in-depth

Technical update - January/February 2018

Andrew Macmillan

All terms equal

Issue

The Agency Worker Regulations 2010 provide that employees supplied to work from an agency should have certain rights in respect of access to collective facilities and from 12 weeks should receive the same ‘basic working and employment conditions’ as those employees who are directly employed by the hirer. In Kocur v Angard Staffing Solutions Ltd the question arose as to whether it had to be assessed on a term by term basis, or if an overall package approach could be taken.

Facts

Mr Kocur was an agency worker in Royal Mail. After 12 weeks’ service he claimed that he had the right to the same holiday and rest breaks as the Royal Mail employees. They were given an hour’s paid break on a night shift and could take 30.5 days paid holiday per year. He had only half an hour’s paid rest break and was only entitled to 28 days holiday. The claim was resisted on the grounds that he was paid more than Royal Mail employees. He had an hourly rate of £10.50 per hour in comparison to their £9.60 per hour. This extra pay more than made up for having fewer paid holidays or breaks.

Decision

It was acknowledged that the statutory entitlement was to ‘the same’ basic working and employment conditions. However it was not considered that it was the intention of Parliament to allow an agency worker to be treated less favourably in respect of the small set of specified terms and conditions to which the Regulations applied, when it set them out. Those terms and conditions included holidays and rest breaks. To ensure the agency worker’s entitlement was the same, a term-by-term approach should be taken. The agency could not offset a failure to confer a specific entitlement with a higher rate of pay.

Action

It may still be possible to have a different payment arrangement in place, for example the agency worker could be paid for his or her identical holiday entitlement by means of a lump sum at the end of the assignment, or by means of a higher, rolled-up hourly rate. Even though different to a comparable directly recruited employee, the result would be that the agency worker would be paid at least that which was paid to employees in respect of the same holiday entitlement and there would be no breach. The key step is to ensure that pay arrangements are transparent and the agency worker is able to ascertain precisely what aspect of his or her remuneration is related to annual leave.

 

 

Redundancy during maternity

Issue

Protection against less favourable treatment on the grounds of pregnancy and maternity is provided in both UK and EU law. In the Spanish case of Porras Guisado v Bankia SA, the European Court of Justice (ECJ) was asked to clarify the extent of this protection and whether it would prevent an employer from making a pregnant employee redundant during a collective redundancy exercise.

Facts

The Spanish company had opened a period of collective consultation with workers’ representatives regarding proposed redundancies. An agreement was reached, setting out the criteria to be applied in selecting those workers to be dismissed and those who were to be retained. Ms Guisado was informed that she had been selected for redundancy as she had one of the lowest scores in the assessment process. Ms Guisado challenged her selection on the grounds that she was pregnant.

Decision

The Spanish national court referred the case to the ECJ to interpret the EU prohibition on the dismissal of pregnant workers. The Advocate General’s opinion suggested a collective redundancy situation may not necessarily justify dismissal. However the full Court held that selection for reasons unconnected with the worker’s pregnancy would not be contrary to EU law, as a collective redundancy situation was one of those exceptional cases where a pregnant employee may be dismissed.

Action

The Advocate General’s opinion last year had caused some concern that UK law may not have provided sufficient protection for employees who were pregnant or on maternity leave. The decision of the full court has confirmed that the protection is compliant. In practice, employers need to ensure that pregnancy/maternity leave has no impact on the selection process and that if selected the employee is offered any suitable alternative position that is available in preference to others.

 

 

Collective consultation triggers

Issue

Where it is proposed to make 20 or more employees redundant within a 90 day period, the duty to collectively consult representatives of the employees is triggered. At what stage in the process the employer ‘proposes‘ making employees redundant can be difficult to identify. There may still be a number of options that are available, but as was seen in the recent case of Keeping Kids Company (in compulsory liquidation) v Smith and others, consultation may be triggered at an early stage.

Facts

Keeping Kids Company was a charity in financial difficulty. On 12 June it applied for a grant of £3 million to save it from closure. It put forward a business plan for restructuring through which it could continue to operate, but with only half the existing staff. On 29 July it was informed that the application had been successful, only for the decision to be reversed the following day when news of a police investigation into safeguarding issues was leaked to the press. The charity immediately closed and claims were made by the redundant staff that there had been a failure to collectively consult.

Decision

The Charity had argued that there had been special circumstances which meant that collective consultation had not been possible. If it had not been for the press story and withdrawal of the grant it would not have shut down. However it was held that there had been a failure to collectively consult as the obligation had arisen much earlier than that. It had been clear when the application for a grant had been made that there was a proposal to make a substantial number of redundancies.

Action

It is important to take into account the duty to collectively consult as the financial penalties can be significant. The Employment Tribunal may award up to 90 days’ pay for each redundant employee. From the facts here it did not matter that the business plan had not identified which employees were to be made redundant when an application for a grant was made. The ‘special circumstances’ defence could not help as the obligation to consult had already crystallised. The later events would only be relevant in relation to the amount of the award.

 

 

Quick call out

Issue

Generally, where a worker is required to be physically present and available at a place determined by the employer, it will be regarded as ‘working time’. In contrast, if a worker is just required to be available but not at a particular location – at home for example – it is not regarded as working time. However, the case of Ville de Nivelles v Matzak showed that in some circumstances, even time spent at home on-call could be considered working time.

Facts

Mr Matzak, a firefighter in Belgium, was required to be on stand-by for one week out of every four, during the evenings and at the weekend. When on stand-by duty he had to remain contactable and, if necessary, report to the fire station within eight minutes. Mr Matzak claimed that he should be paid for time spent on stand-by duty. The case was referred to the European Court of Justice (ECJ) to clarify whether the EU Working Time Directive prevented stand-by time at home from being treated as working time.

Decision

The ECJ held that whilst a requirement to be contactable would not be sufficient to amount to working time usually, the facts here showed that Mr Matzak was not simply required to be contactable but also to respond to calls within eight minutes. In order to comply with this requirement he had to remain in close proximity to the workplace. It was therefore a case where the employer had determined the place where the worker had to be physically present, even if that place could be his home rather than the workplace.

Action

On-call arrangements should be reviewed in light of this decision. Are there geographical and temporal constraints placed on the worker during a period of time that they are on stand-by? There may be a requirement to report in as soon as possible. However, that would still provide a certain amount of flexibility. The test according to the ECJ is whether the arrangement objectively limits the opportunities of the worker to pursue personal and social interests.

 

 

TUPE reason for dismissal

Issue

Following a review of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE), changes were made in 2014 that were intended to ensure that the restrictions on businesses during a transfer were no wider than the minimum required under EU law. This meant that dismissal of an employee would no longer be automatically unfair if it was connected to the transfer; it had to be that the dismissal was because of the transfer. The case of Hare Wines Ltd v (1) Kaur (2) H&W Wholesale Ltd (Dissolved) shows that despite the changes this still has a wide application.

Facts

Mrs Kaur was employed as a cashier by H&W, which ran a wine and beer wholesale business. H&W fell into financial difficulties and a sale of the business was agreed to Hare Wines. All the employees were interviewed before the transfer. During Mrs Kaur’s interview there was a discussion concerning her strained relationship with her manager Mr Chatha. Following the meeting, Mrs Kaur was informed that due to the business ceasing to trade she would no longer be employed. All the other employees transferred to Hare Wines. Mrs Kaur claimed that she had been automatically unfairly dismissed.

Decision

It was found that Mrs Kaur had not transferred because of the “ongoing difficulties” in the working relationship with Mr Chatha. However the existence of ‘purely personal reasons’ did not mean that the dismissal was not because of the transfer. Whilst the relationship difficulties had been ongoing, there had been a failure to address them until the transfer was taking place. Given that timing, it was considered that the transfer was the stronger reason for the dismissal.

Action

The decision highlights the risk of allowing workplace problems to remain unaddressed. If they are not confronted it can only cause future problems, as seen in this case. If steps had been taken to resolve the problems beforehand, a different decision may have been reached. Addressing the issue only on the transfer of the business will carry more of a risk, as TUPE aims to protect worker’s rights at this time.

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Andrew Macmillan

Andrew Macmillan

Partner

Andrew is a specialist employment lawyer, with a particular focus on contentious work such as reorganisations, redundancies, employment aspects of insolvency, executive severance, employment relations issues and employment tribunal litigation.