Employment in the news | November 2023

Contents

• New year, new rights – and some old ones too
• I want (someone else) to ride my bicycle – trade union recognition
• If at first you don’t succeed – agency workers and industrial action
• In the EAT – employment status and heat of the moment dismissals

New year, new rights – and some old ones too

In November the government responded to two consultations on changes to holiday entitlement under the Working Time Regulations and issued Regulations implementing some of the changes. It also took steps to preserve certain EU-derived protections relating to working time and discrimination that might otherwise have fallen away under the Retained EU Law (Revocation and Reform) Act 2023.

For more detail about the changes, you can read our article here. In summary:

• It should in theory become easier to calculate holiday for part-year and irregular hour workers.
• It will be legal to adopt rolled-up holiday pay arrangements for those workers.
• Working time record-keeping requirements have been clarified in an attempt to minimise the administrative burden for employers.
• The situations in which employees can carry holiday forward to a new holiday year and the types of payments that employers have to take into account when calculating holiday pay will be set out in the Working Time Regulations, not only in case law.
• The government will amend the Equality Act 2010 to include the principle of indirect discrimination by association, expand the concept of “normal day to day activities” in the definition of disability and ensure that claimants in an equal pay claim can continue to rely on the range of comparators permitted under EU law.

Action points

• Identify which of your employees will count as irregular hour or part year workers, which may be harder than it sounds given the complexity of the definitions.
• Decide whether to adopt rolled-up holiday pay for those workers as a way to reduce the complexity of holiday pay calculations.
• Amend policies to make it clear when workers can carry forward unused holiday and for how long.
• Remind workers of the normal “use it or lose it” principle and encourage them to take their holiday before the end of the relevant holiday year. This reduces the risk of workers arguing that they are entitled to carry leave forward because they have not had a proper opportunity to take it.

I want (someone else) to ride my bicycle – trade union recognition

The rights of gig economy workers reached the Supreme Court again, this time in the context of trade union recognition. In Independent Workers Union of Great Britain v Central Arbitration Committee, the trade union represented Deliveroo riders. It argued that the CAC was wrong to find that because the riders, who had an unfettered right to appoint a substitute, were not workers under the relevant legislation, the union was not entitled to recognition. According to the union, this infringed the riders’ right to join and be represented by a union under article 11 of the ECHR.

The Supreme Court disagreed. There needs to be an employment relationship in existence for trade union rights to arise, judged according to the criteria set out in the International Labour Organization’s (ILO) Recommendation No 198. This is a multifactorial test, focusing on the practicalities of a relationship and how it operates. However, even under the ILO criteria, an obligation to provide personal service is fundamental to the existence of an employment relationship. The riders had a broad power of substitution and the CAC was entitled to conclude that it was genuine and reflected the true relationship between the parties.

The riders did not have an employment relationship with Deliveroo and were not entitled to be represented by a trade union under ECHR principles.

Action points

• An individual who has a genuine right to appoint a substitute will not be an employee or a worker for the purposes of employment protection legislation because personal service is an essential feature of either category.
• The judgment confirms that a similar approach applies to deciding whether there is an employment relationship for the purpose of the right to trade union recognition.
• However, a contractual right of substitution will be determinative only if it is genuine. This case was relatively unusual because Deliveroo was able to point to cases where riders had used substitutes. This made it difficult to argue that the right did not reflect the reality of the relationship.
• Employers who include substitution powers in contracts should keep records of when the power is exercised to help demonstrate that such clauses are genuine.

If at first you don’t succeed – agency workers and industrial action

In 2022 the government repealed the ban that makes it a criminal offence for an employment business to supply agency workers to cover duties normally performed by a worker who is taking part in industrial action. Earlier this year the High Court overturned the repeal, because the government had failed to carry out the required consultation before amending the legislation. Relying on an earlier consultation exercise was not sufficient.

To remedy that situation, the government has published a further consultation on its proposal to repeal the restriction and permit employment businesses to supply agency workers to cover striking workers in any sector. The consultation says that this is designed to reduce unnecessary interference with business freedom and a worker’s right to be offered and accept assignments. The repeal will not interfere with or change the right to strike or the protections that apply to workers taking industrial action.

Action points

• The government is asking for views on the effects of the current ban on employment businesses, hirers and agency workers and the impact of repeal on workers and the wider economy and society.
• The consultation closes on 16 January 2024.

In the EAT – employment status and heat of the moment dismissals

There were two EAT decisions of interest in November.

In the first, Anglian Windows Ltd t/a Anglian Home Improvements v Webb, the EAT had to decide an employment status question in the context of an unfair dismissal claim. The claimant provided his services to Anglian through a pre-existing partnership of which he was a partner and had received payment for those services through the partnership. The EAT had to decide whether he could be Anglian’s employee on those facts.

It found that he could not. Neither party suggested that the partnership was not genuine or that the arrangement with Anglian was a sham. An earlier EAT decision established that a claimant could not be an employee against that factual background and there was no reason to depart from it. Unless there was a sham arrangement, which there was not in this case, entering a contract for a partner to provide services via a partnership precluded an employment relationship.

The second decision, Omar v Epping Forest District Citizens Advice, is a reminder not to be too quick to accept an employee’s resignation where there may be a reason to think that the employee was not really intending to resign or was not acting “in their right mind”.

After a number of incidents in which the claimant had apparently resigned but had been told that the employer would not accept his resignation, there was a further altercation in which he said “that’s it, from today a month’s notice”. There was a dispute between the parties about what happened next, but the employer said that it had accepted the resignation and asked the employee to put it in writing. A few days later he said that the resignation was in the heat of the moment and did not stand. The employer refused to allow him to retract his resignation and his employment terminated, at which point he brought an unfair dismissal claim.

The tribunal found that he had resigned and had not been constructively dismissed. On appeal, the EAT reviewed the authorities on heat of the moment dismissals and confirmed that once given, a resignation cannot be unilaterally retracted. However, whether an individual has in fact resigned depends on whether, objectively speaking, they have clearly shown a genuine intention to resign – whether immediately or on notice – in circumstances where they were “in their right mind” (for example were not acting in anger, haste or under extreme pressure). Evidence about what subsequently happened may indicate whether the employee had a real intention to resign.

In this case the tribunal had not applied an objective test to decide whether a reasonable employer would have thought that the claimant really intended to resign. The case had to be remitted for the tribunal to consider that issue afresh.

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Authored by Jo Broadbent, Ed Bowyer and Stefan Martin.