Employment law – a review of the year
We look back at the major developments in employment legislation and highlights of case-law during the course of 2016.
Zero Hour Contracts
In January the prohibition of exclusivity clauses in zero-hour contracts came into effect, with associated rights for zero hours employees not to be unfairly dismissed or subjected to detriment for failing to comply with exclusivity clauses. During the year there has been an emerging trend of employers offering staff on zero hours contracts the opportunity to switch to permanent contracts with guaranteed hours. New Zealand meanwhile has banned zero hours contracts outright.
Modern Slavery Act annual statements
The first annual slavery and human trafficking statements have been published during the course of the year, with mixed reviews about their quality and the organisational commitment to combatting modern slavery which the statements indicate. The statutory requirement to publish these annual statements applies to commercial organisations which have a turnover above £36 million.
Childcare vouchers during maternity leave
In March the Employment Appeal Tribunal decided that childcare vouchers provided through salary sacrifice do not need to be provided during maternity leave, since they form part of the employee’s ‘remuneration’ (Peninsula Business Services Ltd v Donaldson). The judgment has received some criticism in the legal press, and further case-law in this area might reach different conclusions.
Also in March the Supreme Court reviewed the law of vicarious liability in the workplace (Cox v Ministry of Justice and Mohamud v WM Morrison Supermarkets plc). The court expanded the doctrine to establish employer liability in situations beyond the employer/employee relationship, for example liability for the actions of a volunteer. The court also confirmed the need for there to be a close connection between the individual’s wrongful conduct and the position in which the individual is engaged in order to establish employer liability.
In a case reported this month (Bellman v Northampton Recruitment Ltd), the High Court found that there was not a sufficiently close connection where a director assaulted an employee in a hotel bar following the company’s Christmas party. As a result the company was not liable for the assault.
National Living Wage
The National Living Wage was introduced in April, setting a minimum pay rate of £7.20 per hour for workers aged 25 and over. This rate will increase next April to £7.50 per hour.
Penalties for unpaid Tribunal awards and settlement payments
Since April financial penalties may be imposed on employers in relation to unpaid Tribunal awards or sums due under ACAS COT3 agreements including accrued interest. The penalties are 50% of the unpaid sum subject to a maximum of £5,000.
Confidentiality of pre-termination negotiations
In June the Employment Appeal Tribunal gave guidance about the scope of the confidentiality of pre-termination negotiations under section 111A Employment Rights Act 1996 (Faithorn Farrell Timms LLP v Bailey). Inadmissibility, in relation to unfair dismissal claims, extends to the fact of these negotiations and not just the details of settlement offers made. It also extends to the employer’s internal communications about the settlement discussions, for example between a manager and the HR department.
Shared parental pay
In August an Employment Tribunal awarded a male employee £23,000 for sex discrimination where mothers were entitled to enhanced shared parental pay but fathers were entitled only to the statutory level of pay (Snell v Network Rail Infrastructure Ltd).
Employment status in the gig economy
The case this year which attracted the highest media attention was the test-case brought by drivers against the online taxi business Uber (Aslam and others v Uber). In October the Employment Tribunal ruled that these drivers fell within the statutory definition of ‘worker’ for the purposes of the minimum wage and rights to rest-breaks and paid holiday leave. Uber has stated that it will be seeking to appeal the decision.
Rest-breaks under the Working Time Regulations
In a judgment last month (Grange v Abellio London Ltd) the Employment Appeal Tribunal ruled that employers have a positive duty to enable workers to exercise the right to a rest-break, whether or not it has been requested. The employer will be in breach of the Working Time Regulations where its working arrangements in practice prevent rest-breaks being taken.