Newsletter September/October 2016


Several employment cases have hit the headlines in the last couple of months, but none has had more coverage than the claim for worker status by the Uber drivers. In what was described as ‘the most important employment law decision of the decade’, the Employment Tribunal announced on Friday its decision that the drivers are workers, meaning they should benefit from the national minimum wage and paid holiday entitlement, amongst other rights. This is being presented as a major victory for the drivers and as opening the door for similar claims by others in the ‘gig’ economy (such as delivery drivers). It is of course an interesting development and does shake things up, but it is a Tribunal level decision only (so is not binding on anyone else) and is certain to be appealed. You should regard this as merely the end of the first chapter of this tale.

It is unusual that so many of the newsworthy decisions in this Newsletter have come in the lowly Tribunal. However, that does mean that their actual impact can be less eye-catching in legal terms than the news banners suggest. The ‘win’ for the ladies at ASDA just allows them to proceed with their claim, rather than actually receive any back pay. The victory of the breastfeeding mothers at easyjet does not change the law, merely interprets it. The discrimination finding in favour of the man denied shared parental pay is not as significant as it first appears as it did not address the more difficult and frequent way in which parental pay is differentiated. Even the latest decision in the Lock case on including commission in holiday pay, which was at Court of Appeal level, merely confirms what we already knew and answers none of the tricky outstanding questions.

The ‘wait and see’ climate post-Brexit seems to be affecting the whole of employment law!

Darryl Evans
T: +44 (0)7771 725341

Taxi! – your driver may be a worker

An Employment Tribunal has decided that two drivers who work for Uber are 'workers' within the meaning of the Employment Rights Act 1996. This means they will be entitled to those (limited) employment rights which workers who are not employees can claim, notably:

  • 5.6 weeks' paid annual leave each year
  • a maximum 48 hour average working week (unless they opt-out)
  • rest breaks
  • the national minimum wage (including the national living wage)
  • protection of the whistleblowing legislation

They did not claim ‘employee’ status, so they have not secured unfair dismissal or redundancy payment protection.

As suggested in my introduction, an appeal seems inevitable and this might be a case which finds its way all the way to the Supreme Court.

Despite that, other people working in the ‘gig’ economy (including other Uber drivers) are likely to start lodging claims for the rights deriving from being a worker. Their resolve will be fuelled by the view the Tribunal appeared to take of the arguments put forward by Uber, which were bordering on scathing in some respects. Terms such as ‘faintly ridiculous’ and ‘pure fiction’ were used. I noted, in particular, that the Tribunal cited and agreed with the North California District Court which, in a similar case brought by Uber drivers in California, concluded that ‘Uber does not simply sell software; it sells rides.’

Discrimination in levels of shared parental pay

Snell v Network Rail Infrastructure Limited (S/4100178/2016) is an interesting recent case, of relevance to all employers which offer enhanced maternity pay. In fact it, too, flatters to deceive – resulting in one highly misleading interpretation of its significance being issued by a large Central London firm.

Those who have looked into this area will appreciate how perfect a test case Mr and Mrs Snell were, because they both worked for Network Rail. When they had a baby they decided that they would share Mrs Snell’s maternity leave by opting into the shared parental leave regime which was introduced in 2015.

Whilst on maternity leave Mrs Snell would be entitled to enhanced maternity pay. Under the shared parental leave policy at Network Rail she remained eligible for enhanced pay. But Mr Snell was not. Network Rail’s policy was to enhance the pay of mothers on shared parental leave, but not that of their partners. Mr Snell complained through the grievance process. The grievance was rejected, Network Rail arguing (amongst other things) that female partners of mothers would have been dealt with in the same way as Mr Snell was, and that the policy was a proportionate means of achieving its aim of recruiting and retaining women in a male dominated workforce. This latter argument had been relied on by Ford in defending a policy of enhancing maternity but not paternity pay.

Network Rail in fact backed off and conceded liability by the time of the hearing, which ended up determining compensation only. So we do not know whether the arguments it put forward would have found favour with the Tribunal, although Network Rail was obviously – and quite possibly realistically - concerned that they would not. Network Rail’s reaction was to change its policy and take away enhanced pay for anyone on shared parental leave, thus creating a distinction between a mother on maternity leave and one on shared parental leave.

It is this resulting differential treatment which is a much more interesting question, but not one which was even raised here, let alone answered. The prevailing view before this case was that treating men and women on shared parental leave differently is very unlikely to be sustainable and nothing here changes that. Enhancing maternity but not shared parental pay might be lawful but it would be open to challenge and for that reason there should be clear, considered and documented justification for such an approach.

easyJet breastfeeding

Again it is the humble Employment Tribunal, whose decisions bind nobody, which sets the direction of travel, in this case for easyjet (pardon the pun etc.) and its obligations as an employer to breastfeeding mothers.

Two flight attendants claimed that easyjet failed to offer suitable arrangements to enable them to continue breastfeeding after they had returned from maternity leave. They asked for eight hour shifts, instead of the usual 12, to enable them to express milk either side of the shift. easyJet refused, apparently failing to take into account medical advice obtained from four GPs in so doing.

easyJet did offered the claimants ground duties for a period of six months, but the Tribunal decided that this and other potential solutions were unworkable and involved the claimants suffering a significant detriment. The airline should, it said, have reduced their hours, found them alternative duties or suspended them on full pay.

This case reminds us of an employer’s obligations to breastfeeding mothers - to provide suitable facilities for them to rest, facilities to lie down, adequate breaks - and the potential for claims of indirect sex discrimination where suitable flexibility is not offered. An employer is, though, entitled to argue justification, provided it can show that its actions (or inactions) amount to a proportionate means of achieving a legitimate aim.

TUPE – same client required for service provision change

Mr Bahi and some colleagues were employed by a charity to provide support for the homeless. The Employment Tribunal held that there had been a service provision change ('SPC') to The Salvation Army.

The EAT supported the Judge’s approach to reaching this decision. TUPE requires the activities to be ‘fundamentally the same’ pre- and post-transfer. Was it, therefore, acceptable for the Judge to consider whether there was ‘fundamental difference’ rather than ‘fundamental similarity’ in the activities?

‘Activities’ should be given its ordinary, everyday meaning - defined in a common-sense and pragmatic way, determined the EAT. An excessively detailed definition would risk defeating the purpose of the SPC provisions. The use of the language of 'fundamental difference' was merely the antithesis to the phrase 'fundamentally the same'. The approach of the Judge was in substance fine. (The Salvation Army Trustee Company v Bahi and others UKEAT/0210/16).

Status of job offer

What are the potential consequences are for an employer wishing to withdraw a verbal, or even written, job offer before the employee has started work? McCann v Snozone Limited (ET/3402068/2015) - yet another Tribunal level decision – provides an answer to this commonly asked question, albeit based on unusual facts.

The simple analysis is that if the employee has accepted the offer, whether orally or in writing, then a legally binding contract has been entered into. That contract can only be terminated in accordance with its terms. In principle, this means that if the employer wishes to pull out of the arrangement, it will have to give the required period of notice or be in breach of contract if it fails to do that. (The employee ought not, of course, have any right to claim unfair dismissal as they clearly will not have achieved the necessary two years of service.)

Here, when Snozone’s verbal offer of a job to Mr McCann was accepted, again verbally, a contract was formed, said the Tribunal. The fact that the discussions were merely oral is not remarkable, nor is the fact that his start date was not agreed. More unusually, his salary was not discussed, but according to the Tribunal that was not fatal to a binding contract.

Consequently, Mr McCann was awarded one month’s pay in lieu of notice (as well as his Tribunal fees) when Snozone did not honour the contract. I do not know whether Snozone argued that it could have started notice running before the likely start date and therefore that Mr McCann would not in fact have been paid anything during the notice period. If it did, that argument was rejected.

Effective communication of dismissal

Ms Sandle was an employee of the agency Adecco and was working on an assignment for one of its clients. When the assignment ended, Adecco did not take any steps to find her other work and there was no further contact between them.

Ms Sandle claimed that she had been unfairly dismissed, but the EAT found that as there had been no effective communication of dismissal, she had not been dismissed at all and remained an employee of the agency. Silence and inaction were not dismissal.

This links in to a commonly raised issue of whether an employer can decide that an employee has in effect resigned by not attending work. The advice on that is always to be proactive by trying to make contact with the employee to see what their intentions are, and then to move forward to dismissal only if it is reasonable to do so in the circumstances, and by going through appropriate procedures. It is not safe to rely on implied or inferred resignation or ‘self-dismissal’. (Sandle v Adecco UK Limited UKEAT/0028/16.)

Protecting pay can be a reasonable adjustment

The EAT has found upheld an Employment Tribunal’s decision that an employer, as a reasonable adjustment, should continue employing a disabled employee in a more junior role (which involved less physical activity) on his existing rate of pay on an indefinite basis.

This may not apply in all cases, but there was no reason in principle why pay protection, in conjunction with other measures, could not be a reasonable adjustment as part of a package of measures to get an employee back to work. What was in fact reasonable should determined according to the particular circumstances. (G4S Cash Solutions (UK) Ltd v Powell UKEAT/0243/15.)

ASDA equal pay claims

You may have seen some misleading headlines regarding this case, suggesting that female Asda employees working in stores have won the right to the same rate of pay as their male colleagues working in Asda warehouses.

In fact, the recent decision of the Employment Tribunal was only on the preliminary question of whether the two sets of employees had sufficiently common terms and conditions to enable the female employees to use the male warehouse employees as legitimate comparators. It was a decision based on the specific circumstances here – the similarity of their terms – and does not change the law or necessarily open the floodgates for similar claims.

The claim can move ahead to the next stage, which is for the Tribunal to decide whether or not the work done by the female employees is of equal value to that carried out by their male colleagues in the warehouses. (Brierley and others v ASDA Stores Ltd ET/2406372/2008 and others.)

Lock v British Gas - holiday pay/commission

Regular readers will be familiar with the saga regarding how to calculate holiday pay when an employee receives regular overtime and/or commission as well as their normal salary.

The latest decision in the long-running case of British Gas Trading Limited v Lock and another (2016 EWCA Civ 983) is by the Court of Appeal and confirms the current state of the law: that the Working Time Regulations 1998 have to be read as stating that if commission is earned regularly, then it must be taken into account when calculating the core four weeks of holiday pay. How that element of holiday pay should be in fact be calculated remains unanswered.

Tribunal procedure

I normally do not report Tribunal procedure changes as I expect few of my clients actually to find themselves in the tribunal, but this is an interesting development.

The President of the Employment Tribunals in England and Wales has issued Presidential Guidance creating a process of judicial assessment. In a confidential and voluntary process an Employment Judge will make an initial assessment of the strengths and weaknesses of the parties' respective cases, to take place at the case management hearing at which directions for the management of the case are fixed.

Parties will want to use the procedure with care, but it further illustrates the desire of the judicial process to lighten its burden by encouraging settlements.

The information and any commentary contained in this newsletter are for general information purposes only and do not constitute legal or any other type of professional advice. Darryl Evans and Evans Employment Law Limited do not accept any and, to the extent permitted by law, exclude all, liability to any person for any loss which may arise from relying upon or otherwise using the information contained in this newsletter. If you have a particular query or issue you are strongly advised to obtain specific, personal advice and not to rely on the information or comments in this newsletter.

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