Taylor & Emmet Soicitors | The Employment law blog
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From April 2019 the statutory minimum employment related payments will change. The most commonly used ones are set out below.
There will be changes to the National Living Wage and National Minimum Wages rates to be implemented from 1 April 2019. These will be as follows:
National Living Wage
National Minimum Wage:
There is also an increase to £7.55 per day where the employer provides a worker with living accommodation, for each day accommodation is provided.
From 6 April 2019 the rates payable for family related leave and sickness absence will also increase as follows:
Statutory Maternity and Adoption Pay
First six weeks at 90% of weekly pay
Additional 33 weeks at £148.68
Statutory Paternity Pay
Two weeks at £148.68 (or 90% of weekly pay if that is lower)
Statutory Maternity Allowance and Shared Parental Leave Pay
Up to 39 weeks at £148.68 (or 90% of weekly pay if that is lower)
Statutory Sick Pay
SSP will increase to a rate of £94.25 per week for up to 28 weeks.
Unfair dismissal / redundancy pay
From 6 April 2019, the cap on a weeks’ pay in Employment Tribunal claims will rise to £525 and the maximum compensatory award for an unfair dismissal claim will rise to the lower of either a years’ gross pay or £86,444. It is therefore possible for Tribunals to award a total of £102,194 in unfair dismissal compensation when the maximum basic award is also taken into account.
The increases which are in line with current inflation rates are not unexpected but they will no doubt be unwelcome for employers as it will mean an increase in the cost of making redundancies (the maximum Statutory Redundancy Payment will increase to £15,750).
The new rates will apply to events which give rise to compensation that occur on, or after, 6 April 2019. The old limits will apply to cases where the event occurred before 6 April 2019.
As the law stands, under the Employment Rights Act 1996, an employee is entitled to an itemised pay statement at the point of payment, or before a payment of wages or salary is made.
An itemised pay statement must include the individual’s gross pay, the amount of any fixed or variable deductions with the reason for those deductions being identified, the net pay and, if there are multiple methods of payment, it should also state which payments will be made by which method.
From 6 April 2019, all workers, including agency workers and zero hours contract workers, will be entitled to a pay statement containing the information set out above. From this date, only genuinely self-employed individuals will not have a right to an itemised pay statement.
Employers that do not comply with this obligation may face a claim in the Employment Tribunal for a declaration of the sums that should have been set out on a pay statement. However, if the employee also brings another claim at the same time and they are successful in that claim the Employment Tribunal may also award compensation of two or four weeks’ pay.
If this is something that you have not yet sorted, you have four weeks to get organised.
Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact Kelly Gibson at Taylor&Emmet at Kelly.Gibson@tayloremmet.co.uk or 0114 218 4307.
In the UK the entitlement to paid annual leave is governed by the Working Time Regulations 1998 (WTR) which implements the Working Time Directive. UK law states that employees must take their entitlement to the 4 weeks leave provided for by the Working Time Directive in the leave year in which it is accrued. A payment in lieu of this leave is not permitted except on the termination of employment. However, the law in Germany states that employees are not entitled to a payment in lieu of termination and will lose the right to leave that has accrued during their employment if they do not take it.
At the end of last year the European Court of Justice (ECJ) heard two cases in which a similar question was asked. That question was,
“Does the Working Time Directive override national legislation which states that no payment in lieu is to be made where the holiday has not been taken by the termination date, even where the worker did not apply to take that leave but could have done so?”
Briefly the facts were that Mr Kreuziger was working for a German state entity, The Land of Berlin, and in the last few months of his employment he did not take the leave that he had accrued. On termination he asked for a payment in lieu of that leave which was refused. In a similar case Mr Shimizu did not take much, if any, leave over the two years prior to his employment ending such that he had accrued 53 days of untaken leave. His employer invited him to take his remaining leave but did not force him to do so. Mr Shimizu took 2 days and requested a payment in lieu of 51 days. Both cases were referred to the ECJ who were asked to decide whether the national law preventing a payment in lieu on termination was compliant with the Working Time Directive. Further, Mr Shimizu asked whether Article 31(2) of the Charter of Fundamental Rights could be enforced directly against a private person in order to guarantee his fundamental right to paid annual leave.
The ECJ held that in a case such as this the worker is the weaker party and so it is the employer’s duty to ensure that it does not restrict the worker’s rights either by preventing them from taking leave they have accrued or, on termination, by making a payment in lieu of that leave. The ECJ held that national law cannot provide for the automatic loss of accrued but untaken leave entitlement on termination or at the end of a specific period simply because the worker has not exercised their right to take that leave. However, this would be different if the employer was able to show that it had enabled the worker to exercise their right to take the annual leave. The burden of proof in this respect will be on the employer, which means that as an employer it is important that you record the fact that you have made your employees aware of their right to take annual leave, the amount of annual leave that they have available to them, when that leave will expire and the fact that they will not be able to carry it over or receive a payment in lieu of that holiday if they have not taken it by the end of the leave year (or any carry over period).
The ECJ also went on to say that Article 31(2) of the Charter of Fundamental Rights is sufficiently clear and precise and is unconditional, such that it confers a right on workers that they can rely on in a dispute with their employer. It is therefore irrelevant whether the individual is employed by a state entity or by a private company.
Whilst the facts of this case are slightly different from the UK where the individual will automatically receive a payment in lieu of any holiday that they have accrued but not taken at the termination date, the decision appears to say that accrued holiday does not automatically lapse at the end of the leave year. Therefore, unless the employer can prove that they have informed their employees of their rights and encouraged them to take that leave, then the leave will carry over to the next year. This case means that the 4 weeks of Directive based leave (unlike the additional 1.6 weeks of leave provided for by the WTR) potentially may be carried over in to the next leave year. So whilst the WTR specifically say that no carry over is permitted, they must, if challenged, be interpreted by the Courts in line with European Law as set out above. This therefore potentially changes the position which previously was that leave could only be carried over either by express consent or due to the personal circumstances of the individual such as where they have been too ill to take the leave or due to a period of family related leave. It may be possible however to limit the period for which the leave can be carried over and ideally this should be set out in the contract of employment.
What you should do
Whilst this has not been tested in the UK, we would advise businesses to ensure that at regular intervals throughout the leave year you remind your workers when the leave year ends, the fact that leave cannot be carried over, and perhaps remind them of how much leave they have to take and any limitations that might be imposed by the business on their ability to take that leave. This should be recorded so that there are clear and transparent records that you have exercised your obligation to the employee and therefore should an individual attempt to challenge it; it is unlikely that they would succeed. One way of doing this, would be to send out an email at regular intervals or to post it on the company intranet. If neither of these is feasible for your workplace, then you may want to put up posters and/or ask line managers to remind employees at team meetings or similar. This will put you ahead of the game and reduce the risk should a similar case be brought in the UK.
Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact Kelly Gibson via Kelly.Gibson@tayloremmet.co.uk and 0114 218 4307.
“We have invited an employee to attend a disciplinary hearing and they have asked to have a lawyer present. Can we refuse?”
Workers and employees have the legal right to be accompanied by either a colleague or a trade union representative at a disciplinary or grievance hearing. The workplace does not need to officially recognise a trade union for the worker to be entitled to be accompanied by a trade union representative. Further, the worker does not need to be a member of that union; however, most unions require the worker to be a member before they are entitled to representation. The right to representation is absolute provided that the worker has asked to be accompanied at the meeting by a trade union representative or colleague. This right applies even where you think that their choice of companion is unreasonable and it is not acceptable to impose restrictions on which colleague they can choose.
One thing to be mindful of is the obligation to make reasonable adjustments in respect of disabled employees where it might be appropriate to allow a friend or family member to attend with them if it would remove a substantial disadvantage. Similarly, if English is not the first language of individual it may be appropriate to consider allowing an alternative companion.
In terms of legal representation, there is no general right for the worker to bring a lawyer to a disciplinary hearing. That said, you should always check the contract of employment and staff handbook as it is possible that there may be rights over and above the legal minimum. In limited circumstances, the worker may be able to establish a right to legal representation under human rights legislation on the basis that a failure to allow it would breach the right to a fair trial. However, this will rarely apply to disciplinary hearings as it is only applicable where the outcome of proceedings would have a “substantial influence” on the decision of a regulatory body (or similar), i.e. an organisation with the power to prevent someone from practising their profession.
Where a worker is invited to a disciplinary or grievance hearing and their chosen representative cannot attend they can ask for the hearing to be postponed for up to five working days.
Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact Kelly Gibson at Taylor&Emmet LLP at Kelly.Gibson@tayloremmet.co.uk and 0114 218 4307
On 23 November 2017, the Chancellor of the Exchequer announced his Autumn 2017 budget. Below are the key employment law considerations.
National Living Wage and National Minimum wage rates are due to increase in April 2018. They are due to change as follows:
Proposed April 2018 Rate
25 and above
This is clearly a significant increase as a full time worker earning the National Living Wage will have the equivalent of a £600 pay rise per year and it will therefore be important for employers to budget for this. Further, these increases to youth rates have been the largest in the last 10 years.
There have been some changes to taxation, increasing everyone’s personal allowance to £11,850 from the current £11,500. The higher rate tax threshold will increase from £45,000 to £46,350, meaning only employees earning £46,350 or above will be subject to the higher 40% rate of tax.
Earlier in the year Matthew Taylor published the Taylor Review of Modern Working Practices which recommended various changes to the way employment status is judged particularly for people working in what has rapidly become known as the gig economy. A specific recommendation of the Taylor Review was removing the focus on substitution clauses in consultancy contracts when deciding employment status. Traditionally employers have been able to use substitution clauses to indicate that they intend that an individual is self-employed, removing their liability for the rights associated with worker status (for example, holiday pay). For further discussion on the review, you can visit our blog post on “Employment Status: Taylor Review Update” by following this link:
The budget announces that the government will publish a discussion paper as part of the response to the Taylor Review with the intention of making employment status tests for both employment rights and tax clearer.
“I have employed someone on a part-time basis for the last year and they keep asking me to give them a contract of employment. Am I obliged to do this?”
No individual, regardless of their employment status is entitled to a contract of employment. If however, the individual you employ is considered to be an employee and they have been employed for more than one month, they are entitled to a written statement that confirms their particulars of employment. This will include: their job title, hours of work, the scale or rate of their pay, their holiday entitlement and the method of calculating holiday, the length of notice both you as their employer and the employee is required to give to terminate employment and some other key pieces of information. Some employers choose to include all of this information in a contract to provide more certainty but there is no legal requirement to do this. A written statement is required regardless of whether the employee is full-time, part-time or fixed-term; providing they meet the above requirements.
In the situation you describe, an employee could bring a claim in the Employment Tribunal for your failure to issue them with written particulars of employment. The result may be that a Tribunal awards a declaration which confirms what those terms are, had they been set out as part of a written statement. If, on the other hand, the employee is successful in bringing another, specific claim in the Employment Tribunal against you, such as that they have been unfairly dismissed or that there has been an unlawful deduction from their wages, the employee may be entitled to receive compensation of between 2 to 4 week’s pay, depending on how bad the failure to provide the information is.
Additionally, you should be aware that if you have given a full-time employee a contract and you have not given this employee a contract due to their part-time status, there is a risk of a claim for treating the part-time employee unfavourably due to their part-time status.
Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact us at firstname.lastname@example.org and 0114 218 4307.
“I have worked for my employer for one year but today my boss came in to my office and told me that as the company had lost a big contract, they could no longer afford to employ me. I was told that I could go home immediately and that the company would give me one weeks’ pay. I was not given anything in writing and I feel that this is really unfair. Can I do anything about it?”
Unfortunately, whilst the above scenario does seem unfair, it is not necessarily unlawful. Under the Employment Rights Act 1996, employees only accrue the right not to be unfairly dismissed after two complete years’ service. Prior to accruing two years’ service, employees can be dismissed for any reason and without a reasonable process and it is still likely to be fair unless the reason is discriminatory or comes within a specific list of reasons which could give rise to a claim for automatically unfair dismissal. Those grounds include, having raised a health and safety concern, having blown the whistle about wrongdoings within the company, having gone on jury service, asserting a statutory right or trying to exercise a right to take family related leave.
If an employee is dismissed within that two year period, their employer is required to give them their normal pay and benefits up to the termination date including, if they have accrued holiday that they have not taken, a payment in lieu of that holiday. Unfortunately, where the individual’s length of service is less than two years there is also no right to written reasons for dismissal although in practice some employers will provide this as standard.
If you are dismissed within the first two years of employment, it may still be worth you taking advice if you believe that you have been discriminated against or automatically unfairly dismissed. You do still have rights in respect of your statutory and common law entitlements and should ensure that you are properly paid by your employer. However, the concept of an unfair dismissal does have a specific statutory meaning in law and whilst it seems unfair in common language, it is often not unlawful.
Please note this article should only be considered as guidance and should not be taken as specific legal advice. For further advice on this topic contact Kelly Gibson at Taylor&Emmet LLP at Kelly.Gibson@tayloremmet.co.uk and 0114 218 4307.
I am a self-employed plumber working for a company and have heard that the Pimlico Plumbers are entitled to a big pay out of holiday pay because they are not actually self-employed. As I am a plumber does this mean the same for me?
You will normally only have an entitlement to paid holiday and any subsequent payment (alongside other rights) if you are classed as a ‘worker’ or an ‘employee.’ That means that genuinely self-employed individuals are not entitled to a pay out because of this case. However, whether you are self-employed is not solely based on what you agreed with the Company you work for or what it says in any written document. It is based upon the reality of the relationship between you and the Company taking into account a number of factors. It does not follow that simply because you are a plumber you will have the same rights as Gary Smith.
In essence, the case of Pimlico Plumbers v Smith does not really change the law in this area, it, and other cases, have just put more of a focus on individuals working in the ‘gig economy’; a term used to describe individuals employed on a series of short-term contracts or freelance work as opposed to permanent contracts or those guaranteeing a minimum number of hours per week.
Employment status is ultimately a question of fact and involves a balancing act of assessing factors such as how much control the Company has over you and how integrated you are into the business. For example, in the Uber case the drivers were given a specific route that they had to follow to take their customers to their destination and drivers were required to select their vehicle from a list of acceptable cars which specified the model and colour. Other considerations include who provides the tools to do the work; whether you wear a company uniform or are identified as part of the Company, and whether there is an obligation for you to perform any work that you are offered.
One crucial point that was analysed in the Pimlico Plumbers case is the use of ‘substitution clauses.’ Such clauses enable the individual to substitute themselves with another contractor. Substitution clauses have become prevalent in contracts by companies seeking to establish that their workforce are self-employed in order to avoid liability for holiday pay and other employment related benefits.
These types of clauses can take different forms. The more restrictions there are on the ability to provide a substitute, for example, a requirement that they can only substitute themselves with someone who has been vetted by the company in advance, the more likely it is that the individual is still a worker despite the ability to use a substitute. If however, the vetting is required due to the nature of the job and the individual only needs a specific qualification, for example if the plumber substitute needs to be a qualified plumber then this alone is unlikely to be suggestive that the individual is a worker.
The important thing to remember is that just because a case suggests that someone with a particular job title is classed as a worker, it does not mean that if you have the same job title, you will also be classified as a worker. It depends on various factors that will need to be balanced against each other when looking at the situation as a whole.
Employment status is complex, it can be costly when companies get it wrong and could entitle individuals to additional rights or a payment of monies owed. If you are unsure you should get in touch for specific advice. The Government is currently looking into this area to try and simplify the approach, but until then we must continue to review situations based on their facts.
As a final point, it is important to note that HMRC do not recognise the status of worker and therefore although their decision on your employment status can be one factor in the puzzle it will not be definitive alone.
Please note this article should only be considered guidance and should not be taken as specific legal advice. For further advice on this topic contact Emma Patchett at Taylor&Emmet LLP at Emma.Patchett@tayloremmet.co.uk and 0114 218 4305.
Yes, we might be experiencing some delays in the tribunal service currently, but certainly here in South Yorkshire, to call them “gridlocked” would be a little overdramatic.
So what is causing the delays?
The problems are rooted in the Supreme Court’s decision to abolish fees for employment tribunals last year. Whilst this was great news for claimants, the rapid increase in cases was not fully anticipated.
When fees were introduced in 2013, the average drop in claims across the UK was 65%. The resulting empty courtrooms meant staffing and judicial resources were managed downwards, in some cases through natural wastage, in response to this reduced demand.
The challenge now is for the tribunal service to react quickly and efficiently to its growing workload, whilst still processing current cases. Simply put, additional staff are required as soon as possible, although I suspect budget and target restrictions imposed previously may be restrictive.
Increasingly, we are moving towards a situation where future claims will be handled electronically and the tribunal service may also have to consider what impact this ongoing strain on resources will have on its ability to embrace new technology and process these changes efficiently.
How can T&E help?
Employment solicitors, like me, see the negative impact tribunal delays have on clients and we are doing all we can to manage expectations, by limiting legal costs and alleviating the frustrations caused by having to wait six months or more to have your say.
At the outset, or in the early stages of a case, we can also explore the benefits and likelihood of seeking resolution before employment disputes reach a tribunal. If this can be achieved, there are obvious advantages for both sides in terms of avoiding lengthy, costly and stressful proceedings.
For an early discussion about your options, the practicalities of settling employment disputes, or to discuss a potential claim in more detail, don’t hesitate to contact me on (0114) 218 4000, email email@example.com or follow us on Twitter, @tayloremmet.
Claims of discrimination by perception are unusual and therefore it is useful to look in a little more detail at this type of claim if they get to the Employment Appeal Tribunal (EAT) to get a better understanding of how the Tribunal’s deal with the issues created by this type of claim in practice. The recent case of Coffey v Norfolk Constabulary gives us just such an opportunity.
Mrs Coffey was a serving police officer working on the front line for Wiltshire Constabulary. She had a degree of hearing loss but this had no adverse effect on her ability to perform her role. Mrs Coffey applied for a transfer to Norfolk Constabulary, disclosed her hearing loss and confirming that reasonable adjustments were not needed. Mrs Coffey was informed her application had been successful, subject to a pre-employment health assessment.
Medical standards are set by the Home Office for police recruitment. In guidance accompanying these standards a practical test for hearing loss is required and it is also confirmed that individuals should be considered on a case by case basis. Even where both ears were below standard the guidance only said the candidate was “unlikely to be suitable.”
The medical adviser for Norfolk Constabulary highlighted that Mrs Coffey’s hearing was “just outside the standards for recruitment strictly speaking” but that she had been performing her role at Wiltshire Constabulary without any undue problems. Mrs Coffey went on to pass a practical test but despite this Norfolk Constabulary refused her application citing her hearing as being below the required standard.
Employment Tribunal Decision
Mrs Coffey’s argument was not that she was disabled. A component of the definition of “disability” is that the impairment must have a substantial adverse effect on the individual’s day to day activities. Mrs Coffey recognised that the reduction in her ability to hear was not significant enough for her to satisfy the required definition of disabled, which was clearly evidenced by her work at Wiltshire Constabulary. Instead Mrs Coffey alleged that Norfolk Constabulary directly discriminated against her because they perceived that her hearing loss was a disability and had treated her less favourably by rejecting her application based on that perception.
The Equality Act 2010 confirms that direct discrimination occurs where:
“A person (A) discriminates against another (B) if, because of a protected characteristic, A treats B less favourably than A treats or would treat others.”
As you can see there is no requirement for B to actually possess the protected characteristic (in this case disability) and therefore a person’s perception of another as having a disability can amount to direct discrimination. This includes job applicants such as the Claimant in this case, not just employees or workers .
The Employment Tribunal concluded that Norfolk Constabulary had discriminated against Mrs Coffey on the basis that they had perceived her to have a disability. The Tribunal concluded the only inference that could be drawn from the decision to reject Mrs Coffey’s application was the perception of Mrs Coffey’s disability and not a failure to meet required standard, otherwise Wiltshire Constabulary would be in breach of the Home Office guidance by employing Mrs Coffey.
Norfolk Constabulary appealed to the EAT denying that they had discriminated against Mrs Coffey by highlighting that they were aware Mrs Coffey’s hearing had not put her at a substantial disadvantage and therefore they could not have perceived her to be disabled.
The EAT rejected this argument on the basis of supplementary provisions in the Equality Act which states that the definition of disabled can be satisfied where the condition is progressive and therefore likely to have a substantial adverse effect in the future.
Norfolk Constabulary had cited in an internal memo that although Mrs Coffey was able to perform her role now, this was likely to worsen over time. The EAT found that this memo was enough to satisfy the required test for perceived disability when the supplemental provisions in the Equality Act were taken into account.
This case is an important reminder that an individual does not need to have a protected characteristic to bring a discrimination claim because claims for discrimination can be based on the perception of a protected characteristic. It is also noteworthy that the Claimant in this case never worked for the Respondent because the Equality Act covers not only employees and workers but job applicants as well.