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CJEU judgment opens door to backdated claims for unpaid holiday

A recent decision by the CJEU has expanded the scope of the right to carry over holidays to situation where workers are stopped from taking their leave for reasons other than sickness absence. Here’s a look at the case, and why employers need to pay attention.

 The background

Between 1999 – 2012 Mr King Worked for Sash Windows as a salesperson on a self-employed basis, and was paid on a commission only basis. Because he was self-employed, his contact did not state if he should receive annual leave.

In 2009, Sash Windows offered Mr King an employment contract, but he decided to remain self-employed. Mr King took his full annual leave entitlement on some years, but he did not request all of it in a number of other years. The tribunals have accepted that Mr King would have taken more holiday if he had been paid for his leave.

When Mr King reached 65, Sash Windows terminated his contract. Subsequently, Mr King brought claims for age discrimination and unpaid holiday pay under the WTR 1998 to the employment tribunal. The employment tribunal accepted these claims, stating that both the company and Mr King had wrongly believed that he was self-employed when he was, in fact, a worker.

The case

Mr King claimed that he was entitled to holiday pay relating to:

  1. paid leave accrued but untaken during Mr King’s final (incomplete) leave year
  2. holiday which Mr King actually took during the previous 13 years with Sash Windows but was not paid
  3. leave which Mr King was entitled to by virtue of being a worker whilst working with Sash Windows but had not actually taken

With respect to his claim for discrimination and paid holidays, Mr King succeeded in the employment tribunal. The third point above, however, was appealed to the EAT and then the Court of Appeal, with the court of Appeal referring the case to the CJEU.

What this means for employers

The decision is particularly topical given the recent high-profile worker status cases involving Uber and Deliveroo and others. Whilst the CJEU’s decision is not binding on UK employers at this stage, businesses with individuals on contracts without paid holiday will need to keep an eye on this case’s outcome as it could result in further holiday pay being due.

We’ll keep you updated as the holiday pay law moves on. In the meantime, you can click here to contact Alison for more expert advice.

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Termination: make sure you follow what the contract says you need to do

In a previous article, we took a look at the importance of being honest when terminating an employee’s contract. It’s never going to be quick and easy, so it’s essential that employers comply with the contractual process of termination. The recent decision in Interserve Construction Ltd v Hitachi Zosen Inova AG shows just how important it is to understand and comply with this process for the termination of a construction contract.

The background

The case concerns the construction of an energy from waste plant in Hartlebury. In July 2015, the main EPC contractor sought to terminate its sub-contract with its subcontractor. The EPC contractor had issued a letter and made arrangements to remove them from site with immediate effect.

Whilst the sub-contractor could have justified immediate termination on a number of grounds, including those relied on by the EPC contractor, the contract stated that the EPC contractor:

“…may (at its absolute discretion) notify the Contractor of the default and if the Contractor fails to commence and diligently pursue the rectification of the default within a period of seven (7) Days… terminate the employment of the Contractor under the Contract.”

It was this that the sub-contractor used to argue that the contract hadn’t been terminated in the correct way, because the EPC contractor had not issued a notice and allowed a seven-day period for rectification of the default.

The case

 The EPC contractor tried to rely on reference to its “absolute discretion” under the clause, and argued that it was exercising this discretion in not allowing the seven days for rectification. But the court disagreed, holding that the notice and seven-day period for rectification was not optional but was a condition precedent. This meant that it had to be complied with prior to the EPC contractor having the right to terminate.

A termination event may have occurred, and it may have been in the EPC Contractor’s absolute discretion to terminate. However, the case demonstrates that the exercise of that discretion had been expressly limited by the terms of the contract, which means the necessary notice had to be given.

 Key points for employers

 The case is an important reminder that both parties must be clear on the rights surrounding termination, both when entering into a contract and when bringing one to an end.

When entering into contracts, make sure to:

  • Establish if there are any notice requirements and weather they are a condition precedent. Read the termination clauses carefully and look out for words such as ‘shall’, ‘subject to’ or ‘condition precedent’;
  • Check for any custom amendments to the timeframes for serving any necessary notices. The standard form can be amended to allow the notices to be given as early as possible.

When it comes to serving any notices, make sure to:

  • Comply with the form which the contract requires. This will normally mean giving the notice in writing, and should describe the circumstance relied on and reference the relevant contract provisions;
  • Serve the notices in the correct way. The contract might require it be served on a particular office or person, or in a specific way like recorded delivery.

If you skip out on the details, you could pay the price – even if there are genuine grounds for termination.

For more advice on the issue, you can contact Alison here.

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Watch your mouth – how employers can be discriminatory without realising it

Discrimination can come in many forms, but can be much subtler than you realise. When it comes to off-the-cuff comments, employers need to be careful of how things come across to other parties. This was the case with a recent claim made by a 59-year-old employee who was told she’d be more suited to a ‘traditional’ office. So where did the employer go wrong?

The background 

In February 2015 Ms Gomes (G) began working as an administration assistant for Henworth, which traded as Winkworth Estate Agents. G had been working for another agent in the Winkworth franchise since 2009, and had been transferred to Henworth from there.

A year later, in February 2016, G had a performance review with the company’s lettings director, who informed her that she needed to be more careful with her work. The meeting upset G, and she subsequently spoke to her line manager who spoke to Graham Gold, one of the directors.

Shortly after this G met with Gold, who told her that he felt she had not been paying attention to new methods of working, and had become preoccupied with an old piece of software that was now rarely used by the company.

A month later, in March 2016, Gold called G in for another meeting and told her: “This marriage isn’t working.” G claimed that, when asked about this comment, Gold said that G had typed and sent an erroneous letter to a solicitor, including referring to the deceased in question as ‘Mrs’ rather than ‘Mr’. Gold stated that, subsequent to this, a note would be placed on her performance record.

Additionally, Gold then told G she would be “better suited to a traditional estate agency” which G interpreted as Gold alluding to her being too old for that particular office. When G asked Gold what he meant by his comment, he suggested she “sleep on it and decide what you want to do,” which G interpreted as Gold recommending she consider leaving the company. According to G, at the time of the meeting she was planning to stay with the business until retiring at 65.

Not long after the meeting, G took sick leave for work-related stress and filed a grievance against Gold. The outcome of this grievance concluded that G should have more training opportunities, as well as stating that the original meeting with Gold had been carried out in an unsatisfactory manner. Gomes was not pleased with this outcome, however, and not only appealed but also tendered her resignation.

The tribunal allowed G’s claim for age discrimination, stating that the original comment ‘better suited to a traditional estate agency’ was unlikely to have been said to a younger employee, and was therefore a direct reference to her age. As well as this, the tribunal also allowed G’s claims for age-related harassment and constructive unfair dismissal.

The person put in charge of handling G’s grievance was also called into question, as they had compromised the meeting’s impartiality by allowing Gold to be present – despite Gold being the subject of the complaint.

In conclusion

This case is a harsh reminder that employers need to be careful with what they say to, or about, their employees. An age discrimination claim can arise from comments that allude to an employee’s age, even if it is not directly referred to – so think before you speak.

If you would like to discuss this within your organisation, please contact Alison.

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Tribunal awards – calculating a week’s pay

In a recent case the Employment Appeals Tribunal ruled that a week’s pay should include employer pension contributions, rather than just basic pay, for calculation of compensation for claims under the Employment Rights Act 1996.

Let’s take a look at the facts.

Ms Drossou (D), who worked for the University of Sunderland, was dismissed on the grounds of an irretrievable breakdown in working relations, of which the University claimed D to be the main cause. Subsequently, D brought a claim of unfair dismissal that was eventually upheld by the Tribunal.

As a result, the EAT ordered compensation from the University, calculating a week’s pay by including the employer pension contributions. On the normal grounds that payments are not paid to the employee but into the pension fund, this decision went against the longstanding practice of excluding employer pension contributions from the calculations of a week’s pay.

The Tribunal felt that this deviation from standard practice was necessary, and said that the law under the Employment Rights Act 1996 (‘the ERA’) does not state that the amount payable by the employer has to be payable to the employee (i.e. it could be payable to a third party such as a pension provider). Additionally, the EAT stated that “remuneration” in the context of the ERA means a reward in return for services, and employer pension contributions are no less a reward for service than basic pay. The University was not satisfied with the ruling, but when it appealed to the EAT the Tribunal’s decision was upheld.

So, what does this mean for employers?

For the time being (at least until we see whether this decision is appealed) employers need to increase their calculations in accordance with the potential value of claims. Employers facing unfair dismissal claims need to be careful. If the claimant’s base salary is below £80,541 – the current statutory cap for unfair dismissal compensation – the calculation of a week’s pay becomes highly relevant. Where the employee earns less than the statutory cap on a week’s pay (currently £489), the basic award will also be increased – as well as all other awards based on the ERA definition such as the eight-weeks’ pay for a flexible working rules breach.

But, more importantly, the decision may impact protective awards. If employers fail to inform and consult under TUPE or, in a redundancy process, under the Trade Union and Labour Relations (Consolidation) Act 1992, then they could face large increases in the total compensation payable. The final amount will depend on the number of affected employees, the generosity of the pension provision and the size of protective award made up to the 13-week maximum. But if each employee has a 10% employer pension contribution and they all get an award of 13 weeks, then the total payable increases considerably.

For more information on this please contact Alison.

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President of the Employment Tribunals announces increase in the Vento Bands

Employers have been hit with a timely reminder that they need to make sure they’re taking all possible steps to prevent workplace discrimination. After a recent consultation, the President of the Employment Tribunals has announced that, in the event that they suffer from workplace discrimination, employees can now receive higher compensation for ‘injury to feelings.’

So, what’s it all about?

Compensation for ‘injury to feelings’ is split into four categories – known as Vento Bands – and these vary depending on the discrimination’s severity. From 11 September 2017, the increased Vento bands will be:

  • £800 to £8,400 for less serious cases;
  • £8,400 to £25,200 for serious cases; and
  • £25,200 to £42,000 for the most serious cases.

As well as this, the Employment Tribunal can award over £42,000 in exceptional cases, but it’s still unclear as to how it defines this. Most important, however, is that compensation under this category could be unlimited.

Stick and stones may break your bones, but, in this case, words can definitely hurt. Employers need to stay up to date with their equal opportunities and anti-bullying and harassment policies – as well as implementing regular diversity training – if they’re going to avoid costly discrimination cases.

For more information or help with any Employment Tribunal matters please contact Alison.

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Was the suspension of a teacher a neutral act and, if not, did it amount to a breach of the implied term of mutual trust and confidence?

The High Court case of Agoreyo v London Borough of Lambeth, available here, is clear on this matter.  In August 2017 they set out that suspension is not a neutral act and an improper suspension can amount to a breach of the above implied term. They also said that a breach could amount to a ‘repudiatory breach’, i.e. be sufficient in itself to destroy the employment relationship and entitle the employee to bring a claim.

The background

Mrs Agoreyo (who was the employee) worked as a primary school teacher for the London Borough of Lambeth.  A number of her pupils had significant behavioural issues and she had made numerous requests to the school for additional support.  However, before all the measures could be put in place Mrs Agoreyo was suspended. This followed three incidents where she had to use a degree of force to get two of these pupils to behave. The allegations suggested that the degree of force used went beyond those considered reasonable under the Education and Inspections Act 2006.

The suspension letter said:

  • the employee was suspended on normal pay;
  • suspension was a precautionary act pending a full investigation into allegations, during which the employee would be given full opportunity to provide her account of events; and
  • the suspension was a “neutral action and not a disciplinary action” and was to “allow the investigation to be conducted fairly”.

However, what sets this case apart, was that, before the decision to suspend, the employee was not asked for her comments on the allegations. Similarly, her employer failed to suggest that it had considered other alternatives to suspension.

Mrs Agoreyo resigned and brought a claim against the employer in the County Court for breach of contract. She argued that suspension was not reasonable or necessary.

Whilst the initial County Court hearing felt that London Borough of Lambeth was bound to suspend Mrs Agoreyo, after receiving reports of the allegations against her, and had “reasonable and proper cause” (to protect the children), Mrs Agoreyo appealed to the High Court.

The High Court disagreed. They felt that the employer was not bound to suspend Mrs Agoreyo and did not feel that it was obvious that there were no other alternatives. Furthermore, the employer had clearly stated in its suspension letter that its purpose was not to protect children but to ensure a fair investigation.

The High Court found that:

  • there was no evidence of any attempt to understand the employee’s version of events prior to the decision to suspend;
  • there was no evidence of any consideration of alternatives to suspension; and
  • the letter of suspension did not explain why an investigation could not be conducted fairly without the need for suspension

As a result they concluded that, given the potential stigma associated with suspension and the potential impact on future career prospects, suspension was not a neutral act, at least in the context of a qualified professional in a vocation, such as a teacher.

The suspension amounted to a breach of the implied duty of trust and confidence.

Employers must remember that even (in cases where the conduct is extremely serious, suspension must never be a knee-jerk reaction and the employer must carefully and pro-actively consider what the true purpose of a suspension would be and whether there might be any alternative.

Our advice is always to contact a qualified professional to help support and guide through disciplinary investigations and matters. You can contact Alison here.

 

 

 

 

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Snow days – what happens when bad weather hits?

British weather is far from predictable and although the peak of our winter may be over, there are still rumours of snow on the horizon. So when the bad weather hits, what does that mean for the workplace? What should employers do if staff are unable to get into work because of extreme weather conditions?

Pay on bad weather days

If bad weather has stopped employees from coming into work, employers need to make a decision about payment. In principle, employers are within their rights to refuse to pay an employee who does not come to work because of the bad weather. In choosing not to come in, they are not fulfilling their contract, even though the situation is out of their control, and do not need to be paid. For many employers, however, the benefits of paying someone for a ‘snow day’ outweigh the cons. Although they are paying an employee for a day they are not working, the long term affect this has for staff morale and their reputation as a good employer is often much better for business.

An alternative is to offer the employee who is unable to come into work the day of as annual leave. It is possible to ask employees if they would like to take extra holiday if they are unable to make it in. Some employees may rather take paid holiday for a snow day than to lose a day’s pay, but this won’t always be the case. Bear in mind if employers want to insist employees use holiday for a snow day, they must give them the minimum statutory notice.

Employees with children at schools that are closed

It is not uncommon for employees with children to be in a position where their child’s school or nursery is closed because of extreme weather. When this happens the employee is entitled to a reasonable period of unpaid time off for dependents. This right can apply when an unexpected disruption to the care arrangements for a dependant occurs, such as bad weather closing a school or nursery. Should an employee want to take advantage of this right, they must inform the employer as soon as possible. 

When the workplace closes

In some cases of extreme weather, it may be that the entire workplace has to close. When this happens, if employees are working from home, the employer must pay them their normal wages. If employees are unable to work before the employer has made the decision to close the premises, then this will in effect be a period of lay-off and employees should be paid their normal wage.

For more information, visit http://79.170.40.162/enlightenhr.com or contact Alison Benney:

alison@enlightenhr.com

Tel: 01803 469466

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Can too many Tinder tales at work cause trouble?

Love is in the air as Valentine’s Day makes an appearance for another year. Dating and love in the modern world has changed dramatically over the past decade and sometimes it’s hard to keep up with what’s appropriate for the workplace. Hearing about employees online dating experiences might make for funny morning coffee conversations but where should the line be drawn, legally, for discussion of Tinder tales in the workplace.

It’s true that online dating is much more accepted but hearing about it constantly at work could lead to something a bit more sinister.

An interesting article we came across talks about a self-confessed Tinder addict amongst their subscribers.

“Her colleagues are often privy to her sexting exploits (text messaging someone in the hope of having a sexual encounter with them later) and the net results. Most of them find her tales entertaining but our subscriber has noticed that there are one or two employees who are clearly unimpressed, although they’ve never actually objected.”

The question of whether or not there is a problem here can be considered with the Equality Act 2010. It states that an employee can be considered to be unlawfully harassing another if they engage in any unwanted conduct of a sexual nature or create an intimidating or offensive environment.

In this circumstance, if one of the employees is offended by, or could potentially issue a tribunal claim over, what they consider offensive behaviour by the subscriber it could be considered as sexual harassment. It doesn’t matter if the subscriber didn’t mean any harm by the conversations, all that matters is the perception by the other employee.

So too many Tinder tales can cause trouble not just for employees but also the employer. To make sure employers aren’t held responsible they can follow a few steps:

  • Ensure there is a clear work policy that states what is considered inappropriate behaviour at work.
  • Carry out regular training on dignity at work for all employees, making sure to include information about their personal legal obligations.
  • If there are any minor incidents that could be considered offensive, have a quiet meeting with the employee to ensure they are aware that others may think of it as sexual harassment.

Employers can be held responsible for employees that offend others in a sexual nature. It is important to ensure that everyone in the workplace is aware of what can be considered offended by others. Encourage staff to keep their Tinder tales to themselves while in the office and leave Valentine’s Day stories at the door.

For guidance on this or related HR matters, please contact Alison.

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