EmpLaw Newsletter January 2024

A guide to the different types of seasonal workers and their rights

During demanding times, many companies need to bring in temporary staff members to help take on the additional work.  Seasonal workers can provide an effective short-term solution, however, it is important that you do not neglect their rights.

There are different ways in which businesses attempt to plug labour shortages; all come with their own pros and cons.

Some businesses opt to engage fixed-term workers. Fixed-term workers are generally employees. They have a right to be treated as favourably as the permanent employees. They also have day one rights in relation to discrimination under Equality Act 2010. They should receive a written contract of employment which sets out the fixed-term period of employment. Consideration should be given to including a clause which allows the business to terminate the employment earlier than the end of the fixed term. This would allow the business to work flexibly if demand is not as high as anticipated, or if there are issues with an employee’s performance.

Another option is to engage agency workers. Agency workers have no direct contractual relationship with the business. The business will use an agency to provide it with workers. The Agency Workers Regulations 2010 apply to agency workers who are assigned to do temporary work for hirers through temporary work agencies. The workers have day one rights – the business must allow access to collective facilities and amenities and provide access to information about job vacancies from the first day of their assignment. Under the Agency Workers Regulations 2010, when an agency worker has undertaken the same role, whether on one or more assignments, with the same hirer for 12 continuous calendar weeks, they are entitled to the same rights as someone employed directly.

A third option is to engage zero hours workers. These workers would be engaged by the business directly on an ‘as and when required’ basis. They would have day one rights in relation to discrimination and would also have an entitlement to paid holiday. This form of engagement works best where the business is not sure of the level of additional labour required. The downside is that zero hours workers have the right to refuse work offered. So, if you have insufficient numbers on your books, you may not have sufficient labour in place to support a sudden increase in demand.

Definition of disability – Williams v Newport City Council

The Employment Appeal Tribunal recently looked in detail at the definition of disability under Equality Act 2010 and, in particular, what should be regarded as ‘day to day activities’ when considering whether a Claimant’s impairment has a substantial adverse impact on day to day activities.

In the case of Williams v Newport City Council, the Claimant was employed as a social worker. The Respondent made changes to her job role and introduced a requirement that she attend court if necessary. She went off-work sick with stress - triggered by the introduction of this requirement (she had previously had a bad experience in court). The Claimant’s GP provided an opinion that the Claimant was likely to make a full recovery as long as she was not required to make court appearances. She was dismissed for capability and claimed unfair dismissal and disability discrimination. Her disability discrimination claims initially failed, as the tribunal held that she was not a disabled person. The tribunal found that her condition did not have a substantial long-term adverse impact on her ability to carry-out day to day activities because the only activity it impacted, on a long-term basis, was attending at court. The tribunal ‘did not consider that that was in any sense a day–to–day activity’.

The EAT overturned this decision. The tribunal had found that the Claimant’s anxiety meant that she could not return to her job at all until the requirement to attend court was removed.  The tribunal, having made these findings of fact, could only properly have concluded that the impairment also had a substantial adverse effect on her ability to carry out normal day-to-day activities – it was preventing her from going to work at all. The EAT substituted a finding that the Claimant was a disabled person.

This case should now be looked at in light of the changes to the guidance on the definition of disability contained in the Equality Act 2010 (Amendment) Regulations 2023. The Regulations state that a person’s ability to participate fully and effectively in working life on an equal basis with other workers is relevant when looking at ‘day-to-day activities’.

Occupational requirements must be applied proportionately to avoid liability for discrimination

Paragraph 1 to schedule 9 of the Equality Act 2010 sets out the general occupational requirement exception, which applies to direct discrimination claims. There will be no liability for direct discrimination where holding a particular protected characteristic (or, in some cases, not holding it) is an occupational requirement.

The application of the requirement must, however, be a proportionate means of achieving a legitimate aim. The exception is not without limit - as the Respondent found in the recent Employment tribunal case of Donnelly v PQ. In this case, the Respondent was a physically disabled woman who had employed the Claimant (a man) as one of her carers. During the Claimant’s probationary period, the Respondent decided that she had concerns about a man providing intimate care. She extended his probationary period. Upon discovering the reason for the probation extension, the Claimant resigned.

The reason for extending probation was because the Claimant was a man. The Respondent was not comfortable with the idea of a man providing the full range of toilet care that she needed. The Claimant made a claim for direct sex discrimination.

The Respondent sought to rely on the general occupational requirement exception. The employment tribunal held that extending the probationary period was discrimination, in the way that the Respondent afforded the Claimant access to an opportunity for promotion. The occupational requirement exception could be applied in principle - it was an occupational requirement for a personal assistant to be a woman to carry out the full requirements of that role. The Respondent had a legitimate aim of privacy and dignity. However, her means of achieving that aim in extending the Claimant’s probationary period were not proportionate. The Respondent could have preserved her privacy and dignity in less discriminatory ways, including overlapping his shifts with female carers, explaining concerns before any need to extend probation arose and creating the opportunity to build a relationship of trust before such care was required.

This case is a reminder of the narrow application of the general occupational requirement exception. It will only be relevant in exceptional circumstances and its application must be justified.

Pilot engaged by Ryanair through an intermediary had rights as an agency worker and was also ‘employed’ by the intermediary for the purposes of the Civil Aviation (Working Time) Regulations 2004

In the recent case of Lutz v Ryanair DAC and others, the Claimant was supplied to Ryanair as a pilot under a 5 year agreement via a company called MCG Aviation Limited. He made a claim for annual leave against MCG under the Civil Aviation (Working Time) Regulations 2004 (CAWR), on the basis that he was a ‘crew member’ who was ‘employed’ by MCG.  He also claimed that he was an ‘agency worker’ under the Agency Workers Regulations 2010 (AWR) and was therefore entitled to the same employment conditions as pilots directly employed by Ryanair. Ryanair and MCG maintained that the Claimant was self-employed.

The Employment Appeal Tribunal held that the Claimant was not self-employed. He was not in business in his own account and Ryanair and MCG were not his clients - there was a complete imbalance of power. The service company he was required to use was a fiction and the substitution clause in the written agreement between him and MCG was significantly limited. A 5-year supply agreement for the Claimant was still a ‘temporary’ supply under the AWR, such that he had protection as an ‘agency worker’ under AWR. He was also entitled to annual leave from MCG under CAWR, as he was ‘employed’ by MCG in the wider sense of that term applicable under CAWR.

This case serves as a reminder that tribunals will look behind the contractual set-up to find the commercial reality. In this case, the commercial reality was that the Claimant’s independence was ‘entirely notional’ and that he was ‘plainly a worker’.

The Supreme Court confirms an important limitation on trade union recognition rights

In November 2023, the Supreme Court handed down their judgment in the case of Independent Workers Union of Great Britain v CAC. The Union had applied to the CAC for recognition in respect of a group of riders working for Deliveroo. The CAC had refused to accept the Union's application on the basis that the riders were not ‘workers’ of Deliveroo, within the meaning of the Trade Union and Labour Relations (Consolidation) Act 1992. Riders were not required to provide personal service and were allowed to use substitutes.

The Union appealed the refusal on the basis that it breached Article 11 of the European Convention on Human Rights, arguing that the definition of ‘worker’ in the Act should have been construed to give effect to Article 11.  Article 11 protects the right to freedom of association and to form and join a trade union. European case law makes it clear that the Article 11 right to form and join a trade union only applies to those in an employment relationship and that this should be looked at through the lens of the European concept of an employment relationship. The Supreme Court had to have regard to the factors set out in the International Labour Organisation Employment Relationship Recommendation, 2006 No 198 in considering whether the riders were employees. The Recommendation focuses on a multifactorial approach looking at performance of the work and remuneration of the worker.

Applying this test, the Supreme Court held that the riders were not in an employment relationship, so the provisions of Article 11 which protect trade union activity did not apply to them. The CAC were correct to refuse the application for recognition.

A reminder that contractual agreements can’t be used to subvert statutory employment rights

A recent Employment Appeal Tribunal decision reminds employers that contractual terms cannot be used if their effect is to subvert or limit statutory employment rights. Disputes which have their root in statutory employment rights (such as unfair dismissal and discrimination) can only generally be settled through ACAS (using a COT3 agreement), or by signature of a settlement agreement which complies with the requirements set out in section 203 Employment Rights Act 1996 (including a requirement that legal advice is taken by the employee).

In the case of SPI Spirits (UK) Limited v Zabelin, the Employment tribunal found that the Claimant had been subjected to detriment and automatically unfairly dismissed on grounds of whistleblowing.

The respondent argued that it would be ‘just and equitable’ for the Claimant’s remedy to be capped at £270,000, as this was the maximum liability on termination included in the contract of employment. The Respondent argued that the Claimant was legally trained and had taken advice on the contract such that the cap should be applied. They further argued that the award should not be uplifted for failure to follow the ACAS Code of Practice as the Claimant’s written grievance did not contain any protected disclosures. These were made later - verbally. The tribunal disagreed, applied a 20% uplift to compensation and awarded the Claimant over £1 million.

The respondent appealed. The EAT agreed with the tribunal:

1. Any attempt to limit liability for employment claims in contractual documentation will be ineffective – an unenforceable contractual cap on the tribunal’s awards (s203 Employment Rights Act 1996).
2. The fact that the contractual clause was ‘freely negotiated’ did not mean that it would be ‘just and equitable’ to apply the cap. For whistleblowing cases, there is no cap and compensation should reflect the loss caused. The tribunal should not be fettered in its ability to reach an appropriate compensation figure.
3. Although a grievance needs to be in writing in order for the ACAS Code apply, the fact that no protected disclosure was included in the written document itself did not mean that the ACAS Code on grievances did not apply.
4. Regardless, the relevant sections of the ACAS Code in this case were those that relate to disciplinary proceedings. Where the employer dismisses or takes other action against an employee because, in substance, of what it regards as culpable conduct, the discipline provisions of the ACAS Code will apply.

Embassy uses state immunity to deny the jurisdiction of the employment tribunal in a discrimination case

In the recent case of The Royal Embassy of Saudi Arabia (Cultural Bureau) v Alhayali, the Claimant worked for the Respondent in their Cultural Affairs department where her duties included supporting Saudi students in the UK on cultural projects. She brought various discrimination claims against the Respondent. The Respondent claimed state immunity. State immunity can be claimed in tribunal proceedings to deny jurisdiction where the individual’s role is an exercise of sovereign authority.

The tribunal concluded that the Claimant’s role was ‘ancillary and supportive’ to any exercise of sovereign authority, so state immunity could not be claimed. The Employment Appeal Tribunal disagreed, holding that the fact that the Claimant’s role was ‘ancillary and supportive’ did not automatically mean that it could not attract state immunity - it could still do so if the functions discharged by her were ‘sufficiently close’ to the exercise of sovereign authority. The EAT found that the Claimant’s ‘ancillary and supportive’ work (looking after the interests of Saudi students in the UK and promoting Saudi academic and artistic work) were duties which were ‘sufficiently close’ to the exercise of sovereign authority and that state immunity applied.

The EAT further concluded that state immunity did not apply to the Claimant’s claim that her discriminatory treatment by the respondent had caused psychiatric injury. The carve-out for state immunity in relation to personal injury claims under s5 State Immunity Act 1978 extended to claims for psychiatric injury. It was not limited to physical or bodily injuries.

New holiday pay rules: a new regime for part-year and irregular hours workers

We are about to enter a brave new world in terms of holiday entitlement for those who have irregular or part-year working patterns. The Employment Rights (Amendment, Revocation and Transitional Provision) Regulations 2023 (the New Regulations) have created two new types of workers whose holiday entitlement and pay will not stem from Regulation 13 or Regulation 13A Working Time Regulations 1998 in the future. ‘Irregular hours workers’ and ‘part-year workers’ will be assessed under new provisions on calculation and entitlement, which will be introduced into the Working Time Regulations 1998 as Regulation 15B-F and 16A.

A worker will be considered an irregular hours worker if the number of paid hours that they will work in each pay period during the term of their contract in that year is, under the terms of their contract, wholly or mostly variable. This will capture zero-hours workers.

A worker will be a part-year worker if, under the terms of their contract, they are required to work only part of the year and if there are periods within that year of at least a week in which they are not required to work and for which they are not paid.  This will include term time workers and some seasonal workers.

For holiday years beginning on or after 1 April 2024, irregular hours and part-year workers will accrue holiday at a rate of 12.07% of hours worked in the preceding pay period. Pay period is not defined in the New Regulations but it is assumed that the term has its ordinary meaning – i.e. a week if the worker is paid weekly, a month if the worker is paid monthly.

Employers have the option of paying rolled-up holiday pay to part-year and irregular hours workers. This involves making a payment of 12.07% of their pay at the same time as their ordinary pay and itemising this amount as holiday pay separately on their payslips.

If an employer chooses not to pay rolled-up holiday pay to its part-year or irregular hours workers, then holiday pay will be paid at the point that the leave is taken and will be calculated by taking an average of hourly pay received during the 52 weeks prior to holiday being taken, excluding all weeks where no work was done and any weeks of absence on statutory (family) leave or sick leave (and looking back to earlier worked weeks to count towards 52 in these cases). This calculation would need to be re-done each time a worker took a period of holiday.

This new regime for part-year and irregular hours workers is not without problems. For example, the New Regulations state that holiday is only accrued at the end of each pay period – what happens at the end of the holiday year? The holiday accrued in the final month will be lost before it can be physically taken unless carry-over applies. The New Regulations also state that the maximum amount of holiday that irregular hours and part-year workers can accrue is 28 days, but their holiday entitlement is calculated in hours – how can employers know what a ‘day’ is? No doubt this and other issues will be looked at by the tribunal in test cases over the course of 2024.

And finally…

The politics which surround the work fridge and its contents are often the cause of significant workplace friction. Employees who have their lunch taken and eaten are often seriously aggrieved. Usually, HR can resolve such issues by way of a polite note on the fridge door and a suggestion that food is named.

However, one employee in the US recently revealed on Reddit that he had taken more dramatic steps to identify who had been eating his sandwiches. Upset that his lunch kept being taken from the work fridge, he laced his sandwich with prescription-strength laxatives. He then reported to HR that his lunch (and his medication) had been stolen. The culprit was found by HR in a nearby toilet. HR took no action against the employee who had set-up the prank but sacked the sandwich-stealer (who was also, according to the Reddit article, interviewed by the police in relation to theft of prescribed medication). Although this example is an extreme one, it is a reminder to HR that theft of any sort within the workplace should be taken seriously. As one person commented on the Reddit article - "This is why employers shouldn't disregard lunch thieves. It's only a matter of time until they turn their thieving hands on the employers' things or somehow cause damages to their employer."