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Employment E-Bulletin – April 2019

​At the time of writing uncertainly still surrounds how/ when/ if we leave Europe and we have had a number of clients ask us whether the UK's separation from the EU will have an immediate or even a long term effect on UK employment law.​

Much of EU employment law has been brought into effect via UK legislation, which will remain in force post-Brexit until amended. Changes to primary legislation require Parliamentary approval and with the pressure on parliamentary time in the face of a looming EU exit the most probable effect will be delays to the implementation of employment law reform such as those proposed in 2018's Good Work Plan which included the proposal to extend the length of the gap in employment necessary to break continuity from one week to four weeks.

Many employment rights, including unfair dismissal and the minimum wage, do not in fact stem from the EU and in some cases the UK deliberately provides protection which exceeds the EU minimum, a prime example being maternity leave.

Although, post-Brexit, UK courts and tribunals would not refer cases to the European Court of Justice or be obliged to follow new decisions from that court, it is less clear how they would deal with existing UK case law stemming from EU decisions.

The UK has come to expect a certain level of workplace protection, and wholesale changes to the likes of, for example, discrimination law, seem highly unlikely. Like the rest of the world, we will just have to wait and see...

In this issue:

  • Data breaches - when employees go rogue
  • Are Uber drivers workers?
  • Unfair dismissal after drugs test
  • Part-time workers' pay
  • Redundancy trial periods
  • Whistleblowing
  • Holiday pay
  • And finally...

Data breaches - when employees go rogue

Is an employer responsible for the actions of an employee who has 'gone rogue' and deliberately posted sensitive employee data online? Yes, the Court of Appeal has said in Morrisons v Various Claimants. Mr Skelton was an internal auditor at Morrisons. He had been recently disciplined and held a grudge against the company. He took sensitive personal data relating to thousands of employees and posted it online. He then told newspapers it was there. The data included names, bank details and salary information.

Mr Skelton was convicted of fraud and various other offences. He was sentenced to 8 years in prison. The employees sued Morrisons. Amongst other things, the employees claimed that Morrisons was vicariously liable for the actions of Mr Skelton in leaking the data.

The Court of Appeal agreed that Morrisons was vicariously liable. There was enough connection between Mr Skelton's job role and the conduct in question. Mr Skelton's motive (to cause harm to the employer) was irrelevant. The Court highlighted that to conclude otherwise might leave an individual who suffered financial loss (because of a data breach) with no recourse except against the perpetrator. The Court advised that employers should insure against the risk of losses caused by dishonest or malicious employees.

This is a worrying case for employers. The safe storage of personal data is vital for employers. Insurance should be secured if it is not already in place. The actions of even the most trusted employees should be monitored. Particular attention should be paid to employees who might bear grudges due to recent disciplinary or grievance proceedings.

Are Uber drivers workers?

The Court of Appeal has confirmed that Uber drivers are workers rather than self-employed, in Uber v Aslam.

The drivers' contracts described them as independent contractors. They had to undertake an interview and an induction. They had to perform the work personally. Drivers used their own vehicles, but Uber stipulated appropriate brands and presentation standards.

In providing jobs, Uber controlled the key information. They would provide drivers with a passenger's first name but no surname, contact details or destination. Uber had complete control of the fares. Financial penalties could be incurred for departing from Uber's suggested route.

When signed onto the Uber App, drivers did not have to accept jobs. However, Uber's terms said drivers should accept at least 80 per cent of trips. There was an expectation that drivers would accept jobs whilst logged onto the App. Drivers who declined more than three jobs in a row would be signed off the App by Uber. If a driver's average rating fell below 4.4 (out of 5), they would be removed from the platform and their accounts deactivated.

The employment tribunal found that the drivers were workers when they had switched on the App, were in their working 'territory' and able and willing to accept jobs. The employment appeal tribunal agreed. The Court of Appeal upheld the drivers' worker status. The contractual documents did not reflect the true nature of the relationship between Uber and its drivers. Uber exerted significant control over its drivers. The Court also confirmed that the drivers were 'workers' from the moment they were in their working territory with the App switched on – they were at the disposal of Uber during this time.

Interestingly, this decision was a 'majority' decision. A very experienced judge did not agree that the drivers were workers. He said that the position was similar to taxi drivers who are usually self-employed. He also said the drivers should only be treated as 'working' when they had accepted a trip. The case has been referred to the Supreme Court. We have not yet heard the last word on worker status.

Unfair dismissal after drug's test

Is it fair to dismiss an employee in the transport industry who fails a drugs test? Not always, said the employment tribunal recently.

Ball v First Essex Buses looked at the range of reasonable responses test in conduct dismissals and shows how an employer can come unstuck even in seemingly clear-cut cases.

A bus driver was dismissed for failing a drugs test. He had been employed for 20 years with an unblemished disciplinary record. He was diabetic. He did finger prick blood tests throughout the day and would lick his fingers to stop the bleeding. His bus route took in lots of students and he handled lots of cash. He argued that his drug test had been contaminated by cocaine on bank notes. He also argued that the test was conducted without gloves or prior handwashing and so was open to contamination. He provided his own drug tests which tested negative for cocaine.

The employment tribunal found that the employer's decision to dismiss was not within the range of reasonable responses. The employer made mistakes about their own drug and alcohol testing policy during the dismissal process. They failed to follow their own procedures, which said they would take an employee's own evidence into account. There were also flaws in the investigation. Given the issues of contamination and the employee's own negative tests, the employer should have undertaken additional investigation.

It might seem surprising that an employee in the transport sector who fails a drugs test can win an unfair dismissal case. Employers should not take drug test results as gospel especially in the face of conflicting evidence and contamination issues. Employers should also ensure that managers know the detail of company procedures and follow them religiously.

Part-time workers' pay

How easy is it for an employer to impose a pay freeze? In Abrahall v Nottingham City Council, the Court of Appeal decided that a group of employees had not 'agreed' to a pay freeze when they continued to work without protest afterwards.

In 2011, the Council imposed a two year pay freeze. The recognised unions objected, but did not raise a formal grievance. Two years went by before the Council tried to freeze pay again in 2013.

At that point, employees brought claims for unlawful deduction from wages based on their contractual right to a pay rise.

The Court of Appeal decided that the employees had not accepted the earlier pay freeze. Despite working for two years without protest, the trade union had protested on behalf of employees at the time of the pay freeze. The Court also noted that the employees had continued to work when the contractual change was of no benefit to them. The Court concluded that the employees' actions did not show 'unequivocal acceptance' of the change.

This case shows how complex the process of changing terms and conditions can be. Employers should remember that the safest way is to get an employee's express written agreement to any proposed changes.

Redundancy trial periods

Can an individual employed as 'bank staff', with no guaranteed hours, be an 'employee'? Ms Lane-Angell worked for Hafal assisting vulnerable adults in police detention. Her contract said there were 'no guaranteed hours' and Hafal would use her services 'as and when they are required, if you are available'. Ms Lane-Angell would communicate her availability which was put into a rota. When on the rota she was expected to work if required.

There was a poorly enforced 'three strikes and off' rule where staff were taken off the rota if they missed calls whilst on duty. Ms Lane-Angell missed calls and stopped receiving work. She then claimed unfair dismissal as an employee. But was she an employee?

The employment tribunal said yes. When work was offered to Ms Lane-Angell, she had to accept it or there were potential sanctions. There was an 'umbrella' contract which existed between her and Hafal. An umbrella contract is an overarching contract of employment which spans a series of individual contracts (in this case, the shifts she worked) and links them together. Hafal appealed to the Employment Appeal Tribunal.

The EAT agreed with the employer and said she was not an employee. The tribunal had not properly considered the original contract. The terms were clear that there was no obligation to provide or accept work. The facts showed that the 'three strikes' rule only applied when Ms Lane-Angell was on the rota. The tribunal was wrong to say there was mutuality of obligation during the periods in between shifts when there was no obligation to provide or accept work. Accordingly each break reset the 'continuity of service' clock to zero. There was no umbrella contract and she was not an employee.

This is a good result for the employer, and highlights the importance of having clear terms of engagement with workers.


Can co-workers be liable for whistleblowing dismissals along with the employer?

Yes, the Court of Appeal has said in Timis v Osipov. Mr Osipov was the employer's CEO. Two directors decided to dismiss him after he made protected disclosures. The employee brought claims against the company for whistleblower dismissal under section 103A of the Employment Rights Act 1996. He also brought claims against the directors (as well as the employer) under section 47B of the same Act for detriments which led to his dismissal.

Mr Osipov won his unfair dismissal claim against the employer (only an employer can be responsible for an unfair dismissal claim). He also won claims for detriment against both the employer and the directors. Together with the employer, the directors were jointly responsible for the losses flowing from the dismissal because it was caused by their detriments. The company became insolvent. Could the employee claim all the compensation from the directors, which amounted to over £2million?

The Court of Appeal said yes. The directors tried to use an exclusion contained in s47B(2), which excludes detriment claims that amount to unfair dismissal. The Court confirmed that a whistleblowing unfair dismissal claim should be brought under section 103 and not section 47B. But claims for detriment involving dismissal can still be brought against a co-worker under section 47B. If dismissal – the most serious of possible detriments – were excluded from the possible claims brought against a co-worker, it would make a mockery of the protection. It would create the situation where individuals would be better off dismissing a whistleblower than subjecting them to lesser detriments, to escape personal liability.

This case is concerning for employers, especially managers. Detriment claims against individuals relating to dismissals are rare. However, in small businesses or those with limited financial means, co-workers may be more vulnerable to claims. Employers should ensure systems are in place to manage protected disclosures properly and fairly.

​Holiday pay

Do workers lose the right to a payment in lieu of holiday at the end of their employment if they did not try to take it? No, said the Court of Justice of the European Union in Kreuziger v Berlin.

The employee worked for a German public sector employer. His employment ended but the employer would not pay him in lieu for untaken holiday. The employee brought a claim. The German court agreed with the employer. It relied on national rules saying payment in lieu was only necessary if the employee had been prevented from taking the holiday by matters beyond his control. The appeal court doubted this were true and referred the matter to the CJEU.

The CJEU said that national laws can only provide for the loss of holiday entitlement if the employer can show that it enabled the worker to take the leave. The employer must provide information to the employee, who is given an effective opportunity to take the holiday. The case was joined with another case for an employee employed in the private sector. The CJEU confirmed that a private sector employee can rely on his individual rights to paid holiday under the European Charter of Fundamental Rights directly against his employer. If national laws clashed with the Charter, national courts must disapply any offending national provision to give effect to European law.

This case suggests that, contrary to previous assumptions, entitlement does not automatically lapse at the end of a holiday year unless the employer has actively enabled the employee to take it. Employers should consider whether they do enough to encourage their employees to take holiday.

And finally...

The employment tribunal will decide this month whether ethical veganism is protected by the Equality Act 2010 as a 'philosophical belief', akin to a religion.

Jordi Casamitjana will have to show that his ethical veganism meets the legal test:

  • his belief is genuinely held; it is a belief rather than an opinion;
  • it relates to a weighty and substantial aspect of human life;
  • it attains a certain level of seriousness and cogency; and
  • it deserves respect in a democratic society.
  • He claims that he was dismissed by the League Against Cruel Sports because of his philosophical belief in veganism.

This case comes hot on the heels of William Sitwell's resignation from Waitrose Food magazine after comments he made in a private email to a freelance journalist hit the press. Well known for his acerbic tongue, Mr Sitwell jokingly suggested killing vegans one by one and force feeding them meat. His comments were meant to be funny, but the fall out was far from it.

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