Employment Law: overtime, minimum wage and the gig economy

2018 has already proved to be an interesting one from an employment law perspective with a number of interesting decisions of the Employment Appeal Tribunal, Court of Appeal and even the Supreme Court to provide clarity in some key areas. In this round up, we look at the Employment Appeal Tribunal’s decision in Flowers v East of England Ambulance Trust considering whether voluntary overtime should be included for holiday pay calculation purposes. Hot on the heels of Flowers, we look at Mencap v Tomlinson Blake in the Court of Appeal, a case which had serious implications for the care industry whichever way it was decided. Finally, as cases concerning workers’ rights and the gig economy come thick and fast, we look at the Supreme Court’s decision in the Pimlico Plumbers case, and the subsequent decision of the Leeds Employment Tribunal in a gig economy case brought by Hermes couriers.

Voluntary overtime and holiday pay – Flowers v East of England Ambulance Trust

The Flowers case concerned the question of whether voluntary overtime counts for holiday pay calculations. Based on the concept of a week’s pay, for those on shift work, such as the ambulance workers involved in the Flowers case, this calculation involves taking an average of hours worked over the 12 weeks prior to the holiday period to which the holiday pay relates. The workers concerned could receive both non-guaranteed overtime and voluntary overtime. Non-guaranteed overtime arose if a worker had to finish a job which took them over the end of the shift they were working. There was no guarantee that this overtime would be available, but if the situation arose, when a job would take them over the end of a shift, the workers were required to finish the job. Voluntary overtime, on the other hand, was more conventional ‘overtime’ which could be offered to workers when available. While there was no question that guaranteed overtime should form part of holiday pay calculations, the employer refused to include voluntary overtime. The Employment Appeal Tribunal disagreed with the employer and held that if voluntary overtime was paid for “a sufficient period of time on a regular and/or recurring basis to justify the description “normal” they should be included in holiday pay calculations.

Mencap v Tomlinson Blake and the minimum wage for sleep-in care workers

This case attracted a degree of press attention given the potential impact the case had on care providers who were facing enormous bills for back pay had the case been decided in favour of the employees. It concerned those care workers who are expected to ‘sleep in’ at a place of work in case they are needed during the night. These workers have no other duties during the night. While the workers in question would be paid the minimum wage for any work they were actually called on to carry out during the night, otherwise they would receive a flat rate payment equating to approximately £25.00 for those nights where they slept in.

After an extensive analysis of the minimum wage legislation, the Court of Appeal determined that where a worker is expected to sleep in at work, in facilities provided by the employer, that time does not count for the purposes of the national minimum wage.

The latest gig economy cases

The current raft of gig economy cases do not really take the law further as each case is determined on its facts. What is apparent from the decisions is that many employers have been exploiting the willingness of people to work on a self-employed basis to achieve flexibility – or simply because it is the only work available – and denying them the workers’ rights to which they are entitled. The Pimlico Plumbers case which went all the way to the Supreme Court was brought by Gary Smith, a plumber working on a freelance basis for Pimlico Plumbers. While the employer argued that Mr Smith was self-employed, the Supreme Court agreed with Mr Smith. On an analysis of the contract and the reality of the relationship between him and Pimlico Plumbers, Mr Smith was a worker, and entitled to workers’ rights.

The Leeds Employment Tribunal reached a similar conclusion in the Hermes case. An analysis of the relationship between Hermes and the couriers bringing the claim revealed that the relationship was again one of worker and employer and not self-employed contractor and client.

Employers may be interested to learn that the Deliveroo litigation which was due to go to the Employment Tribunal in July 2018 was settled. This, despite the decision of the Central Arbitration Committee in the separate proceedings to establish whether there should be union recognition for collective bargaining purposes for Deliveroo cycle couriers and motorbike couriers in Camden, London. The settlement of the Employment Tribunal case was without admission of liability.

For any employment law matters, please contact our specialist employment team headed by Anna Illingworth – telephone 01189 585 611 or email anna.illingworth@rowberrymorris.co.uk