Category Archives: employment law

Pimlico plumbers are workers following the Supreme Court’s judgement


The UK Supreme Court has today upheld the Employment Appeal Tribunal and the Court of Appeal’s judgments that a skilled tradesman (plumber), who had been engaged as an independent contractor, was in fact a worker entitled to basic worker rights.

In short, Mr Smith was engaged by Pimlico Plumbers Ltd (‘PP’) under a contract which referred to him as an independent contractor. However, Mr Smith was working solely for PP from 2005 and until his contract was terminated in 2011 because the arrangement was such that Mr Smith was required to work minimum 40-hour per week for PP. Mr Smith was also required to wear a PP uniform and to hire and drive a PP branded van. When Mr Smith suffered a heart attack in early 2011 he asked for his 5-day working week to be reduced to 3 days per week but this was refused by PP. In May 2011 PP terminated its engagement with Mr Smith who then issued a number of claims against PP – including claims that he was entitled to workers’ rights.

When the case was first heard, the Employment Tribunal ruled that Mr Smith was in fact a worker for the purposes of s. 230(3)(b) (a ‘limb (b) worker’) of the Employment Rights Act 1996 (‘ERA’), a worker under the Working Time Regulations 1998 (‘WTR’) and an employeefor the purpose of the extended definition under s.83 of Equality Act 2010 (EqA). PP appealed the case, first to the Employment Appeal Tribunal, then to the Court of Appeal and finally to the Supreme Court.

The Supreme Court agreed with the lower courts that Mr Smith was a worker because he satisfied the test in s. 230(3)(b) in that:

  1. He was required to carry out the work for PP personally and could not send a substitute. Although there was an understanding that PP plumbers could swap assignments, Mr Smith was not entitled to use a substitute who was not already working for PP; and
  2. PP was not a client or a customer of Mr Smith and he was not in business on his own account. The reality was one of subordination with Mr Smith being an integral part of PP’s operations and subject to the disciplinary and other rules of PP.

Having decided that Mr Smith was a limb (b) worker it followed that he was also a worker for WTR purposes and an employee under the EqA.

Although the media is likely to overstate the impact this ruling will have on the gig economy, the reality is that this case does not make any substantial changes to the current law on employment status. The issues in this case are very fact sensitive and, more importantly, PP did not operate a gig model in respect of Mr Smith’s engagement. However, the media attention which this case has received combined with abolishment of employment tribunal fees may encourage an increase in claims by individuals seeking employee or worker rights.

Accordingly, businesses would be well advised to review the arrangements they currently have in place with independent contractors and consultant to ensure they do not find themselves in the same situation as the employer in this case.

The material contained in this article is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

ebl miller rosenfalck – June 2018

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Sara Kennedy, Legal Director

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Analysing the new Employment Tribunal statistics (March 2018)


New statistics from the UK government show that the total amount of single claims in the Employment Tribunal in 2016 came to 16,870. The total amount of single claims in 2017 totalled 23,708. An overall increase of 40.53 %.

But let’s drill down those figures in more detail…

If you compare the period January to July in 2016 to the same period in 2017 you will see that the number of single claims is relatively similar – 9,712 in 2016 when compared to 9,851 in 2017.

But then the Supreme Court handed down the Unison Judgment ([2017] UKSC 51] on 26 July 2017, and that judgment brought about the abolition of the controversial Employment Tribunal fee regime. The floodgates were then opened and the Employment Tribunal litigation boom began.

Fasten your seat belt for a moment…

If we compare the number of single claims in August 2016 (1,456) to August 2017 (3,045) [the next month following the Unison judgment] you see an increase of a whopping 109.13%.

From then on, the upward trend continues. If we compare the number of single claims in the period September to December in 2016 (5,702) to the same period in 2017 (10,812) we see an increase of 89.6%.

Click here for the raw data.

You will already have gathered that don’t get out very often! From all of the employment team @ebl miller rosenfalck have a good day.

 

ebl miller rosenfalck – March 2018

www.millerrosenfalck.com

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Philip Henson, Partner and Head of Employment Team

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Book Review: The Law Society’s ‘Drafting Employment Contracts’ 3rd edition Howard


The 3rd edition of the Law Society’s ‘Drafting Employment Contracts’ provides invaluable and clear guidance for employment practitioners on the difficult areas in drafting contracts for staff and when and how to use certain clauses. It also provides useful and practical guidance for creating and executing policy.

We found the precedent texts to be of immediate value and they are also very helpfully provided in an electronic format by way of a CD. These were easy to download making for a very user-friendly collection of relevant and up to date precedents.

ebl miller rosenfalck – March 2018

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Philip Henson, Partner and Head of Employment Team

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Book Review: The Law Society’s ‘Employment Law Handbook’ 7th edition Barnett, Baker and Butler


Our firm was delighted to be asked to review the latest edition of the Law Society’s ‘Employment Law Handbook‘.

This 7th edition of the legal handbook offers comprehensive coverage and commentary on the key topics in employment law. It is an excellent read both for the experienced practitioner looking for handy up to date commentary on the most debated issues in the field and also for the junior lawyer looking for a well-written reliable legal companion. Commentary on the status of ‘gig economy‘ workers has also been extremely helpful at a time of extreme uncertainty.

All in all it is a worthwhile purchase and readers will not be disappointed with the depth of expertise provided by the three reputable authors, all experienced in the field of employment law.

ebl miller rosenfalck – March 2018

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Philip Henson, Partner and Head of Employment Team

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New tax evasion offences: What you need to know


In September 2017, the Criminal Finances Act 2017 came into force, introducing new measures to prevent tax evasion. Under these new rules, companies and partnerships can be found guilty of a criminal offence for failure to prevent the facilitation of tax evasion by ‘associated persons’ which includes their employees, workers, agents, contractors, and others providing services for the company (and presumably also covers a third party providing services on the company’s behalf). There are two new offences:

  • The UK tax evasion offence; whereby a company, wherever it is located, facilitates evasion of UK tax.
  • The overseas tax evasion offence; by which any company with a presence in the UK facilitates foreign tax evasion.

These are strict liability offences, so there is no need to show that the company was aware or intended for the tax evasion to take place.  If a company is convicted, it can face an unlimited fine and have its assets confiscated.

It is a defence if a company can show that it put in place appropriate and reasonable measures to prevent the facilitation of tax evasion (or, indeed, that it was not reasonable to expect measures to be put in place in all the circumstances). It is therefore crucial for companies to carry out thorough risk assessments before turning to consider the measures to be adopted.

Why is all this relevant to your business? Because HMRC expects top-level commitment from all companies to tackle the above offences. Some suggested prevention measures include regular staff prevention training, implementing reporting procedures (and monitoring and enforcing compliance with these procedures), and introducing clauses into employment contracts that require employees not to facilitate tax evasion, and to immediately report any concerns. By updating your employment contracts with this new clause, this will mean that your employees are under a strict contractual duty not to facilitate tax evasion and a breach of that duty could result in them being fired.  Another preventative measure could be to put in place a separate anti-facilitation of tax evasion policy, or include a specific section on the anti-facilitation of tax evasion in a general anti-corruption or ethics policy that you may already have.

If you have questions about amending your employment contracts to be compliant with the new law or about putting in place an anti-facilitation of tax evasion policy, do get in touch with our Employment team, who will be happy to help you.

The material contained in this guide is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© Miller Rosenfalck LLP, January 2018

http://www.millerrosenfalck.com/

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Christina Leung, Associate

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National Minimum Wage – Do you know your obligations as an employer?


In December 2017, the UK government named 260 companies owing a total of £1.7 million to their workers for failure to pay the minimum wage, including retail giants such as Primark and Sports Direct.

Whilst most employers may think they are aware of their obligations under the National Minimum Wage regulations, complying is not as simple as setting an hourly rate above the minimum. In the case of Primark for instance, the failure to pay minimum wage resulted from the company deducting the price of employees’ uniforms from their wages. It is essential for companies to know their obligations under the regulations, and what is at stake if they fail to comply.

The national living wage is currently £7.50 per hour (going up to £7.83 on 1 April 2018), and is the minimum wage applying to all workers aged 25 and over. There are different rates in force for younger workers. Employers must ensure they pay the minimum wage on average for the time worked during a pay reference period (which is one week if workers are paid weekly, one month if paid monthly, etc).

Equally important is the obligation to keep records. HMRC can ask to see payment records at any time, so it is key to have these to hand.  Employers’ records must, broadly speaking, show the following (non-exhaustive list):

  • Information about employees’ hours or work and pay;
  • Any information that may affect employees’ pay, such as absences, the provision of accommodation or business travel; and
  • Itemised pay statements given to employees showing gross and net amounts, and any deductions made.

Whilst the National Minimum Wage regulations require employers to keep these records for 3 years, it is advisable to keep these for 6 years to cover the limitation period during which time a worker must bring any contractual claim for failure to pay the minimum wage if he so wishes.

In case of non-compliance by employers, HMRC (which enforces the national minimum wage) can impose civil penalties (up to 200% of the total underpayment, to a maximum of £20,000), and has been known to ‘name and shame’ those who have fallen short in the past. If that is not enough of an incentive to comply, HMRC can also instigate criminal proceedings against an employer for failure to comply with national minimum wage obligations, including record-keeping.

If you are concerned about the arrangements your business has in place, or if you have any other questions about national minimum wage, please contact our Employment team.

The material contained in this guide is provided for general purposes only and does not constitute legal or other professional advice. Appropriate legal advice should be sought for specific circumstances and before action is taken.

© Miller Rosenfalck LLP, January 2018

http://www.millerrosenfalck.com/

Contact details: 

Christina Leung, Associate

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Supreme Court ruling on state immunity gives tribunals jurisdiction to hear embassy worker claims


Two embassy workers, one working for the Libyan embassy in London and another working for the Sudanese embassy in London, brought claims in the employment tribunal, against Libya and Sudan respectively, after being dismissed. The claims were dismissed by the tribunal, on the basis that both Libya and Sudan benefited from state immunity under the State Immunity Act 1978.

A series of appeals joined these cases together and brought them before the Supreme Court. The heart of the issue lies in an apparent tension between the State Immunity Act -the purpose of which is to ensure there are no infringements to a foreign state’s sovereignty- and article 6 of the European Convention for Human Rights (ECHR) regarding the right to a fair trial, which includes right of access to a court.

In reviewing the case-law of the European Court of Human Rights, the Supreme Court found that article 6 violations had previously been found where the application of state immunity was contrary to rules of international law. Naturally, the Secretary of State argued that state immunity in this case was consistent with customary international law.

Interestingly, the Supreme Court found that there has been insufficient international consensus for customary international law to emerge regarding an absolute doctrine of state immunity. Therefore state immunity could not be extended to the employment of embassy staff, which the court deemed to be a private act, unrelated to the concept of state sovereignty.

Those claims which were based on EU law (such as those relating to working time, discrimination and harassment) were therefore allowed to proceed, and were remitted to the employment tribunal for consideration.

This decision is likely to benefit a horde of low-paid workers who were employed in embassies in the UK, and we may see numerous tribunal claims against foreign states proceed in the employment tribunals.

Our advice to embassies is put in place an immediate review of their contractual arrangements (employment contracts and contracts for services) to ensure they comply with English employment law to avoid falling foul of local laws. Please contact our employment team to find out how we can assist.

Benkharbouche (Respondent) v Secretary of State for Foreign and Commonwealth Affairs (Appellant) and Secretary of State for Foreign and Commonwealth Affairs and Lybia (Appellants) v Janah (Respondent) [2017] UKSC 62.

ebl miller rosenfalck – December 2017

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Philip Henson, Partner and Head of Employment Team

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