Frontline: UK Employment Law Update March 2017

By Ian Hunter, Pattie Walsh, Elizabeth Lang, James Froud


Welcome to the March edition of Frontline. This month, Senior Associate Jonathan Goldsworthy summarises the Government's long-overdue review of the introduction of Employment Tribunal fees.

In our Case Summary we review an Employment Appeal Tribunal decision to dismiss an indirect discrimination claim from an individual whose request for 5 weeks' holiday for the purpose of attending religious festivals was refused; a controversial High Court decision in which a successful breach of confidence and contract claim resulted in a damages award of only £1; and, a Supreme Court ruling relating to the Minimum Income Requirement and its compatibility with European Human Rights Legislation.

Our Legal Updates include an update on the British Gas holiday pay challenge, the new regulatory reference regime for the financial services sector and the new Tribunal award caps that will come into effect from 6 April 2017.

We also bring you an update following our latest Post-Acquisition Restructuring workshop in San Francisco, a case review by our Danish team and details of our upcoming Central Eastern Europe seminar.

Government review of the introduction of fees in the Employment Tribunals "highlights some matters of concern that cannot be ignored” but fees are here to stay.

In 2013, fees were introduced for proceedings in the Employment Tribunal and Employment Appeals Tribunal with Type A claims (e.g. unpaid wages) costing £160, Type B claims (e.g. unfair dismissal) costing £250 and a subsequent fee for a hearing (£230 and £950 respectively). In the two years following the introduction of fees, it is estimated that the total number of single claims fell by 68% - a significantly larger decrease than expected.


Case Updates

Five weeks' holiday refusal not religious discrimination

Gareddu v London Underground Ltd UKEAT/0086/16/DM

The EAT has confirmed that an employee was not indirectly discriminated against on the basis of his religion when he was prevented from taking 5 weeks' holiday, which he claimed was for the purpose of attending religious festivals.


Missing the jackpot: damages of £1 awarded in Marathon breach of confidence case

Marathon Asset Management LLP & Anor v Seddon & Ors [2017] EWHC 300 (Comm)

The High Court found that two ex-employees caught copying confidential files belonging to their employer (the Claimant) onto USB sticks prior to their leaving were in breach of both their duties of confidence and their employment contracts.


Minimum Income Requirement for non-EEA spouses compatible with human rights

R (on the application of MM (Lebanon)) (Appellant) v Secretary of State for the Home Department (Respondent) and Others [2017] UKSC 10

The Supreme Court has ruled that the Minimum Income Requirement (MIR) is "acceptable in principle" and compatible with European human rights legislation.


Legal Updates

Supreme Court ends British Gas holiday pay challenge

Last year, the Court of Appeal held that results-based commission and non-guaranteed overtime must be included for calculating the first four weeks of statutory annual holiday pay . The decision was finally confirmed at the end of February by the Supreme Court, who refused to grant British Gas permission to appeal. The case will now return to the employment tribunal to decide on the amount to be paid to the Claimant, although the parties have already agreed that the 12-week period provided for in the Employment Rights Act 1996 should be applied when averaging pay.

New regulatory reference regime for the financial services sector

A new regulatory reference regime for relevant financial services firms (including UK banks, building societies and insurers) comes into effect on 7 March 2017. Under the new rules, such firms will have to comply with stricter requirements when recruiting senior managers, including the need to seek references for candidates in relation to specified senior management functions. These references should cover the entirety of the candidate's employment history over the preceding six years; satisfactory references will also need to be provided before they can be submitted for approval by the regulators. Former employers who are also regulated financial services firms are required to send an updated reference if they become aware of any information rendering their reference inaccurate.

The regulators are considering whether to extend the rules to other regulated firms, and a decision will be made on this in due course.

Tribunal awards limits increased

From 6 April 2017:

  • The maximum compensatory award for unfair dismissal will increase from £78,962 to £80,541.
  • The cap on weekly pay will increase from £479 to £489.
  • The minimum basic award for certain categories of unfair dismissal (dismissals for reasons of trade union membership or activities, health and safety duties, pension scheme trustee duties or acting as an employee representative or workforce representative) will increase from £5,835 to £5,970. 

Beyond the UK

A Danish Review: European Court of Justice ('ECJ') Ruling.

Søren Pedersen, Partner, and Mia Boesen, Associate, both from our Danish team, have reviewed the ECJ's recent ruling on the lawful status of banning employees from wearing visible signs of polictical, philosophical or relgious persuasions. You can read their review here.

Post-Acquisition Restructuring Across the Pond: Spotlight on our San Francisco Employment Workshop

On 7 March 2017, members of our International Employment Group delivered a full-day workshop focused on European and Asia-Pacific employment and labour law, in the context of acquisitions and workforce restructuring.

The workshop, which was held at the Grand Hyatt Hotel in Union Square, San Francisco, CA, was delivered to a strong crowd of General Counsel, HR Directors and Legal VPs from a variety of corporations.

Key topics included:

  • Key differences between U.S./European employment law
  • Union rights and works councils
  • Mandatory employee transfer rules and employment contracts
  • Pre- and post-acquisition considerations (including due diligence)
  • Developing an effective strategy in choosing acquisition targets
  • Comparison between the different legal approaches adopted in the Asia-Pacific region

The international team included Ian Hunter and Frances Vickery (London), Pattie Walsh (Hong Kong), Katarina Åhlberg (Sweden), Nathalie Devernay (France), Miguel Pastur (Spain), Cristiano Pambianchi (Italy) and Gertrud Romeis (Germany). They were joined by consultant Wolf von Kumberg (former-Northrop Grumman European Assistant General Counsel) and Bird & Bird CEO, David Kerr, who delivered a talk on Brexit and its implications for U.S. corporations operating in Europe.

If you would like to find out anymore about this event or about our post-acquisition and restructuring expertise please contact any of the San Francisco team or click here.

International Events

Central Eastern European Employment Seminar - 3 April 2017, Munich, Germany.

Bird & Bird's international employment law and intellectual property groups would be delighted for you to join them to discuss investment and recruitment trends across Central Europe, including Germany, Czech Republic, Hungary, Poland and Slovakia. Click here to find out more and RSVP.