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In light of the above, whilst in my view the majority of employment law legislation will not be repealed or significantly changed, the UK Government may look to alter some employment law that UK businesses have struggled with.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


Can workers claim injury to feelings for a breach of the Working Time Regulations 1998?

This question was recently considered by The Employment Appeal Tribunal (EAT) in the case of Santos Gomes v Higher Level Care Ltd UKEAT/0017/16.
The Facts
The Claimant, Miss Santos Gomes was successful in proving that her employer, Higher Level Care Ltd, had failed in their duty to provide her with 20 minute rest breaks as required by the Working Time Regulations 1998 (WTR).  or this element of the claim she was awarded compensation for her financial loss in the amount of £1,220. The Employment Tribunal however refused to entertain a further compensation claim for injury to feelings.

The Claimant brought an appeal to the EAT on the basis that Regulation 30(4) did not prevent an award for injury to feelings being made, compensation for injury to feelings was not restricted to discrimination laws, and the WTR did not provide an adequate remedy for this as is required by EU Law.
The Law
Regulation 12 of the WTR states that a worker is entitled to a minimum rest break of 20 minutes when working for more than 6 hours per day. Subsequently a worker is permitted to bring a complaint against their employer for a breach of these entitlements. When in such occasions an ET finds in favour of the Claimant, a declaration must be made in this regard and an award of compensation can be made.

The WTR state only that any compensation awarded should be what the ET considers to be ‘just and equitable’ taking into account all of the circumstances and the employers default in refusing to allow the worker to exercise their right (Reg 30(4)(a)) and any subsequent loss sustained by that worker attributable to the matters complained of (Reg 30(4)(b)).  Whilst compensation for injury to feelings is available in some types of employment law claims (mostly for discrimination), you cannot claim such compensation for breach of contract or indeed unfair dismissal claims.
The decision of the EAT


Tips and troncs – under review

It has recently been announced that the Government is to consult on a proposal to ban deductions from employees’ tips. It has long been accepted that employers are within their rights to make the deductions despite the apparent unfairness. However, not surprisingly, and following the exposure of deductions made from some of Britain’s best known restaurant chains the Government has following an 8 month review, decided to consult as to whether deductions from staff tips should be scrapped.

The deductions are taken in the name of an “admin fee” and mean that staff do not get the full percentage of the tips that were intended for them. Unite officer Dave Turnbull said:
We are pleased that the government has woken up to this scandal, but we would ask that they think carefully about an effective solution. Capping admin fees will simply legitimise the underhand practice of restaurants taking a slice of staff tips and be near enough impossible to enforce.

When customers eat at the likes of Pizza Express, they give tips in the expectation that all of it will go to staff and not be pocketed by management.
The Government’s consultation, which will run until 27 June, sets out options for meeting three broad objectives: making it clear that tips and service charges are voluntary; making it clear where these payments go; and ensuring workers get a fair share of the money raised.

The Government said that while unions and other employee groups had asked for a requirement for 100 per cent of tips to be paid to workers, and the majority of customers would prefer to see this, employers were “more supportive of retaining the current treatment of discretionary payments for service; maintaining their flexibility to reward workers but increasing the transparency of actions”.

Prior to 2009 restaurants were allowed to take tips and gratuities into consideration to effectively make up national minimum wage. However, from October 2009 such deductions were prohibited which meant that all eligible workers must receive at least national minimum wage in base pay with any tips paid on top. With that has brought a great deal of confusion as to what this meant.


Judge at EU’s top court backs workplace ban on headscarf

An advocate general at the European Court of Justice has said that companies should be free to ban Muslim women from wearing head scarves if they have a general policy barring all religious and political symbols.

This was said in the run up to a landmark ruling expected from the EU’s highest Court this year. The case involved a woman who worked as a receptionist for the company G4S. After working for the company for three years she decided to start wearing a headscarf for religious reasons. As a result the employee was dismissed given that she had contravened Company policy, which at the time was an unwritten rule.

The employee brought a claim for wrongful dismissal. This was dismissed by the lower courts and further on appeal. However it was referred to the European Court of Justice in Luxembourg to establish whether G4S had contravened the European Union’s anti-discrimination directive.

The Advocate General provided an indication that such a ban would not be deemed direct discrimination and could be justified in order to enforce a policy on religion and ideological neutrality. In arriving at this decision it was said that “whilst an employee cannot leave their sex, skin colour, ethnicity, sexual orientation, age or disability at the door, upon entering their employer’s premises, they may be expected to moderate the exercise of his religion in the workplace.”

If the European Court of Justice’s final ruling agrees with that of the Advocate General, then this will be landmark decision. However, this is not the first time that the contentious issue has come before the European Courts.


Indirect religious discrimination

Can a worker be dismissed for refusing to leave a partner convicted of unrelated criminal conduct with which the dismissed worker was not involved?


This question was considered in the recent case of Pendleton v Derbyshire County Council & Anor (Religion or Belief Discrimination) [2016] UKEAT 0238 15 2903.  The facts of this case were that the Claimant’s (Mrs Pendleton’s) husband was the headteacher of a local school.  The Claimant herself was also a teacher employed at another local school where she was teaching a Year 6 class, had an unblemished disciplinary record and was highly respected both in school and also within the Anglican Christian community (being a devoted and practising Anglican Christian).


In January 2013 the Claimant’s husband was arrested on suspicion of downloading indecent images of children and voyeurism.  He was later convicted of these offences and sentenced to ten months’ imprisonment.


The Claimant initially left her husband and went to stay with her parents, taking leave from work – at this point the headteacher of the school where she was employed assured her that her position would remain open for when she returned.  Although there was no evidence that the Claimant had any knowledge or involvement in her husband’s actions, the headteacher had also stated that the school couldn’t support her if she stayed with her husband.


During her period of leave the Claimant decided that whilst she did not condone what her husband had done, she placed importance on her marriage vows and would therefore stay with him if he could show unequivocal repentance.


The school subsequently dismissed the Claimant summarily, stating that she had “… chosen to maintain a relationship with [her] partner who has been convicted of making indecent images of children and voyeurism. This has led the panel to believe that [her] suitability to carry out the safeguarding responsibilities of [her] role … have been eroded. Furthermore, the choices [she had] made in [her] personal life are in direct contravention to the ethos of … the … School”.


The Claimant’s appeal against her dismissal was unsuccessful and she therefore brought claims of unfair dismissal, wrongful dismissal and indirect religious discrimination against the Respondent based upon her religious beliefs as noted above.


The Employment Tribunal agreed with the Claimant’s submission that she had been unfairly dismissed, stating that the reason for her dismissal was not some other substantial reason (SOSR) – she had not committed an act of misconduct let alone gross misconduct – but rather the Respondent’s view that the Claimant had used poor judgment in staying with her husband despite him being a convicted sex offender.  The Claimant’s claim of wrongful dismissal also succeeded in light of the above.


With regards the indirect discrimination claim however, the Tribunal noted that the claimant held a belief for the purposes of section 10(2) Equality Act 2010, that: “her marriage vow was sacrosanct, having been made to God and being an expression of her religious faith”.  The Tribunal further accepted that the Respondent had applied a provision, criterion or practice of dismissing those who chose not to end a relationship with a person convicted of making indecent images of children and voyeurism, however concluded that the Claimant would have been dismissed whether she believed in the sanctity of marriage or not as another individual in the same situation would have also been dismissed, even if they did not share the Claimant’s religious belief.  The tribunal did comment however that had they needed to consider the question of proportionality, they would have found that the Respondent did not show that the dismissal was a proportionate means of achieving a legitimate aim.


The Claimant appealed to the Employment Appeal Tribunal (EAT) on the basis that making her choose between her marriage vows and her career was enough to show she had been placed at a disadvantage, especially given she had been required to act against her religious beliefs.


Can a demotion amount to a breach of contract/constructive dismissal claim?

In the case of Gibbs v Leeds United Football Club Ltd [2016] EWHC 960 (QB) (28 April 2016) the matter in question concerned a contract of employment between the Claimant (Mr Gibbs) and the Respondent (Leeds United FC).


The question was whether the Claimant had been constructively dismissed due to a repudiatory breach of his contract of employment by Leeds United, or whether he chose to leave the club without there being any breach of contract.  There was a also a further question in respect of whether the Claimant acted unreasonably in failing to mitigate his losses by rejecting the offer of the role of Head Coach after he had resigned.

By way of background information, the claimant’s contract of employment stated that he must “diligently exercise such powers and perform such duties as may from time to time be assigned to him by the Chief Executive and the Board at which are commonly undertaken and exercised by the managers of Professional football club companies of the Company’s status in relation to the playing, coaching and scouting aspects of the Company’s undertaking (included but not limited to player conditioning and the development of tactical instructions and playing standards generally) and in the discharge of the same he shall:…comply with all reasonable and lawful instructions and requests given:…(B) to the Assistant Manager by the Chairman; (C) to the Assistant Manager by the Company; (D) to the Assistant Manager by the Chief of the Executive…and perform such hours of work as may from time to time reasonably be required of him…”


The Claimant was engaged on a fixed term three year contract, however after around eight months of employment the Respondent Company was purchased by a Mr Cellino.  The Respondent thereafter wanted to recruit their own management team, and agreed with the Claimant’s manager to end the manager’s contract early – the Claimant therefore expected that the same thing would happen to him.


A new manager was subsequently recruited by the Respondent along with a new assistant manager, however the Claimant was not offered a termination package.  The Claimant did express during a meeting with the owner of the Company that if work was not available for him, he would be happy for his contract to be terminated if a termination package could be agreed.


An agreement was not met however and the Claimant subsequently reported to work under the new manager.  Unfortunately they did not get on and the Claimant received an email stating that his role had been changed and he was now required to train the Respondent’s youth players instead of the first team.  The Claimant felt that this instruction constituted a demotion and subsequently resigned.


Four months later, strangely, the Claimant was offered the role of manager following the dismissal of his predecessor.  He refused this offer, stating that the treatment he had received by the Respondent had undermined his relationship with his fellow employees.  The Claimant brought a breach of contract constructive dismissal claim against the Respondent.


The High Court held


Discrimination claim against Newcastle United

The former Newcastle United midfielder Jonas Gutierrez has won a disability discrimination claim against his former club after being dropped from the club as a result of his battle with testicular cancer.

Gutierrez who has previously been described as one of Newcastle’s most valuable players signed a new four year deal with the club in 2011. His contract provided a clause providing for an automatic one year extension if he played 80 premier league games. Gutierrez was a regular first team player although following his cancer diagnosis and subsequent treatment the club informed him that he wasn’t going to be retained given that he had only reached 78 of the 80 games that were required to trigger the extension.  Gutierrez argued that the club purposely didn’t select him for premier league games in an attempt to manipulate the extension trigger as they no longer wanted him at the club.

Gutierrez made four claims under the Equality Act 2010 which makes it unlawful to discriminate against workers on the grounds of mental or physical disability which are as follows.

A claim under section 13 for “direct discrimination”
A claim under section 15 for “unfavourable treatment”
A claim under section 21 for failure to make reasonable adjustments.
A claim for disability-related harassment.

The tribunal dismissed claims two and four largely because the effects of his cancer were no more disruptive to his ability to work that the common injuries suffered by footballers. Claim 1 was upheld because the tribunal inferred from the facts that the club were deliberately managing the claimant’s selection to prevent him triggering the option of extension. They further went on to say that the reason why the respondent had managed the claimant’s selection was because they had no longer wanted him at the club because of his cancer.


Incorporation of company handbooks into employment contracts

The employment contract sets out an employee’s rights, responsibilities and duties within the employment relationship. However, as an employer, you also need a set of policies complying with the ACAS code on grievance and disciplinary procedures, paid holiday and maternity and paternity leave. The general position and assumption of most employers are that policies are non contractual and therefore an employee will be prohibited from bringing a breach of contract claim in the event that their employers fail to adhere to any of their policies.

However, the above is not conclusive and the Court will often consider a number of factors in considering whether policies contained in company handbooks will be viewed as contractual. Policies that infer statutory rights such as sickness and holiday rights will be deemed contractual on the basis that the employer is obliged to provide full particulars of their employment under the Employment Rights Act 1996. However with non-statutory rights the Court will try to ascertain what the intentions of the parties were when entering into the agreement

Whether a policy is contractual became a point of contention in Sparks v Departments for Transport [2015] EWHC 181 (QB)  which concerned the contractual validity of a decision by several government agencies to tighten up their sickness absence rules by reducing the amount of time before sickness procedures were triggered.


Age Discrimination & Permanent Health Insurance

Since the abolition of the default retirement age some time ago, questions have arisen regarding what happens to employee benefits should they decide to remain in employment over a certain age.

In the recent case of Smith v Gartner UK Ltd, Ms Smith (the Claimant) was absent from work on the grounds of sickness and had been receiving payments under Gartner UK Ltd’s (the Respondent) Permanent Health Insurance (PHI) scheme during this time.  In line with the terms of the PHI policy that the Claimant had originally signed up to in 2003, these payments were stopped when the Claimant reached the age of 60.

Of further note is the fact that the Respondents had in fact introduced a new PHI scheme in 2007 which provided employees with cover until the age of 65.

In response to the cessation of her benefits, the Claimant brought a claim for direct age discrimination against the Respondents, arguing that by not continuing the payments beyond the age of 60 they had treated her less favourably as a result of her age and could not justify this decision.

Ms Smith’s claim was rejected by the Employment Tribunal and she subsequently appealed to the Employment Appeal Tribunal (EAT) who rejected her appeal on the basis that the reason her payments ceased at the age of 60 was purely because the terms of the policy she had signed up to dictated that this be the case.  This was therefore not a decision made by the Respondent and as such could not be deemed an act of discrimination.

The EAT further decided that the Respondent’s decision not to extend the benefits of the PHI policy introduced in 2007, could similarly not be deemed discriminatory.  As the Claimant was already receiving benefits under the old PHI policy and was not actively working, she did not satisfy the conditions of the new scheme.

In light of the above, Employers could be advised that they are not under an obligation to offer additional benefits in excess of PHI schemes simply to avoid discrimination claims and that cases such as these may very much depend upon the terms of the PHI policy in question.  It should also be noted that the Equality Act 2010 does allow Employers to cease offering PHI in addition to other insured benefits, at the age of 65 or the employee’s state pension age (whichever is the higher).

Beware however that this area of the law may well be subject to change in the future given the very different decision reached by the Employment Tribunal in 2013 in the case of Witham v Capita Insurance Services Ltd.


An employee’s right to privacy – are your emails protected?

One of the most common issues encountered by employers today is whether emails sent by employees are able to be used in disciplinary proceedings against them.  Are they the private property of the employee or can an employer use them as evidence if they have an effect on their employees/the workplace?

In the case of Garamukanwa v Solent NHS Trust, an employer was recently held not to have breached an employee’s right to a private and family life (Article 8 of the European Convention on Human Rights) when they reviewed private information that belonged to the employee on the basis that the information related to work and therefore had a potential impact on the employer.

The Claimant (Mr Garamukanwa) worked as a Clinical Manager for the Respondent (Solent NHS Trust), and had formed a personal relationship with a fellow colleague, Ms Maclean.

Following the breakdown of this relationship, the Claimant then believed that Ms Maclean had started a relationship with another colleague, Ms Smith. Ms Maclean and Ms Smith subsequently received an email from the Claimant in which he advised them that unless they told their manager about their relationship, he would do it himself.

Prior to this an anonymous letter had in fact already been sent to the aforementioned manager (Mr Brown), accusing Ms Maclean and Ms Smith of ‘inappropriate sexual behaviour’ in the workplace.  Mr Brown subsequently raised these concerns with Ms Maclean and Ms Smith, who denied both having a relationship and inappropriate sexual behaviour.  Ms Maclean later advised Mr Brown about the email that herself and Ms Smith had previously received from the Claimant and stated that she felt threatened as a result of this.

Mr Brown therefore informally raised these concerns with the Claimant, who apologised for sending the email but denied being the person who had sent the letter to him.  Ms Maclean and Ms Smith were then the subject of a vendetta which consisted of the sending of malicious emails and photos to management and other members of staff, from various anonymous email addresses.  In addition a fake Facebook profile was set up and around 150 of the Respondent’s employees were added to it.  It later became clear that whoever was responsible for the vendetta was following Ms Maclean and Ms Smith, and Ms Maclean believed that the Claimant was in fact stalking her.