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Range of Reasonable Responses Newsletter: September 2020

With no prospect in sight of life returning to anything like normal, I've been enjoying presenting webinars from the comfort of my employment law bunker. I'm trying not to bother subscribers to this newsletter with too much marketing bumf, so the best way to find out well in advance about the webinars I'm running is to sign up for regular updates here

But I'm afraid that a certain amount of plugging is unavoidable. So let me just tell you that the next webinar is on Gross Misconduct and Wrongful Dismissal on Thursday 1 October. For some reason there seems to have been a run of cases in the past year or so where the Tribunal did not appreciate the difference between unfair and wrongful dismissal. I thought this would be a good opportunity to pick apart how the two different claims work and why you might win one and lose the other. I'm also going to look at what counts as gross misconduct and, in particular, when an employee's negligence allows you to dismiss without notice. Tickets are just £20 plus VAT and you can book your place by clicking on this handy button that I have just learned how to create on Mailchimp: 

Book your place

Restriction of Exit Payments in the Public Sector

Concerns are growing that the government is preparing to implement its long-promised cap on public sector exit payments without putting other measures in place first that will allow the cap to operate smoothly. Key among these is the need to change the rules of the local government pension scheme so that those being made redundant aged 55 have their enhanced benefits reduced to reflect the amount that the employer is allowed to pay in. 

Under the current rules the pension fund can require the employer to to make a payment sufficient to cover the enhanced benefit provided for under the scheme.  The way in which that is calculated varies from fund to fund, but it can easily exceed £95,000 even for employees on middle-range salaries. The Restriction of Public Sector Exit Payments Regulations 2020 limit the extent to which the employer is permitted to make this 'pension strain' payment but DO NOT of themselves change the entitlement of the individual member of the scheme. 

The Ministry of Housing Communities and Local Government is consulting on proposed amendments to the local government pension scheme and that consultation ends on 9 November. Surely the Government is not going to implement the cap before that consultation has run its course and the changes have been made in an orderly manner? 

It was worrying to see the Government plough on with the Parliamentary progress of the Exit Payments Regulations without seeming to acknowledge the importance of wating until these changes are made. The Regulations were debated by the House of Commons Delegated Legislation Committee on 21 September and approved by the House of Lords on 23 September. The only stage left is a vote on the floor of the House of Commons which takes place without any further debate. That was originally scheduled for 22 September, but the government chose not to move to a vote. This is a hopeful sign. Perhaps they are, after all, waiting - perhaps until early next year? -  before the Regulations are brought into force. We will need to watch carefully however. Once the Regulations are voted through and signed by the Minister, they come into force just three weeks later. 

I have had so many questions about this that I have made the webinar I ran on the Regulations publicly available. It goes through the Regulations in detail and grapples with some of the tricky issues that have not yet been resolved. You can watch the full thing here

Sleepover shifts and the minimum wage

A decision from the Supreme Court in the Tomlinson-Blake case on whether or not hours when workers are allowed to sleep on the premises count toward their minimum wage entitlement is now seriously overdue. The Supreme Court's summer recess ends on 1 October (some time later than the actual summer) and a decision in this case must surely be one of the first things on the agenda. 

I don't have much of a sense of the likely result. I just hope that the Supreme Court sorts out the whole issue properly and gives guidance that will be useful for employers and workers across the care sector. There is always a risk that they just give a narrow decision that achieves a result in that case but leaves the wider questions of 'what counts as work'? and 'when is a worker working'? unanswered. 

For those who want to catch up with the subject before a result is announced, I wrote a (very) detailed blog-post here explaining the issues.

Uber in the Supreme Court - why it matters

The case of Uber v Aslam has now been argued in the Supreme Court. All being well we can expect a decision before the end of the year. On the face of it this is quite a limited case looking at employment status in the gig economy - particularly where the 'employer' claims to simply be a platform allowing its 'workers' to meet clients and contract with them directly. The way the case was argued, however, means that the decision may have much wider implications.

One feature of the case is that the contractual documentation that Uber issued to its drivers made it clear that Uber was not their employer but simply their agent - finding passengers and booking their journeys on the drivers' behalf. The courts so far have held that this contractual documentation should be disregarded in the face of the 'reality of the situation' which was that the drivers were in practical terms working for Uber and not engaging Uber as their agent.

A central theme of the argument in the Supreme Court was whether the contractual documentation had to be interpreted on its own terms before considering whether Uber drivers came within the scope of employment law or whether the courts should first of all consider whether the legislation was intended to protect people like Uber drivers before deciding how to classify the contract. What this boils down to is a question of whether or not an employer can avoid being covered by employment law simply by drafting a contract in such a way as to ensure that those engaging with them are noeither workers nor employees. 

This decision has the potential to become the leading case on how employment status is judged when the contract asserts that an individual is self-employed. If Uber wins then the implications may be huge. It could become much easier for employers to control who does and who does not count as an employee or worker. 

Annual Leave in the Supreme Court

Looking ahead to 2021, the Supreme Court has agreed to hear three important cases on the calculation of holiday pay. Flowers v East of England Ambulance Trust is concerned with whether holiday pay needs to include voluntary overtime in the calculation. I'm surprised that the Supreme Court thinks that there is enough doubt about this to be worth hearing the case. Surely if voluntary overtime is so regular that it is normally paid, it becomes part of the worker's normal remuneration and therefore needs to be included in the calculation? I would have said that this was such a settled question that there was no need for the Supreme Court to look at it - but we shall see.

The Police Service of Northern Ireland v Agnew is about back pay when an employer has historically not been paying the right amount of holiday pay. In the Bear Scotland case the EAT suggested that the usual mechanism for claiming in these circumstances - that the failure to pay the right amount of holiday pay amounted to a series of unlawful deductions from wages - was qualified. If more than three months elapsed between any two deductions then the series was broken and the earlier payments would be dismissed as being out of time. In Agnew, the Northern Ireland Court of Appeal held that that was wrong and the matter will now be heard by the Supreme Court. Again I fail to see why this needs to go so far. Of course the Bear Scotland case was wrong on this point - there is nothing in the legislation or previous case law suggesting that a three month gap automatically means that a series of deductions is broken. But the Supreme Court would not have given permission to appeal if they thought the issue was this obvious.

Finally we have the case of Harpur Trust v Brazel which is about the calculation of a week's pay for a term-time only casual music teacher.  The employer used Acas guidance to calculate holiday pay based on 12.07% of the worker's overall earnings. The problem was that this calculation assumes that the worker is working throughout the year except when on annual leave. In this teacher's case the application of the 12 week average (since April the average must calculated based on 52 weeks, but that doesn't affect this case) would result in a payment of around 18% of normal pay. The Court of Appeal held that there was no problem with this. The Working Time Directive would allow a pro-rata reduction in holiday pay to reflect the fact that the worker did not actually work for part of the year, but the Working Time Regulations did not operate that way and there was no problem with them being more generous than EU law required. We shall see if the Supreme Court agrees. I do agree, for what it's worth,. But I think we've clearly established that the Supreme Court doesn't care what I think about things. 

These cases are scheduled to be heard in the summer of 2021, so we should expect the results a little over a year from today. By then of course we will have not only left the EU (we have technically done that already) but we will also be out of the transition period and operating under whatever deal is eventually cobbled together between the UK and the EU. That should not of itself affect the Supreme Court's decision, but it might affect its impact. By then the Government may be free to legislate in a way that is inconsistent with the Working Time Directive and may take the opportunity to 'sort out' the way annual leave and holiday pay works. Personally I'd be happy to see them do that. There really is no reason why the provision of paid annual leave should be one of the most complicated and highly litigated areas in employment law. 

And (finally) just a brief plug for two forthcoming webinars...

Disability Discrimination and Sickness Absence
7 October 2020 10am
More details
Pregnancy, Maternity and Redundancy Selection
21 October 2020 10am
More details
Copyright © 2020 Darren Newman Employment Law Ltd, All rights reserved.

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