Plumbing Firm Loses Appeal In Landmark Gig Economy Ruling

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In the greatest victory yet for a gig economy tribunal hearing, a plumber has won an employment rights case for a second time despite an appeal by his ex-employer.

Gary Smith worked as a self-employed plumber for the revered London firm Pimlico Plumbers over the course of a six year period. He took the firm to tribunal in 2011 to challenge his official status as a self-employed worker. After winning his case in 2014, Pimlico Plumbers launched an appeal which was finally heard in February 2017 and again saw Mr Smith win.

This marks a major ruling in employment law, as it is the first major undertaken by an employer of the gig economy to be rejected at tribunal. This loss is not a good sign for other businesses hoping to reverse recent tribunal rulings of a similar nature.

The claim brought by Mr Smith challenged legislation deeming him a self-employed contractor rather than a full employee. Although Smith was VAT-registered and paying tax in accordance with self-employed regulations throughout his six years at Pimlico Plumbers, he did not work for any other business during that time. He claimed this was due of a contract agreement that made him “tightly controlled” by the firm, and therefore found it it difficult to seek additional employment.

After Mr Smith suffered a heart attack in 2010 he requested the business reduce his working hours from five days a week to three. Pimlico refused and Mr Smith was allegedly dismissed shortly afterwards because of this.

Pimlico Plumbers founder, Charlie Mullins, disputes the claim, saying that workers are hired on a self-employed basis with a generous fee of £80,000, for which the company in return expect workers to provide their own materials for their daily job duties .

Pimlico Plumbers is one of the most prestigious plumbing businesses in Britain, having acquired a value in the region of £75 million since Mr Mullins, a prominent Tory Party donor, founded the company 45 years ago.

Mr Mullins expressed relief that gig economy law is now being clarified for employers. He claims Pimlico Plumbers has benefited from the change and joked “Like our plumbing, now our contracts are watertight.”

Key businesses of the gig economy like Deliveroo, Uber and City Sprint have been in the spotlight recently in publicised cases launched by employees with concerns over their status as a self-employed worker, and what the expected duties of this should involve.

Each of these businesses has lost at tribunal, resulting in Deliveroo having to pay all self-employed staff the minimum wage, City Sprint needing to pay self-employed workers holiday pay, and Uber no longer being able to class workers as self-employed at all.

Lord Justice Underhill, a Court of Appeal Judge at the Pimlico ruling, believes employers should not accept the result as an indication of forthcoming legislation for the gig economy: “They should be careful about trying to draw any very general conclusions from it” he said.

A team of legal experts has been commissioned by government officials to determine a fair criteria for the expectation of gig economy workers. The investigation will be led by Mathew Taylor, the chief executive of the Royal Society for the Arts.

Issues for the team of analysis will include issues of pay during periods of holiday, sickness and maternity leave, and issues of pension employment and job security. The findings are due for publication later this year.

Report Into Tribunal Fees Leads To Widespread Criticism

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A much anticipated government report into how tribunal fees are affecting the volume of tribunal cases instigated by UK workers has at last been published, and, as suspected, it shows a major decline has occurred since the introduction of the fee system in July 2013. This follows a TUC report issued last year that also showed serious failings by the fee system. 

Without access to a fair hearing, workers have instead explored other means of expression. The report details how the ACAS conciliation service has seen a major rise in workers contacting them for advice on various employment disputes over the past four years. This reveals that a third party outlet where workers can express their concerns is clearly needed.

Unison trade union has condemned the current system as ‘ill-judged’ and believes it has fallen short of its goal of saving taxpayer money by reducing the number of false claims put forward each year. In actuality the system has only served to make those seeking justice for genuine grievances less likely to reach out for help due to excessive costs.

Dave Prentis, general secretary of Unison, expressed support for the report findings: “The introduction of fees was a terrible decision […] Tribunal fees should be scrapped immediately before any more law-breaking employers escape punishment because wronged workers simply don’t have the cash to take them to court.”

The report also recorded how a significant decrease in claims occurred between 2012-14, which is well below the numbers expected. There was a 70% drop from 5,847 to 1,740 cases recorded.

Most troubling of all is the kind of cases that have diminished. Disability discrimination cases are down 51%, race discrimination hearings have fallen by 55%, and sex discrimination cases have dropped 71%. Statistics show that low-paid women have been the group to have suffered more than any other under the fee system.

Increasingly there are calls for current tribunal fees, which can be as high as £950, to be altered. One of the most vocal opponents is Frances O’Grady, the General Secretary of TUC, who states:

“Charging people up to £1,200 to take claim has been a gift to Britain’s worse bosses. And it’s allowed discrimination at work to flourish unchallenged. Until the government commits to abolishing fees, its commitment to ‘improve workers rights’ in post-Brexit Britain looks pretty hollow.”

Reacting to the report, ministers have already made a list of suggested alterations in a bid to ensure all workers make their voices heard across Britain, regardless of their background or financial status.

Among these proposals is a monthly threshold for a full fee remission rise, from £1,085 to £1,250. This is an amount that better reflects the income of workers earning the national living wage. Other suggestions include giving financial assistance to workers who live with a partner and/or children .

Leader of Unite, Len McCluskey, has expressed his organisation’s feelings towards the report: “The actual facts are that when working people are priced out of justice, and it is made exceptionally difficult for their unions to pursue it on their behalf, then the only winners are bad employers.

In contrast to those who seek an outright removal of the fee system, Justice minister Sir Oliver Heald reacted to the report’s findings with a mixed opinion: 

Sir Heald also revealed that to prevent the loss of tribunal hearings, the existing Help With Fees system will henceforth receive greater government support, and that a green paper will be issued to establish the legal rights involved.

Unison plans to challenge the fee system in a hearing before the Supreme Court on 27 and 28 March 2017.

Inventive Employees and Exceptional Rewards – Court of Appeal Test Case

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Companies are entitled to reap the benefits of their employees’ inventiveness – but patent law does require compensation to be paid to those whose ideas make an outstanding contribution to profits. In an important test case, the Court of Appeal analysed the circumstances in which such exceptional rewards are justified.

A professor employed by a global company had invented a blood glucose testing device that, after it was patented, generated benefits worth £24.5 million to his employer. Part of his work in developing the device had been carried out in his own time and it had been produced at almost no cost to the company. He argued that his invention had brought an outstanding benefit to his employer and sought compensation pursuant to Section 40(1) of the Patents Act 1977.

His claim was, however, rejected by a hearing officer appointed by the Comptroller-General of Patents and that ruling was subsequently confirmed by a judge. Amongst other things, the hearing officer noted that the profits generated by the device were dwarfed by the company’s overall multi-billion-pound turnover.

In seeking to re-open his case, the professor pointed to the great disparity between the level of his remuneration and the profits yielded by his invention. No other single patent had achieved an equivalent rate of return for his employer. Had he worked for a smaller company, the outcome might well have been different and his employer had, in effect, been found to be ‘too big to pay’.

The Court accepted that it would be wrong to focus solely on a simple comparison between the benefits generated by the invention and the company’s overall profits. In dismissing the professor’s appeal, however, it found that the hearing officer had taken all relevant matters into account before concluding that the outstanding benefit test was not satisfied in the context of the company’s overall performance.

Termination of 20-Year Employment Agency Contract Leads to Court

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Commercial contracts often endure harmoniously for many years, but their very longevity can make termination even more acrimonious. That was certainly so in the case of an employment agency that provided staff to a retailer for more than 20 years prior to its replacement following a tendering process.

The agency had provided its services under a poorly drafted contract, replete with grammatical and syntactical errors. That served to fuel the dispute, which focused on the transfer of more than 160 of the agency’s staff to the rival that replaced it, under the terms of the Transfer of Undertakings (Protection of Employment) Regulations 2006. Those employees continued to work in the retailer’s shops.

After the agency launched proceedings against the retailer, the High Court found that, on a true interpretation of the contract, the former was entitled to receive transfer or introduction fees in respect of the transferred workers. The retailer’s counter-claim that it had been overcharged by the agency was rejected and it was also ordered to pay more than £68,000 in satisfaction of the agency’s outstanding invoices. Although the exact amount of the agency’s award has yet to be calculated, it valued its claim at more than £550,000, before interest.

Landmark Employment Rights Win for Bicycle Courier

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In a case that could have a considerable impact upon the UK gig economy, a London tribunal ruled that Maggie Dewhurst, who works as a courier at the logistics firm City Sprint, should be granted the same rights as other workers despite her status as a self-employed worker.

To receive the same treatment as a fully employed worker gives Ms Dewhurst certain employment rights otherwise denied to self-employed staff, such as sick pay, holiday and and the right to UK national living wage.

The tribunal decision largely relates to a complaint Ms Dewhurst made in regard to pay issues. A statement issued by the tribunal acknowledged that City Sprint “unlawfully failed to pay her for two days’ holiday”, despite the two years of dedicated service she gave to the company.

Reacting to the ruling, City Sprint expressed “disappointment” and will now be reviewing options for an appeal. A spokesman for the business commented:

“This case has demonstrated that there is still widespread confusion regarding this area of law, which is why we are calling on the government to provide better support and help for businesses across the UK who could be similarly affected.”

This individual case could have a large impact upon all companies that are part of the so-called gig economy. This is an area of customer focused UK employment that consists of companies hiring self-employed workers using contracts that limit their employment rights so that they are given working without regular shift patterns unlike full-time workers.

A recent tribunal ruling much like the City Sprint case involves another popular courier business; the taxi-hailing app Uber. This hearing saw legal action being taken by Uber employees and resulted in the business having to provide self-employed drivers with the same benefits that ordinary workers benefit from.

Although Uber intends to appeal this ruling, there are several other tribunal cases currently being heard against other courier businesses relating to claims of unfair treatment against self-employed workers which might also challenge conduct of the gig economy. The other businesses at the centre of these cases include Excel, Addison Lee and E-Courier.

Ms Dewhurst’s case was ruled as one of unfair treatment due to the extent of the workplace expectations placed upon her by City Sprint, which goes far beyond self-employed duties. She stated the following regarding workers of her position:

“we spend all day being told what to do, when to do it and how to do it. We’re under their control. […] that’s why we deserve basic employment rights like the national minimum wage. I’m delighted that the tribunal ruled in our favour as it has set a legal and moral precedent which others can use to make similar claims.”

Some self-employed workers believe flexible working contracts deny them basic employment rights in a job market that leaves them little to no other employment option.

Employers are unsurprisingly less critical of the use of such contracts, which they often defend on the grounds that they are beneficial to workers due to the flexible working hours offered, which in can potentially let workers conveniently balance personal responsibilities with work.

Many workers and employers both feel that current employment laws need to be edited so that all contracts make clear the law for self-employed workers, thus protecting everyone in a manner that is clear for both parties.

The UK government is currently awaiting the results of an independent review into the modern practices of self-employed workers. It is due for publication in spring 2017.

 

MPs Seek Maternity Discrimination Rights For New Mothers

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The government is progressing with a detailed consultation to assess the various means by which employers might act in a discriminatory away against new mothers in the British workplace.

This investigation comes after a series of eighteen recommendations were put forward in August 2016 by MPs working as part of the government’s Women and Equalities committee. The goal is to establish safeguards that will protect new mothers against employer actions which might cause them to leave their position either through direct dismissal from an employer or as a result of unfair treatment that forces them to resign their position.

UK Business Minister Margot James has spoken about the importance of the consultation and the dedication the committee MPs have for it:

“We are determined to tackle pregnancy and maternity discrimination and a key part of that is making sure new and expectant mothers are supported and treated fairly by their employers. There should be zero tolerance of discrimination against pregnant women, or women who have just given birth.”

Ms James has also stated how the discriminatory actions of bosses goes beyond harming new mothers to ultimately impacting upon UK businesses as a whole: “It is shocking that some employers still behave in this way and alienate a key group of their workforce. It makes no business sense.

The Women and Equalities committee has issued the results of several interviews that were conducted with new mothers to support its position. One anonymous woman claims a planned interview for a partnership position at a law firm was rejected once she returned to work after maternity leave. She subsequently left her position due to the discrimination she suffered.

Another woman, who also chose not to be named, saw her PR position get denied after she returned form maternity: “Before I fell pregnant, I had been asking about promotion opportunities, and possibilities were discussed with my manager […] On my return from maternity leave, I raised the issue of promotion again, and was told that if I wanted any hope of promotion, flexible working would make it very difficult.

Sufficient evidence proves that many working women feel too scared to voice their concern about maternity and pregnancy discrimination for fear they will be regarded as “trouble makers” should they do so, and that any such disclosure will have repercussions for their career as a result.

In total the amount of new and expectant mothers who claim to be forced from their jobs has doubled since 2005, to a total of 54,000.

The Women and Equalities committee seeks an all-encompassing protection for women that will include a “substantial” decrease in the existing £1,200 fee required for bringing a maternity convenience to tribunal.

An extension on the three month deadline for registering a claim is also sought, with the hope of doubling this period to six months. This comes despite government insistence that no evidence indicates an extended time frame will encourage more women to speak out.

TUC General Secretary Frances O’Grady believes that negotiating tribunal fee costs is vital for stopping pregnancy and maternity discrimination occuring: “Bad bosses will continue to get away with discriminating against new mums as long as it costs up to £1,200 to take a pregnancy discrimination claim […] My advice to women is to join a union […] pregnant women and new mums are treated better in workplaces that recognise trade unions.”

How Will Employment Law Change in 2017?

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Each year the employment law world experiences a number of changes that will ultimately affect the rulings made by many tribunal hearings.

The past twelve months saw the sanction of a number of government established changes take that will come into law during 2017. Both employers and employees should understand what these changes mean for them. Read on for a number of the most prominent changes that will shape 2017.

Increase of Minimum Wage
From April 2017, the British National Minimum Wage will rise for workers aged 25 and over. The new rate will be set at £7.50 per hour; a 30p increase.

The government has long expressed support for working towards a minimum wage of £9 per hour for all workers aged over 25 by the year 2020.

Although reaching this goal appears to be increasing, the current UK rate is still far below the sum that analysts believe is a fair level of pay when measured against the cost of living in Britain, which is an estimated £8.45 per hour, with £9.75 for London workers.

There will also be a pay increase for workers below 25, as both the 18-20 and 20-24 age groups will see increases of £5.60 and £7.05 respectively.

Foreign Staff Employment
From April 2017, employers who rely on the contribution of workers who hold a Tier 2 visa will now be required to pay a £1,000 employment fee for each worker in accordance with the introduction of the new immigration skills charge. However, charity organisations and smaller businesses will only be required to pay the lower fee of £364 each.

This change coincides with new laws that require Tier 2 workers planning to apply for jobs in Britain as an ‘experienced worker’ to be earning a salary with a minimum of £30,000 per annum. Although some workers employed in the education and health sectors may be exempt from this rate of earning.

Mandatory Apprenticeship Funding
The upcoming year will see large companies need to fund apprenticeship schemes across their business; a move that is hoped to raise at least £3 billion for the UK economy; of which the government will contribute an additional 10% per month.

The tax for this apprenticeship scheme will be set at a rate equivalent to 0.5% of each company’s overall salary bill. This tax, sometimes referred to as the ‘payroll tax’, applies to companies with an annual salary roll in excess of £3 million. This salary cap prevents smaller businesses from suffering against the financial costs involved.

The costs incurred must be also be used to support existing apprenticeships and job training opportunities to allow workers aged 16 and over then opportunity to learn whilst working, with the goal of them gaining a nationally recognised qualification relevant to the business’s industry.

Employers can track their levy sums via a custom account created by the Digital Apprenticeship Service, and they will have the option of an allowance of £15,000 to assist with any difficulties incurred by the cost of the new scheme which begins in May 2017. Businesses that have only recently begun to trade may qualify for additional government assistance.

Gender Pay Gap Report to be Issued

After years of planning, businesses in the public sector with a pay-roll of more than 250 employees will finally have to reveal details of any pay gap between men and women that may exist within the company.

Private and voluntary sectors will be obligated to reveal this information at a later date, with a deadline for the publication of these reports expected in 2018.

Additionally, new rules will be set for stipulating how employers are allowed to release key information regarding the salaries and bonus payments for male and female workers.

Tax-Free Childcare 
The long-awaited tax-free childcare scheme will at last be implemented in 2017. This will allow working families with children aged under twelve to receive 20% support for overall childcare costs, with the maximum amount for an eligible claim set at £2,000 per annum. Although the financial income of a home might be a factor in deciding what the individual minimum and maximum entitlements should be for that family.

Families with disabled children will see the maximum age for their children to receive support raised to seventeen.

The current childcare voucher scheme, supported via employers, will continue to be available for new applicants until April 2018. Families currently relying on this scheme can continue to do so as long as their employer maintains the policy, or until the new tax-free childcare system becomes mandatory.

Salary Sacrifice 
Salary sacrifice benefits are to change from April 2017 as outlined in the 2016 Autumn Statement. This means that most salary sacrifice schemes will soon no longer have permission to avoid the costs required by income taxes, although tax arrangements arranged before April 2017 are to stay protected until April 2018.

Trade Union Balloting 
During 2017 new balloting rules will begin under rules outlined by the Trade Union Act 2016. This includes strike action only being granted if the majority of workers vote in favour of it. A 50% minimum turnout of workers is required.

 

 

 

 

Depressed Care Worker Wins Big Payout Following Unfair Dismissal

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Those who suffer unlawful treatment in the workplace commonly suffer psychiatric injury as a result, and Employment Tribunals (ETs) have broad powers to ensure that they are properly compensated. In one case, a veteran care worker who was plunged into depression before being unfairly dismissed won substantial damages.

The woman had worked for a local authority for 40 years but was suspended after allegations were made about her method of working. She suffered depression as a result and spent a long time on sick leave. She was not kept properly informed of the progress of prolonged disciplinary proceedings, nor that their focus had been shifted from her conduct to her capacity to do her job. She denied that she would never be fit enough to return to work but was ultimately dismissed.

After she lodged a complaint, an ET found that she had been unfairly dismissed and had suffered disability discrimination in respect of her depression. Given the gravity of the initial allegations, it accepted that her employer had had no option but to suspend her. However, it went on to rule that her dismissal was related to her disability and was not a proportionate means of achieving a legitimate aim.

The ET awarded the woman £15,000 for injury to her feelings, £10,000 for personal injury and a further sum for future loss of earnings. The latter two awards related to her continuing depressive condition. In dismissing the employer’s challenge to those awards, the Employment Appeal Tribunal rejected arguments that they were excessive and should not have been made in the absence of expert medical evidence.

Unfair Dismissal Can Blight Your Lifetime Earnings

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Unfair dismissal can blight your career indefinitely but, with the right legal advice, you can be compensated for every penny you lose in earnings. One case that proved the point concerned a finance director who was persecuted for whistleblowing and found herself out of a job in middle age.

The woman blew the whistle on the chief executive officer of the company for which she worked in respect of a share deal. She ultimately resigned, but her complaint that her constructive dismissal was automatically unfair, within the meaning of the Employment Rights Act 1996, was upheld by an Employment Tribunal (ET).

The ET ruled, however, that a two-year cut off should apply to her future loss of earnings claim. That was on the basis of medical evidence that she would by then have achieved optimum recovery from the trauma of her dismissal.

In upholding her challenge to that decision, the Employment Appeal Tribunal (EAT) noted that the woman was in her fifties and was unlikely ever again to achieve such a senior position, nor such a high level of remuneration. Her recovery was not expected to be complete even after two years of rehabilitation.

The work that she was likely to find in the future was at best that of a financial controller. In the circumstances, the EAT found that her loss of earnings arising from her dismissal would continue throughout her working life. The case was sent back to the same ET for the value of her claim to be reassessed upwards.

Sacked Maritime Armed Guard Has Compensation Hopes Boosted

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When losing parties read an Employment Tribunal (ET) decision, fairness demands that it should be clear to them exactly why they have failed. In one case where that did not happen, a maritime armed guard who was sacked after failing to get on with a client won a fresh chance to prove that his dismissal was unfair.

The Ex-Royal Marine was employed to provide armed security services on board vessels at risk of piracy. After he attended an induction day with a new client, the latter stated that it did not wish to work with him. The company that employed him assured him that it would investigate the matter further, but did not do so before his fixed-term contract expired.

He complained to an ET that he had not received the benefit of a disciplinary hearing at which he would have had the opportunity to explain himself, and his employer had failed to seek out alternative employment for him. The ET, however, found that his dismissal was fair in that it fell within the range of reasonable responses open to the company, and accepted the employer’s arguments that it was not its practice to see if there was alternative work in other sections of the company and that the market was contracting.

In ruling on the man’s challenge to that decision, the Employment Appeal Tribunal (EAT) found that the ET had reached a permissible conclusion that, in a contracting market, there was no evidence that alternative vacancies existed at the time within the company or its associated businesses.

However, in upholding his appeal, the EAT noted that the company had specifically told him that it would investigate his falling out with the client further. There was, in the circumstances, no sufficient basis for the ET’s assumption that the company had actively decided not to proceed with that investigation in the belief that it would not have altered the outcome, rather than simply allowing the matter to drift. The ET’s decision was therefore unsafe and the case was sent back to a freshly constituted ET for reconsideration.