Employment Law Snippet – No. 8 – It’s beginning to look a lot like Christmas…

Hello and welcome to our eighth Employment Law Snippet article. As usual, this article aims to explore and discuss how a quirky topic might affect employees and employers alike. This week we will be looking at Christmas!! Now, let’s get some brief, festive-related confessions out of the way. Amongst other things, I’m guilty of the…

Sacked for using a plastic cup?!


Intelligent Hand Dryers, a Company based in Sheffield specialising in, well, Hand Dryers, has recently introduced a ban on its employees using single use plastic including plastic water bottles, sandwich wrappers with plastic ‘windows’, and disposable coffee cups with plastic linings, in order to reduce its environmental impact.

The owner of the Company, Andrew Cameron, has made the above a disciplinary offence and stated that if employees receive three warnings and continue to ignore this policy, they could be dismissed.  The environmental benefits, if more businesses were to impose such policies, are obvious however is it fair to effectively make this a condition of employment?  Surely the choice of an employee to buy a sandwich from a well-known supermarket at lunch time does not hinder their ability to perform their role?

Good news for employers seeking to enforce restrictive covenants

Five years ago I wrote an article for this blog which was entitled “Don’t rely on a court to fix a ‘defective’ restrictive covenant“. In doing so I was merely using a recent case to demonstrate the approach taken by courts to restrictive covenants in employment contracts, viz. that they have to be precise and correct in all respects, failing which they are likely to be struck out in their entirety. That’s why you often see a sub-clause at the end of series of restrictive covenants which states something along the lines that if any covenant or part thereof should be found to be unenforceable, that shall not invalidate the remainder: an attempt to pre-empt the likely outcome if the clauses are subjected to court scrutiny.

Restrictive covenants in employment contracts, and particularly those which seek to restrict a former employee from joining a competitor, can be difficult to enforce in practice. That’s because they are a form of restraint of trade which, on the face of it, is contrary to public policy. However, courts have acknowledged over the years that employers have legitimate business interests which they ought to be able to protect, but only to the extent that it is reasonable to do so. Consequently, such restrictions should be reasonable in area and duration, with the restrictions providing no more protection than is reasonably necessary. the received wisdom has been that if they go too far, they are likely to be struck out altogether. Since court proceedings in this field can be cumbersome, time-consuming and very expensive, often with no guarantee of a successful outcome and with an opponent who might not be in a position to pay costs if ordered to do so, employers have tended to be understandably wary about litigating and have instead relied on the deterrent factor of including such clauses in contracts.

There has been a good deal of litigation concerning restrictive covenants, very often considering what restrictions are reasonable in terms of their scope and application. However, it has been over 100 years since restrictive covenants have been considered by our most senior court. That is until the judgment of the Supreme Court in the case of Tillman v Egon Zehnder Limited, which was handed down on 3 July.

Regular voluntary overtime should be included in holiday pay

The Court of Appeal has this week ruled that employers must consider any ‘regular’ voluntary overtime when calculating holiday pay, in addition to ‘non-guaranteed’ overtime, upholding the earlier decision of the Employment Appeal Tribunal (EAT).

In Flowers and others v East of England Ambulance Service NHS Trust (2017) the Claimants, all employed by the East of England Ambulance Service NHS Trust (in a variety of roles) initially brought their claim to the Bury St Edmunds Employment Tribunal alleging that unlawful deductions had been made from their holiday pay.

They stated that the calculation of their holiday pay should account for overtime in two categories – non-guaranteed overtime, and voluntary overtime. The difference between the two in this case is that non-guaranteed overtime occurs when the employee is carrying out a task which must be completed after the end of the shift (for example dealing with an emergency services call for an ambulance), whereas voluntary overtime would be classed as additional shifts which the Claimant can choose to volunteer for (there was no requirement or expectation for them to do so however).

Red Dead Redemption 2: Is ‘crunching’ actually voluntary overtime?

Cowboy Later today, the review embargo lifts on the biggest video game since Grand Theft Auto 5.  Even those of you not of a video gaming persuasion have no doubt noticed the constant advertisements online, on the TV and on the side of buses for “Red Dead Redemption”.

What is Red Dead Redemption 2?  Well, it’s an adventure game set in the Wild West with the almost mandatory mix of horse chases, gun-slinging and exploring a vast desert-esque landscape.

So, why is it such a big deal?  One word: Rockstar.  Rockstar are the equivalent of Apple 10 years ago.  By that, I mean that nearly every product they make receives rave reviews (at least 95% on average) and is known for its brutal, gritty storytelling.  As an example of their attention to detail, in some shape or form, work on this game has been ongoing for eight years with a budget larger than many Hollywood movies!

So, surely, eight years is more than enough to make a good game.  Well, yes.  But Rockstar want to make ‘extraordinary’ games not just good or very good ones.  And this, unfortunately for them, has led to a lot of media controversy over supposedly ‘voluntary’ overtime and the issue of ‘crunching’.

Let’s tackle the media controversy first.

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.

Equal pay at the BBC

Eddie MairFollowing last year’s widely publicised equal pay audit at the BBC, there has been a good deal of concern expressed about the disparities between the earnings of some of the Corporation’s best known presenters.

The BBC’s former China editor, Carrie Gracie, complained that the male Middle East and North America editors, Jeremy Bowen and Jon Sopel, were earning at least 50% more than her. Her complaint attracted national newspaper coverage and widespread support from her colleagues. Last month the BBC backed down, apologised to her for underpaying her and said it had “now put this right” by giving her back pay. Ms Gracie donated the back pay to the Fawcett Society, which campaigns for women’s rights.

She had refused a £45,000 pay rise because this still left “a big gap” between her and her male counterparts and her objective was to secure equality. She will now, at her request, take six months’ unpaid leave. What struck me as odd about the matter is that the jobs were regarded as equal in the first place. It is undeniably the case that, over many years, the Middle East and North America editors have had a much higher profile than the China editor, whether male or female. Perhaps the most stark disparity between the jobs is the amount of significant news coverage emanating from the different locations. However, the crucial difference in this case was that, when accepting the appointment, Ms Gracie was told that her pay would be “on a par” with that of the North America editor. It turned out that he was in a bracket of £200,000 to £250,000, whereas she was paid £135,000 (Jeremy Bowen was in a bracket of £150,000 to £199,000).

Following Ms Gracie’s resignation last January, a number of well-known male presenters, including John Humphrys, Jeremy Vine, Nick Robinson, Huw Edwards and Jon Sopel, agreed to take pay cuts as part of a move to harmonise salaries.

However, one who notably refused to do so was the presenter of BBC Radio 4’s PM programme, Eddie Mair.