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UK labor law update - March 2021

  • United Kingdom
  • Employment law
  • Labor law and trade union issues

30-03-2021

Welcome to our March UK labor law quarterly update. This edition contains the following content:

News round-up

Recent labor case law

Eversheds Sutherland labor law publications, events and training

 


News round-up

Uber judgment will encourage trade union employment status campaigns

Supported by the trade unions GMB and IWGB, a group of Uber drivers have won their worker status claim in the Supreme Court. The Court decided that they are workers, not self-employed contractors, for national minimum wage, holiday pay and whistleblowing protection purposes. This is despite Uber’s contractual documentation stating otherwise. The company has since announced that all drivers will receive the minimum wage once they have accepted a trip request, alongside pension auto-enrolment and holiday pay.

Businesses reliant on casual staffing models, where contracts identify such workers as independent contractors, should audit arrangements for status misclassification. This reflects potential minimum wage risks (including HMRC investigation, penalties and “naming and shaming”), as well as holiday pay and pension auto-enrolment liabilities. Trade unions are continuing to campaign in this area (there is more status litigation progressing through the tribunals) and they will be encouraged by the Supreme Court’s strongly reasoned decision. For further information on the Court’s ruling, read our update.

The Government pledged to strengthen casual workers’ rights as part of its 2019 manifesto. However, it appears that the pandemic has delayed the legislation required to make these changes. Meanwhile, the EU Commission is consulting on how to improve the working conditions for people working through digital gig/labour platforms and the UK may be influenced by its outcome, reflecting some common concerns.

Tribunal decisions create legal uncertainty for employers responding to strike action

Recent employment tribunal decisions held that aspects of UK strike law are incompatible with human rights law. While the decisions are not legally binding and are expected to be appealed, they have created uncertainty over whether, and how, employers can lawfully respond to employee strike action. For example, where an employer contemplates taking action against those striking, other than deducting pay for work not done during the strike, or they want to offer incentives to strikers to resume working.

We have written previously about how trade unions are increasingly arguing that compiling a list of strikers in order to withdraw benefits during industrial action amounts to blacklisting and that withdrawing the benefit is a detriment under other trade union legislation (TULRCA). These tribunal decisions are the latest development in this area.

We recommend that employers preparing to respond to threatened or actual industrial action should take advice, given the significant legal and financial risks arising from the above direction of travel, before finalising their contingency planning. Contact marcmeryon@eversheds-sutherland.com if you have any questions.

The Government continues to shine a light on employer compliance

Although the Government has yet to enact the new single enforcement body (a manifesto commitment aimed at streamlining and strengthening the enforcement of employment rights), it has demonstrated an ongoing commitment to transparency to drive employer change.

For example, recent initiatives include: a monthly naming of employers who make furlough claims to deter fraud; an announcement that it will “name and shame” deliberate defaulters under the new IR35 (off-payroll) rules; the resumption of naming businesses who fail to pay their staff the national minimum wage; and setting up a new central registry to facilitate ease of access to organisations’ modern slavery annual statements.

With an increasing focus on business’ reputational risks, including ESG (environmental, social, governance) issues, from stakeholders and campaigners, such as trade unions, employers should factor in this transparency and accountability trend to their employee relations strategy.

Recent labor case law

R (IWGB) v BEIS: Court upholds stable collective bargaining policy

The Court of Appeal has dismissed an appeal by the IWGB union in its statutory recognition application for collective bargaining. For employers facing such applications where there is a recognition agreement already in place with another independent trade union, this case provides helpful clarification.

The IWGB had applied for recognition in circumstances where Unison was recognised for collective bargaining purposes for the workers falling within IWGB's proposed bargaining unit. The application was rejected by the Central Arbitration Committee (CAC) as not admissible, applying the statutory rules which address this situation.

The Court of Appeal held that the right to freedom of association and to join trade unions under human rights laws was not infringed by the CAC’s decision and by the above statutory rules. While it did not rule out a case in the future where infringement might occur on the facts, it reiterated the wide latitude given to Parliament by human rights law to block applications such as IWGB’s.

University College London v Brown: Disciplining union representatives

B, an elected representative for the employer’s recognised trade union, was issued with a formal warning. B complained that he had been subjected to a detriment on grounds related to trade union activities, breaching statutory trade union protections.

The employer had instructed B to discontinue sending emails from B’s union to an email distribution list which went to hundreds of staff. This was part of a general initiative to moderate email traffic, to reduce inappropriate content and disruption and to allow employees to chose to opt-in. The Employment Appeal Tribunal rejected the employer’s appeal, deciding that preventing or penalising B from taking part in union activities (the sending of union emails) had been the “sole or main purpose” for his employer’s disciplinary action. This case serves as a reminder that employers should exercise caution when disciplining trade union representatives and members.