Gordons Legal Employment Update – 25 November 2016
Friday 25th November 2016
This week, decisions with a European influence are at the forefront of our update. Developments with employer’s obligations under the WTR, an update on age discrimination, Autumn Statement 2016 changes and a case with a costs order made against a litigant in person are all included.
Update on rest breaks under the Working Time Regulations
Employers must actively arrange rest breaks during shifts in order to prevent breaching the Working Time Regulations 1998 (WTR) according to the EAT reasoning in Grange v Abellio London Ltd (Grange). This development is in contrast to the original position set out in Miles v Linkage Community Trust (Miles) whereby it was held that a breach would only occur where an employer had rejected a direct request for rest breaks from an employee.
The claimant in the Grange case worked as a Relief Roadside Controller (RRC) for a bus company. In his role, he was responsible for monitoring and regulating the frequency of the Abellio London’s bus services. Due to the rushed nature of the job, RRCs on the whole found it difficult to take their mandatory breaks (under the WTR) during their 8 and a half hour shifts.
Consequently, Abellio London changed the shift structure to 8 hours of work with a 30 minute break at the end of the shift; effectively allowing their employees to leave early. Despite not formally mentioning any concerns for 2 years, Mr Grange eventually submitted a grievance on the basis that not having a break (where he could take a meal) was damaging his health. When the grievance was rejected, Mr Grange was already off sick and had also instigated a tribunal claim which subsequently went to a full hearing.
Following the EAT’s decision in Miles, the original ET ruled that because Mr Grange had not made a direct request for a break, Abellio had not ‘refused’ him his right to it. However, on appeal the EAT considered the Scottish EAT’s decision in Scottish Ambulance Service v (1) Truslove (2) Woods to be more accurate as that decision had properly considered the EU Working Time Directive which the WTR implements into UK law.
They found that the Miles decision added in the requirement to make a request that was not found in the Directive. The only time that reasonable notice and a request needed to be given is when an employee wishes to take annual leave. The EAT therefore read the WTR accordingly; finding that a refusal did not need a request and instead employers should be pro-actively ensuring that working arrangements allow for workers to take the necessary breaks.
Consequently, the EAT have sent the case back to the ET for reconsideration. It is very likely that with this new guidance and preferential authority, the ET will now find in favour of the claimant. The interpretation in this decision on rest breaks will also extend to other regulations in the WTR including daily rest, weekly rest, annual leave, compensatory rest periods and annual leave termination payments.
Comment: Under the WTR, workers and employees have the right to an uninterrupted 20 minute break away from their workstation if they are working for six hours or more. Following the EAT’s comments indicating that Truslove is the preferred authority, employers must actively provide this to employees, not simply await their request for it. In most employment situations this will be fairly standard procedure but with less orthodox occupations, difficulties may arise.
Age barriers not discriminatory if legitimate and proportionate
Salaberria Sorondo v Academia Vasca de Policía y Emergencias is a Spanish case that progressed to the Court of Justice of the European Union (ECJ). However, the preliminary ruling that was handed down by the court confirms the discrimination position in UK law, pre-actual-Brexit at least.
The case concerned an upper age limit of 35 for police officers to enter into the Basque Police and Emergency Services Academy, Spain (the “Academy”) and whether such a barrier amounted to age discrimination. The applicant in the case, Mr Sorondo (aged over 35), claimed that it did on the basis that it restricted access to public service posts with no reasonable grounds or justification for doing so.
However, the ECJ found the age policy to be acceptable in accordance with EC Equality Framework Directive. Under the Directive, Article 2(2) stipulates the concept of discrimination (as transposed by the Equality Act 2010) and Article 4(1) sets out ‘Occupation requirements’ and when it is excusable to discriminate in light of an occupational need. When reading both Articles together, the ECJ pointed out the following factors to work in favour of finding the Academy’s recruitment policy to be permissible:
- The possession of particular physical capacities in order to perform essential duties of the police is a genuine and determining occupational requirement (as set out in Article 4(1)).
- The role is operational and the age of recruitment therefore determined how long the person could work in an operational role. Recruitment at a higher age than 35 would jeopardise the chances of having enough agents to fulfil the most physically demanding tasks.
- Such an age limit could help rebalance the ageing workforce (2009 forecasts showed that by 2018 more than two thirds of the workforce would be between 50-65 years old).
The age limit was therefore ‘appropriate to the objective of ensuring the operational capacity and proper functioning of the police service concerned’ and did not go ‘beyond what is necessary for the attainment of that objective.’
Comment: There is nothing particularly new in this case but a reminder from the EU’s highest court that age discrimination can be justified. However, employers must bear in mind that any policy or practice that could be construed as discriminatory on age grounds must have a legitimate objective and be a proportionate method of achieving the objective. Clear reasoning and an open, balanced approach when considering such decisions will be essential to avoiding liability for discrimination.
Autumn Statement 2016 Update
Salary Sacrifice Changes
The tax and National Insurance advantages of salary sacrifice schemes will be phased out from April 2017 in a bid to promote fairness and broaden the tax base. Certain salary sacrifice schemes will be protected from the changes such as pensions and related advice, childcare, Cycle to Work and ultra-low emission cars. Arrangements already in place before April 2017 will be protected until April 2018 whilst schemes for cars, accommodation and school fees will be protected until April 2021.
According to the Statement Report, the changes will mean that those employees who swap their salary for benefits will pay the same tax as those who attain the benefits after receiving their salary.
Employee Shareholder Status
The tax benefits arising out of the worker status of ‘employee shareholder’ are to be abolished by the government. As such, the income tax and capital gains tax reliefs that are currently received will cease to apply to any Employee Shareholder Status (ESS) arrangements entered into after 1 December 2016. Although CGT relief has already been restricted to a £100,000 lifetime allowance, pre-1 December 2016 ESS arrangements will continue to receive the current tax advantages.
ESS allows employees to trade their employment rights (such as unfair dismissal and redundancy payments) for a minimum of £2,000 of shares in the employer’s business. The Government has given indications that it intends to close new ESS arrangements as soon as possible, but this amendment will keep the process open for the time being as no proposed amendment to the Employment Rights Act 1996 has been included.
Proposed NLW and NMW increases
The 2016 Autumn Statement also detailed planned increases in the National Minimum Wage (NMW) and the National Living Wage (NLW) in April 2017.
The proposed increases are as follows:
- NLW (25+): from £7.20 per hour to £7.50
- NMW (21 to 24): from £6.95 per hour to £7.05
- NMW (18 to 20): from £5.55 per hour to £5.60
- NMW (16 to 17): from £4.00 per hour to £4.05
- NMW (apprentices): £3.40 per hour to £3.50
The government also plan to spend £4.3m on National Minimum Wage enforcement by helping small business understand the rules and cracking down on non-compliant employers.
The Autumn Statement 2016 can be accessed here.
Comment: Employers should begin planning for these updates as soon as possible. The salary sacrifice scheme changes could prove particularly problematic if such schemes are incorporated into employees’ contractual situations. Proper consultation with employees and a cost-sharing analysis is advised.
Cost order handed down against a ‘Litigant in Person’
A litigant in person has had a cost order made against her for unreasonable conduct in Liddington v 2gether NHS Trust. Ms Liddington was a community practitioner working for the respondent. She made a safeguarding referral about her concerns relating to the standards of patient care at a private care home but consequently received a complaint about her own care standards. She alleged that because of her safeguarding referral (which she argued was a protected disclosure) she had suffered detriments thereafter and was ultimately dismissed because of it.
On taking her former employer to the tribunal Ms Liddington failed to adequately particularise her claims, which included constructive unfair dismissal, religious discrimination, whistle blowing, unpaid holiday pay and travel expenses, claims for notice pay, and a failure to provide a statement of changes to terms and conditions. Numerous hearings were therefore held to try and delineate the specifics of the detriments to which she was alleging.
After failing to adequately particularise her claims at numerous hearings in front of separate judges, the Respondent requested that Ms Liddington’s claims be struck out and a costs order made. The judge accepted the costs order application on the basis of unreasonable conduct citing that Ms Liddington:
- did not provide the names and characteristics of actual or hypothetical comparators for her discrimination claims;
- could not identify the dates of four of the six protected acts she referred to; and
- did not pay deposit orders when requested on claims with little prospect of success, amongst other discrepancies.
The judge therefore awarded costs in the sum of £1,481. On appeal the EAT approved the original judgment.
Comment: We have succeeded in obtaining costs orders as high as £20,000 against litigants in person. So, whilst tribunal Judges will be more lenient when dealing with litigants in person or lay representatives, costs awards can be achieved where timely warnings are issued against them and when their behaviour crosses the line into “unreasonableness”.
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.