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Employment Law Bulletin April 2015


We hope you are well and enjoyed the holidays.

There are only a few places left on our forthcoming seminar on Tuesday 21 April which covers milestone cases which have shaped employment law. It will provide an overview of the some of the key areas of employment law, which would be useful for HR professionals and managers.

It's also a great opportunity for you to meet or catch up with the Clarion team. We'd be delighted if you can make it and hope that in the meantime our April bulletin is helpful in bringing you up to date.

Sarah Tahamtani



Changes to statutory rates

Please note the following changes to statutory rates:

                                                                April '14        April '15     Date of change

Rates of Statutory Maternity/
Adoption/ Paternity Pay per week 
        £138.18          £139.46            5 April 2015

Statutory Sick Pay per week                   £86.70           £87.55             5 April 2015

Statutory Weekly Pay *                              £460              £475              6 April 2015

Maximum Compensatory Award **         £76,574          £78,335          6 April 2015

* This is used, for example, when calculating Statutory Redundancy Pay

** The maximum compensatory award that can be given in an unfair dismissal or the employee’s annual salary – whichever is lower.

Changes to family legislation:  

Remember also that Shared Parental Leave can be taken by all those with babies due or children placed for adoption.

Statutory Adoption Pay will be brought in line with Statutory Maternity Pay, and no qualifying period for taking Statutory Adoption Leave will be required.

Parental Leave can be taken in the first 18 years of a child’s life (instead of the first 5).

New National Minimum Wage Rates

The government has now announced the new rates for the National Minimum Wage (NMW), which will take effect from 1 October 2015. There are some significant rises:

                                                Current             1 October '15

21 years +                                  £6.50                      £6.70

18-20 years                                £5.13                      £5.30

16-17 years                                £3.87                      £3.79

Apprentice rate                         £2.73                       £3.30

In preparation for these changes you might find it useful to look at all your rates of pay, particularly those at the lower end of your pay scales. If you do pay some jobs at the NMW you need to consider whether you are also going to need to raise other rates of pay by a similar amount, to distinguish between the different jobs. It would also be a good time to think about equal pay.

Do you have some jobs that are predominantly carried out by men, and others that are predominantly carried out by women? Is there a significant difference in pay between the two? If so, can you justify that difference? If you cannot you could face an equal pay claim in the Employment Tribunal.

Compulsory Pay Audits

Having in mind the above issues, a new measure has been added to the Small Business, Enterprise and Employment Bill which will require businesses with more than 250 employees to publish information about the difference in average pay between male and female employees. Not complying with this requirement will result in a fine of up to £5,000.

It is expected that the requirement will be to publish the difference between average basic pay and total earnings of men and women by grade and job type, and also to report on specific elements of pay such as bonuses. The details are not finalised, and it is likely to be at least 12 months before this becomes law.

• Although this is not law yet, if you employ more than 250 employees it is advised that you carry out a pay audit in the near future. If this identifies any issues address them now, rather than waiting until you are required to do an audit and publish the outcomes.


National Minimum Wage and Time Asleep

The Department for Business, Innovation and Skills (BIS) has issued new guidance on when an employee is working (and hence must be paid the National Minimum Wage) if the employee is allowed to be asleep at work.

The guidance states that an employee will be working if there is a statutory requirement to be present at the workplace, or if the employee would be disciplined for leaving the workplace.

The examples given are firstly of an employee who works in a care home and is required to sleep overnight on the premises because the home has a statutory duty to have a member of staff present. The employee is not allowed to leave the premises, and would be subject to disciplinary action if s/he did leave the premises. This employee will be working, even if his/her sleep is not interrupted.

The second example is of an employee who lives above a pub. The employee is required to sleep on the premises to, for example, reduce the likelihood of a burglary. However, the employee can come and go as s/he pleases. This employee would not be working.

The document from BIS can be accessed at:  https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/409995/bis-15-169-calculating-the-minimum-wage.pdf.

• If you have any employees who are required to sleep on your premises review whether or not they should be paid the National Minimum Wage


Holiday pay should include commission

As you maybe aware from our bulletin, a further decision relating to the calculation of holiday pay has been given in the case of Lock v British Gas [2015]. Lock was a salesman who received a basic salary plus commission which was paid according to the sales he achieved. When he took annual leave he did not earn commission, and was only paid his basic salary. He brought a claim, arguing that his holiday pay should have included an amount relating to the commission he typically earned. He has won this argument.

If an employee earns a variable amount of pay you should calculate the payment that the employee receives whilst on annual leave by taking an average of the last 12 weeks’ earnings. As a result of this ruling you must include commission in this calculation.

• Review the way that you are calculating holiday pay, and ensure that you are not excluding commission payments from the calculations.


Enforced Subject Areas

Since 10 March 2015 enforced subject access has become illegal. This is when an employer asks an existing employee, or a job applicant, to seek a copy of their criminal record. This can be done by the individual using a subject access request under the Data Protection Act 1998. The individual can contact the police, or other relevant body, and ask for a copy of the record and then provide it to their employer.

For some time the Information Commissioner has advised against this approach because the report that is received will reveal all criminal convictions, including those that are spent (i.e. sufficient time has passed since the date of conviction meaning that the individual is no longer required to reveal the conviction).

It is now a criminal offence to use this approach, resulting in an unlimited fine in England Wales and in Scotland the fine will be unlimited it heard under solemn procedure, and limited to £10,000 otherwise. 

• If you have been using enforced subject access stop now – and make sure that all your managers understand that this can no longer be used.

• If you need to carry out criminal records checks use the Disclosure and Barring Service


What is a reasonable investigation?

Before dismissing an employee it is always essential to carry out an investigation to determine exactly what has happened. The requirement is for the investigation to be ‘reasonable’, which is clearly a very subjective word. What might it mean?

In Shrestha v Genesis Housing Association Ltd [2015] the employee was a Support Worker who was required to visit clients in their homes – clearly meaning that the job involved travel. His travel expenses were reviewed by comparing the claims he had made with the journey length suggested by the AA. There were significant discrepancies, with one claim for a journey of 197 miles comparing with the AA suggested journey length of 99 miles. The employee said that the additional mileage had occurred because of roadworks, difficulties in parking and similar problems. However, the employer did not accept that the differences could be as significant as they were, and he was dismissed for gross misconduct (namely fraud).

The employee argued that the dismissal was unfair because the investigation was unreasonable. The employer had only reviewed a sample of journeys, rather than looking at them all. This argument was rejected by the Court of Appeal and the dismissal was found to be fair. It was not reasonable to expect that an employer would examine every individual journey, it was sufficient to have sampled them and to have found a significant number of discrepancies.

Remember, that dismissal is dealt with under civil law. This means that there is a need to have concluded, on the balance of probabilities, that an employee did what is alleged. This is lower than the requirement in criminal law, where there is a need to show that it is beyond all reasonable doubt that the individual did as alleged.

• When a possible situation of misconduct is reported to you start by identifying what you need to find out in the investigation.

• Make all reasonable efforts to gather the information that you have identified.

• If it is not possible to gather all the information determine whether, on the balance of probabilities, you can reasonably conclude that the employee did as alleged.


Age Discrimination and Variation of Contract

If there is a need to vary a contract of employment you should always start by consulting with the employees affected, with the aim of reaching agreement over the changes. If agreement cannot be reached, and there is a strong business reason for making the proposed changes, then the changes could be forced (although employees might resign and claim constructive dismissal) or the employees could be dismissed and offered re-engagement on the new terms (although employees might claim unfair dismissal).

As well as ensuring that the variation is carried out correctly there is a need to think about the implications of the change. In Braithwaite & Ors v HCL Insurance BPO Services Ltd; Edie & Ors v HCL Insurance BPO Services Ltd [2015] an employer was accused of age discrimination due to the variations made to contracts of employment.

The employer was experiencing financial difficulties and as part of the cost cutting reduced some benefits, including enhanced annual leave, private medical insurance and the length of sick pay. The entitlement to all of these benefits had increased with length of service, so older employees were affected most as they were likely to have longer service. They claimed that the changes amounted to indirect age discrimination.

Their claim failed. Although the changes to the benefits adversely affected older employees it was found that it was justifiable because the need to cut costs meant that the approach that was taken was reasonable.

• If you need to vary a contract always ensure that you start by consulting with the employees who are affected.

• Before going ahead with any change think about any possibility that the actions could be seen as discriminatory. If you are not sure, contact us for advice.


Keeping in Touch with Absent Employees

If an employee is absent for any length of time, whether the absence is due to sickness, maternity leave or any other reason, you must ensure that the employee is informed about any important news.

In Chawla v Hewlett Packard Ltd [2015] an employee was absent on a long term basis due to stress. To reduce the possibility of hackers or any other unwanted activity the company policy was to suspend email and intranet access for an employee who was absent for a lengthy period of time. Due to the lack of access the employee missed important information about joining a share purchase plan. He successfully argued that this amounted to disability discrimination.

In this situation the employer should have made reasonable adjustments to ensure that the employee was kept aware of important announcements. This did not necessarily mean that his email and intranet access had to be kept, but if it was to be suspended some alternative approach had to be put in place.

• Review the approach that you take to keeping in touch with absent employees. Consider whether it would be useful to send them a monthly update on anything that has happened in the company, and any important personnel issues.


Employee Dismissed for Breach of Contract

If an employee breaches their contract they can be dismissed, even if they are already working their notice period. In Williams v Leeds United Football Club [2015] the employee was under notice of redundancy, and was working his notice period. Whilst the notice period was still being worked the employer discovered that the employee had sent pornographic and obscene emails to two male friends who did not work for the company, and a junior female colleague. The employer determined that this amounted to gross misconduct, and hence the employee’s contract was terminated without him completing his notice period.

The employee argued, unsuccessfully, that this amounted to wrongful dismissal (ie that he had not been paid his correct notice period).

Once it had been identified that the behaviour of the employee amounted to gross misconduct it was acceptable to dismiss the employee without allowing him to work the full notice period. The employer had carried out a reasonable investigation, and had followed the Acas Code of Practice: Disciplinary and Grievance Procedures when managing the dismissal.

• If an employee’s actions amount to gross misconduct the employee can be dismissed without notice, but you must ensure that you have followed the Acas Code of Practice: Disciplinary and Grievance Procedures when dismissing.

• Specifically, you must have allowed the employee to put his/her side of the story, and you must allow the employee an opportunity to appeal against the dismissal.