Employment Review. Melanie Slocombe CASe LAw UpdAte #1. CASe LAw UpdAte #2. CASe LAw UpdAte #3

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1 Employment Review In this month s review we consider an interesting case which examined the meaning of the word temporary in the context of the Agency Workers Regulations We also take a look at a case which considered whether a belief in democratic socialism is a philosophical belief for the purposes of the Equality Act 2010, as well as a case which considered whether a length of service pay criterion was indirectly discriminatory. Finally we look at the Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014, which makes some significant changes to the Transfer of Undertakings (Protection of Employment) Regulations Melanie Slocombe melanie.slocombe@henmansfreeth.co.uk CASe LAw UpdAte #1 Were agency workers who were permanently assigned to a hirer covered by the Agency Workers Regulations 2010? CASe LAw UpdAte #2 Can an individual s democratic socialist views be a philosophical belief under the Equality Act 2010? CASe LAw UpdAte #3 Was a Muslim prison chaplain indirectly discriminated against because of length-of-service pay criterion? LegiSLAtion UpdAte The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 ( CRTUPEAR ) have been laid before Parliament. And finally... The Court of Appeal has referred USDAW v Ethel Austin Limited (in administration) and another (commonly referred to as the Woolworths case ) to the European Court of Justice (ECJ) for further...

2 CASe LAw UpdAte #1 Were agency workers who were permanently assigned to a hirer covered by the Agency Workers Regulations 2010? In Moran and others v Ideal Cleaning Services Ltd and another, the Employment Appeal Tribunal (EAT) considered the meaning of the word temporary in the Agency Workers Regulations 2010 ( AWR ) in the context of a group of workers who were placed on an assignment of indefinite duration. The case concerned a group of agency workers who were assigned to one hirer for periods ranging between six and 25 years. Each worker was employed by the agency and had a written statement of particulars which contained many of the features of a permanent contract of employment including place of work, which was stated to be the hirer s factory. The Claimant s claim was based on the fact that they believed that they qualified for protection under the AWR so as to entitle them to the same basic working and employment conditions as if they had been recruited by the hirer directly. The Tribunal in the first instance dismissed the Claimant s claims on the basis that they were not working temporarily and therefore the AWR did not apply to them. The Claimants appealed and the EAT highlighted that the AWR, which define agency worker as an individual who is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a hirer. The EAT stated that temporary in this context means not permanent. They went on to state that for employment purposes, a permanent contract is generally regarded as one which is open-ended in duration, terminable on proper notice being given. The Employment Judge, in the first instance, had correctly decided that the arrangements under which the Claimants worked were indefinite; therefore they were excluded from the scope of the AWR. This decision introduces an element of uncertainty into the scope of the AWR and questions whether it is as far reaching as anticipated. The decision is good news for users and suppliers of agency workers who use agency workers for an indefinite period and who currently have to try to equalise pay for agency workers to comply with the requirements of the AWR. However, the decision should be treated with some caution. In this case, there was no real doubt that the assignments were "permanent" (in the sense of being open-ended in duration). In many cases, it is unlikely be so clear. There will be many instances where agency worker assignments are for an indeterminate length, not terminable on any condition being satisfied, but renewed from week to week, to meet the hirer's requirements. The grey area will then be at what point would such an assignment become "permanent" resulting in the agency worker not qualifying for protection under the AWR? Unfortunately this decision provided no guidance on this issue.

3 CASe LAw UpdAte #2 Can an individual s democratic socialist views be a philosophical belief under the Equality Act 2010? In Olivier v Department of Work and Pensions an Employment Tribunal has found that a civil servant with strong ties to the Labour Party could bring a religion or belief discrimination claim. Although his mere support of a political party would not be enough to protect him, it was his political belief in democratic socialism, as enshrined by the Labour Party's core values, which qualified as a philosophical belief under the Equality Act In coming to its conclusion, the Tribunal applied the EAT s guidance in Grainger plc and others v Nicholson and found that the Claimant's strong connection with the history and tenets of the party were sufficient to bring him within the scope of the Equality Act s protection. In Grainger plc and others v Nicholson [2010] IRLR 4 (EAT), the EAT gave some guidance on the definition of philosophical belief, drawn partly from human rights cases: The belief must be genuinely held. While it is not a tribunal's function to assess the validity of a belief by some objective standard, evidence (including cross-examination) may be needed to establish that the belief is genuine. It must be a belief, not an opinion or viewpoint based on the present state of information available. It must be a belief as to a weighty and substantial aspect of human life and behaviour. It must attain a certain level of cogency, seriousness, cohesion and importance. It must have a similar status or cogency to a religious belief, but need not allude to a fully-fledged system of thought. In other words, it does not need to be an -ism. It must be worthy of respect in a democratic society, not be incompatible with human dignity and not conflict with the fundamental rights of others. Although this case is only a first instance Employment Tribunal decision and is therefore not binding on other Tribunals, it is an interesting example of how a member of a political party was able to bring their political beliefs within the scope of the discrimination legislation.

4 CASe LAw UpdAte #3 Was a Muslim prison chaplain indirectly discriminated against because of length-of-service pay criterion? The case of Naeem v Secretary of State for Justice involved a prison chaplain of the Muslim faith who began working for the Prison Service in October Until 2002, the Prison Service only employed Christian chaplains. Given that its pay system placed emphasis on length of service, Christian chaplains were more likely than Muslim chaplains to be towards the top of the pay scale. Mr Naeem brought an indirect religion discrimination claim, arguing that he had been disadvantaged as a Muslim chaplain by the application of the length-of-service criterion. He also claimed indirect race discrimination on the basis that more white than Asian chaplains were towards the top of the scale. The EAT s main focus of this case was who was the appropriate comparator. The EAT held that a length-of-service criterion included in the Prison Service s pay system did not indirectly discriminate against a Muslim prison chaplain on grounds of religion or race. Although the Prison Service only started employing Muslim chaplains in 2002, the length-of-service criterion did not place Muslim chaplains at a particular disadvantage for indirect discrimination purposes. Christian chaplains employed before 2002 could not be included in the comparison exercise required because their circumstances were materially different from those of employees appointed after 2002; pre-2002, the Prison Service only required Christian chaplains. The claimant, who was employed in 2004, had been treated in exactly the same way as any chaplain, of whatever religion or race, who was appointed at the same time as him. As such, his claim failed. The decision suggests that where people with certain protected characteristics (whether sex, race, religion or so on) gain access to careers that have previously been unavailable to people with those protected characteristics, they will not be able to challenge length-of-service pay criteria with reference to the period before they were able to apply for the job in question.

5 LegiSLAtion UpdAte The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 ( CRTUPEAR ) have been laid before Parliament. They will amend the Trade Union and Labour Relations (Consolidation) Act 1992 (TULCRA) and the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) and came into force on 31 January 2014, subject to transitional provisions. We have set out below the key points to note in respect of the new legislation: The transferee of an undertaking will not be bound by any terms negotiated as part of a collective bargaining process after the transfer, where the transferee is neither a party to those subsequent collective agreements nor to the bargaining process for them. This is consistent with a recent European Court of Justice decision (Alemo-Herron and others v Parkwood Leisure Ltd) which deemed that after a transfer there should be a static approach to terms incorporated into employment contracts from collective bargaining agreements. In addition to this, the transferee will also now be able to renegotiate terms which have been derived from such an agreement one year after the transfer, provided the changes are no less favourable to the employees. Changes in the location of the workforce will be treated as organisational reasons under TUPE, potentially justifying dismissal. The restrictions in TUPE on dismissing and changing terms and conditions in the context of a transfer will be narrower and more consistent with the underlying EU directive on transfer of undertakings. Employers will still be prohibited from dismissing or changing terms if the sole or principal reason is the transfer, but the more expansive provisions preventing such activities in connection with the transfer are being removed. The provisions as amended purport to allow a variation of contract by reason of the transfer provided that the terms of the contract permit the employer to make such a change. This would on the face of it appear to allow employers to put farreaching variation of terms clauses in employment contracts, which could then be used to introduce changes that would otherwise be unlawful because they were by reason of the transfer. In relation to pre-transfer collective consultation, the transferee can elect to carry out pre-transfer consultation. Micro-businesses with fewer than ten employees will be able to inform and consult affected employees directly where they do not recognise a trade union and have no existing employee representatives. This change will only apply to transfers taking place on or after 31 July Employee liability information (information about the transferring employees) will in future have to be provided by the transferor to the transferee 28 days before the transfer rather than 14. This change will only apply to transfers that take place on or after 1 May The Government has published new guidance in respect of the changes. This is not binding and does not contain much detail about the more controversial aspects of the new changes.

6 And finally... The Court of Appeal has referred USDAW v Ethel Austin Limited (in administration) and another (commonly referred to as the Woolworths case ) to the European Court of Justice (ECJ) for further determination. This case was appealed to the Court of Appeal by the Secretary of State following the EAT decision which held that the words "at one establishment" in section 188(1) of the Trade Union and Labour Relations (Consolidation) Act 1992 were incompatible with the underlying EU Collective Redundancies Directive. The reference to the ECJ will focus on the following two areas: the construction of the relevant provisions of the EU Collective Redundancies Directive (including the meaning of establishment ); and whether the Directive has direct effect against the Secretary of State. This case is extremely significant for employers who have more than one site in the UK because the legal position is currently that redundancies across all sites would need to be counted when considering whether it is necessary to collectively consult. We will update you with further developments on this case as and when they occur.

7 Employment Team: Key contacts David Potter Cumberland Court, 80 Mount Street, Nottingham NG1 6HH Tel: Rena Magdani One Colton Square, Leicester LE1 1QH Tel: Gemma Elliott Floor 2, West Point, Cardinal Square, 10 Nottingham Road, Derby DE1 3QT Tel: Liz Mulvaney St James Building, Oxford Street, Manchester M1 6FQ Tel: Rebecca Sawbridge 6 Bennetts Hill, Birmingham B2 5ST Tel: rebecca.sawbridge@freethcartwright.co.uk Peter Gavin Churchill House, Regent Road, Stoke on Trent ST1 3RQ Tel: peter.gavin@freethcartwright.co.uk Christopher Sing Kimbells Freeth LLP Power House, Harrison Close, Knowlhill, Milton Keynes MK5 8PA Tel: christopher.sing@kimbellsfreeth.co.uk Melanie Slocombe Henmans Freeth LLP 5000 Oxford Business Park South Oxford OX4 2BH Tel: melanie.slocombe@henmansfreeth.co.uk This update is only a summary of the law in force at the present time and is not exhaustive, nor does it contain definitive advice. Specialist advice should be sought from a member of the Freeth Cartwright Employment Team in relation to any queries that may arise. Banking & Finance / Business Services / Corporate Finance / Construction / Employment / Public Sector / Real Estate / Services for Individuals / Taxation Birmingham / Derby / Leeds / Leicester / London / Manchester / Milton Keynes / Nottingham / Oxford / Sheffield / Stoke on Trent Want to know more? Visit henmansfreeth.co.uk