Employment Briefing - September 2014
Published byMartin Stephen
- Update on Holiday Pay: the uncertainty continues
- Employment Law Changes coming into force on 1st October
- Tribunals to have power to order equal pay audits
- Claimant Entitled to Award of Expenses despite having Insurance Cover
- Labour Party set out Proposed Reform of Tribunal System
- Sign up to Employment Briefing
Update on Holiday Pay: the uncertainty continues
In the last issue of Employment Briefing, we commented on the case of Fulton v Bear. This case is currently before the Employment Appeal Tribunal for a decision which will affect both employers and employees.
Away from this case, large numbers of potential claimants are, firstly, currently engaged in the process of the correct way of calculating holiday pay and, secondly, are engaged in early conciliation through ACAS.
Early conciliation is the process which has to be exhausted before a claimant can bring a claim in the Employment Tribunal. The aim of early conciliation is to try to settle claims without the need to proceed to a full a claim before the Employment Tribunal.
There are various arguments as to how far back an employee can claim unpaid holiday pay ranging from three months to five years to twenty years.
A number of employers have used this uncertainty to negotiate settlements with their employees. Others have chosen to factor overtime, commission and bonuses into the calculation of holiday pay going forward which, if done properly, has the effect of limiting, and possibly eliminating, claims.
On that last point, claims require to be brought within three months of the date upon which the holiday pay should have been paid. Claimants will argue that failure to pay the correct rate of holiday pay constitutes a series of unlawful deductions. If that argument is accepted, the three month period for bringing claims runs from the date of the last unlawful deduction. If, therefore, an employer starts paying the “correct” rate of holiday pay and no claim is brought within three months of the date upon which holiday pay was paid at the “wrong” rate, those claims will then be time barred. It is unlikely, however, that employees would allow their claims to become time barred, especially if they are involved in early conciliation. Bear in mind also that the three month period is extended for a period of at least one month where early conciliation is taking place.
We will report further as matters develop and in particular once the decision in the case of Fulton v Bear has been issued.
If you are thinking of negotiating with your employees in order to mitigate your exposure to holiday pay costs, we can help you. Contact Martin Stephen mss@wjm.co.uk or one of the other team members.
Employment Law Changes coming into force on 1st October
National Minimum Wage
The national minimum wage rates applying from 1st October are:
- The adult rate for workers aged 21 and over will increase by 19 pence from £6.31 to £6.50 per hour.
- The hourly rate for workers aged 18 – 20 will increase by 10 pence from £5.03 to £5.13 per hour.
- The rate for workers aged 16-17 will increase by 7 pence from £3.72 to £3.79 per hour.
- The hourly rate for apprentices will increase by 5 pence from £2.68 to £2.73 per hour.
Time off to accompany a pregnant woman to ante-natal appointments
This new right will be available to employees and qualifying agency workers. It applies to the pregnant woman’s husband, civil partner or partner (including same-sex partner), the father or parent of a pregnant woman’s child and intended parents in a surrogacy situation who meet specified conditions.
The entitlement is to unpaid leave for up to two appointments, capped at 6.5 hours per appointment. Employees will have the right to bring claims in the Employment Tribunal if their employer unreasonably refuses to let them take time off for this purpose.
A similar right for adopters will come into force in April 2015.
If you have any questions about this new right and how it might apply to your workforce, please get in touch. employment@wjm.co.uk
Tribunals to have power to order equal pay audits
Employment Tribunals will be able to order employers to carry out equal pay audits where there has been an equal pay breach. Employers should note that the legislation includes a requirement that they publish the results of the audit on their websites (unless they can show that doing so would result in a breach of their legal obligation) for a period of at least three years.
Prudent employers should protect themselves by carrying out their own equal pay audit. Our HR Assist service can advise and assist you with your audit. Contact the team through employment@wjm.co.uk
Claimant Entitled to Award of Expenses despite having Insurance Cover
Even if they have insurance cover, which pays for their case, claimants can receive an award of expenses.
In a recent case, Mardner v Gardner, the EAT decided that having insurance in place which paid all the claimant’s costs was no bar to the claimant receiving expenses.
The underlying facts of the case were not disputed and an award was made to Mr Mardner. What was disputed was that Mr Mardner claimed costs even though he was fully funded by his insurer. In the Employment Tribunal, the judge refused a grant of expenses as Mr Mardner was not personally out of pocket.
Mr Mardner then appealed to the EAT.
The EAT overturned the ET’s decision and awarded expenses to Mr Mardner basing the decision on a case dating back to 1970. In the 1970 case, the judge had noted that a respondent should not be entitled to avoid the cost implications of their unreasonable behaviour, simply because the claimant has been prudent enough to have a policy of insurance in place.
For both employees and employers insurance cover can be a boon when it comes to employment matters. Many employees can find they have legal expenses cover in their household or car insurance – cover, though, may be limited.
Employers can sign up to WJM’s Praesidium. Praesidium is an affordable, comprehensive, employment law protection package. It provides you with all the day-to-day employment advice you require, giving you the peace of mind that you are complying with the fast changing world of employment law and protecting your business against the threat of sudden and expensive claims. Contact us for more details: employment@wjm.co.uk
Labour Party set out Proposed Reform of Tribunal System
Shadow Business Secretary, Chuka Umunna, has set out his party’s plans for reform of the employment tribunal system, pledging to make the system “more streamlined” and “less bureaucratic”. The plans would be put into place if Labour returned to power.
Mr Umunna stopped short of promising to completely abolish tribunal fees, which were introduced by the current government.
Currently it costs from about £160 to £250 to issue a claim, depending on the type of claim. A further hearing fee ranging from £230 to £950 is then levied. These fees have led to a substantial drop in the volume of claims, prompting protests from trades unions that workers are being priced out of justice.
Despite not outlining any specific reforms to the fee structure, Mr Umunna hinted that it will be reviewed, stating that he wanted to ‘ensure that affordability is not a barrier to employees seeking redress in the workplace.’
Mr Umunna’s comments serve as a reminder of the dilemma governments face. On the one hand, the system should ensure that unmeritorious or vexatious claims are weeded out early on while, at the same time, allowing valid claimants not to be priced out of the tribunal system.
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For further information on these or any other employment issues, please contact:
- Martin Stephen mss@wjm.co.uk
- Andrew Wilson ajpw@wjm.co.uk
- Liam Entwistle lae@wjm.co.uk
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- Julia MacDonald jmc@wjm.co.uk
The information contained in this newsletter is for general guidance only and represents our understanding of relevant law and practice as at September 2014. 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: 319 St Vincent Street, Glasgow, G2 5RZ. A limited liability partnership registered in Scotland, number SO 300336.
