Law Society’s submission on the challenges of the gig economy

The Law Society has suggested that people working in the “gig economy” should be assumed to have access to standard employment rights.

The representative body for solicitors in England and Wales has argued that employers should have to demonstrate why its workers shouldn’t be entitled to rights such as paid holidays and a minimum wage.

The intervention comes after another key ruling earlier this month, in which a Tribunal concluded that a bicycle courier had been wrongly classed as a self-employed freelancer by CitySprint.

The success of the claim, brought by South Londoner Maggie Dewhurst, could set an important precedent for a number of similar cases set to be heard later this year.

The Law Society’s comments were in response to a call for evidence from the Business, Energy and Industrial Strategy Committee on how changing employment models were impacting on Britain’s working practices.

In its submission, the society makes the case that employment status is at present rather sketchily defined and it may be time to reassess whether the legal definitions are fit for purpose.

A spokesman said: “The Law Society does not take a view as to whether this new model of work is a positive or negative development. Our interest is in exploring how employment law can best work in the modern economy.

“One problem with existing law is the separate categories of ’employees’ and ‘workers’, enjoying different levels of rights. The very existence of a separate category of ‘worker’ creates uncertainty. As a result many people have no clear idea of their true legal status.

“This can encourage a business to try to impose a particular status, which is more closely related to what they wish the relationship to be rather than what the relationship is in reality.”

For expert advice on employment rights, please contact the head of our Employment team Susan Bernstein or visit.

Tribunal awards former Phones 4U employees £1.4m in redundancy pay

An Employment Tribunal has awarded £1.4million in redundancy pay to more than 400 ex-Phones 4U staff who were dismissed ‘overnight’ without warning when the firm went bust.

The decision comes more than two years after Phones 4U ceased trading in September 2014, closing more than 500 stores nationwide and making more than 2,500 employees redundant.

According to reports, many of the firm’s former employees were dismissed without warning, despite the fact that an employer has a legal obligation to collectively consult with its employees if it intends to make 20 or more members of staff redundant within a certain time period.

But now, following a long-running legal battle initiated by ex-employees, a Tribunal has ruled that hundreds of abruptly dismissed former members of staff are entitled to £3,712 each.

“We can confirm that more than 400 former employees of Phones 4U Limited have been awarded 90 days’ redundancy pay (Protective Award),” said a spokesperson on behalf of Phones 4U’s administrator.

“The Redundancy Payments service (Government National Insurance fund) will make payment for eight weeks (56 days) at the statutory level of £464 per week.

“Any outstanding difference of balance remaining is treated as an unsecured claim as part of the administration,” they added.

Pay gap between permanent and zero-hours contracts could be as high as 9.5 per cent

A new study suggests that workers on controversial zero-hours contracts could be facing a “pay penalty” of almost ten per cent.

The research, which comes from the Resolution Foundation, suggests that the average person on such a contract is earning approximately £1,000 a year less than the average permanent employee.

Resolution says that this equates to a “pay penalty” of 93p an hour, or 6.6 per cent. But in some cases, those who earn the very least could be facing a “penalty” of as much as 9.5 per cent.

Laura Gardiner, senior policy analyst at the Resolution Foundation, said that the “pay penalty” was “a big price to pay for work that too often lacks the security workers desire”.

She said: “Zero-hours contracts have hit the headlines in recent months for their widespread use in Sports Direct and JD Sports.

“But concern about the use and abuse of zero-hours contracts goes far wider than a few notorious firms. There is mounting evidence that their use is associated with a holding down of wages”.

A statement from the Resolution Foundation added: “Understanding the reasons behind this pay penalty will be crucial in order to tackle some of the challenges raised by new forms of employment, without jeopardising the success of the UK’s flexible jobs market”.

3.2 million Britons in ‘precarious jobs’ are wrongfully denied employment rights, says study

A new study suggests that as many as 3.2 million Britons are in ‘precarious jobs’ – which sometimes offer no sick pay, holiday pay, redundancy pay or protection from unfair dismissal.

The research comes from the Trades Union Congress (TUC) and suggests that the number of UK workers who are in ‘gig economy’ careers – and are denied basic employment protection as a result – has ballooned in recent years.

TUC said that workers on controversial ‘zero hours contracts’ are earning £3.80 an hour (34 per cent) less than an average employee, while almost half a million gig economy workers have no legal right to sick pay.

‘Casual workers’ are paid 40 per cent less than average employees, and those classed as ‘self-employed’ or ‘independent contractors’ working under companies such as Uber and Deliveroo usually have no rights to paid holiday or the minimum wage, TUC said.

Their study also found that ‘self-employed’ workers now earn 40 per cent less than average employees, up from just 28 per cent a decade ago.

TUC general secretary, Frances O’Grady, said: “Gig economy workers face the double hit of poverty wages and weaker employment rights.

“Insecure work has exploded in the past decade. In far too many cases, the only people who’ve benefited are bad bosses. Sports Direct can’t be the employment model for the 2020s.

“Whether they’re waiting tables or driving for Uber, all workers deserve respect, fair pay and basic protections”.

Earlier this year, a landmark employment case found that two Uber drivers from London should be deemed ‘workers’ as opposed to ‘self-employed’, after a Tribunal ruled that Uber exercised significant control over them, while wrongfully denying them the basic rights which they would be entitled to as ‘workers’.

The ruling has been described as a “monumental victory” for employment rights.

Employers urged to consider health and safety ahead of Christmas

With the festive season upon us, many employers will be hanging up decorations in the office, or even planning workplace parties or games with the hope of spreading some festive cheer. But our team are reminding employers to be wary of health and safety amidst the festivities.

Statistics from the NHS suggest that as many as 80,000 Britons find themselves in hospital due to a ‘Christmas-related incident’ every year – and employers have a certain responsibility in and around the office, even when hanging up Christmas decorations.

According to the Health and Safety Executive, a risk assessment should be carried out prior to hanging up any Christmas decorations in or around a workplace.

In some cases, should an incident occur, insurance brokers may claim that decorations breach health and safety rules – and therefore invalidate insurance. This problem can also arise if electrical decorations such as Christmas or fairy lights have not been PAT tested, as an insurer may not cover damage caused by untested electrical items.

If your business is hosting games or a Christmas party in-house, it is advised to sensibly ensure that decorations, cables and the like are not carelessly placed in corridors or anywhere else which may cause people to trip. Outside of the building, it is also important to take care of any potential ‘slip’ hazards, such as ice or snow.

The entrances to the business premises will need to be properly lit after dark and the employer will need to ensure that they have public liability insurance in place.

If providing alcohol, employers have a responsibility not to allow their staff access to a free bar – and consideration must be taken for some team members who may not drink due to religious or other beliefs.

Employers also need to take into account the fact that some members of staff may not celebrate Christmas and may find certain ‘jokes’ offensive. Any entertainment provided or games played should be appropriate and inoffensive.

Put simply, both employers and employees alike need to remember that the same rules which apply in the workplace also extend to office parties and games.

Financial manager fights discrimination Tribunal

A UK women and financial manager has taken her employer to an employment Tribunal on grounds of discrimination, claiming that she was ‘demoted’ for failing to ‘bow’ to her Korean boss.

Ms Misook McDonald, 43, who works as a financial manager at a UK-branch of Korean electronics company Dongbu Daewoo, told a Tribunal that she was demoted to a secretarial role in the company upon failing to bow to her male boss “at the beginning and end of each working day”.

The Tribunal in Reading, Berkshire, heard that Ms McDonald, who is of British-Korean origin, found that her role was ‘suddenly changed’ to a Human Resources (HR) position after “a better-speaking Korean employee came along” – despite the fact that Ms McDonald had no previous experience in this field.

“I was no longer his preferred choice – I am also not considered ‘pure’ as my father is English,” she said.

Ms McDonald added that upon challenging her employer, Ho Seung Yoo, about having to make coffee for other employees as part of her new role, he said: “Isn’t that what female workers should do?”

She added that she was “constantly called into his office and spent several hours of [her] day in his room with the door firmly shut”.

Ms McDonald told a Tribunal that she felt she was a victim of sex, age and racial discrimination.

“Mr Yoo was very angry that I had broken protocol by not bowing to him every morning when I get to work and I do not bow to him when I leave the office at night,” she said.

In opposition, Mr Yoo insisted that Ms McDonald’s annual pay rose by about £10,000 to £35,000 a year following her ‘promotion’ to HR.

“The suggestion raised by Mrs McDonald as to me demanding that she bow to me is simply not true,” he added.

He also said that Ms McDonald would make him regular coffees as an act of goodwill without being asked.

“It was quite strange to me. However, I just accepted it,” he said.

The Tribunal continues.

Employment Tribunal awards officer more than £400,000

A police firearms officer is to receive a six-figure payout after successfully taking a race discrimination claim to Tribunal.

Nadeem Saddique will receive £457,664 following a two-day remedy hearing, which concluded earlier this week.

Last year, a Judge had ruled that PC Saddique had been victimised by both senior officers and colleagues at Cleveland Police.

During previous proceedings, the 45-year-old officer – who had formerly been tasked with protecting VIPs – had encountered “a culture of bullying and discrimination” in the firearms department.

The Tribunal had heard claims that one colleague had an English Defence League (EDL) sticker on the holster of his weapon.

PC Saddique – the only Asian member of the team – had also felt that he had been unfairly removed from VIP duties.

At the remedy hearing, it had been suggested that there was an “old guard” in professional standards who failed to take race discrimination seriously and this attitude had led to those who complained being branded “liars” or “money grabbers.”

Cleveland Police had insisted the force had learned lessons and was making “comprehensive efforts” to tackle inequality and improve diversity.

Doctors have ruled that PC Saddique is unable to return to work with the police and after signing off work in 2014 he has experienced insomnia and problems eating.

Speaking after the hearing, he said: “This has been a lengthy and extremely difficult process, which has taken a serious toll on my health and my family.”

“I never wanted it to go as far as a Tribunal, but after experiencing problems with discrimination for a number of years within the force and exhausting all avenues internally without success, I had to do something.”

For further information about this update please contact Susan Bernstein, Partner in our Employment team, on 020 8349 0321 or by email.

Gender discrimination fears prevent young women from pursuing certain careers, says study

A new study has suggested that young women in the UK feel deterred from working in the property, building and construction industries, because they fear that gender discrimination would hold them back in their careers.

The research, carried out by the Royal Institution of Chartered Surveyors (RICS) in collaboration with YouGov, suggested that two in five women between the ages of 13 and 22 thought that they would experience gender discrimination if they pursued a career path in either of the three sectors. The same number agreed that they thought such discrimination would hold them back from advancing their careers.

Furthermore, almost a third of young women added they thought the property, building and construction industries were openly ‘sexist’ and male-dominated.

One in ten young men who were quizzed worryingly agreed, while one in five young women said that they would not consider working for a company unless it appeared to be ‘gender diverse’.

Sean Tompkins, RICS chief executive, said: “This country is suffering from a crippling skills shortage in these sectors. We need to encourage young people to enter the sector, and we need to show them that we are as diverse as the clients we work with.

“This survey reveals that the construction and property industries are still suffering from a reputational image crisis.

“We need to do more to encourage young women into these key sectors and smash the clear perception of a glass ceiling.

“Quite frankly, we need more radical action,” he added.

Crucial Tribunal finds in favour of Uber workers

A landmark employment case has been settled in favour of Uber drivers, with a Tribunal ruling that they should be classed as workers rather than self-employed.

The decision follows a hearing in July, in which two members of the workforce argued that the company exercised significant control over them, while denying them the basic rights which they would be entitled to as workers.

Today’s ruling means that the drivers will have access to a raft of employment rights, including holiday pay and paid rest breaks and could open up the firm to thousands of similar claims.

The outcome could also have significant implications for many other companies which have operated similar business models, including the food delivery firm Deliveroo.

Speaking after the ruling, officials from the GMB trade union, which had supported workers in their case against Uber, welcomed the decision.

Maria Ludkin, GMB’s legal director, said: “This is a monumental victory that will have a hugely positive impact on over 30,000 drivers in London and across England and Wales and for thousands more in other industries where bogus self-employment is rife.”

The taxi-app giant, which had argued its working arrangements had given drivers greater flexibility, has already confirmed that it will appeal against the Tribunal’s ruling.

Jo Bertram, Uber’s UK manager, said: “Tens of thousands of people in London drive with Uber precisely because they want to be self-employed and their own boss.

“The overwhelming majority of drivers who use the Uber app want to keep the freedom and flexibility of being able to drive when and where they want. While the decision of this preliminary hearing only affects two people, we will be appealing it.”

For further information about this update please contact Susan Bernstein, Partner in our Employment team, on 020 8349 0321 or by email.

Christian bakers lose appeal against discrimination ruling

A bakery previously found guilty of discrimination over its refusal to produce a cake supporting gay marriage has failed in its bid to have the ruling overturned.

Ashers Bakery, based in Belfast, Northern Ireland, had declined to make a cake carrying the slogan “Support Gay Marriage”, which has been requested ahead of the International Day Against Homophobia two years ago.

The family-run firm, which is owned by devout Christians, argued that the message was contrary to their religious beliefs.

Last spring, a Judge ruled that the bakery had discriminated against customer Gareth Lee, who placed the order, on the grounds of sexual orientation.

The Court of Appeal this week upheld the decision.

Sir Declan Morgan, one of three senior Judges who presided over the case, said that the legislation could not be altered for the benefit of one specific religious or political group.

“The fact that a baker provides a cake for a particular team or portrays witches on a Halloween cake does not indicate any support for either,” he added.

Mr Lee, who was supported by the Equality Commission for Northern Ireland, said at the conclusion of proceedings that he was “relieved and very grateful”.

Baker Daniel McArthur, who runs Ashers along with his wife Amy, said: “This ruling undermines democratic freedom, religious freedom and freedom of speech.”

The couple now plan to appeal again, this time taking the case to the Supreme Court.

For further information about this update please contact Susan Bernstein, Partner in our Employment team, on 020 8349 0321 or by email.