NEWSLETTER EMPLOYMENT TRIBUNAL RULES THAT CYCLE COURIER IS A WORKER EMPLOYMENT. May 2017

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1 May 2017 NEWSLETTER EMPLOYMENT EMPLOYMENT TRIBUNAL RULES THAT CYCLE COURIER IS A WORKER In the recent case of Boxer v Excel Group Services Ltd (in liquidation), an Employment Tribunal has ruled that a cycle courier was a worker and therefore entitled to receive holiday pay. Jesper Christensen (Partner) E jesperchristensen@bdb-law.co.uk T +44 (0) Mr Boxer began working for Excel as a cycle courier in He brought a claim against Excel in the Employment Tribunal for one week s holiday pay in respect of holiday taken, but not paid, in March Excel argued that he was self-employed. Mr Boxer signed two contracts during his engagement which referred to him as a contractor and subcontractor, and he was selfemployed for tax purposes. He also provided his own bicycle, mobile phone and protective clothing. However, other factors persuaded the Tribunal that he was a worker: he worked nine hours a day for five days a week; he had to be available at all times during the working day; he could only take time off or change hours by giving notice to the company; he had to carry Excel ID at all times; although his contract stated that he could work for third parties, this was not the reality; he was paid according to a fixed, non-negotiable tariff and received a monthly document informing him what he was being paid; although his contract stated that he should have insurance and might be liable for losses and breakages, in practice, this risk was borne by the company; and because courier work is usually urgent, in practice the only person who could act as a substitute for Mr Boxer would be another Excel courier. This made the conditional substitution clause in his contract irrelevant. The Tribunal also noted that although the contract stated that Mr Boxer could generally determine the manner of performance of his duties, in reality, the relationship was tightly controlled by Excel. This was a necessity because of the Bircham Dyson Bell LLP Broadway London SW1H 0BL 51 Hills Road Cambridge CB2 1NT

2 2 May BUSINESSES ENGAGING SELF- EMPLOYED CONTRACTORS MUST ENSURE THAT THE DAY-TO- DAY REALITY OF THEIR WORKING RELATIONSHIP REFLECTS THE WRITTEN DOCUMENTATION... time-critical nature of the work. Applying the recent Court of Appeal judgment in Pimlico Plumbers Ltd v Smith, the Tribunal concluded that this was another case where the written contract did not reflect the reality of the working relationship. Just as Pimlico Plumbers had with its plumbers, Excel was marketing itself to clients on the basis that it had its own dedicated couriers who worked for the business, but sought to maintain an independent contractor relationship as between itself and its couriers. The Tribunal also commented on the significant inequality of bargaining power when Mr Boxer signed his contract. Looking at the relationship as a whole, the Tribunal concluded that Mr Boxer was a worker, not a self-employed contractor. It should be noted that Excel s courier business was sold to CitySprint in September 2016 and Excel did not attend or provide evidence at the Tribunal hearing. However, this decision is consistent with the reasoning in the recent Pimlico Plumbers and CitySprint judgments. It is yet another reminder that businesses engaging self-employed contractors must ensure that the day-to-day reality of their working relationship reflects the written documentation. In the current climate, employers face a higher risk of claims seeking to establish worker status in order to receive holiday pay and other rights. This increases the importance of ensuring that all staff are clear about the nature of their employment status, and of dealing sensitively with issues raised by staff relating to their statutory entitlements.

3 3May 2017 EMPLOYMENT APPEALS TRIBUNAL CONSIDERS HOW TO DETERMINE THE PRINCIPAL PURPOSE OF ORGANISED GROUPING OF EMPLOYEES IN SERVICE PROVISION CHANGES UNDER TUPE TUPE will only apply to a service provision change (SPC) where, immediately before the SPC, there is an organised grouping of employees which has as its principal purpose the carrying out of the activities concerned on behalf of the client. In Tees Esk & Wear Valleys NHS Foundation Trust v Harland and others, the EAT has given guidance on the correct approach to determining the principal purpose of an organised grouping of employees. Caroline Yarrow (Partner) E carolineyarrow@bdb-law.co.uk T +44 (0) Mrs Harland and the other claimants in this case were initially part of a team of 27 carers which was put together in order to provide care to a patient (CE) with severe learning difficulties in a residential home. Over time, CE s condition gradually improved and by 2012 the team was reduced to eleven carers, who also looked after other residents in the home if required. The contract for the provision of care to CE was then re-tendered and awarded to a new provider, Danshell Healthcare Limited, in January The Trust identified seven employees out of the team of eleven whose employment was to transfer to Danshell under TUPE, selected on the basis that they had been engaged in caring for CE for more than 75% of their shifts in the year up to June The claimants wished to remain in the employment of the NHS and argued that TUPE did not apply to the change in service provider for CE s care. At a preliminary hearing, the Employment Tribunal agreed that no SPC had taken place for the purposes of TUPE. There was an organised grouping of employees which had originally been formed specifically for the purpose of providing care to CE, and this grouping had maintained its identity up until the transfer. However, its purpose had been diluted over time. The employees now provided 375 working hours per week, whereas CE only required 125 hours of care per week. This meant that the principal purpose of the organised grouping was no longer the provision of care to CE, which meant that TUPE did not apply. The Trust appealed, largely on the basis that when determining the principal purpose of the grouping, the Employment Tribunal should have looked at the Trust s intention when it organised the grouping, rather than the actual activities carried out by the employees. However, the EAT upheld the Tribunal s decision. It held that the Tribunal was correct to analyse the activities of the grouping immediately

4 4 before the change in service provider and was entitled to conclude that the grouping s dominant purpose was providing care to other residents in the care home. Case law has established that in order to constitute an organised grouping, employees must be organised by reference to the requirements of the client and be identifiable as members of that client s team. The principal purpose of the grouping will depend on the particular facts, and may vary over time. As this case illustrates, if the grouping has too many employees for the activity concerned, or carries out other work, this suggests that the real purpose of the grouping could be something else. This means that Tribunals will need to consider the dominant purpose of the grouping immediately before the change in service provider, not just the original purpose for which that grouping was organised. EUROPEAN COURT OF JUSTICE RULES THAT IT WAS NOT DIRECT DISCRIMINATION FOR AN EMPLOYER WITH A NEUTRAL DRESS POLICY TO PROHIBIT AN EMPLOYEE FROM WEARING AN ISLAMIC HEADSCARF May 2017 The ECJ has recently ruled in the Belgian case of Achbita v G4S Secure Solutions NV that an employer who dismissed an employee because she refused to remove her Muslim headscarf did not directly discriminate against her on the ground of religion or belief. Ian Wasserman (Associate) E ianwasserman@bdb-law.co.uk T +44 (0) All employees of G4S were required to comply with a written rule included in its code of conduct which required them to dress neutrally, irrespective of their political, philosophical or religious belief. This included a ban on wearing any visible signs of their political, philosophical or religious beliefs and from giving expression to any ritual arising from them. Ms Achbita was dismissed for breach of this rule when she refused to remove her Muslim headscarf whilst undertaking her duties as a receptionist. The ECJ ruled that there was no direct discrimination because the policy applied to all employees of G4S, and to all religions. There was no evidence that Ms Achbita was subjected to less favourable treatment when compared to other employees. Although not asked to rule on whether there was indirect discrimination, the ECJ noted that the ban on wearing a headscarf could constitute indirect discrimination if it resulted in employees of a particular religion or belief being put at a disadvantage. However, indirect discrimination can be objectively justified if it has a legitimate aim, and the means of achieving that aim are proportionate and necessary.

5 5May 2017 The ECJ commented that where an employer has a policy of upholding political, philosophical or religious neutrality in customer-facing roles, this is a legitimate aim, but the policy also has to be appropriate and necessary, and pursued in a consistent and systematic manner. For example, in Ms Achbita s case, further consideration could have been given to whether the policy was only applied to customer-facing roles, or whether she could have moved to a non-customer facing role. The ECJ has also handed down its judgment in Bougnaoui v Micropole SA, another case looking at whether it was religious discrimination to prohibit an employee from wearing a Muslim headscarf. In this case, the French employer did not operate a dress code, although Ms Bougnaoui was told when she joined the company that she might not be able to wear her headscarf due to the customer-facing nature of her role. Ms Bougnaoui was dismissed because she refused to remove her headscarf in response to an instruction from a customer. The ECJ held that this could amount to direct discrimination, and could not be justified by subjective considerations such as the employer s wish to take account of the particular wishes of a customer. It is relatively unusual for employers in the UK to have neutral dress policies and whilst these cases have received a lot of publicity, their impact on UK employers will be minimal. Case law has already established that employers must be rigorous in applying dress codes and policies which limit the wearing of religious symbols, and must ensure that any restrictions have a legitimate aim and are proportionate. Rather than introducing a very strict dress code, the Acas Guidance on Dress Codes advises employers to consider the business image they wish to convey and how they can work with employees to allow them to manifest their faith in a way that does not conflict with this image or any health and safety requirements....all EMPLOYEES OF G4S WERE REQUIRED... TO DRESS NEUTRALLY, IRRESPECTIVE OF THEIR POLITICAL, PHILOSOPHICAL OR RELIGIOUS BELIEF...

6 6 COURT OF APPEAL CONSIDERS WHEN NOTICE OF TERMINATION OF EMPLOYMENT TAKES EFFECT IF POSTED TO AN EMPLOYEE May 2017 In the recent case of Newcastle upon Tyne NHS Foundation Trust v Haywood, the Court of Appeal has confirmed that a posted notice of termination will not take effect until it is actually read by the employee. Tim Hayes (Associate) E timhayes@bdb-law.co.uk T +44 (0) Mrs Haywood was employed by the Trust as an associate director of business development. On 1 April 2011, she was informed that she was at risk of redundancy. During a consultation meeting on 13 April, Mrs Haywood informed her employer that she would be on annual leave from 19 April to 3 May and that she would in Egypt for some of this period. On 20 April, the Trust sent letters to her confirming her redundancy and giving 12 weeks notice of termination of her employment. One letter was sent by recorded delivery and collected from the Post Office by Mrs Haywood s father-in-law, who left it at her house on 26 April. However, Mrs Haywood did not read it until her return from holiday on 27 April. Another letter was sent to Mrs Haywood s husband s account, which he opened on 27 April. The issue of when notice of termination was given was crucial because Mrs Haywood s fiftieth birthday fell on 20 July If her employment terminated before her birthday, she would receive a much lower pension than if her employment ended after that date. Notice of termination needed to have been given after 26 April in order for her to be entitled to the enhanced pension. The Trust contended that the letters sent on 20 April gave 12 weeks notice with effect from 21 April, terminating on 15 July....THERE IS NO IRREBUTTABLE PRESUMPTION THAT A NOTICE HAS BEEN RECEIVED BY AN EMPLOYEE ONCE IT HAS BEEN DELIVERED TO THEIR HOME... The High Court had to consider whether posting the letter was enough to give notice or whether the date on which the letter was received or read triggered the start of the notice period. It concluded that notice of termination was only effective when it was actually communicated to Mrs Haywood, which was when she read the letter on her return from holiday on 27 April This meant that the effective date of termination was not until after Mrs Haywood s birthday.

7 7May 2017 The Trust appealed to the Court of Appeal which upheld the High Court s decision. The Court of Appeal concluded that in the absence of an express term in the employment contract, notice of termination must be received personally by the employee in order to be effective. There is no implied term that it is deemed to take effect on a particular date. The Court also held that there is no irrebuttable presumption that a notice has been received by an employee once it has been delivered to their home. This meant that Mrs Haywood did not receive the notice of termination when it was left at her house by her father-in-law, but only when she read it personally on 27 April. The Court of Appeal also considered the Trust s to Mrs Haywood s husband containing the letter of termination, which he had read on 27 April It held that this was not effective, largely because Mrs Haywood had not given permission to send any communications to that address. As this case illustrates, notice of termination of employment which is sent by ordinary post or recorded delivery may not be effective until the employee actually reads the letter, which may be at a much later date, for example, if they are away on holiday or in hospital. In order to avoid any uncertainty, employers should ensure that notice of termination is communicated clearly and effectively, ideally by delivering the letter to the employee personally. This will be particularly vital where the date of termination has implications for benefits such as bonus or pension, or is otherwise of critical importance.

8 8 ASSERTION OF DISABILITY IS NOT ENOUGH TO SUCCEED IN DISABILITY-RELATED HARASSMENT CLAIM May 2017 In Peninsula Business Services Ltd v Baker, the Employment Appeal Tribunal (EAT) held that an employee could not succeed in a claim for harassment related to disability by simply asserting that he had a disability, without establishing that he met the definition of disability in the Equality Act Aisleen Pugh (Associate) E aisleenpugh@bdb-law.co.uk T +44 (0) Mr Baker worked for Peninsula as a legal adviser. After several years of service, Mr Baker informed his manager that he had been diagnosed with dyslexia and that he was struggling with his workload. This was subsequently confirmed in a psychologist s report provided by Mr Baker. Peninsula s occupational health adviser also advised that Mr Baker was likely to be considered disabled for the purposes of the Equality Act 2010 and recommended reasonable adjustments. At around the same time, Peninsula became concerned that he was attempting to avoid doing his fair share of cases and undertaking unauthorised private work. In order to establish whether he was working elsewhere, Peninsula engaged a private firm to carry out covert surveillance. Although the surveillance did not show that Mr Baker was doing other work, it did reveal that on four out of five days he went to his mother s house during his working day for periods ranging from one to three hours. Peninsula decided that this was sufficient to show that Mr Baker was not devoting all his time to his work and initiated disciplinary proceedings during which he was told about the surveillance and given a copy of the report. He then claimed that knowing he was under surveillance had a profound effect on his health, causing him to have sleepless nights and feelings of paranoia....peninsula HAD PLACED HIM UNDER SURVEILLANCE BECAUSE HE HAD DISCLOSED HIS DYSLEXIA, AND THAT THIS AMOUNTED TO HARASSMENT RELATED TO DISABILITY... Mr Baker submitted various claims, including an allegation that Peninsula had placed him under surveillance because he had disclosed his dyslexia, and that this amounted to harassment related to disability. In his claim, Mr Baker did not seek to prove that he was actually disabled as a result of his dyslexia. He argued that his claims could succeed whether he was disabled or not. The

9 9May 2017 surveillance had been related to disability in the sense that it was prompted by his disclosure that he was disabled. The Tribunal agreed, finding that the trigger to carry out the covert surveillance was a suspicion that Mr Baker was not actually dyslexic. Although the surveillance could not amount to harassment because Mr Baker did not know about it, telling him about it afterwards amounted to harassment related to disability. The Tribunal agreed with Mr Baker that asserting a disability was sufficient to sustain a complaint of disability harassment and upheld his claim. However, the Tribunal s decision was overturned by the EAT. It recognised that Mr Baker considered himself to be disabled for the purposes of the Equality Act 2010, but this was not accepted by Peninsula. Whilst the Equality Act is wide enough to cover harassment based on another person s disability or where a disability is wrongly ascribed to a...although THE SURVEILLANCE COULD NOT AMOUNT TO HARASSMENT BECAUSE MR BAKER DID NOT KNOW ABOUT IT, TELLING HIM ABOUT IT AFTERWARDS AMOUNTED TO HARASSMENT... claimant, it does not protect an employee who merely asserts that he is disabled but has not proved it. Since Mr Baker had merely asserted his disability, his claim of harassment could not succeed. In any event, Peninsula had been obliged to disclose the fact of the surveillance in order to conduct a fair disciplinary process, so this could not in itself amount to harassment. It is unusual for an employee to omit evidence of their disability and make a claim based only on an assertion that they are disabled. This case confirms that protection against harassment is only available to employees who have established that they have a disability as defined in the Equality Act 2010, who are associated with a disabled person or who are perceived to be disabled. If an employee asserts that they have a disability, employers should always obtain a medical report and make reasonable adjustments as necessary. If there is any doubt as to the report s conclusions, a second report should be obtained. However, ultimately only a Tribunal can rule on whether an employee satisfies the statutory definition of disability.

10 10 AND FINALLY... Zoe Merrikin (Solicitor) E zoemerrikin@bdb-law.co.uk T +44 (0) Sir Ken Knight has launched his independent review to investigate the case for changing the law to allow electronic balloting for industrial action (e-balloting). E-balloting covers any electronic system which allows votes to be cast at a distance, for example, online, by text or by phone. The Knight review has issued a call for evidence on the appropriateness and ease with which e-balloting might be introduced. This asks for information on a range of issues including examples of situations in which e-balloting is currently used; the strengths and weaknesses of postal balloting; the extent to which e-balloting would increase voter turnout; the risks as regards secrecy and voter intimidation; and cost implications. The call for evidence closes on 10 May The Government Equalities Office has published a consultation paper on how to deal with caste discrimination. This sets out two options: amending the Equality Act 2010 to specifically include caste; or relying on case law, such as Tirkey v Chandhok, to develop appropriate protection. The Employment Appeal Tribunal held in Tirkey v Chandhok that claims of caste discrimination can be brought under the existing provisions in the Equality Act 2010 relating to ethnic origin. The consultation also explains the difficulties of establishing a workable definition of caste since it can apply to various communities and religions. Responses must be submitted by 18 July Two sets of regulations have been published under the provisions of the Trade Union May 2017

11 Act The Trade Union (Facility Time Publication Requirements) Regulations 2017 came into force on 1 April These regulations introduce a new requirement for public sector employers with at least 50 employees to publish annually certain information relating to paid facility time taken by employees who are trade union officials. This includes the percentage of working hours and the percentage of the employer s total pay bill spent on facility time. The information must be published on the employer s website, with the first reports due by 31 July However, there are no penalties or other enforcement mechanisms. The draft Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2017 have also been published, but are not due to come into force until 10 March From that date, there will be restrictions on the deduction of trade union subscriptions from wages in the public sector (check-off). A check-off system may only be operated if affected workers have the option to pay their subscriptions by other means, and the trade union is making a reasonable payment to the employer for operating the check-off system. The Department of Health has published consultation on draft regulations which will provide whistleblowing protection for applicants for employment in the NHS (Employment Rights Act 1996 (NHS Recruitment Protected Disclosures) Regulations). The new regulations prohibit NHS employers from discriminating against an applicant because it appears to them that the applicant has made a protected disclosure. In addition to the right to claim compensation in the Employment Tribunal, applicants will also have the right to apply to the County Court or High Court to restrain or prevent discriminatory conduct. The regulations will also apply to recruitment agents acting on behalf of NHS clients. Consultation on the regulations closes on 12 May The Treasury has issued a call for evidence on the taxation of employee expenses. There are no plans to remove income tax relief on expenses. However, the Government wishes to assess whether the current rules could be simplified, whether the rules are fit for purpose in the modern economy, and why the cost of tax relief for reimbursing expenses has increased significantly in recent years. Submissions are invited on the current tax rules; employers current practices as regards reimbursing expenses; and how employers expect these practices to change in the future. The consultation closes on 12 June The latest figures from the Office for National Statistics indicate that 905,000 people were employed on zero hours contracts in their main job during October to December 2016, amounting to 2.6% of all those in employment. This is an increase of 13% on the same period in However, there was a downturn in the use of zero hours contracts over the last six months of This may be due to negative stigma and publicity, as well as increased awareness amongst workers about the implications of zero hours contracts....e-balloting COVERS ANY ELECTRONIC SYSTEM WHICH ALLOWS VOTES TO BE CAST AT A DISTANCE, FOR EXAMPLE, ONLINE, BY TEXT OR BY PHONE May 2017

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