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18 03 2024

Salary inflation at the slowest recorded rate in nearly three years | Consensus HR | Herts, Beds

Matthew Chilcott Blog, General, Performance Management, Recruitment, Training & Development #bedfordshirebusinesses, #hertfordshirebusinesses, #hrstrategy, #outsourcedemploymentlaw, #outsourcing, #salaryinflation, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Recruitment, Small Business, SME's, stevenage

While February 2024 saw further increases in rates of starting pay for both permanent and temporary workers, as employers reacted to competition for highly-skilled candidates, the rate of salary inflation was the slowest recorded since 2021.

This is one of the key findings in the latest Report on Jobs published by the Recruitment and Employment Confederation (REC) and KPMG.

Ongoing economic uncertainty and hesitancy to commit to new hires amid cost pressures led to a further marked fall in permanent placements, the report notes, while temp billings dropped at the steepest rate since mid-2020.

With uncertainty over the economic outlook leading employers to often delay or freeze hiring decisions, the number of people placed into permanent jobs across the UK continued to decline markedly midway through the first quarter (Q1) of 2024.

The availability of staff rose for the 12th straight month in February amid reports of redundancies and a slowdown in hiring activity.

REC Chief Executive, Neil Carberry, said: “The temporary labour market is the unsung hero of the economic uncertainty of recent years. It keeps the cogs of the economy turning amidst uncertainty and labour shortages — but it still needs nurturing. As we approach the General Election, businesses will be looking to politicians for commitment on this, and reforms of regulation that will support it from IR35, to regulating of the umbrella market and delivering flexibility to the Apprenticeship Levy.”

The retail and construction sectors led the downturn in demand for temporary workers. Of the 10 surveyed job categories, only blue-collar and engineering noted increases in demand for short-term staff during February.

HRInform

Our HR Comment / Advice:- Salary inflation at the slowest recorded rate in nearly three years | Consensus HR | Herts, Beds

Matthew Chilcott, FCIPD, ACEL, owner of Consensus HR comments: “These statistic from these reports demonstrate the current labour market and vas uncertainties of what to expect with the Election approaching and highlight why businesses need to ensure that their Recruitment Strategy is correct for their business. At Consensus HR, we understand that selecting the right candidates whilst attracting them to your business is never easy, whilst ensuring when you have successfully recruited that you retain them. This is why we always encourage our clients to look at the bigger picture and their companies HR Strategy in general for the success of the business and the member of the team. Getting your recruitment strategy right is the start but then ensuring that they remain motivated and an asset to the company is another chapter. Their Induction, development, performance reviews, Contracts of Employment, Employee Handbooks from day one of employment and the list goes on are all key parts of getting your HR strategy right and becoming an employer of choice. Believe me, this is not easy and maintaining it, is another challenge.

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At Consensus HR, we are proud to offer a wide range of HR & Employment Law services to help our clients with all areas of best practice and Employment Law which can be found by clicking on the button:

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Are you concerned about your companies HR Strategy?

If you wish to talk to us at Consensus HR about your current HR Strategy for your business and team and look at ways of getting the right candidates in the right places whilst ensuring your is a place where people like to come to work and the business succeeds, give us a call now. Consensus HR | Your Outsourced HR & Employment Law Department | “Helping companies take the pain out of managing people whilst Preventing People Problems” – 01438 576750

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13 03 2024

Workplace mental health service firm faces investigation | Consensus HR | Herts, Beds

Matthew Chilcott Absence Management, Blog, General, Health & Safety, Investigations #bedfordshirebusiness, #consensushr, #hertfordshirebusinesses, #Mental health, #outsourcedemploymentlaw, #welfare, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Claims about one of the UK’s biggest providers of workplace mental health services are to be investigated by the British Association for Counselling and Psychotherapy (BACP), it has said. BBC Radio 4’s File on 4 programmes has heard allegations that calls from vulnerable people to Health Assured were not always handled properly. Health Assured refutes these allegations. Employee Assistance Programmes (EAPs) are intended to help employees deal with personal problems that might affect their wellbeing and performance at work. According to the UK Employee Assistance Programme Association, three-quarters of the UK working population (almost 25 million people) have access to an EAP through their employer. File on 4 has spoken to 15 current and former employees of Health Assured, an EAP that provides support to 13 million workers in the UK and Ireland, and whose clients include NHS trusts, universities, and police forces. Counsellors and team managers at Health Assured described low morale, high staff turnover, and a frequent struggle to keep up with demand.

BBC News

Our HR Comments / Advice – Workplace mental health service firm faces investigation | Consensus HR | Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “When it comes to the welfare of your team, it is vital that you provide the best support available according to the situation. EAP’s – Employee Assistance Programs, are a great way to provide this service through an external provider, of which there are now many across the UK who provide this service as part of an insurance. At Consensus HR and part of our service, we will always go to the medical professionals for advice, if we have concerns about any members of our clients’ teams, if informed and will see the team members consent to write to their GP / Consultant for their advice on how we can support the team member. This can be a lengthy process and may also consider using our Occupational Health Providers to look at the best solutions in helping our team member and the business. Consensus HR also provides Mental Health development for managers and employees at our central office in Stevenage or at the clients offices together with a wide range of employee and management development workshops.

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Do you know how to correctly deal with managing your team when it comes to dealing with employee issues?

If you manage a team and are concerned for their welfare and would like to talk to us about the Policies, Procedures and development we can provide you, contact us now. Consensus HR | Your Outsourced Human Resources and Employment Law Department | “Helping companies take the pain our of managing people whilst Preventing People Problems – 01438 576750”.

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12 03 2024

Gormley v City of York Council – Unfair dismissal: Reasonable investigation | Consensus HR – Herts, Beds

Matthew Chilcott Blog, General #bedfordshirebusinesses, #consensushr, #hertfordshirebusinesses, #outsourcedemploymentlaw, #unfairdismissal, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Summary:

Investigations into alleged gross misconduct should be conducted reasonably. Reasonableness includes not accepting vague or generic allegations and questioning further to get the specifics of the situation.

Note for employers:

This case serves as a reminder for employers of the importance of a fair and thorough investigation prior to disciplinary. It is not enough simply to rely on vague evidence that lacks detail. Especially where gross misconduct is concerned, employers should investigate every angle of the case and only progress from the investigation when they have specifics as to what happened and in what context. Failing to do so, as in this case, can lead to an unreasonable decision and a loss at ET.

Law:

The law on unfair dismissal is found in section 98 Employment Rights Act 1996. Under this section, the dismissal must be for a fair reason (one of which is conduct). The dismissal must also be conducted in a reasonable manner, dependent on the size and resources of the organisation. Failure on either of those points could render the dismissal unfair.

British Home Stores Limited v Burchell [1978] set out a now well-known test to be applied when determining if the dismissal was conducted in a reasonable way. The test:

Did the respondent have a genuine belief in the misconduct of the claimant at the time of the dismissal?
Was that belief based upon reasonable grounds?
Did the dismissal follow a reasonable investigation and a reasonable procedure?

The “Burchell test” is used by ETs to come to a decision on what a hypothetical reasonable employer would conclude in the same circumstances, and therefore if the decision to dismiss was fair and reasonable under section 98 of the above act.

It is important to note however that the “Burchell test” does not impose on employers the need to conduct an investigation on a par with an investigation by the police, for example. In Ulsterbus Limited v Henderson [1989] the Northern Ireland Court of Appeal confirmed that it was not for the reasonable employer to carry out a quasi-judicial investigation into misconduct allegations, or confront and cross-examine witnesses, and that failure to do so does not always lead to an unreasonable outcome.

Employers should also consider any mitigating circumstances around the alleged misconduct. These circumstances can include the context in which the allegation happened, or the words that were said. They should also take into account the impact on the aggrieved party of the allegation, the accused employees disciplinary record and their length of service. These are relevant in determining whether the incident was an isolated event or part of a pattern of behaviour, amongst other things.

Facts:

The claimant was employed as a mental health practitioner by the respondent and was a long serving employee with a clean disciplinary record.

It was alleged by a junior colleague that the claimant had made sexual comments and “unwelcome innuendos” at work, and other comments that the colleague deemed to be “inappropriate behaviour in the workplace”. As a result, the claimant was suspended and subject to an investigation into their behaviour.

In the respondent’s report following its investigation, in which it was decided to progress to a formal disciplinary hearing, it was said that there was evidence that the claimant had engaged “in behaviour including unwanted innuendo and unwelcome jokes or comments that are sexist”.

A disciplinary hearing was held, the outcome of which was dismissal for gross misconduct. The dismissal letter said that the claimant had “engaged in behaviour including unwanted innuendo and unwelcome jokes or comments that are sexist” and noted that a colleague had described the claimant as a “misogynist”. The letter also concluded that “any reasonable person would realise” the practitioner’s behaviour was “likely to offend”.

The claimant brought claims of unfair dismissal and wrongful dismissal.

Employment Tribunal (ET):

Note that as an employment tribunal case, this is not binding authority. ET cases may be persuasive on other tribunal decisions, but unlike those courts higher in the system (EAT, CoA, Supreme Court), they do not have to be followed by other courts and therefore the outcome is only indicative of how a similar case might be treated.

The ET was critical of the respondent’s investigation, finding that the decision to dismiss on grounds of gross misconduct “was not formed on reasonable grounds after a reasonable investigation”. This was due to the respondent’s failure to ask follow-up questions. The allegations were, according to the ET, vague and “lacking specificity and largely generic” as to what innuendo, unwelcome jokes or comments had actually been made by the claimant and the circumstances in which they were made, and failing to address these in the investigation meant that it was inadequate and unreasonable and the Burchell test was not met.

Overall, the ET found that it was not reasonable to conclude that the claimant’s comments were sexual intimidation or bullying, as the evidence did not show that colleague felt vulnerable or was offended by what was said. As a result, the decision to dismiss lay outside the band of reasonable responses and the claim succeeded.

The claimant was awarded £60,700 in compensation.

Our HR Comment / Advice: Gormley v City of York Council – Unfair dismissal: Reasonable investigation | Consensus HR – Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “This is an interesting case and the case law given and explains the utmost importance in ensuring an investigation is carried out correctly or could result in a £60,700 payment in compensation. It can be too easy within business to rush an investigation and especially when you are busy, but you must remember that being reasonable at all times whilst following the Acas Code of Practice are a necessity to ensure the right outcome as in this case, it was dismissal.”

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At Consensus HR, we help companies with employees in the management of their teams and how to ensure this is done the correct way for the team member and business. If you would like to know more on how we can help you with your team, give us a call / email now. Consensus HR | Your Outsourced Human Resources and Employment Law Department | “Helping companies take the pain our of managing people whilst Preventing People Problems – 01438 576750

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11 03 2024

Spring budget 2024: Chancellor encourages more people into work | Consensus HR – Herts, Beds

Matthew Chilcott Blog, General #bedfordshirebusiness, #bedfordshirebusinesses, #hertfordshirebusinesses, #outsourcedemploymentlaw, #outsourcedhumanresources, #springbudget, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

A plan to make work pay, Chancellor Jeremy Hunt said as he recommended his latest Budget statement to the House of Commons. He announced very little that had not already been trailed in advance but provided more details of the measures that had been widely discussed in this week’s newspapers and news programmes.

Childcare

The chancellor announced a guarantee on the rates that will be paid to childcare providers to deliver the Government’s offer for children over nine months old for the next two years.

Energy

With the increase in energy prices caused by the conflict in Ukraine expected to last longer, as will therefore the sector’s windfall profits, the chancellor confirmed that he will extend the UK’s windfall tax on the profits of oil and gas companies for another year until March 2029.

Great British Nuclear will begin the next phase of the Small Modular Reactor selection process, Mr Hunt said, with companies now having until June to submit their initial tender responses.

Household Support Fund

Funding aimed at supporting vulnerable households with the costs of basic goods and heating their homes through the cost-of-living crisis, will be extended for a further six months.

Investment

The Government will create a British ISA in the form of an extra £5000 tax-free allowance for the public to invest exclusively in UK businesses with all the tax advantages of other ISAs. “This will be on top of the existing ISA allowances and ensure that British savers can benefit from the growth of the most promising UK businesses,” Mr Hunt explained.

He also plans to force local authorities and defined contribution (DC) pension funds to disclose how much they have invested in UK shares.

Levelling up

AstraZeneca will invest £650 million in the UK and Mr Hunt also announced an additional £650 million investment in the Cambridge Biomedical Campus and a new vaccine manufacturing hub in Liverpool.

Having already allocated £188 million for projects in Sheffield, Blackpool and Liverpool, the chancellor announced that £242 million would be allocated to Barking Riverside and Canary Wharf. This investment will, he said, see nearly 8000 houses being built and it will also transform Canary Wharf into a hub for life sciences companies.

Referring to a “Northeast trailblazer devolution deal”, Mr Hunt said this will provide a package of support for the region potentially worth over £100 million. The West Midlands Combined Authority will be awarded a further £15 million for cultural, heritage and investment projects.

NHS

Promising to double the amount the NHS is investing in IT and AI, the chancellor said there must be more digital input and less time-wasting forms. And, pointing out that police officers currently waste eight hours a week on unnecessary admin, he suggested that this approach could be mirrored in education, the police, courts, and local government with, e.g. more investment in non-court resolutions in the justice system.

The Government will, Mr Hunt said, fund in full the £3.4 billion cost of the NHS “productivity plan” he was introducing this week.

Tax

National Insurance (NI): Double taxation of work (through NI and income tax) is unfair, the chancellor argued. It should be simpler and fairer so, from April 2024, there will be another 2p cut in NI taking it down to 8% and that, Mr Hunt argued, should see total hours worked increase by the equivalent of around 200,000 full-time workers. It will, he said, be worth around £450 a year for someone on an average salary.

VAT:

Having been frozen for seven years, the threshold for VAT registration will go up from £85,000 to £90,000.

Vaping: A vaping tax will be introduced from October 2024, accompanied by an increased tobacco tax to maintain the disincentive to smoking. The freeze on alcohol duty will be extended to February 2025 to protect local pubs.

Child benefit: Turning to child benefit, the chancellor agreed that the current system, whereby it is withdrawn once a parent goes over £50,000, was unfair because it meant that a single parent earning £51,000 would lose the benefit while a couple both earning £49,000 would not. He plans to consult on moving to a household-based system in April 2026 but more immediately, from April 2024, will increase the lower limit to £60,000 and the top of the taper at which it is withdrawn will go up to £80,000.

Non-doms:

With regard to the much-discussed question of taxing non-doms, Mr Hunt confirmed that he was planning to abolish the current system while ensuring that the UK remained competitive in line with other major economies. From April next year, new arrivals in the UK will not be required to pay any tax on foreign income for four years but, if they still live in the UK after that point, they will pay the same tax as other UK residents.

Air transport: Air passenger duty will be increased but only for business travellers, not economy flights.

Holiday lets:

Tax breaks which make it more profitable for second homeowners to let out their properties to holiday makers rather than to long-term tenants to rent will be abolished as will stamp duty relief for people buying more than one dwelling.

Property:

The 28% rate of property capital gains tax will be cut to 24% with the chancellor arguing that the lower tax rate will result in more transactions, leading to more tax revenue.

Full expensing:

Referring back to his announcement last year of full expensing, which he described as a £10 billion tax cut for businesses, Mr Hunt announced his intention to publish draft legislation for full expensing to apply to leased assets.

Performing arts:

Tax reliefs for the performing arts introduced during the Covid-19 pandemic are to be made permanent.

Fuel duty:

Finally, he said that the 5p cut in fuel duty due to end this month will be extended for a further year, meaning that it will stay at 53p per litre.

The chancellor’s speech gives highlights of the Budget with full details available in the 98-page “Red Book” and associated documents which can all be found on the GOV.UK website.

HRInform

Our HR Comment: Spring budget 2024: Chancellor encourages more people into work | Consensus HR – Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Comments: “Well, everyone will have their opinion on the recent Spring budget 2024 and how it affects you personally but from our point of view it is good to see the section in relation to childcare and the guarantee as this should hopefully help some parents back into work.”

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Retail union calls on Low Pay Commission to be ambitious on minimum wage rates | Consensus HR in Herts & Beds

06 03 2024

Poor mental health keeping more young people out of work | Consensus HR – Herts, Beds

Matthew Chilcott Blog, General #bedfordshirebusiness, #hertfordshirebusinesses, #Mental health, #outsourcedhumanresources, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

A third (34%) of young people aged 18–24 have reported symptoms that indicate they were experiencing a common mental health disorder such as depression, anxiety or bipolar disorder — a big increase since 2000 when just 24% reported these problems.

This is one of the key findings of a report by an independent think tank, the Resolution Foundation, which shows that young people now have the poorest mental health of any age group and that this can lead to them being in lower-paid jobs or unemployed.

We’ve Only Just Begun: Action to Improve Young People’s Mental Health, Education and Employment is the culmination of a three-year research programme exploring the relationship between the mental health and work outcomes of young people, funded by the Health Foundation.

“Over that time,” the Foundation states, “we have examined issues such as how mental health and insecure work collide; why low hours are so prevalent for young workers today; and the intersection between young people’s mental health, employment and geography.”

The report highlights that young people with mental health problems are more likely to be out of work than their healthy peers.

Between 2018 and 2022, 21% of 18–24-year-olds with mental health problems were workless, compared to 13% of those without mental health problems.

The study also found that young women fare worse, and are one-and-a-half times more likely to experience poor mental health as young men (41% compared with 26%).

HRInform

Our HR Comments / Advice – Poor mental health keeping more young people out of work | Consensus HR – Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments:“ This is an extremely concerning article from our Chartered Institute and demonstrates how mental health is playing a big part in todays society and the workplace.

Supporting mental health in the workplace can be challenging and the issues around it are complex. Therefore, it is important that employers are aware of their legal obligations and the issues that arise. Three key issues are involved:

Health and safety
Disability discrimination
Personal injury claims

Employers can manage mental health issues via two key approaches: having policies and procedure in place to deal with mental health issues and supporting employees via training (for managers especially), return to work interviews and on-going support in the workplace and during periods of absence.

“Professional advice can ensure that policies support both the organisations and its people,” says Matthew from Consensus HR. “With growing awareness and openness about mental health issues, this step is increasingly important.” To read a previous blog we wrote on this subject, Click Here.

Other blogs we have written on the subject are:

To view more about our range of HR & Employment Law Services

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Are you concerned about the mental health of your team?

If you have a team and wish to talk to somebody about how you can support them when it comes to mental health and ensuring your company is working to best practice and the law, give us a call now. Consensus HR | Your outsourced Human Resources and Employment Law Department | ”Helping companies take the pain out of managing people whilst Preventing People Problems – 01438 576750”

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04 03 2024

Monthly HR blog Newsletter – March 2024 | Consensus HR, Herts, Beds

Matthew Chilcott General, Newsletter @sg1businessclub, #b, #bedfordshirebusiness, #hertfordshirebusinesses, #hr newsletter, #networkinbeds, #outsourcedemploymentlaw, 3h, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Welcome

In this months blogs recap from a selection of our February 2024, blogs we discuss:

Determining an Individuals Employment Status | Consensus HR – Herts, Beds
Proposal to bring back fees in Employment Tribunals and the EAT | Consensus HR – Herts Beds
Britain has a bigger but sicker workforce than previously thought | Consensus HR – Herts, Beds
Government takes action against ‘fire and rehire’ practices | Consensus HR – Herts, Beds
Manual handling at work: guidance on the law | Consensus HR – Herts, Beds
More than 500 businesses fail to pay minimum wage | Consensus HR – Herts, Beds

Determining an Individuals Employment Status | Consensus HR – Herts, Beds

Summary:

When determining an individual’s employment status, it is always important to return to the tests set down in the law as shown in Plastic Omnium Automotive Ltd v Horton.

Law:

Employment status has been the subject of much debate over the years, and a number of significant cases have been brought in an effort to determine where the line lies when it comes to employees, workers, and those not in an employment relationship.

The legal definition of the various status’ can be found in the Employment Rights Act 1996 (ERA 1996). Section 230. Under this, an “employee” means an individual who has entered into or works under a contract of employment.

A “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

Proposal to bring back fees in Employment Tribunals and the EAT | Consensus HR – Herts Beds:

The Ministry of Justice (MoJ) has launched a consultation into the proposed reintroduction of modest fees in the Employment Tribunals (ET) and Employment Appeal Tribunal (EAT).

With full details available at https://consult.justice.gov.uk/digital-communications/introducing-fees-employment-tribunals-eat, it states that the aim is to contribute to the continuous improvement of the Courts and Tribunals Service and to reduce the cost to the taxpayer to fund these services.

The proposal is to introduce “modest fees” for claimants to bring a claim in the ET and appellants bringing an appeal in the EAT.

Britain has a bigger but sicker workforce than previously thought | Consensus HR – Herts, Beds:

The Office for National Statistics (ONS) has revised its estimates of the size and shape of the UK labour market showing that it has a bigger workforce, with employment up 170,000 compared to previous estimates.

However, the ONS has also highlighted that the number of people economically inactive due to long-term sickness has been revised up from its previous record high of 2.6 million to 2.8 million.

Independent think tank, the Resolution Foundation, explained that ONS’ reweighting of the labour force survey was to reflect the UK population growing faster than previously thought and it confirms that the labour market is bigger but weaker than previous estimates.

Government takes action against ‘fire and rehire’ practices | Consensus HR – Herts, Beds:

A new statutory Code of Practice concerning certain controversial dismissal tactics will, the Department for Business and Trade (DBT) argues, protect workers’ rights whilst respecting business flexibility.

Dismissal and re-engagement, also known as ‘fire and rehire’, refers to when an employer sacks an employee and then offers them a new contract on new, often less favourable, terms.

Business Minister Kevin Hollinrake said: “Our new Code will crack down on employers mistreating employees and sets out how they should behave when changing an employee’s contract.”

It will, he went on, make clear how employers must behave in this area and help to preserve security and opportunity for those in work.

Consensus HR | Your Outsourced HR & Employment Law Dept.

Manual handling at work: guidance on the law | Consensus HR – Herts, Beds:

As an employer, you must protect your workers from the risks of manual handling injuries in the workplace.

You can find help with preventing these sort of risks in your workplace on the HSE manual handling website pages.

There is a range of information and advice for employers, including sections on assessing manual handling and training for workers.

More than 500 businesses fail to pay minimum wage | Consensus HR – Herts, Beds:

More than 500 businesses, including Greggs and Harrods, failed to pay some of their employees the minimum wage, according to a list released by the Department for Business and Trade. The analysis, which covers breaches between 2015 and 2023, shows that recruitment agency Staffline topped the list for failing to pay 36,767 workers correctly, while Estée Lauder failed to pay £894,980 to almost 6,000 workers. The report shows that 524 employers have repaid more than 172,000 workers almost £16m, plus an additional penalty, for breaches in paying the statutory national minimum wage. Kevin Hollinrake, the minister for enterprise, markets and small businesses, said: “Employees deserve to get paid properly for the hard work they put in.” Caroline Harwood, an employer tax partner at BDO, said: “It’s always a bit of a shock to see so many well-known names appearing on HMRC’s list of employers who have been found to be in breach of national minimum wage rules.”

To view more about our range of HR & Employment Law Services

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Are you concerned about your current Contracts of Employment?

The drafting of Employment Contracts – Terms & Conditions of Employment, need to be written to best practice and the law to date. At Consensus HR, all our Contracts are drafted using the latest information from our Chartered Institute – CIPD and then managed correctly and reasonably and best practice with the advice from our Chartered Fellow Members of the tea If your business is concerned that you current Contracts of Employment may not be up to date with current Employment Law or best practice and you would like a free review, give us a call or email now. Consensus HR – Herts, Beds | Your Outsourced HR Department | “Helping companies take the pain out of managing people whilst Preventing People Problems – 01438 576750

In our current Monthly recap HR blog Newsletter – February 2024 we have:

Determining an Individuals Employment Status | Consensus HR – Herts, Beds
Proposal to bring back fees in Employment Tribunals and the EAT | Consensus HR – Herts Beds
Britain has a bigger but sicker workforce than previously thought | Consensus HR – Herts, Beds
Government takes action against ‘fire and rehire’ practices | Consensus HR – Herts, Beds
Manual handling at work: guidance on the law | Consensus HR – Herts, Beds
More than 500 businesses fail to pay minimum wage | Consensus HR – Herts, Beds

Your Outsourced Human Resources (HR) Department.

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28 02 2024

Steel v Spencer Road LLP – Clawback provisions: Restraint of trade | Consensus HR – Herts, Beds

Matthew Chilcott Blog, Employment Law, General #bedfordshirebusiness, #consensus hr, #consensushr, #hertfordshirebusinesses, #outsourcedhumanresources, Business, Business Owners, employment law, Employment Law Update, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

SUMMARY

A clawback provision can disincentivise an employee to resign, but this is not the same as a restraint of trade.

A full copy of the Approved Judgement – Steel v Spencer Road LLP – Clawback provisions: Restraint of trade can be found by Clicking Here. Steel v Spencer Road LLP – Clawback provisions: Restraint / trade

LAW

The restraint of trade principle, which comes from contract law, is based on the idea that an individual should be free to work without undue interference from another party. Contractual terms that appear to restrict this freedom to work or carry out a trade or business must go no further than is necessary to protect an organisation’s legitimate business interests. Where they do, they could be deemed void.

Steel v Spencer Road LLP – Clawback provisions: Restraint / trade – A two-stage test is applied in deciding where a clause breaches the restraint of trade doctrine.

1) Is the clause in fact a restraint of trade; and

2) If it is, is it reasonable with regard to the parties and the public interest?

FACTS

The claimant worked for the defendant for almost seven years prior to his resignation. Over that time, he received a substantial amount in discretionary annual bonuses. In the last year of his employment, this bonus was to the value of £187,500. Shortly after receiving the bonus, the claimant resigned his position to go and work for a competitor of the respondent.

Under his contract of employment, the discretionary bonus was conditional on (1) the employee staying in employment for three months following the payment of the bonus and (2) notice to terminate the contract not being served or given during that three-month period.

In accordance with the above terms, or “clawback provisions”, the respondent requested repayment of the bonus. The claimant refused to do this, and so the respondent served a statutory demand for the full amount of the bonus plus over £12,000 in legal fees.

INSOLVENCY AND COMPANY COURTS (ICC)

In response to the statutory demand, the claimant applied to the ICC, which has the power to set aside a statutory demand if the debt is disputed “on grounds which appear to the court to be substantial”. Central to his argument for why this should happen was that the clawback provisions were an unreasonable restraint of trade, and /or alternatively they were penalty clauses which are unenforceable.

The ICC dismissed the application, holding that the clawback provisions could not be a restraint of trade as defined in law as they didn’t stop the claimant from working elsewhere. Whilst there might be circumstances, the judge went on, where the consequences of a clawback clause are so severe that they would be out of proportion to the benefit received by the respondent, this was not the case here.

The argument that the clawback provisions were penalty clauses was also rejected.

This was appealed by the claimant and the case went before the high court.

HIGH COURT

Looking at the facts of the case, the High Court drew a distinction between a disincentive to resign and a restraint of trade and held that a clause that disincentives an employee from leaving employment does not in itself make that clause a restraint of trade. In this case, the bonus scheme could cause an employee to remain in employment longer than they would have liked to avoid the clawback, but it did not actually stop them leaving or working elsewhere. It just made that option less palatable.

Looking at the clawback provisions alongside other clauses within the contract, including a three month notice period and a thirteen-week post-termination restriction on working for a competitor, the court rejected that argument that all together these acted as a sufficiently strong disincentive to resign that the effect was to act as a restraint of trade. In any event, the claimant had not challenged these provisions.

Note for employers.

Clawback provisions are sometimes used as a retention tool by employers, and this case can reassure employers that where these are applied, they are likely to be enforceable (although as always, each case would be determined on its specific facts). However, employers should avoid using this as their only retention tool, as its use can leave an exiting employee, and those who remain in employment, with a negative impression of the employer and could impact on employee satisfaction and engagement.

This case is a reminder for employers of the usefulness of clawback provisions in discouraging employees from leaving with little or no notice. They can be a strong, but short term, disincentive to an employee resigning and are arguably less likely to be successfully challenged than restrictive covenant clauses that act to prevent the (ex)employee from working elsewhere.

If the government does go ahead with its plans to limit non-compete clauses to three months, as was announced in 2023, employers may come to rely on clawback provisions more than they previously would have. Making sure they are proportionate to the means which they seek to achieve and do not go further than disincentivising an employee from resigning will be important for employers looking to switch to using these as an alternative to a non-compete clause, or alongside them.

HRInform 23-02-24

Click here to read more about Contracts of Employment. Contracts of Employment must be given to an employee on day one of employment.

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27 02 2024

More than 500 businesses fail to pay minimum wage | Consensus HR – Herts, Beds

Matthew Chilcott Blog, Employment Contracts, Employment Law, General, Payrol #bedfordshirebusinesses, #consensus hr, #consensushr, #hertfordshirebusinesses, #minimumwage, #outsourcedemploymentlaw, #payroll, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

The Times

Our HR comment: – More than 500 businesses fail to pay minimum wage | Consensus HR – Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “This never ceases to amaze me, the amount of companies that fail to pay the minimum wage considering our wages are one of the main things we all work for. However, it can also be easier said than done and hence why, the importance of ensuring yearly salary reviews take place, to give businesses the opportunity to make sure all members of the team are paid adequately.

Generally wage increases happen in April each year and is publicised extensively by the Government so as to ensure that all businesses have the information to make any changes needed. The Government has announced the rates of the National Living Wage (NLW) and National Minimum Wage (NMW) which will come into force from April 2024. In doing so, it has accepted in full the recommendations of the Low Pay Commission.

The rates which will apply from 1 April 2024 are as follows:

	NMW Rate	Increase in pence	Percentage increase
National Living Wage (21 and over)	£ 11.44	£ 1.02	9.8%
18-20 Year Old Rate	£ 8.60	£ 1.11	14.8%
16-17 Year Old Rate	£ 6.40	£ 1.12	21.2%
Apprentice Rate	£ 6.40	£ 1.12	21.2%
Accommodation Offset	£ 9.99	£ 0.89	9.8%

Gov.Uk

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26 02 2024

Manual handling at work: guidance on the law | Consensus HR – Herts, Beds

Matthew Chilcott Blog, General, Health & Safety #bedfordshirebusiness, #consensus hr, #consensushr, #Health&Safety, #hertfordshirebusinesses, #manualhandling, #outsourcedemploymentlaw, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

As an employer, you must protect your workers from the risks of manual handling injuries in the workplace.

You can find help with preventing these sort of risks in your workplace on the HSE manual handling website pages.

There is a range of information and advice for employers, including sections on assessing manual handling and training for workers.

You can also find links to a variety of useful resources. These include our free-to-download publications:

At Consensus HR, we provide Health & Safety services by working with our specialist HR suppliers.

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Manual handling at work: guidance on the law | Consensus HR - Herts, Beds

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21 02 2024

Government takes action against ‘fire and rehire’ practices | Consensus HR – Herts, Beds

Matthew Chilcott Blog, Employment Law, General, Recruitment, Redundancy #bedfordh, #consensushr, #Fire, #outsourcedemploymentlaw, #outsourcedhumanresources, #rehire, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Dismissal and re-engagement, also known as ‘fire and rehire’, refers to when an employer sacks an employee and then offers them a new contract on new, often less favourable, terms.

Business Minister Kevin Hollinrake said: “Our new Code will crack down on employers mistreating employees and sets out how they should behave when changing an employee’s contract.”

It will, he went on, make clear how employers must behave in this area and help to preserve security and opportunity for those in work.

A consultation on a draft statutory Code that sets out employers’ responsibilities when seeking to change employment terms and conditions ran from 24 January to 18 April 2023.

The Government has now published its response to the 50 replies it received to that consultation. This can be found at https://www.gov.uk/government/consultations/draft-code-of-practice-on-dismissal-and-re-engagement together with an updated draft statutory Code on dismissal and re-engagement.

This has been laid in Parliament for approval by both Houses and, subject to that approval, it will be brought into effect later in the summer.

Employment tribunals will have the power to apply an uplift of up to 25% of an employee’s compensation if an employer unreasonably fails to comply with the Code.

Head of Public Policy at the Chartered Institute of Personnel and Development (CIPD), Ben Willmott, said: “The Code promotes good practice, making clear employers should always seek to agree any changes to terms and conditions with employees and that ‘fire and rehire’ should only be used as an absolute last resort. It highlights the importance of early and meaningful consultation with employees to maximise the chances of finding alternative solutions which can lead to agreement over proposed changes.”

HRInform – 20-02-24

Our HR Comments: – Government takes action against ‘fire and rehire’ practices | Consensus HR – Herts, Beds

Matthew Chilcott, FCIPD, ACEL, Owner of Consensus HR comments: “The updated draft of the Code for dismissal and re-engagement is an interesting read following the feedback received with the power to award a 25% uplift should an employer not follow the Code. The link provided within this article links to the draft code and the history behind ‘fire and rehire’ and I do not find anything new and should be what any reasonable employer would be following resulting in the correct and legal outcome for the employee(s) involved. Good constructive consultation is key as with all HR and management in general, to ensure a suitable outcome for the member(s) of the team, management and business in general. At Consensus HR, we work with our clients to ensure that any amendments proposed are managed professionally and to best practice.”

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14 02 2024

Employment Law Newsletter February 2024 | Consensus HR – Herts, Beds

Matthew Chilcott Employment Law, General, Newsletter #hertfordshirebusinesses, #outsourcedemploymentlaw, #PWC #outsourcedHR, bedfordshire, Business, Business Owners, hertfordshire, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Welcome

In this Quarters February 2024, Employment Law Newsletter edition we discuss:

The Employment Tribunal considered whether a university professor had been directly discriminated against, harassed and victimised for her gender-critical beliefs.
Employment contract affirmed in a case of constructive dismissal. All the relevant features of the case must be considered, not just the length of any delay
In the case of Holbrook v Cosgrove KC and others [2023] EAT 168, the Employment Appeal Tribunal (EAT) affirmed that extending the time for filing a belief discrimination claim, submitted five months late by an experienced barrister, was not deemed just and equitable.
Flexible working to become a day one of employment right
Pensions – gender pay gap revealed
The Council of the EU publishes AI Act
New guidance for Barristers and KCs using ChatGPT
Fixed fee of £55 is proposed for Employment Tribunal claims and EAT appeals

The Employment Tribunal considered whether a university professor had been directly discriminated against, harassed and victimised for her gender-critical beliefs.

The Employment Tribunal has affirmed the claims made by a former professor against her previous employer, the Open University. The allegations include direct discrimination, harassment, victimisation, and constructive dismissal based on her gender-critical beliefs. Her perspectives, such as asserting that a person cannot alter their biological sex and emphasising the distinction between sex and gender identity, met the Grainger criteria and were protected under the Equality Act 2010.

Professor Phoenix expressed her gender-critical views by co-signing a letter to The Sunday Times in 2019, leading to harassment and direct discrimination by colleagues. In one instance, the Deputy Head of Department likened her to “the racist uncle at the Christmas dinner table.”

In 2021, Professor Phoenix and others established the Gender Critical Research Network (GCRN), an academic research group focusing on sex, gender, and sexualities from a gender-critical perspective. An open letter, signed by 368 colleagues, opposed the GCRN, calling for its closure due to perceived hostility and harm to the trans community. Professor Phoenix filed a grievance of bullying and harassment, citing false allegations of being hostile to trans rights, damage to her professional reputation, and mental health issues, including death threats. Six months after GCRN’s launch, she resigned following a statement from the Vice Chancellor that failed to condemn the campaign against her.

The Tribunal determined that Professor Phoenix had the right to express her beliefs by initiating and participating in GCRN. The publication of the open letter by colleagues, encouraging a “pile on” from others, was deemed harassment based on those beliefs. Several other instances of similar harassment were also upheld. Although the university did not disaffiliate GCRN, it failed to adequately protect Professor Phoenix from harm, fearing support for gender-critical beliefs. Specifically, it neglected to address her grievance while still employed and refused to remove certain online statements. This failure to act constituted harassment, and the decision to terminate the grievance process after Professor Phoenix resigned amounted to post-employment victimisation. The university’s breaches of implied terms of trust and confidence and the duty to provide a suitable working environment resulted in constructive dismissal.

Employment contract affirmed in a case of constructive dismissal. All the relevant features of the case must be considered, not just the length of any delay.

The Employment Appeals Tribunal, EAT has held that a decision to affirm the employment contract in a constructive dismissal claim needs to address all potentially relevant features rather than relying solely on the fact of delay.

The claimant had worked as an academic at a university for 40 years. Between January 2019 and June 2020, he raised concerns with his employer about how it handled various grievance-related issues. In July 2020, the claimant contacted solicitors, and negotiations were made between his solicitor and the university. The claimant identified the failure of the negotiations on 7 September 2020 as the last straw and resigned.

He claimed constructive dismissal. The Employment Tribunal found that the claimant had realised at the end of June 2020 that the university would not help him and that he had affirmed his contract by waiting until 7 September 2020 to resign. The claimant appealed, and the only issue before the EAT was whether or not he had affirmed the contract.

The EAT considered the factors in play from the end of June 2020 to 7 September 2020. It acknowledged that the claimant’s 40 years of service meant that resigning might have involved particular upheaval and distress, potentially taking him some time to decide. In the context that the claimant was a university academic, the EAT also looked at the work he had been doing over the summer holiday period and whether he was doing work of such a nature or significance that continuing to do work itself constituted affirmation. It also considered the point that the claimant hoped that the negotiations over the summer would resolve his concerns.

The EAT held that the tribunal had relied too heavily on the pure fact of delay with insufficient consideration of these other relevant factors. The appeal was upheld and remitted to the same tribunal.

In the case of Holbrook v Cosgrove KC and others [2023] EAT 168, the Employment Appeal Tribunal (EAT) affirmed that extending the time for filing a belief discrimination claim, submitted five months late by an experienced barrister, was not deemed just and equitable.

The EAT concluded that a tribunal rightly denied an extension of time for the claimant to present his belief discrimination claim. The claimant, a barrister with over 30 years of experience, tweeted in January 2021 about a schoolgirl repeatedly sent home due to her Afro hairstyle, gaining media attention. His colleagues perceived the tweet as offensive and racist, resulting in his expulsion from chambers. The claimant, asserting a belief in social conservatism, filed a belief discrimination claim submitted five months beyond the deadline.

The claimant contended that the tribunal should extend the time on a “just and equitable” basis, arguing he believed the case Forstater v CGD Europe and others ET/2200909/2019 (which initially held that Ms Forstater’s gender critical belief wasn’t a protected belief) suggested his claim’s lack of success. He claimed to have read the reversed EAT decision in Forstater v CGD Europe and others UKEAT/010520 two months after publication due to preoccupation with Bar Standard Board (BSB) proceedings.

The Employment Tribunal rejected the claim, deeming it unreasonable for the claimant to rely on a non-binding authority and to delay reading the EAT decision. The claimant appealed.

The EAT upheld the tribunal’s decision, stating there was “no real uncertainty as to the legal position.” Given Forstater’s tribunal judgment was a first-instance decision and the EAT decision was based on established principles, the claimant’s prioritisation of BSB proceedings wasn’t a valid reason for missing time limits. The Tribunal’s assessment of prejudice to the claimant was found without error.

Flexible working to become a day one of employment right

The Flexible Working (Amendment) Regulations (SI 2023/1328) eliminate the necessity for employees to possess a minimum of 26 weeks’ service to qualify for submitting a flexible working request, and these regulations will be effective from 6 April 2024.

The Employment Relations (Flexible Working) Act 2023 received Royal Assent on 20 July 2023. This Act introduces various alterations to the right to request flexible working, notably allowing employees to make two requests (instead of one) within any 12-month period. Additionally, employers must respond to requests within two months, a reduction from the previous three-month timeframe. Commencement regulations will be established to fully implement the Act, accompanied by an updated Acas statutory Code of Practice.

Upon the Act’s passage, the Government declared its commitment to make the right to request flexible working a “day one” entitlement through secondary legislation. The Flexible Working (Amendment) Regulations 2023 were presented to Parliament on 11 December 2023 and will be in effect from 6 April 2024. These regulations annul regulation 3 of the Flexible Working Regulations 2014, which mandated a continuous employment period of at least 26 weeks for an employee to be eligible to make a flexible working request. Consequently, as of 6 April 2024, no prior service requirement will be necessary to submit a flexible working request. These regulations apply to England, Scotland, and Wales.

Pensions – gender pay gap revealed

Research has unveiled a significant disparity between UK women’s and men’s retirement savings. On average, women would need to engage in full-time employment for an additional 19 years to attain a pension pot equivalent to that of men. The study reveals that women retiring at 67 currently possess an average pension savings of £69,000, whereas men have £205,000.

The report, conducted by NOW: Pensions and the Pensions Policy Institute, underscores the need for girls to save at three to match the retirement savings of their male counterparts, especially considering that pension auto-enrolment typically begins at 22. Various factors contribute to this gender pension gap, including caring responsibilities, childcare expenses, career breaks, and lower income.

In response to these findings, NOW: Pensions advocates for governmental action to eliminate the £10,000-a-year earnings threshold for pensions auto-enrolment. This threshold disproportionately affects women working part-time, holding multiple jobs, or working as freelancers. Additionally, the organisation calls for the commencement of auto-enrolment at age 18 and urges the government to introduce a supplementary contribution for individuals who take time off work to care for children or other family members.

The Council of the EU publishes AI Act

The most recent version of the Artificial Intelligence Act has been released by the Council of the European Union, aiming for approval from the European Parliament, which is expected to occur in April 2024. Council approval was granted on 2 February, 2024, following a political agreement reached in December 2023 after an extensive fifth trilogue meeting. This updated text incorporates an analysis of changes made since the previous published versions of the Act. Notable alterations encompass the final definition of an AI system, prerequisites for a fundamental rights impact assessment, restrictions on real-time biometric identification, and regulations for general-purpose AI systems. The European Parliament will review the latest text before a final vote by Members of the European Parliament (MEPs) scheduled for 10 April 2024. Upon approval, the Act is set to come into effect later in the year following its publication in the Official Journal.

New guidance for Barristers and KCs using ChatGPT

The Bar Council has released updated guidelines for barristers regarding utilising ChatGPT and generative artificial intelligence software based on large language models (LLM). These guidelines outline the primary risks associated with LLMs, including anthropomorphism, hallucinations, information disorder, biases in data training, mistakes, and the potential exposure of confidential data during training. Additionally, the guidance delves into considerations for barristers when employing LLM systems: To mitigate possible hallucinations and biases, barristers are advised to verify the output of LLM software and adhere to established procedures for checking generative outputs. The guidelines emphasise that LLMs should not substitute for the exercise of professional judgment, high-quality legal analysis, and the expertise expected by clients, courts, and society. The guidance highlights the risk of disciplinary proceedings, professional negligence, defamation, and data protection claims arising from careless or inappropriate use of LLM systems. Barristers are urged to exercise extreme caution when sharing legally privileged or confidential information with an LLM system, as the input data may be utilised to generate future outputs that could potentially be publicly disclosed. Additionally, barristers should critically evaluate whether content generated by LLMs might infringe on intellectual property rights and avoid using language that could breach trademarks. Staying updated on relevant Civil Procedure Rules is emphasised, as future amendments may introduce regulations or practice directions related to using LLMs. The guidelines conclude that while there is nothing inherently improper about incorporating reliable AI tools to enhance legal services, practitioners must comprehend these tools thoroughly and utilise them responsibly, ensuring accuracy and compliance with applicable laws, rules, and professional codes of conduct. A press release accompanying the guidelines, provided by the Council, further elaborates on these points.

“The growth of AI tools in the legal sector is inevitable and, as the guidance explains, the best-placed barristers will be those who make the efforts to understand these systems so that they can be used with control and integrity. Any use of AI must be done carefully to safeguard client confidentiality and maintain trust and confidence, privacy, and compliance with applicable laws.

“This Bar Council guidance sets out the key risks and considerations and will support barristers using LLMs to adhere to legal and ethical standards. It will be kept under review and practitioners will need to be vigilant and adapt as the legal and regulatory landscape changes.”

Fixed fee of £55 is proposed for Employment Tribunal claims and EAT appeals

The Ministry of Justice (MoJ) has initiated a consultation on the potential reinstatement of fees for Employment Tribunal claims and appeals to the Employment Appeal Tribunal (EAT). The proposed structure involves a fixed fee of £55 for both claims and appeals, accompanied by a fee remission program for individuals meeting specific financial criteria.

Commencing on 29 January 2024, the MoJ’s consultation revisits the concept of fees, previously introduced in 2013 but invalidated by the Supreme Court in 2017 due to its disproportionate impact on access to justice R (Unison) v Lord Chancellor [2017] UKSC 51. The current proposal suggests a modest £55 issue fee for all Employment Tribunal claims, excluding those related to payments from the National Insurance Fund (typically arising from employer insolvency), which would be exempt. This fee remains fixed at £55, irrespective of the number of complaints or claimants on the form. Unlike the 2013 scheme, no separate hearing fee is suggested; the £55 issue fee covers the entire claims process. For EAT appeals, a proposed fee of £55 applies to each judgment, decision, direction, or order being appealed.

The consultation maintains the authority of tribunals to order a respondent to reimburse a successful claimant’s fees through a costs award (rule 76(4), ET Rules).

The MoJ asserts that a £55 fee is reasonable and generally affordable. Claimants falling below certain income and savings thresholds can benefit from extending the existing civil court fee remission scheme, Help with Fees (HwF), to the Employment Tribunal and EAT. The Lord Chancellor is also allowed to remit fees in exceptional cases outside the HwF scheme.

In contrast to the 2013 fees regime, where fees ranged from £160 to £950, the Government acknowledges that the previous structure did not strike the right balance between funding the tribunal system and safeguarding access to justice. The proposed reinstatement of fees aims for consistency with other civil courts and tribunals while generating funds (estimated at £1.3m–£1.7m annually) to invest in Acas dispute resolution, reducing costs to taxpayers. The government anticipates tribunal fees may incentivise parties to resolve disputes through Acas early conciliation.

The consultation period spans eight weeks, concluding on 25 March 2024.

This newsletter does not provide a full statement of the law and readers are advise to take legal advice before taking any action based on the information contained herein’.

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Employee, Worker or Self-Employed … What’s the Difference

07 02 2024

Determining an Individuals Employment Status | Consensus HR – Herts, Beds

Matthew Chilcott Blog, Employment Contracts, Employment Law, General #bedfordshirebusinesses, #consensus hr, #consensushr, #employmentstatus, #herrtfordshire, #hertfordshirebusinesses, #outsourcedemploymentlaw, #outsourcedhumanresources, Business, Business Owners, HR, HR Advice, HR Consultant, HR Consultants, HR Support, outsourcedHR, Small Business, SME, SME's, stevenage

Plastic Omnium Automotive Ltd v Horton – Employment status: Legal test:

Summary:

When determining an individual’s employment status, it is always important to return to the tests set down in the law as shown in Plastic Omnium Automotive Ltd v Horton.

Law:

A “contract of employment” means a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing.

The worker relationship has a number of key characteristics, including the lack of mutuality of obligation between the worker and the employer, and the need to perform the services personally. As a worker, an individual does enjoy some basic employment rights such as statutory sick pay, minimum wage and the right to take paid holiday. The legal test to be applied is as follows:

Has the individual entered into a contract to personally perform work or services for another party to the contract? If not, they cannot be a worker.
Is the other party to the contract a client or customer of the individual’s business? Again, if they are then the individual is not worker.

Facts:

The claimant was engaged through a service company to provide services to the respondent. Along with another, the claimant was a shareholder of the service company from which they drew salary and dividends.

The service company and the respondent had in place a written contract. Under that contract, the claimant could not provide a substitute in his place although in reality, this happened for some time. The contract also clearly stated that there was no employment contract in place and the claimant was not entitled to holiday or sick pay. However, the daily fee charged by the service company for the services of the claimant included a sum in respect of holiday.

Under the arrangements the respondent provided the claimant with the IT equipment needed to perform his role, a company email address and an office access card. He also reported into one of the respondent’s directors, was required to work set hours and attend training provided by the respondent. In essence, the claimant was treated the same as any other employee of the respondent, other than that he was not subject to the appraisal or disciplinary process. He was required to sign in and out of buildings, as did employees of the respondent, and requested leave in the same way as employees.

An issue arose between the claimant and the respondent. The claimant brought a claim before an employment tribunal that he was an employee, or a worker, and that the respondent had unlawfully deducted his wages by failing to pay him.

Employment Tribunal (ET):

The ET held that whilst not an employee, he was a worker because he was integrated into the respondent’s business and the relationship between the claimant and the respondent operated with the claimant in a subordinate position. The respondent provided the claimant with IT equipment, an email address and he was required to work regular hours and report to one of the respondent’s directors.

The claimant was awarded £28,500 in unlawfully deducted wages.

Employment Appeal Tribunal (EAT):

On appeal the EAT disagreed and found that he was neither an employee nor a worker. There was no contract between the claimant and the respondent, so he did not satisfy the first part of the test for worker status which would have required the claimant to have entered into a contract personally with the respondent. The contract in place was between the service company and the respondent and it was reflective of the working relationship between the claimant and the respondent. Also, whilst the claimant was well integrated to the respondent’s company, the EAT found that this did not mean that the other factors should be ignored.

As a result, the appeal was allowed and the EAT concluded that in this case there was no employment status.

Note for employers:

This case is a reminder of the need to always return to the legal test when determining questions of status. The context of this case along with numerous factors could be argued to indicate some form of employment status. So much of the day-to-day operation of the work performed by the claimant for the respondent was similar, even identical to that of the respondent’s own employees. But in returning to the legal test applied to questions of status, i.e. has the individual entered into a contract under which they undertake to personally perform work or services for another party to the contract, and is the other party a client or customer of the individual’s business – it is clear that employment was not at the heart of this contract.

HRInform-Feb24

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