Aggravated Losses

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A woman banker Svetlana Lokhova in the London office of a Russian bank has been awarded £3.1 million after being driven to a mental breakdown by a campaign of harassment and unfounded drug slurs. At an employment tribunal she won on four heads of claim which were in respect of sex discrimination amounting to constructive dismissal, victimisation, whistleblowing and sexual harassment. The tribunal last October ruled in her favour after hearing that colleagues at Sberbank CIB had referred to her as “Ms. Bonkers” and that she had been falsely accused of being a cocaine addict. She suffered even more agony when the false allegation that she was a drug user was put to her in evidence at the tribunal liability hearing.

Announcing its award of damages, the tribunal has said it increased the pay-out to reflect this attempt to bully her. The judgment stated: “That allegation is completely without foundation and should never have been put to her in cross examination at the liability hearing. It was a deliberate, planned and unnecessary misuse of these proceedings, designed to put pressure on her and cause damage to her given that it was no doubt widely publicised.”

The tribunal also stated that her main tormentor David Longmuir, a former manager at Sberbank CIB (UK) Ltd, should have been fired from the bank for gross misconduct. He was found to have sent a host of emails and made remarks behind her back that were “offensive and derogatory and often personal in nature”. The judgment went on to note that far from being sacked, Mr. Longmuir did not leave the bank until a year after she resigned and received a pay-off of around £168k. “It would seem the bank’s treatment of misconduct varies according to what sort of misconduct it is,” it said. The tribunal ruled it was his comments that had led to Ms. Lokhova’s health collapsing from “mild symptoms to chronic and long-term symptoms”.

The causes of her ill health were harassment, through Mr. Longmuir’s comments, victimisation by the bank’s failure to take action against him after she had complained, and discrimination which led to her constructive dismissal. After she was forced to quit her job, a doctor who examined her found that “the revelation of Mr. Longmuir’s discriminatory treatment of her and his comments about her was the real trigger for the exacerbation to her ill health”.

The award was based on injury to health and feelings, future financial loss plus aggravated damages for the drug allegation made at the hearing.

Peter Stanway, our BackupHR™ legal expert comments:

Most workplaces have a degree of daily workplace banter between employees. It is usually part of the oil which keeps the machine running smoothly. When the banter crosses the line from reciprocal mickey-taking and verbal jousting, it changes into a serious and potentially expensive case of bullying and harassment.

A Sberbank spokesperson said “We are committed to take on board any lessons to be learned.” Those lessons to other employers if they wish to avoid expensive, embarrassing, and time-consuming Tribunal litigation would include that they should have robust equal opportunities and dignity at work policies in place. It is also equally important to:-

  • Investigate promptly, thoroughly and sensitively any allegations
  • Communicate the policy and train employees on it;
  • Investigate promptly, thoroughly and sensitively any allegations
  • Discipline or dismiss employees where policy has been breached.

Your focus should be to avoid Tribunal claims but if you do get one, deal professionally with such claims, so you do not aggravate the conflict and potentially get unwelcome media attention.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

Smoking e-cigarettes, may be a safer and healthier option to traditional tobacco cigarettes, but it could be almost as dangerous in terms of it being a fire hazard. Smoking an e-cigarette is more accurately described as ‘vaping’. It is claimed that ‘vaping’ is safer than smoking because of the absence of tobacco and smoke. In a market worth £90 million, there are approximately 1.3 million users of E-Cigarettes in the UK, a figure which is expected to rise rapidly. Cathy Norton, our BackupHR™ safety expert comments:

There is already fierce debate about the potential for damaging the health of ‘vapers’ and those impacted by passive smoking, but that is not the focus of this article. E-Cigarettes are a relatively new product and their risks, including their fire risks, are not yet fully understood. Despite the fact that you do not light an E-Cigarette, there are still fire risks associated with this product.

E-Cigarettes are usually made up of a rechargeable lithium-ion battery, an atomiser and a replaceable or refillable cartridge containing liquid nicotine, flavours and other chemicals. The battery heats up a coil attached to a wick, which heats liquid containing nicotine, creating vapour which is then inhaled.

One of the fire risks is the potential to overheat, catch fire and even explode whilst charging. These fires have resulted in a number of injuries, including first and second degree burns and one incident tragically resulted in the death of an elderly lady. Figures published by the BBC show that e-cigarettes are believed to have caused just over 100 fires in less than two years. This number is probably understated as cases go unreported, or the source of the fire is not discovered.

Experts are mainly concerned about the chargers used to power the devices. Many of the batteries in these devices do not have over-current protection, found in mobile phones, meaning the E-Cigarette will continue to charge, even when fully charged. And they have been shown to heat up to dangerous temperatures if used with the wrong ‘vaping’ kit.

Currently, there is no regulation of the fire-risks associated with E-Cigarettes, nor are there any plans to introduce such laws. It has led to fire chiefs issuing a warning; the chairman of the Local Government Authority’s (LGA’s) Fire Services Management Committee has said “We are warning users that it is simply not worth risking their lives to save a few pounds buying dodgy, dangerous or incompatible chargers.” The LGA are also “urging e-cigarette manufacturers to introduce clear, prominent and graphic new warnings spelling out the dangers of using incompatible chargers with e-cigarette batteries.”

Safety tips

The fire service provides a number of tips for e-cigarette users:

  1. Only use the charger supplied with your e-cigarette kit.
  2. Do not ‘mix and match’ components between kits.
  3. Do not over tighten the battery on to the charger.
  4. Clean the battery’s ‘centre pin’ and charger contact at least once a week.
  5. Avoid leaving E-Cigarettes on charge overnight or for long periods of time whilst unattended.
  6. Once fully charged, removed the battery from the charger.

Action Points

So what might this mean for employers? Until recently the big issue was whether vapers should be made to share the same smoking areas as smokers and the accepted wisdom is that they ought to be provided with a separate area. This new evidence should prompt employers to take further action:

  • Undertake a risk assessment particularly if you have employees or residents living on the premises.
  • Warn employees about these risks, assuming that you allow employees to charge their e-cigarettes at work.
  • Talk to your Insurance Company.
  • Consult with employees about this safety issue and take appropriate action.
  • Introduce or amend your smoking and e-cigarette policy.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

An Employment Tribunal has ruled in the long running case of Lock v British Gas Trading Ltd that commission payments earned on sales achieved by an energy trader must be taken into account when calculating holiday pay and that the Working Time Regulations were capable of being interpreted in this way. The problem for Mr Lock was that whilst he was on annual leave, he did not generate any commission and therefore he was paid reduced remuneration when he returned to work. The Tribunal took account of the EAT decision in Bear Scotland Ltd v Fulton that the Regulations could be interpreted in such a way as to include non-guaranteed overtime in the calculation of holiday pay. There was no difference, it reasoned, between payment for non-guaranteed overtime and payment in respect of commission insofar as annual pay leave is concerned.

Unfortunately for employers, however, key issues have been set aside for determination at a later date, including what the correct reference period should be for calculating commission payments due during holiday (i.e., whether it should be more than 12 weeks). The issue before the Tribunal at this stage was purely conceptual, that is, how to resolve any potential conflict between EU and domestic law.

Peter Stanway, our BackupHR™ legal expert comments:

This means that a definitive conclusion regarding the reference period for calculation and how to quantify Mr Lock’s claim has been reserved for a future Hearing, and the uncertainty in this area has not been resolved.

This decision is unsurprising but will be disappointing for employers who operate commission plans. It means that the law is clear that where the employees have normal working hours and their pay includes commission, payment of holiday pay must take into account commission earned.

What is not clear and remains problematic until a future hearing/decision is:

  • how to actually calculate the commission element of holiday pay and therefore how much employers need to set aside to reimburse employees if claims are made, and to pay employees during their annual leave in the future.
  • at the moment, the new wording imported into the Working Time Regulations by the decision provides a 12-week reference period, which could potentially give a windfall to employees who work in seasonal businesses.
  • the decision could also be appealed, which means it could be another year or two before employees and employers get certainty over the amount of back-pay owed. The impact on back-claims is reduced by the two year cap on backdated claims which takes effect on 1 July 2015.

It should be remembered that this ruling (and that in Bear Scotland) only applies to the statutory four weeks holiday pay, not the additional 1.6 weeks afforded by domestic legislation or any additional contractual holiday pay, unless specifically provided for. This may be confusing to many but for most employers is likely to mean that the impact is only on holiday not public holidays which can still be paid at normal basic pay.

Employers therefore have two choices:

  1. Take the initiative and make what changes work for them.
  2. Wait and see how the case law develops (whilst accruing something to mitigate the impact of future change).

This is unlikely to be the last decision on what should be included in holiday pay e.g. overtime and similar payments”.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing0″

If an employer is proposing to make redundant 20 or more employees at one establishment within a period of 90 days or less, collective consultation is required. Employee representatives must be elected and consultation must take place with those representatives for a minimum of 30 days. Failure to comply with the collective consultation process will give rise to a protective award of up to 90 days’ pay per affected employee. For employers with multi-site operations, the key question is what is meant by establishment. This has always been a difficult issue and was highlighted when Woolworths went into administration, with large scale redundancies.

The question arose whether each shop should be viewed separately or collectively for the purposes of defining ‘establishment’. Employees in the stores employing more than 20 people got a decent pay-out, but the people in the smaller stores did not. The Woolworths case has been fought by USDAW, the trade union representing former employees, who were made redundant but were not included in a collective consultation process. It turns on whether redundancies across the Woolworths business should be ‘aggregated’ for these purposes, or whether the number being made redundant at individual stores should be looked at separately. It is a case which has reverberated around the UK Courts and is now waiting for a judgment from the European Court of Justice.

The Advocate-General, whose opinion is usually followed by the ECJ, has stated that in his view aggregation is incorrect, and that it is the number of redundancies at each individual establishment that is relevant when determining whether collective consultation is required. He would leave it to the UK’s employment tribunals to decide, as a question of fact, in each case the identity of the establishment. This will not necessarily mean that each individual site would be considered separately. The facts of each situation will be key.

Peter Stanway, our BackupHR™ legal expert comments:

Whilst the opinion appears to be good news for employers, it is not binding so we eagerly await the judgment from the ECJ later this year.

Collective consultation is relatively onerous and employers will generally prefer to avoid it if they legitimately can. However mistakes in this area are expensive as if the employer makes the wrong judgment call, each affected employee is entitled to claim a protective award of up to three months’ pay.

The Advocate General added that national courts must decide what is meant by ‘establishment’ in specific cases. He set out criteria for deciding the issue based on:

  1. the degree of permanence and stability in the relevant unit;
  2. whether the unit performs one or more given tasks; and
  3. whether it can really accomplish its assigned tasks as a stand alone entity.

He added that it is not necessary for the entity to have legal, financial, administrative or technological autonomy in order to be regarded as an establishment.

It is likely that this much litigated concept will continue to be argued over in individual cases. Employers should therefore continue to be cautious for the time being. There is no guarantee that the ECJ will agree with the Advocate General.

We would advise:

  • In any redundancy, however small, meaningful consultation is required.
  • If you normally treat them as all one business, then they may well be one establishment.
  • Consider if it is fair to consult with one site for less time than another one.
  • If it is the same redundancy exercise be very cautious.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

On the 1st April I was fooled by an email from a useful website that I subscribe to in which it was suggested that David Cameron had allegedly said: “It’s clear that our policy on Employment Tribunal Fees was a bit of a wrong turn. We all thought there’d be a modest decrease in claims, mostly the weak or vexatious ones, and hard working people who had decent claims would be perfectly happy to rummage down the back of the sofa for £1,200, or borrow from relatives, or maybe do a little part-time prostitution or drug-dealing. But once my advisers showed me the Dunstan Graph I realised we’d got it wrong.”

Peter Stanway, our BackupHR™ legal expert comments:

My main excuse for my gullibility, (apart from not reading it thoroughly), is that strange things happen in elections; but it did have some credibility because it is based on a solid foundation of evidence. There has been a substantial 70% drop in the number of employment tribunal claims made by employees since the introduction of employment tribunal fees in July 2013. A new report from the CIPD reveals that employers are divided over the future of these fees, with 38% saying they should remain and 36% wanting a reduction or abolition of them, with just over a quarter (27%) undecided.

The report states that, it must be the case that some perfectly valid claims have been discouraged as a result of the new fees which may not make it impossible for claimants to pursue their case but they have certainly made it much more difficult.

The Business Secretary Vince Cable commented on the report saying:

“It’s vital that the employment tribunal system strikes the right balance between employee and employer protection. I welcome this report from the CIPD and its valuable insights. The fact that employers are so split over whether the introduction of tribunal fees has been a good or a bad thing further reinforces the need for a review, despite opposition in some quarters. I’ve now set one in motion in my Department.”

This may be a bit of genuine electioneering, but does raise the question of whether we putting too high a price on access to justice?

Other key findings in the report include:

  • Some employers are critical of the early conciliation process, often on the grounds that they are given insufficient information at the outset of a case to decide how to respond.
  • One in three employers surveyed made use of settlement agreements and a similar proportion reported that they have made more use of them in the last year.
  • Few large employers are interested in making use of the extended ‘without prejudice’ provision in recent legislation, believing that it offers them inadequate protection against possible tribunal claims.I would take issue with the latter finding, albeit it may be a feature of some large employers. We are very interested (and experienced) in using settlement agreements and know that if we handle them properly they will be agreed, and in the rare circumstances where they are rejected, that our clients are protected from claims.

    Whatever the result of the general election, it seems likely that there will be some change to Employment Tribunals. How high a priority, and what direction the change takes, will depend on the result on (or after) the 7th May 2105.

    The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

Mr. Laws was employed as a risk and loss prevention investigator responsible for investigating losses, fraud and theft with Game Retail. He opened a personal Twitter account which did not specifically link him to his employer. He started following the stores for which he was responsible in order to detect any inappropriate activity by employees, such as offering video games for sale. Following an anonymous store manager notifying the employer about offensive and abusive tweets posted by him, he was dismissed for gross misconduct. Mr. Laws claimed unfair dismissal and the employment tribunal upheld his claim. Although the judge accepted that customers and employees might have been offended by the tweets, he considered that dismissal was not within the band of reasonable responses as the tweets had been posted for private use. In addition, the Company’s disciplinary policy did not clearly state that inappropriate use of social media in an employee’s own time would be treated as gross misconduct.

The employer appealed to the Employment Appeal Tribunal, EAT, which overturned the tribunal’s finding. In what is believed to be the first such case to come before the EAT, it said that the Employment Judge had erred in substituting his view for that of the “reasonable employer” and/or had reached conclusions that were either inconsistent given earlier findings or failed to take into account relevant matters or were simply perverse. The judge had not been entitled to find that L’s followers were restricted to social acquaintances, and so customers and employees would not have seen his tweets. He had not made use of the restriction setting on his account, nor had he set up separate accounts, one to follow the stores, and one for purely personal use. The stores that followed him would have seen his tweets, as would any customers who picked up on his account, perhaps after it was recommended by the local manager.

Peter Stanway, our BackupHR™ legal expert comments:

The judge’s finding that there was only a theoretical risk of employees and members of the public seeing his tweets was inconsistent with the fact that an employee had seen his tweets and reported them.

The EAT was asked to provide some general guidance on cases involving alleged misuse of Twitter but declined to do as it believes that cases are likely to be fact-sensitive.

However, it appears from the EAT’s decision that the following factors will be relevant when deciding whether a dismissal is unfair:

  • The nature of the tweets and how offensive they are.
  • Whether the tweets are made on a purely personal Twitter account.
  • Whether privacy restrictions are in use so that only friends can see tweets.
  • Whether there is anything on the employee’s Twitter profile or in any of the tweets to link him to the employer.
  • Whether tweets say anything derogatory about the employer.
  • Whether the tweets are posted in an employee’s own time or in work time.
  • Whether the employee uses his own equipment or the employer’s.
  • Whether the disciplinary rules make it clear what sort of misuse of social media gives grounds for dismissal.

We cannot stress enough the importance of clear rules on social media at work and socially insofar as they impact on work. Your rules should detail your approach to:

  • Whether social media can be accessed in work time.
  • The importance of restraint/politeness.
  • The importance of avoiding divulging confidential information.
  • Not saying anything which might damage the employer’s reputation.
  • The confidentiality of your database of social media contacts.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

Tesco has confirmed that it is paying former chief executive, Philip Clarke, £1.22m and former finance director, Laurie McIlwee, £971k under separation agreements. Those payments had been suspended last year due to an investigation into Tesco’s accounts. In Tesco’s last interim results, the group said the payments were suspended given the investigation into its accounting practices. Last year00, the Company will pursue recovery of the payments and damages and has fully reserved all its legal rights in this respect”.

Peter Stanway, our BackupHR™legal expert comments:

Given the apparently systemic manipulation of the figures at a very high level for very large amounts of money, it will come as a bit of a surprise to most people that these people are receiving any further monies.

It is not for me to comment on the nature of the ‘offences’ but the case does raise some interesting issues and it would seem there may be four good reasons for making such payments, which may resonate (albeit at a lower level) with our clients:

    1. Litigation is expensive and whilst it is difficult to imagine lawyer and court fees coming in at around £2m, there is little point paying good money just out of principle.
    2. Litigation takes a lot of time and energy, which Tesco desperately needs to utilise in turning round its flagging fortunes, including closing many stores and its head office.
    3. Litigation leads to bad publicity, which can be very damaging especially to high profile brands. Paying out the money may cause short term media interest, but nothing like as much as weeks of court reporting.
    4. They may lose, as gross misconduct can be difficult to establish in a civil court. Even in Employment Tribunals the judge and lay members can take a very subjective view if an employer claims that some types of misconduct are so serious (if proven), as to amount to a fundamental breach of contract, entitling the employer to terminate with immediate effect and no compensation. I refer to litigation as ‘Gambling at the Casino of Justice.

 

While not defending Tesco; I am using their current news as an example of some of the difficulties faced by employers when they have ‘lost’ senior people, who believe they have a valid legal claim to some compensation from their former employer.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

The Fit for Work service was launched on 15 December 2014, to offer impartial advice to employers for dealing with long-term sickness absence. The free service will help employees return to work after they have been on sickness absence for four weeks or more. It will be rolled out in phases over a period of months, with further details expected soon.

Guidance by the Department for Work and Pensions (DWP) advises employers on how the service will work, the role of the employer, the benefits for employees and employers and data protection issues. It stresses that the service will mainly target small and medium enterprises. Guidance has also been developed for employees and GPs.

Under the Fit for Work service, employees will be referred with their consent for an occupational health (OH) assessment, usually by telephone. This will result in a return-to-work plan, which will be sent by email or post. The plan will include recommendations for employers on how to help the employee back to work. Employees will primarily be referred to the service by GPs, although employers will also be able to refer employees after they have been absent for more than 4 weeks.

From 1 January 2015, the Government has introduced a tax exemption of £500 per year, per employee where the employer funds the costs of medical treatments recommended to help their employees return to work.

Peter Stanway, our BackupHR™ legal expert comments:

Fit for Work (FFW) was initially called the Health and Work Service but was rebranded in 2014 following complaints from doctors’ body the British Medical Association that the Government was misleading the public by implying it would be a comprehensive OH service. Health professionals are also concerned about how the service will be staffed, as there are limited numbers of OH nurses and doctors available. It is intended that FFW will complement existing occupational health provision, rather than replace it. The service will be provided by OH provider Health Management on behalf of the DWP.

The guidance advises employers to update their sickness absence policies to tell staff that the service is becoming available and explain how it will work. We are changing our client’s sickness absence policies to allow for referral to FFW but our strong preference would be to use well-established OH professionals with a good track record of helping employers. This help might be:

  • Advising employers on reasonable adjustments
  • Advising employers on return to work programmes
  • Advising employees that they should be returning to work or have little chance of doing so
  • Advising employers when the only feasible option is termination of employment.

We expect difficulties over:

  • the need for employee consent
  • case workers not fully understanding the employer’s business, the employee’s job role, or availability of other suitable roles
  • recommendations not being reasonable because of the case worker’s limited knowledge of the employer’s business
  • employees having too great an expectation, or the opposite, not taking any active involvement in the return to work process.

We are optimistic that the new service will work but given its slow introduction and the shortage of good OH professionals, we will suspend judgment for now.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

Shared Parental Leave (ShPL) is a new right that will enable eligible mothers, fathers, partners and adopters to choose how to share time off work, after their child is born or placed for adoption. This could mean that the mother or adopter shares some of the leave with her partner, perhaps returning to work for part of the time and then resuming leave at a later date. The Regulations came into force on 1st December 2014. The options to use the new ShPL rights will apply for parents who meet the eligibility criteria, where a baby is due to be born on or after 5th April 2015, or for children who are placed for adoption on or after that date. Employers could start to receive notice of eligibility and the intention to take ShPL from qualifying employee from January 2015.

ShPL is designed to give parents more flexibility in how to share the care of their child, in the first year following birth or adoption. Eligible parents will then be able to share the remaining maternity leave and pay between themselves. We do not anticipate a significant take up on this new statutory right but it is disproportionately complex.

Peter Stanway, our BackupHR™ legal expert comments:

Key Points

  • Employed mothers will continue to be entitled to 52 weeks of Maternity Leave and 39 weeks of Statutory Maternity Pay or Maternity Allowance.
  • If they choose to do so, an eligible mother can end her maternity leave early, and with her partner or the child’s father, will be able to opt for ShPL instead of Maternity Leave. If they both meet the qualifying requirements and both qualify, they will need to decide how they divide their total ShPL and Pay entitlement.
  • ShPL can be taken by both parents at the same time or in turns.
  • Paid Paternity Leave of two weeks will continue. In addition to ShPL.
  • Adopters will have the same rights to ShPL and Pay.
  • Intended parents in surrogacy who meet certain criteria, will be eligible for Statutory Adoption Leave and Pay, and ShPL and Pay.
  • Fathers, partners and, in certain circumstances intended surrogacy parents, will be entitled to unpaid time off to attend up to two ante-natal appointments. Shared Parental Leave In Touch (SPLIT) days
  • Each parent will have the right to have up to 20 Shared Parental Leave In Touch (SPLIT) days (for keeping in touch with work) during ShPL (this is in addition to the 10 keeping in touch i.e. KIT days allowed during maternity and adoption leave
  • Additional paternity leave and pay will be abolished.

Technical Guidance for Employers was published in September and is available on the BIS website which is supposed to help us understand and operate the new Shared Parental Leave process. That guidance is 56 pages! ACAS have subsequently published a good practice Guide of Employers and Employees which is 42 pages and is available from their website.

Discuss Intentions Early On

Having an early and informal discussion can provide an opportunity for the employee, and employer to talk about their preference regarding when ShPL is taken. This is particularly important in helping to decide whether the employer needs to recruit a maternity leave replacement for the full 12 months maternity leave, for clearly if the employee is thinking of coming back earlier, this will impact on the length of the maternity leave cover required.

Employers can use this discussion as an opportunity to point out the different options, such as maternity leave, paternity leave (or adoption leave), and can ensure the employee is aware of their statutory rights, or any contractual schemes the employer has in place. You should encourage employees to inform you as soon as possible of the intention to take shared parental leave, and the intended leave patterns, so that you have time to properly consider requests and arrange cover where appropriate.

Also employers should:

  • Review and update existing maternity, paternity and adoption policies and prepare policies and procedures relating to shared parental leave.
  • Consider how employee requests for continuous blocks of leave will be administered (given that these requests cannot be refused).
  • Consider how employee requests for discontinuous patterns of leave will be evaluated and responded to, including what factors need to be taken into account.
  • Ensure all managers, HR and payroll staff understand and comply with the new rules and know who to contact for further information.
  • Consider the risks associated with paying enhanced maternity pay, but not offering enhanced pay for shared parental leave.

We can amend your policies and handbooks to comply with the new law, or replace them with new versions, whichever is appropriate. We can also provide bespoke training for HR staff and/or line managers on ShPL covering such issues as eligibility for ShPL, the notification requirements and managing the ShPL process from the initial discussions with the employee, through to the leave itself.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.

Mr. Holden made a claim for holiday pay in the Employment Tribunal even though he was a self-employed general labourer (sub-contract) in the building industry. His case was that he was a worker for the purpose of the Working Time Regulations 1998 and the Employment Rights Act 1996, so was entitled to holiday pay. He worked almost exclusively for one employer. The Tribunal ruled that he was a ‘worker’, saying that whilst they accepted that the business was not obligated to provide him work and he was not obligated to accept it, but had regard to the fact that he had been working with the firm for 16 years, who regularly offered him work and expected him to turn up for work during working hours. He worked with minimum supervision, knew the staff, wore their work clothes and drove its vehicles. They concluded that he had been ‘integrated’ into the workforce.

The Employment Appeal Tribunal (EAT) upheld the decision so a Tribunal will be able to hear his claim. There was no error of law in respect of Employment Judge’s approach to the questions of control a former South Africa Test player was batting during Yorkshire’s match against Lancashire. The English Cricket Board (ECB), other legislation uses the term ‘workers’. A variety of legislation covers who qualifies as a ‘worker’ and it is not clear what they are but one description is someone who is not genuinely self employed. Workers have limited rights but probably the most important is that they are entitled to holiday pay. On this issue, Mr. Holden is arguing that he should be able to recover unpaid holiday pay between 2001 and 2013 (yes twelve years).

Changing someone’s status from an employee to a subcontractor in exchange for payment will not prevent a finding that the person is a worker. Care should always be taken to ensure that employment or self-employed status is correctly assessed, and reflects the realities of the relationship.

How can you avoid getting accidentally ‘caught out?

  • Ensure you have appropriate contracts, which should be drafted and issued to ensure the nature of the working relationship is clear.
  • If the working practices conflict with the description the parties give to the relationship, employee or worker status may be inferred
  • If you cannot dispense with the services of such people, review the two points above to ensure that you are doing all you can to reasonably protect the organisation
  • If someone falls into the worker category then pay them holiday pay.

If you are unsure about the status of some of your contractors, then contact us – We will undertake a thorough review of your current arrangements and provide you with our findings and recommendations.

The guidance provided in this article is just that – guidance. Before taking any action make sure that you know what you are doing, or call us for specific advice.