We shouldn’t scrap race discrimination laws

This is all the fault of Daniel Barnett. He rather mischievously pointed me in the direction of this article in Spiked – the online magazine that likes to think of itself as punchy and edgy. It was written by a barrister – Jon Holbrook – and it is quite possibly the most wrong-headed thing I have ever read. I am almost literally fuming at how wrong it is. And ignoring the shouts of ‘leave it Darren, it’s not worth it’ I would like to explain what is wrong about it because I think that will make me feel better.

Holbrook begins by noting that the British political establishment came down on Nigel Farage like a ton of bricks when he appeared to suggest that workplace race discrimination laws should be abolished. He proposes to develop the debate ‘that Farage tried to start’. What follows is an argument to the effect that race discrimination law stops employers from recruiting and promoting on merit and requires them to lower their standards to admit more black and minority ethnic candidates. Yes really.

First of all, in response to Sadiq Khan who had made a point about the racism his parents suffered Holbrook says:

The reality, of course, is that attitudes towards race have changed beyond recognition since Khan’s parents arrived in the UK. Racism, as the denial of equality of opportunity, is now a thing of the past. Khan’s inability to use a contemporary example of workplace racism was testament to that fact.

I mean. Really? If this was all Holbrook had said I wouldn’t have bothered replying. There are many better qualified than me to talk about the reality of racism today.  I would just suggest, however, that the fact that Sadiq Khan’s article referred more to past than to present race discrimination doesn’t mean there aren’t any current examples that could be referred to. Try Googling the phrase ‘race discrimination claim upheld‘.  Discrimination may not be as overt as it once was, but it has not gone away.

But even if it were true that there was no longer any workplace discrimination, I don’t see that that amounts to an argument for abolishing discrimination law. Developments in security procedures mean that bank robberies are largely a thing of the past, but no-one suggests legalising them.

Direct discrimination – all but disappeared?

The main point I wanted to pick up on however, is what Holbrook says next. Brace yourselves.

In recent years, direct discrimination claims in the workplace have all but disappeared in favour of claims described by the law as indirect discrimination claims.

My reaction to reading this sentence is difficult to describe. Imagine walking across a bridge over the M25 with a friend who turns to you and – shouting to be heard over the noise of the traffic  – says ‘of course in recent years, cars have all but disappeared in favour of bicycles’. When it became clear that he wasn’t being ironic you might seriously worry about his grip on reality.

Quite where Holbrook gets the impression that race discrimination cases are mainly about indirect discrimination is a complete mystery. I would love to know how he arrived at this idea and perhaps he’ll comment on this post explaining his methodology. But anyone with experience of discrimination law – and I suspect that Holbrook does not belong in this category – can tell you that most race discrimination cases are either about harassment or victimisation or straightforward less favourable treatment on the grounds of race. Indirect race discrimination cases are positively unusual.

In researching his article Holbrook obviously decided to read a case and came upon the EAT decision in Essop & Ors v Home Office which is about indirect race discrimination. Perhaps like an alien landing in the desert who assumes that the world is made of sand, he assumed that Essop is typical of race discrimination claims.

Essop is not typical, but it is a neat illustration of how indirect discrimination works. In Essop the pass rate in a test used by the Home Office was shown to be lower among BME/older  employees than for younger/non-BME employees. The difference is not set out in the case but it was agreed to be statistically significant. The EAT allowed the claim to proceed despite the fact that the reason for the lower pass rate – both among the disadvantaged group as whole and the individual claimants was not known. Langstaffe J held that it was enough that the process could be shown to disadvantage a particular racial group. Holbrook says:

In truth, cases of indirect discrimination, of which the Essop case is a good example, never establish racism. Essop was not prevented by his race from becoming a higher-executive officer in the civil service; all he had to do was pass the same exam, which was not racially biased, as everyone else. Indirect discrimination claims succeed not for a want of equality of opportunity, but for a want of equality of outcome.

Holbrook’s point seems to be that race discrimination is now all about indirect discrimination (it really isn’t, remember) and that indirect discrimination is not ‘proper’ discrimination because it isn’t about racism.  This is an absurdly narrow view. In any event, indirect discrimination is not about equality of outcome; it is about unjustified disadvantage.

In talking about Essop notice that Holbrook asserts that the test ‘was not racially biased’. However, that is not what the case says. The point is that the cause of difference has not been identified. However, the fact that the test clearly puts a racial group at a ‘particular disadvantage’ is not just a statistic. It might indeed be that there is a racial bias hidden somewhere in the structure of the test. It might also be that the difference has its roots in the socio-economic backgrounds of the people taking it or it might be about language.

What about the justification test?

Employers accused of indirect discrimination claims have a defence if they can show that the ‘provision criterion or practice’ at issue is a ‘proportionate means of achieving a legitimate aim’.  The Essop decision was concerned only with the preliminary point about the nature of the disadvantage. The case is then sent back to the Employment Tribunal to consider the issue of justification. Justification is absolutely central to indirect discrimination. You simply cannot talk meaningfully about indirect discrimination without talking about justification.

So, given that most of his article is a critique of indirect discrimination it is bizarre that at no stage does Holbrook refer to the defence of justification. Why not? Perhaps he would like to comment on why he thought the concept was not worth referring to. He obviously knows that there is a defence of justification – some of his phrasing is very careful – but he never actually refers to it directly and explains what it is. Is there any explanation other than a desire to make indirect discrimination sound as unreasonable and oppressive as possible?

Nothing to fear…

Instead of explaining how the law actually works he chooses to describe the effect of the law based on what employers ‘fear’.

In the workplace employers fear they may be castigated by statistics showing they employ a disproportionately low number of BME staff, or a disproportionately low number of BME staff on higher pay grades, or a disproportionately high number of BME staff on lower pay grades. Statistics of this sort (which can be sliced and diced in any number of ways until the disproportionate outcome is discovered) can be enough to leave an employer facing the moral obloquy of a ‘race discrimination’ claim in an Employment Tribunal. 

This is an old trick. Rather than complain about what the law actually is, complain about what people think it is. That way you don’t have to make any effort to understand the subject. Actually Holbrook gives no evidence that employers do fear these things – but the clear implication of his article is that they should. But why? Our law does not require diversity; it requires an absence of discrimination. You can’t actually claim indirect discrimination just by citing statistics. You need to show that there is a ‘provision criterion or practice’  that is causing you a disadvantage and which also causes a particular disadvantage to people who share a protected characteristic with you. Lots of employers will have a disproportionately high number of BME employees in lower grades. How many of them actually get sued as a result?

Spiked likes to think of itself as offering something ‘fresh innovative and irreverent’ but this is just the same sort of ‘political correctness gone mad’ whinge we’ve seen so often in the mainstream media. It seeks to confirm prejudices rather than challenge them. Instead of increasing understanding it spreads misinformation. Readers of Spiked may be forgiven for thinking that because Jon Holbrook is a barrister and was shortlisted for a legal journalism award at last years’ Halsbury Legal Awards then he must know what he is talking about. On the evidence of this article, he doesn’t.

Posted in Indirect discrimination, Race Discrimination | Tagged , , | 7 Comments

Why we should scrap the Equal Pay Act

First of all, apologies for the clickbait title – couldn’t resist it.

Also to anyone thinking “Surely the Equal Pay Act was repealed by the Equality Act and replaced by provisions dealing with ‘Equality of Terms’?” you are of course quite right. Well done. But ‘Equality of Terms’ hasn’t really caught on as a phrase has it?

My point is that the separate provisions dealing with equal pay, besides being deeply obscure and complicated are simply not needed. Why don’t we just scrap them and let the normal law of discrimination take the strain?

If you believe that you are being paid less than a colleague because you are black, or gay, or a Christian, or under 40 or disabled then you can claim direct discrimination and the issue the Tribunal will have to decide is whether you are right or not. If you feel that the pay system operates to the disadvantage of people who share your protected characteristic (other than sex) then you can claim indirect discrimination.

However, if you want to claim sex discrimination in relation to pay then you have to bring an Equal Pay claim. Why?  The only real explanation is historical. The Equal Pay Act was passed in 1970 by a Labour Government. The Conservative Government of 1970 -1974 didn’t choose to bring it into force so it was reenacted in 1975 as a Schedule to the Sex Discrimination Act once Labour was back in power. Initially the key difference was that to win a sex discrimination claim you had to show why you were treated less favourably, whereas to win an equal pay claim you only had to show that you were paid less than a man doing the same job or a job that had been rated as equivalent (equal value claims came along later). The burden then switched to the employer to prove that the difference in pay was genuinely due to a ‘material factor’ which is not the difference in sex.

But 40 years later the difference between the two kinds of claim is less easy to justify. If you succeed in showing that you are employed on equal work with a man in the same employment as you (a surprisingly difficult concept), the employer then just needs to show a factual explanation for the difference in pay. Equal pay does not mean fair pay and the employer does not have to justify the difference, just explain it. In reality an equal pay claim can only succeed if it can be shown that the pay is either directly or indirectly discriminatory on the grounds of sex and that is the key issue on which most claims are decided.

But in that case, why go through all the palaver of an equal pay claim? Why not just skip to the good bit at the end and decide whether the pay system is discriminatory? Think of the effort that would be saved arguing about who is or is not a valid comparator or whether the  comparator was ‘in the same employment’ as the claimant.

Is there a downside? I struggle to think of one. Are there really cases where a claimant would succeed in an equal pay claim, but fail in a claim for direct or indirect sex discrimination? I doubt it. Besides even if there were then a claimant could still rely on the directly effective provisions of the EU Treaty (Article 157) which should sort out any wrinkles.

One argument would be that the gender pay gap should be seen in structural terms, not just as a series of individual acts of discrimination. It’s a fair point, but of course the Equal Pay Act didn’t address the underlying structural problems  either. It wasn’t about eliminating the gender pay gap, it was about outlawing a particular form of discrimination based on sex. In recent years we have seen claims involving thousands of women (and men) at a time, but in reality each one was claiming as an individual victim of direct or indirect sex discrimination.

In a recent article in the New Statesman, Emily Thornberry argues that we need a new Equal Pay Act which deals with the structural nature of equal pay problems, with much more emphasis on equal pay audits and a duty on employers to eliminate gender inequality. The article makes some interesting points – although her suggestion that back pay could be limited for employers who are taking steps to tackle an equal pay problem probably wouldn’t comply with EU law. Those details aside, however, there is an important and interesting debate to be had about the causes of the gender pay gap and what can be done to eliminate it.

If a new law is brought in we need to make sure that it does not just deal in crude averages. There is no point for example in just asking employers to publish the average pay of men and women in their organisation (I’m looking at you Liberal Democrats). You can raise the average pay of women in a local authority, for example, by outsourcing school catering services. Removing a large number of low paid, largely female workers from your payroll can reduce your gender pay gap but you aren’t really striking a blow for equality.

Whatever we do about the governance of pay systems, however, I see no reason why individual cases of discriminatory pay need to be dealt with differently when the discrimination is based on sex rather than race or one of the other protected characteristics. Let’s do something that genuinely simplifies employment law and scrap the Equal Pay Act. Then we can go on to think about what can be done to achieve equal pay.

Posted in Equal pay, Equality Act | Tagged , , , | Leave a comment

Unfair Dismissal: What’s it worth?

I remember the days when the compensation limits for unfair dismissal were nice round numbers. The compensatory award was set by Government as £8,000 (a while ago), £10,000 or £12,000. Then New Labour increased the limit to £50,000 and provided that from then on it should rise in line with inflation. Since then I’ve never been able to remember the limit off the top of my head. In fact I have just had to check that the current limit is £76,574. Back in 2013 a new complication was added with the result that the compensatory award was capped at the level of one year’s gross pay if that was lower than the specified maximum figure.

It’s now that time of year again and the Government has announced that the new maximum from 6 April will be £78, 335 (or one year’s pay if that is lower). The limit on a week’s pay – used in calculating statutory redundancy payments and the unfair dismissal ‘basic award’ – is also increasing from £464 to a princely £475.

Do we care? Those of us who advise employers sometimes succumb to the temptation to talk about the maximum figure as if it represents a typical or likely outcome. That may be good for business but the fact is that for the majority of unfair dismissal claimants the maximum award available is irrelevant. Overall we should pay less attention to the maximum amount that can be awarded for unfair dismissal and pay more attention to how much someone is actually likely to get. That is harder to judge, however, because there are just so many variables in play – only one of which is how much the claimant has lost.

The alternative reality of a Polkey deduction

There are several grounds on which the amount payable can be reduced. If the employee is guilty of misconduct then the Tribunal can make a deduction of up to 100% to reflect his or her contributory fault. Even if the claimant is blameless however, there is still the ‘Polkey deduction’ to consider. This is based on the seminal case of Polkey v AE Dayton Services Ltd which emphasised that unfair dismissal was not an ‘all or nothing’ claim. The compensatory award is based on the amount that is ‘just and equitable’ and the courts have taken the firm view that it is not just and equitable to compensate an employee for an unfair dismissal if the employee would still have been dismissed even if the employer had behaved reasonably. As a result Tribunals must assess the chances that an employee would have been dismissed in any event and apply that figure as a a reduction to the compensatory award.

Polkey deductions can be anything up to the whole value of an award and they make compensation for unfair dismissal very difficult to predict. The Tribunal essentially has to peer into an alternative universe where the employer has behaved reasonably and decide how much longer the employee would have remained employed. The Tribunal might decide that dismissal was inevitable and reduce compensation by 100%, or it might decide that there was a 25% chance of the employee being dismissed anyway and make that deduction. How the Tribunal arrives at the right figure is an art rather than a science – and the Tribunal is only expected to take a broad brush approach. On the same facts a Tribunal might make a Polkey deduction of 25%, 50% or 75% based on what it ‘feels’ would be a likely outcome. As long as it comes up with a plausible sounding explanation for its conclusion, there is really very little way to challenge the figure ultimately arrived at.

The modest reality of unfair dismissal claims

There are no statistics kept of the Polkey deductions made by Tribunals but there is little doubt that they are a major factor in keeping the level of awards in check. The latest figures for 2013-14 show a median unfair dismissal award of just £5,065 – but about a quarter of the awards (447 of them) were actually for less than £2,000. These are claims where the claimant won on the merits, but I’m sure that many would not have bothered to bring the claim at all if they had known how little they would be awarded in compensation. I know everyone says ‘its not about the money’ – but I rather think it should be.

We have to be careful not to place too much reliance on the official statistics. The awards that are recorded are atypical because most cases settle before they get to that stage. So it was very interesting to see some recent research that shed some light on the level of Acas conciliated settlements. The research was actually about whether employers pay up when a case has been settled (it seems that they do – which is nice) but as part of that the researchers recorded the level of settlements they were looking at. The median settlement for unfair dismissal cases (on an admittedly small sample) was just £4,360. We don’t know how those settlements were arrived at. Many will certainly be ‘nuisance’ settlements where the employer would probably have won the case anyway. Nevertheless the modest level of settlements recorded does show that concentrating on the maximum award gives a false impression of how the law of unfair dismissal works in practice.

Anyone who tells their clients about the increase in the maximum award without putting that news in the clear context of what awards are made in practice (you know who you are) is just misleading them. Unless the claimant in question was highly paid, in which case the maximum award may represent just a few months’  worth of loss, the cases in which the statutory maximum actually comes into play are likely to be few and far between.

Posted in Compensation and Remedies, Early conciliation, Uncategorized, Unfair Dismissal | Tagged , , , , | 3 Comments

Docking wages for toilet breaks: the real scandal

In the folk song ‘Drill ye Tarriers Drill’ Big Jim Goff is blown into the air by a workplace explosion and when he queries why his next wage packet is a dollar short he is told ‘you were docked for the time you were up in the sky’. We used to sing that song in primary school, so the issue of unlawful deductions from wages has been on my mind since I was about 7.

The song came to my mind this week when I saw (hat tip to Canter, Levin and Berg) the BBC News story headlined ‘Toilet breaks are a worker’s right, minister tells MPs’. The BBC reported:

Workers have a right to toilet breaks, a UK government minister has confirmed, after a Welsh MP raised the case of a man who had his pay docked.

This intrigued me because nothing in UK employment law gives a specific right for workers to take toilet breaks. I thought it was worth looking up exactly what the Minister said:

This from Hansard 20 November Column 411:

18. Mrs Madeleine Moon (Bridgend) (Lab): What steps he is taking to prevent employers deducting money from staff salaries for toilet breaks. [906152]

The Parliamentary Under-Secretary of State for Business, Innovation and Skills (Jo Swinson): The Government would strongly encourage all employers, as a matter of good management practice, not to make deductions in pay for necessary and unavoidable interruptions to work. Employers who do not pay for toilet breaks may find themselves in breach of the Equality Act 2010 or of individual employment contracts.

Mrs Moon: I thank the Minister for that reply. A young constituent of mine was alerted, having just been sent details of his salary to his mobile phone. He was not told what the deductions were for. When he inquired, he was told they were for toilet breaks. The company tells me it makes ad hoc deductions for breaks away from the work station. Does the Minister agree that this is unacceptable, and if ad hoc deductions are made, they must be detailed and explained?

Jo Swinson: Absolutely: workers have rights to rest breaks, which there is a requirement for under law, and if deductions are made from pay, they have to be very clearly outlined—and if they take somebody below the national minimum wage, the employer could find themselves in breach of that law. I very much encourage the hon. Lady’s constituent to seek advice from the pay and work rights helpline on 0800 917 2368, and I am very happy that she has raised this issue and awareness of it in the House.

So actually the BBC story overstates it. The minister did not say that workers were entitled to toilet breaks, even unpaid ones. She said that employers should be encouraged as a matter of good practice not to make deductions for ‘necessary and unavoidable’ interruptions in work. But that is just good practice – being nice. It is nothing to do with a worker’s rights. However she also made some employment law points that are worth looking at.

1.’Employers who do not pay for toilet breaks may find themselves in breach of the Equality Act 2010…’

Well it’s difficult to see how. I think that we can all get behind the idea that if an employer makes deduction when women take toilet breaks – but not when men do – then that would be discrimination. But I think on balance it is fair to assume that the employer in question makes deductions for toilet breaks for all staff regardless of race sex or any other protected characteristic. The practice cannot therefore be direct discrimination.

Could it be pregnancy discrimination? I don’t think so. Pregnant women may need to urinate more frequently but failing to pay for a toilet break is surely not treating a woman less favourably ‘because of the pregnancy’ or even ‘because of an illness suffered by her as a result of it’ as required by s.18 of the Equality Act.

Indirect discrimination is not available in relation to pregnancy and maternity so the fact that a greater proportion of pregnant workers would be disadvantaged by the policy does not alter things. Nor do I see an indirect discrimination claim in relation to sex. It is true that all pregnant people are women, but most women are not pregnant. Besides, lots of men have an enlarged prostate.

There may be a disability claim of course, but even assuming a worker has a disability leading to bladder problems  I’m not sure the cases support the requirement for paid breaks to be provided. In any event, we are drifting far from the general right to paid toilet breaks here. Basically, I don’t think the Equality Act angle works.

2.‘…or of individual employment contracts’

Well yes. if your contract gives you a right to paid toilet breaks then failing to provide them will be a breach of contract. But what about those employers who are cunning enough not to give a contractual right to paid toilet breaks? It certainly isn’t a contractual term that could be implied.

3 ‘workers have rights to rest breaks, which there is a requirement for under law’

Indeed they do. In any day in which a worker works over six hours he or she is entitled to a 20 minute rest break. This is required by the Working Time Directive and implemented by Regulation 12 of the Working Time Regulations 1998.

Trouble is, the entitlement is to an unpaid rest break. There are no provisions for paid breaks under the Regulations.

4 ‘if [deductions] take somebody below the national minimum wage, the employer could find themselves in breach of that law.’

Perhaps. However, hourly paid workers are not entitled to to paid breaks as long as they are paid the NMW for each hour of actual work. Salaried hours work does not include hours when the worker is ‘absent’ so there might be some leeway for the employer there. It really depends on how near the legal threshold the worker’s basic salary is and whether that is affected by deductions for toilet breaks. In any event this doesn’t amount to a right to paid toilet breaks as such.

5 ‘if deductions are made from pay, they have to be very clearly outlined’

I deal with this point last because it is the best point. The real legal issue in dealing with deductions from pay for taking toilet breaks are the provisions in Part II of the Employment Rights Act dealing with unlawful deductions from wages. The key provision is S.13:

13 Right not to suffer unauthorised deductions.

(1)An employer shall not make a deduction from wages of a worker employed by him unless—
(a)the deduction is required or authorised to be made by virtue of a statutory provision or a relevant provision of the worker’s contract, or
(b)the worker has previously signified in writing his agreement or consent to the making of the deduction.

The question Mrs Moon needs to ask her constituent is whether the deductions from wages are authorised by the contract. Another potential issue is whether the constituent was given an accurate payslip but there is not much point in pushing that issue however as there is no compensation available – just a declaration from the Tribunal.

My Answer

So on balance I would not answer the MP’s question in the same way as the Minister did. Were I advising her, this is the version I would have drafted.

There is no general right to paid toilet breaks under UK employment law. If the hon Lady’s constituent has had deductions made from his wages then the question is whether such deductions are authorised under the contract. If they are properly authorised then the employer is acting lawfully, however unfair that may seem. If they are not, then her constituent would be entitled to recover the amount unlawfully deducted by making a Tribunal claim.

Before making such a claim, however, he must first contact Acas to give them an opportunity to seek to conciliate a settlement. If that process fails (it normally takes 4 weeks) he will be issued with a certificate giving him a reference number that he must quote when making his claim. To recover the sum of £50 deducted from his wages he will have to pay a fee of £160. Should the matter reach a Tribunal he will have to pay a hearing fee of £230. If he succeeds in his claim the Tribunal is likely to order the employer to reimburse him for the £390 he will have spent in fees as well as the £50 he is due.

Should the employer refuse to pay this sum, he will be able to enforce it through the County Court system. A further fee of £50 will be payable and added to the total amount owed by the employer.

It may seem bizarre to the hon Lady that her constituent may need to spend so much to recover so little. All I can say is that the issue of Tribunal fees is the responsibility of the Ministry of Justice.

I’m not sure that the Minister would be happy with that reply.

The real scandal

The reason I wanted to write a (rather long) post on a £50 deduction from the wages of an employee in a call centre is that these employment rights really matter. They are low value in the scheme of things but £50 out of somebody’s salary can be the difference between making ends meet and becoming trapped with a payday loan. Employees in these cases cannot afford to risk £390 to recover £50. The ET fee regime has rendered the provisions on unlawful deductions from wages largely meaningless for the very employees who most needs the law’s protection. That, in my view, is a bigger scandal than the deductions themselves.

Posted in Wages | Tagged , , , , , | 16 Comments

New figures on Acas early conciliation

As we all try to assess the continuing impact of the Employment Tribunal fee regime – see the Hard Labour Blog for some excellent analysis of that – Acas have published the latest figures on their early conciliation scheme.

Acas have always offered conciliation in Employment Tribunal cases and a very good service it is too. However since May this year, potential claimants have been forced to contact Acas before even initiating a claim. Attempts at conciliation are then made which lead either to a binding settlement (called a COT3) or to the potential claimant being given a certificate which allows him or her to take the claim on to an Employment Tribunal.

Acas is doing its best to sound pleased by the latest figures which show them being contacted just over 37,000 times in the first six months of the scheme being operational. Acas notes that very few parties refuse to participate in the process, but then report that in between April and June just 18% of the contacts made result in a COT3 settlement. In other words, in the first three months of the scheme (we aren’t given the six month figure), early conciliation has removed just 3046 claims from the system.

I’m not too surprised by that. If I were an employer I would be unlikely to settle a case without seeing the claim put in writing so that I can properly assess the likely outcome and then seeing if the employee is able or keen enough to pursue it by paying the ET fee.

A majority of claims do not proceed

What is particularly interesting about these figures is that Acas is reporting what proportion of the contacts made between April and June this year went on to become Employment Tribunal claims by the end of October.  A total of 4,198 claims went on to the Tribunal – 28 per cent of the total contacts made. However, 9,918 of the cases did not progress to a Tribunal claim. That is 58 per cent of the total claims notified in that period.

That is not a healthy figure. It suggests that a clear majority of those who contact Acas because they think they have a claim against their employer that is worth pursuing do not, in the end, pursue it.

Now it may be that those cases were doomed to fail in any event. Perhaps after discussing the case with Acas or hearing the employer’s response to their claim, those individuals realised that they were going to lose in the Tribunal and decided not to proceed. If that is what is happening then that is a good thing. But if that really is the explanation then we will inevitably see a marked increase in the success rate of the claims that are brought before the Tribunal. If the weak cases are being weeded out by early conciliation then it follows that it is the stronger cases that remain.

I very much doubt that future ET statistics will show that happening. To believe that the claims that are not progressing to Tribunal are mainly weak cases that should never have been brought in the first place you have to really want that to be true. Common sense tells us that the dramatic fall in cases that we have seen over the past year cannot possibly be explained merely by employees realising that they don’t have a valid claim. The fee regime is protecting employers who behave unfairly, discriminate against employees, or who fail to pay them what they are owed.

Our employment law system is broken – and these new figures from Acas  support that view.

 

NB: first version of this post referred to 3046 COT3 settlements in the first six months of the scheme when the figure only refers to the first quarter. Thanks to Richard Dunstan (Wonkypolicywonk) for spotting the error.

Posted in Early conciliation | 4 Comments

The Great Northern Ireland Bake-off

The Equality Commission of Northern Ireland is threatening to take action against a bakery that refused to bake a Sesame Street themed cake with a pro-gay marriage slogan. This has the potential to turn into one of those conscience v equality debates that are always so uplifting and productive and a catholic priest has already threatened to disengage from groups representing the gay community unless they acknowledge the bakery’s right to freedom of expression.

This is the sort of story where your initial reaction can be conditioned by your political / religious / philosophical standpoint. I want to get away from that and take as objective a look as possible  at whether what has happened can actually be discrimination.

So at the outset I should say that I am very much in favour of equal marriage. I have no religious affiliation, but I am a big fan of Sesame street and I think that Bert and Ernie make a lovely couple. I know the programme’s makers have rubbished the idea that they have any sort of sexual relationship, and it seems to me that Ernie is more interested in his rubber duckie than Bert = but I for one would be delighted if they decided to tie the knot.

So in the argument between a bakery and  customer over the decorating a a cake so that it has a pro-gay marriage message, all my natural sympathies are with the customer. But that does not mean that what the bakery did was illegal. The Equality Commission for Northern Ireland however seem convinced that it is – so lets try to pick that apart.

Is it discriminatory for the bakery to refuse to make this cake?

If a baker refuses to bake a cake for a gay customer then of course that is direct discrimination on the grounds of sexual orientation – but I don’t see any suggestion of that here. The baker would refuse to bake this cake whatever the sexual orientation of the customer. The more subtle question is whether the refusal to bake the cake can still be seen as being on the ‘grounds of’ sexual orientation in some wider sense. But how can it be? The baker’s objection is to the decoration of the cake and the decoration is not specifically about sexual orientation. An objection to gay marriage is not in itself an objection to sexual orientation. I just don’t see how refusing to bake this cake in the circumstances described can amount to direct discrimination on the grounds of sexual orientation.

For completeness we should also consider indirect discrimination. But I really think this isn’t an indirect discrimination sort of case. Nevertheless suppose we say that the baker is applying a “provision criterion or practice” of refusing to make cakes promoting gay marriage. Does that cause a particular disadvantage to gay people? Unfortunately I have no statistical data on how many gay people are in the market for cakes decorated with a pro-gay marriage design. I suspect that even among the more politically active sections of the gay community are not greatly disadvantaged by having a limited choice of baker when they want to order cakes decorated in this way.

Even if you could show the requisite disadvantage there would then be the question of justification. Does the baker have a legitimate aim in not baking the cake? I think being true to their religious principles probably fits the bill. As for proportionality we weight the discriminatory impact against the needs of the baker to achieve that aim. I think the fact that they were able to get the cake from a different baker helps show that the disadvantage was not that great. I would think the justification argument would stand a good chance.

Political belief in Northern Ireland

That covers sexual orientation discrimination – but we must also consider discrimination based on political belief. In Northern Ireland this is covered by the Fair Employment and Treatment Order from 1998. Note that this covers religious belief and political belief – we do not have to worry about whether a belief is ‘philosophical’ as we do in GB.

Support for gay marriage is certainly a political opinion, but the baker’s refusal to make the cake was not on the grounds of the political opinion of the customer or any other person. The baker simply refused to make a product that expressed a political opinion he strongly disagreed with.  Is that enough? I generally only argue human rights as a last resort, but surely there is a freedom of expression point here?

This is not like the Bull v Hall  cases where hotel owners refused to allow gay couples to occupy rooms available to the public at large.  In this case a business owner is simply refusing to make a particular product that he finds distasteful. Surely he must be allowed to do that?

I accept of course that we need to bear in mind the different context applying to political belief in Northern Ireland. I don’t hold myself out as an expert on the Fair Employment and Treatment regime, so I pose the following question quite genuinely – could a printer from a nationalist background refuse to print union jack posters with the slogan “God Save the Queen”? If anyone knows whether this sort of issue has been dealt with by previous case law in Northern Ireland, I’d be really interested to hear about it.

If the issue of whether you can force a service provider to produce something conflicting with its religious beliefs hasn’t been dealt with before, then I’m not sure that the Bert and Ernie cake is quite the test case I would go for.

Not every bad thing has to be unlawful

On the whole however, I think that any legal action against the bakery faces some serious obstacles. So why is the Equality Commission for Northern Ireland coming on so strong? It seems they have written a detailed letter to the bakery setting out the basis for their claim. I have not seen that – though I would certainly like to.

I do not dismiss any discrimination lightly. I imagine that it was very upsetting for these customers to have been turned away when they tried to get their cake made. I am on their side and strongly disagree with the decision the baker took. But just because I think the baker was wrong does not mean that what they did amounted to discrimination. On balance I think I would advise the Commission to let this one go.

This post was brought to you today by the letters N and I – and by the number 2.

Posted in Fair Employment, Religion in the workplace, Sexual Orientation | Tagged , , , , | 6 Comments

Why holiday pay has to include overtime

What has struck me most about some of the commentary on the EAT decision in Bear Scotland Ltd v Fulton (and other cases) on overtime and holiday pay has been the way in which it is assumed that the exclusion of overtime from holiday pay is perfectly natural and logical and its inclusion is a surprising and strange requirement imposed by Europe. Take this comment from Adam Marshall of the British Chambers of Commerce, as quoted in the Telegraph:

“This expanded definition of ‘pay’ is so ludicrous that the government itself has argued against it. No business should have to pay more than base salary during holiday periods, unless they elect to do so,”

Or look at what the Independent quotes John Cridland of the CBI as saying:

“This is a real blow to UK businesses now facing the prospect of punitive costs possibly running into billions of pounds – not all will survive, which could mean significant job losses.”

Punitive? As in ‘inflicted or intended as punishment’? Really?

The truth is that it is the exclusion of overtime that is difficult to justify rather than its inclusion. The problem has been caused by the way in which the Working Time Regulations adopted a definition of a ‘week’s pay’ that was never designed to be used in this context.

Government lawyers do not like reinventing the wheel. So when faced with having to include a right to paid annual leave in the Working Time Regulations 1998 they were happy to use the existing definition of a week’s pay set out in the Employment Rights Act 1996.  For those who haven’t already had to – have a go at actually reading those provisions. The meaning doesn’t exactly leap out at you does it? The drafting is hardly a model of simplicity and clarity.

‘Week’s pay’ – a potted history

This definition has been through the mill a few times. The current version is derived from the Employment Protection (Consolidation) Act 1978, which in turn took it from the Employment Protection Act 1975 (schedule 4 for the enthusiasts amongst you). However it has its origins in the Contracts of Employment Act 1963, which first introduced a right to a minimum period of notice. Schedule 2 of the Act provided that an employee was entitled to be paid during the notice period if he or she was off sick, not provided with work or absent on contractual leave.

The schedule divided employees up into those with and those without ‘normal working hours’. Those without were entitled to be paid based on a 12 week average and those with normal working hours were paid the amount they would have received had they worked those hours (with another averaging provision for piece workers). That is pretty much the same method of calculation we find in the Employment Rights Act today

Paragraph 1 of the schedule  specified that those who earned overtime pay when employed for more than a fixed number of hours in a week were to be treated as having normal working hours. It then provided that those normal hours should be taken as excluding hours of overtime unless they were actually part of the minimum number of hours the employee was required to work. The effect of that was to ensure that an employee who had been dismissed or had resigned  – and was in his or her period of minimum statutory notice – would only be paid basic pay, excluding overtime, in any week when he or she was not offered work, was absent, or was taking contractual leave.

Paragraph 1 is now to be found, with only minor amendments, in s.234 of the Employment Rights Act 1996. When the Government used the existing definition of a week’s pay when implementing the Working Time Regulations, therefore, it also incorporated this provision, designed to be used only as the employment relationship was ending.

The exclusion of overtime when calculating holiday pay is therefore based on an archaic definition of a week’s pay which was intended to apply to a completely different set of circumstances more than half a century ago. While it makes perfect sense to limit the pay of an employee who has already been given notice and is not working, it makes very little sense to apply the same limitation to holiday pay while the relationship is alive and ongoing.

No point acting all surprised about it

But even if you don’t accept that, it is the Government’s job to implement directives properly and the need to amend the law has been apparent since the Williams v British Airways decision in 2011. In fact we can probably say that the need to reexamine the definition of a week’s pay was made clear by the ECJ in the Robinson Steele case back in 2006 where the court said:

49. The holiday pay required by Article 7(1) of the directive is intended to enable the worker actually to take the leave to which he is entitled.

50 The term ‘paid annual leave’ in that provision means that, for the duration of annual leave within the meaning of the directive, remuneration must be maintained. In other words, workers must receive their normal remuneration for that period of rest.

By any sensible definition, if an employee normally receives basic pay plus overtime then his or her normal remuneration  must include overtime.  As Mr Justice Langstaff says in the Bear Scotland case:

44. Despite the subtlety of many of the arguments, the essential points seem relatively simple to me. “Normal Pay” is that which is normally received.

Quite.

So there is nothing ludicrous in the EAT deciding that overtime needs to be included in the calculation of holiday pay. Employers should instead be grateful that the EAT found such a creative way to prevent employees who have been underpaid in terms of holiday pay for the past 16 years from claiming back pay (that’s a whole other article). What would be ludicrous however would be to leave the current definition of a week’s pay in place and just expect employers to read up on the case law.

Vince Cable, it seems, has set up a task force to look at how to limit the impact of the decision. There isn’t much that can be done to be honest. I know hardly anyone who thinks that the EAT was actually wrong in the way in which it interpreted the directive and an appeal on that point is highly unlikely to succeed. Short of renouncing the Working Time Directive and leaving the EU altogether (that’s an issue for next year) we are stuck with including overtime in holiday pay. What the task force can usefully do, however, is look at a new definition of a week’s pay that can be clearly understood and which complies with the directive. How hard can that be?

 

 

Posted in EU law, Working Time and Annual leave | Tagged , , , , , , , , | 10 Comments