Plumbing the depths of Employment Law

The case of Pimlico Plumbers v Smith  – which is currently being considered by the Supreme Court – has attracted a lot of publicity for the hitherto obscure and anoraky topic of Employment Status. As is always the case, much of the media coverage is misinformed and the case is being ‘spun’ by the various parties. Since small businesses need to be clear about their employment responsibilities, it may be helpful to explain the differences.
An employee is someone who works for you under a contract of employment. Most people in most companies are employees, which is why the issue of status doesn’t arise in most organisations. Employees have a number of legal rights (e.g. unfair dismissal, notice periods, right to a redundancy payment etc). Employers pay them through a payroll after deducting tax and national insurance
Self-employed individuals are those who work on their own account – they may do work for a variety of clients (both individuals and companies). They invoice their clients and are responsible for their own tax affairs, and they can make a  profit or a loss. They have very few rights (mainly around health and safety and some limited discrimination rights).
All employees are ‘workers’. But there are also others who can be classified as “workers”. They are those who work for you under some form of agreement where they are required to undertake the work personally. Workers are entitled to fewer rights than an employee but they do still qualify for things like paid holidays, sick pay, and minimum wage. It is this group that form the basis of both the Pimlico Plumbers case and the current debate about Uber taxi drivers, Deliveroo cyclists, couriers for City Sprint etc.
To establish employment status, there are a set of legal tests that have been established. For example, who controls where and how the work is done? Can the work be passed to a ‘substitute’? Is the person ‘integrated’ into the business? Is there an expectation that work is provided and if so that the person will do it? And most importantly, even if there is a written agreement saying one thing, if what actually happens is different then this needs to be taken into account.
And because of an oddity of law, it’s perfectly possible to be a worker for the purpose of employment rights and be self-employed for tax purposes. This is what causes many of the disputes.
In Pimlico Plumbers case, the Company and Mr Smith signed an agreement that he was a self-employed plumber. It saved the company money in Employers’ National insurance and administration time, and Mr Smith paid less tax. Mr Smith however was expected to wear a Pimlico Plumbers uniform, drove to his jobs in a Pimlico van and was required to undertake a certain number of hours per week for the company. Nor could he advertise his own personal plumbing services to Pimlico’s clients. Everyone seemed happy with this arrangement until Mr Smith had a heart attack, had his agreement with Pimlico terminated and received no sick pay.
The courts so far have applied the tests based on the facts presented to them, and concluded that Mr Smith was not an employee, but that he was a worker. The Supreme Court will make the ultimate decision in due course. But the real lessons for small businesses are that:
• Trying to fiddle or fudge employment status can come back to bite you
• If the reality of the situation changes over time you need to review your agreements
• Think about why you want someone to work for you and be clear about the intended nature of your working relationship before you start the selection process.

If you want to know more about how employment law affects small businesses, in a simple, easy to read book, just click here

There but for the Gracie of God…


About 6 months ago, I wrote this post about BBC pay and the gender pay gap. Rather naively, I stated in that post “I can’t believe a major national organisation with extensive HR and legal resources would expose itself to such a reputational and financial risk” by breaching equal pay legislation. It appears I was wrong.

As has been widely reported, the BBC’s China Editor, Carrie Gracie, resigned at the weekend, citing the corporation’s failure to pay her at the same level as male colleagues doing the same job in different parts of the world. Reading her public post explaining her reasons for resignation, it appears that she does have the potential for a successful claim.

Equal Pay is either pretty straightforward – men and women doing the same job must be paid the same* – or complex – men and women doing jobs of equivalent value must be paid the same (this is complex because working out the “equivalent value” can be difficult and time-consuming to establish).

Ms Gracie’s case however seems to fall into the former category. As I understand it, there are a group of 4 senior journalists within the BBC who undertake editor roles for distinct regions of the world (Europe, North America, China, Middle East).  So essentially there are 4 people who are doing the ‘same’ job – two of whom are men and two women.

Can the BBC justify a salary difference? It could, if it was able to show that the difference was due to

a)       Work Performance

b)      Geography

c)       Market forces

d)      Special duties or responsibilities

e)      Greater skill and experience

Obviously, I can’t comment in any detail on most of those areas. But given the individuals in the 4 editor roles are long serving experienced BBC journalists, it would seem that reasons a), c) and e) are unlikely.  Reason d) would seem to apply equally to all 4 – all of them undertake other BBC jobs (presenting on TV or radio etc), which leaves us with simply geography as the reason.

On that basis, I could probably argue a case that the Middle East editor should be paid higher (due to the need to visit war zones/higher degree of personal risk etc) and it might be justifiable to pay slightly differently if the cost of living were significantly different between countries/regions.  But otherwise I’m struggling to see how the BBC will justify a difference in salary.

We’ll see how Ms Gracie’s claim does over time. But the message for my clients and other readers is that you should be paying men and women the same* for doing the same job and differences can only be justified for one of the reasons highlighted. A claim may not be as publicly damaging to your organisation but it has the potential to be very expensive.

(*To be clear, the same can mean within the same pay scale/band, not necessarily an identical salary)



Sexual Harassment in the Workplace

With increasing numbers of accusations of sexual harassment (and worse) being made, and several high profile figures seeing their reputation and career vanish overnight, many smaller businesses are concerned how they should deal with an allegation if it should occur in their own organisation.

I was recently asked to contribute an article to Arts Professional magazine on how to handle claims of sexual harassment. Although it’s written specifically for arts organisations, the points are generally applicable to all small organisations, whatever their sector. You can find it here

I’d welcome any comments or queries when you’ve read it – if you have a situation where you need specific advice please get in touch

7 hacks to disrupt HR

Everywhere you look, people want to disrupt HR. Books have been written, conferences held, hashtags created. Many in the HR profession look at the way that Uber, Airbnb, Ryanair and others have disrupted their industry and wonder how we can do the same.  Now I can exclusively reveal that the seven hacks below will ensure that you can disrupt HR whatever your business or sector.

1.       Remove all pencils from the HR office (or in a tech company, hide all the iPad chargers). All HR work will soon grind to a halt.

2.       Respond with “Yes, let’s be just like Enron” whenever the phrase “war for talent” is mentioned. Most HR people won’t actually have read the book to be aware that Enron was one of the key case studies.

3.       If anyone in HR refers to the above concept as the “war on talent”, smile pityingly at them. This will disconcert if not completely disrupt.

4.       Replace all ergonomically designed office chairs with three legged stools. Defend any subsequent health and safety claims with “we were only implementing the Ulrich model

5.       Suggest ignoring employment law if it doesn’t fit in with the preferred solution to a problem (I saw this genuinely proposed by a qualified HR person on a LinkedIn discussion topic, so this disruptive tactic has clearly gone mainstream).

6.       Ask “have you any evidence this will work?” next time they propose a new initiative.  Repeatedly doing this will either a) make them leave you alone or b) find some evidence to support their argument.

7.       For maximum effect, switch on the sprinkler system during the CIPD conference this week. This will disrupt more HR people in one fell swoop than points 1-6 put together.

I completely understand that many in the HR world think things we do could be done differently and better, or even not done at all (I am one of them). And perhaps I’m being too literal by taking the dictionary definition of ‘disrupt’. But the word conveys the snotty-nosed punk rock attitude of ‘let’s smash everything whether it’s good or not’ (fine if you’re 17 and in a band, perhaps not so in a world of work). Moreover, with the disruptive chickens coming home to roost for many of the companies above, should this be a bandwagon that we just watch as it goes hurtling by?

“Just one in ten Brits is engaged at work” – Who Cares?

Last week I attended Prof Rob Briner’s entertaining talk on Evidence Based HR, in Liverpool. His concluding section was on how to spot a management fad, and only a few days later I had a perfect example.

“Just one in 10 Brits feel engaged at work, says Gallup” shouted a People Management article. According to the report, that lagged well behind the US where the figure is apparently one third, and it was suggested that US management practices were one of the principal causes.

I thought it would be quite interesting to explore this in more detail. However, the full report is not available until the end of November – and will cost me £37.50! I wasn’t that interested so I thought that the Executive Summary would do. However, to get this, I need to give Gallup all manner of contact details and information about my organisation, and before I could get the download information there was the threat that “someone from Gallup may contact you to discuss your interest further”.

So essentially, Gallup have issued some marketing information disguised as “news”, with data that they are only prepared to reveal at a price and which can’t currently be challenged. It’s the sort of approach that ought to sound warning bells for anyone (such as a prospective customer) looking for evidence to support their claims.

And even if we take their facts as true, there are a number of questionable elements. Why does it matter that only 11% (which is actually one in nine, but what’s a percentage point between friends?) of Brits are engaged? Does it affect organisational performance – if so how? Profitability, turnover, productivity? And if it’s a more direct people impact, what is it? Turnover, absence rates, recruitment difficulties, industrial disputes?

And what about these management practices that result in higher US scores? What exactly are they? How do they affect engagement? And are they suggesting that US businesses are 23% better in organisational performance? We’re not told, which makes me wonder why low engagement is a problem at all? Could it be that Gallup have some magic product or consultancy service that they wish to sell?

Now, you may think that it’s easier to debunk someone else’s idea rather than come up with a possible solution myself – a question the CIPD’s David D’Souza raised on Twitter last week as a result of this article in the New York Times about psychologist Amy Cuddy and her “power pose” research. However, I think that’s missing the point. We should critically evaluate other people’s findings and scrutinise whether things that are claimed actually do work. The example of Amy Cuddy suggests that the debate moved from her actual research into a battle of egos and ad-hominem attacks, accompanied by online trolling by academics that seems to have made Twitter seem like a bastion of civilised discussion in comparison.   

HR and “Fake News”

Last Friday (15 Sept) the tweet below appeared regularly in my timeline.

Screenshot (5)
Given that unpaid internships – along with zero-hour contracts and ‘disguised’ employment (Uber/Deliveroo etc) – are the big ethical no-nos in HR currently, it will not surprise you that the response to the tweet was much collective tutting on behalf of those in the profession (including me initially)
But something nagged at me. Whether it was the fact that the original tweet was not from one of the usual HR sources; or the fact that there was no link to the offending advert, merely a picture; or that I’m currently studying the “Calling Bullshit” online module; or as an HR person I’m used to carrying out disciplinary and grievance investigations and digging beneath the surface of issues. But mostly it was the fact that the story seemed too good to be true.
So, in my lunchbreak I did a little research. And in around 10 minutes – significantly less time than this post has taken to write – I discovered the following:
1. There is no such charity as “Fight Against Slavery”. No organisation of that name is currently registered or has been registered in the recent past with the Charity Commission (an essential requirement to describe yourself as a charity in the UK). Nor is any such organisation listed on the publicly available Police list of Anti-Slavery organisations.
2. There was a Crowdfunding page set up around a year ago with the aim of starting a charity under this name. It seems to have raised precisely no money at all.
3. The Daily Mail appears to have run a story on this in January this year. Given that newspaper’s reputation for playing fast and loose with facts, and its ability to twist any story to one of its political narratives (in this case “The HYPOCRISY of LEFTIES who tell US what to do while THEY do the opposite”), it’s possibly not a reliable source.
4. A quick bit of fact-checking on the Mail story reveals that the advert was allegedly placed on the Gumtree website, a general classified ads site that does include job adverts. At this distance of time there is no way of checking whether the advert was ever posted there.
5. The alleged spokesperson for the charity is one Chiara Chiavaroli. The only person listed on LinkedIn with this name is a Bologna University student, and while there are around 10 women with this name on Facebook, all also appear to live in Italy (Disclaimer – I didn’t check individual profiles). The crowdfunding page above lists a different organiser.
So, was this a prank to fool the Daily Mail, or an invented story to raise an issue of concern? Or is there some other explanation? What it certainly isn’t is a charity abusing its role or an example of an organisation exploiting people (since real charities can and do operate with volunteers, a situation which is both legally and ethically accepted). And it shows that even HR is not immune to the concept of fake news, something that we should all be aware of when commenting or retweeting stories related to the profession.

ET Fees – what should small organisations do?

You’ve probably seen today’s news that the Supreme Court has ruled that the current Employment Tribunal fees system is unlawful, primarily because it denies individuals the ability to exercise the rights granted to them by Parliament. If you run a small business or charity, you may wonder what this means for you. Here are some key tips

  1. Don’t panic – today’s ruling simply restores the legal situation to what it was in 2013.
  2. Treat Employees legally and fairly – you should be doing this anyway, most employers already do. If you’re not sure exactly what you should be doing, my posts here and here may help
  3. If you do get a claim from someone relating to a past dismissal (or other issue), alleging they were unable to make a claim at the time due to the fees, seek advice immediately. 
  4. Don’t believe the hysterical nonsense in the Daily Mail (actually, that’s true of most employment law issues)
  5. See point 2