Reed Smith Client Alerts

Authors: Carl De Cicco David Ashmore

We have summarised three of the most notable employment related updates for you to mull over while enjoying the summer sun.

European case opens the door for easier indirect discrimination claims to be brought by individuals without protected characteristics Owing to a case about, of all things, the positioning of electricity meters in Bulgaria, it is now easier for individuals who are not part of a disadvantaged protected group to bring indirect discrimination claims.

The UK Equality Act does not permit individuals to bring indirect discrimination claims because of their association with a disadvantaged protected group; rather, the individual must share the protected characteristic of the group itself (e.g. race, disability, etc.). However, the Court of Justice of the European Union in the case of CHEZ Razpredelenie Bulgaria has held that EU law permits individuals who are not part of a protected group, but who share the disadvantage of the protected group, to bring discrimination claims.

Courts in the UK are obliged to interpret statutory provisions in line with European law; therefore expect challenges to the Equality Act. This might happen where, for example, a man with caring responsibilities challenges an employer’s flexible working policy. Generally, the tribunals have regarded women as being more detrimentally impacted by onerous flexible working policies (due to their greater level of child caring responsibilities); as men are not part of that protected group, it has been difficult for them to bring challenges to employers’ flexible working practices. However, the CHEZ Razpredelenie Bulgaria case appears to give the opportunity to challenge this approach.

Uber faces legal action over drivers’ rights The GMB union for professional drivers has brought an action in the UK against Uber, asserting that Uber’s contract terms with drivers breach UK employment law. Specifically, the union is challenging Uber’s position that its drivers are ‘business partners’, rather than ‘employees’ or ‘workers’. The union is seeking to establish that drivers should be entitled to basic employment rights as ‘workers’, such as a minimum wage, rest breaks, paid holiday and whistleblowing protection. This claim has been issued in the wake of a recent ruling by a Californian court that an Uber driver was an employee, rather than an independent contractor. Evidently, a finding against Uber in the UK would have significant repercussions for the company.

This case demonstrates how the emergence of new technologies and unconventional business models is testing the boundaries of the ever-developing law on employment status. Uber’s drivers do not sit readily within any of the established employment status categories, so it will be interesting to see how the traditional legal tests are applied in the context of the company’s unique operating model.

National Living Wage to see over 25s earning £7.20 per hour from April 2016 April 2016 will see the introduction of the National Living Wage ("NLW"), increasing the minimum wage that must be paid to workers aged 25 and over to £7.20 per hour (rising to £9 per hour by 2020).

Once introduced, the NLW will effectively become an additional tier of the existing National Minimum Wage framework, which will continue to apply to those between the ages of 21 and 25, as well as younger individuals in work and apprentices.

The Office for Budget Responsibility predicts that around six million people will be affected by the introduction of the NLW. Although measures have been announced to reduce the burden of the increased costs of the NLW on businesses, such as a 2 per cent reduction in corporation tax and a 50 per cent increase to the National Insurance Employment Allowance, employers in the low wage, labour intensive sectors are expressing serious concerns about the impact of the NLW.

In particular, significant concerns have been raised by the providers of care homes who warn that they may face “collapse” if the NLW is implemented. The Government is working with care homes to understand how the NLW will affect them. News on whether these discussions result in any further developments in relation to the NLW is keenly awaited.


Client Alert 2015-238