Bright light!

Employment Law Newsletter - October 2016


In this issue ...

  Another padLock   Modern slavery – a statement please  
  Not the procedure but the outcome   Also already on us  
  Brexit - no sudden movements please   All points covered  
  Other exits are available (for now...)   Dismissed? – not unless you've heard about it  

Another padLock

We last covered the saga of British Gas v Lock in January 2016 and February 2016. This case directly concerns the inclusion of commission payments in the calculation of holiday pay. Within that, it considers the scope of the freedom of courts and tribunals to 'judicially rewrite' the Working Time Regulations (WTR) to make them compatible with European Court of Justice's interpretation of the Working Time Directive (WTD) – first espoused in Bear Scotland v Fulton on the inclusion of non-guaranteed overtime earnings in holiday payments (mentioned in numerous issues between November 2014 and September 2016).

The Court of Appeal has now had the chance to address these points. On both, it has upheld the Employment Appeal Tribunal (EAT) – so commission earnings are to be reflected in holiday pay and the WTR can have words added by the judges to meet the WTD's requirements. This can be treated as headline news (and it occupies pole position in this issue). But, as we suggested at the beginning of the year, you have probably already moved on with this whole subject and, while perhaps hoping for a post-Brexit change of climate, are already including many 'non-basic' elements of remuneration in holiday pay.


Not the procedure but the outcome

The handling of long-term absence is a subject that can readily import considerations of disability discrimination. It is also a subject upon which many employers have a procedure or policy.

So, where there is a claim of discrimination arising from a long-term absentee's disability and the treatment in question has resulted from the application of such a procedure/policy, can the treatment be justified simply by reference to the fact that it occurred under the procedure/policy?

According to the EAT in Buchanan v Commissioner of Police of the Metropolis, no – because, in any case where the written content of the procedure/policy is standard or reasonable, it would be too easy for the employer to avoid liability for discrimination just by saying that, generally, it is a proportionate means of achieving the legitimate aim of managing long-term absence. Rather, the specific treatment of the individual within the policy and decisions taken by managers on actions, stages and their timings are the elements of potentially discriminatory 'treatment' that must be justified.


Brexit - no sudden movements please

After an (at least outwardly) quiet summer, Brexit has awoken with a vengeance.

The argument about whether Article 50 can be triggered by the Government's exercise of the royal prerogative (as it maintains) or only with Parliament's imprimatur - through an Act or the quicker but less precise vehicle of resolutions in the Commons and Lords - will be considered, if not finally settled (there's always the chance of an appeal), by a case coming before the High Court this week.

However, in the meantime, the Government has sought to explain how it plans to deal with those of our laws that are of EU origin once the UK leaves the European Union. The European Communities Act 1972 (ECA), which currently gives EU law its binding effect and primacy in the UK, will then be immediately repealed by a 'Great Repeal Act' (GRA). This new legislation will also 'adopt' directly into UK law all existing EU measures which do not already have independent standing, so that they do not fall away as soon as the ECA lapses. (Of course, many, like the working time rules, are already supported by domestic regulations which would survive the ECA's demise.) This will then allow the UK to review and sift through those measures and to decide which to keep and which to discard in its own time, rather than look to resolve that issue by the time of Brexit itself.

A point of slightly more than academic interest here is how past and future rulings or interpretations by the ECJ of EU laws will be treated, both in a GRA and by the UK's courts and tribunals. For example, the chaos surrounding overtime and the calculation of holiday pay under the working time rules is not the result of any clear words in the Working Time Directive or Regulations, but the product of the ECJ's interpretation of the former then having (because of the ECA) to be applied by the UK's judges to the latter. And although one might hope the formal position on future ECJ pronouncements would be that the UK did not have to accommodate them in applying its own domestic-equivalent legislation, who would bet against judges looking across the Channel and importing such utterances for use in the UK.

In any event, don't hold your breath on any changes in EU-initiated employment laws any time soon. If the Article 50 process itself doesn't start for another six months and is likely to run for two years, and then there is to be Parliamentary consideration of any prospective repeals, we could still be waiting on answers in three or four years' time. Even then, with the Government trying to avoid igniting the fuse on a political powder keg, the signs are that little will change. Even David Davis, the arch Brexiteer, came out the other day with assurances that workers' rights will not be eroded. So, our pre-referendum assessment of what might give (see the May 2016 issue) still covers the ground reasonably well.


Other exits are available (for now...)

Exit, or termination, payments for managers in the public sector have been the subject of particular scrutiny and comment in the last few years. The recent Southern Health saga illustrates that the question of 'rewards for incompetence' cannot, and should not, be kept out of the spotlight.

After consultation, the Government has produced proposals for controlling payments in the public sector (including the NHS, Civil Service, Local Government, Teachers, Police and Firefighters). The key features are:

a maximum of three weeks' pay per year of service;
an overall cap of 15 months' pay;
a notional maximum annual salary of £80,000 for the above calculations;
tapering down of the amount of calculated compensation with the approach of retirement age or target pension age; and
control (reduction) of employer-funded pension top-up payments.

The responsible Government Departments are expected to produce proposed implementation measures by the end of this year and to be operating them by June 2017.


Modern slavery – a statement please

By now, the first organisations that supply goods and services and have a minimum annual turnover (including that of any subsidiaries) of £36 million should, strictly, have published their 'Slavery and Human Trafficking Statement. That is because the new duty on such entities applies to each financial year ending on or after 31st March 2016 and because the Government's guidance says that publication should 'be expected' within six months of the end of the financial year. Neither that 'loose' approach to compliance nor the Government's current preoccupation with other pressing issues suggests that a breach is likely to get jumped on tomorrow. But, if you are meant to have produced a statement already, it would be a good idea to get a move on now…

Some more detail can be found in the current edition of 'Employment Law for line managers' (pages 16-17). For specific guidance, please contact the employment law team at Collinson Grant.


Also already on us

The revised hourly rates for the National Minimum Wage (NMW), covered in our March 2016 edition, applied from 1st October. The NMW categories and, in brackets, accompanying hourly rates are now: Apprentices under the age of 19 or in their first year (£3.40), 16-17 years old(£4.00), 18-20 years old or those who are older and in the first six months of work under an accredited training scheme (£5.55) and 21-24 years old (£6.95).

The hourly rate for the recently-introduced National Living Wage (NLW), applicable to those aged 25 or older, did not change and remains £7.20. From 1st April next year, all NMW and NLW rates will have a common annual review date.


All points covered

In Compass Group UK & Ireland v Morgan, the EAT had to consider whether a claim of 'constructive' unfair dismissal was properly accepted by an employment tribunal when the employee's resignation occurred after submission of the conciliation certificate but was connected to events and allegations that had been the subject of earlier conciliation by Acas. The EAT decided it was, so the claim could proceed.


Dismissed? – not unless you've heard about it

An agency worker was employed by the employment business which hired her out on assignment to work at one of its clients (or 'end-users'). The assignment finished. The worker was given no new assignment or work to do. She took no steps to chase things up with her employer, who assumed she was not interested in further work, ultimately generating a P45 which, however, was 'internal' and was not sent to her. After three months' inertia, she presented an unfair dismissal claim. Was there a 'dismissal' to be assessed for fairness? No, according to the EAT in Sandle v Adecco. Just as in more orthodox employment situations, the employer's unequivocal intention to terminate must be communicated to the employee – there is no room for implying dismissal through an employer's inaction alone.


Just a quick reminder that Collinson Grant does a lot more than advise clients in all sorts of organisations about the complexities, constraints and opportunities presented by employment law. Our consultants also provide support regularly on: employee relations, reward, restructuring, recruitment, leadership and HR strategy. And we have well-honed skills in operations: managing and reducing costs, organisational design, process improvement, procurement and managerial controls. Do ask if you would like to know more.


If you would like to discuss this or any other issue facing your organisation please speak to your usual contact at Collinson Grant or Peter Howarth on 0161 703 5600

Although care has been taken in the preparation of this Newsletter, Collinson Grant cannot accept responsibility for errors, omissions or advice given. Readers should note that only Acts of Parliament and Statutory Instruments have the force of law and only the courts can authoritatively interpret the law.