The big employment law topics of the moment remain the calculation of holiday pay and Shared Parental Leave. The next holiday pay/overtime cases which are in the system have still not been reported, so look out for those next month. Separately, I have sent you a briefing on Shared Parental Leave, although in this context please note the Ford case reported below, especially if you offer enhanced maternity pay. Otherwise my update covers the usual mixed bag of cases and regulatory changes.
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The annual increase to national minimum wage rates has taken effect from 1st October. The new rates are:
- workers aged 21 and over: £6.50 per hour
- 18-20 year olds: £5.13 per hour
- 16-17 year olds: £3.79 per hour
- apprentices: £2.73 per hour
This 'family friendly' change also took effect from 1st October 2014. An expectant father, or the partner of a pregnant woman, can now take unpaid
time off work to attend antenatal appointments with the mother. The
entitlement is to unpaid leave for one or two appointments and the amount of
time off is capped at 6.5 hours for each appointment. Equivalent rights
apply to adoptive parents. The Department of Business, Innovation and Skills
has produced a guide for employers
which provides more information.
Plastering Contractors Stanmore Ltd v Holden (UKEAT/0074/14) is a reminder
that, in order to become entitled to holiday pay, it is not necessary for a
staff member to be an employee. Worker status qualifies, the qualification
criteria for which are less stringent and which category therefore includes
a wider range of staff members.
Mr Holden was employed for four years before accepting £200 in exchange for
becoming a labour-only subcontractor for the same company. Despite the new
contractual arrangements the Employment Appeals Tribunal (EAT) found that he
was a worker. The necessary mutuality of obligation existed during each
assignment or period of work undertaken, the requirement for the personal
performance of work had been met and Mr Holden had been recruited by his
former employer to work as a member of its workforce, so the requirements of
integration and control had also been satisfied.
He was not an employee because the Tribunal found that although there was
mutuality of obligation during the periods when he was actually working,
there was no overall mutuality, so that the "employer" could not compel him
to work, and equally had no obligation towards him to provide work.
Nonetheless, as a worker he should have received holiday pay.
To add to the challenges of deciding which staff members have what
protections, Windle v Arada and another (UKEAT/0339/13) deals with
qualification for protection under discrimination law. The bottom line is
that anti-discrimination protection catches an even wider class of people
than the worker category who can claim paid holiday (among other rights).
A person can claim protection from discrimination if he/she can demonstrate
that he/she was working 'under a contract personally to do work'. The key
difference from the tests for 'worker' status is that there need not be
overall mutuality of obligation. So the claimants here, who were
interpreters, were potentially eligible for protection even though no such
mutuality existed and they were therefore neither employees nor workers.
The case was in fact remitted back to the Employment Tribunal by the EAT for
it to establish whether the interpreters were providing their services in a
position of subordination, which is a prerequisite of working under a
contract personally to do work.
Like many employers (especially larger ones) Ford offers to pay women on
maternity leave enhanced pay over and above the minimum statutory maternity
pay entitlements. Like the vast majority of those employers, it does not
enhance in an equivalent way the pay of men who take paternity leave. Since
2011 that leave has extended beyond the core two week paternity leave period
to a potential Additional Paternity Leave (APL) period in which the father
uses up the unused maternity leave period of the mother (although this right
will be replaced by the new Shared Parental Leave scheme).
Is this distinction unlawful discrimination against men? Mr Shuter thought
so and took his claim to the Employment Tribunal.
Unfortunately for him, the Tribunal found Ford's approach to be lawful.
There was no direct discrimination because the appropriate comparator was a
woman who had also taken APL (which is possible, where the pregnant mother's
partner is a female, for example) and who would have been treated in the
same way. Although the policy was indirectly discriminatory, it was
objectively justified by Ford's need to recruit and retain women in a
In my briefing on Shared Parental Leave I drew attention to the hazardous
question of whether, under that new sharing regime, it would be possible to
treat men and women differentially in terms of enhanced pay. This case
provides some comfort to employers who wish to do that, but I say that with
caution. It was only a (non-binding) Tribunal decision, and Ford's ability
to demonstrate a need to recruit and retain women as justification for the
approach may not be replicated in other businesses. (Shuter v Ford Motor
Company Ltd ET/3203504/13.)
In Quality Solicitors CMHT v Tunstall (UKEAT/0105/14) the claimant alleged
that she had suffered discrimination at work on the basis that she had
overheard a colleague saying to a client "She is Polish but very nice". Her
employer's version was that the words used were "She is Polish and very
nice". The Tribunal held that it did not matter which was the correct
version, because neither one could amount on its own to harassment on the
ground of race.
In order to meet the definition of harassment on the grounds of race the
conduct has to be unwanted conduct which has the purpose or (as was claimed
in this case) the effect of violating the claimant's dignity or creating an
intimidating, hostile, degrading, humiliating or offensive environment for
One incident can on its own amount to harassment and a Tribunal is entitled
to take into account the claimant's own viewpoint as well as the context,
but can only decide that the conduct has the effect of violating the
Claimant's dignity where it could reasonably have been perceived as doing
so. Here it seems that the Tribunal felt that the claimant was overly
To round off this little section on discrimination we have the rare sighting
of a claim under the Fixed-Term Employees (Prevention of Less Favourable
Treatment) Regulations 2002.
In Hall v Xerox UK Ltd (UKEAT/0061/14) the employer provided income
protection for employees who were off work for at least 26 weeks. However,
fixed-term employees ceased to be members when their fixed term expired.
Mr Hall was injured on 12th April 2012, but his contract ended on 20th July
2012, so the insurer advised that with effect from 20th July the scheme no
longer applied to him.
The EAT decided that the discriminating act was that of the insurer, not
Xerox, and so the employer was not liable.
Mr Ellis took his heavily pregnant partner to hospital, at first due to
illness and then, on the following day, because she was being admitted to
give birth. Perhaps excusably in the circumstances, he failed to tell his
employer the reason for his absence as soon as it was reasonably practicable
to do so, albeit that his father did telephone the employer after the first
You may be surprised to discover that his claims for unfair dismissal
following this failure were unsuccessful. The legislation states that the
employee must inform the employer of the need for dependant's leave as soon
as reasonably practicable. Mr Ellis's excuse that his mobile phone battery
had expired was not held to be sufficient as so many means of communication
are now available. As he had not met the statutory requirements to take the
leave his dismissal was not automatically unfair and it was also held to be
fair under the normal regime. The fact that Mr Ellis had a history of poor
attendance may have been relevant. (Ellis v Ratcliff Palfinger Ltd
In Hakki v Instinctif Partners Limited (UKEAT/0112/14), Ms Hakki was an HR
Co-ordinator, reporting to the HR Manager, and also provided administrative
assistance to the employer's CEO. When business expanded significantly, the
employer decided to create two new full-time posts: HR Adviser and PA to the
CEO/FD. At the same time, and even though these posts took over her duties,
the employer decided that Ms Hakki's role was redundant.
The EAT concluded that because the two new roles differed materially from Ms
Hakki's former role, that role had become redundant. The requirement for an
employee to carry out that job had ceased. It was also significant that Ms
Hakki accepted that she was not qualified to carry out the HR Advisor role.
She did apply for the PA role, but was not successful. Thus there was no
suitable alternative employment for her because she was not qualified or
appropriately skilled to carry out either of the two new roles.
Mr Armitage worked for the building contractors Costain, responsible for
managing various projects for the same client. One of the contracts he
managed - the only one offering guaranteed work - was taken over by a new
contractor and was therefore the subject of the service provision change
under TUPE; other ancillary contracts which Mr Armitage managed did not
transfer to the new contractor. 67% of Mr Armitage's time was spent on the
The EAT, overturning the Tribunal's decision, held that the Tribunal should
have first defined the organised grouping of employees and then determined
if the employee was assigned to that grouping. Instead, it reached a broad
conclusion without distinguishing between the contract that had transferred
and the ancillary contracts.
Of particular note is that the EAT accused the tribunal of placing too much
emphasis on the percentages of the employee's time spent on each project.
The case was sent back to the Tribunal for reassessment, but it provides
further emphasis that it is the organisation's grouping of employees which
determines who transfers under TUPE, not the allocation of their time.
(Costain Ltd v Armitage and another UKEAT/0048/14.)
Regular readers know that I like a good case on the question of whether an
international worker is covered by UK employment law protection. Over the
years it has become increasingly clear that this is a matter of factual
assessment by the Tribunal as much as the application of hard and fast
rules. This means each decision provides an extra clue on whether a
particular employee will be able to bring statutory claims in UK.
Well joy of joys, this month I can report two cases on the subject! And the
result is a 2-0 win for employers.
First we have Fuller v United Healthcare Services Inc and another
(UKEAT/0464/13) in which a US citizen employed by a US company and required
to spend around half of his working time in the UK, could not claim unfair
dismissal under the Employment Rights Act 1996 or discrimination under the
Equality Act 2010. The employee had not given up his base in the US, despite
carrying out work in the UK and other countries and being provided with
accommodation in London. He entered into a contract with an "overwhelmingly
close connection" with the US and this contract had not been overtaken by
events. He was paid in US dollars. The dismissal had been carried out in the
US, and the employee's assignment to the UK had finished before his
employment was eventually terminated.
The employee's claim for UK protection also failed in Creditsights Ltd v
Dhunna (2014 EWCA Civ 1238). The employee on this occasion worked for a
British company and moved to Dubai. The Tribunal decided he had severed
links to UK and was not protected. The EAT overruled that decision on the
basis that it was necessary to compare the strength of his connections to UK
law with the strengths of connections to Dubai laws.
The Court of Appeal restored order. There was no legal justification for
the comparison proposed by the EAT. The tests of the application of UK
rights concern the degree of connection to UK laws and the relative merits
of any competing systems of law have no part to play in that. The object of
the exercise is not to decide which system of law is more or less favourable
to the employee. A corollary of this of course is that a person will not be
denied UK protection if he qualifies for it, just because he may have rights
in another country as well.
The First-tier Tribunal has held that a compensation payment related to
discrimination and injury to feelings that was made to an employee on the
termination of their employment was taxable as a termination payment. Where
the alleged discrimination is the act of termination, the payment will,
almost inevitably, be connected with the termination and taxable as a
That said, some of the Tribunal's comments, in which it criticised some
previous case law and particularly of the method to be used for apportioning
an agreed global settlement payment, leaves some uncertainly. More decisions
may follow in this area. In the meantime, specialist tax advice should be
taken where compensation for discrimination is paid. (Moorthy v HMRC 2014
UKFTT 834 (TC).)