eBrief: Gordons Legal Employment Update – 13 October 2016

Not so much this week but the key developments are reported below:

Results-based commission confirmed as part of holiday pay

The Court of Appeal has confirmed that results-based commission is part of holiday pay in the case of Lock v British Gas. The case involved a complex interpretation of the Working Time Directive 1998 (WTD) to bring it into line with European legislation stating that employees should be paid ‘normal remuneration’ whilst on holiday.

Mr Lock was an energy trader for British Gas – persuading customers to enter into contracts for energy. The variable commission from such sales was responsible for around 60% of his weekly pay. Therefore, when taking holiday (and only being paid his basic wage) Mr Lock’s normal remuneration was significantly reduced. He therefore took British Gas to an employment tribunal claiming back pay for loss of earnings whilst on holiday.

The case has a lengthy and embattled history; starting in the employment tribunal before making its way up to the EAT and the Court of Appeal with reference to the ECJ itself. All of the UK courts considered the underlying thrust of the WTD legislation when deciding to supplement the statute with new provision 16(3)(e). This provision allows the basis of the ECJ ruling to be judicially ‘interpreted’ into UK law.

As a consequence, all staff who earn commission will be entitled to holiday pay that would reflect what they would have earned had they not taken the holiday. Although such an interpretation prevents conflict with the EU Directive that the WTD is based upon, there are still issues that need clarification:

• Which period is to be used in order to calculate the new holiday pay? How long is this reference period? Commentators have suggested 12 weeks but the judge opted to decide the reference period on a case-by-case basis.
• What is the situation with other pay entitlements? Bonuses were not included in the judgment so it remains a grey area whether employers should include this in their holiday pay.

This case, therefore, represents a fairly narrow confirmation of holiday pay entitlement. Nonetheless, Unison (Trade Union) has declared the decision a ‘legal victory’ for Mr Lock and themselves. However, the case may yet drag on as British Gas has applied for permission to appeal the decision to the Supreme Court.

Comment: The decision will have a wide effect on both employers and employees in respect of how much to pay their employees for holiday pay. British Gas alone are said to be subject to 1,000 similar claims from their workforce. Great care will need to be exercised when determining an employee’s ‘normal remuneration’ for the purposes of calculating holiday pay. An early proactive and communicative approach to this ruling may be in an employer’s best interests although a decision on the Supreme Court application may be worth waiting for.

If you would like further information on holiday pay and surrounding issues which may affect you or your organisation it is not too late to sign up for our Employment seminar on Tuesday 18 October 2016 where it will be directly addressed in one of our key-note presentations. If you are interested in this event, please contact Nemi Alexis, Marketing Administrator, on 01274 202 145 or email nemi.alexis@gordonsllp.com.

The importance for employers to communicate a dismissal

In the case of Sandle v Adecco UKEAT/0028/16/JOJ, the Employment Appeal Tribunal (EAT) held that the employer’s unequivocal intention to dismiss still had to be communicated to the employee. The Claimant was an agency worker employed by the Respondent but worked on assignment to another entity.  Upon conclusion of the assignment, the Respondent did not take steps to find other work for the Claimant and assumed that she was not interested in further agency work. No contact was made by either party, but the Claimant subsequently brought a claim of unfair dismissal.

On appeal, the EAT held that the Employment Tribunal had not erred in asking whether the Claimant had established that the Respondent has communicated an unequivocal intention to treat the contract of employment as at an end. It concluded that she had not been dismissed and her employment was still continuing at the time she brought her claim. The EAT dismissed her appeal.

Comment: Although, the Employment Tribunal dismissed the claim, this case serves as a useful reminder that dismissal needs to be expressly communicated to an employee. Failure to do so could lead to non-working employees accruing holiday pay and other employment benefits and protections without the employer being aware.

Breakthrough for breastfeeding mothers

In the case of Cynthia McFarlane and Sara Ambacher v EasyJet Airline Company Limited 1401496/2015 & 3401933/2015, the Claimants brought claims under ss19 and 30 of the EA 2010 for indirect sex discrimination and contravention of ss66 – 70 of the ERA 1996 which sets out provisions relating to suspension on grounds of maternity, which encompasses breastfeeding.

On recommendations of both their GPs, the Claimants separately requested rostered hours to be restricted to eight hours per day to allow them to continue to breastfeed. The requests were refused and the Claimants separately raised a grievance.

On Ms McFarlane’s return from maternity leave she continued to work as part of cabin crew, but did not work shifts above eight hours and during those shifts she was recorded as being on unpaid leave. EasyJet then offered the Claimants ground duties for a period of six months as a result of them submitting these claims to ACAS. At the expiration of the six month period, Ms McFarlane returned to full flying duties as she had ceased breastfeeding. However, Ms Ambacher was still breastfeeding and requested an extension of ground duties until the tribunal hearing.  EasyJet refused to alter the working hours and stated they do not have bespoke rosters for staff, but the main reason was on health and safety grounds.

The Employment Tribunal held that the claims were successful under both heads of claim. In relation to the ERA 1996 claims, the Employment Tribunal found: that EasyJet had not carried out individual risk assessments when there was a material risk to the Claimants health and safety; they were unfit to work over eight hours and as they were provided with no alternative work they were deemed to be suspended.  The Employment Tribunal went on to find that the Claimants should have been offered ground duties at an earlier stage and if these duties were not available they were entitled to be suspended on full pay.

In relation to the Equality Act claims, the Employment Tribunal did not accept that there was anything preventing EasyJet from implementing a bespoke roster. In fact, EasyJet’s reasoning for refusing to accommodate the eight hours rostering request on health and safety grounds was contradictory. The Employment Tribunal held that the business needs of EasyJet did not outweigh the impact of the PCPs on the protected group and on the Claimants in particular.

Comment: This breaking case acts as a reminder to all employers of their requirement, under the Workplace (Health, Safety and Welfare) Regulations 1992, to provide suitable facilities for breastfeeding mothers to express at work. It is also vital that employers accommodate breastfeeding mothers and immediately carry out risk assessments on their return to work.

Employers should also consider changing the working hours to enable expressing if it is unable to provide suitable facilities. If this is not possible then the breastfeeding mother is likely to be deemed unfit for work and she has the right to be offered an alternative role. In the alternative and no such role exists, or it cannot be created, then the breastfeeding mother has a right to suspension on normal pay.

Employment law intentions post-Conservative Party conference

Employment law was a topic of discussion at the Conservative Party conference with the Prime Minister directly addressing concerns over post-Brexit changes. According to a guarantee from Theresa May, employment law rights will only be enhanced, rather than weakened, following Britain’s political split from the continent:

“Existing workers’ legal rights will continue to be guaranteed in law – and they will be guaranteed as long as I am Prime Minister. We’re going to see workers’ rights not eroded, and not just protected, but enhanced under this Government.”

The recently commissioned independent review, to be led by Matthew Taylor (Tony Blair’s former policy expert), may shed some light on the areas we can expect to see ‘enhanced’.

Meanwhile, the Secretary of State for the Home Department, Amber Rudd, announced plans to force firms to publicly reveal the number of foreign workers on their books. It appears the underlying intention of the plan is to limit net migration into the UK. The Government has since received backlash over the proposals. Peter Cheese, chief executive of CIPD, stated that “a Government-mandated list designed to name and shame organisation organisations is entirely inappropriate and sends the wrong message about tackling a complex issue of skills shortages across the workforce.” In a U-turn of sorts, the Government has now indicated that any figures will be kept private and utilised for the purpose of filling gaps in the labour market.

Comment: It appears, based on the Prime Minister’s comments, that the world of employment law will not witness drastic changes post-Brexit. UK employment law already goes further than most existing European employment laws so it will be interesting to see how the Government will look to further enhance what is already on offer and whether the recently commissioned review will lead to recommendations for specific enhancements and, if so, whether ‘gig economy’ employees will be beneficiaries

If you require any further information on the above developments please do not hesitate to get in contact with a member of the Employment Team, on the following number 0113 227 0100.