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.

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.

Compensation for post-termination losses, even though lawfully expelled from partnership

The status of professional partners in the context of employment law has exercised the courts on many occasions. Are they employees, workers, or employers or, in some cases, none of the above. Is there a difference between self-employed salaried partners and employed salaried partners? From an employment perspective, probably not. Of course, the employment rights available vary from none to most, depending on which type of employment status (if any) applies.

The same issue arises in the case of members of an LLP (or limited liability partnership), who are often referred to as partners. One such member was a solicitor who worked for Wilsons Solicitors LLP and whose claim was recently considered by the Court of Appeal.

Mr Wilson became a member of the LLP in May 2008. He held the post of managing partner, as well as being the firm’s COLP (Compliance Officer for Legal Practice) and COFA (Compliance Officer for Finance and Administration).

In July 2014 the board of the LLP received a complaint of bullying made against the senior partner, Mr Nisbet. Mr Wilson investigated the complaint, reported his findings to the board and produced a report on 7 October 2014. On 21 October the board was supposed to meet to discuss the report. However, a majority of the members refused to attend the meeting. Instead, the following month, they demanded that Mr Wilson should resign. They then voted to remove him from his post. They also removed him from the posts of COLP and COFA before he was able to submit his report.

In January 2015 Mr Wilson wrote to the other members and claimed that they had repudiated the terms of the members’ agreement by their actions and he accepted the repudiatory breaches. He gave one month’s notice of his intention to leave the membership of the LLP on the basis that their actions had made continued membership intolerable.

Dismissal for beard that was “too long” and “too religious” upheld

Back in December 2015 I commented on the decision of the European Court of Human Rights in Ebrahimian v France, which concerned the termination of employment of a health worker at a hospital who refused (on religious grounds) to remove her headscarf when she was on duty at work. By way of a brief recap, state secularism (or laïcité) is a strongly protected principle in French society. That is why you will not hear hymns or carols sung in French schools and there was a big fuss last month when a village commune tried to place a nativity scene in the square in front of the local mairie. It was determined that Ms Ebrahimian, by wearing a symbol of religious affiliation, was breaching her duties as a public official. In its judgment the court held that the non-renewal of her employment contract did amount to an interference with her right to manifest her religion, contrary to Article 9 of the European Convention on Human Rights. However, that interference had the legitimate aim of protecting the rights and freedoms of others, pursuant to French law. Accordingly, her claim failed.

A similar case has now surfaced in the Versailles administrative Court of Appeal. A trainee doctor of Egyptian origin was dismissed from his job at Saint-Denis hospital centre in Seine-Saint-Denis because his “imposing” beard constituted an “ostentatious display of religious belief”. The individual concerned declined to deny or confirm that his appearance was intended to be a way to “demonstrate his religious activity”.  On 19 December, the Court of Appeal supported the decision, noting that although the wearing of a beard “even long”, cannot “on its own” cannot (necessarily) constitute a sign of religious affiliation, the “circumstances” entitled the hospital to at as it did.

Important ECJ decision opens up the possibility of valuable retrospective holiday claims

I have written in this blog on many occasions about the importance of getting it right if you are going to treat all or part of your workforce as self-employed, rather than as fully fledged workers or employees. As you may recall, the Pimlico Plumbers case earlier this year ruled in favour of the claimants, finding that they were workers rather than being “fully” self-employed and therefore entitled to holiday pay and other benefits. The issue has been a hot topic throughout 2017 with the Uber and Addison Lee cases for example showing a willingness on the part of the courts to find that there was an employment relationship where, previously, there was assumed not to be.

But what basis should be applied for calculating losses if an entitlement to retrospective holiday pay or other benefits is established. The normal cut off point for calculations is six years, since this is the time limit for claims based on breach of contract. However, the entitlement to paid holidays arises under the EU Working Time Directive and this has a statutory footing.

This issue was recently considered by the Court of Justice of the European Union (CJEU/ECJ) and judgment was delivered in the case of King v The Sash Window Workshop Limited and Dollar on 29 November. Mr King had started working for Sash Window Workshop (“the Company”) in June 1999 on a “self-employed commission only contract”. He continued to work for the Company until his retirement in 2012. He took numerous holidays during the 13 years that he worked for the Company, but was not paid for them. Following his retirement he asked to be paid all his holiday pay for the entire period of his engagement. Unsurprisingly, the Company refused.

Mr King took his claim to an employment tribunal which held that there were in effect three types of holiday claims: (i) holiday pay for 2012-13 accrued but untaken when he left, (ii) holiday pay for leave actually taken but in respect of which no payment was made and (iii) pay in lieu covering accrued but untaken leave (amounting to a further 24.15 weeks). The tribunal found that Mr King was a worker (within the meaning of the statutory definition – see the Pimlico case) and therefore ruled in his favour in respect of all three.

The Company appealed to the Employment Appeal Tribunal.

The end of “fit to work” notes and referrals

Back in March 2010 I reported about the proposed introduction of fit notes, noting that the Government expected savings to the economy of £240 million over 10 years, by aiding the recovery to work of sick workers. Well, it didn’t turn out that way. By July 2010 there were teething problems. Bogus fit notes were widely available on the internet and offered for £9.99 with an introductory “buy one get one free” offer. A further and entirely predictable problem was that employers receiving the fit notes were unable to decipher GPs’ illegible handwriting and therefore overlooked key elements of the process such as, for example, arranging a structured return to work.

In 2015 the Engineering Employers Federation (EEF) reported that the scheme wasn’t working. By September 2014 only 5000 GPs from a pool of 40,854 had received training and 43% of employers said that the fit note had not helped employees to return to work. The EEF’s head of health and safety noted that the quality of advice being given by GPs to help people back to work was deteriorating and that, in order to work, the scheme needed greater resources.

Late in November 2017 it was quietly announced that the scheme is to be scrapped.