Legal Round-Up

April enforcement dates, new legislation, and the latest case law from courts and tribunals

April saw the shared parental leave rules reached the ‘expected week of childbirth’ trigger, the Small Business, Enterprise and Employment Act 2015 became law just before Parliament shut down for the general election, an employment tribunal released the first part of its judgment on the Lock holiday pay case, and new statutory pay and tribunal compensation limits increased.

April changes

A whole raft of employment law changes were ushered in on 5 April:

  • Shared parental leave rights applied to babies due, or children matched for adoption
  • Parental leave, which is unpaid, was extended to parents of children under 18 years (previously the leave had to be taken before the child’s fifth birthday, unless the child was adopted or disabled)
  • Additional paternity leave ceased to be available, although the rights continue until April 2016 to cater for parents of babies due, or children matched for adoption, before this date (usually the leave can only start 20 weeks after the child’s birth or matching, and must be taken within a year of that date)
  • Statutory maternity, paternity, shared parental and adoption pay increased from £138.18 to £139.58.

On 6 April:

  • Statutory sick pay increased from £87.55 to £88.45
  • Limits on a week’s pay (used for calculating redundancy and unfair dismissal basic awards) increased from £464 to £475
  • Maximum basic award for unfair dismissal and statutory redundancy payment rose from £13,920 to £14,250
  • Cap on the compensatory award for unfair dismissal went up from £76,574 to £78,335.

 

Also from this date, new consolidating regulations governing the National Minimum Wage are in force. New NMW rates apply from 1 October 2015. The government is planning to launch a new online tool, called the National Minimum Wage Accelerator, which will compare rates of pay across regions, sectors and occupations, drawing on data collected annually by the Office for National Statistics.

New legislation

The Small Business, Enterprise and Employment Act 2015 became law on 26 March. It includes provisions on mandatory equal pay reporting for companies employing 250 or more, a ban on exclusivity clauses in zero hours contracts without a guaranteed weekly income, measures for clawing back exit payments from public sector executives who are then re-employed in the same area of work, a fine capped at £5,000 for employers that fail to pay compensation awarded by tribunals and an increase in penalties for employers not paying the national minimum wage.

Most of the changes need further regulations to bring them about, which will require the backing of the new post-election government. The equal pay reporting provisions stipulate the new regulations should be introduced by the end of March 2016.

Case law

The holiday pay case Lock v British Gas has returned to an employment tribunal following its referral to the European court. The tribunal followed a previous EAT decision which said that the UK’s Working Time Regulations 1998 can be amended to include commission when calculating pay for four (in other words, the basic holiday entitlement under EU law) out of the 5.6 weeks statutory leave UK workers have a right to. The tribunal also thought the employee in this case should be treated like a piece worker under the regulations, which would mean using a 12-week reference period when calculating holiday pay. However, exactly how the calculation will be done in this case is to be decided at a later date.

Employment partner at Irwin Mitchell Glenn Hayes pointed out that the circumstances in the Lock case were relatively straightforward and that ascertaining what an employee is owed will not be so easy where, for example, commission is paid annually, or is based in part on team performance. “We are likely to need further cases before we have answers to the more difficult questions,” he said.

Research conducted by Irwin Mitchell and polling company YouGov found that a quarter of employers surveyed expected staff costs to increase as a result of the holiday pay case law, and that half of the senior managers surveyed did not have a plan for dealing with the issue. From 1 July 2015, claims for backdated underpayment of holiday will be limited to two years under the Deduction from Wages (Limitation) Regulations 2014.

The European court is due to deliver its judgment on 30 April 2015 on defining an “establishment” for collective consultation purposes in the ‘Woolworths’ case. In February the EU Advocate General gave a legal opinion on the case, which is called USDAW v WW Realisation 1, that ‘establishment’ was the local employment unit to which the redundant workers are assigned – in this case, the shop – and did not require employers to aggregate dismissals across the whole organisation to see if this triggered consultation requirements. The Court of Justice of the European Union does not have to follow the AG opinion.

The issue of tribunal fees is due to return to the courts in June as Unison has been given permission to appeal the decision of the High Court failing to grant the trade union a judicial review of their introduction.

Petaurum Solutions’ Comment

At Petaurum Solutions we are experts in ensuring your policies, processes and working practices not only comply with legislation but are also appropriate for your business. Talk to us to see how we can help.

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