JANUARY – EMPLOYMENT LAW BULLETIN

Martin Stephen

Published by
Martin Stephen

18th January 2017

Welcome to January's Employment Briefing. This month topics include immigration and the right to work in the UK, another gig economy case, the importance of European Union law in UK employment and the failure of employment tribunal fines.

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

Baker v Abellio London

Baker, the claimant, had been working for Abellio for two years. He had immigrated to the UK as a child and has the right to live and work here indefinitely. However, under the Immigration, Asylum and Nationality Act 2006 and the Immigration Act 1971, he was required to provide documents to his employers which prove his right to work in the UK.

Abellio carried out this check 2 years into Baker’s employment with them. The only documentation which Baker could produce was an expired passport with his right of abode endorsed thereon. In the tribunal’s view, Abellio were generous in their behaviour toward Baker. They loaned him £350 toward the cost of obtaining a new passport and biometric residence permit (the latter of which now records the right to abode). They kept him aware of the processes being followed by asking him to show proof that he had applied for new documents and warning him of the risk of dismissal.

Baker, however, failed to take steps to order a new passport and was subsequently dismissed with the right of appeal. Baker claimed that this was unfair dismissal. The tribunal, however, disagreed. Ultimately, it is the employee’s responsibility to ensure that he has the correct documentation available and so his employers were entitled to let him go.

This is a decision which looks curious on some levels. Firstly, it seems to be directly contradictory to other immigration rules. Individuals entering the UK can rely on expired passports with right of abode endorsements thereon to prove their right to enter the UK. It would perhaps be more logical for the immigration and employment rules to be harmonised.

Secondly, questions arise regarding the loan which was offered to Baker. Will tribunals now expect to see evidence that the employer offered assistance with the cost of documents? If so, this may make individuals with the right to work here less attractive to employers.

WJM’s employment team believes that this is a case which turned on its own facts. Abellio behaved in an accommodating manner throughout and an employer behaving less exemplarily may well have been met with a different decision. As a matter of good practice, immigration checks ought to be carried out straight away and at regular intervals to ensure that both employer and employee are not caught out at a later date.

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Dewhurst v City Sprint (UK)

This case is the latest judgement regarding the status of those working in the gig economy. Dewhurst was engaged as a cycle courier by City Sprint. This followed a two day recruitment exercise consisting of an assessment, entering an employment agreement via an online tick box system and an induction course.

Dewhurst was said to be a contractor under the terms of her contract. The contract was non-exclusive and gave Dewhurst discretion as to when she was available to take on jobs and how she would carry them out (e.g. she was free to set her own route). City Sprint was not obliged to offer jobs and Dewhurst was not obliged to accept them. Moreover, the courier had the right to subcontract jobs. On the face of it, this would appear to be a less restrictive arrangement than some offered by similar companies like Uber.

Nevertheless, Dewhurst brought a claim before the London Employment tribunal in respect of two days unpaid holiday pay. The tribunal judge upheld the claim and found that Dewhurst had the status of worker.

Among other things the judge gave weight to the fact that invoices were generated by the courier company and not the courier; the right to sub-contract was impossible in practice due to the conditions placed on the courier and so amounted to no more than a paper right; the company, in practice, exercised control over the couriers’ working patterns and the couriers did not have the opportunity to develop their business as ultimately it was City Sprint who allocated jobs.

What is perhaps most noteworthy is the tribunal’s view of the contract in question. Whilst a contract’s express terms are always important, courts and tribunals will look beyond the strict terms. The tribunal in this case viewed the contract as being drafted in legalistic terms to conceal the true arrangement which existed between the parties.

This is an interesting development in what is likely to become a lengthy list of gig economy cases. It indicates that the courts and tribunals are willing to take a tough line with such employers. At first glance, City Sprint’s arrangements would appear to address some of the concerns raised regarding Uber in its tribunal case last year. Judges appear to be looking at whether self-employer contractors in the gig economy are truly free to run and develop a business and that is proving a very tough test for these companies to meet.

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Govia GTR Railway v ASLEF

Those who have followed the news of late will have noticed the ongoing dispute between the train workers’ union ASLEF and the operator of Southern Rail, Govia. The operator wants to introduce driver only operation trains which would eliminate the need for a guard and put the driver in charge of operating the doors. The union objects believing that this is an unsafe system which will put excessive strain on drivers. ASLEF called a strike ballot in which over 90% voted to walk out on a 75% turnout.

Govia applied to the High Court seeking an injunction to stop the strike action. They relied on Articles 49 and 56 of the Treaty on the Functioning of the European Union (TFEU) which provide for the right to freedom of establishment for EU companies in other member states (Govia is party French owned) and the right for EU citizens to provide and receive services in other member states (the rail network affected served Gatwick Airport and Govia contended that this would impinge on EU citizens’ ability to travel and use services). Govia argued that, in light of these freedoms, British labour law could not allow the rail strike whilst remaining compatible with EU law.

Perhaps unsurprisingly the High Court did not find favour with Govia’s arguments. It was held that the right to strike is also a fundamental right in EU law and that it is the actual object of the strike which is relevant rather than any damage caused by it. The object of the strike, in this instance, was a domestic industrial dispute and so there was no breach of Article 49. As to Article 56, the Court found that this argument, if successful, would totally undermine the right to strike and leave Unions with potentially open ended liability.

WJM’s employment team’s view is that this case demonstrates the continued importance of European Union law in UK employment and labour relations laws. In spite of the vote in favour of Brexit, EU law based arguments will continue to be made in our courts for some time and our Courts will continue to apply the fundamental principles of EU law.

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Failure of Employment Tribunal Fines

Embarrassing new figures have revealed the failure of the Government’s Employment Tribunal fines scheme. Introduced 3 years ago, Employment Tribunals were handed the power to levy fines on rogue employers in cases where aggravating factors were in play.

Pre-introduction estimates from the government had claimed that this would generate £2.8 million of fines annually, In fact, since April 2014 only £18,000 worth of fines has been levied. This comprises 18 individual fines, a number of which remain unpaid or have been written off due to insolvency events.

Opposition parties have pinned this failure squarely on the government. The Green Party leader and Brighton MP Caroline Lucas said that: “the most likely explanation for the imposition of just 18 penalties is that the tribunal fees introduced in 2013 have eradicated exactly the kind of tribunal claim that ministers had in mind when they came up with the idea: a relatively low-value claim, because the claimant is low-paid, against a rogue, exploitative employer”.

A government spokesman countered that it is a matter for individual employment tribunal judges to decide whether to impose a fine and stated that the impact of tribunal fees would form part of the Department for Business, Energy and Industrial Strategy’s upcoming review into the Employment Tribunal system. 

WJM’s employment team feels that we ought to be braced for further reform in the Employment Tribunal system. These figures show the failure of the current approach and are at odds with much of the Prime Minister’s rhetoric since taking office. Reductions in the fee regime may be in the offing in the near future and this would almost certainly lead to an increase in the number of cases going to tribunal.

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