Employment Law Review - June 2019

Welcome to our June Employment Law Review

In this bulletin we look at: the recent ruling that requires employers to keep a detailed record of actual hours worked by employees; whether it is discriminatory to pay women on maternity leave more than men on shared parental leave; the impact of new information coming to the employer's attention at an appeal hearing; injury to feelings awards; and, a brief overview of the process when a trade union is requesting recognition for the purpose of collective bargaining. We also have some interesting news for those of you who fancy becoming a Tribunal wing member!

• Employers must have a system for measuring daily working hours of all workers

The European Court of Justice (CJEU) in CCOO v Deutsche Bank has ruled that employers must have a system for measuring the daily and weekly working hours of all workers. This decision raises concerns that the UK's record keeping requirements under the Working Time Regulations (WTR) do not comply with the requirements of the Working Time Directive.

• Is it discriminatory to pay a woman more than a man during shared parental leave?

The Court of Appeal in Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextall has said that it is not unlawful sex discrimination to pay women on maternity leave more than men on shared parental leave (SPL).

• Dismissal could still be discriminatory even if the employer did not know of disability until appeal hearing

In Baldeh v Churches Housing Association of Dudley and District Ltd the Employment Appeal Tribunal (EAT) held that a dismissal may still be discriminatory in the circumstances where the employer did not have knowledge of the employee's disability until the appeal hearing.

• Increase in injury to feelings award guidelines

The Vento bands ­− which employment tribunals use to assist them when making injury to feelings awards in discrimination claims - have been updated. For cases presented on or after 6 April 2019 the bands have been increased

• Understanding a trade union recognition request

The Guardian has reported that online fashion retailer, Boohoo, has refused a request by the trade union, Usdaw, to discuss recognition. This raises the issue of what a request for recognition looks like if you are an employer. In this article we take a brief look at the recognition process.

 

HR seminar series - Age: managing changing demographics in the workforce

As the population ages, so does the workforce. Particularly following the abolition of the default retirement age and employees working longer to fund this next stage in their lives. Our Summer HR update seminars will provide practical insights into managing an ageing workforce. From a legal perspective we'll cover areas such as age and disability discrimination, flexible working, performance management, pensions and benefits. Case studies will be used to illustrate key points and provoke discussion. Find out more here.

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Employers must have a system for measuring daily working hours of all workers

The European Court of Justice (CJEU) in CCOO v Deutsche Bank has ruled that employers must have a system for measuring the daily and weekly working hours of all workers. This decision raises concerns that the UK's record keeping requirements under the Working Time Regulations (WTR) do not comply with the requirements of the Working Time Directive.

The WTR regulates working time in the general workforce and requires an employer to keep “adequate records” to demonstrate compliance with the 48 hour average working week limit and protections for night workers. Health and Safety Executive (HSE) guidance sets out that it is not necessary to create records specifically for the purpose of complying with the WTR and that an employer may be able to use records maintained for other purposes (e.g. pay). A failure to keep appropriate records is a criminal offence enforced by the HSE.

In this particular case, CCOO, a Spanish workers' union, brought an action which sought a declaration by the Spanish Court that Deutsche Bank was under an obligation to set up a system for recording the time worked each day by its staff. The matter was referred to the CJEU.

The CJEU said that an accurate record of hours worked was required to know if the employer had complied with its obligations; and, to place the worker in a better position to challenge any non-compliance. It stated that an objective and reliable determination of the number of hours worked each day and each week is essential in order to establish whether the maximum weekly working time limit was complied with and whether the minimum daily and weekly rest periods were met.

 

Practical points

Under the WTR there is currently no requirement to keep a record of the daily and weekly hours actually worked. There is also no requirement to keep records showing the employer is complying with the daily and weekly rest break requirements. As a result the WTR does not appear to comply with the Working Time Directive in view of this decision. It is now likely that the Tribunals and HSE will interpret the WTR in line with this decision. Many employers will already record actual hours worked - particularly if workers are paid by the hour - but many will not. In view of this decision it is advisable for employers to review their internal record keeping system and - if necessary - ensure they have in place an “objective and reliable” system to measure actual hours worked by individuals.

 

Is it discriminatory to pay a woman more than a man during shared parental leave?

The Court of Appeal in Ali v Capita Customer Management Ltd and Chief Constable of Leicestershire v Hextall has said that it is not unlawful sex discrimination to pay women on maternity leave more than men on shared parental leave (SPL).

 

Background

During maternity leave, statutory maternity pay (SMP) is available for 39 weeks and for the first six weeks is payable at the higher rate of 90% of the mother's average weekly earnings, or the prescribed rate (currently £148.68). For the following 33 weeks it is paid at the lower of those two rates. SPL pay is available for a maximum of 37 weeks (i.e. after the two week compulsory maternity leave period). The weekly entitlement is the lower of the statutory rate (currently £148.68) or 90% of the partner's average weekly earnings. However, employers often choose to pay more than the statutory minimum amounts. In this case, the two employers paid enhanced maternity pay of full pay for 14 and 18 weeks respectively before dropping down to SMP. However, both employers only paid SPL pay at the statutory rate. As a result, two male employees brought claims alleging that paying men on SPL at a lower rate - during the enhanced period - than women on maternity leave, amounted to sex discrimination. The employees brought a number of different claims. The Court looked at claims of direct and indirect sex discrimination as well as an equal pay claim.

 

Direct discrimination

A key issue in the case related to the underlying purpose of maternity leave and SPL. It was argued by the employees that after the two week compulsory maternity leave period, the purpose of both maternity leave and SPL is to enable parents to look after their new born child. The Court disagreed with this. Whilst the purpose of SPL was to enable parents to look after the baby, the purpose behind maternity leave was much broader and includes safeguarding the health and safety of the mother. In the Court's view, the introduction of SPL did not change the underlying reason for maternity leave.   As a result of this, women on maternity leave are materially different from men and women taking SPL. The Court considered that enhanced maternity pay amounted to “special treatment afforded to a woman in connection with pregnancy or childbirth”, meaning that under the Equality Act 2010 (EA 2010) it was not something that could be taken into account when deciding if a man had been subject to direct sex discrimination (i.e treated less favourably than a woman because of his sex).This meant that for the purpose of direct discrimination a man on SPL could not compare himself to a women on maternity leave. On that basis, a claim of direct sex discrimination could not succeed.

 

Equal pay

As there was a contractual difference in SPL pay and enhanced maternity pay the Court of Appeal held that this type of claim could be characterised as an equal pay claim. However, the EA 2010 provides that the sex equality clause implied into contracts of employment does not apply when terms being challenged afford “special treatment to women in connection with pregnancy or childbirth”. As we have already seen, the Court considered enhanced maternity pay to fall within this exception.

 

Indirect discrimination

As the claim was properly one of equal pay no claim of indirect discrimination could be brought in any case. However, the Court went on to say that even if an indirect sex discrimination claim could be brought, it would fail. The reason for this being that as a woman on maternity leave was materially different from a man on SPL and would be excluded from the pool for comparison. The Court went on to say that even if it was wrong on this point, it would find that any disadvantage suffered by the Claimant could be justified as being a proportionate means of achieving a legitimate aim, namely the “special treatment” mentioned above.

 

Comment

The fact SPL is not yet widely taken means this is not a problem many employers have had to deal with in practice. However it is a question often raised by employers. It is helpful to now have a decision from the Court of Appeal which confirms that an employer does not have to enhance SPL pay (to men or women who take SPL) just because it pays enhanced maternity pay to a woman.

 

Dismissal could still be discriminatory even if the employer did not know of disability until appeal hearing

In Baldeh v Churches Housing Association of Dudley and District Ltd the Employment Appeal Tribunal (EAT) held that a dismissal may still be discriminatory in the circumstances where the employer did not have knowledge of the employee's disability until the appeal hearing. If an employer did not know and could not reasonably have known about an employee's disability it will not be liable for claims of direct disability discrimination, discrimination arising from a disability or the failure to make reasonable adjustments. In this case, Mrs Baldeh had brought a claim that her dismissal amounted to discrimination arising from a disability. The Employment Tribunal found that she did have a disability (depression) but that her claim of discrimination arising from a disability failed because the employer had no actual or constructive knowledge of the disability at the time of the decision to dismiss, which the Tribunal treated as the act of alleged discrimination. The Claimant subsequently appealed the Tribunal decision to the EAT. The EAT allowed Mrs Baldeh's appeal. It found that although the employer did not know about her disability at the time of dismissal, it may have acquired actual or constructive knowledge of it before rejecting her appeal. Importantly, the EAT found that the appeal formed part of the unfavourable treatment of which Mrs Baldeh was complaining and that it was not just limited to the dismissal itself.

 

Practical point

What this case does show is just how important an appeal can be to the overall lawfulness of the dismissal. The EAT's view was that the appeal against dismissal is “integral to the overall decision to dismiss”. This is true in this case in relation to determining whether the employer had knowledge of the disability. However, more widely, it is a reminder that an appeal should never simply be a “rubber stamping” exercise. An employer should treat the appeal as an opportunity to remedy failings in the dismissal process, consider new issues that arise (as one did here) and, if appropriate, be willing to overturn the original decision to dismiss.

 

Increase in injury to feelings award guidelines

The Vento bands ­− which employment tribunals use to assist them when making injury to feelings awards in discrimination claims - have been updated. For cases presented on or after 6 April 2019 the bands have been increased as follows: Lower band (less serious cases) - £900 - £8,800Middle band (cases that do not merit an award in the upper band) - £8,800 - £26,300Upper band (the most serious cases) - £26,300 - £44,000Although for exceptional cases the award could exceed £44,000.

Understanding a trade union recognition request

The Guardian has reported that online fashion retailer, Boohoo, has refused a request by the trade union, Usdaw, to discuss recognition. This raises the issue of what a request for recognition looks like if you are an employer. In this article we take a brief look at the recognition process.

 

What is recognition?

A recognised trade union is entitled to conduct collective bargaining in relation to pay, hours and holidays for workers within a bargaining unit (i.e. a group of workers - both union and non-union members typically identified by role).

 

When can a TU request recognition?

A request can be made by a trade union at any time. The initial request is usually on an informal basis and the parties are free to agree recognition and the scope of any recognition on an entirely voluntary basis. However, if the trade union make a valid request for recognition in accordance with the statutory rules, the recognition process and nature of any recognition would be governed by the statutory rules.

 

What is the process for seeking statutory recognition?

A valid request must be in writing and comply with the statutory rules. In order for a valid request to be made, the employer (taken with any associated employer) must also have at least 21 employees at the time the request is made. In the first instance the employer and trade union can still agree the bargaining unit, recognition and the process for collective bargaining after a request has been made under the statutory rules. However, if they cannot reach agreement on any of these issues an application can be made to the Central Arbitration Committee (CAC) to determine them.

Once a valid request is made, and before the trade union can make an application to the CAC, there are certain time frames (set out in the statutory rules) that an employer and the trade union must be aware of:

• On receiving a valid request the employer has 10 working days to agree to the request, indicate if it is willing to negotiate or reject the request. If it agrees to the request the trade union is recognised for the purpose of collective bargaining; if it rejects or ignores the request the trade union can then apply to the CAC.

• If the employer indicates that it is willing to negotiate, the parties then have a further 20 working days (or longer if the parties agree) to negotiate. If, within 10 working days of agreeing to negotiate, the employer proposes that ACAS be asked to assist with negotiations, the trade union must agree to this request within a further 10 working days otherwise it will be prevented from referring the matter to the CAC.

What does the CAC do and when will it order recognition?

Amongst other requirements, which we will not go into here, before accepting an application from the trade union, the CAC must be satisfied that 10% of the proposed bargaining unit are trade union members and a majority of the workers in the bargaining unit will be in favour of collective bargaining. Providing the statutory rules for making an application to the CAC are satisfied, the CAC can decide on the appropriate bargaining unit if the parties cannot. It can then determine if the majority of workers in the bargaining unit support recognition. The CAC can also specify the method for collective bargaining if the parties do not agree.

Once there is a bargaining unit in place, whether by agreement of the parties or as decided by the CAC, the next question is whether the majority of the workers in the bargaining unit support recognition. If the majority of workers in the bargaining unit are trade union members, the CAC must declare that the trade union is recognised for the purpose of collective bargaining, unless certain conditions are satisfied which mean it must still organise a secret ballot. If the majority of workers are not trade union members the CAC will arrange a secret ballot. The majority of workers voting and at least 40% of all those in the bargaining unit must support recognition before the CAC can declare that the trade union is recognised following a ballot.

 

Practical point

This is a very brief overview of the recognition process but hopefully it gives you a flavour of how a recognition request could proceed. It is unlikely that a trade union request for recognition will come out of the blue. Typically it will try to build support for recognition and seek to engage with the employer over many months or even years before making any formal request. If a trade union does indicate that it is seeking recognition it is advisable for an employer to seek legal advice at the earliest opportunity in order to understand the process and what recognition would mean for its business.

 

 

Only a few days left if you would like to become an Employment Tribunal panel member!

The Employment Tribunal is looking to recruit 340 non-legal (wing) members. A panel consists of two non-legal wing members sitting alongside legally qualified employment judge. Non-legal wing members are required to have workplace experience from an employer or employee perspective. For example, from a HR or trade union background.

If this is of interest you can find out more, but do hurry as the deadline for applications is 14 June 2019!