Qualifying Armed Service

There was much (well some) fanfare following Redfearn v UK [2012] ECHR 1878 when the qualifying period for unfair dismissal was removed where the sole or principal reason for dismissal was due to a person’s political affiliation. It didn’t become “automatically unfair” so could still be an “ordinary” unfair dismissal on normal principles, although presumably it would have to be argued as some other substantial reason; the sole or principal reason not being one of the usual list of conduct, capability etc.

 

Whilst not entirely overlooked, a similar provision is likely to be quietly introduced in respect of members of the Reserve Forces – something that was envisaged by craighrb on my last blog on the subject.

 

Section 48 of the Defence Reform Act 2014 introduces an identical right in respect of dismissals where the sole or principal reason for the dismissal of an employee:

is, or is connected with, the employee’s membership of a reserve force…

 The provision is not yet in force. The only commencement order currently made does not apply to the new right. There has been discussion about how much further the employment rights of reservists could be extended. In the second reading debate, the then Shadow Secretary of State for Defence raised the prospect of what would appear a right not to be subjected to detriments on the same grounds. There was a proposal in committee to amend section 39 of the Equality Act 2010 so that discrimination in employment on the basis of membership of the reserve forces would become unlawful. That proposal. as well as a proposal to give the right to time off for training, were both defeated; the latter both in the Commons and in the Lords.

 

What could have been a wide ranging change has remained quite narrow. It’s also of questionable value bearing in mind the right to reinstatement contained in the Reserve Forces (Safeguard of Employment) Act 1985. In practice, any member of the reserves is going to be much better off getting what is (in most cases) going to be a guaranteed return to a job. Bearing in mind that on average fewer than 10 employees are reinstated each year, and bearing in mind that there are no fees to start a Reinstatement Committee case, the new change to the qualifying period seems to be very much the poorer relation.

ET claims & fees: a few more charts (sorry)

If you feel that you’ve already seen enough charts detailing the evisceration of the employment tribunal system by fees in recent days, then this post is not for you. Go and watch some football or something.

For those still with me – Hi Mum! – I’ve been looking at the regional breakdown of single and multiple claims included in yesterday’s statistical release by the Ministry of Injustice. And they make for some striking charts that put in context all those anecdotes from employment lawyers of tumbleweed blowing through the corridors and hearing rooms of regional ET centres.

This is the North East, where the average monthly number of claims (singles and multiples) has fallen by 85.5 per cent, from 1,561 in the 18 months prior to the introduction of fees in July 2013, to just 227 in the six-month period October 2013 – March 2014:

ET North East

And this is the South West, where the average monthly number of single claims has fallen by 63 per cent, from 445 in the 18 months prior to the introduction of fees, to just 166 in the six-month period October 2013 – March 2014:

ET South West

This is Scotland, where the average monthly number of claims (singles and multiples) has fallen by 67.4 per cent, from 945 in the 18 months prior to the introduction of fees in July 2013, to just 308 in the six-month period October 2013 – March 2014:

ET Scotland

And this is Wales, where the average monthly number of claims (singles and multiples) has fallen by 71 per cent, from 404 in the 18 months prior to the introduction of fees, to just 117 in the six-month period October 2013 – March 2014:

ET Wales

And even London – with all those high-value discrimination claims from the City – is pretty much a wasteland, with the average monthly number of claims (singles and multiples) having plummeted by a staggering 88.5 per cent, from 7,952 to just 912:

ET London

But no need to worry as, according to the Ministry of Justice, this is all just a long-term trend, nothing to do with the fees regime introduced last July.

A long-term trend? Really? Let’s do a couple more charts. As suggested to me by Daniel Barnett, these show the rolling three-month average number of claims over the period March 2012 to March 2014. That is, each month’s figure is the average of that month and the previous two months. Such a rolling average smooths out the inevitable ups and downs from month to month, to give a more reliable indication of any longer-term trend.

And this is what we get on single claims:

ET rolling singles

Does that look like a long-term trend to you? It looks more like a cliff-edge to me. And applying the same approach to multiple claims, we get this little shocker:

ET rolling multiples

Again, if that’s a long-term trend, then I’m a banana.

But if anyone in the Ministry of Injustice is reading this – unlikely, I know – and would like to send me or Sean Jones some alternative charts showing their long-term downward trend, we would be very happy to reproduce them here on Hard Labour. I have of course seen Figure 3 on page 8 of the Ministry’s commentary on the quarterly statistics, which purports to show a long-term downward trend in both single claims and multiple claims encompassing the drop in claims since July 2013, but actually shows no such thing.

First of all, by cramming five years of data into one very small chart, the Ministry makes it difficult to distinguish very long-term (but shallow) trends from shorter-term, steeper movements such as that since July last year. Viewed from the moon, the Great Wall of China looks like a smoothly curved line, but viewed from a helicopter it clearly wiggles all over the place.

In any case, in terms of multiple claims, the Ministry’s pathetic little chart simply shows a mountain range of fluctuations, with no discernible trend whatsoever since as long ago as early 2011 until … the autumn of 2013. Sure, there were a couple of higher peaks in 2009 and 2010, not replicated since, but then there was a little difficulty in the economy at that time.

As for single claims, yes there was a steady but shallow decline from the peak in mid-2009, right the way through 2011 and 2012.  Indeed, some of us tried hard (but failed) to get ministers to acknowledge that steady decline in 2012, when they were pushing through employment law and tribunal reforms predicated on allegedly explosive growth in the number of claims. But that shallow, long-term trend since 2009 does not begin to explain the cliff-edges shown in my (green) chart above.

Ironically, the Ministry’s chart leaves out the only type of case in which there was a significant downward trend in the 12 months prior to the introduction of fees: multiple claimant cases.  But, as the following chart shows, even that downward trend cannot conceal a marked acceleration of the fall in July 2013.

ET rolling multiple cases

 

 

Jessemy v Rowstock Ltd: post-termination victimisation and the limits of judicial reasoning

Jessemy v Rowstock Ltd: post-termination victimisation and the limits of judicial reasoning by Harini Iyengar

How did the Court of Appeal in Jessemy v Rowstock Ltd [2014] EWCA Civ 185 conclude that victimisation of former employees remains unlawful even though “on any natural reading of the relevant provisions of the [Equality Act 2010], taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”.

Summary

The Court of Appeal (“CA”) has held that post-termination victimisation is unlawful, by adopting an ingenious interpretation of section 108(7) of the Equality Act 2010. Whilst the outcome is clearly correct according to the coterie of right-minded employment lawyers (amongst whom I would aspire to class myself), the case provides an intriguing example of a court concluding that what the law says is in fact exactly what it does not say. Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?

The Judgment

The judgment of the CA was given by Underhill LJ, former President of the Employment Appeal Tribunal (“EAT”), (with whom Ryder and Maurice Kay LJJ agreed) and upheld the judgment which his successor, Langstaff J, had given on the same issue in the EAT in Onu v Akwiwu, whilst overruling Mr Recorder Luba QC in Jessamy v Rowstock Ltd in the EAT.

As Underhill LJ stated, “the issue is one of pure law”, so, in regard to the facts, it is sufficient to relate simply that the claim of post-termination victimisation which the Employment Tribunal (“ET”) and then the EAT dismissed concerned a Claimant who was subjected to a detriment in the form of a poor reference from a former employer because he had brought proceedings for unfair dismissal and age discrimination.

The First-Generation Discrimination Statutes

The CA first considered the law on victimisation under the “first-generation” discrimination statutes (the Sex Discrimination Act 1975, the Race Relations Act 1976, and the Disability Discrimination Act 1995) which prohibited discrimination by an employer against a worker “employed by him” or “whom he employs”. In Post Office v Adekeye the CA held in 1997 that the natural meaning of these phrases confined the protection against discrimination to workers employed at the time of the act complained of, however, in Coote v Granada Hospitality Ltd in 1999 the European Court of Justice (“ECJ”) held that since sex discrimination was proscribed under the Equal Treatment Directive, the “principle of effectiveness” meant that employees complaining of sex discrimination had to be protected against victimisation on that account, whether the victimisation occurred during employment or after termination. On remission, the EAT held in Coote that “employed by him” should be construed as including a former employee who had complained of sex discrimination, and that Adekeye should not be followed.

Then, in Rhys-Harper v Relaxion Group plc in 2003, the House of Lords authoritatively determined that in regard to all three first-generation discrimination statutes, “employed by him” and “whom he employs” (despite the use of the present tense) could and should be read as applying to former employees. According to Underhill LJ, “The essential point is that it was regarded as extremely unlikely that Parliament had intended to exclude all claims for post-employment discrimination.” The majority reached those conclusions by applying ordinary domestic principles of construction, rather than the ECJ decision in Coote.

The Second-Generation Discrimination Provisions

In 2003, in regard to sexual orientation and religion or belief, and in 2006 in regard to age, the second-generation discrimination rights were brought in through statutory instruments which expressly rendered unlawful any discrimination or harassment which arose out of and was closely connected to “relationships which have come to an end”. Equivalent provisions were inserted by regulation at the same time into the first-generation discrimination statutes.
This analysis brought Underhill LJ to the bedrock of his argument: “The upshot of all that is that at the time that the 2010 Act was drafted it was well-established that post-employment discrimination – which included victimisation – was unlawful.”

The Equality Act 2010

He went on to analyse the structure of the Equality Act 2010. Part 2 sets out key concepts on equality, Chapter 1 giving the protected characteristics and Chapter 2 explaining “Prohibited Conduct” in the form of direct and indirect discrimination, ancillary matters, and then “Other Prohibited Conduct” in sections 26 and 27 defining harassment and victimisation respectively. Unlike the first- and second-generation anti-discrimination rules, under the Equality Act 2010 rules, discrimination, harassment and victimisation are separated out as distinct forms of prohibited conduct.

It is only in Parts 5 and 8 that the relevant prohibited conduct is made unlawful. In Part 5, sub-sections 39(3) and (4) make it unlawful to victimise an employee by subjecting him or her to any other detriment (such as providing a bad reference). Section 83 contains the definition of “employee” as someone who is employed under a contract of employment, a contract of apprenticeship or a contract personally to do work. Part 8 covers “Prohibited Conduct: Ancillary” and includes section 108:

(1) A person (A) must not discriminate against another (B) if –
(a) the discrimination arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the discrimination would, if it occurred during the relationship, contravene this Act.
(2) A person (A) must not harass another (B) if –
(a) the harassment arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.
(3) It does not matter whether the relationship ends before or after the commencement of this Act.
(4) …
(5) …
(6) For the purposes of Part 9 (enforcement), a contravention of this section relates to the Part of this Act that would have been contravened if the relationship had not ended.
(7) But conduct is not a contravention of this section in so far as it also amounts to victimisation of B by A.

The CA plainly identified “the problem” about section 108 as being that it explicitly proscribes post-termination discrimination and harassment, but contains no equivalent provisions as to victimisation. Underhill LJ politely said of section 108(7) that its “intended effect is far from clear”.

The New Generation Directives

Underhill LJ next moved on to European Union (“EU”) law, in the form of the Race Directive of 2000, the Framework Directive of 2000 on religion or belief, disability, age and sexual orientation, and the Recast Directive on sex discrimination of 2006, which he categorised as the new generation directives, structured differently from the Equal Treatment Directive which was in force at the time of the claims in Coote and Rhys-Harper. The new generation directives all contain a prohibition on victimisation which is worded in a broadly similar way, requiring Member States to introduce into their national legal systems such measures as are necessary to protect employees against dismissal or other adverse treatment by the employer as a reaction to a complaint within the undertaking or to any legal proceedings aimed at enforcing compliance with the principle of equal treatment.
Reaching the same conclusion in regard to EU law as he had in regard to domestic law, he said, “It is clear from the decision of the ECJ in Coote that that provision must apply equally to acts done after as well as during the currency of the employment relationship.”

The Straightforward Reasoning of the ET and the Luba EAT in Jessamy

The CA described the reasoning of the ET and the EAT in Jessamy as “straightforward”. Mr Recorder Luba QC’s EAT regarded it as “highly unlikely” that Parliament had intended with the Equality Act 2010 to legislate away any redress for post-employment victimisation, given both the domestic law in Rhys-Harper and the UK’s obligations under EU law. The EAT fully acknowledged the “flexible interpretative approach” required by EU law, and cited Attridge LLP v Coleman and Ghaidan v Godin-Mendoza, but concluded that to read section 108(7) as prohibiting post-termination victimisation would “fly directly in the face of what Parliament has actually enacted.”

The Wholly Domestic Interpretation of the Langstaff EAT in Onu

In contrast, Langstaff J’s EAT in Onu took an approach based on interpretative principles of domestic law, as in Rhys-Harper, to conclude that the reference to “an employee of A’s” in section 39(4), could be stretched to include former employees.

The Reasoning of the Court of Appeal

Underhill LJ considered that it was “clear that on a natural reading of the relevant provisions of the 2010 Act, taken on their own and without reference to any contextual material, post-termination victimisation is not proscribed”. How then did he manage to reach the opposite conclusion through deft judicial reasoning?
To start with, he acknowledged the shortcomings in Langstaff J’s approach in the EAT. Although, in isolation, “an employee of A’s” can be read as referring to a former employee, that is not consistent with the scheme of the Equality Act 2010, in which prohibited conduct arising out of a past relationship will be proscribed, if at all, by the ancillary provisions in Part 8, and in particular by section 108. There, discrimination and harassment post-termination are prohibited but not victimisation.

He then stated that when the contextual materials were considered, it was clear that the provision in the statute was “not the result which the draftsman intended”, pointing out that Langstaff J, Mr Recorder Luba QC, and the barristers in the case all shared that view.

The contextual materials on which Underhill LJ relied were (i) Rhys-Harper and the second-generation discrimination provisions which expressly made post-termination victimisation unlawful; (ii) the absence of any indication from the Government that the Equality Act 2010 was intended to change the law by removing protection against post-termination victimisation; (iii) the Explanatory Notes on section 108 which referred to claims being “dealt with under the victimisation provisions and not under this section”; (iv) the fact that if post-termination victimisation were not proscribed then the UK would be in breach of its obligations under EU law; and (v) the absence of any rational basis for treating post-termination victimisation differently from post-termination discrimination and harassment.

Taken together, these five matters led him to conclude, “It follows that the apparent failure of the statute to proscribe post-termination victimisation is a drafting error. … In the end, it is unnecessary to be able to show how the error arose as long as it is clear that it was indeed an error.”

The key issue for Underhill LJ was therefore, “… how far is it right to go to correct what is an undoubted drafting error: would that, as the EAT put it, involve crossing the Rubicon?” Underhill LJ reasoned that since the Equality Act 2010 gives effect to the UK’s equality obligations in EU law, the Court must adopt “the Ghaidan approach” which empowered it more widely to “depart from the natural reading of the language of the statute, including by the implication of words which alter its effect as drafted” than would be possible on a conventional domestic approach to statutory construction. He considered that the “flexible interpretative” Ghaidan approach “unquestionably” applied here. After a detailed analysis, he concluded that “the only question is whether it is “possible” … to imply words into the 2010 Act which achieve that result” of proscribing post-termination victimisation, that it plainly was possible, and that the implication of such words “in fact represents what the draftsman intended.” According to Underhill LJ, the Luba EAT erred in failing to appreciate just how flexible the Ghaidan approach was. Yet, while making this criticism, he acknowledged that “the effect of section 108(7) is decidedly opaque”. After bravely attempting to find meaning in the sub-section, Underhill LJ concluded that the first possible meaning (that post-termination was not intended to be proscribed and therefore was also not proscribed where it happened also to constitute post-termination discrimination) was one which would have “no rational reason … for having that effect, and it would have perverse results”, and the second possible meaning (that post-termination victimisation was proscribed elsewhere in the statute but for some reason cases of overlapping post-termination victimisation and discrimination claims should only be complained of under those other provisions) was “unconvincing” because cases of overlapping claims are common and do not in practice give rise to double recovery. Ultimately, Underhill LJ did accept that “it is indeed impossible to see the point of sub-section (7)”. He considered that “the draftsman may rather have lost his way in his treatment of section 108”, noting that in Schedule 28 “discrimination” was said to be defined in, amongst others, section 108, whereas in fact that section proscribed it.

From this position, that the draftsman must have lost his way, made an error, and drafted a meaningless sub-section, Underhill LJ reached the view that the section 108(7) contained “no clear indication of an intention that post-termination victimisation should be lawful”. Therefore, he reasoned, there was “no obstacle” to implying that section 108 gave effect to the EU obligation to proscribe post-employment victimisation. Perhaps intending to guide the lost draftsman, the Court of Appeal suggested either an amendment to section 108(1) to add:

In this sub-section discrimination includes victimisation,

or a new sub-section 2A to add:

A person (A) must not victimise another (B) if –
(a) the victimisation arises out of and is closely connected to a relationship which used to exist between them, and
(b) conduct of a description constituting the harassment would, if it occurred during the relationship, contravene this Act.

Having determined that it was meaningless, Underhill LJ was “not sure that anything needs to be done about sub-section (7)”. He was, however, careful to state that the meaningless sub-section “can have no meaning which is inconsistent with post-termination victimisation being unlawful.”

Then, at the request of the Equality and Human Rights Commission, which was concerned about discrimination in the provision of goods and services, not all of which is proscribed by EU law, Underhill LJ also considered whether the domestic approach to statutory construction would lead to a different result. He accepted a “more straightforward domestic route to the same result, by way of a “rectifying construction” of the kind adopted by the House of Lords in Inco,” involving a “plain case of drafting error”. For Underhill LJ, where there is a drafting error through omission, there is “no real difference” between the Ghaidan and the Inco approaches.

In Inco the court concluded that “the draftsman slipped up” and “the court must be able to correct obvious drafting errors”: the court held that the words “from any decision of the High Court under that Part” were to be read as meaning “from any decision of the High Court under a section in that Part which provides for an appeal from such decision.” According to Lord Nicholls in Inco, a court could adopt such a course only if “abundantly sure of three matters: (1) the intended purpose of the statute or provision in question; (2) that by inadvertence the draftsman and Parliament failed to give effect to that purpose in the provision in question; and (3) the substance of the provision Parliament would have made, although not necessarily the precise words Parliament would have used, had the error in the Bill been noticed.” Lord Nicholls went on to say, however, that the third condition was of crucial importance, because otherwise the court would be crossing the boundary between construction and legislation.

No doubt recognising the dramatic nature of his interpretation, Underhill LJ said, “It would be different in a case where no such intention is established and the argument is simply that the implication sought is necessary in order to comply with EU law or the requirements of the Convention.”

Conclusion

Through sophisticated reasoning, the CA has achieved a result which is fair in the minds of the coterie of employment lawyers, and which will be of practical service to many litigants (be they workers, employers, or those giving or receiving goods and services) by ending legal uncertainty. Is it right, however, for a court to respond to a statutory provision which has no satisfactory meaning by implying into the statute words which make conduct unlawful? The CA did not hold that sub-section 108(7) must be deleted as meaningless, but left it to “some other court” to “cudgel its brains about what real effect, if any, it has”. In spite of its hesitation to delete the sub-section, the CA felt confident in asserting that, whatever it might mean, the sub-section was definitely inconsistent with post-termination victimisation being permitted.

It seems to me that the CA has turned a statutory provision, which is, at best, meaningless, and is, at worst, ambiguous and inconsistent with the UK’s equality obligations under EU law, into a provision which renders conduct unlawful. Can the position really be said to be analogous to Inco? The Equality Act 2010 separated out harassment and victimisation into different claims, after decades of being aspects of discrimination. In my view, the difficulty is that, whilst the draftsman clearly drafted poorly, exactly what he was up to in terms of tinkering with the law on discrimination, harassment and victimisation and how they should interrelate, remains very unclear, yet, I feel sure that he was up to something.

Our clever judges know how to achieve the result which right-minded employment lawyers desire, through the deployment of deft judicial reasoning, but is it right to develop principles of judicial interpretation which permit a statutory provision to mean that conduct which is stated to be lawful is held to be unlawful?

Access to justice in general is a matter of acute concern to barristers right now. Within the field of employment law, the introduction of ET fees is having a profound effect on discrimination litigation, a part of the legal system which is intended to protect the most marginalised and disadvantaged groups of workers. Is it idealistic and unrealistic for me to long for judicial reasoning which makes sense to those outside the inner circle of employment lawyers, in regard to what the major discrimination statute means? Does the type of judicial reasoning which the CA has deployed in Jessemy v Rowstock Ltd give discrimination law a bad name?

Has the Low Pay Commission jumped the shark?

It is a truth not previously acknowledged that one way to unite the TUC and CBI in outrage is to suggest that the Low Pay Commission has outlived its original purpose, and that control of the national minimum wage (NMW) rate might now be best reclaimed by the people we elect to run the country.

I know this because, late on Tuesday evening, after a day of ever more surprising media reports of machinations within the Coalition over a possible ‘inflation-busting’ hike in the NMW rate, I was impertinent enough to make such a suggestion on Twitter.

Within a few minutes, my tweet had prompted sharp responses from both Nicola Smith, Head of Economic & Social Affairs at the TUC, and Neil Carberry, Director of Employment & Skills at the CBI.  This in itself was intriguing, as neither Nicola nor Neil had previously exhibited any great inclination to respond to anything I might have said or written.  But what most tickled my interest was the degree of solidarity Nicola and Neil showed in seeking to pour a large bucket of cold water over my impertinence.

Every year since 1999, the Low Pay Commission has laid waste to a small forest in producing an inch-thick report on the NWW that is read by few if any outside a small circle of NMW policy geeks (and the handful of unfortunate civil servants charged with drafting the government’s response).  In my last job I had a whole shelf of these reports, and laid across a road they would easily have stopped a marauding tank.

But have these hefty reports, and the existence of the Commission itself, done much in recent years to improve the plight of the five million or so workers in the UK economy who now languish on low pay?  The Commission is, after all, the Low Pay Commission, not the Minimum Wage Rate Commission.

Well, with all due respect to the hard work and undoubted integrity of the individual members of the Commission, I’m not sure that low paid workers have been terribly well served by the Commission in recent years.  A succession of paltry, below-inflation NMW rate increases since 2009 have resulted in an hourly rate some 45 pence below what it would be if it had risen with the cost of living since June 2010.  The critical issue of enforcement of the NMW has been woefully neglected.  And where has the Commission been in debate about the shocking growth of in-work poverty?

How dare I even think such heresy! “Over time NMW workers have done better than both inflation AND wages”, retorted Neil Carberry.  However, as the Low Pay Commission itself noted in its 2012 report, “most of the real and relative increases in the minimum wage occurred as a result of the comparatively large up-ratings from October 2001 to October 2006. Since that time, the adult rate of the minimum wage has risen more or less in line with average earnings, but has lagged price increases”.  The largest up-ratings were in 2001, 2003 and 2004, and those relative hikes were entirely justified given the excessively cautious (i.e. low) rate at which the NMW was introduced.

Nicola Smith, meanwhile, was even more extravagant about the recent influence of the Commission: “without the LPC would we even still have a NMW?”  Well, yes, I’m sure we would Nicola, as I don’t think even Nick Clegg could have convinced his MPs, let alone his party membership, to tolerate abolition of the NMW itself – always assuming that the Liberal Democrats would have needed to take such a stand.  Any mooting of abolition by deep blue Conservative ministers would have faced strong internal opposition from MPs and think tankers such as Matthew Hancock, Guy Opperman, Robert Halfon and Ryan Shorthouse.  And, as of this week, Conservative ministers and MPs of all shades of blue are madly trying to outbid each other both in their regret for their party’s past opposition to the NMW, and in their personal enthusiasm for a substantial hike (of as much as £1.00 per hour) in the NMW rate now.

So, given where we are now, with all three main parties scrabbling to position themselves as the shoutiest champion of the NMW, what are the “very big risks to ending the Commission approach” that so alarm the TUC and CBI?  Apart from, that is, the terrible risk of the TUC and the CBI having a tad less direct influence on government policy.

Well, I’m not sure that I can see any significant risks. The Commission and its plodding, bipartisan approach were products of the excessive caution and timidity of the first New Labour government in relation to any policy that might possibly fetter corporate power.  And, in the early years of the NMW, that approach undoubtedly served a valuable function: to take the politics out of the NMW whilst it bedded in.

But to my mind the NMW is now safely cemented into the UK’s labour market policy architecture.  In the words of the Conservative pressure group, Bright Blue, “there is now a strong academic consensus that a sensible minimum wage does not cause unemployment.  Firms adapt well: reducing profits or pay differentials, or boosting productivity”.  And, armed with data, analysis and advice from civil servants, advisory bodies and political advisers, our elected politicians routinely take positions on, and make decisions about, any number of economic issues at least as consequential as what the NMW rate should be.  In short, the Low Pay Commission has – just like the Happy Days of my youth and Sherlock last weekend – jumped the shark.

It’s time to put politics back into the National Minimum Wage.

Party Politics – A Re-Appraisal Of Corporate Entertainment For The Festive Season

Once upon a time, in a land far far away (the 1980s), Christmas parties were an excuse for a good old knees-up, staggering amounts of inebriation, wildly inappropriate conversations, and for drunken staff to get anything off their chest to the MD safe in the knowledge that he (and in those days it almost always was a ‘he’) was too pie-eyed either to recognise them at all or as a minimum, to remember the incident the following day. If anyone even made it into work the next day, that is.

Of course, some things cannot (and, perhaps, should not) last and, like an outrider for the Four Horsemen of the Apocalypse spotting a town ripe for plunder, a keen employment lawyer one day identified Christmas parties as a ‘marketing opportunity’. Nowadays, if you want to know when Christmas is approaching, rather than simply waiting until your city looks as if it has been invaded by an army of incoherent yet smartly dressed zombies, you just have to wait for the first ‘Christmas party’ blog, article or newsletter warning you of the obvious pitfalls of allowing your staff a moment’s respite from a year of trying to do more with less, good economic news which has somehow not reached their employer and the nagging fear that their teenage children will now never, under any circumstances, leave home.

However, what was once original is now tired – indeed crowds of lurching suited zombies thronging the streets trying to find a nightclub that will let them in have instead been replaced by their equivalent in prose, with lawyers and HR consultants simply re-writing and re-working the same undead warnings. These may have been ‘original’ and ‘new’ and possibly even “trendy” during the 80’s and early 90’s but now they simply remind those in HR of what they already know – that no matter how you ‘set the tone’ or remind people of their responsibilities, if someone is going to be an idiot at a Christmas party, you can’t stop them. Now, as then, combining someone else’s alcohol, institutional cooking, and the eternal but nonetheless baseless belief that you will become more attractive as the evening goes on, is a recipe for trouble. But you knew that, right?

Courtesy of website Hereisthecitynews.com we can however add some new blood to the usual pre-party cautions: don’t talk about work, it advises, ask for a raise or steal the cutlery. No twerking, adultery or drunken use of the photocopier either. No wonder, perhaps, that a recent survey by life-and-pensions group Metlife reports that over 70% of UK workers would sooner have the money their employer spends per head on the Christmas bash than the party itself. And that is not just the old and jaded among us – the party spirit has also left some 65% of 18-24s preferring the cash, though that may be more a comment on their recent pay progression than a general cooling on the festive frolic front. After all, how could a little post-tax cash really compare with the boost to the spirits occasioned by watching your senior management forfeit their dignity on the dancefloor, a spectacle which discretion and good timing can now ensure is preserved forever on Youtube? What pleasure can mere money give you relative to the knowledge that at the end of the evening you will not have to wear black tie again for another year? You might discover that some of your management/employees are quite decent people, even if they have done their best to hide it over the preceding year. And in the end, do remember the wise words of US writer PJ O’Rourke: “After all, what is your hosts’ purpose in having a party? Surely not for you to enjoy yourself; if that were their sole purpose, they’d have simply sent champagne over to your place by taxi”.

So no holier-than-thou fliers this year. HR has a right to enjoy the Christmas party too, and if you do see the first stirrings of trouble in a dark corner of your chosen venue, you will know immediately the sensible and professional thing to do – run.

Update on ‘Cliffs and Claims’

EMPLOYMENT TRIBUNAL CLAIMS

POST-FEES

UPDATE

 

 

 

In my earlier post I analysed the figures that the Government published on 18 October 2013, a few days in advance of the judicial review hearing challenging the introduction of fees for bringing employment tribunal proceedings. My analysis showed significant drop in the number of claims being submitted. The drop was far greater than the Ministry of Justice’s analysis appeared to suggest. The MoJ’s line was that “Employment Tribunal receipts were around 40,000 for July – September in line with historical quarterly trends [my emphasis].

My analysis was that once you get past the distorting effect of the 29 July 2013, when fees were imposed, claims had dropped by over 75%. (By ‘distorting effect’ I mean where there is a specific date for fees to be introduced, it will have the effect of many claims being submitted early, to beat the fees, with a corresponding decrease in claims immediately after that date).

One big caveat that was attached to the figures by the MoJ was that they were preliminary figures and subject to revision at a later date. That was a fair point, especially given that a claim is not “accepted” until the fee is paid, or remission granted. Inevitably with a new system – and a government one that involves IT – there will be delays and errors. Claims submitted with applications for remission of fees may have been caught in the system, unable to be included in an earlier count.

The MoJ has published its updated figures today. Very little has changed for the current year, but –  surprisingly – quite a lot has for last year.

In reviewing the figures for the current year, we are most concerned with quarter 2, being July to September 2013. Unhelpfully the information published by the MoJ does not follow the same format as that published in October. No information is given on the number of single claims submitted, so I am not able to revise my analysis on those (a drop of from over 4,000 claims per month on average, to  just 1,003 this September).

We do have figures for multiple claims. The provisional figures showed 1,034 multiple claims accepted in the quarter; the revised figures show 1,061, a modest revision. Unfortunately, a month-by-month breakdown is not given so a similar comparison as in my last post cannot be done.

One can also look at “receipts” for the quarter. In my view this is not as good a measure as single or even multiple claims, but we can at least see to what extent there have been revisions from the provisional figures. The figures in October showed receipts of 38,963. Today’s revised figures show receipts of 39,514. A modest increase of about 1.4%.

Therefore, now we have the revised figures, we can see that very little has changed. The number of claims remains significantly down following the introduction of fees.

What is curious is what has happened to the figures for 2012/13. These show a significant downwards revision. In July and October 2013 figures were published for 2012/13. These showed the following:

 

2012/13

Apr-

Jun

Jul-

Sep

Oct-

Dec

Jan-

Mar

Annual Total

Total Claims Accepted

51,463

47,614

45,240

63,715

208,032

The figures published today show a significant difference:

 

2012/13

Apr-Jun

Jul-Sep

Oct-Dec

Jan-Mar

Annual Total

Total Claims Accepted

40,305

47,789

45,710

57,737

191,541

No note or explanation is provided in the commentary that accompanies the figures. It would be unusual for such revisions to be of this size and made so late. Needless to say, enquiries are being made.

If one wanted to show a consistent downward pattern in employment tribunal claims since, say, May 2010, then it would certainly be helpful to revise 2012/13 down by at least this amount. I’m not being cynical and I’m sure there’s a perfectly reasonable explanation…………..

@AlexLock

 

 

Including Commission in Holiday Pay

The Advocate General’s opinion given in Lock v British Gas Trading Ltd & ors is that commission payments should be included in a worker’s holiday pay. If this is followed by the Court then frankly it is going to cause chaos.

The opinion relies heavily on the Court’s decision in Williams & (many, many) others  v British Airways to the effect that pay in respect of annual leave must correspond to the ‘normal remuneration’ received by the worker in so far as that remuneration is ‘intrinsically linked’ to the performance of the worker’s tasks and has a degree of permanence.

In Lock’s case, the employee received commission on sales made which was paid in arrears once a sale had been completed. This meant that Mr Lock did get paid commission when he was on holiday, but that pay was in respect of work he had done before his annual leave began. His complaint was that since he was not able to earn commission while he was on holiday then his future pay would be lower than if he had not been on leave.

The Advocate General accepted that commission was intrinsically linked to the work Mr Lock did and that although it varied from month to month it was an inherent part of his overall remuneration and had the necessary degree of permanence. A failure to take commission into account was capable of deterring Mr Lock from taking his annual leave – all the more so since it made up about 60% of his total remuneration. On that basis the AG concluded that commission did have to be included in calculating Mr Lock’s holiday pay, with the suggestion that he should receive the average amount of commission paid over a representative reference period.

Has Lock really lost anything?

It seems to me that the key flaw in this is that it assumes that if Mr Lock worked for 52 weeks in the year rather than 48 he would make an extra four weeks’ worth of sales. But simply as a matter of common sense that will not be true. There will be quiet periods when the clients themselves are on holiday and so unlikely to close a deal and Mr Lock will also organise his time around the fact that he will be taking holiday at various points over the year. There may well be cases where commission is earned at a constant rate per hour of work done – telesales might work like that – but sales jobs based on closing more complicated deals and building relationships just don’t work that way.

British Gas argued that the commission paid to Mr Lock was based on an annual sales target which took holiday into account. The AG said (para 43 &44) that there was no clear evidence for that and that in any event that would breach the rule against rolled-up holiday in Robinson Steele. I think that misses the point. This isn’t about rolled-up holiday, but about how many sales you would expect a good sales person to make over the course of a year and working out a commission scheme accordingly.

Implications

If this AG opinion is followed then things are going to get pretty complicated. I can think of all sorts of ways in which an employee might try to ‘game’ the system to make sure that no commission would normally be paid during a holiday period, so as to maximise the windfall when the holiday pay is calculated and has to include a sum representing commission. Also, I don’t quite see how just paying an average commission payment during the holiday period itself will work. Mr Lock would normally be paid during his leave for the commission he had earned before taking his holiday. It is his subsequent wages which suffer – when he is paid after his holiday and has lost the opportunity to be paid commission in respect of work he would otherwise have completed. When would that actually need to be paid?

I would love to hear suggestions about how commission schemes could be made to comply with the AG opinion. Whatever the eventual outcome of this case, however, we clearly need to revisit the whole definition of a week’s pay for the purposes of the Working Time Regulations. The definition we have in the Employment Rights Act just isn’t up to the job anymore. I’m sure BIS would be grateful for any suggestions in the comments about how we can define a week’s pay in a way that the CJEU will accept, and which normal mortals can actually understand.