Sintons Employment Law E-Bulletin Issue 56

• R (on the application of Unison) v Lord Chancellor [2017] UKSC 51 – Supreme Court declares Employment Tribunal Fees unlawful
• Dudley Metropolitan Borough Council v Willetts and ors (2017) UKEAT/0334/16 and Focus Care Agency v Roberts (2017) UKEAT 0143/16 – Update on working time and pay
• ACAS Guidance on Supporting Trans Employees in the Workplace

R (on the application of Unison) v Lord Chancellor [2017] UKSC 51 – Supreme Court declares Employment Tribunal Fees unlawful

On 26 July 2017, the Supreme Court (“SC”) upheld a challenge to the controversial tribunal fees brought by trade union, Unison, in a landmark decision.

Unison began its legal battle arguing that the fees of up to £1,200 introduced by the Government in 2013, unfairly prejudiced low and medium paid workers from accessing justice for being unfairly treated by their employers.

The rise in tribunal fees made it extremely hard for particularly low paid workers to exercise any kind of legal recourse against their employer. Statistics recorded a 70% drop in the number of claims brought in tribunals since the fees were introduced. The SC judges acknowledged this in their decision, describing the high fees as having such a serious deterrent upon claims that it has had the effect of dissuading the more genuine claims (including discrimination) rather than achieving the desired effect of deterring vexatious and unmeritorious legal action. The SC acknowledged that the arguments presented by Unison exposed the reality that such extortionate fees could not reasonably be afforded by those on low to middle incomes.

In allowing Unison’s appeal against the fee regime, the SC has ruled that the Government acted unlawfully in its introduction of the regime four years ago, citing that the Government failed ‘not just on simple economics but on constitutional law and basic fairness’.

In terms of what this could mean for claimants, Unison has called for the Government to compensate the thousands of individuals who have already been charged for bringing a claim against their employer and has stated that the decision itself means that “anyone treated unfairly at work will no longer have to pay to take their employers to court” going forward. Fees are therefore no longer payable for tribunal claims or EAT cases, and the Ministry of Justice has confirmed that steps will be taken to begin refunding retrospective payments. The Financial Times estimated that the level of any such compensatory figure could amount to around £27 million.

Earlier in August the Employment Tribunals (England & Wales) released a statement to the effect that it is currently working on the detailed arrangements of the refund scheme to comply with their undertaking to refund all retrospective fees, if the Fees Order was declared unlawful. The government has confirmed that the practical arrangements are still being thought through but that it hopes to make proposals shortly.

What is more, many commentators are saying that because the fee paying scheme was unlawful, it will take primary legislation to bring back fees. Hence, it will be difficult to even bring in a lower tariff for fees without enacting new legislation and, given the current balance of power, the government may not want to do this.

Dudley Metropolitan Borough Council v. Willetts and ors (2017) UKEAT/0334/16 and Focus Care Agency v. Roberts (2017) UKEAT 0143/16 – Update on working time and pay

Two important recent Employment Appeal Tribunal (EAT) decisions affecting time spent at work have highlighted some key considerations for employers in calculating holiday pay and establishing entitlement to the National Minimum Wage.

Holiday Pay

In Dudley, the EAT ruled that payments for voluntary overtime must be taken into account when calculating holiday pay if:

• they are paid with sufficient regularity to amount to ‘normal’ remuneration;
• a failure to make such payment would have the unjust effect of deterring employees from taking leave; and
• despite the voluntary nature of the overtime, it is ‘intrinsically linked’ to the work required under the contract i.e. the purpose of the payment is to reimburse the employee for the additional work undertaken.

This case involved a group of 56 employees with set contractual hours of employment. In addition to those hours, they volunteered to perform additional duties and participate in on-call rotas – something which their contracts of employment did not require them to carry out and the Council had no right to require them to do. The employees received overtime payments, a standby allowance and call out payments if called upon, all of which (the EAT held) counted towards the calculation of holiday.

National Minimum Wage (NMW)

In Focus the EAT was asked to determine whether employees who were required to sleep on site were working for the full duration of their shift, and therefore entitled to the NMW, or whether they were only entitled to the NMW when they were awake and carrying out work.

Deciding three conjoined appeals, the EAT held that a multifactorial test should be applied and identified four relevant factors to be considered:

• the employer’s purpose in engaging the employee to sleep on site;
• the extent to which the employee’s actions are restricted by the requirement to be present;
• the degree of responsibility untaken by the employee; and
• the immediacy of the requirement to provide services if an emergency arises

The employees in the first and third appeal, Mr Roberts (R) and Mrs Tomlinson-Blake (TB), were support workers for vulnerable adults. During night shift they had no specific tasks but were required to remain on site in case help was needed. In R, the EAT held that the tribunal had failed to apply the multifactorial test but upheld the Tribunal’s decision that R was entitled to paid while sleeping on the basis of his contractual entitlement. In T, the EAT upheld the tribunal’s decision that she was working when asleep and so entitled to the NMW. The Tribunal had considered relevant factors including the regulatory requirement for T to be present, the need for her to exercise her judgement and fact that she would be disciplined if she left her post.

In the second appeal, Mr and Mrs Frudd (F) worked on a caravan site and were required to respond to emergency call outs. The EAT held that the Tribunal had failed to apply the multifactorial test, specifically, it had not considered the purpose or requirement for F to be present. The Tribunal’s decision that F was not working when asleep could therefore not stand and the case was remitted to a fresh Tribunal.

While each EAT decision makes separate inroads into the specific legislation to which they relate, they represent a common theme – a requirement to adequately reimburse employees for work done. They serve as a useful reminder to employers to:

• review the hours of work undertaken by employees and what they are required to do during their shifts;
• consider their pay arrangements for out of hours work and overtime; and
• identify, in advance, the implications of their working practices by taking advice.

ACAS Guidance on Supporting Trans Employees in the Workplace

Recent research carried out by the Institute for Employment Studies (“IES”) into the treatment of transgender individuals in the workplace has suggested that managers are failing to provide adequate support to transsexual employees at work.

The research involved a series of interviews with ‘good practice employers’, with recognised knowledge and experience of managing trans employees across a number of sectors and also with various advocacy groups for LGBTQIA (Lesbian, Gay, Bisexual, Transgender, Questioning, Intersex and Allies).

The IES research also revealed concerns that the Equality Act 2010 (the Act) did not provide sufficient protection for intersex, non-binary or otherwise gender non-confirming employees. Employers who were found to be implementing best practice towards such employees were found to be treating them as though they were covered by the Act. This approach is considered to be vital by LGBTQIA advocacy organisations.

Examples of good practice identified included: approaching each trans employee’s circumstances differently in terms of management, appreciating that each trans experience is diverse and that no two journeys are likely to be the same; and making use of tailored staff policies which specifically considered the needs of trans employees, and which were drafted on the strength of viewpoints of transgender employees, trade unions and expert parties.

In response to the study, Acas has issued new gender reassignment guidance for employers in supporting transgender and non-binary employees in the workplace. This provides a number of suggestions for how employers might improve their practice, which include:

• making equal opportunities clear throughout the recruitment process, with specific reference and discussion of trans and intersex issues and how they are to be managed;
• ensuring that personal, sensitive data is carefully handled and managed. For example, do not retain any documentation that would not be required for legal (e.g. pensions) or valid employment (e.g. references) reasons; and
• providing suitable training for line managers, capitalising on lived experience where possible, and ensuring they are given the necessary support with any difficulties or queries. Encouraging those who have received training to spread it to others.

The full research report, ‘Supporting trans employees in the workplace’, and guidance, ‘Gender reassignment discrimination: key points for the workplace’, can be found on the Acas website.