Overtime counts towards holiday

Workers have today won a groundbreaking case in the Employment Appeal Tribunal to include overtime in holiday pay.  Currently, only basic pay counts when calculating holiday pay. 

This decision means that all people working voluntary overtime could claim additional holiday pay. Currently, there are around 5 million workers in the UK who work overtime and some estimates suggest that if claims can be backdated, the cost to employers could amount to billions.

The law on holiday pay has been in flux for some time, so today’s decision provides some clarity.  However, given the significant potential financial implications for employers, the decision may well be appealed, so we may well not have heard the last on the matter. In fact, a final decision may be years away.

Meanwhile, many employers may well look at reducing the availability of overtime as a preventative measure.

For more information, call Consensus Employment Law on 01202 739249. 

Time off for ante natal appointments

From 1 October 2014, an employee or agency worker who has a "qualifying relationship" with a pregnant woman, or her expected child, will be entitled to take time off during their working hours to accompany the woman to ante natal appointments.

There is no qualifying period of employment for this right, so it will be available to relevant employees from the start of their employment. Agency workers must fulfil certain criteria to have the right to accompany.

Was Tesco right to suspend?

Tesco has today stunned the markets by confessing to having overstated its half-year profit guidance by £250m.  The news prompted a plunge in Tesco's share price, which closed 11.6% lower at 203p.

An investigation has been launched and four executives, including the UK Managing Director, have been suspended.

Employers should only suspend:

  • In cases of alleged serious misconduct
  • Where there is a potential threat to the business or other employees
  • Where it is not possible to properly investigate if the employee remains at work
  • Where relationships have broken down

Employers should have a clear disciplinary procedure, setting out rules of conduct as well as possible sanctions for misconduct and gross misconduct.

Tribunal Fees to be Scrapped says Labour

Labour will abolish the current employment tribunal fees regime if elected in May 2015, shadow business secretary, Chuka Umunna, told delegates at the Trade Union Congress (TUC) conference this week.

Describing the current procedure as “unfair and unsustainable”, Umunna said a future Labour government would reform the Employment Tribunal system to ensure that “all workers have proper access to justice”.

The number of single claims made to Employment Tribunals has fallen 70% in a year, according to the latest figures from the Ministry of Justice.

Umunna said prohibitive costs were “locking people out of the justice they are entitled to”.

Holiday Pay and Commission

In a judgment recently handed down by The European Court of Justice (ECJ) the court found that that holiday pay must correspond to normal pay, including any commission or other variable pay that it might ordinarily comprise.

In this case, the employee was able to earn a sizeable commission, which could represent up to 60% of his total remuneration. However, when he took annual leave, his holiday pay was based on his basic salary only.

The ECJ found that the employee’s holiday pay should include an amount to reflect the commission he was unable to earn while on annual leave. The court stated that workers may be deterred from exercising their important social right to take annual leave if they suffer a financial disadvantage for doing so. Therefore, holiday pay must correspond with the normal pay received by the worker.

The principle applied by the European Court is likely to apply to any variable pay including overtime, allowances and bonuses. Arguably, any variable pay, provided it is intrinsically linked to a worker’s contract, should be included in holiday pay.

Two cases are due to be heard by the Employment Appeal Tribunal at the end of this month.  Employers and employees alike should closely watch this space, as the outcome of these could have considerable financial implications for both.

Flexible Working Rights Extended

From today, all employees with 26 weeks’ service have the right to make a “flexible working” request, ie a request to change their hours/pattern of work.  Previously, this only applied to parents or carers.

In effect, this is a right to request, not a right to get.  Employers must deal with the request reasonably and respond within 3 months.  Requests can be refused for business reasons (eg cost).  Only one request can be made per 12 month period.

ACAS Early Conciliation

From today, claimant employees will have to submit details of their dispute to ACAS before they can issue a claim in the Employment Tribunal.  They will be offered early conciliation for a month, which can be extended by two weeks, and the time limit for presenting a claim will be extended. 

If conciliation is refused by either party or does not succeed, the employee will be able to present his or her claim. 

There is no obligation on either party to conciliate, but it is hoped that ACAS will have a high success rate and that this free service will mean a number of potential employment claims are settled before tribunal proceedings are started.

Employment Tribunal Claims Plummet

On 29 July 2013, fees became payable by employees bringing tribunal claims. The Government’s aim in introducing fees is to transfer around 33% of the £74m cost per annum of running the tribunal system from the taxpayer to those who use the system. 

However, it is widely believed that the main aim of the new fees was to drive down the overall number of claims.

Quarterly figures from the Tribunals Service, covering the period October to December 2013, show that 9,801 employment tribunal claims were received. This was 79% fewer than in the same period in 2012, with only one tribunal claim in five still being filed.

Sexual harassment ­- how to recognise and prevent it

High profile court cases of sexual assault/harassment have been widely reported recently, with varying degrees of success.

Even though the media has focussed on high profile cases, it is known that similar undercurrents exist in the workplace, both toward male and female employees. Harassment in the work environment, whatever form it takes, is not to be tolerated and if proven to exist, can result in severe penalties.

Employers should note:

Harassment involves unwanted conduct that has the purpose or effect of violating a person's dignity or creating an offensive, intimidating or hostile environment. It is discriminatory if it is related to someone’s gender.

Often, the first an employer knows about harassment is when an employee puts in a written grievance or goes off sick with stress. By this stage, it may be too late to avoid liability.

Allegations of discrimination or harassment are likely to create bad publicity for an employer. It is better to take steps to prevent such claims, than to manage a crisis after a claim has been made.

Discrimination law is designed to ensure equality of opportunity at work, protect employees' dignity and ensure that complaints can be raised without fear of reprisal.

Tribunal Fees

From today, fees are payable by employees bringing tribunal claims. The Government’s aim in introducing fees is to transfer around 33% of the £74m cost per annum of running the Tribunal system from the taxpayer to those who use the system.  The Government says it's unfair for taxpayers to foot the bill for workers who choose to "escalate workplace disputes to a tribunal.”

The main types of fees will be a fee at issue of the claim or appeal, and a fee before the hearing.  Type A claims, eg unpaid wages or holiday pay, now incur £160 when the claim is lodged, plus £230 for the hearing.  For Type B claims, eg unfair dismissal, discrimination, or whistleblowing, the issue fee is £250, plus £950 for the hearing.  If a claim consists of both unpaid wages and unfair dismissal, the higher fees apply.

The fee for an appeal is £400 when the appeal is lodged, plus £1200 for the hearing. Fees now also apply to counterclaims, reviews and judicial mediation.

Her Majesty’s Courts & Tribunal Service remissions scheme, currently in force in the Civil Courts, will be extended to protect access to Tribunals for those who cannot afford to pay a fee. 

While the introduction of fees may be music to the ear of many employers, The Federation of Small Businesses, while agreeing with the principle of employees bearing some of the cost of Tribunal claims, says that the fees may be too high.  Meanwhile, The Institute of Employment Rights think tank warns that fees will add to a climate "in which it is extremely difficult for workers to receive compensation and support if they are treated unfairly by their employer."

Because of concerns for its members’ rights, Unison, which represents 1.3 million workers, has won permission from The Royal Courts of Justice for a Judicial Review over the introduction of fees. It is estimated that the new fee structure could affect up to 150,000 workers a year and Unison has pledged to pay the tribunal fees of its members. The hearing is set to go ahead in October.

Anything that speeds up the tribunal system or reduces claims will be welcomed by employers, and the payment of fees is expected to do this. However, another effect of the new regime may be to increase the value of settlement offers for low-value claims. Offering £500 as an economic offer to settle is not likely to be attractive to a claimant who has paid £1,200 to bring a claim.