Employment Law Review - December 2021

 

Welcome to our final employment law update of 2021.

As employers are once again supporting national efforts towards tackling the Omicron variant, you can see how to support employees and ensure business continuity with our key considerations for employers here. We also highlight key cases on employment status, national minimum wage compliance and handling flexible working requests. We set out details of the new consultation on disability workforce reporting and the recent ACAS guidance on ‘fire and rehire’ practices. Lastly, we highlight the changing landscape and potential regulation around the use of AI within workplaces.

• Employment status: ability to cancel a booked ‘gig’ not enough for self-employment

• Considering flexible working requests: Don’t delay

• NMW breach for failure to deduct expenses related to employment

• Changing terms and conditions of employment: avoid ‘fire and rehire’

• National Disability Strategy: Disability workforce reporting consultation

• AI in the workplace: Accountability for Algorithms Act

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Employment status: ability to cancel a booked ‘gig’ not enough for self-employment

The Court of Appeal has recently revisited the issue of substitution and personal service in another employment status case, concluding that a continuing obligation to deliver services personally meant that a moped courier was not self-employed, but was in fact a worker. There are three types of employment status for the purposes of employment law. At one end there are self-employed contractors who are afforded very little by way of employment rights, and at the other are employees afforded the full suite of employment rights and protections. There is also a middle ground; ‘workers’ who have some of the same rights and protections as employees, for example National Minimum Wage (NMW) and holiday pay. To determine whether someone is genuinely self-employed, the extent to which an individual is required to provide the services themselves (or whether they can send a substitute to do the work) is a critical issue. Generally, a genuine and unfettered right to send a substitute usually means the individual is self-employed, not a worker. However, if a substitute can only be sent with the end-user’s permission or if the right to substitute is conditional, this will be an indication that the individual is not self-employed. It will depend on how the right to substitute is framed and how it operates in practice. Mr Augustine was a moped courier for Stuart Delivery. Mr Augustine could select time slots during which he would make deliveries. Once he signed up to a slot, he was obliged to complete the deliveries even if he subsequently cancelled the time slot, unless another courier took it on. If no other courier offered to take the time slot, Mr Augustine had to complete it or would face penalties for missing it. This was necessary for Stuart Delivery’s business model. The Court of Appeal agreed with the Employment Tribunal that this implied a continuing obligation to deliver services personally. Therefore, Mr Augustine was a worker and entitled to holiday pay, NMW and other workers’ rights.

Employment status and associated workers’ rights have been a battle ground over recent years as workers’ rights catch up with the world of work and use of digital labour platforms. Employers operating a labour platform should review their contracts and operational arrangements. If an individual continues to be bound to personally deliver services even once they have ‘cancelled the gig’ employers will find themselves in ‘worker’ territory, and potentially liable for holiday pay and the underpayment of NMW. Employers should also be mindful that following the decision of the Supreme Court in the Uber case, clauses in contracts (e.g. employment status indemnities) that directly or indirectly contract out of worker status or workers’ rights are likely to be void. 

Considering flexible working requests: Don’t delay

The Employment Appeal Tribunal (EAT) has decided that an employee did not agree to extend the statutory three month window for concluding his flexible working request, simply by agreeing to attend an appeal meeting outside of that time frame. If an employer receives a flexible working request, they are required to consider it and conclude the flexible working request process within three months from the date of the request. Mr Walsh’s flexible working request had been denied by Network Rail; a decision that he later appealed. The appeal meeting was scheduled to take place outside of the three month time frame for the request process to be concluded. The EAT concluded that agreeing to attend the appeal meeting did not demonstrate an implied agreement to extend the statutory three month time frame.

This case demonstrates how important it is for employers to consider flexible working requests in a timely fashion. Although the maximum penalty for a breach of the procedural requirements is low, there has been a recent rise in flexible working claims, especially those that involve a discriminatory angle, and which are subject to uncapped compensation if successful. We expect this trend to continue especially following the Government’s consultation on making flexible working a day one right. Employers should ensure that all managers are aware of their organisation’s flexible working policy and the process and timeframes for dealing with such requests. Although managers will need to consider individual circumstances, it is also important that managers across the organisation support a consistent application of any flexible working policy.  

NMW breach for failure to deduct expenses related to employment

The Employment Appeal Tribunal (EAT) has concluded that a taxi driver’s uniform and car rental payments were deductible for National Minimum Wage (NMW) purposes as they were payments in connection with employment. This brought the driver’s wages below the NMW rate. Certain deductions from a worker's wages or payments made by a worker to the employer or to a third party that relate to their employment must be taken into account when calculating pay for NMW purposes. However, other deductions and payments are ignored for NMW purposes. Mr Augustine worked for Data Cars as a taxi driver. He was required to either provide his own vehicle if he had one or rent one from Data Cars. Mr Augustine initially used his own vehicle but later rented one from a company associated with Data Cars. He also rented a uniform from Data Cars so that he could undertake ‘gold level’ work. He did not have to rent a uniform but needed it if he wanted to do optional, gold level work. Mr Augustine brought Employment Tribunal (ET) claims including that he had not been paid the NMW. The ET found that neither the cost of the vehicle nor the cost of the uniform reduced NMW pay as neither was contractually nor legally required for Mr Augustine to do his job. However, the EAT overturned this decision stating that the cost of renting the vehicle and the uniform were ‘payments in connection with the employment’ and were therefore reductions for NMW purposes.

This decision has a significant impact on workers paid at the margins of NMW. In view of this case and the upcoming NMW rate rises in April 2022, employers should revisit any employment related costs incurred by workers. Employers should also make it clear that workers should seek prior approval before incurring any such expense to provide some protection and avoid a worker incurring an unreasonable expense. 

Changing terms and conditions of employment: avoid ‘fire and rehire’

ACAS has published new guidance to help employers avoid fire and rehire practices when it comes to changing terms and conditions of employment. The guidance is accompanied by a statement from the ACAS Chief Executive stating that fire and rehire practices are an ‘extreme step’ highlighting the many risks to employers of using fire and rehire practices as a mechanism to change terms and conditions. Whilst the guidance does not cover any new ground, it provides a useful reminder to employers that engaging in genuine and meaningful consultation with both employees and their representatives (when necessary) can help maintain good working relations, avoid negative publicity and expensive and lengthy employment disputes. Employers should remember that meaningful consultation is a two way process that makes employees feel that their views have been considered. So aside from any legal considerations about the duration of consultation periods, employers should always aim to build in a reasonable period for consultation which would allow employees to ask questions and take an informed view on the changes being proposed. The ACAS guidance also highlights that there are important, additional considerations if employers are considering changing terms following a TUPE transfer. We would always recommend seeking legal advice before making changes to terms and conditions of employment following a TUPE transfer. 

National Disability Strategy: Disability workforce reporting consultation

This month, many organisations marked International Day of Persons with Disabilities by highlighting the barriers faced by disabled people and key issues around discrimination and ableism in the workplace. We have also seen the Government launch a consultation on disability workforce reporting this month. This consultation seeks views on how large employers with over 250 employees might be encouraged to collect and report statistics about disability to make their workforces more inclusive. There is currently a voluntary framework in place which provides support to employers to voluntarily report information on disability, mental health and wellbeing, however few employers have been forthcoming. This consultation forms part of the Government’s National Disability Strategy which sets out the key actions the Government aims to take to improve the lives of all disabled people. Employers, and in particular HR and D&I professionals, are encouraged to respond to this open consultation providing details about the data currently held on disabled employees and how this might be improved. If you would like to contribute to, or discuss the potential impact of this consultation on your business, please contact us. The consultation closes on 25 March 2022. 

AI in the workplace: Accountability for Algorithms Act

In November 2021, the All Party Parliamentary Group on the Future of Work published a report into the use, implications, and potential regulation of surveillance and other artificial intelligence technologies at work. The key proposal is to create an Accountability for Algorithms Act, which would impose a duty on both the private and public sector to undertake Algorithmic Impact Assessments prior to the use of algorithmic systems at work, to understand the impact of such technologies on work and workers. This would also include a dedicated equality impact assessment to better understand any accessibility or discrimination issues. Identifying any issues at an early stage may also allow for remedies to address any adverse impacts as early as possible.