Sun sets on low cost holidays

The Issue

We now have the Employment Tribunal decision on how businesses should factor in contractual

commission when they calculate holiday pay. This aligns UK and EU law and alters UK law

immediately with some retrospective impact.

The new calculation

For holiday pay businesses must now calculate the average remuneration inclusive of

commission received by the worker during their normal working hours in the 12-week period

immediately preceding each holiday. The holiday pay is based on this average pay rate.

This new rule only applies to the four weeks’ holiday required under EU law but not to the

additional 1.6 weeks holiday given under UK law, for which pay is unaffected.

Our Guidance

Businesses should review their commission schemes for this holiday pay impact, particularly for:

the additional cost of commission based holiday pay;

whether they have a contractual right to alter the commission scheme for current staff to

manage this cost (and the employee relations consequences of doing that); and

what commission terms they will offer to new joiners.

Anomalies

The new rule does not separate out different types of commission; for example, commission

based on personal sales and commission based on team sales. A worker was previously

financially disadvantaged on personal sales commission by going on holiday but may not have

been for team sales commission. Interpreting the new wording literally may now result in some

anomalies for these commission types.

Claims for historic holiday pay

New Regulations will limit the unlawful deductions basis for holiday pay claims made on or after

1 July 2015 to a two-year backstop period.

Sun sets on low cost holidays? How to count commission for holiday pay

Employment E-alert

March 2015

If you would like more information on our services, please visit www.howardkennedy.com here you will find all our latest news, publications and events. This material is for general information only and is not intended to provide legal advice. © HowardKennedy, 2015

Lydia Christie

Senior Associate, Employment T: +44 (0)20 3755 5402 E: [email protected]

Contact the authors: Practical ways to limit backdated holiday pay claims

A gap of more than 3 months between holiday pay underpayments breaks the ‘series’ of

deductions. This restricts backdating to claims less than 3 months old and stops claims for

underpaid holiday pay from previous holiday years.

UK cases say, unless the contract states otherwise, a worker takes their 4 weeks of “EU holiday”

first in a holiday year and their additional 1.6 (UK only) weeks afterwards. So, breaking a series

of deductions can be achieved:

if the additional leave is paid at the correct (non commission-inclusive) rate applicable to

the 1.6 UK only holiday weeks; or

generally by paying statutory holiday pay at the correct (commission inclusive) rate and

extinguishing historic holiday pay claims over three months old.

Alexandra Mizzi

Associate, Employment T: +44 (0)20 3755 5614 E: [email protected]

Susie Al-Qassab


Carolyn Brown

Partner, Head of Employment T: +44 (0)20 3755 5390 E: [email protected]

http://www.fsilaw.com/

Spring Changes: Extension of Adoption and Parental Leave rights This Spring a number of rights for working families come into bloom. The one most heralded is

the right for parents of babies due on or after 5 April 2015 to take shared parental leave. The

extension of rights to adoption leave, adoption pay and parental leave also change from 6 April.

The Changes

Parental Leave: From 5 April 2015 all parents will have the right to take up to 18 weeks'

parental leave per child until their child's 18th birthday.

Before 5 April, parents could only take parental leave up until their child’s 5th birthday (or

18th birthday in the case of a child entitled to disability living allowance).

Parental leave is unpaid and can be taken at a maximum of four weeks per year (but not per

child per year).

Adoption Rights: For parents who have a child placed with them for adoption on or after 5 April

2015 adoption rights are being aligned with maternity rights:

There will no longer be a period of qualifying service before an employee can take adoption

leave; and

Statutory adoption pay will be at 90% of the employee's average earnings in the first six

weeks of adoption leave as for statutory maternity pay.

Adoption rights (which pre 5 April only apply to those adopting through a UK adoption agency)

will be extended to:

overseas adoptions;

foster to adopt situations; and

intended parents in surrogacy arrangements where the child is due on or after 5 April 2015.

Practical Guidance

Businesses should:

Update parental leave and adoption policies

Train managers on these changes


Carolyn Brown


Contact the authors:

Employment E-alert

April 2015

Louise Gibson



Employment E-alert

April 2015 Fewer Claims, But More Expensive Tribunal Awards From 6th April 2015 The Issue

Since July 2013 employees have had to pay a fee to issue claims in the Employment Tribunal.

UNISON has failed in one application for judicial review of the decision to introduce fees and no

fresh challenge is imminent.

The introduction of fees has reduced the number of tribunal claims dramatically but those

successfully brought may now result in more expensive awards.

(Discrimination compensation and some specific unfair dismissal awards, e.g. an employee

dismissed unfairly or selected for redundancy for reasons connected with health and safety or

public interest disclosure (whistleblowing) are not subject to a statutory cap and unaffected.

The Consequences

For unfair dismissals effective on or after 6 April 2015:

the cap on the unfair dismissal compensatory award rises to the lower of £78,335 or 52 weeks' pay;

the cap on the maximum amount of "a week's pay" increases to £475; and

the minimum basic award for some automatically unfair dismissals (e.g. those based on health and safety, working time or trade union membership) increases to £5,807.

For redundancies with effective dates of termination on or after 6 April 2015:

The cap on the maximum amount of "a week's pay" also increases to £475; and

The cap on the maximum statutory redundancy increases to £14,250.

Unfair dismissal awards are still subject to either an uplift or a reduction of up to 25% where

either an employer or employee fails unreasonably to follow the ACAS Code on Disciplinary and

Grievance Procedures. The overall statutory cap still applies even if an uplift is made.

The Solution

To avoid employment tribunal claims, businesses should:

ensure adherence to the guidelines in the ACAS Code of Practice on Disciplinary and Grievance Procedures as recently updated

adopt an equal opportunities policy to reduce the risk of liability for discrimination claims

communicate such policies to all staff, provide training in and monitor their fair operation

train managers to conduct disciplinary and grievance procedures fairly

obtain specialist legal advice before dismissing or taking action to enforce employment rights.

Carolyn Brown




Edward Belam

Solicitor, Employment T: +44 (0)20 3755 5378 E: [email protected]


Employment E-alert

April 2015 Whistling at work: what is in the public interest? The Issue

Workers reporting wrongdoing at work under the whistleblowing legislation must reasonably

believe that their disclosure of information is in the public interest.

This “public interest” requirement was added in June 2013. It was intended to reverse the

effect of case law that gave whistleblower protection to workers who disclosed information

covering a breach of their own contracts of employment, which had been heavily criticised.

The Employment Appeal Tribunal has recently delivered the first appeal level decision on the

meaning of “in the public interest”.

What is in the public interest?

Mr Nurmohamed was a senior manager at the estate agency, Chestertons. Following changes to

the company's commission structure, he complained on three occasions about alleged

manipulation of the company's accounts, which he believed had an adverse effect on his, and

100 other senior managers', commission income.

Mr Nurmohamed was dismissed and successfully claimed that he had been unfairly dismissed

because he had reported this wrongdoing.

In addressing the question of whether the information reported by Mr Nurmohamed was made

in the public interest, it was found that:

the relevant question is not whether the information in itself is in the public interest but

whether the individual reporting it reasonably believes that it is in the public interest.

when he reported his concerns Mr Nurmohamed believed that it was in the interests of

the 100 senior managers and, based on the facts, that belief was reasonable.

where a section of the public would be affected, rather than simply the individual

concerned, this is sufficient for a matter to be in the public interest.

a relatively small group may be sufficient to satisfy the public interest test. In this case,

the affected group was the 100 senior managers. Although Mr Nurmohamed was most

concerned about himself, he did have other office managers in mind.

Consequences and practical guidance

This decision sets a relatively low bar for the public interest test. Disclosures concerning

personal disputes may amount to whistleblowing if the worker reasonably believes it affects a

wider group. If so, workers will be protected under the whistleblowing legislation if they are

subjected to any detriments or dismissed because they have reported those concerns.

Businesses should:

assess the risk of potential whistleblowing claims by workers who raise concerns about

apparent personal disputes which they reasonably believe have a wider impact.

review/update existing whistleblowing policies to include the public interest test.

ensure that managers are trained in recognising potential whistleblowers, operating their

whistleblowing policies and responding appropriately to reports of wrongdoing to

minimise potential claims risk.


Carolyn Brown



Lydia Christie

Senior Associate, Employment T: +44 (0)20 3755 5402 E: [email protected]


Employment E-alert

September 2015 Commuting on the job: For mobile workers, travelling to and from work is now “working time.”

The Issue

The European Court of Justice (ECJ) has decided that time spent by mobile workers (those who

have no fixed workplace) travelling from their home to their first customer and from their last

customer back home counts as working time under the EU Working Time Directive.

The Court decided:

Commuting time was a necessary means of providing their services to customers

Mobile workers are at the business’ disposal during commuting time since the employer

allocates the customer visit appointment times.

The Consequences

Working hours for mobile workers: The decision does affect how maximum weekly working

hours and rest break entitlements are calculated for mobile workers (for example sales people,

carers on client home visits, engineers/maintenance workers, delivery drivers etc.) particularly

those who live outside their territory or in a remote location.

This worked travelling time will reduce the on the job maximum working hours available under

the Working Time Regulations. Resourcing may be impacted.

Pay for mobile workers: The decision may affect pay. The ECJ said this decision does not give

businesses a statutory obligation to pay staff for the worked commuting time. However, for

hourly paid mobile workers who work, or are paid overtime, it may count as additional paid

working time under their contract.

Working hours and pay for fixed workplace workers: The decision does not affect how

commuting hours are treated for their working time or their pay.

Carolyn Brown


Contact the author:

Guidance for businesses to manage mobile workers with no fixed workplace

Businesses employing mobile workers:

Can consider reassigning mobile workers to a fixed base they travel to before

commencing work and leave last before going home and so remove their classification as

mobile workers

Can arrange mobile workers’ first and last assignments close to home to limit travelling

working time

Should institute monitoring of travelling working time to ensure working time regulation

compliance and so manage commuting “working time"

Working time guidance:

If the additional travelling working time might take mobile workers over the maximum

weekly working time (48 hours prescribed by the Working Time Regulations), ensure the

worker has given a written opt-out of this Regulation. If they refuse, reduce their active

working hours to avoid any working time breach by the business

Check all mobile workers can take at least 11 hours' rest between getting home at night

and setting off again next morning.

Pay guidance:

Check contracts of hourly paid mobile workers and/or those with overtime arrangements

and obtain advice on whether they are entitled to pay for the additional travelling

working time

Consider whether the business will pay for the additional travelling working time of

mobile workers

If businesses have no current obligation to pay for the additional working time, expect

pressure from staff to negotiate or claim pay for this travelling worked time (such as

breach of contract claims from those paid hourly or with paid overtime)

National Minimum Wage Regulations in the UK say that time travelling to/from work is

not included when calculating the national minimum wage. Take advice on the impact for

mobile workers now.



Employment E-alert

October 2015 Slaving Away – New Reporting rules on supply chain labour practices

The Issue

The Modern Slavery Act 2015 requires large businesses operating in the UK (with a £36 million +

turnover worldwide) to publish annually on their website a Board-approved statement of steps

taken to ensure slavery and human trafficking do not exist in their business or supply chains

(inside or outside the UK).

For these purposes:

“Slavery” is holding people in slavery or servitude or requiring them to perform forced or

compulsory labour.

“Human trafficking” means facilitating workers’ travel with a view to exploiting them.

“Exploitation” covers sexual offences, removal of organs as well as working under threats, force or

deception.

There will be interim rules for large businesses whose financial year ends soon. Promised

Government Guidance is still to come when an update will follow.

The Consequences

It is likely these Board statements will need to specify: business and supply chain relationships

relevant policies, including supplier due diligence and auditing processes training provided to

those in supply chain management key risks related to slavery and human trafficking and how

those are evaluated and managed key performance indicators enabling assessment of the

effectiveness of the business’ anti-slavery activities.

Guidance

Large businesses and those who supply to them should now:

Assess their suppliers and supply chains for risk

Introduce an Anti-slavery policy, which should:

identify high risk business and supply chain areas (e.g. types of supplier heavily reliant

on migrant labour)

guide procurement and supplier liaison staff on identifying ‘red flags’

provide mechanisms for reporting concerns which ensure prompt remedial action.

Train staff on the operation of the Anti-slavery policy

Review procurement arrangements and supplier contracts for inclusion of appropriate

business safeguards such as:

supplier information provision and monitoring

use of anti-slavery compliant policies and practices

contract termination rights when anti-slavery compliance issues arise.

Carolyn Brown


Contact the author:

If you would like more information on our services, please visit www.howardkennedy.com here you will find all our latest news, publications and events. This material is for general information only and is not intended to provide legal advice. © Howard Kennedy, 2015


Employment E-alert

November 2015

Not whistling in the wind. Workers' own contract disputes can attract whistleblower protection The Issue

Workers reporting wrongdoing at work must reasonably believe the information is "in the public interest" to get employment law whistleblowing protection against resulting detriment or dismissal.

This public interest requirement was intended to remove whistleblower protection from workers who disclosed information covering a breach of their own contract. With no definition of “in the public interest”, there has now been another appeal level decision confirming this public interest test is not as broad as it might appear. What does “in the public interest” mean in whistleblowing?

The latest decision concerned Mr Underwood who was an HGV driver with Wincanton plc and who, with three colleagues, made a written complaint about their terms and conditions of employment, including about the way overtime was allocated. When Mr Underwood was dismissed seven months later, he claimed he had been automatically unfairly dismissed because of his overtime complaint which he termed a whistleblowing report.

In that case, the EAT directed that for whistleblowing claims:

A contractual dispute between a group of employees or workers and their employer can be in the public interest

An employee or worker could reasonably believe that a disclosure about this to the employer was in the public interest.

Consequences and Practical Guidance

This second EAT decision appears to take whistleblowing protection back close to its pre-public interest test days when workers who disclosed information about alleged breaches of their own contracts of employment had whistleblowing protection.

The EAT’s first public interest test decision is being appealed but that appeal is not due to be heard until October 2016.

Until then, the low bar for establishing that whistleblowing is in the public interest remains firmly set and so even cases involving disclosure of individual contractual disputes will potentially enjoy whistleblowing protection.

Businesses should, to minimise claims risk, continue to:

Assess the risk of potential whistleblowing claims by workers who raise with their employer concerns about apparent individual contractual disputes which the employee or worker may reasonably believe have a wider impact

Review or update existing whistleblowing policies to cover the public interest test

Ensure that managers are trained:

In recognising potential whistleblowing reports

In operating their whistleblowing policies

To respond appropriately to reports of wrongdoing made by workers in their business.

Carolyn Brown


Contact the author:

If you would like more information on our services, please visit www.howardkennedy.com here you will find all our latest news, publications and events. This material is for general information only and is not intended to provide legal advice. © Howard Kennedy, 2015


Documents

Sun sets on low cost holidays