When perseverance does not pay – repeated attempts to settle leave would-be claimant out of time

Since 6 May 2014 it has been a pre-condition of starting most Employment Tribunal claims that the employee first refers the matter to Acas for early conciliation. If that process fails for any reason then Acas will issue an early conciliation (EC) certificate to that effect which is essentially a green light to issuing proceedings if the individual wants to do so. In order not to deter the parties from genuine attempts at conciliation, the early conciliation period “stops the clock” on the normal timescale for lodging an ET claim, i.e. 3 months from the act complained of.

If an employee contacts Acas after notice of dismissal is given but before it takes effect (and therefore prior to the point where time limits begin) and then contacts Acas again some months later, can this second attempt at early conciliation stop the clock?

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US Department of Labor Withdraws Obama-Era Interpretation Letters On Key Wage And Hour Issues

On June 7, 2017, the US Department of Labor (DOL) withdrew its 2015 Administrator’s Interpretation on “independent contractor” status under the Fair Labor Standards Act (FLSA) and its 2016 Administrator’s Interpretation for determining “joint employment” under the FLSA. The two guidance memos specifically were intended to increase liability for employers under the Fair Labor Standards Act (“FLSA”), the federal statute that governs payment of minimum wages and overtime compensation. The guidance on joint employment was particularly controversial for employers, making it possible for the DOL to assess joint and several liability on even loosely related entities that did not necessarily have any control over the worker(s) in question.

Newly appointed Department of Labor Secretary Alexander Acosta acted to unwind these memoranda. In so doing, he reminded employers that their withdrawal did not “change the legal responsibilities of employers under the FLSA” as “reflected in the Department’s long standing regulations and case law.” Nevertheless, the action clearly signals a significant change in the enforcement position of the DOL concerning who qualifies as a joint employer or independent contractor under the FLSA. Although the DOL’s enforcement position is not the last word on the subject and courts will have the final say, the rescission of these guidance memoranda should provide some assurance to employers that under the present administration, there is less risk of a DOL enforcement action. Although the withdrawal of these memos does not formally change the law, it does signal the direction of the current DOL. While perhaps a positive development for employers, employers should still take caution with respect to all forms of wage and hour compliance, particularly in light of the availability of private class and collective action remedies.

NLRB’s Ruling on Workplace Recording Policy Survives Appellate Court Review

Like many employers, Whole Foods maintained a policy that prohibited employees from making audio or video recordings at work.  The purpose of the policy, as explained by Whole Foods, was not to stifle employees, but rather to promote open communications by allowing employees to speak freely without concern of being secretly recorded.  In 2015, the National Labor Relations Board (NLRB) ruled that this policy violated the National Labor Relations Act because it could be interpreted by employees to apply to activity undertaken by them on a concerted basis for mutual aid or protection, and thus within the guarantee of rights in the National Labor Relations Act.  Whole Foods appealed the NLRB’s ruling to the United States Court of Appeals for the Second Circuit, arguing, among other things, that what was prohibited was recording, which is not protected, and not any actual protected activity itself.

On June 1, 2017, the court issued a summary order, in which it affirmed the NLRB’s ruling that Whole Foods’ blanket “no-recording” policy was overly broad and therefore violated the Act.  The court explained: “Whole Foods’ attempt to separate the act of ‘recording’ from conduct falling within Section 7’s protection ignores that its policies prohibit recording regardless of whether the recording is in relation to employees’ exercise of their Section 7 rights.”  The court further supported its conclusion that the policy was overly broad by pointing out that it was “not limited to controlling those activities in which employees are not acting in concert.”  Although the court upheld the NLRB’s finding that the policy was overly broad and unlawful, the panel left open the door that employers can “craft a policy that places some limits on recording” without running afoul of the NLRA by keeping the scope of the prohibition narrow.  Presumably a policy that does not prohibit all recording, including recordings protected by Section 7, and that specifically details the non-protected recordings which are prohibited (such as, for example, prohibiting recording in patient care areas of health care employers), could be deemed lawful under the NLRB’s current standard for evaluating employer rules.


President Trump Set To Nominate New NLRB Members

It appears that the National Labor Relations Board (NLRB) may finally get new members, and along with it, a much-anticipated Republican majority. The Trump Administration soon is expected to formally announce attorneys Marvin Kaplan and William Emanuel to fill the two vacant slots on the National Labor Relations Board, to join the current Chairman and lone Republican on the Board, Philip Miscimarra.

The administration hopes to have the new members confirmed by the Senate before the August recess. If confirmed, the new NLRB members are expected to use their newly-obtained majority to reconsider significant workplace issues, including the NLRB’s test for determining whether joint employer relationships exist, the standards for evaluating whether workplace rules interfere with employees’ rights under the National Labor Relations Act “(NLRA”), appropriate units for collective bargaining, the question of whether graduate students and research assistants are employees under the NLRA with the right to collective bargaining and a plethora of other decisions from the past eight years that more expansively interpreted the NLRA.

Mr. Kaplan currently is counsel to the commissioner of the independent Occupational Safety and Health Review Commission. He previously served as the Republican workforce policy counsel for the House Education and the Workforce Committee. Mr. Emanuel is a lawyer in private practice at a management-side law firm in Los Angeles with extensive experience representing employers in labor relations matters.

Along with the expiration of current NLRB General Counsel Richard Griffin’s term in October 2017, the upcoming change in the makeup of the NLRB portends to bring an employer-friendly shift in the interpretation of the NLRA from that given over the past nearly nine years by the Obama-appointed NLRB.

New Acas guidance on holiday pay and accrual during sickness

The Acas National Newsletter for June, out earlier this week, contains some slightly updated advice on the eternal question of how you calculate holiday pay, plus an existential poser on the relationship between sickness and holiday accrual.

  1. On the holiday pay front, there remains no steer as to how commission or overtime earnings should be factored into your calculations, only the repeated assertion that they should be. The advice notes that Lock is now to be sent back to the Employment Tribunal “to decide how such holiday pay calculations must be made“.  This is not correct – the finding of the Employment Tribunal will relate only to the facts in Lock.  While they may be persuasive in other cases, they will be of no greater precedent value than that, especially where commission earnings are much lumpier or less regular than Mr Lock’s.
  2. The guidance does not mention the recent reiteration of the effectiveness of a three month gap to break a “series of deductions” for claims of holiday pay arrears via the unlawful deductions provisions of the Employment Rights Act http://www.employmentlawworldview.com/good-news-for-employers-facing-holiday-pay-claims.    
  3. There is currently no definitive case law that suggests voluntary overtime needs to be taken into account”, it says, but also “several Employment Tribunal rulings have judged (sic) that voluntary overtime should be included when undertaken regularly”. “Regularly” is undefined but obviously brings with it a whole series of subsidiary questions.  What happens if the overtime is regular, but not on the days you took as leave? Over how long must you work an overtime pattern before it becomes regular?  What degree of variance of hours or days stops voluntary overtime being regular for these purposes?  Acas refers to an EAT decision expected later this year which may answer some or none of these questions, but it is wildly unlikely to deal with all of them.
  4. Then there is the sickness question. The accepted wisdom is that (per the Acas note) “when a worker takes paid or unpaid sick leave their annual leave will continue to accrue. If a worker is unable to take their annual leave in their current leave year because of sickness, they should be allowed to carry that leave over”.  Separately the guide says that “while workers are in employment, 5.6 weeks of their annual leave…… must be taken and cannot be “paid off.    

The Working Time Directive minimum holiday requirement is a health and safety measure designed to ensure that workers have an opportunity to recover from the strains of work. It is far less clear that they need those holidays to recover from the strains of not being at work, or in either case that there is any actual health and safety benefit in carrying accrued holidays forward to what could be many months after the period of work notionally being recovered from.  Nonetheless, that is the law.

However, the same Acas guidance indicates nonetheless that the employee “may choose to specify a period where they are sick but still wish to be paid annual leave”.  Really?

So does your being off sick mean that you can take holiday or not? The WTR are very clear that you cannot pay out statutory minimum holidays other than on termination of employment, sick or not.   They have to be taken or carried forward.  But if they can be taken when sick, as the Acas note suggests, when is an employee actually unable to take holiday due to sickness?  In other words, why is there ever any need for it to be carried forward?

Is there a level of sickness which is compatible with being on leave and something more serious which isn’t? Bear in mind here that there is nothing in the Working Time Regulations which says that your holiday has to be away from home, physically beneficial or even particularly enjoyable, so that threshold of incapacity would surely be a high one.

And if it is possible to take holidays while off sick, what stops the employer using the WTR to compel you to take holidays during the paid period of your sick leave and so save itself sick pay and/or holiday accrual?  Other than its being employment relations suicide, I suppose.

The practical answer is probably that an employee can agree to “take” WTR holiday and be paid for it, even while off sick, and probably won’t then take any points in relation to the technical breach of the WTR which that entails.  However, he cannot be compelled to do so. That distinction is not a satisfactory legal position for employers which face the accrual of substantial holiday pay liabilities merely because the absent employee does not agree to take it.  If it is possible conceptually to take holiday while off sick then there would be no cases where employees are “unable” to take it on those grounds in the current leave year, and so those liabilities should not arise.

Justification of Redundancy Following Disability-Related Absence

If because of your disability you are absent from work and if because of that absence your employer discovers that it doesn’t actually need you, does your resulting redundancy arise from your disability? 

This is important because Section 15 Equality Act 2010 says that if A treats B unfavourably “because of something arising in consequence of B’s disability” then that will be unlawful discrimination if A cannot justify that treatment.

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Webinar: Key Labour and Employment Issues Affecting UK Employers

Squire Patton Boggs presents a webinar to discuss key labour and employment hot topics affecting UK employers.

On 28 June 2017 at 4.00 p.m. BST (UK) (5.00 p.m. CEST, 11.00 a.m. EDT, 8.00 a.m. PDT) David Whincup, Annabel Mace and Bryn Doyle will focus on:

  • Business Immigration – An update on recent changes plus the latest on Brexit and immigration.
  • Holiday pay and working time − The current position.
  • Gender Pay Gap Reporting – Complying with the new duty.
  • Mental health − Dealing with mental health issues in the workplace.

Note that compliance with the General Data Protection Regulation, due to come into force in May 2018, will be the subject of a stand-alone webinar.

The webinar will be a 50-minute presentation in English, followed by a 10-minute online question and answer session.

Intended to help you manage labour and employment law risks across your international operations, the webinar will be of interest to both HR professionals and in-house counsel.

This webinar is part of our 2017 series focussing on key labour and employment issues in countries throughout Europe, the Middle East, Asia Pacific and the US.

Register Online.

Summertime Blues for the President’s Travel Ban Executive Order?

As we enter the dog days of Summer, the Fourth Circuit Court of Appeals upheld a nationwide preliminary injunction issued by the US District Court for the District of Maryland enjoining the implementation of  President Trump’s second Executive Order, travel ban restricting nationals of six Muslim-majority countries from being issued visas and entering the United States. In the case, International Refugee Assistance Project (IRAP) v. Trump, 10 of the 13 judges that heard the case, upheld most of a District Court’s injunction against the president’s revised executive order. Chief Judge Gregory’s introduction eloquently encapsulates the seventy-nine page opinion of the majority:

The question for this Court, distilled to its essential form, is whether the Constitution, as the Supreme Court declared in Ex parte Milligan, 71 U.S. (4 Wall.) 2, 120 (1866), remains “a law for rulers and people, equally in war and in peace.” And if so, whether it protects Plaintiffs’ right to challenge an Executive Order that in text speaks with vague words of national security, but in context drips with religious intolerance, animus, and discrimination. Surely the Establishment Clause of the First Amendment yet stands as an untiring sentinel for the protection of one of our most cherished founding principles—that government shall not establish any religious orthodoxy, or favor or disfavor one religion over another. Congress granted the President broad power to deny entry to aliens, but that power is not absolute. It cannot go unchecked when, as here, the President wields it through an executive edict that stands to cause irreparable harm to individuals across this nation. Therefore, for the reasons that follow, we affirm in substantial part the district court’s issuance of a nationwide preliminary injunction as to Section 2(c) of the challenged Executive Order.

IRAP v. Trump, Opinion No. 17-1351, pg. 12 (4th Cir. May 25, 2017).

The Trump administration indicated it intends to appeal this decision to the US Supreme Court. However, the Executive Order travel ban remains on hold while proceedings continue in the lower court. In addition, the Ninth Circuit Court of Appeals is expected to rule on a similar challenge in State of Hawaii, et al. v. Trump. Perhaps, judicial fireworks are in store just in time for the Fourth of July.

Sixth Circuit Joins Two Sister Circuits In Holding That Class Action Waivers In Employment Arbitration Agreements Violate National Labor Relations Act

Court joins Seventh and Ninth Circuits in holding that employer’s requiring employees to waive class and collective action procedures as a condition of employment is unenforceable, but issue will be resolved late this year by United States Supreme Court

The issue of whether an employer can require, as a condition of employment, that an employee agree to arbitrate all claims against it, and that the employee do so only on an individual basis, thereby forgoing class and collective action procedures, has been quite the ongoing saga.  In brief, in 2012, the National Labor Relations Board (NLRB) held that requiring employees to waive the right to bring claims in the form of a class action (or a collective action under the Fair Labor Standards Act) violates the guarantee of rights in Section 7 of the National Labor Relations Act (NLRA), which includes the right to engage in protected concerted activity for mutual aid of protection.  The employer in that case (D.R. Horton, Inc.) appealed with NLRB’s decision to the Fifth Circuit Court of Appeals, which denied enforcement of the NLRB’s order.  Undaunted, the NLRB thereafter issued a decision in a different case (Murphy Oil USA, Inc.), but reaching the same result – class waivers in arbitration agreements unlawfully interfere with employees’ right to engage in protected concerted activity under the NLRA.  Once again, the employer appealed to the Fifth Circuit, and once again, the court invalidated the NLRB’s ruling.

The Fifth Circuit’s position rejecting the NLRB’s stance on class waivers in arbitration agreements subsequently was joined in decisions from the Second and Eighth Circuits, as well as impliedly agreed to by the Eleventh Circuit and numerous state courts, including, notably, the California Supreme Court (in the Iskanian decision).  However, in May 2016, the Seventh Circuit Court of Appeals issued the first federal appeals court decision agreeing with the NLRB’s interpretation (in Lewis v. Epic Systems).  Several months later, in August 2016, the Ninth Circuit joined the Seventh Circuit in holding that class waivers in arbitration agreements violate the NLRA (in Morris v. Ernst & Young)Based on this emergent split in authority, in January 2017, the U.S. Supreme Court agreed to take up the issue, granting certiorari and consolidating the Murphy Oil, Lewis, and Morris cases.  Those cases will be heard during the upcoming Supreme Court term, which starts in October 2017, and a decision is expected in late 2017 or early 2018.  For more information, see our extensive coverage on this issue in posts here (Murphy Oil NLRB decision), here (Murphy Oil Fifth Circuit decision), here (Lewis decision), here (Morris decision), and here (US Supreme Court grants certiorari).

On May 26, 2017, the anti-waiver parties in the consolidated Supreme Court proceeding got a boost from the Sixth Circuit Court of Appeals, which joined the Seventh and Ninth Circuits in concluding that mandatory waivers of class and collective action proceedings violate the NLRA because they interfere with employees’ rights under that law to engage in protected concerted activity.  Central to the court’s ruling in NLRB v. Alternative Entertainment, Inc. was its determination that the right to engage in class action litigation is not a procedural right which can be waived by employees, but instead is a substantive right guaranteed by the NLRA, and thus an employer cannot require that employees give up that right as a condition of employment.

Of course, the employer in this decision almost certainly will seek Supreme Court review, given that the issue presented in the case is nearly identical to that in Murphy Oil, Lewis, and Morris.  How the high court resolves this issue finally will put to rest an issue that has divided the courts and caused ongoing confusion (and headaches) for employers by providing a much-needed answer to the question of whether class waivers in employment arbitration agreements are enforceable.

Whose lie is it anyway? Not for employer to decide if whistleblowing disclosure is protected

For a whistleblower to benefit from the statutory protections, his disclosure must be protected, i.e., be (usually) about the breach of a legal obligation and reasonably believed by him to be true and in the public interest.  If he deliberately lies or makes his disclosure only to advance his own interests or prejudice somebody else’s, he may lose that protection.  While he may still be able to claim unfair dismissal, he cannot get to the uncapped compensation available to ‘proper’ whistleblowers.

But who decides whether he is lying or whether he reasonably believes he is acting in the interests of the public.  Is it the employer or the Employment Tribunal?

Beatt –v– Croydon Health Services NHS Trust was a long story.  A very long story. The Employment Tribunal judgment ran to over 200 pages, an “immense labour” said the Court of Appeal, clearly damning with faint praise.  However, it was also somewhat randomly paragraphed and rather repetitive, and “not a model I would encourage others to follow” said the Judge shortly afterwards, so abandoning the “faint praise” bit of that almost immediately.

Dr Beatt made disclosures about his employer’s decision to suspend one of his key assistants more or less mid-surgery.  He alleged, and the Coroner later accepted, that this had potentially contributed to the death of a patient.  He also made a related series of complaints about other members of his surgery team which the Trust eventually decided had been made out of personal malice rather than any objective and genuine concern about patient safety at the Trust.  Therefore it dismissed Dr Beatt for misconduct, accepting entirely that it was because of his disclosures, but denying liability because (in its view) those disclosures were “unsubstantiated and unproven” and in part aimed at discrediting and destabilising others.

The ET was critical of the Trust taking 9 months to investigate the charges against Dr Beatt, but it was not until close on five years later that the case staggered wearily into the Court of Appeal, reduced essentially to a single question – at the point in the legislation where it says that whistleblowing protections are engaged “if the reason for the dismissal is that the employee made a protected disclosure”(section 43 ERA 1996), is it the employer’s reason which matters or the actual reason?

That is not as obvious as it sounds.  Remember that in most cases the fairness of a dismissal is based on the employer’s reasonable belief at the time, so a termination for misconduct could be fair even if the Employment Tribunal later found that there had been none.

The Court of Appeal was clear – the employer’s belief in whether the disclosure was genuinely made in the public interest or with any real belief in its truth is not the determining question.  If it were, it would be too tempting for employers to argue that they saw some element of malice or self-advancement in the disclosure, that whistleblowing protection was therefore forfeited and that the subsequent dismissal was fair.  After all, it is well recognised that protected disclosures are not always factually well-founded, that they are sometimes intemperate in tone and that they will often necessitate damaging criticisms of other employees.  Such arguments would be easy to make. No, the question of the employee’s reasonable belief that his disclosure was true and in the public interest was for the Employment Tribunal to decide as an issue of fact, and not for the employer as a matter of its perception at the time.

Lessons for Employers:

1          The Trust said that even if Dr Beatt’s conduct in making his complaints had not been found to be misconduct, it was still a “breach of trust and confidence” meaning that he had to go anyway.  The Court of Appeal agreed that in the right circumstances a valid distinction could indeed be made between dismissal for the fact of making a disclosure and dismissal for the manner in which it is made, which could potentially be fair.  However, to get home on the manner point, the employee’s conduct had to be really seriously unreasonable, rather than merely ordinarily so.  If you retaliate against ordinary unreasonableness you will be treated as retaliating against the disclosure itself, and will therefore be sunk.

2          If you are going to rely on a lack of reasonable belief by the employee in the truth or public interest element of his disclosure, do be very sure (i) you are right; and (ii) even more so, you can prove it.  The Trust’s witnesses were kicked all around the ET’s park in credibility terms because they were largely unable to explain why they had reached the conclusions they had about Dr Beatt’s motives.

3          Last, do remember that nailing your pleaded colours to the mast of the disclosure being unprotected is a high-risk play – you have just freely admitted that your dismissal was in retaliation for the disclosure, so if it turns out to be protected after all, you are in a lot of trouble.