Martin Stephen

Published by
Martin Stephen

4th September 2018

Welcome to our Employment news briefing, providing a summary of some of the main employment judgements in August.

If you have any questions about any of the topics covered, or would like to meet with our Employment team, please call Martin Stephen on 0141 248 3434 or email mss@wjm.co.uk

CEO Pay Reporting

The Government intends to legislate to require all UK-listed companies with more than 250 employees in the UK to report annually on the difference in pay between their Chief Executive Officer and their average UK worker. The 250 employee threshold is the same as for gender pay gap reporting although that applies to all companies and not just listed ones. CEO pay is the total remuneration paid to the Director carrying out the role of CEO in the relevant financial year. This is to be based on the existing “single figure” in the Directors’ Remuneration Report, and must include all elements of remuneration including salary, fees, benefits, bonuses, share schemes and pension benefits. If more than one person undertakes the role of CEO in the financial year, the total remuneration paid to all persons who held that role must be calculated. Companies will be compelled to justify their CEO salary, as well as reporting on how their Directors take employee and other stakeholder interests into account.

The Government has clearly been emboldened by what it sees as the success of the Gender Pay Reporting Regulations and hopes to use these new rules as a tool to address public concern over pay equality. The new rules will however undoubtedly place additional burdens upon legal HR and payroll teams.

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Care Workers not entitled to minimum wage for sleep-in-shifts

In a case of huge significance to the care sector, the Court of Appeal in England has decided that care workers carrying out “sleep-in” shifts are not entitled to the national minimum wage for the whole shift but only when they are required to be awake and working. The question is whether a worker is entitled to the NMW when sleeping during a shift. This depends on whether the individual is actually working throughout the period or is just on call by being required to be available for work. If a worker is working by simply being present at the workplace, he or she will be carrying out “time work” and so be entitled to be paid under the NMW for the whole of this time, even if sleeping. If however a worker is required to be available at or near their place of work for the purpose of working the NMW rate is only payable for the hours when the worker is awake for the purpose of working. In this case, time spent sleeping does not need to be paid at the NMW rate, even if the worker sleeps at their place of work using facilities provided by the employer. The critical question is whether the worker is still working while asleep or simply available and ready to work if required. This makes a big difference to the amount that needs to be paid to a night worker.

In the Mencap case the Claimant was a Care Support Worker employed by the Royal Mencap Society. She provided care to two men with autism and learning difficulties in their home, working some day shifts and some sleep in shifts. The Claimant did not have any tasks to perform during the sleep-in shift and was merely obliged to remain in the house to be available if needed, for example if one of the men was ill or indeed needed help. She was actually expected to sleep during this time and had her own bedroom in the house. The need to intervene was real but infrequent and there had been about six occasions in the preceding 16 months when it had arisen. If nothing happened she would sleep throughout. For a nine hour sleep-shift the Claimant was paid a flat rate of £22.35 plus one hour’s pay of £6.70, totalling £29.05. She claimed that the whole shift, including the time asleep, was “time work” and so she was entitled to be paid the NMW for the entire period. At first instance the Employment Tribunal found that the Claimant was working and entitled to the NMW while on sleep-in shift. On appeal, the Employment Appeal Tribunal found that the Claimant was working and entitled to the NMW while on a sleep shift. However the Court of Appeal overturned the earlier decision finding that the Claimant was only “available for work” and not actually working while on a sleep-in shift. As such she was only entitled to the NMW when she was required to be awake and working.

Although it may seem counter-intuitive to argue that someone can be working while asleep, all the cases, including the Mencap one, confirm that this can be true and if someone is working, they are entitled to be paid the NMW. All decisions are however fact sensitive.

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Voluntary Overtime in NHS

It has been established that regular voluntary overtime forms part of normal remuneration for the purpose of calculating holiday pay if it is paid over a sufficient period of time which of course is a question of fact and agree. In the latest case a group of NHS employees argued that calculation of their holiday pay had failed to take account of two types of overtime. The first was non-guaranteed overtime where a task needed to be completed by the same employee after the end of their normal shift. The second was voluntary overtime where an employee simply volunteered to work extra shifts.

The Employment Tribunal found that the non-guaranteed overtime should be included but that the voluntary overtime should not because the employees were not required to do this work under their contracts of employment. The Employment Tribunal also found that the voluntary overtime was not part of “pay” under the NHS contract, although the non-guaranteed overtime was included.

The matter was appealed to the Employment Appeal Tribunal which found that both the non-guaranteed and voluntary overtime should potentially be included in the calculation of holiday pay. In relation to voluntary overtime the Employment Appeal Tribunal followed the approach in the earlier case of Dudley. Under the Working Time Regulations this should be included in the holiday calculation if it was sufficiently regular and settled to be taken into account in the calculation of “normal remuneration”. The question of whether the overtime was sufficiently regular would need to be assessed for each individual employee.

On the contractual point, the Employment Appeal Tribunal ruled that the purpose of the relevant clause in the NHS Terms and Conditions were to calculate holiday pay on the basis of what the employee would in fact have been paid if he or she had been at work. There was no basis for distinguishing between non-guaranteed and voluntary overtime, so both types of overtime should be included in calculating holiday pay under this particular contract.

The case has been remitted back to the Employment Tribunal to assess the correct payment for each employee but the NHS Trust has applied for permission to appeal to the Court of Appeal and we will report further as this case develops.

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Independence Views are Protected By Law

An Employment Tribunal in Glasgow has ruled that Equality Law protects an employee’s belief in Scottish Independence. The decision was made following a preliminary hearing in a case brought by Chris McEleny against his former employer, the Ministry of Defence.

Mr McEleny, an SNP Councillor and former candidate for his party’s Depute Leadership, claims he was unfairly targeted because of his views. The Employment Judge has agreed that his support for independence qualifies as a “philosophical belief” and that the case will now proceed to a full hearing on the merits.
We shall keep our eye on this case and report to you further as it develops.

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The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at September 2018. Wright, Johnston & Mackenzie LLP cannot be held responsible for any action taken or not taken in reliance upon the contents. Specific advice should be taken on any individual matter. Transmissions to or from our email system and calls to or from our offices may be monitored and/or recorded for regulatory purposes. Authorised and regulated by the Financial Conduct Authority. Registered office: 302 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.