Employment Review – December 2017
Sash Windows decision leaves employers wide open to holiday pay claims
King v Sash Window Workshop Ltd (C-214/16) EU:C:2017:914, the long awaited holiday pay case has re-opened the door to holiday pay claims dating back years. It is of particular relevance given the ongoing spot light on worker status following the high profile decisions involving Uber and Deliveroo.
The CJEU have held that workers who are wrongly classified as self-employed contractors can claim back pay in respect of unpaid annual leave going back many years. Where an employer has not provided a worker with paid leave, the right to paid leave carries over until she or he has the opportunity to exercise it and, on termination of employment, the worker has the right to payment in lieu of leave that remains outstanding.
The CJEU also held that there should be no limit on carry-over. In fact, the back-pay claim can go all the way back to 1996, when the original Working Time Directive came into force.
The practical ramifications are that employers whose ‘self employed’ contractors turn out to be ‘workers’ may find themselves facing very substantial holiday pay bills, dating back 20 years. Since this ruling only applies to 4 weeks’ EU holiday (rather than all 5.6 weeks of UK holiday), the bill could be 20 years x 4 weeks = 80 weeks’ pay per worker.
This case also suggests that the Deduction from Wages (Limitation) Regulations 2014 SI 2014/3322, which limit back pay claims to two years, are incompatible with EU law. That means we are likely to see more cases challenging the limit in the future.
We should receive more clarity on these points when the case returns to the Court of Appeal next month.
EAT dismisses Uber appeal on worker status
In a further setback for Uber, the EAT has dismissed an appeal against an employment tribunal’s decision that Uber drivers were workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998 (WTR 1998). In the case of Uber BV and others v Aslam and others UKEAT/0056/17 the EAT rejected Uber’s argument that it was simply a technology platform acting as an agent for drivers by putting them in touch with passengers and that it was in no way a provider of taxi services.
The EAT held that the tribunal applied the correct legal principles and reached permissible conclusions. It therefore upheld the decision that the drivers were engaged as workers for as long as they were in the territory in which they were authorised to work, they were signed into the Uber app and were ready and willing to accept bookings. This same period of time counted as working time under the WTR 1998 as well as the number of hours worked for the purposes of the national minimum wage provisions.
The issue that caused the EAT the most difficulty was the period for which the drivers were workers: was this limited to just the time the drivers were transporting passengers, or did it also include waiting time (that is, time that the drivers were signed in to the Uber app and waiting for bookings)? The troubling aspect was that the drivers were, in theory, able to accept bookings from other sources during this time. Nevertheless, the EAT concluded that the tribunal had been entitled to find that the drivers were workers even during this waiting time. This resulted from the tribunal’s findings of fact as to the extent to which drivers had to remain available: If a driver failed to accept bookings, the app generated warning messages that could lead to the driver’s access to the app being suspended or blocked (this would prevent the driver from carrying out any more work via Uber for the duration of the suspension or block). The EAT held that the tribunal had acknowledged that there may be a different set of facts where drivers were genuinely free to accept other work during waiting time but that was not the case here.
This is one of a number of employment cases in recent years that have questioned gig economy firms’ arrangements with their workforces. As previously reported, the ruling will have significant implications for approximately 40,000 Uber drivers and, more broadly, individuals engaged across the gig economy. It is anticipated that tens of thousands drivers will now seek to make substantial back-dated claims.
Uber announced an appeal and applied for permission to ‘leapfrog’ the Court of Appeal and go straight to the Supreme Court. However, having been refused permission to leapfrog, the appeal will now be heard by the Court of Appeal next year. Watch this space!
Failing to conduct appropriate risk assessment for breastfeeding mothers is sex discrimination
In Ramos v Servicio Galego de Saude (C-531/15) EU:C:2017:789, Ms Ramos worked as an accident and emergency nurse. She informed her employer that she was breastfeeding and that she considered that her work was likely to expose her to health and safety risks, due to the complex shift rotation system, ionising radiation, healthcare associated infections and stress. She asked her employer to adjust her working conditions and to put preventative measures in place but her employer refused, stating that her work did not pose any risk to breastfeeding mothers.
Ms Ramos then applied for a state benefit available to breastfeeding mothers deemed to be at risk. Her application was rejected on the basis that her role had been included in the list of risk-free jobs drawn up by her employer and that a doctor in the department of preventative medicine and occupational risks had examined her and declared her fit to carry out her work.
She challenged that decision in the Spanish courts, arguing that her employer had not conducted the risk assessment in accordance with the requirements of the Pregnant Workers Directive. Ms Ramos was supported by her line manager, the senior accident and emergency consultant, who stated that her work exposed her to a physical, chemical, biological and psychosocial risk.
The Spanish courts referred a number of questions to the European Court of Justice (ECJ).
The ECJ considered that a risk assessment of the work of a breastfeeding mother must include a specific assessment of her individual situation, in order to ascertain whether her health or safety or that of her child is exposed to risk. Failure to carry out an appropriate risk assessment is less favourable treatment related to pregnancy or maternity leave and constitutes direct sex discrimination.
Although the case was referred to the ECJ by a Spanish court, the decision is notable because it conflicts with the exclusion in section 13(7) of the Equality Act 2010 which prevents a woman from bringing a claim for direct sex discrimination under UK law in these circumstances.
As a result of the ECJ decision, employers who only carry out a generic assessment of the risks associated with a particular role for breastfeeding mothers will not have done enough to comply with their legal obligations and could face claims of sex discrimination. As soon as an employee informs their employer that she is breastfeeding they must assess the risks for that particular employee and her baby.
Charity employee fined for unlawfully obtaining personal data from his employer (Crown Court)
A Rochdale Connections Trust employee has been ordered to pay a total of £1,860.25 after pleading guilty at Preston Crown Court to unlawfully obtaining personal data under section 55 of the Data Protection Act.
An investigation revealed that the employee had sent information relating to 183 Trust clients (including their dates of birth, medical records, telephone details and full names) to his personal email account. A further investigation revealed that the employee had sent similar information to his personal email account the year before.
Head of Enforcement at the Information Commissioner’s Office, Steve Eckersley, stated: “People whose jobs give them access to this type of information need to realise that just because they can access it, that doesn’t mean they should. They need to have a valid legal reason for doing so. Copying sensitive personal information without the necessary permission isn’t a valid reason.” In this case, the employee was ordered to pay prosecution costs of £1,845.25 and a victim surcharge of £15. He was also given a conditional discharge for two years.
As mentioned in our November bulletin, in response to rapid technological developments and growth in the collection and sharing of personal data, an updated data protection law (GDPR) comes into force next May. The GDPR will have a significant impact on employers as it introduces new and varied concepts to strengthen the existing date protection core principles. For more information on the GDPR and what employers should be aware of us please read our update.
Employer considerations when recruiting fixed-term Christmas staff
In sectors such as hospitality, tourism, retail and agriculture, the Christmas season can bring an influx of work. Employers should take a number of issues into consideration when recruiting temporary staff throughout this busy period, the most notable are detailed below.
One of the first matters to consider is the employment status of the individuals being recruited. Will they be classed as an “employee” or a “worker”? Workers have fewer rights than employees however are still covered by the right to the national minimum wage, holiday pay, working time requirements and protection against discrimination. Recruiting additional workers rather than employees may seem attractive but it is important to note that workers do not have the same ‘mutuality of obligation’ as employees. For example, they do not have to work when requested and are not generally subject to the same degree of control. Given the importance of getting staff right at this busy time of the year, this level of uncertainty may be unmanageable.
Another issue to consider is if staff are taken on as fixed-term employees they will be protected under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002 giving fixed-term employees the right not to be treated less favourably than comparable permanent employees. For example, if permanent employees are given a Christmas bonus based on performance or receive double pay on public holidays, these provisions will need to be extended to fixed-term employees.
Finally, employers should consider how the seasonal contractual relationship will end. The expiry of a fixed-term contract will still amount to a dismissal. The reason for dismissal will usually be redundancy or ‘some other substantial reason’ and a fair process must be followed. If a fixed-term contract is not terminated correctly and an employee has two years’ continuous service, they could bring an unfair dismissal claim and may also be eligible to receive statutory redundancy pay. Whilst it is unlikely that seasonal workers will accrue sufficient continuous service to bring such claims, employers should be aware that continuous service can accrue from back-to-back fixed-term contracts. It can even accrue if an employer is employing the same people each Christmas season and there is an expectation of work each year. It is therefore important for contracts to state the length of the work on offer, the amount of accrued continuous service from previous contracts, and that there is no guarantee of employment in future seasons.
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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