Employment Eye March 2017

30/03/2017

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Jodie Sinclair

Partner

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

 

Featured case

Headscarves tied in knots

"Muslim headscarf can now be banned", reports the press. But this is not the full picture. Alastair Currie sets the record straight on dress codes.

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Briefing

Spring forward

The end of the financial year is always a busy time, but this year is set to be even busier than usual with a number of key changes taking effect in March and April 2017. Jodie Sinclair reports.

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News round-up

Brexit takes centre stage this month, as the Prime Minister commences the formal process of our withdrawal from the European Union.

We re-cap on the key issues for HR and in-house legal, plus look at the rest of the top employment law developments for March 2017: new whistleblowing proposals for the NHS, tribunal reform, ill health early retirement and the latest on the 'gig economy'.

And diaries at the ready: we release details of our Spring series of free training events, which will be looking at workforce issues in the modern economy. Julian Hoskins reports.

Read more

Events and training

Dates and details of our next series of free training events in Birmingham, Bristol, Leeds and London have now been released. Details below.

Read more

 

 

Headscarves tied in knots

"Muslim headscarf can now be banned", reports the press. But this is not the full picture. Alastair Currie sets the record straight on dress codes and religious discrimination.

The background

The Directive

The Equal Treatment Framework Directive (the Directive) establishes a general framework for equal treatment in employment and occupation. Article 2 of the Directive prohibits direct and indirect discrimination on several grounds, including religion or belief.

This is transposed into Belgian law via its national legislation, which (like the UK) prohibits

  • direct discrimination on various grounds, including religion; and
  • indirect discrimination (where an apparently neutral provision, criterion or practice has a detrimental effect on individuals with specific characteristics, which includes those who hold a particular religious belief). Similarly to the UK, indirect discrimination in Belgium may be justified.

Previous case law on dress codes

Back in 2013, the European Court of Human Rights (ECtHR) decided that a Christian British Airways' employee was entitled to wear a discrete visible cross outside her uniform (Eweida and others v United Kingdom) – contrary to British Airway's uniform policy. The ECtHR held that to not allow this would infringe Mrs Eweida's right to manifest her religious belief, under Article 9 of the European Convention on Human Rights. 

The facts

Ms Achbita was employed by G4S Secure Solutions (G4S) as a receptionist.

G4S (in Belgium) has a 'policy of neutrality' which prohibits employees from wearing, in the workplace, any visible signs of their political, philosophical or religious beliefs.

Although Ms Achbita initially attended work without wearing a headscarf, she later announced that, in future, she would wear a headscarf during working hours, for religious reasons. As a result, Ms Achbita was dismissed.

Ms Achbita brought a discrimination claim in relation to her dismissal. In the course of proceedings, the Belgian Supreme Court asked the European Court of Justice (ECJ) whether G4S's policy of neutrality amounted to direct discrimination under the Directive.

The decision

The ECJ held in Achbita v G4S Secure Solutions NV that the headscarf ban did not constitute direct discrimination. There was no evidence that Ms Achbita was treated differently compared to any other worker, so there was no difference in treatment, whether based on religion or otherwise – all employees were treated the same.

However, the ECJ then went on to make some comments about indirect discrimination (although it was not strictly obliged to do so, because this was not part of Ms Achbita's case). The ECJ felt that the G4S policy on work-wear could amount to indirect discrimination, but that its desire to project a neutral image was legitimate. This approach is in line with the approach taken by the ECtHR, in the Eweida case (see above), in that the aim of projecting a certain corporate image may be allowable; but, it would then be for national courts to decide whether the way in which that aim was pursued by the employer was appropriate and necessary. The ECJ said that the G4S policy may be justified if it was approached in a consistent and systematic manner and did not go further than necessary – for example, if the policy only applied to employees in a customer facing role.

What does this mean for me?

This case was widely reported in the press as meaning that employers are now entitled to ban Muslim employees from wearing headscarves to work. This is, however, misleading; the true position is more nuanced and complex.

In both this case (and the 2013 Eweida decision) it was found that the aim of wishing to present a particular corporate image could 'trump' an employee's right to manifest their religion. However, in the Achbita case, the ECJ only went as far as saying it would then be for the Belgian national courts to determine whether the way in which that aim was pursued was appropriate and necessary – and whether or not a national Belgian court would conclude that the dress was pursued in an appropriate manner would depend very much on the specific national context and the specific details of how G4S implemented their policy in Belgium. It may be that a Belgian court will decide that G4S did not pursue its policy in an appropriate and necessary manner and, even it did, a UK tribunal would not necessarily follow the same reasoning when interpreting the Equality Act 2010.   In the Eweida decision, British Airway's desire to project a particular corporate image was held to be legitimate but it was, ultimately, not objectively justified. The ECtHR felt that the UK tribunal had attached too much weight to that aim. Employers should, therefore, be wary of taking this latest ruling on dress codes as sanction for a ban on employees wearing Islamic headscarves to work.

In a decision on a similar question which was published at the same time as the Achbita case – Bougnaoui v Micropole - the ECJ held that a dismissal for wearing an Islamic headscarf at work, contrary to a customer's objection to her wearing the headscarf, was directly discriminatory on grounds of religion or belief. However, in this case there was no general ban; a specific customer request was made and this could not justify the discrimination so it is the different factual context which is likely to have led to the opposite conclusion from the ECJ.

 

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Spring forward

The end of the financial year is always a busy time, but this year is set to be even busier than usual with a number of key changes taking effect in March and April 2017. Jodie Sinclair reports.

Reforms to intermediary company rules in the public sector (IR35) will take effect in relation to payments made from 6 April 2017. Where an individual supplies their services to a public sector organisation through an intermediary – such as a Personal Service Company – the organisation engaging the contractor must decide if the new rules apply and, if they do, the engaging organisation must deduct tax and National Insurance Contributions. The new rules will apply if a worker is providing services personally to a public authority and would, except for the use of an intermediary, have been considered an employee or office holder. Please click here for our full briefing on these changes and details of how we can help – we are currently advising many of our public sector clients on the practical and legal implications of this change which is set to have a significant impact. By way of example we can:

  1. carry out a review of your current contractual documentation
  2. audit specific individuals or groups of individuals to assess whether they will be captured by the new rules
  3. prepare a guidance note for managers
  4. provide a training session on the new requirements.

Please contact Victoria McMeel or James Gutteridge if you would like to discuss this further.

In another big change to affect the public sector in the coming weeks, public sector employers will be required to undertake their first 'snapshot' gender pay gap analysis on 31 March 2017.  And private and voluntary sector employers must soon follow suit and undertake the same analysis on 5 April 2017. The first gender pay gap reports must be published within 12 months of the 'snapshot' dates.  Please click here for details of the public sector reporting requirements and please click here for details of the private sector reporting requirements.

The offence of wrongly advertising a course or training as an 'apprenticeship', when it is not a statutory apprenticeship, comes into force from 1 April 2017. The aim of this reform is to prevent the misuse of the word 'apprenticeship' and protect the quality reputation of the statutory scheme.  The apprenticeship levy will also come into force on 6 April 2017: all UK employers in both the private and public sector with annual wage bills of over £3million will be required to pay 0.5% of the pay bill for a tax year, less an annual allowance of £15,000. This is intended to contribute towards the cost of apprentice training.  In another development related to apprenticeships, certain large public sector employers (those with over 250 employees) will be required to meet apprenticeship targets of 2.3% apprenticeship starts each year. Employers in scope for the target include all government departments (other than GCHQ), Transport for London, Acas, the Health and Safety Executive, and the Office for Budget Responsibility. Organisations specifically excluded from the scope of the regulations include charities, housing associations and trusts, independent schools and financial institutions carrying out regulated activities.  The draft Public Sector Apprenticeship Targets Regulations 2017 are due to come into force on 31 March 2017 with the first reports on the apprentice target (with an explanation if a target has not been met) due within 6 months of the end of each reporting year, i.e. by 30 September 2018.

The new immigration skills charge will take effect from 6 April 2017, so that large employers (i.e. those with more than 50 employees or an annual turnover of £10.2 million) will be required to pay £1000 per employee for each skilled migrant it employs (the cost is £364 for small employers and charities).  The tier 2 (general) salary threshold will increase to £30,000 from 6 April 2017, for migrants who are 'experienced workers'.

Salary sacrifice arrangements entered into on or after 6 April 2017 will be pared back: the availability of tax and National Insurance Contribution benefits will be restricted to reduced salary arrangements exchanged for

  • pension benefits
  • childcare
  • cycle to work schemes; and
  • ultra-low emission car benefits.

The restriction will also apply to arrangements entered into before 6 April 2017, but 'grandfathering provisions' will allow arrangements entered into before that date to continue until 6 April 2018 (unless the arrangement is ended, varied or renewed before then) and a further extension, until 6 April 2021, will be allowed for arrangements related to cars, accommodation and school fees (unless the arrangement is ended, varied or renewed before then).

The government has also announced that it aims to have the new tax-free childcare scheme in place in April 2017. This scheme will be available to all working parents (not just employed parents, as under the current childcare voucher scheme) who will be able to claim back up to 20% of childcare costs for children under twelve. Childcare voucher schemes will continue to be available to existing members, but will be closed to new entrants once the new tax-free scheme is introduced.

Allowance and payment increases

Statutory maternity, paternity, adoption and shared parental leave pay increases to £140.98 per week from 2 April 2017.  Statutory sick pay increases to £89.35 per week from 6 April 2017.

The maximum limit on a 'week's pay' for the purposes of calculating redundancy payments and unfair dismissal basic awards increases from 6 April 2017 to £489. The limit on unfair dismissal compensatory awards increases to £80,541 from 6 April 2017.

On 1 April 2017, national minimum wage rates will increase, so that the standard adult rate for workers over the age of 25 (the 'living wage') will be £7.50 per hour. The standard adult rate for workers over the age of 21 will be £7.05 per hour.

Also on 1 April 2017, the personal allowance will rise to £11,500 and the higher rate tax threshold to £45,000.

 

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Employment news round-up, March 2017

Brexit takes centre stage this month, as the Prime Minister commences the formal process of our withdrawal from the European Union. We re-cap on the key issues for HR and in-house legal, plus look at the rest of the top employment law developments for March 2017: new whistleblowing proposals for the NHS, tribunal reform, ill health early retirement and the latest on the 'gig economy'. And diaries at the ready: we release details our Spring series of free training events, which will look at workforce issues in the modern economy. Julian Hoskins reports.

Brexit news – the countdown begins…

As expected, yesterday the Prime Minister issued noticed under Article 50 of the (now famous) Lisbon Treaty and commenced the formal process for the UK to leave the European Union (EU).

What this will mean in the longer term for employment law is still very far from certain. What we do know for now is that, until the withdrawal process completes (which could be within the two year period set out in Article 50, or longer, if all EU nations agree) all EU derived legislation and case law remains fully applicable. And given the Prime Minister's stated intention to preserve EU derived employment rights post-Brexit, it is likely that this will remain the position for the foreseeable future. When legal complexities and practical changes start to bite post-Brexit, they will most likely relate to the status of the existing body of EU derived employment law and possible amendments to EU derived legislation. The huge complexity and legal uncertainty ahead was noted earlier this month by the House of Lords' Select Committee Report on the Great Repeal Bill and delegated powers.      

Whilst HR and in-house legal advisers are unlikely to have to grapple with significant legal changes post-Brexit, at least in the medium term, the more immediate and pressing problem is the practical impact of notification to leave the EU in terms of staffing, engagement and recruitment. The Nursing and Midwifery Council has reported that EU nurses registering to work in the NHS fell by about a quarter at the end of last year, compared to the same period in 2015.  In evidence to the Health Select Committee on 21 February 2017, the chief executive of NHS Employers, Daniel Mortimor, highlighted the crucial contribution of EU staff to the NHS and social care and the early adverse effect of the EU referendum result on recruitment and retention of clinical staff, as well as the anxiety and concern felt by EU NHS staff.  It is our understanding that similar workforce concerns are shared beyond the healthcare sector and particularly amongst industries with a heavy reliance on our 1.6 million EU workers, such as social care, housing, hospitality, construction, manufacturing and agriculture.

Please click here for our infographic summarising the short, medium and long term legal and practical workforce implications of leaving the EU, across all sectors and industries, and suggested immediate practical steps.

NHS whistleblowers – consultation on new protections

A short period of consultation has commenced on proposals to prevent discrimination against applicants for jobs in the NHS who appear to have made a 'whistleblowing' protected disclosure.

This is the latest development to follow on from Sir Robert Francis' report into malpractice at the Mid-Staffordshire NHS Foundation Trust, and his follow up report on improving the raising concerns culture in the NHS, Freedom to Speak Up.

The draft regulations:

  • prohibit discrimination by NHS employers in the recruitment of an applicant on grounds that they appear to have made a protected disclosure or 'blown the whistle'
  • allow for recourse to an employment tribunal where such discrimination is alleged
  • entitle the applicant to bring a separate claim in the County Court or the High Court for breach of statutory duty in order to, among other things, restrain or prevent discriminatory conduct
  • extend the scope of the new claims, so that discrimination of an applicant by a worker or agent of the prospective NHS employer is treated as if it was discrimination by the NHS employer direct.

Importantly, the proposals suggest that compensation for such claims will be uncapped (similarly to existing whistleblowing claims).

The consultation period closes on 12 May 2017 and the full consultation documents (including a copy of the draft regulations) can be found here.

"It's the tribunal system, Jim, but not as we know it"

Employment tribunals are set to change: according to the government's response to its consultation on tribunal reform, it will be going ahead with proposals to digitise the claims process, so that tribunal users will have the option to utilise online case management and tracking. At present, claims can be lodged online but much of the ongoing case management process is undertaken on paper.  The government also proposes to delegate certain tasks away from judges and over to legally qualified 'caseworkers' – the type of work which will be delegated has yet to be decided, but will likely include the more routine case management judicial tasks.  Employment tribunal panels will continue to include non-legally qualified 'wing members' but panels will be tailored to needs of the particular case.

Ill-health early retirement – no duty to inform about higher pension entitlement

The Deputy Pensions Ombudsman has decided that an NHS Pension Scheme employer was not under any obligation to raise the possibility of ill-health early retirement with an employee who was dismissed on the grounds of redundancy – even though the employee would have been entitled to a higher pension if she had been dismissed for ill health reasons rather than being made redundant.

An occupational health doctor had previously recommended reasonable adjustments to facilitate the employee's return to work, but the member had said she would prefer to be made redundant.

At the time the member's employment was terminated, the employer had not arrived at a decision to terminate her employment on grounds of ill health, as required to receive an ill-health pension. Nor did the member satisfy any of the criteria under the employer's sickness absence policy for consideration for ill-health retirement. The employer therefore had no duty to raise the question of ill-health retirement with the member. Please click here for the full decision.

The 'gig economy' – latest developments

Modern working practices and how they interact with traditional employment law continue to be an area of significant interest. The latest development is that Deliveroo (an online food delivery company) has agreed to remove unenforceable clauses in its contract which purport to prevent staff from taking the company to an employment tribunal. This assurance was given by Deliveroo's Managing Director in evidence to the House of Commons' Work and Pensions Committee on self-employment and the gig economy. Evidence was also taken from a range of other companies which have adopted a flexible workforce models, including Uber, Amazon and Hermes UK Limited (full evidence to the House of Commons can be accessed here)

In a separate but related development, Acas has issued new guidance on employment status, presumably in response to the current focus on self-employment and flexible work in the modern economy. The guidance looks at how to define a range of categories of worker, such as agency workers, workers utilising umbrella arrangements and self-employed workers.

 

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Spring updates – free training events

'The future is now: dealing with modern workforce issues'

Our next series of employment law training events will look at dealing with a range of modern workforce issues, including 'gig working' and other atypical working arrangements. The second part of the session will focus on key practical steps to assist with managing employees' misuse of social media and reducing litigation risk. These events will take place over the course of a morning, followed by a networking lunch.

 

Please click here for further details of the programme, dates and how to book.

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