Insights Worked up, your monthly employment law lowdown – March 2022

Welcome to Worked Up for March 2022! Given present events, we hope to bring you some light relief in this month’s employment law lowdown.

There is plenty of employment-related news worth talking about. Perhaps most significantly, we can all perhaps start to think of a world free of Covid following the announcement that government restrictions are to be phased out completely in England over the coming months. Kicking this off, from 24 February, those who have tested positive are no longer legally required to self-isolate and workers are now not required to inform their employers of a positive test result. It’s almost hard to believe after the last two years we’ve all had!

In respect of other updates, in this month’s edition we cover the circumstances that may impact fire-and-rehire practices, whether workers have the right to apply and be considered for their hirer’s internal job opportunities, the limitations of whistle-blowing rights in relation to retaining confidential documents post-termination, how much employers may have to pay for taken but unpaid annual leave and the implications with the increasing trend of using video evidence in immigration tribunals.

If you would like to discuss any of the below updates, please do get in touch. Alternatively, if you would like to receive these updates directly to your inbox, please subscribe here.

Smith v Pimlico Plumbers Ltd [2022] EWCA Civ 70

You may remember Pimlico Plumbers from their previous bout in the Supreme Court where they unsuccessfully argued that their plumbers were self-employed independent contractors. Well, to the delight of employment lawyers and HR professionals throughout the UK, they are back driving the employment news sphere again, this time fighting against everyone’s favourite thorny issue, holiday pay.

In what is being heralded as a ‘landmark case’, the Court of Appeal have ruled that their London-based plumber was entitled to compensation for accumulated annual leave. The Claimant, Mr Smith, worked as a plumbing engineer. During his time with Pimlico, Mr Smith took intermittent periods of unpaid leave. The leave was unpaid as, at the time, Pimlico regarded Mr Smith as a self-employed independent contractor who was not entitled to paid annual leave. However, following the Supreme Court decision mentioned earlier, it was held that Mr Smith was in actual fact a worker and therefore (in principle) entitled to 5.6 weeks paid annual leave. Having received confirmation of his worker status from the highest of English courts, Mr Smith then proceeded to seek to enforce his entitlement to paid annual leave.

After being heard in the Employment Tribunal and Employment Appeal Tribunal, Mr Smith’s case eventually reached the Court of Appeal where the court held that there was a “single composite right” to paid annual leave and that a worker could only lose the right to take leave at the end of a leave year where the employer could meet the burden of showing that it “specifically and transparently” gave the worker the opportunity to take paid annual leave, encouraged the worker to take it and informed the worker that the right would be lost at the end of the leave year.

As Pimlico was of the belief that Mr Smith was not a worker (and therefore not entitled to paid annual leave), it had not given Mr Smith the opportunity to take paid leave nor encouraged him to do so, meaning that Pimlico had clearly not discharged this burden. Therefore, Mr Smith’s right to paid annual leave did not lapse and was instead carried over each year until the termination of his contract.

This case is potentially very significant for employers engaging self-employed contractors, particularly where there is any doubt about their employment status. While it is hoped that most contracts accurately reflect the engaged individual’s employment status, where long-standing self-employed contractors are found in reality to be workers, this decision creates the scope for affected individuals to bring significant claims for backdated unpaid holiday.

Back to top

USDAW & others v Tesco Stores Limited QB-2021-000988

The controversial practice of fire-and-rehire has been in the spotlight over the last few years. There have been several high-profile disputes about the practice of terminating and re-engaging staff (which is often used as a way of driving through changes to employment terms), including the case of the USDAW & others v Tesco Stores Limited which was recently heard in the High Court.

An abridged version of the facts are as follows. Between 2007 and 2009, Tesco agreed that employees affected by a substantial distribution relocation restructure would be entitled to “Retained Pay”. This Retained Pay was meant to (i) encourage employees to relocate and (ii) make up the difference between the employee’s existing pay package and the new terms and conditions they would move to at the new distribution sites. At the time, affected employees were told that the Retained Pay would be a “permanent” benefit “for life” and that it “cannot be negotiated away by either Tesco [or] Usdaw”. The entitlement was significant – by way of an example, one employee’s Retained Pay equalled approximately 39% of their wages.

In early 2021, Tesco stated that the Retained Pay had achieved its intended aim and could now be phased out. The supermarket giant offered affected employees two options: (1) to receive the sum of 18 months’ Retained Pay upfront in exchange for the removal of the entitlement (in effect, a buy-out) or (2) to terminate their contracts and re-engage them under new contracts without the Retained Pay entitlement (a fire-and-rehire scenario). Some individual union members refused to agree to this ultimatum and were included as claimants in proceedings brought against Tesco, which were issued in the High Court.

The High Court found in favour of the Claimants and granted an injunction which prevented Tesco from either withdrawing the Retained Pay or from using the fire-and-rehire practice to remove the Retained Pay. The High Court held that a term should be implied into the affected employees’ contracts that had the effect of preventing Tesco from exercising the right to terminate their contracts for the purpose of removing or diminishing the employees’ right to Retained Pay. This term was implied to reflect the permanent status of the Retained Pay that had been agreed. Without this implied term, the word permanent would be superfluous as Tesco could have chosen to engage in the fire-and-rehire practice immediately after agreeing to the “permanent” Retained Pay benefit.

While this decision arguably aligns with the general sentiment expressed by unions, some MPs and the media that employers should not circumvent the requirements for changing contractual terms via fire-and-rehire practices, it is not clear at this stage whether this decision will have a substantial impact on the law in this area. This case itself is very fact-specific and this decision is unlikely to affect cases concerning less significant benefits, though it does provide an apt reminder that employers should tread with care when embarking down the risky fire-and-rehire route.

Back to top

Nissan Motor (GB) Ltd and another v Passi [2021] EWHC 3642 Ch

As many of you are no doubt aware, under English law whistle-blowers are afforded a variety of legal protections to prevent employers from victimising individuals seeking to reveal information of a certain kind by making protected disclosures. Given the many protections afforded to whistle-blowers, the recent decision by the High Court in the case of Nissan v Passi is a useful reminder that whistle-blowers do not have carte-blanche when seeking to deal with any potential detriment related to them blowing the whistle.

In this case, the High Court issued an interim injunction against the Claimant, the former Global General Counsel of Nissan, ordering him to return over 100 sensitive and confidential documents belonging to his former employer. The Claimant had initially taken these documents for the purpose of obtaining legal advice as he lacked confidence that his former employer would comply with its disclosure obligations. The High Court held that the Claimant had “barely a case, if any, for asserting an entitlement [to] possession of the documents or any copies of them” even if the documents were retained for the purpose of seeking legal advice. The Claimant had, in essence, attempted to pre-empt the Respondent’s actions in relation to its disclosure obligations despite not having, at the point that the Claimant obtained and kept these confidential documents, the rights and obligations of disclosure.

Following this decision, employers can now have some degree of confidence that the courts will uphold their ownership rights in confidential information, especially against former employees pursuing proceedings against them. This decision may also provide some comfort to employers seeking to enforce any return and/or destruction of confidential information clauses for whistle-blowers whose employment has been terminated through actual or constructive dismissal.

Back to top

An increasing trend at the Immigration tribunal is the use of video link witness evidence, which has been invaluable during the pandemic to allow hearings to proceed.

This also makes it possible for witnesses to give evidence from abroad. Great, you might think, since immigration appeals are often going to involve parties in other countries and their oral evidence might be very useful to a case. However, it’s not that straightforward as the case of Agbabiaka (evidence from abroad; Nare guidance) [2021] UKUT 00286 (IAC) sets out. This is because, in the words of the Upper Tribunal;  “There is an understanding among Nation States that one State should not seek to exercise the powers of its courts within the territory of another, without having the permission of that other State to do so.  Any breach of that understanding by a court or tribunal in the United Kingdom risks damaging this country’s relationship with other States with which it has diplomatic relations and is, thus, contrary to the public interest.  The potential damage includes harm to the interests of justice.

This means that simply by hearing evidence via video link from a foreign jurisdiction without permission a tribunal risks creating a diplomatic incident. The way to avoid this, the Upper Tribunal held, is for permission from the state in question to be sought before oral evidence can be taken. This will involve the “Taking of Evidence Unit” of the Foreign, Commonwealth and Development Office (FCDO). Naturally there might be a reticence to do this in some cases, perhaps because the issues and the country involved creates sensitivities. It is worth noting therefore that permission is not considered necessary in the case of written evidence, and so a well-crafted witness statement might in some cases suffice. However, if a point is contentious then an inability to cross-examine the witness at the tribunal might adversely affect the weight to be given to their written evidence.

Back to top

In this case, the Court of Appeal considered the scope of the rights conferred on agency workers under regulation 13(1) of the Agency Worker Regulations 2010 (AWR). Specifically, whether the day-one right for agency workers to have access to the hirer’s internal job vacancies extended to an implicit right to apply and be considered for internal vacancies on the same terms as the hirer’s own employees.

In Kocur v Angard, the Claimant worked as an agency worker for Angard Staffing Solutions (a wholly owned subsidiary of Royal Mail) and was provided to the Royal Mail for over 12 weeks. This triggered the Claimant’s rights under AWR, entitling the Claimant to the same basic working and employment terms and conditions as the Royal Mail’s permanent employees. Despite being engaged for the 12-week qualifying period, differences remained between the Claimant’s working conditions and the Claimant brought a claim against the Angard Staffing Solutions and the Royal Mail. Significantly for the appeal to the Employment Appeal Tribunal and, subsequently, the Court of Appeal, this included a claim under regulation 13(1) of the AWR that the Claimant was entitled to apply and be considered for the internal vacancies notified to him.

At appeal, the EAT held that regulation 13(1) of the AWR did not confer the right for agency workers to apply and be considered for internal vacancies on the same terms as employees engaged directly by the hiring company. In its judgment, the EAT held that the regulation 13(1) right was only for the agency worker to be notified of the internal vacancies on the same basis and with the same amount of information as directly recruited employees. The Court of Appeal subsequently dismissed the appeal and agreed that the EAT correctly interpreted Regulation 13 of the AWR. While this decision is not ground-breaking, it does show a willingness by the courts to prioritise employers’ need for flexibility over worker interests in some circumstances and is helpful clarification for employers who regularly engage agency workers interested in applying for internal roles.

Back to top