Newsletter February / March 2017


April is the month when legislative changes normally come into effect and that includes changes to redundancy pay and unfair dismissal award limits. I confirm those new limits below as well as the new national minimum wage rates.

A (some may say unfair) weapon which can be deployed by employees bringing employment claims is to make a subject access request under the Data Protection Act. This can be a useful trawl for evidence whilst at the same time putting the employer to considerable inconvenience. Three cases reported recently address the balance of interests in relation to such requests. I also report the well-publicised European Court decisions on the banning of headscarves in the workplace and the latest gig economy decision.

Darryl Evans
T: +44 (0)7771 725341

Annual award limits increase

From 6 April 2017:

  • the limit on the compensatory award for unfair dismissal rises from £78,962 to £80,541
  • the limit on a week’s pay for calculating a statutory redundancy payment and the basic award for unfair dismissal (and some other payments) rises from £479 to £489

These rates apply where the date of termination of employment is on or after 6 April 2017.

New national minimum wage rates

The following hourly rates of national minimum wage will apply from 1 April 2017:

  • the national living wage (workers aged 25 and over): £7.50
  • the standard adult rate (workers aged between 21 and 24): £7.05
  • the development rate (workers aged between 18 and 20): £5.60
  • the young workers rate (workers aged under 18 but above the compulsory school age who are not apprentices): £4.05
  • apprentices is £3.50

The accommodation offset becomes £6.40 each day.

Subject access requests – case 1

I will begin this little run of subject access request (SAR) cases with the High Court decision in Holyoake v Candy and another (2017 EWHC 52 (QB)). The judge said that the data controller's implied obligation to carry out a search having received a SAR was limited to what was reasonable and proportionate. It was not necessary to search directors' private email accounts as there was no evidence they had been used for company business. No order for compliance with the SAR was granted.

The judge also considered that legal professional privilege had been properly claimed. The court will, he said, only inspect documents said to be protected by legal professional privilege as a last resort, where there was credible evidence that those claiming privilege had misunderstood their duty or were not to be trusted.

So a welcome decision for employers, especially as regards ‘reasonable and proportionate’, although compliance will always turn on the efforts made in a given case and those efforts are likely still to have to be significant.

Subject access requests – case 2

This second case concerns a SAR lodged by the beneficiaries of a Bahamian trust involved in a legal dispute in the Bahamas to the law firm Taylor Wessing. The firm’s client, a Bahamian trustee company, administered the trust.

Taylor Wessing claimed the legal professional privilege exception. The Court of Appeal overturned the High Court's judgment and ordered compliance with the request. It said that the exception applies to privilege for the purposes of English law. It also said that the judge had been wrong to not to make an order on the grounds that the beneficiaries may use the results in the course of a litigated dispute. (Dawson-Damer and others v Taylor Wessing LLP 2017 EWCA Civ 74.)

Subject access requests – case 3

However, in a third case the Court of Appeal refused to order data controllers to take further steps in subject access compliance. The Court, like the High Court in case 1, confirmed that a data controller's implied obligation to search for documents on receipt of a SAR is limited to what is reasonable and proportionate.

However, there can be no objection to a SAR made in connection with actual or contemplated litigation.

In exercising its discretion as to whether to order compliance, the court should consider many factors so as to strike the right balance between data subject access rights and data controller interests. The "absence of a legitimate reason" for the SAR may have a bearing on the exercise of that discretion, but the fact that the results of the search may assist in litigation is a collateral purpose is not an absolute bar. Still, the data subject's motives may be relevant. (Ittihadieh v 5-11 Cheyne Gardens RTM Company Ltd and Others 2017 EWCA Civ 121).

Headscarf bans

Cases about SARs are unlikely to hit the national press, but in contrast the European Court of Justice (ECJ) judgment in Achbita and another v G4S Secure Solutions NV (Case C-157/15) concerning a Belgian company's dress code certainly did.

The code banned employees from wearing any visible religious, political or philosophical symbols in the workplace. It was used to prevent a Muslim employee from wearing an Islamic headscarf. The ECJ concluded, in short, that this did not amount to direct discrimination because the ban affected all employees equally.

The questions specifically referred to the ECJ did not include one about indirect discrimination. Nonetheless, in a rare departure from its normal approach of only answering the precise questions before it, the Court offered the view that such a dress code could amount to indirect discrimination. Where the employer had a policy of upholding political, philosophical or religious neutrality in customer-facing roles, this must be regarded as a legitimate aim (therefore making the indirect discrimination potentially lawful). However, it would be for a national court to determine whether it was in fact appropriate and necessary – the second limb of the justification test.

On the same day, the ECJ decided another case (Bougnaoui and another v Micropole SA (Case C-188/15)) concerning a headscarf ban. This one was imposed in response to a customer's objection, rather than being based on an employer's policy of neutrality, and did constitute direct discrimination. Such a request could not constitute a "genuine and determining occupational requirement". That term applies to objectively assessed requirements of the job in question, not the subjective preferences of a customer.

None of this is legally remarkable. Of course, the interesting issue is whether a policy like the G4S really affects Muslims disproportionately, or maybe even targets them, and could be justified. That is for another day.

Refusal to permit holiday to attend religious festivals

Mr Gareddu, a Catholic, claimed indirect religious discrimination when his request for five consecutive weeks' holiday to attend a series of religious festivals in Sardinia was declined. He said that his employer's practice of only allowing a maximum of three consecutive weeks of annual leave stopped him from manifesting his religion by attending the religious festivals.

The claim failed. Mr Gareddu was undermined by the fact that the Employment Appeals Tribunal (EAT) considered that the tribunal had been entitled to find that his evidence about his previously attending the festivals was not true. He had not invariably attended all the festivals, as he claimed. On last occasion he had been fit enough to attend, he only went to half of them even though he maintained that they had deep religious significance for him. His claim about their religious significance was not made in good faith. The real reason for taking the lengthy period of holiday was because he wanted to be with his family.

Given the facts here the case is of no real precedent value, but it may be gratifying for employers to see that employees can get caught out for fibbing. (Gareddu v London Underground Ltd UKEAT/0086/16.)

Dismissal for violent conduct

Mr Spoor was dismissed for gross misconduct after he violently grabbed a colleague by the neck. He successfully claimed unfair dismissal, breach of contract and failure to pay notice pay. The tribunal decided that his employer had not carried out a reasonable investigation and had dismissed without proper regard to all of the circumstances.

The EAT dismissed the employer’s appeal. Mr Spoor had over 42 years' service and an exemplary disciplinary record. The employer had not considered it appropriate to undertake any assessment as to the level or degree of physical violence. There was no evidence that it operated a zero tolerance policy towards physical violence or that it had given due consideration to Mr Spoor's otherwise exemplary record.

Again there is no great legal precedent established by this case, just a reminder to employers to be thorough in investigations into employee conduct and to take into account all the circumstances surrounding the incidents in question and the individual employees themselves in reaching any disciplinary decision. (Arnold Clark Automobiles Ltd v Spoor UKEAT/0170/16/DA.)

Pimlico Plumbers – no change

The fact that I relegate the Court of Appeal’s decision in Pimlico Plumbers & Charlie Mullins v Gary Smith (2017 SWCA Civ 51) to the second half of this newsletter demonstrates that what a short while ago was a dramatic legal development is now entirely predictable.

The Court upheld the EAT’s decision that the plumbers are workers, not self-employed contractors. A quote from the Master of the Rolls sums up where we are: "This case puts a spotlight on a business model under which operatives are intended to appear to clients of the business as working for the business, but at the same time the business itself seeks to maintain that... there is a legal relationship of... independent contractor rather than employer and employee or worker".

The case is of course very fact sensitive and each decision in this area will involve a careful look at the way the relationship operates and the documents used. You might care to visualise lawyers for Pimlico Plumbers, Uber, Citisprint and the like scrutinising the judgement late into the night to determine what (minor?) tweaks could be made to their clients’ business models to tip the balance over into non-worker status. However, there does seem to be, from the words, of the Master of the Rolls, an element of ‘you cannot have it both ways’.

Service provision change

Time for a TUPE case (I’ve been missing them recently).

To decide whether there is a TUPE transfer in a service provision change situation it is necessary to determine the "principal purpose" of an organised grouping of employees who carry out the services in question.

According to the EAT, this will always be fact specific. The intention of the employer behind the organisation of the grouping might be relevant, but so might the activities actually performed. Neither is necessarily determinative. But things may change over time. Even if an employer historically organised a grouping with a particular intention, the activities actually carried out by that grouping immediately before a putative transfer could be the key factor. (Tees Esk & Wear Valleys NHS Foundation Trust v Harland and others UKEAT/0173/16.)

When does notice of termination take effect?

Unless the contract of employment deals with the question, on actual receipt. That is the determination of the Court of Majority in Newcastle Upon Tyne NHS Foundation Trust v Haywood (2017 EWCA Civ 153).

Ms Haywood was told she was at risk of redundancy in April. She reached 50 on 20 July. Redundancy after her 50th birthday meant a considerably more generous pension than redundancy beforehand. She was entitled to 12 weeks’ notice, but the contract said nothing about how notice was deemed given.

On 19 April she went on holiday, returning on 27 April. On 20 April, her employer sent notice of termination by recorded delivery and ordinary post and an email to her husband’s email address. She read the notice on her return from holiday.

On the basis that notice of termination was given on actual receipt rather than on delivery or any deemed date of receipt, Ms Haywood received notice on 27 April and termination took place after her 50th birthday.

Government reviews

I finish with a quick round up of two Government reviews. The Ministry of Justice has published (at last) its review of the introduction of fees in the employment tribunal. It acknowledges that there has been a significantly larger fall in claims than was estimated when fees were first introduced, and that people have been discouraged from making claims, but says that there is no conclusive evidence that they are prevented from doing so. The review proposes to widen access to the fee remission scheme by raising the income level at which claimants can receive fee remission. A consultation on that change has just closed.

Separately, the Department for Business, Innovation and Skills has released its Employment Status Review. It summarises the current system of employment status, considers the position of some atypical workers and examines the future and possible reforms (without making any recommendations). The executive summary states: "There are a number of options presented but most are highly complicated, would take years to deliver and could create new issues of their own."

Draw your own conclusions.

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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