Statutory sick pay

Statutory payment rates confirmed for new tax year

The Social Security Benefits Up-rating Order 2018 has now been published in draft form, and points out a number of statutory payment rates that employers are going to need to consider. Most importantly, it states that:

  • The standard weekly rates of statutory adoption pay (SAP), statutory maternity pay (SMP), statutory paternity pay (SPP) and statutory shared parental pay (ShPP) are set to rise from £140.98 to £145.18 from 1 April 2018 (or 90% of the employee’s average weekly earnings if that is less than the statutory rate)
  • From 6 April 2018, the weekly rate of statutory sick pay (SSP) is set to rise from £89.35 to £92.05

As well as this, the Social Security (Contributions) (Rates, Limits and Thresholds Amendments and National Insurance Funds Payments) Regulations 2018 has also been published in draft form. It confirms that, from 6 April 2018, the lower earnings limit (LEL) will increase from £113 to £116 per week. Employees below the LEL do not qualify for SMP, SAP, SPP, ShPP and SSP.

For plain-English, expert advice on any of the above you can contact Alison here.

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EAT rules that Uber drivers are workers

The Employment Appeal Tribunal (EAT) has upheld a tribunal’s ruling that two Uber drivers were ‘workers’ and, therefore, entitled to worker benefits such as the National Minimum Wage and holiday pay.

The background

In UK law, ‘workers’ are entitled to a range of employment rights such as the national minimum wage, holiday pay and access to a pension scheme. Full employment rights, however, including statutory sick pay and protection against unfair dismissal, only apply to a category of workers normally referred to as ‘employees’.

For a non-employee to qualify as a ‘worker’ status there usually has to be a contract between the individual and the ‘employer,’ under which the individual undertakes to do work personally, and the ‘employer’ must not be a client or customer of a business operated by the individual.

How does this apply to Uber?

In this particular case, the EAT found that those conditions were satisfied. In particular, it found that the tribunal was entitled to reject the description of the relationship between Uber and the drivers in the written contractual documentation. Rather, the drivers were incorporated into Uber’s taxi business and subject to controls that pointed away from their working in business on their own account in a direct contractual relationship with the passenger each time they accepted a trip. The EAT confirmed that the tribunal had been entitled to consider the true agreement between the parties as not one in which Uber acted as the drivers’ agent.

But the EAT’s decision is unlikely to be the final one. It’s certain that Uber will look to bring a further appeal and it is likely that the case could go straight to the Supreme Court.

What can we learn from this?

The fact that the Uber drivers have won ‘worker’ status, however, does not mean that cases brought by others who work in the ‘gig economy’ will have the same success. In fact, the tribunal that originally heard the case said it did not doubt that Uber could have created a business model which did not involve the drivers having worker status. However, companies that rely on the ‘on demand’ freelance workforce will be keeping an eye on similar cases for any emerging trends that could impact their business model.

Particularly, these employers should review any possible risks of misclassifying the status of their workforce, including the affordability and practicability of paying statutory minimum wage, pension auto-enrolment and holiday pay entitlements.

Additionally, those businesses utilising IT platforms to exercise significant control over ‘on demand’ workers should be aware of the potential challenge in maintaining that such workers are genuinely self-employed, as opposed to one based on worker status (although it will always depend on the circumstances).

For more expert employment advice, you can contact Alison here.

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Does long-term sick leave mean termination of employment is unfair?

The UK Court of Appeal has considered if an employer was discriminating against its employee who had been on long term sick leave for more than 12 months by terminating her employment.

The background

In the case O’Brien v. Bolton St Catherine’s Academy, a teacher employed by the Respondent school was assaulted by a pupil in March 2011. Consequently, the teacher suffered serious stress and was on sick leave for over a year.

The teacher attempted to return to work in December 2011, but she was unsuccessful. Following this she had not returned to work, and in January 2013 the school terminated her employment.

The teacher lodged an internal appeal, which was heard in April 2013. The teacher produced a ‘fit for work’ note, as well as additional medical evidence, at this hearing. However, the panel upheld the dismissal on the grounds that the medical evidence was inconsistent, the prognosis was not good, and her return was uncertain. As a result, the teacher claimed against the school for disability discrimination.

The outcome

The UK Court of Appeal considered it unreasonable that the school had disregard the teacher’s  medical evidence at the internal appeal hearing. Because the school already had endured the teacher’s absence for 15 months, it was considered unreasonable for the school not to wait a few months longer, so that the school could obtain and assess its own medical evidence.

The court felt that the school should consider and provide evidence of the impact of the teacher’s prolonged absence (which it had not done to this point). Therefore, the court felt, the school’s dismissal of the teacher constituted disability discrimination. The court did acknowledge that this was a borderline ruling due to length of absence, and the nature of evidence of when the teacher would be fit to return to work.

What can we learn from this?

Although employers are not expected to wait forever for an employee to recover from illness, there are a number of steps they should take to prevent any action being considered as unfair.

  • Written records of any disruption caused to the business of the employers arising from the employee’s absence should be documented.
  • Employers should assess any medical evidence produced by the sick employee carefully, including any new evidence which may be available during the dismissal process (including any internal appeal hearing).
  • Additionally, employers should consider the nature of the illness, the likely length of continuing absence, and the need of the employers to have done the work which the employee was engaged to do.

For more expert employment advice, you can contact Alison here.

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Can an employee be too sick to take holiday?

Most of us have been there. You’re getting excited for your upcoming holiday, getting last minute details sorted and then suddenly a cough or cold comes on. Most of us power through and end up having a good time, but what happens if it’s worse and you come back to work feeling anything but refreshed? Should you be entitled to reschedule your holiday – or even claim sick pay?

The European Court of Justice has said in a recent case that a worker who falls ill or becomes incapacitated before a period of pre-arranged statutory holiday should have the right to reschedule their holiday to a later date. As well as this, the court also suggested that the same should apply to workers who become sick whilst on holiday – not just before. Although a contentious suggestion, the ECJ later confirmed this in Asociacion Nacional de Grandes Empresas de Distribucion v Federacion de Asociaciones Sindicales & Ors.

It’s important to note here that the ECJ ruling only applies to four weeks’ holiday, and not the full 5.6 weeks’ statutory holiday or any contractual amount in addition to this. On top of this, there could be argument about whether the UK’s own Working Time Regulations already provides this.

Employees are becoming more aware of their rights than ever, and holiday rights come high up on the list. The ECJ’s decisions mean employers can expect to receive claims from employees that they should be paid sick pay and allowed to re-schedule their holiday. But this can put employers in a difficult position. With the risk of false claims out there, how can you prove your suspicions that an employee didn’t spend their whole holiday holed up in the hotel room? How sick do you have to be before a day in bed counts as sick leave rather than annual leave?

Our advice

Employers have to adopt a clear and consistent approach to avoid any arguments of unfairness or discrimination. The employer is going to have a tricky decision to make – do you follow the ECJ decisions (and the UK decisions following them) and allow employees with legitimate claims to reschedule their leave, or do you adopt a riskier approach and try to stick to the letter of the Working Time Regulations?

Employers are also going to need to be robust in many of these situations – whilst you may choose to allow employers to reschedule their holidays you need to protect yourself from abuse or manipulation. The best way to go forward is with clear, concise policies and expected standards of behaviour – such as asking staff to report and notify sickness in the usual way (even when they’re on holiday), having return-to-work meetings and not being shy to ask necessary question or request medical evidence.

You should also be keeping up-to-date records of sickness absence to review closely, which can help to identify patterns of ‘holiday sickness’. A judicious checking of the employee’s social media posts may another option, and questions should be asked if posting about a big night out and is struck down with ‘stomach flu’. As well as this, you should make clear contracts and disciplinary policies, and the serious consequences for any dishonesty.

The important thing to remember is to be clear, concise and consistent in your approach, with support from your contract of employment and holiday, sickness, equal opportunities, disciplinary, social media and data protection policies.

For more information, you can contact Alison here. For help with your documentation, click here.

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Pensions update: Was a disabled employee treated unfavourably?

In Williams v The Trustees of Swansea University Pension & Assurance Scheme and another the Court of Appeal stated that a disabled employee was not treated unfavourably (and therefore discriminated against) when his enhanced pension on ill-health retirement was based on the salary he earned when working part time due to his disability, rather than his full time salary.

Background

Mr Williams, the employee, suffered from Tourette’s syndrome, obsessive compulsive disorder and depression. Before eventually taking ill-health retirement (at 38) he reduced his hours with his employer, Swansea University, in order to better cope with his condition and his pay was reduced accordingly.

Mr Williams was allowed, by the University, to take his accrued pension benefits immediately and without any actuarial reduction for early receipt, rather than having to wait until his normal pension date nearly twenty-nine years later. This meant he was treated as though he had accrued nearly twenty nine years further pensionable service and his benefits were advanced.

Mr Williams brought a disability discrimination claim at the Tribunal under s 15 of the Equality Act 2010. Mr Williams argued that, by using his actual part time salary rather than a full time equivalent, the calculation of the enhancement to his benefits amounted to “unfavourable” treatment and therefore unlawful discrimination.

In the initial hearing the Tribunal upheld his claim. The University then successfully appealed to the EAT. Following this Mr Williams appealed to the Court of Appeal.

The Court of Appeal agreed with the EAT because:

  • under the pension scheme rules the only employees entitled to retire early and to receive an enhanced pension were those who retired through ill-health and who were necessarily disabled within the meaning of the Equality Act 2010;
  • Mr Williams had been treated advantageously in comparison to non-disabled colleagues and there is no authority for the proposition that a disability discrimination claim can succeed simply because an individual thinks he should have been treated better;
  • that Mr Williams was working part-time hours because of his disability could not be enough to require the employer to justify the treatment; and
  • there is no authority for the proposition that a disabled person who is treated advantageously because of their disability, but not as advantageously as a person with a different disability, has a valid claim that they have been treated “unfavourably”.

This decision confirms that, even if it could have been more advantageous, treatment that is advantageous does not amount to unfavourable treatment.

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The Supreme Court has ruled that employment tribunal fees are unlawful

The government suffered a heavy defeat on 26th July after the Supreme Court ruled that employment tribunal fees are unlawful and the government will now have to repay up to £32m to claimants, relating to claims dating back to April 2013.

Brought forward by the Unison union Lord Reed, the judgment said that the fees were unlawful because of their effects on access to justice. Introduced in 2013 and costing between £390 and £1200, the fees have been said to prevent access to justice for workers unable to fund their case.

“The making of the Fees Order was not a lawful exercise of those powers, because the prescribed fees interfere unjustifiably with the right of access to justice under both the common law and EU law, frustrate the operation of Parliamentary legislation granting employment rights, and discriminate unlawfully against women and other protected groups.”

While the fees were brought in by the government to reduce the number of malicious and weak cases, after 3 years there had been a 79% reduction in cases brought forward.

Discrimination cases cost more for claimants because of the complexity and time hearings took. The Supreme Court found this was indirectly discriminatory because a higher proportion of women would bring discrimination cases.

Unison general secretary Dave Prentis has said: “This is absolutely a tremendous victory, it’s probably the biggest victory of employment rights in this country.”

So what now?

In order to deal with this massive backlog of repayment and claims the Presidents of the Employment Tribunals have issued Case Management Orders.

The Order states that all cases and applications arising from the Unison case, or applications for reimbursement of fees, shall be made in accordance with administrative arrangements to be announced by the Ministry of Justice and HMCTS shortly… We wait to see what happens next!

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Five key employment law changes in April 2017

April is a busy month for employment law with several changes coming into force over the next few weeks. We’ve put together a summary of five of the main things to look out for this month and how they will affect employers.

Gender pay gap reporting rules come into force

The Gender Pay Gap guidance is a huge topic this month and is one that we will dedicate a separate blog to but in summary, every year large employers will have to report data about their gender pay gap, including any bonus payments. All details about the proportion of male and female employees in different pay quartiles and those who receive bonuses. For more information you can read our blog here. [Link to blog]

Apprenticeship levy is introduced

At the beginning of April the apprenticeship levy cam into force, meaning that employers with a paybill or more than £3 million will pay the levy to fund apprenticeship training. Employers in England that pay the levy will then be able to access the funding through a digital service, currently aiming to be in operation from May. Employers that do not pay the levy will also be able to access funding for apprenticeships and while the levy applies across the UK, different arrangements will exist of how apprenticeship funding will work in Scotland, Wales and Northern Ireland.

Immigration skills charge

Any employer that sponsors skilled workers under tier 2 of the immigration points-based system will have to pay a levy of £1,000 per certificate of sponsorship per year. This levy will come into force for each worker under tier 2, although there are some exemptions.

National minimum wage increases

This month the national minimum wage will increase, despite a relatively recent increase in October last year. It is happening now so that the timing of the annual increase in the national living wage rate for workers aged 25 or over will fit with the other national minimum wage rates. From this month the rate for workers aged 25 and over increases from £7.20 to £7.50.

Statutory family-related pay and sick pay rates increase

Also happening this month is an increase in the weekly rate of statutory maternity, paternity, adoption and shared parental pay. This is moving up to £140.98 for pay weeks commencing on or after 2nd April 2017. At this time the weekly rate of statutory sick pay will increase to £89.35 from 6th April 2017.

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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Is an employee entitled to draw sick pay while working in a second job?

It might seem common sense to answer “very rarely” to this question but a recent case has pointed a spotlight on this matter, providing clarity for many employers.

The background

An employed hospital consultant had a second job seeing private patients one day per week. The hospital was aware of this. She submitted a series of medical certificates stating that she was unfit for work at the hospital and started a long period of leave. During this, however, she continued to see her private patients. Although there was nothing in her contract with the hospital to say she couldn’t carry on her private work during a period of sick leave the hospital’s Medical Director had written to her (and spoken to her) to say she should not do this as it “could be construed as fraud”. When the hospital found out that she was doing this they started disciplinary proceedings against her.

This started with a letter convening the disciplinary hearing. It was headed “Allegation into the undertaking of private practice during the period when certified as medically unfit” and contained the sentence “I must advise you that the allegation is potentially one of gross misconduct and if substantiated could lead to dismissal.”

Perhaps unsurprisingly, given the circumstances, the disciplinary panel decided that the consultant had committed gross misconduct and dismissed her. They sent her a letter containing the phrase “The Panel felt that this allegation constituted fraud which could be considered as gross misconduct”.

An employment tribunal rejected the consultant’s complaint of unfair dismissal although she was given leave to appeal to the Court of Appeal.

The appeal centred around the use of the term “fraud” in the dismissal letter. The Court of Appeal, however, was very clear in its ruling. The reason for dismissal was that the consultant had done private work while on sick leave. They ruled that the employment tribunal was indeed justified in finding the dismissal fair. Although the use of the term “fraud” may have been misleading they felt that the substance of the misconduct was correct and warranted dismissal.

The Court of Appeal made a very clear statement about employees who try to justify working in a second role while continuing to draw sick pay:

“The lay members of this Tribunal would emphasise that in the employment world claiming sick pay whilst working elsewhere is in general regarded very seriously by employers. In their experience any substantiated case almost inevitably will lead to dismissal, not least because if it did not, the employer might find it difficult to distinguish on any proper basis between the cases of other employees doing the same. That is not, however, to say that it is an inevitable conclusion”.

The court said this represented the general principle in future cases.

What do you need to do as employers?

Although the basic concept of this might appear obvious it is always worth spelling things out to employees when producing (and communicating) sickness and absence policies. Our advice is always to be as clear as possible and make sure employees are aware of exact circumstances and likely outcomes.

If you require advice on this or any other matters surrounding sickness or absence, please contact Alison.

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Linked Waiting Days for Statutory Sick Pay Purposes

Following some questions we’ve had recently about linked Waiting Days for Statutory Sick Pay purposes, we’ve put together a quick briefing to help clear any uncertainties.

For SSP purposes if an employee is off again within 8 weeks of the first absence whatever waiting days (unpaid) he/she has served count towards the next period. Also, an employee is only entitled to a total of 28 weeks SSP so linked absences are added together for that calculation too.

Waiting Days (WDs)
SSP is not payable for the first three QDs in a Period of Incapacity of Work (PIW). These are called Waiting Days (WDs). They are not always the first three days of sickness as the employee may have been sick on non-QDs. Where PIWs are linked and all three WDs have been served in the first PIW, there will be no WDs in any later linked spells of sickness. But, if all three WDs have not been served in the first PIW, any remaining WDs must be served at the beginning of the next linked PIW or series of linked PIWs.

Linking
Periods of Incapacity for Work are linked and treated as one PIW if the gap between them is eight weeks or less. Any subsequent spells of sickness must be four or more days in a row to form another PIW, otherwise there is no subsequent PIW to link with an earlier PIW.

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