Range of Reasonable Responses Newsletter: June 2020
This month - partly in an effort to get away from the Flexible Furlough Scheme - I thought we would look at what is coming up through the Supreme Court. For those who have worked their way through the best that Netflix has to offer it is worth bearing in mind that Supreme Court cases are streamed live on their website. You can watch the arguments being made and you can also watch judgments being given. I give it a solid four stars.
The Supreme Court is fussy about the cases it hears. They must raise arguable points of law of general public importance and which the Supreme Court thinks it 'ought' to consider at this time. The fact that so many employment law cases have met this test shows what a legally complex subject it has become. So here is what we have in store...
Royal Mencap Society v Tomlinson Blake; Shannon v Rampersad
These cases were heard together back in February and a decision must surely be imminent. They concern the extent to which a worker who is allowed to sleep through a shift on the basis that they will occasionally be woken to deal with something that has occurred in the night should be treated as working for the purposes of the national minimum wage. The issues are complicated and the legislation is not nearly as clear as it should be. In advance of the hearing I wrote a rather detailed blogpost about the issues that you can read here.
Asda Stores Ltd v Brierly & others
Hearing on 13/14 July
This is the sort of huge scale equal pay case that we saw some years ago affecting local authorities and the NHS. There are about 30,000 claimants. They are mainly women working in Asda supermarkets and claiming equal pay with men working in distribution. Their argument is that the work they are doing is equal to that of the men, but that their terms and conditions are less favourable.
There are several stages to an equal pay claim and if each one of them is appealed to the full extent possible then a claim such as this can take years to complete. This one promises to be quite a marathon. The issue that is going to be heard by the Supreme Court is the preliminary one of whether the retail workers can compare their pay with those working in distribution. The Equality Act requires that the comparator in an equal pay claim should either be employed in the ‘same establishment’ or in different establishments where ‘common terms apply’.
This can lead to some pretty obscure questions. In this case the issue identified by the Court of Appeal was whether distribution workers would have the same terms and conditions if they were employed in a supermarket rather than a depot. Since no distribution workers are actually employed in the supermarkets, this is an entirely hypothetical question. However the Court followed the relatively recent Supreme Court decision in North v Dumfries and Galloway Council and held that if – however implausibly – the distribution workers were all moved to a retail site but continued working in their distribution roles, they would continue to be employed under their current terms and conditions. It followed that ‘common terms’; were observed between the retail and distribution sites.
An easier way to think about this is to ask whether the different terms applying to different workers are really due to their location - in which case a comparison across locations would not be appropriate - or whether location per se is nothing to do with how people are paid. In that case it is reasonable to ask - what is?
I don’t know what angle Asda will be taking in this appeal. But even assuming (as I do) that they will lose this point, the case is far from over. The next stage will be to ask whether the two groups of workers are indeed employed on equal work. Then there will be the question of why that is and whether the reason for the difference is tainted with sex discrimination. The case has been running for more than four years so far and we have yet to answer the first preliminary issue. Goodness only knows when it will actually reach a final conclusion.
Uber BV and others v Aslam and others
Hearing 21 July 2020
We’ve waited some time for this one. The Court of Appeal decision on whether Uber drivers were ‘workers’ entitled to minimum wage and holiday pay was published way back in December 2018. Uber lost - as it did in the Tribunal and EAT - but what struck me most about the decision was the dissenting judgment from Lord Justice Underhill.
He pointed out that there is nothing unique about the proposition that Uber acts not as an employer but as in intermediary between drivers and their customers. That triangular relationship has been found to defeat a claim for employment status in situations as varied as golf caddies (Cheng Yuen v Royal Hong Kong Golf Club) and lapdancers (Stringfellow Restaurants Ltd v Quashie) and it is well established that on this basis taxi and minicab drivers are self employed.
The fact that Uber operates through an app does not strike me as making much of a difference to the underlying arrangement. Indeed the taxi firm that I use (or used to use, pre-lockdown) operates an app that is very similar to the one used by Uber.
One issue that I will be looking out for is what the Supreme Court says about the case of Autoclenz v Belcher. This is the 2011 Supreme Court decision that emphasises the importance of looking beyond the contractual documentation in an employment case and considering the ‘reality’ of the agreement. If Uber persuades the Supreme Court to place more emphasis on the precise terms of a written agreement then that will have profound consequences for employment status cases more generally.
Also in the pipeline...
As well as those already in the schedule, the Supreme Court has given permission to appeal to a flurry of employment law cases. Kostal UK Ltd v Dunkley and others is a case about unlawful inducements – the provision preventing employers from making an offer to employees which would have the ‘prohibited effect’ of taking them out of the scope of collective bargaining.
The Court of Appeal held that an employer did not act unlawfully when it made a pay offer directly to employees after it was rejected by the union. The decision was based at least in part on the fact the remedy for an unlawful inducement is so draconian (almost £4,000 per employee for each offer made – the employer in this case was facing a bill for almost half a million pounds) that the law could only have been intended for cases of actual derecognition, whereas the effect of the employer's offer in this case would only have lasted for one pay round. We shall see what the Supreme Court makes of that, but in the meantime, any employer looking at changing the nature of its relationship with a trade union should be very careful as to how it goes about it.
The other cases heading to the supreme court concern annual leave and holiday pay – an issue that just refuses to die. East of England Ambulance Service v Flowers the Court of Appeal held that holiday pay should reflect voluntary overtime worked by the employees. This was based on the interpretation their ‘Agenda for Change’ contracts but also on their rights under the Working Time Regulations. The Court held that there was no basis for distinguishing between compulsory and voluntary overtime under the Regulations. The European Court of Justice had made it clear that what mattered was that the pattern of overtime was sufficiently regular for it to amount to ‘normal remuneration’. Personally I struggle to see the Supreme Court saying anything different - but we shall see.
A case from Northern Ireland is also going to the Supreme Court. Police Service of Northern Ireland v Agnew and others is about how much back pay can be claimed when it is clear that an employer has not been paying employees the correct amount in respect of annual leave. In the Bear Scotland case the EAT held that repeated deductions from holiday pay could only constitute a single series if there was a gap of no more than three months between any two deductions. If there was more than a three month gap then the series would be broken and the deductions made before that gap would be subject to the three month time limit for bringing a claim. That ruling took many employment lawyers by surprise. The EAT was essentially making up a rule that was not found anywhere in the actual legislation. The Northern Ireland Court of Appeal duly ruled that there was no basis for it and the Supreme Court will now have a chance to make a definitive ruling. Note that the two year limit on backpay in a claim for unlawful deductions from wages that was introduced in 2014 does not apply in Northern Ireland, so the claims being made in the Agnew case go all the way back to the introduction of the Working Time Regulations 1998.
Finally the Supreme Court has just given permission to appeal in the case of Harpur Trust v Brazel – the case involving a casual, term-time only music teacher. The issue is essentially whether holiday pay should be pro-rated when the worker is only working for part of the year or whether the average pay should be calculated in the normal way. Since in calculating average pay any week where no pay is due does not count, this can inflate the normal week’s pay of a term-time only worker. So far the courts have not seen a problem with that – and nor frankly, do I. The Regulations give a formula for working out holiday pay and I don’t see the justification for disregarding the Regulations provided they meet the requirements of the Directive. The Supreme Court would not be hearing the case if it thought there was no room for argument on the point however, so there is no taking the outcome for granted.
These cases will take a good bit of time before they are heard and decided. This means that the law around annual leave and holiday pay will remain uncertain for another year or so at least. .
I've spent much of the past month writing and speaking about the various ways in which the Covid-19 crisis intersects with employment law. Subscribers to XpertHR will find guides on furlough and redundancy alongside a variety of articles dealing with annual leave, remote disciplinary hearings and health and safety rights. Those without a subscription can still get access to webinars and podcasts that they produce, so you might like to check out some of these:
Coronavirus and your workforce webinar: starting the return to work journey
Managing your workforce out of lockdown: collective redundancy process and pitfalls
Podcast: managing hearings remotely
Podcast: managing annual leave
At the time of writing I've just recorded another podcast for XpertHR on the flexible Furlough Scheme that should be up in the next day or so.
Don't forget that you can arrange your own webinar on the employment law topic of your choice. Email me at Darren@darrennewman.co.uk to talk through all the options.
Thanks for subscribing.