U.K. Employment Law Update: Employment Law Reform, Uber’s Appeal and Proportionate Pay

U.K. Government Outlines Proposals for Future Employment Law Reform

The U.K. government has published its Good Work Plan. The report’s proposals seek to implement most of the recommendations in the Taylor Review of Modern Working Practices, which we reported in 2017 and 2018. The government has presented its proposals under three headings: fair and decent work, clarity for employers and workers, and fairer enforcement.

Fair and Decent Work

• Those on zero hours contracts would be able to request a more predictable and stable contract after 26 weeks of service.
• The length of the gap required to break the continuity of employment would be extended from one to four weeks, making it easier for casual employees to accrue employment rights.
• The current principle allowing employers to pay agency workers less in exchange for guaranteed pay between assignments would be repealed.

Clarity for Employers and Workers

• Employment status frameworks under employment law and tax law would be aligned for greater clarity.
• Employers would be required to give all workers a written statement of the terms of work on their first day.
• The reference period for determining holiday pay would be extended from 12 to 52 weeks.

Fairer Enforcement

• Employers who do not pay tribunal awards would have their names published by the government.
• The maximum penalty for an aggravated breach of employment law will be increased from £5,000 to £20,000 and employers who repeatedly breach the same issue would face additional sanctions.
• A single labour market enforcement agency would be established to ensure that vulnerable workers are aware of and have access to their rights.

As mentioned above, these are currently only proposals, but it is clear that businesses can expect further legislation on these issues in the near future.

On Appeal, Uber Drivers are Once Again Found to be Workers

In Uber B.V. and others v Aslam and others [2018] EWCA Civ 2748, the Court of Appeal upheld the decisions of the Employment Tribunal and the Employment Appeal Tribunal that Uber drivers are workers and not self-employed contractors.

Although the drivers’ contracts contained elements indicating that they could potentially be self-employed, the Court of Appeal relied on previous case law which held that a court can disregard the terms of a contract if they do not reflect the practical reality of the working relationship between the parties. The Court noted that the drivers’ contracts did not reflect the reality of the arrangements and on the facts found that the drivers were workers. 

Uber has been granted permission to appeal to the Supreme Court. Nonetheless, employers should note that the U.K. courts are increasingly willing to find that those working in the “gig economy” are workers, rather than self-employed contractors.

Part-Time vs Full-Time: The Importance of Proportionate Pay

In British Airways Plc v Florence Pinaud [2018] EWCA Civ 2427, the Court of Appeal considered whether paying a part-time worker a proportionately lower salary than a full-time worker constituted less favourable treatment.

Ms Pinaud worked as a part-time cabin crew member for British Airways (BA). She was required to be on duty for 14 days followed by 14 days off duty, which totalled 130 working days per year. Full-time cabin crew members were required to be on duty for six days followed by three days off duty, which meant they were paid on the basis of 243 working days per year.

Ms Pinaud claimed that she had been treated less favourably than her full-time colleagues because, although the 130 days that she worked represented 53.5 percent of full time working hours, she received only 50 percent of a full-time salary.

The Court of Appeal agreed with Mrs Pinaud. On its face, requiring her to work 53.5 percent of full-time working hours in exchange for 50 percent of the salary was a clear instance of less favourable treatment. However, BA would have a defence if it could demonstrate that this difference in treatment was objectively justified, i.e. if it was a necessary and appropriate way of achieving a legitimate aim. In this context, it was important to consider whether there were advantages to Ms Pinaud under this arrangement and whether in reality she actually worked 130 days a year. The Court remitted the case to a freshly constituted Employment Tribunal to consider the matter of objective justification.

Employers should ensure that part-time and full-time workers are treated proportionately in relation to all aspects of their terms and conditions of employment, and that any differences in treatment are objectively justified and documented.