This month, our bulletin looks at the referendum result and the potential implications of Brexit on employment law.
We also examine what we can learn from the parliamentary questioning of Sports Direct, along with looking at recent decisions relating to employees use of confidential information. We look at a recent case confirming that use of racist language in the workplace which causes offence to another colleague is unacceptable and was found to be gross misconduct.
There have been a number of recent decisions relating to discrimination and we will look at these in further detail, including discrimination at the job interview stage and cases relating to disability discrimination. We will also look at a recent decision which highlights the importance of identifying which employees are assigned at the time of a TUPE transfer.
Also, learn more about our employment team in our Q&A with Victoria Clark- including why you’ll most likely find her hiking up a hill in the Lake District on her weekends!
Thanks to those of you who attended our TUPE seminar on 28 June 2016. For those of you who missed out, our seminar programme for the coming year is now available- click here to see what’s coming up and to register your interest.
We have also published some useful guidance on the Apprenticeship Levy which you will find helpful in preparing your business for the introduction of the levy in April 2017. Click here to read more.
The impact of Brexit
The vote on 23 June 2016 to leave the EU raises a huge list of questions, including what impact the decision will have on employment law. At present there is no impact. The UK has not triggered Article 50 and has not given formal notification to the EU of the decision to leave. Even when Article 50 is triggered there will be no immediate impact due to the lengthy negotiations which will then take place. However, it is certainly important to ask what the future might hold.
One concern that many employers have relates to immigration. Will existing employees from the EU still be able to work in the UK, and what happens to UK employees who are currently working overseas? We do not know. It is very likely that there will still be a freedom of movement agreement as part of any trade deal that the UK negotiates. However, we will not know the detail of this for some time. In the meantime you should not use nationality as a factor in making any recruitment decisions, because you could face a race discrimination claim if you do.
The other concerns relate to possible changes to the law. Again, it is important to note that any changes that do occur will not happen immediately. If the UK government did want to alter the law after an exit from the EU there would be a need to repeal existing laws. Law that was introduced as a result of EU directives and regulations will not just disappear. It is also important to note that there is a significant amount of UK law (for example Shared Parental Leave, Employment Tribunal fees) that is nothing to do with the EU and leaving the EU will have no impact on it.
It is also worth noting that there are some areas where UK legislation has done more than the EU has required. For example, the EU Directive requires member states to give their employees 4 weeks of paid leave, but in the UK we give 5.6 weeks. It is likely that such areas will not be top of the list for altering.
It is possible that UK law that has been introduced with some disquiet, such as the Agency Workers Regulations 2010, will be removed. However, this might not be a priority for a UK government.
In summary, we have to wait and see. Rest assured that we will keep you informed and advised as the picture becomes clearer.
What should we learn from the troubles of Sports Direct?
The founder of Sports Direct, Mike Ashley, has recently faced questioning by a parliamentary committee about various activities in the organisation. Many of the issues he was questioned about were quite specific to the organisation, but there are some points that are important for us all to note.
He faced criticism for the way that zero hour contracts had been used in the organisation. He admitted that they were used because the workloads were unpredictable, but members of the committee questioned whether it was fair to put the burden of that unpredictability on the employees, rather than the business absorbing any problems that unpredictability brought.
The message from this is that there is nothing unlawful about using zero hour contracts. There might be some moral issues to consider, but as long as there are no exclusivity clauses in the contracts (which would stop the employees working for another employer) zero hour contracts can be used.
He also faced criticism for non-payment of the National Minimum Wage, and this is an important point. Part of the problem arose because employees were required to stay at work until they had been searched for security reasons at the end of the day. The employees were not paid for this time.
Here the message for us all is that if you are keeping employees from leaving work then it is very likely that they are working. Employees must be paid at least the National Minimum/Living Wage for each hour that they are working.
Another criticism was docking 15 minutes of pay if an employee was late – even if the lateness amounted to just one minute. If you have a company rule that docks pay then you can apply it. However, care needs to be taken. If your hourly rate of pay is the National Minimum/Living Wage and the employee is docked 15 minutes but worked 55 minutes (for example) you would be underpaying, and this is not allowed.
Finally, there was the rather controversial ‘six strikes and you are out’ rule. If employees were caught breaking company rules on six occasions they were dismissed. This might seem very strict, but there is nothing unlawful about the approach. As long as you apply rules consistently they can be enforced.
- Employees must be paid at least the National Minimum/Living Wage for each hour that they are working.
- If you have a company rule that docks pay then you can apply it. However, care needs to be taken to ensure the employee is not being underpaid.
- Company rules should be applied consistently.
Two cases relating to confidentiality
It is essential to ensure that employees understand what information in your organisation is confidential. You should not presume that all employees understand this, and you should take action if confidentiality is breached. Two recent cases show the importance of acting appropriately if confidential information has been misused.
The first case was reported by the Information Commissioner’s Office and related to an employee who was leaving an organisation. On his last day of work at Acorn Waste Management Ltd the employee emailed the details of 957 clients to his personal email address. The information he emailed included their contact information, commercial data and the history of their purchases and amounts charged. He was moving to work for a competitor and planned to use this information in his new role.
He was fined £300 plus a victim surcharge of £30 and costs of £405.98 for breaches of the Data Protection Act 1998.
The second case is Arthur J Gallagher Services (UK) Limited and others v Skriptchencko . In this case the employee left and started work for a new organisation. His old employer thought that he was using confidential customer information that he had taken from them, and he admitted that he had done this. His old employer did not trust him to delete all this information from his computer and other electronic devices and hence it applied for an order that he had to submit all his electronic devices to an IT expert to check that the information had been deleted.
This order was granted by the High Court. It agreed that the employee could not be trusted to delete the information.
- Ensure that you make it clear to employees what you class as confidential information.
- When an employee resigns remind them, in writing, that they must hand back any confidential information that they have and that they must delete any confidential company information from their electronic devices.
- Ensure that you keep a record of what devices an employee has, and ensure that they are returned on the last day of work.
- Consider using restrictive covenants to protect your company after the employee has left. Contact us for suggested wording that could give your business the protection it needs.
Unacceptable racist language is never allowed
We all know that there are certain words and expressions which are very offensive and should not be used in public. If an employee uses such a word when talking to colleagues who are not offended, is it gross misconduct if someone else overhears?
In Mann v NSL Ltd  the employee was talking to three white male colleagues. He used a particularly offensive racist term to describe someone he had met socially at the weekend. The remark was overheard by a white female colleague who found it offensive and reported him. He argued that it was just ‘street talk’, he had not meant to cause offence and he had not meant others to overhear what he said. However, he was dismissed for gross misconduct.
This was a fair dismissal. The expression he had used was very offensive, and the fact that he had not intended to be cause offence or for anyone to overhear his comment, was no defence.
- Do not allow any offensive terms or expressions to be used in your workplace. Not only can this be upsetting for individuals, but they could also claim harassment.
- Act consistently. If you take disciplinary action against one employee who says something offensive you should take the same action against any other employee who does something similar.
£2000 awarded for discrimination in the job interview process
In the recent case of Macdonald v Consulate General of Japan in Edinburgh  a woman with two young children applied for a job. During the interview she was repeatedly asked questions about her childcare arrangements, being asked whether she could afford appropriate care and who would look after the children if she was unwell. She did not get the job.
All the other applicants were women, but she successfully brought a claim of sex discrimination and was awarded £2000 in compensation. She successfully argued that a hypothetical male would not have been asked the same questions in the interview situation.
- Be sure that all your managers who are involved in interviewing have had appropriate training about what they can and cannot ask in an interview situation. We can provide this training if that would help you.
- You can ask candidates questions about their ability to meet the demands of a particular working pattern. However, you must ensure that you ask these questions of all applicants, and do not pick on individuals such as young mothers.
Two cases relating to disability discrimination
There have been two cases reported recently of employees claiming disability discrimination. One claim was successful, but the other was not.
In the case of Carreras v United First Partners Research  the employee typically worked very long hours. He was involved in a serious accident which left him with long term injuries. These met the definition of a disability as defined in the Equality Act 2010. Although he was able to return to work, he struggled to work long hours. He argued that there was still an expectation that he would work long hours and resigned, claiming both disability discrimination and constructive dismissal.
His claims were successful. It was more difficult for him to meet the expectations of working late due to his disability. In addition, the many occurrences of being expected to work late added together to cause a breach of contract.
- When an employee returns to work following a serious illness or accident take medical advice about what they can and cannot do.
- If an employee is disabled there is a requirement for you to make reasonable adjustments to assist them in working. This could include an adjustment to working hours.
The second case of disability discrimination was Brangwyn v South Warwickshire NHS Foundation Trust . The employee worked in a hospital providing support in rehabilitating patients. He had a phobia of needles, blood and injections which was so severe it was a disability. He had been given reassurances from a number of managers that he would not be required to go onto a ward where the phobia might be triggered. However, his job description did not reflect these reassurances and he argued that this amounted to disability discrimination.
His claim was unsuccessful. The job description and the reassurances, when added together, meant that there was no discrimination.
- It is always best to ensure that a job description reflects any verbal discussions that there have been about a job.
- If an amendment is agreed to a job ensure that this is covered in a revised job description.
Transfer must focus on who is assigned at the time of the transfer
If there is a sale of part or all of a business, or the change of a service provider, it is likely that there is a transfer of undertaking. For there to be employees transferring from one employer to another there must be individuals assigned to the work that is transferring and the work must be fundamentally the same before and after the transfer.
In the case of Amaryllis v Macleod  the Employment Judge looked back over a number of years when deciding who was assigned to the work that was transferring. However, the Employment Appeal Tribunal disagreed with the approach.
There had been a rather complicated allocation of work over the years, going back to 2003. The employees who were arguing that they should be transferred had been allocated to the work, but not in recent times.
The Employment Appeal Tribunal has ruled that it is only those who are assigned to the work at the time of the transfer who should transfer.
- It can be very difficult to identify who should transfer, so always seek our advice.
- Those who transfer must be allocated to the work that is transferring. If no-one is specifically allocated to the transferring work then no-one will transfer.
- The work that is transferring must be fundamentally the same before and after the transfer for there to be a transfer of undertaking situation.
Did the employee breach the contract?
If the employer breaches the contract of employment the employee can resign and claim constructive dismissal. However, if the employee has already breached the contract of employment a claim of constructive dismissal will not be successful.
In the case of Gibbs v Leeds United Football Club  the employee worked as an Assistant Manager. He had moved to the Club with the Manager, who was dismissed but Gibbs remained at the Club. Gibbs made it clear to the Club that he was happy to leave, but discussions about a possible termination never materialised. The Club then started to marginalise Gibbs, leaving him out of a pre-season tour in Italy, and giving him menial work to do. He resigned and claimed constructive dismissal, but the Club argued that he had already breached the contract by suggesting a termination.
Gibbs was successful. Although he had suggested a termination he had remained ready and willing to work. By excluding him from the Italy tour, and giving him menial work, the employer had breached his contract.
- If there is a situation where an employee is suggesting that it might be best for everyone if they leave the business, ensure that these discussions are recorded and that there is a common understanding of what has been concluded.
- Never try to force an employee to leave an organisation by side-lining him/her. It is very likely to lead to a successful constructive dismissal claim.
Q&A with Victoria Clark, Associate
Your first job?
I’ve had a job ever since I turned 16 and my parents told me it was time to start earning my keep! My first job was as a chambermaid, cleaning bedrooms and toilets for little over £3 an hour, at a hotel in Leeds.
How did you get into the career you're in?
I studied law at A-Level and got some work experience at a commercial law firm in Leeds at an early stage. I got a taste for employment law in particular, decided to do a law degree and my professional qualifications at Northumbria University up in Newcastle, and continued to get legal work experience as and when I could during the university holidays. My university had a law centre run by students so I was involved in advising real-life clients by then – I won a tribunal case in my final year and it sealed the deal for me!
What's the best piece of advice anyone has ever given you?
Be resilient and always believe in yourself.
If you weren't doing what you're doing now, what would it be?
Something interactive - I’ve always liked dealing with people.
Favourite thing about our beloved Yorkshire?
The people! Us Yorkshire folk are known for being friendly, genuine and straight-talking - you always know where you stand.
Three desert island items?
A chilled glass (or bottle) of fizz, a good thriller) and a survival manual!
When I’m not working you’ll probably find me in the Lake District hiking up hills, kayaking or running – I love the countryside and being outdoors.
What would you like people to remember you for?
I like to think I’m easy to get along with and generally good company.