National Minimum Wage – “On Call”, “Sleep In” employees

Global Workplace InsiderBy Amanda Sanders on Posted in Contracts, Europe, UK

The Court of Appeal has held that carers who carry out overnight “sleep-in” shifts are not entitled to be paid the National Minimum Wage (NMW) for the full duration of the shift, only when they are actually performing work.

The UK National Minimum Wage Act 1998 creates the right for workers in the UK to be paid an hourly rate of remuneration for work carried out. The National Minimum Wage Regulations 2015 (the 2015 Regulations) (and its predecessor the National Minimum Wage Regulations 1999 (the 1999 Regulations ))  contain complex provisions relating to how employers should calculate the number of hours worked.  The specific issue related to the provision of “time work” set out in Regulation 32 of the 2015 Regulations (with similar provisions in the 1999 Regulations).  This provides that “time work” includes hours when a worker is available, and required to be available, at or near a place of work for the purposes of working (unless the worker is at home).  This is further clarified that, if a worker, by arrangement, sleeps at or near a place of work and the employer provides suitable sleeping facilities, then the hours when the worker will be considered available are only those hours when the worker is awake for the purposes of working.

In the care sector, workers are often required to “sleep in” at premises in order to provide 24 hour care to elderly, disabled or other vulnerable people. This particular case involved a claimant who was a care support worker and was required to work a mix of day shifts and overnight “sleep-in” shifts to care for individuals with learning difficulties. No specific tasks were allocated during the overnight period, although she was required to keep a “listening ear” in case her support was required.  The claimant was claiming the NMW for the full duration of the “sleep in” shift.

The Court of Appeal held that on the reading of the 2015 Regulations and the 1999 Regulations, as well as a report by the Low Pay Commission, the provision was that the hours should count for NMW purposes only when the worker on a “sleep-in” shift was awake, or required to be awake, for the purpose of performing some specific activity.

The Court of Appeal then also considered a series of cases and held that whilst some could be distinguished on their facts (i.e in this particular case the worker was expected to be asleep), another had been incorrectly decided based on a mistaken understanding of those previous authorities.

This judgment will be very important in the care sector and is likely to bring relief to many employers who were concerned about both the future level of pay and the potential historic liability.

Regulation applicable to dress codes in the workplace in France

François GuillonBy François Guillon and Elodie Grangier on Posted in Europe, France

An individual freedom…

Generally speaking, employees are free to choose how they wish to dress, including in the workplace. Such freedom is protected by the rules of the French labor code, which provide that an employer may not restrict an employee’s work clothing without proper justification based on the nature of the tasks to be performed and that any such restrictions must be in proportion to the goal sought.

…which can be limited under certain circumstances

However, the freedom to dress as one wishes does not fall within the category of fundamental liberties and therefore it may be limited in certain circumstances.

The decisions of the French courts have therefore held that certain restrictions on the freedom to dress may therefore be permitted if they are prescribed by professional necessities, relating to any of:

  • health and safety (e.g. in the case of a butcher whose particularly negligent clothing had been unfavourably commented on several customers);
  • security (e.g. where particularly unhealthy or dirty working conditions require that appropriate work clothing must be made available to workers);
  • decency (e.g. wearing a transparent blouse, for a bookkeeper, has been considered as “likely to cause trouble in the business”);
  • out of concerns for the company’s image–in particular when the employee is in direct contact with the customers.

Where restrictions are set by the employer, a specific procedure is required to be implemented and this will need to be formalized.

Example of particular restrictions which can be set by French employers

  • Uniform

The employer must justify the requirement made to employees to wear uniform for reasons of health or safety, or due to the fact that employees are in contact with customers.

In this regard, the French Supreme Court has confirmed the validity of the dismissal of an assistant responsible for hotel reservations, who refused to wear the uniform which she considered too daring.

  • Name badge

Under certain circumstances employers may require employees to wear name badges. This is the case in particular for employees who are in contact with the public.

  • Religious clothing or symbols

French law provides a general prohibition on wearing clothing intended to conceal one’s face in a public space, as well as in places open to the public or designated for a public service.

However, French law also considers religious freedom to be a fundamental liberty and any dismissal based on an employee’s religious beliefs is considered as null and void.

The question of how to reconcile the protection of such individual religious liberty (and the consequent freedom to express one’s religious beliefs) and the legitimate interests of employing companies may prove to be difficult, but French courts generally consider that an employer may, under certain circumstances, require employees who are in contact with the public to maintain strict religious neutrality, which implies a prohibition on wearing religious clothing or symbols.

Overtime and holiday pay – non-guaranteed and voluntary overtime

Global Workplace InsiderBy Amanda Sanders on Posted in Contracts, Europe, UK

The Employment Appeal Tribunal (EAT) in the UK has recently considered whether voluntary as well as non-guaranteed overtime should be taken into account in calculating the amount of holiday pay. The question arose both under the terms and conditions of the claimants’ employment, but also pursuant to the EU Working Time Directive (No.2003/88) (WTD).

The case involved a group of employees in an NHS trust, who brought claims for unlawful deductions from wages, relating to two types of overtime – non-guaranteed overtime and voluntary overtime. Non-guaranteed overtime related to payments, where, at the end of a shift, one of the employees was obliged to work extra time to finish a task. The claimants were also completely free to choose whether or not to work any voluntary overtime shifts.  The first claim was in relation to the terms and conditions of employment of the employees which stated that pay during annual leave was “calculated on the basis of what the individual would have received had he/she been at work”. The employees also brought a claim under Article 7 of the WTD.

The Employment Tribunal initially held that the employees contractual terms and conditions entitled them to have their non-guaranteed overtime taken into account in the calculation of their holiday pay, but not the voluntary overtime.   With regard to the WTD claim, the employer conceded that non-guaranteed overtime should also be taken into account under the WTD following the decision in Bear Scotland Ltd v Fulton (2015), but the Employment Tribunal held that voluntary overtime did not form part of the claimants “normal remuneration” and therefore did not have to be considered.

The claimants therefore appealed the Employment Tribunal’s findings that voluntary overtime did not need to be included in the calculation under either the terms or conditions or Article 7 of the WTD, and the employer cross-appealed the finding that the contract required the claimants non-guaranteed overtime to be taken into account when calculating holiday pay.

The EAT noted firstly that the tribunal has not had the benefit of the recent decision of the EAT in Dudley Metropolitan Borough Council v Willetts (2018), (Holiday pay – Regular voluntary overtime should be included – 18 August 2017) which held that the overarching principle established by the case law  is that “normal remuneration” must be maintained in respect of the period of annual leave guaranteed by Article 7.  This meant that payments in respect of voluntary remuneration should be taken into account where they have been paid over a sufficient period of time and which formed a regular and settled pattern. As such, the determination of whether each claimant had a pattern of overtime which was sufficiently regular to fall within “normal remuneration” would need to be remitted to another tribunal.

In relation to the contractual claim, the EAT held that references to “pay” in the contract terms did not have to be limited to basic pay. The clause should be read as a whole and  its intention was to maintain the overall level of remuneration which the employee would have received if working.  This construction also accorded with the WTD.  As such there was no basis to distinguish between non-guaranteed and voluntary overtime in the contractual term.

This case again shows the difficulties employers face in arguing that voluntary overtime should be excluded from holiday pay. In principle it can be taken into account and it is then a question of fact as to whether it is regular and sufficiently settled to fall within the definition of “normal remuneration”.  It is likely that this case will be appealed and we will keep you updated.

Tort liability: other grounds for bringing actions against a parent company in French employment litigation

Marie-Thérèse EugénioBy Marie-Thérèse Eugénio on Posted in Europe, France

It is a fact of life in French employer-employee relations that employees have no hesitation in bringing actions against their employer, in particular following termination of an employment, and that litigation is therefore not just a virtual weapon. Not only do employees sue their employer but, where the employer is a part of a group of companies, they have sought to impose liability on the group parent company in such employment litigation where they consider that the parent company was too involved in the management and decisions of its French subsidiary and that such involvement had proven detrimental to the French entity.

Historically, such actions were initially based on a claim by the employees that they were in fact co-employed both by the company with which they had their employment and by the group parent. However, over the course of several years, French case law has rendered more stringent the criteria entitling the employee to claim co-employment by the group parent, making the chances of success of an action based on such ground more difficult.

However, the door has not been entirely closed with respect to the ability of an employee to bring a claim directly against the parent company, as grounds of action against parent companies exist other than a claim of co-employment and this is what the French Supreme Court has recently recalled in several decisions rendered on 24 May 2018.

In one of these decisions, following the judicial liquidation of Lee Cooper France which had led to the dismissal of 74 employees, several of them lodged a claim against the holding company of the group. The claim was firstly based on alleged co-employment by the parent entity, but this argument was rejected by the court, on the basis of the principle that co-employment is defined restrictively as follows: a company belonging to a group can only be considered as the co-employer of staff initially employed by another entity if, beyond the necessary coordination of economic actions between entities belonging to the same group, there is a confusion of interests, activities and management between them resulting from an interference in the social and economic management of the other entity.

However, the employees also made an alternative claim for damages from the holding entity on the basis of tort liability (responsabilité délictuelle ) for actions which according to the employees had led to the loss of their employment.

On these grounds, the court of appeal ruled that because the parent entity had – through various questionable acts aimed at favoring its own interests – made faulty decisions which created economic difficulties and led to the disappearance of job positions within its subsidiary, it was liable to pay damages to the employees of the French subsidiary. More precisely, the holding entity was found to have required the French subsidiary to do the following:

– make a financial contribution to the group beyond the subsidiary’s financial capacity;
– effect a free transfer of a trade mark license to another entity of the group while the French subsidiary continued to bear the license fee;
– provide a real estate guarantee for the benefit of another entity of the group;
– purchase a stock of goods to another entity of the group when such stock was already subject to a right of retention in favor of a creditor;
– provide services to other entities of the group which were only partially paid.

The decision of the appeals court was subsequently confirmed by the French Supreme Court, which ruled that such behavior was faulty and damageable for the French entity and its employees.

In an earlier decision of 8 July 2014, the French Supreme Court had already admitted that tort liability constituted valid grounds to hold a parent entity directly liable towards the employees of its French subsidiary. The recent decisions of 24 May 2018 have confirmed this possibility while providing more details as to the scope of the faulty behavior of the parent entity on which such an action must be based, i.e., management decisions made abusively by the parent entity in its sole interest, which prevent the subsidiary from acting in accordance with its own corporate social interest.

Therefore, it is essential that within groups of companies a line can be drawn between the necessary economic interactions amongst the various entities of the group and the situation where the decisions made at group level would endanger its subsidiary and would fall into the category of faulty behavior which the French jurisdictions have constituted grounds upon which the actions of the parent company may trigger claims for damages.

Le temps de trajet des salariés itinérants n’est (définitivement) pas du temps de travail effectif

Global Workplace InsiderBy Elodie Grangier on Posted in Contracts, Europe, France

La détermination du temps de travail effectif des salariés est un sujet complexe, et l’enjeu est considérable pour les salariés dans la mesure où ce temps de travail effectif a un impact direct sur leur rémunération.

C’est encore plus vrai pour les salariés itinérants, dont les fonctions impliquent des temps de trajet importants (notamment entre leur domicile et le lieu d’implantation des clients de l’entreprise pour laquelle ils travaillent, qu’il s’agisse du premier client visité dans la journée ou le dernier client).

Comment doivent être pris en compte ces temps de trajet ? Sont-ils constitutifs d’un temps de travail effectif ? Dans la négative, l’employeur est-il tenu d’offrir une compensation aux salariés concernés (sous forme de repos ou sous forme financière) ?

Cette question peut apparaître simple, dans la mesure où l’article L. 3121-4 du Code du travail énonce clairement : « Le temps de déplacement professionnel pour se rendre sur le lieu d’exécution du contrat de travail n’est pas un temps de travail effectif. Toutefois, s’il dépasse le temps normal de trajet entre le domicile et le lieu habituel de travail, il fait l’objet d’une contrepartie soit sous forme de repos, soit sous forme financière. La part de ce temps de déplacement professionnel coïncidant avec l’horaire de travail n’entraîne aucune perte de salaire. »

Le Code du travail répond donc sans ambiguïté à la question de la prise en compte des temps de trajet des salariés itinérants. Mais c’est sans compter le droit européen…

Dans un arrêt récent du 30 mai 2018, la Cour de cassation a été saisie du cas d’un technicien SAV dont le contrat de travail prévoyait, pour la compensation de ses temps de déplacement, un forfait rémunéré de 16 heures hebdomadaires, et qui réclamait l’annulation de ce forfait et le paiement de ses temps de trajet domicile – client comme temps de travail effectif.

A l’appui de ses prétentions, le salarié faisait valoir un arrêt de la CJUE en date du 10 septembre 2015 rendu à propos de travailleurs itinérants soumis à la législation espagnole. A cette occasion, la CJUE avait considéré, en s’appuyant sur les termes de la Directive Temps de travail n° 2003/88/CE du 4 novembre 2003, qu’en l’absence de lieu de travail fixe, le temps de déplacement quotidien entre le domicile des travailleurs et le premier et dernier lieu d’intervention devait être considéré comme du temps de travail.

Cet arrêt avait été particulièrement remarqué en France eu égard aux dispositions de l’article L. 3121-4 du Code du travail, qui sont en parfaite contradiction avec la décision de la CJUE. La Cour de cassation avait même, dans son rapport annuel pour 2015, appelé le législateur à modifier les termes de cet article.

Le Code du travail n’a pas été modifié, et la Cour de cassation a été saisie de cette question épineuse.

C’est finalement pour une application stricte des dispositions de l’article L. 3121-4 du Code du travail que la Cour de cassation a opté, et elle a, de ce fait, débouté le salarié de l’ensemble de ses prétentions.

La motivation de la décision de la Cour de cassation a fait l’objet d’une attention particulière. La Cour de cassation a en effet pris soin de relever que la directive de 2003, sur laquelle s’appuyait la décision de la CJUE, « se borne à réglementer certains aspects de l’aménagement du temps de travail, de telle sorte que, en principe, elle ne trouve pas à s’appliquer à la rémunération des travailleurs ». Elle en a légitimement déduit que cette directive ne s’oppose pas aux termes de l’article L. 3121-4 du Code du travail qui ont vocation à déterminer les droits à rémunération des salariés.

Pour l’heure donc, et sauf modification législative, le sujet est réglé. Les salariés itinérants ne peuvent réclamer la rémunération de leurs temps de trajet en tant que temps de travail effectif. Cependant, il ne faut pas oublier que ces temps de trajet, lorsqu’ils excèdent le temps normal de trajet entre le domicile et le lieu habituel de travail du salarié, doivent faire l’objet d’une compensation (financière ou en repos).

The Australian Government has Announced an Amnesty on the Superannuation Guarantee

Sally WoodwardBy Sally Woodward on Posted in Australia

On 24 May 2018, the Minister for Revenue and Financial Services announced a 12 month Superannuation Guarantee Amnesty (Amnesty), subject to the passing of legislation, which will apply retrospectively from 24 May 2018 to 23 May 2019.   The Amnesty is encapsulated in the Treasury Laws Amendment (2018 Superannuation Measures No 1) Bill.

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AHRC launches national inquiry into sexual harassment in Australia

Sally WoodwardNicola MartinBy Sally Woodward and Nicola Martin on Posted in Australia, Discrimination and harassment

The Australian Human Rights Commission (Commission) has recently launched an inquiry into sexual harassment in Australian workplaces (Inquiry). It seems that the ‘watershed’ moment that the #MeToo campaign was hailed as, has indeed driven the momentum to keep the issue alive and for meaningful action to come from it.

There can be little argument that a culture that tolerates, condones or rewards inappropriate conduct or the wrong behaviours creates real and significant risk for an organisation – from a legal, commercial and reputational perspective.   It is essential, both at Board and executive level, that there is an awareness and understanding of the organisation’s culture or cultures and the risks that arise through such a culture and, most importantly, that steps are taken to mitigate or remove those risks.   Indeed, organisational culture and behaviours that are rewarded, encouraged or ignored, have been a key focus in the Financial Services Royal Commission and the Royal Commission into Institutional Responses to Child Sexual Abuse.

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National Minimum Wage Exemptions: employers to heave a sigh of relief

Global Workplace InsiderBy Karen Ainslie on Posted in South Africa

On 30 May 2018, the Minimum Wage Bill (the Bill) was approved by Parliament with a margin of 50% plus 1 vote. The Bill will now be sent to the National Council of Provinces for confirmation, before being signed into law. It will enforce a national minimum wage of R3 500 per month for full-time workers, or R20 per hour for any number of hours worked per day.

The national minimum wage will exclude any payment made to enable an employee to work including transport, equipment, food or accommodation allowance, any payment in kind, which includes board or accommodation, gratuities including bonuses, tips or gifts and any other prescribed category of excluded payments. Section 2 of the Bill further provides for allowances ranging from R301.01 to R1 755.84 per week for learners who have concluded learnership agreements in terms of the Skills Developments Act, 1998.

The Bill prescribes that the payment of a national minimum wage will take precedence over any contrary provision in any contract, collective agreement or law, except a law amending the Act. The Bill further states that national minimum wage will constitute a term of the worker’s contract except to the extent that the contract provides for a more favourable wage.

The purpose of the Bill is to advance social economic development and social justice by improving the wages of the lowest paid employees and protecting employees from unreasonably low wages.

The Bill will exempt low-income professions such as farm workers and domestic workers. Domestic workers will be paid 75% and farm workers will be paid 90% of the national minimum wage, but the Department of Labour stated that both sectors will be brought up to 100% within two years of implementation of the Bill, but pending research by the commission on this proposed timeframe.

Whilst the implementation of the Bill is a great victory for employees, it may however prove to be a challenge for employers who are genuinely unable to pay employees wages in line with the prescribed minimum.

The Bill does provides some relief for employees who are unable to meet the minimum wage level. Section 15 of the Bill empowers the Minister, on application by any relevant employer, to grant exemptions from the national minimum wage. This means that any employer who can show they will not be able to afford the minimum wage will be able to apply for temporary exemption.

Employers will be required to submit documents like audited financial statements, household income, commercial balance sheet, working hours, supporting statements from workforce, motivation and any other documents as evidence to justify the application for an exemption.

The Department will conduct a thorough audit of the company and then grant or reject an exemption.

The Department of Labour is currently developing an online system to help analyse data submitted by employers when applying for national minimum wage exemptions. The department has not indicated when the online system will be available, but has cautioned employers about the consequences of misrepresenting facts in the application for exemptions. The department emphasised that exemptions will only be granted to firms in significant economic distress.

Exempted businesses will be required to pay a determined percentage of the prescribed minimum wage. The exemption granted will be for a maximum 12-month period at a time, giving employers time to adjust to the prescribed minimum wage. The exemption granted by the minister will specify the wage that the employer is required to pay its employees and any other relevant condition. An employer will be required to submit a motivation for any subsequent exemption applications.

Exemptions will strike a balance between the needs of employees and relief for employers who will struggle to remunerate at the minimum wage level and will also encourage employers to work with the government in eradicating poverty and unemployment.

This article was written by Mandisa Duma, Candidate Attorney,  Norton Rose Fulbright South Africa Inc

It Takes Two to Tango: Employee-duties in the Accommodation Process

Taryn MackieBy Taryn Mackie on Posted in Canada

In 2012, Statistics Canada reported that 11% of the population aged 25 to 64 (or 2.1 million people) reported having limitations caused by a physical or mental disability, with conditions ranging from hearing loss, to visual impairment, to mobility challenges, to pain, to mental health conditions.  As our population ages, disability-related conditions are only projected to increase.  In light of these statistics, and given that many Canadians will spend most of their day in the workplace, knowing how to accommodate employees in the workplace has become a key part of managing today’s workforce and employees knowing what role they are responsible for playing is also a critical factor for both employers and employees.

The accommodation process is a multi-party process and employees are not without their own obligations with respect to accommodation.  Employees, generally, have three fundamental duties in that regard:

  1. to make a request for accommodation when accommodation is needed (with requests in some cases being constructive or reasonably assumed in the circumstances);
  2. to disclose relevant information, such as medical information, to assist the other parties (which may include the employer and the union) in the accommodation process in making and facilitating reasonable accommodations; and
  3. to act reasonably.

With respect to the third duty, the law has been consistent that an employee cannot expect the perfect accommodation, only a reasonable one.  Where the employer has proposed a solution that is reasonable and that would accommodate an employee’s abilities, limitations, and restrictions, the employee has a duty to facilitate the implementation of that solution.  If a solution proposed by the employer is reasonable, and the employee rejects that proposal, then the employer’s duty to accommodate the employee is  discharged.

These principles have led to a number of employer-supported decisions, including cases finding that:

  • an employee’s refusal to participate in an independent medical examination justified termination of employment when the employer had no other ability to determine if the employee was fit for work, with or without limitations, for the foreseeable future;
  • an employee may be required to accept reduced hours as part of the accommodation process;
  • an employee is not entitled to be paid at a higher pre-accommodation rate if the rate associated with the accommodated work is lower;
  • an employer is entitled to depend upon the medical information that it has when an employee fails to provide up-to-date medical information;
  • an employer is not obligated to invent new positions and can look to available vacant positions when exploring reasonable accommodations with an employee;
  • if an employee’s condition has changed, then it is incumbent upon the employee to share that information with the employer to reassess available accommodations; and
  • although part of a reasonable accommodation may include the right of employees to be absent from work due to a disability, this right is not unlimited and an employer is not obligated to keep open a position for an employee who has been unable to work for an excessive period and unlikely to return to work in the reasonably foreseeable future with or without accommodation.

In all of these cases, effective, written communication was critical to the employer’s success and the employer could establish that it had clearly engaged in a meaningful dialogue with the employee making reasonable inquiries, setting out expectations, and demonstrating the steps taken, or the steps attempted, to accommodate the employee.  Employers are, therefore encouraged, to continuing the conversation, which may involve reminding employees of the proverbial phrase that it takes two to tango.

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