2017 has got off to a busy start for the Clarion Employment team with our seminar programme. Thank you for those of you who attended our Wetherby HR Forum and our Can’t Do, Won’t Do seminar in January.
Don’t worry if you missed out, we have several events coming up;
On 17 March 2017 we are hosting the next seminar in our TUPE series, ‘TUPE and Tenders’, looking at the implications and risks involved for any business outsourcing or insourcing a service. The session will include presentations from Joanna Dodd, Senior Associate in our Employment team, , pensions input from KPMG and a commercial perspective on procurement from David Cunningham, Partner in our Commercial team. Click here for more details and to register.
On 31 March 2017, we will host our second HR Rising Stars Breakfast Club event- for HR professionals at the start of their HR career. The session will include presentations from Helen Saunders, Clarion’s Head of HR, on her career journey and a session on key employment case law from Victoria Clark, Associate in our Employment team. Let Laura Courbet knows if you would like to register and we will send you more details very soon.
We look forward to seeing you there.
In this month’s bulletin, we delve into some key case law developments in relation to flexible working requests, reasonable adjustments and misconduct on social media, along with an analysis of the recent judgment on employment status in the case of Pimlico Plumbers. We also highlight some legislative changes in relation to Gender Pay Gap Reporting, Tier 2 workers and the Apprenticeship Levy
CASES OF INTEREST
The past month has seen a number of case decisions that are worthy of note:
Following the landmark Uber case last year, the issue of employment status continues to be heavily debated in the courts. The most recent decision on this issue came last week in the case of Pimlico Plumbers & Charlie Mullins v Gary Smith.
Mr Smith worked for Pimlico Plumbers as a self-employed plumber and submitted his own tax returns to HMRC and was registered for VAT. In January 2011, Mr Smith suffered a heart attack and was Pimlico terminated their agreement with him. He brought a number of claims in the employment tribunal, including unfair dismissal, unpaid holiday pay, and disability discrimination.
All the claims brought by Mr Smith depended on his employment status as being an ‘employee’ or ‘worker’ of Pimlico Plumbers. The Tribunal at first instance, did not agree that Mr Smith was an ‘employee’ under s203 of the ERA 1996, however they did find that he was a ‘worker’ under the ERA definition, and also that he was an ‘employee’ under the extended definition at s83 of the Equality Act 2010.
Pimlico Plumbers unsuccessfully appealed to the EAT, and then brought a further appeal to the Court of Appeal.
Court of Appeal
The Court of Appeal upheld the EAT’s decision and found that the Tribunal were right to find that Mr Smith was not self-employed and Pimlico could not be said to be a client or customer of Mr Smith. The following factors were taken into account:
- Mr S was subject to Pimlico’s staff manual which required to him work 40 hours per week and he was required to agree these hours with Pimlico in advance;
- Mr S did not have a right to use a substitute and was required to provide the services to Pimlico personally. The agreement in place referred to Mr S solely; and
- Pimlico exercised tight control over most aspects of the arrangement, including subjecting Mr Smith to post-termination restrictions.
- When you engage consultants on a self-employed basis, ensure that the terms of the consultancy agreement are compatible with their employment status and that they do not place too much control on the individual.
- When engaging consultants, consider if there are any other company documents in place ,such as a handbook, which could be argued to form part of their contract and may contradict any agreement in place.
Refusal of Flexible Working Request
An employee who has at least 26 weeks’ service can make a request for flexible working. The employee can only make one request in a one year period. If you receive a request you are required to give it consideration, and to make a decision within three months. You can refuse a request, but if you do so it must be on one of the following grounds:
The burden of additional costs:
- A detrimental effect on the ability to meet customer demand
- An inability to reorganise work among existing staff
- An inability to recruit additional staff
- A detrimental impact on quality
- A detrimental impact on performance
- Insufficiency of work during the periods the employee proposes to work
- Planned structural changes
As you can see, the range of reasons is quite broad. However, you must act reasonably if you refuse the request, and once a request has been made you cannot force the employee to change back to their previous working pattern.
In Holt v Bannatyne Fitness  the employee was a Beauty Therapist who had a young child. She had worked for the company for 10 years, and had made a flexible working request to help with her childcare responsibilities. This had been agreed and she only worked Monday-Friday. Management then decided that they wanted her to work at weekends, but she refused because she could not find any childcare. Eventually, she was made redundant.
She was successful in her claims of unfair dismissal and of sex discrimination. The dismissal was unfair because her concerns had not been investigated and she had not been told that she might be dismissed if she did not agree to the change. Her sex discrimination claim was successful because women are more likely than men to have childcare responsibilities, and hence the decision disadvantaged women more than men.
- If you receive a flexible working request and you decide to refuse it, always make sure your reason is one of those given above.
- If you are not sure whether the proposed change will work out, only agree to the change on a trial basis. Make it clear to the employee that this is a trial, and that you will make a final decision at the end of the trial.
- If you do agree to a change confirm it in writing. If the change is only agreed for a limited period of time ensure that this is made clear to the employee.
Reasonable adjustments required in disciplinary process
If an employee is disabled, as defined in the Equality Act 2010, there is a requirement to ensure that you make reasonable adjustments to help that employee to work. The requirement for reasonable adjustments extends to all aspects of work, including disciplinary hearings.
In Everitt v Regal Consultancy Ltd  an autistic employee was awarded £15,484 following his unfair dismissal. He worked in a Subway making sandwiches. There was a routine hygiene inspection which found that out of date food had not been thrown away, and that the restaurant was a mess. Everitt was asked to attend a disciplinary meeting, but the explanations he gave for the outcome of the inspection were deemed to be chaotic and totally inadequate. He was dismissed, but another employee working in the same restaurant was just given a written warning.
On appeal, Everitt’s dismissal was overturned but he felt that he had been bullied and did not return to work. He successful claimed discrimination on the grounds of his disability. The employer should have taken his autism into account when questioning him and should have made reasonable adjustments to the disciplinary procedure to accommodate this disability, such as allowing a family member to be present.
- If you have a disabled employee involved in a disciplinary process, identify any difficulties that the employee might experience because of the disability.
- Ask the disabled employee if they are likely to experience any difficulties. The employee is not responsible for identifying the adjustments, but it is certainly useful to ask if there is anything specific you can do to address the difficulties.
- Make reasonable adjustments to accommodate the issues identified.
COT3 wording was insufficient to protect employer
If an employee makes a claim against you, and you negotiate a settlement through Acas the terms of the settlement will be documented in an agreement referred to as a COT3.
In the recent case of Department of Work and Pensions v Brindley , the employee had made a claim of disability discrimination which related to a warning for absence. The claim was settled on 11 December 2014 with the wording of the COT3 covering all issues relating to that claim and ‘all other Relevant Claims arising from the facts of the Proceedings up to and including the date (of) this Agreement’.
In November 2014 he had received a further warning for absence, which he unsuccessfully appealed in January 2015. He then went on to make a disability discrimination claim relating to this warning. The employer argued that he could not do this because of the COT3 agreement, but the employee argued that it did not cover the second warning.
The employee was successful in his argument. The COT3 wording only covered issues relating to the first warning, and not issues relating to any subsequent warnings.
- Always seek our advice over the wording of any settlement agreement, whether it is through the COT3 process or any other process. Care needs to be taken to ensure that it gives you all the protection that you need.
Dismissal for Tweets was fair
There have been a number of cases relating to the content that employees have posted on personal social media accounts. In Creighton v Together Housing Association  an employee informed the employer that his supervisor had posted derogatory comments about colleagues and the organisation on his personal Twitter account. Some of these posts went back as far as three years.
The supervisor was dismissed because it was determined that the tweets could have damaged the reputation of the employer. The supervisor appealed, saying that he had not realised that the tweets were public, and he thought that they were private messages in a similar ways to texts. In addition, he argued that he had not been aware of the possible outcome of making the tweets. His arguments were unsuccessful. This was a fair dismissal because the employer had been brought into disrepute.
- We strongly recommend that you put in place a social media policy, making it clear to your employees what you will class as unacceptable use of personal social media.
- If an employee does post something that you see as being unacceptable it could be fair to dismiss, if you can show that the post has brought your company into disrepute. However, this can be rather subjective to argue so we recommend that you contact us for advice before going ahead with a dismissal.
In our January Newsletter we detailed a number of legislative changes due to come into force this April . There have been a number of updates on these changes and we would like to bring your attention to the following:
Gender Pay Reporting
The government has now passed legislation that extends the gender pay reporting requirements to the public sector. Previously the requirement had only been applied to private and voluntary sector employers with at least 250 employees, now it has been extended to the public sector as well. The requirement on the reporting is the same for all sectors, with two exceptions:
- The requirement on the public sector will be part of the public sector equality duty, rather than a stand-alone requirement.
- The public sector will have to use 31 March as their calculation date, whereas the private and voluntary sector will use 5 April. This will be the date that you have to use as your reference point when calculating the median and mean pay for men and women and the number of men and women in each quartile when employees are arranged in ascending order of pay. When calculating the average bonus and the number of men and women paid a bonus the public sector will calculate it over the year from 31 March and the private/voluntary sector from 5 April.
If you have any concerns about you Gender Pay Reporting obligations, please do not hesitate to contact us.
Tier 2 workers
The rules relating to the entry of tier 2 foreign workers into the UK are changing from April 2017.
The main change is that the minimum annual income threshold for those entering under tier 2 is increasing from £25000 to £30000. For new UK-based graduates the threshold is not changing, and will remain at £20,800 per annum.
There will be a requirement to complete the Resident Labour Market Test unless the job is exempt from this. This means that the job must be advertised to UK based potential applicants for at least 28 days in the 6 months prior to appointing a tier 2 worker. You must ensure that the advertisement states the criteria for the position, and the date the applications close, and there must be a minimum of two advertisements posted in English. You must keep a copy of the advertisement.
You will have to pay a skills charge of £1000 to the government for each tier 2 entrant that you sponsor. If you have fewer than 250 employees the skill charge will be £364.
If you have any questions about these processes please contact us.
The apprenticeship levy is being introduced in April 2017, and must be paid by all organisations with a pay bill of £3 million or more. There is no opt out from this, it must be paid whether you employ apprentices or not.
‘Pay bill’ is defined as the employee pay on which you have to pay National Insurance contributions, so this will include wages, bonuses, commission and similar payments.
The apprenticeship levy is 0.5% of the annual pay bill. You will have to pay this to the HMRC in the same way that you pay PAYE and National Insurance contributions. There is a levy allowance of £15,000 which will be deducted from the 0.5% of the pay bill you are required to pay.
When you have declared the levy to the HMRC you will be able to access funding for apprenticeships under the digital apprenticeship service account. This will only apply to new apprentices. The fund will be topped up by the government, by 10%. This means that for every £1 you pay into the fund you will get £1.10 to spend. Using this account you will be able to:
- Select an apprenticeship framework
- Choose the training provider you want to deliver the training
- Choose the organisation that will assess your apprentices
- Post apprenticeship vacancies
- Set the price agreed with the training provider
- •Pay for apprenticeship training and assessment
- Stop/pause payments (for example, if the apprentice stops their training)
The digital apprenticeship service supports the English apprenticeship system. Scotland, Wales and Northern Ireland have their own arrangements for supporting employers to access apprenticeships.
The funds in your digital account will expire after 24 months. So, if you have not spent them on apprenticeship training you will lose them.