History of UK Labour Law

History of labour law in the United Kingdom concerns the development of UK labour law. Before the Industrial Revolution and the introduction of mechanised manufacture, regulation of workplace relations was based on status, rather than contract or mediation through a system of trade unions. Serfdom was the prevailing status of the mass of people, except where artisans in towns could gain a measure of self regulation through guilds. The law of the land was, under the Act of Apprentices 1563, that wages in each district should be assessed by Justices of the Peace. From the middle of the 19th century, through Acts such as the Master and Servant Act 1867 and the Employer and Workman Act 1875, there became growing recognition that greater protection was needed to promote the health and safety of workers, as well as preventing unfair practices in wage contracts. Trend towards statute law

Minute regulations were made governing the contract between master and servant, and their mutual rights and obligations on parallel lines for (a) artificers, (b) laborers in husbandry. Hiring was to be by the year, and any unemployed person qualified in either calling was bound to accept service or pain of imprisonment, if required, unless possessed of property of a specified amount or engaged in art, science or letters, or being a ” gentleman.” Persons leaving a service were bound to obtain a testimonial, and might not be taken into fresh employment without producing such testimonial, or, if in a new district, until after showing it to the authorities of the place. A master might be fined or a labourer imprisoned, and if contumacious, whipped, for breach of this rule.

Law of the United Kingdom in 1910

During much of the nineteenth century the employment contract was based on the Master and Servant Act of 1823, designed to discipline employees and repress the ‘combination’ of workers in Trade unions.

Trade Disputes Act 1906

Trade Boards Act 1909

The Employment Rights Act 1996 (ERA) was passed originally by the Conservative government in 1996. It consolidated a number of previous statutes dating from the Contracts of Employment Act 1963. It deals with rights that most employees can get when they work, including unfair dismissal, reasonable notice before dismissal, time off rights for parenting, redundancy and more.

It has also been amended substantially by the Labour government since 1997, for instance to include the right to request flexible working time.

Defining self-employment

The starting premise is the possibility that some self-employment is either really “disguised employment” (whereby a person is defined as self-employed simply to reduce tax or national insurance liability) or “economically dependent work” (because the self-employed person works mainly, if not entirely, for one client). Implicit in the Green Paper is the suggestion that because some self-employed people are economically dependent they should be entitled to the same rights as dependent workers, thereby requiring a new legal category of “economically dependent worker”.

There is considerable debate about where the scope of employment rights really lie. Most people will have a contract of employment, and fall squarely within the “employee” category. But it will not apply to professional self employed people at the top end of the labour market, and it is uncertain whether it always applies to those working through agencies and those whose jobs Right to a tribunal.

The way to enforce a claim for unfair dismissal is at an employment tribunal. An employee who is dismissed may also have breach of contract claim(s), based on common law. Common law claim(s) may be brought in a county court.

So there is no restriction on management’s right to dismiss (for instance, giving reasonable Right to a tribunal.

The consequences of employment protection legislation

Both the UK and Denmark, for example, adopt a light approach to employment protection laws governing the ease of hiring and firing (i.e. there are relatively few legal constraints on numerical flexibility). The experience of both countries in this respect is generally viewed favourably.

In this latter regard, our evidence has shown that the UK, by contrast with most other EU Member States, has relatively light employment protection legislation. One consequence of this is that relatively fewer UK workers have non-standard contracts of work and, of those that do, the vast majority prefer to have them. Moreover, while there are exceptions, such workers enjoy similar employment rights to employees with standard work contracts, and in several ways these rights have been strengthened in recent years as a result of legislation introduced independently by the UK in addition to those resulting from the implementation of EU directives.

The DTI accepted that labour law was by no means the only reason for this success but contended that the current framework of UK law aided labour market flexibility to the benefit of both employers and workers. As a result, the DTI stated that the UK had “one of the widest range of job types and ways of working available in the world” enabling workers and employers more choice of the type of work that suits them.

It is suggested that, to improve the UK’s productivity performance appreciably, the priority needs are:

• to raise levels of investment in physical capital and in research and development;

• to improve skills at all levels;

• to assist the innovation process; and

• to increase the standard of people management and development in the workplace.

Case development Redcar v Cleveland Borough Council – this is a recent case in which the Court of Appeal confirmed that a woman bringing a claim for like – work could compare herself against a comparator from a lower grade, receiving lower pay. the case arises in the context of the large number of equal pay claims brought by female employees of the Council. It is part of a network of cases in which women employed by local authorities, many of them in the north east, are claiming equal pay with male comparators. Women employed in manual jobs such as caterers and care workers are seeking parity with male comparators such as road sweepers, gardeners and refuse collectors (who are placed in lower grades). The Employment Tribunal, in part of a long decision dated 13 December 2005, which covered many issues of which this was only one, held that it was permissible for a Claimant to rely on a comparator who was placed in a lower grade. The EAT upheld that position. In many cases, low paid, vulnerable workers, especially agency workers have been held to fall outside the scope of those rights in the Act which are only for “employees”. This is because some judges have taken the view that there was not sufficient “control” or “mutuality of obligation” to establish a contract of employment. What those judges have meant by “mutuality of obligation” is that the terms of the contract, especially an obligation to work or not work at any given time and the promise of work in future, were not reciprocal enough. So in O’Kelly v Trusthouse Forte plc [1983] ICR 728, Sir John Donaldson MR held that some waiters who were hired through an agency to do dinner functions were not “employees” (either of the function hall or the agency) because they did not, technically, have to turn up to work for a shift, and they could be sacked at any time.

The case for the Council was that where a proposed comparator has been placed in a lower grade, a claimant is not employed on work “rated as equivalent” with his. In its decision, the Court took the bold step of implying additional wording into section 1(5) of the Equal Pay Act 1970 to make this point clear. The Court’s decision was that Section 1(5) of the Equal Pay Act needs to be amended in the following way: “A woman is to be regarded as employed on work rated as equivalent with that of any man if, but only if, her job and their job have been given an equal value or her job has been given a higher value, in terms of the demand made on a worker under various headings (for instance effort, skill, decision), on a study undertaken with a view to evaluating in those terms the jobs to be done by all or any of the employees in an undertaking or group of undertakings, or would have been given an equal value, or her job would have been given a higher value, but for the evaluation being made on a system setting different values for men and women on the same demand under any heading.”

The Employment Appeal Tribunal has recently decided in the case of Zaiwalla & Co v Walia that an employer can be ordered to pay aggravated damages if they behave unreasonably when defending a discrimination claim. Ms Walia had a training contract with Zaiwalla & Co Solicitors. She suffered sex discrimination during her training and was dismissed. She made a claim to the Employment Tribunal that she was discriminated against. The employer decided to represent itself. The employer conducted its defence in an unreasonable manner by attempting to discredit Ms Walia. The Tribunal awarded her £7500 in aggravated damages as well as significant other compensation, to compensate her for the unreasonable behaviour. Cheryl Edmonds and Andrew Hunter of Steele & Co’s London Employment Unit represented Ms Walia. Cheryl comments: “This is a very important decision. Employers who decide to save costs by representing themselves should be careful how they defend discrimination claims. If they behave unreasonably they may be asked to pay thousands of pounds in compensation.”

Gender Reassignment Dismissal not on Grounds of Sex: A new case in the Employment Appeal Tribunal has said that the poor performance of a person who was undergoing gender assignment was linked to the side effects of medical treatment but the necessary causative link could not be demonstrated to show that dismissal was on the grounds of her sex and nor was she disabled. In Ashton -v- Chief Constable of West Mercia Constabulary, Judge Peter Clarke giving the judgement of the Court said that notwithstanding P -v- S (1996) which was concerned with less favourable treatment directly attributable to the Applicant’s stated intention to undergo gender assignment, it would be a bridge too far to hold, where the cause of the Appellant’s poor work performance was linked to side effects of her treatment that the necessary causative link had been established between the treatment complained of, dismissal and her sex. The finding as to disability was unimpeachable

A case attracting a high level of interest from all sectors, the ruling in High Quality Lifestyles v Watts addressed the issue of whether dismissing an employee on the grounds of his HIV status constituted direct discrimination. Mr Watts did not disclose his HIV status to his employer when he commenced work as a care worker. When he subsequently disclosed it, his employer arranged for a work-place risk assessment to be carried out by a health and safety consultant. At the same time Mr Watts was suspended on grounds that he had been dishonest. Mr Watts was then dismissed as the risk assessment showed that he posed a significant risk of transmitting the disease. Due consideration was given to the nature of his role, in particular the unpredictable and violent behaviour of certain patients that had resulted in Mr Watts sustaining occasional bites, scratches, superficial abrasions and deep lacerations. Mr Watts made an application to the Tribunal on the basis that he had suffered direct discrimination as a result of his dismissal. He also claimed that his suspension and dismissal constituted disability-related discrimination that was not justified because the employer had failed to carry out a proper investigation or an adequate risk assessment.

The Tribunal held that Mr Watts’ dismissal was not direct discrimination since an employee with an equally serious illness that carried the same risk to others might also have been dismissed. It also held that it was not the employee’s HIV status alone that was the reason for the dismissal, but the possibility of transmitting the disease.

However, the Tribunal ruled that the employer had failed to make reasonable adjustments, or to consider alternative employment, as they did not carry out a proper investigation or adequate risk assessment of the situation created by the employee’s condition.

While Mr Watts would clearly not have been dismissed had he been free of HIV, this was not in fact the causal factor of his dismissal. His dismissal was instead based on the risk that he presented to others. There was therefore no case of direct discrimination. This case highlights the need for employers to give careful consideration to the need for reasonable adjustments when dealing with such sensitive health issues

This involves a legal distinction between “employees” and “workers”. “Employees” are people who work for an employer under the terms of a contract of employment. “Workers” are people who work for an employer whether or not under a contract of employment.

Workers without employment contracts include temporary agency workers, casual workers and some freelance workers but not genuinely self-employed people. Under UK labour law therefore all employees are workers but not all workers are employees, and the genuinely self-employed are not deemed to be “workers”. It may be for an Employment Tribunal or higher court to

decide a person’s contractual status in cases where this may be disputed. Such disputes can be significant to those involved because the rights of employees and workers differ.

Employers’ organizations and the trade unions are divided on which rights should be accorded to agency workers. In support of adoption of the proposed Temporary Agency Workers Directive, the TUC argued that agency workers in the UK “face discrimination on pay and other basic employment conditions”.

Employment contracts vs. commercial contracts

In practice, in the UK the issue of self-employed status is complicated by the tax authorities sometimes adopting a narrower definition of who is self employed than Employment Tribunals or courts. It is noted the high rate of transitions between different forms of employment and contractual status within the UK labour market. It is concluded that whatever market segmentation does exist is explained primarily by social disadvantage, caused by lack of basic skills and qualifications, rather than by barriers created by labour law.

Status

Characteristics

Rights

Employee

Has a contract of service or apprenticeship whether express or implied. Tests for employment include:

is under the control of the employer

is part and parcel of the employer’s undertaking

is not in business on their own account

there exists mutuality of obligation between employer and employee

All rights, including unfair dismissal, redundancy and maternity rights – includes all those rights enjoyed by workers

Worker

Someone who is not an employee but who has agreed pursuant to a contract (which can be oral or written, express or implied) to personally perform services for another party and who is not a client or customer of any profession or business carried on by the individual

Discrimination rights, unlawful deduction from wages, rights in respect of the Working Time Regulations (including holiday rights), minimum wage rights; right to be accompanied at disciplinary and grievance procedures; rights under the Part Timer Workers (prevention of less favourable treatment)

Self employed

Genuinely in business on own account – for example, provides own tools (other than hand tools) and accepts risk.

Certain rights in respect of trade unions and under the Human Rights Act only.

Labour law and the UK economy

It is evident that the UK’s relatively light employment protection legislation, by facilitating a high degree of numerical labour market flexibility, has benefited the UK economy . This has helped the UK to avoid the high unemployment and labour market segmentation witnessed in some other EU Member States, notwithstanding the problems of structural unemployment and social disadvantage suffered by some people in this country. It is recommend that the problems of structural unemployment and social disadvantage in the UK need primarily to be addressed by measures directed at tackling poor skills and social inequality, and by enforcing existing labour law where this is being flouted, rather than by changes to labour law.

The need for labour law reform and the role of the EU

The present framework of individual labour law in the UK strikes a fair, efficient and sensible balance between the rights and responsibilities of “employees” and “workers”. Any change in this framework would create difficulties for employers without providing any substantive advantage to workers and possibly harm employment prospects. The focus of attention should therefore be on informing all workers of their rights and enforcing existing entitlements.

The important role played by trades unions and collective machinery in helping to ensure people are treated fairly at work, are able to exercise their legal rights, and can make a productive contribution in the workplace.

Trade unions in Britain experienced a serious decline from the time of the election of Margaret Thatcher’s Conservative government in 1979. Thatcher passed new union legislation, which was largely seen as a direct response to the actions of trade unions during the Winter of Discontent of the previous year. At that point the level of union participation in the UK was around 80% of the workforce. By 1997, that number had declined to 30%, most of which was in the public sector. Union participation in the private sector hovers around 12% of the workforce.

In the UK context, therefore, it is recommended that measures to improve employability, rather than modernisation of labour law, should be the main priority of government policy toward the labour market.

Legislatures should be greatly concerned by evidence of the exploitation in the UK of vulnerable groups, especially migrant workers. However, the appropriate course is to tackle abuse where it occurs and to provide vulnerable and migrant workers with information about their existing legal entitlements.