The big news in employment law in 2017 is that the Supreme Court (on the application of Unison the trade union) has declared that fees in the Employment Tribunal and Employment Appeals tribunal are unlawful.
The story goes something like this: prior to July 2013 employees and former employees could make claims to an Employment Tribunal without charge. In July 2013 the Government introduced a fee system whereby claimants had to pay a fee to submit a claim and another to go ahead with a full hearing, the laudable rationale being that the introduction of fees would significantly reduce the number of vexatious and weak claims blighting the lives of innocent employers. Due to the fact that fees could be as much as £1,200, the number of claims did indeed reduce – by a whopping 79% over three years. Unfortunately, due to the high level of the fee (which applied to many people who’d just lost their jobs), individuals who had good, strong claims were also deterred from enforcing their rights at a Tribunal. Predictably, the unions challenged the fees on the basis that the system denied individuals proper access to justice and was discriminatory on the basis of sex (discrimination claims are the most expensive claims to bring, more women make discrimination claims and therefore more women than men were disadvantaged by the introduction of fees). Unison then applied to the Supreme Court for a judicial review of the fee system on this basis and won.
The consequence? It is once again free to make a claim at Tribunal, the number of claims (both those with merit and those without) is likely to rise significantly, the Government has to pay back £32 million to claimants who had to pay fees and the entire fee system, which took considerable amounts of time and money to put together, has to be dismantled.
From a practical point of view, employers should be aware that once again employees who are in dispute with their employers have nothing to lose financially by submitting a claim against them. Whilst it has always been important for reputable employers to comply with employment legislation and best HR practices, there’s now an added incentive to do so - in order to be able to robustly defend any claim.
The Gig Economy
For several years now the gig economy (a labour market characterised by the prevalence of short-term or free-lance contracts as opposed to permanent jobs) has been gaining momentum, with all the benefits and challenges that such an economy brings. Its supporters and large companies which benefit from it (such as Deliveroo and Uber) say that it promotes flexible working and allows businesses to be agile, thereby keeping prices low for its customers, while its challengers say that it is a ploy by unscrupulous employers to exploit low paid and low skilled workers whilst growing rich on the savings and profits. However, such businesses are not without their problems: individuals who have been engaged by businesses on a “self-employed” basis are challenging their employment status and arguing, with some success, that they are in fact workers (a hybrid between an employee and a genuinely self-employed person), giving them increased protection at work. For example, the Employment Appeals Tribunal has just handed down its judgement agreeing with a Tribunal which found that although the employment contracts were drawn up in order to show that self-employment status was intended to be created, they did not reflect the reality of the relationship. This landmark ruling has opened up claims from all of Uber’s 40,000 drivers in the UK, who are currently not benefitting from holiday pay, pensions or other workers’ rights. In Pimlico Plumbers Ltd v Smith (leave to appeal has been granted), a plumber who was described as “self-employed” was found to be a worker and therefore protected against disability discrimination and unlawful deductions from wages. There are also significant tax implications stemming from the courts’ decisions.
From a practical point of view, companies who rely on a “self-employed” workforce should be clear on whether they will be able to successfully defend that status and should now review their practices to avoid storing up problems and liabilities for the future.
GDPR: an Employment Perspective
Few business people will have failed to notice that the UK’s data protection regime is about to change. In summary, the General Data Protection Regulation (GDPR) is an EU regulation which will replace the UK Data Protection Act 1988. The aim of this Regulation is to guarantee the fundamental right to personal data protection across the EU. The Regulation is likely to have an impact on the ways that employers store and gain consent to retain information about employees. The Information Commissioner has published “The Employment Practices Data Protection Code” which deals with the impact of GDPR on the employment relationship. The Code discusses issues such as obtaining information about workers, and retention of and access to records. Please find a link to the code here: and a link to our blog on the subject here.
Other Developments and…Brexit!
Other developments in 2017 include the implementation of gender pay gap reporting requirements for employers with 250 or more staff in a bid to tackle workplace discrimination, against a background of increasing intolerance for sex discrimination. Businesses must comply with this requirement by April 2018 or face being contacted by the Equalities and Human Rights Commission. Whilst there’s question mark over the measures the EHRC can actually take against businesses, it’s the reputational and employee relations risks to organisations which are likely to be the biggest drivers. While there’s no obligation on smaller employers to comply with the reporting requirements the Government has encouraged them to do so.
And, of course, all of these developments are taking place in the run up to Brexit. However, whilst a significant proportion of employment law is derived from the EU, it is unlikely that there will be wholesale changes following Brexit. That said, the Government may take the opportunity to amend some areas to reduce the regulatory burden on employers in areas relating to agency workers, discrimination compensation, TUPE, holidays and sick leave and the limit on weekly working hours. The greatest practical implication for employers is likely to be the change to the right of freedom of movement. Existing EU migrants may be able to stay in the UK (possibly for a limited period) on the basis that UK nationals working in the EU can do the same. Many EU nationals working here may be able to obtain permanent residence, or even British citizenship. Alternatively, EU nationals may be able to obtain permission to work in the UK in the same way as, for example, US nationals can do at the moment. The situation remains uncertain and, as with all aspects of Brexit, we shall have to wait and see….
2017 has been another busy year for the HR and employment law team at MBM. Amongst other things, we’ve been expanding our Holistic HR offering. Holistic HR is a annual, fixed fee, unlimited HR and employment law advice service, which also gives our clients access to our online portal of employment contracts, workplace policies etc. As optional extras, we can now, through a network of trusted preferred suppliers, obtain services for our clients such as business coaching, health and safety, pensions and employee well-being. This is on top of our preferred supplier arrangements with providers of business immigration advice, payroll, HR software and recruitment. More information about Holistic HR can be found here.
For further information please contact:
0131 226 8216