Gowling WLG's employment, labour & equalities experts bring you the latest top five employment law developments that may affect your business.

  1. Sleeping on the job & NMW take 2
  2. Beyond belief: commercial concern not a philosophical belief
  3. Vanishing act: successful internal appeal makes dismissal vanish, but take care in communicating decision
  4. Time shifting: when do statutory notice periods need to be added to qualifying service for an unfair dismissal claim?
  5. Home Office launches toolkit for employers to support EU Settlement Scheme

1. Sleeping on the job & NMW take 2

Treatment of "sleep-in" shifts for national minimum wage (NMW) purposes is an area that has caused considerable confusion over recent years. Where a worker is required to work a number of "sleep-in" night shifts at the employer's premises to be available in case of an emergency, does the full night shift constitute 'working' for the purposes of the NMW? The Court of Appeal has now answered this question ruling: "the only time that counts for NMW purposes [during sleep-in-shifts] is the time when the worker is required to be awake for the purpose of working" (combined judgment in Royal Mencap Society v Tomlinson-Blake and Shannon v Rampersad t/a Clifton House Residential Home).

Quite simply the only time that counts for NMW purposes is the time when the worker is required to be awake and actually carrying out work. Time spent sleeping/relaxing does not count. In a single judgment, the Court of Appeal has effectively overturned the precedent value of numerous Employment Appeal Tribunal (EAT) judgments concerning sleep-in shifts.

Factors previously found to point towards NMW being payable for the entire sleep-in shift (e.g. employer having a statutory or contractual obligation to have someone at the premises; requiring the worker to remain at the premises throughout the shift; and level of responsibility for dealing with any emergency that arose) are now irrelevant. The sleep-in exception in the NMW Regulations applies to cases where "the essence of the arrangement is that the worker is expected to sleep".

It is important to note, that this judgment deals with shifts where the worker is expected to sleep all or most of the shift but may be woken if required to undertake some specific activity. A footnote to the judgment indicates that a night watchman with periodic patrolling duties through-out the night would be working throughout the shift even if permitted to sleep for short periods between patrols.

It remains to be seen whether, and if so how, HMRC will alter its enforcement policies under the Social Care Compliance Scheme which it implemented based on what was previously understood to be the correct (though now longer correct) legal position. It is expected that HMRC will suspend the scheme pending further advice.

For more on this see, Sleeping on the job take two: National minimum wage and 'sleep-in' shifts

2. Beyond belief: commercial concern not a philosophical belief

Can a belief in "the statutory human or moral right to own the copyright and moral rights of her own creative works and output" amount to a philosophical belief protected under the Equality Act 2010? This is the question the EAT had to consider in Gray v Mulberry Company (Design) Ltd.

In this case, a market support assistant was dismissed for refusing to sign an intellectual property agreement. Ms Gray refused to sign the agreement as she felt it could interfere with her work as a screen writer and film-maker carried out in her own time. Despite the employer agreeing to amend the contract to make it clear that only company intellectual property would be covered, with her private creative works outside the scope of the agreement, she still refused to sign. At the time her stated objection was expressed as a commercial concern as she did not want to be a party to any contract on copyright as she might have to disclose it when selling the copyright in her screen play to a third party in future.

The EAT agreed with the tribunal that Ms Gray had not stated or demonstrated at any time during her employment that she held such a belief. Ms Gray's objections could be described as purely commercial and designed to protect her own private interests. The alleged belief lacked sufficient cogency to qualify as a philosophical belief protected under the Equality Act 2010. Ms Gray's personal commercial interest could not be described as a "philosophical touchstone to her life".

In addition, the EAT held that even if Ms Gray had established a genuine philosophical belief, there could be no indirect discrimination because Ms Gray was (as far as the evidence went) the only person known to hold such a belief. Accordingly there could be no disadvantaged group, as she was not part of any group.

3. Vanishing act: successful internal appeal makes dismissal vanish, but take care in communicating decision

An employee's right to appeal against dismissal may be set out in a contractual disciplinary procedure or a procedure that is expressly non-contractual. Unless they make it clear that they are seeking some other outcome, when a dismissed employee appeals against their dismissal it is implicit that they are asking their employer to find that the dismissal decision was wrong and to return them to their pre-dismissal position.

The effect of a successful appeal against an earlier dismissal is that the employee is reinstated with retrospective effect, the earlier dismissal simply vanishing. The employer must treat the previous dismissal as having no effect and the employee is bound in the same way. That is inherent in the very concept of an appeal in respect of a disciplinary dismissal. In Patel v Folkestone Nursing Home Ltd the Court of Appeal confirmed this remains the case even where the employer addresses only one of two disciplinary allegations that had resulted in the initial dismissal when communicating the successful appeal result.

Mr Patel, a healthcare assistant, was dismissed for gross misconduct following charges of (1) sleeping on the job and (2) falsifying residents' records. The second charge could result in a reference being submitted to the Disclosure and Barring Service (DBS). Mr Patel submitted an internal appeal against the decision to dismiss which was successful. The external appeal officer considered both charges and found in Mr Patel's favour on both when allowing the appeal. However, for some reason, the employer's letter to Mr Patel informing him that the decision to dismiss him would be revoked only explicitly referred to the first charge. Mr Patel was unhappy that he was not informed of the precise finding on the second charge nor assured no DBS reference would be made. As such, he refused to return to work and issued claims of wrongful and unfair dismissal.

The question before the tribunal was, had Mr Patel had been 'dismissed' given that his appeal against dismissal had been successful? The Court of Appeal held that it is clearly implicit in a contractual term conferring a right to appeal against dismissal that, if an appeal is lodged, pursued to its conclusion and is successful, the effect is that both employer and employee are bound to treat the employment relationship as having remained in existence throughout. The Court acknowledged that an employee may pursue an appeal for reasons other than reinstated, such as, wishing to clear their name. But, even if the employee does not wish to continue in employment, the effect of a successful appeal is to treat the employee as if he was never dismissed.

But a twist in the tale...In Mr Patel's case, it was strongly arguable that the employer was in breach of the duty of trust and confidence in failing to resolve the more serious of the allegations and explain that the DBS submission had been withdrawn. As such, the case is going back to the tribunal to consider whether Mr Patel had been constructively dismissed due to the employer's breach of the implied term of trust and confidence.

Lessons for employers:

  • It is inherent in the very concept of an appeal in respect of a disciplinary dismissal, that if successful the dismissal falls away; and
  • Care should be taken when communicating the outcome of an appeal. Leaving important matters "simply up in the air" as far as the employee is concerned is capable of amounting to a breach of the implied term of trust and confidence.

4. Time shifting: when do statutory notice periods need to be added to qualifying service for an unfair dismissal claim?

The effective date of termination (EDT) is all important for calculating whether an employee has sufficient qualifying service and whether a claim has been brought in time. While in theory pointing to the EDT sounds simple, it is not always straightforward.

Where an employee is dismissed without notice (summary dismissal) the EDT will be the date that dismissal actually took place. However, in certain circumstances the EDT is extended where statutory notice is not given:

  • For the purpose of determining the qualifying period for an unfair dismissal claim (section 108(1)) ERA 1996) (note this should not be confused with the question of when the 3 month time limit starts to run);
  • For the purposes of calculating a basic award (section 119(1) ERA 1996); or
  • For the purpose of determining the qualifying period for the right to receive a statement of written reasons for dismissal (section 92(7), ERA 1996).

For the above purposes only, if no notice is given (summary dismissal) the EDT instead of being the date of actual dismissal, becomes the date of actual dismissal plus the minimum statutory notice period (being 1 week for those with less than two years' service).

But does this 'artificial' extension of the EDT to the date on which the statutory notice period would have expired always apply where an employee is summarily dismissed?

In Lancaster and Duke Ltd v Wileman, the EAT has held that the extension of the EDT by the statutory notice period, does not apply where the employer is entitled to dismiss summarily by reason of the employee's conduct. Where there is a genuine entitlement to summarily dismiss, the employee cannot rely on the deeming provisions in the ERA extending the EDT to get to two years' qualifying service.

What does this mean?

Where an employee has been dismissed without notice for gross misconduct just shy of having two years' qualifying service, they may not be able to rely on the statutory notice period extension provisions. To succeed they will need to establish not only that the employer acted unfairly, but also that they themselves had not in fact committed gross misconduct amounting to a repudiatory breach of contract. In other words they will need to establish that their dismissal was not only an unfair dismissal under statute, but also a wrongful dismissal under common law. Where the employee has committed a repudiatory breach of contract enabling the employer to dismiss the employee without notice at common law, the deeming provisions extending the EDT simply do not come into play. This is most likely to arise where the employee is claiming procedural unfairness in an unfair dismissal case.

5. Home Office launches toolkit for employers to support EU Settlement Scheme

As the Brexit date looms ever closer, many EU citizens who have been living and working in the UK for a number of years are understandably concerned about their legal status. On 21 June 2018, the Home Office published a statement of intent about how EU citizens resident in the UK by 31 December 2020 and their families can apply for 'settled status' in the UK under the new EU Settlement Scheme.

EU citizens or a non-EU family member of an EU citizen who have been resident in the UK for five years or more by 31 December 2020 will be eligible for settled status. Those considered to be a serious or persistent criminal or a threat to national security will not be eligible. It is proposed that an application will cost £65 and £32.50 for a child under 16. For those who already have valid permanent residence or indefinite leave to remain documentation, they will be able to exchange it for settled status for free. Those who have been resident for less than five years by 31 December 2020 are eligible for pre-settled status and are able to apply for settled status once they reach the five year point (this second application being free of charge).

On 25 July, the Home Office launched a toolkit to enable employers to increase awareness amongst their staff about the EU Settlement Scheme and what EU citizens need to know and do to apply for "settled status". The toolkit contains information packs, posters and leaflets and aims to allow employers to communicate clear information about the new immigration status that EU citizens must obtain to stay in the UK after Brexit.

A pilot for the new EU Settlement Scheme online application process will begin on 28 August 2018 by NHS workers and students. Up to 4,000 EU members of staff and students from 12 NHS Trusts and three universities in North East England have been invited to make real applications for "settled status".

The scheme is to be phased in more widely later this year and fully open by the end of March 2019. There is no quota for applications. Those wishing to apply under the scheme will have until 30 June 2021 to make their application with their rights remaining unchanged until then, provided they were resident in the UK by 31 December 2020.

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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.