Employment News - What’s Changed? It’s Not Just The Clocks
The Budget announced an increase in the national minimum/living wage from April 2019, which is covered in our handy guide, but the hottest development is the extension of the IR35 regime.
As expected, the government announced that it will extend to the private sector the reforms it has implemented in the public sector to off-payroll working rules (aka IR35). From April 2020, it will become the responsibility of the engaging business to determine whether IR35 applies to the contractors it engages via an intermediary and, if so, to pay tax and NICs on the sums paid to that intermediary for the contractor’s services. Businesses engaging contractors are advised to undertake a review of their current position and implement strategies moving forwards, which could include replacing contractors with employees, perhaps on a fixed-term basis, and using third party contractors to provide a workforce to manage the PAYE risks from the new rules.
The buck absolutely stops with you
Bupa Insurance Services Ltd have been fined £175k by the ICO after an employee stole 547k data subjects’ personal data (which included email addresses, nationalities and names) and tried to sell it online. Systemic failures had left 1.5m records at risk for a long time.
Heathrow Airport Ltd has also been fined £120k following the loss of a USB stick containing personal data (including names and dates of birth) which was found by a member of the public. The data had not been secured. There was neither any encryption nor password protection. Further, the ICO found that: only 2% of staff had data protection training; the company contravened its own policies; and it lacked controls regarding staff and removing data.
The ICO’s position is clear:
Data protection is a boardroom issue. It is imperative that businesses have the policies, procedures and training in place to minimise any vulnerabilities. Personal liability can apply.
To that end, the Court of Appeal has ruled in the Morrisons case that the retailer was legally liable for a former employee leaking the personal information of around 100k staff members. The staff who brought claims are likely to recover significant compensation. That is likely to run into millions of pounds. A summary of the case is set out below, for those who wish to read on.
Mr Skelton (“S”) an auditor of WM Morrison Supermarkets PLC decided to act as he perceived disciplinary action taken against him to be unfair. He copied payroll data relating to some 100k employees to a USB stick and posted their personal details online to a file sharing website. S also sent a CD containing a copy of the data to a few newspapers, who did not publish it, but informed the retailer. The website was subsequently removed.
The High Court upheld a claim brought by circa 5.5k employees. It surmised the company was vicariously liable for S’s wrongful conduct. S’s role was to handle payroll data and there had been a seamless and continuous sequence of events involving the planning and disclosure of the data. This meant there was a sufficiently close connection between S’s job and his wrongful conduct to make the company vicariously liable.
The Court of Appeal dismissed the retailer’s appeal. In its view, S had planned the data disclosure process and it was not disconnected by time, place and nature from his employment. There was an uninterrupted thread that linked S’s work to the disclosure.
It’s a piece of cake, so why is this relevant?
You may be familiar with the “Gay Cake” case (Lee v Ashers Baking Company Ltd & Others). Mr Lee (“L”), a gay man, ordered a cake from a bakery run by Christians who believed that only a man and woman can marry. The cake said “Support Gay Marriage”. The order was accepted then cancelled. L received a refund and apology. The Supreme Court (“SC”) ruled that the bakery was entitled to refuse to bake the cake. There was no discrimination as the objection was to the message, not the individual.
The SC rejected the argument that the message was associated with L’s sexual orientation since it was not inseparable. People of all sexual orientations (including gay, straight or bisexual) can and do support gay marriage. Further, there had been no discrimination on grounds of sexual orientation because the company would also have refused to supply a cake with the same message to a heterosexual customer.
This ruling is likely to create confusion when it comes to workplace clashes. If you are in doubt about whose rights should trump whose (e.g. an employee’s religious belief, which conflicts with another employee’s sexual orientation) it’s vital you have the advice you need in advance to protect your business. We’re always here to help.
Pre-festive warning: company was vicariously liable for Managing Director’s assault
In Bellman v Northampton Recruitment Ltd, the company’s Managing Director (“MD”) assaulted an employee (“B”) after the company’s Christmas party; some staff had moved on to a hotel and were consuming alcohol. The employee was left severely disabled. The Court of Appeal ruled that the company was vicariously liable for MD’s actions. This was on the grounds that even though MD had taken off his managerial hat when he arrived at the hotel, he chose to misuse his position when his decisions were challenged. Despite the time and place of the assault, there was a sufficient connection between MD’s role and the attack to make it just that the employer be vicariously liable.
In terms of what took place, MD became annoyed when challenged by B about the appointment of an employee. He made comments about how he owned the company. He also stated that he made the decisions and paid their wages. B raised the matter again, which led to MD punching him twice. The second serious blow caused B to fall and hit his head. B sustained a fracture to his skull, leading to traumatic brain damage, which resulted in him losing capacity to manage his own affairs.
Homophobic comments = grounds for dismissal
In Faraz v Core Education Trust, the Claimant (“F”) was a Deputy Head Teacher. He was dismissed for making homophobic comments on a WhatsApp group. He stated “These animals are going out full force. As teachers, we must be aware and counter their satanic ways of influencing young people”; “I agree that the BBC will exploit any situation however the problem of homosexuality is rife in Pakistan in the village and the cities”; and “Sign of the end of times”.
F claimed unfair dismissal and direct discrimination on the grounds of his religious belief – he was a practicing Muslim. The Employment Tribunal dismissed the claims.
F had posted homophobic and offensive comments in a public forum, which breached the Teaching Standards and brought the school into disrepute. His comments were unacceptable for a teacher, especially one in a leadership role. Dismissal was within the range of reasonable responses.
The Tribunal also held that F was not expressing a religious belief: his comments went far beyond that and he was not dismissed for doing so.
Directors personally liable for dismissal & circa £2m compensation
The Employment Rights Act 1996 (“ERA 1996”) makes an individual worker liable for subjecting a colleague to a detriment for whistleblowing. The employer can however also be liable.
In Timis and Sage v Osipov, two directors (“T”) and (“S”) summarily dismissed an employee (“O”). The Employment Appeal Tribunal (“EAT”) upheld the Employment Tribunal’s decision that O was unfairly dismissed for whistleblowing, having disclosed that T and S were involved in serious wrongdoing and T and S had subjected O to the detriment of dismissal contrary to the ERA 1996. Compensation was recalculated at some £2m.
On appeal, the Court of Appeal agreed with the EAT. An employee can bring a claim against an individual co-worker for being subjected to the detriment of dismissal. A claim based on such a distinct prior detrimental act done by a co-worker allows for recovery from that worker for losses flowing from the dismissal.
Employer entitled to reduce disabled employee’s sick pay
The Claimant, Miss Browne (“B”) suffered from asthma. She brought a claim against The Commissioner of Police of the Metropolis, alleging disability discrimination. During one absence, her pay was reduced in accordance with the sick pay policy, which entitled employees to full pay for a finite period, followed by half pay and unpaid sick leave. There was a procedure for extending the period of paid sick leave. B was encouraged to apply for this extension. She failed to do so in line with policy requirements and her sick pay was reduced. The Employment Appeal Tribunal held that there was no discrimination; the policies were flexible and included a mechanism to consider individual circumstances, which had clearly been drawn to B’s attention and B was informed in writing as to what would happen if she did not apply. (Browne v The Commissioner of Police of the Metropolis).
Should you need solutions on how to deal with any of the issues raised please feel free to contact Bhavna Patel.
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