News, Advice and Discussions on British Law

Following the recent failure of attempts by the European Union to change the Working Time Directive, so as to make it unlawful to allow a person to work more than an average of 48 hours a week, the current Directive remains in force. This means that the opt-out from the 48-hour weekly working limit negotiated by the UK remains in place.

With many businesses trying to cut staff costs, now is a good time for employers to check that their efforts to cope in difficult economic circumstances do not mean that they are failing to comply with the laws relating to working time.

Under the Working Time Regulations 1998, which implement the European Working Time Directive into UK law, the general rule is that an employer must take all reasonable steps to ensure that the working time of any adult worker does not exceed an average of 48 hours for each seven days during a 17-week reference period.

However, if an individual worker is willing to work more than an average of 48 hours per week, this is allowed provided that this is evidenced by a signed opt-out agreement. The agreement must be revocable. A worker who does not wish to sign an opt-out agreement must not be subjected to any detriment as a result. For workers under 18, the maximum working week is 40 hours. These hours may not be averaged out and no opt-out from the weekly limit is available to young workers.

However, if no adult is available to do the work and the young worker’s training needs are not affected, he or she may work more than 40 hours if doing so is necessary to maintain continuity of service or production or in order to respond to a surge in customer demand.

The employer must keep an up-to-date list of adult workers who have agreed to work more than the 48 hours a week average and retain adequate records which show whether working time limits in general are being complied with. These must be kept for two years from the date they were made. There are additional record- keeping requirements relating to hours worked by young workers and where work involves special hazards or night work.

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The gender pay gap is the term used to describe the difference between the hourly earnings of men and women. It is determined by calculating the overall pay of women as a percentage of that of men. The pay gap is the difference between this and 100 per cent. So, for example, if women’s pay is 80 per cent of men’s, the pay gap is 20 per cent.

There are different ways of calculating the gender pay gap. If calculated using the mean (average) hourly pay, women’s pay (excluding overtime) was 17.1 per cent less than men’s pay in 2008, showing an increase on the comparable figure of 17.0 per cent for 2007.

At present, private sector employers are only under an obligation to disclose gender pay information if requested to do so as part of a questionnaire under the Equal Pay Act 1970 or during Employment Tribunal proceedings. However, the Equality Bill contains a power to require employers with more than a specified number of employees to report on the gender pay gap. The original provision was for those with more than 250 employees to provide this information but a reduction in the
number to 100 has been mooted.

Initially, organisations with more than the specified number of employees will be ‘encouraged’ to volunteer information on the average hourly pay of male and female workers. To this end, the Equality and Human Rights Commission will carry out a consultation in order to develop a system of pay reporting for the private sector. If by 2013 it is clear that a voluntary reporting system has been ineffective in narrowing the gender pay gap, legislation will be brought forward to force disclosure. The Equality Bill also bans secrecy clauses which prevent staff from disclosing their salaries to colleagues.

A recent survey of senior Human Resources professionals revealed that only 29 per cent of organisations had conducted gender pay audits and only five per cent had actually reported their findings. Employers would therefore be well advised to carry out an audit sooner rather than later and to ensure that any discrepancies are remedied so as to reduce the risk of equal pay claims in the future.

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It is an implied term of any employment contract that an employer should not act in a way that breaches the trust and confidence which an employee can expect from them. A serious breach of an implied contractual term or the ‘last straw’ in a series of less serious actions which cumulatively undermine the employee’s trust and confidence will amount to a repudiatory breach of the employment contract. It would normally justify the employee in terminating the contract and claiming constructive dismissal.

It was established in Omilaju v Waltham Forest London Borough Council that the last straw, which allows an employee to resign and claim constructive dismissal, need not necessarily be a breach of contract. It could be a relatively minor act. However, to be successfully relied on by the employee the last straw has to be the last in a series of acts or incidents which cumulatively amount to a repudiation of the contract of employment by the employer. It has also to contribute, however slightly, to the breach of the implied term of trust and confidence. In addition, an action on the part of the employer that can be objectively judged to be entirely innocuous cannot be a last straw, even if the employee genuinely but mistakenly interprets the act as being hurtful and destructive of the trust and confidence in his or her employer.

In Wishaw and District Housing Association v Moncrieff, Mr Moncrieff was told that there were 13 areas of concern regarding the quality of his work as a Property Services Officer and that he would therefore be asked to attend a formal disciplinary interview. He considered these allegations unfair and in some cases untrue. Receipt of the notes of this meeting against a background of family problems caused him to suffer ill health and he was unable to work.

Mr Moncrieff remained off work on the advice of his GP. However, the Chief Executive of the Housing Association was sceptical that his illness was in any way due to domestic problems. When referring Mr Moncrieff to the Occupational Health department she stated that the family issues cited as the reason for his depression, which included his brother’s attempted suicide, were well known in the office because he had talked openly about them and his brother was now back at work. Mr Moncrieff was upset by this and claimed that someone had lied to her about it.

Over the ensuing months, the relationship between Mr Moncrieff and his employer deteriorated to the point where they were only corresponding via their respective solicitors. Eventually, Mr Moncrieff resigned and brought a claim of constructive unfair dismissal, using the last straw argument, and the Employment Tribunal (ET) upheld his claim. The Housing Association appealed and successfully overturned this decision.

The Employment Appeal Tribunal (EAT) held that in last straw cases, the ET must first identify the last straw act. It must then consider whether, assessing that act objectively, it is capable of contributing to a series of earlier acts so as to amount cumulatively to a breach of the implied term of trust and confidence. If the ET concludes that the act does have that potential, then it is required to consider the other acts in the series and ask whether, looked at together, all the acts, including the last straw, amount to a breach of the implied contract term. If, however, the ET concludes that the final act does not have the characteristics of a last straw, then it need not examine earlier events.

In this case, the EAT found that it was impossible to determine what the ET’s finding was regarding what exactly constituted the last straw or, indeed, whether the correct approach had been taken. For that reason alone, the ET’s judgment could not stand and Mr Moncrieff’s claim of unfair constructive dismissal was bound to fail.

Furthermore, when the EAT examined the correspondence between the parties, in its view there were only two letters that were possible candidates and neither one, when viewed objectively, could be regarded as evidence of a last straw.

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