Employment Law Update 2014, London

Name: Employment Law Update 2014, London
Start: 2014-10-07T00:00:00+01:00
End: 2014-10-07T23:59:59+01:00

A day spent reviewing the year's most important updates in employment law.

7th October 2014

About the conference

by Nerys Owen of the Labour Research Department.

A full house of delegates met on 7 October 2014 at the Unite building for a day spent reviewing the most important current issues for the trade union movement in employment law, with just seven months to go until a general election described by Institute President Professor Keith Ewing as more difficult to call than any in recent years.

Ewing took delegates through Labour’s core employment law proposals in relation to both individual and collective rights, drawing on the party’s National Policy Forum Report, which he characterised as “very much a work in progress”. The policy document is notable as much for what is missing as for what it contains.

On individual rights, the proposals can be divided into three broad categories: pay, working time and access to justice.

Pay

Ewing pointed out that while the document includes broad commitments on the need for the standard of living to rise to stimulate demand, job creation and so on, there are no firm commitments on pay, and it is difficult to see what the promises mean in reality. In September, Labour committedto raise the national minimum wage to £8 by 2020. However, says Ewing, there is a danger that even this promise could backfire, particularly since it is lower than the promises about the Living Wage, so it is surprising that the Policy lacks any firm commitments or any detail as to how it is to be delivered, except for a vague promise to work with Labour councils and other public sector employers to support moves to pay the Living Wage “where possible”. What, says Ewing, about workers who are not employed by public bodies, and what if requests are ignored?

Ed Milliband must answer hard questions on Labour’s manifesto commitments to pay before Labour wins the votes of trade union members.

Working time

The current lead political issue on working time is of course zero hours contracts (ZHCs). Everyone is looking for a solution. In its Policy document, Labour condemns “exploitative” – but not all – ZHCs. The party has been developing policy on this, through the Pickavance Review. Unlike pay, there are clear proposals here, including;

a ban on exclusivity contracts – although one risk of a simple ban, says Ewing, is that those with multiple Employers could be left unable to access employment rights, so a very careful approach is needed.
ZHC workers who have “consistently worked regular hours” will move automatically to a fixed hours contract. But there is a disagreement between Labour and unions as to the trigger for the transition to fixed-hours. Pickavance suggested 12 months, but trade unions expected 12 weeks. The most likely outcome, suggests Ewing, is a policy compromise such as 6-8 months, but the issue needs resolving quickly.
There will be a right to compensation for those ZHC workers whose shifts are cancelled at short notice.

These proposals are a good start, says Ewing, but there are other things Labour could be talking about, such as:

The need for much greater transparency so that workers are clear about their employment status and rights from the start of the relationship.
What about the right to request a permanent contract at an earlier stage?
What about technical challenges presented by the employment continuity rules?

Given that using legislation to achieve these objectives would be complicated and difficult, Ewing questions whether more regulation is the best way forward and whether instead, we should be looking elsewhere for alternatives. He cites the approach of the Irish Republic, where issues relating to short-term contracts, pay and hours are dealt with through collective bargaining, and litigation is avoided.

Access to Justice

It is encouraging, says Ewing, that Labour are describing the tribunal fee system as “unfair, unsustainable and resulting in prohibitive costs locking people out of the justice they are entitled to”. But one of the most compelling features of the Policy document is the absence of any commitment to abolish fees after the election. Instead, Labour promises to “introduce a system where affordability will not be a barrier to workplace justice”. “It would also be a mistake”, the document goes on, “to return to the broken system of the past, where tribunals were so slow that meaningful justice was not available”. In other words, what appears to be on the table is yet another promise of tribunal reform. While this is a laudable goal, Labour evidently has not learnt from previous failed attempts – most recently the disastrous statutory dispute procedures, since repealed. The idea that Labour will introduce a new system shortly after taking office is implausible. In the meantime, we could be stuck – for years rather than months – with the current fee arrangements, unless UNISON’s judicial review challenge succeeds. UNISON’s claim is scheduled to return to the Court of Appeal on 21 and 22 October 2014. UNISON is hoping to live tweet the result.

The Policy document does contain some good stuff about health and safety, says Ewing, as well as a welcome promise to abolish the Swedish derogation – due mainly to thecampaigning work of the CWU, who have been the most badly affected by it. But one glaring omission is the absence of any mention of unfair dismissal and the two-year qualifying period? Will Labour reverse it?

Collective rights – trade unions

Ewing characterises Labour’s position on trade union rights as full of “warm words” about the “positive role” of the trade union movement but low on substance. There are certainly some positives – including strong condemnation of blacklisting. But even here what is offered is an inquiry, but not the Leveson-style judge-led public inquiry the Blacklist Support Group have been calling for. Nor is any compensation being offered.

Neither is there any commitment to change the blacklisting laws, or to take up any of the positive suggestions of the Scottish Selection Committee on blacklisting, especially on public procurement.

The commitment on trade union facilities is also important, but there is no promise to roll back the restrictions on facility time for the civil service unions introduced since 2010, even though no change to the law is needed.

And despite these positives, there are three glaring omissions from Labour’s policy commitment on trade union rights:

Consultation: there is no reference to the cut to collective redundancy consultation periods from 90 to 45 days. There is a general commitment to “review” current arrangements under the ICE Regulations 2004, and a promise to implement the results of the successful USDAW challenge in the Woolworths case, but what is missing is any promise to reverse the cut in consultation time. Is Labour saying they will not change this?
Collective bargaining: Labour “recognise the important discussions around the role of collective bargaining in boosting pay” but there is no indication at all as to what, if anything, they propose to do about achieving this. Collective bargaining coverage is in inexorable decline, says Ewing, now reaching levels close to those of the USA. This is an issue of critical importance to trade unions. There is no promise to simplify the statutory recognition procedure, or to do anything to promote sector level bargaining.
Industrial Action: This, says Ewing, is the first Labour policy document he has seen in advance of an election where “strike” is not referred to anywhere in the document. Perhaps Labour believes they can stay silent on the basis that the status quo is better than what would be on the cards under a majority Tory government. Or perhaps Labour’s policy is to leave it to trade unions to tackle the strike laws through the courts. There have certainly been successful trade union challenges to the UK anti-strike laws through the courts. Many commentators were pessimistic in the aftermath of the most recent example – the RMT challenge to the lawfulness of the UK’s ban on secondary industrial action. But Ewing argues that the case has fundamental importance because it shows that the right to strike is now protected by Article 11. Ewing drew delegates’ attention to a very recent judgment, handed down by the ECHR on 2 October 2014 in the case of Tymoshenko v Ukraine (Application No. 48408/12). The case involved Ukrainian cabin crew whose strike was banned as a breach of a Ukrainian law prohibiting strikes by workers on passenger aircraft. The cabin crew took their case to the ECtHR and won. In it, the ECtHR confirmed unequivocally that “strike action is clearly protected by Article 11”, citing the RMT case. This development, explains Ewing, represents an important “symbolic shift”. To date, British industrial action law has begun from the presumption that all industrial action is an unlawful contract breach for which workers and unions are liable unless the action meets the various restrictive statutory tests. The RMT and Tymoshenko cases reverse this position, says Ewing. Workers have a right to strike in the UK and it is up to employers to justify restrictions on that right, not the other way around. Following RMT, the right to strike is now deeply entrenched in jurisprudence. This means that even though secondary action is unlawful, the many other restrictions on the right to strike under UK law are now open to challenge as unlawful restrictions on the right to strike.

Ewing closed by briefly summarising the Conservative position:

The Beecroft report, still “lurking in the background” and likely to be enacted by a majority Tory government;
Proposals to raise the strike ballot threshold;
Proposals for 14 days notice of industrial action and ballots with a life limited to three months, which will make it difficult to carry out a rolling strike;
Plan to repeal the Human Rights Act.

The next speaker, barrister David Renton from Garden Court chambers, talked to delegates about how to get the most for members out of the new Acas conciliation regime. Renton’s slides are available to download from the IER website.

Voluntary conciliation is undoubtedly a good thing, says Renton. In a healthy civil justice system, it is entirely appropriate to plan for as many as 90% of cases to settle: but not if, at exactly the same time as you introduce conciliation, you change the rules so that for one party, a refusal to settle immediately results in their claim being worth less. “We have priced justice so high as to remove the incentive on employers to settle”.

Anecdotally, relates Renton, cases that employee representatives would have settled a year ago are now worth about half of what they were. Employers are refusing to settle and workers are walking away because, relative to the size of the fee, their claim is no longer worth pursuing. COT3 settlement agreements are down by about half – from around 6,000 to 3,000 per calendar month. As is the case with any group of professionals, there is both good and bad practice among Acas conciliation officers, but officers have targets to meet in relation to the number of claims that settle without a tribunal claim being issued, and there is an in-built incentive to target those cases that are easiest to settle. Although Acas officers are not allowed to advise on the merits of a claim, in practice it is much easier, suggests Renton, to boost settlement figures by encouraging an unrepresented worker to settle at an undervalue than to take the same approach with an employer, especially where that employer is legally represented. Anecdotally, Renton describes the quality of Acas coverage as “very patchy” and uneven.

Renton anticipates that time limits will also create major problems under the new regime, leading to complex and unpleasant outcomes for some members. Just as was the case under the old system, some potential claimants will leave contacting Acas until the last minute, and will suffer, in particular, from last minute electronic failure.

A key role for reps will be to ensure there is a clear evidence trail – through email and by telephoning Acas – to be able to prove exactly what happened and when. Under rule 6 of the Regulations and Rules of Procedure, time starts running on the date of “receipt by Acas of the Early Conciliation Form”. What happens, says Renton, if you have sent your form but it has not been received by Acas?

In particular, he warns, It is easy to anticipate problems where either:

A worker believes they have completed an Early Conciliation Form but they cannot prove this because their system crashed, meaning that no automatic acknowledgement was generated; or
The claim form has been sent in but Acas has lost it.

In disputes over time limits alleging failure by Acas, there will be no Acas officer before the tribunal giving evidence. Instead, without a clear paper trail kept by the worker or their rep, the only evidence available to the tribunal will be Acas correspondence.

Renton advises unions to put in place a formal policy. In particular, the policy should encourage members to:

have a simple script ready, explaining, for example: “I was sacked/suffered discrimination and I want £xx”;
have the contact details of their union rep somewhere to hand, ready to pass to Acas. Acas will only know that the member wants the negotiation carried out by their union rep or the rep’s contact details if the member gives them this information. There is no space on the conciliation form to add the details of a rep.

There is more tactical guidance for union members and reps on the operation of the Acas conciliation scheme available on Renton’s Struck Out blog.

A GMB delegate reported to the conference that the union has already put in place a formal procedure that is working well. GMB have managed to turn the new system to their advantage and are both securing settlements and helping officers to stay engaged.

As regards the amount of compensation to ask for at the start of any settlement negotiation, in an unfair dismissal claim Renton suggests that the most straightforward opening position is 12 months’ wages – the new maximum compensatory award, following changes to the compensation scheme from July 2014.

A particular issue discussed by conference delegates was the effect of misidentifying the employer on the conciliation form. A delegate from union solicitors Thompsons emphasized the importance of describing the employer correctly, drawing attention to a disclaimer in the Acas leaflet Early Conciliation Explained, where Acas expressly warns that a claimant’s failure to name the employer correctly on the form could lead to their claim being rejected in the tribunal.

The next speaker, Paul Scholey, Head of the Employment Rights Team at Morrish solicitors, talked about developments in social media and employment law. His slides are available here and include many helpful examples of employment tribunal rulings involving workers who have got into trouble through the misuse of social media tools such as Facebook and Twitter. Although the cases cited by Scholey are not binding – they are decisions of the employment tribunal rather than the appeal courts – they provide valuable illustrations for reps of the factors a tribunal is likely to take into account when deciding whether or not a dismissal involving social media is fair.

In summary, Scholey explained that although social media is relatively new, employment tribunals have responded using established legal principles. In unfair dismissal claims involving social media, tribunals consistently apply the general principles contained in section 98(4) of the Employment Rights Act 1996, including the “band of reasonable responses” test. In other words, the same legal standards are applied to the online as to the ordinary world, with predictable results, but social media offers new opportunities to employers to dismiss and makes it much easier for employees to trip up.

Human rights-based arguments are unlikely to succeed, says Scholey, because the tribunal takes the view that employees abandon any right to privacy when they opt to post their comments on Facebook and other similar sites. There is some useful guidance available, summarised on the slides.

Next the conference heard from TUC Head of Equality and Employment Rights Sarah Veale. Veale talked about the broad political and social implications of employment law changes, spelling out how the next election will call on voters to make fundamental choices as to the sort of country they want to live in, affecting a whole generation.

The big message, says Veale, is that as a country, we can escape from our economic woes but not the Tory way, which will lead to further misery. If employers want higher productivity, they need to pay decent wages and treat employees fairly. The recession has been lucrative, but only for very few: this is not a recovery for ordinary people. Not only the very low paid but also traditionally “middle class” jobs are affected. Next week will see the first ever strike by midwives. “How”, asks Veale, “will the Daily Mail square that?” It is absolutely critical, she argues, to tackle head on the right wing press narrative of welfare dependency and work-shy claimants. Most welfare benefits are paid to working people.

Turning to address employment rights, Veale identified a number of laws that Labour must commit to repeal immediately if it is to be credible, including the two year service requirement – “the longest probation period in Europe”, “Beecroft-lite” settlement agreements, disastrous employment tribunal fees, weakened TUPE rights, cuts to collective consultation and facility time. They also need to reinstate lay tribunal members and to undo the damage that has been done to the Equality Act, for example the abolition of third party harassment. Veale also highlighted the erosion of trade union representation on a range of public bodies such as the HSE.

If the Tories win a majority, warns Veale, a bill on trade unions and industrial action will be inevitable. They are also looking to criminalise picketing through a new Code enforceable under criminal law.

Veale emphasized that the TUC has always supported appropriate employment law reform. For example, a huge overhaul of the rules on employment status and enforceability is long overdue and much more emphasis is required on enforcement by regulatory bodies such as HMRC. But the only real way to protect workers is through a strong union presence and effective trade union rights such as the introduction of statutory equality reps and paid time off. Tribunals who are faced with poor employers should be asking why is no trade union recognised in that workplace.

The afternoon sessions began with a presentation from Bruce Robin of union solicitors Thompsons. Bruce’s presentation, Happy Holidays, explained some key trade union victories around holiday pay – a rare “good news story” given the continuing climate of low pay for most workers. Bruce’s slides can be downloaded here. Holiday pay is one of the most heavily litigated of all employment rights, accounting for a quarter of all tribunal claims.

Good employers are already looking to negotiate this issue, says Robin, following the wake up call offered by John Lewis, who have already paid back pay of around £40 million to staff. As well as back pay, employers who fail to negotiate collectively face liability to repay tribunal fees, along with the risk of a penalty payable to the Treasury in the presence of “aggravating factors”. Bruce outlined the basic position in relation to holiday pay and explained the importance of the three most significant recent cases, Stringer, Williams and Lock. We are waiting for an important EAT ruling on the way holiday pay is calculated – in particular the treatment of regular but non-contractual overtime – in three conjoined cases: Neal v Freightliner Limited, Fulton v Bear Scotland and Hertel (UK) Ltd v Wood. The cases were heard over the summer but the EAT’s decision has not yet been published.

Robin outlined a strategic approach for unions, set out on his slides. However, his key message is that holiday pay represents an opportunity for trade unions to kick-start negotiations with employers through collective bargaining. Litigation can be used, but only as a last resort, to support collective bargaining.

Robin’s talk was followed by a presentation from Simon Deakin, Professor of Law at the University of Cambridge and programme director at the Centre for Business Research. Simon delivered a well-received presentation: Zero-hours contracts – legal challenges and solutions. Simon’s slides can be found here and his arguments are developed in more detail in a new IER publication, Re-regulating zero hours contracts, by Adams and Deakin, available to buy from the Institute’s website. Describing the government’s Small Business, Enterprise and Employment Bill 2014as “so full of holes it is really extraordinary” and its attempt to define ZHCs as “very mysterious”, Deakin explained that it would be “very easy” for an employer to avoid or evade the definition. Indeed the government’s latest consultation expressly accepts this, by asking employers for advice on how best to prevent ”exclusivity clause ban avoidance”.

Deakin’s research is particularly important because it underscores the link between ZHCs, tax credits and national insurance avoidance and the consequences for workers, including gaps in their contribution record. It also spells out the link between the growth of ZHCs and changes in welfare benefits, including the need for workers on Job Seekers Allowance to take any job or else risk sanction. Universal Credit, if it is ever rolled out, will make things even worse, warns Deakin, by forcing more workers to seek out casual work to supplement their hours. It is conceivable, says Deakin, that universal credit will never be rolled out, because the system cannot be made to work in a casualised labour market.

The final speaker of the day was barrister Ben Collins of Old Square Chambers, who updated delegates on developments in human rights law. Collins drew attention, in particular, to the importance of the positive obligation on states under Article 11 to provide effective protection and to promote trade union freedom, and to the continuing ramifications of the ruling by the European Court of Human Rights that the right to engage in collective bargaining is an essential element of the right to freedom of association (Demir v Turkey [2009] IRLR 766). Collins’ slides are available here. Collins highlighted two important pending decisions which will test the borders of states’ positive obligation to promote sector-level collective bargaining.

The first is general union Unite’s challenge to the abolition of the Agricultural Wages Board, which removed the only mechanism for collective bargaining of agricultural wages – in place since 1917 and recently reinstated in Wales through Court Order. The second is The Irish Congress of Trade Unions v Ireland, a case arising from a decision by the Supreme Court of Ireland to declare unconstitutional the mechanism for registration of sector-wide collective agreements.

The idea that states have a positive legal obligation to put in place mechanisms to secure collective bargaining is powerful and of fundamental importance, says Collins. Success in these cases could help support a challenge to other restrictive UK laws inhibiting the spread of collective bargaining, such as limits to the statutory recognition scheme, in particular, the exclusion of employers with less than 21 employees or employers with a sweetheart union already in place, and the limit on the scope of collective bargaining under the statutory procedure to just pay, holidays and hours.