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Range of Reasonable Responses Newsletter Summer 2020 

Since my school days I have always regarded the summer as the end of the year, and September as a new beginning. That's a particularly useful way of thinking this year. We all want 2020 to be over and done with so that we can make a fresh start. 

Life is far from returning to normal, however, and I know that I won't be able to get out and see the clients that I regularly visit in the autumn - at least not in person. Instead I am delivering employment law webinars from the comfort of my home office. Its not the same as being there in real life, but I've been really pleased with how well they have gone. I've been able to put together some really flexible options that allow the equivalent of a normal day's training to be divided into a series of bite-size chunks and spread out over a couple of days. Let me know if this is an option you'd like to explore.

This autumn I will also be delivering a series of webinars that individuals can sign up for. I promise not to turn this newsletter into a series of adverts - but I hope you'll forgive me If I mention them from time to time!  

The first will be on Wednesday 9 September at 10.30. Its a ninety-minute employment law update looking at everything that's happened so far this year in the world of employment law. Registration is just £20 plus VAT and you can sign up below. I'm not advertising this until later in August, so this is a sneak opportunity just for subscribers.

Register now

Capping exit payments in the public sector

They're back! I had genuinely started to hope that the Government’s plan to cap public sector exit payments at £95,000 had been put on the back burner. The last consultation closed just over a year ago and I had thought that perhaps it could be quietly forgotten. But no. We now have the response and a new set of (barely) amended Regulations.

For those who have not been following the story so far, these Regulations place a cap of £95,000 on the amount that an employee in the public sector can be paid at the end of their employment. That sounds almost uncontroversial. Very few public sector employees are entitled to be paid a sum coming anywhere near the cap if they are made redundant for example. But the cap does not just include direct payments. It also covers ‘pension strain’ – the payment made to the appropriate pension fund to cover any enhanced pension rights that an employee acquires on leaving employment. This element of an exit payment can easily exceed the £95,000 cap on its own and varies enormously depending on things like the financial position of the relevant pension fund.

The employees who will be most affected by the exit pay cap are not under-performing senior executives who are denied a golden parachute, but long-serving middle ranking employees who are made redundant when they are 55 or older.

The central problem with the Regulations is that they do not of themselves affect the actual entitlement of employees under the pension scheme – they merely limit the employer’s ability to fund that entitlement. Separate changes need to be made to the various public sector pension schemes themselves to avoid a mismatch between the employee’ entitlement under the pension and the employer’s obligation to fund it. We can only hope that the Government does not implement the Regulations before these changes can be made.

The Regulations can only come into force following a vote in both the House of Commons and the House of Lords. If the Government treats introducing the cap as a priority, then these could be scheduled for the autumn with the cap taking effect just three weeks later. But that would not allow anything like enough time for the required changes to pension schemes. And also - it is not as if Parliament will have nothing else to work on when it returns in September. So my bet is that these Regulations are most likely to come into effect in the Spring of 2021.

Uber in the Supreme Court

Argument has now been heard in what might turn out to be the most important case on the scope of employment law, well, ever. 

Uber v Aslam  is concerned with whether Uber drivers count as ‘workers’ for the purposes on the minimum wage and entitlement to paid annual leave under the Working Time Regulations. Uber argues that it is acting as the agent for drivers and that the drivers perform their work for individual customers. The drivers argue that that is nonsense. Uber provides a driving service to customers, and the drivers work for Uber in delivering that service. 

But the case has the potential to be about much more than that. 

Uber argued that employment law was designed to give protection to workers with a particular kind of contract - where the worker undertakes to perform work for the employer. So the question of whether or not an individual is protected is essentially a question of analysing the terms of the contract to see whether it fits into the relevant category.

The drivers are arguing that the starting point should not be the terms of a particular contract but the reality of the relationship between the ‘worker’ and the ‘employer’. If the relationship is of the sort that the law was designed to protect, then the precise terms of a written contract should not be allowed to get in the way.

If you were of an academic frame of mind you could see this as a choice between employment law as an off-shoot of the law of contract, or as a creature in its own right. They would see the case as being about the ’autonomy’ of labour law.

The more practically minded among us – like me – see the issue as being how easily an employer should be able to avoid employment law through clever drafting. The leading case on looking at the ‘reality of the relationship’ is Autoclenz v Belcher from 2011. That too was a decision of the Supreme Court, but its scope is far from clear. The Court now has a chance to make a definitive ruling on the relationship between the written documentation and the practical reality in determining employment status.

I don’t want to predict the outcome, but in argument,  Lord Reed - the President of the Supreme Court - seemed pretty sceptical of the suggestion that you must look at the contract before you consider the purpose of the legislation that the claimants are relying on. So I would be surprised if the decision makes things easier for employers to define workers as being self-employed with the stroke of a pen.    

Sleepover shifts

Of course, just because the Uber case has been heard, that doesn't mean that we will get a result anytime soon. The Minimum wage case of Royal Mencap Society v Tomlinson-Blake was heard back in February and we still don't have a result. 

The Supreme Court term is now over the summer, but that may not prevent a judgment from being handed down when it is ready. If it does come out, I promise to get off my sun-lounger and let you know. 

Have a good summer!

Copyright © 2020 Darren Newman Employment Law Ltd, All rights reserved.

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