Employment Law Bulletin - April 2021

Welcome

The Supreme Court has given the final word on whether workers should get paid the national minimum wage for sleeping. The case law in this area has been conflicting, with different courts giving different judgments based on similar facts. Regulation 32(1) of the National Minimum Wage Regulations 2015 says that a person who isn’t working may be treated as working if they are available (and required to be available) at or near a place of work for the purposes of doing work unless they are at home (emphasis added) – this is the home exception. Regulation 32(2) says that the worker is only treated as ‘available for work’ when they are ‘awake for the purposes of working’, even if the worker sleeps at or near a place of work – this is the sleep-in exception. These regulations were originally introduced to implement the recommendations of the Low Pay Commission.

In Royal Mencap Society v Tomlinson-Blake, the employees were sleeping at or near their workplaces and disturbed infrequently at night. They received an allowance for their shifts but not the NMW for each hour of it. They brought claims saying they should be paid the NMW for the whole of their sleep-in shifts. Both claims won at tribunal. On appeal, the Employment Appeal Tribunal upheld the judgment in one claim but allowed the employer’s appeal in the other. The Court of Appeal said that the employees were only ‘available for work’, not actually working, while they were asleep. As such, they were only entitled to the NMW when they were disturbed and therefore awake for the purposes of working. They were not entitled to be paid the NMW when they were asleep. The Court of Appeal went through some conflicting case law, saying some were wrong and distinguishing others, leaving the waters still muddy.

The Supreme Court agreed with the Court of Appeal. The employees were only entitled to the NMW when they were awake and working. They referred to the report of the Low Pay Commission which preceded the NMW and which the government was bound to implement. They had not intended workers to be paid the NMW while they were sleeping, only when they were awake. In this case, the employee’s requirement to keep a ‘listening ear’ while asleep did not mean she was working.

This case is good news for employers in the care sector who were facing enormous back pay bills if the appeals had succeeded. The Supreme Court went further than the Court of Appeal, saying more of the previous (conflicting) case law was simply wrong. The clarity on pay for sleep-ins is welcome. However, we are living through times where the value and skills of our care workers are under the spotlight, their vital work ever more appreciated. The Low Pay Commission report is 20 years old and there will be pressure to revisit this issue. And what of the home exception? We are currently all home working, the lines between working, being available to work and not working are ever more blurred. Although the law on sleep-ins is now clear, wider questions have not yet been put to bed.

Tim Lang

Termination agreements

It is commonplace to negotiate severance terms before an employee leaves employment due to redundancy. Discussions usually agree the sums to be paid and formal settlement agreements are signed to create a clean break between the parties. The EAT has recently looked at a case where the parties had different ideas about what had been agreed, as well as what could be enforced.

In Evergreen Timber Frames v Harrington, the employee worked for the employer as a manager. He was told he was at risk of redundancy and his severance terms were discussed over several months. Before his dismissal, the employer wrote setting out the amounts that the employee would be paid on termination if he worked his notice and said they would like to ‘gift’ him a car. The employee wrote back (via an appeal letter) accepting the gift of the car but querying the redundancy calculation and complaining that they had agreed in verbal discussions that the company would also give him a computer and a month’s pay as a bonus. When the car was not transferred on termination, the employee then brought claims for breach of contract. The employment tribunal upheld part of his claim relating to the car, saying an agreement had been reached for its transfer as part of the severance package. It had been offered in the employer’s letter and accepted in the employee’s appeal letter. They awarded him £8400, representing its value. The employer appealed.

The EAT agreed with the employer. Termination discussions often involve back and forth conversations about different elements of the overall package. Negotiations would become too complicated if it were possible to hive off and accept one part of a deal whilst rejecting or trying to improve on other parts of it. In this case, the car was not a standalone promise but one part of a wider termination package. The employee’s letter of appeal was not acceptance of part of a deal but a counter-offer to improve the severance terms overall. The matter was sent back to a fresh tribunal on another point (to decide whether there had been a deal struck at a previous meeting to transfer the car in return for doing specific work during the employee’s notice period).

This case shows the importance of agreed written terms when employment is being terminated. The confusion in this case could have been avoided if the employer had used a settlement agreement. The discussions about its terms would have been frontloaded and confusion ironed out at an earlier stage. Settlement agreements have the added benefit of settling outstanding claims, meaning there is a clean break on termination and the certainty that there will be no future litigation.

Health and safety

Section 44 of the Employment Rights Act 1996 protects employees from employer detriment in certain health and safety cases: if they are absent from work because they reasonably believe that attendance would put them in serious and imminent danger or take appropriate steps to protect themselves if they reasonably believe they are in serious and imminent danger. The right currently only extends to employees, rather than the wider definition of workers.

New laws extending certain health and safety rights to workers are due to come into force on 31 May 2021. We reported last year about the case of R (Independent Workers’ Union of Great Britain) v Secretary of State for Work and Pensions which confirmed that the UK had failed to implement EU law properly because it limited those section 44 rights to employees. The draft order has now been tabled in Parliament and if it is approved will extend these protections to all workers.

If this Order is approved it will provide clarity in this area, at a time where health and safety is high up on everyone’s radar. The law will not be retrospective, so any alleged detriment would have to occur after 31 May 2021 to be actionable.

Working time

The Court of Justice of the European Union (CJEU) has considered two cases involving workers on standby and whether the whole of the standby period should be considered working time. The Working Time Directive says that working time is any period where the employee is working, at the employer’s disposal and carrying out their duties. A rest period is any period which is not working time. The CJEU has previously found that standby time can be working time if the employee must be physically at the workplace (or another place determined by the employer) and able to provide services immediately if required. Another case, Ville de Nivelle v Matzak, said time spent by firefighters on standby at home was working time because they were required to be at home by the employer and to respond within 8 minutes. This put significant constraint on what they could do in terms of social and personal interests during that time.

In DJ v Radiotelevizija Slovenija, the CJEU said that a period of standby wouldn’t be working time just because a worker was required to be contactable on the phone and able to return to the workplace within an hour, in circumstances where they were able but not required to stay in employer accommodation. It was for the national courts to looks at each case’s individual facts, the frequency of disturbances, the consequences of the time limit for responding and therefore the constraints placed on the worker’s ability to pursue their own interests.

In RJ v Stadt Offenbach am Main, a firefighter on standby had to be able to reach the town boundary in full uniform and in their service vehicle within 20 minutes of a call. The CJEU said it would depend on the circumstances whether a requirement to reach the town boundary within 20 minutes was working time. It repeated what it had said in DJ that what was relevant was the consequences of the response time and the frequency of call outs when on standby. The question was whether the constraints placed on the worker during standby objectively and very significantly constrained their ability to freely manage and pursue their own interests. The court noted that a requirement to be at a workplace, or another place, by an employer would be decisive in making standby working time. Time periods for responding may also be relevant - if a worker must respond to a call within a few minutes, that will necessarily constrain what they are able to do during standby. If there is a reasonable period to respond though (such as an hour as in the DJ case) standby may not be working time. The frequency of calls is also important – the more calls received during standby, the less able to pursue their own interests a worker is likely to be. It goes without saying that time actively working once called out is working time.

This case was decided after the UK left the EU. However, courts and tribunals may still have regard to post-Brexit CJEU case law if it is relevant. These cases may well be considered by UK courts and tribunals in considering cases under the Working Time Regulations 1998.

Equal pay

Employers dread receiving a claim form citing claims which have no teeth and ‘fishing’ for more information from the employer to inform their claims. Often, these claims lack any merit at all. But in some cases, getting hard data to back up anecdotal evidence can be impossible for an employee, especially when it comes to closely guarded information about pay. The EAT has recently looked at a request for supporting data in relation to an equal pay claim. This case sits against the backdrop of extensive mass equal pay litigation in recent times, originally in the public sector, for women in predominantly female roles who claim they do work of equal value to predominantly male roles within a business. Most recently, this mass litigation has moved into the private sector and supermarkets like Asda, Co-op and Sainsbury’s.

In Tesco v Element, a group of predominantly female employees who worked at Tesco stores brought equal pay claims citing male employee comparators who worked at Tesco distribution centres. They claimed they did work of equal value to the men who were paid more than them. Little information was given about the comparators in the claim forms, saying they would be clarified after the disclosure of more information from Tesco. The employment tribunal ordered Tesco to disclose more information, including how much the distribution centre employees were paid, the work they did, and potential ‘material factor’ defences for the difference in pay. Tesco appealed, arguing this went too far and saying the employees were on a fishing expedition.

The EAT dismissed the appeal. Employment tribunals have wide case management powers. The test is whether the disclosure is necessary to fairly dispose of the proceedings. The EAT noted that a claim must have some reasonable prospect of success and in this case the employees said they did work of equal value to comparators who got paid more. That was enough for disclosure to be necessary to dispose of proceedings fairly. They said that where a claim clearly had no reasonable prospects – for example if a junior clerk tried to compare her work to that of senior managers – that might result in a refusal to order disclosure (because it wasn’t necessary to fairly dispose of the case) or even strike out of the claim. The EAT said that the Tesco employees had not gone on a fishing expedition to find a claim, rather requested information to narrow and clarify their existing claim.

This case seems to place an unfair burden on employers at a stage where the merits of a claim are often unclear. However, both in big and small businesses, pay rates are often shrouded in mystery, something which the tribunal system is all too aware of. Tribunals will use their powers to order disclosure of comparator and pay information to allow the parties to be on an equal footing in relation to the facts about pay. Better to nip things in the bud before things get to court.

Religious discrimination

Employers must not discriminate against workers on the grounds of their religion or religious beliefs. In Page v NHS Trust Development Authority, the Court of Appeal has looked at whether an employee can be fairly dismissed for the way he expressed his beliefs, rather than the beliefs themselves.

Mr Page was a non-executive director of an NHS Trust. He also sat as a magistrate on a panel to consider the adoption of a child by a same-sex couple. He told his fellow magistrates that children should be brought up by a mother and father and that it was 'not normal' for children to be adopted by a single parent or same-sex couple. His colleagues complained and he was disciplined. He then spoke to the press, saying his views stemmed from his Christian beliefs. After they heard about the press coverage, the NHS Trust told him to stop talking to the press. Mr Page ignored this instruction and continued to give high profile interviews, including on primetime TV. He was removed as a magistrate and was suspended by the Trust. His position as a non-executive director was not renewed due to his behaviour. He brought a religious discrimination claim against the Trust.

The employment tribunal dismissed his claims. He was not dismissed because of his religious beliefs or his expression of it. He was dismissed because he continued speaking to the press despite being asked to stop. The EAT and the Court of Appeal dismissed his appeals. The Court of Appeal said that the Trust’s actions were not because of Mr Page’s religion or views on homosexuality but because he had expressed those views to the media without permission. The employee’s expression of his views about homosexuality risked hindering the Trust’s ability to perform its key functions by alienating homosexual people with mental health issues. His views went beyond those relating to same sex adoption and into opinion on homosexual activity which was more likely to cause offence. In relation to direct discrimination, the Court said he had not been dismissed because of his Christian beliefs but because he expressed his views about the ‘traditional family’ and homosexuality in the national media. The Court made it clear that Christians with traditional views could still hold public office, but there would be limits on how those views could be publicly expressed.

This case continues to highlight the tension that can arise between religion and sexual orientation in discrimination claims. In this case, the issue wasn’t the employee’s beliefs, rather his senior position within the Trust and the effect that the expression of his views, against the Trust’s instructions, could have on service users. Each case will turn on its own unique facts. Employers must conduct a delicate balancing act between the competing rights and freedoms of employees and the legitimate interests of the business.

Holiday pay

In 2017, in the case of King v Sash Windows, the CJEU established that a worker can carry over unlimited annual leave which they have been prevented from taking because the employer refuses to pay for it. The CJEU said domestic time limits for bringing such a claim – for example, our 3-month time limit to bring an employment claim for unpaid holiday under the Working Time Regulations 1998 or unlawful deduction from wages – should not prevent workers from exercising important EU rights. In Smith v Pimlico Plumbers, the EAT has looked at whether a worker can carry forward holiday that he has taken, but not been paid for, to future years.

Mr Smith worked for Pimlico Plumbers as a plumbing and heating engineer. The business maintained that he and other Pimlico Plumbers were self-employed and not entitled to paid holiday. Mr Smith took periods of unpaid leave between 2005 and 2011. He stopped working for Pimlico Plumbers in 2011 and brought a claim for unpaid holiday pay. In 2018, in a groundbreaking judgment for the gig economy, the Supreme Court decided that Mr Smith and other Pimlico Plumbers were workers, not self-employed. As such they were entitled to paid holiday. However, an employment tribunal went on to dismiss Mr Smith’s holiday pay claim because it had been brought out of time. They did not believe that King entitled Mr Smith to ‘carry over’ a right to payment for unpaid annual leave that had already been taken.

The EAT agreed. King was about carry over and payment in lieu of accrued but untaken holiday, not holiday that had been taken but unpaid. Mr Smith’s remedy – for holiday which had been taken but unpaid – was a holiday pay or unlawful deduction from wages claim, rather than carry over of annual leave that had already been taken. Mr Smith’s last period of unpaid holiday was January 2011. He should have been paid for that in February 2011. Therefore a claim should have been lodged in May 2011 at the latest. When Mr Smith lodged his claim in August 2011, it was too late. The EAT also confirmed that Bear Scotland - the case which said that a gap more than 3 months in a series of deductions would ‘break the chain’, meaning earlier deductions would be out of time - was still good law.

This case ends a long running saga for Mr Smith and his personal holiday claim, although his litigation more generally has had an enormous impact on wider workers’ rights. Employers will welcome the clarity that claims for unpaid but taken holiday cannot be carried forward in the same way as that which is untaken. The holiday pay saga continues at pace though. The case of Agnew – which decided, contrary to Bear Scotland, that gaps of more than 3 months in a series of holiday pay deductions may not be fatal – is going to the Supreme Court in June. This is another issue which employers hope will be put to bed in summer – in their favour.

And Finally...

Remote working has hidden employees from sight, causing some employers to worry about what their staff are doing during working hours. The Guardian has reported that one of the world’s biggest call centre companies is planning to install surveillance systems to monitor what their staff are doing, whether that’s working, eating or going to the toilet. Teleperformance, which employs 380,000 staff in 34 countries, works for big names in Britain such as the government, NHS Digital, Vodafone, Aviva and the Guardian itself. The article says that there is nothing to suggest that these companies know about this surveillance plan and Teleperformance has now indicated that surveillance will not be rolled out in the UK. Teleperformance has said that the surveillance plans evolved from employees saying that they felt isolated while working at home.

Do employees need this kind of monitoring to do their jobs? There will always be some employees who take advantage of being invisible to managers. But in normal times, these people take a few minutes extra for lunch, hang out too long at the water cooler and do their online shopping while they should be working. Most employees understand that they need to get the job done, regardless of where they are doing it. Sticking a camera in someone’s face and asking them to tick a box before they go to the toilet is insulting and infantilising. It is likely to breed distrust and cause the majority of hardworking employees to feel aggrieved. It won’t help businesses to recruit and retain the best people.

The best way to monitor performance is to do just that - monitor performance, just as you would in the office. Apply clear and measurable targets. Conduct appropriate day to day management. Create an open dialogue between staff and management. You don’t need a camera to see what your staff are doing. You need good management.