Top employment cases that will shape 2018/19

We have identified the cases which will have a big impact on employment law and HR policies and practices over the next 12 months.

These cover: 

• Sex and age discrimination 
• Working time breaks and holiday pay
• Employment status
• Disciplinary suspensions

Sex discrimination: Do employers have to enhance shared parental leave pay if they enhance maternity pay?

The Employment Appeals Tribunal said that the employer did not directly discriminate against a male employee taking shared parental leave when it refused to enhance his pay even though it did enhance maternity pay - Ali v Capita. 

But, could such a policy constitute indirect sex discrimination? In Hextall v Chief Constable of Leicestershire Police the Employment Appeal Tribunal (EAT) indicated that it might do because fathers can only take shared parental leave if they want to care for their baby whereas mothers have a choice about whether to take it or remain on maternity leave. The argument is that if shared parental pay is paid at statutory rates, men might be deterred from taking it.

Both decisions have been appealed to the Court of Appeal. The hearings will take place separately in 2019.

Why is this important?

The government produced detailed technical guidance to employers when it introduced shared parental leave which stated that it was not necessary for employers to enhance shared parental pay even if they enhanced maternity pay. Many employers have relied on this to justify differences in their family leave policies.

Age discrimination: Can employers introduce lower salary scales for new entrants?

The European Court of Justice will consider whether the practice of paying new recruits less than rates paid to existing employees amounts to indirect age discrimination. The case of Horan and Keegan v Minister for Education & Skills involves salary scales for teachers, reduced by the Irish Government as a cost cutting measure in 2010. Evidence showed that when lower salaries were introduced, 70% of new teachers were aged 25 or under. Teachers who were already in employment did not have their pay altered.

In this case, both claimant teachers claim they will each lose 100,000 Euros over their careers compared with a teacher appointed before the introduction of the new pay scale.

The case has not been listed for hearing yet.

Why is this important?

A policy which adversely affects a group of people because of a protected characteristic (such as age) will amount to indirect discrimination unless their employer can justify it. Reducing costs can be a legitimate aim but not if it is the only reason.

If the employer (which in this case is the government) can show their policy was legitimate, it must then establish that its response was “proportionate”. Generally, an employer will not be able to clear this hurdle if there is a less discriminatory way to achieve the same result. Here, the court will have to consider if the employer could have made equivalent savings by reducing the pay of all teachers rather than limiting it to those who were new to the profession.

The outcome will provide guidance to businesses thinking of making cost cutting measures that disproportionately affect certain groups within their workforce.

Working time breaks: Does compensatory rest have to be provided if a worker can’t take a 20 minute uninterrupted break?

Adult workers must be given a 20 minute break after six hours work and must know, in advance of taking it, that they will not be interrupted. The Employment Appeal Tribunal in Crawford v Network Rail Infrastructure said that workers who are only able to take short breaks must be given compensatory rest – even if they take several short breaks which, added up, amount to 20 minutes or more. The Working Time Regulations are designed to protect the safety and health of workers and it not open to employers to decide that shorter breaks can be taken because of the nature of the work.

The Court of Appeal will hear the case on 6-7 November 2018

Why is this important?

Many lone workers cannot decide, in advance, when they can take a break because of the nature of their work. Despite this, they may have periods of “down time” (when they are less busy) which allow them to rest for shorter periods of time. If these can be treated as statutory breaks, employers will not have to provide someone to cover breaks, or give the employee compensatory leave. This will give employers greater flexibility when preparing shift rotas etc.

This decision will particularly affect employers engaging workers providing social care, security guards and some transport workers who work alone.

Working time: Are workers who have been wrongly treated as self-employed entitled to holiday pay going back more than two years?

In King v Sash Windows the European Court of Justice made it clear that workers who have not taken paid leave because they have been wrongly treated as self-employed contractors can obtain compensation for all accrued holiday – even if this goes back many years.

The case will return to the Court of Appeal on 20-21 November 2018 to determine if the Working Time Regulations can be interpreted to give effect to this decision and, if so, how much compensation Mr King will receive for his 13 year service.

Why is this important?

There has been a huge rise in the number of individuals challenging their employment status in order to claim valuable employment rights such as the right to receive paid holiday. The ECJ has made it clear that national governments cannot impose limitations on this (such as the UK’s two year limitation on how far back a worker can recover underpaid holiday) until a worker is made aware that he has the right to receive paid holiday.

We don’t yet know how holiday pay will be calculated for individuals who have not taken any holiday (and therefore haven’t suffered any financial loss) and we hope that the Court of Appeal will set down principles that other employers can apply to ascertain their exposure to similar claims.

Worker, employee or self employed? Status takes centre stage

Employment law recognises three categories of person; “employee”, “worker” and those who are “self-employed”. It is important to know the status of your workers because employees and workers have important employment rights (although workers have fewer rights than employees) that are not available to those who are genuinely self-employed.

In Aslam v Uber, Uber have argued that it is a technology platform (not a taxi service) which puts drivers in touch with passengers. It operates on the basis that its drivers are self employed and are free to accept or reject work. This model of gig working is extremely tax efficient for the employer as it reduces employee NI and PAYE deductions and VAT.

Uber has appealed the decision of the Tribunal and EAT that its drivers are, in fact, workers and the Court of Appeal is due to hear the case on 30 October 2018. 

Why is this important?

It has always been difficult to correctly determine the employment status of some individuals, particularly those engaged under self employed contracts, or who work on a casual basis. The law has been interpreted in numerous cases, but the courts have not been able to devise a single test that will conclusively point to the distinction in all cases.

This case will not provide a single test but it will provide guidance that other companies operating “gig” arrangements may be able to apply to determine whether their self employed contractors are workers and entitled to some employment rights.

Discipline: Is suspension a neutral act?

The Court of Appeal will re-consider whether suspending an employee, even where suspension might be appropriate, is a neutral act that causes no detriment to an employee.

The case of Agoreyo v London Borough of Lambeth concerned an experienced teacher, suspended as a “precautionary” measure, after she was accused of using excessive force to restrain two children in her class. The High Court said suspending her was a “knee jerk” response and the employer had breached the implied duty of trust and confidence it owed to Ms Agoreyo.

The Court of Appeal will hear the case on 29 January 2019.

Why is this important

Organisations often automatically suspend any member of staff suspected of serious misconduct without properly considering whether it is necessary to do so. In this case, the High Court said that the school should have conducted a sort of “mini investigation” (including finding out what the teacher had to say about the allegations) before reaching a decision about suspension.

It also said that suspending an employee is not a neutral act and neutrality can’t be imposed by informing the employee their suspension does not imply guilt. If suspension is inappropriate, it will breach the employee’s contract and (potentially) give rise to a claim of constructive dismissal.

The outcome will help organisations to decide whether suspension is appropriate and what steps they need to take before imposing it.

Need additional information on any of these cases?

Please contact our partner, Glenn Hayes: glenn.hayes@irwinmitchell.com or 44 (0)113 218 6484.

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