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 , , , , | 7 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.


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 , , , , , , , , | 11 Comments

ACAS early conciliation – first results

Acas has published its first figures on the operation of the early conciliation scheme that came into effect in April this year. The figures they have released cover the period of 6th April 2014 – 30 June 2014 and show that Acas received 17,145 notifications in that period, all but 540 of those coming from the employee rather than the employer.

Acas says that the notifications came in at about 1,000 a week during the run in month of April and that this figure went up to 1,600 once notification became mandatory in May. This is. says Acas ‘in line with the numbers of notificatons we expected to receive’.

The test, of course, is not how many people contact Acas, but whether that contact results in settlements that avoid the need to go to Tribunal. Acas is encouraged that only 7 per cent of employees (1,122) and just 9 per cent of employers (1,483) rejected the offer of conciliation. But of course most parties will want to hear what offer the other side will make before deciding what to do. What matters is how many settlements are reached.

These are still early days, as Acas recognises, but these first figures show that in the period covered, 11,355 cases reached the end of their early conciliation period (usually one month). Of those 1,873 cases ended with a settlement – that is 16.5 per cent.

The next question to answer is a difficult one. Is that a big number? Acas gives no indication of whether a settlement of 16.5 per cent is regarded as encouraging or disappointing. There is obviously still a long way to go before we understand exactly what the impact of early conciliation has been. At this stage, I would make a couple of observations.

Firstly, we have no information about the level of the settlements or how many of the employees had legal advice. There is a concern that potential claimants have not had proper advice about the strength of their claim or the amount that they are likely to receive if successful. Reaching a settlement is good – but not if employees are being rushed into doing a bad deal.  If an employer proposes a settlement agreement that needs to be signed off by the employee’s legal adviser – but there is no such protection in relation to early conciliation and Acas obviously can’t advise the parties on whether a proposed settlement is a good one or not.

Secondly we need to remember that conciliation is not a new service. Acas has always conciliated in individual employment disputes and a high proportion of cases have always been settled in this way. It is not clear what savings – if any – are made by the parties who have settled at the early conciliation stage. Would they have settled anyway, and, if so at what point? Early conciliation is fine if it suits the parties. The controversy in the scheme is that the employee must contact Acas before bringing an ET claim.

I am hugely supportive of the Acas conciliation service as a whole – but remain deeply sceptical about the value of this compulsory early conciliation scheme.  What we have not seen yet are  cases where a dispute arises about time limits or whether an employee’s notification to Acas properly related to the claim that is subsequently brought. When those cases start coming through – and they will – then I think the rule on contacting Acas before bringing an ET claim will be seen as an overly complicated and unnecessary requirement.


Posted in Early conciliation | Tagged , | 5 Comments

Why did Haringey pay Sharon Shoesmith so much?

It is being widely reported that the accounts published by Haringey Council reveal the amount that was paid to Sharon Shoesmith to settle her legal challenge to the decision to sack her back in December 2008 (note to the press: it was not an unfair dismissal claim; it was a judicial review).

I wrote about the case here when the fact of the settlement was first announced. At that time I had no idea what the level of the settlement would be. I thought it might be more than she would have got for an unfair dismissal claim but I completely took it for granted that it was a much lower figure than the £600,000 that had been suggested. Wrong again.

Because surely, that £600,000 was right at the top end of what the court could award? It represented full back pay for the years that had passed since her dismissal. When you settle a case you do so because there is a reasonable chance that the settlement might turn out to be a better deal for you than if you let it go all the way. But I really don’t see how that can be the case here.

Shoesmith’s argument would be that the circumstances of her dismissal rendered her practically unemployable. She lost a six figure salary and cannot recoup her loss by getting another job. She  relied on the case McLaughlin v Governor of the Cayman Islands – a case from the Judicial Committee of the Privy Council (broadly equivalent to a Supreme Court decision, but not technically binding)  in which Lord Bingham said:

“It is a settled principle of law that if a public authority purports to dismiss the holder of a public office in excess of its powers, or in breach of natural justice, or unlawfully (categories which overlap), the dismissal is, as between the public authority and the office-holder, null, void and without legal effect, at any rate once a court of competent jurisdiction so declares or orders. Thus the office-holder remains in office, entitled to the remuneration attaching to such office, so long as he remains ready, willing and able to render the service required of him, until his tenure of office is lawfully brought to an end by resignation or lawful dismissal.”

That approach would indeed suggest full back-pay for Shoesmith, running from her purported dismissal in 2008.  But Haringey had an argument too.  They could have argued that whatever procedure had been followed, the fact was that Shoesmith was unlikely to have remained in post for much longer. The sheer scale of the public outcry would have made her continued employment untenable and on that basis paying her full back-pay would be excessive. The Court of Appeal in giving its judgement accepted that the issue of compensation was not a straightforward. Two of the judges seemed to think that Haringey could have protected its position simply by giving Shoesmith contractual notice. Maurice Kay LJ said:

I am satisfied that the relief to which Ms Shoesmith is entitled should include a formulation which extends to compensation… It seems to me that the outer limits are, at the low end of the scale, a sum equivalent to three months’ salary and pension contributions (reflecting the contractual notice period) and, at the high end of the scale, a McLaughlin-type order. In the last resort, I would remit the case to the Administrative Court for this remaining issue to be resolved.

So this was not a case where the writing was on the wall and it was just a question of Haringey biting the bullet and paying up. There was a genuine issue to try – and the outcome was not a foregone conclusion. Haringey must have thought so too, for a while, because the Court of Appeal decision was given in May 2011 and the deal was not reached until October 2013 – just before the hearing on remedy was due to start. By that time most of the preparation would have been done. Why would Haringey settle at the very top end of the scale just before the hearing?

My assumption was that Shoesmith indicated before the hearing that she would accept far less than a McCloughlin-style order for full back pay and that was why Haringey was prepared to risk the bad press it would receive for reaching a settlement. However, if the press reports about the amount are correct then it seems that it was Haringey that bottled it.

I simply don’t get it.  Having come so far, surely the better option would have been to take a chance on the remedy hearing. It couldn’t have resulted in an award much higher than the amount paid in secret and Haringey would at least have been able to day that they were only paying out the amount ordered by the Court. What’s more, there would have been a reasonable chance that the amount awarded would be considerably less than full back pay.

If I were a resident of Haringey I would want someone to explain to me exactly why they spent two years preparing for a remedies hearing before simply surrendering before kick-off. It does seem like somebody somewhere has blundered.

Posted in Compensation and Remedies | Tagged , , , | 2 Comments

Is obesity a disability?

It probably is – sometimes. It depends, really.

In America it is well established that being obese counts as a disability (actually my only source for this is an episode of the Simpsons, but Matt Groening wouldn’t lie would he?). Here in Europe, however, the jury is still out. The Advocate General has just given his opinion in a case brought by a Mr Kaltoft who claims that he was dismissed from his childminding job because of his obesity. The employer, it should be said, denies this and says it was simply a redundancy, but the Danish court has asked the European Court of Justice to rule on whether obesity is a disability within the meaning of the Equal Treatment Directive.

The AG’s opinion – not binding on the Court – is that obesity can be a disability, but he says:

In my opinion, most probably only WHO class III obesity, that is severe, extreme or morbid obesity, will create limitations, such as problems in mobility, endurance and mood, that amount to a ‘disability’ for the purposes of Directive 2000/78

The opinion has led to a predictable kerfuffle in the press but I actually think the AG opinion is rather conservative. The AG’s suggestion that protection should be limited to class III obesity seems completely arbitrary.  I would go much further. Not only is obesity (of any class) capable of being a disability, but almost any other condition is too.

Defining Disability

The definition of disability in the Equality Act and associated regulations is both technical and prescriptive. Luckily the Government has published this handy 60 page guidance document explaining it. Feel free to browse through it – but I think it is mostly irrelevant now.

Our Equality Act has to be interpreted in a way which complies with the Directive. On this issue we also have to take account of the United Nations Convention on the Rights of Persons with a Disability because that Convention was ratified by the EU in 2010. The Court of Justice explained in a case I will simply call Ring that the Convention is now to be regarded as ‘an integral part of the European Union legal order’. In that case the Court went relied on the Convention in finding that an employee with lumbar pain and another with whiplash could be disabled within the meaning of the Directive.

The Court referred to the Convention because while the Directive does not try to define disability, the Convention does. Article 1 says:

Persons with disabilities include those who have long-term physical, mental, intellectual or sensory impairments which in interaction with various barriers may hinder their full and effective participation in society on an equal basis with others.

This is a much wider definition than we have in the Equality Act. There is no exclusion for addictions, kleptomania or voyeurism (if you’ve missed that part of the UK definition look here). Nor, crucially, is there any need to measure the effect of the condition on ‘day-to-day’ activities which, hitherto, has been central to the UK definition.

Medical v Social Model

Basically, the difference between the Equality Act and the Convention is that our law uses the medical model of disability, which regards the disability as being intrinsic to the individual, whereas the Convention is much closer to the social model of disability which regards disability as arising from the interaction between the individual and society.

The Equality Act essentially asks whether an individual’s condition is serious enough to warrant protection. The Convention asks whether the individual with a particular condition is treated in a way which leads to inequality.

Let’s look at obesity – and assume that we are dealing with someone whose weight can be described as a ‘condition’. Using the traditional UK approach we would ask whether the individual’s ability to carry out normal day to day activities is adversely affected. Can he or she climb the stairs, walk down the street, drive a car, cook a meal? Only if the effect is great enough do we then move on to consider whether there has been any discrimination.

But I think the Convention requires a different approach.   The issue should be whether that person has been prevented from participating in working life (in an employment case) on an equal basis with others. Does the design of the office make it hard for them to get around? Is the pace of work too quick for them to keep up? Are they treated with a lack of respect in the workplace that hinders their participation? The question is no longer just about their condition – it is about they way in which they are treated.

We simply don’t need to divide the population into those who are disabled and those who are not. For those with a given condition, what makes them disabled is the discrimination they suffer. Any condition, on this logic, can be a disability.

This view is already coming through in the UK. In the EAT case of Sobhi v Metropolitan Police an employee with dissociative amnesia (the only symptom of which was that she forgot she had received a police caution for theft) was held to be disabled. The EAT used the Convention to take a staggeringly wide view of what constituted a normal day-to-day activity.

What is a reasonable adjustment?

When I talk about that case to HR managers the response tends to be despairing – “if that was a disability then so is everything”. Well perhaps. But what we should be focusing on is not whether an individual is protected but what that protection means. Most cases are concerned with discrimination ‘arising out of’ disability or with the duty to make reasonable adjustments. In both cases the employer has a chance to explain why it was necessary to do as it did. Just because someone happens to qualify for protection does not mean the employer has to go to ludicrous lengths to continue employing someone who is not capable of doing the job.  The Convention defines a reasonable accommodation as one not imposing ‘a disproportionate or undue burden’ (Art 2) and Recital 17 of the Directive says:

  (17) This Directive does not require the recruitment, promotion, maintenance in employment or training of an individual who is not competent, capable and available to perform the essential functions of the post concerned or to undergo the relevant training, without prejudice to the obligation to provide reasonable accommodation for people with disabilities.

We should be focusing on how employers can help employees do their jobs well and removing unnecessary barriers that get in the way. Doing that should not be dependent on an individual meeting some medical test of whether they are or are not disabled. But nor should an employer put up with a job being done badly.  This is a civil rights issue – it’s not about being nice to someone because they are disabled. .

Judging the limits of reasonableness in a reasonable adjustment will continue to be a difficult issue. But I think it is clear that the Equality Act definition of disability simply doesn’t stand up anymore. We need to scrap it and replace it with something much more in line with the social model used by the UN. If the Government doesn’t act on this, then case law will simply leave the statute behind.


Posted in Disability Discrimination | Tagged | Leave a comment

Exclusivity in zero-hours contracts

There is a general political consensus that something must be done about zero hours contracts. So with some fanfare, the Small Business, Enterprise and Employment Bill published today contains a provision which ‘bans’ the use of exclusivity clauses. In other words an employer engaging workers under a zero-hours contract will not be able to prevent them from doing work for other employers.

At least that’s the theory. In reality there are a number of reasons why the new law will make little, if any, difference.

Defining zero-hours contracts

Firstly, it’s incredibly difficult to define a zero-hours contract. Here is how the proposed new S.27A of the Employment Rights Act tries to do it:

(1)In this section “zero hours contract” means a contract of employment or other worker’s contract under which—

(a)the undertaking to do or perform work or services is an undertaking to do so conditionally on the employer making work or services available to the worker, and

(b)there is no certainty that any such work or services will be made available to the worker.

Well that won’t work will it? What on earth does ‘there is no certainty’ mean? A bit philosophical for the Employment Tribunals, I reckon. And note the lack of any sort of timescale. If I guarantee at least 12 hours a year, but in any given week you might get nothing, is that a zero-hours contract? What if it is certain that some work will be offered at some stage but the probability is that in most weeks there will be no certainty at all?

To be fair I think that BIS realises that you can – to use a hackneyed lawyer’s phrase – ‘drive coach and horses’ through this definition. A new S.27B will give the Secretary of State power to make Regulations effectively plugging the gaps and making provision for a range of other zero-hour type arrangements that don’t quite fall into this definition to be covered.

There really is too much of this in modern employment law. The Government needs to legislate but hasn’t the time or energy to work out the details and so it creates an order-making power.  Essentially the Government is saying ‘We know this definition won’t really work, but we’ll fix it later’.

What does a ‘ban’ amount to?

Another thing they will have to fix later is the actual ban on exclusivity clauses, because as it currently stands the provision is effectively meaningless. Here it is:

(3) Any provision of a zero hours contract which—

(a) prohibits the worker from doing work or performing services under another contract or under any other arrangement, or

(b) prohibits the worker from doing so without the employer’s consent,

is unenforceable against the worker.

What this means (I suppose) is that an employer will not be able to sue a zero-hours worker who has – out of some selfish determination to earn a living – gone off and done some work for somebody else. I’m sure I won’t be the first to point out that they won’t need to.  The clause might be legally unenforceable, but that will hardly matter if a worker can be denied any further work as a result of breaching it and there is nothing in the Bill, so far, which creates a right for a worker not to suffer a detriment for breaching an exclusivity clause.

It is worth noting that the order making power allows the Secretary of State to

make provision for the purpose of securing that zero hours workers, or any description of zero hours workers, are not restricted by any provision or purported provision of their contracts or arrangements with their employers from 
doing any work otherwise than under those contracts or arrangements.

That seems wide enough to allow the unfair dismissal and unlawful detriment rights that any sensible reform will have to include – but why are these not on the face of the Bill?

BIS has published a memorandum on the delegated powers contained in the Bill which says:

439. For example, where evidence shows that employers are seeking to avoid the effect of the primary provisions, by varying zero hours contracts to provide one hour of guaranteed work under a contract, regulations to add such a category of contract would enable this to be addressed. If evidence showed that employers sought to penalise workers as a consequence of taking work for other employers, these powers would allow regulations to confer rights on workers who had suffered detriment in these circumstances.

440. Given that the content of secondary legislation under these powers will depend on further evidence, it is necessary for this power to be delegated in order to allow the Government to respond to that evidence. In particular, the Government is committed to consulting on the use of these delegated powers during the passage of the Bill and will consider carefully the evidence received from stakeholders and interested parties in determining how to exercise these powers

I can’t think of any other area of employment law where the ‘right’ was introduced, but the standard protection for those exercising the right was held back pending actual evidence of abuse.  It simply makes no sense to me.

What Exclusivity Clauses?

Overall, then, I don’t think this new law solves the problem. But then again, I’m not entirely sure that there is a problem to being with. Where are these exclusivity clauses which this Bill seeks to clamp down on? The Department estimates that 125,000 people are restricted by these clauses , but the evidence for that is pretty weak. It is drawn from a CIPD research paper which said:

Six in ten zero-hours workers report they are allowed to work for another employer when their primary employer has no work available. A further 15% say they are able to sometimes. Just 9% say they are never able to work for another employer and a sizeable 17% don’t know.

It is far from clear to me that the respondents to this survey were talking about actual exclusivity clauses, as opposed to an unspoken rule. Also, the the sample size on that issue was under 500 employees. Even if the figures are right, however, it hardly points to exclusivity being the biggest problem  with zero-hours contracts – the one issue that is crying out for Government action.

In reality this provision will be inserted into employment law with little practical effect. It will gather some headlines but do next to nothing to improve the lives of those who are trapped in precarious and low-paid employment. You might argue that it is hardly worth the effort. But here is the politician’s syllogism at work: something has to be done; this is something – therefore we must do it.

Posted in Zero Hours COntracts | Tagged , , , | 4 Comments