Employment Briefing

Published byMartin Stephen

4th October 2016

G4S Cash Solutions v Powell

Can protecting pay be a reasonable adjustment?

In this case, Powell was a Front Line Maintenance engineer (FLM) working for G4S. Due to lower back problems, he could no longer do this job. He was switched to a position as “key runner” providing support to engineers. This was a newly created role (although it was not created specifically for Powell).

Despite key runners’ rates of pay being lower than those of FLMs, Powell continued on his FLM salary for almost a year. He believed – and indeed was allowed to believe by G4S – that this was a permanent arrangement. However, G4S decided to reduce his pay to the standard rate for key runners (in effect a 10% pay cut) and threatened dismissal if Powell did not accept the reduction.

The Employment Appeal Tribunal (EAT) considered the case in light of section 20(3) of the Equality Act 2010 which imposes a duty on employers to make reasonable adjustments to protect disabled employees.

It found that there was no inherent reason why maintaining a disabled employee’s level of pay when moved to a lower grade position could not be considered a reasonable adjustment. It did not set down a general rule that pay must be maintained, merely that employers must consider whether it would be reasonable to do so. Indeed, the EAT acknowledged that such pay maintenance would not be an “everyday event”.

However, looking at the facts in Powell’s case, the EAT affirmed the initial tribunal’s view that maintenance of pay was a reasonable adjustment. In particular, they had regard to such factors as:-

- The fact that Powell had been paid the FLM salary while working in the key runner role for almost a year – and had been led to believe that this would be a permanent arrangement;

- That the key runner position was new to the business when offered to Powell and that they had a free reign as to the salary at that point; and

- That G4S is a large business which could easily sustain the extra cost of Powell’s salary;

Also of significance, the tribunal rejected G4S’ argument that Powell’s higher salary would cause discontent among other key runners on lower salaries. This argument was described as “unattractive” and it was stated that the discrepancy in wage could be justified to the employees by virtue of a reasonable adjustment being made.

WJM’s Employment Team advise that although this decision may yet be appealed further, it clearly demonstrates the importance to employers of documenting the steps being taken as reasonable adjustments and being clear as to salary throughout.

Are Uber Drivers Workers?

Uber has appeared this month in an employment tribunal test case which may have wide ranging ramifications for modern “sharing economy” businesses.

Nineteen Uber drivers, with the support of the GMB union, are attempting to establish that they are “workers” under employment law. Uber, on their part, contends that the drivers are self-employed contractors.

The difference in status is significant. Workers are entitled to certain rights including holiday pay, TUPE protection, auto-enrolment to pension schemes, the national living wage and protection from discrimination. Self-employed people, however, enjoy virtually no employment rights.

Should the tribunal find in favour of the drivers then there would be a potentially seismic effect on Uber’s business model.

Holiday pay and pension contributions alone would add about 15% to the costs of employing each driver and these costs would no doubt have to be passed on to customers. Furthermore, Uber may find itself replacing Sports Direct on the front pages risking reputational damage.

However, perhaps the most telling issue is that many Uber drivers claim to be earning less than the national living wage (currently £7.20 per hour). In fact, there have been reports that some drivers earn up to £3 per hour less than this.

Uber is estimated to have around 30,000 drivers in London alone (by contrast, the entire company only lists 6,700 employees worldwide). Were the tribunal to side with the drivers, Uber would not only have to pay £7.20 per hour in future, but its drivers would be entitled to two years back pay to the level that they were paid below the minimum wage.

WJM’s Employment Team says it is clear that the current action presents a major threat to the Uber business model. The company is part of a wider trend towards self-employment and the so called “sharing economy” (see also companies such as Deliveroo). This, therefore, is potentially a key juncture both in employment law and the wider economy.

Jeffrey v The British Council

In this case, the EAT considered whether the claimant had a sufficiently strong link to the UK in order to be covered by British employment law and bring his claims before a tribunal.

Jeffrey worked for the British Council in Dhaka, Bangladesh. The British Council is a non-departmental public body with charitable status. It is governed by a Royal Charter and its role is to promote British culture and education throughout the world. Its employees are public servants but are not UK government employees or members of the Civil Service.

The claimant managed a teaching centre. Such centres have operational freedom and do not receive money from UK taxpayers. They are funded by fees raised in the local market.

At first instance, the tribunal judge took the view that the claimant was wholly expatriate and worked for a business carried on and managed locally. Accordingly, it was held that he did not have a sufficient strong link to UK employment law.

In its decision, the EAT held that the first tier tribunal had incorrectly applied the law. The general rule is that an expatriate employee will be required to rely on local employment law. However, this principle can be overcome. What is required is a “comparative exercise”. A tribunal must look at the factors at hand and decided whether these are sufficiently compelling to override the pull of the local jurisdiction in favour of the UK. In such cases, these must be an “overwhelmingly closer connection” to the UK.

The EAT noted the fact that Jeffrey’s contract was governed by the law of England and Wales and that he was recruited in the UK by a British organisation. These, however, were not sufficiently compelling factors on their own.

Three stronger factors were noted by the EAT. The claimant was enrolled in the Civil Service Pension Scheme (despite not officially being a member of the Civil Service), his salary was subject to a notional deduction for income tax and the nature of the British Council as an organisation which is not “directly part of government” but nevertheless plays an important role in the “life of the nation”. Moreover, the EAT noted that Jeffrey’s contract made reference to the Official Secrets Act 1989 which it considered exceptional for someone not employed in the Civil Service, Armed Forces or Security Services.

It was made clear that while the first tier judge did not err in stating that the business was carried on locally, this factor was overwhelmed by the factors pointing to a closer connection to the UK.

WJM’s Employment Team advise that this decision makes clear that previous cases such as Serco do not present an exhaustive list of exceptions to the jurisdictional rules. Further, it provides guidance as to the types of factors expatriate employees may be able to point to when trying to establish UK jurisdiction over their claims.

TUC Reports on Sexual Harassment in the Workplace

The TUC has published a report on workplace sexual harassment which concludes that the problem is “as widespread as ever”.

A poll of 1,500 women found that 52% had been victims of sexual harassment in their place of work. Some 79% of these women never reported this to their employer citing embarrassment, fear over career prospects and a belief that they would not be taken seriously amongst other factors. The report and the full results of the survey are available on the TUC website (https://www.tuc.org.uk/sites/default/files/SexualHarassmentreport2016.pdf).

Sexual harassment is defined by the Equality Act 2010 as “unwanted conduct of a sexual nature” which has the purpose or effect of violating a person’s dignity or “creating an intimidating, hostile, degrading, humiliating or offensive environment”. It can be a one off occurrence or a series of incidents.

Employers are liable for harassment which occurs in the course of employment regardless of their knowledge or approval of the matter. Conduct which takes place at events such as the office Christmas party may also be considered examples of harassment.

The onus, therefore, is upon employers to keep workplaces free of harassment. Accordingly, it is imperative for employers to maintain clear anti-harassment policies which are effectively communicated to staff.

Furthermore, it is essential that line managers and supervisors are properly trained in anti-harassment procedures and are in a position to identify any issues and deal with any complaints in a satisfactory manner.

WJM’s Employment Team advises that we would recommend that employers be mindful of their workplace environment and adopt a zero tolerance approach to harassment issues.

If you have any questions about the above or would like to meet with our Employment team please call Martin Stephen on 0141 248 3434 or email ms@wjm.co.uk