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Last updateTue, 24 Feb 2015 5pm

Hogan Lovells

Hogan Lovells

Stefan Martin and Helena Davies look at some of the different ways EU member states and the US are responding to the rise of non-standard working arrangements and how these contrast with the UK’s approach

The rapid and widespread growth of the gig economy has ramifications for employment law in many jurisdictions. There have been a range of legislative and case law responses, particularly on the question of the legal status of workers in the new economic environment and the classification of workers as employees or self-employed contractors. Some of these provide food for thought on how the UK might tackle this issue after the general election.

Jo Broadbent rounds up recent case law and developments affecting employers and their advisers

Jo Broadbent rounds up recent case law and developments affecting employers and their advisers

Jo Broadbent examines two recent decisions on whether the UK courts had jurisdiction to hear claims involving employees based abroad

Two interesting decisions on jurisdiction enlivened (at least from an employment lawyer’s perspective) an otherwise quiet August. The first, from the Employment Appeal Tribunal (EAT), highlights the importance of governing law when an expatriate employee is seeking to establish a tribunal’s jurisdiction to hear statutory employment claims. The other decision, from the Court of Appeal, treads slightly less familiar ground, assessing whether companies (including employing companies) could take action in the English courts against employees domiciled in Switzerland, or whether Lugano Convention protections for employees were engaged.

Jo Broadbent rounds up recent case law and developments affecting employers and their advisers

Crispin Rapinet and Khushaal Ved examine the here and now of enhanced UK efforts to make anti-bribery and corruption compliance the norm

Anti-bribery and corruption efforts are trending globally and the hype is very real in the UK. Fresh off the SFO’s conviction of Sweett Group, the first under s7 of the Bribery Act 2010 (UKBA), and the judicial approval of the first deferred prosecution agreement (DPA), with Standard Bank, the UK government has recently hosted an anti-corruption summit in London, suggesting a determined fostering of compliance.

Jo Broadbent reviews two recent decisions focusing on whether individuals working abroad could bring a claim in the UK employment tribunal

Neither the Employment Rights Act 1996 (ERA) nor the Equality Act 2010 (EqA) contain provisions about their territorial scope. This has resulted in the courts and tribunals having to determine in what circumstances someone who does not actually work in Great Britain will have protection against unfair dismissal and discrimination.

Jo Broadbent and Sarah Parkin round up recent case law and developments affecting employers and their advisers

Payment for covenant did not make it enforceable

Michael Roberts and Alex Hohl assess the past performance and future prospects of the SFO

David Green QC’s reappointment as director of the Serious Fraud Office (SFO) on 9 February 2016 comes at the end of a highly eventful six-month period for the agency. Credited by many with having turned around the fortunes of the UK’s lead anti-corruption agency, Mr Green will remain in his current role until April 2018 and has had some success in overcoming a number of legacy issues that have beleaguered the SFO since before his tenure began.

Ivan Shiu and Giles Hutt analyse the application of EU jurisdiction rules and the judgment in Goldman Sachs International v Novo Banco SA

In the vast majority of commercial disputes, the starting point for considering jurisdiction questions is the Recast Brussels Regulation (EU 1215/2012) (the Regulation), which sets out detailed and somewhat rigid rules that courts in all EU member states must follow. (Denmark is theoretically excluded from the scope of the Regulation, but has agreed to ‘opt in’ by means of a separate agreement with the European Community (EC) – see OJ L 79/4.)

Neil Mirchandani and Alice Jowitt report on the role of mediation across the EU

The Mediation Directive (2008/52/EC, the Directive) is not necessarily something that contracting authorities in England and Wales think much about. The culture of mediation, and alternative dispute resolution (ADR) generally, is well embedded here, and when the Directive came into force in 2008 there was little the UK government needed to do by way of implementation. However, the situation is different in some other EU member states, where the Directive has been a force for good in promoting mediation as an alternative to legal proceedings, or as a means of resolving disputes before too much time and money is invested in the court or arbitration process.

The Supreme Court has issued a landmark judgment on penalty clauses. Paul Joukador, Nathan Searle, Jane Dockeray and Ingrid Stables discuss the implications

In its judgment in the combined cases of Cavendish Square Holding BV v El Makdessi; ParkingEye Ltd v Beavis [2015], the Supreme Court has formulated a new test for determining if a clause is an enforceable liquidated damages clause or an unenforceable penalty clause.

It was not reasonable to expect an employer to make adjustments to its absence management policy to remove disadvantage to a disabled employee, reports Jo Broadbent

Absence management policies often contain a so-called ‘trigger point’. This usually means that once an employee exceeds a certain number of absences over a particular period, formal action under the policy, such as a warning, will follow. Whether the duty to make reasonable adjustments applies in such circumstances has been the subject of a number of Employment Appeal Tribunal (EAT) cases over the last few years. The Court of Appeal decision in Griffiths v Secretary of State for Work and Pensions [2015] confirms that it does – but also highlights some of the factors that will be relevant to deciding whether an adjustment is reasonable.

Paul Joukador and Nathan Searle report on a landmark Supreme Court judgment

It is common practice to include a clause in a contract which specifies that predetermined compensation (commonly a sum of money or transfer of an asset) is due to the innocent party upon breach of the contract by another party. A key concern for these clauses is whether they are classified as liquidated damages, which are enforceable, or penalties, which are not. In these two cases the Supreme Court was asked to re-examine the long-standing rule against penalties to determine if it was fit for purpose and whether it should be extended or dispensed with entirely. The court decided not to abolish the rule, but it did confirm that the application of penalties is narrower than previously thought.

Daniela Vella examines the new Financial List: a ‘beacon’ for litigants?

In the second half of 2014 a group of judges from the Commercial Court and the Chancery Division, led by the Lord Chief Justice, Lord Thomas, invited a targeted pool of individuals drawn from various parts of the financial markets and legal industries, who had experience of litigation in the Rolls Building, to provide feedback on the potential for a swifter and more economical form of dispute resolution for financial markets disputes. In January 2015 a working group was formed to develop the ideas born out of these discussions into concrete proposals, and in April a joint consultation by the Commercial Court and the Chancery Division was published, proposing new procedural rules to establish a new specialist court list to handle court claims relating to financial markets – the Financial List – and inviting comments on the draft rules. Comments were gathered and reviewed, and the final Financial List rules were published in August and came into force on 1 October 2015. They comprise new civil procedure rules (CPR Part 63A), practice directions (PD 51M and PD 63AA), court forms and a new court guide.

Sarah Parkin rounds up the key employment law cases and legislative developments that practitioners can expect in the coming year

With a number of significant Court of Appeal decisions and legislative developments on the horizon, 2016 looks set to be an interesting year for employment practitioners and in-house counsel. The top ten developments to look out for are outlined in this article.

Giles Hutt and Whiston Bristow report on the shorter trials and flexible trials pilot schemes

If there is one aspect of English court procedure that litigants would most like to change, it is probably disclosure. Not only is disclosure often time-consuming and expensive, it can also be immensely disruptive of a company’s operations, without always bringing a corresponding benefit in terms of access to an opponent’s documents. Of course, parties disclosing large numbers of documents is appropriate in certain kinds of cases, a good example being those involving allegations of fraud, but it is seen by many as the main downside of English litigation as opposed to arbitration – or indeed litigation in most other jurisdictions.

A service provider that inherited an employee on long-term sick leave following a transfer was unable to move him on when it later lost the contract to another provider. Matthew Towers and Emily Skinner investigate

In a recent service provision change decision, the Employment Appeal Tribunal (EAT) has held that an employee on long-term sick leave did not transfer when a contract on which he had previously worked was retendered. The EAT held that employees on permanent sick leave with no prospect of returning to work, but who remain ‘on the books’ merely for administrative or historic purposes, will not be regarded as ‘assigned’ to an organised grouping. This is due to their permanent lack of participation in the transferring activities.

Julianne Hughes-Jennett and Sarah Baddeley look at the implications of Gazprom

The Court of Justice of the European Union (CJEU) has handed down its judgment in Gazprom OAO v Republic of Lithuania [2015] confirming that the Brussels I Regulation (Reg 44/2001), which governs the jurisdiction of member state courts over civil and commercial matters, is not applicable to an award issued by an arbitral tribunal prohibiting proceedings in the court of another EU member state (a so-called anti-suit injunction). Instead, anti-suit injunctions issued by arbitral tribunals are governed by national and international law including, where applicable, the New York Convention.

Elizabeth Slattery and Jo Broadbent consider how employment law might change if the UK votes to leave the EU

As the European Union Referendum Bill begins its passage through Parliament, the focus of many commentators is firmly on David Cameron’s EU reform agenda. The outcome of that agenda will obviously not be known for some time; until it is, employers will not have a clear idea whether the government will be campaigning for an in or out vote in the referendum on the UK’s membership of the EU. Given that uncertainty, it is worth thinking at this stage about what an out vote could mean for employment policy in the aftermath of the referendum.

Paul Chaplin examines an unintended agreement

In the recent case of Bieber v Teathers Ltd (in liquidation) [2014], the court considered whether an exchange of emails by parties’ solicitors constituted a binding settlement agreement. In coming to its conclusion the court carried out an objective appraisal of the parties’ words and conduct during their negotiations to determine whether they had intended to conclude a legally binding agreement.

Three recent cases have highlighted the difficulties employers face if they wish to make a unilateral variation to employees’ terms and conditions, writes Sarah Parkin

Changing terms and conditions of employment is a notoriously difficult issue for employers and their advisers. It may be good practice for employers to seek employee consent to any proposed changes, particularly those that are significant. However, they are normally advised to see if there is a unilateral variation clause in the contract of employment which would allow them to impose the changes they wish to make.

Ed Bowyer and Jo Broadbent provide answers to some of the more difficult queries being raised about the new SPL system

Most employers and their advisers are now reasonably familiar with the main features of the shared parental leave (SPL) system available to parents of children due on or after 5 April 2015. However, there are a number of tricky issues arising from the Shared Parental Leave Regulations 2014 (and related legislation), of which practitioners need to be aware.

Julianne Hughes-Jennett and Sarah Baddeley analyse Advocate General Wathelet’s opinion in Gazprom

The relationship between arbitration and litigation has, for a number of years, caused both the courts and commentators considerable difficulty, most notably in the case of Allianz SpA v West Tankers Inc [2009] where the European Court of Justice (ECJ) held that an anti-suit injunction issued by a national court, in support of arbitration proceedings, is incompatible with Reg 44/2001 (the Brussels I Regulation). This relationship has recently been addressed once again by Advocate General Wathelet in his opinion in Gazprom OAO v Republic of Lithuania [2014]. In this case the advocate general considers whether a national court may refuse to recognise and enforce an arbitral award on the basis that it would restrict that court’s right to determine its own jurisdiction under the Brussels I Regulation.

The government’s attempt to limit claims for unpaid holiday could be undermined by a new ruling, warns Louise Mason

In the wake of the ruling in Bear Scotland v Fulton [2014], the government has introduced legislation limiting a worker’s ability to claim for underpaid backdated holiday pay.

Sarah Parkin rounds up the key employment law developments, cases and policies that practitioners can expect in the coming year

Next year is currently set to be relatively quiet as far as new employment legislation is concerned, although the new shared parental leave system coming into force in April marks a significant change to the landscape of family-friendly rights. With the political parties gearing up to the general election in May, however, we are starting to get an indication of how employment law could change over the new few years, depending on which party is elected. This article sets out ten predictions for 2015, outlining the main parties’ proposals and the key developments and cases employment lawyers can expect next year.

Oliver Spratt discusses a government review aimed at clarifying and potentially strengthening workers’ rights

As Peter Clark J commented in the Employment Appeal Tribunal earlier this summer in Windle v Secretary of State for Justice [2014]:

Giles Hutt and Alex Sciannaca examine Part 36 and discuss possible reform

One section of the Civil Procedure Rules (CPR) that is generally thought to work well, but is clearly in need of a spring clean, is Part 36, which governs formal offers to settle. These are the offers that can alter fundamentally the costs order that a court makes if they are not accepted and, as a result, a case goes all the way to summary judgment or trial.

Nicholas Cheffings, Mathew Ditchburn, Guy Fetherstonhaugh QC and Jonathan Karas QC propose a new protocol for avoiding, or resolving, alienation disputes

No, not the latest thriller by Frederick Forsyth: the Alienation Protocol (or, to give it its proper name, the Protocol for Applications for Consent to Assign or Sublet) goes beyond holiday reading.

Confiscation of assets from those convicted of a crime is not a new concept. Helen Boniface and Jessica Hickson report on how the confiscation process is being used in a new way with far-reaching implications

People are familiar with large-scale drug dealers and others involved in very serious crime being relieved of the benefits of their criminal conduct through the court system. What will be less familiar is the use of these same powers to claim the assets of companies convicted of regulatory offences, including those in planning, advertising and environmental fields. Recent experience has shown that prosecuting authorities are becoming more willing to consider pursuing confiscation proceedings in cases of regulatory crime. The impact of confiscation upon individuals or companies convicted of regulatory offences can be massive. Even in circumstances where the maximum penalty in a particular case is relatively small, confiscation can attract a very significant confiscation order which dwarfs any fines imposed.

Louise Mason examines a recent ruling on whether employers need to adjust absence policies to avoid treating disabled staff unfairly

In Griffiths v Secretary of State for Work and Pensions [2014], the Employment Appeal Tribunal (EAT) considered the issue of reasonable adjustments to absence management policies for disabled employees. It concluded that the duty to make reasonable adjustments did not require varying trigger points for formal action under such policies. However, the decision is potentially open to challenge and employers should be wary of relying on it too heavily.

An employee who did not have a work permit will not be barred from bringing a claim under the Equality Act, reports Kate Barker

In Wijesundera v Heathrow 3PL Logistics [2013], the Employment Appeal Tribunal (EAT) has revisited the question of whether illegal workers should be permitted to bring discrimination claims.

Matthew Towers discusses a recent case on what counts as ‘employment’ for the purposes of bringing a discrimination claim

In some industries, such as IT, it is relatively common for individuals to provide their services through their own limited liability companies – so-called personal service companies. Structuring work arrangements this way raises certain issues about employment status, which is an area of law that throws up a significant number of cases for two main reasons. First, establishing status as an employee rather than a worker is the gateway to claiming one of the more favourable statutory entitlements, such as unfair dismissal or a statutory redundancy payment. Secondly, although the legal principles are relatively settled, the determination of employment status heavily relies on the specific facts and circumstances of each claim and, as a result, it is often not difficult for either party to construct arguments on which to base its case.

Chris Wellham reviews the current position on annual leave and sickness absence in light of a series of European and domestic rulings

Over the past few years, there have been a number of judgments from the European Court of Justice (ECJ) on the interaction between holiday and sick leave. These cases have not always been compatible with UK law, which has created significant uncertainty for employers and practitioners, leading the government to propose legislative change.

Sarah Parkin rounds up the key legal developments and cases that employment law practitioners need to be aware of next year

In 2013, employment practitioners had to get to grips with a multitude of legislative changes, including the passage of the Enterprise and Regulatory Reform Act 2013 (the Enterprise Act) and the introduction of new employment tribunal rules. While 2014 will not see quite as many changes on the legislative front, a number of significant Enterprise Act provisions are still due to come into force, and there are also some important Supreme Court and Court of Appeal cases on the horizon.

The reprieve for the service provision change rules in the government’s response to its TUPE consultation will come as a relief to most businesses, comment Chris Wellham and Oliver Spratt

On 5 September 2013, the government published its response to the consultation on its proposed changes to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE). The response was keenly anticipated, given that some of the proposed amendments had sparked concern among both businesses and employment practitioners about their practical implications. In this article we highlight the main conclusions of the response and what they may mean in practice.

Paul Tonkin and Eleanor Marsh summarise recent case law

Vanessa Hogan and Oliver Spratt consider the impact on employers of the information commissioner’s new Code of Practice

It is becoming increasingly frequent for employees to send their employer a data subject access request (DSAR) either in anticipation of, or during, a tribunal claim. Responding to DSARs can be notoriously time consuming and costly. Given the proposed abolition of discrimination questionnaires in April 2014, it seems likely that this trend will continue. In light of this change, and the publication last month by the Information Commissioner’s Office (ICO) of the Subject Access Request Code of Practice, this article will:

Shanna Davison looks at the new regime and how it compares to the current law of distress

The law of distress for rent arrears is an ancient remedy that has remained broadly unchanged for centuries. In 1749, a practitioner described it as: ‘the remedy obtained so early in our law, that we have no memorial of its original with us’. (Gilbert: The Law and Practice of Distresses and Replevin (3rd ed, 1794), p2, quoted in para 1, Distress for Rent (1991) Law Com No 194). In its earlier form, it entitled a landlord to enter property let to its tenant, seize goods and hold them until any rent arrears had been settled. Since 1689, a landlord has also been entitled to sell the goods to recover the outstanding rent.

Jo Broadbent looks at what approach the tribunals are taking to employees’ new-found ability to gather evidence secretly on their smartphones and how employers should respond

Employee monitoring is generally understood to refer to a situation in which an employer is monitoring the activities of its workers. However, with the rise in the number of smartphones and other electronic devices in the workplace, employers are beginning to find that the boot is sometimes on the other foot. It is becoming increasingly common for an employee to make covert recordings of conversations or formal or informal meetings with fellow employees and then seek to rely on such recordings in internal grievance procedures or a tribunal claim.

Following the recent consultation on changing the formulae to calculate the Retail Price Index, John Condliffe looks at the impact of any changes

Changes to the purpose and make up of investors’ real estate portfolios over recent years including, in particular, the increased focus on a liability driven investment (LDI) strategy, has resulted in a number of funds investing in real estate assets which produce income linked to the Retail Price Index (RPI).

Oliver Spratt and Louise Mason consider the implications of the European Court of Human Rights’ decision in Eweida

Judgment in Eweida & ors v United Kingdom was handed down on 15 January 2013. The decision was met with near unprecedented press coverage for an employment law issue: Nadia Eweida was pictured in newspapers from the Guardian to the Daily Mail, her cross very much in evidence. Even the prime minister joined in on the commentary, tweeting that he was:

Oliver Spratt compares the enforceability of post-termination restrictions in the UK, Europe and the US

It has become increasingly common for multinational companies to try to implement employment policies that apply to all of their employees throughout the world. In recent years, we have also started to notice a trend of clients looking to adopt a ‘one size fits all’ approach to post-termination restrictive covenants. There are difficulties in implementing a global form of restrictive covenants, however, as the rules governing enforceability may vary in the different jurisdictions. This article will briefly examine the basic rules governing enforceability of post-termination restrictions (focusing in particular on non-competition covenants) in the UK, Germany, France, the Netherlands and the US, noting in particular the main similarities and differences in each of these jurisdictions.

Ed Bowyer and Helena Davies look ahead to what the new year holds for employers and their advisers

For those trying to keep up to speed with legislative developments in employment law, 2012 has been a trying year, with a plethora of announcements, calls for evidence, consultation papers and bills. It seems there will be no letup in 2013, even though a recent ‘one-in, two-out’ announcement pledges that, from January, every new piece of domestic regulation imposing financial burdens on firms must be offset by reductions in red tape to save double those costs.

Jamie Hyams looks at whether the financial crisis has undermined the foundations of Opco/Propco structures or whether anything can be salvaged from the rubble

Before the current lending crisis it was not uncommon for companies with good real estate portfolios to look at alternative ways of leveraging their assets to raise finance. Often the trend was to move away from traditional methods of charging property in order to increase the level of borrowing available or improve the terms on offer. One popular method was to transfer the property ownership to one group company (Propco) and retain the operating business in another (Opco). By financing each separately a group could, in theory, raise more and/or cheaper debt.

Two contradictory EAT judgments have left it unclear whether a reduction in hours constitutes a redundancy situation, reports Louise Mason

It is, perhaps, a sign of the times that in recent years the Employment Appeal Tribunal (EAT) has not addressed the dividing line between a redundancy situation and a reduction in hours. In the current economic climate, employees faced with the prospect of a reduction in contractual hours have, in many cases, been happier to accept such a reduction, and the commensurate cut in income, rather than face redundancy and the challenge of seeking a new role.

Laura Oliver and Julia Heyn assess how changes in flood insurance are likely to impact on landords and tenants as well as lenders

If Noah were alive today he would surely insist on taking out insurance against flood risk. Even without Noah’s pessimism, concern about flooding over recent years stems from more than the British obsession with the weather. There is a wealth of evidence that weather patterns are changing and that surface water flooding is an increasing problem.

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