News round up
Welcome to our July newsletter.
We were delighted to host our annual Mock Employment Tribunal recently and to see so many familiar faced from the Clarion community enjoy the theatre of the Hearing unfold.
We found that a lot of our HR professionals thought that the experience would be particularly useful for their people managers and help them understand why it is important to manage their teams effectively.
As a result of your request, we are proposing to re-run the same event on 23 November. We hope this will enable members of our network who were initially unable to join us to share the experience.
If you were unable to make the event last week, or if you have any managers or other colleagues who you think would benefit from attending a Mock Employment Tribunal, you can register an interest in booking a place for the Autumn event by emailing: firstname.lastname@example.org
Our next event will be on Tuesday 26 September (8.30am registration and 10.30am finish) and will be a useful update of development in employment law. We’ll also be identifying the people issues and trends including the challenges of the ‘on demand’ or Gig economy. We’ll be emailing full details shortly but if you are interested do keep the date free.
In the meantime, we hope you have a great summer. We’ll be taking a break from our bulletins next month, but will be back with all the latest employment law news and developments in September. If you have any queries in the interim, as ever, please don’t hesitate to contact your Clarion Employment Team.
If you would like to receive our Employment Law bulletin via email, please contact Laura Courbet at email@example.com
More focus on holiday pay
In recent times we have seen a number of rulings relating to the calculation of holiday pay. If someone who is on a fixed salary goes on holiday the pay that they receive whilst they are taking annual leave is their usual salary. This is very straightforward. However, if someone has variable pay (maybe they get bonuses, commission, overtime, other financial allowances etc) then their pay during annual leave is less clear.
Recent cases have shown us that commission, non-guaranteed overtime (where the business doesn’t guarantee overtime but when it does need overtime, the employee must work it) and other financial allowances should be included when calculating the holiday pay. A recent case has added to that approach.
In Flowers and others v East of England Ambulance Trust  the case concerned Ambulance Drivers. If they are partway through a call at the time that their shift ends they work through to the end of the call. This is referred to as a ‘shift over run’ and they get paid for this extra time. In addition, they can volunteer to work extra shifts, in accordance with demand, again getting paid for the extra work.
The Employment Tribunal ruled that the payment for shift over runs must be included when calculating their holiday pay. This is because employees must receive holiday pay at a rate that represents their normal, contractual pay. In the case of the Ambulance Drivers, this included the over run payments - since shift over runs were not voluntary and had to be worked when needed.
In contrast, the Tribunal held that the other extra shifts were genuinely voluntary and not worked regularly by the Drivers. Therefore, in this particular case, there was no requirement to factor payments for voluntary extra shifts into holiday pay.
- If you have any employees who receive variable pay ensure that you calculate an average of their earnings prior to their annual leave when calculating their holiday pay.
- There is no definitive guidance on how the average earnings should be calculated, as the circumstances of how employees are paid can be different from business to business. However, taking an average of earnings in the 12 weeks prior to the holiday would seem to be a reasonable approach and the approach most frequently taken in light of recent holiday pay cases.
- If you are not sure whether to include an element of pay in that calculation contact us for advice. As a general rule, it is most likely that you will need to include it.
Important decision related to holiday pay
Another important topic has been addressed in the case of King v The Sash Window Workshop Ltd . The individual concerned was treated as self-employed. He was given the opportunity to become an employee, but he declined this. As he was deemed to be self-employed he was not given paid annual leave. If he wanted to take any time off, this was unpaid.
The Employment Tribunal decided that he was actually a worker, which meant he was entitled to paid annual leave. The question, therefore, was about how much back-pay he could claim with regard to unpaid annual leave.
There is a statutory limit on the amount of holiday back-pay that can be claimed, capping claims at two years’ worth of underpayments. Also, a claim has to be brought within three months of the last occurrence of leave not being paid. So, if there had been a gap of more than three months between periods of leave the Claimant in this case would have lost the ongoing right to claim unpaid leave.
The case has been referred to the Court of Justice of the European Union. In advance of the ruling we have had the opinion of the Advocate General. The Court of Justice does not have to follow this opinion, but usually does.
The Advocate General has given the opinion that the limit on claiming unpaid leave does not apply if the worker has been restricted or deterred from taking the leave. Such a situation can be distinguished from a case where a worker is given leave but is not paid correctly.
- Not paying the leave is a deterrent to taking it, and hence the Advocate General gave an opinion that there should be no limit on the length of time that the amount of back-pay that can be claimed for, and the 3-month time limit on bringing a claim will only start once leave is permitted but not paid or on termination.
- We will provide an update when the Court of Justice of the European Union confirms its decision.
- If you have anyone working for you on a self-employed basis do check carefully that they are genuinely self-employed, and not a worker. If you are at all unsure please contact us for advice.
- If you have been treating someone as self-employed and not giving paid leave, and you now conclude they are a worker, you are likely to have to reach some form of settlement with the individual. Seek our advice first.
£19,000 awarded to harassed employee
Employees should not receive any unfair treatment in the workplace relating to their disability or their race. A recent case has shown us how it can be difficult to police this, and how it can be difficult to manage if an employee regularly makes complaints.
In Hoyte v Jaguar Land Rover Ltd  an employee of Afro-Caribbean ethnic origin made various claims, including harassment due to race and disability. The company had put up a number of motivational posters including one which related to whistleblowing. The slogan on the poster was ‘Don’t let one bad apple spoil the bunch’. The employee alleged that a colleague had pointed out this poster to him, substituting the word ‘bad’ for ‘black’. He also said that he was called a number of names relating to his colour.
In addition, the Claimant suffered from irritable bowel syndrome (which was the nature of his disability) and this meant that he had to go to the toilet quite frequently. He said that he suffered a lot of teasing because of this. The Tribunal found that he was required to telephone his manager in advance every time he wanted to go to the toilet. All workers were required to make managers aware of their whereabouts (including toilet breaks) but this was enforced more rigorously for the Claimant, subjecting him to a higher level of scrutiny and suspicion, and hence indignity, than his colleagues.
His employer commented that he was a regular complainant and that he was difficult to manage.
The Claimant was ultimately dismissed due to his poor attendance. The Employment Tribunal found that the dismissal was fair, but that he had suffered harassment on the grounds of race and disability. He was awarded just over £19,000 in compensation.
In this case it does seem that this employee was someone who the employer was struggling to manage. However, that does not mean that the harassment was acceptable.
- However difficult an employee might be you must always take allegations of harassment seriously and investigate them.
- Report the outcomes of your investigation to the employee. Explain any action that you are going to take. Make it clear that this has brought the issue to an end. If the employee does complain about the same thing again, point out that it has already been investigated and resolved.
- You do not have to investigate the same issue time and time again, but always check very carefully whether there is any new evidence which needs to be considered and addressed.
Restrictive covenant upheld
It is possible to put a restrictive covenant in a contract of employment, to protect your organisation once an employee leaves. The covenant must be protecting something specific – you cannot just put in place a covenant to stop an employee doing any work. However, specific and well-drafted covenants with a reasonable scope and duration may still be used and enforced.
In Egon Zehnder Ltd v Tillman  the individual concerned was a senior employee in an executive search and selection company. There was a restrictive covenant in her contract of employment which stopped her from working for a competitor for 6 months after she left the company. In addition, there was a covenant stopping her from enticing employees of the company to leave with her. She resigned, to go and work for a competitor. Her company successfully sought an injunction to stop her going to the competitor for the full 6 months.
It was not possible to stop her from ever going to a competitor, but that 6 month gap meant that she would have less recent knowledge about work the company was doing, and also that her relationship with customers would have lapsed for 6 months – valuable protection for the company. The period of 6 months was found to be reasonable in the specific circumstances.
- Consider if there are any employees whose knowledge could damage your company if they resigned and went to a competitor.
- If there are any such employees, review the contractual protection that you currently have in place.
- Ensure that you check whether covenants need updating when you promote employees.
- Seek our advice about the wording of a restrictive covenant. For it to be enforceable it must be worded very carefully, and it must be protecting something specific in your organisation and last only for a period that is necessary for the business to be protected.
Approach to Shared Parental Pay was Discriminatory
An employee can choose to end their Statutory Maternity/Adoption Leave early, and then share the remainder of their leave with their partner in the form of Shared Parental Leave. Any employee who takes Shared Parental Leave is entitled to Shared Parental Pay, which is paid for 39 weeks (in the same way as Statutory Maternity or Adoption Pay).
In Ali v Capita Customer Management  the employee’s wife ended her Statutory Maternity Leave early, and Ali (her husband) then started to take Shared Parental Leave. If Ali had been a woman and had taken Statutory Maternity Leave in his organisation he would have received 14 weeks at full pay – an enhanced level above Statutory Maternity Pay. However, he was told that his Shared Parental Pay would all be at the statutory rates.
He successfully claimed sex discrimination, on the basis that Mr Ali did not receive full pay for 14 weeks because of his sex.
- If you pay an enhanced rate for maternity or adoption pay make sure that you are paying the same for any employee taking Shared Parental Leave.
- If there is anything else that you do for an employee on maternity or adoption leave which is preferential do the same for those taking Shared Parental Leave.
Pay protection was discriminatory
A number of organisations have had to take measures to address historical situations where the approach to pay has not been equal for men and women. It is certainly true that these situations need addressing, but it is important to ensure that the action taken is not discriminatory in itself.
In Glasgow City Council v Unison  the Council had identified that its pay scales were discriminatory against women and had put in place measures to address this. This meant that the pay scales were all reviewed, and as a result a number of employees (predominantly men) would, over time, have a reduction in their pay. To cushion this a three year ‘pay protection’ period was put in place, during which the men would not receive any reduction in their pay. The women argued that the pay protection itself was discriminatory because primarily men would benefit from it. They were successful in their argument.
- If you are concerned that any aspect of your approach to reward is potentially discriminatory against men or women you must address it.
- Before putting any measures in place discuss this with us, to ensure your solution is not going to give rise to different problems.
Employee treated unfairly, even when disciplinary action was not appropriate
An interesting case reminds us of the importance of treating an employee fairly when the disciplinary process has been concluded.
In Dickenson v The Governing Body of Easington Lane Primary School  the employee concerned was the School’s Business Manager. She had worked at the school for 21 years, and had 15 staff reporting to her. She managed a budget of £1.2m, and was concerned that a shortfall in the funding might mean that redundancies would occur. She told a colleague about her concerns and was suspended for doing this. Her employer said that she should have raised her concerns with senior management only. At a disciplinary meeting it was decided no disciplinary action was appropriate, and she returned to work.
However, when she returned she found that she had lost her management role, was required to work in the general office on basic work, and that staff who had previously reported to her now reported to someone else.
She resigned and successfully claimed constructive dismissal, arguing that the implied term of mutual trust and confidence had been breached.
- If you ask an employee to attend a disciplinary meeting and conclude that no action should be taken, ensure that no action is taken. An employee must not be treated in a way that is detrimental if it has been concluded that no action is appropriate.
Unacceptable social media post
There have been a number of cases which have questioned whether it is fair to dismiss when an employee posts something unacceptable on social media. A recent case has shown us again that dismissal can be fair if an employee posts something which brings the company into disrepute.
In Plant v API Microelectronics Ltd  the employee had worked for the company for 17 years with no problems. The company had a social media policy which clearly stated that no comments must be made on social media which could bring the company into disrepute.
The employees were told that they were going to move premises, and she posted on Facebook, ‘PMSL (p***ing myself laughing) b****y place, I need to hurry up and sue them’. Her Facebook page clearly identified her employer, and the post clearly related to the company, and so she was dismissed for bringing the company into disrepute.
This was a fair dismissal. There was a policy which set out what was and was not acceptable, and she had breached that policy.
- If you have not already done so, put in place a social media policy so that employees clearly understand what is and is not acceptable.
- If you are not sure whether a post comes into the category of bringing the company into disrepute seek our advice.