I'm a solicitor and the chief operating officer at Canter Levin & Berg. I was formerly head of the employment department. I maintain this website so if you have any suggestions, criticisms or recommendations please email me at martinmalone@canter-law.co.uk. Outside work my interests include national hunt horse racing, France and French wine and current affairs. I also design and maintain websites.

You leave this court without the slightest stain on your character, except…

disclosure and barringCRB checks, DBS checks or ECRCs, whatever they are called, criminal record checks have become an integral part of many employment and recruitment procedures.

The object is laudable: to protect children and vulnerable people from coming into contact from those who are unsuitable to be among them. However, a decision of the Supreme Court at the end of July has exposed an interesting aspect of enhanced checks that many people did not realise and which raises interesting questions concerning our justice system and how mere involvement in a criminal process without any finding of wrongdoing can still result in a disclosure which can call into question the suitability of the individual concerned.

The case concerned someone known as “AR” (he cannot be named for legal reasons, a qualified teacher who was found not guilty of rape in 2011 after a Crown Court trial.

Although he was found not guilty, details of the allegation and the verdict were included in his criminal records certificate. Following hearings on 21 November 2017 and 23 April 2018, Lord Carnwath delivered the judgment of the Supreme Court. The respondents were the Chief Constable of Manchester Police and the Home Secretary.

In a report into the operation of the criminal records legislation, its author Sunita Mason pointed out that there was:

“…a degree of dissatisfaction with a system that has evolved with the laudable aim of protecting vulnerable people but is now viewed by some as intrusive and an unnecessary bar to employment. There is also concern that some people may be treated as ‘guilty until proven innocent'”

As a result of her report there were amendments to the legislation including a right to request a review.

Pimlico Plumbers and other employment status news

Late last month the Supreme Court delivered its long-awaited if not altogether surprising decision in Pimlico Plumbers v Smith. It upheld the decisions of the lower courts that Mr Smith should properly be classified as a worker, with attendant rights (including discrimination rights and holiday pay), rather than being self-employed.

Gary Smith worked for Pimlico Plumbers for six years (from 2005-2011). Although he was VAT registered and paid self-employed tax, from an employment law perspective, he was nonetheless entitled to workers’ rights.

The judgment was unanimous and the lead judgment was provided by Lord Wilson. Having considered the history of the law concerning the status of workers (dating back to 1875), he considered the written agreements between Pimlico and Mr Smith (the original dated 2005 and a replacement issued in 2009), both of which he thought were confusing. However, he noted the extent of control exercised over Mr Smith including the right to dismiss him for gross misconduct, how he should provide his services, an obligation to provide advance notification of absences and the supply of tools. The second agreement included an obligation to wear Pimlico’s uniform, a minimum 40 hours’ working week, advance notice of annual leave and provision for warnings and dismissal.

He also noted that there was no provision for Mr Smith to appoint a substitute to do his work (other than by another Pimlico operative). Having considered relevant authorities, he concluded that “the dominant feature of Mr Smith’s contracts with Pimlico was an obligation of personal performance”.

There was an “umbrella contract” between Mr Smith and Pimlico whereby, if work was available to be done by him, he would be expected to do it. Nonetheless, Mr Smith correctly presented himself as self-employed for tax purposes.

Is it fair to dismiss for action which falls short of gross misconduct?

It is well known that dismissal can result from a single matter which is usually found to amount to gross misconduct, or as the result of more than one event, with the prior matters resulting in written warnings and/or a final written warning. Indeed, most disciplinary procedures outline this process and generally include examples of what will normally be treated as gross misconduct.

However, in Quintiles Commercial UK v Barongo the question for the Employment Appeal Tribunal (EAT) was whether it was fair for Quintiles to dismiss Mr Barongo for conduct which was initially classified as gross misconduct but subsequently downgraded to serious misconduct.

Quintiles supplies staff for pharmaceutical companies. Mr Barongo started working for them in October 2012 and was latterly engaged to sell drugs for Astra Zeneca. On 5 January 2016 he was dismissed on notice on two grounds. First, he had failed complete Astra Zeneca’s compliance training course by the deadline of 3 November 2015 and, second, failing to attend their compulsory training course on 19 November 2015. Mr Barongo did not deny the allegations and he also accepted that they amounted to misconduct on his part. However, he contended that he had been dealing with other matters. He said that he had not intentionally failed to engage with the training but he had chosen to priorities other matters. This had been at a time when he was on a performance improvement plan.

There was a disciplinary hearing conducted with his line manager which took place by telephone. As the EAT pointed out, conducting the hearing by phone might not have been best practice but it was not in itself unfair. His line manager concluded that the duty of trust and confidence which ought to exist between employer and employee had been broken and, as a result, Mr Barongo was dismissed on notice, for gross misconduct.

He appealed against the decision and the appeal was heard by one of the employer’s directors, Mr Athey, who took the view that there had been a breach of the duty of trust and confidence, but that it amounted to serious rather than gross misconduct.

Mr Barongo submitted a claim of unfair dismissal to the Employment Tribunal. The Tribunal took the view that the downgrading of the misconduct from gross to serious was highly significant:

How to deal with convictions for sexual offences committed by a person associated with the employee

Judgments of the Supreme Court concerning employment law issues are fairly infrequent and usually worthy of attention. That is certainly so in the recent case of Reilly v Sandwell Metropolitan Borough Council which concerned an individual convicted of the surprisingly common offence of downloading indecent images of children.

Ms Reilly was the deputy head teacher of a primary school. She was in a close but not sexual relationship with a Mr Selwood and they did not live together. In 2003 they bought a property in joint names as an investment and Mr Selwood lived there, although he did not make any payments to Ms Reilly. Ms Reilly did not live there but she occasionally stayed overnight, including on 24 February 2009 when, the following morning, she awoke to the arrival of the police who searched the property and arrested Mr Selwood on suspicion of having downloaded indecent images of children. In September Ms Reilly was promoted to the post of head teacher at the school and in February 2010 Mr Selwood was convicted of making indecent images of children by downloading. On a scale of 1-5, the images ranged from level 1 to level 4. He was sentenced to a three year community order, made the subject of a sexual offences prevention order (which included a ban on him having unsupervised access to minors) and he was required to take part in a sex offenders’ programme.

Ms Reilly was immediately aware of the conviction and sentence but chose not to disclose them to the school governors or the local authority. In June 2010 the authority became aware of the conviction and she was suspended on full pay. She was required to attend a disciplinary hearing, the allegation being that, in failing to disclose her relationship with a man convicted of sexual offences concerning children, she had committed a serious breach of an implied term of her contract of employment, sufficient to warrant dismissal for gross misconduct. Following a hearing in May 2011 she was summarily dismissed. The panel was particularly concerned that Ms Reilly continued to refuse to accept that her continued association with Mr Selwood might pose a risk to children at the school. Her appeal against her dismissal failed.

New GDPR compliant data protection

As I mentioned to readers of our monthly newsletter, like many organisations, we have been preparing for the implementation of the General Data Protection Regulation on 25 May 2018. As you may know, there is no transition period so the new rules concerning data protection will be in full force and effect from day one.

At Canter Levin & Berg we introduced our new data protection policy last week and we have recently published our template GDPR compliant data protection policy, with associated documents and guidance notes, in the subscription section of this website. The policy is intended to be straightforward and easy for all readers and users to understand.

As usual we have accompanied the policy with detailed background and guidance notes which are intended to demystify the compliance process for SMEs. We have explained the background to GDPR, provided a commentary on what the Information Commissioner says about preparing for GDPR and summarised the main areas that need to be considered.

We have provided a clause by clause summary of the policy so that our users have all that they need to adapt the policy for implementation in their organisations.

Of course, subscribers who have access to our employment lawyers can have them prepare a suitably adapted policy, as well as receiving advice about how to implement the changes.

The stakes are high when the wrongful dismissal claimant is the former boss of The AA

In June 2014, when The AA was taken public in what was described as a management buy-in, chartered accountant Bob McKenzie was appointed as its chief executive on a base salary of £750,000.

On 1 August 2017 he was sacked for gross misconduct after he was reported to have to have got into a hotel bar fight with one of the Company’s senior managers. He was reported to have engaged in “a sustained and violent attack” on the manager which was captured on the hotel’s CCTV. Days after the incident he was removed from the board. As a result of being dismissed for gross misconduct, thereby disqualifying himself from any further contractual benefits, he stood to lose what was estimated at the time to be about £100m in share awards. Following his dismissal Mr McKenzie admitted himself to hospital suffering from work related stress.

He was known as strong boardroom performer, driven by financial returns. In an interview with The Sunday Telegraph in 2016 he said of his employment prior to joining The AA:

“Work hard and play hard: you were given targets and you met them or else you parted company.”

Shortly following his appointment, chief executive Chris Jansen left abruptly, followed finance director Andy Boland. Mr McKenzie assumed the (much criticised) dual role of chairman and chief executive, assuming greater power in 2015 by absorbing the duties of executive director Nick Hewitt, architect of the business plan that led to the float, who also left abruptly.

Mr McKenzie instructed top City firm Bird and Bird and in January 2018 The AA declared that it was “astonished” that Mr McKenzie had commenced an unfair dismissal claim in the employment tribunal, with the intention of bringing a wrongful dismissal claim for “tens of millions of pounds” in the High Court.

DPD relaxes onerous terms imposed on its delivery drivers

A year ago I wrote about the onerous terms imposed on DPD couriers, which had come to the attention of the Work and Pensions Select Committee:

“Meanwhile, it has emerged that DPD, which deliver parcels for Marks & Spencer, John Lewis and River Island, fines their couriers £150 per day if they cannot find cover when they are ill. This has resulted in drivers being forced to work when they are sick. The fine, which is described as “liquidated damages”, means that couriers who earn on average £200 a day, lose £350 if they cannot work through illness and are unable to find a substitute.”

Chair of the Committee (and my MP) Frank Field, commented at the time:

“The gig economy is producing wave after wave of evidence on the grim reality of life at the bottom of Britain’s labour market…A group of companies now controls the working lives of an unknown number of people, and yet evades its own responsibilities as employers and taxpayers by labelling those people as self-employed… This move [by DPD] makes the rest of the gig economy look as though it operates in the Garden of Eden.”

In February 2018 The Guardian reported the sad story of Don Lane, a DPD courier, who was fined £150 for attending a medical appointment to treat his diabetes and who, at age 53, subsequently collapsed and died for reasons connected with the disease. His widow, Ruth, disclosed that he had missed medical appointments because he felt under pressure to cover his round. He had collapsed twice, including once into a diabetic coma, while at the wheel of his DPD van. His fine was imposed when he went to see a specialist about eye damage caused by his diabetes. He collapsed in late December, having worked through illness during the Christmas rush and died in the Royal Bournemouth Hospital on 4 January.

More unrest at the BBC – now it’s about personal service contracts and a word of warning about the ostensibly self-employed

Perhaps the most surprising aspect of “employment” provided through personal service companies is that such arrangements have lasted as long as they have.

When the BBC first published the salaries of its top presenters last year there were some notable omissions. For example David Dimbleby didn’t appear on the list. Why? Because he is paid by the BBC through a separate production company. Similar arrangements are in place for Lord Alan Sugar, John Torode and Gregg Wallace.

For years the BBC has encouraged and, some have argued, mandated some of their key talent to be paid through a personal service company. The idea is that the company provides the services of, say, the presenter to the BBC and the BBC therefore pays the company for the services provided. The upshot is that the presenter benefits from the lower tax regime for limited companies (currently 20%) rather than the higher personal tax rates of 40% over £45,000 and 45% over £150,000.

Unsurprisingly, HMRC have been chipping away at such arrangements for a number of years and, as far as the BBC is concerned, matters recently came to a head with a victory in the High Court against BBC Look North presenter Christa Ackroyd. Ms Ackroyd was sacked by the BBC in 2013 after HMRC demanded unpaid taxes from her on the basis that she was, in reality, an employee of the BBC and therefore required to be taxed under Schedule E. Her HMRC appeal was unsuccessful and she is now facing a bill for £419,151 in back taxes, plus undisclosed legal costs. An HMRC spokesman reiterated their long held view that “employment status is never a matter of choice…It is always dictated by the facts and when the wrong tax is being paid we put things right”.

You may take the view that Ms Ackroyd had tried it on and been caught out but, as is so often the case, it is by no means that straightforward and the BBC is very much under scrutiny as a result of its actions.

Is the National Living Wage causing problems?

I think that most employers would take the view that the principle that employees should be paid a fair wage for their work is one that should be supported. However, sometimes a one size fits all approach can throw up anomalies. I should be clear: I’m not talking about those who exploit people to work excessively long hours for very poor pay (as low as £2.00 per hour), often in plainly unacceptable working conditions. I’ve written in this blog about people who have been kept effectively as slaves in the most appalling circumstances and these employers should be rooted out and dealt with severely, where appropriate in the criminal courts.

It is worth remembering that, when introduced on 1 April 1999, the adult National Minimum Wage was £3.60 per hour. Since then, it increased steadily for a number of years (around or a little ahead of inflation) but the big jump came on 1 April 2016 when it was hiked from £6.70 to £7.20 as part of the merger and rebrand as the National Living Wage. Subsequent increases (including those coming into effect on 1 April 2018) are here.

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Employees who are paid below the minimum wage can complain to an employment tribunal or to HMRC. If HMRC upholds the complaint the employer can be sent a notice of arrears plus a penalty. The maximum fine for non-payment (in addition to making good the arrears) is £20,000 per worker. In recent years HMRC have made a point of publishing (with high profile PR) lists of those businesses that have paid below the prescribed rates. It is not widely known that, in addition, directors of defaulting companies can be banned from being directors (or shadow directors) of any company for up to fifteen years.

So, what are the problems referred to in the title?

A family (business) at war

If, like me, you have been enjoying Kay Mellor’s comedy drama Girlfriends on ITV, you may have cringed at some of the artistic licence deployed when dealing with aspects of the age discrimination claim being brought by Miranda Richardson’s character against her boss (and lover), played by Anthony Head. However, it has neatly highlighted the particular difficulties that can arise when workplace disputes get a bit too close to home.

A real life family dispute has been playing out in the Manchester Employment Tribunal and, more recently, in the Employment Appeal Tribunal. There is a major clue in the name of the case: Mrs J Feltham, B Feltham (Maintenance) Limited and Ms H Feltham v Feltham Management Limited, Mr D Feltham and Mr M Feltham. Feltham Management is a long established family business, specialising in property management, particularly in respect of student lettings. Jane Feltham is the claimant. She has three brothers, David, Martin and Stephen, all of whom were respondents in the Employment Tribunal claim. They all worked for the family business which was founded by their father. Hazel, the adult child of David, worked for the company as a clerical assistant and Jane’s husband was Mr Eckersall, a self-employed joiner who did work for the company.

In August 2013 it came to light that Mr Eckersall had been sending inappropriate texts and Facebook messages to his niece, Hazel. On the same day he told his wife, Jane, that he was leaving her because he had feelings for Hazel. Jane confronted Hazel, accusing her of inappropriate conduct, but she denied that she had done anything wrong. Jane’s brother David got involved and told Jane that if was her fault because she did not take Mr Eckersall’s name on marriage, did not respect him as head of the household and suggested that these (among other reasons) were why he wanted Hazel. Jane was upset and left work. She did not return.

With support from David, Hazel took over Jane’s duties as office manager. The company stopped paying Jane from the end of August, but she remained a director as well as continuing to receive benefits including a company car and credit card.