Employment Law May 2020

Legal claims: if employers’ do not get safety at work right!

Introduction

The government has provided its 50 page guideline to assist employers and employees in terms of easing the lockdown and beginning to encourage people to return to work when necessary. Further, specific guidance is to be issued today.

Employees can look at s44 of the Employment Rights Act 1996 to learn about when they can withdraw their labour because they do not feel safe in the workplace. S44 enables an employee to refuse to work in an unsafe environment. This article is not about that today.

In this article, we are making assumptions, things have gone wrong. Employees contracted Covid 19 in your workplace and they can prove it! Some staff have managed to survive and others have died.

We will therefore simply look at the potential liabilities of an employers.

1.      Health and safety

The Health and Safety executive may pursue a criminal claim against you as an employer if you are in breach of your duty to  look after the health and safety of your employees.

Employees have a duty to look after themselves at work, but as an employer, you are responsible to ensue that you do as much as possible to ensure that they are safe. In the current climate it is thus important to look at what WHO is saying about Covid 19 as well as the national government, I would also get a health and safety executive (independent consultant) to help.

You, as the employer will have employment liability insurance. Insurers want you to avoid risk , so not only look at WHO and any government guidelines. Speak also to your insurers who may have their own guidance.

Not only are you at risk of criminal liability if you get things wrong, there is also the civil liability.

 2.      Civil Claims

2.1   Negligence

This is the most obvious potential claim. You owe a duty of care; you are in breach of that duty as an employer. Your employee has suffered loss and damage as a result of your negligence. Your failure to deal with the pandemic in your workplace properly, accordingly your employees have caught the illness at work and can prove it. Under these circumstances, your failure to protect your employees from Covid 19, will make you liable. Due to the fact that this illness is so contagious, more than one member of staff ill, will increase your liability.

 2.2   Employment law

Under the employment law, employees may use s44 and refuse to return to work. They can issue a claim for breach of the health and safety regulations using s100 of the Employment Rights Act 1996. It is automatic unfair dismissal, if a member of staff brings a health and safety claim against an employer.

There are other potential employment law claims, constructive unfair  dismissal, because of breach of the implied term of mutual trust and confidence if you have not dealt with Covid 19 properly. Employees also concerned about poor prevention policies, may be forced to whistle blow to the relevant authority, such as the health and safety executive. Thus you are at risk of an expensive whistleblowing claim.

3.      Occupiers liability

This old piece of legislation may be dusted down and used because it imposes liability when individuals ( cleaners, postman, visitors) are harmed because they have entered your premises and contracted Covid 19.

4.      Personal Injury

Personal injury claim may be pursued because an employee became ill at work and died. Some lawyers will be happy to deal with such a claim on the basis of a ‘no win, no fee’.

 Conclusion

From the above, it is clear that you must take the health and safety of employees and any visitors seriously. This would involve:

  1.      Reading any WHO and government guidelines

2.      Talking to your insurers as they may have already considered what can be done to reduce risk. Similarly, some professional bodies may be providing members with additional guidance.

3.      Ensuring you carry out a risk assessment.

4.      Ensure you carry out a risk assessment (this not a typo, it is here again for you to take it very seriously!).

5.      Do all that is necessary to mitigate any risk you have established  as a result of your risk assessment and thus reduce liability.

6.      Review frequently and often in the current climate. Once a week, may not be so bad until your happy with your own attempts to stay safe.

    Useful government guidance.

    Link to the government Covid-19 strategy below

The Governementd UK’s Covid 19 recovery strategy, can be found here

We are always here to help with any employment law problems you may have. You can contact us here.

Employment Law 2020

Purpose

To:

1.      Look at the corona virus employee retention scheme

2.      Look at the statutory sick pay scheme (as amended)

The corona virus employee retention scheme

Introduction

The government has advised that it will give businesses support up to 80% of the salary of their employees who would have lost their jobs in this crisis provided employers retain the staff and have explained that they are no longer going to be able to work during the crisis and must stay at home. The staff will be defined as “Furloughed Workers” and a claim can be made to HMRC.

Some employment contracts, depending on what the terms and conditions state will allow you to take advantage of the scheme without the need for any adjustment or discussion with your staff. Other contract types. will mean a discussion with the employee and you arrive at an agreement because you usually can not simply vary the contract of an employee unilaterally. It is worthwhile in the latter case getting the employee to confirm to the new arrangement in writing and for it to be placed on the employee personnel file.

Employers must remember that they are still responsible to pay the employee their full wages under their contract of employment. The government is just helping by providing up to 80% per month in this pandemic.

Who is eligible?

All UK employers  with a PAYE scheme, thus it could be a business or a charity.

How much will I get per employee?

The amount is 80% of salary capped at £2,500. It covers all employment costs: salary, national insurance, pension costs etc.

When do I apply to get paid?

HMRC are working hard to get the scheme up and running and you will be advised by the government when it is ready.

Others Matters

The scheme is open for 3 months and is back dated to 1 March 2020.

Please remember, holiday pay and sick pay are still due to be paid as normal.

 Risk of non-compliance

·        A potential claim in the employment tribunal for constructive unfair dismissal (provided the individual is employed for two years).

·        A negligence claim:-

o   Employees ( and workers) are owed a duty of care.

o   By refusing the above and insisting that they work, you are in breach of their duty of care as per any government policy guidelines regarding Covid -19 as well as a breach of the health and safety regulations, and

o   The individual concerned has suffered loss and damage.

·        I am not a personal injury expert, but I am sure a good one will try and make an employer liable under this head of claim if any harm was caused to the employee at work, because of the employer insisting for example that they must continue to work and the employee has been harmed at work, as a result of the employers failure.

In the current pandemic, non-compliance with government advice is not a good idea. Trying to insist this difficult times, in the life of all humans as holiday period, cannot be valid and should be refrained.

The statutory sick pay scheme (as amended)

 Support for employers paying sick pay for the employed

Small and medium size business owners will be allowed to reclaim the statutory sick pay (SSP) paid to employees who have Covid – 19.

Employees  that can claim

·        Employees who have contracted Covid-19.

·        Employees who have to self-isolate because of Covid-19

Eligibility

Employers who are in the UK and defined as a small or medium sized business who thus employ less than 250 people.

Other Matters

S38 to 40 of the Covid 19 emergency legislation is what deals with amendments to the statutory sick pay (SSP)  legislation. S38 removes the 3 day need for workers to wait before they can receive SSP because the government wants to encourage people to stay at home when ill. It is important as an employer that you comply with this and the recent rule that only key workers must be working.

S39 enables the secretary of state to make the necessary amendments to encourage employees to stay at home if they are sick, so they can claim SSP now from day one. Employees must not be forced to work if ill or they have to self-isolate.

The SSP rules have been amended to encourage to help contain the virus and to try and reduce the pressure on the NHS. The bottom line is if this virus is not contained, many would die unnecessary. Let us play our part and try and be fair and keep social contact to a minimum.

Employment Law Newsletter

March 2018

This is a gentle reminder of the tax changes  from 6 April 2018 that will have the potential to impact settlement agreements and should be known to employers who will be responsible for the tax in principle.

Tax relief – Settlements Agreements

Introduced by the Finance (No 2) Act 2017, from 6 April 2018 the government will tax ‘payment in lieu of notice’ and the scope of taxation on ‘injury to feelings’ has been widened.

Payments in lieu of notice (PILON) will from 6 April be classed as earnings and subject to tax and national insurance in the usual way. This is whether or not such a clause has been included in the employee’s contract of employment. This rule applies notwithstanding the fact that the first £30,000 is supposed to be tax free. In other words, the amendment is an indirect in road into the general rule that the first £30,000 is free from taxation; thus the statement will no longer be true in many settlement cases.

For example: let us assume Samantha is to be paid £30,000 as part of her settlement agreement. This represents 6 months’ salary. This includes a payment in lieu of notice of three months (£15,000). Under the old law Samantha would receive £30,000.

Under the new rules let us assume Samantha will pay tax of £40% on the sum of £15,000 because it is a payment in lieu of notice. Samantha is thus worse off by £6,000. Samantha would therefore receive £24,000.

Samantha is not going to be happy as she has to pay tax and will push for more money. The employer will be unhappy because their tax bill has been increased. The only winner in this situation is the tax man.

The above is a very simply example to get the message across. There is formulae to be used if the calculation has to be made properly.

Tax Relief – Injury to Feelings

Whether a person has been discriminated against pre-termination or post termination. The injury to feelings damages awards are subject to tax and national insurance except where the injury amounts to a recognised psychiatric injury. I feel that some lawyers might start to be creative here!

The current rule  (before 6 April 2018) was that there was no tax in relation to injury to feelings as a result of discrimination during work; however tax had to be paid on the injury to feeling award that related to termination of employment. This came about as a result of the case Moorthy v Revenue and Customs Commissioners [2016] UKUT 13 (TCC), [2016] All ER (D) 08 (Feb) which was decided by the Upper Tribunal. It was made clear that discriminatory payments for injury to feeling in relation to termination were subject to tax.

Foreign Service Relief

Foreign Service Relief for staff working and living aboard will no longer exist after 6 April 2018. Thus any termination payments will be exempt only up to £30,000. Thereafter any other payment will be subject to tax and national insurance in the usual way.

Increase in compensation payments

The statutory redundancy payment will increase to £508 per week on 6 April 2018 (previously £489).

The maximum compensatory award for any employees who issue claims unfair dismissal and their effected date of termination is on 6 April 2018 will be £83,682 (previous award £80,541).

CALL TO ACTION

Employers simply have to remember if there is a settlement agreement being agreed; tax will have to be paid for PILONS and/ injury to feelings.

Employees also need to remember to ask for the sum’s to be paid as gross to take account of the taxation that will need to be paid.

NEWSLETTER - AUGUST 2017

BUSINESS NEWSLETTER

This newsletter would be short as it is the silly season; however I have looked at a rather important legal case on the issue of ‘holiday pay’. It is worth a read.

Holiday Pay Case

The most recent holiday pay case is Dudley Metropolitan Council v Willett & Other’s (2017).

The case was appealed in the EAT because of the calculation of holiday pay by the Judge at first instance. The appeal was obviously resisted by the employees as it is in their favour.

References found in this newsletter are references to paragraphs in the actual judgement.

Facts

The claimants (56 of them) were employees of the council. They were responsible for fixing the council’s housing stock. They claimants comprised of plumbers, electricians, roofers, storemen etc. They had contracts of employment. There standard hours of work was 37. Then some had contractual overtime of between 2-4 hours per week. There was additional overtime that could be earned and it was the choice of the employees whether or not they did this over time (paras 4 to 5).

The dispute was whether the additional voluntary overtime should be included as part of ordinary pay when determining a persons’ holiday pay calculation.

The elements of additional voluntary pay that was in dispute for the purpose of calculating holiday pay was:

1.       Out of hours standby pay

2.       Call out allowance

3.       Voluntary overtime

4.       Mileage or travel allowance linked to the above.

The Employment Judge referred to the decision of Williams and stated clearly that the test is ‘what is normal pay’ and in this regard it was for her; that which was intrinsically linked to the performance of the task. In Williams the advocate general said that employees must not suffer any disadvantage in taking leave and must receive normal or average remuneration so as not to suffer a disadvantage. Thus the Judge applied the test of what was to be considered normal pay to each of the issues in dispute.

Thus the Judge found:-

1.       Out of hours standby pay – did fit within the definition of normal pay.

2.       Call out allowance – again this fitted within the definition. It was intrinsically linked to his work and a payment for working during antisocial hours.

3.       Voluntary overtime, fell within the definition of ordinary working hours as explained by the Attorney General in the William’s case.

4.       Mileage or travel allowance linked to the above was viewed as benefit in kind and still part of normal pay as explained in the William’s case (see para 7)

The employers thus appealed this decision and as I explained before it was vigorously defended by the employees’ lawyers.

The employer’ argument was that pure voluntary overtime was not intrinsically linked to the performance of the task and therefore should not be taken into consideration when calculating overtime pay. The employers relied on the cases of Lock v British Gas C-539/12 [2014] ICR 813 and British Airways v Williams and others C-155/10 [2012]/ ICR847 which clearly stated  that such payments did not amount to remuneration for the purpose of calculating holiday pay (see para 2).

Hence the appeal.

Employment Appeal Tribunal

The Judge explained the four week holiday entitlement pay was established by virtue of the Working Time Directive Article 7 (UK, Working Time Regulations 13 and the additional leave (the additional 8 days) which is a national law derived from regulation 13A. The importance of this distinction is that the calculation of holiday entitlement applies only to 4 weeks.

Mr Jones QC, acted for the Council, his submissions (see paras 31 to 34) regarding how holiday pay should be calculated (although clever and appear almost sound; I am laughing) was rejected by the Judge.

Mr Ford’s, acting for the claimant’s submission were accepted. He argued:

1.       The rational for the rule was to ensure that during their rest period workers received remuneration that was comparable to when they were working; because any payment that placed a worker at a disadvantage may deter him or her from taking a holiday.

2.       To exclude the overtime therefore would be incompatible with the objective of article 7 of the Working Time Directive.

To support his submissions Mr Ford relied on the opinion of the Advocate General in the William’s case and aspects of the case of Lock. The Judge accepted Mr Ford’s submissions and explained why:

1.       Paid annual leave is an important part of EU social law and there is nothing in the Working Time Directive that allows the UK to depart from compliance.

2.       Overtime does constitute remuneration as part of EU domestic law.

3.       EU law is clear, normal contractual pay for 4 weeks must be used to calculate holiday pay. The principle that this pay should be calculated based on normal remuneration can be found in the cases of Williams and Lock.

Case Comment

I do not believe that for one minute this decision should be a surprise to anyone. Although we have the Exit bill upholding all EU laws; only time will tell what will happen to cases like this once we are out of the Union. My view, if we want to trade we will still have to comply with laws compatible with the laws of the EU.

The Judge in this case also had a social conscience because if we simply accepted the employer’s argument; technically it would have mean that employees on zero hour contracts would not be entitled to holiday pay. Such a decision could not stand as it would be truly incompatible with current EU law.

Newsletter - July 2017

R (on the application of UNISON) (Appellant) v Lord Chancellor (Respondent) [2017] UKSC 5

Introduction

This is a brief summary of the recent decision on tribunal fees.

  I will look also at why Lady Justice Hale has got things so right, when she discussed the impact of fees on discrimination.

The Case

The issue in this appeal is whether fees imposed by the Lord Chancellor in respect of proceedings in employment tribunals (“ETs”) and the employment appeal tribunal (“EAT”) are unlawful because of their effects on access to justice.

It is argued that the making of the Fees Order was not a lawful exercise of those powers, because the prescribed fees interfered unjustifiably with the right of access to justice under both the common law and EU law, frustrating the operation of Parliamentary legislation granting employment rights. The fee order also discriminated against women and other protected groups. The issues relating to discrimination are addressed in the Judgement of Lady Hale.

 ET’s  are intended to provide a forum for the enforcement of employment rights by employees and workers, including the low paid, those who have recently lost their jobs, and those who are vulnerable to long term unemployment [para 8].

 The fees for a single claimant bringing a type A claim total £390, payable in two stages: an issue fee of £160 and a hearing fee of £230. For a type B claim the fees totalled £1,200, comprising of an issue fee of £250 and a hearing fee of £950.  In the EAT the appeal fees were £1,600 [para 18 & 19].

 Many claims which can be brought in ETs are for modest financial amounts. While the fees in relation to small claims are related to the value of the claims. This is not the case when it comes to the value of the claims in the ET or EAT.

The reasons for the provision of the fees

To transfer part of the costs (aim 33%) to users. It transpired that the Tribunals were only receiving between 17 to 19% [para 56].

 The secondary objective of the introduction of fees was to deter the bringing of unmeritorious claims [para 57]. Rather than simply deter unmeritorious claims, the introduction of fees significantly reduced all claims, the good and the bad.

A further objective was that the introduction of fees would mean more people would settle claims. The result of fees being introduced was that settling claims in recent years has in fact reduced. Some employers deliberately refusing to negotiate to see if the employee would issue the claim [para 59].

Decision of Lord Reed

Is the Fees Order unlawful under English law?

It was held by Lord Reed (with whom the other Law Lords agreed) that the fee order was unlawful because it impact the ordinary man’s ability to access the employment tribunal using English common law or the law granted by virtue of the EU. Due to the fact that the fee order prevented access to justice, it was unlawful ab initio, and must be quashed immediately.

Decision of Lady Hale

Lady Hale found that the Fees Order was discriminatory. She referred to s29 of the Equality Act which stated that a service provider must not discriminate against a person in the provision of that service as to the terms in which the service is provided, by termination of that service to a person or by subjecting the user to a detriment [para 122]. Lady Hale reminded everyone that this provision applied to a public service providers.

The fee’s order Lady Hale pointed out is not directly discriminatory, instead it constitutes indirect discrimination as explained by s19 of the Equality Act 2010. Lady Hale quoted s19 in her judgement and pointed out the prohibited acts: age, race, sex etc. Most women claims Lady Hale pointed out would fall within the ambit of class B claims. Thus women would be paying more for claims compared to men as more women would bring type B claims; rather than type A claims. Thus women Lady, Hale pointed were at a disadvantage compared to their male colleagues. The Lord Chancellor Department ascertained that 45% of women issued part B claims. This was still high and placed women at a disadvantage compared to their male counterpart.

Lady Hale could not find no justification for the provision, criterion and practise which resulted in the indirect discrimination and it is on this basis that she held that the fees order was illegal.

Although it was not stated by Lady Hale, it is obvious if the Fee Order was discriminatory for women, it would have been discriminatory for people who were not white or individuals who were religious and had to bring a religious discrimination claim.

How the fees order was causing a problems

With the advent of the fee’s system, the discriminatory issues surrounding women who were mothers simply got worse. BIS & ECHR 2015 reported the following findings:

•  1 in 9 new mothers lose jobs (dismissed or poor treatment and left work) = 54,000 mothers pa
•  1 in 5 mothers harassed or negative comments about pregnancyat work=100,000 mothers pa
•   10% of mothers discouraged from attending antenatal classes = 53,000 mothers pa
• 1 in 3 mothers no support at work
•  3 in 10 not allowed flexible working hours during pregnancy

Ashamed to say: pregnancy and maternity discrimination therefore really got worse as a result of introduction of the fees. Thus the House of Commons Committee on Equality & Discrimination report of session 2016 &2017 clearly found that there was more discrimination against working mothers.

In terms of access to justice, the committee recommended that the government should consider extending the time limit of 3 months for bringing a claim. They also stated that the government should reduce the employment tribunal fees because of its impact on access to justice.

They also argued that the government should monitor the access to free quality advice on pregnancy and maternity discrimination and should provide additional resources where needed.

Many employment land discrimination lawyers have expressed their absolute delight at this decision. That does include me. So employers who are treating staff unfairly, should reconsider their behaviour as this decision means that they can bring a claim without having to pay fees.

COHABITATION AND THE LAW

Introduction

This article is intended for people who cohabit.

When people fall in love it is usually with ‘rose tinted’ glasses. No one thinks about what happens if things go wrong. The world becomes a very beautiful place. There are loads of smiles and giddiness. Things are absolutely fantastic, some people marry, form civil partnerships. Then there are those individuals who decide to cohabitation.

When relationships are good, we swim in a sea of happiness. There are ups and downs but people aim to get on. Children may come along, grow up and leave the nest. Couples plan and aim to grow old together. Sometimes however, out of the blue, one partner tells the other that they are no longer in love and they want to leave the nest.

Separation is not much fun, especially when imposed. One party may still love the other party that wants to leave. There may be young children involved; accordingly separation can be pretty painful if you do not want to separate. It truly can be the car crash you did not expect to happen.

The parties with the best legal protection when separating are those who are married or in civil partnerships. So the nightmare scenario is when the parties are cohabiting. If both parties are reasonably well off and in good jobs, they can simply part company and move into new homes; provided everything is agreed. This scenario/situation is not straightforward because even with assets; if the parties cannot agree then they end up in court.

Cohabitation

Cohabitation as I have previously stated is the worse legal position to be in when separating. Why? Well your rights are left to the law. Law that was not developed with cohabitees in mind.

 The law fails to provide cohabitees with adequate protection, so lawyers have to do a significant amount of legal gymnastics to protect clients who cohabit. Children are afforded some protection. Parents have a duty to house them and to ensure that they are looked after through the maintenance system.

Adult spouses, who cohabit, have no right to maintenance. If the home in which the parties reside is in joint names, that provides a little protection and the parties when trying to part company will look to property law to help with division of the main asset; if their shares in the property have not been defined.

There are however a lot of spouses where one party is the breadwinner. That spouse alone has purchased the family home. The other spouse residing in the property does not work and looks after the child or children. Usually the property owning spouse believes that their partner has absolutely no legal rights whatsoever to their property. Technically this is true, however the law (trust, property, estoppel and the law of contract) can and will be used to try and protect the spouse who find themselves in a weak position.

Without the need for litigation

If the parties can enter into a cohabitation agreement before they cohabit. It would be better than leaving things simply to chance.

Cohabitation agreements will cover for example:-

1.       The children (subject to review by the courts)

2.       Legal ownership of the family home and other major assets.

3.       Payment of bills

4.       What happens to the property should the parties split up.

The need for litigation

Where there is a dispute about property and no agreement in place. The parties will have to rely on the law of trusts (Trusts of Land and Appointment of Trustees Act 1996). Under this legislation, the party who issues the claim will be telling the court that there was always an intention to share the property. The court will make a determination as to whether or not the Claimant can establish that such an interests exist. If it does, the courts will make a declaration of trust and will specify the interest of the Claimant.

Litigation should always be a last resort. Rather than going to court, we try our best to persuade adults to reach an agreement in just the same way a mediator would try and make the parties reach a settlement.

March /February 2017

BUSINESS NEWSLETTER

Introduction

In this newsletter we will look at:

• Consent under the General Data Protection Regulation
• The New National Minimum Wage figures
• The potential impact of the Chancellor's recent u-turn

General Data Protection Regulation (GDPR) & Consent

Business owners and employers are well aware that employees must consent to the processing of their personal data.

The GDPR was adopted in April 2016 and everyone has 2 years to get into shape as the law will be enforced in May 2018.

GDPR will apply to businesses that process personal data in Europe. It will also apply to companies outside of Europe that have a significant client base or a large number of employees in Europe. This short note is a discussion on the issue of obtaining a person’s consent.

There must be real consent, freely given in relation to the processing of personal data, whether it is a client’s data or an employee. The new regulations place a significant emphasis on freely given consent.

In your business you will have a standard contract. Usually at the end the individual concerned simply executes the agreement and consent to everything including the processing of their data. Online, it is all tick boxes.

GDPR states that you will need to have a separate consent form in relation to the processing of the data. Similar to your ‘cooling off’ form which naturally is separate from your main contract.

Ticking boxes on a web page, or silence (implied consent if you continue to process the information for the person) is not going to be consent under the new regulations.

Consent must be intelligible, informed and unambiguous. Thus if you provide a service online, even online to children, consent to processing data must be clearly given.

Consent must be granular for distinct processes (just imagine!).

You must let the data subject know that they have a right to revoke your ability to processing their data at any time.

If the consent will cover several processes, you must let the client know the persons involved in the processing. They must be named. So for example if I am completing a divorce petition. Then my consent form to be executed by the client in theory will mean, I need to get consent for me to prepare the petition as I am processing the personal data. When this form is sent to the court. It will be processed by the court, so my consent form in theory should state that there will be processing by the court. The court will need to be named. If I was sending a barrister to court to argue about the finances, the form would need to consent to the barristers’ chambers processing the personal data so that the client can representation at court. So the barrister’s chamber will need to be named.

The rationale behind the new consent is to give customers and staff more control.

Consent forms therefore must be drawn up in plain English to ensure compliance with the new rules.

Consent obtained must then be documented.

National Minimum Wage

The National Minimum Wage (and National Living Wage) rates will increase from 1 April.

The National Minimum Wage is defined as the minimum wage per hour a worker is entitled to under the law.

National Living Wage was introduced by the government on 1 April 2016 and is defined as the living wage for all working people over the age of 25.

The new rates from

• £7.50 per hour - 25 years old and over
• £7.05 per hour - 21-24 years old
• £5.60 per hour - 18-20 years old
• £4.05 per hour - 16-17 years old
• £3.50 for apprentices under 19 or 19 or over who are in the first year of apprenticeship.

If an employer provides a worker with living accommodation, the maximum deduction from the National Minimum Wage or National Living Wage which can be made will be £6.40 per day.

Phillip Hammond’s NI U-turn may be a huge problem for some employers

In the recent budget, the Chancellor announced that he was going to increase National Insurance (NI) contributions to be paid by the self-employed by 2%. This would impact 2.5 million people. His aim was to raise £2bn. This aspect of the budget created mayhem as you know, there were a few bad headlines and tory backbenchers screaming Mr Hammond was in breach, it is alleged, of a manifesto promise not to raise taxes.

In order to avoid a backbenchers revolt; after all we have Brexit to think about, the Chancellor Phillip Hammond did a complete u-turn and scrapped the NI increase to the delight of the self-employed.

The Chancellor must however raise funds to compensate for the loss of revenue because of the U-turn.  The best way to deal with it surely is to go after those employers who use or exploit the false/ bogus self-employed. The staff are forced to be self-employed because this saves the employer money, holiday pay, sick pay etc. The industries that have a tendency to do this are the gig economy, construction industry, transport and private social care firms.

In 2015, the CAB suggested that there were approximately 460,000 bogus self-employed[i]

It would be prudent therefore if you have contractors working for you that you make sure they are truly self-employed. You do not want to be in the position where a Judges makes an order to the effect that the staff in question are employed by you; with all the associated risks of the Inland Revenue chasing you for money.

[i] https://www.citizensadvice.org.uk/about-us/how-citizens-advice-works/media/press-releases/bogus-self-employment-costing-millions-to-workers-and-government/

January 2017

Business Newsletter

Introduction

In this newsletter we will look at the badly drafted Brexit Bill, work place dress code and an employment law decision regarding employer’s liability outside work.

If I have no said so before, Happy New Year and I hope that compliance with the current legislation regarding employment rights and Data protection rights were part of your New Year’s resolutions!!!

What’s new?

We are proposing to send out emails on a weekly basis. These will be much shorter than the newsletter and may deal with topical issues or just be a bit of fun. Nothing hard, if you do not want to receive these emails let me know.

1.       Brexit –We still have a legal problem? 

The Brexit case has finally been decided by the Supreme Court 8 to 3 dissenting judges.  The outcome is no surprise. The argument of the Attorney General was rejected, again no surprise. The unanimous decision that there was no need to discuss matters with Northern Ireland or Scotland under the devolved powers did cause me a great deal of concern and I wondered if this aspect of the Judgement should be challenged.

I am not going to discuss the Supreme Court case as political and legal journalists have covered the subject well.

The dissenting Judgements were of interest and should be read if you have time.

The decision has been made and we have a new bill that has been laid before parliament. ‘The European Union Notification of Withdrawal Act[i]’. It is a two paragraph bill written in plain English. When you read it, it looks as if it does the job. However if you look at it closely, horror of horrors, no, it does not do the job. Jo Maugham QC kindly wrote an article using the title of Samuel Beckett’s play ‘Waiting for Godot[ii]’ highlighting this point.  He said “if the referendum is not the decision to leave, and the decision to leave has to be taken by parliament, where is the decision to leave in the bill?” The last three words are mine!!!! Come on, I have to show some intellect.

The decision to leave is not in the wretched bill, as it only makes reference to giving the Prime Minister power to provide the European Union with a withdrawal notice under article 50(2) of the EEC Treaty.  I am deeply unimpressed that a bill that appears to solve a simple problem, is wrong, so it will be amended in due course as it passes through the House of Commons and the House of Lords before it becomes law.

Brexit appears not to be as simply as it was sold to the people of the UK.

2.       Employers vicarious liability for the acts of employees

In employment law, it is accepted that employers are vicariously liable for the acts  or omissions of their employees during the course of employment. In certain instances, the liability of employers can extend to social settings for the behaviour of employees. However there has been a very strange judgement made on this point in the High Court. The case is Bellman v Northampton Recruitment Ltd [2016] EWHC 3104 QBD.

The firm had a Christmas party and after the Christmas party, some staff went to a nearby Hilton hotel and had a few more drinks and got completely intoxicated. Mr Major (the MD) and his wife ran a HGV drivers Recruitment Company. They were the owners and shareholders of the defendant company. Mr Major and Mr Bellman were friends. Mr Major had offered Mr Bellman the job of Sales Manager.

Mr Major whilst intoxicated reminded everyone he was in charge, he paid the wages and made important decisions about the company.

Mr Major hit Mr Bellman. Mr Bellman had not provoked the attack and it was unwarranted. Mr Bellman got up, and held out his hand as if to say he was surrendering. Mr Major however hit him again.  It resulted in Mr Bellman falling to the ground for a second time, hitting his head. His skull was fractured and there was bleeding on the brain. Mr Bellman suffered a traumatic brain injury. It is my understanding that Mr Bellman cannot work as a result of the injury.

CPS decided not to prosecute; simply amazing!

Mr Bellman, with the assistance of a third party brought an action against the Defendant Company stating that it was vicariously liable for the conduct of its employee, Mr Major

Held by the His Honour Judge Cutter

There was no liability on the part of the employer company because the assault was committed after several hours after a work social event.  In other words, Mr Major was acting personally and outside the scope of his employment.

3.       High heels and workplace dress codes

First of all I deliberated as to whether or not I should cover this topic again as I had discussed it in a previous newsletter. The topic is still very much live and topical because over 138,500 people signed the petition of Nicola Thorp. The report on High heels and work place dress code looked at the issue of high heels in the work place and in particular the industries where high heels are often required: hospitality, corporate, tourism and agency services. More often than not, it was young women who were expected to wear high heels.

Women were usually asked to wear makeup, dye their hair blond, tight revealing clothes and short skirts.

The interesting aspect of the report was that when John Bowers QC[i] was asked about the legitimacy of the practise; it was not clear cut that if a woman took the issue of being forced to wear high heels to court she would win the claim.

We are all aware that employers are not allowed to discriminate against the genders in the work place. Sex discrimination (like race, age, disability for example) is one of the protected[ii] characteristic under the Equality Act 2010.

Direct discrimination[iii] occurs when A treats B because of a protected characteristic, less favourably in the work place. High heels however is not caught by the direct discrimination legislation because work a place dress code policy document is usually applicable to both sexes. If high heels are to be found in the dress code policy and effects one group (women), it will be regarded as indirect discrimination[iv] under the law.

Indirect discrimination can in law be justified if it is reasonably necessary to achieve a legitimate aim and it is here that it is believed that the law falls down and does not help women. The tribunal costs just to issue a case is in the region of £1,200 and this too is clearly a deterrent for some women.

The committee found the current law did little to protect women from gender discrimination in the work place. The committee has asked for the government to review the law and to increase the penalties that tribunals can make and award against employers. The current penalties do not to stop employers breaking the law.

High heels worn for a long period of time is bad for women’s health as highlighted by the report at pages 8-13.

Wearing high heels at work also gives rise to health and safety considerations! A good employer should do a proper risk assessment.

The Management of Health and Safety at Work Regulations 1999 require an employer to (1) conduct a suitable and sufficient assessment of the risk to the health and safety of persons at work[v]; and (2) to set out a hierarchy of risks in the workplace. This risk assessment duty builds on the general duty on employers under section 2 of the Health and Safety at Work Act 1974 to provide a safe working environment.

Employers should consider:

·         Reviewing and re-writing the work place dress code policy that may impact staff at work. Try to remove where possible any gender bias for example if you feel it is a perquisite that a woman’s hair is neat and she must wear make-up. Then a man must be clean shaven, wear his hair short and neat and should wear aftershave. Sorry if some of you are mumbling what rubbish is Johanna on about now; but I am trying to get you into the habit of understanding equal treatment.

·         Training so as to prevent discriminatory treatment.

·         Carry out appropriate risk assessments and implement changes where necessary to protect staff.

[i]  a leading employment lawyer

[ii] S11 Equality Act 2010

[iii] S13 Equality Act 2010

[iv] S19 Equality Act 2010

[v] To include those not in his employment that may enter his premise

[i] http://www.publications.parliament.uk/pa/bills/cbill/2016-2017/0132/cbill_2016-20170132_en_2.htm#l1g1

[ii] Waiting for tax.co

December 2016 - Newsletter

In this article we will take a brief look at the following:-

·         Brexit

·         Cybersecurity

·         The General Data Protection Regulations (GDPR)

·         The Uber Case

·         Facebook and its abuse of WhatsApp

·         Minimum wage

·         Christmas Messag

This is a short article looking at things likely to be of interest to businesses next year. I have missed a few things out: for example artificial intelligence; although recently some of the top law firms have started to look at it. Important cases, such as the Chesterton case which is being appealed. This is whistle-blowing case where the issue is the definition of ‘public interest’. In this case it has been interpreted widely and will be appealed next year.

1.      Brexit decision

The decision is expected in January 2017; hopefully the result should not cause a riot.

The factual issue the court has to decide is whether or not the executive (the current government), using its prerogative powers can trigger article 50 without the need for an act of parliament.

The government lost its case in the lower court on the basis that parliament is supreme and only parliament has the power to make and get rid of our laws. The government appealed. They were represented by the Attorney General (Jeremy Wright) and Mr Eady QC. The argument put forward on behalf of the government is that the lower court got the law fundamentally wrong and that the government can use its prerogative powers to trigger article 50.

The AG of Northern Ireland, Ron Lavery intervened and stated (besides other matters), it would be unconstitutional to withdraw from the EU without the consent of the people from Northern Ireland. EU law was part of the devolution settlement and accordingly the UK government had transferred power to Ireland and it cannot simply take it away.

James Wolfe QC, the Lord Advocate intervened on behalf of Scotland. The Lord Advocate accepted that Scotland did not have a right to veto the UK parliament; however because the withdrawal from the EU has such constitutional importance and impacts upon Scotland’s devolved powers; Scotland’s consent would be required.

Scotland also argued that the decision of the divisional court must be upheld as the government does not have the authority to remove the UK from the EU using its prerogative powers.

Lord Pannick, on behalf of the respondent, Ms Gina Miller, stated quite clearly in his submissions thatit is preposterous  (my words) for the executive to believe it has the power to trigger article 50 using the royal prerogative. The European Communities Act 1972 brought us into the European Union, It is of constitutional significants because it created a new source of law. The Act also gave new rights to the citizens of the UK and parliament never intended for these rights to be removed by a minister, using the royal prerogative.

James Eady in his closing submissions stated that the European Communities Act is designed for acceptance by the UK of its treaty obligations. It is not intended to control those obligations. The Act is merely a conduit for legal rights.

I sadly believe that Mr Eady has got his law wrong. Parliament is Supreme and there is no legal concept ‘the will of the people’. However the Oxford legal philosopher Timothy Endicott has written a brief article which appears to support the government’s position. So I cannot wait for the Judgment, especially as it has been reported in the press that the decision may not be unanimous!

2.      Cybersecurity

 This will really be a hot potatoes next year! Well the breaches we had (whether in the UK or the USA) were all too embarrassing and could happen to anyone. Talk Talk, Sony and the law firm Mossack Fonseca.

The government has created recently its new National Cybersecurity centre to be based in London. The government will invest 1.9 billion pounds over the next 5 years into cybersecurity.  GCHQ will have some input and over see it. The objectives is for the government to understand the cybersecurity environment in the UK as we are lagging behind when compared to the USA. 

The government aims to reduce the risk to the UK and wants the public and private sector to work together in the creation of a more secure environment. There will be a push to nurture the UK’s cybersecurity capabilities and to provide leadership in this area. 

 We have to improve (on cybersecurity) and it will be relevant to the next topic under discussion.

3      GDPR

 I know that we are leaving the European Union, however all organisations small and large must be get ready for compliance with the General Data Protection Regulations. It is not negotiable. It will become law in 2018.

Businesses will have to get to grips with the fact that data will be portable, heavy fines if there is a breach of new data protection rules. There will be a new role for the data protection officer and the larger businesses have started employing data protection officers in order to protect their businesses.

I have written a lot on this subject. I am not going to do so today. What I will say is that I will run a few seminars in 2017 to help small businesses get ready.

4.      Aslam and Others v Uber (2016)

 This was one of the more important employment law cases this year. It was decided that Uber workers were ‘employees’ and not self-employed contractors. Thus Uber’s staff are entitled to the minimum wage and holiday pay. Uber may also find itself being hit with a huge tax bill!

The decision was not a surprise as Uber had been losing these cases in other parts of the world (for example the USA where it settled drivers claims).

Whilst Uber’s business model had been viewed as ‘disruptive technology’.  There are other companies that use similar technology that will be before the courts/ tribunals next year for example Adison lee, City Sprint, excel and ecourier. It is worth looking out for these cases.

There is no guarantee that the outcome will necessarily be the same as each case is determined on how the facts are pleaded and presented to the Judges.

On 21 November 2016 permission to appeal the Uber decision was granted; so it is clearly a case to watch in 2017.

5.      Facebook

 Facebook took over WhatsApp as many people will know. However few people new that Facebook were told by the European Commission that they were not allowed to use the WhatsApp data and link it to Facebook. Instead most people opted out of consenting to Facebook using their WhatsApp data as Facebook gave people that opportunity.

Any way what is exciting is that the European commission is investigating Facebook. It claims that Facebook has been misleading it during the investigation. Consequently, Facebook is at real risk of a fine! 1% of turnover.

Facebook has until 31 January 2017 to respond.

6      Minimum Wage

 There are some employers who just love to flout the law. However in the Autumn Statement the government announced that it was going to spend more money trying to enforce the law so that these rouge employers will be made to pay the minimum wage.

From the 1 April 2017 the minimum wage increases will be:-

£7.50 per hour - 25 yrs old and over

£7.05 per hour - 21-24 yrs old

£5.60 per hour - 18-20 yrs old

£4.05 per hour - 16-17 yrs old

£3.50 for apprentices under 19 or 19 in the first year of apprenticeship.

Christmas Message

Thank you for taking time out to read out newsletters. Have a wonderful Christmas and a prosperous New Year. Please do not forget, if someone has legal problems, we would like to be the first to solve them. If we cannot, we are always happy to refer them to a third party.

 Kindly note the firm will be closed from the 21 December 2016 until 4 January 2017

Business Newsletter November 2016 →

In this addition of the newsletter we discuss:

1.      A company director being disqualified for employing illegal workers.

2.      A man losing his job even though he had indefinite leave to remain in the UK.

3.      The Snoopers Charter

Company director banned for employing illegal workers

Introduction

The government is much stricter these days with employers who flout the law.

It is illegal under the Immigration Act 2016 to employ an illegal worker. The Immigration and Asylum and Nationality Act 2006 is clear, employers are responsible for compliance with the law and must carry out the necessary checks to ensure that they only employ staff legally entitled to work in the UK.

In November 2015 the Insolvency Service issued a press release advising the public that it had disqualified the director of an Indian restaurant for 6 years for employing illegal workers. The director in question will not be a director of a company for 6 years from 9 November 2016.

The Home Office Immigration Enforcement team turned up at his business premises only to discover that 3 of the staff were not legally entitled to work in the UK. I have advised in a previous newsletter that there will be a fine of £10,000 per illegal employee. So that employer was fined £30,000.

On 2nd December 2016, the company went into liquidation owing creditors £34,296 of which £30,000 had been imposed by the Home Office. It is not rocket science, the Home Office clearly put this company out of businesses because they tried to use cheap labour.

Sue Macleod, Chief Investigator of the Insolvency Service stated “Illegal workers are not protected under employment law, and as well as cheating legitimate job seekers out of employment opportunities, these employers defrauded the tax payer and undercut honest competitors…..The public has a right to expect that those who break the law will face the consequences and this should serve as a warning to other directors tempted to take on illegal staff”[i].

Tips for employers

Do not take the risk.  Ensure all staff are legally entitled to work in the UK.

No sure what you are doing, ask for help.

I have noticed since the draconian immigration law changes, some employers when advertising jobs have specifically stated, do not apply if your immigration papers are not in order. This is not unreasonable; because of the risk of the penalties that may be imposed; however employers must take care not to discriminate against minorities legitimately entitled to work in the UK.

Tip for employees

Sort out your immigration status.

The employment law will not protect you if you are employed illegally.

Your income can be seized as the proceeds of crime. I do have difficulties with this one and believe at some point that it will be challenged in the courts.

Employers fairly dismiss man who had indefinite leave to remain in the UK

 

Introduction

A Jamaican man is dismissed from the employ of Abellio London Ltd because he could not provide his employers with evidence that he was entitled to live and work in the UK.

The case

In the case of Baker v Abellio London Ltd (2016), Mr Baker, the Claimant, had travelled from Jamaica to the United Kingdom as a child; at the time he was using a Jamaican passport. Mr Baker had lived in the United Kingdom for a long time and had indefinite leave to remain. However he had not left the United Kingdom for a holiday accordingly his Jamaican passport had expired and he had not acquired a UK passport.

Mr Baker was employed by a transport company, Abellio Ltd. The employers were checking the staffs’ immigration status. Mr Baker was asked to provide evidence of his immigration status.  Mr Baker had to prove to his employers that he had a right to live and work in the UK without restriction. Mr Baker did not have a valid Jamaican passport as it had lapsed. Nor did he have a UK passport. Mr Baker could not prove he had indefinite leave to remain, although it had been acquired.

Mr Baker was loaned £350 by his employer to enable him to get the correct legal documents to avoid dismissal. He failed to do so.

Mr Baker acquired the passport as requested by his employers; however he failed to obtain the endorsement as proof of his indefinite leave to remain in the UK.

Mr Baker was not a UK citizen. He was a Jamaican national, even though he had indefinite leave to remain. A passport alone therefore was not sufficient evidence of his rights to live and work in the UK. The endorsement was required.

Mr Baker’s employers had arranged a meeting with him to discuss the matter and warned him that he may be dismissed. Mr Baker failed to attend the meeting.

Mr Baker was ultimately dismissed. He appealed, but the appeal failed. The employers Abellio had followed a fair dismissal procedure; accordingly the dismissal was fair and Mr Baker’s claim for unfair dismissal was rejected.

I understand that 13% of the UK population do not own a passport; however if you are subject to the immigration rules of the UK, you have to comply in order to work.

Tips

·        Employer: provided you follow a fair dismissal procedure and the employee has not provided you with valid documents to prove their right to work in the UK, your dismissal would be viewed as fair.

·        Employee: it is a prerequisite that you ensure you have valid evidence of your right to live and work in the UK. Do not let your passport or relevant legal document lapse without obtaining a replacement.

The Snoopers Charter

Introduction

Very few people have heard me swear, that is because I believe it is not necessary. There are loads of useful, colourful words in the English language that can convey a message without the need for the ‘F’ word! However when I think about this piece of legislation and its true implications for everyone’s privacy or lack thereof. I get extremely angry and want to shout, scream and swear profusely; because whilst the opposition were taking an extensive ‘nap’ the conservative government pushed through one of the most sweeping pieces of surveillance legislation this country has ever seen. The offensive legislation is referred to as the ‘Investigatory Powers Act’ (also known as the ‘snooper’s charter’).

It is fair to say privacy is dead. I know many of you will argue that this piece of legislation is to protect us from terrorists. However the terrorists are not so sophisticated. It is the lack of sophistication and lack of use of technology why the Paris bombers were caught so quickly.

I remember when I first read through aspects of this dreadful legislation I wondered how I was going to handle such snooping.  Good encryption perhaps! Put my laptop in the Fridge[ii].

Paul Bernal, a leading lecturer on Information technology law described the bill as ‘the most invasive surveillance law in democratic history’.

Edward Snowdon, through twitter; “it is the most intrusive and least accountable surveillance regime in the West”.

Apple made a formal submission, specifically on the issue of encryption, to the Investigatory bill’s committee. Apple stated in their submission, “we believe it would be wrong to weaken the security for hundreds of millions of law-abiding customers so that our systems will be weaker for the very few who pose a threat. In this rapid evolving cyber-threat environment, companies should remain free to implement strong encryption to protect customers.” I agree with Apple!

What the new bill allows the authorities to do in summary

1.      Web and phone companies will have to store records[iii] of all our website visits, telephone calls made, what apps use and text messages for 12 months.  There is no need for a warrant to get access to this information. The police just need the authority of someone senior to access the information for their own use. There is just the right of these institutions to hack. This cannot be right!! What will be retained is our metadata says the government and not the content. Metadata the experts advice is more intrusive than content because it allows the police etc., to make cross references.

2.      With this type of surveillance, everything will be under surveillance and privacy as we know it will become a thing of the past. However, some companies have made it clear to the government that they will help customers (like me) to circumvent the new legislation. Thus virtual private networks have been promoting their products to the general public to get override this legislation.

3.      Security services will be able to bug computers and phones upon obtaining a warrant. Companies such as Apple, Samsung etc., will have to assist security by getting rid of any encryption if it is deemed necessary as part of an investigation.

4.      The security services will be able to acquire and analysis bulk data. For example all NHS records. The protection provided to prevent this is called double-lock. A Judge has to approve the warrant to be issued to the security services and a senior minister. My first reading of the original bill was that the Judges powers were weak and ineffective. Therefore there is the real risk that this power will be abused by the security services.

5.      The bill is so outrageous that whilst it provides some protection for sensitive professions, such as my own. Thus in theory it protects the concept of ‘legal professional privilege’. In other words you can speak to me in strict confidence and know that it will stay with me. The harsh reality is that the makes some inroads into the concept of ‘legal professional privilege’. View this as potential the new legislation has created an exceptions. In other words, I may have to convey to the authorities what you have told me. To be honest, if I deemed it as intrusive and unnecessary I will not part with the information.

Regrettably this legislation will become law by the end of the year. There are only two forms of saving grace. First of all experts have stated that it is going to be very expensive for the various companies to retain the records needed by the government for compliance.

The bit that gets me more excited, is the second saving grace. An intelligent person will challenge this piece of legislation and it will be in the European Court of Justice. Thank goodness for ‘crowd funding’. Hopefully it will be with the court before Brexit and it will naturally be struck down by lightening. I cannot see why the Judges would not make a unanimous decision. There is absolutely no way a Judge will approve this nonsense in a democracy. I cannot wait for this to happen as the legislation is just dangerous and open to abuse.

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Should you or any person you know have a legal problem relating to employment, immigration or company law issues raised by this article. Please do not hesitate to provide them with our contact details so that we may assistance.

[i] https://www.gov.uk/government/news/restaurant-company-director-banned-for-employing-illegal-workers

[ii] In a book I read on Snowden, he did this for the purpose of security.

[iii] Internet connection record

EMPLOYMENT AND DATA PROTECTION NEWSLETTER – OCTOBER 2016

In this edition we shall discuss:

·         Making sense of the Uber legal decision

·         Data protection and Yahoo & WhatsApp

·         UK ICO recommendation personal liability for directors for breach of data protection

·         Heathrow expansion

1.       Aslam & Others v Uber BV & Others (2016)

Uber has an app and its customers use this app to get access to a cheaper taxi service. The customers pay Uber by credit or debit card. The drivers are paid money once a week by Uber who deduct a percentage (25%) from the total profits made by the drivers. When the Claimants had started to work for Uber the deduction was in fact 20%.

A claim was brought by a number of Uber drivers stated that they were not self-employed contractors as indicated by Uber. Instead they were in reality employed workers, notwithstanding what the contract between the parties state and accordingly they were entitled to protection under the current employment law.

The central issue: to determine whether or not an Uber driver is a ‘worker’ is whether or not Uber exercised control. What the drivers had to show was that Uber controlled them and they were not truly independent.

At paragraphs 52 & 53 are the legal reasons why the drivers argued that they were controlled by Uber. For example Uber would force drivers to turn off the app for 5 minutes if they had declined 3 trips whilst they were meant to be working. In other circumstances, they were forced to log off the app for 10 minutes as a penalty, if they were in breach of Uber’s rules. The drivers also highlighted to the tribunal that there was further control by Uber through its rating system (see paragraph 54).

Uber management, Ms Bertram denied that Uber exercised control. Ms Bertram said that no member of management at Uber advised the driver to take a particular route. This statement was true, however everything at Uber was done electronically and the drivers were provided with a route courtesy of the system. The Judges accepted the evidence of Mr Farah that if a driver did not drive a specific set route then Uber would deduct money from the driver and provide the passenger with a refund.

To illustrate that the drivers were self-employed, at paragraph 60, Uber highlighted that:-

1.       Drivers were responsible for their own PH licence.

2.       Drivers were self-employed for tax purposes.

3.       Driver were free to elect what Uber products they used.

4.       Drivers met all expenses for running their own vehicles.

5.       Drivers are not provided with an Uber uniform.

Uber also said that even if the court determined that the drivers were ‘workers’. They were contractually bound by ‘Dutch law’ and not UK employment law.

It was held that the Uber drivers were ‘workers’ in accordance with the definition provided by s230 (3) (b) of the ERA[i]. Thus they were not self- employed contractors. The tribunal had looked at the case law. The case law favoured the Uber drivers’ case that they were workers. Thus although Uber tried to prepare a business model that would ensure it was not an employers. The business model, which the tribunal criticised failed to achieve its object.

The decision means that the Uber drivers are entitled to holiday pay. Their working hours are to be carried out in accordance with the Work Time Regulations. They will be entitled to receive the National Minimum Wage and they will be protected by the whistleblowing legislation.

Tips from the Uber Case!!!

The lesson to learn here is quite simple. Parties can say that the person providing the service is a self-employed contractor and that person pays their own tax and national insurance as well as the expenses of being self-employed. A contract has been drawn up to back up the legal position agreed between the parties. However when the independent contractor seeks to challenge their status and they do more often than you think. The first thing a tribunal judge or a court will look at is whether or not the other party to the proceedings exercises control. If a tribunal can see a lot of control being exercised by a defendant, it is highly likely the tribunal will impose the worker status as they have done in the Uber case.

Some employers may want to review their contracts with staff and if they can see that they are exercising a lot of control over the person’s working life. It may be prudent to offer them a permanent employment contract to remain with the law. Rather than face the cost of a legal challenge to be classified by the court as a worker with employment law rights.

2.       WhatsApp & Yahoo– data protection issues

WhatsApp & Facebook recently joined forces. In doing so they decided that they would share information between the two groups. Europe Data Protection Authorities have asked WhatsApp and Facebook to pause the sharing of people's data between the two groups and to communicate information to the s29 Working Party that confirms they will assure the relevant authorities in Europe that they will not abuse their position and that the public’s privacy will be protected in accordance with Europe’s Data Protection law.

Facebook recently changed its privacy policy so that the information can be shared between the two groups to the annoyance of a lot of users.

Yahoo, also admitted recently that in 2014 there was a data protection breach that involved the account of 500 million users. Yahoo had also allowed the US intelligence authorities to scan public information to the dismay of the Data Protection Working Party. The working party has requested that Yahoo should communicate with them issues about this breach as well as confirm that they had notified all the users involved. The working party has also requested that Yahoo should cooperate with all national data protection authorities who may decide to investigate their breach.

The data protection authority has written to both companies and it is my understanding that they are cooperating.

The Working Party will be looking into these breaches in November 2016.

3.       ICO – directors should be personally liable for breach of data protection law

The Information Commissioner, Elizabeth Denham recently advised the Commons Public Bill Committee as they were discussing the Digital Economy Bill that she was for directors being made personally responsible for Data Protection Breaches. We have seen some high profile breaches over the last 18 months (UK and USA). TalkTalk is always the breach that comes to mind and then Ashley Madison to name but a few. It sounds like a good idea, so let us see what happens.

Ms Denham may be motivated by the fact that last year the ICO fined UK companies £4 million pounds, but collected only a small portion of this sum.

4.       Heathrow Expansion

The government recently announced that Heathrow will have its third runway. The Department for Transport stated that the third runway would bring economic benefit to the wider economy worth £61 billion and it would create 77,000 jobs over 14 years.[ii] Some businesses would have been ecstatic by the news of the expansion others (for example those supporting Gatwick) less so.

What is certain is that the people who live close to the airport, the public authorities and environmental groups are not happy at all. Many view the expansion as an unnecessary evil. Zach Goldsmith resigned from his post and is now standing as an independent. Boris Johnson has made his unhappiness with the airport expansion well known.

The result, it is highly likely that there will see a legal challenge in the courts to the proposed expansion. The reason aviation is responsible for a lot of pollution. The air around Heathrow is not clean and expansion will make the air quality worse not better for the people who live around the Heathrow area. Building the third run way would further breach air pollution laws. It is believed that the proposed expansion fly’s in the face of the recent Paris Climate Agreement which we recently executed. Thus Tory MP’s are getting together to bring the government to court so as to fight the expansion. So although the runway has been approved to keep the UK economy afloat; there is no guarantee it will go ahead. If the MP’s can get good, creative lawyers to challenge the expansion they may win.

It will be worth watching to see if proceedings are issued in the not too distant future.

[i] Employment Rights Act 1996

[ii] http://www.bbc.co.uk/news/business-3776018

Business Newsletter September 2016

Employment and Business Law Update 

In the newsletter we will discuss:-

1.       Simplification of tax in relation to Settlement Agreements

2.       Court of Appeal upholds blocking of websites that infringe trademarks

3.       Apple Tax Fiasco and the E

1. Simplification of Settlement Agreement Tax

First and foremost I must say I never found the regime difficult to understand. I cannot help feel although we have full employment (in theory); the reality is that we are not collecting sufficient taxes and by any means necessary the government is trying to raise more funds because we need the money.

The new rules will come into force April 2018. The consultation has not finish so there are likely to be further changes. For employers who from time to time use settlement agreements; it is prudent to keep an eye out for any additional changes.

1.       Under £30,000 tax exemption

The tax exemption regarding payments under £30,000 will continue to apply. For junior staff this payment is the norm. Senior staff are usually paid over £30,000.

Contractual or non-contractual payments over the sum of £30,000 will be subject to income tax as normal.

2.       National Insurance Contributions

National insurance must be paid in relation to any income earned under a contract of employment. It is not paid at present in respect of any settlement payment over £30,000; as only income tax is applied. Under the new regime, sums paid in excess of £30,000, will attract income tax and NI.

This is good for HM Inland Revenue as they get more money, however it will cost employers more to get rid of senior staff.

3.       Payment in lieu of notice (PILON)

The rule was that only income tax, not NI had to be paid. The simplification rule means that both NI and tax will have to be paid on any PILON provision after April 2018. This simplifies matters.

2. Court of Appeal upholds blocking of infringing websites

Working in an industry where infringing copies are sold online using a website has just become more difficult in the UK.

 In the case of Cartier International and others v Sky, BT, EE, Virgin & Talk Talk (2016) EWCA Civ 658 . The five internet service providers (ISP) were appealing against orders made in the High Court which stated that they must block websites that infringed the registered trademarks of the Claimants (collectively known as Richemonts). The trademarks being infringed related to Cartier, Mont Blanc, IWC and other well-known brands. The order also stated the ISPs must pay for implementation. Due to the fact that they were the unsuccessful party, the ISP’s were also forced to pay the legal fees of the claimants.

The ISPs (Applicant’s on appeal) appealed on the basis that the order of the lower court was too wide and that they had done nothing wrong.  The lower courts had exceeded their jurisdiction. The Court of Appeal upheld the decision of the lower court ordering the ISP to be legally responsible for blocking the websites of the infringers. In particular the judges up held paragraph 35 of the Judgement of Arnold J, in the high court.

This is a great decision for trademark owners where counterfeit of their goods are being sold online. The courts will protect the rights of trademark owners and order the ISP to pay the costs if they are unsuccessful in any claims that are defended. Thus ISP, should be more cooperative and help to pull down infringing website selling counterfeit goods. 

3. Apple Tax Fiasco

The European Competition Commissioner Margreth Vestager stated that Ireland had granted tax benefits of 13 billion euros (£11 billion) to Apple. Notwithstanding high profits, Apple paid significantly less tax than other large corporations. Corporate tax in 2003 was 1% and by 2014 it was 0.005%. This means that Apple pay 50 euros for every million pounds worth of profit (do not swear!!!).

Apple tax arrangement is that it has ‘Apple Sales International’ and ‘Apple Operations Europe’.

In terms of Apple Sales International (based in Ireland), the Apple products sold in stores throughout Europe result in a contract between the consumer and Apple Sales International in Ireland rather than in the country of purchase. Thus all profits are allocated to Apple Sales International. The tax arrangement Ireland has is that Apple are taxed on the profits it makes in Ireland. However the European Commissioners view is that although all European profits go to the Irish Companies, instead of all profits being taxed; only the profits made in Ireland are taxed. The other profits (from for example Apple stores in England and France) are channelled away from Ireland to a “head office”.  The head office is a separate subsidiary. The head office is not based in a country. It does not have employees or its own premises. Once in a blue moon it has board meetings. Therefore only a small percentage of Apple’s Europe profits are taxed in Ireland.

A similar model exists for Apples Operations Europe.

The Commission therefore felt that the tax rulings issued by Ireland endorsed the artificial allocation of profits within Apple Sales International and Apple Operations Europe which has no factual or economic justification. The tax rulings enabled most of the sales of Apple Sales International to be allocated to its ‘head office’ when the ‘head office’ was simply a sham (my words). The Commission concluded that the tax arrangement is illegal under EU state aid.

Ireland disagrees with the Commission assessment.

Apple now argues that the decision will have a profound impact on work and jobs (5,500) in Europe. Apple proposes to appeal the decision.

This multinational corporation appears to be simply using a complex corporate structure to avoid tax. I understand that MacDonald’s and Amazon are also on the radar. The appeal outcome will be worth waiting for and in the interim what is clear is that: companies (large or small) need to understand that ‘aggressive tax planning’ is under review and may be deemed illegal!

Client Newsletter - July 2016

Introduction

In this newsletter we looked at:

·         Maternity law, on the last occasion we looked at mothers rights! 

·         Working in hot weather

Maternity Law

One of the reasons why I have concentrated on maternity rights (in the last issue) and maternity law in this newsletter is that in the UK we shamefully discriminate against pregnant women.

I have seen the real ugly side of things for example employers changing the rotas of receptionists ignoring completely that most of the receptionists are young mothers.

Employers dismiss expecting mothers regardless of what the law has to say on the matter.

Employers ignoring health and safety in relation to pregnant mothers.

Sports direct has been in the news and it is always reported, the story of the young mother who gave birth in a toilet. She continued to work so as not to find herself in the position whereby her pay was being deducted.

It is fair to say that the attitude of companies whether large or small is simply to try and get away with discriminating against pregnant mothers; even though we all come from a mother.

Maternity and pregnancy discrimination

Maternity and pregnancy discrimination are direct discrimination claims under s18 of the Equality Act 2010 (“the Act”). They are a specialist area of discrimination law.

A person must not treat a woman unfavourably during the protected period in relation to her pregnancy or any illness suffered by the woman because of her pregnancy.

A person must also not treat a woman unfavourably during the protected period because she is on compulsory maternity leave (the first two weeks after birth) or sheis exercising or seeking to exercise the rights to ordinary or additional maternity leave.

What is the Protected Period?

From the start of a pregnancy up to and including the end of the woman’s maternity leave.

No Need for a Comparator

It is the norm in discriminatory cases that the individual bringing the claim has to point to another individual as a comparator. Due to the unique position of pregnant women; the legislation has removed the need for a comparator.

Women can also be victimized and/ or harassed because of their pregnancy and are legally entitled to add this to any potential claim.

Women can therefore bring claims because they have been discriminated against during their pregnancy or their maternity. If they are unable to bring the claim under maternity and pregnancy discrimination law, then the law that relates to sex discrimination may help.

Do I have to prove length of service?

Due to the fact that pregnancy and maternity discrimination is a special form of discrimination claim. If a person is unfairly dismissed by their employer they will not have to prove any length of service as pregnancy related discrimination is an exception to the two year (length of service) rule.

Case examples

Rather than spending a lot of time describing the law. I will look very briefly at two cases.

The first case is Nixon v Ross Coates Solicitors. In this case at the office Christmas party Ms Nixon kissed the IT Manager Mr Wright. After the party Ms Nixon went on vacation. However she also fell ill and did not return to work until the end of January 2008.

The office staff caught on to the fact that she had fallen pregnant and there was a lot of gossip about who was the father of the child. The HR manager made a suggestion about the paternity of the baby. [i]Ms Nixon did not want to work in the same office as the HR Manager. The solicitors did not deal with the matter properly. Ms Nixon resigned and brought a claim under the old law for sex and pregnancy discrimination as well as constructive dismissal

At first instance the tribunal rejected Ms Nixon’s claims except the claim for constructive dismissal. However the tribunal felt that Ms Nixon had contributed to the situation and made a reduction of 90% in relation to her award for damages. Rightfully Ms Nixon appeal.

The Employment Appeal Tribunal overturned the decision. It was held that Ms Nixon had been discriminated against on the grounds of a sex and pregnancy. Ms Nixon had also been constructively dismissed. The tribunal at first instance had made an error when it deducted the compensation by 90%.

The second case is: The Commissioner of Police for the Metropolis v Katherine Keohane.

Ms Keohane was a dog handler and had two narcotics dogs. Her dual narcotics dog handling credentials meant that she could get overtime on regular basis and that she was in a good place for her career to take off.

Ms Keohane gave notice to her employers that she was expecting a baby. It was the second notice in a relatively short space of time (17 months) and it is fair to say that the police were not happy about it. The police decided that Ms Keohane could keep one of her dogs, Borg Warf. However Nunki Pippin, the second dog had to go because it had been inactive from duty for nine months as it was with Ms Keohane during her first pregnancy.

Ms Keohane complained to a tribunal about unfavourable treatment during her pregnancy contrary to s18 of the Equality Act. Ms Keohane issued a second application during her maternity, she claimed a further breach of s18 because her employers refused to give back Nunki Pippin.

Mr Justice Langstaff stated “the fact that the needs of the Metropolitan Police to keep Nunki Pippin operational may have been major, or a major reason for the decision to not allow Ms Keohane to keep him during her second pregnancy. However the employers subjected Ms Keohane to detriment because by having no second dog, Ms Keohane lost the opportunity for overtime and thus her career prospects had been damaged by Nunki Pippin’s removal. It is not difficult for anyone to see the detriment Ms Keohane had suffered because of her pregnancy.

We have assisted mothers or prospective mothers in difficult situations. If you are aware of a mother who is being discriminated against; please feel free to refer the mother to the firm.

WORKING IN HOT WEATHER

Introduction

Listed below are what we know we ought to do, but many of us simply forget if we are rushing around.

Things to be considered when working in hot weather:-

1.       Access to cool water. This does mean remembering to take it with you when you are travelling long distances.

2.        Ensure that you remain hydrated.

3.       Working in doors, the air conditioning on to keep cool.

4.       Alternatively, blinds should be down to create shade!!

5.       No air condition, fans and windows open may help.

6.       Treats such as a cold drink, ice cream etc., should not break the bank balance of your employer. If you employer is tight; alternate such treats with your colleagues. If this is not possible; look after yourself.

7.       Dress code: This will vary from organisation to organisation; but you may want to ask your employer to consider relaxing the dress code if the weather is unbearable.

8.       Comply with the health and safety regulations[ii].

9.       For people working outside; I attach a link to an article from the Health and Safety Executive. It corroborates a lot of what has been said at points 1-7 above, (see the foot note).

10.   Travelling to work in this weather, it would be prudent to walk with some water and use an umbrella as sun shade if it is deemed necessary.

11.   Sun tan lotion for the skin; all skin types I assume as I am nursing a sun burn!

© Johanna Cargill

[i] This is when the employer has committed a fundamental breach of your contract of employment. You have every right to resign.

[ii] http://www.hse.gov.uk/temperature/outdoor.htm

Business Newsletter - July 2016

BREXIT – A NEW MODEL FOR BRITAIN

This article:

·         Looks at the different modelsthe UK can take on post Brexit

Introduction

This article is intended to examine briefly the different types of models used by countries outside the EU who wish to gain some access to the single market.

Before looking at the different models; we will first of all define the single market.

1.       The Single Market

The single market is an economic trade bloc that exists for the benefit of its citizens. It is the largest economic free trade zone in the world. The single market allows: free movement of goods, services and capital between all 28 member states of the EU; referred to as the Customs Union. There are preferential/no tariffs or import duties for members who are part of the union. The bloc stimulates competition and trade and aims to improve efficiencies’ and raise standards of the quality of goods and keep down costs.

 There exists a single common external tariff for businesses who import from countries outside the EU.

Europe also negotiate on behalf of its members free trade agreements with other countries for the whole bloc. So far there are 36 external trade agreements that covers 53 economic markets. We get preferential rates because of these agreements when we export.

Not only do UK businesses have access to the largest single market in the world tariff free, we also benefit from cooperating with our European neighbours in relation to international security, crime and terrorism.

The financial passport allows free movement of financial services. UK has always benefited from this and has always been at the heart of Europe’s financial sector. This will change once we Brexit and it will impact on London as the financial centre.  The extent to which this sector is really damaged will depend on the Brexit terms. If anyone disagrees with this statement. I am truly happy to hear your views on the matter.

An important factor of this union is that we cooperate with each other on terrorism, crime and security. The Union has helped to maintain a reasonable amount of peace in the region[i].

A.    The Norway Model

 Introduction

·         Norway is not part of the EU, but is a member of the European Economic Area (EEA) which comprises of the EU 28 member states and Norway, Iceland and Liechtenstein[ii].

·         Norway has some access to the Single Market, but not complete access. Norway is therefore outside the EU Customs Union.

·         This model means that there is no access to the EU trade agreements with 53 other markets around the world.

·         Norway contributes to the EU and is bound to its rules.

If we were to take on this model we would still be bound by EU rules but we have no right to vote or veto some of these rules. To adopt the Norway model we would need to agree with the remaining 27 EU countries, along with Iceland Liechtenstein and Norway. Members have a right to veto the UK from joining.

The key features of the Norway Model are:-

Access to the European Union

·         Norway is outside the Customs Union, thus all the trade in goods between Norway and the EU are subject to customs procedures. Countries that export to the EU will have to provide documentary evidence that goods are made inside the EEA or the goods comply with 500 product specific rules[iii]. Reality check, this means more costs to UK businesses.

·         Norway is outside the Single Market for agriculture. However 64% of the UK fish exports and 73% of our vegetable exports[iv] so these industries if they still want access to the market will have tariffs added making the goods less competitive.

·         Norway deals with its own trade and investment deals. Some has been dealt with by the European Free Trade Association[v] however this organisation only has 25 Free Trade Agreements compared to the 53 we abandoned with Brexit.

·         Norway chose to be part of Schengen border free area. Thus it accepts freedom of movement from both the EU and EEA. Although because of the recent migration crisis, Norway has introduced temporary passport checks at its borders for EU member states[vi].

·         Norway has no automatic right to participate in the EU cooperation in police and security. In order to benefit from important things as the European Arrest Warrant, Norway has executed a bilateral agreement with the EU. These take time to negotiate.

·         Norway has no voice in decision making or a right to vote over EU International and security policy as it is not part of the club.

Costs and legal obligations

·         Norway domestic laws comply with EU legislation that forms part of the EEA Agreement.

·         Norway has to accept freedom of movement.

·         Norway still makes a significant spend to the EU.

·         The UK will still have to pay the EU for access to the single market. The House of Commons estimated that its contribution under the EEA would fall by 17%.[vii]

Influence

 ·         I am not prepared to write a lot here as it goes without saying that if you are outside of an important economic club; you will have little or no influence. Naturally it will impact on how you are perceived also on the world stage.

Good model or not for the UK

First of all we are not really comparing like for like. Norway is a much smaller country. 5.2 million Population. GDP $388 billion. The UK in comparison 65 million people and our GDP is $2.85 trillion[viii]. We used to be the 4 largest economy in the world; everyone forgets this fact and under the current government we are now the 5 largest economy in the world.

Compared to the current arrangement, this proposed new arrangement will not benefit those who run businesses that export to the EU as there will be additional costs with more regulation and no influence. It is not rocket science.

Due to the fact that immigration was the biggest reason for Brexit; I cannot see those who vote for Brexit accepting freedom of movement. However if we want access to the single market; freedom of movement may be imposed. This is the position under the Norway model; so I do not see this model being used frankly.

This model is not good for the financial services sector which accounts for 8% of the UK output.

We most certainly will be spending a lot of time negotiating new Free Trade Agreements.

Whatever new model we have, our global influence has been damaged as we had a powerful position almost at the helm of the European Union; but few people would agree with that statement.

The Norwegian government did a report in 2012 of the benefits of being outside the EU and concluded that it has received economic benefits through access to the EU single market; but the cost was a loss of voice. In other words EU rules and regulations were imposed rather than negotiated.

On a personal note, I cannot see how this model would assist the UK to achieve its goals especially as free movement is a fundamental pillar of the EU. The UK is trying to get away from this provision.

B.    Bilateral Agreements

Some countries have simply negotiated their agreement with the EU. To be honest this appears to be what the UK may have to do. How long it would take for a reasonable agreement to be made only time will tell. However I would be impressed if everything was resolved, done and dusted within 2 years.

Countries that appeared to have negotiated such agreements are: Switzerland, Turkey and Canada. We will therefore briefly look at these in turn.

Switzerland Model

Access

Switzerland’s relationship with the EU is based on a number of bilateral agreements. The country has negotiated over 100 agreements with the EU covering market access in relation to different sectors. Unlike Norway Switzerland only has partial access to the Single Market. Most of it is trade in goods, agriculture is not covered and therefore any agricultural produce is subject to tariffs.

Switzerland bilateral agreement only provided limited access to trade in services. There is a limited market for professional services, such as accountants or lawyers (90 days to be precise). This therefore has impacted on Switzerland’s ability to export to the EU.

In order to benefit from the financial passport provisions, Swiss banks have been forced to establish a subsidiary in an EU country with full membership (dare I say such as the UK) so as to get the passport rights. Brexit must make the UK less attractive.

UK banks, just like the Swiss banks will have to do the same to retain financial services passport rights.

Costs and legal obligations

Switzerland does not have to comply with EU legislation like Norway; however because of its agreements with the EU Switzerland chooses in most cases to align its legislation to EU laws.

Switzerland has to enter into its own trade agreements with other countries around the world. Switzerland has 29 agreements which covers 41 countries unlike the 53 markets covered by the EU. These agreement can take time to negotiate.

Switzerland has similar arrangements as Norway on border and police cooperation. It is also part of the Schengen border free area.

          Influence

Just like Norway, Switzerland is not part of the EU club so it has little or no influence. It has always been known for its neutrality in any event politically. Like Norway it does make a contribution to the EU spend as part of its bilateral agreements.

Currently there is a dispute between Switzerland and the EU regarding one of the bilateral agreements. In 2015 the Swiss chose to vote for immigration quotas and the EU is arguing that this is a breach of the bilateral agreement between Switzerland and the EU regarding freedom of movement. In response the EU has suspended negotiations with Switzerland regarding further access to the Single Market.

Good model or not for the UK

I do not see how this can differ from the argument specified above; save to say the position for Switzerland actually appears to be worse as they have limited access compared to Norway.

This model was created to enable Switzerland to join the EU. This never occurred. The EU are not happy with the model and it is unlikely that they would enter into such an agreement again.

Turkey Model

        Access

Turkey and EU have been trading with each other under a trade and economic Association Agreement since 1963[ix]. Turkey joined the EU Customs Union. The relationship is based on the fact that Turkey is a developing country that aspires to acquire full EU membership.

The recent political turmoil in Turkey will not help it to acquire the EU membership it desires.

Access to the single market is partial and relates to Turkey’s industrial goods and processed agricultural goods. Thus there are no custom checks for these goods when they enter the EU single market. The arrangement means however that Turkey has to comply with some EU specific rules such as the rules on competition, production and the environment. Turkey aligns support to businesses (state aid) in line with EU rules. Turkey’s tariffs must also be aligned with the EU.

Part of the agreement that Turkey has with the EU means that a Turkey has some limited rights to enable it nationals to reside in the EU.

One of the major problems with this model is that the Customs Union does not cover financial services which are essential to the UK economy.

Costs and legal obligations

Turkey can do trade with other countries. However because its tariffs are aligned with the EU, this limits the trade deals that Turkey can agree. What makes things worse is that if the EU enters into an agreement with a third party country. Turkey is bound by that agreement and must open its market to the third party county. Turkey still has to enter into an agreement with this country to be able to export its goods.

Influence and sovereignty

It is clear that there is only minimal influence.

Suitable for the UK

The above model would not be suitable for the UK who would have tariffs imposed. This model again is a precursor to Turkey joining the EU; there is no evidence that the EU would have the appetite for a similar model with another country. However we would be foolish to use this model as it’s clearly not in our vested interest as a country to do so.

Canada’s Model

Access

Canada and the EU have a Free Trade Agreement. It took them 7 years to conclude the agreement. Canada’s access to the EU is less than what we currently enjoy. The agreement had to be approved by the EU Commission and its parliament.

Canada has no obligation to contribute to the EU.  Canada is not part of the single market therefore it is not bound by rules and regulations and policies and it does not have access to the EC of Justice

The agreement will allow for tariffs on industrial and most agricultural goods entering the EU to be phased out. In this agreement businesses are allowed:

a.       To carry out trade, Canadian companies must prove that sufficient components of goods they manufacture are from Canada in order to benefit from the preferential tariffs.

b.      Tariffs have not been removed however for everything. Thus for certain products the EU has imposed quotas. I assume this is when the EU produces the product. Thus Canada is limited on its export of beef. I understand that 90% of the UK beef goes to the EU, no wonder we will want some access to the market. Outside Europe our famers are facing tariffs of more than 12%. Our cars will also be looking at a similar tariff.

c.       There is no passport provision for financial services. If Canadian financial firms want to benefit they have to establish a subsidiary inside the EU to operate under EU regulations.

d.      EU is liberalising its market in relation to professionals. Thus making the market more flexible for professionals to travel and work abroad. Currently if Canada wants to benefit it has to establish subsidiaries in individual EU countries, employing professionals with qualifications in that country.

e.      In terms of products submitted, for example medical equipment, in order to enter the market, the EU will have to approve the product.

f.        Investment restrictions exist in relation to sectors such as banking and aerospace.

Costs and obligations

Both parties made concessions to make this agreement. It has taken a long time to thrash out though, 7 years!

Suitability for the UK

Another model where I cannot see anything positive because UK companies will have to comply with the rule of origin, adding to their costs. UK will have to comply with EU product standards which would be imposed as we will not be in a position to help set those standards.  If companies in the UK feel that they are being treated unfairly under the agreement, it would be difficult and costly to enforce as the UK Company will not be able to use the ECJ.

UK will not have the benefits of cooperation with the EU regarding security, the police and the European Arrest Warrant.

There would be tariffs applied to industries such as agriculture and for those that manufacture. We may also have quotas imposed. We will not be able to benefit from the Financial Services passport regime. Instead the banks and insurance firms will have to have a base in a European country, a member of the EU to obtain this benefit.

C.     WTO – MODEL

The World Trade Organisation model is like the ‘lender of last resort in banking’. If we cannot arrive at an amicable agreement with the EU, this is the model we may have to be used.

Access

We would have no preferential access to the single market as all WTO members must be treated the same. We would be outside the European Union. There would be no need to make a contribution.

We would have tariffs imposed by the EU. I believe that this is inevitable. This will significantly increase costs and make us less competitive than countries within the EU or those with free trade agreements. The EU will impose a common tariff and WTO members must offer similar terms to other WTO members. So much for sovereignty and control. The WTO agreement would not cover financial services.

Access to the 53 markets we currently have would naturally stop and we would need to negotiate new agreements.

Rights to live, work and be educated in other member states will end.

The European Court of Justice would not apply.

Obligations

If there is any remote chance we get access to the market, we will need to comply with the rules. For example if you manufacture cars and sell them in the EU, you will still need to meet the EU safety standard.

Influence and Sovereignty

Again, the UK would be insignificant. The main players of the 162 WTO members are USA, China and the EU. These countries or trade blocs will be at the table when it comes to the multilateral trade deals.

Good model or not for the UK

I do not think we intentionally want to lose our place in the world ranking, however we will. The UK would be viewed as smaller player internationally,

We would have tariffs imposed.

We would have no access as such to the single market; nor for that matter would we have access to the 53 markets with whom the EU has trade agreements. Yes, we can enter into new agreements however with different countries. Australia has said it is prepared to enter into an agreement.

This model would impact on UK companies, jobs, exports and investments.

We would not have cooperation with Europe regarding crime, terrorism and policing unless we enter into bilateral agreements. Such agreements take time.

Conclusion

I do hope those who pushed Brexit as the way forward can enter into a Free Trade Agreement with the EU and other markets that in the long run is truly beneficial to the UK and does not destroy the financial services industry in the City of London.  Development over the next few years would be interesting.

Useful articles

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/504604/Alternatives_to_membership_-_possible_models_for_the_UK_outside_the_EU.pdf

https://www.slaughterandmay.com/media/2535258/brexit-essentials-alternatives-to-eu-membership.pdf

© Johanna Cargill

[i] I have used the word ‘reasonable’ in an odd fashion here;  because I am referring to the fact we all simply sat and watch Russia expand its borders.

[ii] Norway, Switzerland, Liechtenstein and Iceland are also part of EFT. The European Free Trade Zone which promotes closer economic cooperation and free trade amongst member states.

[iii] http://eur-lex.europa.eu/legal-content/EN/TXT/HTML/?uri=OJ:L:2005:321:FULL&from=en

[iv] UN COMTRADE Harmonised System Product Group 03

[v] Norway, Switzerland, Iceland and Liechtenstein

[vi] Schengen border – 26 European members who have no passport checks

[vii] House of Commons Library (2013), “The Economic Impact of EU , membership on the UK”, pg 25

[viii] http://country-facts.findthedata.com/compare/28-179/United-Kingdom-vs-Norway

[ix] Ankara Agreemen

Business Newsletter - June 2016

IMMIGRATION ACT 2016

An Immigration Special

Introduction

On 16 May 2016, the Immigration Act received Royal Assent. Significant changes were made to the law which will come into effect through regulations over the next few months.

This article is intended for organisations that employ staff, business owners, HR Departments, landlords and letting agents.

The purpose of the new Immigration Act is to make life tougher for illegal workers (migrants) and to punish those employers and landlords who do not play by the rules and turn a blind eye.

In this article we will discuss some of the key changes:

1.       Residential Tenancies

2.       The new offence of illegal working

3.       Skilled workers charge

4.       Significant rule changes for migrants

5.       Charging employers recruiting from outside the EEA

6.       Language requirements for the public sector

Residential Tenancies

Landlords who comply with the law are aware that under the Right to Rent Scheme they are obliged to check the legal status of tenants to ensure that the prospective tenants are in the country legally. This involved checking passports or biometric residence permits and keeping copies. Landlord who fail to make the checks risked a maximum civil penalty of up to £3,000 per illegal migrant tenant.

If a landlord discovers that the tenant is illegally residing in their property. Then must use the law to evict that individual rather than risk a fine.

The government changed the law, so it is now a criminal offence to lease premises to an illegal migrant. The offence is committed if the tenant is disqualified from renting because they do not have the immigration status that allows them to reside and work in the UK legally.

The landlord who knows or has reasonable cause to believe that the person is disqualified because of their immigration status runs the risk of committing an offence under the new Act. The landlord may be fined (there is no upper limit). There is also imprisonment of up to five years.

The legislation also states agents of a landlord may also commit an offence.

It is a defence to show that the landlord had taken reasonable steps to evict the tenant. So on discovering the tenant is not residing in your property legally; you must start eviction proceedings.

This is just a brief summary of the new law and you are respectfully referred to the relevant provisions of the Act.

See s39 of the Immigration Act 2016. 

The new rules regarding illegal working

Employees/ Workers

A.      The offence of Illegal working

The legislation introduces the new offence of illegal working.

A migrant commits the offence of illegal working if that person is subject to immigration control and:-

1.       The person works at a time when they know that they are disqualified to work because of their immigration status; and

2.       The person knows or has reasonable cause to believe that they are disqualified from working because of their immigration status.

A person working refers to any  person who works; whether it is under a contract of employment, an apprenticeship, a contract to personally work, a contract to provide a service, or a contract to supply goods, a member of the crown, a constable, staff in the House of Lords or the House of Commons.

It is fair that the definition of work is very wide and catches almost anything really. The migrant is likely to be at risk in my opinion if they are self-employed under this new legislation.

The individual may be fined and or imprisoned for a term not exceeding 51 months.

See s34 of the Act for further details.

B.      The offence of employing an illegal worker

In terms of the employment market. An employer commits the offence of employing an illegal worker if they employ an employee who is disqualified from employment because of their immigration status; and

The person has reasonable cause to believe the employee is disqualified from employment because of their immigration status.

A person is disqualified from employment by reason of their immigration status if as an adult they:

1.       Have not been granted leave to remain or to enter the UK; or

2.       The person’s leave to enter or remain in the UK is

a.       Invalid; or

b.      Has ceased to have effect (because of curtailment, revocation, cancellation, passage of time or otherwise); or

c.       Is subject to a condition that prevents employment.

‘Reasonable cause to believe’, means that the employer does not need actual knowledge to be guilty   of the crime. Although the government states in their fact sheet that the intention is only to prosecute rogue employers. I am not taking on board what they are saying and would advise employers to take make sure that the migrants they employ are lawfully employed; otherwise they will be an easy target to be fined and prosecuted.

The employer (you) can be imprisoned for up to five years under the new legislation.

Likewise if you’re a rouge landlord and a repeat offender; the new law allows the authorities to close down your business for 48 hours.

What is even more important for you to realise is that the law specified above will take effect on 12 July 2016.

See s35 of the Act.

English language requirement for public sector workers

Public sector employers will have to ensure that staff who interact with the public must speak English. There will be a Code of Practice outlining compliance. This has to be drawn up!

The public authorities must have a complaint procedure in place, so that members of the public can complain.

Public sector workers will include NHS staff; so again I think this new legislation is at risk of being challenged.

See s77 of the Act.

 The Skills Workers Charge

The government has decided that to incentives employers in the UK to use British workers over foreign workers.

In order to actively encourage a change in behaviour the government is going to introduce a charge for employing skill workers from outside the European Economic Area. It is proposed that this will take effect in 2017.

Employers will be charged £1,000 for tier 2 skilled employees from certain skill sets. However there will be a reduction in the charge to £364 in relation to small organisations or charities.

The minimum salary also for employing such a person will increase from £25,000 to £30,000.

There is an exemption to the charge. It will not apply to PHD student jobs; or students who switch from student visas to work visas.

 Specific rule changes for migrants

·         Bank Accounts

Banks and building societies will have to check the status of the account holders in order to ensure that they are entitled to reside in the UK. There will be a charge and this will no doubt be passed on to customers.

Where the bank or building society ascertains that a migrant is not lawfully entitled to reside in the UK. The organisation in question must report potential illegal migrants to the Home Office. The Home Office will probably do their own checks. If they are agree with the bank, then the bank will be ordered to close the account down. Alternatively the Home Office will apply for a freezing order.

See s45 of the Act.

·         Driving Licence

A migrant who is not a lawful resident in the UK, cannot drive under the Act. If the person drives they commits the offence of driving when unlawfully in the UK. The person may receive a penalty and or imprisonment not exceeding 51 weeks. The motor vehicle of such a person may be seized.

I assume that the road insurance of such an individual may be invalid. Hopefully it would still be honoured in relation to any passengers or innocent third party as a result of a road accident.

See s44 of the Act.

This picture was added for a bit of fun!

Conclusion

A prudent employer who has read this note will immediately check their right to work procedures. Make amendments to the procedure to ensure compliance with the new law.

It would be sensible to check the immigration status of employees. You could explain to the employees in question that the law has changed and that everything is under reviewed.

For the landlord or agent, check your procedures for determining the status of tenants. If you have not done checks on the immigration status of your tenants for a while; now might be a good time for a review.

Annual checks all around may be prudent as well as checks when you are taking on a new employee or a new tenant.

Employers and landlords however must not forget that the discrimination legislation still exists and they must comply with it.

There is also the human rights legislation which is applicable in this area of law. I suspect lots of cases will be commence as a result of this new legislation.

Client's Newsletter - 25 May 2016

This issue looks at:

·         Is France right to introduce a ‘right to disconnect’ law?

·         Maternity Rights.

·         Should ‘employers’ or ‘third parties’ dictate appearance at work?

    Is France correct to introduce a ‘right to disconnect’ law?

France is in the process of drafting a ‘right to disconnect’ law. This is the right of employees to disconnect from social media, telephone calls from employers and emails after work. Thus an employer will not be allowed to request that an employee should respond to emails in their own time. Nor for that matter will employees be expected to respond to telephone calls. The intention of the French legislators is to enable employees to cut off from the digital world of work. It is fair to say that we are more connected than ever because of mobile telephones, portable computers and tablets. Some argue that we may at time suffer from digital burn out. Thus a right to disconnect law may appear attractive. However I am not sure if it would really afford employees the protection that the French legislators intend. So we will have to wait and see what the legislators produce as new law.

In the interim, I cannot see the introduction of such a law in the UK under the current government. This  does not mean UK staff are not afforded any protection. Legislation such as the Working Time Regulations and Health and Safety at work can be used to provide employees or workers in the UK with some protection.

Employers will also have email and social media policies which could stipulate a cut off point.

Maternity Rights

Introduction

This short article looks at the rights of women in relation to maternity leave and pay.

Paid Time Off For Ante-Natal Care

·         Pregnant women are entitled to time off from work to attend ante-natal classes.

·         A pregnant woman is entitle to be paid for her absence from work to attend ante-natal classes.

·         No qualifying period is necessary for this employment right.

Health and Safety Risk Assessment

·         A prudent employer would carry out a Health and Safety risk assessment.

·         There is no general obligation to carry out a risk assessment. In O’Neil v Buckinghamshire County Council (2010) IRLR 384, the EAT held  an employer only has a duty to carry out a risk assessment when:

·                            1.       The employee notified the employer of her pregnancy; and

2.       The work carried out by the employee is of the kind that involves a risk of harm or danger to the health and safety of the mother and/ or her baby; and

3.       The risk in question arises from either the processes, work conditions or physical, chemical or biological agents in the workplace.

Maternity Leave

·         A pregnant woman in the work place has the right to 52 weeks maternity leave.

·         26 weeks will be ordinary maternity leave.

·         The second 26 weeks is called additional maternity leave.

·         To qualify for maternity leave the pregnant employee must advise her employer on or before the 15th weeks before childbirth:

o   That the employee is pregnant.

o   The date the employee intends to start maternity leave which can be any time from the 11th week before the date of birth.

·         An employer must then give the employee notice of her return date which an employee is entitled to change; provided the employer is given eight weeks’ notice.

·         If the child is born early, the maternity leave starts the day after the birth of the baby.

During maternity leave an employer and employee can agree up to 10 keep in touch days; however this does not confer a right on the employer. Accordingly the employee does not have to agree to it.

Compulsory Maternity Leave

·         Employees must have at least two weeks off after child birth. If the employee works in a factory, then it is at least four weeks.

Statutory Maternity Pay (SMP)

·         This is available only for eligible employees for a period of 39 weeks.

·         An employee is eligible for SMP if they have worked continuously for their employer for 26 weeks up to the qualifying week – the 15th week before the expected week of child birth.

·         The first 6 weeks the employee will obtain 90% of their average weekly wage before tax.

·         The remaining 33 weeks the lowest of £139.58 or 90% of their average weekly wage. This is paid in the same manner as income and is therefore subject to tax and NI.

·         If the baby unfortunately dies after being born or is still born after the 24th week of pregnancy, the employee will still be entitled to leave or pay.

Maternity Allowance

·         Women who do not qualify for SMP may be able to obtain a maternity allowance for a period of up to 39 weeks. The person must have been employed or self-employed for 26 weeks out of 66 weeks before the expected week of child birth. The allowance is £139.58 per week (or 90% of average earnings whichever is the lowest figure) and is tax free.  Payment starts 11 weeks before the baby is due.

Pregnancy Related-Illness

Maternity leave and statutory maternity pay will start automatically if an employee has a pregnancy related illness in the last four weeks before the baby is due.

Holiday entitlement

·         An employee is entitled to holiday as specified in their contract of employment and this includes mothers on maternity leave.

·         The holiday entitlement of the employee on maternity leave will accrue as if they were still at work in the office. Some mothers simply add the holiday entitlement to their maternity leave.

·         If the holiday is not taken, the government allows up to 28 days to be carried over to the following leave year. This is a factor you should discuss with your employer.

Shared Parental Leave

·   The law has been reformed so that leave can be shared between parents.

·    Shared Parental Leave Pay is £139.58 per week (or 90% of average earnings whichever is the lowest figure) and is tax free.  Payment starts 11 weeks before the baby is due.

Should ‘employers’ or ‘third parties’ dictate appearance at work?

Everyone would have heard of the commotion caused recently by the young lady Nichola Thorp, a temp who was asked to leave work (for a day) without pay; because she failed to wear high heels as part of the work dress code. Nichola Thorp started a petition which was signed by 100,000 people. The matter of women and high heels at work will at a later date be discussed by our MP's in parliament. 

Ms Thorp’s employers changed their dress code policy because of the adverse publicity and she is now allowed to wear high heels. Good for her. What amazed me is that she still has a job.

On Facebook I then posed the question to friends, if Nichola Thorp was a black female would she still have a job? Many refrained from answering the question which was what I expected. One brave man said’ no’. A black female in exactly the same position would have lost her job. Sadly I agreed with the statement.

The closest case I could find  was a young lady, Lara Odifin’s who had been offered a permanent job; however the job offer was withdrawn because her proposed employers were not prepared to accept Lara Odifin with her hair in braids. The young lady posted the matter on Facebook. She did not name the company because she did not want to take legal action and she did not want to be sued.

Both issues Ms Thorp 'shoes'. Ms Odifin 'hair' related to dress code.

It is true, employers can dictate what staff wear at work; however the policy must be fair and reasonable. It should not be discriminatory.  There have been many problem cases regarding dress code and religious symbols. The most famous case of all was Eweida v British Airways which went all the way to the European Court of Justice. 

Lara Odfin prospective employer may have discriminated against her. Lara Odiifin had a potential claim; claims however costs money and Laura took the practical approach and decided not to sue. I have no criticism of this approach. It is pragmatic. Prospective employers who discriminate can be sued. A factor many overlook by them and it is likely Ms Odfin was not truly aware of her rights.

Newsletter - May 2016

This issue looks at:

• Security and commercial contracts.
• The National Minimum Wage
• Dress Codes at work

Security Risks

In 2018, the General Data Protection Regulations (GDPR) will come into force. One of the effects is that if there is a breach of data security, the data controller and the data processer will both be legally responsible for the lack of security compliance. This is not the position at the moment. For example if we look at the TalkTalk breach, only the data controller would be liable for any fall out.

Under the new rules, the parties are obliged to be proactive in terms of notifying the Information Commissioner of any significant breach. The data subjects will also have to be notified of the breach.

The GDPR makes clear that if there is a breach, the data subject has the right to claim compensation. In the future there will be a lot of focus on this aspect of the regulation as clients seek compensation.

When looking at contracts between data controller customers and data processors. The controller will want contracts that have unlimited liability clauses and uncapped indemnities. This is unrealistic and data processors may decide to pull out of the market; rather than being exposed to such risks.

Instead the parties should consider focusing on:-

1.       Agree the technology  and procedures to be in place to keep data secure; and

2.       Ensure that the system is tested frequently to avoid breaches;

3.       Review security risks from time to time as threats do evolve.

4.       Have the contract specify what happens when there is a security breach.

5.       Negotiate the extent of liability and indemnity to be provided.

6.       Putting insurance in place.

The above would be beneficial to all as a contract that focuses purely on liability and indemnity is of no use where there is a massive security breach and the company simply folds. A likely event for smaller firms with significant breaches.

National Minimum Wage

On 1 April 2016, the national minimum wage became law. Thus for anyone over the age of 25, an employer will have to pay £7.20 per hour.

The national minimum wage will be paid in accordance with an employer’s work reference period. Thus if you pay your staff on the 28 day of the month, the national minimum wage for your company will need to be paid on the 28 day.

It therefore stands to reason that if an employee is 24, he will not get the minimum wage until the first pay date after his 25 birthday.

The average employee will receive an additional increase in income of approximately £1,000 as a result of the new minimum wage. This may lead some employers to try and restrict their work force to the under 25. Attempts may be made to do this contractually or a simply refusal to accept older workers for the position on offer after an interview; even though they are the right person for the job.

The law is clear, age discrimination is prohibited under the Equality Act 2010 and care should be taken as the savvier employee (or prospective employee) may bring a claim. If for example you had a contract terminating employment at 24 ½, then such an employee can bring a potential claim for automatic unfair dismissal (no need to establish 2 years employment) and a claim for age discrimination. Remember in discrimination claims there is no limit to liability.

Wearing High Heels

Price Waterhouse Cooper (PwC) were in the lime light when a young actress, Ms Nicola Thorp who was employed as a temp was sent home without pay because she refused to wear high heels all day in her day job as a receptionist job.

The young lady was sent home and fought back by creating a petition requesting parliament should make it illegal to force women to wear high heels at work.

 PwC have been quick to point out that this is not written in the firm’s dress code. This aspect of the dress code was in the policy of the temp agency.

So long as it is reasonable, employers can define acceptable staff wear in the workplace. Whereas in the 1960’s it might have been reasonable to expect women to wear high heels all day; in 2016, there is the real risk that such behaviour would be deemed sex discrimination under the Equalities Act 2010. No one should be surprised to learn that the temp agency that employed Ms Thorp has immediately changed its work dress code policy as a result of a discussion with PwC. Ms Thorp is free to work wearing her pumps.

 When I last looked at Ms Thorp’s petition, approximately 63,000 people had signed it. I believe she needs to get to 100,000.

A constant source of amusement with this petition is its potential impact on the fashion industry and the ‘catwalk’. No doubt they will argue the shoes are worn only short term and are essential for this particular the job.

This article is not intended to constitute legal advice, if assistance and advise on the legal topic covered is required, please do not hesitate to contact Johanna Cargill by completing the contact form which can be found here