Employment law update

Employment law always has to cope with the subordinate relationship of employee to employer. Protecting employees is the overt objective of most employment legislation, whether European or domestic. How that legislation is interpreted and made changes from time to time, depending on the prevailing political and economic conditions. Developments in the last few months have moved variously, some favouring employers, and others, employees.

We have all got very used to our courts adopting a 'purposive' approach to avoid giving words their natural meaning in order to reach conclusions 'compatible with the grain of the legislation'. That grain is always of European origin and designed to provide employment protections.

Employers' organisations and the current government complain about the burdens they perceived to have been created by these protections. Resulting from those complaints have been the 'red-tape challenge', the war against 'gold-plating' and even Cabinet Office guidance to all departments that they should never implement a directive beyond its minimum requirements.

Improving competitiveness

The most recent of these developments was the publication in October of the recommendations of the Prime Minister's Business Taskforce which makes many proposals to improve the competitiveness of Europe and, among other suggestions, recommends a number of changes to European employment law. It calls for abandonment of the proposed changes to the directives on Pregnant Workers and Posted Workers and for radical changes to working time rules. It also wants a cut back on the scope of the TUPE rules to permit contractual changes after a transfer. Perhaps the most sweeping proposal is that there should be a general presumption that micro-enterprises (those with less than 10 employees) should be exempt from any new legislative proposals. The argument in favour of this proposal is that protective legislation discourages the taking-on of employees. '¨The well-established argument against the idea (which is far from new) is that employees are treated worst in these businesses. In practice many problems would be created by a numbers-based exclusion when the number of employees fluctuates above and below the cut-off.

What may surprise some of the UK policy makers is that only one month before the publication of the Taskforce report European Commission president José Barroso claimed that the commission was cutting red tape and in particular helping small businesses as part of what is called the 'smart regulation agenda', asserting a saving to businesses of ‚¬32.3bn a year. The reliability of this figure is not known and it is unlikely that the bigwigs of the Taskforce will be impressed as their view of the outcome of the commission's past activity is very apparent.

Acquired rights

A reflection of these attitudes can also be detected in the judgment of the CJEC in Alemo-Herron and Ors v Parkwood Leisure [2013] IRLR 744 which held that member states could not provide that collective agreements, negotiated and adopted after a transfer, would be binding on a transferee who is not able to take part in the negotiating process. This resolves the debate between the 'dynamic' and 'static' interpretation theories for such agreements in favour of the latter. That '¨was surprising enough but one statement made by the court really did indicate a quite radical change of approach.

What was said was that the Acquired Rights Directive does not aim solely to safeguard the interests of employees in the event of a transfer but also seeks to ensure a fair balance between the interests of those employees on the one hand, and, those of the transferee on the other. It even referred to the need for an employer to have "the room for manoeuvre necessary for a private transferee to make such adjustments and changes" as would be necessary on a move from the public to the private sector. It is not possible to view this decision as other than a radical change of attitude which is aligned to some degree with the views of both the government and the Commission in its intention to restore greater balance to the respective interests of employees and employers. There is a great deal to come and the case will be regularly deployed in many tribunal hearings by employers' representatives dealing with purposively inclined judges.

The similarity of theme in such disparate sources indicates that the financial climate presages a reduction of protections. The problem could be that by the time any real change has been effected, such are the delays in changing European law, the economic cycle will have moved on by the time it happens and, again, the time will be out of joint.

Zero-hours contracts

But naturally there are a number of employee-oriented developments to report. One is the decision of the business secretary, Vince Cable, to deal with what he sees as abuses in the use of zero-hours contracts. He announced that he had become aware that these contracts were much more widely used than he had previously thought. He did not reveal why BIS were ignorant of what was fairly common knowledge amongst both employment lawyers and trade unions, that the use of these contracts was widespread. He did say that the issues were exclusivity (i.e. that employees were prevented from working for other businesses); the lack of clarity of what constitutes such a contract; the uncertainty of earnings (odd, as that it the whole point of using them and mirrors the uncertainty of available work) and our old friend 'the balance of power in the employment relationship'. A consultation paper is to follow. At the same time the Business Secretary has asked the Low Pay Commission to consider how the minimum wage might be able to rise faster than current conditions allow over the medium term. Some may think that greater attention should be paid to resourcing the ability of government to police the wide-spread abuses of the current minimum wage law, but that probably attracts fewer headlines.

Failure to consult

If however one is awarding prizes for the most employee-oriented development in the last few months it has to go to HH Judge McMullen QC. '¨In USDAW v WW Realisation 1 Ltd [2013] UKEAT/0547/12 he reinterpreted the law relating to consulting redundant employees radically, to enable protective awards to be made to 4,443 redundant employees who were employed in retail branches with less than 20 employees.

On the conventional interpretation of section 188(1) Trade Union and Labour Relations (Consolidation) Act 1992 they were not required to be consulted. By a series of what Sir Humphrey might have called 'brave' interpretations of European case law and the Collective Redundancy Directive he held that the vital three words which prevented recovery of an award "in one establishment" could be ignored. By judicial fiat they simply disappeared. A serious flaw in the process of reaching this decision was the absence of anyone arguing the case for the status-quo as the Secretary of State failed to appear. The same issue will be considered by the CJEC in the Northern Ireland case of Lyttle & Ors v Bluebird UK Bidco 2 Ltd NIIT/00555/12.

So the 'eternal struggle' of employment law '¨lives on vigorously. The search for balance may '¨be a matter for the opinion of all but it will never satisfy everyone. SJ