In this Be Aware review of the year, we highlight the most important legislative and case law developments from 2017 and identify the key developments to watch out for in 2018.

2017: The year in review

Legislation

Apprenticeship levy: Finance Act 2016, Income Tax (Pay As You Earn (Amendment) Regulations 2017 The apprenticeship levy became payable with effect from 6 April 2017 and is payable by employers through PAYE.

Read more in our Be Aware alert.

Immigration: Immigration Skills Charge Regulations 2017 The Regulations introduced a charge which is payable by sponsors from 6 April 2017 in respect of each skilled migrant they sponsor (subject to some exemptions and transitional provisions). The charge is £1000 a year for larger sponsors, with a lower rate for smaller sponsors and charities.
Gender pay gap reporting: The Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 The Regulations came into force on 6 April 2017

and require affected employers to publish information on their gender pay gap, gender bonus gap and the gender split across four pay bands (quartiles).

The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 extend the duty to publish annual gender pay gap reports to public sector employers with over 250 employees.

The main differences between the public and private sector requirements are:

  • The public sector duty takes effect as part of the existing public-sector equality duty, rather than as a standalone requirement
  • The ‘snapshot’ date for private sector employers is 5 April but 31 March for public sector employers.

Read more in our Be Aware alert.

Trade unions: Trade Union Act 2016 commencement orders Commencement orders brought the main provisions of the Trade Union Act 2016 into force on 1 March 2017. These include:
  • Ballots: 50% turnout requirement (section 2).
  • Ballots in “important public services”: additional 40% support requirement (section 3).
  • Information requirements in relation to voting papers and information provided to members on the result of a ballot (sections 5 and 6).
  • The requirement for unions to provide two weeks’ notice of industrial action to employers (sections 8 and 9).
  • Union supervision of picketing (section 10).
  • Check-off in the public sector: the power to make Regulations to require unions to make a reasonable payment to employers for operation of a check-off system (section 15).

Regulations defining important public services in health, fire, transport, education and border security also came into force on 1 March 2017.

Read more in our Be Aware alert.

Whistleblowing: The Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 The Prescribed Persons (Reports on Disclosures of Information) Regulations 2017 came into force on 1 April 2017. The regulations set out the requirements for prescribed persons to report annually on disclosures of information received from workers. Specifically, they provide that the reporting period will be 12 months beginning on 1 April each year, setting out how the report should be published and what it should contain.

Key cases

Worker status
Aslam & Farrar v Uber, EAT The EAT upheld an employment tribunal’s ruling that Uber drivers are workers for the purposes of the Employment Rights Act 1996, the National Minimum Wage Act 1998 and the Working Time Regulations 1998.
Independent Workers’ Union of Great Britain and RooFoods Limited t/a Deliveroo The Central Arbitration Committee decided that Deliveroo riders are not workers for the purposes of a union’s application for compulsory recognition under Schedule A1 of TULRCA
Gascoigne v Addison Lee Ltd, ET An employment tribunal held that a cycle courier working for Addison Lee was a worker under the Working Time Regulations 1998 and the Employment Rights Act 1996.
Dewhurst v CitySprint, ET An employment tribunal held that a cycle courier working for CitySprint was a worker under the Working Time Regulations 1998 and the Employment Rights Act 1996.
Discrimination
Bougnaoui and another v Micropole SA, ECJ The ECJ held that an employee’s dismissal for wearing an Islamic headscarf at work, in breach of a direct instruction following a customer’s objection to her wearing the headscarf, was directly discriminatory on grounds of religion or belief.
Achbita v G4S Secure Solutions NV, ECJ The ECJ held that a Belgian company’s dress code banning the wearing of a Muslim headscarf while on duty did not amount to direct discrimination but was capable of amounting to indirect discrimination under the Equal Treatment Framework Directive.

Read more in our Be Aware alert.

Essop v Home Office (UK Border Agency); Naeem v Secretary of State for Justice, Supreme Court The Supreme Court confirmed in Essop that, in indirect discrimination claims, claimants are not required to prove the reason why a PCP puts, or would put, an affected group at a particular disadvantage. The essential element is a causal connection between the PCP and the group and individual disadvantage. In the conjoined case of Naeem, also in relation to indirect discrimination, the Supreme Court said that the reason why a PCP puts or would put an affected group at a particular disadvantage does not need to relate to the protected characteristic.
Ayodele v Citylink Ltd, Court of Appeal The Court of Appeal held that Efobi v Royal Mail Group Ltd was wrongly decided, and restored the position that the claimant has the initial burden of proof of showing a prima facie case of discrimination.
Working time
Dudley MBC v Willetts, EAT The EAT held that payment for voluntary overtime that is normally worked is within the concept of normal remuneration and should be taken into account when calculating holiday pay.

Read more in our Be Aware alert.

Fulton and another v Bear Scotland Ltd (No 2), EAT The EAT confirmed that a three-month gap between underpayments of wages breaks a “series of deductions”, limiting the scope to make retrospective claims for underpaid holiday pay.
The Sash Window Workshop v King, ECJ The European Court of Justice held that a worker is entitled to be paid on termination for any periods of annual leave that have accrued during employment, where the worker has been deterred from taking that leave because the employer would not grant paid leave.

Read more in our Be Aware alert.

Employment tribunals
R(Unison) v Lord Chancellor, Supreme Court In judicial review proceedings brought by Unison, the Supreme Court unanimously declared that employment tribunal and EAT fees are unlawful, under both domestic and EU Law, and has quashed the Employment Tribunals and the Employment Appeal Tribunal Fees Order 2013 on the basis that it prevents access to justice.

Read more in our Be Aware alert.

Joint Presidential Guidance on injury to feelings awards The Presidents issued joint Presidential Guidance which will apply to claims presented on or after 11 September 2017 and in respect of which there will be:
  • A lower band of £800 to £8,400.
  • A middle band of £8,400 to £25,200.
  • An upper band of £25,200 to £42,000, with the most exceptional cases capable of exceeding £42,000.

There is specific provision for the Simmons v Castle uplift in claims in Scotland and in respect of claims presented before that date, it will be open to tribunals to adjust the bands.

Whistleblowing
Royal Mail Group Ltd v Jhuti, Court of Appeal The Court of Appeal held that an employee was not automatically unfairly dismissed for making protected disclosures to her line manager because the person who took the decision to dismiss her (for poor performance) was unaware of those disclosures.
Chesterton Global Ltd v Nurmohamed, Court of Appeal The Court of Appeal considered for the first time the meaning of the “public interest” test inserted into the whistleblowing legislation in 2013. The court upheld the tribunal’s decision that the worker’s allegations of financial misreporting, that had adversely affected the levels of commission received by about 100 employees (including the worker himself), was in the public interest and a qualifying disclosure.
Trade unions
R. (on the application of Lidl Ltd) v Central Arbitration Committee, Court of Appeal The Court of Appeal upheld the CAC’s decision that a group of warehouse operatives constituting 1.2% of Lidl’s total UK workforce was an appropriate bargaining unit.
Dunkley v Kostal Limited, EAT The EAT held that an employer’s attempt to bypass collective bargaining with a recognised trade union by making a pay offer directly to individual employees amounted to unlawful inducement contrary to section 145B of the Trade Union and Labour Relations (Consolidation) Act 1992.

Read more in our Be Aware alert.

British Airline Pilots’ Association v Jet2.com Ltd, High Court The High Court held that an airline, on which the specified method of collective bargaining had been imposed by the CAC, was not required to negotiate with a recognised trade union over pilots’ rostering arrangement

2018: What’s on the horizon?

Legislation

Data protection: GDPR and the Data Protection Bill 2017-2019 The Data Protection Bill will replace the Data Protection Act 1998 (DPA) to provide a comprehensive legal framework for data protection in the UK supplemented by the General Data Protection Regulation (GDPR) until the UK leaves the EU. The GDPR comes into force on 25 May 2018.

Read more in our Be Aware alert.

Taxation of termination payments: Finance Act 2018 The Finance Act 2017 will tighten the termination payment rules to prevent manipulation. These changes are set to be implemented in April 2018 and will mean that the basic pay amount of payments made in lieu of notice will be taxable and subject to NICs.
Parental bereavement: Parental Bereavement (Leave and Pay) Bill 2017-19 The Bill was introduced to the House of Commons by Kevin Hollinrake MP, but is supported by the government. Under the Bill, employed parents who have lost a child below the age of 18 will be entitled to at least two weeks’ paid leave (paid at the same rate as the flat statutory maternity pay rate) if they meet eligibility criteria.
Gender representation: Gender Representation on Public Boards (Scotland) Bill The aim of the Gender Representation on Public Boards (Scotland) Bill is to improve the representation of women in non-executive positions on public boards. The Bill seeks to introduce a “gender representation objective” that women should make up 50% of non-executive board membership. In addition, the Bill suggests measures to increase under-representation from different groups, without resulting in unlawful discrimination.
Monitoring: Investigatory Powers (Interception by Business etc for Monitoring and Record-keeping Purposes) Regulations 2018 Draft regulations were made on 18 December 2017 and will replace The Telecommunications (Lawful Business Practice)(Interception of Communications) Regulations 2000 in due course (the Telecommunications Regulations). The draft regulations simply replicate what is in the Telecommunications Regulations, which provide for circumstances where, in a business context, it is lawful for the purposes of RIPA 2000 to intercept communications (including those of employees) without consent.
Public sector exit payments: Repayment of Public Sector Exit Payment Regulations Sections 154 to 157 of the Small Business, Enterprise and Employment Act 2015 empower the government to make regulations requiring certain public sector workers to repay specified exit payments if they are re-employed in the public sector within 12 months. These provisions came into force on 1 January 2016 and draft regulations have been consulted on but not yet brought into force.

The government also intends to introduce a cap of £95,000 on the total pre-tax aggregate value of exit payments made to most types of public sector employee. Initially the cap was expected to come into force in Autumn 2016.

Trade unions: Public sector check-off The Trade Union (Deduction of Union Subscriptions from Wages in the Public Sector) Regulations 2017 came into force on 10 March 2017 and define relevant public sector employers for the purposes of section 116B of the Trade Union and Labour Relations (Consolidation) Act 1992. When it is brought into force, section 116B will place restrictions on deduction of union subscriptions from wages (check-off) in the public sector.

Key cases

Worker status
Smith v Pimlico Plumbers, Supreme Court Whether a plumber was a worker for the purposes of the Employment Rights Act 1996 and the Working Time Regulations 1998 and an employee within the extended meaning in the Equality Act 2010. Hearing on 20 and 21 February 2018.
Boxer v Excel/City Sprint, ET Whether TUPE applies to workers. Hearing on 2 and 5 February 2018.
Discrimination
Porras Guisado v Bankia SA, ECJ Advocate General Sharpston has given her view that the Pregnant Workers Directive should protect workers against dismissal from the moment they become pregnant, even before they have notified their employer of the pregnancy. ECJ judgment awaited.
Donelien v Liberata UK, Court of Appeal Whether an employer that took reasonable steps, but not every step possible, to ascertain whether an employee was disabled, did enough to avoid having constructive knowledge of the disability.
Carreras v United First Partners Research, Court of Appeal Whether an expectation, rather than a strict requirement, for an employee to work long hours was a PCP. Judgment awaited.
Asda Stores Ltd v Brierley, Court of Appeal Appeal from decision of the EAT which upheld an employment tribunal’s decision that a predominantly female group of supermarket retail employees can compare themselves with a mainly male group of distribution depot employees for the purposes of an equal pay claim of work of equal value. The EAT rejected all grounds of appeal submitted by Asda and held that the comparison was permitted under both EU and domestic law. Due to be heard 23 October 2018.
Capita Customer Management Limited v Ali, EAT Appeal against tribunal decision that a male employee was subjected to sex discrimination when his employer refused to allow him any period of shared parental leave at full pay (when a woman on maternity leave would have received 14 weeks’ full pay). Judgment awaited.
Hextall v Chief Constable of Leicestershire Police, EAT Appeal against tribunal decision that a police force’s policy of giving a period of full pay to mothers on maternity leave, but paying only statutory shared parental pay to partners, is not discriminatory. Heard on 16 January 2018 and judgment awaited.
Working time
Ville de Nivelles v Matzak Advocate General Sharpston has given an opinion that the definition of “working time” in the Working Time Directive should not be interpreted as automatically including time spent on “stand-by” duty, during which workers must be readily available to perform duties for their employer within a short period of time but need not be present at their workplace. ECJ judgment awaited.
Sash Window Workshop Ltd v King, Court of Appeal The Court of Appeal will consider whether a worker is entitled to be paid on termination for any periods of annual leave that have accrued during employment, where the worker has been deterred from taking that leave because the employer would not grant paid leave.
National Minimum Wage
Focus Care Agency Ltd v Roberts; Frudd and another v The Partington Group Ltd; Royal Mencap Society v Tomlinson-Blake. Court of Appeal The Court of Appeal will consider the correct approach to determine the question whether employees, who sleep-in in order to carry out duties if required, engage in “time work” for the full duration of the night shift or whether they are only entitled to the national minimum wage when they are awake and carrying out relevant duties. Hearing on 20 March 2018.
Contracts of employment
Abrahall and ors v Nottingham City Council and anor, Court of Appeal Appeal from an EAT decision which held that a local authority’s employees retained their contractual right to annual increments in pay notwithstanding their acceptance of new contract terms that were subject to a later collective agreement which did not incorporate the entitlement. Judgment awaited.