REUTERS | Luke MacGregor

Employment round-up: autumn 2016

This round-up summarises the employment-related developments that generated the most interest from in-house lawyers in the past three months, including the delay of the gender pay gap reporting regulations, the introduction of the illegal working offence and the implications of Brexit on employment law in the UK. It also highlights several key employment cases.

Gender pay gap reporting regulations delayed

In August, the bringing into force of regulations requiring large companies (those with 250 or more employees) to analyse the company’s gender pay gap and publish the data within 12 months was delayed until April 2017. The final regulations were expected to be published in the summer and come into force on 1 October 2016. They are now expected to be published in the autumn and come into force on 1 April 2017, with the first ‘snapshot’ date on which companies must analyse the pay gap expected to remain as 30 April 2017.

Action points: Companies should stick to their current timetable and continue to prepare for the new regime so they are ready to analyse the company’s pay gap in April 2017 and report by April 2018.

In the same month, the government published a consultation paper on closing the gender pay gap in the public sector. It set out the government’s plans to introduce similar reporting obligations in the public sector as are planned for the private and voluntary sectors. The consultation closed on 30 September 2016.

Brexit: implications for employment law in the UK

The UK voted to leave the EU on 23 June. Until the shape of the UK’s exit has been determined, its direct legal implications for employment law in the UK are unclear. A significant proportion of the UK’s employment law comes from the EU, including discrimination rights, collective consultation obligations, rules on the transfer of undertakings and working time, and duties to agency workers.

Action points: Read this article, which discusses the possible implications for UK employment law and use our Brexit homepage, which highlights resources from across Practical Law on the legal implications of Brexit, to keep up-to-date with developments.

New illegal working offence came into force

The new illegal working offence created by section 34 of the Immigration Act 2016 came into force on 12 July. The new offence enables the earnings of illegal workers to be seized under the Proceeds of Crime Act 2002.The existing criminal offence of knowingly employing an illegal migrant has also been extended to include the situation where an employer has a reasonable cause to believe that a person is an illegal worker.

Action points: Read Practice note, Prevention of illegal working and establishing the right to work in the UK and the government guidance on the new offence, which includes advice on how to carry out right to work checks and a factsheet on illegal working.

Key employment cases

Two differing opinions on dress codes and religious discrimination

Two Advocate General (AG) opinions reached very different conclusions in two cases with similar facts:

  • In June, AG Kokott opined that a Belgian company’s dress code banning employees from wearing any visible religious, political or philosophical symbols in the workplace, which was used to prevent a Muslim employee from wearing an Islamic headscarf, did not amount to direct discrimination. This was the first case of religious discrimination under the Equal Treatment Framework Directive (2000/78/EC) to have reached the ECJ.
  • The following month, AG Sharpston opined that an employee’s dismissal for wearing an Islamic headscarf at work, in breach of a direct instruction, was directly discriminatory on grounds of religion or belief.

The ECJ is due to give judgment in both cases towards the end of the year. Given the two conflicting opinions, the decisions in both cases will be eagerly awaited.

Action points: While awaiting the judgment, companies should read the dress codes section of Practice note, Religious or belief discrimination and compare their own rules to the case examples to highlight any problem areas.

Workers prevented from taking annual leave due to sickness can carry it forward to next holiday year

In July, the ECJ held that a worker who is prevented from taking their scheduled annual leave because they are on sick leave is entitled to elect to take the leave at a different time and carry the untaken holiday forward into the next holiday year if necessary. Any national law or practice that prohibits this would be contrary to Article 7 of the Working Time Directive (2003/88/EC).

This case again highlights that regulation 13(9) of the Working Time Regulations 1998 (which provides that statutory annual leave entitlement can only be taken in the leave year to which it relates) is incompatible with the ECJ’s view that carry over may be necessary in cases of sickness absence to preserve workers’ Article 7 rights.

However, in the current political climate, it seems unlikely that this is an issue the government will address any time soon, if at all. The Modern Workplace Consultation, intended to address these issues as part of domestic legislation, has sat gathering dust since its publication in May 2011.

Action points: Read Practice note, Statutory holidays and sickness absence: Carrying holiday over to the next leave year for a detailed breakdown of the position.

Dismissal automatically unfair despite decision-maker not being aware of protected disclosures

In the same month, the Employment Appeal Tribunal held that an employee was automatically unfairly dismissed for making protected disclosures even though the person who dismissed her was unaware of those disclosures. Therefore a decision made by one person in ignorance of the true facts and which is manipulated by someone else who is responsible for the employee and does know the true facts, can be attributed to their employer.

Although this is not a great decision for employers, it does provide some clarity on dismissals under the whistleblowing regime and on the distinction between it and the discrimination regime.

Action points: Refer to Standard document, Whistleblowing policy and its accompanying drafting notes to see how an employer can implement an effective whistleblowing policy.

Employment tribunals have power to increase Vento bands in line with inflation

In August, the Employment Appeal Tribunal (EAT) upheld  an employment tribunal’s decision to award £14,000 injury to feelings to a young woman who was forced out of her job because of sexual harassment from her employer.

Even if the EAT thought the amount to be on the high side, it refused to interfere as the award was not “manifestly excessive” and was correctly placed in the middle band under the Vento guidelines. In making its ruling, the EAT commented that tribunals are entitled to take account of the effect of inflation on the Vento bands, without waiting for further guidance from the EAT or higher courts.

Action points: See Practice note, Discrimination in employment: compensation and other remedies: Vento guidelines: the value of injured feelings: Inflationary increases to the Vento bands and use our Injury to feelings award inflation calculator when calculating any increase.

Voluntary overtime should be included in calculation of statutory holiday pay

Later that month, an employment tribunal held that voluntary overtime, and other payments associated with rotas worked voluntarily, should have been included in the calculation of statutory holiday pay. Although this was only a tribunal decision, and so non-binding, it shed light on the question of what constitutes “normal remuneration” for the purposes of holiday pay.

Action points: Read Practice note, Q and A: Lock, Bear Scotland and other holiday pay cases for guidance on what can be a tricky area for employers.

Practical Law In-house Robert Clay

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