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8 cases to watch out for in 2018

We’ve picked out the key cases that will influence employment law over the next 12 months.

Worker, employee or self-employed? Status takes centre stage

It has always been difficult to correctly determine the employment status of some individuals, particularly those engaged under self-employed contracts, or who work on a casual basis. The law has been interpreted in numerous cases, but the courts have not been able to devise a single test that will conclusively point to the distinction in all cases.

Two widely publicised cases will be heard this year – one involving Pimlico Plumbers and the other Uber taxi drivers which, we hope, will provide some much needed clarity.

In Smith v Pimlico Plumbers, the Supreme Court will have to decide whether a plumber engaged under a self-employed contract is, in fact, a worker in circumstances where he was required to wear a uniform, drive a branded van, work a minimum number of hours per week and had to do the work personally. We hope that the Supreme Court will offer real guidance on the meaning of “in employment” and “worker”, which will help employers correctly determine the status of their workers from the outset of their relationship.

That case was heard on 20 and 21 February and judgment will be delivered at a later date.

In Aslam v Uber, Uber have argued that it is a technology platform which puts drivers in touch with passengers (not a taxi service). It operates on the basis that its drivers are self-employed and are free to accept or reject work. This model of gig working is extremely tax efficient for the employer as it reduces employee NI and PAYE deductions and VAT.

Uber has appealed the decision of the tribunal and EAT that its drivers are, in fact, workers and the Court of Appeal is due to hear the case on 20 November 2018. Uber initially tried to appeal straight to the Supreme Court (and leapfrog the Court of Appeal) which suggests that, if it loses, it will apply to appeal the decision further.

Holiday pay

If a business’s self-employed contractors are actually workers or employees, are they entitled to recover unpaid holiday pay? If so, how much and over what period?

In King v Sash Window Workshop Ltd, the Court of Justice of the European Union established very important principles for workers/employees who are wrongly treated as self-employed. These are:

1 A worker must know that he is going to be paid before he takes leave

2 A worker has the right to be compensated for untaken and unpaid leave

3 A worker can carry over and accumulate untaken leave until the end of their employment relationship and is not restricted in the same way as workers unable to take holiday due to long-term sickness.

These principles apply even if the employer wrongly believes that the worker is not entitled to paid leave. Employers are under an obligation to correctly determine the status of their workforce, and, if they get it wrong, they “must bear the consequences”.

The case returns to the Court of Appeal on 20 and 21 November 2018 to decide if the UK’s Working Time Regulations 1998 can be interpreted to give effect to this decision and, if so, how much compensation Mr King will receive.

The outcome of this case may expose businesses to claims for holiday pay from self-employed contractors who believe they are workers, which could go back up to 20 years.

Vicarious liability

Is an employer vicariously liable for the deliberate leak of personal data of its employees?

In Current and former Morrison’s employees v WM Morrison Supermarket PLC, 6,000 staff have brought a claim against their employer following a deliberate data breach by a rogue employee who illegally shared a spreadsheet online containing bank, salary and NI details of 99,998 members of staff. The High Court held the supermarket was vicariously liable for the leak.

Morrison’s appeal will be heard by the Court of Appeal by 12 December 2018. The outcome of this case is important because it potentially extends the scope of an employer’s vicarious liability, even where direct liability for data breach rests with the employee. The High Court acknowledged that the finding of vicarious liability could lead to the paradoxical result of furthering the intention of the rogue employee which was to cause financial harm to his employer.

National minimum wage and working time

Are workers providing “on call” cover or engaged in “sleep in” shifts entitled to be paid the national minimum wage for their whole shift or only when they are awake and carrying out duties? And, separately, is this time working time for the purposes of the Working Time Regulations?

In Shannon v Rampersad t/a Clifton House Residential Home, a worker on-call from 10pm to 7am claimed £239,490 in underpaid national minimum wage payments and also argued that he could accrue and carry over outstanding working time holiday leave which he had not taken. The ET and EAT have rejected his claims and the appeal will be heard by the Court of Appeal on 20 April 2018.

In Royal Mencap Society v Tomlinson-Blake, the EAT suggested that a worker will be working (and be entitled to be paid for the whole shift) where:

• The employer is under a statutory or contractual duty to have a worker on the premises at all times

• The worker is unable to leave the premises at any time during the shift

• The worker has a degree of responsibility for personally performing duties when needed and making judgments about what is required over and above merely having to call out emergency services.

This case will be heard by the Court of Appeal on 20 March 2018 alongside Shannon v Rampersad t/a Clifton House Residential Home.

These claims are particularly important for employers engaged in the care industry. Liability for underpayment of the NMW can go back six years and it has been predicted that the outcome of this decision may put many care homes out of business.

Shared parental leave

If you enhance maternity leave, do you have to enhance shared parental leave?

Two cases were brought before different employment tribunals, arguing that the failure to enhance shared parental leave pay in these circumstances discriminates against male parents.

In Hextall v Chief Constable of Leicestershire Police, the tribunal held that the employer's policy to pay maternity pay at full pay for 18 weeks, but to pay shared parental pay at only the statutory rate to the father, did not amount to direct sex discrimination.

However, in Ali v Capita Customer Management Ltd, the tribunal found that the employer's policy to pay maternity leave at full pay for 14 weeks, but to pay shared parental pay at the statutory rate, did amount to direct sex discrimination.

Both cases were appealed to the EAT and we are expecting a decision in spring 2018.

If the EAT decides that it is discriminatory to enhance maternity pay but not shared parental leave pay, many employers will need to adapt their policies. One approach is to reduce statutory maternity pay to statutory rates to “level down” the entitlement, which will disadvantage new mothers.

February 2018

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