You will be pleased to know that we have resisted the temptation to jump on the bandwagon by trying to shoehorn an employment-law perspective into the unfolding Mossack Fonseca furore, not least since at the time of going to press, it is not entirely clear how the 11 million or so documents came to be liberated from the firm. There is still time, though, and if it turns out that a disgruntled (ex) employee was responsible, we may not be able to contain ourselves…
In the meantime, this month’s roundup:
The Modern Slavery Act 2015 came into force last October. One requirement that it imposes on large commercial organisations is to publish a statement on their websites setting out the steps that they are taking to ensure that slavery and human trafficking is not taking place in their supply chain.
The duty only applies directly to companies with a presence in the UK and a global turnover of at least £36 million a year, but a much wider range of UK employers will form part of the supply chain of such companies and are therefore likely to have to satisfy their customers that they are doing what they can to ensure that slavery and human trafficking is eliminated.
Modern slavery statements must be published in relation to financial years ending from 31 March 2016 onwards, so this is becoming a live issue now. Businesses that provide goods or services to larger businesses – particularly in the retail sector – may want to look carefully at how they manage their own supply chain to ensure compliance with national and international labour standards. Whilst they may not have to publish a statement themselves, they should not ignore the issue as their customers may be asking for information as to compliance.
The introduction of the National Living Wage makes it more important than ever to be clear about what hours must be counted in deciding whether a worker has been paid the correct rate. This is not straightforward. A particular problem concerns workers who are required to live on the employer’s premises to deal with any issues that may arise outside of normal working hours. While the National Minimum Wage Regulations appear to exclude hours where the employee is simply ‘on call’ and is provided with appropriate sleeping accommodation, case law has taken a very narrow view of this exception. As a result, a distinction must be drawn between someone who is available ‘just in case’ he or she is needed and a worker whose very presence on the employer’s premises provides value and therefore be regarded as working even while there are no specific tasks to perform.
This is a fine distinction, but the consequences of getting it wrong can be significant. In The Governing Body of Binfield Church of England Primary School v Roll, Mr Roll was a Site Controller (apparently, this is what caretakers are now called – who knew?) who was required to live in a bungalow on the school’s premises. He worked a 39-hour week with a requirement to perform unpaid overtime outside of normal hours for up to 30 hours per month. In addition he was required to remain on or within easy reach of the school premises at all times. He claimed that he was entitled to be paid at the rate of the National Minimum Wage for all of these hours – including those where he was at home in his bungalow – because his continued presence was an important part of his role. The Tribunal agreed and awarded him £81,532.27 in back pay!
On appeal however, the EAT held that the Tribunal had failed to deal with a number of important considerations. Mr Roll was not required to be physically present at all times – just within easy reach. He could therefore go to the pub or the cinema in the evenings subject to the requirement to keep his mobile phone switched on so that he could respond to emergencies. He could also arrange with his employer to stay away from home on occasional weekends. There was also no statutory obligation on the school to ensure that someone was on the premises at all times and Mr Roll’s contract specified that he was required to work just 39 hours per week plus overtime. It did not require 24 hour working. These were factors that the Tribunal should have specifically considered before deciding whether the minimum wage was payable for the hours when Mr Roll was not actively engaged in his duties.
Employees on maternity leave are entitled to continue to enjoy all their terms and conditions of her employment except those relating to “remuneration”. Benefits in kind must continue to be provided, but pay may be limited to Statutory Maternity Pay (SMP). So does this mean an employer has to continue a salary sacrifice scheme providing childcare vouchers during a woman’s maternity leave?
HMRC’s guidance (which is not legally binding) says yes. However, the Employment Appeal Tribunal has now, in Peninsula Business Services v Donaldson, said no. Peninsula operated a salary-sacrifice scheme under which childcare vouchers could be provided to employees. It was a condition of scheme that employees agreed that entitlement to the vouchers would cease for the duration of any maternity leave taken. Ms Donaldson objected to this provision and claimed that it amounted to pregnancy discrimination and an unlawful detriment.
Her claims were upheld at first instance, but this decision was overturned on appeal. The EAT accepted that the vouchers were not a benefit in kind provided in addition to remuneration but instead represented a diversion of part of her salary which was used to purchase the vouchers on her behalf. She was not therefore entitled to continue to receive the vouchers during maternity leave because they were part of her remuneration. It would have been different if the vouchers were a benefit that was provided independently of the salary earned by the employee.
For the moment, then, the legal position conflicts with HMRC’s guidance.
At the time of going to press we are waiting for the final regulations that will require large employers (those with 250 or more employees) to publish information about their gender pay gap. The information must relate to the amount that employees are being paid on 30 April 2017 – although the information will not need to be published until a year later. The figures will then need to be updated annually – always using 30 April as the key date.
For bonus and commission payments, the published must relate to the 12 months leading up to 30 April 2017 – so the payments made from 30 April 2016 will have to be included. Relevant employers therefore have to start thinking about compliance now.
The Regulations will set out in detail what information is to be presented and how. Note that actual rates of pay will not need to be considered, but statistics as to differences between average hourly rates and bonus amounts will do, along with the proportion of male and female employees receiving bonus pay.
Importantly, however, there is no need for the employer to show how it has arrived at the published figures and no mechanism for challenging their validity, however, a director of the company must sign them off as being accurate. There is also no penalty for non-compliance with the Regulations – although failure to publish gender pay gap information may lead to some adverse publicity. Employees bringing equal pay or discrimination claims may also be able to gain access to the information on which the employer’s published figures are based so it will be sensible to take care to make sure that the figures are basically accurate and fair.