Employment Bulletin – March 2017

Plumber wins 'worker's rights' claim against employer

A plumber who carried out jobs on behalf of a plumbing company should be classed as a "worker" under the Employment Rights Act, not a self-employed contractor.

That was the decision of the Court of Appeal in a high profile case involving Pimlico Plumbers and one of its operatives, Gary Smith.

Mr Smith carried out plumbing work for the company between August 2005 and April 2011. He complained that, following a heart attack, he was unfairly or wrongfully dismissed and claimed entitlement to pay during medical suspension, holiday pay and pay arrears.

The company said that the original contractual agreement between them, signed in 2005, described Mr Smith as a "sub-contracted employee". He was an independent contractor, he was VAT registered and filed his accounts as a self-employed person.

The court also heard that every operative was issued with a company identity card, which had to be carried when working. They also had to wear a uniform marked with the company's logo and were issued with a mobile phone.

Mr Smith worked only for Pimlico Plumbers. He could reject particular jobs, decide his own hours and work unsupervised, exercising his own discretion as to the work needed for a particular customer and whether to negotiate on price.

The contract provided for normal working hours consisting of five days a week in which he was required to complete a minimum of 40 hours. However, the company had no obligation to provide him with work on any particular day, and if there was no work for him he was not paid.

Mr Smith only worked on average about 20 hours each week in the last weeks of his relationship with the company. The Employment Appeal Tribunal found that Mr Smith was a worker within the meaning of the Employment Rights Act 1996 and entitled to the benefits that brought.

The Court of Appeal has upheld that decision. It held that evidence before the tribunal was clear and consistent that the relationship between Pimlico Plumbers and its operatives would only work if the operative was given and undertook a minimum number of hours' work.

Mr Smith like the other operatives, was required to use the van with the company logo on it for work assignments and was issued with a company mobile phone. He had to earn enough from work assignments to be able to pay the van and telephone expenses, and provide an income. His case was that it would have to be a minimum of 36 hours a week.

The case has attracted a lot of public attention because of the rise of the so called gig economy in which operatives are paid on a task by task basis rather than receive a regular weekly wage. However, the court warned against reading too much into this one decision.

Lord Justice Underhill said: "Although employment lawyers will inevitably be interested in this case - the question of when a relationship is genuinely casual being a very live one at present - they should be careful about trying to draw any very general conclusions from it."

The government is currently carrying out a review of workers' rights following similar high profile cases involving companies like Uber and City Sprint.

A spokesman for the Department for Business, Energy and Industrial Strategy said: "We are determined to make sure our employment rules keep up to date to reflect new ways of working, and that is why the government asked Matthew Taylor to conduct an independent review into modern working practices."

Sainsbury's entitled to dismiss employee for gross misconduct

Sainsbury's had been entitled to dismiss an employee for gross misconduct after he failed to carry out key company policy concerning staff engagement.

That was the decision of the Court of Appeal in the case of an employee who had worked for the company for 26 years. At the time of his dismissal he was a regional operations manager, responsible for 20 stores.

The company had a key policy called Talkback, designed to ensure staff motivation and engagement. As part of the Talkback procedure, staff in all locations gave information in confidence about their working environment.

A human resources manager sent an email to the employees' store managers encouraging them to focus on getting their "most enthusiastic colleagues to fill in the survey". This would potentially undermine the Talkback survey results.

When the employee became aware of the email he told the HR manager to clarify what he meant with store managers. The HR manager failed to do so, and the employee did not check whether he had done so. When he became aware that the HR manager had failed to follow his instructions, he took no further action.

Sainsbury's dismissed him for gross misconduct on the basis that he had failed to take adequate steps to remedy the manipulation of the survey scores. The judge at the Employment Tribunal concluded that the employee had been in serious dereliction of his duty to the company, given his obligation to ensure that the Talkback procedure was properly carried out.

The Court of Appeal has now upheld that decision. It held that the employee's failure constituted gross misconduct because it had the effect of undermining the trust and confidence in the employment relationship.

Dyslexic employee wins race and disability discrimination claim

A dyslexic employee has won a race and disability discrimination claim because her employer failed to make reasonable adjustments to accommodate her condition.

The employee was from Ghana. She suffered from dyspraxia and dyslexia, which meant it took her longer than others to complete her work. She was granted compressed hours at her request, working four days per week instead of five. The employer also agreed to provide her with specialist equipment.

The employee asserted that the employer should have made the reasonable adjustment of reducing her workload. She also said that the employer had downgraded her performance review because of her race. She relied on an internal document which stated that part-time, disabled or minority staff were statistically less likely to receive a performance bonus than other staff.

The employment tribunal found that the employer had imposed a 'provision, criterion or practice' of requiring the employee to carry out the same volume of work as her colleagues, resulting in her having to work extra hours to finish her work.

It concluded that reducing workload would have amounted to a reasonable adjustment and the employer had breached its duties under the Equality Act 2010. However, it rejected the race discrimination claim, finding that the employee had not provided sufficient proof.

The employer appealed against the disability discrimination decision while the employee appealed against the dismissal of her race discrimination claim.

The Employment Appeal Tribunal (EAT) found in her favour. It held that it was clear that the steps taken by the employer had not removed the disadvantage to which she was put during the relevant period.

Turning to the race discrimination claim, the EAT said tribunals had to be alive to the possibility of unconscious discrimination as well as overt discrimination.

The statistical evidence relied on by the employee could tend to show a discernible pattern of treatment of the employee's racial group from which a tribunal might infer unlawful discrimination.

In those circumstances, it was not open to the tribunal, taking proper account of the evidence before it, to reject the race complaint without considering the issues further. The race claim was therefore remitted to the same tribunal for reconsideration.