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UK HR Two Minute Monthly: employment status, harassment and reasonable steps, workplace surveillance and unfair dismissal

The Supreme Court Delivers Verdict in Landmark Uber case

As we reported in our dedicated update, the Supreme Court gave judgment in the final appeal in relation to the Uber litigation at the end of February, unanimously concluding that the Uber drivers who brought claims against Uber in 2015 were workers within employment legislation.

Why this matters?

The outcome of this case has been long awaited given its importance to gig economy businesses. The Supreme Court found that the rights asserted by the drivers were not contractual rights but rather rights granted under statute. As such, while the contract between the parties is something that the courts can consider, the correct approach is to consider all the relevant circumstances, which will also include the relationship between the parties in practice and the general purpose of the legislation in question.

It is worth noting that this assessment must be carried out on a case-by-case basis and, as such, this decision does not determine the status of all gig employee workers. The issue of employment status therefore remains an area of debate.

Uber BV and others v Aslam and others

Employer unable to rely on “reasonable steps” defence in respect

The Tax Cuts and Jobs Act Impacts Settlements of Sexual Harassment and Abuse Claims

January 5, 2018

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The recently enacted Tax Cuts and Jobs Act eliminated a business expense deduction for settlements of sexual harassment and sexual abuse claims that are subject to confidentiality restrictions.  Specifically, a “settlement or payment related to sexual harassment or sexual abuse,” and the “attorney’s fees related to such a settlement or payment,” are no longer a deductible business expense “if such settlement or payment is subject to a nondisclosure agreement.” IRC §162(q) (added to the IRC by §13307 of the TCJA).  Section 13307 became effective on December 22, 2017.

This new Code provision raises many questions, which the IRS has not yet addressed, including:

What is the impact of IRC §162(q) on the settlement process for sexual harassment or sexual abuse claims?

Employers will need to weigh the additional costs of a nondisclosure provision, which include the tax on the settlement payment and related attorney’s fees, and the value of a nondisclosure provision to the employer with respect to the specific claim asserted by an employee.  Rather than “boilerplate” in a settlement or separation agreement, nondisclosure provisions will need to be assessed on a case-by-case basis.

Attorneys for both employers and employees will need to track time separately for “attorney’s fees

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