Review of 2016 (to date) and upcoming developments Anne Sammon & Ashley Wootton 7 December 2016 Simmons & Simmons LLP 2013. Simmons & Simmons is an international legal practice carried on by Simmons & Simmons LLP and its affiliated partnerships and other entities.
What will we cover Brexit (briefly!) possible employment law implications Gender Pay Reporting General case law update Extension of the Senior Managers Regime What else to expect in 2017 and beyond 1 / L_LIVE_EMEA1:35089339v2
Brexit 2 / L_LIVE_EMEA1:35089339v2
Brexit Mechanics of a Brexit Art 50 TEU UK serves formal notice of withdrawal Although Supreme Court hearing currently ongoing R (on the application of Miller and Dos Santos) (Respondents) v Secretary of State for Exiting the European Union (Appellant) UK and EU negotiate agreement taking into account the framework for its future relationship with the EU (i.e. future trade deal) Withdrawal takes effect from agreed date, or failing that, 2 years from service of notice of withdrawal (unless extended with unanimous agreement from remaining 27 members) 3 / L_LIVE_EMEA1:35089339v2
Brexit: Impact on your business - Short term Very much business as usual (albeit lack of certainty for future) Existing EU law will continue to apply Continuation with current EU regulatory reform / implementation (e.g. PRIIPS / MIFID2) 4 / L_LIVE_EMEA1:35089339v2
Impact on your business Long term Business as usual in UK/with UK, non-eu clients Ability to use UK entities to service EU clients will depend on a number of factors London very likely to remain a major global financial capital (perhaps with a more off-shore focus) 5 / L_LIVE_EMEA1:35089339v2
Employment law: wholesale repeal unlikely Renegotiation New economic trade arrangements may require UK to comply with certain EU laws (see e.g. Swiss and Norwegian models) Domestic Law Much does not stem from Europe (e.g. minimum wage, unfair dismissal) Some predates European equivalent (e.g. discrimination) Some goes further than European legislation requires (e.g. holiday entitlement, maternity rights) These areas are unlikely to change as a result of Brexit Political Considerations Main political parties and public would see much as fair and reasonable 6 / L_LIVE_EMEA1:35089339v2
Which UK employment laws might change? Agency Worker Regulations Remuneration (CRD IV) Working Time Directive Discrimination TUPE 7 / L_LIVE_EMEA1:35089339v2
Gender pay rules and the Ghadia report 8 / L_LIVE_EMEA1:35089339v2
Gender Balance Gender Pay Reporting Gadhia Report: Women in Finance Charter What gets measured gets managed; what gets published gets managed even better 9 / L_LIVE_EMEA1:35089339v2
Gender Pay Reporting UK s average gender pay gap is 19.2% 60% of UK employees in the lowest pay quartile are women; over 60% in the highest quartile are men The UK gender pay gap is highest in certain sectors e.g. financial services (34.9%); energy and construction (28.1%) What are the aims? Is it a good idea? Will it work? 10 / L_LIVE_EMEA1:35089339v2
What is Gender Pay Reporting? A legislative requirement to publish gender pay gap data Not just about pay it s about where women sit within the organisation Who is caught? Employers with 250 or more relevant employees Timeline: 01 October 2016: Regulations come into force 30 April 2017: First snapshot of data 30 April 2018: First publication of data required 11 / L_LIVE_EMEA1:35089339v2
What must be published? Difference in mean pay, during the pay period, between male and female relevant employees Difference in median pay, during the pay period, between male and female relevant employees Difference in mean bonus pay, during the period of 12 months preceding the relevant date, between male and female relevant employees Proportion of male and female relevant employees who received bonus pay during the period of 12 months preceding the relevant date, and The numbers of male and female relevant employees employed by the relevant employer on the relevant date in quartile pay bands A, B, C and D 12 / L_LIVE_EMEA1:35089339v2
Publication Where? On the employer s website in the United Kingdom: in English in a manner that is accessible to all employees and the public, and for at least 3 years beginning with the date on which the information is published on the website The information must also be uploaded on or through a website designated by the Secretary of State 13 / L_LIVE_EMEA1:35089339v2
Penalties No additional civil penalties Levels of compliance will be closely monitored Government plans to set up a website publishing the data, ranked by sector 14 / L_LIVE_EMEA1:35089339v2
Gadhia Report: Gender Balance makes Economic Sense Report commissioned by HM Treasury as part of Productivity Plan UK Government Equalities Office estimates that equalising the role of men and women in the labour market could add 600 billion to the UK economy and increase GDP by 10% by 2030 A recent McKinsey report notes that US$12 trillion could be added to global GDP by 2025 by advancing women s equality 15 / L_LIVE_EMEA1:35089339v2
Opportunities to Gain Commercial Experience Invest in Supportive Managers Create the Right Culture Mentoring Schemes and Active Sponsorship Greater female representation Provide Technology to Support Flexible Working Support Working Parents Transparent Pay Structures Good Flexible Working Policies Increase Female Role Models Gadhia Report: Top Enablers 16 / L_LIVE_EMEA1:35089339v2
Women in Finance Charter HM Treasury has published its voluntary Women in Finance Charter and it expects most firms in scope to commit to the Charter HM Treasury may announce a more prescriptive approach in the next 12 months Once committed to the Charter, organisations will need to consider how their existing policies and processes support the three overarching recommendations and what further work they would need to do in order to satisfy these https://www.gov.uk/government/publications/women-in-finance-charter 17 / L_LIVE_EMEA1:35089339v2
Case law update 18 / L_LIVE_EMEA1:35089339v2
Gig economy employment rights Aslam and others v Uber BV and others An ET held that Uber drivers are workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998. Uber's case was that it is simply a technology platform which puts drivers in touch with passengers and that it is in no way a provider of taxi services. They argued the drivers were self-employed. The reality, was that Uber is in the business of providing taxi services and engaged the drivers as workers to deliver its business. The drivers were engaged as workers for as long as they were in the territory in which they were authorised to work, they were signed into the Uber app and were ready and willing to accept bookings. This same period of time counted as working time under the WTR 1998 as well as the number of hours worked for the purposes of the national minimum wage provisions. Drivers now entitled to minimum wage, protection from deduction of wages and paid annual leave. 19 / L_LIVE_EMEA1:35089339v2
Whistleblowing Royal Mail v Jhuti Dismissal can be automatically unfair even if the person who made the decision to dismiss does not know about the protected disclosure Ms Jhuti made a protected disclosure to her manager (Mr Widmer) about a colleague. Mr Widmer encouraged her to withdraw the disclosure. Mr Widmer then started a performance improvement process, with objectives that Ms Jhuti could not meet. Ms Jhuti raised a grievance, which was not upheld. An independent manager was appointed to review Ms Jhuti s position. The manager met with Mr Widmer, who lied to her and said that Ms Jhuti had misunderstood something and had accepted that this was the case. The independent manager was not provided with copies of relevant emails/information by HR. 20 / L_LIVE_EMEA1:35089339v2
Discrimination Age discrimination: Smith v Gartner Not age discrimination where an employer ended payments under a PHI policy when an individual reached 60. Employer had a contractual obligation to provide an insured PHI with benefits provided by an insurer. Insurer s scheme provided that benefits ceased when employee turned 60. EAT suggested that claim for age discrimination would need to be brought against the insurer. 21 / L_LIVE_EMEA1:35089339v2
Discrimination Disability discrimination: G4S Cash Solutions v Powell Maintaining pay can be a reasonable adjustment. Mr Powell became disabled through a back injury (no suggestion that employer responsible). G4S gave Mr Powell a new role at his existing rate of pay; the following year, it told him that it would only continue to employ him in this role at a reduced rate of pay. Mr Powell refused to accept the reduced salary and was dismissed. ET and EAT found that offering Mr Powell the new role at his existing rate of pay could be a reasonable adjustment. EAT comment: unlikely to be an everyday conclusion that maintaining pay is a reasonable adjustment. 22 / L_LIVE_EMEA1:35089339v2
Family-friendly issues McFarlane and Ambacher v easyjet Airline Company ET decision Refusal of request for reduced hours on the basis of breastfeeding amounted to indirect sex discrimination Medical evidence for both the Claimants suggested that could not work longer than 8 hours between feeding Probably would not have been discriminatory to ask the employees to work for more than 8 hours if they had had appropriate facilities to express milk. 23 / L_LIVE_EMEA1:35089339v2
Family-friendly issues Snell v Network Rail Reported as showing that failing to offer enhanced pay for SPL to fathers amounts to discrimination Liability hearing was not contested Network Rail s policy provided that mothers could receive enhanced pay for both maternity leave and SPL; fathers only received statutory pay Working Forward (EHRC initiative) Employers pledge to make their workplace the best it can be for pregnant workers and new mothers Includes: training and supporting line managers and offering flexible working practices Founding members have committed to encouraging their suppliers/counterparties to sign up to the pledge 24 / L_LIVE_EMEA1:35089339v2
Holiday Pay British Gas v Lock (Court of Appeal) Court of Appeal has dismissed British Gas s appeal of decision that holiday pay calculation (where derived from WTD) should include commission. British Gas has reportedly applied for permission to appeal to the Supreme Court 25 / L_LIVE_EMEA1:35089339v2
HR processes Stevens v University of Birmingham In the circumstances, refusing a chosen companion breached implied terms of trust and confidence The employee had few choices as to who should accompany him The chosen companion had been allowed to accompany previously and had specific relevant knowledge/expertise Ramphal v Department for Transport Decision to dismiss should not be unduly influenced by HR HR to confine advice to matters of law and procedure, ensuring necessary matters have been addressed and achieving clarity 26 / L_LIVE_EMEA1:35089339v2
Social Media Game Retail Ltd v Laws Dismissal for offensive tweets on a personal twitter account was fair Test is whether employer s decision was within range of reasonable responses Relevant factors in this case: employee was following other stores; followers included other stores; employee knew stores were following him; followers not restricted to social acquaintances; employee had not created a separate account for private use Williams v Leeds United Football Club Sending pornographic images to male friends and junior female employee amounted to repudiatory breach of contract 27 / L_LIVE_EMEA1:35089339v2
Extension of Senior Managers Regime 28 / L_LIVE_EMEA1:35089339v2
Extension of the Senior Managers Regime Senior Managers Regime has replaced Approved Persons Regime for banks The Government has indicated that the regime will be extended to all FSMA firms in 2018 Consultation was expected in 2016 29 / L_LIVE_EMEA1:35089339v2
The Senior Managers Regime (for banks, assumed to apply the same for other FSMA firms from 2018) Ancillary staff Small number of employees not covered by Conduct Rules Conduct rules staff Enforceable conduct rules Certification regime staff Other nonexecutive directors Onus on firm to satisfy itself at outset and annually re fitness and propriety Non-executives who are not senior managers but must be fit and proper Senior Managers Senior Managers those who really run firms. Responsibilities for running the firm must be allocated and mapped 30 / L_LIVE_EMEA1:35089339v2
Upcoming legislation / developments Regulatory references New obligation to establish and maintain adequate policies and procedures to comply with obligations re regulatory references. Plus existing obligations: Not to enter into arrangement/agreement that limits ability to disclose relevant information Obligation to respond (normally within 6 weeks of request) Additional obligations to full scope firms but may be extended to all, include: Obligation to use template Obligation to update references that have been given where become aware of matters that would cause the organisation to respond differently, if it was providing the reference now. (During notice period / 6 years from the date the individual left the firm) 31 / L_LIVE_EMEA1:35089339v2
Proposals SPL for grandparents Intended to be implemented by 2018 (but consultation is now overdue) Two million grandparents have given up their jobs or reduced their hours to care for grandchildren. Approximately 1 in 10 working grandparents have been refused time off to care for their grandchildren or felt unable to ask for this. Unclear whether will be a separate right (Shared Parental Leave for Grandparents) or whether existing right will be extended (e.g. by changing the eligibility criteria) 32 / L_LIVE_EMEA1:35089339v2
Proposals Caste discrimination Public consultation due on whether additional measures are needed to protect victims of caste discrimination Non compete clauses Call for evidence closed on 19 July 2016 Could lead to non compete restrictions being prohibited Paid volunteering leave Three days paid volunteering leave per year Employers with at least 250 employees 33 / L_LIVE_EMEA1:35089339v2
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