January 2017

Welcome

Hello, we would like to share the latest news within Cluer HR as well as keeping you up to date with developments in the world of HR and employment law as they occur.

It’s all part of the service. We hope you find it useful. Your comments and suggestions are always welcome.

Pensions Tribunal Win for Judges ‘bad news’ for public and private sectors

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More than 200 judges whose pensions entitlements had been cut have won a legal case against the Ministry of Justice, which was found to have unlawfully discriminated against them. The ruling – which was brought by High Court judges, crown court judges, district sheriffs and tribunal judges – held that they had suffered age, race and sex discrimination.

The case stems from the introduction in 2012 of new a judicial pension scheme that required employees to make pension contributions, as well as additional pension scheme cuts that reduced pension lump sums for new and younger judges. In 2016, the judiciary warned the changes were deterring “well-paid lawyers” from becoming judges. Under the changes, younger judges were obliged to leave the judicial pension scheme in 2015 while older judges were able to remain in it. The pension changes amounted to age discrimination, the judges alleged, while two High Court judges made additional claims for gender and race discrimination.

Shubha Banerjee at Leigh Day, the law firm representing 204 of the judges, said: “Many of [these younger judges] sit alongside older judges who were appointed some years after them but who are, in effect, paid more purely because they are older. The fact that there is a significant number of female and BAME judges in the younger group simply compounds the unfairness of the changes that were made to judicial pensions.”

Laura Darnley at HRC Law, told People Management that the ruling could have implications across other public sector organisations, particularly if pension changes cannot be justified.

“This case flags a risk to other public sector organisations if they can’t demonstrate changes made to their pension entitlements are not discriminatory,” she said. “Public sector organisations would be well advised to revisit any changes they have made to pensions now and ensure they can justify them. When it comes to pensions, the stakes are high for individuals and the risk posed by this decision is that this case starts to galvanise challenges by younger employees who feel they have been discriminated against.”

If you’re concerned about any similar situations in your company, please get in touch at [email protected] or call 01386 751740.

British engineering giant Rolls-Royce will pay £671m to settle corruption cases with UK & US authorities.

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The UK’s Serious Fraud Office (SFO) found conspiracy to corrupt or failure to prevent bribery by Rolls-Royce in China, India & other markets.

The firm apologised “unreservedly” for the cases spanning nearly 25 years. A UK court ruled the aerospace firm would pay £497m plus costs to the SFO, which conducted its biggest ever investigation into the firm. The SFO revealed 12 counts of conspiracy to corrupt or failure to prevent bribery in seven countries – Indonesia, Thailand, India, Russia, Nigeria, China and Malaysia. Rolls-Royce said it would also pay $170m (£141m) to the US Justice Department, and a further $26m (£21.5m) to Brazilian regulators.

A BBC report asked: “Who was responsible for the conduct which has tarnished the reputation of the UK’s flagship engineering firm?” Approving this agreement between the SFO and Rolls-Royce, Sir Brian Leveson, President of the Queen’s bench division, stated that “the conduct involved senior Rolls-Royce employees”. 38 employees have faced disciplinary proceedings. 11 left the firm during the disciplinary process. 6 were dismissed. Rolls-Royce has also reviewed 250 intermediary relationships across the company – 88 have now been suspended. The SFO says that investigations into individuals continue. But until those who undertook these corrupt activities – and crucially those at a high level who signed them off – are brought before the courts, many will ask whether justice really has been served.

SFO director David Green said the £13m probe into Rolls-Royce was the biggest single investigation the office had carried out. “It allows Rolls-Royce to draw a line under conduct spanning seven countries, three decades and three sectors of its business,” he said. “I think it shows very clearly that the SFO has teeth and that the SFO will not go away,” Mr Green told the BBC. He added: “On a positive side from a company’s point of view it shows that co-operation with a SFO investigation, pays.” However, there are still questions about whether “justice has been served”, said Robert Barrington, executive director at Transparency International UK. “Individuals haven’t been held to account and the markets – when the share price has gone up today – are perhaps suggesting this isn’t really a punishment or deterrent,” Mr Barrington said. The SFO told the BBC it would consider prosecuting individuals in connection with the case now it had reached an agreement with the company.

Can a Checklist Approach Be Used To Indicate Employment Status?

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Not according to the First-Tier Tax Tribunal (FTTT) in Dhillon and Dhillon v HMRC, which reminds us all of the need to step back and look at the whole picture.

The Appellant provided haulage services, engaging drivers who were paid a fixed amount per shift, could refuse jobs and were not guaranteed work. There was induction training, but no subsequent supervision and a limited right of substitution. Drivers had to meet certain competency and safety standards, generally provided their own equipment and used the Appellant’s lorries. Having examined the various indicia for employment status, the FTTT found that the drivers were employees during each individual contract. The key factors were the considerable degree of control exercised and the fact that the drivers were not in business on their own account.

Importantly in this case, the FTTT were considering whether the drivers were employees or independent contractors under tax legislation, a dichotomy that does not allow for the third category of ‘workers’ contained in employment legislation. In addition, the FTTT reiterated the need to make “an informed, considered, qualitative appreciation of the whole picture” and avoid a checklist approach. If you’d like advice and support in assessing employment status, please get in touch with us at [email protected] or call us on 01386 751740.

HR Cases To Watch in 2017

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There are a few key cases to look out for this year, here is a quick run-down and what the potential implications are for employers.

1. Brierley and others v Asda Stores Ltd

In June 2016 female store workers at Asda appeared at an employment tribunal arguing that they were entitled to equal pay to their male colleagues working in the supermarket’s warehouses. They claimed that: Their roles are similar to, or of equal value, to warehouse staff. The reason for the pay discrepancy is that they are female, both groups should receive the same pay. Asda contended the case saying that they believed the demands of the jobs are very different. The Manchester tribunal ruled in favour of the workers.

What are the implications for employers?

The decision could see workers recovering more than £100m in claims, dating back to 2002, with the potential for even more claims from workers who had been waiting to see the result of the Manchester judgment. It also has far-reaching implications for other supermarket equal pay claims. Pay differences between male and female co-workers will certainly be one of, if not the most, important topics of 2017.

All organisations with 250+ employees will need to report the overall gender pay gap between all men and women on 5 April 2017. This will need to be reported annually, not just on the organisation’s website, but also a dedicated Government website, which means that the information is accessible to all.

2. Employment Tribunal Fees

Anticipated by some to feature in the Autumn Statement, but which failed to materialise, the removal of employment tribunal fees argument looks set to carry on into 2017. From July 2013, claimants in the UK have been charged a fee to bring a claim to tribunal, another fee if the claim is heard, and a charge on top of that if they choose to appeal a decision.

Unison, one of the UK’s largest trade unions, have campaigned to remove the fees since their introduction, so far to no avail. The Court of Appeal rejected the claim on the basis that there was insufficient evidence that claimants were unable to afford the fees. Unison’s appeal is expected to be heard by the Supreme Court in March 2017.

What are the implications for employers?

The number of cases which have reached Employment Tribunal have dramatically reduced since the fees were brought in. If Employment Tribunal fees are ruled unlawful, encouraged by Unison, it is likely that the ET figures will ascend once more. The fees have arguably been beneficial for employers, in the sense that their introduction has deterred false or spurious claims from reaching the stages of a tribunal hearing.

3. Gig Economy Cases

A trend toward a gig economy is well and truly underway. The term itself defines an environment whereby temporary positions are common, and businesses contract with independent workers for short-term engagements. Instead of a salary, workers will be paid for the ‘gigs’ they do, such as a delivery or taxi ride: hence the terminology.

More and more people engaged with businesses operating in a similar manner are beginning to question their employment status. This mentality is expected to continue throughout 2017, so is likely to spur more cases as time goes on.

What are the implications for employers?

Getting employment status wrong can subject a company to unnecessary predicaments. The way an employee acts and is treated will significantly differ to the traits of a self-employed contractor, which employers should always abide by. As proved by recently tribunal cases, the financial implications of getting an employment status incorrect can be crippling, i.e. the decision that Uber drivers are workers means the calculation and payment of many hours holiday pay.

4. Whistleblowing

Whistleblowing laws have meant that a disclosure is not protected unless an employee reasonably believes that it is being made “in the public interest”. The laws have existed since June 2013, and have summoned a particular interest surrounding what exactly qualifies as being “in the public interest”. The case of Chesterton Global v Nurmohamed is listed to be heard in The Court of Appeal in June 2017, where it is expected to decide whether or not the EAT’s liberal interpretation of what the phrase means is correct.

The EAT in the Chesterton case originally held that matters which potentially affected the operation of the commission scheme for over 100 Managers at a large firm of estate agents could be considered ‘in the public interest’.

What are the implications for employers?

The case will help to define what is considered to be ‘in the public interest’, which could influence what should or shouldn’t be reported by employees.

If you’re concerned that any of these cases have implications within your business, please get in touch with us on 01386 751 740 or email [email protected]

Do You Receive Our Fortnightly Blog? It Could Help You Out Of Some Awkward Situations.

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This month we wrote about how ADHD in the work place can be handled positively in Attention Deficit Disorder Needn’t Be A Hurdle in The Workplace. As the weather turns chilly, our minds (at least here at Cluer HR) turn to how this affects the workplace – is your business prepared? Here are some ideas in What Precautions Should Employers Take When The Weather Turns Icy?

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