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A Range of Reasonable Responses:
March 2021

Apologies for the lack of a February update - but I've always thought that February is a month best ignored if possible. The result is that that this update has a bumper crop of major employment law developments to talk about. 

Before we get into that, can i just do a quick plug for the webinars I am running In April? I've picked four subjects that I get asked about a lot - and in each webinar I will explain the current state of the law and the key issues that employers need to be on top of. On 8 April I will be 'Making Sense of TUPE' then on the 15th I'll cover 'Religion and Belief'. On 21 April I'll talk about 'Selection for Redundancy' and I'll finish on the 29 April by looking at 'Annual Leave and Holiday Pay' 

All the webinars start at 10am and last for about an hour - though I always allow extra time for questions. Don't worry if you can't make a particular date. All webinars are recorded so as long as you are registered you will be sent a link that allows you to watch the webinar at your leisure. 

To be the first to hear about new webinars as they are schedule - sign up here..

Uber changes course

I have to hand it to Uber's PR people. They managed to make their 'Uber will pay the minimum wage to its drivers' story sound like a generous concession when the headline could have been 'Uber agrees to stop breaking the law'. The Supreme Court decision finding that Uber drivers were workers is the new definitive case on determining worker status. The starting point is no longer the contract - which we then pick apart to make sure it has all the features of an employer-worker relationship. Instead, we start with the statutory right that is being claimed and decide whether the relationship under scrutiny is one that Parliament intended should be covered. 

I wrote about the decision in some detail here

There are two questions  outstanding. The first is whether this new approach to worker status also applies when the question is whether or not someone is an employee rather than just a worker. The contract of employment has existed for much longer than statutory employment rights and so the argument might be that Parliament knew what it was doing when it said that some rights only extended to employees. 

The other question is how far we can take Lord Leggatt's suggestion that you can disregard any contractual terms that has as its purpose the exclusion of employment rights. He raised that in the context of contractual terms that deny that an individual is working for the employer, but he seemed to go further. Could the courts ignore a term that was not a sham but was included just to prevent the individual form being a worker or an employee? I'm thinking in particular of a substitution clause. An unlimited right to send a substitute has been held time and again to be incompatible with the obligation for personal service that is an essential ingredient of both employee and worker contracts. It might be genuine in the sense that the employer is willing to put up with a substitute, but the employer might envisage such substitutions as being rare in practice and have only agreed to them as a hitherto fool proof method of preventing someone from claiming employment rights. 

It was on the basis of a substitution clause that the Central Arbitration Committee ruled that a union representing Deliveroo riders could not claim recognition because they were not workers. There is an appeal in that case due to be heard soon - albeit on a a completely separate point about union recognition and the European Convention on Human Rights. But it may be that the riders' legal team will manage to squeeze a new argument in. If not, it seems inevitable that there will be a case on this question soon.

Sleepover shifts and the minimum wage

More than a year after hearing the case (much of the delay caused by the sad death of Lord Kerr who was due to draft the leading judgement) The Supreme Court has definitively ruled that anyone working a sleepover shift - where it is expected that they will sleep through the night unless disturbed to deal with an emergency - is not entitled to have those hours count towards their minimum wage entitlement. 

The decision cuts through the rather convoluted case law that essentially worked around a poorly drafted provision in the Minimum Wage Regulations designed to deal with sleepover shifts. The Court took a 'purposive approach' asking what Parliament intended by the provision rather than concentrating on the technicalities of what it actually said. That meant going back to a report from the Low Pay Commission in 1998 where the level of the minimum wage was first set. That report made it clear that sleepover shifts should not attract the minimum wage and the Government had indicated that it had accepted that recommendation. The Regulations therefore had to be interpreted with that in mind. 

There is of course rather more to it than that. On the afternoon of the judgement I gave a webinar picking apart what the Court said - you can watch that here. 

The thing that strikes me as unfortunate is that the assumption underlying the Low Pay Commission report is that while care workers would not get the minimum wage in respect of a sleepover shift, they would get an 'allowance'. But there is no Minimum Allowance Act and the consequences of the Supreme Court decision is that workers on a sleepover shift do not have to be paid at all except for the time when they are actually woken up to deal with an issue. Given the year that care workers have had, there is clearly an overwhelming case for legislating to require at least some level of minimum payment to cover time when the employee is away from home, serving the interests of the employer. I don't see what the argument against such a law would be - though I struggle to see the Government getting around to it any time soon.

Splitting contracts of employment under TUPE? 

Despite Brexit, our courts will continue to apply EU law - as interpreted by the European Court of Justice - as long as the legislation implementing it remains unaltered. Nevertheless I confess that I did rather ignore a decision from 2020 on how EU law deals with a business transfer in which an employee's role is split  between two or more new employers. The European Court seemed perfectly happy with the suggestion and said it was for the national court to determine how that would work in practice. My assumption was that this couldn't happen here. Splitting a contract in that way will surely mean that there is no transfer at all - or at least that an employee whose work is divided between the two will not be part of it. 

But the issue has now been picked up in the UK. The EAT in McTear Contracts Ltd v Bennett has ruled that contracts of employment can indeed be split between two employers as a result of a TUPE transfer and has remitted the case to a Tribunal to work out the details. That I think is the point at which things will become unstuck - how on earth can the details be worked out? If an employee had previously worked across a contract that has now been split into two how are the Tribunal to allocate the working hours of his two separate employments?  There is nothing in TUPE allowing then to do that. Unless the initial contract already had a very clear division, I just don't see how it can be done.

The EAT in this case were not helped by the fact that all the parties accepted that the Tribunal should have looked at the contracts of the employees being split into two. So there ass no-one arguing that it was a bad idea. I think the answer that has to come out in the wash is that splitting contracts in this way is a theoretical possibility, but in reality situations in which a Tribunal finds that such a split has actually happened will be vanishingly rare.

Did I mention I was doing a webinar on TUPE?


A Screeching U-turn on exit payments

For much of the end of last year I was trying to help councils get to grips with the Restriction of Public Sector Exit Payment Regulations. They were a nightmare, badly drafted, internally contradictory, sometimes downright meaningless (i'm looking at you, Regulation 8!). Their most fundamental problem, however was that there was a disconnect between the rule that pensions strain payments would be included in the cap and the fact that there was no change made to the local government pension scheme that entitled employees made redundant at the age of 55 and over to an unreduced pension. The result was that pension schemes had to pay out in full, but could not call upon local authorities to make the pension strain payments that would fil the resulting shortfall in the pension fund. There were proposals to change the pension scheme in the pipeline, but the government made the absurd and irresponsible decision to impose the £95K cap first. 

Then on Friday 12 February it was announced that the Regulations were being revoked. The Government said that this was due to them having 'unintended consequences'. I think this is true - the unintended consequences being the prospect of a successful judicial review of the Regulations brought by Unison, among others.  

The position now is that anyone whose exit payments were capped by the regulations can go back to their old employer to recover the lost amount - plus interest. In the meantime, we wait to see whether the Government will now abandon its policy of aa £95K cap on exit payments or whether they intend to learn from their mistakes and come up with a new set of Regulations. Perhaps come autumn 2021 we will be going through the whole process again. 

For local government people, watch out for the LGA employment law webinar on 22 April  I'll be speaking - but also listening very carefully to what my friends at the LGA think will happen next. They are much more plugged in to Government thinking than I am, so I'll be keen to hear their predictions. 
That's all from me this month. Happy Easter to those who celebrate it - and a fun Spring to all!

Copyright © 2021 Darren Newman Employment Law Ltd, All rights reserved.

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