In this newsletter we look at legislation updates and recent case law judgements covering Changes to Exclusivity Clauses, TUPE Service Provision Changes and Suspension from Work, along with Digital Employment Right To Work Checks, and other elements.
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Legislation Updates / Case Law
Contractual Exclusivity Clauses No Longer Enforceable Against Certain Low-Income Workers
Exclusivity clauses in employment contracts prohibit a worker from doing work or performing services under another contract or arrangement without their employer’s consent or consent of the business. In May 2015, their use was banned in zero hour employment & casual worker contracts, which are contracts under which work is not guaranteed to the worker.
This ban on exclusivity clauses has now been extended to low-income workers by new regulations, making contractual exclusivity clauses unenforceable against workers whose guaranteed net average weekly wages do not exceed the Lower Earnings Limit (currently £123 a week). To calculate this net average, where the contract of employment or other worker’s contract is permanent, the average weekly wages are calculated by dividing by 52 the total remuneration to which the worker is entitled under that contract in respect of a period of 52 weeks. For temporary contracts, the average weekly wages under the regulations are calculated by dividing the total remuneration to which the worker is entitled under their contract by the number of weeks during which their contract is expected to continue. This means that any contractual clause that prohibits these workers taking on additional employment will be void and unenforceable.
The new regulations also contain equivalent provisions making it automatically unfair to dismiss an employee or worker to whom the regulations apply, if the reason or principal reason for the dismissal is that the employee breached an exclusivity term, and there is no qualifying period of employment to bring this claim. In addition, relevant workers are protected from suffering any detriment (such as disciplinary action) if they breach an exclusivity term in their contract.
TUPE Service Provision Changes and Unfair Dismissal
Under the TUPE Regulations, a service provision change takes place where:
- a client outsources services to a contractor for the first time;
- where a client transfers services from one contractor to a new contractor; and
- where a client brings services back “in-house” from a contractor.
Where TUPE applies, in most cases employees’ employment is automatically transferred to the new employer and they continue to be employed under their existing contracts of employment with the new employer. Where an employee is dismissed due to a service provision change, rather than employed by the new employer, the employee can bring a claim for unfair dismissal where they have at least 2 years’ service at the date of dismissal. The TUPE Regulations do not apply where the business activities carried out by the new business are fundamentally different.
An employment tribunal (ET) recently considered whether the reasons for the change in services following a transfer of services is relevant in determining whether the TUPE Regulations applied when services carried out by a contractor were brought back in-house. The employee in this case worked for as a CCTV operator for a contractor company which provided CCTV monitoring services for a Council for a number of years until the Council ended the contract and brought the CCTV service in house. When the contract came to an end, the employee was dismissed. Rather than hiring specialist staff to continue to monitor the CCTV, the Council instead tasked its existing staff with CCTV monitoring on top of their other duties. As a result, those existing staff rarely monitored the CCTV. The employee argued that her dismissal was unfair as there had been a ‘service provision change’ for the purpose of the TUPE Regulations, as the staff who were tasked with monitoring the CCTV as an additional duty were carrying out the same activities she had. She brought a claim in the ET for automatic unfair dismissal when she was dismissed by the contractor when that contract had come to an end.
The ET considered that it did appear on the face of it that a TUPE transfer had taken place, as the contracted services had been insourced. However, services or activities which are insourced should be ‘fundamentally the same as the activities carried out by the person who has ceased to carry them out’. The employee had carried out proactive monitoring of CCTV, answering calls from the police and public in relation to security matters. When the contract to provide the CCTV and call services came to an end and the Council took after the service, the Council chose not to employ full time CCTV operatives to provide the same service. The staff were principally assigned to other activities and, due to their high workload, CCTV was no longer monitored proactively. Cameras were not checked and there was no routine surveillance of areas in which the cameras were situated. Calls from the police and public remained unanswered as this was no longer a service that the Council could routinely provide. Proactive support, which played such a large part of the employee’s role, had disappeared over night. This distinction led the ET to conclude that the activities being carried out were fundamentally different and therefore a TUPE transfer had not occurred. Whatever the rights or wrongs of the decision taken by the Council, the demand on budgets were such that the money for the service disappeared to pay for something else. The ET did not accept that there was any deliberate action on the Council’s part to do this or not fund the service to avoid TUPE applying.
The employee appealed the ET’s ruling on the basis that changes caused by employee availability should be ignored as the activity was still there to be carried out. The Employment Appeal Tribunal (EAT) dismissed the appeal. It found that the tribunal was entitled to reach the conclusion it did on the basis that the activities undertaken by the respondent after the alleged transfer date were fundamentally different to those previously carried out by the claimant’s employer, regardless of the reasons for that difference (where there was no evidence that this was a deliberate attempt to avoid TUPE applying). The EAT found that the reasons behind the change, if there was a change, are not directly relevant (save in so far as they indicate a deliberate engineering to avoid the consequences of the TUPE Regulations); if the activity was fundamentally different, it was not relevant whether this difference in service arose from staff availability or for other reasons. Accordingly, the EAT found that the ET was correct to conclude that the TUPE Regulations did not apply in this case, such that the dismissal was not unfair.
ACAS publishes new Advice on Suspensions at Work
This includes the key elements of:
- Deciding whether to suspend someone;
- The process for suspending someone;
- Supporting an employee’s mental health during suspension;
- Pay and holiday during suspension.
The full details can be seen at https://www.acas.org.uk/suspension-during-an-investigation
Digital Employment Right To Work Checks
Employers can now check someone’s right to work in the UK digitally, using Identity Document Validation Technology (IDVT) through a certified third-party Identity Service Provider (IDSP). Currently, this digital service can only be used for British and Irish citizens who hold a valid passport (including Irish passport cards).
It is still acceptable for employers to check an applicant’s documentation in person, as is using the online right to work check (Home Office Employer Checking Service). For Disclosure and Barring Service checks, employers must use a certified IDSP. Those employing foreign nationals with biometric residence cards, biometric resident permits or frontier work permits are also able to conduct an online right to work check via the Employer Checking Service.
Although not mandatory, the Home Office recommends employers use a certified IDSP for carrying out a right to work check on the basis that it provides assurance that the provider meets relevant right to work scheme guidance and standards. Government guidance states that this means an employer can reduce risk by recruiting and renting in a safer way as they are able to assure prospective employee identity and eligibility using consistent and more secure methods. Employers will retain obligations that they must comply with under the schemes, including to satisfy themselves that the IDSP has carried out an identity check on the employee, and to retain copies of the check.
As was the case previously, employers that do not carry out the correct right to work checks (either manually, online using the Employer Checking service, or now digitally) could face civil penalties of up to £20,000 per worker or even a custodial sentence if they are found to have employed an illegal worker without the right checks.
Operational Managers are key to a Company’s success, and how they work with and manage their teams is an essential part of this.
We have recently introduced an additional ‘1 to 1 HR Coaching for Managers’ module, Managing Recruitment. The full list can be seen below, all are delivered remotely via Microsoft Teams:
- Being an Effective Manager / Responsibilities of a Manager;
- Dealing with Misconduct (Discipline), Poor Performance (Capability) and Grievances;
- Managing Attendance / Sickness Absence;
- Managing Performance / Developing People;
- Dealing With Conflict;
- Managing Recruitment.
Each module is focussed on the key elements involved, and takes around 1 to 1½ hours, with Managers also completing a workbook containing a number of questions and scenarios which is then analysed and feedback provided to ensure an in-depth understanding of the subject(s).
We also provide the following classroom based training courses (when social distancing rules allow) to help Managers deal with issues and people correctly to enhance your business:
- Influencing Styles and Persuasive Negotiating;
- Managing Conflict;
All of our courses can be tailored to suit your exact needs and delivered at your premises if required.
More details on all of the above can be found on our website.
We have long-term partnerships with key providers which enables us to provide other recommended services to our clients covering:
- Legal Services;
- Financial Services;
- Health Insurance and Staff Healthcare Benefits;
- Health and Safety.
Visit our website to see full information on our partners and their services.