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Employment eBulletin: spring 2019

03 April 2019

Our latest Employment eBulletin focuses on mental health in the work place, increases to National Minimum Wage and National Living Wage, extra protection for employees on maternity leave and worker’s rights.

Employers must be held more accountable for workers’ mental health

Business leaders recently wrote an open letter to Theresa May to apply pressure on the government to make good its election pledge to transform how mental health is regarded in the workplace.

They called for the Health and Safety at Work Regulations to be updated so that workplaces are required to make provision for mental as well as physical first aid.

There is little doubt that implementing the proposed changes would be a worthwhile step towards ensuring employers treat their duty of care for workers’ mental wellbeing as seriously as they do their physical health.

It is the economic costs, however, in terms of working days lost, that appear to be the motivation behind the clamour for decisive action to be taken now.

If the campaign is to really take hold, then employers – and indeed their insurers – must be faced with other serious direct monetary consequences when held liable for breaching the duty and where serious psychiatric injury has been caused as a result of their negligence.

Since the landmark ruling in the 1995 case of Walker v Northumberland County Council, it has been clear in law that in principle an employer owes its staff a duty of care to prevent not only physical but also psychiatric injury.

What is perhaps less well appreciated is simply how difficult recent case law has made the task of pursuing a duty-of-care claim against an employer. The outcome of these cases often hinges on a court’s subjective determination as to whether an employer could reasonably have foreseen that an employee may develop mental health problems as a result of ill treatment.

In the 2014 case of Yapp v Foreign and Commonwealth Office, the Court of Appeal surprisingly reversed the decision of a High Court judge. It found that unless there were indications that the employer was, or should have been, aware of some psychological vulnerability on the part of the employee, an injury will not usually be foreseeable.

Many of us experience adverse events in life, some of which can trigger mental ill health. In the workplace, bullying, sexual harassment, excessive work demands or an unwarranted disciplinary process are often triggers. Can it still be considered exceptional for a robust employee to become ill, especially when their livelihood, reputation and future employment prospects are threatened as the result of unfair treatment at work?

The Court of Appeal’s approach indicates a denial of the extent to which many employees are susceptible to mental ill health, including those who have no prior history of illness.

Until members of the senior judiciary transform their perspective as to how commonly mental health issues occur and how easily they are triggered, many deserving employees will be left without an effective remedy.

This feature, written by one of our Employment partners Howard Hymanson, first appeared in The Times on 29 November 2018, which you can read here (£).

Howard was also quoted in HR magazine on employers’ duty of care, which you can read here.

Increases to National Minimum Wage and National Living Wage

As of 1 April 2019, new rates for the National Minimum Wage and National Living Wage will take effect.

The National Minimum Wage (NMW) applies to workers under 25 and the National Living Wage (NLW) applies to workers aged 25 and over.

You can read the article in full here.

Extra protection for employees on maternity leave

The Department for Business, Energy and Industrial Strategy (BEIS) announced a consultation on 25 January 2019 aimed at extending the protection afforded to women in relation to maternity leave and redundancy.

Specifically, the Government wishes to seek views on a proposal that the current protection against redundancy for women on maternity leave be extended so that it applies for six months following the date of return to work.

At present, there is a level of enhanced protection from dismissal for redundancy for women who are absent on maternity leave which takes the form of an obligation on the part of the employer to offer any suitable alternative vacancy it may have to a woman whose job becomes redundant while she is on maternity leave. This has the effect of allowing the woman to ‘queue jump’ other possible candidates for a vacancy during a redundancy exercise. The protection ceases as soon as the woman returns to work.

The Government is now considering extending the period in which maternity leavers are protected, for a period of six months after return from maternity leave. BEIS also seeks views on whether this protection should also apply to those who take time off for adoption or shared parental leave.

Impact

Publication of earning levels in recent years under ‘gender pay gap’ legislation continues to show that the most highly paid roles are more commonly held by men than women. Such statistics cannot show whether this reflects genuine choices made by women in terms of their work/life balance during the years when the children are young, or whether other factors are at play, including women being dismissed from their jobs when they take maternity leave, under the guise of redundancy.

Reorganisation of roles while an individual is on maternity leave or at the point of return is not unusual, and while this may reflect changes that the business needs which occur during the period of leave, the consultation paper notes that the Women and Equalities Select Committee did find evidence of new mothers being forced out of work when they seek to return.

An additional period of protection might therefore be an effective means of promoting the participation of returning mothers in the workforce.

The consultation is open until 5 April and includes questions relating to the way in which any such right might be enforced, noting that in some European jurisdictions, consent from Government or a public authority is required to dismiss a woman during pregnancy and for a period following birth.

The proposal made is not as draconian as that, suggesting only an extension of the period in which an employee who takes maternity leave has priority for alternative vacancies.

You can see the consultation paper here.

Hermes: better rights for gig economy drivers

Hermes, a major courier company, has entered an agreement with a Trade Union conferring a number of rights upon self-employed individuals.

Hermes has agreed to allow drivers to opt into worker status for its self-employed couriers which ensures that they will receive holiday pay and minimum wage.

It has agreed to pay an hourly rate which is greater than the current national minimum wage.

In addition, the company is effectively guaranteeing a minimum rate of pay if individuals fail to achieve the agreed rate in their earnings which are calculated on the basis of a fee per delivery.

This guarantee sits perhaps uncomfortably with the concept of genuine self-employed status, where one of the legal tests is the bearing of genuine financial risk by the individual, and it will be interesting to see whether HMRC seeks to assert that these ‘workers’ should in fact be paying employees tax and national insurance through the PAYE system, with Hermes making the additional Employers NI contribution of 13.8% of earnings.

The additional burden of employer’s national insurance contributions is thought to be a powerful factor influencing the structures companies use in relation to their workforces.

Hermes notes that many of its workers choose self-employed status because they value the freedom to work when they want, to manage their other commitments in life, such as family responsibilities.

That has no doubt influenced the agreement, but may not be compelling for HMRC purposes, given that there is nothing preventing employers from granting employee status and allowing a high level of flexibility to drivers as to when tasks required are completed.

Workers, unlike employees, do not qualify after two years’ service for protection from unfair dismissal or the right to receive a redundancy payment.

Hermes drivers were found by an Employment Tribunal to have worker status last year and so the company was already at risk of claims for failure to pay for holiday and national minimum wage.

The direction of travel appears to be firmly in favour of gig economy workforces having at least worker rights, but the threat of full employment rights has not gone away, and we can expect further challenges.

Coverage

Yvonne Gallagher, one of our Employment partners, commented on this issue in articles for a couple of publications.

You can read the coverage in full below:

In the press

You might have missed some of our Employment specialists in the media.

Here’s a round-up:

  1. Audit & Risk coverage on mental health (£)
  2. SheerLuxe coverage: Marian Derham on workplace bullying
  3. People Management coverage for Yvonne Gallagher
  4. Coverage for Marian Derham in SheerLuxe on equal pay
  5. HR Review coverage for Yvonne Gallagher
  6. International Bar Association coverage on employee micro-chipping
  7. Taxation coverage on Lorraine Kelly tax tribunal
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