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Emplaw Monthly - End of May 2017

New to Emplaw Online

This month we published the following useful articles:

Sleeping on the job: National minimum wage and 'sleep-in' shifts

Click here for an article by Emplaw Online authors Gowling WLG following recent EAT guidance on the treatment of "sleep-in" shifts for national minimum wage (NMW) purposes.

For further information on hours that count for NMW purpose, see Emplaw Online guides: National Minimum Wage (NMW): Key Card and NMW - Time Work, Salaried Work, Output Work and Unmeasured Work

Ready or not - a new data protection regime is coming

Click here for another article from Gowling WLG, this time on on the impact of the upcoming General Data Protection Regulation (GDPR) for pension scheme operators.

With a year to go to implementation, which will affect all employers, not just pension scheme operators, the ISO has published guidance including '12 Steps to Take Now'  and at Emplaw Online, we will be publishing more information over the coming months.  For our existing extensive list of guides on data protection, click here.

Focus on Emplaw Online content

We publish a number of useful checklists and reference cards - examples of which are:

Codes of Practice - a summary of the various code of practice which impact on employment law including those issued by Acas,  the Secretary of  State, the ICO, the EHRC, the  H & S Executive, the FCA and UK Visas and Immigration.

Time Limits for Claims - a table of time limits for making employment related claims.

Social Security/Key card - a summary of the main benefits, recoupment and other legal issues.

The General Election - What are the parties promising on employment?

A useful table comparing the election promises of the main parties on employment is found at

What has been the impact of the National Living Wage?

There has been much media coverage on the impact of rises in the National Minimum Wage and the National Living wage on terms and levels of employment offered by some employers but is there evidence of widespread impact? The Low Pay Commission has issued a consultation letter seeking evidence of the impact of the recent increases, particularly with regard to the NLW to inform thinking about future upratings. Views are sought by 7th July.

Looking for judgments from the Employment Appeal Tribunal?

Recently reported cases are now found on GOV.UK at, where you can subscribe to receive email alerts as judgments are published.

ET judgments have been available for some months at

The  Gig economy- Report from the Work and Pensions Committee

The Work and Pensions Committee has published a report following its inquiry into self-employment and the gig economy. The Committee sees the introduction of the New State Pension as removing the last major difference between the entitlements of employees and self-employed and hence recommends that the incoming government should set out a ‘roadmap for equalising the National Insurance contributions made by employees and the self- employed’

The committee are concerned that bogus self-employment ‘passes the burden of safety net support to the welfare state’ and about the low levels of retirement savings amongst the self-employed, again storing up problems for the welfare state.

Its recommendations include using an opt-out system on tax returns to encourage greater contribution to pensions by the self-employed. And that there should be an assumption of the employment status of “worker” by default, rather than “self-employed” by default,  as that ‘would protect both those workers and the public purse and would put the onus on companies to provide basic safety net standards of rights and benefits to their workers’.

Reports are also expected in due course from the Taylor review of Employment Practices in the Modern Economy and the BEIS inquiry into The future world of work and rights of workers.

Deliveroo overhauls courier contracts

Deliveroo has changed the contract for its couriers, removing a clause that banned couriers from challenging their self-employed status before an employment tribunal. In the new supplier agreement Deliveroo specifies that freelance couriers can work for other businesses and do not have to wear Deliveroo-branded clothing.

Reform of termination payments stalled

The government’s proposals that payments over £30,000 will be subject to employer's NICs was dropped from the Finance Act 2017 as it was hastened through Parliament as a result of the calling of the general election. The changes were not planned to take effect until April 2018 in any event but it does seem now that their future is uncertain.

Government response to ‘high heels’ petition

The government has responded to the report recommendations on ‘high heels and workplace dress codes’.

The government states that the Government Equalities Office will be producing guidance on dress codes in the workplace and will work closely with Acas, the EHRC and the HSE to raise awareness. It intends to publish guidance in the summer of 2017. With regard to discrimination compensation guidelines, the government considers these to be proportionate.

Policy statements on whistleblowing in UK branches of overseas financial services firms

 In October 2016, the PRA and the FCA introduced new rules requiring internal whistleblowing arrangements to be introduced by banks, building societies, credit unions and PRA-designated investment firms (collectively, RAPs) as well as certain insurers. These rules did not initially apply to UK branches of overseas banks but the regulators have now published their policy statements, PRA PS8/17 and FCA PS7/17.         

The PRA has published rules that require:

-  UK branches of non-EEA banks and both EEA and non-EEA insurers to inform their workers about the FCA/PRA whistleblowing services; and

-  Any non-EEA deposit taker with both a UK branch and UK subsidiary which is subject to the existing whistleblowing rules to inform the UK branch staff about the subsidiary’s whistleblowing channel (this proposal does not apply to insurers). The PRA has decided not to apply the whistleblowing rules to UK branches of EEA insurers.

The FCA rules require:

-  UK branches of overseas (EEA and third country) banks to inform relevant staff of FCA/PRA whistleblowing services. Guidance has been included to remind branches that they may continue to have concurrent reporting obligations to their home state regulator

-  UK branches of overseas banks that have a sister or parent company that is subject to the FCA whistleblowing rules to tell its staff that they are able to make use of that company’s whistleblowing arrangements

The new rules apply from 7 September 2017 and can be found in SYSC 18.3 and PRA Rulebook: CRR firms/ Solvency II firms.

FCA: guidance on the statutory duty of responsibility

Under section 66 of the Financial Services and Markets Act 2000 (FSMA) the regulators may take disciplinary action against those they regulate. The regulators introduced a statutory duty of responsibility from 10 May 2016, with the burden being on the regulators to prove that a senior manager in a regulated financial services firm has failed to take reasonable steps to prevent a regulatory breach from occurring.

The FCA has now issued final guidance in policy statement PS17/9 on the duty of responsibility and makes final amendments to its Decision Procedure and Penalties Manual. The guidance applies from 3 May 2017.

Conduct Rules and non-executive directors

The FCA has published policy statement PS17/8 which introduces final rules which come into force on 3 July 2017. Under these rules standard non-executive directors (i.e. those who do not hold senior manager roles) (NEDs) will be subject to the five FCA individual conduct rules (COCON 2.1) and to senior manager conduct rule 4 requiring individuals to ‘disclose appropriately any information of which the FCA or PRA would reasonably expect notice’. The other senior manager conduct rules will not apply unless the NED is also a senior manager.

PRA supervisory statement SS2/17 and policy statement PS7/17 on remuneration

PRA supervisory statement SS2/17 replaces earlier remuneration policy documents and letters to firms and should be read together with the rules set out in the Remuneration Part of the PRA rulebook. It applies to all firms regulated by the PRA which fall within the scope of the Remuneration Part.

SS2/17 was published together with policy statement PS7/17 which provides feedback to consultation paper CP33/16 on remuneration principles.

The PRA and FCA (see below) have complied with the European Banking Authority (EBA) final guidelines on remuneration except for the provision that the limit on awarding variable remuneration to 100% of fixed remuneration (or 200% with shareholder approval) – the bonus cap – must be applied to all firms subject to the Capital Requirements Directive (CRD). The EBA guidelines (effective from 1 January 2017) apply for the performance year 2017 onwards.

Level one and two firms must continue to apply the bonus cap. Both the PRA and the FCA require level three firms to set an appropriate ratio between fixed and variable remuneration. All other aspects of the EBA guidelines must be complied with.

SS2/17 sets out expectations of firms in relation to:

·        Proportionality

·        Material risk takers

·        Application of malus and clawback to variable remuneration

·        Governing body/ remuneration committees

·        Risk management and control functions

·        Remuneration and capital

·        Risk adjustment (including long-term incentive plans ‘LTIPs’)

·        Personal investment strategies

·        Remuneration structures (including guaranteed variable remuneration, buy outs and retention awards)

·        Deferral

·        Breaches of the remuneration rules

FCA policy statement PS17/10

The FCA has published its final rules and guidance on remuneration policies and practices in PS17/10 in response to consultation paper CP16/28. Guidance on remuneration and proportionality has been simplified and new non-Handbook guidance addressing FAQs on implementation of the EBA guidelines is included. The policy statement affects all firms that fall within the scope of CRD IV who must comply with the FCA Remuneration Code under SYSC 19A and 19D.

As stated above, the EBA guidelines came into force on 1 January 2017 and firms should ensure they comply with the guidelines and FCA rules and guidance for the 2017 performance year onwards.

Social Security (Miscellaneous Amendments no.3) Regulations 2017

HMRC consulted extensively on the off-payroll working in the public sector rules and the reform of the intermediaries legislation (IR35), including whether the approach to defining ‘public authority’ was the correct one. IR35 is aimed at addressing a form of perceived tax avoidance when individuals supply services through an intermediary and thereby avoid paying income tax and NICs.
These new regulations replace the definition of ‘public authority’ in the Social Security (Intermediaries) Regulations 2000 and come into force on 18 May 2017. The amendments reflect new provisions to be inserted into the Income tax (Earnings and Pensions) Act 2003. The revised definition ensures that some private sector retail businesses including high street pharmacies and opticians, which were incorrectly brought into scope because they provide services on behalf of the NHS, are now taken out of scope.
HMRC will publish guidance in the HMRC Employment Status Manual

Report on victims of modern slavery

The House of Commons Work and Pensions Committee has published a report on victims on modern slavery.

Pensions Regulator’s report

The pensions regulator has published research on the rollout of automatic enrolment. New businesses that start up from October this year are being warned that they will have instant pension duties once they recruit a member of staff. More than half a million employers have now complied with the law and have integrated automatic enrolment into the day-to-day running of their business.

Fine for breach of auto-enrolment duties

Separately, the consequences of failing to comply with auto-enrolment obligations are illustrated by the action taken against Johnsons shoe company, which failed to comply by the statutory deadline and then refused to pay a penalty notice. The fine finally reached £40,000 and before a court hearing was held, Johnsons paid the fine.



Weatherilt v Cathay Pacific Airways Ltd [2017] UKEAT/0333/16

ET can determine issues relating to construction of contract – Agarwal not followed

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Case Summary Tag: 

Interserve FM Ltd v Tuleikyte [2017] UKEAT/0267/16

Blanket policy to treat three months absence without pay as leavers was not unfavourable treatment by reason of pregnancy/maternity

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Focus Care Agency Ltd v Roberts [2017] UKEAT/0143/16

Multifactorial approach needed to assess whether employees who sleep in are engaged in time work

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Case Summary Tag: 

Smith v United Kingdom, application 54357/15

No breach of Article 8 for use of personal data in a blacklist

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Day v Health Education England & Ors [2017] EWCA Civ 329

Application of the whistleblowing provisions to Junior Doctors as regards Health Education England

This case concerns the application of the whistleblowing provisions and extended definition of ‘worker in ERA 1996. Section 43K(1)(a) extends the definition of worker in section 230(3) to include ‘an individual who:

·        Works or worked for a person in circumstances in which

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The Government Legal Service v. Brookes [2017] UKEAT/0302/16

Multiple choice test discriminated against applicant with Asperger’s syndrome

The EAT has upheld an ET decision that Ms Brookes, who has Asperger’s syndrome, was discriminated against by being required to sit a multiple choice ‘Situational Judgment Test’ as the first stage in a competitive recruitment process for lawyers wishing to join the Government Legal Service.

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Fulton & another v Bear Scotland UKEATS/0010/16

Gap of more than three months breaks series of deductions

The EAT has confirmed that a gap more than three months between non-payments or underpayments of wages will break a series of deductions for the purpose of section 23 Employment Rights Act 1996.

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Lidl Ltd v Central Arbitration Committee & Anor [2017] EWCA Civ 328

Small section of workforce could still be an appropriate bargaining unit

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