Employment Law Update

Welcome

The latest news on employment law matters from Richard Gvero.

Holiday pay – East of England Ambulance Trust v Flowers
Strike action – Mercer v Alternative Future Group
Unfair dismissal – Illegality – Robinson v His Highness Sheikh Al Qasimi
Covid-19 – Unfair dismissal – Gibson v Lothian Leisure
And finally – Are your employees reaching burn out point?

Richard Gvero
Joint Senior Partner, Head of Employment and Commercial – Longmores Solicitors

01992 305210
richard.gvero@longmores.law

Holiday pay
East of England Ambulance Trust v Flowers

In June, the Supreme Court was due to give the final word on holiday pay and overtime in East of England Ambulance Trust v Flowers. Back in 2019, the Court of Appeal decided that voluntary overtime should be included in holiday pay. Although the Flowers employees had a contractual right to overtime, the Court said the situation was the same under the Working Time Directive. Voluntary overtime should be included in holiday pay calculations where the overtime is regular enough to be considered part of normal pay. The fact that the overtime is voluntary is irrelevant. If this weren’t the case, workers might be discouraged from taking annual leave which would undermine the purpose of the legislation. Other policy reasons were at play here too. If voluntary overtime were excluded, unscrupulous employers might set low basic hours, to be topped up with ‘voluntary’ overtime, in order to reduce holiday pay entitlements. The employer appealed.

The Supreme Court hearing was due to take place on 22 June 2021 but was vacated after communication from the parties involved. It is believed that the case may have settled on the basis of an NHS wide arrangement in England for holiday pay to include regularly worked overtime and additional standard hours. Existing claims will apparently be settled locally.

This outcome doesn’t necessarily mean that the Court of Appeal’s judgment is the final word on holiday pay and voluntary overtime. The Court of Appeal decision included discussions about a case from the Court of Justice of the European Union (Hein) which seems to contradict this position. There may yet be more litigation on this issue. However, in the meantime, employers should ensure that regular voluntary overtime is included in holiday pay calculations unless and until the next instalment in the holiday pay saga.

Strike action
Mercer v Alternative Future Group

The Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA) provides protection to employees taking part in trade union activities including industrial action. TULCRA provides an absolute ban on dismissing an employee for taking part in industrial action, but there is no ban on subjecting employees to a detriment short of dismissal on the same grounds. Section 146 TULCRA protects employees against detriment for taking part in ‘trade union activities’ but not industrial action. Article 11 of the European Convention on Human Rights (ECHR) guarantees the right of workers to join a trade union. UK law must be interpreted in a way which gives effect to the ECHR.

In Mercer v Alternative Future Group, the employee was a support worker and Unison trade union representative. She was involved in organising strike action in which she intended to take part. She was suspended and subsequently disciplined for abandoning her shift. She brought  a claim saying that the industrial action was a ‘trade union activity’ and she had suffered a detriment – the discipline – as a result. The employer said the discipline was unconnected to trade union activities and said taking part in strike action was not a protected activity under section 146.

The employment tribunal said that although strike action clearly was a trade union activity in ordinary language, section 146 did not cover strike action. Although they had to construe the law in line with article 11, the tribunal said that interpreting section 146 to include strike action would go against the grain of the legislation. The EAT disagreed. The lack of protection against detriment for taking part in industrial action was a breach of article 11. That interference with article 11 served no objective and was not justified. The fact that employees were protected against dismissal for striking but not detriment was a legislative anomaly. It didn’t matter that it was a private rather than public sector employer. Trade union activities under section 146 should now be read as including participation in industrial action, including during working hours.

The EAT has made it clear in this case that employees are protected against retaliatory detriment as well as dismissal if they take part in industrial action. Employers must take extra care when dealing with striking employees and ensure they do not fall foul of the redefined law.

 

Unfair dismissal – Illegality
Robinson v His Highness Sheikh Al Qasimi

Parties to an employment contract where illegal activity has occurred may be prevented from bringing employment related claims. Where an employment contract has been entered into lawfully, but then illegally performed, the enforceability of the contract will depend on the parties’ knowledge of, and active participation in, the illegal conduct. The Court of Appeal has previously found that an employee who unknowingly worked in breach of immigration rules was not stopped from enforcing her contract (Akedina v Chilake). The Court of Appeal has looked at this issue again recently in Robinson v His Highness Sheikh Al Qasimi.

The employee was hired in 2007 to look after Al Qasimi’s UK properties in his absence and the family when they visited. She was paid £34,000 a year and told she was responsible for her own tax and national insurance contributions. She paid no tax at all between 2007 and 2014. A dispute arose in 2014, with the employee saying her pay was net and that Al Qasimi should pay her tax. From 2014, the employer deducted amounts equivalent to the self-employment rates from her pay. The tax dispute continued, and the employee was dismissed in 2017. She brought an unfair dismissal claim.

The employment tribunal said there was a potentially fair reason to dismiss – the tax dispute – but the dismissal was unfair because there was no final meeting before dismissal and no right to appeal. The contract had been performed illegally because the employee had not declared or paid tax so she could not bring an unfair dismissal claim. The EAT said the tribunal’s approach to illegality was wrong. They reasoned that the employee had knowingly performed the contract illegally between 2007 and 2014. However, she had then worked for three more years after that where tax was paid. That meant that she could bring her claim when she was dismissed at the end of that three-year period. The Court of Appeal agreed and clarified the illegality test in relation to employment contracts. The focus should be on whether the claim arises out of, or is so bound up in, the illegal conduct that the court couldn’t allow the employee to recover compensation without appearing to condone that conduct. Illegality will prevent an employee’s claim only if the employee knows about and actively participates in the illegal performance of the employment contract. A causal link between the illegal conduct and the claim will also be relevant, as will the seriousness of the illegality and its proximity to the legal claim. Bearing all that in mind, they agreed with the EAT that illegal conduct between 2007 and 2014 did not stop the employee from pursuing her rights in 2017.

We understand that the employer in this case has appealed to the Supreme Court so this case may not be over. However, the judgment shows that illegal conduct of an employment contract can affect an employee’s rights to bring a claim in relation to it. In this case, the illegal conduct had finished three years before the unfair dismissal claim, which meant the causal link between that conduct and the claim had been broken. There is an important lesson here for employers too. Even in cases where illegal conduct is clear, employers should always follow a fair procedure to minimise any litigation risk.

Covid-19 – Unfair dismissal
Gibson v Lothian Leisure

Another employment tribunal case this month has highlighted the importance of taking appropriate steps to make the workplace safe during the pandemic. In Gibson v Lothian Leisure, the employee worked as a pub chef. He had no prior issues at work. When the Covid-19 pandemic struck, and pubs closed, he was furloughed. His father was shielding due to various medical conditions. Towards the end of the first lockdown, the employer asked the employee to come in and help out ‘a bit’. The employee had already started raising concerns about catching Covid at work and bringing it home to his father. The employee said the employer was ‘very robustly negative’ in response, provided no PPE for staff and had no intention of creating a Covid  secure workplace. The employee said he was told to shut up and get on with it. The employee was dismissed summarily by text without notice, with the employer saying it was going to run the business with a smaller team.

The employee did not have two years’ continuous employment so brought claims for automatic unfair dismissal under section 43B of the Employment Rights Act 1996 (whistleblowing) and s100(1)(e) – that he was dismissed for taking appropriate steps to protect himself or others from serious and imminent danger. The whistleblowing claims were dismissed. His only concerns had been for his father and so he failed the ‘public interest’ requirement of the whistleblowing test. However, he won his claim under s100(1)(e). The tribunal found that the employee reasonably believed the Covid risk to his father was serious and imminent. Raising the issue of PPE was an appropriate step. The employee had previously been well-regarded and valued. The tribunal said he had been dismissed because he had taken steps to protect his father from serious and imminent danger. He had been automatically unfairly dismissed.

There are two big lessons from this case. Dismissing Covid-security is dangerous. So is not defending a tribunal claim – in this case the employer did not enter a response and did not attend the hearing. That resulted in the employee’s evidence being uncontested and therefore accepted by the tribunal. The employer must now pay 6 months’ loss of earnings together with unpaid holiday pay and pension contributions. What almost certainly started as a knee jerk reaction at a time of high stress turned into an expensive mistake.