Zelda Perkins (assistant to Harvey Weinsten) has recently done her first broadcast interview for BBC Newsnight, thereby allegedly breaking her settlement agreement confidentiality clause (in America, where it is called a non-disclosure agreement, NDA) that she signed 19 years ago.
Settlement agreements are useful documents given to departing employees, typically to prevent an employee bringing claims against their employer, not to speak ill of their employer (non-derogation) and not reveal any confidential information in exchange for money.
She received £125,000 for signing the NDA. Zelda says that she was given the NDA to silence her from telling anybody about an incident that left a colleague accusing movie mogul Mr Weinstein of trying to rape her, an allegation that he denies.
Ms Perkins has told the BBC “The last 19 years have been distressing, where I’ve not been allowed to speak, where I’ve not been allowed to be myself…It’s not just distressing for me, but for lots of women who have not been able to own their past, and for many of them, their trauma. Although the process I went through was legal, it was immoral.’
This story has brought to light an intriguing question: Are UK settlement agreement confidentiality clauses enforceable?
There is not a straightforward answer to this, as a settlement agreement confidentiality clause could be invalid on the basis of public policy because it is a ‘contract damaging to morality’ or a ‘contract that interferes with the machinery of justice’. This is because there is a distinct possibility that such a settlement agreement could be used to cover up sexual crime.
Geoffrey Robertson QC has said ‘There is, however, an entirely legitimate case for the UK Parliament to pass an amendment to the Criminal Justice Act, making it a crime to offer money to employees to silence them in relation to criminal offences that they know about’.
It is unlikely that Parliament intended settlement agreements to be used in a way which could cover up criminal acts or prevent whistleblowing.
In summary, the Harvey Weinstein saga appears to have raised an important legal question as to whether there should be an exception to settlement agreements being used to cover up wrongdoing. The question now is whether Parliament will do as Geoffrey Robertson has suggested, in making it illegal to compensate employees so they are silent about criminal offences that they know about.
By Zahid Reza
Image used under CC courtesy of David ShankboneRead More
One of our commercial clients had recently found that a former employee was competing, with restrictive covenants being breached blatantly.
This key employee had the passwords for our client’s website. He altered the website to divert business away from the company to himself, meaning the company was losing significant profits. This is of course a nightmare scenario that businesses of all types dread and hope will never happen to them.
However, there are measures employers can take to reduce the chances of an employee becoming a competitor.
While the employment is ongoing
Firstly, employers can insert a clause within an employee’s contract, instructing them to devote ‘all their time, attention and abilities’ to the business when they are employed. This means that an employee would not be allowed to set up a competing business during working hours.
A further preventative measure includes that of including such competing activity within a list of matters that would constitute gross misconduct in the employer’s staff handbook.
The above two preventative measures can not only act as a deterrent for an employee but would put the employer in a stronger position to immediately dismiss if they find out about the activities whilst the employee is still employed.
After the employment has ended
The most effective preventative measure is restrictive covenants. These contractual clauses are used to prevent a former, often more senior employee (after their employment has ended) from:
- enticing away existing clients/customers;
- poaching employees; and
- representing themselves as associated with the former employer.
Post-termination restrictive covenants need to be well-drafted to enforce because if they go further than reasonably necessary they will be unenforceable. It is particularly difficult to show this ‘reasonableness’ element and judges have to look at a number of factors when assessing ‘reasonableness’. The upshot of this is that employers must take legal advice on whether they are successfully preventing employees competing with restrictive covenants each time they recruit and promote.
This is because in order for restrictive covenants to be enforceable, they need to be tailored specifically bearing in mind the employment relationship. Our article on how to stop employees competing with restrictive covenants gives more details.
By Zahid Reza
Image used under CC courtesy of Fe llya
When it comes to nannies and the National Minimum Wage, the position is usually clear. But this is not the case with live-in workers. A minimum wage claim brought by an immigrant domestic worker was recently heard by the High Court.
The case required the court to address the “family worker” exemption set out in the National Minimum Wage 2015. The provision in question is the one relating to wage “deductions” for accommodation and meals.
Mrs Ajayi, came to the UK from Nigeria in 2005. She has worked for Mr and Mrs Abu for a total of nine years and claims she was a victim of human trafficking.
There was no dispute over the fact that Mrs Ajayi was an employee over the alleged period, but there was a disagreement on her hours and pay. In this kind of situation, the employee’s word is generally believed unless the employer has kept records.
The defence initially relied on the “family worker” exemptions for live-in workers who are treated as members of the family. This obviously includes nannies and the national minimum wage would not need to be paid. For this defence to be successful, however, the employer cannot make the employee pay for food and accommodation. This was the issue that the court had to decide.
The court ordered Mr & Mrs Abu to provide a detailed spreadsheet with a breakdown of monthly salary, “expenses” and the net payments made to Mrs Ajayi. The spreadsheet they submitted showed how expenses had been deducted from Mrs Ajayi’s salary for “lodging” and “feeding”.
At this point they realised that this scuppered their defence and claimed that the document was unreliable. Unsurprisingly, they were held to the spreadsheet they had provided and their defence was rejected. The court said that the Claimant’s “very little pay was the produce of effectively making her pay for the ‘free’ accommodation and meals”.
It is now for the courts to decide how much Mrs Ajayi is to be awarded, with an additional claim of harassment to now be considered.
By Matthew Wheatley
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A case on overtime and holiday pay at the EAT (Employment Appeals Tribunal) says that regular overtime forms part of ‘normal work’ and be treated as such when calculating holiday pay for employees. This is because holiday pay is calculated as a proportion of your normal working hours.
The case saw 56 employees bring a number of holiday pay claims against Dudley Borough Council, who carried out the repair and maintenance of council houses. They all received holiday pay for approximately 37 hours a week; however they sought additional holiday pay for being on call and working additional hours on a regular basis of every 4-5 weeks. This was said to have occurred over a “period of years” which the Court deemed a “sufficient period of time”.
The tribunal sided with the Claimants’ argument that carrying out voluntary overtime involves performing tasks that are required by their work contract. As such, regular overtime must be factored into calculations for the first 4 of the 5.6 weeks holiday pay employees in the UK are entitled to. This is because the 4 weeks are from EU law and the other 1.6 weeks are from UK law.
The EAT explained how the decision to uphold the initial ruling of the ET is based on a matter of fairness. Employers must factor in regular overtime to ensure that employees are not financially disadvantaged as a result of taking leave.
The decision is not expected to expose employers to backdated claims for voluntary overtime; however it may leave them vulnerable to claims for underpayment of holiday pay in their current year. That said, the decision lacks clarity as it is not stated how regular the overtime must take place, or how long a period of having carried out the work constitutes a “sufficient period of time”.
Case report: Dudley Metropolitan Borough Council v Willett
By Matthew Wheatley
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Since the revelation that “49% of self-employed workers (4.8 million people) earned less than £310 a week”, the Resolution Foundation have published its opinion that the minimum wage should apply to the self-employed.
The Resolution Foundation says:
“The UK’s labour market has been very successful at creating jobs in recent years. However, far too many of those jobs offer very low pay and precious little security….This is especially true of the growing army of the self-employed. While many are higher earners who benefit from significant flexibility, around half fall below the low pay earnings threshold of just £310 a week
“The government can start by extending minimum wage protections to those self-employed people whose prices are set by a firm. This would mean that self-employed people in the gig economy would be given protection against extreme low pay for the first time ever”.
Because this can stop employers from making individuals purposely self-employed just to avoid the need to pay them the minimum wage. Therefore if the minimum wage does apply to self-employed individuals, this will likely reduce exploitation in the UK workforce generally. Additionally, some may say that if the basic premise of the minimum wage is to ensure all individuals earn enough to live, then this protection should apply no matter whether such individuals are employees or is self-employed.
It will be interesting to see whether this recommendation comes to fruition. If it does then it may open the door for other rights, such as the compulsory 20 minute break (for a working day that is six hours or longer) and a 48 hour maximum working week, rights currently enjoyed by employees. Additionally, if these recommendations become implemented, this may be a step towards the UK having a single stand-alone category of worker, rather than the three types (‘employee’, ‘worker’ and ‘self-employed’) that we have today.
By Zahid Reza, Paralegal
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Over the past few years, zero-hours contracts have caused a lot of controversy. Some laud the flexibility, whilst others see zero-hours contracts as a mechanism for employers to label their employees as ‘self-employed’, to avoid the employment rights attached to workers and employees.
The subject of zero-hours contracts has been a key political issue. The government have commissioned what is named the ‘Taylor Review’ to look into this as well as all other employment practices. This review is expected to recommend that workers on zero-hours contracts be given a right to request to switch to fixed hours. We think that this right will be similar to that of the legal right to request flexible working, where all employees can apply but employers will have limited grounds to refuse such a request. If this is introduced, we feel that there will be a low bar for employers to refuse them, just as there is with flexible working requests. The Confederation of British Industry agree with this idea. Trade Unions have expressed their displeasure of this proposal; they say the right does not go far enough. The Labour and Liberal Democrat parties have said in their manifestos that they are willing to go further, namely completely eradicate zero-hours contracts completely.
Not all that bad?
Contrastingly, there is evidence to suggest that zero-hours contracts may not be that bad after all. McDonalds have recently offered to let their employees on zero-hours contracts switch to permanent hours in 23 of their restaurants. Only 20% wanted to switch while the others preferred the more flexible way of working, even if it would mean there would be less certainty over their income.
How each political party intends to resolve this hotly-contested issue may well sway votes in the upcoming general election. We shall await and observe the future of these contracts.
MPs are calling for employers to be fined firms for sex discrimination in dress codes.
The government must ban sexist dress rules at work that discriminate against women, a committee of MPs has recommended.
The Women’s and Equalities committee began an inquiry following the case of Nicola Thorp, who was sent home from a receptionist’s job with PWC for not wearing high heels. She refused to obey the then rules of her employment agency, Portico, that she should wear shoes with heels that were between two and four inches high.
She argued that wearing them all day would be bad for her feet and that her male colleagues were not asked to follow similar rules. “This may have started over a pair of high heels, but what it has revealed about discrimination in the UK workplace is vital, as demonstrated by the hundreds of women who came forward via the committees’ online forum” Mrs Thorp said. She added: “The current system favours the employer, and is failing employees“.
The committee received reports of women being told to dye their hair blonde and wear revealing clothes at work, such as shorter skirts.
Her parliamentary petition on the issue gained more than 150,000 signatures.
The committee said the Equality Act 2010 should ban discriminatory dress rules at work and that but in practice the law is not applied properly to protect workers of either sex. Chair of the Petitions Committee, Helen Jones MP, said: “It’s clear from the stories we’ve heard from members of the public that Nicola’s story is far from unique.” It said that discriminatory dress codes remain commonplace in some sectors of the economy.
The MPs report recommends a publicity campaign to ensure that employers know their legal obligations that workers know how they can complain effectively. But its key recommendation is that the existing law should be enforced more vigorously, with employment tribunals able to apply bigger financial penalties.
A government spokesperson said: “No employer should discriminate against workers on grounds of gender – it is unacceptable and is against the law. Dress codes must be reasonable and include equivalent requirements for both men and women.
By Naomi Vlad. Image used under CC courtesy of Veenya VenterRead More
The gig economy describes the employment contracts done by individuals on a temporary or specific project basis rather than being a full-time employee.
The delivery network City Sprint had classed Maggie Dewhurst, a courier for the firm, as self-employed or an independent contractor, rather than a worker or employee. Because of this status she was not allowed sick pay, holiday pay or a guaranteed wage, despite having worked for the firm for two years.
Big firms such as Uber, CitySprint, Addison Lee, Deliveroo and Excel tend to consider their employees as self-employed rather than workers in order to avoid giving them the employment rights due to an employee. These rights include being paid the national minimum wage, getting the statutory minimum level of paid holidays and rest breaks. The fact that self-employed workers do not have the rights of those with employment contracts can be very convenient for these big firms.
The Employment Tribunal judged that Maggie Dewhurst’s contract in fact gave her worker status. Which therefore affords her many more employment rights than she had previously. While Uber intends to appeal, CitySprint has not clarified its position yet. In the UK, the firm currently has 3500 independent contractors, Maggie’s case could therefore lead to many other claims. It seems fair that these physical and intense jobs should have some sort of protection. While the gig economy can be considered a very innovative and productive way of working, it can lead to one party taking a advantage of the other. It appears that the law is not adapted to this new way of working, as the number of claims relating to the gig-economy is rising. CitySprint has 42 days since the day of the judgment to appeal, therefore we shall see the improvement made to the law in the following weeks.
While Uber intends to appeal, CitySprint has not clarified its position yet.
In the UK, the firm currently has 3,500 independent contractors, Maggie’s case could therefore lead to many other claims and the company will have to redraft its employment contracts, no doubt having to give up commercial advantages.
It appears that the law is not yet adapted to this new way of working, as the number of claims relating to the gig economy is rising.
CitySprint has 42 days from the day of the judgment to appeal, therefore we shall see the improvement made to the law in the following weeks and keep this article updated.
By Lily Wilde
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The term “precarious employment” is being used more and more. Another term for it is the “gig economy”. A Government-commissioned inquiry into modern employment practices is gearing up. Precarious workers are those who fill permanent job needs but are denied permanent employee rights. They are subject to unstable employment, lower wages and even more dangerous working conditions. They rarely receive family-friendly rights or pensions and are often denied the right to join a union. Women, minorities and migrant workers are much more likely to fill these kinds of jobs.
The number of workers in the UK in precarious positions has grown by almost 2 million in the last ten years. This comes as a result that more and more businesses prefer using more self-employed workers and are increasingly recruiting staff on temporary and zero-hours contracts.
For example, companies such as Tesco and Argos use thousands of agency temps. Also, currently, Sainsbury’s is using 54 different employment agencies for its temporary warehouse workers. The taxi company Uber are among firms relying on 4.7 million “self-employed” workers, although see our recent article on the legal challenge by two of its drivers.
The increase in precarious workers has stirred up anxiety about low pay to the extent that more than 10,000 people called the Acas helpline from May to September 2016 voicing concerns that they were not receiving the statutory minimum. This is a 73% increase on the same period last year. This means that the UK currently has more full-time employees in low pay (as a percentage) than all but seven of the 22 developed nations in the OECD.
The long-term employment trend has hit young adults the hardest. The proportion of working 16- to 20-year-olds in low pay rose from 58% in 1990 to 77% in 2015, while the proportion aged 21 to 25 rose from 22% to 40%, according to Resolution Foundation analysis. This can hardly be encouraging for the next generation of employees. However, older workers have become less likely to suffer from low pay.
There are currently about 750,000 more people are on zero-hours contracts than in 2006, and over 200,000 more people are working as temps, according to the government’s labour force survey.
It remains to be seen if these statistics will be affected by the formal trigger of Article 50 of the Lisbon Treaty by Prime Minister Theresa May – see our Brexit series for more details.
By Gina Mukova
Image used under CC courtesy of Ding Yuin ShanRead More
Does employment law mean that interns should be paid whilst being trained?
In November 2016, the government refused to ban unpaid internships by blocking the National Minimum Wage (Workplace Internships) Bill. The refusal to pass the Bill was justified by the fact that paying interns would add financial pressure to firms.
Current employment law insists that interns be paid the national minimum wage if they fulfill the definition of a “worker”. That is, someone who performs work personally under a contract.
A contract requires that both sides make promises about the continuation of the working relationship.
Little case law exists on the matter, but in one a Ms Reilly was working for nothing in a big store, accused her employer of breaching her human rights with regard to slavery. The Supreme Court (House of Lords) found for her, saying that Parliament had not given authority to the Department of Work and Pensions to create these back-to-work schemes.
True interns are volunteers; that is they enter into an arrangement which
- Does not entitle them to financial reward.
- Does not require them to turn up to work.
- They should not produce work that an employee would be paid for.
We and some of our clients use interns. We give them detailed feedback on their work, which makes the relationship more about them learning a skill and less about our firm using free labour. We don’t impose any expectation of them turning in any work.
To conclude, opinions on the subject are diverse. While some people argue that unpaid internships are a form of modern day exploitation, others say that they provide a chance for an intern to see in depth how paid employees work, gaining experience and skills. Twenty-two Members of Parliament are currently advertising for unpaid internships, which shows reluctance to ban them, even in Parliament.
The debate concerning the bill is definitely not over, as it will be re-considered by Parliament in February 2017.
By Lily Wilde
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