In this “back to school” round-up, we take the opportunity to catch up on the most important UK employment law events and developments in 2017 to date.
Happy 2016! It’s time to take a look at what this year will bring (apart from an Olympic Games and apparently lots of rain…). Here are the topics we will be keeping an eye on.
In the latest in a long-running series of cases on holiday pay, the Employment Tribunal has handed down its first judgment in Lock v British Gas Trading Limited.
This judgment confirms the principle that workers paid commission should receive holiday pay at a rate reflecting normal income, which can include commission, rather than basic salary only.
The UK Government has introduced legislation to help employers deal with the fallout of recent decisions indicating that pay for statutory holiday should include, and should always have included, overtime and other job-related allowances, as we reported on previously here and here.
Unite, the trade union that backed the majority of the claimants in Bear Scotland v Fulton regarding the calculation of holiday pay, has announced it will not appeal the Employment Appeal Tribunal decision. To read our alert on the decision, please click here.
What Has Happened?
One effect of the EAT’s judgment was to dramatically limit workers’ rights to bring Employment Tribunal claims for historic underpayments of holiday pay. It had been widely expected that Unite would lead an appeal to the Court of Appeal, so the union’s announcement that it won’t will be music to the ears of employers who are concerned about the potentially significant cost of such claims.
The bad news is that Unite’s decision not to appeal is not necessarily the end of the issue. Many cases were stayed pending a decision in Bear Scotland, and it is likely that these cases will now proceed and a new test case may well work its way up to the Court of Appeal.
What Does This Mean For Employers?
The EAT’s judgment is highly unlikely to be overturned within the next 12 months. In the meantime, employers can stand firm on requests made or claims brought for significant back pay that are outside outside the parameters set by the EAT.
By way of reminder, the EAT decided that a Tribunal can only deal with a claim for an unlawful deductions from wages if it is brought within three months of: i) the date of underpayment; or ii) if there has been a series of deductions, within three months of the last deduction in the series (unless the Tribunal decides that the deadline should be extended because it wasn’t reasonably practicable for the claim to have been brought in time).
As it is only the four weeks (20 days for a full-time worker) mandatory holiday required to be given to workers by the European Working Time Directive that must include overtime, etc., an underpayment claim relating to more than one period of holiday may only be considered by a Tribunal if periods of mandatory holiday have been taken within three months of each other. The EAT said that it made sense for mandatory holiday to be treated as having been taken first in the holiday year. This means that any additional holiday taken towards the end of the year will tend to break up the periods of mandatory holiday and so disrupt a workers’ ability to claim for them.
The Employment Appeal Tribunal (EAT) has handed down an important decision for UK employers, limiting the right of workers to carry forward holiday entitlement accrued during a period of long-term sickness absence.
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