers in the first place and was partly responsible for the original underpayments. The workers were also in a much weaker bargaining position than either the company or the agency. In those circumstances, they were entitled to be compensated for the underpayments on a pound-for-pound basis. The Court’s ruling rendered the company liable to pay 50 per cent of the compensation due to the workers. The amount of their awards will be assessed at a further ET hearing.

Being Harassed by a Disgruntled Ex-Employee? See a Lawyer Today!

Ex-employees who have left in acrimonious circumstances can bear grudges, and social media gives them the opportunity to make a pest of themselves. As a High Court case showed, however, specialist lawyers are more than capable of protecting clients who are on the receiving end of harassment or abuse.

The case concerned the former CEO of an IT company whose departure was not harmonious. Subsequent Employment Tribunal proceedings were compromised and, as part of the settlement agreement, she agreed not to publish disparaging or derogatory statements about the company or any of its officers or employees.

That, however, did not prevent her from engaging in a prolonged campaign in which she aired a number of perceived grievances directly to the company and two of its directors and to third parties. She made frequently incoherent claims of dishonest and criminal conduct on Twitter and on an investment information website.

After proceedings were brought on behalf of the company and its directors, the woman failed to respond or put in a defence to the claim. The Court was, however satisfied that she had been properly served with all the required legal documents and permitted the hearing to go ahead in her absence.

In granting summary judgment on the claim, the Court was entirely satisfied that the woman’s activities amounted to defamation, harassment, and breaches of the settlement agreement. The directors had suffered hurt and upset as a result of her campaign and feared continuing reputational damage.

An interim injunction was also issued against her, requiring her to cease her unlawful activities, and she was formally warned that breach of the order would be a contempt of court, punishable by up to two years’ imprisonment. The amount of damages that she will be required to pay the directors has yet to be assessed. There was no separate damages claim by the company.

Guidance for Tribunal Users

The Government has published guidance explaining the powers available to Employment Tribunals (ETs) – their use and their application – based on feedback from users of the service which suggested there was a lack of awareness on this issue.

Using case law examples to illustrate how ETs have used the powers at their disposal in the past, the guidance aims to provide reassurance about their purpose and limits, so that users are not dissuaded from proceeding with or responding to a claim, and to increase confidence that poor behaviour in the manner in which proceedings are conducted can have financial consequences.

Whilst the Government is committed to ensuring that people can resolve disputes within the workplace wherever possible, where this cannot be achieved it seeks to ensure that ETs have the case management powers they need to act against employment law breaches or poor conduct during proceedings in line with the following objectives:

  • ensuring that the parties are on an equal footing;
  • dealing with cases in ways which are proportionate to the complexity and importance of the issues;
  • avoiding unnecessary formality and seeking flexibility in the proceedings;
  • avoiding delay, so far as is compatible with proper consideration of the issues; and
  • saving expense.

Ex-Employee Threatening to Speak to the Press? This is What You Should Do!

Breakdowns in workplace relationships are always painful and can be particularly so when they are revealed in the press. However, as a High Court case showed, judges are always on hand to take emergency steps to ensure that current and former staff members abide by confidentiality clauses in their employment contracts.

The case concerned a professional firm whose director of business development and marketing had been dismissed on six months’ notice. His contract included a clause which forbade him from disclosing the firm’s confidential information, even after leaving its employ. On top of his contractual entitlements, he had been paid a substantial ex gratia sum by way of reminder of his obligations.

After receiving his final termination payment, the man expressed his dissatisfaction, saying that, given his age, his dismissal had effectively ended his career. He expressed an intention to speak to the press about the firm’s prevailing culture, particularly in relation to women in the workplace. He said that he would be demonstrating his impression of that culture by reference to three particular incidents.

In those circumstances, the firm made an emergency application to the Court, before proceedings had been formally issued. The Court was content to deal with the matter in the man’s absence on the basis that all reasonable steps had been taken to notify him of the application.

In granting an interim injunction against the man, the Court found it more likely than not that the firm would succeed in establishing at trial that there was a real risk that he would disclose information to the press in breach of the confidentiality clause. The firm’s grievance procedures were confidential and individual former colleagues to whom the man might refer in press interviews also had an expectation of privacy.

The Court acknowledged that there is a legitimate public interest in employers meeting their social and moral duties towards their staff. However, the existence of such an interest did not justify the indiscriminate disclosure of sensitive information which others have a legitimate interest in keeping confidential. A general desire to speak about the firm’s culture was not enough to justify such disclosures.

The interim order would be kept under review pending the trial of the action, and its terms, which referred to 11 specific categories of information, were designed to ensure the minimum necessary interference with the man’s human right to freedom of expression. He was also ordered to disclose to the firm the identity of journalists, media organisations or others to whom he had spoken with a view to publication and the nature of any information he had imparted to them.

Revised Code of Practice on Preventing Illegal Working

Following changes introduced by the Immigration (Restrictions on Employment) (Code of Practice and Miscellaneous Amendments) Order 2018, the Home Office has issued a revised ‘Code of practice on preventing illegal working: Civil penalty scheme for employers’. This sets out the document checks prescribed by the Home Office that an employer should make to ensure someone has the right to work, or continue working, in the UK and the factors to be considered when determining the amount of the civil penalty payable for a breach of the Immigration, Asylum and Nationality Act 2006.

The revised code of practice takes into account the introduction of the online ‘Employer Checking Service’ whereby, from 28 January 2019, employers have had the option to conduct an online right to work check, which will establish a statutory excuse against a civil penalty in the event that the employee is found to be working illegally. However, not all employees or potential employees will have an immigration status that can be checked at this stage, in which case a manual check must be completed. Follow-up checks for those whose right to work is time limited can also be carried out online or manually.

The code of practice applies when calculating the penalty amount in respect of any employment which commenced on or after 29 February 2008 where the breach of Section 15 of the Act occurred on or after 28 January 2019, or when determining liability where an initial check on a potential employee, or a repeat check on an existing employee, is required on or after 28 January 2019 in order to establish or retain a statutory excuse.

Employers are reminded that an employer who is found to have knowingly employed a person who is not allowed to work in the UK, or is considered to have had reasonable cause to believe that the employee was disqualified from employment because of their immigration status, can face criminal prosecution under Section 21 of the Act and, if convicted, up to five years’ imprisonment and/or an unlimited fine.

30,000 Supermarket Workers Score Lynchpin Victory in Equal Pay Dispute

Women and men who do comparable jobs for the same employer have for decades been entitled to equal pay – but the basis on which such comparisons can be made has been a perennial subject of legal debate. The Court of Appeal gave authoritative guidance on the issue in a case concerning about 30,000 supermarket workers.

Car SupermarketThe retail workers, mainly women, argued that their roles could be validly compared with those performed by mainly male workers employed in the supermarket chain’s distribution depots. The chain, however, argued that its distribution and retail sectors were fundamentally different, having evolved separately over time. The physical environment of its depots was very different from that of its stores and the two categories of workers had profoundly different functions and skill sets.

Lawyers representing the non-unionised retail workers argued that the terms and conditions of their unionised distribution colleagues were superior to theirs, although their work was of equal value. Following a preliminary hearing, an Employment Tribunal (ET) found that the retail workers were entitled to compare themselves with their distribution colleagues for the purposes of the Equality Act 2010. That decision was subsequently confirmed by the Employment Appeal Tribunal.

In dismissing the chain’s challenge to that outcome, the Court disagreed with aspects of the ET’s reasoning, but found that it had reached the correct result. In posing the question whether there were common terms and conditions generally as between the retail and distribution workers, it had conducted wholly the wrong exercise. The issue for the ET to decide was whether broadly common terms applied to retail and distribution workers, regardless of where they worked. Given that no retail workers were in fact employed in depots, or distribution workers in stores, that question was necessarily hypothetical.

Detailed argument and evidence going to minute comparisons between the terms which applied to the two sets of workers were thus irrelevant and the preliminary issue could have been resolved on the straightforward basis that the chain’s terms for retail and distribution workers both applied wherever they worked. The Court noted that it would be no credit to the law if the kind of elaborate and confusing exercise the ET had been encouraged to undertake was required in order to establish whether the statutory comparison could be made.

The retail workers’ claims were primarily brought under the Equality Act but, if they prove well-founded, some of them will be entitled to arrears of pay going back to before the Act came into force. Such claims would be assessed under the Equal Pay Act 1970. Issues as to whether their work is of equal value to that of their distribution colleagues and, if so, the extent of any differential between their respective pay and terms of employment, remain to be resolved by an ET.

Employees Plotting Your Downfall on Your Time? See a Lawyer Today!

Suspicions that your employees are using your confidential information and time that you have paid for to plot their next career move are sadly often justified. However, as a High Court case showed, specialist solicitors can help you protect your business from such unlawful conduct.

The case concerned a price reporting agency whose business development manager resigned and swiftly established a new venture in a similar field. The agency launched proceedings, accusing the man of, amongst other things, breaching restrictive covenants in his employment contract.

In upholding the agency’s claim, the Court noted that the man had very closely modelled his venture’s services and marketing material on those of his former employer. The two businesses provided price reports on similar products and were properly viewed as competitors.

There was ample evidence that, since his departure, the man had solicited or dealt with the agency’s clients in breach of covenant. The agency had a legitimate interest in protecting its confidential information, clients and other business connections and the duration of the covenants – nine months following the end of the man’s notice period – was no longer than was reasonably necessary.

The man had also breached his duty of fidelity in devoting an immense amount of his time, whilst still employed by the agency, to planning and obtaining investment in his venture. He had retained confidential documents belonging to the agency and had arranged meetings with its clients, promoting his services to them, prior to his resignation. His new business had thereby been able to hit the ground running.

The Court rejected the man’s plea that the company had breached his contract by examining his emails, including messages of a private nature, whilst he was on garden leave. The agency’s employee handbook conferred on it a right to access and inspect messages sent by employees on its internal IT systems. Even if the agency had breached the man’s privacy rights, that was not so serious as to amount to a repudiatory breach of his employment contract.

In those circumstances, the Court issued an injunction requiring the man to honour the contractual restrictions on his post-termination activities. The agency was also seeking compensation in respect of damage caused to its business by his unlawful conduct, but that matter was adjourned to a further hearing.

The Rights and Wrongs of Disclosing Criminal Records – Supreme Court Ruling

There is a clear public interest in those who work with children or vulnerable adults being required to submit to criminal record checks – but how old, or minor, do their convictions have to be in order to be exempt from disclosure? The Supreme Court addressed that burning issue in a guideline case.

The case concerned four individuals who had all been convicted or received cautions or reprimands in respect of offences ranging from carrying children in a car without a seatbelt and theft of a sandwich to assault occasioning actual bodily harm and sexual assaults arising out of childhood experimentation. The offences were of some antiquity, all but one of them dating back to the 1980s or 1990s, and some of them had been committed when the offender was very young.

By virtue of legislation designed to promote the rehabilitation of offenders, all of the convictions and cautions were spent and there was no general obligation to disclose them to potential employers. However, as the four either worked with, or wished to work with, children or vulnerable adults, employers were required to obtain extended criminal record certificates, on which their past misdemeanours would be disclosed.

The four argued before lower courts, all but one of them successfully, that the statutory disclosure schemes were incompatible with their right to respect for their privacy, enshrined in Article 8 of the European Convention on Human Rights. That was because of the breadth of the categories of offence that were required to be disclosed. The schemes were also ruled disproportionate in failing to distinguish between convictions and cautions of varying degrees of relevance.

The Supreme Court conducted a comprehensive review of the relevant law after the Home Office, and the one complainant whose case failed in the lower courts, appealed. The Court noted that the schemes derived from the Rehabilitation of Offenders Act 1974 and the Police Act 1997, both of which created highly prescriptive and mandatory disclosure regimes. On that basis, the schemes passed the legality test and were in accordance with the law for the purposes of Article 8.

Turning to the issue of proportionality, the Court found that the schemes were not indiscriminate in nature but were carefully devised to achieve a balance between the competing public interests of rehabilitating offenders and safeguarding children and vulnerable adults. It was unfeasible to require a system of individual assessments and bright line rules were required to render the schemes practicable.

The approach of the schemes in requiring disclosure by reference to pre-defined categories of offending was justified. There was little evidence that employers could not be trusted to take an objective view and final decisions as to the relevance or otherwise of prospective employees’ convictions was properly left to them.

The Court, however, found that the schemes lacked proportionality in two respects: a rule concerning those with multiple convictions did not achieve the purpose of indicating a propensity to offend and applied irrespective of the nature, similarity, number or time intervals of offences. The schemes also failed to take sufficient account of the fact that warnings and reprimands issued to younger offenders are instructive and specifically designed to avoid damaging effects later in life through disclosure. The Court disposed of the appeals, and made limited declarations of incompatibility, in accordance with its ruling on the principles raised by the case.

Consultation on Boosting Protection for Pregnant Women and New Parents Returning to Work

The Government has published a consultation paper on its plans to enhance protection from redundancy for pregnant women and new parents returning to work. This follows a recommendation in the 2017 Taylor Review of Modern Working Practices and conclusions of the Women and Equalities Select Committee put forward in its report on pregnancy and maternity discrimination.

The consultation document explains the current law on redundancy protection for pregnant women and new mothers who are on maternity leave, as afforded under the Maternity and Paternity Leave etc. Regulations 1999, and puts forward a proposal that this should be extended so that it continues for up to six months after their return to work.

The consultation also seeks views on affording the same protection to parents returning from adoption leave or shared parental leave.

The consultation closes at 11.45pm on 5 April 2019.

Live-In Agency Carer Developed Employment Status Over Time

As relationships and working arrangements change, self-employment can morph into an employment relationship over time. Exactly that happened in the case of a live-in agency carer who worked 12 hours a day for the same client for over three years.

The agency for which the woman worked generally provided carers on a rota basis but an elderly man’s nephew (the client) wanted someone who would commit to a live-in placement, lasting at least six months, to provide care as and when required. In the event she stayed for years and, after her services were dispensed with, she lodged a complaint with an Employment Tribunal (ET).

Following a preliminary hearing, the ET found that the woman was an employee. The fact that she had paid her own Income Tax and National Insurance Contributions was not decisive. The client had described himself as her employer in the termination letter and other correspondence. She had lived in throughout the three-year period and, albeit informally, had received holiday pay. For most of the period she was paid by direct debit, only invoicing for overtime.

The agency laid on replacement carers when she was on holiday, but that did not mean that she had herself arranged such substitutions. The level of control that the client exerted over her had led to the development of a master/servant relationship. The mutuality of obligation required for an employment relationship was present and there was nothing to indicate that she had been running her own business.

In rejecting the client’s challenge to that ruling, the Employment Appeal Tribunal (EAT) noted that he had perhaps not intended his use of the word ‘employee’ in correspondence to have legal effect. However, he had indicated in trenchant terms his reluctance to accept independent action on the woman’s part.

The gradually decreasing level of oversight to which her work was subjected by the client was a mark of his increasing trust in her and did not affect her employment status. The ET’s conclusion was amply supported by findings of fact and the client’s appeal was based on over-analysis of the reasons it gave.