Top employment cases that will shape 2020

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: 

• Holiday entitlement and pay
• National minimum wage
• Part time worker rights
• Data protection and vicarious liability
• Collective bargaining
• Employment status
• Sex discrimination

Holiday pay - are the 'rules' which limit a series of deductions correct?

Last year, the NI Court of Appeal in Chief Constable of the Police Service of NI and others v Agnew held that the EAT's analysis of what amounts to a series of unlawful deductions in Bear Scotland was incorrect and had resulted in 'arbitrary and unfair' results.  It said that a series is not broken by lawful payments, or by a gap in payments of three months or more. It also stated that annual leave is not taken in a particular sequence and the different types of leave (Directive, Working Time Regulation and additional contractual holiday) are indistinguishable from each other.

This meant that over 3,300 police officers and staff could recover around £40 million in underpaid holiday. Our blog explaining this case is available here.

Decisions of the NI Court of Appeal aren't binding in England, Wales or Scotland. However, the employers have asked for permission to appeal to the UK Supreme Court and we are waiting to hear if they will hear the case. If they do, its decision will be binding on all UK employers.

Why this matters

Most employers have been able to rely on the EAT's judgment in Bear Scotland to limit their holiday pay liabilities to a worker's current holiday year.

If the Supreme Court agrees with the NI Court of Appeal, workers will be able to recover underpayments going back up to two years in England, Wales and Scotland.

Holiday entitlement of term time and other part year workers

In Brazel v The Harper Trust, the Court of Appeal decided that a teacher engaged on a term time only contract was entitled to 5.6 weeks holiday per year, even though she did not work for the whole year. This was the minimum requirement and it couldn't be pro-rated to reflect the number of weeks she actually worked. Nor, could the employer apply the 12.07% 'formula' for working out her holiday entitlement.

Our blog explaining the decision is available here.

The employers have asked for permission to appeal to the UK Supreme Court and we should know whether it will hear the case soon.

Why this matters

Many organisations engage individuals on term-time or other part year contracts and have pro-rated their holiday entitlement to reflect the number of weeks actually worked and have therefore, as the law currently stands, underpaid staff.

National minimum wage -  what rates apply to 'sleep in' shifts?

In Mencap v Tomlinson-Blake, the Court of Appeal said that under the National Minimum Wage Regulations, workers are either available for work or actually working. Those who provide sleep in cover are only available for work and, therefore, only have to be paid at appropriate NMW rates if they have to get up during the night to help a patient or do some other work. They don't have to be paid at NMW rates when they are in bed or resting.  

Our blog explaining the decision is available here.

The Supreme Court is due to hear the case on 12–13 February 2020.

Why this matters

Organisations on very tight budgets (such as care homes) welcomed the clarity provided by the Court of Appeal. If the Supreme Court reverses this decision, many will be exposed to claims they have underpaid staff.

Individuals who are not paid the correct NMW for the hours worked can recover up to six years underpayments. More significantly, HMRC can impose huge fines on employers who have breached the NMW of up to £20,000 for each underpaid worker.

Data protection - are organisations responsible for deliberate breaches made by staff?

In Various claimants v WM Morrisons Supermarkets the Court of Appeal confirmed that the supermarket was vicariously liable for data breaches of a member of its staff with a grudge against it whose job involved processing data because there was a 'close connection' between this and their wrongful conduct. The employee deliberately leaked the personal details of almost 100,000 members of staff. 

Our blog explains the decision here.

The Supreme Court heard the employer's appeal in November 2019 and its judgment is expected soon. 

Why this matters

The Court of Appeal accepted that the employee responsible for the breach had done it deliberately and had gone 'rogue'. It also accepted that the company couldn't have done anything to prevent it and wasn't to blame for the breach. Despite that, it still imposed liability on it.

Over recent years there have been many significant data breaches caused by corporate system failures or staff negligence. If organisations are liable for these types of breaches, they could be liable for claims for damages for 'ruinous amounts' and will need to obtain insurance to offset risk.

Vicarious liability - are organisations liable for the unlawful acts of third parties against their staff?

In Barclays Bank v Various Claimants the Court of Appeal agreed that an employer was vicariously liable for the actions of an independent contractor doctor who committed sexual assaults on employees during medical examinations it had requested. 

The Supreme Court heard the appeal in November 2019 and its judgment is expected soon.

Why this matters

The field of vicarious liability is widening all the time. Previously it was believed that employers weren't responsible for the acts of truly independent contractors.

If the Supreme Court upholds the decision, employers may need to undertake risk assessments and put in place measures to reduce any risks they identify.   

Collective bargaining - when can organisations negotiate directly with staff?

In  Kostal UK Ltd v Dunkley and Others the Court of Appeal held that trade unions with collective bargaining rights cannot prevent employers approaching staff directly to try to agree temporary changes to their terms of employment where negotiations have broken down.

Our blog explains the decision here. 

The employers have asked for permission to appeal to the UK Supreme Court and we should know whether it will hear the case soon.

Why this matters

Prior to this decision, some unions operated as though they had a veto and it was very difficult for employers to change even minor terms and conditions of employment without the union's agreement. Many organisations erred on the side of caution and backed down because, if they made a mistake, they could be liable to pay huge penalties. 

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, EAT and Court of Appeal that its drivers are, in fact, workers and the Supreme Court is due to hear the case on 22–23 July 2020.

Why this matters

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.

Sex discrimination - do employers have to enhance shared parental leave pay if they enhance maternity pay?

In Ali v Capita, the Court of Appeal ruled 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. 

In Hextall v Chief Constable of Leicestershire Police the Court of Appeal said that a similar policy did not indirectly discriminate against men or amount to a claim for equal pay because the law allows employers to make exceptions to women who are pregnant, have recently given birth or whom are breastfeeding.

Our blog explains these decisions here.

Hextall  has appealed. We expect the Supreme Court to hear the appeal in 2020 - but no date has been set down yet.

Why this matters

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.

... a note about the impact of Brexit on employment law

The UK is due to leave the EU at the end of this month. Unless extended, the transition period will end on 31 December 2020. After that time we will not be bound by decisions of the Court of Justice of the European Union and the government will, potentially, be able to make radical changes to employment laws. Plus, as we pointed out in our recent blog the Withdrawal Bill contains a mechanism to roll back existing employment rights as it gives ministers the right to tell our tribunals and courts to ignore EU decisions. 

Need more information?

 We're running a series of free update seminars across our offices in January/February to get your business ready for the year ahead. 

To find out when your nearest seminar is taking place, please contact Faaria Hussain: Faaria.Hussain@irwinmitchell.com or Joanne Moseley: Joanne.moseley@irwinmitchell.com