May Employment Law Update

Welcome to the May issue of our Employment Law Update which is designed to keep you updated on all the latest HR news. This month, following the result of the recent General Election there are a number of changes on the horizon to the landscape of Employment Law which we've detailed below.

We always welcome feedback on how we can support you further, therefore if you have any queries or any comments on our updates, get in touch.

The meaning of ‘Establishment’ for collective redundancies

Following the conclusion of the "Woolworths" case (USDAW and another v WW Realisation 1 Ltd (in liquidation), Ethel Austin Ltd and another (C-80/14)) the ECJ has held that the number of dismissals in all of an employer's establishments do not have to be aggregated in order to determine whether the threshold for collective redundancy consultation is met.

This decision has gone some way to clarifying the position with regards to when the threshold of 20 employees is reached where redundancy dismissals are being implemented in different locations. It was held that ‘establishment’ denotes the local employment unit to which the workers made redundant are assigned to carry out their duties. A local employment unit may be a retail site or single office location.

This case will now return to the Court of Appeal to determine whether, on the facts, each branch of Woolworths and Ethel Austin was a separate establishment to determine whether or not where an employer has several premises with less than 20 employees within each one they are required to consult with all these employees as though they all worked from one premises.

Holiday Pay and unlawful deductions from wages claims

Bear Scotland Ltd v Fulton and others UKEATS/0047/13, Hertel (UK) Ltd v Woods and others UKEAT/0160/14 and Amec Group Ltd v Law and others UKEAT/0161/14

The EAT held that payments for overtime which a worker is required to work but which an employer is not required to offer (non-guaranteed overtime) is "normal remuneration" for the purposes of Article 7 of the Working Time Directive, and the Working Time Regulations 1998 (WTR 1998) must be interpreted to achieve this.

Following this decision and the continuation of claims for unlawful deduction of wages in respect of unpaid holiday, The Deduction from Wages (Limitation) Regulations 2014 will mean that claims to Employment Tribunals on this issue cannot stretch back further than 2 years.

These changes will apply to claims made on or after 1 July 2015 and will impose a two-year backstop period on most unlawful deduction of wages claims.

We are recommending that anyone who has employees who do regular overtime (accepting that we don’t have a definition of regular at this point) should have a chat with us regarding whether they need to take action.


Post Election – some proposed changes

Following the result of the recent General Election there are changes on the horizon to the landscape of Employment Law. Outlined below are just a few changes that the government wishes  to make and the potential impact of these changes for the future of Employment Law.

1) Zero hours contracts

The newly elected Conservative Government plans to eradicate exclusivity clauses in zero hours contracts. s 153 of the Small Business, Enterprise and Employment Act 2015 inserts two new sections, 27A and 27B, into the ERA 1996. This will make exclusivity clauses which prohibit the worker from either of the following unenforceable:

  1. Doing work or performing services under another contract or under any other arrangement.
  2. Doing work or performing services under another contract or under any other arrangement without the employer's consent.

The aim of the change is to prevent employers using a pool of people who are ‘on-call’ or ‘on standby’ to be used exclusively by them when the need arises and allow employees to do other work alongside their zero hours contract. This change in legislation came into effect on 26th May 2015.

2) National Minimum Wage and Pay

By the autumn of 2015 the Government proposes to have increased the National Minimum Wage to £6.70 with a view to increasing the NMW to over £8 an hour by the end of 2020.

In order to meet their aim of improving the living standards of working people the Government proposed to increase the tax-free personal allowance to £12,500.

In order to maintain this, it is intended that a new law will be passed so that the tax-free personal allowance will rise in line with the NMW.

Business will also be encouraged to offer the Living Wage if they can afford it.

3) Volunteer leave

As part of its vision of "Building the Big Society", volunteering will be made a workplace entitlement. Employees working in large companies with at least 250 employees and ell employees working in the public sector will be entitled to take up to 3 days paid leave a year.

There is concern about how this new pledge will be managed by the majority of employers who don’t offer paid volunteering, it has been advised that they incorporate this into a policy. We are sure that there will be more news on this to come.

4) Employment Tribunal Penalties

The Small Business, Enterprise and Employment Act 2015 allows the Government to bring in regulations to impose a penalty on employers who fail to pay employment tribunal awards or sums due under a settlement agreed following ACAS conciliation.

The financial penalty will be of 50% of the unpaid award subject to a minimum of £100 and maximum of £5,000. These penalties will be payable to the Exchequer.

5) Fees

Following the High Court’s decision to turn down Unison’s second Judicial Review application over the Government’s decision to introduce employment tribunal fees the Court of Appeal is scheduled to hear Unison's case in mid-June 2015. The Government awaits the outcome of the latest pending judicial challenge, but if the union is successful in their challenge there is likely to be a review of tribunal fees this year.

6) Whistleblowing

Protection for NHS workers

It is estimated that by 2016 there will be new regulations prohibiting an NHS employer from discriminating against an applicant because it appears to the NHS employer that the applicant has made a protected disclosure. This proposal will enhance the protection already provided to NHS Whistleblowers and is intended to increase the confidence of those wishing to make protected disclosures.

Prescribed persons annual reporting

The Government intend to require 'prescribed persons', to whom whistleblowing disclosures can be made, to report annually on the disclosures they receive. The nature and the extent of the required reporting have not at yet been made clear but the Government is planning to hold a consultation later this year to establish this.