UK: Five Significant Developments For UK Employers

Extending discrimination law?

It seems likely that following a recent European Court decision which appears to extend discrimination "by association"1 that there is an increased risk that this type of discrimination claim will now be brought.

The case was about an electricity supplier in Bulgaria, which placed electricity metres at an inaccessible height (six metres) in areas which were mainly populated by people of Roma ethnic origin, while the normal height was 1.7 metres. The reason for this was to prevent crime, on account of allegedly high levels of tampering and illegal connections in those areas. However the claimant, who had a shop in a "Roma district", was not of Roma origin. She brought a race discrimination claim on the basis that she suffered the same disadvantage as the Roma people in that area. She complained that she could not reach the meters to read them and assess her consumption, and that her electricity bills were excessive.

The decision may well result in creative discrimination claims being brought on the basis that an individual suffers less favourable treatment or a disadvantage even though they do not personally possess the relevant protected characteristic, such as sex or race, etc.

For example, if a woman's request to work flexibly for childcare reasons is rejected she may have a claim for sex discrimination on the basis that women are at a disadvantage compared with men as statistically they have greater childcare responsibilities. So for example, if an employer rejects a man's request to work reduced hours because of childcare responsibilities, he may allege that he can claim sex discrimination as he has been disadvantaged in the same way as women, despite being a man.

It remains to be seen what impact this decision will have on UK discrimination law. But in any event, if employers act fairly towards their employees, this will reduce the risk of discrimination claims being brought, including claims "by association". So, when considering flexible working requests, employers should focus on the business reasons for their decision and not follow stereotypes – and it is also essential to keep a record of the business reasons for rejecting any requests.

Peripatetic employees – more working time issues

In a recent decision, the European Court confirmed that the journeys to/from home at the beginning and end of the day made by workers who have no fixed workplace count as "working time"2.

This decision is significant because, if this travel time is "working time", it will impact on:

  • The total number of hours worked in any one working week – European law imposes a cap of 48 hours, although UK law allows UK workers to opt out of this cap by giving written consent
  • The timing of the worker's daily and weekly rest break entitlements under the working time rules
  • Night workers, as there are restrictions on the length of night work and rest breaks

Given that the working time rules extend beyond employees to all workers, they also apply to agency workers and contractors (other than the genuinely self-employed).

Although the 48 hour weekly working limit can be opted out of on an individual basis, from a wider safety and health perspective, employers may want to query how this aligns with their strategy and values.

The impact of this case will vary depending on the organisation. Certain sectors are excluded entirely from all or most of the key limits, for example mobile workers in civil aviation, travelling staff in passenger or goods by road or air transport and workers covered by the "drivers hours" or tachograph regime – and police and civil protection staff and certain shipping crew are also excluded.

Employers should review their position to determine the risks of any possible breaches of the working time rules, and those with a peripatetic workforce will need to look at their resourcing plans.

National living wage

Since 1 October 2015, the new hourly National Minimum Wage (NMW) rates have applied, with the standard adult rate (for workers aged 21 and over) increasing from GBP 6.50 to GBP 6.70. Of greater significance for employers, however, is the introduction of the National Living Wage (NLW) in April 2016 which will apply to workers aged 25 and over, and will effectively replace the existing NMW for these workers.

The NMW rules will also apply to the NLW. In relation to enforcement, the Government plans to introduce stricter penalties for employers which do not comply.

By enshrining the NLW in law, businesses in certain industries will be compelled to implement a potentially significant pay rise for many of their employees. Those employers will need to consider carefully how they implement this change, including assessing the likely knock-on effect in terms of existing pay scales, job evaluation schemes, pension costs and other employee benefit schemes. Many large employers have announced substantial payroll cost increases and opted to extend the NLW to under 25s.

Confusingly, the rates, in London and outside, recommended by the Living Wage Foundation (a non-public body) will remain as a higher voluntary benchmark.

Gender pay reporting

The Government plans to introduce mandatory reporting on gender pay differences for large employers, to increase transparency and thereby reduce the gender pay gap. There is likely to be a phased implementation of the new pay reporting rules, with larger companies (500+ employees) publishing the information earlier.

There will be a number of issues of concern for employers in the gender pay proposals, including whether existing systems are able to collect the necessary gender pay data, and, if not, the administrative burden of ensuring that they do so. Of course, much will depend on what information will need to be reported, and this is not yet clear.

While many employers have previously resisted the temptation to carry out a gender pay analysis because they wanted to avoid creating documentation which could be used against them in an equal pay or discrimination case, given that compulsory reporting is now coming in, we recommend that employers review this approach and consider whether or not to update it.

Of course, although this may be secondary to the risk of future equal pay claims, employers will face increased administration costs in order to gather and report this information. Publishing gender pay information is likely to mean that more equal pay and sex discrimination claims will be brought relying on information made available. However, what is most significant for businesses is undoubtedly the risk of reputational damage arising from negative publicity over gender pay gap issues. Employers will want to seek to limit any damage by explaining the context, such as the sector/regions in which they mainly work, etc.

Trade union reforms – weakening the unions

The key reforms include:

  • A higher "turn-out threshold" of 50% for strike ballots
  • In addition to the 50% "turn-out threshold" for strike action in essential public services, 40% of those entitled to vote must actually vote in favour of industrial action
  • Industrial action must take place within four months of a ballot, and the ballot paper must contain a clear description of the trade dispute and the planned industrial action, making it difficult for unions holding a single ballot to authorise a series of strikes
  • Increasing the notice unions must give to employers to take industrial action from 7 to 14 days
  • The requirement to appoint a picketing supervisor
  • Enhancing the role of the Certification Officer in regulating trade unions
  • A possible repeal of the current ban on employers from hiring agency workers to cover striking employees

For employers with unionised workforces, the new balloting requirements will clearly make lawful industrial action less likely, and the new picketing restrictions will assist employers in encouraging employees to come to work even if industrial action is called. But could there be an increase in unlawful/wildcat industrial action if these proposals are introduced?

One interesting proposal is the appointment of a picketing supervisor whose responsibilities would include informing the police where the picketing is to take place, and being present at the picket line, or readily contactable and able to attend at short notice. Although this does not appear to be a particularly onerous provision, the surprise is the proposal to link this with the lawfulness of the industrial action, such that if the new requirements are not complied with, the industrial action will be unlawful. This link makes it critical for unions to follow the new rules to the letter.

1. Chez Razpredelenie Bulgaria AD C-83/14

2. Federacion de Servicious Privados del Sindicato Commisiones Oberas v Tyco Integrated Security SL (c-266/14)

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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