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
Image courtesy of Resolution FoundationRead More
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
Image used under CC courtesy of alx_chiefRead More
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
Image used under CC courtesy of Paul InklesRead More
We read that multi-claimant employment solicitors Leigh Day are taking a class action against Tesco, who are cutting pay rates for night and weekend shift workers on hourly rates.
The complaint is by workers who are unhappy at pay rates decreasing for weekends, bank holidays and night shifts.
17 employees are involved in the test case to protest against the cut introduced in July. The employment solicitors involved in the case believe that 38,000 members of staff could be affected.
It often comes as a surprise to employees but employers are allowed to reduce pay and conditions as long as they introduce the changes in the right way, which includes proper consultation. Tesco agreed the changes after consultation with union in February. The move was accompanied by a 3% pay rise to staff and a lump sum to those affected. The employees concerned were given 18 months of the difference in their pay as compensation.
However, the main change has been that double time for Sunday and bank holiday shifts becomes time and a half instead.
The employment law issue is that the hourly-paid staff are mostly those over the age of 40 years old. Therefore this could be seen age-discrimination unless it is justified, which is a tough legal test for Tesco to beat.
In a trend that we anticipate will become even stronger after Brexit, retailers are making cuts to staff wages.
It is the longer-serving staff in these businesses who usually suffer the most, said the employment solicitors bringing the case.
The transition payment was equivalent to the loss in pay over the next 18 months. Tesco did not confirm how many workers were affected but said it was a small number.
We hear that Marks & Spencer may be facing similar issues. Recently they reduced the earnings of about 10% of its shop-floor workers by cutting anti-social hours payments.Read More
It has been reported that Argos are paying an extra 80p per hour to their staff on minimum wage as a Christmas bonus on the condition, that they do not take any time off sick from work in the lead-up to the busy Christmas season.
Could such an incentive lead to many employment tribunal cases being taken out against Argos?
Some employment lawyers are pointing out that it could be discriminatory against disabled employees, who are more likely to require time off and lose their entitlement to bonus. On the face of it, this looks like indirect disability discrimination.
Indirect discrimination is applying a “one size fits all” policy to all employees, but that has a greater impact on a particular group, such as the disabled.
Agency workers at Argos’s Basildon depot have been told that they will not benefit from the 80p per hour uplift if they call in sick even once.
Whether this is discriminatory or not depends on whether employers can avail themselves of the “justification defence”. This applies where the practice is in pursuit of a “legitimate aim” (which reducing staff absence clearly is) but also “proportionate” (which means no more discriminatory than necessary). It is this second limb of the test that some employment lawyers believe the scheme will probably fail, because the cost to the employee is an all-or-nothing one, not according to a sliding scale.
We think that the scale doesn’t have to be perfectly linear – so you wouldn’t need to say you lose 1% of the bonus for every 1% of absence. But, equally, the ability to lose 100% of the bonus for 1% of absence is apparently overkill. We would have advised Argos to apply the bonus penalty in, say, windows of 20% or 25%.
The risk is particularly the case for staff members who may be suffering from chronic illnesses. They might see the bonus scheme as not being within the Christmas spirit at all!
Illustration courtesy of Quinn Commendant, licensed under CCRead More
An employment law case heard in the London employment tribunal could have important ramifications for the business models of companies like Uber, Deliveroo and Yodel.
Uber drivers have been classed as workers rather than self-employed. They will be entitled to holiday pay, the minimum wage and unpaid rest breaks. Taxi costs will go up for passengers.
The GMB union described the decision as a “monumental victory” but customers won’t see it this way. Uber said it would appeal
There is no easy way for employment lawyers to tell the difference between the two. Judges essentially apply a “walks like a duck / quacks like a duck” test on a case-by-case basis. They ask whether the features of an employment relationship or an independent contractor are there.
The modern business model relies on devolving as much of the business model to their staff as possible, such as letting them choose if/when to work, and absorbing the risk of whether there is work. For example, Uber pays more to drivers for driving at times of peak demand.
The tribunal said “The notion that Uber is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our mind faintly ridiculous.”
“This is a monumental victory that will have a hugely positive impact on drivers,” said Maria Ludkin, legal director at the GMB, which brought the case.
The quacking duck
Here are the features of the contract between Uber and their drivers that, in the opinion of the tribunal, make it look more like an employment contract, in the eyes of employment law:
- Uber has sole and absolute discretion to accept or decline bookings
- They interview and recruit drivers.
- They control key information like passenger contact details and the destination. Drivers don’t even know where they are going until the trip starts.
- Though drivers can choose when to work, they can’t turn down trips.
- Uber sets the route.
- They fix the fare and drivers can’t negotiate a higher one (as an independent contractor would be able to).
- They impose conditions such as the type of car that drivers must use.
- Uber subjects drivers to performance management and disciplinary procedures.
- Uber decides issues such as rebates without involving the driver.
- Uber, not the driver, takes on risk of loss such as in the case of fraudulent passengers.
- Uber handles complaints by passengers.
- Uber can change the drivers’ terms unilaterally.
- Drivers are not allowed to contact passengers after rides (a contractor would normally be able to contact his clients).
- Using terms like “on-duty”, “off-duty” and “our vehicles”.
The future for employment law
This was a case by two drivers, James Farrar and Yaseen Aslam in one employment tribunal. However, the two are on the same contracts as tens of thousands of drivers around the country. could pave the way for big changes in the economy but until it is appealed there won’t be a ruling that affects other drivers.
The case could pave the way for big changes in the economy but until it is appealed there won’t be a ruling that affects other drivers, employment lawyers report.
By Lily WildeRead More
Employment lawyers in Birmingham and around the country have welcomed a recent Employment Appeal Tribunal (EAT) decision that highlights the dangers of contacting employees who have been on sick leave for a long time.
It’s a tightrope; employers should keep absent staff in the loop but not cause them distress by unwanted contact.
In this case of the EAT held that an employee was constructively dismissed because of the content of a letter she received from her employer while she was on sick leave.
The dangers include a claim for unfair constructive dismissal because the contact breaches the implied term that (effectively) the parties should not act unpleasantly towards each other.
The usual situation that is relevant is when an employee is off with a mental condition including depression or anxiety.
The employer in this case sent two letters to the employee, who responded saying that she was in “no fit state to communicate without breaking down”.
A month later, they sent another letter, proposing a meeting. But it wasn’t a meeting about her absence. They were trying a different tack – criticising her performance. But none of the complaints were urgent and most had already been dealt with. It was a cruel, tactical letter.
The employee resigned and claimed constructive dismissal and unfair dismissal, disability discrimination, harassment and other claims.
She won her claims for constructive and unfair dismissal.
This is a case of particular interest to two of our Walsall clients, who are in the same position at the moment; off sick and wanting to resign. The case emphasises how careful employers and HR need to be in this kind of situation.
Employers need to do some communicating with an employee during their absence; after it would be unreasonable to make them feel ignored. A common complaint is that they feel left out of the loop.
Employment lawyers warn employers to keep contact to a minimum and stick to their return to the workplace. Disciplinary and performance issues should not be broached, nor should other work-related issues unless they are urgent.
It is sensible to check that absence policies reflect this, to avoid managers making mistakes. In fact, it is good practice to ensure that employees who may be suffering from mental illness are only contacted by a named person, ideally in HR.
From the employee’s point of view, if they are wanting to leave with a potential claim for unfair constructive dismissal it is important to know that remaining off work sick is rarely helpful because the time away from the office reduces the likelihood of a breach of contract taking place. Often, for the sake of their health they should stay off sick, but for the sake of their claim they should get back to work.
Case report: Hodkinson v Private Medicine Intermediaries Ltd