Welcome to the November Edition of employment law MATTERS. The festive season is nearly upon us, evidence of which can be found on our TV screens with the new John Lewis Christmas advert, which has become something of a tradition in recent years. The advert is the epitome of Christmas Spirit, and, in particular, emphasises goodwill and kindness to others. This marketing campaign appears rather to be at odds with John Lewis’ recent admission that they have underpaid holiday pay for certain employees during the last seven years, and their subsequent public refusal to reimburse former employees following this admission. You may have caught my thoughts on the issue on the recent ‘Moneybox’ programme on Radio 4. We have an article update on the position below.

We also look at the question of ‘Zero-Hours’ contracts which continue to make the news. Many employers use these fairly and the current publicity appears to be one-sided. We take a look at how the business secretary proposes to change the law in this area.

On a lighter note, to help us celebrate the festive season the Employment team will be hosting our annual Christmas drinks reception on Thursday 12th December at Frederick’s coffee house from 5-8pm. Clients and colleagues of the team are warmly invited. For further information please contact Alicia Dacre, Marketing and Events Executive.

Robert Holland
Twitter: @RobertHolland72

This months articles

John Lewis update

National Minimum Wage – 2013 Increase

LinkedIn Legal Battle –  Whitmar Publications Ltd v Gamage

TUPE Changes

Consultation on Zero-Hours Contracts

John Lewis update

It appears that John Lewis’ ‘Scrooge mentality’ has given their former employees incomplete holiday pay, which goes against their motto of having ‘never knowingly undersold on price, quality and service’. It may be that taking positive action at this time of year will make John Lewis re-consider their position. If you have been affected or know somebody who has please contact our Employment team.

For more information on the John Lewis position, please click here or to listen to Robert on Radio 4’s Moneybox click here.

National Minimum Wage – 2013 Increase

1 October 2013 was an important date for both employers and employees as the national minimum wage increased. You should make sure your company has implemented the increase.

The following table shows the previous rate, the new rates effective from October and also the amount by which the rate has increased since 2010:

 

Year 21 & over  18 to 21  Under 18  Apprentice*
2013 (from 1 October)   £6.31 £5.03 £3.72 £2.68
2012 (Previous Rate) £6.19 £4.98 £3.68 £2.65
2011 £6.08 £4.98 £3.68 £2.60
2010 £5.93 £4.92 £3.64 £2.50

  *This rate is for apprentices under 19 or those in their first year. If you’re 19 or over and past your first year you get the rate that applies to your age.

The Business Secretary, Vince Cable, has also asked the Low Pay Commission (LPC) to consider how the national minimum wage might be increased faster than current conditions allow. The LPC is to consider what labour conditions will need to be in place to allow a further increased in wages, without an adverse impact on jobs. The report is due to be presented to the Government in spring 2014, with a view to the recommendations advising on an increase to national minimum wage rates applying from October 2014. 

LinkedIn Legal Battle –  Whitmar Publications Ltd v Gamage

LinkedIn is a social media site for professionals. A legal battle has commenced in the UK with regard to ownership of ‘connections’ built up by employees during their employment.

The matter is relevant given that the popularity of LinkedIn with both professionals and employers has grown rapidly in recent years, and millions of people now use the site as a reliable platform and tool for sales, marketing and professional networking.

Employers are now actively encouraging senior members through to new recruits to open personal accounts and to keep them up-to-date, such is the strength of the site in terms of marketing and promoting the companies brand. Employees are encouraged to add ‘connections’ with other professionals, colleagues and those they meet general during their employment and professional lives with the company. Indeed, employees go further and add friends and members of their family to bolster their profile. The ownership of these connections, however, is a contentious issue which has sparked fierce legal debate both in the UK and overseas.

The High Court first considered ownership of ‘connections’ recently in the case of Whitmar Publications Ltd v Gamage, in which Whitmar sought to prevent ex-employees from using and benefitting from ‘connections’ from the company’s LinkedIn group account, built up during employment, when the ex-employees were setting up their rival firm. The court granted an interim injunction preventing use of the connections on the basis that such was misuse of confidential information and a breach of implied good faith.

The matter becomes curious when you consider how contacts are formed. Many connections are made on a personal level. Is it correct to identify connections as confidential information belonging to an employer, which you have to give up/delete or hand over your account password following termination of employment, even if you resign and the get a new job and there is no misconduct on the employee’s part?

LinkedIn accounts are owned by the creator in a personal capacity. This is clear from LinkedIn’s terms and conditions. In addition, the data is stored on LinkedIn’s servers, not the employers.

As this is a developing area of the law it is vital for employers to consider and implement robust social media policies which deal specifically with ownership of LinkedIn connections, and information on other social media sites such as twitter. Failure to create such post-termination obligations restricting use of connections by former employees presents a real risk of damage to an employers business interests. Such policies should be considered as important as restrictive covenants. Even something as small as an ex-employee updating their profile to reflect their new position at a rival is enough to cause damage. Such an update appears on the homepage of all that ex-employee’s connections, and is effectively free advertising for the rival firm advising them that they are open for business.

If you require an update to your Social Media Policy, please let us know.

TUPE Changes

The Government has announced that it intends to have changes to TUPE regulations before parliament in December 2013, with implementation expected in early 2014.

Changes to the legislation have been confirmed following the recent publication of its response to the public consultation regarding TUPE which was launched on 17 January 2013.

The changes aim to make all TUPE transfers easier, fairer and more effective. The Government wants to cut the red-tape whilst preserving the necessary protections for employees.

To help employers the changes seek to clarify and improve unclear areas of the current legislation so that all businesses know how to conduct a TUPE transfer properly. Commentators have been somewhat surprised (and relieved) that the service change provisions have been retained.

The following summarises the changes and clarifications:

Businesses will be able to re-negotiate terms and conditions provided for in collective agreements one year after the transfer (provided the changes are no less favourable). This clarification is good news for businesses. Currently, TUPE protects such terms and conditions and does not generally allow them to be changed by reason of the transfer. This change is an exception provided the relevant time has passed.

Only terms and conditions existing as part of a collective agreement at the time of transfer will apply to employment with the new employer. Subsequent changes will not bind the new employer unless the employer is party to such changes or is part of the process.

The response has retained the position regarding service provision. The test requires activities to be fundamentally or essentially the same as those carried on before. Radical changes in provision services is not likely to trigger application of the TUPE regulations.

The rules have been amended to accommodate businesses where the place of work changes post transfer. Under the changes redundancies as a result of a new location will not be automatically unfair. Therefore an employer will not face an unfair dismissal claims by virtue of a change of location of the workplace.

Micro-businesses (under 10 people) will be allowed to directly consult with employees where there is no recognised trade union or appropriate representatives.

The time limit by which the employer must provide the employee liability information has been extended by 14 days to 28 days.

The Government reiterates that the changes will reduce unnecessary red-tape and will remove potential unfair risks from businesses. This will, in turn, result in increased confidence and competitiveness for employers. Aligning TUPE with the European Acquired Rights Directive will ensure that the regulations no longer inhibit innovation and allow more businesses to engage in transfers at a lower cost.

Consultation on Zero-Hours Contracts

Following a review conducted by the Department for Business, Innovation and Skills (BIS), Vince Cable, the Business Secretary, intends to launch a consultation investigating abuse of zero-hours contracts by employers. The consultation will focus on identifying and tackling any abuse to ensure that employees are getting a fair deal. The launch date for the consultation will be announced later this year.

In particular, there are 4 areas of concern:

1. Exclusivity Clauses

BIS will investigate the legality of contractual provisions which prevent workers from working for another company, especially because under these contracts there is no minimum number of guaranteed hours. The main argument in favour of excluding these provisions is the necessity for employees to supplement their income with other work if required;

2. Lack of Transparency

The consultation will address the issue that there is no clear legal definition of a zero-hours contract. It is also apparent that people on such contracts are unaware that they might not be offered work regularly. BIS will seek to identify if a concise legal definition will help the position of both employers and employees in understanding their rights an obligations, with a view to improving the employment relationship in general;

3. Uncertainty of Earnings

As earnings depend on the hours worked, workers currently find it difficult to calculate their earnings accurately. This leads to the real risk of financial uncertainty which impacts many aspects of the workers everyday lives, such as paying bills and rent. Inaccurate earnings may also cause concern and confusion with regard to entitlement to state benefits. These concerns will be considered at length by the consultation; and

4. The Balance of Power in the Current Employment Relationship

Workers currently feel as though they are obliged to take all hours offered, and fear being penalised if they refuse, even in situations where hours are offered at very short notice and do not suit the worker. This issue will be addressed by the consultation committee and the Government is keen to avoid a culture of fear in which workers are less likely to be offered regular work in the future if he or she fails to accept the hours on offer.

Despite the above, ‘Zero-Hour’ contracts can be a helpful tool for both employers and employees if used properly.

 

For further information on any of the above articles or to discuss your Employment Law requirements, please contact Robert Holland or any of the Employment team at Balfour+Manson.

Disclaimer: The views and opinions expressed in this article site are soley those of the original authors and other contributors and do not purport to give specific legal advice.