NEWSLETTER EMPLOYMENT TRIBUNAL REJECTS CLAIM OF RELIGIOUS DISCRIMINATION BY CHRISTIAN OPPOSED TO SAME-SEX ADOPTION EMPLOYMENT.

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1 January 2018 NEWSLETTER EMPLOYMENT EMPLOYMENT TRIBUNAL REJECTS CLAIM OF RELIGIOUS DISCRIMINATION BY CHRISTIAN OPPOSED TO SAME-SEX ADOPTION In Page v NHS Trust Development Authority, an Employment Tribunal has dismissed a claim of religious or belief discrimination by a Christian non-executive director who had been removed from office after publicising his opposition to same-sex adoption in the national media. Jesper Christensen (Partner) E jesperchristensen@bdb-law.co.uk T +44 (0) Mr Page served as a nonexecutive director of the Kent and Medway NHS and Social Care Partnership Trust, and also sat as a lay magistrate. He is a devout Christian who believes that it is in the best interests of every child to be brought up by a mother and a father, and is therefore against adoption by same-sex couples. Mr Page was issued with a reprimand in relation to a magistrates case involving same-sex adoption after he was found to have been influenced by his religious beliefs. He subsequently gave interviews to local and national media, challenging the reprimand and re-stating his views. The Trust s Chairman made it clear to him that expressing his personal views in this way could undermine confidence in the Trust s commitment to equality, particularly within the LGBT community. However, Mr Page continued to engage with the media, even after he was removed as a magistrate for serious misconduct. Following disciplinary proceedings, the Trust concluded that it was not in the best interests of the health service for Mr Page to continue as a non-executive director. This was due largely to his highly public response to his removal from the magistracy; the negative impact this could have on the confidence of NHS staff, patients and the public; and his lack of personal responsibility and insight into the impact of his actions. Mr Page brought several Employment Tribunal claims including direct religious or belief discrimination. The Tribunal accepted that his belief that it is always in the best interests of a child to be brought up by a mother and a Bircham Dyson Bell LLP Broadway London SW1H 0BL 51 Hills Road Cambridge CB2 1NT

2 2 January THIS CASE SHOWS THE IMPORTANCE OF DISTINGUISHING BETWEEN A RELIGIOUS BELIEF AND THE INAPPROPRIATE PROMOTION OF THAT BELIEF... father satisfied the wide interpretation given to belief under the Equality Act However, the Tribunal held that he was not removed because of his religion, or because of his personal beliefs on same-sex adoption. He was removed because he had accepted invitations to appear on national television and other media without informing the Trust, despite specific requests to do so, and because he was unwilling to distinguish between his personal views and what was appropriate for a senior NHS professional to say to the media. The Tribunal rejected Mr Page s argument that his religious views could not be distinguished from the manner in which he chose to express them. This case shows the importance of distinguishing between a religious belief and the inappropriate promotion of that belief. Employers should ensure that they have a clear up-to-date policy setting out the procedure for employees and directors when making public comments, including obtaining permission in advance where necessary and the consequences of noncompliance. Mr Page has indicated that he intends to appeal the judgment and is supported by Christian Concern.

3 3January 2018 EMPLOYMENT APPEALS TRIBUNAL CONFIRMS THAT UBER DRIVERS ARE WORKERS In Uber BV and others v Aslam and others, the Employment Appeals Tribunal (EAT) has upheld the Employment Tribunal s decision that Uber s drivers are workers and not self-employed contractors. Nicholas Le Riche (Partner) E nicholasleriche@bdb-law.co.uk T +44 (0) The Employment Tribunal had ruled that most features of Uber s relationship with its drivers are indicative of worker status, most importantly the significant degree of control exercised by Uber over the way in which drivers work, the fact that the drivers cannot in practice accept work from other sources, and the lack of a right of substitution. On appeal, Uber argued that the Tribunal had been wrong to reject its contention that it is not a taxi service provider, but simply a technology platform acting as an agent for selfemployed drivers by using the Uber app to put them in touch with passengers. The EAT disagreed, ruling that it was difficult for Uber to argue that there is a principal and agent relationship when there is no direct written agreement between the drivers and Uber London Limited, which holds the operating licence in London. In reality, the drivers are incorporated into Uber s business of providing taxi services. As the Tribunal had noted, it was unlikely that 30,000 individual drivers sharing one point of contact could be operating as separate businesses. The EAT also held that the Tribunal was right to conclude that the very detailed contractual documents do not reflect the reality of the working relationship between Uber and its drivers, particularly given the inequality in bargaining power. The EAT had more difficulty with the issue of precisely when the drivers are working for the purposes of their entitlement to the National Minimum Wage. However, the EAT also approved the Employment Tribunal s finding that the drivers are working once they have switched on the app, are within the territory in which they are authorised to work, and are able and willing to accept assignments from Uber. It is reported that Uber intends to appeal the EAT s decision in the Court of Appeal, and the final outcome of this litigation is therefore unlikely to be decided for some time. Although the judgment provides some guidance on how employment status will be assessed for organisations using a similar business model, this will always depend on the particular facts and circumstances of each case. Employers who use selfemployed contractors and app-based services are advised to check whether written agreements reflect the reality of their working relationship and to assess any potential financial and reputational risks involved in their current business model.

4 4 ENTITLEMENT TO PAID ANNUAL LEAVE CARRIES OVER INDEFINITELY WHERE AN EMPLOYER HAS DENIED A WORKER THE RIGHT TO PAID LEAVE January 2018 The Working Time Regulations, which implement the EU Working Time Directive, provide that statutory holiday entitlement expires at the end of each leave year if it has not been taken. Caroline Yarrow (Partner) E carolineyarrow@bdb-law.co.uk T +44 (0) Case law has established that the only exception to this is where a worker has been unable to take holiday due to sickness absence, although employers do not have to allow carry-forward for more than 18 months after the end of the holiday year in which leave accrued. However, in King v The Sash Window Workshop Ltd, the ECJ has ruled that a salesman who was wrongly treated as self-employed was entitled to be paid on termination for holiday accrued at any time during his 13 year engagement where he was discouraged from taking it because it would have been unpaid. This is a highly significant decision for employers who have classified individuals as self-employed when in reality they are workers. Mr King worked for The Sash Window Workshop as a commission-only salesman for 13 years. Since he was engaged on a self-employed basis, he received no salary and was not paid for holiday or sickness absence. When Mr King reached 65, his contract was terminated and he subsequently brought claims for age discrimination and holiday pay. The Employment Tribunal held that Mr King was a worker. His age discrimination claim was successful and was not appealed. He was also awarded pay for holiday accrued in his final leave year but untaken at the date of termination; and for unpaid leave taken in previous years, which was claimed as a series of unlawful deductions from wages. However, his claim for leave accrued but untaken in previous years was eventually referred to the ECJ by the Court of Appeal. The company argued that because holiday not taken in a leave year is lost, Mr King was not entitled to pay for any accrued but untaken holiday in respect of previous leave years. Mr King argued that he had not taken his full leave entitlement only because he would not have been paid for it, and that he had therefore been prevented from exercising his basic right to paid leave under the Working Time Directive. The ECJ agreed with Mr King, ruling that a worker is entitled to be paid on termination for any periods of annual leave that have accrued during their employment where they were discouraged from taking it because it would have been unpaid. It was irrelevant that the company wrongly believed that Mr King was self-

5 5January 2018 employed and therefore not entitled to paid holiday, since employers are responsible for ensuring correct employment status. The ECJ also held that there was no limit on the amount of holiday that could be carried over, nor on the number of leave years it could be carried over from. This only applies to the four weeks holiday provided by the Directive, not the additional 1.6 weeks under the UK Working Time Regulations. In its judgment the ECJ stressed that any act or omission by an employer that deters a worker from taking holiday is contrary to the purpose of the Working Time Directive, and that employers must bear the consequences of misclassifying a worker as self-employed. This is therefore a very significant case for employers who have wrongly labelled workers as selfemployed contractors. In theory, back pay claims for holiday which was not taken because it would have been unpaid could date back to when the Working Time Directive came into force. Mr King s case will now return to the Court of Appeal which will have to decide whether the Working Time Regulations are consistent with the ECJ s ruling. Since Mr King continued to work instead of taking holiday, it will also have to decide how his financial loss will be calculated. CENTRAL ARBITRATION COMMITTEE RULES THAT DELIVEROO RIDERS ARE NOT WORKERS In Independent Workers Union of Great Britain (IWGB) v RooFoods Ltd (t/a Deliveroo), the Central Arbitration Committee (CAC) has considered the IWGB s application to the CAC for statutory recognition in respect of Deliveroo s riders in the Camden area. Brian Gegg (Partner) E briangegg@bdb-law.co.uk T +44 (0) Statutory recognition only entitles unions to conduct collective bargaining on behalf of workers in the bargaining unit. Deliveroo argued that the IWGB s application could not be accepted because the drivers are self-employed rather than workers. Deliveroo is an app-based service which enables customers to order takeaway food from participating restaurants for delivery by cycle, scooter or motorcycle riders. Riders enter into non-negotiable supplier agreements with Deliveroo in which they are described as independent contractors. The agreement also states that riders can work for other organisations, including competitors; Deliveroo is under no obligation to provide work; and riders are not required to wear branded clothing. Riders supply their own transport and smartphone, and pay a refundable deposit of 150 for a supplier pack which includes a branded jacket, thermal box and bags to transport food. When logged into the Deliveroo app, riders can mark themselves as available or unavailable and can accept or decline jobs with no repercussions. The Camden riders are paid on a nonnegotiable fee per delivery basis. Given that these factors point towards selfemployment, the key question for the CAC was whether the riders are obliged to perform services personally. Case law has shown that, where there is a genuine and unfettered right of substitution,

6 6 January THE RIDERS HAVE A GENUINE AND ALMOST UNFETTERED RIGHT OF SUBSTITUTION AND THAT SINCE THEY ARE NOT OBLIGED TO PROVIDE PERSONAL SERVICE, THEY ARE NOT WORKERS... the individual is not obliged to perform services personally and will therefore be classed as self-employed. Deliveroo s contracts contain a number of provisions relating to substitution, including: riders may provide a substitute, who may be employed or engaged directly by the rider, to perform the delivery. There is no need to obtain Deliveroo s approval, or even inform them, unless the substitute is using a different vehicle type, which might affect delivery times; it is the rider s responsibility to ensure that the substitute has the necessary skills and training; the substitute must either carry the rider s phone or be given the rider s login details so that they can log into the app to ensure the location of the delivery can be monitored; the rider is responsible for a substitute s performance; and the rider is paid for the substitute s work and any arrangements for paying the substitute are between the rider and their substitute. Crucially, there was evidence of this right of substitution being used in practice, one Deliveroo rider having subcontracted work for a 15-20% share in the delivery fee. The CAC therefore concluded that the riders have a genuine and almost unfettered right of substitution and that since they are not obliged to provide personal service, they are not workers. The IWGB s application for recognition was therefore rejected. The facts in this case are very different to the Uber, Excel and CitySprint cases, where the main issue was the degree of control and subordination rather than whether there was an obligation to provide services personally. As this case illustrates, a right of substitution will usually be fatal to a claim for worker status. Although employers often include substitution clauses in contracts with service providers, this will not be sufficient to avoid a finding of worker status if the right to substitute is not genuine or cannot be exercised in practice.

7 7January 2018 SELECT COMMITTEES PUBLISH RESPONSE TO TAYLOR REVIEW OF MODERN WORKING PRACTICES The Work and Pensions Committee and the Business, Energy and Industrial Strategy Committee have completed a joint inquiry into the Taylor Review of Modern Working Practices which was published in July On 20 November 2017 the Committees published their report, A Framework for Modern Employment. Zoe Merrikin (Solicitor) E zoemerrikin@bdb-law.co.uk T +44 (0) This makes 11 key recommendations for the Government, many of which reflect the findings of the Taylor Review. The report is accompanied by draft legislation designed to implement these recommendations. As yet there has been no specific response from the Government to the Taylor Review or this latest inquiry. The Committees recommendations include: legislation to provide greater clarity on how to determine worker or employee status, setting out the relevant factors to consider; legislation to introduce a rebuttable presumption of worker status where employers have a selfemployed workforce above a certain size; a pilot scheme enforcing a pay premium on the National Minimum Wage and National Living Wage for workers who do not have guaranteed hours, in order to compensate them for this uncertainty; legislation to allow employees a gap in service of up to one month, rather than the current one week, without breaking continuity of employment for the purposes of accruing employment rights; legislation to allow class actions in disputes over wages, worker status and working time, in order to make it easier to enforce employment rights across a company s workforce; an obligation on Employment Tribunals to consider punitive fines and costs orders if an employer has already lost a similar case; extend the right to receive a written statement of employment particulars to cover workers as well as employees, and within seven days of starting a new job rather than the current two months; allow workers to be counted towards the 50 employees needed for the Information and Consultation of Employees Regulations to apply, and reduce the threshold for an employee request to negotiate from 10% to 2% of the workforce; abolish the Swedish Derogation and give the Employment Agency Standards Directorate greater powers and resources to enforce compliance with the Agency Workers Regulations 2010; introduce greater deterrents against repeat or serious breaches of employment legislation, including punitive fines and naming and shaming ; and provide the Director of Labour Market Enforcement with sufficient resources to prevent the abuse of employment rights.

8 8 EMPLOYMENT TAX CHANGES The Treasury has announced that although the National Insurance Contributions Bill will be introduced into Parliament in 2018, the measures contained in it will not take effect until April 2019, one year later than originally planned. The delay will allow time for consultation on the impact of the abolition of class 2 NICs on self-employed individuals with low profits. This also means that the extension of Class 1A NICs to termination payments in excess of 30,000 will now take effect on 6 April 2019 rather than 6 April However, it appears that changes to the taxation of payments in lieu of notice (PILONs) will still go ahead in Accordingly all PILONs, rather than just contractual PILONs, will be treated as taxable earnings from 6 April 2018 meaning that employers may need to review the structure of their termination payments and Settlement Agreements as a result. All employees will pay tax and Class 1 NICs on the amount of basic pay that they would have received if they had worked out their notice in full. Ian Wasserman (Associate) E ianwasserman@bdb-law.co.uk T +44 (0) AND FINALLY... January 2018 Tim Hayes (Associate) E timhayes@bdb-law.co.uk T +44 (0) The Autumn 2017 Budget contained the following announcements on pay and benefits: the National Minimum Wage rates will increase from April 2018: for apprentices the rate will rise to 3.70 per hour (from 3.50); for year olds to 4.20 (from 4.05); for year olds to 5.90 (from 5.60); and for year olds to 7.38 (from 7.05); the National Living Wage, for those aged 25 and over, will increase from 7.50 to 7.83 an hour from April 2018, an increase of 4.4%; the tax free personal allowance will rise from 11,500 to 11,850 in April The higher rate tax threshold will also increase from 45,000 to 46,350; during 2018 the Government will consult on extending the IR35 reforms, introduced in the public sector in April 2017, to the private sector; and the Government also intends to publish a discussion paper on employment status as part of its response to the Taylor Review. The Department for Work and Pensions has announced the

9 9January 2018 proposed increases to statutory benefit payments from April Statutory maternity, paternity, adoption, shared parental pay and maternity allowance will all be per week (up from ). Statutory sick pay will increase to (from 89.35). After a phased introduction during October 2017, the Government has now rolled out in full the refund scheme for Employment Tribunal and EAT fees paid between 29 July 2013 and 26 July The scheme is open to both claimants and respondents, including those who had to reimburse their opponent s fee pursuant to an order. The scheme is also open to representatives and sponsors who paid a fee on behalf of a party to a claim. Most refund applications can be made online on the relevant form. The Information Commissioner s Office (ICO) has updated its guide to the General Data Protection Regulation (GDPR). This contains more detail on several key areas including consent; the lawful basis for processing; automated individual decision-making; and documentation requirements. It also incorporates the guidelines on consent and transparency published by the Article 29 Working Party which are due to be finalised in early 2018 once consultation is complete. The ICO s guidance and checklists will be regularly updated to help organisations prepare for the fundamental changes in data protection law from 25 May 2018 when the GDPR comes into effect. Following extensive consultation, the Institute for Apprenticeships has published its final statement setting out the requirements for high quality apprenticeships. This will also be used as the basis for the development of its Quality Strategy with employers and other stakeholders. The statement includes an explanation of apprenticeships...government HAS ANNOUNCED IT WILL DOUBLE THE NUMBER OF TIER 1 VISAS AVAILABLE TO INDIVIDUALS IN THE DIGITAL TECHNOLOGY, ARTS, SCIENCE AND CREATIVE INDUSTRIES... as well as details of the key indicators for high quality apprenticeships and how these will be measured. The Government has announced that it will double the number of Tier 1 (Exceptional Talent) visas available to individuals in the digital technology, arts, science and creative industries from 1,000 to 2,000 each year. As now, these individuals must be recognised as existing global leaders or promising future leaders by one of five endorsing organisations: the British Academy, the Royal Society, the Royal Academy of Engineering, Arts Council England and Tech City UK. The usual requirements of maintenance and English language proficiency do not apply to initial applications for this visa and successful applicants may be employed or self-employed, work for any employer and take up a position at any level.

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