eBrief: Gordons Legal Employment Update – 8 September 2016

Thursday 8th September 2016

This week, one of the professional updates to which we subscribe told us that there were no employment law developments to report! Imagine that. Ok so perhaps it has been a little more quiet this past week but nevertheless we still have some news and some updates to report: please find below details of recent Employment Law updates and news from the past week or so.

Assessing compensation in concurrent unfair and wrongful dismissal claims – a case of the blindingly obvious?

When calculating the compensatory award in respect of an unfair dismissal claim in circumstances in which there is a concurrent claim of wrongful dismissal, the employment tribunal has a choice as to how to approach its task. The EAT in Shifferaw v Hudson Music Co. said it can either start at the expiry of the period compensated by the wrongful dismissal award or it can calculate the unfair dismissal compensation from the effective date of termination and then deduct any sum due by way of pay for the notice period. However where an ACAS uplift is only to apply to the unfair dismissal award, this might be a relevant consideration for the tribunal in deciding which method to adopt.

Comment: Apparently this is news to some – suffice to say we are completely unsurprised by this decision! It may be of interest to those involved in putting together settlement offers in otherwise unfair situations and it is certainly relevant to claimants seeking to maximise their schedule of loss.

Sexual discrimination claim successful against Flybe

A female cabin crew member from Birmingham has won her sex discrimination claim against Flybe at an employment tribunal. The case concerned working arrangements after Emma Seville returned to part-time work after 9 months’ maternity leave. After asking to work 11 pre-arranged days a month to facilitate childcare planning, Flybe categorically refused her request. The airline only offered the Claimant a return to work on a flexible working arrangement in which she would have to make herself available to work on any given day.

Flybe argued that they could not provide any more staff with pre-arranged part time work without detriment to their business. However, the tribunal found that Flybe’s decision to refuse the Claimant’s request was indirectly discriminatory against female cabin crew staff, putting them at a disadvantage to their male counterparts.

The Claimant is now in talks to agree compensation with Flybe as well as agreeing long-term working hours that do not put her at a disadvantage.

Comment: Although Flybe most likely had sensible business interests in mind with their reasoning, any provision, criteria or practice which puts the affected employee with the protected characteristic (in this case ‘sex’) at a substantial disadvantage compared with other employees who do not possess that protected characteristic, may fall foul of the Equality Act 2010 unless the PCP is ‘a proportionate means of achieving a legitimate aim’. The idea of trying to reverse engineer ‘a proportionate means of achieving a legitimate aim’ is never a good one: these issues really need to be tackled from the outset if there is to be credibility when challenged.

What is going on at Sports Direct? The employment law implications

With Sports Direct still making business headlines, it’s easy to lose sight of the issues at the heart of the controversy at the sports retailing giant. Mike Ashley’s lawyers have recently released a report into the working practices and corporate governance at Sports Direct. The 88 page document has revealed many issues surrounding how workers are dealt with, particularly at the Shirebrook warehouse.

Agency workers were allegedly on a ‘six-strike rule’ whereby they can be dismissed for accumulating warnings for misdemeanours such as spending too much time in the toilet or chatting too much. In addition, lengthy searches when exiting the site meant that workers were being paid below the national minimum wage for the work they were undertaking. After a grilling by MPs in June and by the company’s shareholders (on Wednesday), Sports Direct have publicly promised to make the following changes:

  • All ‘directly employed’ staff on zero-hours will be moved to guaranteed 12-hour contracts. However, this excludes the 3,000 agency workers at the Shirebrook warehouse (94% of the total staff at the site) who will not be eligible
  • Electing a workers’ representative onto its board to give the workforce a voice
  • Forcing the agency work providers to axe their “hierarchically and potential oppressive” six strikes firing policy – the only part of the changes that really benefits the agency workers

Despite these promises, the consequences of Sports Direct’s poor corporate governance have already been felt, generally in terms of the considerable reputational damage for the retail giant but more specifically:

  • Share prices have dropped considerably on last year’s level
  • Hermes Real Estate, landlord for numerous Sports Direct sites, has reportedly instructed its lawyers to draft ‘anti-slavery’ clauses into future tenancy contracts
  • Independent shareholders’ revolted at the company’s AGM on Wednesday calling for wholesale changes to the corporate governance structure

Comment: An object lesson in just how significantly steps aimed at controlling overheads can backfire resulting in severe reputational damage and ultimately hitting the bottom line.

Service provision changes under TUPE

When a Council-tendered ‘park and ride’ service closed after a competitor set up at the site, there was no service provision change according to the EAT in C T Plus (Yorkshire) CIC v Stagecoach. This case will feature on our website shortly but in essence this case focused on the rejection of the contention that there was an SPC and hence a TUPE transfer of staff to Stagecoach when the Appellant ceased operations.  The EAT urged a ‘common sense and pragmatic’ approach to the SPC regulations. Here, Stagecoach was carrying out a service as a commercial venture on its own behalf: there service was not being carried out for the council in the sense of the council being their ‘client’, as is required for an SPC under TUPE.

Comment: TUPE continues to throw up case law and to cause problems for contractors. Assumptions can be very expensive in this arena and there is no substitute for specialist advice when in doubt.

Embracing the ‘Gig Economy’ – Self-Employed, Workers or Employees?

With the rise of the ‘gig economy’, whereby workers take ‘gigs’ instead of regular hourly or salary work, basic employment rights can become compromised. Google offers this comment for those not familiar with the term: “A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. The trend toward a gig economy has begun. A study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.”

Many companies involved in the booming ‘gig economy’, including Deliveroo, Uber, Hermes and Yodel, have taken advantage of weak employment laws to keep flexibility high and costs down. Typically, these companies hire workers on ‘self-employment’ contracts with no holiday or sick pay, low wages and virtually no employment protection.

We have seen workers from Uber and Deliveroo protest recently over working conditions with Deliveroo riders going on strike after the company tried to replace their hourly rate with a payment per delivery. Uber workers took the company to an employment tribunal in July over claims that they should be technically defined as workers and thus receive benefits such as sick pay, holiday pay and protection from unlawful deductions from their pay.

Hermes and Yodel between them use 18,500 ‘self-employed’ couriers and with Uber and Amazon looking to enter the parcel and goods delivery market, the ‘gig economy’ looks set to keep on expanding.

There have been calls for employment law to catch up with this new and modern way of engaging a workforce, but just how much it needs to do so is likely to depend on tribunal interpretation of existing situations. Many of the self-employed contractors operating in the gig economy are in reality more closely aligned to the working practices of a worker or an employee.

Comment: Employment status can be a very tricky area but it is a vital one to get to grips with as businesses evolve. Different rights and statutory protections apply to “workers” and “employees” which has the potential for businesses unintentionally to expose themselves to legal risk if the categorisation is misunderstood. Employment tribunals will look at the reality of the terms of the contract between the company and individual which could open the business up to financial and legal implications.

Which European country offers the best sick leave?

The UK has the lowest sick leave pay in Europe a recent study has found. Vouchercloud, who carried out the study, calculated SSP during a week and a month of sick leave which ultimately found Britain to be trailing behind with average workers across Europe receiving 65% of their salary during a week of sick leave.

In the UK, we are paid less than 9% of our typical week’s salary whereas Germans, Austrians and Belgians get 100%!  For the link follow: https://www.vouchercloud.com/resources/sick-leave-across-Europe


Comment: the research doesn’t show which country has the most prolific levels of sickness absence or whether there is any correlation between sick pay and absence rates which in my view might be a more interesting statistic perhaps.

Reminder: we have had a fantastic response to our invitation to join us at our update seminar on 18 October. If you haven’t yet diarised this event and would like to attend please click here for more details.


If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.