The CitySprint decision is concluded, the gig-economy continues to unravel
Wednesday 11th January 2017
On the 23 November 2016, Amy Anderson provided an update on the latest litigation being debated in the ‘gig-economy’ in her blog ‘First Uber, now CitySprint – The Latest Gig Economy Employment Litigation’.
Since then, the London Central Employment Tribunal has ruled (in the decision of Dewhurst v CitySprint UK, referred to hereafter as “CitySprint”) against CitySprint and concluded that Ms Dewhurst was a ‘worker’ of CitySprint for the purposes of the Employment Rights Act 1996, even though Ms Dewhurst was issued with contractual documentation describing her as a self-employed contractor.
When starting at CitySprint each courier is issued with a document ‘Confirmation of Tender to Supply Courier Services to CitySprint Ltd’. Within the document, CitySprint highlight a number of specific key terms, with a tick list system on a computer to ensure the courier acknowledges the information has been read and understood. Some of key terms covered are:
- CitySprint are under no obligation to provide work to the courier;
- If the courier does not work they will not get paid;
- The courier may send a substitute to work in his or her place (subject to certain criteria); and
- The courier will not be paid sickness pay, holiday pay or maternity pay.
In this case, Ms Dewhurst, would start her day by speaking to a controller and logging onto CitySprint’s electronic tracking system, “Citytrakker” and would remain on the system until she had finished her working day to go home. Typically, Ms Dewhurst worked from 9.30 am to 6.30pm four days a week and would move from job to job.
In-between each job there would be gaps ranging from 10 minutes to an hour. The Citytrakker system effectively monitors the courier’s whereabouts and with this information this would assist the controllers at CitySprint to assign jobs to each courier working that day.
In conclusion, Ms Dewhurst successfully won her claim for two days outstanding holiday pay, as it was determined she was a ‘worker’ within S.230 (30 (b) of the Employment Rights Act 1996 during the time that she was logged into Citytrakker.
This case again reinforces the position that Tribunals will look at the reality of the situation rather than the contractual documentation alone. Here the Tribunal were quite damming in their verdict (something else that seems to also be a running theme in the gig-economy cases) and described the contractual documentation produced by CitySprint as merely ‘window dressing’ and the work of an ‘army of lawyers’ rather than the reality of the position.
It is clear this type of litigation will not go away with three similar cases against other courier companies Excel, E-Courier and Addison Lee all due to be heard in March and April 2017. Additionally HMRC have also recently announced that it was setting up a new unit to investigate firms that use large numbers of self-employed contractors and agency workers to deliver their services.
Author: Laura Pointon
Employment law—looking ahead to 2017
Monday 9th January 2017
Elspeth Beatty, associate at Brabners, recently joined a panel of employment law experts to consider what 2017 might have in store for employment lawyers.
To read her comments, please click here.
This article was first published on Lexis®PSL Employment analysis on 3 January 2017. Click for a free trial of Lexis®PSL.
Author: Elspeth Beatty
Naming and shaming: Some thoughts for 2017
Monday 9th January 2017
In October 2016, we ran a HR Forum on the highly topical subject 'Named and shamed for low pay: A headline you don't need' about a certain sports retailer that had been in the press, and not for the right reasons.
National Minimum Wage compliance and pay generally were big news items in 2016 and are likely to remain so in 2017. The biggest risks to businesses are no longer Employment Tribunal claims but in fact public “naming and shaming” on social media and in the news. In our HR Forum we explored the use of zero hour contracts and breaches of the National Minimum Wage, looked at what went wrong and identified the learning points for businesses.
Headlines you don't need
Last year undercover reporters for a national newspaper reported on a world where staff were searched daily, harangued via tannoy to hit targets and could be sacked in a ‘six strikes and you’re out’ regime
It was said that workers were kept onsite at the end of each shift in order to undergo a compulsory search by security staff. This typically added another hour and 15 minutes to the working week – which was unpaid.
Given that the workers were not free to leave their place of work until and unless the security check has been completed, this time should be considered ‘working time’ and therefore paid in accordance with the National Minimum Wage provisions.
In addition, deductions from wage packets for clocking in for a shift just one minute late were imposed raising further issues of breaches of the National Minimum Wage requirements.
There was also criticism that:
- more than 80% of staff in parts of business were on zero hours contracts;
- a large proportion of workers were supplied by recruitment agencies;
- workers were warned they would be sacked if they received six black marks over a six-month period for offences including a period of reported sickness, errors, excessive/long toilet breaks, time wasting, excessive chatting, horseplay and using a mobile phone in the warehouse;
- workers were banned from wearing certain clothing brands at work;
- the strict culture in the workplace resulted in workers being afraid to speak out over low pay and conditions as they feared immediately losing their jobs.
Following the newspaper investigation the department of Business, Innovation and Skills select committee published a damning report where one MP stated working practices were similar to those of a Victorian workhouse.
The report requested a review of the health and safety provisions and a review into corporate governance arrangements to improve the running and reputation of the company.
An internal review recommended that the company should put a workers’ representative on its board and stated that the board would give zero hours staff the option to choose a permanent employment contract with guaranteed hours of at least 12 hours work a week.
It also stated that the board was considering the business case for the continued use of agency workers and would consider transferring ten staff a month from the agencies to direct employment. Other pledges in the report included fewer searches of staff and a change to the deduction of wages regime for clocking in late.
It is impossible to put a price on the cost and disruption this unwelcome attention may have had on the business concerned. There was a continuing spate of negative publicity during 2016. The business fought back with its own publicity campaign. The share price of the business also fell. The internal costs to the business in taking remedial action must have been considerable.
Perceived worker exploitation is now big news. The Government has pledged to review modern working practices which includes the “gig economy” in view of the increasing use of engaging “self-employed” workers, frequently on digital Apps. You can be sure that worker pay and the use of zero hours contracts will remain in the news. Some thoughts:
- Are you confident that your business could defend its employment practices if it was thrust into the news?
- What is your approach to worker pay and reward?
- Carry out a pay audit – consider pay deductions and clocking in, do you count all working time in the pay calculation? Could unpaid overtime, “calls outs” or on call time be an issue?
- Do you use agency workers or zero hours contracts and why do you do so?
- Are your recruitment processes and staff contracts clear?
- What is your process regarding staff tips and service charges?
- How can we encourage staff to raise any concerns internally before going external?
We are offering a complimentary audit of employment practices in January 2017 or if you have any concerns about the above issues and would like a chat please click here.
Author: Lee Jefcott
Gender Pay: No Respite for Millennials
Wednesday 4th January 2017
The Resolution Foundation has identified that the gender pay gap for Millennials (those born between 1981 and 2000) stands at 5%, which is lower than for previous generations. Whilst this is a positive step, the same study has also found that when women reach their 30s and early 40s, a time when many start to have children, the pay gap widens considerably and continues for decades afterwards.
According to the Resolution Foundation, this trend is likely to continue for Millennials with the effect that female Millennials are likely to suffer “a significant lifetime earnings penalty compared to their male counterparts”.
The Government is seeking to address the gender pay gap by requiring employers with 250 or more employees to publish their gender pay gap information. The final version of the Equality Act 2010 (Gender Pay Gap Information) Regulations 2017 (“the Regulations”) has been published and is expected, subject to parliamentary approval, to come into force on 6 April 2017.
The Regulations contain a number of changes from the draft Regulations, including the fact that the “snapshot date” has been moved forward to 5 April, meaning that the first gender pay gap reports must be published by 4 April 2018. We will be updating you more fully on the changes in the coming weeks.
Author: Susan McKenzie
First Uber, now CitySprint – The Latest Gig Economy Employment Litigation
Wednesday 23rd November 2016
The “gig economy” is a term bandied around a lot these days. Apparently, the word “gig” stems back to 1920’s jazz musicians who “gigged” at the various jazz clubs. Today, the phrase “gig economy” is used to represent the growing trend of people working on either a short-term, temporary basis or businesses preferring to use independent contractors, rather than workers or employees. Like the jazz musicians of the 1920s, today’s independent contractors won’t get holiday or sick pay and there is an increasing trend towards individuals doing piecemeal work for various different businesses, with a lesser degree of job security.
My colleague, Laura Pointon, recently wrote an article about the employment tribunal litigation involving the taxi app, Uber. In this case, the Employment Tribunal found that the two claimants were “workers” and not self-employed contractors, as Uber suggested. For more on the Uber case and a bit of background on the issue of employment status,
But the recent Uber decision is really only the tip of the iceberg. As Laura said, an individual’s employment status is not always easy to determine and the growth of the gig economy has encouraged people to stop, consider and question their rights.
This week therefore sees another case regarding not all that dissimilar issues to the Uber case. One of CitySprint’s couriers, currently treated as a self-employed contractor, will argue over the next few days that she should be classed as a worker and therefore have the benefit of rights such as holiday pay and the national minimum wage.
The claimant in this case will, no doubt, seek to argue that CitySprint exerts a great deal of control over her activities in terms of how and when she completes deliveries and whether or not she can truly send a substitute in her place if she is unable to attend work on a particular day. Whilst these aspects are not the be all and end all, they are significant factors in deciding whether an individual is a worker or genuinely self-employed. The tribunal will have the job of assessing all the relevant factors to determine the working relationship between the courier and the company and it may well decide that the current label of “self-employed” does not match the reality of the situation.
As with the Uber case, if the Claimant is successful, she will benefit from greater rights. Such a decision would, however, heavily impact on CitySprint’s business and I anticipate that an appeal would be inevitable.
Author: Amy Anderson
Equal Pay Day and Gender Pay Gap Reporting
Thursday 10th November 2016
Just over a year ago I wrote a blog post entitled "Equal pay for women - why reducing the gender pay gap should be a priority for employers". Today is Equal Pay Day in the UK, the day on which due to the gender pay gap women effectively start working for free for the rest of the year.
Under new legislation expected to come into force over the next few months, employers with 250 or more employees will be required to publish certain gender pay gap information annually. The first snapshot for the information is expected to be in April 2017 with the report to be produced within 12 months.
Whilst we are still awaiting the final version of the legislation we are receiving enquiries from employers about how to comply with the gender pay gap reporting requirements.
Author: Susan McKenzie
Uber: Does the latest decision give any more clarity on employment status?
Monday 31st October 2016
Uber, a taxi company classified its drivers as either independent contractors or self-employed individuals to support its business model which allows its drivers to work flexibly as and when they wished.
Classification of employment status and the case law surrounding this area goes back many years due to the fact that employment status is not easy to determine. The reason it seems that employment status is back in the lime light again now, is because there has been a growth in the so called ‘gig-economy’ a name given to companies utilising self-employed workers.
As a recap, under section 230 (1) of the Employment Rights Act 1996 (“ERA 1996”), an employee is defined as:-
"an individual who has entered into or works under (or, where the employment has ceased, worked under) a contract of employment".
Under section 230(2) of ERA 1996, a contract of employment means:-
"a contract of service or apprenticeship, whether express or implied, and (if it is express) whether oral or in writing".
The argument from the two claimants that brought the case against Uber, was that they believed they should be classified as employees. On 20 July 2016, a central London employment tribunal considered the claim from the two individuals (backed by the GMB union), to determine if Uber had acted unlawfully by not providing them with holiday and sick pay and whether they were entitled to receive a guaranteed minimum wage.
On 28 October 2016, the Employment Tribunal has ruled that the two claimants are ‘workers’ within the meaning of the ERA 1996 which means that the drivers will now be entitled to more rights for example but not limited to, the protection of the whistleblowing legislation, 5.6 week’s paid annual leave and the national minimum wage.
Although this case is being communicated as a land mark decision, it must be remembered that the main argument of the claimant’s case centred on ‘mutuality of obligation’ between the claimant(s) and Uber. The meaning of ‘mutuality of obligation’ is the obligation on the employer to provide work and the obligation on the individual to accept that work, an element that Uber did not feel was in place as it had the ability to offer the work to an individual and the individual had the option as to whether to accept the work or not.
Of course, this latest decision is by no means the end of litigation in this area, as Uber have already confirmed they will be appealing against the decision that they have acted unlawfully, no doubt resulting in this area of employment law continuing to rumble on in its complexity.
Author: Laura Pointon
Football Association hard line on inappropriate tweets
Tuesday 27th September 2016
The misuse of social media in the world of football hit the headlines again this weekend. Burnley forward, Andre Gray, was suspended for 4 matches in relation to 6 postings on his personal Twitter account. The tweets in question were, in part, homophobic in nature and considered to be abusive, insulting, improper and considered to have brought the game in to disrepute. They were found to be aggravated breaches of FA Rule E3.
There have been numerous high profile cases of misconduct associated with the use of social media but the Gray case begs the question “how far back will The FA go?” Lydia Edgar, Partner in our Employment Department states:
“What is particularly interesting is that the tweets in question were posted 4 years ago when Gray was playing for non-league side Hinckley Town. They have only recently come to light.
“There is a clear need for Clubs to educate players and staff in order to avoid disruptive sanctions and reputational harm. As a minimum, players should be encouraged to review their historical postings and remove anything that may cause offence.”
Lydia has presented seminars to Executive Boards, first team players and staff at Premier League and Championship clubs which provide practical guidance to clubs regarding:
- The requirements and scope of FA Rule E3
- The concept of “Aggravated Breach”
- Sanctions for breach
- The Clubs potential liability for Aggravated Breach
- The test applied by Regulatory Commissions
- What is “private”?
- Case studies and examples within the game.
It is clear that misconduct associated with the use of social media is high on the agenda for The FA.
For more information or to discuss the provision of training to pro-actively address the risk to individuals and clubs, please contact Lydia Edgar at email@example.com
Author: Lydia Edgar
Shared Parental leave, over one year on but has it achieved its purpose?
Thursday 22nd September 2016
The starting point from which the shared parental leave scheme evolved, was back in the 2010 election manifestos for both the Liberal Democrats and Conservative parties. During both of their campaigns they promised to introduce a more flexible system for both parents to take leave on the birth or adoption of their child.
The Shared Parental Leave (“SPL”) Regulations came into force on 1 December 2014 and the scheme applied to any children where the expected week of childbirth (“EWC”) began on or after the 5 April 2015 or a child was placed for adoption on or after the 5 April 2015.
In order to be eligible for SPL both the mother and the father have to meet certain criteria, examples of which are (but not limited to) that they must have been continuously employed for 26 weeks, at the end of the 15th week before the EWC (and still be in employment) and at the date of the child’s birth have the main responsibility for the care of the child (Regulation 4 (1), 4 (2) and 8 (1) of the SPL Regulations cover the full criteria for the mother and Regulations 5 (1) and 5 (2) cover the full criteria for the father).
If the mother and the father satisfy all of the criteria identified within the SPL Regulations, they then have to take certain steps with regards to their respective employers, namely a notice of entitlement to take shared parental leave and a period of leave notice (and if requested provide a copy of the child’s birth certificate).
In simple terms calculating the amount of SPL that is available to the mother and the father will be determined by the total amount of maternity leave or the total amount of maternity pay (or maternity allowance) that has been taken.
As is already evident from the first part of the blog, the steps the mother and father have to consider and then actually take can be complex to personally understand, this all happens even before they have notified their retrospective employers of their intentions.
From a practical point of view many businesses, have embraced family friendly rights, flexible working, job sharing and remote working but the problem of getting mothers back into work after maternity leave is still falling short. Only recently the Women and Equalities Committee report on pregnancy and maternity discrimination highlighted that the number of expectant and new mothers who left their jobs has almost doubled since 2005. This has resulted in the Equality and Human Rights Commission (“EHRC”) announcing a number of employers have joined the EHRC’s initiative, Working forward – supporting pregnancy and maternity rights, which aims to tackle the barriers that prevent a return to work and job progression.
The uptake of SPL has been lower than anticipated.
In order for this to change companies should take steps earlier on in the build up to maternity leave, to recap and inform employees on all options available with regards to their work / life balance. This should provide a greater opportunity for mothers and fathers to be able to discuss their desires and for businesses to look at the internal mechanisms of these options earlier on the process. Of course, those desires may change once the employee’s child has been born, but the considerations already discussed between the parties can then be used as a foundation to develop those options in practice further.
Author: Laura Pointon
Lessons to learn over your morning coffee
Wednesday 10th February 2016
Starbucks aren’t strangers to being in the news and yesterday was no exception. Meseret Kumulchew, a supervisor at Starbucks, successfully sued the company for disability discrimination after they accused her of falsifying records. Starbucks rejected her explanation that the discrepancies in her records were errors due to her dyslexia and as a result reduced Ms Kumulchew’s duties and told her that she needed to retrain. She told BBC News that their actions caused her such distress she considered taking her own life.
Whilst the precise details of the judgment are not yet clear, there are a number of important lessons that employers should take away from the headline:
There are important lessons for employers arising from the employment tribunal decision in the case of Meseret Kumulchew against her employer Starbucks. Firstly, it is an important reminder to all employers that employees with dyslexia can be classed as disabled pursuant to the provisions of the Equality Act 2010. Secondly, the case highlights the duty placed on all employers to make reasonable adjustments when dealing with staff with dyslexia. Thirdly, and more generally, it emphasises the need for employers to exercise a degree of caution and to carry out a thorough investigation when alleging dishonest or fraudulent behaviour on the part of an employee.
Author: Nick Campbell