Gordons Legal Employment Update – 3 November 2016

Thursday 3rd November 2016

There has been just so much “law stuff” going on in the last week and then ,with today’s Brexit shenanigans, we almost didn’t know what to include or leave out! However, we decided to leave Brexit to everyone else, so this week’s employment update features articles on the Uber tribunal judgement, pregnancy and maternity discrimination, unpaid internships, discrimination compensation and an ACAS update on employees with potentially life-threatening illnesses.

The Uber Tribunal Judgment

The long-awaited Uber tribunal judgement has finally been handed down classifying Uber drivers as workers rather than self-employed individuals. The ruling will potentially have far-reaching implications for Uber and the ‘gig economy’ as a whole.

The judgement, for the most part, is an interesting read – particularly from paragraph 85 onwards – with the tribunal considering the intricacies of Uber’s technical operations and how they impact on the way in which the drivers undertake their work. The tribunal was presented with numerous pieces of evidence by the Claimants’ QC showing the extent of the control that Uber exercises over drivers when they log on to the app. For example; forcibly logging drivers off if they refuse to accept consecutive jobs; applying continuation standards based on ratings and car worthiness and; the creation of invoices between driver and passenger that neither party ever receive.

It becomes apparent that Uber have attempted to argue themselves as a technology company to avoid accepting the reality that they actually provide transportation services. The UK tribunal borrowed the following explanation from another Uber case in the United States:

‘Uber does not simply sell software; it sells rides. Uber is no more a “technology company” than Yellow Cab is a “technology company” because it uses CB radios to dispatch taxi cabs.’

It is this contradiction of Uber’s defence to the practical reality of its operations that the employment tribunal’s criticisms firmly centre on: ‘The notion that Uber in London [the distinct area where the Claimants brought their claim] is a mosaic of 30,000 small businesses linked by a common ‘platform’ is to our minds faintly ridiculous’. Consequently, the tribunal allowed the Claimants’ arguments to succeed.

In doing so, the classification of ‘worker’ rather than ‘self-employed’ will entitle the claimants to the national minimum wage (NMW), holiday pay, sick pay, rest breaks and protection from unlawful deduction of wages amongst other benefits. It is also likely that there will be pension issues. However, workers are not entitled to protections such as unfair dismissal and redundancy pay.

The potential costs to Uber of implementing these changes and pay protections to all drivers could result in crippling the innovation and success of the company. Many Uber employees are happy with the status quo and enjoy the flexibility and freedom that the work offers. Adding in holiday pay, sick pay and NMW could limit Uber’s competitive pricing edge and provide less work for drivers. However, shadow business minister Jack Dromey has commented that “Uber are going to have to fundamentally rethink how they operate in this country.”

With so much at stake, Uber have emailed all individuals who drive for them notifying them of their intention to appeal the case. Whatever the outcome of that appeal, the losing side will undoubtedly appeal the case up and up through the courts until it likely ends up at the Supreme Court.

Comment: As mentioned in previous updates, the government has instructed Matthew Taylor to conduct an independent review into modern working practices which will coincidentally run concurrent with Uber’s appeals up the court chain. A clear cut idea of what this case really means for new types of ‘self-employment’ won’t become apparent for at least a couple of years.

Pregnancy and Maternity Discrimination Costs Businesses £280m Each Year

The Equality and Human Rights Commission (ECHR) has published research this week which shows that British businesses are losing almost £280 million every year as a result of women being forced to leave their jobs as a result of pregnancy and maternity discrimination.  The losses were mainly attributable to the cost of recruitment and training as well as lost productivity.

The research has also showed:

  • The cost to British women could be as much as £113 million a year when they are forced to leave their job (either by way of being dismissed, or constructively dismissed);
  • The women who keep their jobs report a financial loss of up to £34 million each year for reasons including failing to gain a promotion, receiving reduced bonuses or being demoted;
  • 11% of women are forced to leave their jobs;
  • 77% of pregnant and new mothers reported experiencing negative and potentially discriminatory treatment each year (in a similar a report published in 2005, only 45% of women said they had experienced such discrimination);
  • Less than 1% of women reported bringing a claim in the Employment Tribunal

As a result of these findings, the ECHR is leading a new coalition together with some of Britain’s leading businesses called Working Forward.  The coalition’s aim is to support other organisations by sharing experiences and good practice.

Comment: The business costs referenced in the report are alarming and suggest that pregnancy and discrimination within British businesses is on the increase, although the actual number of tribunal claims being brought is small. Pregnancy and maternity issues are often very tricky ones for employers to deal with. Employers need to act very carefully when they are looking to either dismiss or take any action which may be constituted as being a detriment to pregnant staff or those staff who are on maternity leave, regardless of that staff member’s length of service.  For more advice on pregnancy and maternity issues, please speak to a member of the Gordons employment team.

A Ban on Unpaid Internships?

The Employment Minister, Damian Hinds, is looking to review unpaid internships with the possible outcome of suggesting a complete ban. Unpaid internships can be economically unviable to those who do not have external help with living costs and as such can put them behind in the race to land top jobs. Tomorrow, MPs will debate the proposed National Minimum Wage (Workplace Internships) Bill which would require organisation to pay interns at least the minimum wage. Tory MP Alec Shelbrooke considers unpaid internships to be “a scourge on social mobility.” Citing companies such as KPMG, Ernst & Young and Pimlico Plumbers, Mr Shelbrooke said “there really is no excuse for profit-making companies not to pay their workforce.”

Comment: Opinion is largely split on this potential Bill. Although social mobility will no doubt be increased, some companies may well be discouraged from offering work experience at all with the new associated costs. Some compromise on the actual wage (potentially lower than the national minimum) may be the ideal solution.

Discrimination Compensation

This week a number of tabloid headlines have highlighted the potential sums involved with discrimination compensatory awards:

  • A former VIP protection officer at Cleveland Police has been awarded £457,664 in damages following racial discrimination and harassment. Nadeem Saddique had previously guarded Tony Blair, George Bush and members of the Royal Family. The Claimant said that his colleagues had wanted him removed from the force being the only Asian member of their team. In addition, an EDL sticker found on the holster of one of his colleagues was never investigated. When bringing internal complaints, Mr Saddique found himself rebuffed with ‘members of the Old Guard’ insisting complainants were ‘liars, money grabbers or deluded.’ His barrister stated that it’s ‘difficult to see how much more aggravating the respondent’s conduct could have been following the acts of discrimination.’ Cleveland Police have since updated their policies and have implemented equality, human rights and diversity training in response to the outcome of the tribunal.
  • Meanwhile, a city hedge fund manager is claiming £1m in compensation for discrimination from his previous employer on the grounds of his sexuality. Paul Newton was dismissed without explanation from his role. Balyasny Europe Asset Management, the firm in question, has since indicated that his dismissal was attributed to poor performance in the immediate post-Brexit vote period. However, Mr Newton claims that other managers suffered larger losses and were not also dismissed on the basis that they were straight. He also claims that he was subjected to a campaign of ‘unrelenting homophobic abuse’ that began almost as soon as he joined the hedge fund in 2014. Such abuse included limp wristed jibes about his sexuality, comparisons of his looks to that of a woman, circulating rumours that he had slept with the office cleaner and statements that ‘normal’ people would find it strange to see him [a gay man] drive an Aston Martin. The tribunal is expected to take place next March.

Comment: Both news stories highlight the importance of embedding sound equality policies within any organisation. Compensation in claims for discrimination is uncapped and for high earners facing lengthy job searches this can lead to pay-outs in the hundreds of thousands.

ACAS Guide on Cancer, HIV and MS

ACAS have introduced a new Guide setting out advice for when an employee is diagnosed with cancer, HIV or multiple sclerosis. These conditions are automatically treated as “disabilities” under the Equality Act and the Guide provides useful information in relation to the implications for disability discrimination.

ACAS also recognises that some employers may be ill equipped to manage staff with potentially life threatening conditions. So the guide also explains how best to communicate with staff members and provides some practical tips covering topics such as the “role of the manager”, “telling colleagues” and “keeping in touch”.

A full copy of the guide can be found here.

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.