Frontline UK Employment Law Update August 2018

In this month's edition, Alison Dixon explores the boundaries of potential employer liability for harassment carried out by third parties and suggests some practical tips to mitigate risks.

Our case update covers some helpful pointers when considering an application for interim relief in employee competition cases, the definition of philosophical belief under the Equality Act, whether or not "sleep in" care workers are entitled to be paid for time spent asleep and the impact of significant gaps in operations on the application of the Acquired Rights Directive (implemented as TUPE in the UK).

In our legal update section, we consider potential next steps in the government's approach to regulation aimed at minimising the gender pay gap and report on a significant decline in the minimum annual salary needed to sponsor migrants under Tier 2 of the UK's points based system in August.

Third party harassment: is the employer liable?

The #metoo movement continues to throw up stories of sexual harassment in the workplace in all sectors and industries, and employers are scrambling to keep up. The reputational stakes have never been higher; businesses who are perceived or reported to be enablers (or sweepers under the carpet) of inappropriate sexual conduct attract adverse publicity and may suffer financially.

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Case Summary

Beware unsigned employment contracts when considering an injunction

Tenon FM Limited v Cawley (High Court)

The High Court has emphasised that where an employer wishes to vary an employment contract to incorporate more onerous post-termination restrictive covenants, it is advisable to ensure it has evidence of valid consideration for the change and should always ensure it obtains proof of agreement from the employee; ideally in the form of signature. Any unreasonable conduct from employers when seeking interim relief can also reduce chances of success.

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Philosophical beliefs do not extend to the sanctity of copyright

Gray v Mulberry Company (Design) Ltd (Employment Appeal Tribunal)

An individual did not genuinely believe in the sanctity of copyright so it could not amount to a protected philosophical belief under UK discrimination legislation. Her claim of indirect discrimination on the grounds of such belief therefore failed.

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No additional payments for sleeping care-workers

Royal Mencap Society v Tomlinson-Blake; Shannon v Rampersad (t/a Clifton House Residential Home) (Court of Appeal)

Individuals who are contractually obliged to perform sleep-in shifts at or near their place of work are only entitled to the national minimum/living wage, as applicable (“NMW”), in respect of hours during which they are awake for the purposes of working. NMW was not payable for time spent asleep during their shifts.

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Significant gap in services may not preclude TUPE transfer

Colino Sigüenza v Ayuntamiento de Valladolid and others (Court of Justice of the European Union)

The Court of Justice of the European Union ("CJEU") has determined that a five-month suspension of an undertaking’s activities did not inhibit the subsequent transfer of that undertaking under the terms of the Acquired Rights Directive (implemented as TUPE in the UK), to which its statutory protections - including the protection against dismissal for a reason connected with such transfer - would apply.

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Legal Updates

Gender pay gap reporting: what next?

The Business, Energy and Industrial Strategy Committee (BEIS) has published a report on the lessons learnt from the introduction of gender pay gap reporting. The report highlights that whilst the UK's median gender pay gap is 18%, the figures published by organisations in April this year reveal some "alarming truths", including that gender pay gaps of over 40% are not uncommon in some sectors and 78% of organisations reported having pay gaps in favour of men.

Whilst BEIS welcomes gender pay gap reporting and notes that overall compliance was high, the report calls for the Government to be more ambitious and sets out 25 detailed recommendations, including the following:

1. Extending the obligations to those with 50 or more employees from 2020 (the current threshold is 250 or more employees). It is also recommended that the Government publish a definitive list of all organisations in scope.
2. Introducing a mandatory requirement to publish an explanation of any gender pay gap and an action plan with objectives and targets for addressing it against which future reports can be measured. Under the current rules, any narrative is entirely voluntary.
3. Improved guidance from the Government on how to calculate the figures which clarifies outstanding areas of ambiguity. BEIS stressed that the data reported this year is believed to be inaccurate, although to an unknown degree.
4. Giving the Equalities and Human Rights Commission clear enforcement powers by providing for specified fines for non-compliance.
5. Requiring more detailed gender pay gap data to be published, including: part-time and full-time statistics, salary quartiles to be changed to deciles, pro rata bonus calculations as well as the publication of bonus figures by gender.
6. Extending the reporting obligations to pay gap data in respect of disability and ethnicity from 2020.

The Government has not yet responded to the report and we are not expecting that the recommendations will be accepted wholesale. However, they give a helpful indication of how the reporting obligations may evolve over the next few years.

The Government Equalities Office has separately published evidence-backed guidance on the actions which are most likely to improve the recruitment and progression of women to help employers reduce their gender pay gap.

Tier 2 annual cap update: minimum salary plunges in August

The Home Office has announced the minimum points needed to be awarded permission to sponsor overseas nationals for the month of Aug 2018. In order to be successful, employers needed a minimum of 21 points. This translates to a minimum salary of £20,800 per year (or the appropriate rate for the job, whichever is higher) assuming a valid resident labour market test was conducted.

Compared to the minimum salary threshold which fluctuated between £41,000 and low £60,000 per year since December 2017, this is welcome news for employers. It remains to be seen whether this is a temporary drop in demand for allocations due to the recent removal of doctors and nurses from the Tier 2 annual cap. Employers are advised to remain vigilant and can check the latest information here.