Almost two years ago, I mentioned the English Court of Appeal’s decision in Uber BV & Ors v Aslam & Ors [2018] EWCA Civ 2748 on appeal from UKEAT/0056/17/DA), where individuals working as taxi drivers for Uber were to be classified as workers not self-employed individuals.
This decision was a significant defeat for Uber, but it was hardly going to be the last word in the story and so it proved. An appeal to the U.K. Supreme Court was always going to be on the cards and, on Friday 19 February, the Justices issued their judgement (see Uber BV & Ors v Aslam & Ors [2021] UKSC 5).
The Supreme Court was asked to consider two questions by Uber:
Whether the drivers (the Respondents) were “workers” providing personal services to the Second Appellant.
If the Respondents were “workers”, what periods constituted their “working time”.
The result? Uber drivers are workers not self-employed individuals. Essentially, the Supreme Court has approved the earlier decision of the English Court of Appeal.
Although Uber drivers won’t acquire full employment status, this decision is, nonetheless, highly significant. It will, for example, mean that Uber drivers will be protected under the National Minimum Wage legislation and the Working Time Regulations.
Paragraphs 94 to 102 of the Supreme Court’s decision are really instructive. The Court found the following matters extremely significant:
The rates of pay for taxi drivers was set solely by Uber
The contractual terms were dictated solely by Uber
Uber constrained or restricted the ability of drivers to decline jobs
Uber strictly vetted the type of vehicle which drivers could use for jobs and the technology used by drivers was “wholly owned” by Uber
The communication between a driver and a passenger was severely restricted by Uber in order “to prevent drivers from establishing any relationship with a passenger capable of extending beyond an individual ride.”
As Lord Leggatt (who delivered the unanimous judgement of the Court) stated at paragraph 102:
“Taking these factors together, it can be seen that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Furthermore, it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors – in particular, the inability to offer a distinctive service or to set their own prices and Uber’s control over all aspects of their interaction with passengers – mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”
Worker is a term which is widely used in EU equality and employment law, but a single definition does not exist. As a result of the U.K.‘s long relationship with the EU, the term has entered the British legal systems and, in the interim period, Brexit will not change this fact.
In Allonby v Accrington and Rossendale College (Case C-256/01) [2004] ICR 1328; [2004] ECR I-873 the Court of Justice made the following observation:
“… there must be considered as a worker a person who, for a certain period of time, performs services for and under the direction of another person in return for which he receives remuneration …”
In Syndicatul Familia Constanta v Directia Generala de Asistenta Sociala si Protectia Copilului Constanta (Case C-147/17) EU:C:2018:926; [2019] ICR 211, the Court of Justice of the EU was strongly of the opinion that the relationship between employer and worker was of a “hierarchical” nature. This was a view echoed by Lord Clarke in the Supreme Court’s decision of Hashwani v Jivraj [2011] UKSC 40; [2011] 1 WLR 1872 where he identified the relationship as one of “subordination” in favour of the person receiving the services.
That said, Baroness Hale in a later Supreme Court decision – Clyde and Co LLP and Anor v Bates van Winkelhof [2014] UKSC 32 – stated that “while subordination may sometimes be an aid to distinguishing workers from other self-employed people, it is not a freestanding and universal characteristic of being a worker”. This remark was quoted with approval by Lord Leggatt in the Uber decision at paragraph 74 of his judgement.
In other words, such a feature is merely to be deployed as one of the many possible tests that can be used by the courts to analyse a relationship between two parties.
The Employment Rights Act 1996
Section 230(1) of the Employment Rights Act 1996 contains the definition of who precisely is an employee i.e. someone who has a contract of service. If you don’t have this type of contractual arrangement (you’re not an employee), you may well be working under a contract for services. This is one of the most important distinctions in employment law in the United Kingdom.
Section 230(3) of the Act also defines in law an individual who is a ‘worker’. This can include someone who provides services under an employment contract – and, crucially, some individuals who fall into the self-employed category.
Conclusion
Individuals working under a contract for services – precisely because of their lack of employment status – are often denied access to the sorts of legal rights which employees routinely take for granted e.g. unfair dismissal protection, redundancy protection, family friendly rights.
There are notable exceptions (aren’t there always?): high earning British television celebrities (e.g. Lorraine Kelly) or a number of BBC news journalists have preferred to be treated as freelancers or self-employed persons. Why? They can then minimise their exposure to income tax liability in a way (often via the medium of personal service companies) that would not be possible because if they were employees they would almost certainly be taxed at source on a PAYE (pay as you earn) basis.
We have seen an explosion in the type of work that is often characterised or labelled as the ‘gig economy’. This work is often characterised by a distinct lack of employment rights; irregular working patterns; chronic insecurity; lack of long term career progression; and low pay. It is often impossible for such individuals to complete the necessary periods continuous service to acquire employment rights.
Companies such as Deliveroo, Lyft and Uber have become synonymous with the ‘gig economy’, as have whole sectors of the employment
There’s now a growing awareness on both the part of the UK Government (The Taylor Review) and the European Union (the forthcoming EU Directive on Transparent and predictable working conditions) that people on contracts for services deserve greater levels of work-place protection.
It’s not just in the UK that debates about employment status are currently playing out. At the tail end of 2019, it was with particular interest that, in 2019/20, I was following a story from the United States which highlighted many of the issues which I have just been discussing in this Blog.
The US State of California enacted a law, Assembly Bill 5 2019 or AB5 (known more popularly as the gig economy law) giving those individuals working in the gig economy more employment rights. The law came into force on 1 January 2020.
The Covid-19 pandemic has also exposed the lack of employment protection for workers and the self-employed. Only last March, I was writing about the fact that the U.K. Government’s reforms to Statutory Sick Pay would would not include approximately 2 million individuals – a situation that Frances O’Grady, General Secretary of the TUC was quick to highlight.
By Louise Aitken, Siobhan Donaghy, Kieran Flynn and Elisha Masini (Editor: SJ Crossan)
Introduction
Privacy is a human right and both the Scotland Act 1998 and the Human Rights Act 1998, implemented provisions of the European Convention on Human Rights (Article 8) directly into national. The employment contract, consequently, is not in any way exempt from human rights issues (see the judgement of the European Court of Human Rights in Bărbulescu v Romania 5 September 2017 (Application no. 61496/08). The European Union (EU) has also had a major influence on the development of privacy laws e.g. General Data Protection Regulations.
Privacy has become a major issue in recent years, particularly due to the rise of social media use. The increasing use of IT systems and the internet by organisations and their employees are key factors in the expansion of laws regarding privacy.In Bărbulescu, the employer had violated the employee’s rights to privacy in terms of Article 8 of the European Convention in the way that it had monitored the company’s email system. Privacy in the work-place is a major issue for both employers and employees. Some of the most important areas of law that govern privacy are to be found in the areas of human rights, data protection, and freedom of information.
It is very important to establish from the outset that employees do not have an absolute right to privacy and there may be situations within and outwith the work-place where the employer has a legitimate interest in the activities of their employees – especially if such behaviour could amount to gross misconduct.
Gross misconduct
Gross misconduct relates to serious behaviour on the part of the employee that is deemed so bad that it destroys any relationship or trust between the employer and the employee. Gross misconduct warrants instant dismissal without any notice or pay.
Section 94 of the Employments Rights Act 1996 states that an employee has the right not to be unfairly dismissed.
Section 95 of the Employment Rights Act 1996 states that an employment contract can be terminated by means of the company through purpose of the employee’s conduct. Such a dismissal or termination of contract should be viewed as a fair dismissal (Section 98: ERA 1996).
Acts or omissions by the employee which would be classified as misconduct, such as theft, alcohol or drug use, poor discipline, continually missing work without justification or poor performance are all potential exceptions to this right.
Sexting
Matt Simpson former officer in the Cumbria police force is one of many who have been caught out due to things such as inappropriate text messages. In 2020, PC Simpson was dismissed from the force after he was found to be having a secret, sexual relationship while on duty. It first came to light after the new partner of the female, with whom Simpson was involved, found text messages that had been sent to her. The new partner of Simpson’s lover then went to the police authorities with this information to make a formal complaint.
A hearing was held to establish if PC Simpson was guilty of any wrongdoing. The panel found that this was a dereliction of Simpson’s duties and he was guilty of gross misconduct – not only due to having this relationship during the time when he was meant to be working but also due to him using confidential police system to uncover information about the women purely because he was “curious”. As well as this Mr Simpson also visited the female around 20 times when on shift and had vital police equipment with him while visiting such as a body camera and a taser device. The fact that this whole affair had come to light via Simpson’s private text messages was neither here nor there: this was an aspect of Simpson’s private life in which his employers had a legitimate interest and he had been carrying out his romantic activities during his employment.
A link to the story on the BBC website can be found below:
In PC Simpson’s case, he clearly performed his duties inadequately and was guilty of very poor discipline. He was aware of the consequences of his actions. By involving himself with the female, he was making himself unavailable at times such as an emergency. Dereliction of duty is defined as the failure to fulfil one’s obligations. Here, PC Simpson clearly failed to do his job in a proper and professional manner and he could have been potentially negligent should an emergency have risen.
A further example of an employee committing acts of misconduct occurred in Adesokan v Sainsburys Supermarket Ltd [2017] EWCA Civ 22. Mr Adesokan was hired by Sainsbury’s as a Regional Operation Manager when he was in charge of ‘Talkback Procedure’, a key company policy which involved all members of staff giving information in confidence about their working environment and relationships with other colleagues. Mr Adesokan discovered that his HR manager had tried to manipulate the Talkback scores within his region by sending an email to five store managers telling them to seek feedback only from their most enthusiastic colleagues. Mr Adesokan asked the HR manager to “clarify what he meant with the store managers”, but the HR manager never responded. Mr Adesokan failed to follow this matter up and he was later dismissed by his employer for not taking action to confront the HR manager’s deliberate “manipulation” of the survey data.
A subsequent investigation into the matter led to Mr Adesokan’s eventual summary dismissal for “gross negligence on his part which is equivalent to gross misconduct”. Mr Adesokan brought a claim for breach of contract with regard to his notice period. The English High Court found that although he was not dishonest, his failure to take active steps to remedy the situation had damaged Sainsbury’s trust and confidence in him, which was sufficient to warrant the sanction imposed. The English Court of Appeal subsequently affirmed the decision of the High Court.
The Adekosan case was remarkably similar to that of PC Simpson where no other option was available to the employer as there was a complete loss of trust.
Activities outwith working hours
What individuals do with their own time is largely their choice (as long as they stay on the right side of the law). It is exceedingly difficult, however, for many people to do much these days without using social media or a mobile phone. Activities which used to be very much private are, consequently, at a much greater risk of public exposure in the virtual world in which we find ourselves living in 2020.
Employees can carry out many activities in private that may get them in trouble with their employers and have serious consequences for them. This might include, for instance, acts of gross misconduct committed in private which result in reputational damage to the employer. Consequently, the employer may have no alternative but to contemplate dismissal of the employee.
There is a lot of case law with regard to employees being dismissed from situations that have happened outside the workplace, an example would be the well-known case of X v Y [2004] EWCA Civ 662.
The facts of the case are as follows:
A charity employee who worked with young offenders committed an indecent act with another male in a public toilet at a motorway service station. He was put on the Sex Offenders’ Register as a result of receiving a police caution. The worker had not been straightforward with the Police when they asked questions about his job and, compounding this, he failed to inform his employer about the situation. Later, his employer decided to terminate his contract and the dismissal was once deemed to be fair. The reputational harm which the employer suffered due to the fact of the employee’s failure to be completely honest about what had happened was an enormous element of the decision to dismiss.
The English Court of Appeal was firmly of the view that the employee’S argument that he had a right to privacy (on grounds of his sexual orientation) in terms of Article 8 of the European Convention on Human Rights was not applicable here as the indecent act was not of a personal nature due to the fact it had been carried out in a public toilet.
Doctor Beck
In some cases, however, it may be problematic to dismiss the ‘offending’ employee who may be involved in activities which come under the protected characteristics of the Equality Act 2010 e.g. philosophical beliefs or freedom of speech laws in terms of the European Convention on Human Rights.
One example of this was reported by The Independent regarding Dr Gunnar Beck, a German national and a candidate for the Alternative for Germany (AfD), a far right political party.
Dr Beck was employed at School of Oriental and African Studies (SOAS), (part of the University of London) as a law lecturer. A number of his students and colleagues were enraged after discovering that he was an AfD candidate for a German seat in the European Parliamentary Elections in 2019.
Students and fellow lecturers organised protests arguing that Dr Beck should be fired from his position and for his employer to justify its part “in facilitating his far-right politics”. His colleagues from the School of Law stated that they vehemently oppose the AfD and its policies and wished to dissociate themselves completely from the people who support and advocate the Party.
The members of AfD are well-known for making provocative remarks concerning the actions taken by the Nazis. They targeted climate change activist, Greta Thunberg as part of their attempts to deny climate change.
Employees at the University of London went on to say that they were making their views public since they “recognise the importance of not being complicit in the normalisation of reactionary, right-wing populism.” A declaration by the students’ union at the university asked why Beck chose to work at a university “who hold and support so many of the identities he wants to see diminished”.
The Acting General Secretary of the University and College Union, Paul Cottrell stated that:
“The AfD is an extreme right-wing, racist, anti-immigration party that has no place on UK campuses. We are shocked that a member of academic staff from SOAS could be involved with a party like this which stands for policies utterly incompatible with the values of diversity, tolerance and internationalism at the very heart of SOAS as an institution.”
Dr Beck informed The Independent that his reason for supporting the AfD was because “there is no other Eurosceptic conservative party in Germany”.
He also went on to say that the AfD are “not a Nazi nor a fascist party.” Dr Beck stated that he was an advocate for freedom of speech and would defend anyone’s rights to it and any claims of him being a white supremacist, Islamophobe or fascist were outrageous.
Subsequently, Dr Beck was elected as 1 of 10 German MEPs from the AfD Party, but he was not dismissed from his position at the university.
A representative of SOAS stated:
“We find the policies of the AfD on a range of matters to be abhorrent. They conflict with the fundamental values we hold as an institution. We recognise the anxiety caused to staff and students as a result of this situation.”
However, they added that:
“As an academic institution, we are committed to the rights of academic freedom of speech within the law, despite the painful choices to which it gives rise. We encourage members of our community to tackle these issues through robust debate.”
This story regarding Dr Beck’s private affairs is an excellent illustration of employers not being able to fire an employee for acts committed in private due to protected characteristics (i.e. political beliefs) of the Equality Act 2010.
Both Dr Beck and the University of London have undoubtedly suffered reputational damage. Beck has suffered reputational damage in the eyes of his fellow lecturers and students because he is a member of AfD; and the university has suffered reputational damage for employing him in the first instance and subsequently for not dismissing him after the revelation about his political activities came to light.
That said, the University of London was in something of a difficult position because Dr Beck would probably have launched a legal challenge in terms of the Equality Act 2010. He would doubtless have protested that his political activities were a protected characteristic (philosophical beliefs). It would then have been up to an Employment Tribunal and, potentially, the higher courts to determine this issue. There was also the possibility that the university would have been accused of suppressing the right to freedom of speech.
A link to the story in The Independent can be found below:
As previously discussed, reputational damage is a big concern for organisations. Employers have also had valid fears about risks to their’ reputation as a result of work place misconduct that becomes widely publicised in e.g. the media. These fears have been increased with the surge in social media use today.
Employees are now far more likely to be found behaving in questionable ways or making offensive remarks online, which can attract a large audience or readership very quickly. Social media platforms, such as Facebook, Instagram, Twitter and WhatsApp (where responses can be instant) can represent something of a nightmare for an employer. It is important to remember that social media, if abused, can have a significant impact on relationships within the work place and could result in serious legal consequences.
Social media misuse by employees has become a frequent and complicated issue for employers to address. Although social media can be an extremely valuable resource for organisations, it can also pose a serious challenge to both employees and employers. Inappropriate social media misuse e.g. racial or sexual harassment could lead to employers being held vicariously liable for their workers’ misbehaviour.
When an employee misuses social media, firms need to know how to respond and handle it. Therefore, it is vital for companies to devise a clearly defined social media policy by which employees abide. It is important that employers notify workers about the nature of these policies and the potential ramifications of any violations.
So, when employers want to act against employees who make offensive remarks, such disciplinary action should come as no surprise. Such remarks can cause embarrassment, at best. At worst can hurt a firm’s reputation and lose them customers. Even if the remarks were posted years ago, they can still come back to haunt the employer and the employee.
The difficulty of dealing with social media use by employees for organisations can be seen in the case below.
Creighton v Together Housing Association Ltd ET/2400978/2016 Mr Creighton was dismissed for tweets which were made three years earlier. He had made negative remarks about colleagues and his boss on Twitter. The claim that Mr Creighton posted offensive remarks on Twitter resulted in his dismissal for gross misconduct even though he had worked with the organisation for 30 years.
Held: The Tribunal further clarified that the disciplinary policy of THA included “defaming the company or undermining its image by the use of social media” as an example of gross misconduct. The appeal panel rejected Mr Creighton’s appeal to the decision, arguing that he was aware or should have been fairly aware of the implications of his conduct as the disciplinary policy of the company.
There are more and more cases of social media defamation – which emphasises a need for extremely specific social media rules and regulations in the terms and conditions of an employer.
Employees are going to be very foolish if they assume it’s a credible argument to claim that social media comments happened outside working hours, were believed to be posted on an account that is supposed to be “secret” or posted years earlier, which Mr Creighton found out.
The importance of having a social media policy
As previously mentioned, establishing a solid social media policy is vital for an organisation. From the workers’ viewpoint, it is important that they are aware of the existence of such a policy, understand its substance and also recognise any potential consequences for failing to follow its rules.
Employers are also urged to review and update social media policies on a routine basis. New platforms and technology continue to be developed at a quick pace today and to maintain the knowledge of social media is simply made part of induction and training methods.
It is extremely necessary for an employer to make clear to its employees the kind of conduct which may justify dismissal. Usually, this may be done via a section in the employee handbook which addresses the consequences of misconduct in the workplace.
Additionally, an acceptable induction technique for new personnel may centre on the kinds of behaviour which the corporation would not condone. Regular refresher training for current and long-term personnel may be beneficial and, in large organisations, this would be a necessary function of the Human Resources Department.
Panera Bread
There was a huge news outbreak when a Panera Bread employee leaked a video of a man laughing hysterically that’s racked up almost 1 million likes (now that’s a lot), as a plastic packet of frozen macaroni and cheese is dropped into a boiler, burst open and then poured into a bowl geared up to serve to customers. The lady who posted the clip offers a thumbs-up in the hat that marks her as a worker of Panera Bread.
The clip introduced a wave of complaints in October 2019 from dissatisfied clients of a chain recognized for “fast casual” eating commonly perceived as a step in quality above other quickly made or fast food meals. Commenters stated they expected more than warmed-from-frozen dishes, or — as one critic put it — “glorified hospital food.”
Unfortunately for the employee she later posted on Twitter stating, ‘lol I lost my job for this’. The employer was clearly very unhappy at the negative media attention and being ‘outed’ for lying to its customers and providing them with low quality food.
Conclusion
In conclusion, employees should be incredibly careful of what they are doing or how they areusing social media during or outwith their working hours as their employers will have the right to investigate any implications arising from employees’ misconduct.
One of most likely repercussions arising from employees’ misconduct in privacy cases, is that the business and those involved will experience reputational damage. Whether this reputational damage is a result of offensive language in a tweet, forms of bullying in a Whatsapp groupchat or even now a TikTok exposing behind the scene practices of a company – there can be significant consequences. The preponderance of evidence shows that how employees conduct themselves in what they may consider private, has a major effect on workplace relations.
References
Adesokan v Sainsburys Supermarket Ltd [2017] EWCA Civ 22
Bărbulescu v Romania 5 September 2017 (Application no. 61496/08)
startups, (2019) ‘Employee privacy and employee confidentiality: Know the laws’ Available at: https://startups.co.uk/employee-privacy/ [Accessed: 28 April 2020]
I seem to be on something of a theme these last few weeks where my focus in the previous blog (and in this one) has been on agreements which are not enforceable in court.
In my last blog (Rock, paper, scissors …), I examined the historical, legal position in Scotland in relation to gambling agreements. These types of arrangements were – until the introduction of the Gambling Act 2005 – unenforceable in the Scottish courts on the basis that they fell into a category of agreement which was below the dignity of judicial scrutiny (sponsiones ludicrae).
It was with some interest then that the ongoing Covid-19 crisis should flag up another aspect of the law of contract which addresses situations where certain agreements are deemed to be unenforceable.
I am speaking of agreements where an individual volunteers to provide services, for example, to a charitable or community organisation. This type of arrangement is technically referred to as an agreement binding in honour only.
The well known UK retailer, Boots, has recently been criticised for its use of volunteers during the Covid-19 outbreak and accusations of exploitation have been flying around. The retailer placed advertisements for individuals to come forward to be trained as testers. This was all part of a UK Government initiative to encourage people to volunteer to help out during the crisis.
At first glance, there seems to be nothing wrong with what Boots is doing, but the retailer has been accused of abusing or exploiting the enthusiasm of volunteers to help out. The advertisements stated that individuals must commit to work at least 32 hours per week. This situation begins to sound less like volunteering and more about control. The Trades Union Congress and some employment lawyers have warned that Boots may be opening itself to legal action in the future. You may label an individual as a volunteer, but if you begin to treat him or her as a worker or even an employee, you may find that the relationship is not one of volunteer and recipient. In Scotland, this would an example of the doctrine of personal bar (or estoppel as English colleagues would say) in operation.
A link to the story about Boots as reported in The Independent can be found below:
When we think of volunteers, we do not often think of them as individuals who provide services to commercial companies, but rather charitable and community based organisations. Furthermore, UK National Minimum Wage legislation exempts charities from its provisions – not commercial organisations like Boots.
Genuine volunteers
Such situations arise where the parties (the volunteer and the recipient of services) clearly intend not to be bound by the agreement that they have entered. There is no intention in the minds of the parties to create a legal relationship. The arrangement will last as long as the parties find it convenient. Other side can withdraw from this arrangement at any time without penalty. The party who withdraws from the arrangement may find that their honour or integrity is called into question, but in the absence of legal sanctions, this is a situation that they can probably live with.
There are downsides to being a volunteer: they are not employees within the meaning of Section 230 of the Employment Rights Act 1996 and this means that if such individuals suffer less favourable treatment in the course of their involvement with the recipient, they may have limited legal redress.
Section 83 of the Equality Act 2010 makes it very clear that if a person wishes to pursue an employment related discrimination claim, s/he must be in ‘employment under a contract of employment, a contract of apprenticeship or a contract personally to do work’. The wording of Section 83 would, therefore, exclude genuine volunteers because such individuals are providing services to recipients under an agreement binding in honour only.
In X v Mid Sussex Citizens’ Advice Bureau (CAB) and Others [2012] UKSC 59, the UK Supreme Court affirmed the earlier decision of the English Court of Appeal in which the claimant (‘X’) had signed a ‘volunteer agreement’ to work at the Citizens’ Advice Bureau which was ‘binding in honour only’. This meant that ‘X’ did not have a contract of employment or a contract in which to perform services personally. This meant that ‘X’ was outwith the disability discrimination laws (now contained in the Equality Act 2010) and it was incompetent of her to have brought the claim. The Supreme Court, in a lengthy exposition of the effect of EU Directives, also considered whether there was an obligation placed upon EU member states to outlaw discrimination in relation to volunteers. The Supreme Court concluded that there was no such duty placed upon member states by the EU.
A link to the Supreme Court’s judgement can be found below:
I never thought that the subject of impossibility and frustration in relation to contract would become such a popular topic of everyday conversation; but it has.
The phrase “force majeure” has also been making more of an appearance than is commonly the case.
Why?
The continuing fallout from Coronavirus or COVID-19 has led to all sorts of sporting and cultural events being cancelled or postponed. We are also about to enter the holiday season with the Spring Break and Easter Weekend just over the horizon. Many people will have booked getaways to foreign climes and events have now completely overtaken such plans.
Critically, thousands of people will have paid something up front for football season tickets and holidays and they will be anxious to know where they stand legally.
Hearts owner Ann Budge says she would consider legal action should her club be relegated from the Scottish Premiership with eight games left:
There are two ways of dealing with an unexpected situation which affects contractual performance: being reactive or being farsighted.
At the moment, the scale of COVID-19 has completely taken Governments, societies, business, cultural, sporting organisations and individuals completely by surprise. So, in a sense, we are being forced to react to changing circumstances and rely upon established legal contractual principles which govern the termination of agreements i.e. frustration, impossibility and illegality. More about these matters shortly.
As lawyers, could we have pre-empted or foreseen that events (I’m speaking in the general sense here) might render contractual performance highly unlikely or well nigh impossible? Well, yes the concept of Force Majeure clauses is recognised in contract law – although the linguists amongst us may recognise that it’s not a native species of English or Scots law.
“words ‘force majeure’ are not words which we generally find in an English contract. They are taken from the Code Napoleon and they were inserted by this Romanian gentleman or by his advisers, who were no doubt familiar with their use on the Continent.”
In the English case of Matsoukis v Priestman [1915]1 KB 681 Bailhace J, sitting in English High Court was of the view that force majeure clauses could cover events such as industrial action, but certainly not bad weather or football or funerals:
“these are the usual incidents interrupting work, and the defendants, in making their contract, no doubt took them into account”.
Yet, in the later English High Court decision LebeaupinvRichard Crispin[1920]2 KB 714, force majeure clause was given a much broader meaning to include events such as war, bad weather, industrial action and, interestingly, epidemics. That said McCardie J was at pains to point out:
“A force majeure clause should be construed in each case with a close attention to the words which precede or follow it, and with a due regard to the nature and general terms of the contract. The effect of the clause may vary with each instrument.”
Essentially, such clauses are inserted into contracts to deal with the consequences of events outwith the control of the parties which may render performance of the contract impossible.
Ross Campbell of Brodies Solicitors who has pointed out that the rules of last year’s Rugby World Cup tournament in Japan contained a force majeure clause addressing the cancellation of matches due to extreme weather. The clause was not utilised and, therefore, not challenged, but it’s an interesting example of how parties to an agreement might attempt to address situations which can have serious consequences for contractual performance.
A link to Ross Campbell’s article can be found below:
The very phrase force majeure conjuresup images of an unstoppable force that sweeps away the accepted rules or conventions – almost akin to the idea of damnum fatale or an act of God.
So whether, will the courts permit the application of a force majeure clause will turn on the wording of the clause.
Could anyone have predicted the situation that we are now in with COVID-19 and drafted an appropriate clause to address these unprecedented times? It’s extremely doubtful. I’m not pretending to be Nostradamus (or for our Scottish readers, the Brahan Seer or Thomas the Rhymer) when I predict that many lawyers and their clients will actively be looking at the usefulness of force majeure clauses.
Triggering a force majeure clause
For those parties wishing to rely upon force majeure clauses, drafting the term may be crucially important. It might be highly advisable to have a list of events or circumstances which trigger operation of the clause; and then have a catch-all provision or belt and braces term to cover things you might not have explicitly specified (as per McCardie J’s remarks in Lebeaupin v Richard Crispin [1920]. Be aware, however, that extremely wide catch-all provisions may be disallowed because they are not within the normal meaning of the term (see Tandrin Aviation Holdings Ltd v Aero Toy Store LLC [2010] EWHC 40 (Comm)).
Frustration, impossibility and illegality
Let’s now turn to situations where individuals have to react to unexpected events without having the benefit of a force majeure clause in the agreement.
Since the formation of a contract, circumstances affecting the agreement may have changed dramatically (i.e. the pandemic). The contract may now be impossible to perform or the contract may have been rendered illegal by changes in the law.
Physical destruction of the subject-matter of the contract can also frustrate contracts.
Perhaps one of the best known examples of frustration can be seen in the case below:
Taylor v Caldwell (1863) the Surrey Gardens and Music Hall was hired by the pursuers from the defenders for the purpose of holding four grand concerts and fêtes. Before the first concert on 17 June 1862 could took place, the hall was completely destroyed by fire. Neither party was responsible for this incident. The pursuers, however, brought an action for damages against the defenders for wasted advertising costs.
Held: By the English High Court that it was clearly impossible for the contract to be performed because it relied on the continuing existence of the venue. The pursuers claim for damages was dismissed on the grounds that the purpose of the contract had been frustrated.
In another case, Vitol SA v Esso Australia 1988The Times 1 February 1988, a contract for the sale of petroleum was discharged on the grounds of frustration when both the ship and its cargo of petroleum were completely destroyed in a missile attack in the Persian Gulf during the Iran-Iraq War (1980-1988). The sellers had attempted to sue the buyers for the price of the goods, but this claim was dismissed.
The ‘coronation’ cases
Two famous cases which are particularly instructive are the ‘Coronation Cases’ because they concern the consequences of changing circumstances. Both cases arose due to the illness of King Edward VII. The new King was unable to participate or attend a variety of events to celebrate his accession to the British throne following the death of his mother, Queen Victoria.
The English Court of Appeal took different approaches in each of the cases:
Krell v Henry [1903] 2 KB 740 the pursuer was the owner of a flat in the central London district of Pall Mall. The pursuer’s flat was on the route of the proposed coronation procession of the new King, Edward VII, which was scheduled to take place on 26 and 27 June 1902. The pursuer had advertised his flat for rent during the daytime on 26 and 27 June for the purpose of viewing the procession. The defender, who was anxious to view the procession, responded to the advertisement and entered into an agreement to hire the flat on the days specified. An announcement was made on 24 June stating that the procession was to be cancelled owing to the King’s illness. The defender refused to pay the balance of the rent for the flat by reason that events had frustrated performance of the contract. The pursuer brought an action against the defender for payment of the balance of the rent.
Held: by the English Court of Appeal that the cancellation of the event frustrated the contract and discharged the parties from their obligations under it. The clinching argument in the defender’s favour was that both parties clearly entered into the contract with the same intention.
The reason behind the hire of the flat was, therefore, a material term of the contract. Had the defender failed to communicate his motivation for hiring the flat, then the contract would have remained capable of enforcement by the pursuer.
Lord Justice Vaughn-Williams was of the opinion that frustration of contract was not limited to either the destruction or non-existence of the subject matter of the contract. It was also important to identify the substance or the purpose of the agreement. In other words, did the parties share the same intentions?
The illness of King Edward resulted in a second legal action. This time, however, the English Court of Appeal took a completely different approach to the issue of frustration of contract.
Herne Bay Steamboat Co v Hutton [1903] 2 KB 683 the pursuers had entered into a contract to hire a steamship to the defender for two days. The Royal Navy was assembling at Spithead to take part in a naval review to celebrate King Edward’s coronation.
The King was to review the fleet personally. The defender wished to transport paying guests from Herne Bay to Spithead to see the naval review. Due to the King’s illness, an official announcement was made cancelling the review. It would still have been perfectly possible for the defender to take his passengers on a cruise to see the assembled fleet. The defender, however, refused to use the vessel claiming that the contract had been frustrated. The pursuers brought an action against the defender for the balance of the fee of £250 (a considerable sum in those times) owed by the defender who was refusing to pay for the hire of the boat.
Held: the contract was not discharged by reason of frustration. The main purpose of the contract could still be achieved i.e. to take paying guests for a cruise around the fleet.
Why the difference in approach?
In Krell v Henry [1903], Lord Justice Vaughn-Williams was of the opinion that frustration of contract was not limited to either the destruction or non-existence of the subject matter of the contract.
The difference in Herne Bay Steamboat Co v Hutton [1903] was that the contract was the main purpose of the contract could still be achieved i.e. to take paying guests for a cruise around the fleet – despite the fact that King Edward VII would not be personally reviewing the fleet due to his unexpected illness.
This difference in approach taken by the Court of Appeal in both cases is sometimes difficult to understand. In Krell v Henry, both parties had clearly intended that the purpose of the contract was to view the coronation procession (which was postponed). Reinforcing this fact, was the fact that the defender was only entitled to use the flat during the daytime.
In Herne Bay Steamboat Co v Hutton, the purpose of the defender in hiring the steamship was to see the naval review, but this was not the purpose of the owners who were not the slightest bit interested why the vessel had been hired.
Lord Justice Vaughn-Williams compared the situation in Herne Bay Steamboat Co to someone who hires a carriage to go and see the Epsom Derby, but the outbreak of some unforeseen epidemic means that the races are cancelled. This makes no difference to the owner of the carriage who will still expect to be paid for the hire of his vehicle.
It will, however, be important to identify the substance or the purpose of the agreement. The cancellation of an event can frustrate the performance of a contract where that event is an absolutely material term of the agreement.
The limits of frustration …
Frustration can only be used to have the contract discharged in situations where neither party is to blame. When one party is to blame for the failure to perform his obligations under the agreement, this represents a breach of contract and the innocent party can raise the appropriate action.
Tsakiroglou v Noblee Thorl GmbH [1961] 2 ALL ER 179 the sellers had agreed to transport Sudanese ground nuts from Port Sudan in the Red Sea to Hamburg in Germany. The ship was to take the fastest route to Europe through the Suez Canal. This proved to be impossible because the Canal was closed as a result of military hostilities following the Anglo-French-Israeli invasion of Egypt causing the Suez Crisis in late 1956. The sellers would have to ship the goods around the alternative route of the Cape of Good Hope in South Africa. This meant that the distance the ship had to travel from Port Sudan to Hamburg was greatly increased and this would also mean a dramatic increase in the costs of carriage in respect of the goods.
Held: by the House of Lords that a party will still have a duty to perform a contract even if this means that performance is more difficult or expensive than was originally intended by the parties. The closure of the Suez Canal did not mean that the sellers’ duties were discharged by reason of frustration of contract.
Contracts for personal services
Such a contract is discharged by the death of the person who was to perform it. The incapacity of a person who is to perform a contract may discharge it. However, temporary incapacity is not enough unless it affects the performance of the contract in a really serious way. If an employee is killed or permanently incapacitated, it will be very difficult to argue that the employment contract should be allowed to continue. Employees who have had a lengthy prison sentence imposed on them by a criminal court may find it very difficult to argue against the employer’s proposition that the contract of employment has been terminated by reason of frustration.
Some words of warning: the courts may be unwilling to use frustration as a means of terminating an employment contract if other ways of achieving this result are available. This could occur in situations where it is possible for the employer to dismiss the employee entirely fairly by reason of a lack of capability (e.g. on grounds of ill health) as per the Employment Relations Act 1996.
Notable cases on frustration in connection with employment contracts include the following:
Davis Contractors Ltd v Fareham UDC [1956] AC 696
Marshall v Harland & Wolff [1972]IRLR90
G F Sharp & Co Ltd v McMillan [1998]IRLR 632
The purpose of the contract becomes impossible to perform
As we have seen, a situation involving the physical destruction of the subject-matter of the contract will discharge the parties from performance of their duties by reason of frustration. However, frustration can also occur in situations where physical destruction of the subject-matter of the contract may not be the issue.
Jackson v Union Marine Insurance Co (1874) LR 10 CP 125 the pursuer owned a ship which had been chartered to go with all possible speed from Liverpool to Newport for the purpose of loading a cargo bound for San Francisco. The pursuer had insurance with the defenders to protect himself in the event that the charter might be prevented from being carried out. The vessel was stranded whilst on its way to Newport. It was not refloated for over a month and could not be properly repaired for some time. The charterers hired another ship and the pursuer turned to the insurers. They suggested that the pursuer should sue the charterer for breach.
Held: the fact that the ship was stranded effectively frustrated the agreement’s commercial purpose and, therefore, the charterers were free to go elsewhere. The pursuer had no remedy against the charterers and was in turn entitled to seek compensation under the insurance policy.
Illegality
We are seeing the introduction of emergency powers legislation across the World in response to COVID-19 and this will undoubtedly have a huge impact on a range of contractual obligations. Many European Union countries have reintroduced border controls and curbs on free movement of persons which would normally be a clear breach of European Treaties (e.g. the Treaty on the Functioning of the European Union; the Treaty on European Union; and the Schengen Agreement), but these are not normal times. These drastic measures can all be justified on grounds of public security and public health – legitimate derogations or grounds for withdrawal from key EU legal principles. Travel and tourism will obviously be disproportionately affected by these restrictions.
Contracts can become illegal because Parliament introduces legislation to this effect. After the murder of schoolchildren and a teacher at Dunblane Primary School in 1996 by Thomas Hamilton, the British government made it illegal to own particular models of firearms. Therefore, anyone who entered a contract to purchase firearms shortly before the legislation was introduced could not force the supplier to perform the contract. If the buyer insisted on performance of the contract by the seller, the seller would be complying with his contractual duty, but he would also be breaking the law as the contract would be illegal.
Events can also make further or future performance of contracts illegal e.g. the outbreak of war. Two House of Lords’ decisions are excellent authority for this proposition –
Stevenson & Sons Ltd v AG für Cartonnagen Industrie (1918) AC 239 an English company, Stevenson, was in partnership with a German company acting as a sole agent to sell the German company’s goods. By continuing to carry on business with an enemy during wartime (the First World War had broken out), Stevenson would be committing a criminal act and there was no alternative but to have the partnership dissolved (see also Cantiere San Rocco SA v Clyde Shipbuilding & Engineering Co Ltd (1923) SC (HL) 105 where, again, the First World War had a similar effect on a contract between a Scottish company and an Austrian buyer of a ship).
Conclusion
The Coronavirus or COVID-19 is not merely a health issue – it has also become something of a legal minefield for society. This is where knowledge of the circumstances of termination of contractual obligations and performance is vital. The doctrine of frustration, impossibility and supervening illegality are highly relevant to this debate.
Doubtless, the use of force majeure clauses will become more common – especially, if as predicted, we are going to be experiencing further waves of disruption due to this pandemic.
The above photograph conveys everything that is pleasant about staying in a nice hotel or boutique guesthouse.
Sadly, this was not the case for one couple, Mr and Mrs Jenkinson, who had booked into accommodation (the Broadway Hotel) in the English seaside resort of Blackpool in 2014. The couple were so disappointed by the lack of basic hygiene standards and facilities that they were motivated to leave a review on Tripadvisor – a very bad review, in fact, which did the establishment absolutely no favours.
How did the hotel respond?
Not in the way that you would think the management should have responded i.e. by issuing the couple with a grovelling apology and, possibly, a refund?
No, the couple were checking their credit card statement some days after their review had been posted and noticed that £100 had been charged to their account by the Broadway Hotel. Surely, this must have been some oversight or mistake? Following further enquiries by the couple, they discovered that the hotel had levied the charge because they had the nerve to leave a bad review on Tripadvisor about the very poor standards they had experienced while staying there.
When the couple objected to this, the establishment told them to check the small print in its booking documents – which Mrs Jenkinson had admittedly signed. True enough, buried somewhere in the small print was a statement to the effect:
“Despite the fact that repeat customers and couples love our hotel, your friends and family may not. … For every bad review left on any website, the group organiser will be charged a maximum £100 per review.“
Now, the Broadway Hotel was by no means luxury accommodation (the Jenkinsons had paid £36 for an overnight stay), but even budget hotels must meet basic standards such as adequate hygiene. The hotel failed miserably to meet these standards. More and more often, we do rely on the experiences of other people to guide us in our choices as consumers and the Jenkinsons were posting a fair comment review on Tripadvisor. The ability of businesses and traders to prevent consumers doing this would clearly be a retrograde development.
At the time, the story went viral and Mr and Mrs Jenkinson were invited on to the BBC Television’s Breakfast show to talk about their experiences. Needless to say, the hotel got more than it bargained for with the adverse media publicity and Blackpool Council’s Trading Standards Department taking a keen interest in its business practices.
A link to the story on the BBC website about the Jenkinsons’ experiences at the Broadway Hotel, Blackpool in 2014 can be found below:
At the time of the story breaking, I fortuitously happened to be teaching Unfair Terms in Contract Law to two of my classes. I had never seen a clause like this before and informed my students that it was very unlikely to be capable of enforcement by the hotel given its blatant unfairness – let alone the implications for freedom of speech in the UK.
I’ve long wanted to write about the Jenkinsons’ experience and I was reminded of their story some weeks ago when teaching a group of students about unfair terms in contracts.
Normally, when I discuss this area of the law, I make students aware that businesses used to be extremely trigger happy when using all sorts of unfair terms in contracts in order to avoid their responsibilities to customers.
Prior to the introduction of the Unfair Contract Terms Act 1977 (about more later), businesses and other organisations could exclude or limit their liability for causing death and personal injury so long as adequate noticeof the existence of the term was brought to the attention of the other party to the contract.
So, for example, if a garage owner wished to exclude his liability to a customer who put a vehicle in for repairs or a service, he could simply alert the customer to the existence of an exclusion or limitation clause in the contract. The customer leaves the car to have the brakes fixed; picks the car up later; the mechanic has been negligent and not carried out the work properly; the customer later suffers a terrible accident because the brakes haven’t been fixed. Hey presto, no need to worry because the garage owner could point to his standard terms of business which contained an exclusion clause. In effect, the exclusion clause was a get out of jail card.
Another tactic often deployed was where the business could argue that the customer had constructive notice of the existence of the unfair term e.g. the customer should have read the documents presented to him or her. Mrs Jenkinson had signed the booking documents presented to her by the Broadway Hotel. She later admitted that she did not read the terms because she did not have her spectacles with her.
On occasion, the courts might intervene and side with a party objecting to the enforcement of an unfair term under a number of judicial doctrines:
the repugnancy rule
fundamental breach
the contra proferentum rule
Despite judicial intervention, the odds were still stacked against parties who wished to challenge the inherent unfairness and abusive nature of attempts by traders and businesses to exclude or limit their liability.
Sensibly, the UK Parliament decided to tackle what was becoming the Wild West of contractual terms and passed the Unfair Contract Terms Act 1977 which made such attempts to evade liability automatically void.
Generally speaking, the Act made it much harder (but not impossible) for businesses to impose other unfair terms on consumers. Businesses, on the other hand, were still, advised to read the small print of any agreements that they were contemplating entering, although courts would be more sympathetic if a larger business tried to use its unequal bargaining power to impose unfair terms on a smaller business.
The European Union also passed legislation (European Council Directive 93/13 on Unfair Terms in Consumer Contracts and, for a while, the Unfair Terms in Consumer Contracts Regulations of 1994 and 1999 respectively were in force. These were later repealed and replaced by the Consumer Rights Act 2015, although the terms of the Directive live on in this legislation (remember: EU Law is hardwired into UK national laws).
Along the way, the Enterprise Act 2002 and the Consumer Protection from Unfair Trading Regulations 2008 severely restricted the ability of businesses and traders to impose very unfavourable terms on consumers.
The net effect of all of this legislation was that consumers were really protected against the imposition of unfair terms by traders and businesses. Consumers were often deemed to be the weaker party in a relationship with traders and businesses and, therefore, needed to be protected.
Returning to the Jenkinsons’ experience at the a Broadway Hotel, it is worth emphasising that the couple were being provided with accommodation services as consumers and, therefore, would have been entitled to the benefit of existing UK consumer protection laws on the statute books in 2014.
Had this incident occurred in 2020, the Jenkinsons would, of course, have been able to challenge the legality of the penalty clause primarily in terms of the Consumer Protection from Unfair Trading Regulations 2008 and the Consumer Rights Act 2015.
Conclusion
Happily, we have come a long way in consumer law where businesses could previously impose all sorts of unfair, not to say downright abusive, terms on customers.
We are now in a position, where UK consumers will be protected by legislative safeguards which should ensure that these types of terms will not be permitted to stand i.e. they will be automatically void or simply unenforceable. The penalty clause which the Jenkinsons experienced would doubtless have fallen foul of consumer protection legislation had the issue got anywhere near a court room. Nonetheless, it was an interesting example of the inventiveness of businesses regarding the creation of new types of unfair terms in contracts.
It remains the case, however, that in business to business contracts (or in private transactions), it will be highly advisable for parties to remain wary about the potential unfairness of contractual terms. Only the most outrageous and downright abusive terms (such as excluding or limiting liability for death or personal injury) will be automatically void – no matter how much notice of their existence has been given by the party seeking to rely on them. If a business is seeking to have a clause declared void or unenforceable, the debate to be had in terms of the Unfair Contract Terms Act 1977 will often centre around the perceived reasonableness (or otherwise) of the clause.
Willkomen (welcome) to Austria? Not if you’re Italian or someone travelling across the Austro-Italian frontier last weekend.
Why? The dramatic escalation of Coronavirus (COVID-19) outbreaks in Italy is the short answer.
The Austrian Government is very nervous about this and took emergency action by, arguably, suspending free movement provisions – if only briefly. On Sunday 23 February 2020, the Austrian authorities refused entry to its territory of a train coming from Italy for several hours. The Italian railway authorities had informed their Austrian counterparts that at least two of the passengers were exhibiting signs of a fever. The Austrians were taking no chances. The train was eventually permitted to cross the frontier.
The crisis is far from over with controls between Austria and Italy being currently considered by the Government in Vienna to deal with this public health issue.
A link to an article about this incident can be found below:
What are the legal implications of an EU member state suspending freedom of movement rules?
Italy and Austria are both member states of the European Union and free movement of persons is a key provision or fundamental freedom of the EU’s Single Market. Both countries are also part of the Schengen Agreement (from which the UK opted out whilst in the EU) which allows visa free travel between participating states. This Agreement has seen the abolition of frontier controls, to a a greater or larger extent, in many parts of Europe.
The imposition of frontier controls between EU member states is not a measure which is considered lightly.
Freedom of movement is a right which is fundamentally based on a person holding EU citizenship (or being related to a person who has citizenship). As Article 20 of the Treaty on the Functioning of the European Union (TFEU) which establishes the concept of citizenship states:
“Citizenship of the Union is hereby established. Every person holding the nationality of a Member State shall be a citizen of the Union. Citizenship of the Union shall be additional to and not replace national citizenship.”
Article 21 TFEU declares in the following terms:
“Every citizen of the [European] Union shall have the right to move and reside freely within the territory of the Member States, subject to the limitations and conditions laid down in the Treaties and by the measures adopted to give them effect.”
These freedom of movement provisions would be meaningless and ineffective if EU citizens faced discrimination on the grounds of their nationality in the host member state. Article 18 of the TFEU prohibits discrimination on the grounds of nationality (see Case 197/84 Steinhauser v City of Biarritz).
According to Article 45(5) TFEU, the free movement provisions can be derogated from i.e. disregarded on the following grounds:
Public security
Public policy
Public health
For its part, the Italian Government has since publicly stated that it will not be reintroducing frontier controls as an emergency measure to combat the spread of the Coronavirus:
Attempts by member states to derogate or withdraw from the free movement provisions will not be automatically approved and the affected individuals will always be able to challenge such restrictions in the national courts or, ultimately, before the Court of Justice of the European Union (CJEU) (see, for example, Cases 115-116/81 Adoui & Cornaille; Case 41/74 Van Duyn v Home Office; Case 36/75 Rutili v Minister of Interior).
In 2009, Geert Wilders, the far right Dutch politician was refused entry to the UK because the British Government argued that his presence in the country could undermine public safety by harming race and cross-community relationships. Wilders had made a short film, Fitna, which was highly critical of Islam. He had intended to present a showing of his film at the Westminster Parliament.
Please see a link below to an article in The Guardian about the incident involving Wilders’ attempted visit to the UK:
The freedom of movement as originally given to EU (EEC) citizens in the Treaty of Rome had an emphasis on permitting free movement of workers and other economically active individuals. This was perhaps understandable given the labour shortages in certain EU/EEC member states immediately after the Second World War. The postwar economies of France and Belgium, in particular, benefited from hundreds of thousands of economic migrants coming from their partner state, Italy.
Although the UK was not, at this point, a member state, it faced many of the same challenges as the Six EU/EEC Founding Members, but British recruitment of labour would centre on the former (and existing) colonies of its Empire e.g. from the Caribbean (the so called ‘Windrush Generation’).
Some of the most important decisions of the Court of Justice of the European Union (CJEU) about free movement were about removing the barriers which prevented foreign (EU/EEC) nationals working or providing services in another member state (see Case 59/85 Netherlands v Reed (workers); Case 2/74 Reyners v Belgium (services); & Case 246/89 Commission v UK (Nationalityof Fishermen) (establishment)).
Under the original Treaty of Rome (now to be found in the TFEU), EU citizens could take advantage of the free movement provisions by going to other member states to receive services: education, health and tourism (see Case 286/82 Luisi v Ministero del Tesero) – and many did just that.
Later, the CJEU would cement these rights by permitting family members of workers to claim entitlement to the free movement provisions of the Treaty of Rome.
That said, the freedom of movement provisions really only began to take on the dimensions of European citizenship as recently as the early 1990s after the stormy passage of the Maastricht Treaty (or the Treaty on European Union).
Underpinning the rights of free movement for individuals which are contained in primary legislation (the European Treaties) and decisions of the CJEU is the Citizens’ Directive (Directive 2004/38). This Directive really spells out (in a concrete way) the rights which EU citizens enjoy, namely, entry, residency, exit and the right to pursue employment opportunities in other member states.
Directive 2004/38 (Articles 4-14) also updated the older Directive 1612/68 (Articles 1-5) which guaranteed equal treatment and non-discrimination in employment to EU nationals residing and working in another member state.
Conclusion
The EU’s freedom of movement rules for its citizens and their dependants is a part of its fundamental law. A member state which derogates or withdraws from these rights does not do so for flimsy or superficial reasons. The TFEU does permit member states to suspend free movement provisions, but such action is always subject to the threat of possible legal action by the affected individuals; fellow member states and enforcement action by the European Commission.
Michael O’Leary, the motor mouth CEO of Ryanair, could never be accused of being a shrinking violet or one to shy away from a fight. As they say in Ireland: that one would cause trouble in an empty house.
The latest controversy to engulf Mr O’Leary concerns accusations of racism, religious discrimination and, indeed, sexism. Quite a charge sheet. He has suggested that single, males of the “Muslim persuasion” should be turned away from plane flights because “this is where the threat is.”
Ryanair is an Irish airline, but it services a large number of European destinations and many of its customer base will be single Muslim males who have quite lawful travelling plans.
Ryanair is a popular (I probably meant busy) airline that flies to and from destinations in the UK and many of British citizens are, of course, Muslim.
Mr O’Leary’s comments could potentially fall foul of the provisions of the Equality Act 2010 in relation to direct discrimination (Section 13) on the grounds of the following protected characteristics:
Religion (Section 10)
Sex (Section 11)
Now the Muslim faith is not a racial characteristic, so where could the accusations of race possibly arise? Well, if you are applying a criterion to your customer base, it could have a disproportionately adverse effect on certain groups within the population. Muslims are much more likely to be found amongst non-White British and Irish UK citizens. Indirect discrimination any one? (see Section 19 of the Equality Act 2010)
There’s also the small matter of European Union law (yes, in the UK we continue to follow these rules throughout the Brexit transition period) and Mr O’Leary’s comments could represent a breach of the Treaty on the Functioning of the European Union (primary legislation) and Equal Treatment Directives (secondary legislation).
There may be one get out for Mr O’Leary: if he can show that his comments were an objective (don’t laugh) and proportionate means of achieving a legitimate end. National security and health and safety concerns do, potentially, fall into this category, but Mr O’Leary’s approach to dealing with terrorism might be regarded as using a sledgehammer to crack a nut i.e. totally over the top and disproportionate. Section 192 of the Equality Act states:
“A person does not contravene this Act only by doing, for the purpose of safeguarding national security, anything it is proportionate to do for that purpose.”
Mr O’Leary may not be too concerned about the latest furore surrounding his comments – after all, as a fellow Irishman (Oscar Wilde) once remarked: “There is only one thing in life worse than being talked about, and that is not being talked about.”
In fairness to Mr O’Leary he has since apologised for his remarks, but the Muslim Council of Britain has condemned his comments (made in an interview with The Times).
Many Muslims have logged on Twitter their negative experiences of flying (see below):
#flyingwhilstMuslim
A link to an article on the BBC News App about Mr O’Leary’s comments can be found below:
Email can be a wonderful form of communication. It can also be, quite frankly, something of a curse for many employees and workers. Essentially, you’re never too far away from the work-place and bosses/clients/service users expect to receive an instant reply.
The expectation by bosses and managers that employees and workers should be monitoring their emails (constantly) does tend to be a contributory factor in the rising number of cases of work-related stress. Employers: please note that you have a duty of care to provide a safe working environment and part of this obligation includes monitoring unacceptably high levels of stress in the work-place.
There is a perception (rightly or wrongly) that UK employees suffer from some of the longest working hours in Europe. In 2019, data from the EU’s Eurostat Agency seemed to support this contention but, interestingly, the Organisation for Economic Co-operation and Development (OECD) took a more sceptical approach by questioning the method of data collection (the old adage about lies, damned lies and statistics springs to mind here).
Links to a BBC article about this issue and the Eurostat figures (and OECD response) can be found below:
UK employees are, of course, entitled to receive a written statement of the main terms and particulars of their employment as per Section 1 of the Employment Rights Act 1996. This statement must contain a provision which addresses the employee’s normal weekly working hours.
Despite Brexit (which did occur on 31 January 2020 – in case you missed it), the UK is still following EU rules until the end of this year … One EU Law with particular relevance to this debate is the Working Time Directive ((2003/88/EC) which was transposed into UK employment law by way of the Working Time Regulations 1998.
In theory, the Directive and the Regulations cap the number of hours that employees (and workers) can work at 48 hours per week (technical point: this figure can be averaged out over a reference period – 17 weeks normally). Crucially, however, UK employees and workers can opt out of the 48 hour maximum by signing a declaration (opt-out) that they wish to do so. If they change their minds, they are entitled to do so by giving the employer a minimum seven days’ notice (or in certain cases – 3 months) of this intention.
The legal rules on working hours are all very well in theory, but what about the culture of organisations which may (at an informal level) promote the idea that long hours spent at work (or just working) are a sure fire way to get ahead in your career?
This is where the influence of email (and other instant messaging services) can be quite insidious (pernicious even?). Employees feel under pressure to deal with this work load at weekends, during holidays and evenings. Parents of young children and carers of elderly relatives, who may have negotiated flexible working arrangements, may be under acute pressure to deal with emails etc when they are outside the work-place. In this way, the work-place becomes like the Eagles’ song, Hotel California (‘You can check out any time you like, But you can never leave!‘).
Interestingly, in some of our ex-EU partner countries, there have been initiatives at both the organisational and legal level to curb the smothering influence of email outside the work-place.
There is a real danger here for employers that, by encouraging employee use of email outside working hours, it may constitute a policy, criterion or practice (PCP) – no matter how informal – which could open themselves up to accusations of indirect discrimination on grounds of sex (women are still the primary carers for children and elderly dependents) and disability (by reason of a person’s association with a disabled person) in terms of Section 19 of the Equality Act 2010.
Furthermore, employees might feel that they are under constant surveillance by the employer because it becomes easier to keep tabs on individuals when they are logging in and out of the company’s IT network. For employers, this could lead to legal challenges from employees who are concerned that the right to privacy and family life as enshrined in Article 8 of the European Convention on Human Rights has been violated.
Is there a better way of doing things? Yes, is the short answer.
In 2011, the German multinational car manufacturer, Volkswagen (VW) introduced major changes to its working practices by curbing the use of emails when employees were off duty. This agreement was negotiated by the company and trade union/labour organisations.
In France, in August 2016, they went further and passed the El Khomri Law (named after the French Government Minister for Labour who introduced the proposal). This law gave employees a right to disconnect from email. In one particular case which involved the French arm of the British company, Rentokil, an employee was awarded €60,000 because his right to disconnect from email had been breached.
Links to stories about the changes to VW’s working practices and the French El Khomri Law can be found below:
The debate about the right of employees to disconnect from email – whether this is negotiated via some sort of collective agreement or underpinned by law – now seems to have penetrated the British consciousness. Rebecca Long-Bailey MP, one of the leading contenders for leadership of the British Labour Party has thrown her hat into the ring by backing a trade union campaign to introduce a legal right to disconnect in the UK.
One small problem: the Labour Party lost the last British General Election on 12 December 2019 to the Conservatives and is, therefore, in no position to deliver. Over to you Prime Minister Johnson? (a man fond of the populist gesture).
A link to an article in The Independent about Rebecca Long Bailey’s support for the trade union campaign to introduce a law guaranteeing the right to disconnect can be found below:
The only gay in the village became a household phrase in the UK thanks to the long running Little Britain sitcom TV and radio series (which has been broadcast by the BBC since 2000).
Daffyd Thomas claimed to be the only gay person in a small, Welsh village (actually he wasn’t), but in some respects his catchphrase reflected the isolation that many people in the LGBTI communities experience – either in their personal or professional lives.
The reason that I mention this topic is because, last week, the LGBTI campaigning organisation, Stonewall, published research about the most inclusive LGBTI friendly employers in the UK (Newcastle City Council topped the list). That said, for many LGBTI employees, an inclusive work place is still a far off dream.
Please find a link to a story on the Sky News website about one employee’s decision to hide his LGBTI identity from his colleagues:
A person’s sexual orientation is, of course, a protected characteristic in terms of Section 12 of the Equality Act 2010. Such individuals should not be subjected to direct discrimination (Section 13); indirect discrimination (Section 19); harassment (Section 26); and victimisation (Section 27).
Many years ago, I remember teaching a group of students who were studying for a professional qualification. Many of them were employed by recruitment agencies and it was my task to highlight the relevant provisions of discrimination law at that time. One evening, we had a discussion about discrimination on the grounds of a person’s sexual orientation – particularly in the context of the ban on gay and lesbian people serving in the UK Armed Forces. This ban would eventually be lifted in 2000 – following the decision of the European Court of Human Rights in Smith and Grady v UK (1999) 29 EHRR 493.
One of the students asked me what protection existed for gay and lesbian people in employment law generally. Very little was my response. Before the introduction of the Scotland Act 1998 and the Human Rights Act 1998, the work place could be very hostile for LGBTI people (see Macdonald v Lord Advocate; Pearce v Governing Body of Mayfield School [2003] UKHL 34).
Yes, admittedly, the UK was (and still is in spite of Brexit) a signatory to the European Convention on Human Rights. In particular, Article 8 of the Convention recognises the right to family and private life. It was this Article which was used to overturn extremely restrictive laws on same sex relationships which existed in Scotland, Northern Ireland, the Isle of Man and the Channel Islands. Reinforcing Article 8 is Article 14 of the Convention is Article 14 which contains a general prohibition on discrimination.
The late 1960s are often referred to as the key period of the start of gay liberation in the UK with the passing of the Sexual Offences Act 1967 which decriminalised homosexual relationships between consenting adults (aged 21 or over) and as long as such conduct was in private. What is often overlooked is that the 1967 Act applied to England and Wales only. The picture was very different (and would remain so for over a decade – sometimes longer) in various parts of the British Isles.
Homosexual relationships were decriminalised in Scotland in 1980; in Northern Ireland in 1982; the UK Crown Dependency of Guernsey in 1983; the UK Crown Dependency of Jersey in 1990; and the UK Crown Dependency of the Isle of Man in 1994. The age of consent was set at 21 for all these parts of the British Isles. Things have since moved on and the age of consent was firstly reduced to 18 and then eventually to 16.
In the last 20 years, the influence of the European Union has been particularly profound regarding measures to combat sexual orientation discrimination.
In 1999, as a result of the Treaty of Amsterdam, the EU adopted two Directives which considerably expanded the scope of its anti-discrimination laws (the Racial Equality Directive (2000/43/EC) and the Employment Equality Directive (2000/78/EC). Of particular interest to this discussion is the Employment Equality Directive which made it unlawful to discriminate against a person on grounds of sexual orientation. Admittedly, this Directive was limited because it covered the areas of employment and vocational training only.
On 1 December 2003, the Employment Equality Directive would eventually become part of UK law in the form of the Employment Equality (Sexual Orientation) Regulations 2003. The Regulations were repealed and replaced by the relevant provisions of the Equality Act 2010 (which came into force on 1 October 2010).
It did not extend to the provision of goods and services, so had the case of Bull and Another v Hall and Another [2013] UKSC 73 occurred when the Directive was first transposed into UK domestic law, the same sex couple who were refused a double room at the guest house in Cornwall would not have been successful in their claim for sexual orientation discrimination. Luckily for them, the Equality Act had since come into force and covered unlawful less favourable treatment on grounds of a person’s sexual orientation with regard to the provision of goods and services.
The Treaty on the Functioning of the European Union (TFEU) is also worthy of comment. Article 19 prohibits discrimination by reason of a person’s sexual orientation and, notably, this provision is hardwired into UK law by way of the Equality Act 2010. Article 19 extended legal protection to gay and lesbian people more generally – over and above the limited areas of employment and vocational training which the Treaty of Amsterdam and the Employment Equality Directive had originally addressed.
The EU Charter of Fundamental Rights (although Poland and the UK had negotiated some opt-outs) contained significant provisions on equality and non-discrimination, namely, Article 20 (equality before the law) and Article 21 (the principle of non-discrimination).
Another massive step forward for the equality of the LGBTI community was the introduction of the Civil Partnerships Act 2004 which would give legal recognition (and protection) to gay and lesbian people who chose to enter such relationships. These rights would be further underpinned by permitting same sex couples to marry (in England and Wales in 2013 and in Scotland in 2014). Currently, Northern Ireland is the only part of the UK not to permit same sex marriage – although this will change from next week onwards (see link below):
Robyn Peoples and Sharni Edwards will celebrate their wedding on Tuesday in Carrickfergus.
This change to the law has come about as a result of the introduction of the Northern Ireland (Executive Formation etc) Act 2019 passed by the UK Parliament (in the absence of of a functioning devolved government for nearly the last 3 years).
Finally, if employers want to do more to create an inclusive work place, they could start by using Stonewall’s inclusive toolkits (see link below):
As a society, the UK has certainly moved on from the overtly hostile attitudes towards members of the LGBTI communities over the last 50 years or so. The legal rights and protections which LGBTI people now enjoy would have seemed unthinkable in 1967 when a limited form of tolerance was ushered in as a result of the Sexual Offences Act (in England and Wales). More recently, the UK and Scottish Governments have issued pardons to those individuals who were convicted of criminal offences under the previous laws (in 2017: the Policing and Crime Act 2017 in England and Wales (known as Turing’s Law after Alan Turing, the Enigma Code Breaker) and, in 2018, the Scottish Parliament followed suit by passing the Historical Sexual Offences (Pardons and Disregards) (Scotland) Act 2018).
Postscript
On Friday 7 February 2020, Phillip Schofield, the British TV celebrity announced that he was gay at the age of 57. Mr Schofield is married with 2 children and had lived a heterosexual life – until now. He likened hiding his sexual orientation to being in prison and being consumed by it.
A link to the story on the Sky News website can be found below:
At 2300 hours GMT today (or 0000 hours CET if you prefer), the United Kingdom will set a precedent and become an ex-member state of the European Union.
The European Union (Withdrawal Agreement) Act 2020 was given Royal Assent on 23 January 2020 and, earlier this week, the European Parliament overwhelmingly ratified the Withdrawal Agreement of November 2019 between the UK and the EU.
Click on the link below for the text of the Agreement:
Job done; back to normal then (whatever that is); the British have taken back control? Well not quite. The Withdrawal Agreement was always going to be the first part of the equation that needed resolving i.e. setting the terms on which the UK would leave the organisation. This has been popularly referred to as the divorce agreement e.g. dealing with the UK’s agreed financial contribution to projects and initiatives to which it had agreed when it was a member state.
The more difficult task will be to figure out what kind of future relationship the EU and the UK will have e.g. about future trading arrangements. UK Prime Minister, Boris Johnson wants such an agreement to be finalised by 31 December 2020; leading figures on the EU side (e.g. Ursula Von der Leyen, the Commission President) have been more cautious.
The fact that Brexit Day has finally arrived does not, however, mean that EU Law will cease to have effect in the UK.
We have now entered what is known as the transition period (31 January 2020 until 31 December 2020) and Article 127 of the Withdrawal Agreement explicitly states:
‘Unless otherwise provided in this Agreement, Union law shall be applicable to and in the United Kingdom during the transition period.’ [My emphasis]
In any event, as I have previously observed, EU Law is hardwired into the UK legal domestic systems. Areas such as consumer law; employment law; discrimination and equality law; environmental protection law and family law have all been extensively influenced by European legal principles. Any lawyer with some knowledge of EU Law knows this to be a question of fact. After 47 years of involvement with the European Project, this should be blindingly obvious.
Even this last week, documents published by the European Commission demonstrated that there will be import/export checks between the Island of Ireland and the UK. The Court of Justice of the EU will have the final say in relation to any disputes – despite what Prime Minister Johnson believes or says.
As Lord Denning opined many years ago in Bulmer (HP) Ltd v Bollinger SA [1974] 1 Ch 401, [1974] 3 WLR 202, [1974] 2 All ER 1226:
“But when we come to matters with a European element, the Treaty [of Rome] is like an incoming tide. It flows into the estuaries and up the rivers. It cannot be held back. Parliament has decreed that the Treaty is henceforward to be part of our law. It is equal in force to any statute.”
Or to use another metaphor: perhaps Brexit is a case of building the legal equivalent of the Thames Barrier after the deluge. Too little, too late. Whether the British Government likes it or not, by dint of Brexit, this country is no longer a rule maker and has assumed the status of rule taker.
Seán Crossan's Scots Law 