July 31, 2018

U.K. Employment Law Update, July 2018

All Things Brexit

Earlier this month, as the latest formal development concerning Brexit, the U.K. government published a White Paper entitled ‘The Future Relationship between the United Kingdom and the European Union’ (the White Paper). The White Paper covers a great raft of issues, from goods and services to data protection.

However, most importantly for employers and employees alike, the White Paper expressly commits to “non-regression of labour standards”. Essentially, this means that the existing body of U.K. employment law will remain unchanged when the U.K. exits the EU in March 2019, with no EU based laws being repealed.

It had been predicted that there would, on a U.K. exit from the EU, be areas of relaxation of existing legislation, for example on the rules around harmonising terms and conditions following a TUPE transfer. However, this does not now seem to be on the cards, at least for the present. This may be because, in many areas of U.K. employment law, U.K. legislators have already chosen to exceed EU minimum standards (for example on issues such as parental leave and flexible working arrangements) and U.K. employment law is well entwined with EU regulation. Both employment practitioners and businesses can take some comfort in knowing that significant changes in this field are therefore not to be expected.

However, as with all things Brexit, watch this space.

Further Gig Economy Update: Mutuality of Obligation

In Addison Lee Ltd v Gascoigne UKEAT/0289/17/LA, the Employment Appeal Tribunal (EAT) found that a courier working for Addison Lee was a worker rather than a self-employed contractor.

Mr Gascoigne was a cycle courier for Addison Lee until March 2017. Mr Gascoigne claimed that he was a worker and therefore entitled to pay in respect of holiday taken in 2016. The Employment Tribunal at first instance upheld his claim, finding that although the written terms of the contract between the parties expressly referred to Mr Gascoigne as a self-employed contractor, this did not reflect the reality of the relationship. During the time that Mr Gascoigne was 'logged on' to Addison Lee's app there was sufficient mutuality of obligation for 'jobs' to be offered and accepted. Mr Gascoigne was therefore a worker.

The EAT dismissed Addison Lee’s appeal. The EAT held that, for the periods in which Mr Gascoigne was logged on to the app, the necessary mutuality of obligation existed. The Employment Tribunal’s multi-factorial approach was found to have been correct, and factors such as Mr Gascoigne's somewhat erratic working pattern, his entitlement to log off at any time and Addison Lee’s provision of insurance were not at odds with worker status. It should be noted, however, that such cases will be highly fact sensitive.

This case once again supports the current direction of travel in the U.K. courts whereby those working in the gig economy are found to have worker status (also reported by us here). It also serves to remind employers that the courts will look to the reality of the employment relationship to determine employment status, no matter what the express terms of the contract provide.

Constructive Unfair Dismissal: the “Last Straw”

In Kaur v Leeds Teaching Hospitals NHS Trust [2018] EWCA Civ 978 the Court of Appeal considered the “last straw” principle in a claim for constructive unfair dismissal.

The Court of Appeal provided some helpful guidance on the “last straw” principle in the context of a constructive unfair dismissal claim. This principle applies where there has been a series of breaches of contract which separately may not amount to a fundamental breach, but do so when taken together. Ordinarily, if the employee continues working as if a breach of contract had not occurred, they will be deemed to have “affirmed” the contract as a result of which they will lose their right to resign and claim constructive dismissal. However, the Court held that in such cases, even where an employee has affirmed a past breach, a new breach in the series can effectively “revive” the employee’s right to rely upon the whole series.

In addition, the Court set out five questions that should be asked when considering this issue: (i) what was the most recent act/omission by the employer which caused or triggered the resignation; (ii) has the employee since affirmed the contract by continuing to work as if the breach had not occurred; (iii) if not, was that act/omission a fundamental breach; (iv) if not, was it nevertheless part of a course of conduct comprising several acts/omissions which together amount to fundamental breach; and (v) did the employee resign in response (or partly in response) to that breach?

Employers need to take note that, as a result of this judgment, employees may be able to rely on past events that they appeared to have accepted as contributing to a series of events leading to a constructive dismissal claim.

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