Summary: The most significant developments over the last month include the Supreme Court’s decision abolishing Employment Tribunal fees, the Taylor Review proposing major changes to employment law, the landmark Court of Appeal decision on what is “in the public interest” for whistleblowing purposes, and the first EAT decision confirming that voluntary overtime should be included in holiday pay.

Supreme Court abolishes employment tribunal fees

In a landmark decision, the Supreme Court ruled that the employment tribunal fees regime is unlawful and abolished it with immediate effect. You can read more about the practical issues this raises for employers in our blog.

Taylor ‘Good Work’ Review recommends significant employment law changes

The long awaited Taylor Review of Modern Working Practices has now been published. The Review stresses the need for employers to provide their workers with “good work” and makes many recommendations, some highlights of which include:

  • making the tests for “employee”, “worker” and “self-employed” clearer so it is easier for employers and individuals to know what employment status the individual has;
  • introducing a new test for workers (which the Review suggests should be renamed “dependent contractors”) which places a stronger emphasis on the degree of control by the employer;
  • extending the right to written particulars, to dependent contractors, from day one;
  • improving protections for those on zero hours contracts and for agency workers; and
  • making the enforcement process simpler for employees and workers by allowing the government to take direct enforcement action against employers who do not comply with employment tribunal judgments.

The Government has indicated that it will consult on the Taylor Review recommendations in due course.

Whistleblowing – Court of Appeal considers what it means for a disclosure to be in the ‘public interest’

The Court of Appeal has given guidance on when a disclosure will be ‘in the public interest’ in the context of whistleblowing claims. You can view our full analysis here.

Holiday pay: first EAT decision ruling that voluntary overtime pay should be included in holiday pay

Previous case law has confirmed that pay for compulsory overtime and for non-guaranteed overtime (that is, overtime that the employer doesn’t have to offer, but if it does, the worker must do it) should be included when calculating statutory holiday pay entitlement. What has remained unclear is whether voluntary overtime pay should also be taken into account. (Note that this issue relates only to the 4 weeks core statutory holiday underpinned by the Working Time Directive, not the additional statutory 1.6 weeks holiday).

The EAT has now said that such voluntary overtime payments should be included if they form part of a worker’s “normal remuneration”. A payment is “normal” if it has been paid over a sufficient period of time on a regular or recurring basis. This is a question of fact and degree. Examples given by the EAT of payments that would count would be payments made for one week each month or one week in every five weeks.

Why this matters?

Some employers have decided to wait and see before including voluntary overtime in their statutory holiday pay calculations, given the uncertainty on this issue. It is not yet clear whether this case is being appealed. Employers in this situation may therefore wish to track developments in this case.

Injury to feelings and personal injury awards uplifted by 10%

The Court of Appeal has confirmed that the Simmons v. Castle 10% uplift - which is a compensation mechanism from the civil courts system – should be applied to discrimination compensation for injury to feelings and psychiatric injury. This uplift applies to discrimination claims made in the England and Wales Employment Tribunals only, not Scotland.

Why this matters?

After years of conflicting Tribunal decisions, the Court of Appeal has confirmed that the Simmons v Castle 10% uplift does apply in this context, and increases the amount that can be claimed for these elements of discrimination compensation.

Territorial scope: collective consultation obligations

Case law has made clear that an Employment Tribunal has territorial jurisdiction to hear claims if the claimant has a sufficiently strong connection with Great Britain and British employment law. However, what has not been clear is whether this test applies to collective employment rights such as the right to collective redundancy consultation, in the same way that it applies to individual employment rights such as unfair dismissal. The EAT in this case has now decided that the same test does apply in the context of collective redundancy consultation.

Why this matters?

The territorial scope of an employer’s collective consultation obligations requires an analysis of each employee’s individual circumstances to see if they satisfy the strong connection test. This includes a consideration of factors such as: where the employee is domiciled, the governing law of the employment contract, and the practical reality of the relationship. As a consequence of this EAT decision, employers may be faced with the prospect of having to comply with the collective consultation regime in circumstances in which, previously, they would not considered it to have applied.

Seahorse Maritime Limited v Nautilus International

Round up of other developments

Extension of the Senior Managers and Certification (SMCR) Regime: the FCA and PRA have published consultation papers proposing the extension of the existing SMCR regime to all FCA firms and to insurers. You can read more in our blogs on extension to all FCA firms and extension to insurers.

Government factsheet on workers’ rights post-Brexit published: the Department for Exiting the European Union has published a factsheet on workers’ rights in support of the Repeal Bill. The factsheet for workers’ rights provides a commitment to ensuring the continued level of workers’ rights following our exit from the EU. The factsheet highlights the possibility of the Supreme Court in future overruling previous ECJ decisions.

Caste discrimination consultation continues: the Government are consulting on whether or not to make caste a protected characteristic under the Equality Act 2010. The consultation was originally due to close this month. However, in light of the general election, this consultation has been extended by 8 weeks and is now due to close on 18 September 2017.