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United Kingdom labour law involves the legal relationship between workers, employers and trade unions.[2] People at work in the UK benefit from a minimum charter of employment rights.[3] This includes the right to a minimum wage of £6.50[4] for over 21-year-olds under the National Minimum Wage Act 1998, 28 paid holidays and no longer than 48 working hours unless one consents under the Working Time Regulations 1998, the right to leave for child care, and the right to request flexible working patterns under the Employment Rights Act 1996. The Employment Rights Act 1996 adds that, unless the employee repudiates the relationship, before a dismissal every employer must give reasonable notice after one month of work, and after two years employers must provide a sufficiently fair reason for dismissal and redundancy payments for employees made redundant. If a company is taken over the Transfer of Undertakings (Protection of Employment) Regulations 2006 state that employees' terms cannot be worsened, including to the point of dismissal, without a good economic, technical or organisational reason.
Beyond individual rights, workers have the ability to participate in decisions about how their enterprise is managed through a growing set of statutory rights and the traditional models of collective bargaining. Gradually, the number of "John Lewis" style participatory institutions at work have grown, often mirroring European standards. Workers have the right to codetermine how their occupational pensions are managed under the Pensions Act 2004, and how health and safety policies in the workplace are formulated under the Health and Safety at Work Act 1974. In larger firms with over 50 staff, workers must be informed and consulted about major economic developments, particularly about business difficulties. This happens through a steadily increasing number of works councils, which usually must be requested by staff. The UK has not yet implemented earlier proposals, or followed the majority practice in the EU to require that employees have a vote for members' of their company's board of directors. Collective bargaining between trade unions and company management remains the UK's primary participatory model. Collective agreements are backed up by the threat of a strike which is lawful if "in contemplation or furtherance of a trade dispute". Since the early 1980s, industrial action has steadily decreased, as has membership of trade unions. The Trade Union and Labour Relations (Consolidation) Act 1992 sets out rules for the constitution of trade unions, members' rights, the conditions to be fulfilled before strike action may be taken and the legal status of collective agreements.
"It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorises, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, a merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate."
Labour law in its modern form is primarily a creation of the last three decades of the 20th century. However, as a system of regulating the employment relationship, labour law has existed since people worked. In Peasants' Revolt of 1381, which was in turn suppressed and followed up with the Statute of Cambridge 1388, which banned workers from moving around the country. Yet conditions were improving as serfdom was breaking down. One sign was the beginning of the more enlightened Truck Acts, dating from 1464, that required that workers be paid in cash and not kind. In 1772 slavery was declared to be illegal in R v Knowles, ex parte Somersett,[5] and the subsequent Slave Trade Act 1807 and Slavery Abolition Act 1833 enforced prohibition throughout the British Empire.[6] The turn into the 19th century coincided with the start of the massive boom in production. Gradually people's relationship to their employers moved from one of status - formal subordination and deference - to contract whereby people were formally free to choose their work.[7] However, freedom of contract did not, as the economist Adam Smith observed, change a worker's factual dependency on employers.
As its height, the businesses and corporations of Britain's Winston Churchill were rising stars, embarked on significant welfare reforms. These included the Trade Disputes Act 1906, which laid down the essential principle of collective labour law that any strike "in contemplation or furtherance of a trade dispute" is immune from civil law sanctions. The Old Age Pensions Act 1908 provided pensions for retirees. The Trade Boards Act 1909 created industrial panels to fix minimum wages and the National Insurance Act 1911 levied a fee to insure people got benefits in the event of unemployment.
During World War One the brutality of the Transfer of Undertakings (Protection of Employment) Regulations 2006, a clear example where employees contracts transfer was in Litster v Forth Dry Dock.[295] The House of Lords held that a purposive interpretation is to be given to the legislation so that where 12 dockworkers were sacked an hour before a business sale, their contracts remained in effect if the employees would still be there in absence of an unfair dismissal. This does not, however, mean that employees unfairly dismissed before a sale have a right to their jobs back, because national law's normal remedy remains with a preference for damages over specific performance.[296] The same principle goes for any variation that works to the detriment of the employee. So the transferee employer may not (without a good business reason) for example, try to impose a single new gardening clause[297] or withdraw tenure, or the employee will have a claim for constructive dismissal.[298]
An acute question for the TUPE Regulations, particularly in the years when the Conservative government was implementing a policy of shrinking the size of the public sector, was the extent they applied to jobs being outsourced, typically by a public body, like a local council, or changed between businesses in a competitive tender process for public procurement. On this point a series of ECJ decisions came to the view that there could be a relevant transfer, covered by the Directive, even where there was no contractual link between a transferor and a transferee business,[299] so long as the business entity retained its "identity". In turn the "identity" of a business would be determined by the degree to which the business' factors of production remained the same before and after a sale.[300] It could be that no employees were hired after an asset sale, but the sacked employees would still have a claim because all their old workplace and capital equipment was being used by the new employer. It is also relevant to what extent a business is capital or labour-intensive. So in Oy Liikenne Ab v Liskojärvi[301] the ECJ held that it was unlikely that 45 Helsinki bus drivers' contracts were transferred, between the company that lost the contract and the new bus company that won it, even though 33 drivers were rehired, because "bus transport cannot be regarded as an activity based essentially on manpower". On the other hand, employees stand to benefit where a new employer offers old staff their jobs, the intention to rehire makes it more likely the court will deem there to be a transfer.[302]
Often business transfers take place when a company has plunged into an insolvency procedure. If a company enters liquidation, which aims to wind down the business and sell off the assets, TUPER 2006 regulation 8(7) states that the rules on transfer will not apply.[303] The main objective, however, in an insolvency procedure particularly since the Cork Report and the Enterprise Act 2002, is to effect rescues through the system of company administration. An administrator's task under the Insolvency Act 1986 Schedule B1, paragraph 3, is either to rescue the company as a going concern, rescue the business typically by finding a suitable buyer and thus save jobs, or as a last resort put the company into liquidation. If employees are kept on after an administrator is appointed for more than 14 days, under paragraph 99 the administrator becomes responsible for adopting their contracts. The liability on contracts is limited to "wages and salaries".[304] This includes pay, holiday pay, sick pay and occupational pension contributions, but has been held to not include compensation for unfair dismissal cases,[305] wrongful dismissal,[306] or protective awards for failure to consult the workforce before redundancies.[307] If the business rescue does ultimately fail, then such money due employees achieves the status of "super priority" among different creditors' claims.
The Insolvency Act 1986 priority list
The priority list in insolvency sees creditors with fixed security (typically banks) get paid first, preferential creditors third, unsecured creditors up to a limit of £600,000 third, floating charge holders (usually banks again) fourth, remaining debts to unsecured creditors (in the unlikely event that anything remains) fifth, "deferred debts" (typically to company insiders) sixth, and shareholders last.[308] Among the preferential creditors, the insolvency practitioners' fees together with adopted contracts attain super-priority. Otherwise, employees wages and pensions still have preferential status, but only up to an £800 limit, a figure which has remained unchanged since 1986.[309] Employees having priority among creditors, albeit not above fixed security holders, dates back to 1897,[310] and is justified on the ground that employees are particularly incapable, unlike banks, of diversifying their risk, and forms one of the requirements in the ILO Protection of Workers' Claims (Employer's Insolvency) Convention.[311] Often this limited preference is not enough, and can take a long time to realise. Reflecting the Insolvency Protection Directive[312] under ERA 1996 section 166 any employee[313] may lodge a claim with the National Insurance Fund for outstanding wages. Under ERA 1996 section 182 the amount claimable is the same as that for unfair dismissal (£350 in 2010) for a limit of 8 weeks. If an employee has been unpaid for a longer period, she may choose the most beneficial 8 weeks.[314] The Pensions Act 2004 governs a separate system for protecting pension claims, through the Pension Protection Fund. This aims to fully insure all pension claims.[315] Together with minimum redundancy payments, the guarantees of wages form a meagre cushion which requires more of a systematic supplementation when people remain unemployed.
Under the Equality Act 2006,[316] a new Equality and Human Rights Commission was established, subsuming specialist bodies from before. Its role is in research, promotion, raising awareness and enforcement of equality standards. For lawyers, the most important work of predecessors has been strategic litigation[317] (advising and funding cases which could significantly advance the law) and developing codes of best practice for employers to use. Around 20,000 discrimination cases are brought each year to UK tribunals.
Since the 98) abolition of forced labour (29 and 105) abolition labour by children before the end of compulsory school (138 and 182) and no discrimination at work (Nos 100 and 111). Compliance with the core Conventions is obligatory from the fact of membership, even if the country has not ratified the Convention in question. To ensure compliance, the ILO is limited to gathering evidence and reporting on member states' progress, so that publicity will put public and international pressure to reform the laws. Global reports on core standards are produced yearly, while individual reports on countries who have ratified other Conventions are compiled on a bi-annual or perhaps less frequent basis.
Because the ILOs enforcement and sanction mechanisms are weak, there has been significant discussion about incorporating Dispute Settlement procedures (effectively a judicial process) may retaliate through trade sanctions. This could include reimposition of targeted tariffs against the non-compliant country. Proponents of an integrated approach have called for a "social clause" to be inserted into the GATT agreements, for example by amending article XX, which gives an exception to the general trade barrier reduction rules allowing imposition of sanctions for breaches of human rights. An explicit reference to core labour standards could allow action where a WTO member state is found to be in breach of ILO standards. Opponents argue that such an approach could backfire and undermine labour rights, as a country's industries, and therefore its workforce, are necessarily harmed but without any guarantee that labour reform would take place. Furthermore it was argued in the Singapore Ministerial Declaration 1996 that "the comparative advantage of countries, particularly low-age developing countries, must in no way be put into question."[322] On this view, countries ought to be able to take advantage of low wages and poor conditions at work as a comparative advantage in order to boost their exports. It is disputed that business will relocate production to low wage countries from higher wage countries such as the UK, because that choice is said to depend on productivity of workers. However, the view of many labour lawyers and economists remains that more trade, when workers have weaker bargaining power and less mobility, still allows business to opportunistically take advantage of workers by moving production, and that a coordinated multilateral approach with targeted measures against specific exports is preferable.[323] While the WTO has yet to incorporate labour rights into its procedures for dispute settlements, many countries began to make bilateral agreements that protected core labour standards instead.[324] Moreover, in domestic tariff regulations not yet touched by the WTO agreements, countries have given preference to other countries who do respect core labour rights, for example under the EU Tariff Preference Regulation, articles 7 and 8.[325]
While the debate over labour standards applied by the ILO and the WTO seeks to balance standards with free movement of capital globally, conflicts of laws (or private international law) issues arise where workers move from home to go abroad. If a worker from the UK performs part of her job in other countries (a "peripatetic" worker) or if a worker is engaged in the UK to work as an expatriate abroad, an employer may seek to characterise the contract of employment as being governed by other countries' laws, where labour rights may be less favourable than at home. In Lawson v Serco Ltd[326] three joined appeals went to the House of Lords. Mr Lawson worked for a multinational business on Ascension Island, a British territory as a security guard. Mr Botham worked in Germany for the Ministry of Defence. Mr Crofts, and his copilots, worked mostly in the air for a Hong Kong airline, though his contract stated he was based at Heathrow. All sought to claim unfair dismissal, but their employers argued they should not be covered by the territorial reach of the Employment Rights Act 1996. Lord Hoffmann held that, first, if workers are in Great Britain, they are covered. Second, peripatetic workers like Mr Crofts would be covered if they are ordinarily working in the UK, but that this could take account of the company's basings policy. Third, if workers were expatriate the general rule was they would not be covered, but that exceptionally if there was a "close connection" between the work and the UK they would be covered. This meant that Lawson and Botham would have claims, because both Lawson and Botham's position was in a British enclave, which made a close enough connection. Subsequent cases have emphasised that the categories of expatriate worker who will exceptionally be covered are not closed. So in Duncombe v Secretary of State for Children, Schools and Families[327] an employee of the UK government teaching in EU schools could claim unfair dismissal because their employer held their connection close to the UK. Then, in Ravat v Halliburton Manufacturing and Services Ltd[328] an employee in Libya, working for a German company that was part of the American multinational oil conglomerate Halliburton, was still covered by UK unfair dismissal rights because he was given an assurance that his contract would come under UK law. This established a close connection. The result is that access to mandatory employment rights mirrors the framework for contractual claims under the EU Rome I Regulation article 8.[329] It is also necessary that a UK court has jurisdiction to hear a claim, which under the Brussels I Regulation article 19,[330] requires the worker habitually works in the UK, or was engaged there. Both EU Regulations emphasise that the rules should be applied with the purpose of protecting the worker.[331]
As well as having legal protection for workers rights, an objective of trade unions has been to organise their members across borders in the same way that European Union in two decisions. In Laval Ltd v Swedish Builders Union[332] a group of Latvian workers were sent to a construction site in Sweden on low pay. The local Swedish Union took industrial action to make Laval Ltd sign up to the local collective agreement. Under the Posted Workers Directive, article 3 lays down minimum standards for workers being posted away from home so that workers always receive at least the minimum rights that they would have at home in case their place of work has lower minimum rights. Article 3(7) goes on to say that this "shall not prevent application of terms and conditions of employment which are more favourable to workers". Most people thought this meant that more favourable conditions could be given than the minimum (e.g. in Latvian law) by the host state's legislation or a collective agreement. However, in an interpretation seen as astonishing by many, the ECJ said that only the posting state could raise standards beyond its minimum for posted workers, and any attempt by the host state, or a collective agreement (unless the collective agreement is declared universal under article 3(8)) would be an infringement of the business' freedom to provide services under TFEU article 56. This decision was implicitly reversed by the European Union legislature in the Rome I Regulation, which makes clear in recital 34 that the host state may allow more favourable standards. However, in The Rosella, the ECJ also held that a blockade by the International Transport Workers Federation against a business that was using an Estonian flag of convenience (i.e. saying it was operating under Estonian law to avoid labour standards of Finland) infringed the business' right of free establishment under TFEU article 49. The ECJ said that it recognised the workers' "right to strike" in accordance with ILO Convention 87, but said that its use must be proportionately to the right of the business' establishment. The result is that the European Court of Justice's recent decisions create a significant imbalance between the international freedom of business, and that of labour, to bargain and take action to defend their interests. For this reason it has been questioned whether the ECJ's decisions were compatible with fundamental human rights, particularly the freedom of association guaranteed by article 11 of the European Convention on Human Rights.
When compulsory redundancies are unavoidable and the employer must select among a group of workers, the procedure the employer follows must be procedurally fair, or the workforce will have an unfair dismissal claim. In Williams v Compair Maxam Ltd[289] Browne-Wilkinson J held that, in response to managers who had selected workers to lose their jobs based on personal preference, the proper steps should be to (1) give all warning possible (2) consult the union (3) agree objective criteria (4) follow those criteria, and (5) always check there if there is alternative employment rather than dismissal. Under ERA 1996 section 141 an employee should accept a reasonable offer for redeployment, and will lose entitlement to redundancy if she declines it. The Collective Redundancies Directive,[290] implemented in TULRCA 1992 section 188 also requires collective consultation with the union or other elected workforce representatives. If the employer fails to consult in good time it will be liable to pay a protective award to its staff.[291]
An economic dismissal because of redundancy is a "fair" reason, but one that triggers a minimum statutory right to a redundancy payment. Under [287] If an employee is not dismissed for redundancy it may be that the dismissal falls within the "fair" ground of "some other substantial reason". In Hollister v National Farmers’ Union[288] a farmer's refusal to accept decreased pension entitlements, after a consultation process, was a "substantial" reason for dismissal. Provided employers give proper notice and have the right to terminate the contract by consent, it is possible to worsen terms without the employee being able to claim redundancy.
Partly because the courts take a deferential approach to the employer's substantive reasons for dismissal, they emphasise the importance of employers having a fair process. The Advisory, Conciliation and Arbitration Service Code of Practice (2009) explains that good industry practice for disciplinaries requires, among other things, written warnings, a fair hearing by people who have no reason to side against the employee, or with any manager involved in the dispute, and the opportunity for union representation. Often a company handbook will include its own system, which if not followed will likely mean the dismissal was unfair.[279] Nevertheless, in Polkey v AE Dayton Services Ltd[280] the House of Lords held that, in a case where a van driver was told he was redundant on the spot, if an employer can show the dismissal would be made regardless of whether a procedure was followed, damages can be reduced to zero. In the Employment Act 2002, Parliament made an abortive attempt to instil some kind of mandatory minimum procedure for everybody, but after complaints from unions and employers alike that it was merely encouraging a "tick-box" culture, it was repealed in the Employment Act 2008.[281] Now if the ACAS Code is not followed, and this is unreasonable, an unfair dismissal award can be increased by 25 per cent.[282] Generally, under ERA 1996 sections 119 and 227, the principle for a "basic" unfair dismissal award is that, with a cap of £350 per week and a maximum of 20 weeks, an employee should receive one week's pay for each year employed if aged between 22 and 40, 1½ weeks if over 40 and ½ a week if under 22. By ERA 1996 section 123, the employee may also be entitled to a discretionary "compensatory" award, which should take into account the actual losses of the employee as just and equitable, based on loss of immediate and future wages, the manner of the dismissal and loss of future unfair dismissal protection and redundancy rights.[283] This is capped, but usually increased in line with RPI inflation, and in 2010 stood at £63,500. Much lower, the median award for unfair dismissal, without any element of discrimination, was £4903 in 2009–2010.[284]
Once it is established that a dismissal took place, the employer must show that their reason for dismissing the employee was "fair". Dismissal on grounds of union membership,[272] or any protected characteristic in the Equality Act 2010, will be automatically unfair. Otherwise the employer has the opportunity to show the dismissal is fair if it falls within five main categories listed in ERA 1996 section 98.[273] The dismissal must have been because of the employee's capability or qualifications, conduct, because the employee was redundant, because continued employment would contravene a law, or "some other substantial reason". If the employer has an argument based on one of these categories, then the tribunal evaluates whether the employer's actual decision fell within a "reasonable range of responses", i.e. that a reasonable employer could have acted the same way.[274] Thus the review standard lies in between an outright perversity, or "Wednesbury unreasonableness" test and a forthright reasonable person test. It gives employers considerable latitude in the way they manage their workforce, as the Tribunal's job is not to substitute what it believes would have been fair, but only to intervene if a decision was arbitrary, harsh or contrary to acceptable business practice.[275] There is also considerable room for Tribunals to assess the facts and come to their own conclusions, which can only be appealed on legal grounds, and not on their judgment of good workplace relations. For example, in a conduct case, HSBC Bank plc v Madden,[276] the Court of Appeal held that it was acceptable for a Tribunal to have decided that dismissing an employee for potential involvement in theft of credit cards was fair, even though an actual police investigation turned up no evidence.[277] By contrast, in Bowater v Northwest London Hospitals NHS Trust,[278] an employer argued a nurse who, while physically restraining a naked patient, said "It's been a few months since I have been in this position with a man underneath me" was lewd and deserved dismissal for her misconduct. The Tribunal said the dismissal was unfair and the Court of Appeal held the Tribunal had competently exercised its discretion in granting the unfair dismissal claim.
In contrast to "wrongful" dismissal, which is an action for unjustified breach of the terms of an employment contract, "unfair" dismissal is a claim based in the Employment Rights Act 1996 sections 94 to 134A that governs the reasons for which a contract is terminated. The Industrial Relations Act 1971, following the Donovan Report 1968, set up its structure.[265] Under ERA 1996 section 94 any employee who is employed for over two years[266] may claim for an Employment Tribunal (composed of a judge, an employer and an employee representative) to review the decision of their dismissal, and get a remedy if the dismissal was not "fair" within the meaning of the Act. An employee is only "dismissed" if the employer has decided to end the work relationship, or if they have constructively dismissed the employee through a serious breach of mutual trust and confidence. In Kwik-Fit (GB) Ltd v Lineham[267] Mr Lineham used the toilet at work after drinking at the pub, and in response to the manager rebuking him in front of other staff, he threw down his keys and drove off. He claimed he was dismissed, and the Tribunal agreed that at no time had Mr Lineham resigned. By contrast in Western Excavating (ECC) Ltd v Sharp[268] Mr Sharp walked off because the company welfare officer refused to let him collect holiday pay immediately. Although Mr Sharp was in financial difficulty, this was due to his absences, and so he was not justified in leaving, and not constructively dismissed.[269] An employee is also not dismissed if the relationship is frustrated. In Notcutt v Universal Equipment Co (London) Ltd[270] a man's heart attack meant he could no longer work. The employer paid no wages during the ordinary notice period, but was successful in arguing that the contract was impossible to perform and therefore void. This doctrine, applicable as a default rule in general contract law, is controversial since unlike commercial parties it will be rare that an employee has the foresight or ability to contract around the rule.[271]
The primary implied term that may be broken is mutual trust and confidence. In Johnson v Unisys Ltd[260] the House of Lords held by 4 to 1 that damages for breach of mutual trust and confidence at the point of dismissal should not exceed the statutory limit on unfair dismissal claims, because otherwise the statutory limits (£63,500 in 2010) would be undermined. This meant a computer worker who became psychiatrically ill following a wrongful dismissal procedure could not claim the £400,000 at which damages could otherwise be quantified. However, if the breach occurs while the employment relationship subsists, that limit is inapplicable. So in Eastwood v Magnox Electric plc,[261] a school teacher who also suffered psychiatric injury, but as a result of harassment and victimisation while he still worked, could claim for a full measure of damages for the breach of mutual trust and confidence. In any event the limit is merely implied and depends on construction of the contract, so that it may be opted out of by express words providing for a higher sum, for example, by expressly providing for a disciplinary procedure.[262] A notable absence of an implied term at common law historically (i.e. before the development of mutual trust and confidence[263]) was that an employer would have to give any good reasons for a dismissal.[264] This was recommended to be changed in the Donovan Report 1968, and it launched the present system of unfair dismissal.
The requirements of notice and any disciplinary procedure do not apply if the employee was the one to have repudiated the contract, either expressly, or by conduct. As in the general law of contract, if an employee's conduct is so seriously bad that it manifests to the reasonable person an intention to not be bound, then the employer may dismiss the employee without notice. But if the employer is not justified in making a summary dismissal, the employee has a claim under ERA 1996 section 13 for a shortfall in wages. The same principle, that a serious breach of contract gives the other side the option to terminate,[257] also works in favour of employees. In Wilson v Racher[258] a gardener was bullied by his employer, the heir of Tolethorpe Hall, and gave him a rude telling off for not picking up some string on the lawn. Mr Wilson, the gardener, told Mr Racher "get stuffed, go and shit yourself". The Court of Appeal held that the employer's attitude meant this breakdown in trust and confidence was his own doing, and because labour law no longer saw employment as a "czar-serf" relationship, Mr Wilson was in the right and was wrongfully dismissed. The remedy for breach of contract, following a long tradition that specific performance should not result in draconian consequences or binding hostile parties to continue working together,[259] is typically monetary compensation to put the claimant in the same position as if the contract had been properly performed.
Wrongful dismissal refers to a termination of employment which contravenes a contract's terms, whether expressly agreed or implied by the courts. This depends on construction of the contract, read in the context of the statutory charter of rights for employees in the ERA 1996.[253] In the old common law cases, the only term implied by the courts regarding termination was that employers had to give reasonable notice, and what was "reasonable" essentially depended on the professional status of the employee. In Creen v Wright[254] Lord Coleridge CJ held that a master mariner was entitled to a month's notice, though lower class workers could probably expect much less, "respectable" employees could expect more, and the period between wage payments would be a guide.[255] Now the ERA 1996 section 86 prescribes that an employee should receive one week's notice before dismissal after one month's work, two weeks' notice after two years' work, and so forth up to twelve weeks for twelve years. The employer can give payment of the weeks' wages instead of giving notice. Another important express term that may be broken could be the proper disciplinary procedure for disputes at work. If a contractual disciplinary procedure is not followed, the employee may claim damages for the time it would have taken and the potential that she would still be employed.[256]
Originating with the National Insurance, to collect a "jobseekers allowance", and may make use of public employment agencies to find employment again.
The Agency Workers Regulations 2010 provide people protection against less favourable treatment when they arrive at work through an employment agency. Here the regulation is again more limited, as agency workers are explicitly entitled merely to equal treatment in "basic working conditions", which is defined as their pay and their working time. However, an agency worker may, unlike part timers or fixed term employees, appeal to a hypothetical comparator. One consequence in the UK, however, is that this legislation left uncertain the position of agency workers protection by the job security, child care and other rights for employees in ERA 1996.[248] While the dominant view is that an agency worker will always qualify as an employee when they work for a wage and are the more vulnerable party to the contract, the English Court of Appeal has issued conflicting judgments on whether an agency worker should have an unfair dismissal claim against the end-employer, the agency, or both or neither.[249] Reflecting their vulnerable position, the regulation of agency work goes beyond discrimination, to place a set of duties on employment agents' operations and conduct. Found in the Employment Agencies Act 1973 and the Conduct of Employment Agencies and Employment Businesses Regulations 2003[250] agencies are generally prohibited from charging fees to prospective workers. Various other duties include being honest in their job advertising, keeping all information on jobseekers confidential and complying with all employment laws. Originally agencies had to have licenses, and under the oversight of the Employment Agency Standards Inspectorate, risked losing their licenses if found to be acting in violation of the law. The Deregulation and Contracting Out Act 1994 removed the licensing requirement, but was partially reinstated for agencies in agricultural, shellfish and packing sectors through the Gangmasters (Licensing) Act 2004. In response to the 2004 Morecambe Bay cockling disaster this established another specific regulator, the Gangmasters Licensing Authority, to enforce employment law in those areas.
Outside the Equality Act 2010, and the EU Directives that target discrimination based on a fixed status, the law has a series of measures, albeit weaker, to counteract discrimination against people who hold non-permanent contracts. An important reason for the trio of the Part-time Workers Directive,[238] the Fixed-Term Work Directive[239] and the Temporary and Agency Work Directive[240] is that people doing such work often fall into the same groups as those seeking protection under the EA 2010. Each are implemented by domestic legislation, but have come under criticism for their restrictive nature. The Part-time Workers (Prevention of Less Favourable Treatment) Regulations 2000[241] state that part-time workers cannot, without objective justification, be treated less favourably than a comparable full-time worker. Accordingly not just indirect discrimination, but also direct discrimination can be objectively justified, as it can for age. However, unlike the general scheme of the EA 2010, a worker cannot compare themselves to a hypothetical full-time worker. While the law is generally effective at preventing people in the same workplace from being treated differently, part-time workers across the UK economy remain underpaid compared to full-time workers as a whole, because workplaces tend to be structurally segregated, often where women are working as part timers.[242] One of the first leading cases, Matthews v Kent and Medway Fire Authority,[243] surprisingly involved male firefighters. Under regulation 2, a comparator must be under the "same type of contract" and doing "broadly similar work". It was held that even though part-time firefighters did not do administrative work, their contracts were still broadly similar. The Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002[244] formulate the test for a comparator in a similar way, except that they purport (unlike the Directive appears to suggest) to cover "employees" and not the broader group of "workers".[245] In addition to a ban on less favourable treatment, without objective justification,[246] regulation 8 stipulates that if an employee has a succession of fixed term contracts lasting over 8 years, they are to be treated as having a permanent contract.[247]
For characteristics other than disability, "hard" positive discrimination, through privileged contract terms, hiring and firing based on gender, race, sexuality, belief or age, or setting quotas for underrepresented groups in most jobs, is unlawful throughout the EU. This policy, however, leaves open the issue of historical disadvantage, and Re Badeck’s application[237] legitimate positive action measures include quotas in temporary positions, in training, guaranteeing interviews to people with sufficient qualifications, and quotas for people working on representative, administrative or supervisory bodies such as a company's board of directors. This approach, developed initially in ECJ case law, is now reflected in the Treaty on the Functioning of the European Union article 157(4) and was put into UK law in the Equality Act 2010 sections 157-158.
According to Chacón Navas v Eurest Colectividades SA[229] disabilities involve an impairment "which hinders the participation of the person concerned in professional life". This includes all varieties of mental and physical disabilities.[230] Because treating disabled people equally based on ability to perform tasks could easily result in persistence of exclusion from the workforce, employers are bound to do as much as reasonably possible to ensure participation is not hindered in practice. Under the Equality Act 2010 sections 20 to 22, employers have to make "reasonable adjustments". For example, employers may have to change physical features of a workplace, or provide auxiliary aids to work, or adjust their working habits and expectations. In effect, the law holds the social model responsible for the exclusion of disabled people, rather than seeing a person's disability itself as being the relevant cause. EA 2010 Schedule 8 lists more examples of reasonable adjustments, and the Equality and Human Rights Commission provides guidance. In the leading case, Archibald v Fife Council,[231] it was held that the council had a duty to exempt a lady from competitive interviews for a new job. Mrs Archibald, previously a road sweeper, had lost the ability to walk after complications in surgery. Despite over 100 applications for grades just above a manual worker, in her submission, the employers were fixated on her past history as a sweeper. The House of Lords held it could be appropriate, before such an ordeal, for a worker to fill an existing vacancy without a standard interview procedure. By contrast, in O’Hanlon v Revenue and Customs Commissioners[232] the Court of Appeal rejected that it would be a reasonable adjustment, as Ms O'Hanlon was requesting after falling into clinical depression, for an employer to increase sick pay to full pay, after the expiry of a six month period that applied to everyone else. The aim is always to ensure that disabilities are not a barrier to full participation in working life, as much as possible.
[228] This has meant, primarily, that older workers can reach a compulsory retirement age set either by the workplace or the government, on the basis that it is a legitimate way of sharing work between generations.[227] is open to justification on the same principles, on the basis that everyone will go through the ageing process.age discrimination section 13(2), direct EA 2010 Unlike other protected characteristics, under [226] and can even result in liability for the union that concluded them.[225] the House of Lords held that women teachers who had to fill in for an absent male head master were not entitled to be paid the same during that time. This was a different job. It has also been asserted that collective agreements designed to incrementally make a transition to equal pay between jobs rated as equivalent cannot be justified,[224]Strathclyde RC v Wallace being paid less than a male counterpart could not be justified only on the ground that this resulted from different collective agreements, if a disparity came from market forces, this was an objective justification. It has, however, been emphasised that the legislation's purpose is to achieve equal pay, and not fair wages. So in speech therapist the ECJ held that although a [223]Enderby v Frenchay Health Authority In [222] The ECJ, mostly in cases concerning sex discrimination under [216] Indirect discrimination, after a neutral practice puts a member of a group at a particular disadvantage, is not made out if there is an "objective justification". In most cases, this will be a justification based on business necessity.
Harassment and victimisation cannot be justified, but in principle there are exceptions or justifications for all forms of direct and indirect discrimination. Apart from direct age discrimination which can also be objectively justified, the general rule for direct discrimination, elaborated in judicial review of the legislation,[215] Richards J rejected that a faith school would be exempt in any way, rather than an actual religious establishment like a church. Even there, it was rejected that a gay person could be dismissed from a job as a cleaner or bookshop worker, if that was incompatible with the religious "ethos", because the ethos would not be a genuine requirement to carry out the job.
Originally a sub-category of direct discrimination, harassment is now an independent tort which requires no comparator. The Protection from Harassment Act 1997, and now the Equality Act 2010 sections 26 and 40, define harassment as where a person's dignity is violated, or the person is subject to an intimidating, hostile, degrading, humiliating or offensive environment. An employer will be liable for its own conduct, but also conduct of employees, or customers if this happens on 2 or more occasions and the employer could be reasonably expected to have intervened.[205] In a straightforward case, in Majrowski v Guy's and St Thomas' NHS Trust[206] a gay man was ostracised and bossed about by his supervisor from the very start of his work as a clinical audit co-ordinator. The House of Lords held the laws create a statutory tort, for which (unless a statute says otherwise) an employer is automatically vicariously liable. Under the Equality Act 2010 section 27, an employer must also ensure that once a complaint is brought by a worker, even if it ultimately proves to be unfounded, that worker should not be victimised. This means the worker should not be subject to anything that a reasonable person would perceive as detrimental. In St Helen’s MBC v Derbyshire[207] the House of Lords held a council victimised female staff who were pursuing an equal pay claim when it sent letters warning (without much factual basis) that if the claim went ahead, the council would be forced to cut school dinners and make redundancies. Because it attempted to make the workers feel guilty, a reasonable person would have regarded this as a detriment. By contrast, in Chief Constable of West Yorkshire Police v Khan,[208] a sergeant with a pending race discrimination claim was denied a reference by the employer that he was suing. The House of Lords held this could not be considered victimisation because the Constabulary was only seeking to protect its legitimate interests by not giving a reference, so as to not prejudice its own future case in the discrimination hearings.
A significant exception to the basic framework for indirect discrimination is found for the issue of equal pay between men and women.[200] Because the Equal Pay Act 1970 preceded other legislation, and so did the TFEU article 157,[201] there has always been a separate body of rules. It is not entirely clear why this should continue, or whether the equal pay rules are more favourable. First, a claim must relate to "pay", concept which is generally construed widely to encompass any kind of remuneration for work, as well as sick pay or for maternity leave.[202] Second, under the EA 2010 section 79, a comparator must be real, and employed by the same employer, or an associated employer, and at the same establishment, or a different establishment if common terms apply.[203] It is usually harder to find a real comparator than imagine a hypothetical one. Third, under EA 2010 section 65, the claimant must be doing "broadly similar" work to the comparator, or work "rated as equivalent", or work which is of "equal value". These criteria, which at their broadest focus on the "value" of labour, make explicit what a court must taken into account, but also potentially constrain the court in a way that the open ended test for indirect discrimination does not. Fourth, under section 128 there is a time limit of six months to bring a claim, but unlike the three month time limit for other discrimination claims it cannot be extended at the court's discretion. However, equal pay claims do import an "equality clause" into the claimant's contract of employment. This allows a claim to be pursued in the High Court as well as a Tribunal. But whether the rules are more favourable in some respects or not, it is unclear what principle justifies the segregation of unequal pay claims based on sex, compared to all other protected characteristics.[204]
"Indirect" discrimination means an employer, without an objective justification, applies a neutral rule to all employees, but it puts one group at a particular disadvantage.[194] However, the particular disadvantage is irrelevant if it involves a discriminatory state of mine. In Ladele v Islington LBC a woman who refused to register gay civil partners, because she said her Christianity made her conclude homosexuality was wrong, was dismissed for not carrying out her duties. Lord Neuberger MR held that she was not unlawfully discriminated against because the Council was objectively justified in following its equality policy: that everyone working in marriage or partnership registries had to register everybody equally.[195] The European Court of Human Rights upheld this decision. By contrast, in Eweida v British Airways plc a lady who wished to wear a cross claimed that BA's instruction to remove it was indirectly discriminatory against Christians. Although the English Court of Appeal held crucifix jewellery is not an essential part of the Christian religion,[196] the ECHR found that, under the reasonableness limb of the proportionality test, it was an illegitimate interference with Ms Eweida's religious beliefs under ECHR article 9. British Airways changed its uniform policy shortly afterwards in any case, and this indicated that they had acted unlawfully. The question of particular disadvantage also typically relies on evidence of statistical impact between groups. For instance in Bilka-Kaufhaus GmbH v Weber von Hartz[197] an employer set up pensions only for full-time workers, and not for part-time workers. But 72 per cent of part-time workers were women. So Frau Weber von Hartz was able to show that this rule put her, and women generally, at a particular disadvantage, and it was up to the employer to show there was an objective justification. Statistics might be presented in a misleading way (e.g. a measure could affect twice as many women as men, but that is only because there is 2 women and 1 man affected in a workforce of 100). Accordingly the correct approach is to show how many people in the affected workforce group are put at an advantage, and then if there is a statistically significant number of people with a protected characteristic who are not advantaged, there must be an objective justification for the practice. In R (Seymour-Smith) v Secretary of State for Employment[198] the UK government's former rules on unfair dismissal were alleged to be discriminatory. Between 1985 and 1999, the government had made the law so that people had to work for 2 years before they qualified for unfair dismissal (as opposed to 1 year presently), and this meant that there was a 4 to 8 per cent disparity between the number of men and women who qualified on dismissal for a tribunal claim. Following ECJ guidance, the House of Lords held by a majority that this was a large enough disparity in coverage, which required justification by the government.
UK and EU law divide discrimination into direct and indirect forms. Direct discrimination means treating a person, because of a "protected characteristic", less favourably than a comparable person who has a different type of gender, race, sexual orientation, etc.[185] This is an objective test, so the employer's motives are irrelevant. Even if employers have “positive” motives, for instance to help underprivileged groups, discrimination is still unlawful in principle.[186] The claimant's trait merely has to be the reason for the unfavourable treatment.[187] An appropriate comparator is one who is the same in all respects except for the relevant trait, which is claimed as the ground for discrimination. For instance in Shamoon v Chief Constable of the Royal Ulster Constabulary[188] a chief inspector claimed that she was dismissed because the police force was sexist, and pointed to male chief inspectors who had not been treated unfavourably. The House of Lords overturned a Tribunal finding of sex discrimination because colleagues had complained about how Ms Shamoon had performed appraisals, and her chosen comparators had not received complaints.[189] Generally there is, however, no need to point to an actual comparator, so a claimant can allege they were treated less favourably than a hypothetical person would have been, who is the same except for the protected characteristic. The burden of proof is explicitly regulated so that claimants merely need to show a set of facts from which a reasonable tribunal could conclude there was discrimination, and need not show an intention to discriminate.[190] Because the law aims to eliminate the mindset and culture of discrimination, it is irrelevant whether the person who was targeted was themselves a person with a protected characteristic, so that people who associate with or are perceived to possess a protected characteristic are protected too. In Coleman v Attridge Law a lady with a disabled child was abused by her employer for taking time off to care for the child. Even though Ms Coleman was not disabled, she could claim disability discrimination.[191] And in English v Sanderson Blinds Ltd, a man who was from Brighton and went to boarding school was teased for being gay. Even though he was married with children, he successfully claimed discrimination on grounds of sexual orientation.[192] An instruction by an employer to discriminate against customers or anyone else also violates the law.[193]
The Equality Act 2010 embodies the principle that people should treat one another according to the content of their character, and not another irrelevant status, to foster social inclusion. This principle, which slowly became fundamental to common law,[176] and EU law,[177] goes beyond employment, to access private and public services. At work, the law largely builds on the minimum standards set in three basic Directives for the whole EU.[178] Beyond the absolute prohibitions on discriminating against trade union members,[179] the EA 2010 protects the characteristics of gender (including pregnancy), race, sexual orientation (including marital status), belief, disability and age.[180] Atypical workers, who have part-time, fixed-term, or agency contracts, are also protected under specific regulations.[181] But although equality legislation explicitly prohibits discrimination on just ten grounds,[182] the common law may also extend protection if employers treat workers unfairly for other reasons that are irrelevant or arbitrary.[183] "Direct" discrimination is when a worker is treated less favourably because of a protected characteristic (e.g. gender or race) compared to another person (with a different gender or race), unless employers can show that a person's characteristic is a "genuine occupational requirement".[184] "Indirect" discrimination is when employers apply a neutral rule to all workers, but this has "disparate impact" on people with a particular protected characteristic, and the rule cannot be "objectively justified". Workers have a right to not suffer harassment at work. Claimants may not be victimised for bringing a discrimination claim. Equal pay between men and women has historically been treated separately in law, with subtle differences (sometimes more or less favourable). The law on disability is more favourable, by placing positive duties on employers to make reasonable adjustments to include disabled people in society. While UK and EU law presently only allow promotion of underrepresented groups if a candidate is equally qualified, it is still debated whether more “positive action” measures should be implemented, particularly to tackle the gender pay gap, and over-representation of white men in senior positions. If discrimination is proven, it is a statutory tort, and it entitles a worker to quit and/or claim damages.
that collective action by a trade union does not bring liability if done "in contemplation or furtherance of a trade dispute". But although statute presumes that there can be liability on a union at common law for strike action, the issue is not finally resolved. [175] section 219 repeats the classic formula,TULRCA 1992 In [174]) unless statute grants a specific immunity for the trade union from civil liability.[173] with a contracttortious interference or [172],inducement of breach of contract [171],conspiracy to injure (particularly economic torts On this view, even though an employer might not be liable for the economic losses of unemployment caused if it collectively dismisses workers (because contract terms drafted by the employer invariably allowed it) a union could be liable to the employer. A general framework has been that liability could exist on the grounds of various [170] First, the objectives and targets of a strike were tightly constrained by
The ability of a trade union to ensure that an employer abides by a collective agreement, or any worker rights, is contingent upon the extent of workers' right to take collective action, including the right to strike. The right of workers to collectively withdraw their labour in protest is also seen as necessary for the maintenance of a democratic society, and has frequently been used as a protest against political repression (since the Peasants' Revolt of 1381), to prevent military coups against democratic governments (e.g. the general strike in Germany against the Kapp Putsch in 1920), or as part of resistance to dictatorships (e.g. in the 2008 Egyptian general strike and the Egyptian Revolution of 2011). Anti-democratic regimes necessarily suppress collective action by workers, and for this reason the right to strike is regarded as a fundamental human right in international law. Protection is express in the case law of the European Court of Human Rights under article 11,[162] in the EU Charter of Fundamental Rights article 28, and implicitly in the ILO Convention 87 (1948) articles 3 and 10.[163] However, because of its importance for upholding democratic society, and furthering the economic and social interests of people at work, the right to take collective action has a controversial history at common law. It was heavily constrained by the Trade Union and Labour Relations (Consolidation) Act 1992 in sections 219 to 246, meaning the UK falls below international standards in several respects.
Under the Information and Consultation of Employees Regulations 2004,[161] companies with more than fifty employees must inform their workforce about major economic issues in their enterprise, and should consult about major changes, particularly redundancies.
Formal, and individual information and consultation rights have been a recent development, mostly deriving from EU law. Domestically, the Companies Act 2006 requires in section 419 that companies issue an annual report, which must include details of how, under section 172, the business has fulfilled its duties to have regard to employees, people working down supply chains, the community, environment and long term performance. Such information can often be cursory, but may be useful for employees, and unions, in the use of their participation rights, or during collective bargaining. Consultation can sometimes encourage a change in employers' policy, even if employees' views are ultimately often ignored.
There are, however, direct participation rights on one workplace issue, although not dismissals or working time. The Pensions Act 2004 sections 241-243 state employees must be able to elect a minimum of one third of the management of their occupational schemes, as "member nominated trustees". This gives employees the ability, in principle to have a voice on how their pension money is invested in company shares, and also how the voting power attached to company shares is used. There have, at the initiative of the European Union been a growing number of "work councils" and "information and consultation committees", but unless an employer voluntarily concedes to staff having a binding say, there is no legal right to participate in specific questions of workplace policy. Participation at work is limited to information, consultation, collective bargaining and industrial action.
Although direct participation rights in UK companies or organisations have a long history,[152] the ability for workers to elect directors or have a binding voice became rare after 1979. Historically, participation rights existed across a broad range of sectors including the gas industry, port authorities, iron and steel, and post, and the UK had the first "codetermination" laws in the world.[153] Today, a right of codetermination exists by law in universities,[154] and occasionally in private companies or government bodies by voluntary arrangement. By contrast in 16 out of 28 EU member states employees have participation rights in private companies, including the election of members of the boards of directors, and binding votes on decisions about individual employment rights, like dismissals, working time and social facilities or accommodation.[155] At board level, UK company law allows for any desired measure of employee participation, including alongside shareholders in the general meeting and on the board of directors. Although shareholders typically are the only ones with votes in the company's general meeting to elect the board of directors, the Companies Act 2006 section 168 defines only "members" as those with participation rights. Under section 112 a "member" is anybody who initially subscribes their name to the company memorandum, or is later entered on the members' register, and is not required to have contributed money as opposed to, for instance, work. Moreover under the European Company Statute, businesses that reincorporate as a Societas Europaea may opt to follow the Directive for employee involvement.[156] An SE may have a two-tiered board, as in German companies, where shareholders and employees elect a supervisory board that in turn appoints a management board responsible for day-to-day running of the company. Or an SE can have a one tiered board, as every UK company, and employees and shareholders may elect board members in the desired proportion.[157] An "SE" can have no fewer employee participation rights than what existed before, but for a UK company, there is likely to have been no participation in any case. In the 1977 Report of the committee of inquiry on industrial democracy[158] the Government proposed, in line with the new German Codetermination Act 1976, and mirroring an EU Draft Fifth Company Law Directive, that the board of directors should have an equal number of representatives elected by employees as there were for shareholders. But reform stalled, and was abandoned after the 1979 election.[159] Despite successful businesses like the John Lewis Partnership and Waitrose that are wholly managed and owned by the workforce, voluntary granting of participation is rare. Many businesses run employee share schemes, particularly for highly paid employees; however, such shares seldom compose more than a small percentage of capital in the company, and these investments entail heavy risks for workers, given the lack of diversification.[160]
(3) Membership rights
(2) Other members' rights If there are irregular occurrences in the affairs of the union, for instance if negligence or mismanagement is alleged and a majority could vote on the issue to forgive them, then members have no individual rights to contest executive decision making.[150] However, if a union's leadership acts ultra vires, beyond its powers set out in the union constitution, if the alleged wrongdoers are in control, if a special supra-majority procedure is flouted, or a member's personal right is broken, the members may bring a derivative claim in court to sue or restrain the executive members. So in Edwards v Halliwell[151] a decision of the executive committee of the National Union of Vehicle Builders to increase membership fees, which were set in the constitution and required a ⅔ majority vote, was able to be restrained by a claim from individual members because this touched both a personal right under the constitution and flouted a special procedure.
The express terms of the union rule book can, like any contract, be supplemented with implied terms by the courts as strictly necessary to reflect the reasonable expectations of the parties,[148] for instance, by implying the Electoral Reform Society's guidance to say what happens in a tie break situation during an election when the union rules are silent.[149]
(1) Voting and governance The principle that the common law enforced a union's own rules, and that unions were free to arrange their affairs is reflected in the ILO Freedom of Association Convention, and article 11 of the European Convention on Human Rights, subject to the requirement that regulations "necessary in a democratic society" may be imposed. Unions must have an executive body and that executive must, under TULRCA 1992 sections 46 to 56, be elected at least every five years, directly in a secret, equal postal vote of union members, and if irregularities are alleged, complaints can be taken up by the Trades Union Certification Officer.
Generally speaking, trade unions in the United Kingdom and their members have a broad freedom of contract, while the association's property held on trust for its members. However, since 1984 UK unions have been increasingly heavily regulated by statute to give members a series of rights beyond the common law: rights to vote for the union's executive, and to vote on use of political funds and strike action; rights to sue in court regarding a series of duties owed by the union's management, on finances and transparency; and rights to regarding membership of the organisation: to not be unjustly expelled, and to not be a member at all.
Although a wide set of employment rights create minimum standards of decency at work, the most important right to achieve conditions beyond those minima is participation in an enterprise's management. The UK has slowly codified its collective labour relations in law: there are legislative rights to information, consultation (on redundancies, business restructuring and management generally) and participation (so far, in pension management and health and safety committees) in workplace and company affairs. collective bargaining. Since 1999, unions can follow a complex statutory procedure which will eventually mandate that employers recognise and bargain with them. Collective agreements typically set scales of pay and working hours, require better pensions, training and workplace facilities, with a system to update terms and conditions as the business environment changes. The ability to bargain rests on the final resort of collective action. As a counterweight to management's power to make workers redundant,[146] an official trade union is protected by law in its ability to call a strike. Collective action, including a strike, must always be "in contemplation or furtherance of a trade dispute".[147] Since the 1980s, there have also been strict requirements to ballot the workforce and warn the employer before, to not call sympathy strikes, and to take only passive action in picketing or protests, which have been called into question under international law.
While there are minimum standards for worker participation in the management of any occupational pension, the terms of people's pensions may be very different particularly regarding who bears the risk of workers having a long life after retirement. Increasingly, "defined benefit" plans (or "final salary" schemes) where the employer pays a fixed sum however long the former worker lives and thus averages out the risk between different workers, have been scrapped. The contrasting system is a "defined contribution" plan, where individual workers simply retire with a pension that is as much as the contributions they made, meaning that if they live longer than they plan, they run the risk of being left with only the state pension. Some schemes combine elements of each. The rate of decline in defined benefit plans has been rate consistent with the decline in trade union membership, and increasing mobility of the labour market. Defined benefit plans also attract more regulation, as many employers have not necessarily actually kept aside money from "contributions" shown workers' pay slips, since the employer simply pays the final salary out when the time comes. This problem, revealed in early 1990s scandals like the Robert Maxwell scandal, led to the introduction of requirements for minimum funding, and also taking out insurance in the event that a company goes insolvent, and the pension fund is in deficit.[142] This system is overseen by the Pensions Regulator,[143] which also takes general complaints about the activities of trustees or management. In addition, there exists a Pensions Ombudsman who may hear complaints and take informal action against employers who fall short of their statutory duties.[144]
Occupational pension schemes are one of the three pillars of pension provision in the UK, in addition to the state pension administered by the government based on National Insurance contributions, and private, or "personal pensions" which individuals may arrange for themselves.[131] After the Pensions Act 2008, and due to begin in October 2012, every "jobholder" (defined as a worker, age 16 to 75, with wages between £5,035 and £33,540[132]) must be automatically enrolled by the employer in an occupational pension scheme, unless they choose to opt out.[133] In order to reduce the administrative complexity, a new non-departmental trust fund called the National Employment Savings Trust is established as a cheaper public competitor, able to take advantage of significant economies of scale, compared to existing fund manager options on the private pension market.[134] Employers will be required to set aside their jobholders' wages at an agreed percentage, and negotiate how much they will give in contributions, if anything. Outside this "public option", it has typically been up to the employer often in negotiation with the trade union, to establish a trust fund for pension schemes; however, there has not yet been any legal duty on employers to do so, leaving most people with nothing but the state pension.[135] However, when there is a pension in place as a result of a term in the jobholder's employment contract, the employer is under a duty to inform their staff about how to make the best of their pension rights.[136] Moreover, workers must be treated equally, on grounds of gender or otherwise, in their pension entitlements.[137] Where occupational pensions exist, the employer typically acts as a trustee and creates a board of trustees, or contracts with a trust corporation, to oversee the management of the workforce's pension savings. Following the Goode Report of 1993 on pensions, it has been a requirement that the pension trust members have the right to "codetermine" the pension management by having a vote to elect a minimum of one third of the trustees, or corporation directors, either directly or through their trade union.[138] Often member nominated trustees are one half of the scheme, and the Secretary of State has the power by regulation, as yet unused, to increase the minimum up to one half.[139] Trustees are charged with the duty to manage the fund in the best interests of the beneficiaries, in a way that reflects their preferences,[140] by investing the savings in company shares, bonds, real estate or other financial products.
Beyond the period around child birth, after Commotion Ltd v Rutty[129] a toy warehouse assistant was refused a reduction to part-time work because, according to the manager, everyone needed to work full-time to maintain "team spirit". The Employment Appeal Tribunal ruled that because "team spirit" was not one of the legitimate grounds for refusal, Mrs Rutty should get compensation, which is set at a maximum of 8 weeks' pay.[130]
Rights to leave from work to care for children have important consequences for career advancement and gender equality. The major right, which goes beyond the minimum set by the Pregnant Workers Directive,[114] is a mix of paid and unpaid maternity leave. A contract of employment can always be and often is more generous. Otherwise, the minimum right to paid maternity leave arises for women employees after 26 weeks work, though the right to unpaid leave has no qualifying period.[115] Under the Maternity and Parental Leave, etc Regulations 1999[116] mothers must take compulsory leave at the time of child birth for two weeks. After that comes a right to 6 weeks' leave paid at 90 per cent of ordinary salary. Then is 20 weeks leave paid at a rate set by statute, which was £123.06 per week in 2010. This has to be at least the same level as statutory sick pay.[117] Then she may take additional but unpaid maternity leave for another 26 weeks.[118] She must tell the employer 15 weeks before the date of the expected birth, in writing if the employer requests it. Except insofar as they administer the payments, employers do not bear most costs of maternity leave as they are reimbursed by the government according to their size and national insurance contributions.[119] Along with different forms of leave, mothers have the right to not suffer any professional detriment or dismissal while they are absent, and should be able to return to the same job after 26 weeks, or another suitable job after 52 weeks.[120] For fathers, the position is less generous. To redress the balance between how much of child raising each partner bears, under the Additional Paternity Leave Regulations 2010[121] it will be possible for a woman to transfer up to 26 weeks of her leave entitlements to her male partner. Otherwise the Paternity and Adoption Leave Regulations 2002 state that a man is entitled to a minimum of just 2 weeks off, at the statutory rate of pay.[122] Both parents may also benefit from "parental leave" provisions in the MPLR 1999, passed after the Parental Leave Directive.[123] Until a child turns 5, or a disabled child turns 18, parents can take up to 13 weeks unpaid leave.[124] Unless there is another collective agreement in place, employees should give 21 days' notice, no more than 4 weeks in a year, at least 1 week at a time, and the employer can postpone the leave for 6 months if business would be unduly disrupted.[125] Otherwise similar provisions apply on employees not suffering detriment or dismissal and having a right to their previous jobs back.[126] "Emergency leave" is, under ERA 1996 section 57A, available for employees to deal with birth or a child's issues at school, as well as other emergencies such as dependents' illness or death, so long as the employee informs the employer as soon as reasonably practicable. In Qua v John Ford Morrison Solicitors[127] Cox J emphasised that there is no requirement to deliver daily updates.
The Working Time Regulations 1998 set limits on working time, and implement the basic requirements of the Working Time Directive.[99] Paid holidays are the most concrete measure, following basic standards in international law.[100] Every worker is entitled to a minimum of 28 days, or four full weeks each year (though this includes public holidays).[101] There is no qualifying period for this, or any other working time right,[102] because the law seeks to ensure both a balance between work and life, and that people have enough rest and leisure to promote better physical and psychological health and safety.[103] Because the purpose is for workers to have the genuine freedom to rest, employers may not give a worker "rolled up holiday pay", for instance an additional 12.5% in a wage bill, in lieu of taking actual holidays. However, if the worker has not used his or her holidays before the job terminates, the employer must give an additional payment for the unused holiday entitlement.[104] Where a person works at night, he or she may only do 8 hours in any 24-hour period on average, or simply 8 hours at most if the work is classified as "hazardous".[105] Moreover every worker must receive at least 11 consecutive hours of rest in a 24-hour period, and in every day workers must have at least a 20 minute break in any 6 hour period.[106] The most controversial provisions in the working time laws concerns the right to a maximum working week. The labour movement has always bargained for a shorter working week as the economic productivity grew: the concept of a two day "weekend" arose in the earlier 20th century, while France more implemented the right to a 35-hour workweek in 2000. Under the Directive, this EU maximum is 48 hours. The maximum does not apply to anyone who is self-employed or who can set their own hours of work. In Pfeiffer v Deutsches Rotes Kreuz the ECJ emphasised that the rules aim to protect workers who possess less bargaining power and autonomy over the way they do their jobs.[107] Nevertheless, the UK government negotiated to let workers "opt out" of the 48 hour maximum by individually signing an opt out form.[108] Theoretically and legally, a worker may always change his or her mind after having opted out, and has a right to sue the employer for suffering any detriment if they so choose.[109] However, the obvious criticism has been made that the opt-out makes the right fictitious, because in jobs with a "long hours culture", people are socially compelled to do what everyone else does. If the worker has not "opted out", then the 48 hour week is not a rigid maximum, but is taken as an average over 17 weeks.[110] Analogous to the minimum wage rules, "on call" time (where people must make themselves available, but are not necessarily active) is regarded as working time if the workers are bound to remain awake and close to their workplace.[111] This created a significant problem for junior doctors, where in all European countries the culture has typically been that very long hours are expected. The European Court of Justice's decision in Landeshauptstadt Kiel v Jaegar[112] that junior doctors' on call time was working time led a number of countries to exercise the same "opt out" derogation as the UK, though limited to medical practice. The Health and Safety Executive is the UK body charged with enforcing the working time laws, though it has taken a "light touch" approach to enforcement.
[98] A remedy of up to 80 times the minimum wage is available to the worker and HMRC can enforce a penalty of twice the minimum wage per worker per day.[97].Her Majesty's Revenue and Customs However, because many workers will not be informed about how to do this, or have the resources, a primary enforcement mechanism is through inspections and compliance notices issued by [96] A worker may not be subjected to any detriment for enquiring, or requesting records or complaining about it.[95] section 13 claim for a shortfall of wages in a Tribunal.ERA 1996 The minimum wage can be enforced individually through an [94] a worker who cared for a young epileptic lady had to be on call 24 hours a day, 3 days a week, but could do her own activities outside tasks such as going shopping, making meals and cleaning. Her company made an agreement with her that her tasks took 6 hours and 50 minutes a day, which resulted in her £31.40 allowance meeting the minimum wage. Certain deductions may be made including £4.51 per day for any accommodation the employer provides, though extra bills, such as for electricity, should not ordinarily be charged.[93] To bring the UK back into compliance with basic standards in
Since 1998, the United Kingdom has fixed a national minimum wage,[78] and sets outer limits on working time for virtually all workers. Direct wage and working time regulation is a comparatively recent phenomenon, as it was traditionally left to collective bargaining to achieve "a fair day's wage for a fair day's work". The Truck Acts were the earliest wage regulations whose provisions have survived,[79] requiring workment to be paid in money, and not kind. Now, the Employment Rights Act 1996 section 13 stipulates that employers can only dock employees’ wages (e.g. for missing stock) if the employee consented to deductions in writing. This, however, does not cover industrial action,[80] so following 18th century common law on part performance of work, employees who refused to 3 out of 37 hours a week in minor workplace disobedience, had their pay cut for the full 37.[81] From the Trade Boards Act 1909,[82] the UK had set minimum wages according to the specific needs of different sectors of work. But this system was eroded through the 1980s and eventually repealed in 1993.[83] One wages council that survived was the Agricultural Wages Board, established under the Agricultural Wages Act 1948, however it was abolished in England in October 2013, though boards still operate for Scotland and Northern Ireland.
The common law of tort also remains particularly relevant for the type of liability an employer has where there is scientific uncertainty about the cause of an injury. In asbestos disease cases, a worker may have been employed with at a number of jobs where he was exposed to asbestos, but his injury cannot with certainty be traced to any one. Although he may be able to sue all of them, a number may have already gone insolvent. In Fairchild v Glenhaven Funeral Services Ltd[75] the House of Lords held that if any employer had materially increased the risk of harm to the worker, they could would be jointly and severally liable and could be sued for the full sum, leaving it up to them to seek contribution from others and thus the risk of other businesses' insolvency. For a brief period, in Barker v Corus[76] the House of Lords then decided that employers would only be liable on a proportionate basis, thus throwing the risk of employers' insolvency back onto workers. Immediately Parliament passed the Compensation Act 2006 section 3 to reverse the decision on its facts. It has also been held in Chandler v Cape plc,[77] in 2011, that even though a subsidiary company is the direct employer of a worker, a parent company will owe a duty of care. Thus shareholders may not be able to hide behind the corporate veil to escape their obligations for the health and safety of the workforce.
While the modern scheme of legislation and regulation engenders a comprehensive approach to enforcement and worker participation for health and safety matters, the common law remains relevant for getting civil law compensation, and some limits on an employers' duties. Although the legislative provisions are not automatic, breach of a statutory duty is evidence that a civil law duty has been breached. Injured employees can generally claim for loss of income, and relatives or dependents recover small sums to reflect distress.[66] In principle, employers are vicariously liable for all actions of people acting for them in the "course of employment" whenever their actions have a "close connection" to the job, and even if it breaks an employer's rules.[67] Only if an employee is on a "frolic of his own", and the employer cannot be said to have placed him in a position to cause harm, will the employer have a defence. Under the Employers’ Liability (Compulsory Insurance) Act 1969, employers must take out insurance for all injury costs, and insurance companies are precluded by law and practice from suing their employees to recover costs unless there is fraud.[68] However, until the mid-20th century there were a series of major limitations. First, until 1937, if an employee was injured by a co-worker, the doctrine of common employment, the employer could only be liable if it was shown they were personally liable by carelessness in selecting staff.[69] The House of Lords changed this in Wilsons & Clyde Coal Co Ltd v English,[70] holding an employer had a non-delegable duty of care for all employees. Lord Wright held there were "fundamental obligations of a contract of employment... for which employers are absolutely responsible". The second old restriction was that, until 1891, volenti non fit injuria meant workers were assumed to voluntarily accept the dangers of their work by agreeing to their contracts of employment.[71] Only if an employee callously ignores clear directions of the employer will he be taken to have voluntarily assumed the risk, like in ICI Ltd v Shatwell[72] where an experience quarry shotfirer said he "could not be bothered" to wait 10 minutes before setting of a detonation, and blew up his brother. Third, even if a worker was slightly at fault, until 1945 such contributory negligence precluded the whole of the claim. Now the court will only reduce damages by the amount the employee contributed to their own injury.[73] The fourth defence available to employers, which still exists, is ex turpi causa non oritur actio, that if the employee was engaged in any illegal activity they may not claim compensation for injuries. In Hewison v Meridian Shipping Services Pte Ltd[74] Mr Hewison concealed his epilepsy so that he could work offshore was technically guilty of illegally attempting to gain a pecuniary advantage by deception under the Theft Act 1968 section 16. After being struck in the head by a defective gangplank he suffered worse fits than before, but the Court of Appeal, by a majority, held his illegal act precluded any compensation.
One of the principle terms that accompanies the employment relationship is that the employer will provide a "safe system of work".[63] As the industrial revolution developed, accidents from a hazardous working environment were a front line target for labour legislation, as a series of Factories Acts, from 1802, required minimum standards in workplace cleanliness, ventilation, fencing machinery, not to mention restrictions on child labour and limits to the working day. These Acts typically targeted particular kinds of workplaces, such as mines, or textile mills, before the more generalised approach took hold now seen in the Factories Act 1961. That applies to any workplace where an article is made or changed, or animals are kept and slaughtered.[64] The Employer's Liability (Defective Equipment) Act 1969 made employers automatically liable for equipment with defects supplied by third parties. Because isolated employees lack the technical skill, time, training to litigate, such regulation's primary line of enforcement was through inspectors or agencies before matters went to court. Today the Health and Safety at Work etc. Act 1974, enforced by the Health and Safety Executive, is the main law. The HSE can delegate enforcement to local authorities, whose inspectors have the power to investigate and require changes to workplace systems. In addition, HSWA 1974 section 2 foresees that employees will set up their own workplace committees, elected by the employees and with the power to codetermine health and safety matters with management. Spelling out the general duties found in HSWA 1974, are a set of health and safety regulations, which must also stay in line with the European-wide harmonised requirements of the Health and Safety Directive.[65]
The second, and older hallmark of the employment contract is that employees are bound to follow their employers’ instructions while at work, so long as that does not contravene statute or their agreed terms. Every employment relation leaves the employer with a residue of discretion, historically expressed as the ‘master-servant’ relationship. Today, in practice, this leaves the employer with the ability to vary the way work is done in accordance with business need.[58] The courts have allowed this to continue, so long as it does not contradict a contract’s express terms, which always require an employee’s consent,[59] or renegotiation of a collective agreement.[60] However, it has also been held that employers may insert ‘flexibility clauses’ allowing them to reserve the right to vary any contract term.[61] The limits of the courts’ tolerance of such practices are evident if they touch procedures for accessing justice,[62] or potentially if they would contravene the duty of mutual trust and confidence.
In addition to statutory rights, expressly agreed terms and incorporated terms, the contractual hallmark of the employment relation is the series of standardised implied terms (or terms implied in law) that accompany it. First of all, and in addition to individualised implied terms that the courts construe to reflect the reasonable expectations of the parties,[47] the courts have long held that employees are owed additional and beneficial obligations, such as a safe system of work[48] and payment of wages even when the employer has no work to offer.[49] Reflecting more recent priorities, employers have also been recognised to have a duty to inform their employees of their workplace pension rights,[50] although they have stopped short of requiring employers to give advice on qualifying for workplace disability benefits.[51] The key implied term, however, is the duty of good faith, or “mutual trust and confidence”. This is a flexible concept that is applied in a broad variety of circumstances leading to remedies in damages or an injunction. Examples include requiring that employers do not act in an authoritarian manner,[52] do not call employees names behind their back,[53] do not treat workers unequally when upgrading pay,[54] do not run the company as a front for international crime,[55] or do not exercise discretion to award a bonus capriciously.[56] There has been disagreement among judges about the extent to which the core implied term of mutual trust and confidence can be 'contracted out of', with the House of Lords having held that the parties are "free" to do so, while others approach the question as a matter of construction of the agreement which is within exclusive judicial competence to define.[57]
The terms of employment are all those things promised to an employee when work begins, so long as they do not contravene statutory minimum rights. In addition, terms can be incorporated by reasonable notice, for instance by referring to a staff handbook in a written employment agreement,[43] or even in a document in a filing cabinet next to the staff handbook.[44] While without express wording they are presumed not binding between the union and employer,[45] a collective agreement may give rise to individual rights. The test applied by the courts is to ask loosely whether its terms are ‘apt’ for incorporation, and not statements of ‘policy’ or ‘aspiration’. Where the collective agreement’s words are clear, a "last in first out" rule was held to potentially qualify, but another clause purporting to censure compulsory redundancies was held to sound like it was binding ‘in honour’ only.[46]
Once a person's work contract is categorised, the courts have specific rules for determining, beyond the statutory minimum charter of rights, what are its terms and conditions. Analogous rules for incorporation of terms, and implication terms exist as in the ordinary law of contract. However, in Gisda Cyf v Barratt, Lord Kerr emphasised that if it affects statutory rights, the process of construction is one that must be “intellectually segregated” from the general law of contract, because of the relation of dependency an employee has.[41] In this case, Ms Barratt was told her employment was terminated in a letter that she opened 3 days after its arrival. When, 3 months and 2 days after arrival, she lodged an unfair dismissal claim, the employer argued it was time barred on the ground that in ordinary contract law one is bound by a notice when a reasonable person would have read a message. The Supreme Court held that Ms Barratt was in time for a claim because she was only bound by the notice when she actually read it. The applicable in employment was different, given the purpose of employment law to protect the employee. From formation to termination, employment contracts are to be construed in the context of statutory protection of dependent workers.
This meant that a group of car valeters, although described in their contracts as being self-employed, with a right to substitute another person to do their work, and professed to have no obligation to undertake work, were entitled to a minimum wage and paid leave. The contract terms could be disregarded because they did not represent the reality of the situation.[40] In addition, a ‘worker’ is defined in ERA 1996 section 230 as someone with a contract of employment or who personally performs work and is not a client or a customer. This concept has greater scope, and protects more people, than does the term ‘employee’. This class of person is entitled to a safe system of work, a minimum wage and limits on working time, as well as discrimination and trade union rights, but not job security, child care and retirement rights. This concept thus reaches up to protect people who are quasi-self-employed professionals, albeit not so vulnerable relative to their quasi-employer, such as a home cleaner, or music teacher who visits student homes, or a taxi cab driver wearing a firm’s logo.
Lord Clarke held that an exchange of work for a wage was essential. The private "true" intentions of the parties were not as important as the reality, because employment began in the context of an unequal bargaining relation. As he put it, [39] decided by a unanimous Supreme Court in 2011, brought the definition of an employment contract in line with that in used in the EU. Confirming that employment contracts are one of a specific type, and separate from commercial agreements,Autoclenz Ltd v Belcher This led to cases where employers, typically of people on low wages and little legal understanding, pleaded that they had only hired a person on a casual basis and thus should not be entitled to the major job security rights. However, the leading case, [38] Another view stated that the employment relationship had to be one where there was an ongoing obligation to offer and accept work.[37] But in the late 1970s and 1980s, some courts began to speak of a new test of ‘mutuality of obligation’. One view of this was merely that workers exchanged work for a wage.[36] In the UK an ‘employee’ has all available rights (all the rights of a ‘worker’ but also child care, retirement and job security rights). The meaning is explicitly left to the common law under the main statute, the
As yet, the UK has not consolidated a single statutory definition of the people to whom employment rights and duties apply. Statute and case law, both domestic and European, use 2 main definitions (employee and worker), and approximately 3 other minor types (jobholder, apprentice, and someone with an employment relation). The EU does have one consolidated definition of a ‘worker’, which is someone who has a contract for work in return for a wage, or an indirect quid pro quo (as in a communal cooperative), and also stands as the more vulnerable party to the contract.[30] This reflects the kernel of classical labour law theory, that an employment contract is one infused with “inequality of bargaining power”,[31] and stands as a justification for mandating additional terms to what might otherwise be agreed under a system of total freedom of contract.
UK labour law's primary concern, particularly under the Employment Rights Act 1996, is to ensure that every working person has a minimum charter of rights in their workplace.[24] Traditionally it draws a divide between self-employed people, who are free to contract for any terms they wish, and employees, whose employers are responsible for complying with labour laws. UK courts and statutes, however, use a number of different terms for different rights, including "worker", "employee", "jobholder", "apprentice" or someone with an "employment relation". A "worker", for example, is entitled to a minimum wage of £6.31 per hour,[25] 28 statutory minimum days of holiday, enrolment in a pension plan, not to mention the right to equal treatment and anti-discrimination that also apply to consumers and public services.[26] An "employee" has all those rights, and also a safe system of work, the right to a written contract of employment, time off for pregnancy or child care, reasonable notice before a fair dismissal and a redundancy payment, and the duty to contribute to the National Insurance fund and pay income tax.[27] The scope of the terms "worker", "employee", and others, are more or less left to the courts to construe according to the context of its use in a statute,[28] but someone is essentially entitled to more rights if they are in a weaker position and thus lack bargaining power. English courts view an employment contract as involving a relation of mutual trust and confidence,[29] which allows them to develop and enlarge the remedies available for workers and employers alike when one side acts out of bad faith.
From 1979, a new Conservative government took a strongly sceptical policy to all forms of labour law and regulation. During the 1980s ten major Acts gradually reduced the autonomy of trade unions and the legality of industrial action.[22] Reforms to the internal structure of unions mandated that representatives be elected and a ballot is taken before a strike, that no worker could strike in sympathetic secondary action with workers with a different employer, and that employers could not run a closed shop system of requiring all workers to join the recognised union. The wage councils were dismantled. A public campaign against the merits of unions paralleled the decline of membership and collective agreement coverage to under 40 per cent. In addition, the government opted out of the EU Social Chapter in the Maastricht Treaty. In 1997 the new Labour government brought the UK into the EU's Social Chapter, which has served as the source for most reform in UK law since that time. Domestic led reform was minimal. The National Minimum Wage Act 1998 established a country-wide minimum wage, but did not attempt to reinvigorate the Wage Board system. The Employment Relations Act 1999 introduced a 60 page procedure requiring employers to compulsorily recognise and bargain with a union holding support among workers, though union membership remained at a level steadily declining below 30 per cent.
By the Second World War and the Labour government of Clement Attlee, trade union membership was well established and collective agreements covered over 80 per cent of the workforce. With the British Empire in rapid dissolution, immigration from Commonwealth countries, and record levels of female workplace participation the character of Britain's workforce was changing fast. Though the common law was sometimes comparatively progressive,[15] sometimes not,[16] the first statutes to prohibit discrimination focused on gender and race emerged in the 1960s as the Civil Rights Act was passed in the United States. Discrimination in employment (as in consumer or public service access) was formally prohibited on grounds of race in 1965,[17] gender in 1975, disability in 1995, sexual orientation and religion in 2003 and age in 2006.[18] A complicated and inconsistent jamboree of Acts and statutory instruments was placed into a comprehensive code in the Equality Act 2010. Much discrimination law is now applicable throughout the European Union, to which the UK acceded in 1972. Although labour laws in the early European Treaties and case law were scant,[19] the Social Chapter of the Maastricht Treaty brought employment rights squarely into the EU's jurisprudence. Meanwhile, starting from the Contracts of Employment Act 1963, workers gained a growing list of minimum statutory rights, such as the right to reasonable notice before a fair dismissal and a redundancy payment.[20] Labour governments through the 1960s and 1970s were troubled by reform of the unwieldy trade union system. Despite producing reports such as In Place of Strife and the Report of the committee of inquiry on industrial democracy[21] which would have made unions accountable to their members created more direct workplace participation, reform did not take place.
. Great Depression had formed Parliamentary majorities in 1924 and 1929, but achieved little in the way of reform, particularly after the onset of the Labour Party. The Chancellor of the Exchequer, by then the Winston Churchill against coal miners' pay cuts paralysed the country, though was broken by General Strike for agreement and dispute settlement between industrial partners. The 1920s and 1930s were economically volatile. In 1926 a voluntarism, encouraging collective laissez faire behind collective agreements, the law remained in a state of Without legal force [14] of workers.inequality of bargaining power to remedy the Industrial Democracy in Beatrice Webb and Sidney Webb This was based on a theory of collective bargaining, agreement or action, advocated by [13]
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