Pay and benefits

1 February 2022 Summary Previously responsible for establishing the proper interpretation of substitution clauses, and therefore bringing many into the scope of ‘worker’ status in the gig economy, Smith has again successfully challenged his ex-employer, this time in relation to unpaid holiday pay for the entirety of his employment with them. Law The Working Time Regulations 1998 Regulation 13 - Entitlement to annual leave (1)    Subject to paragraph (5), a worker is entitled to four…

Pay and benefits

29 October 2021 Summary In this decision on deductions and the national minimum wage (NMW), the Employment Appeal Tribunal (EAT) overturned the decision of the initial Employment Tribunal (ET) in holding that where expenses are directly connected with employment, they fall within NMW legislation, even if the obligation resulting in the expenditure could have been met in another way.   Law Regulation 13 of the National Minimum Wage Regulations 2015: Deductions or payments as respects a…

Pay and benefits

1 July 2020 The EAT has provided guidance on situations where deducting wages for training costs and accommodation expenses could put organisations in breach of minimum wage law. As outlined in the National Minimum Wage Act 1998 (NMWA), and clarified by the National Minimum Wage Regulations 2015 (NMWR), workers must be paid at least the current rate of the minimum wage as set by the government. The law does permit certain deductions to be made from wage calculations that do not place…

Pay and benefits

20 March 2020 The EAT has overturned a previous ruling from the employment tribunal, finding that Middlesbrough FC had unlawfully deducted wages from their staff when taking money from salaries for season tickets. Under the National Minimum Wage Regulations 2015, employees are entitled to be paid at least the national minimum wage. There are certain deductions that can be made from their wage without going below the minimum, such as tax and National Insurance contributions. The Regulations…

Pay and benefits

The Employment Appeal Tribunal (EAT) has held that an organisation was wrong to completely depend on a negative right to work check when deciding to withhold work, and pay, from the claimant.    If an individual does not have the right to live and work in the UK, an organisation cannot employ them. Such an action can result in a civil penalty fine of up to £20,000 per worker, alongside criminal charges. However, it is possible for a ‘statutory excuse’ to be used as a defence for this if…

Pay and benefits

6 August 2019 (Please note this case has been appealed to the Supreme Court and is due to be heard November 2021) The Court of Appeal has held that holiday pay for permanent staff who only work part of the year, such as term time workers, should be calculated using average earnings over a 12-week period and not pro-rated. Article 7 of the EU’s Working Time Directive (WTD) outlines that workers in Member States should be provided at least four weeks of paid annual leave in one leave year. In…

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Pay and benefits

  Ruling confirms that collective agreements cannot be used to reduce minimum holiday pay Facts During 2015, the employee was placed on short-time working for a total period of 26 weeks. Over the course of 2015 and 2016, the employee took 30 days’ annual leave. According to German domestic law, pay for annual leave is calculated using a worker’s average earnings during a 13-week reference period. Within this legislation, there is a provision stating that earning reductions caused by a loss…

Pay and benefits, Business principles

Court of Appeal – June 2019 In a landmark judgement, the Court of Appeal has ruled that voluntary overtime does need to be taken into account when calculating holiday pay if it is ‘sufficiently regular and settled’.  The Working Time Directive (WTD) is EU legislation that gives all workers in Member States the right to at least four weeks (20 days) paid leave per year for workers who work five days a week. This is adapted into UK law through the Working Time Regulations 1998 (WTR), which…

Pay and benefits, Equality

Court of Appeal upholds decision that retail workers can compare pay terms to distribution workers due to common terms applying at the establishments. Facts Around 30,000 predominately female retail employees have submitted equal pay claims against the organisation, alleging there are not receiving equal pay in comparison to the pay terms afforded to predominantly male distribution employees. As set out within s79(4)(c) of the Equality Act 2010, claimants can rely on comparators where “…

Terms and conditions , Pay and benefits

Employment Appeal Tribunal – September 2018 The Employment Appeal Tribunal (EAT) has ruled that an employee was entitled to a written statement of terms despite only working for the organisation for six weeks. This case concerned three European claimants who were employed by a hotel as waiting staff and claimed they were poorly treated. Following a complaint to management about numerous issues, such as shortfalls in their wages, falsification of their wage slips and late payments, they were…

Pay and benefits, Termination

Employment Appeal Tribunal – November 2018 Contractual term preventing ill-health capability dismissal whilst receiving PHI benefits implied by EAT. Facts The employee worked as a security agent under a contract entitling him to a long-term disability benefit plan, which expressly stated that the benefits would cease if his employment was terminated. In October 2012, the employee commenced sick leave due to depression and his employment was subsequently outsourced to ICTS under the…

Pay and benefits

European Court of Justice (ECJ) – November 2018 The ECJ has ruled that domestic law does not prohibit the right for employees to be paid in lieu for untaken annual leave at termination of employment. Facts The ECJ was asked to consider two separate cases from Germany that concerned workers who, when their employment was to terminate, had requested an allowance in lieu for annual leave that they not taken. The first worker had not taken any annual leave at all during the last five…

Pay and benefits

19 March 2021 The Supreme Court (SC) has brought an end to uncertainty around sleep in shifts and national minimum wage (NMW) by confirming the rulings of the previous courts, specifically that a care worker who performed ‘sleep in’ shifts was ‘available for work’ and not 'actually working’ and so was not entitled to the NMW for the time spent asleep. Note. This matter is now closed as there is no further route to appeal.  Facts This case relates to a situation which had, up until this…

Pay and benefits

2018   Summary In this case on unpaid holiday pay, that went as far as the European Court of Justice (ECJ), it was held that where holiday has not been taken because the worker was not permitted to do so, then this holiday will carry over indefinitely, even where the leave was not given because the employer wrongly believed the individual was not legally a worker.  Employment Tribunal and Employment Appeals Tribunal (EAT) An employment tribunal decided he was entitled to pay in lieu…

Pay and benefits

Court of Appeal - February 2013 A graduate, working voluntarily at a museum in pursuit of a career in that sector, was offered a six-week training scheme through her Jobcentre. She was told the scheme was ‘mandatory’ and she risked losing benefits if she did not participate. She challenged the lawfulness of the regulations.   Reilly, a geology graduate, was working voluntarily at a museum in order to fulfil her ambition of working in that sector. She was receiving Jobseeker’s Allowance (…

Pay and benefits

Employment Appeal Tribunal – July 2017 Here the EAT decided an employment tribunal was right to conclude that voluntary overtime that was normally worked should be included when calculating holiday pay.   EU law requires that workers should receive their ‘normal remuneration’ while taking their statutory holiday entitlement (20 days under EU law) for work that is ‘intrinsically linked’ to the work they usually do.   Case law, such as Lock v British Gas, has indicated that workers who…

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Pay and benefits

20 June 2017 The Scottish Employment Appeal Tribunal has confirmed that breaks of more than three months in a series of holiday pay underpayments breaks the series, thereby limiting the scope for back pay   When Bear Scotland v Fulton was heard in the Employment Appeal Tribunal (EAT) in 2014, the EAT decided that ‘non-guaranteed’ overtime that is part of ‘normal remuneration’ should be included in holiday pay. But the EAT limited the scope for employees to claim back pay.   Because a…

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Pay and benefits, Equality

Employment Appeal Tribunal February 2017 Here the EAT decided that the purpose of an employee’s request for a five-week holiday in Sardinia was to visit his family, rather than to attend religious festivals, and so refusing it was not discriminatory.   Gareddu, an engineer, had worked for London Underground for over 25 years. He was entitled to 38 days’ holiday a year, and between 2009 and 2013 had been allowed to take the whole of August off (five weeks) in order to visit his family…

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Pay and benefits, Equality

Employment Tribunal – January 2017 Here changes made to a pension scheme for judges was found by an employment tribunal to be less favourable treatment which the Ministry of Justice could not justify. This case was brought on behalf of 210 judges at various levels in the judiciary. They claimed that a new pension scheme disadvantaged them, and that this was age discrimination and, where the scheme disadvantaged female and ethnic minority judges, race and sex discrimination. The claimants…

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Pay and benefits

7 October 2016 Here the Court of Appeal held that commission based on results must be included when calculating holiday pay, confirming earlier decisions of the Court of Justice of the European Union (CJEU), an employment tribunal (ET) and the employment appeals tribunal (EAT). Under the Working Time Regulations 1998 (WTR), workers have a right to paid annual leave. The intention is to put the worker in a comparable financial position to being at work. However holiday pay in the UK was not…

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Pay and benefits

Court of Justice of European Union – July 2016 Here the European court has confirmed that a period of convalescence serves the same purpose as sick leave, which means holiday due to taken during it may need to be carried over to the following leave year. Sobczyszyn, a teacher in Poland, was unable to take her accrued annual leave entitlement in the school summer holidays as her contract required, because she was undergoing an agreed period of convalescence. She asked to carry her leave…

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Pay and benefits

Employment Tribunal – May 2016 This is the first decision from an employment tribunal in England on whether voluntary overtime should be included in holiday pay calculations. The tribunal decided it should be. The case involved 56 claimants working on repairing and maintaining a local authority’s social housing. They had the option of working additionally on Saturdays and could also choose to go on standby every four weeks to deal with emergency call-outs and repairs. The employer…

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Pay and benefits

Court of Appeal – May 2016 An HR executive could not prove that a conversation held ten years earlier with the HR director from the company that was taking over his own was contractual and binding with regard to pension rights Cunliffe joined the company in this case as a senior human resources executive. His letter of appointment (although not his employment contract) said he could join the defined contribution (DC) pension scheme, which he did a year later. When the company was taken…

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Terms and conditions , Pay and benefits

High Court: February 2016 Here an employee failed to prove his bonus, which was lower than his colleagues’, was ‘irrational and perverse’, because the contractual rules permitted the employer to treat the employees differently   A derivatives trader’s contract of employment stated he was entitled to be considered for a discretionary bonus. The factors to be used when determining the level of bonus, such as the bank’s overall performance and his individual contribution, were described in…

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Pay and benefits

Employment Appeal Tribunal: November 2015 Sleeping on site did not entitle a care home assistant to back payments of the national minimum wage for all the hours he was on site, as he was seldom called on to actually assist night care workers while there.   The national minimum wage (NMW) legislation specifies that working time can include time when workers are available for work at or near their place of work.   Shannon was an on-call night care assistant at a residential care home…

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Pay and benefits, Equality

Court of Appeal: October 2015 In this case, the claimant had worked for the employer for 23 years before retiring in 2003. He had lived with his partner since 1993 and, following their civil partnership in 2006, wanted to clarify the amount of pension his partner would receive on his death.   The Equality Act 2010 prevents occupational pension schemes from discriminating on the grounds of sexual orientation, which means civil partners must be treated the same way as spouses on the death…

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Pay and benefits

Northern Ireland Court of Appeal – July 2015 In this test case, the Northern Ireland appeal court decided there was no reason in principle why voluntary overtime should not be included in holiday pay.   Voluntary overtime is generally agreed to be overtime which the employer is not obliged to provide and which the employee can choose to work or reject. Patterson worked 52 hours over a reference period of 13 weeks, an average of four hours overtime a week, giving him additional pay of £60…

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Pay and benefits

Employment Appeal Tribunal – July 2015 A worker who had been off sick for nearly four years, and who had not taken or requested any holiday, was not entitled to be paid in lieu for all his unused holiday when his employment ended. This case also establishes that 18 months should be the ceiling on carrying over holiday untaken due to sick leave.   Under the Working Time Regulations 1998, workers are required to take their statutory holiday during the holiday year in which it accrued and…

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Pay and benefits, Termination

Employment Appeal Tribunal - March 2015 This case had to decide whether a genuine redundancy dismissal amounted to age discrimination because its timing avoided significant pension costs. The EAT also had to decide, if this was discrimination, whether it could be justified.   The claimant was dismissed for redundancy a few days before her 55th birthday; if she had been dismissed after that date she would have been entitled to take her pension immediately. She argued that the timing of…

Judgement published:
Pay and benefits

Employment Appeal Tribunal - December 2014 A commission-only worker, who was unable or unwilling to take holiday because of the loss of income associated with doing so, was not able to claim for lost holiday pay but was entitled to claim for the loss of the benefit of taking holiday.   If annual leave cannot be taken because of sickness, it must be granted at some other time, or paid for on termination of employment. This case raises the possibility that the same principle could be…