Virginia Restricts an Employer's Ability to Require Access to Employees' Social Media Accounts

This post was written by Gregory J. Sagstetter.

Effective July 1, 2015, Virginia will join the growing list of states (including Arkansas, Colorado, Illinois, Louisiana, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oklahoma, Oregon, Rhode Island, Tennessee, Utah, Washington, and Wisconsin) that have enacted legislation restricting the circumstances in which an employer can access their employees’ social media accounts.

While employers may still view publicly available information in an employee or prospective employee’s social media account, HB 2081 (Virginia Code § 40.1-28.7:5) prohibits employers from requiring a current or prospective employee to: (1) disclose login information to a social media account; or (2) add an employee, supervisor or administrator to the list of contacts associated with the social media account. It also prohibits employers from using inadvertently obtained login information (through network observation and/or security, for example) to access an employee’s social media account.

Importantly, HB 2081 prohibits employers from failing or refusing to hire a prospective employee for exercising his/her rights under the law, as well as taking action or threatening to discharge, discipline or penalize a current employee for exercising his/her rights under the law.

The lone exception in the statute is for an employer’s formal investigation into allegations that an employee has violated the law or company policy. In that case, the employer may require an employee to provide his or her login information if the employee’s social media account activity “is reasonably believed to be relevant to a formal investigation or related proceeding,” but any information viewed may only be used in connection with that formal investigation.

Arrival of Intern Season Means Prep Work For Employers is Key

This post was written by Cindy S. Minniti and Mark S. Goldstein.

With summer right around the corner, many high school and college students are preparing to begin unpaid internship programs at companies across the country. Such programs have long been considered a staple for U.S. businesses, as well as a valuable option for students seeking opportunities that will offer them real-world experience while opening doors in their sought-after career fields. But in recent years, these internship programs have come under intense scrutiny and fierce legal attack. Indeed, employers in a broad swath of industries have faced a veritable flood of class and collective actions challenging the legality of their unpaid internship programs.

Propelled by a continuously aggressive plaintiffs’ bar, these suits have attempted to hold companies liable under the federal Fair Labor Standards Act (FLSA) and parallel state laws under the theory that the sponsoring employers are unlawfully withholding minimum wage and overtime pay from their interns, while reaping the benefits of their “free” labor. Victory for the intern-plaintiffs in these suits means not only back pay with interest, but also hefty attorneys’ fees. Indeed, these suits have become so costly to defend that several high-profile companies have elected to discontinue their internship programs altogether.

So, with intern “season” upon us, let’s review whether your company’s internship program is compliant with applicable wage and hour laws, and, if not, what you can do to bring the program into compliance..

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European Court clarifies when collective redundancy consultation obligations apply

The Court of Justice of the European Union (“CJEU”) has today given its decision in the case of USDAW and others – v – Ethel Austin and others, otherwise known as the Woolworths case. The CJEU has decided that, in determining whether collective redundancy consultation obligations are triggered, an employer need only consider proposed redundancies in each of its ‘establishments’ separately, and not all proposed redundancies in aggregate across all sites.

Background

UK law requires that, where an employer proposes to dismiss as redundant 20 or more employees at one establishment within a period of 90 days or less, collective consultation must take place prior to the dismissals taking place. During the administration of Woolworths and Ethel Austin, the administrators proposed that thousands of employees across the two companies’ stores throughout the UK would be dismissed by reason of redundancy. Collective consultation took place with the employees in larger stores, where it was proposed that 20 or more employees would be made redundant. However, in the smaller stores, where fewer than 20 employees were affected, the employer did not collectively consult. This was challenged by the employees affected and the trade union, USDAW. They regarded it as unfair (and contrary to EU law) that, in the case of mass redundancies where all employees of Woolworths and Ethel Austin were affected, some employees were consulted and others were not, and this depended on the happenstance of the size of the store in which the employees worked.

Tribunal Litigation

Claims were brought in the Liverpool and London Central Employment Tribunals. The Tribunals held that the redundancies in each store needed to be considered separately; therefore, in the smaller stores, where fewer than 20 employees were proposed to be made redundant, the collective consultation obligations were not triggered. The employees appealed.

In the Employment Appeal Tribunal, the EAT held that the UK had applied EU law (from which the collective consultation rights originate) incorrectly. The EAT said that it was necessary for an employer to determine how many redundancies it was proposing to make across its whole undertaking, not in each establishment, to determine whether the threshold of 20 proposed redundancies would be met. Clearly, this would result in the threshold being reached much more quickly, particularly in the case of large employers with operations throughout the UK.

CJEU Decision

The decision was appealed to the Court of Appeal, which referred the matter to the CJEU. The CJEU has decided that the UK has applied EU law correctly. For the purposes of EU law, ‘establishment’ means the entity of an undertaking to which a worker is assigned to carry out his or her duties (in this case, the Tribunals found that the ‘entity’ was each individual store to which an employee was assigned). Furthermore, it was legitimate for the UK to link the collective redundancy consultation triggers to the number of redundancies per establishment, rather than to the employer’s undertaking as a whole.

Effect on Employers

The EAT’s decision in this case constituted a major rewriting of UK collective redundancy law, with an enormous impact on employers, particularly those with many sites across the UK. It will come as a relief to employers that the CJEU has restored the long-established test, meaning that the collective redundancy consultation threshold will be met far less often. However, employers still need to be aware that the test of what constitutes an ‘establishment’ is not, itself, an easy one, and a careful analysis will still need to be undertaken where redundancies are proposed across several sites.

New York Employment Roundup: March & April 2015

This post was written by Cindy S. Minniti and Mark S. Goldstein.

Today’s New York employment law landscape is increasingly dynamic, with a constant stream of newly issued legislation and judicial opinions. To keep our readers current on the latest developments, we will share regular summaries of recent developments affecting Empire State employers. Here’s what happened in March and April 2015:

Minimum Wage Hike Suffers a Setback

New York lawmakers recently dealt a significant, but not necessarily fatal, blow to Gov. Cuomo’s plan to raise the minimum wage to $10.50 per hour (and to $11.50 in NYC). In late March, state legislators surprisingly omitted the proposed wage hike from the state’s upcoming annual budget. The debate over whether to yet again raise the state’s minimum wage – which is already slated to increase to $9.00/hour on December 31, 2015 – is now left to unfold in the State Assembly and Senate over the next six weeks, until the 2015 legislative session ends on June 17.

State Assembly Passes “Family Care” Leave Bill

On March 17, the State Assembly passed a bill that would provide up to 12 weeks of partially paid “family care” leave to employees statewide. Under the bill, employees would be able to take a leave of absence, and receive up to one-half of their regular wages: (i) to participate in providing care for a family member’s serious health condition; (ii) to bond with a newly born or newly adopted child; or (iii) because of any qualifying exigency, as interpreted under the Family and Medical Leave Act (FMLA), arising out of the active duty of certain family members. Like FMLA leave, the proposed state family care leave law would allow employees to take family care leave on an intermittent or reduced schedule basis.

The family care leave bill is now under consideration by the Republican-controlled Senate, which earlier this year recommended its own family leave law. That proposal would have provided employees with up to six weeks of leave, with partial pay, for certain qualifying exigencies, but would have required the state to fund the program, at least in the first year. Passage of a family care leave bill – in any form – is hardly a certainty and will likely take a backseat to other initiatives that Gov. Cuomo is supporting, such as the minimum wage increase and the Women’s Equality Act.

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The general election - implications for employment law

With just three weeks to go until the general election, and the main parties having now published their manifestos, what is the future looking like for employment law?

The Conservatives have indicated their support for real terms increases in the National Minimum Wage, rising from its current level of £6.50 per hour to reach £8 per hour by the end of the decade. The Conservatives have also promised to prohibit the use of exclusivity clauses in zero-hours contracts. Employers with more than 250 employees will be required to publish the difference between the average pay of male and female employees.

There will also be restrictions on the ability to strike. Lawful strike action will only be able to take place where at least half of eligible workers have voted. In essential public services, industrial action will require the support of at least 40 percent of those entitled to vote, as well as a majority of those who actually turn out to vote. Restrictions on the ability of employers to hire agency workers to provide cover during strikes will also be lifted.

Of potential far greater significance is the promise to hold a referendum on the UK’s membership of the EU by the end of 2017. Any re-negotiation of the UK’s terms of membership, and any withdrawal from the EU, has the potential for a huge upheaval in employment law.

Labour also promises to increase the National Minimum Wage to £8 per hour, by October 2019. Labour will additionally use government procurement to encourage the higher Living Wage (currently £7.85 per hour, £9.15 per hour in London). Publicly listed companies will be required to report whether they pay the Living Wage.

Zero-hours contracts will also be restricted. Those workers who work regular hours for more than 12 weeks will be entitled to a “regular” contract. Employers will also be prevented from undercutting the pay of permanent staff by using cheaper agency workers.

Labour has also promised to abolish the current Employment Tribunal fees system. It is not clear whether fees will be abolished completely or whether a new system will be put in place with (we assume) lower fees.

The Other Parties

While it is almost certain that either the Conservatives or Labour will be the largest party after the general election, the likelihood that neither will secure an overall majority and may need to form a coalition or looser alliance with smaller parties, makes the policies of those smaller parties significant.

The Liberal Democrats aim to expand flexible working. They aspire to paternity leave and shared parental leave becoming rights from day one of employment. More particularly, the Liberal Democrats will expand shared parental leave and introduce a “use it or lose it” month to encourage fathers to take time off to care for their young children.

The Liberal Democrats will also require employers with more than 250 workers to publish details of pay differentials between men and women. By 2020, those employers will also be required to publish details of those who are paid less than the Living Wage and the difference between top and median pay. Interestingly, the Liberal Democrats also propose measures to prevent employers from avoiding employment rights by wrongly classifying employees as workers or self-employed. In relation to zero-hours contracts, the Liberal Democrats would introduce a right to request a regular-hours contract, and consult on making regular working patterns contractual after a certain period of time.

UKIP proposes that the UK should leave the EU. Given that so many UK employment rights (such as those relating to unlawful discrimination, the regulation of working time, and paid holidays and rights provided under TUPE) derive from EU law, there promises to be a significant upheaval to employment law. If Britain left the EU, UKIP have said that they will seek to incorporate EU derived rights into UK law, but with amendments. The Working Time Directive has been cited as an EU law which would require amendment before being incorporated into UK law. UKIP also promises to give employers the right to choose to employ British citizens first. UKIP additionally proposes to regulate, but not ban, zero-hours contracts.

The Green Party aim to increase the National Minimum Wage to £10 per hour by 2020, with the highest earner in an organisation earning no more than 10 times the pay of the lowest earner. A 35-hour working week would be phased in, together with an end to ‘exploitative’ zero-hours contracts. The Greens would also reduce Employment Tribunal fees.

The Scottish National Party has today launched its “Jobs Manifesto”. Proposals include increasing the minimum wage to £8.70 per hour by 2020 and ending ‘exploitative’ zero-hours contracts.

Plaid Cymru proposes to end ‘exploitative’ zero-hours contracts, as well as to increase the National Minimum Wage to the level of the Living Wage. Plaid Cymru would also require supervisory boards of employers with more than 500 staff to include employee representatives. A ‘fair pay’ scheme will be introduced to link the pay of everyone within a company. The stated aim is to prevent spiralling executive pay while other staff receive no pay increase. A review of the Employment Tribunal Fees system is also promised, together with legislation against ‘blacklisting’.

With the opinion polls so close, it is very unclear at the moment as to what changes will be made to employment law after the election. What is clear, though, is that further changes are coming, with the National Minimum Wage and zero-hours contracts being targets for whoever is elected.

Breaking: NYC Council Bars Most Pre-Employment Credit Checks

This post was written by Cindy S. Minniti and Mark S. Goldstein.

New York City employers who routinely use credit checks as part of the pre-employment process may be in for a rude awakening. Earlier today, the NYC Council passed legislation that bars most employers with four or more employees, as well as employment agencies, from requesting or using a current or prospective employee’s “consumer credit history” for employment purposes, including those related to hiring and compensation (the Bill). The Bill defines “consumer credit history” as an individual’s creditworthiness, credit standing, credit capacity, or payment history, as indicated by:

  • A consumer credit report
  • A credit score, or
  • Information an employer obtains directly from the individual regarding
    • Details about credit accounts, including the individual’s number of credit accounts, late or missed payments, charged-off debts, items in collections, credit limit, prior credit report inquiries, or
    • Bankruptcies, judgments or liens.

As a slight consolation to the business community, the Bill – informally dubbed the Stop Credit Discrimination in Employment Act – contains several exemptions, which were a late addition that helped push it across the finish line. Specifically, the Bill exempts:

  • Entities that are “required by state or federal law or regulations or by a self-regulatory organization as defined in section 3(a)(26) of the securities exchange act of 1934” to use an applicant’s or employee’s “consumer credit history for employment purposes”
  • Certain law enforcement personnel
  • Positions that require an individual to be bonded under federal, state, or local law
  • Positions that require an individual to possess security clearance under federal or state law
  • Non-clerical positions pursuant to which individuals will have “regular access to trade secrets, intelligence information or national security information” (the Bill goes on to provide that “[t]he term ‘trade secrets’ means information that: (a) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use; (b) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy; and (c) can reasonably be said to be the end product of significant innovation. The term ‘trade secrets’ does not include general proprietary company information such as handbooks and policies. The term ‘regular access to trade secrets’ does not include access to or the use of client, customer or mailing lists”).
  • Individuals applying for positions “(i) having signatory authority over third party funds or assets valued at $10,000 or more; or (ii) that involve[] a fiduciary responsibility to the employer with the authority to enter financial agreements valued at $10,000 or more on behalf of the employer,” or
  • Individuals applying for positions “with regular duties that allow the employee to modify digital security systems established to prevent the unauthorized use of the employer’s or client’s networks or databases.”

The Bill also directs the NYC Commission on Human Rights – the City’s fair employment practices agency – to issue a report within the next two years concerning employers’ use of the aforementioned exemptions.

With regard to enforcement, the Bill permits employees to pursue a private right of action and seek the same broad remedies as any other claims asserted under the employee-friendly NYC Human Rights Law. It will take effect 120 days after it is signed by Mayor Bill de Blasio.

Practical Considerations

For New York City employers who perform credit checks on job candidates or current employees, a review of existing policies and procedures is a must. Employers should also review job descriptions to identify which positions are exempt from the Bill. Working with experienced counsel now to align your pre-employment and other relevant practices with the Stop Credit Discrimination in Employment Act will result in fewer headaches down the road.

UK Update - Whistleblowing: When is a disclosure made in the public interest?

In Chestertons –v– Nurmohamed, the Employment Appeal Tribunal has given the first appellate guidance on when a worker’s disclosure is made in the public interest, so as to attract whistleblower protection.

Changes to Whistleblowing legislation

In July 2013, the whistleblower legislation was changed to require a worker making a disclosure to have a reasonable belief that the disclosure was made in the public interest. The change was primarily aimed at removing whistleblower protection from workers who made disclosures about an employer’s alleged breaches of their own personal contract of employment, where such breaches had no wider public interest.

Mr Nurmohamed’s disclosures

Mr Nurmohamed was a director at the Mayfair branch of Chestertons Estate Agents. In August and September 2013, Mr Nurmohamed made three disclosures to the effect that Chestertons was manipulating its accounts to the benefit of shareholders with the effect that he, and approximately 100 other managers, would be disadvantaged through receiving lower commission payments. Mr Nurmohamed was subsequently dismissed and brought claims in the Employment Tribunal. One of his claims was that he had been automatically unfairly dismissed for making a protected disclosure, i.e., he had blown the whistle on his employer’s wrongdoing.

The Employment Tribunal agreed with Mr Nurmohamed. It found that Mr Nurmohamed’s three disclosures pointed to Chestertons having breached its legal obligations to the 100 managers in question. This meant that the disclosures were potentially covered by the whistleblowing legislation. The Tribunal also found that the disclosures were made in the (reasonable) belief of Mr Nurmohamed at the time that it was in the interest of the 100 senior managers (and not just himself). The Tribunal felt that this was a sufficiently large group of ‘the public’ to amount to being a matter of public interest. Chestertons appealed to the Employment Appeal Tribunal

The EAT’s Decision

The EAT upheld the Employment Tribunal’s decision. The EAT made the following points about disclosures in the public interest:

  • The question was not whether the disclosures were actually in the public interest, but whether Mr Nurmohamed had a reasonable belief that they were. Mr Nurmohamed had such a reasonable belief in this case.
  • The new requirement for disclosures to be made in the public interest was introduced to do no more than prevent a worker from relying on a breach of his own employment contract, where the breach was of a personal nature and there were no wider public interest implications. The implication of the EAT’s statement is that the legislation should not be read too widely to exclude potential whistleblowing claims.
  • The EAT did not accept the argument made on behalf of Chestertons that Mr Nurmohamed’s disclosures were essentially about a private dispute between Chestertons and its workers regarding their contracts of employment and, therefore, not in the public interest. The Tribunal had recognised that the person that Mr Nurmohamed was most concerned about in making the disclosures was himself. However, it was satisfied that Mr Nurmohamed did have other managers in mind as well. There was no reason to overturn the EAT’s conclusion that this resulted in a section of the public being affected, and the public-interest test was therefore satisfied.

Effect on Employers

This is the first appellate decision on the meaning of ‘public interest’ in the whistleblowing legislation. The EAT has made clear that the public interest hurdle will be fairly easy to clear. Even in circumstances where an employee’s primary motivation in making a disclosure involves a dispute about his or her own contract of employment, that disclosure may be in the public interest so long as other employees are affected, even in what is essentially a ‘private’ dispute between the employer and its employees about their contracts of employment.

In this case, the fact that 100 other senior managers were affected made it relatively easy for the Tribunal to find that a section of ‘the public’ was affected by Mr Nurmohamed’s disclosure. However, it will be interesting to see how this case law develops where fewer employees are affected. What happens if an employee’s disclosure about an employer’s breach of employment contracts only affects that employee and one other? We shall have to wait and see.

Is Your Social Media Influencer or Blogger an Employee or an Independent Contractor? What Companies Need To Know Before They Engage Bloggers and Other Independent Contractors

With the first quarter of 2015 behind us, many companies are already deeply engaged in social media campaigns. Many of these campaigns include the engagement of professional bloggers or other persons with social media influence to promote corporate brands through social media. These individuals are typically classified as independent contractors, but are they really employees? This article describes the risks and rewards of classifying bloggers (and any other workers) as independent contractors instead of employees, and ways to manage that risk.

Click here to read the entire post on Adlaw By Request.

Term Limitations in Competitive Sports: Are All German Professional Sports Contracts Invalid?

The Labour Court Mainz is currently creating quite a stir in German professional sports. For decades, it was customary and recognized by the courts that contracts of professional athletes could be limited. The Labor Court in Mainz now sees this differently.

German goalkeeper Heinz Müller brought an action against his club Mainz 05. He had been under a fixed-term contract with the club since 2009, most recently between 2012 and summer 2014. The club Mainz 05 was of the opinion that because of uncertain progress in performance of the player (Müller, in 2012, was already 34 years old), and because of it being customary practice in the industry, a fixed-term contract was permissible. However, the Labour Court Mainz instead agreed with Müller's complaint, and explained that with regard to the last contract of employment, there were no substantive exculpatory reasons. The central assertion of the Labour Court is that even in professional sports, the mere uncertainty of future performance does not justify a limitation.

The club Mainz 05 has announced plans to appeal. The case carries explosive force and is expected to be decided before the Federal Labour Court or the European Court of Justice. This can take time, and there is uncertainty whether countless professional sports contracts contain invalid fixed-term clauses.

The decision can hit the clubs hard. That the uncertain progress in performance of professional athletes should not justify a term limitation is difficult to accept. Careers of professional football players regularly end no later than in the athlete’s late 30s. This must be taken into account. Either the legislature must intervene, or collective bargaining agreements in professional sports must regulate practice-oriented term limitations in the future. First, however, the opinion of the Labour Court Mainz must contend with the judicial instances. Thus, the game is not over by a long shot. We will keep you posted.

It May Not be a Matter of 'If,' but 'When' for Private Employers in the Commonwealth -- Virginia 'Bans the Box' for Many State Employment Applications

This post was written by Betty S. W. Graumlich and Gregory J. Sagstetter.

On April 3, Virginia Governor Terry McAuliffe issued Executive Order #41, thereby adding Virginia to the growing list of jurisdictions (including California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Illinois, Maryland, Massachusetts, Minnesota, Nebraska, New Jersey, New Mexico, Rhode Island, Washington, D.C., and more than 100 cities and counties) that have “banned the box” and excluded and/or limited the use of criminal background checks in hiring for certain jobs.

As drafted, Executive Order #41 applies only to “agencies, boards and commissions within the executive branch of [state] government,” and requires removal of questions relating to convictions and criminal history from state employment applications. The text of the Order, however, encourages private employers to adopt “similar hiring practices,” and signals that legislation affecting the commonwealth’s private employers may be next.

While Executive Order #41 does not currently impact private employers, Virginia employers should begin evaluating whether the use of criminal background information for employment purposes is appropriate for their organizations, including whether the benefits of such practices are worth the risks in the current political environment. Given the EEOC’s current position that use of criminal background information to screen job applicants may violate Title VII, waiting for mandatory “ban the box” legislation to consider the issue may not be prudent.

Sickness absence management - employee rights, risks and recommendations

This post was written by Séverine MartelMarie BrunotJan WeißgerberMartin GätznerDesmond LiawAnita WanMichael Smith, Amy Ferrington, and Joel S. Barras.

France

Under French law, the employment contract of an employee who is on sick leave is suspended. The employee is expected to inform his or her employer and the relevant social security organisations of the sickness absence within 48 hours, and will be entitled to receive social security allowances while absent from work.

Depending on the provisions of the applicable collective bargaining agreement, employees may be entitled to receive their full salary for a limited period. In such cases it falls to the employer to pay the difference between usual salary and the allowances provided by the French social security organisations.

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Lock v British Gas - eagerly awaited holiday pay Judgment now handed down

This post was written by Amy Ferrington and Michael Smith.

The recent line of holiday pay cases has led to widespread media coverage suggesting some employers’ payroll costs are due to soar. Businesses have therefore been eagerly awaiting the Employment Tribunal’s decision in Lock v British Gas, which has now been handed down on the question of whether commission structures will impact holiday pay. In short, many employers are to pick up a bill, but the question of quantum here is yet to be determined.

Summary

In our previous blog on this case, we described the decision of the European Court of Justice which established that, in some circumstances, a worker’s holiday pay should be calculated based on salary and commission payments, not just basic pay, where commission payments are “intrinsically linked” to the performance of tasks required to be carried out by a worker. The ECJ left it to the Employment Tribunal to decide the method of calculating commission payable to workers away on annual leave.

The case returned to the Tribunal in February this year, and in the Judgment handed down this week, the Tribunal has held that the Working Time Regulations 1998 should be interpreted so that an employee’s holiday pay includes an element of commission. A further Employment Tribunal Hearing will be held to determine the applicable reference period for calculation purposes (i.e., over what period a worker’s earnings should be averaged to calculate holiday pay) and how to quantify claims.

Facts

Mr Lock was a sales consultant with British Gas. Mr Lock’s wage was made up of basic monthly salary plus commission payments, which were calculated in accordance with the level of sales achieved. Commission earned in one month was paid in subsequent months. Accordingly, when on annual leave, Mr Lock received commission payments relating to his sales achieved in previous months. However, Mr Lock incurred a reduced income in the months following his annual leave because he had not generated any sales during his period of holiday. Mr Lock argued that the reduced income constituted a breach of the Working Time Regulations 1998.

The case was referred to the ECJ, which held that where a worker's remuneration includes contractual commission, which is determined by reference to sales achieved, a national law that calculates statutory holiday pay based on basic salary alone will be incompatible with the Working Time Directive.

The case therefore returned to the Employment Tribunal, to determine the extent to which the WTR 1998 could be read consistently with the EU law and, if not, whether words should be added to the WTR to ensure conformity.

Tribunal Decision

The Tribunal held that it was necessary to interpret the domestic legislation (i.e., the WTR 1998) to require that employers take results-based commission into account when calculating pay for annual leave. The Tribunal went on to decide that a conforming interpretation of national law could be achieved by adding a new sub-paragraph to the WTR 1998.

The new sub-paragraph provides that where remuneration includes commission or similar payments, employers should calculate “a week’s pay” for holiday pay purposes on the basis that remuneration varies with the amount of work done. In short, this will likely mean that under the WTR 1998, employers are now required to calculate the employee’s holiday pay by reference to the previous 12 weeks’ total earnings, including commission.

Unfortunately for employers, however, key issues have been set aside for determination at a later date, including what the correct reference period should be for calculating commission payments due during holiday (i.e., whether it should be more than 12 weeks). The issue before the Tribunal at this stage was purely conceptual, that is, how to resolve any potential conflict between EU and domestic law.

This means that a definitive conclusion regarding the reference period for calculation and how to quantify Mr Lock’s claim has been reserved for a future Hearing, and therefore employers cannot be assured just yet that all uncertainty in this area has been resolved.

Also, note that a further potential frustration for employers is the reference in the new WTR wording to both commission and “similar payments”. So while this case should ultimately provide clarity for employers on commission payments in particular, this change to the WTR could throw up a wealth of related claims on other types of remuneration.

A Note on Limitation Periods

Employers can take some comfort from the Deduction from Wages (Limitation) Regulations 2014, which came into force on 8 January 2015. The Regulations provide that for most claims for unlawful deductions, there is a new backstop period of two years. This will apply to claims concerning commission, holiday pay, bonuses, fees and other emoluments (but not other types of remuneration, such as statutory sick pay and statutory maternity pay). The Regulations will take effect for claims presented on or after 1 July 2015.

UK update - Type 2 diabetes controlled by diet is not automatically a disability

This post was written by David Ashmore and Amy Treppass.

In Metroline Travel v Stoute, the Employment Appeal Tribunal (“EAT”) decided that employees with type 2 diabetes controlled by diet (rather than medication) are not automatically protected by disability discrimination legislation.

The Facts

Mr Stoute was employed by Metroline and worked for them as a bus driver for 21 years. He suffered from type 2 diabetes. To keep his blood sugar levels low, he followed a low sugar diabetic diet which mainly consisted of avoiding soft drinks.

On 11 March 2013, he arrived late at work and was dismissed for gross misconduct. He claimed that his late arrival at work was the result of diarrhoea, which was a consequence of his diabetes.

Mr Stoute brought claims against Metroline of unfair dismissal, discrimination arising from disability, and failure to make reasonable adjustments. A preliminary hearing took place to determine if type 2 diabetes meant that he was disabled under the Equality Act 2010.

The Employment Tribunal (“ET”) referred to a medical report where it was noted that for two periods of time, Mr Stoute was not taking medication which reduces blood sugar levels, but was following a controlled diet.

In rendering its decision, the ET had regard to guidance from the Equality and Human Rights Commission on the definition of disability. The guidance provides that if a person suffers from an impairment and is undergoing treatment or correction for that impairment, then the impairment is to be treated as having a substantial adverse effect if, without the treatment or correction, the impairment was likely to have that effect.

The ET decided that a controlled diet amounted to treatment or correction of an impairment, and that Mr Stoute was disabled within the meaning of the Equality Act as a consequence of his type 2 diabetes.

The EAT’s decision

The EAT found that the ET had made an error of law in concluding that anyone with type 2 diabetes was automatically disabled under the Equality Act. In the EAT’s view, abstention from sugary drinks did not amount to medical treatment that had to be ignored when determining the issue of disability. The EAT also pointed out that a coping or avoidance strategy (such as a controlled diet) might result in the effects of an impairment being reduced to the extent they are no longer substantial, with the outcome that an individual is not disabled under the Equality Act 2010. The EAT also concluded that diabetes controlled by diet does not amount to an impairment or interference with normal day-to-day activities. The EAT allowed the appeal and ordered Mr Stoute to pay the appellant’s fees in full.

What does this decision mean for employers?

This is an interesting and potentially important decision. Type 2 diabetes is by far the most common type, with 90% of approximately 3.1 million diabetics in the UK having type 2 diabetes. This case illustrates the fact that even where a medical condition is clinically well recognised, that in itself is not sufficient for it to be a disability. This case will also likely make it harder for people suffering from nut allergies, lactose intolerances, etc., who manage their conditions by avoiding certain foods/drinks, to claim that they are disabled. Note that the EAT accepted that medicated diabetes sufferers (type 1 or type 2) are regularly considered to be disabled for the purposes of the Equality Act.

Webinar: Philadelphia's New Paid Sick Leave Law

Philadelphia Mayor Michael Nutter recently signed the “Promoting Healthy Families and Workplaces” Ordinance, adding Philadelphia to the growing list of cities and states to require sick leave. The new law, which takes effect May 13, 2015, generally requires employers to provide workers with 40 hours of sick leave each year.

On Thursday, April 16 at 12 p.m. EDT, Reed Smith attorneys John DiNome and Lindsay Freid will present a webinar: “Employer Briefing: Philadelphia’s New Paid Sick Leave Law.” They will provide an overview of how the new law will affect employers.

Topics include:

  • Which employees are entitled to paid sick leave, which employees and employers are exempt, and exactly what qualifies as “sick leave”
  • How sick leave accrues and how it may be used
  • Obligations employers may impose on employees to entitle them to sick leave
  • New employer obligations – including record-keeping and notice requirements – as well as prohibited conduct
  • What to do now to ensure compliance with the law on its effective date

This webinar is part of Reed Smith’s ongoing series, "What Employers Need To Know in 2015." We invite employers to register here.

Thursday Webinar: Managing the Risks of Social Media in the Workplace

Facebook, Twitter, and other social media have become ubiquitous in the workplace, with a staggering 75 percent of employees using social media at work. But employers face a great deal of uncertainty about what restrictions on social media use are permissible – and which could get them into trouble.

On Thursday, March 26 at 12 p.m. EST, Reed Smith attorneys Joel Barras, Cindy Schmitt Minniti, and Keri Bruce will present a webinar: “Beyond the Water Cooler: Managing the Risks of Social Media in the Workplace.” They’ll address practical steps for managing the risks of social media in the workplace.

Topics include:

  • The NLRB’s recent decisions on social media use, and what they mean for union and non-union employers
  • Tips for drafting enforceable electronic-use policies
  • Use of social media in employment decisions
  • Determining whether an employee’s social media activity is legally protected
  • What to do when an employee goes rogue on social media

This webinar is part of Reed Smith’s ongoing series, "What Employers Need To Know in 2015." We invite employers to register here.