Long reads

Legal roundtable: We are the law

23 Aug 2017 By PM Editorial

We took employment lawyers from top firms and asked them about what really matters to HR – from Brexit and the Taylor review to staying out of court

It is far from hyperbole to say 2017 has been the most significant year for employment law since the Magna Carta was signed. Matthew Taylor has shaken up the notion of employment status, tribunal fees have been scrapped and the implications of Brexit are beginning to become clear, not to mention the introduction of the gender pay reporting regime.

To unpick these matters, and set them in the context of the modern workplace, People Management went straight to the top. We asked employment lawyers from seven of the UK’s most prestigious firms to assemble for an afternoon in the heart of London for a wide-ranging discussion. And while their guidance would normally cost thousands, we’re giving it to you for free…

What was your reaction to the abolition of tribunal fees?

Richard Fox, partner at Kingsley Napley: It took far too long. I couldn’t understand how [trade union] Unison kept losing. The Supreme Court had the courage to pull down the government’s defence of something that was really tricky to defend.

Rajiv Joshi, partner at Blake Morgan: I was surprised. We’ve heard the estimates of what the government will have to reimburse, and the details of how that will be worked out will be interesting. What happens to those who’ve had an award made against them? How will [defendants] be able to pay it back? And what happens to those who didn’t lodge claims because the fees deterred them?

Jeremy Coy, associate at Russell-Cooke: We have no idea how many people were put off making claims since 2013 [when fees were introduced]. Things could get back to the same level as they were before then.

Joanna Pennick, associate at DAC Beachcroft: There might be an initial spike, but I don’t think we will get to that previous level in the short term because there has been a big culture change. People have been put off [making claims] and that filters through to their colleagues.

Have people been deterred from pursuing ‘vexatious’ claims since the fees came in?

Fox I don’t think it’s right to say the level of vexatious claims has come down. The same proportion of claims are winning, so that argument is specious. The bigger question is what fees have done to the culture of litigation. For example, sex discrimination cases are down 85 per cent and you have to ask why.

Rhian Radia, partner and head of employment at Hodge Jones & Allen: [After fees] it seemed to become such an employer-friendly world. It was increasingly difficult for claimants. I received constant cost threats against employees at every stage of the litigation, even before claims had been issued. That really deterred people.

Fox You could argue that tribunal fees have not done fair employers a favour, because many bad ones know they’re unlikely to be challenged for malpractice. Arguably, fair employers will want a proper review of the system to ensure the bad apples – those who don’t pay wages properly or who play fast and loose with process – are taken out, leaving a level playing field.

Will Brexit mean certain employment legislation is removed from the statute books?

Michael Bronstein, partner at Dentons: The government repeatedly said in the run-up to Article 50 that there would be no change to workers’ rights post-Brexit. It would be a brave government that would do away with the right to paid annual leave, for example. Plus, there’s a common misconception that all employment rights are created by the EU, and in fact the contrary is true.

Fox I’m not quite as sanguine. Theresa May has been associated with worker rights from day one. And one benefit from Brexit might be that the government can set its own agenda. There may be a focus on sex discrimination payouts, and I wonder if – playing to the employer market – they will feel it’s appropriate to put a cap on those cases.

Coy TUPE is most likely to be reformed because it’s not something the average person on the street is likely to know about. If harmonisation [under TUPE] is liberalised, that’s not going to make waves in the national press, whereas, if you reduce workers’ rights to holiday, Labour will be on top of it.

Joshi I can’t see significant changes being made to TUPE. But agency worker regulations have been unpopular with some employers and we may seem some move away from them.

Pennick TUPE will stay. Slight tweaks might include the ability to harmonise terms and conditions after a TUPE has happened, because most employers find that unworkable.

What is the most likely outcome in terms of a new visa regime post-Brexit?

Bronstein It’s extremely opaque. We don’t even know what’s going to happen on 29 March 2019. I’ve got clients who say good workers are leaving because of the uncertainty in their personal lives. The government’s proposals were far-reaching but a lot of detail was missing.

Pennick We’ve got clients already setting up entities – in Ireland, for instance – and they are asking workers if they are willing to move. For example, a lot of banking employees are highly mobile so they have been saying ‘I’ll go wherever you want to send me’.

Philip Pepper, partner at Shakespeare Martineau: [Home secretary] Amber Rudd has set out a year-long consultation on migration. I’m astonished we haven’t got some certainty in this area. My clients in the food sector say people are leaving and it’s creating real problems for them.

Bronstein It’s a spectacular own goal for the UK economy that just at the point where we’re beginning to see labour shortages, we’re looking to obstruct the supply of talented labour from the EU and the lower-skilled labour we need to do jobs in agriculture, for example.

Does the Taylor review provide clarity over the future of employment status?

Pennick The report is commendable but aspirational. If it was easy to determine an employee, worker or self-employed person, we’d already be doing it.

Joshi For me, it’s all about relationships and that will always end up in a tribunal at some point, whether we have the categorisation of dependant contractor or not. I don’t think we will see a massive reduction in the number of employment status claims coming before a judge.

Bronstein Employers like Uber are not exactly gaming the system, but they are exploiting what the system allows them to exploit. In every case I’ve seen in this area, the employer has lost because the tribunals have taken a robust view. In the Uber case, the judgment saw through the byzantine layers of documents the army of lawyers had invented to say the company wasn’t a taxi service. Taylor has got that right – it is a very nuanced spectrum: at which point do you become sufficiently subordinate to become a worker rather than self-employed?

Fox Taylor has shown that being self-employed is not what it used to be – it’s not just solicitors and architects and so on, it’s people who really need support. And while I agree that you need the flexibility of case law around this, the difficulty is how you legislate.

Bronstein It comes down to tax. At the moment, there is a big incentive for an organisation to ensure the individuals they engage are self-employed, which means [not paying] 13.8 per cent employer’s national insurance. If that is removed or lessened then the incentive to game the system is diminished and that’s a more logical starting point.

Is the gender pay reporting regime fair?

Bronstein Equal pay is the employment legislation equivalent of banging your head against a brick wall. Gender pay gap reporting is a sensible thing to try because it makes employers think about the issue and consider addressing it, although the pay gap is not about equal pay as such.

Radia I’ve acted on equal pay cases for many female clients who’ve said at the start: ‘It’s no more than a feeling.’ They’ve got no figures to work with. I hope tribunals will be more willing to order the disclosure of pay data at an early stage – you don’t know if you’ve got a case until you have transparency.

Joshi The hard remedy might not be there yet but there is a lot to be said for reputational damage – many employers will fear that.

Pennick Over time, a divide seems to have appeared. The Equal Pay Act hasn’t made the difference we all hoped for – maybe putting the gap into the press and making employees aware of it is the only way to change it.

What piece of advice would you give an HR professional or employer that would help them avoid litigation?

Fox Download all Acas guidance and read it before you make any decision – you will probably knock out a large percentage of claims that way.

Pepper Get your managers trained. In lots of organisations, HR might do it by the book but you need managers to do it by the book too.

Joshi Seek early advice – not just HR seeking legal advice, but managers seeking advice from HR. Lots of employment tribunals begin with a very small issue that could have been nipped in the bud but instead snowballs into this massive piece of litigation.

Coy Small employers often want to get things done right away. They want to investigate, do the disciplinary, do the appeal but, if you just wait another couple of weeks and follow the procedure, you could avoid a litigation claim. If you don’t want to do that, open your chequebook.

Fox Remember everything electronic is potentially disclosable. Many a fantastic case has been bust apart because of some injudicious communication, often by managers who don’t have HR expertise.

Joshi Often, HR is the ambulance that arrives after the accident has happened. Just getting managers to understand the basics of disciplinaries and grievances, or to understand discrimination, for example, can really help.

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