You’ve had zero hours, now try a sliver of time

Victoria Phillips is head of employment rights at Thompsons Solicitors

The weekly Thompsons Solicitors Blog

 

You might think the outcry after a report revealed that more than a million people are on zero hours contracts would make government ministers think twice before bragging about other ruses to take advantage of desperation for work. But not this government – or, at least, not Lord Freud, the Minister for Welfare Reform.

 

As ever, nasty stuff has a euphemistic name – ‘slivers of time’ – the idea being to create a marketplace where workers bid against each other to see who can offer the lowest price to do very short, sub part-time, periods of work.

 

Some local authorities, including Tory-led Hammersmith and Fulham, have been using it for several years, and Tesco opened up slivers of time to its workforce in 2010.

 

The champion of this scheme, Lord Freud, is a man with no background in social policy and who is best known for leading the somewhat botched floatation of Eurotunnel.

 

He is responsible for spearheading government attacks on the Welfare State and is notorious for commenting that Scottish welfare claimants should get a job if they wanted an extra bedroom.

 

At a fringe session on welfare at the Conservative Party Conference, Freud described slivers of time as ‘a marketplace for short hours’ where an employer would say ‘right, we want three hours on Wednesday afternoon – what am I bid?’ That group would then say ‘I’ll do it for £10 an hour, £15 an hour… whatever’.

 

In other words, slivers is a Dutch auction for job seekers’ time, set up to encourage it to be sold as a commodity in a race-to-the-bottom. And, if people are forced to work at rates below the national minimum wage, such contracts could potentially be unlawful.

 

In his speech to the Conservative Party Conference, David Cameron announced that 16 to 25 year olds ‘Neets’ (Not in Education Employment or Training) who refuse to take up offers of education, work or training will have their benefits stopped.

 

But rather than conjuring up ideas for finding random hours of work to fill on shoddy terms, the government should concentrate on how best to place people into real jobs on a fair rate of pay.

 

Slivers of time may well have positive applications in limited circumstances if done on the worker’s own terms. But its integration into a benefits regime that operates on compulsion takes us back to the Victorian days and the fundamentally exploitative nature of workers having to tout for anything they were lucky enough to get.

 

Read the Labour & European Law Review on zero-hours contracts

Responsible employers should follow the lead on holiday pay

Victoria Phillips is head of employment rights at Thompsons Solicitors

The weekly Thompsons Solicitors blog

 

Recent news that John Lewis will be handing its 69,000 employees a one-off payment to backdate incorrect holiday pay should serve as an example to other employers to get their houses in order.

 

Following a review of its holiday pay policies, the John Lewis partnership is paying its staff an extra £40 million for holidays taken since 2006.

 

The review was triggered by developing case law on working time. It concluded that their calculations about what their employees should receive while on leave have been wrong by excluding additions such as premiums for working on Sundays or bank holidays.

 

The major judgment on the issue was a Thompsons case – BA v Williams. The Supreme Court ruled in 2012 that holiday pay of pilots should include allowances on top of their basic salary, which were included in their overall pay.

 

To date, most employers have failed to take heed of this case and are continuing to calculate payments for holiday leave using basic pay.

 

But, at a recent Birmingham Employment Tribunal, the judgment in another Thompsons case – Neal v Freightliner – re-emphasised that normal remuneration – including premiums - should be paid, based on European case law and Williams.

 

The John Lewis example should prompt other employers to address this issue. But if they don’t, the Williams and Neal cases mean they will inevitably lose if they are challenged at employment tribunals.

 

Trade unions can now rely on two recent and authoritative judgments when pressing for members to get their full holiday pay entitlements.

 

Click on the image to access the full Thompsons Labour and European Law Review

Zero hours contracts and Vince Cable’s “informal” review

Victoria Phillips is head of employment rights at Thompsons Solicitors

Labour’s 1997 manifesto promised to deal with the issue of zero hours contracts. But in government Labour was persuaded that it needed to “retain the flexibility that those contracts offer businesses”. The national minimum wage and working time directive were deemed as providing enough protection from abuse.

 

That was then. The economy was growing. But the recent dramatic increase in the use of zero hours contracts, which do not specify the number of hours the employee is required to work, represents the unacceptable face of our flexible labour market in a time of recession.

 

They are the ultimate in the government’s obsession with ridding businesses of burdens, allowing employers to avoid all manner of employment rights obligations to their workforce. They can, for example, get around the agency workers regulations by setting up directly employed banks of workers on zero hours contracts. Little wonder then that, according to the Financial Times, there has been a 24 per cent leap in the number of zero hours contracts used in NHS hospitals in the last two years.

 

Surprising then that Vince Cable has announced an “informal” review of the use of such contracts (see this week’s LELR) when they provide exactly the sort of opportunity for employers to exploit vulnerable workers that David Cameron and George Osborne appear to have been trying to engineer through the myriad of employment law reforms they’ve forced through.

 

Though we know from Cable’s “brave” blocking of the Beecroft report that having him on side is about as much use as a handbrake on a canoe. After all, the Tory-donor’s no fault dismissals proposal, described by Cable as “the wrong approach”, has simply been rebranded.

 

Having said that, we know how much the government loves to make policy on the basis of anecdote, usually tall tales from employers and insurance companies. Cable says there’s anecdotal evidence of abuse of zero hours contracts by certain employers. That should be evidence enough to take the action the TUC calls for and regulate their use.

 

Click on the image to access the full Thompsons Labour and European Law Review

Mesothelioma Bill – not the act of benevolence it is portrayed as

Victoria Phillips is head of employment rights at Thompsons Solicitors

I’m writing this from the ASLEF annual conference, a union whose members are all too familiar with the devastating effects of asbestos exposure, as well as of other industrial diseases.

 

In the main, members who have become ill, and the many who have tragically died, have been able to claim compensation from the former rail industry employers who exposed them. Even those employers which no longer exist can be traced, more often than not back to British Rail. This means that historic employer liability insurance policies will usually be available and a claim against them can be made.

 

But thousands of industrial disease sufferers negligently exposed in the course of their work have been unable to trace their employers’ liability insurers and so are unable to bring a claim

 

Now the government has launched the Mesothelioma Bill, which had its second reading in parliament this week. It establishes a scheme of last resort for untraced employers’ liability insurance claims and has given the coalition a fair few positive news stories.

 

But it’s not the act of benevolence it is portrayed as. It’s certainly not the proposed scheme which the last Labour government consulted on, which would have created an insurance fund of last resort to compensate all industrial disease victims where the employer has gone out of business and their liability insurer can’t be traced.

 

It’s unlikely the scheme will pay more than 70% of the average compensation claimants would have got if they could trace their former employer’s liability insurance. And it will only compensate mesothelioma claims, but only then the ones where diagnosis was on or after 25 July 2012 – an arbitrary cut off date based on when the coalition finally got round to announcing the outcome of the consultation which had ended the day before the 2010 general election.

 

So aside from the thousands of people who have been deprived of compensation over the years due to the insurance industry’s incompetence in losing or destroying the policies it sold for decades in a compulsory market, hundreds more will lose out due to the government’s delay of over two years in announcing its intentions.

 

A delay no doubt caused by ministers’ cuddling their insurance industry buddies until the latter were completely reassured that the scheme would not dent their vast profits.

 

There are lots of other holes in the scheme. To read more see this week’s LELR weekly.

 

Click on the image to access the full Thompsons Labour and European Law Review

Access denied – Fees for tribunals consultation opens

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors weekly blog

 

Fees for pursuing employment tribunals are expected to come in at the end of July, though a letter to stakeholders from the Courts and Tribunals Services is vague about the date and whether the systems will be ready.

 

In fact, now that the Enterprise and Regulatory Reform Act has passed into law, there’s a long list of employment law changes that the government has yet to give clear implementation dates for [see this week’s LELR weekly].

 

A consultation on how the fees remission system will work in practice was expected last autumn but has only recently opened. It closes on 16 May.

 

The government’s stated aim is that through fees it will achieve 100% recovery of the costs of running the system. Given that targets below full cost recovery have already been agreed with the Treasury, I wonder what the point of consultation on fees remission is?

 

Not that many claimants will qualify under the government’s proposals anyway.

 

If an applicant has too much “disposable capital” there will be no remission and no need to consider income levels. Disposable capital includes such things as jointly held capital, ISAs, savings and redundancy payments. The test has been set to “prevent fee remissions being paid to wealthy individuals”.

 

An individual or a couple with savings of as little as £3,000 will be expected to pay up to a third on fees. This rises to a half for those with £8,000 put away for leaner times. Nothing is said about the practical problems of liquidating capital assets within the three-month time limit for lodging a claim.

 

An applicant who passes the disposable capital test is then subject to an income test, which is now based on gross monthly, not annual income. No explanation is given for this, nor for the fact that the income threshold is being slashed at the same time.

 

A single person’s lower threshold remains at about £13,000, but a couple’s threshold drops from £18,000 to £15,000 – a mere £2,000 above that of a single person. The minimum wage for one person working 40 hours a week is just under £13,000. So is the majority of the population “wealthy” on this analysis?

 

A partner’s income is taken into account on the basis that “both the applicant and their partner gain financially or otherwise from the use of a court or tribunal”. Income levels must be proved by showing their last three months bank statements.

 

No account is taken of the fact that those claiming unfair dismissal or unlawful deduction from wages will no longer be in receipt of the income those statements show.

 

And if you want to retrospectively claim a remission you must do so within two months – so there’s not much chance to produce three months of post-dismissal bank statements.

 

These proposals have nothing to do with making the wealthy pay, or saving the taxpayer money. As we have come to expect from this government, the bar to qualify for remissions is being set so deliberately high that it will simply deter people pursuing legitimate employment tribunal claims, denying access to justice to those who need it most.

 

This business burden obsessed government

Victoria Phillips is head of employment rights at Thompsons Solicitors

The weekly Thompsons Solicitors blog

 

Although the government’s proposed changes to the TUPE regulations will benefit employers and employers alone, there’s little evidence that they actually want them.

 

At a recent meeting of the influential Westminster Policy Forum, a number of representatives from City law firms – employers’ lawyers – said there was no appetite among bosses for the reforms.

 

And for good reason. Employers appreciate the certainty that the 2006 amendments relating to service provision changes (SPCs) – which happen when work is outsourced, taken back in house, or when the contractor providing the work changes – afford.

 

Certainly, no clamour for change emerged from the BIS call for evidence on the issue last year. The majority of respondents wanted to retain SPCs.

 

Our response to the TUPE regulations consultation, reported in this week’s LELR points out that until 2007 there was a steady stream of appeals to the Court of Appeal, and even to the Court of Justice, dealing with the fundamental issues relating to whether there had been a transfer under the 1981 version of TUPE.

 

But the introduction of SPCs in 2006 changed all that. There have been a handful of appeals to the employment appeal tribunal, but the existence of SPCs has greatly reduced the scope for dispute as to whether TUPE applies.

 

Inevitably, that’s a problem for this business burden obsessed government. As with its resolve to remove strict liability from health and safety laws because they provide certainty over an employer’s responsibility for a workplace accident caused by a breach of the regulations, it is determined to free up employers to try to circumvent the TUPE rules.

 

That doing so will mean more litigation and cost for employers seems not to have occurred to ministers, though it has to businesses – hence their support for the status quo.

 

Appallingly, the government’s justification is that, anecdotally, employers have been seeking legal advice on how to avoid TUPE or at least mitigate its effects. There’s no evidence this is widespread, and the comments of the City boys this week would imply it isn’t.

 

There will always be employers who try to get around the rules. It’s what keeps union reps and union lawyers so busy. But it doesn’t mean the rules are wrong, anti-competitive, damaging to the economy or a deterrent to employing people.

 

Neither does it mean that businesses who want to be free not to respect workers’ rights are entrepreneurs while everyone else is in hock to employment lawyers, as was implied by business minister Michael Fallon during last Tuesday’s Commons debates on the equally illogical shares for rights scheme.

TUPE and pensions, a brilliantly baffling combination

Victoria Phillips is head of employment rights at Thompsons Solicitors

Ministers have hit on a new way of slipping attacks on working people past us. Make the consultations so confusing that not even us lawyers (I am not being ironic) can be sure what they mean.

 

A recent meeting of colleagues fell momentarily silent when one asked if anyone shared his reading of a DWP consultation about amending the TUPE pension protection regulations.

 

TUPE and pensions, a brilliantly baffling combination. So when a DWP press release claims it simply wants to clarify the 2005 regulations to reflect the original intention of enabling the member to choose their rate of contribution, it’s tempting to accept it’s as innocuous as that.

 

But my colleague was right to read the proposals differently. The reality is the proposals will remove significant rights from employees in occupational pension schemes who transfer under TUPE to another employer.

 

The government appears to be trying to over-ride primary legislation that obliges the new employer to make contributions to the money purchase scheme (MPS) of a transferring employee.

 

We’ve been cautiously generous in our response to the consultation, which is reported in this week’s LELR. We ask if the government really intended the amendment to the pension protection rules to enable transferee employers to not pay into a MPS if the transferor was, for example, on a pension holiday at the time of the transfer.

 

We “doubt” if the amendment was meant to allow the new employer to say to an employee that because at the time of the transfer they didn’t have enough accrued service to join the MPS, they can never join the MPS.

 

We’d like to think it’s all a mistake, a drafting error that the DWP will correct by withdrawing the amendment. If it doesn’t it will confirm our reading, and that the government is again reducing workers’ rights under the guise of endowing them.

 

Click on the image to access the full Thompsons Labour and European Law Review

Is the Government determined to ride roughshod over workers’ rights, or just plain stupid?

Victoria Phillips is head of employment rights at Thompsons Solicitors

If the Department of Work and Pensions can’t get it right when shedding staff, then no wonder the government is making it easier to sack workers. It claims that employment laws are a burden on business and that employers are scared to take people on for fear of facing an employment tribunal should they later want to get rid. But the case of the Public and Commercial Service union members who last week won their right to redundancy payments should tell ministers, both as policy makers and employers, that simply applying plain common sense should keep them out of the courts.

 

Employment legislation exists to protect employers as well as employees. Regulations are not, on the whole, difficult to understand. Get it right, or just admit when you’ve got it wrong, and you won’t have to pay significant lawyers’ costs for the pleasure of having an employment tribunal judge explaining why you got it wrong.

 

The DWP’s refusal to pay redundancy payments to Jobcentre Plus workers whose fixed term contracts had ended was always difficult to fathom. Its lawyers argued throughout that the JCP workers were dismissed because their fixed term contracts had not been renewed, not because it was a redundancy situation. Yet the law is clear: if an employer decides it needs fewer employees of a particular kind to carry out work, the reason for the dismissal is redundancy.

 

As the employment tribunal judge concluded, there were “no distinguishing factors” to disapply the decision of the Court of Appeal in a similar case involving a lecturer whose fixed term contract was not renewed.

 

In that case (known as Lee), the appeal court ruled that the decision of the college not to renew the claimant’s contract because it had less need for lecturers was a redundancy situation.  Just because it was known that the contract would not be renewed did not alter that.

 

And so the same was always, in our view, going to apply in the JCP cases. In 2010, as a direct result of coalition cuts, there was a freeze on civil service recruitment and no extension of fixed term contracts without ministerial permission. Some limited extensions were granted over the following months, but the need to reduce headcount remained and both the lead claimants in the case – Ms Fanis and Ms Ricciardi -  were eventually dismissed when their contracts were not renewed.

 

Thousands of other fixed term employees suffered the same fate in order that the DWP could meet head count reduction targets set by ministers. To argue that this was not a redundancy situation showed either a determination to ride roughshod over fixed term workers’ rights, or was just plain stupid.

 

Read more about the PCS fixed term contract case in LELR weekly

Click on the image to access the full Thompsons Labour and European Law Review

Scapegoating workers is not the economic medicine the economy needs

Victoria Phillips is head of employment rights at Thompsons Solicitors

Last week the government published another self-congratulatory report on the red-tape challenge – a progress report on its employment law reforms.

 

Two passages in Jo Swinson’s foreword stand out:

 

“Our reforms support better relationships between workers and employers. They are aimed at making evolutionary improvements to the labour market so it retains a flexibility and dynamism that benefits individuals, employers and the economy.”

 

And:

 

“There is a range of employment laws that seek to make the process of taking people on fair. The Government continues to review these regulations to ensure they do not unreasonably burden employers or disincentivise them from hiring people, ensuring the labour market remains flexible.”

 

There is no trace of irony in either statement.

 

How a wholesale dismantling of employment rights, collective redundancy rules, equality laws and health and safety regulations are evolutionary improvements to the labour market only Jo Swinson may be able to explain.

 

But perhaps I’m missing something.

 

After all, the reforms aren’t yet all in place. In fact the timetable for some of them has changed, as this week’s LELR reports. The new employment tribunal rules, which are intended to make them easier to understand and which give employment judges new powers to strike out claims, will be with us in the summer rather than on 1 April in order to coincide with the introduction of ET fees.

 

So perhaps manufacturing output will take off when these rules come in. Or when it costs so much to lodge a claim that thousands of unrepresented workers will be unable to access justice.

 

Or when the TUPE regulations are reformed (currently out for consultation yet happening in the Autumn, BIS says) and employee-owners can give up their rights in return for shares – though the Chancellor’s much derided flagship policy suffered a humiliating defeat in the House of Lords on Wednesday (it was described by former Thatcher-era minister Lord Forsyth as a “positively dreadful clause”), the 71st Lords defeat for the government this Parliament.

 

Perhaps the sharpest wage fall of any developed economy, as highlighted by the TUC, will be reversed when unfair dismissal compensation is capped and employers are no longer liable for third party harassment or have to fill out discrimination questionnaires.

 

But of course it won’t. Scapegoating workers is not the economic medicine the economy needs. Jo Swinson, pictured in her report standing in leafy woodland, can’t see the wood for the employment rights trees that she and her colleagues are determined to fell, no matter what the damage.

 

Click on the image to access the full Thompsons Labour and European Law Review

 

 

 

Employer fear of employment regulations is perception, not reality

Victoria Phillips is head of employment rights at Thompsons Solicitors

The Thompsons Solicitors UnionHome blog

 

It’s an odd contrast, the Queen signing the Commonwealth Charter with its commitment to equality and respect for the protection and promotion of civil, political, economic, social and cultural rights and gender equality, while HM Government goes on driving employment rights down to the level of developing countries.

 

As manufacturing output falls alarmingly, creating massive job insecurity by making it easier for employers to sack people is economically illiterate. It makes even less sense now that we have evidence that employers are far more relaxed about employment regulation than ministers would have us believe.

 

The study by academics at Kingston University, commissioned by the Department for Business, Innovation and Skills, which we report in this week’s LELR weekly reinforces our view that the government’s obsession with restricting employment rights and access to justice to ease so-called burdens on business is driven by ideology and has no basis in reality.

 

The researchers’ finding that employment regulation is generally considered both necessary and fair because it ensures employee rights are protected while providing employers with a legal framework belies the government mantra that businesses are scared of taking on staff because of employment laws.

 

Firms surveyed recognised that they rarely experienced issues relating to regulation – such as dismissal or dealing with a dispute. Tellingly however, when asked directly, they said that regulation was burdensome. Employment regulation was perceived as complex. Employers were anxious about the impact that regulation may have on their business or other businesses in the future should they face litigation for failing to meet all the legal requirements.

 

It’s hardly surprising that, when researchers, business organisations or government put it directly to employers that regulations are a burden, or that they are scared of employing staff, that they’ll get the response they want. They are not, usually, asking for evidence to explain the answer. Take question two in BIS’s October 2011 Flexible Labour Markets consultation: What more can Government do to reduce the fear factor in employing staff, particularly the first member of staff that a business takes on?

 

Fear factor, what fear factor? Oh now you mention it…for employers (particularly small ones) can be very suggestible when they are receiving so much attention from policy makers.

 

The Kingston researchers conclude that employers tend to have an “inflated idea of the risk of being taken to an industrial tribunal when dismissing staff” and call for the “high risk” myth to be dispelled to help to reduce the perception that all employment regulation is burdensome.

 

I doubt this is a piece of advice ministers will welcome or act on. Easier to allow anecdote to continue to drive policy, whatever its impact on growth, in order to keep up the government’s calculated attack on working people.

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