October Legal alert

legal alert

This month:

Case law: long-established contractor can be 'worker' entitled to holiday pay

Businesses who use sub-contractors over a period of many years should carefully consider the extent to which the contractor is integrated into the workforce. Otherwise, they risk those sub-contractors acquiring workers' rights, such as a right to holiday pay. 

In a recent case, a self-employed sub-contractor had worked with a business almost exclusively for 16 years but did not legally have to offer him work and he did not have to accept work offered. He claimed he was a 'worker' and therefore entitled to holiday pay. 

Ordinarily, someone is only a worker if there is 'mutuality of obligation' – the employer is obliged to offer work and the worker is obliged to accept it. However, the Employment Appeal Tribunal (EAT) in this case accepted the sub-contractor was a worker – despite the lack of mutuality. 

The EAT ruled that the following factors in this case meant he had integrated into the workforce: 

  • the length of time involved;
  • the fact the business regularly offered him work;
  • he would turn up to do it when it did;
  • that he worked with minimum supervision;
  • he wore the business's work clothes;
  • he drove the business's vehicles.

The sub-contractor was therefore entitled to holiday pay. 

Operative date

  • Now

Guidance: government guidance on new time off rights for fathers-to-be

Employers will welcome new government guidance on new rights for fathers-to-be and partners of pregnant women to time off to go to ante-natal appointments with them. The new laws came into force on 1 October 2014.   

The Department of Business, Innovation and Skills has produced a free guide for employers containing Frequently Asked Questions on the new rights.  

These include questions such as Who can take the unpaid time off?, Is there a qualifying requirement? and How much time can the person accompanying the expectant mother take off? 

Operative date

  • Now

Recommendation

Guidance: government and Acas issue guidance on new shared parental leave and pay

The government and Acas have both published online guidance on new shared parental leave and pay rules for parents of babies due (or adopted) on or after 5 April 2015. 

The new rules will allow a mother and father to share up to 50 weeks' shared parental leave between them, and 37 weeks' pay. The government guide contains sections on eligibility, entitlement, starting shared parental leave, blocks of leave and record keeping. 

The Acas guidance summarises the new rules and gives practical guidance on developing a shared parental leave policy, the request process and communications with parents regarding the possible outcomes following a request. 

Operative date

  • April 2015

Recommendation

Case law: employer liable for losses caused by unauthorised customer reference

Employers should take particular care to make sure employees are clear as to who is expressly authorised to provide references.  

In a recent case, an employee gave a customer reference without authority to do so, and the employer was held liable for losses caused to a third party for negligence. 

A bank employee gave a customer reference without having authority to do so. A casino relied on it and allowed the customer to bet immediately after receiving cheques from him. The customer lost and the cheques bounced. The casino claimed that the bank was negligent, and owed a duty to exercise reasonable skill and care which it had failed to discharge; the casino had relied on it and suffered loss. 

The High Court ruled that the bank had been negligent. The reference had been issued in the usual way so the casino could argue either: 

  • the employee had apparent authority to give the reference, so the bank was liable even though the employee had no actual authority; or
  • the bank was vicariously liable – that it was liable for the acts or omissions of its employee, provided they took place in the course of their employment.

However, the court found there was some contributory conduct of the casino in failing to notice that the cheques were self-evident forgeries, and the award was therefore reduced by 15% for contributory fault. 

Operative date

  • Now

Case law: patent owners can mark products with web address

Patent owners now have an easier way to mark their products by simply using a web address of a page giving details of the patent – rather than having to set out the details on the product itself. 

Under new rules that came into force on 1 October 2014, a product can be marked with a web address instead of words such as 'patent applied for', provided the web page at that address clearly associates the patent number with the product. This allows patent owners to change their web page, rather than each product, if the status of their patent changes. 

The address of the owner's home page is unlikely to meet the criteria – patent owners in countries where this is already possible have invariably set up special pages dedicated to their patent details. 

The Government has issued guidance on the new rules. 

Operative date

  • April 2015

Recommendation

Case law: employers must be proactive over reasonable adjustments for disabled employees

Employers with disabled employees or job candidates need to make sure they are proactive in deciding whether, and how, to make reasonable adjustments to their usual practices, criteria or provisions to remove substantial disadvantages. 

A recent case highlights the issues and concerned a disabled employee who the employer found difficult to contact when he was off work. The employee was at risk of redundancy and was included in a pool of employees looking for alternative posts. He received his termination notice, but was then off sick for three months with sleeping problems and depression. He was referred to occupational health who told his employer he was not fit to attend administrative meetings such as interviews. 

His employer later emailed him to ask if he was able to attend an interview for an alternative post which was less senior than his previous position. He did not reply. Nor did he respond to calls to his mobile phone about the post because he had switched it off. He also failed to answer another email sending him details of four further vacancies. 

The employer wrote and confirmed his dismissal and the employee's appeal was rejected because he had failed to express an interest in any of the roles offered to him, and had given no indication whether he was able to attend interviews. He therefore claimed unfair dismissal and disability discrimination. 

The Employment Appeal Tribunal ruled that the requirement that employees in the redeployment pool attend interviews was a practice that put the employee at a substantial disadvantage compared to non-disabled employees, because his disability meant he could not attend interviews. The employer clearly knew this and should have made reasonable adjustments, for instance, through a less formal assessment at his home.  

Operative date

  • Now

Case law: ruling on fathers' entitlement to enhanced paternity pay may affect pay under new shared parental leave rules

Employers giving mothers enhanced maternity pay, but don't plan to give fathers enhanced paternity pay under the new shared parental leave provisions, should make sure they can evidence that this is a proportionate means of achieving a legitimate aim. If they don't, they risk indirect discrimination claims. 

A father took additional paternity leave and was paid the statutory rate of pay. However, mothers at the same company were entitled to enhanced pay, which was significantly above the statutory rate, during additional maternity leave. 

The Employment Tribunal rejected his direct discrimination claim because he had chosen a female employee on maternity leave as his comparator. He should have chosen a woman whose partner had given birth and who applied for additional maternity leave. 

In his indirect discrimination claim, the employee successfully proved the employer was operating a discriminatory provision, criterion or practice. However, the Tribunal said it was objectively justified as a proportionate means of achieving the employer's legitimate aim of increasing the number of women in its workforce. 

The employer was able to produce detailed evidence of its attempts to bring more female employees into its male-dominated workforce, including specific targets, and other evidence demonstrating it was objectively justified as a proportionate means of achieving the employer's legitimate aim. 

As the ruling is a tribunal decision, is not binding on other tribunals but it provides an indicator of the possible approach future Employment Tribunals will take to discrimination claims from fathers if they are paid less than mothers under the shared parental leave rules (in force for babies born on or after 5 April 2015). 

Operative date

  • Now

Case law: UK design law changes come into force

Owners of existing UK and Community designs, and creators of new designs, should be aware of changes to the laws governing UK registered and unregistered designs which came into force on 1 October 2014.

The changes include a new criminal offence. The main changes are as follows: 

  • Criminal offence: it will be a criminal offence to intentionally copy a UK or Community registered design, which the infringer knows is registered, in the course of a business without the owner's permission. The copy must be identical or differ from the original only in 'immaterial details'. It will be a defence if the infringer can show it reasonably believed the registration to be invalid (ie the design should never have been registered in the first place) or that it has not been infringed.
  • New designs: if someone commissions a designer to create a design, intellectual property (IP) rights in the new designs will belong to the designer, not the commissioner, unless they agree otherwise.
  • Criteria for unregistered Design Right: the criteria for when UK unregistered Design Right applies have changed. The new rules protect 'the shape or configuration (whether internal or external) of the whole or part of an article'. The effect is to stop owners of Design Right from asserting their rights over just one small – perhaps trivial – part of their design, rather than the overall design.
  • Unregistered designs: these must still be 'original' (not commonplace), but the new law clarifies that they need only be original in the UK and EU (and a limited number of territories that have treaties with the UK in relation to IP rights).
  • New defences: there are new defences allowing use of unregistered designs for non-commercial private purposes, experimental purposes, teaching and citation purposes, and using equipment on non-UK registered ships or planes which are temporarily in the UK.
  • Continued use if same purpose as before registration: a person who was using a design (or had made serious and effective preparations to do so) before you registered your UK design, can continue to use that design despite your subsequent registration of it provided they only use it for the same purposes as they did before your registration. This brings UK registered design law into line with Community design law.

Further changes are expected, and we will update you as they become imminent.

Operative date

  • Now

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Members seeking prompt advice on employment, company or commercial law can contact our legal helpline, Directors' Law Express, on 0870 241 3478, up to 25 times a year.

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