Many employers are rewarding their staff by hosting a Christmas party, but gross misconduct is a risk.
Whilst this is no doubt a time for staff bonding, laughing and joking (often whilst recollecting the humorous stories at work this year), let’s rewind 12 months to a case in late 2016.
This case illustrates that whilst a Christmas party is an event where everyone lets their hair down, employers should be mindful that this is a work-related event and as such, they can be held responsible for the actions of their staff if things kick off (also known as vicarious liability).
The key question for vicarious liability is whether the offender was acting in their personal capacity, or in the course of their employment.
Bellman was about a Christmas party hosted by Northampton Recruitment for their staff and guests. The party which was at a Golf Club, proved uneventful. But after the party, a number of guests travelled to a local hotel, where the party continued. At this after-party, the MD assaulted a member of staff (leaving him with brain damage) because he felt his authority was being challenged at work.
The High Court found that Northampton was not vicariously liable for the assault. The judge described the after-party as not a company event and so Mr Major’s conduct was not in the course of his employment. The judge’s reasoning was that the after-party was ‘an entirely independent, voluntary and discreet early hours drinking session of a very different nature to the Christmas party and unconnected with the or employer’s business’.
This decision shows that if the incident had taken place at the Christmas party, then the employer would have been responsible for gross misconduct that resulted.
All employers should be wary of Christmas party gross misconduct. Employers should take all reasonable steps to ensure misconduct (especially gross misconduct) does not occur, such as:
- Ensuring their equal opportunities policy is up to date; and
- Providing training to staff (e.g. on anti-discriminatory practices, and on bullying and harassment).
Such measures would reduce the likelihood of an employer being held vicariously liable for the gross misconduct of their staff.
Case report: Bellman v Northampton Recruitment Ltd
by Zahid Reza
Image used under CC courtesy of Bill TyneRead More
What is the gig economy?
The phrase ‘gig economy’ is used to describe individuals who earn their income per task, or ‘gig’, that they complete. Examples include a car journey (like Uber drivers) or a food delivery (like Deliveroo drivers).
It has been estimated that around 5 million people in the UK work this way. The attraction for individuals is said to be the flexibility of being able to work whenever they like. Similarly, the gig economy is attractive to businesses because they only pay staff when work is available, thus avoiding staff costs when there is no work. Therefore it is no surprise that the gig economy has gained particular traction within the hospitality and transport industries, as these industries are known for their regular fluctuations in supply and demand.
Timeline of the Uber case and the central issue that it raises
In 2016, a number of Uber drivers brought claims against Uber. The central issue was that of the status of Uber drivers, namely whether they had self-employed employment status (as Uber argued) or whether they were workers. On 28 October 2016, the Employment Tribunal (ET) held that the Uber drivers are workers. Uber appealed against this decision. On 10 November 2017, Uber lost their appeal, with the Employment Appeal Tribunal (EAT) ruling that the Uber drivers are workers.
Uber recently attempted to leapfrog the Court of Appeal and go straight to the Supreme Court. However, this application was rejected and the Court of Appeal will hold Uber’s appeal sometime in 2018.
The issue of ‘status’ that the Uber case raises
Why are Uber so resistant to their drivers having worker status? The likely reason is because workers are entitled to employment rights that self-employed individuals are not entitled to, which include:
- The National Minimum Wage;
- Protection against unlawful deductions from wages;
- The statutory minimum level of paid holiday;
- The statutory minimum length of rest breaks; and
- To not work more than 48 hours on average per week or to opt out of this right if they choose.
Therefore if Uber drivers are recognised as workers, Uber will be forced to accommodate these rights (which is something that is not in their business interests).
Implications of Uber on the gig economy
The implications could be huge on the ‘gig economy’, because if their drivers are ultimately recognised as workers:
- It would force all other businesses operating within the gig economy to re-evaluate the status of the individuals working for them; and
- It could open the floodgates to individuals working within the gig economy (who previously thought they were self-employed) to bring claims against their employers alleging breaches of workers rights. The recent Supreme Court decision eradicating tribunal fees only increases the chances of this happening.
The Uber ‘warning’ on employers
This case highlights the importance of employers carrying out their due diligence before treating any staff member as self-employed, because the law does not look at the label, but what the relationship is in practice. It appears Uber made the mistake of treating their staff as self-employed when the ET and EAT after looking at the relationship in practice, concluded that their staff were workers.
When Judges are assessing whether or not an individual is a worker, there are many factors that can be considered, some of which include:
- The existence of a contract – (whether written, verbal or implied);
- Whether or not the individual is contractually obliged to perform work or services;
- The degree of control the individual is subjected to;
- Whether or not the other party is a ‘customer’ or ‘client’ of the individual; and
- Who pays the tax of the individual.
Watch this space, it will be interesting to see the outcome of Uber’s appeal, and whether this decision brings to an end the Uber saga. One would think that if the Court of Appeal rule against Uber (like the ET and the EAT), Uber will attempt to get the decision overturned by the Supreme Court. One thing is for certain, this case has brought to the fore the issue of ‘status’ and the importance of all employers to carry out their due diligence in this regard.
By Zahid Reza
Image used under CC courtesy of Alper ÇuğunRead More
Chris Kirkland realised the dream of millions of youngsters in playing football at the highest level for his country (England), and representing great domestic clubs like Liverpool FC and Wigan Athletic. However he has recently opened up about his battle with depression whilst he was playing football, which ultimately led to his retirement after he left Bury FC before the 2016-17 season began.
Chris explained that his battle with depression started when he left Wigan Athletic for Sheffield Wednesday FC (because the football manager at the time expressed that Chris was not in his plans for the First Team). Chris says that he never wanted to leave Wigan Athletic.
Chris encapsulated his struggle with depression when he described having panic attacks and anxieties about mundane things such as traffic.
‘I didn’t want to do anything. I wanted to shut myself off. My head was just… I couldn’t think straight. I couldn’t wait to get to sleep at night to have a little bit of clear mind. But when I woke up in the morning, it all started again’.
Sheffield Wednesday were unbelievable. They came up with a routine’.
This story highlights how difficult mental conditions can be for employees to deal with, and also illuminates the reluctance employees may have in disclosing this information to employers. It also highlights that mental health can affect anyone, including highly coveted and successful footballers like Chris.
Employers should be aware that the legal definition of disability takes into account a ‘mental impairment’, as well as a physical one. Therefore if employers do not treat these employees with care, there is a risk of disability discrimination. Employers must be aware that just because they do not know, does not exempt them from liability for disability discrimination if they ‘should have known’ about the employee’s mental disability.
Therefore tips for employers to lower their chances of liability for disability discrimination include:
- Providing a medical questionnaire for employees when they start employment, giving them an opportunity to notify their employer of any illnesses.
- A positive working environment may encourage employees to be more forthcoming to employers with any mental illnesses, allowing employers to deal with them effectively.
- Another more obvious tip would be to provide adequate training for line managers so they can be better at detecting and handling mental illness (the Mental Health at Work Report 2017 highlighted that only 24% of line managers are trained in mental health).
There is no doubt that awareness of mental health is improving, and experiences like that of Chris only highlight how seriously employers should take mental health.
By Zahid Reza
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The topic of sexual harassment at work recently hit the headlines after the allegations against producer Harvey Weinstein and actor Kevin Spacey.
The publication of some dramatic statistics suggests that sexual harassment at work is a subject that hasn’t been addressed in depth.
Half of women in the UK have been victims of sexual harassment at work. However, this problem does not only concern women, as one in five men has experienced sexual harassment at his workplace. How can such a worldwide problem not have been seriously addressed before? A possible explanation to this lack of attention resides in the fact that the number of victims who report sexual harassment at work is very low. A research conducted in 2016 showed that victims do not report sexual harassment at work by fear of embarrassment (20%), or that they would not be taken seriously (24%),) and finally, that reporting it would affect their relationships at work (28%).
The Equality Act 2010 offers protection to employees and independent contractors. Sexual harassment is when “A engages in unwanted conduct […] and the conduct has the purpose or effect of violating B’s dignity, or creating an intimidating, hostile, degrading, humiliating or offensive environment for B“.
Sexual harassment can be verbal and/or physical. Inappropriate comments or touching, sexually explicit jokes by email or persistent requests for dates are examples of sexual harassment. Additionally, unwanted conduct related to the employee’s gender, such as criticising an employee’s childcare arrangement, is also considered to be sexual harassment. Finally, an employee is victim of sexual harassment if he/she is treated less favourably after refusing sexual advances or being victim of them.
Several actions can be taken to rectify the situation. The first step is to inform a person in a position of authority by making a note in writing.
The employer should then invite the employee to a grievance meeting and provide an outcome within a reasonable time.
A claim would have to be started within three months after the incident. Finally, it is crucial to gather evidence by writing down the times and dates during which the inappropriate behaviour took place, along with finding colleagues who have witnessed it.
An employer can be held liable for the actions of an employee, including sexual harassment. In order to prevent this, the employer can show that it took reasonable steps to prevent sexual harassment. This is done by having an anti-harassment policy, undertaking equal opportunity training and showing no tolerance when disciplining harassers.
Sexual harassment can render the working environment intolerable and these claims should always be treated very seriously. The law protecting victims of sexual harassment exists, however statistics have shown that denouncing sexual harassment can be difficult, especially when one’s job is at stake. Following the recent Hollywood allegations , women have started sharing their experiences and a real debate concerning sexual harassment at work has been started.
Hopefully, the current controversy will encourage both male and female employees to speak out and exercise their legal rights when sexual harassment occurs.
By Lily Wilde
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Training apprentices is a great way for employers to mould and develop their staff to cater for immediate business needs and shape the future of the business. Also, apprentices can help to reduce staff turnover as they have a tendency to be motivated and loyal to the employer that has provided them with the opportunity. Employers can also receive government funding for apprenticeship programs, which will obviously reduce costs. However, as much as an asset apprentices can be to businesses, employers should be wary of unintentionally granting an apprentice ‘common law’ status.
‘Common Law’ apprentices
For centuries, all the legal principles that dealt with apprenticeships were contained in case law (also known as common law). Apprentices who fall under the common law are beneficiaries of the legal principle that the essential purpose is training, with the production of work for their employer being secondary. Therefore as the primary purpose is training, such apprentices have heightened protection when it comes to dismissal (and indirectly, sanctions) compared to non-apprentice employees. This heightened protection applies in cases of misconduct, performance management and redundancy (common law apprentices are totally protected when it comes to redundancy).
The consequences of an illegitimate early termination include the employer paying out the former apprentice for loss of earnings for the remainder of their apprenticeship term. An employer may also be required to compensate the former apprentice for the diminution of their future prospects.
In 2008, the government wanted more apprentices, and removed the enhanced rights given to ‘common law’ apprentices so that apprentices could be dismissed like ordinary employees. It was at this time the concept of a statutory ‘apprenticeship agreement’ was born.
For employers to avoid granting an apprentice ‘common law’ status, they must ensure apprentices are given a statutory apprenticeship agreement. There are different types of apprenticeship agreement depending on whether the apprentice is doing a course that is an ‘approved standard’ or a ‘framework’. If the wrong type of apprenticeship agreement is given to an apprentice, the apprentice will be granted ‘common law’ status by default.
Therefore employers must carefully check the correct agreement is given to an incoming apprentice in order to prevent the apprentice getting the enhanced rights granted by them being of ‘common law’ status.
By Zahid Reza
Image used under CC courtesy of InstituteForApprenticeships
Today’s Victoria Derbyshire programme on BBC News discusses maternity discrimination.
It highlights that when employers settle cases, there is typically a gagging clause that prevents the employee from talking about the settlement, so cases get under-reported.
This meets with our experience. We have rarely seen a settlement agreement for maternity discrimination, or any kind of discrimination, that didn’t contain a confidentiality clause.
This can prevent the employee from discussing
- the details of the dispute
- the negotiations
- the fact of settlement
- the terms of the settlement; or
- the amount of the settlement
Or it may extend to all of the above.
The programme found that around one in nine of mothers had been dismissed or treated so badly they felt they had to leave their job. We think that only a small proportion of these will have brought a maternity discrimination claim. New mothers often tell us that they have their too hands full with the new baby to deal with legal claims.
The programme spoke to Catherine McClennan, who won a maternity discrimination employment tribunal case in 2015 against her employer, the TUC, the union, receiving an award of £21,000 in compensation.
Among her claims was that she was left off the company’s telephone list when she went on maternity leave.
The Women and Equalities Committee recommends a “dismissal ban” for pregnant women and new mothers. At the moment, they can be dismissed as long as the reason is not linked to the fact of pregnancy or maternity absence or a linked reason.
The government says it is determined to tackle pregnancy and maternity discrimination. However we are not aware of specific plans and many feel that Theresa May has her hands full with Brexit.
By Zahid Reza
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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
Why do we need to consider the differences between UK employment law and US labour law?
With Britain and the European Union (EU) in talks for some months now after the historic Brexit vote, Britain must consider how to mitigate the problem of leaving the luxury of the single-market (which provided for the free movement of goods, capital, services and labour between EU member states). Apart from the obvious idea of trying to secure new trade deals with individual EU states, Britain might negotiate trade agreements with the US.
Therefore in light of a possible strong trade relationship post-Brexit, it is a good time to look at how UK employment law differs from that of the US. There is a common presumption that because of our shared language and relationship, American laws and practices work in symphony with UK laws. Although historically US law emanates from English common law, this assumption is far from correct and there have been many examples of businesses making critical mistakes because of this presumption.
Therefore we thought it best to summarise some of the main areas of difference in employment and labour laws that businesses from the UK thinking of entering the US market should be aware of:
- Paid holiday leave
US workers are not legally entitled to any holiday pay, however most US employers (probably through commercial competition) will offer workers paid time off. Although the number of days off will differ from employer to employer, on average a US employer will offer 10 working days for their workers. The UK in comparison, legally entitles employees to 5.6 weeks paid holiday per year (28 days including public holidays for a full-time worker).
- Sick Pay
There is no federal law that requires workers to be offered sick leave. However many state laws require sick leave to be given. The precise terms will differ from employer to employer, and in accordance with individual state rules and regulations. By way of contrast, the UK requires all employees (provided they qualify) to be entitled to Statutory Sick Pay (SSP) and employees are entitled to this for up to 28 weeks. The current SSP rate employers must pay to employees who qualify for SSP is £89.35.
In the US, employers who have 50 or more full-time workers (full-time workers being defined as those who work 30 hours or more per week) are required to provide ‘health care coverage’ to employees (including dependants). Employers with 50 or more full-time workers who fail to provide adequate ‘health care coverage’, will owe an employer shared responsibility payment to the government. The UK has the National Health Service (NHS) which is publicly-funded; therefore employers in the UK do not need to contribute to the healthcare of employees, although sometimes private-healthcare can be added as a benefit.
- Laws governing the employment relationship
In the US, there are few laws governing the employment relationship. However UK employment law provides for pregnancy leave, sickness leave and pay, protection of employees on a sale of business (TUPE), dismissal, notice periods and redundancies to name a few.
- Employer terminating employment
In the US, there is the concept of ‘at will’ employment, which allows employers to terminate the employment relationship at any time, without notice, good cause or prior warning provided it is not a violation of a ‘protected class’ (these classes include race, sex, religion or national origin). The majority of employees in the US are ‘at will’. Under UK employment law, employees have pretty much the same lack of employment rights until they have two years’ service. Employers therefore can generally dismiss employees with less than two years’ service without notice, any prior warning or reason (provided there is no discrimination and the reason for termination is not for whistleblowing or a similar, ‘automatic’ reason).
- Written contract
In the US, there is no legal requirement for a written document or contract as proof of the employment relationship. Sometimes an offer letter is issued which address the main terms such as salary, title, bonus (if any) and holidays. UK employees must be provided with a written statement setting out the fundamental terms of the contract. Typically employees are given very detailed employment contracts.
- Age Discrimination
In the US, federal protection is given to applicants and employees who are aged 40 or over. Whereas in the UK, protection is given to employees and applicants of all ages. There is also a clear difference in the amount of money awarded for discrimination, although in both countries awards for discrimination are uncapped. In the US, discrimination claims can reach millions of dollars following long (often years) legal disputes and great expense. In the UK, discrimination awards are not that high; they rarely reach the six-figure mark.
Employers in the US can generally order an employee to do as much overtime as it wants. UK employment law limits the hours of work an employee can be obliged to work to 48-hours. So employers cannot require employees to work over this amount. However those employees who want to work more than 48-hours can sign an ‘opt-out’ agreement to work more than this, and senior staff are not covered at all. So in reality, the 48-hour week is a law without teeth.
We shall wait and see the specific terms of Brexit. However if there is a trend of UK businesses deciding to operate within the US post-Brexit, then they will need to comply with US labour laws and recognise the distinctions between US and UK employment laws.
By Zahid Reza
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Following the National Crime Agency’s (NCA) shock revelation that Modern Slavery and Trafficking is affecting ‘every large town and city in the country’ and that the NCA’s previous estimates of 10,000 – 13,000 victims in the UK are the ‘tip of the iceberg’, a report by the University of Sheffield and the University of Bath has illuminated one of the main reasons why it is difficult to know the true scale of Modern Slavery and Trafficking in the UK.
The study focused on the food and construction sectors. The report found that whilst an increasing number of companies can accurately trace where their product comes from, many companies do not know the backgrounds of their workforce.
An owner of a UK hotel chain explained: “We have pretty much solved traceability of the food served in our restaurants. I can tell you the farm where the steak on your plate came from, probably even the name of the cow. But we have no idea where the workers came from that work in our kitchens.”
The report indicates that existing background checks are not ‘fit for purpose’ to uncover Modern Slavery and Trafficking. The researchers in this study concluded that the key is to understand and monitor the labour supply chain.
Professor Andrew Crane from the University of Bath says that if companies can find a way to trace their products, they can do the same with their workforce. He said “Twenty years ago most high street retailers did not have a clue where the products they sold actually came from. Since then, there has been a revolution in responsible business practices and companies have invested millions of pounds to trace the source of their products and tackle the myriad sustainability issues they found there. To prevent the misery of modern slavery from blighting our workforces companies must apply that same focus to their staff.”
It remains to be seen whether in light of this study, the government will take steps to ensure employers carry out a more thorough background check on workers before they commence employment.
By Zahid Reza
Image used under CC courtesy of Marissa Orton
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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