December’s Employment & HR Update covers;
– Good Work Plan
– Supreme Court ruling: Early-retiring employee not treated unfavourably by pension scheme
On 17 December 2018, the Government issued its Good Work Plan setting out how it intends to implement the reviews undertaken earlier this year following the Taylor Review of Modern Working Practices. The Government’s stated vision is “A labour market that rewards people for hard work, that celebrates good employers and that is ambitious about boosting productivity and earnings potential in the UK”.
The Good Work Plan sets out a number of legislative changes which are designed to improve protection for agency workers, zero-hour workers and others with atypical working arrangements. The dates for bringing in the changes are unclear save where stated below and these include:
- Repealing the “Swedish derogation” in the Agency Workers Regulations 2010. This excludes agency workers from the right to the same pay as directly-recruited workers if they have a contract of employment with the agency. The Regulations which abolish the “Swedish derogation” have been published and this will come into effect on 6 April 2020.
- For employment which begins on or after 6 April 2020, the statement of terms and conditions of employment will have to be given no later than the date that employment begins.
- Increasing the period required to break continuity of employment for the purposes of accruing employment rights from one week to four weeks.
In respect of enforcing worker rights the Government has committed to the following;
- Quadrupling the maximum employment tribunal fine for employers who are demonstrated to have shown malice, spite or gross oversight in breaching employment rights from £5,000 to £20,000. The maximum penalty is to be raised to £20,000 for breaches occurring on or after 6 April 2020.
- Bringing forward proposals in early 2019 for a single enforcement body to ensure vulnerable workers are better protected.
- Creating new powers to impose penalties on employers who breach agency legislation like non-payment of wages.
The Good Work Plan also confirms the Government’s intention to legislate to clarify the test of employment status on which eligibility for worker rights depends. It accepts the Taylor Review’s recommendation that the differences between the employment status tests that govern entitlement to employment rights and tax liability should be reduced to an absolute minimum. The Government accepts that ‘renewed effort’ should be made to align the tests and will bring forward detailed proposals in this regard. The Government will also legislate to ‘improve the clarity of the employment status tests, reflecting the reality of modern working relationships’.
They are workers, held the majority of the Court of Appeal in Uber BV v Aslam & ors (upholding the decision of the Employment Appeal Tribunal) meaning Uber drivers have the right to receive entitlements such as holiday pay and National Minimum Wage. This decision follows the same decisions of worker status in the Employment Tribunal and Employment Appeal Tribunal.
The main question in the case relates to ‘worker status.’ The drivers argued that Uber contracts with the passengers to provide driving services, which the drivers perform for it. Uber argued it acts only as an intermediary, providing booking and payment services, and the drivers drive the passengers as independent contractors.
The Employment Tribunal and Employment Appeal Tribunal concluded that the drivers were workers, finding that Uber was in the business of providing taxi services rather than generating leads for drivers to grow their own businesses.
The Court of Appeal majority concluded that although the written contractual terms said that Uber only acted as an intermediary, providing booking and payment services, and the drivers drive the passengers as independent contractors this did not reflect the practical reality of the relationship and can therefore be disregarded in accordance with the principle established in an earlier Supreme Court decision in Autoclenz Ltd v Belcher.
The Court of Appeal has given Uber permission to appeal to the Supreme Court.
Watch this space….but this is another clear message for employers to be careful in labelling relationships as “self-employed” and assuming this is the case legally as Courts and tribunals will always look at the nature of the relationship in practice.
In Williams v The Trustees of Swansea University Pension & Assurance Scheme and Swansea University the Supreme Court provided useful confirmation on the meaning of “unfavourable treatment” under section 15 of the Equality Act 2010 (“the Act”).
Mr Williams was employed by Swansea University from 12 June 2000 until he retired for ill-health reasons on 30 June 2013 at the age of 38. He suffers from Tourette’s syndrome and other conditions satisfying the definition of “disability” under section 6 of the Act. He had been an active member of the university’s pension scheme throughout his employment.
For the first 10 years he worked full-time and then, for the final three, he worked between 17.5 and 26 hours per week when he was fit to do so. The reduction in working hours arose from his disabilities. When he retired he was working half his full-time hours (17.5 hours a week).
Under the University’s pension scheme rules, he was entitled to his accrued pension, as well as an enhanced pension based on a period of deemed pensionable service, as though he had continued to be employed to normal pension age. Both the accrued and enhanced pension were based on his actual final salary at retirement, without actuarial deduction.
Mr Williams claimed that the calculation of his enhanced benefit amounted to unfavourable treatment since it was based on his part time salary and he was only working part time because of his disability. The tribunal agreed, but the Employment Appeal Tribunal and the Court of Appeal did not.
The Supreme Court agreed with the Court of Appeal, holding that the relevant ‘treatment’ in question was the immediate award of a pension. Had the Claimant not been disabled (and able to work full time), he would not have been entitled to a pension at all at that time. The treatment was therefore not ‘unfavourable’, nor could it reasonably have been regarded as such.
If you would like further information on any of the above or advice on how they apply to your business then please contact our Employment & HR Team.