Employment Relations Update

1. Date www.local.gov.uk
Employment relations update:
employment law
Philip Bundy
Senior Employment Law Adviser
20 April 2018 www.local.gov.uk

2. What will we cover?
• Exit pay reforms in public sector
• Legislative changes
• Case law
• What next?
www.local.gov.uk

3. Public sector exit pay reforms
1. £95k cap on exit payments (includes LGPS
employer pension costs for those 55+)
2. Recovery of exit payments made to those
earning £80k or more and who return to
public sector within 12 months (tapered
payback)
3. Further sub-sector reforms e.g. cap of 15
months’ actual pay, 3 weeks’ per year of
service, pension top-ups restricted
www.local.gov.uk

4. When?
• £95k cap
– Consultation on draft Regs
– Affirmative Parliamentary process
• Recovery of exit payments
– Consultation on further draft Regs
– Affirmative Parliamentary process
• Further reforms were to be in place by end of
June 2017…
www.local.gov.uk

5. Gender pay gap reporting
• Local authorities
• Pay:
• 5.4% median
• 5.1% mean
• Quartiles
• Lowest: 64% women
• Second: 65% women
• Third: 63% women
• Highest: 55% women
www.local.gov.uk

6. Trade Union Act: check off
• ‘Check off’ arrangements in public sector only
permitted if union pays costs of it and
employees given another way to pay (power
to extend it to non-public sector bodies
performing public functions/publicly funded)
• Due to be in force 10 March 2018: now
delayed, but still intend to implement
www.local.gov.uk

7. Trade Union Act: facility time
• Requirement for public sector bodies to
publish trade union official facility time and
cost of that
• Facility time = (1) trade union duties + (2) paid
trade union activities (see Acas guide)
• 1 April – 31 March reporting, starts April 2017
• Information to be published by 31 July
(starting 2018)
www.local.gov.uk

8. Trade Union Act: facility time
• Local authorities have to treat as separate:
– central function
– education function
– fire and rescue function
• What if one of your central function officials
carries out work in education function? Is that
trade union activities as ‘outside employer’?
• Government guidance expected soon
www.local.gov.uk

9. Mencap v Tomlinson-Blake (AB 648)
• Does on call sleeping in time count towards
National Minimum Wage? (AB 648)
• Despite what NMW Regulations say on their
face, and previous Government guidance,
EAT said ‘yes’ it can (decision on appeal)
– Test e.g. is there a statutory requirement to
remain on premises
• Potential for 6 years’ back pay
www.local.gov.uk

10. Mencap v Tomlinson-Blake
• HMRC responsible for enforcement
– Penalties: 200% of amount owed (up to £20k per
worker)
– Naming and shaming
• 1 November 2017, social care compliance
scheme: avoids fines and naming
• Review pay and return compliance form by 31
December 2018, pay workers within 3 months
www.local.gov.uk

11. Dudley MBC v Willetts ors (AB 651)
• Working Time Directive holiday pay should be
based on ‘normal’ pay (AB 651)
• EAT now confirmed that voluntary overtime
pay should be factored into normal pay, where
paid over sufficient period of time
• Consistent with Green Book: holiday pay
based on earnings during period of normal
working, excluding non-regular payments
www.local.gov.uk

12. Villes de Nivelles v Matzak (AB 657)
• Is on-call time away from workplace working
time?
• Mr Matzak volunteer firefighter: contractual
requirement to live within 8 minutes of station
and respond within 8 minutes
• ECJ held requirement to spend on-call time at
home and within 8 minutes amounted to such
a restriction that on-call time was working time
www.local.gov.uk

13. Villes de Nivelles v Matzak
• Remember: this is about working time for
purposes of Working Time Directive
• No impact on pay, but impacts on 48-hour
working week and rest periods/breaks
• 48-hour opt out
• Rest periods can be varied through
workplace/collective agreement, subject to
compensatory rest issues
www.local.gov.uk

14. Sunderland Uni v Drossou (AB 653)
• Week’s pay under ERA 1996 (in this case for
UD compensation)
• Conventional approach: did not include
employer’s pension contributions
• EAT held a week’s pay is remuneration
payable under the contract so can include
employer pension contributions
• LGPS: how do you calculate that figure?
www.local.gov.uk

15. Sunderland Uni v Drossou (AB 653)
• Impact on redundancy
• Will apply to statutory redundancy pay
• What about enhanced redundancy pay? What
does your policy say about a week’s pay?
• Does it link into ERA definition?
• Do you need to specifically exclude employer
pension contributions?
www.local.gov.uk

16. Kostal v Dunkley (AB 655)
• S.145B TURL(C)A 1992:
– Trade union worker has right not to have offer
made which would have the ‘prohibited result’ i.e.
that the worker’s terms and conditions or any of
them will not or no longer be determined by
collective agreement
– Employer’s sole or main purpose in making offers
must be to achieve that prohibited result
– S.145D: to determine sole or main purpose you
must look at certain background issues
www.local.gov.uk

17. Kostal v Dunkley (AB 655)
• Collective pay negotiations stalled
• Employer offered pay rise and Christmas
bonus to cover that year, on individual basis
• Held: breach of s.145B, even though collective
bargaining would continue in long term
• Award: £7600 each (2 x offers of £3800)
• Expect an appeal
• That award is now £4,059 per employee
www.local.gov.uk

18. Capita v Ali (AB 658)
• Male employee, got 2 weeks paid paternity
leave, comparator female gets 14 weeks OMP
• He argued 2 weeks after birth either parent
could care for child and sought enhanced pay
• ET held direct sex discrimination
• EAT held purpose of shared parental leave
different to maternity leave
• Correct comparator a woman on shared
parental leave
www.local.gov.uk

19. What next? Brexit
• What do we know?
– DExEU July 2017 paper
– EU workers’ rights will continue to be available
– ECJ decisions prior to exit will have same
precedent status as Supreme Court decisions
(Supreme Court could overturn, but rarely
happens)
– Subsequent ECJ decisions will have same status
as other foreign judgments

20. What next? Brexit
• Potential areas of reform?
– TUPE: post-transfer changes to terms and
conditions
– Agency Workers Regulations
– Tweaking working time rights: holiday pay and 48-
hour week
• Wider factors
– Gig economy etc

21. What next? Taylor review
• Taylor review looked at
• Status: employer/worker/self employed
• Agency workers: remove Swedish derogation
• Zero-hours contracts: higher rate of pay for
non-guaranteed hours
• Consistency in tax treatment/state benefits
• Improve transparency

22. Taylor review: Government response
• Series of consultations
– Clarity on employee/worker/self employed status
– Improving transparency
– Agency workers
– Enforcement of employment rights
• Immediate plans
– Payslips: specify hours/rates worked, if relevant
– Higher penalties for aggravated breach: £20K

24. QUESTIONS
eru@local.gov.uk
https://www.local.gov.uk/our-
support/workforce-and-hr-
support/employment-relations
www.local.gov.uk