Julian Taylor

With no clear sight of a Brexit deal, it remains sensible for employers to consider how to prepare for a no-deal scenario.  As things stand, it is possible we could leave without a deal on 31^st January 2020.  In the meantime, employers should consider the following:

• Support EEA/ Swiss citizens that already work for you in the UK, and their family members.  Encourage them to make applications for settled or pre-settled status under the EU settlement scheme in order to secure their stay in the UK. This should be done before the no-deal deadline of 31^st December 2020.

• Because we don’t know what any new immigration regime will look like post-Brexit, it would be prudent to manage your recruitment pipeline where possible.  If you have EEA/ Swiss recruits you are looking to bring to the UK, you should do so before 31^st January 2020 where possible if you want to have better certainty of their ability to remain here long term.     

Legal professional privilege, the protection of confidential communications between a solicitor and their client, is a fundamental principle of English law. Privileged documentation does not need to be disclosed in response to a Data Subject Access Request.

Employers are finding that it is becoming common, in the early stages of a dispute with an employee, for the employee to request information from the employer under their GDPR rights of access to information. This request can be informal, in most situations a fee cannot be demanded, and the response is required without undue delay (in most situations within one month). Employers are finding the pressure on them to respond quickly, to numerous and sometimes complex requests, has increased. Further, the issue of legal professional privilege is not straightforward. At its simplest, if data held by an employer contains legal advice from solicitors to the business, which has not been widely circulated, this information is likely to be privileged (Advice Privilege). Also, if a claim has been, or is likely to be, made by the employee any communications or documents, whose dominant purpose is to defend a claim, are also privileged (Litigation Privilege).

This combination of speed and complexity can cause mistakes to be made.

So, what if privileged information is accidently shared?
The recent case of Kasongo v Humanscale UK Ltd considered the application of legal privilege when information is shared with former employees.

If a privileged document is disclosed a view may be taken that privilege has been waived in relation to that document. More worryingly still it is then open to the employee to argue that privilege is lost on other connected information, and the employer should disclose all the advice received, discussed or produced. The case confirmed the position that, if documents have been disclosed by mistake, it is open to the employer to argue that privilege has not been waived. However, if the information released looks like it has been deliberately selected the employer may be ordered to disclose all connected information to give a full picture of the situation or advice received. The courts emphasised the employer cannot “cherry pick” disclosed information. If privileged information is provided accidently, and a view is taken that the information gives a biased impression, a court may order that all the privileged information relating to the issue should be revealed.

The Solution

Employers need to be careful that, in their haste, they are not disclosing information which is privileged. Any information collated in relation to responding to the employee’s request should be carefully checked and privileged information removed or reference to it obscured. 

If you have received a Data Subject Access Request from an employee and require assistance to ensure that you are not accidently “oversharing” information, please contact us to discuss how we can help.  

 

In Conisbee v. Crossley Farms Ltd and others, an Employment Tribunal has decided that vegetarianism is not a philosophical belief that qualifies for protection under the Equality Act 2010. 

It was accepted that Mr Conisbee’s belief in vegetarianism was genuinely held and worthy of respect in a democratic society. However, the Tribunal found that vegetarianism did not concern a weighty aspect of human life and behaviour. Instead it was a lifestyle choice. Many people decide to be vegetarians for different reasons (lifestyle, health, diet, concern about the way animals are reared for food and personal taste). Therefore a belief in vegetarianism does not have a similar status or cogency to a religious belief. 

It is interesting to note that the Tribunal contrasted vegetarianism with veganism, stating that there was a clearer cogency and cohesion in vegan belief because the belief held by each vegan, and underlying motivation for veganism, appear largely to be same (ie. a distinct concern about the way animals are reared, the clear belief that killing and eating animals is contrary to a civilised society, and also against climate control). 

The decision isn’t binding on future tribunals, because it is only a first instance decision, but it is an interesting one, and a useful example of how cases on philosophical belief are approached.

For the full judgement:

https://www.gov.uk/employment-tribunal-decisions/mr-g-conisbee-v-crossley-farms-ltd-and-others-3335357-2018

Further details have been released by the government in relation to the changes to off-payroll working rules (IR35).  As previously announced the responsibility for determining whether individuals should be taxed as employees under the off-payroll working rules will move to the organisation receiving the individual’s services from 6 April 2020.

This change impacts upon medium and large sized clients. Such clients include those businesses with an annual turnover of £10.2 million (the simplified test) or, if companies or limited liability partnerships, you meet two out of the three factors below:-

• an annual turnover of £10.2 million;
• a balance sheet total of more than £5.1 million; or
• more than 50 employees.  

If neither test is satisfied you will be classed as a small company/employer and the new rules may not affect you. Be aware that if you are a small company but are part of a larger connected or associated company group, if the parent of the group is medium or large, then subsidiaries will need to apply the off-payroll working rules. 

Also, if a business grows then the changes may apply going forward.  They will apply either from the start of the tax year following the end of the calendar year for the simplified test or if the multifactorial conditions apply and you meet the criteria for two years then the rules will apply in the tax year following the filing of the accounts for the second financial tax year.

If you are caught by the new rules our advice is to start the analysis of whether individuals should be taxed as employees sooner rather than later.  You need to inform workers and agencies of your determination on their status from 6 April 2020 regardless of the outcome of the determination.  If you fail to take reasonable care in making the determination this could result in the worker’s tax and National Insurance becoming your responsibility.

If you feel you are likely to be affected by the change guidance is available on gov.uk on how to prepare for the change of rules and we can assist with the analysis of the status of workers under IR35.

Earlier this year the Equality and Human Rights Commission (EHRC) commenced formal investigations into six organisations that had failed to report their gender pay gap for 2019. As a result of those investigations the relevant organisations have now all reported their gender pay figures, and entered into formal legal agreements with the EHRC committing to report on time for the next 5 years. 

The EHRC have said that they will now be contacting organisations that have reported implausible data. Those that are found to have submitted inaccurate data will be required to re-submit and could face further legal action.  

This is a reminder to all organisations caught by the reporting obligations that a failure to comply can lead to action and adverse press coverage. We advise businesses on gender pay gap reporting  – contact us for more information / assistance. 

https://www.equalityhumanrights.com/en/our-work/news/formal-investigations-lead-100-compliance-gender-pay-gap-reporting

Should holiday entitlement and pay for term time only workers be calculated on a pro-rata basis at 12.07% of annual pay under the Working Time Regulations? 

In Harpur Trust v. Brazel the Court of Appeal said no – workers who are employed all year round but only actually work during term time should not have their holiday pro rated. 

In this case, a visiting music teacher was employed under a permanent zero hours contract. She worked mainly during term time. Her contract provided for her to have the full time equivalent of 5.6 weeks’ annual leave, which had to be taken during school holidays. In an approach that was consistent with the ACAS guidance on holiday pay, the school calculated her holiday pay at 12.07% of hours worked in a term, paid in three instalments at the end of each term. She believed that her holiday should instead be calculated using average weekly earnings over the 12 week period immediately before her holiday was taken. 

The Court of Appeal found that the Working Time Regulations do not provide for the kind of pro-rating adopted by the school, resulting in more generous holiday calculations for the music teacher in question. 

The case is an important one. Those who use the 12.07% approach to pay holiday pay to zero hours staff with permanent contracts should analyse their exposure and consider adapting their approach. Employers should note that the principle only applies to those on permanent contracts, as opposed to seasonal or other casual workers employed on a series of short term / casual contracts.  However, the law may develop in this area – watch this space.

The Court of Appeal has found that an employer cannot rely on a breach of the immigration rules to argue that an employment contract is unenforceable. 

In the recent decision in Okedina v. Chikale the employee, Ms Chikale, worked for the employer Mrs Okedina, as a domestic live-in worker.  Both were Malawian nationals, and Ms Chikale originally worked under a six month visa. She continued to work for long hours at very low pay when the visa expired, that fact having been hidden from her by her employer. When she was summarily dismissed Ms Chikale brought various tribunal claims including claims for unfair dismissal and unlawful deductions from wages. Mrs Okedina argued that the employee’s claims could not be heard given that she was working illegally because her leave to remain had expired.

The Court of Appeal rejected this argument.  It was found that the legislation dealing with illegal working was not directed at those working illegally, but instead imposed penalties on those who employed people who were. It was not Parliament’s intention to deprive an innocent employee of all contractual remedies against their employer. Ms Chikale had not knowingly participated in any illegality and so should not be denied a remedy.  

As the UK temperatures soar ACAS has issued some guidance to help employers manage workplace challenges due to hot weather.  Their suggestions include:

Workplace temperatures should be reasonable – the Health & Safety Executive (HSE) advice is that the temperature in all workplaces inside buildings must be reasonable. The HSE offers advice on how to carry out a thermal comfort risk assessment if staff are unhappy with the temperature: http://www.hse.gov.uk/temperature.

Keeping cool at work – switch on any fans or air conditioners to keep workplaces comfortable and use blinds or curtains to block out sunlight. Staff working outside should wear appropriate clothes and use sunscreen to protect from sunburn.

Stay hydrated – employers must provide staff with suitable drinking water in the workplace. Workers should drink plenty of water throughout the day to prevent dehydration and not wait until they are thirsty.

Dress code – employers are not under any obligation to relax their uniform or dress code requirements during hot weather but where possible it may be advisable to for employers to relax the rules for wearing ties or suits.

Getting into work – if public transport gets adversely affected by the hot weather, this could affect staff attendance and their ability to get into work on time. Staff should check timetables in advance.

Vulnerable workers – some workers may be more adversely affected by the hot weather such as the elderly, pregnant women or those on medication. Employers may wish to give them more frequent rest breaks and ensure ventilation is adequate by providing fans or portable air cooling units.

Acas’ full hot weather guidance is available at http://www.acas.org.uk/hotweather.

In the October 2018 Budget the Chancellor confirmed that with effect from 6 April 2020 private sector businesses that engage contractors who supply services through an intermediary business (such as a personal service company) will be responsible for determining whether the IR35 rules apply. If the rules do apply, the entity paying the intermediary’s fees (the “Client”) will be responsible for operating PAYE and NICs on those fees.

The change, which reflects changes that came in for the public sector in 2017, was originally due to come in in 2019. The delay until 2020 is good news for businesses, but the change remains of real significance for a number of reasons:

• The Client, rather than the intermediary, will be responsible for determining whether IR35 applies. In essence it applies where an individual personally provides services to a Client via an intermediary, and the circumstances are such that if the arrangements had been made directly between the individual and the Client, the individual would be regarded as employed by the Client. Employers will need to get to grips with the tests for assessing employment status, and situations will need to be judged on a case by case basis.
• If the Client decides IR35 applies, then as the fee payer they will be responsible for deducting income tax and employees’ NICs from the fees, and will also need to pay employer NICs. This increases costs for all concerned so it is possible contracts will need to be reviewed and renegotiated.
• Payroll and accounting systems will need to be checked well in advance to ensure that they can cope with the changes.

“Small” businesses will be exempt from the new rules – we are waiting for clarification on which businesses will be classified as “small”.

The test for whether an employer can be found vicariously liable for acts of an employee is whether the employee is acting “in the course of their employment”, and whether the specific events are so closely connected with the employment that it would be fair and just to hold the employer vicariously liable.

In the case of WM Morrison Supermarkets v. Various Claimants an internal auditor was aggrieved having undergone a disciplinary process. He sought revenge against Morrisons by publishing the personal payroll data (including sort codes, account numbers and National Insurance information) of over 100,000 colleagues on the internet. He was personally tracked down, and imprisoned for his offences, but a number of the victims sought damages against Morrisons. Whilst the supermarket was not directly liable, and had taken appropriate measure to prevent data leaks, the Court of Appeal found Morrisons to be vicariously liable for the actions of its employee. He had clearly been entrusted with payroll data in his role, and although the leak was conducted using his personal computer outside his usual working hours, there was a sufficiently close connection with his employment upon which to base liability. The Court stressed that the employee’s malicious motive was irrelevant, and while it recognised that this could cause significant damage to an employer (which was precisely what had been intended by the employee), it suggested that the solution for employers is to insure against such wrongdoing.

This is a significant judgment with very far reaching implications for employers, and it will be nigh impossible to stop a determined, disgruntled employee from doing similar. Morrisons has indicated it will appeal the decision, but in the meantime employers should check their insurance policies, and also review their data security standards to do all they can to reduce their risk.

Link to Judgment: www.bailii.org/ew/cases/EWCA/Civ/2018/2339.html