Tag Archives: commission

Summer Employment Law Update

It’s been a busy time for most people during the Summer months and most sensible people have put the blackberry’s away and gone somewhere hot to lay by a pool.  In the meantime, many important employment law changes and decisions have been made which I will bring to your brief attention during this Summer employment law update.

Exclusivity clauses in zero-hours contracts to be banned

The Government has confirmed that it will ban the use of exclusivity clauses and increase the availability of information on zero-hours contracts for employees.

The Government will also work with unions and business to develop a best practice code of conduct aimed at employers who wish to use zero-hours contracts.

The ban on exclusivity clauses will form part of the Small Business, Enterprise and Employment Bill. The Government states that 83% of the responses to the consultation were in favour of the ban.

Severe Obesity may be a disability

In the Danish case of Kaltoft v Municipality of Billund (C-354/13), which was referred to the European Court of Justice, the Advocate General has given the opinion that obesity may amount to a disability for the purposes of the EU Equal Treatment Framework Directive (No.2000/78) but only if it is ‘severe’.

The Advocate General thought it probable that only obesity with a body mass index (BMI) of over 40 would hinder an individual’s participation in professional life to such an extent as to amount to a disability.

He also rejected the argument that there is a freestanding prohibition in EU law on discrimination on the ground of obesity per se.

In the Advocate General’s view, ‘most probably’ only WHO class III obesity, also known as ‘severe, extreme or morbid obesity’ with a BMI over 40, will create such problems in mobility, endurance and mood as to amount to a disability.

Further reduction in number of Tribunal Claims in first quarter of 2014

The Ministry of Justice (MoJ) has published tribunal statistics for January to March 2014. The statistics show that the significant reduction in the number of claims since the introduction of fees in July 2013 has continued.

Ignoring the impact of multiple claims (those involving more than one claimant, which can skew the statistics), the number of claims brought by single individuals has dropped by 59% compared to the same period in 2013. This continues the trend shown in the October to December 2013 statistics of a reduction of 63% in single claims compared to the same period in the previous year. The reduction appears to be consistent across all types of claim and in all tribunal regions.

Of the complaints disposed of by the employment tribunals in the period January to March 2014, 37% related to working time, 19% were for unfair dismissal, 10% were for equal pay and 8% were associated with discrimination.

Source: Tribunal statistics quarterly, January to March 2014, MoJ, 12 June 2014.

Statutory holiday pay should include a sum in respect of commission

The ECJ has held that, where a worker’s remuneration includes contractual commission, determined with reference to sales achieved, the Working Time Directive precludes a national law that calculates statutory holiday pay based on basic salary alone. If commission payments are not taken into account, the worker will be placed at a financial disadvantage when taking statutory annual leave as no commission will be generated during the holiday period. In such circumstances, the worker might be deterred from exercising the right to annual leave. This would be contrary to the directive’s purpose.

This case was referred to the ECJ by the Leicester employment tribunal. The tribunal recognised that, under the natural wording of the Working Time Regulations 1998 and the week’s pay provisions of the Employment Rights Act 1996, the claimant was not entitled to a sum in respect of commission in his holiday pay. The case is now likely to return to the tribunal to consider whether the domestic legislation can be interpreted in line with the ECJ’s decision and, if it can, the level of holiday pay to which the claimant was entitled.

Contractual disciplinary procedure did not allow for increased sanction on appeal

The Court of Appeal has upheld the High Court’s decision that an employer could not increase the disciplinary sanction it imposed following the employee’s appeal. The employer, an NHS Trust, had incorporated a formal and detailed disciplinary procedure into the employee’s contract. The employee appealed against the imposition of a written warning and the Trust contemplated increasing the severity of that sanction, which would lead to the employee’s dismissal.

The court held that the contractual procedure did not allow for increased penalty on appeal. To construe the procedure in that way was inconsistent with the terms of the contract and the Acas guide on discipline and grievances. If the Trust wished to reserve its right to increase the disciplinary sanction on appeal, that should have been made explicit in the procedure.

Seldon: law firm partner’s mandatory retirement at 65 was objectively justified

The EAT has upheld an employment tribunal’s decision that, as at 31 December 2006, a law firm’s mandatory retirement age of 65 for partners was a proportionate means of achieving the legitimate aims of workforce planning and staff retention. The retirement age was objectively justified and did not amount to direct age discrimination against a partner, Mr Seldon, who was required to retire on that date. The tribunal correctly determined where the balance lay between the discriminatory effect of choosing a particular retirement age and its success in achieving the aims identified. (Seldon v Clarkson Wright & Jakes UKEAT/0434/13.)

HR letter advising the outcome of a grievance could bind employer to higher pay

The EAT has held that an employer was bound by rates of pay set out in a letter from an HR officer who had investigated a grievance about employees’ pay. The EAT held that the critical principle was whether it was intended that the communication would set out what had been decided by the employer and whether the HR officer was held out by the employer as authorised to make that communication.

However, the question of whether the contract was void for mistake was remitted to be considered by a fresh tribunal. The employer’s argument that the employees must, or ought to have known, that the information provided by the HR officer was in error therefore remains to be decided. (Hershaw and others v Sheffield City Council UKEAT/0033/14.)

Workers on call do not need to be at the workplace to be “working”

The Scottish EAT has held that ambulance paramedics who were contractually required to stay within a three-mile radius of the ambulance station and to respond within three-minutes were working during such on-call periods. It was not a rest period for the purposes of the Working Time Regulations 1998. The tribunal erred in finding that there needed to be a form of near confinement to one specific location for it to be considered working time. The decisive factor was that they were obliged to be present and remain available at a place determined by the employer.

Earlier ECJ cases have considered on-call time to be working time where the worker is required to be in the workplace and ready for work (even though they were sleeping). This case widens the scope to workers who are not required to be in the workplace while on call but are nevertheless subject to certain limitations. In this case, they were not completely free to choose where they would stay since they were limited to a specific area and a specific response time. (Truslove and another v Scottish Ambulance Service UKEAT/0053/13.)

New Acas code of practice and guidance on the right to request flexible working

The right to request flexible working has been extended to all employees with at least 26 weeks’ continuous service, effective from 30 June 2014. To assist employers with handling flexible working requests, Acas has published a new Code of practice: Handling in a reasonable manner requests to work flexibly and The right to request flexible working: an Acas guide.

The Acas Code of practice will be taken into consideration by employment tribunals when appropriate. It provides detailed steps for managing flexible working requests “in a reasonable manner”. The guide provides good practice tips for employers when implementing flexible working policies and considering requests, and sets out “business reasons” for refusing requests.

Sources: Acas: Code of practice: Handling in a reasonable manner requests to work flexibly (June 2014) and Acas: The right to request flexible working: an Acas guide.

If you need further advice on this blog whether you are an Business or an Individual, please send an email, (william.addis@osjlaw.co.uk) or call me, on my mobile 07767 166705 or 01580 712718 (local office number) or 0207152 6550 (London office number).

http://osjlaw.co.uk/about-me/

© OSJ Law Limited

May Employment Law Update

May Employment Law Update

“Lots of people go mad in January. Not as many as in May, of course.”

(Karen Joy Fowler, Sarah Canary)

Hopefully you have kept your sanity in May despite the pressures of work and life generally, whether a business or an individual. If you have, then you will be able to catch up on this brief summary of the latest changes in the ever changing minefield that is UK employment law.

Legal changes

1 May 2014 reminder: deadline for TUPE employee liability information notification increases to 28 days

The Collective Redundancies and Transfer of Undertakings (Protection of Employment) (Amendment) Regulations 2014 (SI 2014/16) came into force on 31 January 2014. The regulations make a number of amendments to the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE).

One such amendment is to the timeframe for providing employee liability information.

Regulation 11(6)(a) of TUPE has been amended so that the deadline for notification of employee liability information to the transferee is increased, from 14 days to 28 days. This amendment only applies to transfers that take place on or after 1 May 2014.

Early conciliation mandatory from 6 May

Early conciliation becomes mandatory for most types of employment tribunal claims from 6 May 2014. It will make important changes to how limitation dates are calculated and how claims should be presented.

For further information  go to the ACAS website http://www.acas.org.uk/index.aspx?articleid=4028

 

Employment Law cases round up

Court grants order for imaging and inspection of ex-employees’ computers

The High Court has ordered that an employer may instruct an independent computer expert to inspect and take images from the personal computers of two former employees. The employer was granted the mandatory injunction after information came to light which suggested that the individuals had misused confidential information belonging to the employer during their employment.

The court took into account the fact that it had a high degree of assurance about the strength of the employer’s claim, and that the employer had taken years and used significant resources to create the confidential information at the heart of the proceedings.

(Warm Zones v Thurley and another [2014] EWHC 988 (QB).)

Receiving pay was not a prerequisite for employment status

The EAT has held that an individual can still be considered an “employee” for the purposes of the Employment Rights Act 1996 even if they have not exercised their right to be paid.

The individual, the Managing Director and sole shareholder of a company, remained entitled to a redundancy payment from the Insolvency Service under section 166 of ERA 1996, despite not receiving pay for two years. She had elected to forgo her salary in an attempt to keep the company afloat.

(Secretary of State for Business, Innovation and Skills v Knight UKEAT/0073/13.)

 

Statutory holiday pay should include a sum in respect of commission

The ECJ has held that, where a worker’s remuneration includes contractual commission, determined with reference to sales achieved, the Working Time Directive precludes a national law that calculates statutory holiday pay based on basic salary alone.

If commission payments are not taken into account, the worker will be placed at a financial disadvantage when taking statutory annual leave as no commission will be generated during the holiday period. In such circumstances, the worker might be deterred from exercising the right to annual leave. This would be contrary to the directive’s purpose.

This case was referred to the ECJ by the Leicester employment tribunal. The tribunal recognised that, under the natural wording of the Working Time Regulations 1998 and the week’s pay provisions of the Employment Rights Act 1996, the claimant was not entitled to a sum in respect of commission in his holiday pay. The case is now likely to return to the tribunal to consider whether the domestic legislation can be interpreted in line with the ECJ’s decision and, if it can, the level of holiday pay to which the claimant was entitled.

(Lock v British Gas Trading Ltd C-539/12.)

LLP member was “clearly” a worker and entitled to whistleblower protection

The Supreme Court has held that a former equity partner of a law firm incorporated as a limited liability partnership (LLP) was clearly a worker and therefore eligible to bring a whistleblowing claim against the LLP.

Overturning the decision of the Court of Appeal, the court found that the LLP member fell within the definition of worker in section 230(3) of the Employment Rights Act 1996, as she could not market her services as a solicitor to anyone other than the LLP and was an integral part of its business.

It was not necessary for there to be an element of subordination in order for worker status to be made out. While subordination may sometimes be an aid to distinguishing workers from other self-employed individuals, it is not a universal characteristic of being a worker.

The court also shed some light on the meaning of section 4(4) of the Limited Liability Partnerships Act 2000, which has been notoriously difficult to interpret. It does not mean (as the Court of Appeal found) that LLP members can only be workers if they would also have been workers had the LLP been a traditional partnership under the Partnership Act 1890.

The Supreme Court’s decision is significant as it means that LLP members will benefit not only from the statutory protection from detriment available to whistleblowers, but also from a range of other rights available to workers. These include the right to paid annual leave and the right to be auto-enrolled in a pension scheme.

(Clyde & Co LLP and another v Bates van Winkelhof [2014] UKSC 32.)

Source: The Practical Law Company

If you need further advice on this blog whether you are an Business or an Individual, please send an email, (william.addis@osjlaw.co.uk) or call me, on my mobile 07767 166705 or 01580 712718 (local office number) or 0207152 6550 (London office number).

http://osjlaw.co.uk/about-me/

© OSJ Law Limited