Employment status – Page 2 – Seán Crossan's Scots Law

Take it or leave it …

Take it or leave what?

This is the stark choice faced by thousands of Asda employees (US parent company Walmart) in the UK who have been told by their employer that they must accept new contracts of employment.

The GMB Trade Union representing many of the affected employees has publicly stated its opposition to the new contracts. The Union’s argument amounts to the claim that the new terms and conditions will leave employees in a worse position.

Asda has stated that if employees don’t agree to the new contracts of employment by 2 November 2019, they will no longer have a job with the company. Effectively, the employees will be terminating their employment with the company Asda is arguing.

What’s the legal position?

Well, Asda is stating that it wishes to terminate the existing contractual agreement with the affected employees and replace it with a new contract. In this type of situation, Section 86 of the Employment Rights Act 1996 is particularly relevant.

The Act lays down statutory minimum periods of notice that the employer must give to the employees in question. These statutory minimum periods of notice apply to all those employees who have been continuously employed for four weeks or more.

Given the amount of previous Blogs of mine where I have covered the issue of an individual’s employment status, I really shouldn’t have to remind readers that the statutory notice periods apply to employees only i.e. those individuals who work under a contract of service (as per Section 230 of the Employment Rights Act 1996).

The statutory periods are detailed below:

One week’s notice is required to be given to those individuals who have been employed for more than four weeks but under two years

If the employee has between two and 12 years’ continuous service, s/he is entitled to a week’s notice for every year of service

If an employee has more than 12 years’ continuous employment, the maximum notice period is 12 weeks

It is important to note that these are statutory minimum periods of notice and that contracts of employment may actually lay down a requirement for longer periods of notice.

Alternatively, some employers may choose to insert a term in the contract where they can pay off the employee immediately by giving them their full entitlement to notice pay. There is no need for the employee to work whatever notice period they are entitled to receive. This type of contractual term is known as payment in lieu of notice.

Back to Asda: the affected employees are being given their statutory notice period whether that’s 1 week, 2 weeks or up to the maximum notice period of 12 weeks (depending on the individual’s length of service) as per Section 86 of the Employment Rights Act 1996.

What if some people still refuse to sign the new contracts after their statutory period of notice has expired?

There is always the possibility that certain employees (with the requisite length of service or meeting other relevant criteria e.g. protected characteristic discrimination) may be able to raise a claim for unfair dismissal in terms of the Employment Rights Act 1996.

Asda, on the other hand, may be able to justify the dismissals as potentially fair under Section 98(2) of the Employment Rights Act 1996 i.e. for some other substantial reason (the necessity for a wide-scale reorganisation in a tough retail environment).

No doubt lawyers for both Asda and the GMB are already staking out their respective legal positions for a possible battle before the Employment Tribunal.

A link to the story on the Sky News website can be found below:

Asda refuses to remove sack threat for thousands of staff over compulsory contracts http://news.sky.com/story/asda-refuses-to-remove-sack-threat-for-thousands-of-staff-over-compulsory-contracts-11845215

Postscript

It has since been reported in the Daily Mirror newspaper that one of Asda’s longer serving employees who was sacked for refusing to accept the new contract is intending to lodge an Employment Tribunal claim.

Please see the link below to this story:

https://www.mirror.co.uk/money/asda-worker-sue-supermarket-after-20857926

The Guardian also reported that the negative publicity from this story could be costly for Asda – see the link below:

https://www.theguardian.com/business/2019/nov/10/asda-faces-backlash-enforces-new-contracts

Copyright Seán J Crossan, 26 October and 12 November 2019

Good work?

Photo by Maarten van den Heuvel on Unsplash

One of the consistent themes of my blog has concerned an individual’s employment status in the work-place – or the very real difficulties associated with the lack of such status.

Section 230(1) of the Employment Rights Act 1996 defines who is an “employee” in the following terms:

“… an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment.”

As I have stated on more than one occasion, those who have a contract of service rather than a contract for services tend to be in a much stronger position legally speaking when it comes to a range of employment rights such as:

Paternity and maternity pay/leave
Statutory adoption pay/leave
Consultation rights in redundancy and TUPE situations
Entitlement to redundancy payments
Entitlement to sick pay
Minimum notice periods
Protection against unfair dismissal

The above are just some of the rights that people with employment status potentially can acquire depending on their length (or continuity) of service with their employer.

Those individuals with more insecure working patterns (e.g zero hours and/or casual workers) will almost never be in a situation to acquire such rights because it is almost always impossible for them to build up the necessary period of continuous service with the organisations to which they provide services. Typically, many of these workers are part of what has become known as the “gig economy” where the feature of employment contracts known as mutuality of obligation is absent.

Admittedly, the UK Government has attempted to begin to address the disadvantages facing “gig economy” workers by setting up the Taylor Review (which published its findings in July 2017). The final report made 53 recommendations concerning modern, employment practices:

https://www.gov.uk/government/publications/good-work-the-taylor-review-of-modern-working-practices

The UK Government’s official response to the Taylor Review was entitled “Good Work” and a link to this document can be found below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/679767/180206_BEIS_Good_Work_Report__Accessible_A4_.pdf

The desire to extend workers’ rights seems to be something of a trend as, in April 2019, the European Union also ratified a new Directive with the working title Transparent and predictable working conditions in the European Union. This Directive (for the remaining EU 27 member states) will certainly give casual workers greater legal rights, but given the current uncertainty over the UK’s Brexit position, it remains to be seen if this measure will ever be implemented in this country (for more information, see my blog entitled “The gig economy” which was published on 19 April 2019).

One of the most significant new rights that the UK Government is proposing to extend to non-employees is the right to sick pay from day 1 of their service. It is calculated that this reform (if implemented) will benefit some 2 million workers.

A link to how the story was reported by The Independent can be found below:

https://edition.independent.co.uk/editions/uk.co.independent.issue.160719/data/9005291/index.html

Although employment law is a matter reserved to the Westminster Parliament, the Scottish Government has established its own Fair Work Convention with the express aim:

“… that, by 2025, people in Scotland will have a world-leading working life where fair work drives success, wellbeing and prosperity for individuals, businesses, organisations and society.”

A link to the Convention’s website can be found below:

https://www.fairworkconvention.scot

Copyright Seán J Crossan, 22 July 2019

Get me an Uber!

Photo by Thought Catalog on Unsplash

An interesting story today about industrial action being taken by taxi drivers working for Uber. The action is taking place in the USA and in cities across the UK (including Glasgow). It is designed to draw attention to working practices within the company before it lists its shares on the New York Stock Exchange.

Quite a few of my previous blogs have looked at employment status and the steady increase in the number of individuals who provide services to organisations but, critically, not under the traditional employment contract model.

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.

Those 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, rights to information and consultation etc.

Admittedly, employees will not acquire these rights from day 1 of their employment, but the critical difference in relation to people working under a contract for services is that they have the potential to obtain employment rights (by completing the requisite period of continuous service e.g. 2 years’ continuous service for entitlement to protection against unfair dismissal and for entitlement to a redundancy payment.

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.

The industrial action being taken by Uber drivers today is principally an attempt by these types of workers to secure better contractual terms and conditions. The law does now appear to be recognising that individuals working for organisations such as Uber (and Lyft) are not genuinely self-employed persons. Rather they should be categorised as workers with an entitlement to a basic level of legal protection (see 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).

A link to the Aslam judgement can be found below:

https://www.judiciary.uk/wp-content/uploads/2018/12/uber-bv-ors-v-aslam-ors-judgment-19.12.18.pdf

A link to an article on the BBC website about the industrial action can be found below:

https://www.bbc.co.uk/news/business-48190176

Copyright Seán J Crossan, 8 May 2019

Paternity leave

Photo by Kelly Sikkema on Unsplash

The basic (statutory) entitlement to paternity leave for employees was introduced by the then Labour Government of Tony Blair in 2003.

A recent news item on the BBC highlighted the fact that Aviva, one of the UK’s leading financial institutions, has introduced improved, family friendly policies for new fathers.

The company is permitting new fathers to take up to 6 months of paid paternity leave.

A link to the story can be found below:

Paternity leave: ‘All of my dad friends were incredibly jealous’

This is an incredibly generous arrangement for male employees, but it is not typical. In this blog, I intend to examine the basic statutory provisions which govern this area of employment law.

I should also point out that, in all probability, Aviva will be paying male employees the statutory rate of paternity pay (more about this later in the blog).

Admittedly, the Labour Party seems to be prepared to consider the introduction of improved, family friendly policies. In a previous blog (Out of office: the work/life balance published on 25 February 2019), I mentioned that the extension of rights to flexible working arrangements was being considered by Labour. Under these proposed arrangements, employees would be entitled to access these types of arrangements from day 1 of their employment (not the current 26 weeks’ continuous service requirement).

The impact of family friendly policies in the UK

The House of Commons’ Women and Equalities Committee published a Report entitled Fathers and the workplace (on 7 March 2018) which stated in its opening paragraph that:

“The Government must reform workplace policies to support fathers to better balance their parental responsibilities and work and to ensure they meet the needs of the twenty first century family. Fathers in particular want to be supported at work to take a more equal share of childcare when children are young.”

The Report goes on to comment that:

“… we have heard evidence from employer organisations, unions, researchers, think-tanks and experts, but most importantly from fathers and mothers themselves, that the current policies supporting fathers in the workplace do not deliver what they promise, despite good intentions. This is particularly the case for less well-off fathers.”

In particular, the Committee noted that entitlement to flexible working arrangements has not led to cultural change in the workplace.

In 2015, the UK Coalition Government (2010-15) introduced Shared Parental Leave to try and encourage new fathers to share parental responsibilities with the mothers. This policy has not been a success if you look at figures reported by the Financial Times (2017) and the BBC (2018):

https://www.ft.com/content/2c4e539c-9a0d-11e7-a652-cde3f882dd7b

https://www.bbc.co.uk/news/business-43026312

The figures seem to suggest that between 1-2% of eligible parents are making use of shared parental leave. This is an abject failure given that the UK Government gave evidence to the Women and Equalities Committee stating that it would like to achieve a figure of 25% of eligible men and women taking up shared parental leave. So, a lot of work still to be done here.

The sheer complexity of the legislation covering family friendly policies can also be an added difficulty for employers and employees alike.

A link to the Women and Equalities Committee Report and a link to the UK Government’s response to it can be found below:

https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/358/358.pdf

https://publications.parliament.uk/pa/cm201719/cmselect/cmwomeq/1076/107602.htm

Statutory Paternity Leave and Pay

In the UK, new fathers are entitled to take 1 or 2 weeks of statutory paternity leave following the birth of their child. The employee can choose to take either 1 or 2 weeks’ leave. You will not get additional leave if the mother is having twins or triplets (and we’ll leave it at that!).

Generally, new fathers must take paternity leave all at once – although some employers may be flexible about this.

An employee should give his employer the correct notice, but this is not about pinpointing a precise date (understandably). The leave period could be changed, but an employer would expect to receive 28 days’ notice of this intention. Paternity leave cannot be taken before the birth and any entitlement must be used up within 56 days of the child being born (or adopted).

Employees can either inform their employers in writing; complete the official SC3 form; or complete the employer’s own form.

A link to the SC3 form can be found below:

https://public-online.hmrc.gov.uk/lc/content/xfaforms/profiles/forms.html?contentRoot=repository:///Applications/PersonalTax_iForms/1.0/SC3&template=SC3.xdp

Eligibility

This important employment right is subject to the following conditions:

It applies to employees only
Employees must have 26 weeks’ continuous service with the employer up to and including any day in the qualifying week
Employees must be the biological parent; adopter; or intended parent (i.e. surrogacy arrangements)

The qualifying week is 15 weeks before the child is born.

During paternity leave, the continuity of employment of new fathers is maintained and this means that they will still accrue holidays/holiday pay; have an entitlement to raise any pay rises; and they have the right to return to work.

During the actual pregnancy or adoption process, expectant fathers are entitled to accompany the mother of the child to two ante natal appointments or two adoption appointments after matching with a child. The amount of time that employees can take off to attend these types of appointment is 6.5 hours, although employers can increase this.

New fathers taking leave will be entitled to receive statutory paternity pay – which is not exactly generous (from April 2019: £148.68 per week or 90% of the employee’s average weekly earnings – whichever is the lower figure).

Again, some employers may may much more generous and operate a contractual paternity leave and pay scheme which will allow male employees to be paid their full salary while taking time off to be with their newly born or newly adopted children.

In order to qualify for paternity pay, employees must currently be earning £118 (before tax) from 6 April 2018. This is known as the Lower Earnings Limit.

Employees will receive paternity pay via the usual arrangements operated by the employer and tax, national insurance and other deductions (e.g. pension contributions) will be taken. Paternity pay should actually be paid when employees are taking their leave entitlement. It is possible to change the dates for payment of paternity pay, but the employer has a right to insist on 28 days’ notice.

Conclusion

Paternity leave and pay (in common with many other so called family friendly policies in the workplace) tends not to be particularly generous. The cultural change whereby men and women would share parental responsibilities (especially in the child’s first year of life) seems to be a pious hope. Much more is going to have to be done by the UK Government to encourage this sort of change. Perhaps getting rid of some of complexity which surrounds the law in this area could be a useful start.

Arrangements operated by employers, such as Aviva, tend to be the exception rather than the rule.

The Nordic countries (Denmark, Finland, Iceland, Norway and Sweden) tend to be the benchmark used to make criticisms of how far behind the UK is when it comes to implementing family friendly policies. Sweden, in particular, is often cited as one of the most progressive countries in the developed world in this respect:

https://sweden.se/society/10-things-that-make-sweden-family-friendly/

Related Blog Article:

https://seancrossansscotslaw.com/2019/02/25/the-work-life-balance-or-utopia-reimagined/

Copyright Seán J Crossan, 30 April 2019

More hell on the high street (or redundancy again)

Photo by Becca McHaffie on Unsplash

The difficult trading conditions on the UK high street don’t seem to be easing with news that Debenhams, one of the country’s biggest retailers, will close 50 of its stores. This will affect about 1,200 employees of Debenhams, many of whom will be facing up to the threat of redundancy.

Debenhams have just announced the names of the first 22 stores which will close in 2020.

Debenhams names 22 stores to close

The struggling department store chain plans to close the shops next year, affecting 1,200 staff.

Redundancy

Redundancy can be potentially fair reason for dismissal… if handled correctly by employers.

Only employees can be made redundant.

Remember: Section 230 of the Employment Rights 1996 defines who is an “employee”.

The definition of redundancy can be found in Section 139(1) of the Employment Rights Act 1996:

(1) For the purposes of this Act an employee who is dismissed shall be taken to be dismissed by reason of redundancy if the dismissal is wholly or mainly attributable to-

(a) the fact that his employer has ceased or intends to cease-

(i) to carry on the business for the purposes of which the employee was employed by him, or

(ii) to carry on that business in the place where the employee was so employed, or

(b) the fact that the requirements of that business-

(i) for employees to carry out work of a particular kind, or

(ii) for employees to carry out work of a particular kind in the place where the employee was employed by the employer,

The relevant legal provisions governing redundancy are quite extensive and can be found in:

● Trade Union and Labour Relations (Consolidation) Act 1992

● Employment Rights Act 1996

● Information and Consultation of Employees Regulations 2004

● Transfer of Undertakings (Protection of Employment) Regulations 2006

● Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014.

The really critical provisions of UK employment law which govern redundancy handling are to be found in the following:

● Sections 188-198 of the Trade Union and Labour Relations (Consolidation) Act 1992

(Section 188 is further supplemented by the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 1999).

Handling redundancies

Employees should be selected for redundancy in a fair way.

The employees who are at risk for potential redundancy will be part of a group of individuals known as the redundancy pool.

Employers can manage situation in a number of ways.

How?

● LIFO

● Volunteers

● Disciplinary records

● Staff appraisal – skills, experience etc (redundancy matrices or re-applying for your job).

What is LIFO?

Last in, first out – was the most commonly used method, but it could fall foul be regarded as indirect discrimination e.g. too many young people are made redundant. So there are limitations to this approach.

Redundancy selection criteria must be objective.

Many employers will have contractual redundancy policies. Must stick with this: see John Anderson v Pringle of Scotland [1998] IRLR 64.

Appeals should be permitted.

Individuals will still be an employee until effective date of redundancy.

Avoiding redundancies

Redundancy could be avoided by:

● Short-time working

● Lay-offs

The employer needs to consult with employees or their representatives.

Both sides may not reach agreement, but consultation has occurred.

It has to be a meaningful exercise – not a paper one.

Additional rights

Employees have additional rights in redundancy situations:

● Consultation with employer

● Notice period

● Suitable, alternative employment

● Time off to find new employment

Selection for redundancy

Selection for redundancy is automatically unfair in relation to:

● Protected characteristics e.g. age, disability, gender, maternity and pregnancy etc

● Trade Union participation or acting as employee representatives

● Jury service

● Whistle-blowing & health and safety cases

● Asserting statutory rights

● Occupational pension trustees

Statutory redundancy pay

Statutory redundancy pay is most common payment. Only those employees who have 2 years or more continuous service are entitled to claim statutory redundancy pay.

It is worked out according to the following formula:

● half a week’s pay for each full year employees were under 22

● 1 week’s pay for each full year employees were 22 or older, but under 41

● 1 and half week’s pay for each full year employees were 41 or older

Length of service which can be used to calculate the amount of redundancy pay is capped at 20 years and the amount of weekly pay is capped at £525 (the maximum statutory amount claimable is £15,750) from 6 April 2019.

Employers can be more generous with redundancy pay or they can include employees with less than 2 years’ continuous service.

No tax is payable on redundancy pay less than £30,000.

Employees can calculate their entitlement to statutory redundancy pay by clicking on the link below:

https://www.gov.uk/calculate-employee-redundancy-pay

Notice of redundancy

Proper notice of redundancy must be given. Section 86 of the Employment Rights Act 1996 contains the relevant notice periods for termination of the employment contract.

The maximum period of notice for those employees with 12 years or more continuous service is 12 weeks.

Sometimes contractual periods of notice can be longer, but not shorter than the those laid down by the Employment Rights Act 1996.

That said, notice can be shorter if the employment contract permits employer to make a payment in lieu of notice.

Employees will receive full entitlement to redundancy pay, notice pay, holiday pay & other entitlements.

Collective redundancies?

This situation arise where more than 20 employees are going to be made redundant in a 90 day period. Fixed term contract employees do not need to be included in collective consultation, except if contract ending early because of redundancy.

The Debenhams’ situation is likely to be classified as a case of collective redundancy.

There must be consultation with with Trade Union or employee representatives.

Consultations must cover:

● ways to avoid redundancies

● the reasons for redundancies

● how to keep the number of dismissals to a minimum

● how to limit the effects for employees involved, e.g. by offering retraining

Length of consultation period?

No time limit for how long this period should be, but the minimum is:

● 20 to 99 redundancies – the consultation must start at least 30 days before any dismissals take effect

● 100 + redundancies – the consultation must start at least 45 days before any dismissals take effect

These minimum periods apply if employers are contemplating making collective redundancies within a 90 day period.

The UK Coalition Government (2010-15) substantially reduced redundancy consultation periods.

Failure to consult employees?

Dismissals will almost certainly be unfair.

In a collective redundancy situation, employers should notify the Redundancy Payments Service (RPS) by filling out form HR1. It is a (strict liability) criminal offence not to complete the HR1.

A link to a template HR1 form can be found below:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/782487/NEW_HR1.pdf

Failure to pay redundancy payments or payment of the wrong amount?

Affected employees have 6 months (minus 1 day) to lodge an Employment Tribunal claim.

Insolvent employers?

The State will ultimately pay out from the National Insurance Fund (employee’s should complete and submit an RP1 Form).

Employees can find out if their employer is insolvent by going to the following link:

https://www.gov.uk/get-information-about-a-company

A short film from ACAS about the core employments rights in relation to redundancy can be found below:

The gig economy

Photo by Austin Distel on Unsplash

On 16 April 2019, the European Parliament adopted measures in a new European Union Directive that will give workers providing services in the so called gig economy greater legal protection. The Directive will not apply to those individuals who are genuinely self-employed (see previous Blog: “Hello, I’m Lorraine and I’m definitely self-employed” published on 22 March 2019).

The final text of the Directive was adopted with 466 votes to 145 and 37 abstentions. The EU Council of Ministers had already approved the measures.

The EU member states will have three years to put the rules into practice.

The new Directive has a working title of the Transparent and predictable working conditions in the European Union. The Directive will eventually repeal Council Directive 91/533/EEC and it has been introduced using the Ordinary Legislative Procedure of the EU (formerly the Co-decision procedure).

Council Directive 91/533/EEC of 14 October 1991 related to an employer’s obligation to inform employees of the conditions applicable to the contract or employment relationship. Note the wording of this Directive title: it contains the key term of ’employees’, so casual workers were most definitely not covered by its provisions.

Member states will have 3 years in which to implement the new Directive.

Typically, in the popular imagination, gig economy workers are personified by the likes of Uber taxi drivers and Deliveroo couriers. In comparison to employees, gig economy workers tend to lack job security and have far fewer employment rights. Unlike employees who have a contract of service, gig economy workers have a contract for services (a key distinction in employment law).

In a press release issued via the official EU website (Europa), the main objectives of the new Directive are listed:

Basic rights (i.e. a floor of rights) for workers in casual or short term employment
Working conditions must be clearly stated on Day 1 of employment, and no later than 7 days in permitted circumstances
Limiting probationary periods to a maximum of 6 months

A link to the EU press release can be found below:

http://www.europarl.europa.eu/news/en/press-room/20190410IPR37562/meps-approve-boost-to-workers-rights-in-the-gig-economy

A link to an infographic outlining the key objectives of the new Directive can be found below:

http://www.europarl.europa.eu/news/en/headlines/society/20190404STO35070/gig-economy-eu-law-to-improve-workers-rights-infographic

The Independent newspaper also reported the new Directive in its edition of 18 April 2019.

A link to the article can be found below:

https://edition.independent.co.uk/editions/uk.co.independent.issue.180419/data/8874676/index.html

The new Directive is firmly part of the EU’s Social Pillar which was itself adopted at Gothenburg, Sweden on 17 November 2017.

As European Commission President, Jean-Claude Juncker said at the time of the adoption of the Social Pillar:

“Today we commit ourselves to a set of 20 principles and rights. From the right to fair wages to the right to health care; from lifelong learning, a better work-life balance and gender equality to minimum income: with the European Pillar of Social Rights, the EU stands up for the rights of its citizens in a fast-changing world.”

https://ec.europa.eu/commission/priorities/deeper-and-fairer-economic-and-monetary-union/european-pillar-social-rights_en

Brexit Alert!!!

At the moment, the UK has committed itself to leave the EU. The latest deadline for doing so is 31 October 2019. Will a future UK Parliament or Government choose to implement the provisions of the Directive if this country is an ex-member state of the EU? That really depends on the type of relationship that this country has with the EU 3 years from now. Any future trading agreement with the EU may contain provisions about minimum employment protection laws. We will just have to wait and see what happens. It seems rather sad that when the EU is passing a very progressive measure, the UK has decided to leave the organisation.

Strippers are workers too. Discuss.

Photo by Eric Nopanen on Unsplash

We had Lorraine Kelly and employment law in one of Friday’s blogs (Hello, I’m Lorraine and I’m definitely self-employed). Today, rather than TV personalities, we have strippers (which demonstrates the sheer breadth of this area of the law).

Anyway, a report on Sky News (Sunday 24 March 2019) highlighted the campaign by women working as strippers who wish to be classified as workers rather than self-employed individuals. A worker has, of course, a broader meaning than employee in both UK and EU employment law.

Workers enjoy, for example, protection under legislation such as the Working Time Regulations giving them access to holiday pay and minimum holiday entitlement, as well as regulating their working time (i.e. the 48 hour limit). The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000 is also an important source of legal protection for workers.

In terms of Section 230 of the Employment Rights Act 1996, an employee is someone who has a contract of service. As I have stated in previous blogs, an employee has potential access to multiple employment rights – a situation which a worker or self-employed individual can really only dream about.

In the Sky News piece, the spokesperson for individuals providing services in the “adult entertainment” business makes an eloquent claim for greater legal rights. We hear tried and tested arguments about the level of control (arguably) which nightclubs have in relation to these individuals. This is an attempt to deploy the control test to the advantage of people working in this industry. Whether it will be a clinching argument which secures the status of worker for many people remains to be seen.

A link to the Sky News article and video can be seen below:

Strippers seek workers’ rights recognition

http://news.sky.com/video/share-11674273

This is not, however, the first time that an individual working in the “adult entertainment” industry has sought employment rights.

In Chapter 6 of Introductory Scots Law, I discuss the case of Quashie v Stringfellows Restaurants Ltd [2012] EWCA Civ 1735 where an individual argued that they had employment status and, therefore, the right to legal protection – principally in relation to unfair dismissal in terms of the Employment Rights Act 1996.

Quashie provided services as a lap dancer to two clubs, Stringfellows and Angels, both owned by Stringfellows Restaurants Ltd over a period of about 18 months. Stringfellows decided to dispense with Quashie’s services on 9 December 2008 because the management was suspicious that she was involved with drugs while working on the premises.

Quashie submitted a claim for unfair dismissal to an Employment Tribunal. The customers paid Quashie to dance – not Stringfellows Restaurants – and she had to pay the clubs a fee for the right to dance there. There was no barrier, in theory, to Quashie accepting engagements to dance at other clubs not owned by Stringfellows Restaurants – as long as she had not made a prior booking to dance at Stringfellows or Angels.

Holidays could be taken by Quashie when she wished, but so long as she completed a form giving advance warning of her intention to do this. Quashie received a club agreement from Stringfellows Restaurants which stated that she was an independent contractor. Admittedly, Stringfellows Restaurants did put Quashie on a rota to dance on a regular basis and a failure by her (or other dancers) to turn up for these shifts meant that she would be suspended from the clubs the following week and she would not be permitted to work.

The Employment Tribunal held that there was no mutuality of obligation between the parties and that Quashie was not an employee and that the right to claim unfair dismissal (Section 94: Employment Rights Act 1996) was not available to her. Quashie appealed to the Employment Appeal Tribunal. On appeal, the Employment Appeal Tribunal overturned the original decision of the Employment Tribunal and found Quashie to be an employee. Stringfellows Restaurants appealed to the English Court of Appeal.

Held: by the English Court of Appeal that the Employment Appeal Tribunal had erred and that the original Employment Tribunal decision should be reinstated: Quashie was not an employee as there was insufficient mutuality of obligation between the parties.

Conclusion

As reported in the Sky News piece, the argument being advanced that strippers should be given worker status is clearly a more modest attempt to secure some employment rights for individuals working in this industry. It may be easier to win this argument than the contention that such individuals should be treated as employees (as occurred in Quashie). That said, it will be for judges to determine on a case by case basis who has employment status and who does not.

Postscript

In an attempt to secure better employment rights for women working in the “adult entertainment” industry, BBC Scotland reported in July 2019 that many lap dancers working in Glasgow had joined a trade union.

Please see a link to this story below:

The lap dancers who joined a union

Hello, I’m Lorraine and I’m definitely self-employed

Photo by Sam McGhee on Unsplash

I rarely tire of writing about employment status and today is no exception.

I never thought, however, that I would be talking about Lorraine Kelly, the well known British TV personality, and employment status in the same breath. I suppose there’s a first time for everything.

Anyway, Ms Kelly has just won an income tax dispute valued at £1.2 million with Her Majesty’s Revenue and Customs (HMRC). She was able to demonstrate to the First Tier Tax Tribunal that she was not an employee of ITV, but rather she was a freelancer or a genuinely self-employed person. If you are classified as a freelancer or a self-employed person, you will be able, quite legitimately and courtesy of a competent accountant, to pay less in income tax to the Exchequer. Clearly, this situation will be more advantageous to higher, earning individuals such as Ms Kelly.

Judge Jennifer Dean, who chaired the Tribunal, was convinced that Ms Kelly was effectively a theatrical performer who was “presenting a persona of herself … she presents herself as a brand and that is the brand ITV sought when engaging her [my emphasis].”

Significantly, Ms Kelly was also able to show that ITV did not give her any employee or worker benefits such as holiday and sickness pay. There were also no restrictions placed on her ability to carry out work for other organisations.

I think that it would be safe to say that Judge Dean would have had Section 230 of the Employment Rights Act 1996 at the forefront of her reasoning when she decided that Ms Kelly does not have a contract of service with ITV, but rather she has a contract for services.

Employment status as a real issue does matter and, in Lorraine Kelly’s case, the lack of it will mean that she pays far less in income tax to HMRC.

On another point, Lorraine Kelly’s dispute with HMRC provides an insight into the work of specialist Tribunals. Members of the public probably have little awareness of the existence of the Tax Tribunal, but this story shines a light on an otherwise obscure part of the legal system.

A link to an article about the story on the BBC website can be found below:

Lorraine Kelly wins £1.2m tax case against HMRC over ITV work

HMRC claimed she was employed by ITV, but the judge ruled that Kelly’s TV persona is a daily performance.

Horses for courses: the equine flu affair

Photo by Mikael Kristenson on Unsplash

Regular readers of this (relatively newish) wordpress site will be aware that blog entries dealing with employment relations tend to feature quite frequently.

In Chapter 6 of Introductory Scots Law, employment status is discussed i.e. whether someone has a contract of service (in terms of Section 230 of the Employment Rights Act 1996) or whether they are deemed to have some other legal status e.g. a freelancer or a casual worker which would mean that access to many of employment rights is simply not an option.

When teaching employment law courses to students, I often have to emphasise the distinction between contracts of service and contracts for services. The modern labour or employment market is undoubtedly complex (even fragmented). Many individuals may be working alongside one another but some will enjoy far better conditions of service because of their status as employees. For some individuals the most that they can aspire to is to be classified as a worker. It’s certainly not ideal, but it’s better than being someone who is engaged on a casual as required basis – with no employment protection.

You might wonder where on earth this leading? If you’re not a punter (seasoned or occasional), you might struggle to see how the recent outbreak of equine flu in the United Kingdom has got to do with employment status? Quite a lot actually and it just goes to prove that every day is a school day – not just for students of employment law.

When casually tuning into BBC Breakfast’s sports bulletin today (14 February 2019), I learned something to do with horse racing and employment status: jockeys are self-employed individuals who usually take up a trainer’s offer of an appointment to ride a horse in return for an agreed fee. The jockey who appeared in the short news clip said that he was very glad that racing had resumed after a 6 day health ban and that he could get back to work. In short: if he wasn’t working, he didn’t get paid.

Now, if jockeys were working under a contract of service (an employment contract), their employers would have common law duties to provide work (arguably) and/or to pay wages. If no work was available because of a temporary problem (e.g. a public health scare), an employee would still expect to receive wages.

As I am now aware, the vast majority of jockeys (as genuinely self-employed persons) do not benefit in this way. It just goes to show you what you can learn from the morning sports bulletin. Maybe I’ll pay more attention in the future. It was certainly one of those gems that I could share with the students this morning … but then if I was a punter, perhaps I would already have been aware of a jockey’s employment status.

The death of the independent contractor defence?

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Traditionally, vicarious liability in employment law was primarily an issue for parties who had entered a contract of service. For many years, it was the general legal position that an independent contractor i.e. someone engaged under a contract for services who had committed a wrongful act or omission which harmed a third party was personally liable for the consequences of their behaviour. The person hiring the contractor would normally escape any such liability. Vicarious liability, however, is an area of the law which continues to develop – as we are about to see.

Worryingly, for organisations which use independent contractors (people working under a contract for services), an English Court of Appeal decision may mean that they could be liable for delicts and other wrongful acts/omissions e.g. assaults which were carried out by non-employees.

The English Court of Appeal has clearly come to its decision based on the logic of recent decisions of the UK Supreme Court: namely,
Mohamud v WM Morrison Supermarkets [2016] (which is discussed in Chapter 6 of Introductory Scots Law). It would seem likely, therefore, that the Scottish courts will follow this decision remains to be seen, but it is not a development which organisations are likely to welcome. A summary of the decision can be seen below:

Barclays Bank PLC v Various Claimants [2018] EWCA Civ 1670

Barclays Bank hired a doctor, Gordon Bates, to carry out medical examinations of members of its staff and applicants for employment at the Bank. These examinations were carried out by Bates at his consulting room located at his private address. The doctor was accused of sexually assaulting 126 people during examinations carried out between 1968 and 1984. These incidents did not come to light until much later. By this time, the doctor had died and there was no question of his professional indemnity insurance or his estate paying out compensation to his victims. Barclays Bank stated that the doctor was not an employee – he was an independent medical practitioner paid by the Bank to carry out a service as and when required. Barclays Bank argued that on these grounds they should not be held liable for the doctor’s wrongful actions. In fact, the victims themselves did not claim that Bates was an employee of Barclays, but significantly they did argue that its relationship with the doctor was “akin to employment” and that the delictual act was sufficiently closely connected to the employment or quasi-employment. Bates was under the control of Barclays Bank; by using the services of Bates, the Bank had created the risk of the victims being exposed to his wrongful acts; The medical examinations were carried out on behalf of the Bank; and the Bank had the resources to compensate the victims who now had no practical means of obtaining damages from Bates.

The case was first heard in the English High Court. The High Court decided that Barclays should be held liable for the doctor’s actions. They were benefiting from the service that he was providing and they had the financial resources to compensate the victims (this for organisations using independent contractors will be the really controversial and worrying part of the judgement).

Barclays appealed to the English Court of Appeal, but the decision of the High Court was upheld. At paragraph 41 of the judgement, Lord Justice Irwin stated:

“The law of vicarious liability has been developed – has been “on the move” – in recent times, most notably in the five critical decisions of: E v English Province of Our Lady of Charity; the Catholic Child Welfare Society; Cox v Ministry of Justice; Mohamud v WM Morrison Supermarkets; and Armes v Nottinghamshire County Council.”

Significantly, Lord Justice Irwin goes on to say (at paragraph 45):

“Moreover, it seems clear to me that, adopting the approach of the Supreme Court, there will indeed be cases of independent contractors where vicarious liability will be established. Changes in the structures of employment, and of contracts for the provisions of services, are widespread. Operations intrinsic to a business enterprise are routinely performed by independent contractors, over long periods, accompanied by precise obligations and high levels of control. Such patterns are evident in widely different fields of enterprise, from construction, to manufacture, to the services sector.”

Conclusion

What are the consequences of the Barclays judgement? The logical conclusion is that any organisation engaging workers or independent contractors under a contract for services will have to be aware of this decision and its implications because it expands the area of vicarious liability considerably. If the English Court of Appeal’s decision is upheld and then followed in Scotland, it will be true to say that vicarious liability is no longer an exclusive feature of the contract of employment (contract of service). Essentially, it will be very difficult for a an organisation to mount a competent defence that it should not incur liability merely because the wrongful act or omission was committed by an independent contractor for services.

A link to the English Court of Appeal’s decision can be found below:

http://www.bailii.org/ew/cases/EWCA/Civ/2018/1670.html

Postscript

Barclays appealed against the decision of the Court of Appeal and the UK Supreme Court heard this appeal on 28 november 2019.

We await the decision of the Supreme Court with considerable interest.