Connie Cliff
PSL Principal Associate
Article
Gowling WLG's employment, labour & equalities experts bring you the latest top five employment law developments that may affect your business - what they are, and what you can do about them.
It is now well established that the prohibition on carry-over of untaken annual leave contained in the Working Time Regulations 1998 (WTR) does not apply where a worker is 'prevented' from taking their annual leave due to sickness absence or family related leave. Is a worker also 'prevented' from taking their annual leave in circumstances where an employer has wrongly classed an individual as an independent contractor, therefore denying any right to take paid holiday? Does carry-over equally apply in such cases and if so how much can be carried over? These are questions the Court of Justice of the European Union (CJEU) has considered in Sash Window Workshop Ltd v King.
Mr King worked for Sash Windows as a self-employed commission-only salesman from June 1999. While Mr King did take some holiday throughout his years of service, he was never paid for this. When Sash Windows terminated his engagement in October 2012, Mr King successfully claimed holiday pay before an employment tribunal, which accepted that he was a 'worker' for the purposes of the WTR 1998.
In particular, Mr King as a worker, was entitled to holiday pay for:
The EAT allowed Sash Windows' appeal on the inclusion of Holiday Pay 3, holding that the tribunal had failed to make findings of fact to support its conclusion that Mr King was prevented from taking his annual leave for reasons beyond his control. There was therefore no basis for departing from the usual position under the WTR that entitlement to leave expires at the end of the relevant leave year. Mr King appealed to the Court of Appeal, who made a reference to the CJEU.
On 29 November, the CJEU ruled as follows:
Where employers incorrectly treat workers as independent contractors, they could find themselves faced with unpaid holiday claims going back a number of years, in Mr King's case 12 years. While the Deduction from Wages (Limitation) Regulations 2014 limits how far back individuals can claim unpaid holiday as a deduction of wages claim, this judgment opens a new door for back pay claims via a statutory Working Time Regulations route.
This case takes on an added significance in light of the rise in 'gig economy' worker status cases. For example the case of Mr Smith v Pimlico Plumbers to be heard by the Supreme Court in February next year concerns a seven year working relationship.
This month we have had two contrasting decisions on worker status - Uber and Deliveroo.
On the one hand the Employment Appeal Tribunal (EAT) has upheld the tribunal's high profile decision that drivers engaged by Uber are not self-employed, but instead are 'workers' legally entitled to the national minimum wage, paid annual leave, and whistleblowing protection. The EAT confirmed that the tribunal was entitled to reject Uber's arguments that it was not a transport provider, but merely a technology platform providing an app which self-employed drivers could use. See Uber's 'worker status' appeal rejected - further appeal highly likely.
On the other hand, the Central Arbitration Committee (CAC) has found that Deliveroo riders are not 'workers' as there was a genuine substitution right that could be used both before and after a rider accepted a particular job, meaning the riders did not undertake to personally do any work or services for another party. See Uber drivers are "workers" but Deliveroo riders are not - what's the difference?
The "worker v independent contractor" debate is set to continue. Uber is now seeking permission to bypass the Court of Appeal and go straight to the Supreme Court using leapfrogging appeal rules that came into force in August 2016 for exceptional cases.
The Supreme Court is due to hear a similar worker status appeal in the case of Pimlico Plumbers Ltd and anor v Smith on 20 & 21 February 2018. In that case, the Court of Appeal upheld the decision of an employment tribunal that a plumber who was self-employed for tax purposes was nevertheless a 'worker' for unpaid holiday pay and unlawful deduction of wages claims and an 'employee' under the extended definition of the Equality Act 2010 for the purposes of a disability discrimination claim. It is understood that Uber will be seeking to get its appeal heard either together with or shortly after Pimlico Plumbers. We wait to see if the Supreme Court agrees to grant permission (a good chance) and if so how quickly it will be heard.
The Government too will have more to say on the subject. In the Budget the Government acknowledged that this is an important and complex issue. It intends to publish a discussion paper as part of its response to the Taylor Review of employment practices.
This month, Rawlinson v Brightside Group Ltd provides a helpful illustration of wrongful dismissal principles.
Mr Rawlinson was employed as in-house legal counsel. Shortly after his appointment, the employer had growing concerns about his performance. Instead of going through a performance management process, the employer decided to dismiss Mr Rawlinson five months after he had joined the company. The employer was keen to have Mr Rawlinson work his three month notice period to allow time to organise his replacement and for an orderly hand-over.
To "soften the blow" when dismissing Mr Rawlinson, he was told that he was being dismissed with notice as the company had decided to change its approach to its legal service requirements and would be using more external legal expertise. However, Mr Rawlinson believed the changes amounted to an outsourcing exercise to which the transfer of undertakings regulations (TUPE) applied. He resigned with immediate effect on the basis he believed the employer breached its statutory duty to inform and consult under TUPE.
Mr Rawlinson subsequently brought claims for breach of the duty to inform and consult under TUPE and wrongful constructive dismissal (based upon a fundamental breach of the implied term of trust and confidence). He did not have sufficient qualifying service to bring an unfair dismissal claim.
The tribunal rejected his claim that there was a relevant transfer under TUPE. As for the breach of contract claim, the tribunal found that the company's failure to forewarn Mr Rawlinson of any performance concerns and the potential for dismissal did not amount to a breach of the implied term of trust and confidence. Also, Mr Rawlinson's complaint was really about the manner of his dismissal. Under what is known as the 'Johnson exclusion zone', damages for breach of contract cannot be awarded in respect of unfair treatment due to the manner of dismissal (instead a statutory unfair dismissal claim must be pursued).
However the EAT has overturned the finding that there was no wrongful dismissal:
As the old adage states, 'honesty is always the best policy'.
This case provides a helpful illustration of the key differences between wrongful and unfair dismissal:
In this month's Budget the Government has confirmed the April 2018 National Minimum Wage (NMW) increases. The National Living Wage (NLW) which applies to workers aged 25 and over, will increase by 4.4% from £7.50 to £7.83 and is estimated to benefit over two million workers. At the same time, the other NMW rates will be increased as follows:
Earlier this month, on 6 November, the Living Wage Foundation increased what it calls the 'Real Living Wage' (RLW) from £8.45 to £8.75 (UK rate) and from £9.75 to £10.20 (London rate). But these are only voluntary rates and are not the same as the NLW. In The National Minimum Wage, the National Living Wage and the Real Living Wage - What's the difference?, we take a back-to-basics look at what the legal requirements are for employers in the UK, the key differences between the NLW and the RLW and look to the future to see what challenges lie ahead.
Against a backdrop of increasing awareness of the importance of good mental health, allegations of workplace sexual harassment by those in positions of power come thick and fast, causing a serious headache for Mrs May and business leaders alike.
This month the Advisory, Conciliation and Arbitration Service (ACAS) has launched new guidance to help employers Managing staff experiencing mental ill health and updated its guidance on what constitutes Sexual harassment
In Workplace sexual harassment and the effect on mental health - recognising and creating a healthy workplace, we explore the effect of workplace sexual harassment on mental health and how to look out for the signs of ill-health to develop a healthy and positive environment.
CECI NE CONSTITUE PAS UN AVIS JURIDIQUE. L'information qui est présentée dans le site Web sous quelque forme que ce soit est fournie à titre informatif uniquement. Elle ne constitue pas un avis juridique et ne devrait pas être interprétée comme tel. Aucun utilisateur ne devrait prendre ou négliger de prendre des décisions en se fiant uniquement à ces renseignements, ni ignorer les conseils juridiques d'un professionnel ou tarder à consulter un professionnel sur la base de ce qu'il a lu dans ce site Web. Les professionnels de Gowling WLG seront heureux de discuter avec l'utilisateur des différentes options possibles concernant certaines questions juridiques précises.