What are the likely implications of Brexit on UK Employment Law/HR practices?

Employers may not be aware that much of the current legislation in place to protect employee rights actually derives from the European Union – for example, working time regulations, rights of the employees on a business transfer (TUPE) and family leave rights to name but a few. Indeed some Politicians for the ‘Leave Campaign’ will no doubt have argued that such laws were inhibitive to British businesses and produced too many rules and regulations having a negative effect on both time and profits.

What is likely to happen?

In reality it is doubtful that the UK Government would look to repeal any employment law which implements minimum EU requirements, the reason being that many of these laws simply complement existing UK law (equal pay rights for example). In addition, much of our existing employment law simply reflects good/acceptable practice in business (or indeed life generally!) such as the right not to be discriminated against on the grounds of sex, age, disability etc. Furthermore some UK Laws actually go above and beyond the minimum requirements of EU legislation – in respect of holidays for example, the EU Working Time Directive 2003/88/EC only requires EU Member States to provide for a minimum of 20 days’ annual leave for employees, whilst the UK statutory minimum leave entitlement is actually 28 days inclusive of normal bank and public holidays.

As a final point it is worth noting that despite a (potential) Brexit, the UK will still need to maintain strong trading relations with Europe. If the UK is a member of the EEA (European Economic Area) it would be required to remain subject to many aspects of EU employment law.

In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with. The following are areas that may be most susceptible to change:

Six year time limit for contract claims does not apply in tribunals

Pursuant to section 5 of the Limitation Act 1980 there is a time limit of six years to bring a breach of contract claim, running from the “the date on which the cause of action accrued”. However, in Grisanti v NBC News Worldwide Inc, an employment tribunal has held that the six year time limit does not apply to breach of contract claims brought in an employment tribunal. In doing so it has declined to follow an earlier decision in which it was held that the six year limit did apply.

Employment Judge Wade, sitting in the Central London Tribunal, was asked to consider the issue at a preliminary hearing on 11 June. The judgment has recently been handed down. Ms Grisanti claims (among other things) that her employer deducted national insurance contributions from her salary between 1996 and 2003. However, when she came to claim her pension in 2015 she was told by HMRC that no payments were made for those seven years. The result is that she is entitled to a greatly reduced pension.

The deductions were calculated correctly and Ms Grisanti does not allege that her employer has kept the money. However, at the time of the hearing it was unclear what had happened to it. However, HMRC had commenced an enquiry.

NBC took the opportunity at the hearing to argue that the claim should be struck out in any event on the basis that the breach of contract claim was out of time, as was a claim under Part II of the Employment Rights Act, commonly referred to as a “Wages Act claim”. It was contended that not only was the claim not brought within three months of termination (as extended by the ACAS early conciliation scheme), it was also subject to section 5 of the Limitation Act 1980 so that it was barred on the basis that more than six years had passed since the cause of action accrued in 2003.

The Employment Tribunals Extension of Jurisdiction Order 1994 allows breach of contract claims to be brought in an employment tribunal. The objective was to avoid duplication of claims in courts and tribunals. NBC submitted that, logically, the time limit of six years must also have been imported otherwise there was the risk of a flood of old claims and claimants would have the right to pursue claims in tribunals that could not be pursued in courts. More particularly a tribunal only has jurisdiction if “the claim is one…which a court in England and Wales would under the law for the time being in force have jurisdiction to hear and determine”. It seems to be a pretty compelling argument, not least because it was successful in the 2012 employment tribunal case of Taylor v Central Manchester University Hospitals NHS Trust.

Justice Secretary Grayling to use EAT case as political challenge to EU law

Last October Joshua Rozenberg reported in The Guardian that a recent case concerning Moroccan workers in diplomatic missions in London resulted in failed claims for unfair dismissal, unpaid wages and breaches of the Working Time Regulations because the employers were able to claim state immunity. I commented about the case last November.

It has now emerged that the Justice Secretary, Chris Grayling, intends to use the case as a way of challenging “creeping” increases in the influence of EU law in British cases. It is part of the Tories’ wider campaign to be seen to be taking a strong line on Europe in the run up to elections and in the face of what is regarded as a significant challenge from UKIP.

While much is made of the effect of the European Convention on Human Rights, particularly in the context of immigration cases, these decisions only have to be taken into account by courts in the UK. However legal practitioners, particularly in the field of employment law, have been dealing with the direct application of European law for decades. Cases are often referred to the European Court for guidance and decisions of the European Court can be directly applied in employment cases in England and Wales.

The crucial difference is that some claims can be brought based on the direct application of EU law. That happens with claims, such as these, based on the EU’s Charter of Fundamental Rights, enshrined in UK law by virtue of the Lisbon Treaty in 2009. Significantly these rights would remain even if the UK withdraws from the European Convention on Human Rights.

whistle-blowers’ protection for LLP members

The decision of the Employment Appeal Tribunal in Clyde & Co LLP v Winkelhof [2012] UKEAT 056 holds that limited liability partnership (LLP) members may be "workers" for the purposes of whistle-blowing protection, even if they are remunerated in part by a profit share. The case concerned an equity member of a LLP who worked in part in the UK and in part for an associated firm in Tanzania. She was expelled from the partnership after she made allegations of bribery and corruption against associated Tanzanian firm AKO Law’s managing partner, Kibuta Ongwamuhana. She made a complaint that her expulsion was detrimental treatment on the ground of a protected disclosure. She also made complaints of sex discrimination and pregnancy discrimination.

At a preliminary hearing her claim was rejected because she did not fall within the definition of a "worker" and was therefore not entitled to protection. The Employment Appeal Tribunal overturned this decision, concluding that she fell within the definition of a worker, that is a person working under a contract "to do or perform personally any work or services for another party to the contract whose status is not by virtue of the contract that of a client or customer of any profession or business undertaking carried on by the individual". Although, for some of the time, the claimant was working on her own account, when she did so, the respondent partnership was not her client.

The question also arose whether the tribunal had jurisdiction to hear her claims under the Equality Act 2010 (which specifically covers partners) when she worked partly in Tanzania (she had spent 78 days of the year in London).

British employment law protection in Libya and elsewhere

Commuting is no fun, unless you are fortunate enough to work from home, but imagine the plight of the international commuter. Now at least they may have the comfort of knowing that they have employment law protection, as this case shows.
Since 1996, when the territorial restriction was removed from unfair dismissal legislation, there has been a series of cases looking at how far unfair dismissal protection applies to workers who spend all or part of the their time working outside the UK. Two situations were set out in Lawson v Serco [2006] ICR 250 where an employee could claim unfair dismissal while working abroad:

– employees based in the UK, even though they carry out many of their duties abroad – “peripatetic” employees; and
– expatriate employees – who both live and work outside the UK – who may be covered by unfair dismissal law in special cases where there is enough of a connection with the UK, for example living in an extra territorial enclave such as a military base or who are posted abroad to work for a UK based business

Are these categories exhaustive, or is it possible for employees working under different arrangements to have UK employment protection? This question of exactly what Lord Hoffman intended his categories to amount to in 2006 has often been debated, but given it was a House of Lords decision this has never been in an authoritative context – until now.