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A B C D E F G H I J K L M N O P R S T V W Y

Employment

High Court rules that personal service company arrangement was actually an employment relationship
Thursday 9th August 2018

A recent High Court judgment serves as a reminder that, even where parties agree and intend to enter into a consultancy arrangement or a contract for services, the Courts and Tribunals have the power to categorise the arrangement as an employment relationship instead.

The rights and obligations which can flow from a finding that, actually, a person is an employee rather than a consultant or limited company contractor, are significant. And we’re not just talking about tax. Employees have the highest standard of protection from an employment law perspective (as opposed to workers and the genuinely self-employed). For example, if an individual who has been engaged under a contract for services for more than 2 years is subsequently deemed to be an employee, he or she would have unfair dismissal rights. An individual who has been wrongly deemed to be self-employed, rather than a worker, would be entitled to holiday pay and sick pay – you only need to look at the recent decisions about employment status involving Uber and Sash Windows to see that.

But the recent case of Sprint Electric Ltd v Buyer's Dream Ltd and another was not about the so-called gig economy. Dr Potamianos was recruited to work for Sprint Electrical Ltd (“Sprint”) because of his computer programming expertise. It was agreed that he would work through a service company for tax purposes. Dr Potamianos therefore formed Buyer's Dream Limited (BDL) and entered into a contract for services with Sprint in 1997. Years later, things turned sour and Dr Potamianos’s contract was terminated. Litigation commenced, but not in relation to the employment status of Dr Potamianos; it centred on intellectual property rights in relation to the source code which he had written for Sprint. Even at the point of litigation commencing, neither party questioned the label which they had attached to their relationship; from both their perspectives Dr Potamianos was working via a service company under a contract for services.

The High Court, however, had a different interpretation. It concluded that Dr Potamianos was actually an employee of Sprint; he was required to personally perform the services under the contract (personal service being one of the factors which forms the basis of an employment relationship). The result of that conclusion in this particular case was that Sprint was deemed to own the copyright in the documents and source code which Dr Potamianos had written.

Whilst this was a case about intellectual property rights, the Court’s findings in relation to the parties’ employment relationship have wider implications. The Court in this case found that it was “clear that the parties were motivated by tax avoidance objectives” when they entered into the contracts, and that there is “an element of artificiality concerning agreements of this kind”. The Judge went on to say that it was the Court’s responsibility to declare the true legal position between the parties (i.e that they were actually employer and employee) and the Court would leave it to HMRC to claim any taxes and penalties that may appear due as a result of that finding. It should be noted, however, that whilst a Court or Employment Tribunal may deem an individual to be an employee for the purposes of employment legislation, a Tax Tribunal could come to a different conclusion in relation to the individual’s tax status.

It is not to say that all personal service company arrangements are a sham or a mechanism to avoid tax. There can be legitimate reasons for using such arrangements and many of those operating (or engaging the services of those) in the freelancer/contractor sector value the flexibility that such arrangements provide.

Contractors and clients alike must, however, be alive to the fact that even if it is the parties’ intention to enter into a contract for services (and the contract is labelled as such), the Courts and Tribunals may take a different view. It is therefore important that contracts are carefully drafted to protect the parties’ positions as far as possible.

If you would like to discuss any issues regarding contracts for services or consultancy agreements, or for any other employment law matter, please contact Hannah Morrison or any other member of the Brabners Employment team.


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Written warning for 60 days’ sickness absence was discrimination – EAT
Monday 30th July 2018

DL Insurance Services Ltd v Mrs S O’Connor UKEAT/0230/17/LA

The EAT upheld a finding that the Respondent (‘DL Insurance’) had discriminated against the Claimant (‘Mrs O’Connor’) by treating her unfavourably because of something arising in consequence of her disability (as per section 15 Equality Act 2010).

It was held that the Respondent was unable to prove that issuing a written warning to a disabled employee for her sickness absence (as permitted under the Respondent’s sickness policy) was a proportionate way of improving attendance at work.

Facts

The Respondent operated a sickness absence policy. Under the policy, a “trigger point” set a limit on the number of sickness absences employees were permitted to take over a 12 month period. If an employee absence period exceeded the trigger point, disciplinary procedures could be initiated.

The Claimant was disabled for the purposes of the Equality Act 2010, and had taken numerous periods of sickness absence in previous years. By 2013, the duration of the Claimant’s sickness absences reached a level which would have triggered disciplinary procedures.

The Respondent had taken no action in previous years to discipline the Claimant for her absences, and made the appropriate reasonable adjustments to her working arrangements. At various return to work interviews, the Claimant was told that no further action would be taken, but was warned that in future if her absences rose the Respondent could consider disciplinary action.

In 2015 – 2016, the Claimant’s absences increased to the point at which she was six times the trigger limit set under the Respondent’s sickness policy. The Claimant was called to a return to work interview in 2016 and a formal written warning was imposed upon her. Her sick pay was suspended. The Claimant alleged that this treatment amounted to discriminatory treatment.

The ET upheld the Claimant’s complaint. It held that the written warning was imposed because of the absences arising out of the Claimant’s disability-related sickness. The ET found that the Claimant was treated unfavourably in consequence of something arising out of her disability, and that the Respondent failed to adequately justify its treatment of the Claimant.

Analysis

An employer may avoid liability in certain discrimination cases if it can objectively justify its behaviour. In this case, the Respondent had the legitimate aim of reducing workplace absence, but its method in reaching that aim was not proportionate or justifiable. Issuing formal warnings to the disabled will not reduce absences in a proportionate fashion.

Employers must also tread lightly when imposing blanket policies on the workforce. Such measures may not appear outwardly discriminatory at first glance, but could prove more burdensome for those who are dealing with “something arising in consequence” of their disability, which may in turn lead to a claim.

The judgment calls into question the viability of the “Bradford factor” – a points-based HR method used to quantify employee absence over any given period. Although use of the Bradford factor is justified in giving the employer an idea of the levels of absenteeism within its business, care must be taken before employee absence scores are used to initiate disciplinary proceedings.

It’s a sensitive balance. Employers should not expect to rely on the “we apply the same policy to everyone” argument. Equally, the Respondent in this case did take a sensitive approach to this employee for years, but was ultimately punished for issuing a warning. Employers should remember that their actions may have to be justified at Tribunal in the future, and act accordingly.

If you would like to find out more on the topic please contact Adrian Horne or a member of the Employment team


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The difficulties of controlling a departing employee - how should you protect your business?
Wednesday 25th July 2018

According to media reports, former Foreign Secretary Boris Johnson has allegedly failed to comply with a 3 month restriction for former ministers on accepting new jobs in the private sector after leaving their post. 

Whilst not a post- termination restriction in the strict employment law sense it does beg the question- when a key senior member of staff hands in their resignation how do you deal with what they do next?

Post- termination restrictions

Post- termination restrictions (or restrictive covenants as they are also known) are a useful tool to restrict the activities of an employee post-employment. They are commonly found in contracts of employment, particularly for senior employees.

When drafted correctly, and particularly when used in conjunction with garden leave, restrictive covenants are a powerful source of protection for employers against the damage to the business that could potentially be caused by an employee leaving to work for a competitor or setting up on their own and trying to poach your key staff, customers and clients.  

The legal position

Restrictive covenants in employment contracts are subject to stringent scrutiny by the courts given the inequality of bargaining position between the employer and the employee.

In deciding whether restrictive covenants are enforceable the court will evaluate whether the restriction goes any further than is reasonably required to protect the legitimate interests of the employer. This will be assessed at the time the employment contract is entered into and does not take into account promotions or new positions generally.

The court will also consider the nature of the business when the clause was entered into. Therefore, in a business which has evolved to carry out different work the restrictive covenants may no longer be relevant and therefore are more likely to be unenforceable.

Another common pitfall is that employers have a ‘one size fits all’ approach where the restrictive covenants in use are the same for all roles across the business. The courts do not favour this approach as it fails to take into account an employee’s changing role and responsibilities as they progress and are promoted within the business.

How can garden leave help?

Placing an employee on garden leave is a valuable tactic to employ when an employee tells you they are leaving or indeed when you dismiss an employee on notice. 

A well drafted clause would allow you to remove the employee from the workplace immediately and compel them to see out their notice period at home without contact with any of your clients or suppliers thus limiting their ability to damage your business.

Putting an employee on garden leave does, however, come at a cost. The employee would [normally] be entitled to their usual remuneration and benefits for the duration of their notice period; you may decide that commercially this is a cost worth bearing to protect your business.

The duration of a garden leave clause is frequently off- set against the period for which an employee would be restricted under restrictive covenants. Without such off- set a court may find both clauses to be unenforceable if it believes the combined duration of employee restriction is too punitive. 

Practical tips

Business protection is very much a case of prevention being better (and cheaper) than cure- you need to make sure that your restrictive covenants are enforceable.

We recommend that you:

  • Review the employment contracts of key employees annually, particularly restrictive covenants. We suggest that this forms part of a salary review process.
  • Avoid a ‘one size fits all approach’ to restrictive covenants- tailor to employees and roles.
  • Issue new contracts with relevant restrictive covenants with promotions or role changes. 
  • Review your use of garden leave- make sure your contracts include this right.
  • Have a robust confidential information clause in your contracts of employment.

Need advice or wish to talk to us?

If you would like to discuss any issues regarding restrictive covenants, garden leave and the protection of confidential information, or for any other employment law matter please contact Stephen Brodie or any other member of the Brabners Employment team


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Brexit White Paper Release: An employment perspective
Wednesday 18th July 2018

The Prime Minister released the Government’s formal proposal regarding the UK’s Brexit position on 12 July 2018. To say the proposal received a “mixed response” would be slightly disingenuous. The proposal is described as “the worst of both worlds” and “dead” by Justine Greening and Sir Bernard Jenkin respectively, but what does it mean for UK employment law?

What was anticipated?

Legal professionals did not predict a wholesale overhaul of the existing framework of employment law following Brexit. EU-derived legislation such as the Working Time Regulations and TUPE have enshrined a body of law which most of the electorate within the UK has come to revere.

That said, a number of slight concerns have been raised within the legal community since 2016 regarding TUPE harmonisation of terms, collective consultation during the redundancy process, alongside some of the protections detailed under the Working Time Regulations. There is some debate as to whether pruning the UK’s employment law regime is necessary or desirable following Brexit.

Elsewhere, the mood has not been so calm. Commentators, media outlets, politicians, experts and trade unions alike have been decrying the “bonfire of workers’ rights” which would engulf EU-derived worker protection if Brexit were to pass. Following publication of the Government’s white paper last week, such sensationalism seems, at first glance, to be slightly wide of the mark.

What will change?

As it stands, not much. The white paper confirms that: existing workers’ rights enjoyed under EU law will continue to be available in UK law on the day of withdrawal. Ultimately, the Government’s stance on this issue is that: the UK proposes that the UK and the EU commit to the non-regression of labour standards.

The white paper reminds readers that the UK is already a leader in workers’ rights protection. The Government seemingly holds employment rights in the same esteem as existing consumer and environmental standards; none of which shall be compromised following Brexit.

There is to be no bonfire in the foreseeable future if the Prime Minister gets her way. However, given the backlash to the Government’s white paper, the likely amendments suggested by Parliament and pending EU consideration of the eventual offer, it is unlikely that the proposal in its current form will represent the final arrangement.

What’s next?

Former Cabinet Minister Justine Greening called for a second referendum in light of publication of the white paper. Such a call is likely to fall on deaf ears – the appetite for a second referendum is currently mild at best, given that the public are generally polling at the same percentages that they were in 2016 on this issue.

Of course another possibility is that the Government might fail. These are extremely turbulent times, a leadership challenge against Mrs May is not out of the question and could lead to even more uncertainty.

The Government is highly unlikely to materially repeal workers’ rights on Brexit, regardless of the manner in which the UK leaves the EU. It is promising to see that the Government’s opening position ensures protection of employment law. It is not in the interest of the EU to attempt to negotiate on this position.

For a brief moment, at least, the fog has lifted on the future of UK employment law. But for how long? According to a recent Independent article concerns have been raised in a letter sent  by a number of organisations supporting disabled people to the International Trade Secretary that the Trade Bill “lets ministers change a wide range of laws- including the Equality Act- without scrutiny, in order to implement international trade agreements.” While the focus of the letter is on disabled people’s rights, in particular their access to public transport, as we all know, the Equality Act contains anti- discrimination in employment legislation so it remains to be seen whether there could, in fact, be changes to employment rights after all.  Once again, it’s a case of wait and see.

For more information on the topic please contact Adrian Horne or a member of the Employment team

 


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The sleep-in saga continues: Court of Appeal overturns Mencap case decision
Friday 13th July 2018

The Court of Appeal has this morning ruled that only time spent awake and working during a ‘sleep-in’ shift will count as work time for the purposes of National Minimum Wage.
 

This judgment overrules a previous tribunal decision compelling care providers to fund six years’ back pay for overnight carers, costing approximately £400 million.
 

Overnight carers had previously been paid a flat fee of approximately £30 in accordance with governmental guidance until last year when the Employment Appeal Tribunal ruled that care workers should be paid the National Minimum Wage for every hour of a ‘sleep-in’ shift.


Charities employing overnight carers had argued that the £400 million back pay was unaffordable and could push the care sector towards the brink of collapse.


Whilst today’s judgment will come as a relief to care providers across the country, including many charities operating in the care sector, it will inevitably leave many employees feeling aggrieved.


Unions have criticised the judgment, Unison claiming that it is a “mistake” that would enforce “pittance pay” on care workers.


Unison has advised that it is considering an appeal to the Supreme Court so it may well be the case that the saga continues and it will be interesting to see what impact, if any, it has on HMRC’s Social Care Compliance Scheme (SCCS).

 

 


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Take a slice of this Dominos pizza case – a reminder that employers should offer a right of appeal even in right to work dismissal cases!
Thursday 5th July 2018

This case should be of interest to employees and employers alike and not just because of the pizza reference! 

In the case of Afzal v East London Pizza Limited t/a Dominos Pizza , the Employment Appeal Tribunal (‘EAT’)  confirmed that the employee should have been given the right to appeal against his dismissal resulting from a failure to prove his right to work in the UK.

The employer in the case (referred to as Dominos for ease) dismissed Mr Afzal in the belief that they may be exposed to criminal and civil penalties if they continued to employ him.  However, the EAT's view was that he still should have been offered an appeal and that he could have been reinstated if sufficient proof of the right to work had been provided at the appeal stage.

What's the background then? 

In short, Mr Afzal had been employed by Dominos since October 2009 working in different job roles.  He had been given ‘time-limited leave’ to work in the UK, having married an EU national in 2011.  His leave expired on 12 August 2016, but he was allowed to keep working in the UK after this date provided that he applied for documentation that evidenced his right to permanent residence before 12 August 2016.

Dominos had reminded Mr Afzal that he needed to provide them with evidence of his application and they told him that this should be done by 11 August 2016 to avoid last minute problems.  Unfortunately, it was not provided by that date. Whilst the employee did email the evidence to Dominos late afternoon on 12 August, they could not open the attachments to check this.  Dominos dismissed him without giving him the right to appeal against the decision.   

Following this, we understand that Mr Afzal produced the relevant documentation and Dominos offered to re-employ him as a new starter. 

Mr Afzal brought a claim of unfair dismissal.  An employment tribunal found that Dominos held a genuine, reasonable belief that continued employment was prohibited by law.  When considering whether they were right to not offer him an appeal, teh tribunal found that the question was whether Dominos had “reasonable grounds” for their belief that Mr Afzal had not made the application for permanent residence before his work permit expired.   As this belief was held when they dismissed, the tribunal did  not consider that it was unfair to bar an appeal and considered that there was nothing to appeal against.

What did the EAT find?

The EAT disagreed on appeal - noting that providing an appeal in employment practices is “virtually universal”. The EAT held that although tribunals can find on the facts that a dismissal is indeed fair without an appeal being needed, this could only be found in exceptional circumstances where such an appeal would be futile. 

The EAT held that the ET was wrong to find that there was nothing to appeal against or that an appeal would have been futile.  Mr Afzal had the right to work throughout and it was the evidence to show that right to work which was not provided in time. The evidence could of course have been provided (and considered) on appeal and Mr Afzal could have been reinstated.  

Additional comment

This is a reminder of the importance of offering appeals to dismissals, even in the tricky cases of right to work dismissals.  As you can see, there is limited exception to the normal requirement of offering an appeal and it is likely to be construed narrowly.  If in doubt, one should be offered!


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Equality is not just about women - The Government’s response to the Women & Equalities Committee First Report “Fathers and the Workplace”
Monday 18th June 2018

The Women & Equalities Committee’s (the “Committee”) first report of 2018 was published on 20 March 2018.  The report highlighted seven areas that the committee felt the Government needed to undertake more consideration and valuation of, especially around increasing rights for self-employed parents in certain areas for example but not limited to antenatal appointments, paternity leave pay and shared parental leave pay.

On 14 June 2018, the Government provided its response to the Committee’s report which has been highlighted by Maria Miller as an “a missed opportunity” by the Government to “really make some headway in this area”.  Quite frankly I would agree.

One aspect the Committee’s report highlighted that they wanted the Government to consider antenatal appointments for fathers in more detail, effectively they stated that fathers who are employed should be entitled to paid time off to attend antenatal appointments as a day 1 right with agency worker fathers being entitled to unpaid time off to attend antenatal appointment (again as a day 1 right), and to pay time off to attend antenatal appointments once they have been with the same company for 12 weeks. The Government’s response was that they would “like as many fathers and partners as possible to attend antenatal appointments” but yet concluded that the current statutory provision strikes the right balance between allowing fathers time off for antenatal appointments and employers the need to balance all other annual leave requirements in the context of running a business.  This seems a strange approach to me, as it seem the Government are suggesting that short term absence costs to businesses are more important than the right to a family life?

One of the interesting areas in terms of the response from the Government, was around paternity leave and pay where the Committee has suggested that fathers who are employees should be eligible for 2 weeks paternity leave as a day 1 right (similar to maternity leave) and that fathers who are agency workers should be eligible for paternity pay with the same eligibility requirements as agency worker mothers have for maternity pay. The Government’s response on this point focuses again on the statutory position, concluding that in their view fair the current position is fair and reasonable and that the reason that mothers have a minimum of 2 weeks maternity leave is to physically recover from childbirth and they do not think that this time is also required for the father. This begs the question as to how a mother can fully recover after childbirth if her partner is expected to return to work immediately?

Another area of consideration put forward by the Committee was shared parental leave and pay where the Committee recommended that as part of a review of shared parental leave, the Government should undertake an analysis of the costs and benefits of an alternative policy of 12 weeks paternity leave and pay to replace shared parental leave. The Government’s response to this point was that although an evaluation of shared parental leave and pay has started, it felt that the laws established in this area i.e. shared parental leave were too early in transition to have a full understanding of its impact. In my view this is quite a weak approach from the Government, in my experience it is very rare in practical terms for fathers of newly born children to exercise as a family their shared parental leave entitlements on the basis that knowledge of this leave is fairly low, the practical steps that the mother and the father have to take to work out and/or consider whether they are eligible for this leave are convoluted and complex and most relationships in terms of financial input centre around the income of the father.

For the Government to simply sign off their response around changing the culture of fathers in the workplace by thanking the Committee for raising the profile of their experiences of fathers and that they will monitor the results of the planned 2018 maternity and paternity rights survey carefully is simply not enough.  It seems to me like the Government are giving lip service to the strong views of equality for all from the general public and experts.

If you would like to find out more on the topic, please contact Laura Pointon or Sue McKenzie


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World Cup 2018 - Are employers ready for kick off?
Thursday 14th June 2018

With the World Cup starting in Russia today employers should be thinking how the event might impact their organisation.

Although the event is taking place outside of the UK, it is still likely to cause a shift in behaviour amongst the UK workforce with an increase in requests for annual leave, sickness absence and website use during working hours.

Instead of giving employees a straight red card, employers might see the World Cup as a way to maximise engagement. Providing greater flexibility, improved communication and further support to employees can be a means of curbing absenteeism and managing productivity during an event like the World Cup.

With this in mind, employers should have a set of simple workplace agreements and rules in place which cover the following:  

Annual Leave

While there is no obligation to give employees time off for any reason associated with the World Cup, a blanket ban is likely to be counter-productive and damaging for employee relations. Therefore, employers can look at being a little more flexible when allowing employees leave during the event. However, employees should also remember that it may not always be possible to book leave off. The key here is for both parties to come to an agreement and for planning to be in place to ensure that the organisation has sufficient cover in place at times when holidays are likely to be requested.

If employees are allowed flexibility or additional time off, an employer needs to ensure that it is not limited to England matches and supporters, but also applies to supporters of other nationalities which may be involved.

Sickness Absence

With the time zone differences, some World Cup matches kick off at 1pm and 4pm UK time- during many companies’ “normal” working hours. There is therefore a chance of employees calling in sick or going home sick, or turning up for work/ coming back from lunch worse for wear.

An employer should make it clear at the outset that they will be monitoring absences and that any unauthorised absences could result in formal proceedings. Being under the influence of alcohol or drugs while at work presents serious health and safety issues and should be dealt with in the normal way, regardless of the reason.

However, again, careful planning can help avoid absenteeism becoming a significant issue and there is no reason why an employer cannot agree a one-off variation to shift patterns with individuals or groups of employees if it allows employees to enjoy evening matches without affecting operational needs.

Use of social networking sites and websites

During the World Cup, there may be an increase in the use of social media sites such as Facebook and Twitter, as well as websites covering the event. It is vital that employers have a clear policy on web use and that it is clearly communicated to all employees. If it is allowed at break and lunch times then that is fine but it should be made clear that it is not acceptable at times which would interfere with normal work. If a company is monitoring an employee’s internet usage, then legally, they should make it clear that it is happening to all employees.

If you would like to find out more on the topic, please contact Joseph Shelston or a member of our Employment team

 


 

 


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Top tips for employers on engaging volunteers
Thursday 7th June 2018

Volunteering is a useful tool that can provide charities and other third sector organisations with assistance whilst allowing an individual the opportunity to give something back to the community. Issues arise, however, when the relationship between the individual and the organisation is not correctly defined. The risk being that the volunteer is found to be either an employee or a worker rather than a volunteer and has the benefits of rights with the organisation having increased obligations.

Volunteers’ Week seems like a good time to consider the issues that organisations need to be alive to when dealing with engaging volunteers.

To ensure that a volunteer is not construed to be an employee, we have some top tips:

  1. Consider having a written volunteer agreement in place. Whilst not compulsory it can help to explain the arrangement. Use flexible language such as, “we hope” or “we would prefer” so there is no actual obligation on the volunteers. It is also advisable to include an express term in the agreement that the parties do not intend to create an employment relationship. Be aware, however, that should issues arise a tribunal or court would also look at “the situation on the ground”.
  2. Don’t make payments that could be viewed as wages. Volunteers can be reimbursed for reasonable expenses however they should be ones that have actually been incurred and should not be paid during times of absence, for example, if the individual is on holiday, as this could be deemed to be wages.
  3. Volunteers should not receive any benefit in kind other than reasonable subsistence or accommodation (if required). Any benefits could be construed as the individual being treated the same as an employee.
  4. Differentiate between paid staff and volunteers. This could be as simple as paid staff having set shifts and the volunteers having the ability to pick as and when they work.

As volunteers do not have employment rights, they do not have the right to claim for discrimination (as things stand), unfair dismissal or any other employment related issues. However, volunteers must still be consistently treated fairly and with respect. You should still deal with any volunteer complaints in a formal manner (ideally following separate volunteer- specific policies to limit the risk of the volunteer being found to be an employee or worker).

Don’t forget either that you must comply with your data protection and health and safety obligations in respect of any volunteers.

If you use or are considering using volunteers and want advice on employment law aspects of this then please contact a member of the Brabners employment team.  


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Risks around stress in the workplace
Monday 21st May 2018

As you may be aware, the focus of this year’s Mental Health Awareness Week was stress.

According to research by the charity Mind from 2014 over 56% of those surveyed revealed that they found work very or fairly stressful. That is significantly higher than those reported in relation debt/ financial problems (38%), health (29%) or relationships (20%). This may come as no surprise to some, as we spend such a significant part of our lives at work and it can impact on many aspects of our lives.

The more recent HSE Work-related Stress, Depression or Anxiety Statistics in Great Britain 2017 defines work- related stress as “a harmful reaction that people have to undue pressures and demands placed on them at work”. The same statistics (which are based upon a Labour Force Survey) reveal that in 2016/17 the total number of cases of work related stress, depression or anxiety was 526,000 and that 12.5 million working days were lost due to work-related stress, depression or anxiety.

In its 2014 report, Mind also revealed that 95% of those surveyed who had taken time off because of stress had actually put down another reason, for example upset stomach or headache. This shows that people don’t feel comfortable telling their employer that they suffer from stress and how it impacts on them. This situation is supported by figures from a recent report by Business in the Community, The Mental Health at Work Report 2017 in which only 13% of employees feel they could disclose their mental health condition to their line manager and worryingly 15% of employees that had disclosed a mental health issue faced disciplinary procedures, demotion or dismissal.

If work is the cause of such levels of stress it’s highly likely that we will see an increase in the number of stress- related claims being brought.  Let’s briefly consider the types of claims that may be brought and what employers can do to reduce the risks of being on the receiving end of a successful claim.

Is stress a disability?

Stress can amount to a disability for the purposes of the Equality Act 2010 (“the Act”) provided it meets the definition of disability contained in section 6 and Schedule 1 of the Act. Many of you will be familiar with the section 6, but by way of refresher:

A person (P) has a disability if-

  1. P has a physical or mental impairment, and
  2. the impairment has a substantial and long-term adverse effect on P’s ability to carry out normal day-to-day activities.”

Stress impacts on individuals in different ways so determining whether an employee has a disability by reason of stress will necessarily depend upon the facts of each case and will involve an examination of the impact of their stress on the individual and whether it fulfils the above definition. The importance of whether an employee is disabled goes to whether an employee can bring a disability discrimination claim which has no cap on compensation and the employee can also claim for injury to feelings.

Are there any other claims that a stressed employee could bring?

Under common law an employer has a duty to take reasonable care for safety of employees and a duty to take reasonable care for the provision of safe place of work and safe system of work. An employer also has duties of care under legislation. Under the Health and Safety at Work Act 1974 an employer has a general duty to ensure as far as reasonably practicable the health, safety and welfare at work of its employees. Under the Management of Health and Safety at Work Regulations 1999 an employer has duties in relation to risk assessments and in relation to the risks identified by such a risk assessment it must apply “the principles of prevention” and provide information to employees about the identified risks.

If an employer breaches any of these duties there is a risk that an employee could bring a personal injury claim. They would need to establish that the employer has breached a duty of care owed to the employee; that this breach caused the employee injury and that an injury of that type, as result of the breach was reasonably foreseeable.

Employees suffering from work- related stress may also be able to bring claims for breach of the Working Time Regulations 1998, for example in relation to rest breaks/ periods, holidays and the 48 hour weekly working hours limit. Depending upon the circumstances an employee may also have potential claims for breach of contract and/ or potential constructive unfair dismissal, unfair dismissal and for harassment under the Protection from Harassment Act 1997.

So, how can you reduce the risks of stress- related claims?

The starting point is having a stress policy. As we have seen with recent issues surrounding sexual harassment, however, a policy on its own is not enough- it must be reflected in your culture. You must ensure that the policy is widely communicated to all staff and that it is followed.

One of the best ways to do this is to provide mandatory, regular training to all staff (particularly managers) on the policy and how to identify employees suffering from stress and stressful situations in the workplace and how to deal with them. In The Mental Health at Work Report 2017 referred to above 49% of managers said they would welcome some specific basic training in mental health. This training should also equip managers with the skills and empower them to have conversations with employees about stress and other mental health conditions.

You should also communicate with staff what they should do if they feel stressed. Employees need to feel confident to disclose to their employer that they are suffering from stress or indeed any mental health condition and know that they will be supported, not feel like it could be used against them in some way. And if you are dealing with performance/ capability issues where stress or other mental health conditions are involved or you suspect may be involved then tread carefully as you will need to consider whether the employee has the protection of the Equality Act and adjust your approach accordingly.

If an employee does notify you that they are suffering from workplace stress then you must not ignore it. You must take all reasonable steps to remove that workplace stress. Increasingly, however, you should not be waiting for employees to tell you that they are suffering from work- related stress- you should be proactive and alert to such issues from the point of view of safeguarding your employees’ wellbeing and getting the best from them as well as from the point of view of increasing productivity and looking to reduce the risk of successful stress- related claims.

If you’re looking for guidance and support on any of the issues raised in this article, then do not hesitate to contact any member of our Employment team and consider contacting Mind, our nominated charity for this year, who have a wealth of material and experience in this area.

 


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