Sleeping on the Job!

 

Sleeping on the job

The EAT has upheld the claims of a care worker for National Minimum Wage (‘NMW’) for ‘sleepover’ shifts and travel time between care user appointments, in Whittlestone and BJP Home Support Ltd. The employee was paid £6.35 per hour for attending to care users at their homes but she was not paid for travel time.  She also worked sleepover shifts for a flat rate of £40 per week.

The employee brought a claim for NMW in respect of travel time and the eight hour sleepovers.  The Tribunal rejected her claim and she appealed to the EAT.  The EAT found that the employee was entitled to NMW while she was required to be present at a care user’s home, even if she was sleeping.  The entire shift was ‘working time’ for the purposesof the NMW because there was an agreement she would work and she would have been disciplined if she had not been present.  The Judge noted that she could not for instance have slipped out to see a movie or for fish and chips!  It was irrelevant whether she was asleep.  It was her job to be present at the care user’s home and she had to be paid the NMW for the duration of the shift.

The EAT found that the employee was entitled to be paid NMW for her travel time between care user appointments.   The employee was required to visit care users throughout the day.  This constituted assignment work which meant that she was entitled to receive NMW for the time spent travelling between each assignment.  The judge held that the NMW would not apply only where there was enough time for the employee to go to and from her own home between assignments.

This case is relevant for care providers who need to ensure that staff are paid NMW for the entirety of their shift (i.e. care and travel time, other than travel to and from home).  Failing to pay NMW puts you at risk of employment tribunal claims, civil penalties and being publicly named and shamed by HMRC.  Shift patterns may need to be restructured to limit the amount of travel time.

If you are concerned about whether your pay arrangements are compliant with the NMW, please contact a member of the Blackadders Employment Team.

Sarah Winter
Senior Solicitor – Business Services

More Compensation – Employment Rights Update

The Employment Rights (Increase of Limits) Order 2014 SI 2014/382 will come into force on 6 April 2014. The effect of this will be to increase the statutory limits on certain types of compensation which an employment tribunal can award.  For example:-

  • the statutory cap on a week’s pay for calculating statutory redundancy pay and basic awards in unfair dismissal claims will increase from £450 to £464;
  • the maximum compensatory award which a tribunal can make in unfair dismissal claims increases from £74,200 to £76,574.  It is however worth noting that the additional statutory cap introduced for claims lodged after 29 July 2013 still applies – the additional cap is one year’s pay.  Thus the lesser of the two caps will apply depending on a claimant’s salary.
  • guarantee pay rises from £24.20 per day to £25 per day; and
  • in cases of unfair dismissal due to health and safety, employee representative, trade union, or occupational pension trustee reasons, the minimum basic award increases from £5,500 to £5,676.

These new rates will apply in all cases where the event which gives rise to the compensation occurs on or after 6 April 2014 (irrespective of when the compensation is assessed by a tribunal).  So, for dismissals prior to 6 April 2014, the old rates still apply.  For dismissals after that date, the new rates take effect.

Jack Boyle
Solicitor – Employment Law

Unfair Competition? A Fresh Look at Restrictive Covenants

Those currently negotiating the purchase or sale of a business might have been interested to see the judgment in the recent Scottish Court of Session case of Agri Energy v Ian Logan McCallion.

Mr McCallion sold his business, which supplied cooking oil and arranged for its disposal and recycling into biofuel, to Agri Energy in October 2009. The sale and purchase agreement contained a clause which restricted Mr McCallion from carrying on business throughout Scotland for a period of five years.

Following completion of the deal, Agri Energy discovered that Mr McCallion was involved in a competing business, which was established by his son. Agri sought an order from the court preventing Mr McCallion from continuing to act in breach of the agreement which Mr McCallion challenged on the grounds that the restriction was unreasonable and unenforceable.

The presiding judge noted that there were two points to consider in relation to the reasonableness of the clause:

(i)             the geographic extent of the restriction; and

(ii)            the length of time that the restriction applied for.

The judge decided that the clause was enforceable and found in favour of Agri Energy.

It is important to note that this decision turned, in large part, on the facts and circumstances surrounding the payment of the purchase price. The judge noted in his opinion that the purchase price was greatly over the price which could be attributed to the modest sum of the assets concerned in the business and therefore the purchaser was paying for an established client list and the associated goodwill. It was also observed that half of the purchase price was paid at completion with a further three instalments, the last of which was payable in October 2014 (being the five year anniversary of completion).

The judge took the view that this was indicative of the obligations of the parties being reciprocal during that period.

It was also taken into account that if Mr McCallion set up in competition to the purchaser he would not require to be situated in the North East of Scotland, where he had previously traded, in order to attract his former clients away from the purchaser. What might otherwise be considered onerous geographic restrictions were, on the facts of this case, considered to be reasonable. 

Recognition was also given to the general principle that parties have freedom to contract and are in the best position to decide what is reasonable in the circumstances of their trade. This also persuaded the judge to find that the constraints on Mr McCallion were reasonable.

This case demonstrates that, despite the generally accepted principle that restrictive covenants should be narrowly geographically and temporally defined, longer and wider restrictions can be considered reasonable in certain circumstances.

A note of caution should be sounded though. The overarching principle remains the same; parties should be free to reach agreement. Mr McCallion had received independent legal advice and was therefore not deemed to be at a commercial disadvantage in the negotiations.

In summary, while this was an interesting case, I would not recommend that purchasers attempt to negotiate lengthier restrictions than they otherwise would purely on the basis of this decision, as each situation must be considered on its own merits.  Certainly, these clauses should not be negotiated by a party without them having taken proper advice in the hope that they can challenge their validity at a later date, should they turn out to constitute a “bad bargain”. This decision highlights the importance of ensuring that you have both proper advice and are fully committed to negotiating these crucial clauses, rather than simply hoping that the other party will be too busy or have insufficient funds available to enforce their rights through the courts.

Kelly Craig
Solicitor – Corporate & Commercial 

Linking to Other Websites – Copyright or Wrong Again?

My colleague, Kirk Dailly, wrote on this blog in September 2011 concerning the developments in case law surrounding hyperlinks at the time. Another decision has recently been issued concerning hyperlinks, but has it changed the position since Kirk reported?

The European Court of Justice (ECJ) has recently (13 February) published a pragmatic decision finding that the redirection of internet users to protected copyright material via hyperlinks is permissible without the authorisation of the copyright holder of the protected works.

Under EU law, authors of copyright work have the exclusive right to authorise any communication to the public of their protected work. The question was put to the ECJ by the Swedish Court of Appeal as to whether the redirection of internet users to journalists’ articles via hyperlinks was a “communication to the public”.

If the court had decided that it was such a communication then consent from the owner of copyright work would be required in order to establish a hyperlink from one site to the site containing the copyright material.

However, the court noted that the communication must be made to a new public in order to qualify as requiring authorisation. The articles which were the subject of the referral to the ECJ had originally been published on an open website to which any member of the public had access. The court took the view that, despite the fact that the hyperlinking website’s users were considered a “public” for the purposes of the legislation, they were not new, or were outwith the scope of the possible public to which the articles were intended for circulation.

Given the prevailing practice of hyperlinking across the internet, the practical consequences of a decision finding hyperlinks to be a communication requiring consent could have been extensive.

However, the court did acknowledge that any hyperlink which attempted to circumvent restrictions put in place on the protected works which normally permitted access only to members or subscribers would be considered a communication to a new public, as these people would not have been considered in the ‘public’ originally envisaged by the copyright owner.

Interestingly, the ECJ went a step further than simply acknowledging the realities of internet practice, noting that even if the internet user was under the impression that the copyright material was appearing on the site containing the link, authorisation was not required in that scenario either.

Despite this decision, we would still recommend that operators of websites who use hyperlinks at least make it clear who owns or operates the site and the material to which the link relates.

It is also important to be clear in your website terms and conditions that any outside links are just that. You should state that any material which is contained on a third party’s site is the responsibility of that party. In addition, if the user enters into a contract with the party operating the linked website, your own terms of use should also be unambiguous that the responsibility for entering into that contract lies with the user.

Please contact me, or another member of the Corporate and Commercial team, if you feel that your website terms and conditions would benefit from a review.

Kelly Craig 
Solicitor – Corporate & Commercial 

Employment Tribunal Fees – Early Indications

In the six months since the introduction of employment tribunal fees at the end of July 2013, unofficial figures suggest that the number of employment tribunal claims lodged in that period are down by approximately 50% compared to the level of claims being lodged in the pre-fee era.  This is good news for employers and it appears that one of the policy objectives of the fee structure has been met, at least in this initial period.  In particular, the number of lower value claims such as wages and holiday pay claims has dropped significantly.  This is not unsurprising since such claims can be pursued as Small Claims in the Sheriff Court for a much lower lodging fee than in the tribunal forum  (£71 in the Small Claims court as opposed to £160 in an employment tribunal).  In addition, a Sheriff Court claim has no hearing fee whereas a wages claim in the employment tribunal attracts a £230 hearing fee.

From an employee perspective, the recent outcome in the London High Court case (whereby an application for judicial review of the fee regime brought by the trade union, UNISON, was rejected) is disappointing.  This is good news for employers although it remains to be seen whether the current downward trend on cases lodged will continue.  There is also the prospect of a successful appeal by UNISON.  A similar case has been brought in Scotland – this action was sisted (frozen) pending the outcome in the trade union’s case.

An interesting point which flows from the UNISON decision relates to the possibility of successful claimants recovering any fees incurred from the employer if they win their tribunal case.  The High Court Judgment stated that “the Lord Chancellor agrees that a successful employee should expect to recover the fees they have incurred from the employer”.  Whilst this appears sound in principle, it is worthy of note that the tribunal rules of procedure do not make provision for the circumstances in which a claimant can seek to recover fees from the respondent or the factors which an Employment Judge can take into account when deciding whether to grant such an award of “expenses”.

The initial impact of the fee regime is relatively staggering but there still remains a degree of uncertainty as to the future for employment tribunals and a number of unanswered questions.

Jack Boyle
Solicitor – Employment Law

Never Can Say Goodbye

Most employers do not enjoy dismissing employees.  This is understandable.

However, during the stress of conducting a formal hearing, many employers fall into the trap of not being direct enough with the employee about the reasons for dismissal.  Occasionally, in such situations, employers will omit to actually tell the employee the real reason for dismissal.

Do you require to tell a dismissed employee why they have been dismissed?

Yes.  Furthermore a dismissed employee has the right to request a statement of written reasons for the dismissal from his employer.

If an employee:-

– has more than two years’ qualifying service and
– makes a request for the reasons for dismissal,

an employer must provide the employee with a statement of written reasons for the dismissal within 14 days of the employee making this request.

What if you have already given written reasons in letter of dismissal?

It does not matter if the employer believes it has already provided the reasons for dismissal, the legislation still states that, if a request is made by the employee, the employer has a duty to provide written reasons within that 14 day period.  Similarly any previous correspondence from the employer to the employee does not automatically frustrate this duty.

What about pregnant employees or employees on maternity leave?

The law is slightly more onerous for pregnant employees and employees on maternity or adoptive leave.  Where an employee is dismissed whilst pregnant or whilst on maternity or adoptive leave, the entitlement to written reasons for dismissal arises automatically.  There is no need for the employee to have two years’ service or to make the request for this duty to arise.    

Are there any monetary sanctions for non-compliance?

Unfortunately if an employer either:-

– fails to provide written reasons to an employee with two years’ qualifying service (or more) who makes such a request,
– fails to provide written reasons to a dismissed employee who is pregnant or on maternity/adoptive leave, or
– gives written reasons for dismissal which are inadequate or untrue

a tribunal can made an award of compensation to the employee of up to two weeks’ pay.

In such circumstances, a week’s pay is not capped at the usual £450 and is instead based on the employee’s actual pay.

In conclusion employers should exercise caution when saying goodbye to employees.  Employers should certainly know the reasons for the goodbye and best practice is to make sure that these reasons are known to the employee too!

Simon Allison 
Partner – Employment Law

Maternity and Sick Pay Rates – Statutory Changes

 

 

Effective from 6 April 2014, the rates for Statutory Sick Pay (SSP) and Statutory Maternity Pay (SMP) are set to increase.  These changes will be implemented by the Welfare Benefits Uprating Order 2014.

SSP will increase from £86.70 per week to £87.55 per week.  SMP will increase from £136.78 to £138.18 per week.  The SMP increase also applies to ordinary/additional paternity pay and adoption pay.

Employers should update their payroll departments accordingly.

Jack Boyle
Solicitor – Employment Law