Employment Eye May 2017

Welcome to the May 2017 edition of our employment law report: our monthly round-up of key employment law developments and what they mean for you.

  

Featured case	Asperger's syndrome and MCQ recruitment A multiple choice test as part of a recruitment exercise indirectly discriminated against a candidate with Aspergers syndrome, reports Sarah Lamont. Read more
Briefing	Red, blue or yellow? The General Election and HR What do each of the three main parties' manifestos have to say about workplace rights and employer obligations? Ashley Norman looks at the details. Read more
News round-up	Employment news round-up, May 2017 Jodie Sinclair provides this month's edit of the key employment law news for this month, including holiday pay and industrial action - plus the latest news on Brexit and 'gig working'. Read more
Events and training	Our current series of free training events are looking at managing modern workforce issues – including employment status, social media, IR35 and other aspects employer self-regulation.   Please see below for further details of dates and booking arrangements for these events. Read more

 

 

Asperger's syndrome and MCQ recruitment

A multiple choice test, set as part of a recruitment exercise, indirectly discriminated against a candidate with Aspergers syndrome, reports Sarah Lamont.

The background

Unlike the more straightforward concept of 'direct' discrimination, indirect discrimination is more difficult to pin down and more common. It is designed to deal with apparently innocent non-discriminatory rules and practices which have a detrimental impact on those with a 'protected characteristic', namely: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, gender and sexual orientation. For example, a policy to refuse all flexible working requests would indirectly discriminate on the ground of gender, because more women than men have primary responsibility for childcare and more women would, therefore, be adversely affected by the policy.

So, indirect discrimination applies where an apparently neutral 'provision, criterion or practice' (PCP) has

• an adverse impact on a protected group
• the person in question is actually affected by that PCP; and
• the employer cannot justify its PCP (i.e. cannot show that it is a proportionate means of achieving a legitimate aim (section 19 of the Equality Act 2010)).

The facts

The claimant, Ms Brookes, has Asperger’s syndrome and applied to join the Government Legal Service (GLS) as a trainee lawyer. The first stage of what the Employment Appeal Tribunal (EAT) described as a "fiendishly competitive" recruitment process requires candidates to sit a multiple choice test.

Prior to undertaking the test, Ms Brookes contacted the GLS and explained that answering multiple choice questions would be difficult for her because of her disability and she asked if she could, therefore, provide short narrative answers instead.

Ms Brookes was told that an alternative test format was not available but that she could be allowed extra time, as well as a guaranteed interview – but only if she passed the initial tests. Ms Brookes took that test in the standard format and narrowly failed to reach the pass mark.

Ms Brookes brought a claim in the employment tribunal for indirect disability discrimination, in that GLS had applied a PCP which placed her at a particular disadvantage and which could not be justified. She also claimed that GLS had failed to make reasonable adjustments to the test and that she had suffered discrimination because of something arising as a consequence of her disability.

In respect of the indirect discrimination claim, it was agreed between the parties that the relevant 'PCP' (see above) was the requirement to sit a multiple choice test and the reasonable adjustment contended for was to be able to submit short written answers.

An employment tribunal upheld Ms Brookes’ complaints of disability discrimination on all three grounds.

The GLS appealed.

The decision

In The Government Legal Service v Brookes, the Employment Appeal Tribunal (EAT) dismissed the GLS appeal.

GLS argued that

• Ms Brookes had not shown that the testing method of using multiple choice questions put applicants with Asperger's syndrome at a particular disadvantage; and
• even if it did, then the testing method was justified as a proportionate means of achieving the legitimate aim of recruiting the highest quality candidates.

On the first point, the EAT said that the employment tribunal had been entitled to reach its conclusions on the evidence presented to it. Although some of the evidence suggested that some people with Asperger's syndrome would not be disadvantaged by a multiple choice test, Ms Brookes fitted the profile of someone who would ordinarily be disadvantaged by a multiple choice test, and this was supported by expert evidence at tribunal. Furthermore, the university at which Ms Brookes had studied for her degree had accepted that multiple choice questions should be replaced with questions requiring a short written answer.

The EAT therefore concluded that the employment tribunal was right to find that there was both 'group' and 'personal' disadvantage

• those suffering from Asperger's syndrome would be disadvantaged as a group, and
• Ms Brookes herself was personally disadvantaged.

The fact that some of the evidence was inclusive was not determinative; it meant that the tribunal was entitled to evaluate it in the light of other evidence and medical evidence and come to a conclusion.

On the second point of appeal, GLS argued that where a test of competency is commensurate with – or intrinsically linked to – the competency itself, it should not need to be justified and should not require adjustment. In other words, an employer should not have to adjust a test to such an extent that it then fails to test effectively the competency in question. GLS also argued that allowing Ms Brookes to provide short written answers might have presented logistical and cost issues. However, the EAT gave these arguments short shrift: it said that these inconveniences to the employer did not outweigh the factors on Ms Brooke’s side.

What does this mean for me?

A key attraction for employers running recruitment campaigns using automated assessments, such as multiple choice tests, is that it eliminates bias and, therefore, reduces risks of equalities claims; but, as this case demonstrates, it can have the opposite effect. As automation and AI make their presence increasingly felt in the workplace, this is one of the issues with which HR and resourcing teams will need to get to grips sooner rather than later (please click here for more information on HR and AI). If automated assessments are being put in place, then systems will need to have the capacity for flexibility built in, preferably at the design stage – for example, ensuring that invitations for testing are sent alongside requests for any adjustments for disabled candidates, allowing sufficient time for alternative testing to be arranged.

 

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Red, blue or yellow? The General Election and HR

What do each of the three main parties' manifestos have to say about workplace rights and employer obligations? Ashley Norman looks at the details.

 

Conservative Party

The Conservative party's manifesto, Forward, Together, contains a large number of workforce proposals.

On Brexit, the manifesto reiterates the Prime Minister's previous assertion that all workers' rights derived from European Union law will be protected after Brexit. There is no mention of measures that will be amended or repealed as a result of leaving the EU – although, of course, once this has happened, there is nothing to stop the government from repealing, amending or extending rights which were originally derived from the EU (please see our Brexit infographic for more information). Outside of the manifesto, the Conservatives have proposed to transpose EU derived rights only "wherever practical" (David Jones MP, Minister in the Department for Exiting the European Union).

The manifesto also confirms that the Conservatives would retain the Human Rights Act 1998 and remain a signatory to the European Convention on Human Rights (although it should be noted that this treaty is separate from our membership of the European Union and would remain intact regardless of Brexit).

On employment status and the gig economy, the manifesto confirms that the review into employment status, currently being undertaken by Matthew Taylor, will continue (the review is due to publish its findings in June or July 2017). Once the review concludes, the Conservatives would ensure that self-employed workers and gig economy workers are properly protected. There are no details on how that would be achieved.

The Conservatives propose reforms to encourage employee representation on Boards and would introduce a right for employees to request information relating to the future direction of the company – e.g. information about takeovers, asset disposals and significant reorganisations.

The Conservatives would curb executive pay, by extending the remit of the directors' remuneration regime, making executive pay packages subject to annual votes by shareholders.

A new right to request unpaid leave for training is proposed, as well as new rights to time off to care for sick relatives and for child bereavement.

On pension protections, the Conservatives would bolster the powers of the Pensions Regulator 

• to scrutinise acquisitions that could affect the sustainability of a pension fund
• issue fines for wilfully leaving a pension scheme under-resourced; and
• disqualify the company directors in question (if necessary).

The Conservatives would consider introducing a new criminal offence for directors who deliberately or recklessly put at risk the ability of a pension scheme to meet its obligations.

The current gender pay gap regime would be extended, and new reporting requirements would be introduced for large employers on the 'race gap' (the pay disparities between people from different ethnic backgrounds).

The current immigration skills charge of £1,000 per employee will be increased to £2,000 per employee.

The manifesto does not mention reform of employment tribunal fees.

 

Labour Party

The Labour Party's manifesto, For the Many, Not the Few, also contains a wide range of employment law proposals. What are the key policies?

On Brexit, like the Conservatives, Labour have also pledged that employment rights currently guaranteed under EU law will remain in place post-Brexit. However, Labour goes further and pledges to guarantee all existing protections afforded under EU law under an EU Rights and Protections Bill. The Human Rights Act 1998 would also be preserved under Labour.

Labour proposes to extend the national living wage, to all workers over the age of 18.

In relation to working families, the Labour party would increase free childcare to include 30 hours for all two-year-olds (currently 30 hours of free childcare will available from September 2017 for all three and four year olds). Labour also proposes to subsidise paid-for childcare.

In relation to maternity and paternity pay, Labour proposes to

• increase the rate of paternity pay
• double paid paternity leave to four weeks; and
• extend maternity pay to 12 months.

Labour would also introduce statutory bereavement leave.

Employment tribunal fees would be abolished under Labour.

In relation to employment status and 'gig working', Labour would ban zero-hours contracts and introduce a right for workers who regularly work more than 12 weeks to switch to a 'regular contract'. Labour would extend employment rights to all 'workers', regardless of their employment status. In addition, Labour intends to tackle issues around employment status by

• creating statutory definitions for 'self-employed', 'worker' and 'employee'
• shifting the burden of proof onto employers to show that individuals are not employees
• banning umbrella companies and other employment structures which are aimed at limiting workers' employment rights
• making end-users and agencies jointly responsible for agency workers' rights.

Proposed measures around pay / equalities include

• requiring suppliers to the public sector to ensure a maximum pay ratio between the highest and lowest paid of 20:1
• abolishing the 1% public sector pay cap
• closing the 'ethnicity pay gap' by introducing equal pay audit requirements on large employers
• banning unpaid internship.

Labour would repeal the Trade Union Act 2016, which tightened regulation of balloting and industrial action, particularly for 'important public services' – please click here for more information on the Trade Union Act 2016.

A Labour government would only award public contracts to employers that recognise unions in the workplace and would introduce sectorial collective bargaining.

Labour would reform the Transfer of Undertakings (Protection of Employment) Regulations (TUPE), by repealing the 2014 amendments to TUPE. Labour would also introduce a right for employees to have 'first refusal' when their employer is proposing to sell the company.

 

Liberal Democrats

The Liberal Democrats' manifesto, Change Britain's Future, seeks to position the party as the 'alternative opposition' to Labour.

Opposition to a 'hard' Brexit is a key theme in the Liberal Democrats' manifesto and the Liberal Democrats are also in favour of offering a referendum on the terms of the agreement for the UK leaving the European Union.

In terms of the type of Brexit advocated by the Liberal Democrats, it is in favour of

• guaranteeing the rights of existing EU nationals in the UK
• remaining part of the Single Market and Customs Union
• retaining free movement of people as far as possible
• defending existing social rights and equality laws.

The Liberal Democrats would also oppose any attempt to withdraw from the European Convention on Human Rights or water down the Human Rights Act 1998.

On equalities, the Liberal Democrats would

• require publication of data on gender, BAME, and LGBT employment levels and pay gaps
• require name-blind recruitment processes in the public sector
• guarantee the freedom to wear religious or cultural dress
• strengthen companies' responsibility for supply chains, focusing on good practice in tackling modern slavery.

In relation to support for working families, the Liberal Democrats would

• make flexible working, paternity leave and shared parental leave (SPL) 'day one' rights
• introduce an additional one month period of SPL for fathers
• extend free childcare provision to all two years olds and to the children of all working families from the end of paid maternity/paternity/shared parental leave.

The Liberal Democrats would end the pay freeze in the NHS and the 1% cap on public sector pay.

The Liberal Democrats propose to address 'gig working' issues by creating a right for zero-hours workers to request a fixed hours contract and would consult on introducing a right to make regular patterns of work contractual after a period of time.

Other workforce proposals include

• the creation of a 'good employer' kite mark
• a requirement for larger employers to publish data on the number of workers earning less than the living wage, and the ratio between top and median pay
• giving staff in large listed companies the right to request shares, to be held in trust for the benefit of the workforce
• require binding public votes by board members on executive pay policies.

The Liberal Democrats would abolish employment tribunal fees.

 

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Employment news round-up, May 2017

Jodie Sinclair provides this month's edit of the key employment law news for this month, including holiday pay and industrial action - plus the latest news on Brexit and 'gig working'.

Holiday pay – EAT confirms three month break in deductions

The latest instalment in the long-running holiday pay saga (for a summary, please see our briefing 'unpacking holiday pay') concerns the important question: does a gap of more than three months between underpayments of holiday pay 'break' the series of deductions from wages? This is a key battleground for holiday pay claims because they must be submitted within three months of the last in a 'series of deductions' in order to comply with legislation on unlawful deductions from wages. Controversially, the original analysis of the Employment Appeal Tribunal (EAT) in Fulton v Bear Scotland (back in 2015) was that there will be a break in the chain of a 'series' of deductions where more than three months has passed between underpayments of holiday.

In the Bear Scotland case, the claimants appealed against an employment tribunal's application of the EAT's ruling on the 'series' question, arguing that this was only a side point in the EAT's original decision and not binding. The EAT have, however, rejected that argument and have endorsed the previous ruling that a break of more than three months between underpayments (or non-payments) of holiday will mean that a 'series' of deductions has been broken, thereby starting the clock ticking on the time limit for bringing an employment tribunal claim. Please click here for a transcript of the EAT's decision.

"A Summer of protest"

It has been reported that the Royal College of Nursing (RCN) has voted in favour of industrial action, relating to discontent with their level of pay. Precise dates for the industrial action have yet to be announced, but are expected to take place over the course of this Summer. 

As the ballot was only consultative, a further ballot will be required before formal industrial action occurs. The ballot will need to take place under the new, more stringent, rules under the Trade Union Act 2016, including the additional requirements for 'important public services' (which includes nurses) to meet an additional threshold of 40% of support for industrial action from all eligible members, and at least 50% of eligible members must have voted in the ballot. Please see our May 2016 update for more information about the reforms introduced by the Trade Union Act 2016, and please see our December 2016 update for details of the tighter industrial action requirements for 'important public services'.

Calculating a 'day's pay'

Given that there may well be industrial unrest over the Summer, the Supreme Court's decision in Hartley v King Edward College is timely: a College was only entitled to deduct 1/365^th of annual salary for a day of industrial action; rather than 1/260 working days (i.e. 52 weeks multiplied by 5 working days). The employee's contracts were annual contracts, so a deduction had to be made on the basis of a year's employment, over 365 days. Although this case concerned facts specific to teachers, it may have wider application for employees who do not work on set days of the week.

Employment status and 'gig' working – latest developments

A robust new report into self-employment and the gig-economy has been published by the Work and Pensions Select Committee. The report is available here. It is an abridged version because the committee's work was cut short due to the the dissolution of Parliament prior to the general election.

The report does not pull its punches: it finds that too many organisations are using self-employed workers for cost reasons, rather than genuine need, and this is having an adverse impact on the public purse and worker rights. The report concludes that it is a myth that a flexible workforce must be engaged on a self-employed model, but that “current ways of categorising workers are creaking under the weight of a changing economy” and need to be revisited. The report's main recommendations are as follows.

1. Equalise national insurance contributions made by employees and the self-employed. The report argues that, with the introduction of the single-tier state pension in April 2016, the last major difference between employees and the self-employed (in terms of them being beneficiaries of the welfare state) was removed, so the inequality of contribution is unfair.
2. Encourage self-employed workers to save for retirement. This may include a re-design of the tax return form so that the presumption is that people make contributions to a pension, with there being an option to opt out.
3. Worker status should be default. The report proposes that companies wishing to deviate from worker status should have to present the case for doing so and the engaging organisation should bear the burden of proof as to employment status. The tax status of individuals would not be affected by this presumption.

The key point here is point (3): the proposal for a presumption of worker status. This is an idea which we understand has been floated as part of the current Taylor Review into employment status, which is due to publish in June or July 2017.

For more information about the Taylor Review and 'gig working', please see below for details of our current series of free training events, which are looking at this and other 'modern workforce' issues. In addition, please see our Agile Workforce Toolkit for information about how we can help with the effective positioning your flexible workforce.

Brexit news

Whilst new policy decisions regarding the process for exiting the European Union are on hold for the period of 'purdah' prior to the 2017 General Election, two key new reports have been published.

The Institute for Government has published a report called Taking Back Control of Trade Policy. The report focuses on trade with non-EU countries and suggests that the government needs to address issues of collaboration, expertise, consistency, focus and effective partnership between ministers and civil servants to make the most of the new opportunities presented by the UK's departure from the European Union.

The House of Commons Health Committee has published a report on Brexit and health and social care - people and process. The report states that the UK’s withdrawal from the EU will affect many aspects of the provision of health and social care in the UK. The key points are as follows.

• The government is urged to address preparations for withdrawal from the European Union and departmental resources. The report states that the Department of Health should produce a comprehensive list of those issues that will require contingency planning and ensure that it has sufficient staff working on the process of Brexit.
• The report expresses the view that the government’s plan for the post-Brexit future should ensure that health and social care providers can retain and recruit international staff. The value of the contribution of lower paid health and social workers is recognised.
• The report welcomes the government’s signal that it wishes to prioritise and resolve the existing rights of all EU nationals resident in the UK and UK nationals resident in the EU, taking account of the impact Brexit will have on people who rely on the EU’s reciprocal healthcare arrangements.

 

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Bevan Brittan events and training

The future is now: dealing with modern workforce issues

Confused by the current raft of employment status claims? Would you like to know more about how to manage the misuse of technology in the workplace? Are you concerned about IR35 and the current self-regulation requirements for employers? Our Summer 2017 series of employment law training events are looking at a range of modern workforce issues, including

• 'gig working' and the current state of play on employment status
• the current focus on employer self-regulation, including the reform of taxation arrangements for intermediaries (IR35)
• practical steps in managing social media misuse and reducing litigation risk
• dealing with employees covertly recording meetings on their Smartphones.

These free events are taking place in May and June 2017 – the first event took place at our London office last week, and there are still places available in Birmingham on 6 June, Bristol on 7 June and Leeds on 8 June 2017. The sessions run from 9.30 am until 1.00pm, followed by lunch. Please click here for further details and registration arrangements.

Bevan Brittan training packages

In addition to our free training programme, we also provide bespoke knowledge transfer sessions on a range of employment law topics – recent popular sessions have included immigration training, 'changing and terms and conditions' and 'practical sickness absence management'. Please contact Ashley Norman for details of our immigration training and contact me for further information about training on other employment law topics.

           

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