Category Archives: Employment Appeal Tribunal

Protected Conversations Must Remain Secret

SUMMARY: Learn more about protected conversations with your employeesPrivate conversations

In 2013 there was a welcome change, which now enables employers to have what are called protected conversations with their employees about ending the employment relationship.  Previously, employers had been nervous about having such conversations, due to the risk that an employee would later rely on what had been said as evidence in an unfair dismissal claim.

Since then employers in some circumstances have been able to speak more freely with those employees who are not considered to have a future with the organisation, usually because their performance or conduct is substandard. Once the discussions have started, there are likely to be two outcomes:

  1. The employee agrees to leave and their departure is managed with a settlement agreement to remove the risk of any tribunal claim. To learn more about settlement agreements, please click on the following link – http://www.fgsolicitors.co.uk/news/settlement-agreements-a-perfect-ending/
  2. The employee declines the offer of an agreed departure.  If that is the case, the employer can then go back to its internal procedures to manage the situation. If the employee is subsequently dismissed, the following protection arises so that there can be no reference to either:
  • the content of any settlement offer or the pre-termination discussions; and/or
  • the fact an offer has been made or pre-termination discussions have arisen. This level of protection has recently been confirmed by the Employment Appeal Tribunal, which explained that an employee should not be able to refer to the fact discussions have taken place pre-dismissal in an unfair dismissal claim.

Clarification was also provided that the protection extends to any internal discussions between different managers and human resources.

Protected conversations are potentially a safe way of managing straightforward people management issues. Employers however wanting to have such discussions should be aware of the following:

  • The protection is lost if either party engages in improper behaviour including for example, bullying, harassment, discrimination, victimisation, physical assault, or undue pressure.

Telling an employee that the capability or conduct procedure will be invoked if terms cannot be agreed would not be improper behaviour.  Stating that the individual would be dismissed if they do not agree to leave would be improper behaviour.

  • The employee should be given a reasonable period of time to consider any offer and take advice; ten days is usually considered to be reasonable in most cases.  Although there is no statutory right to be accompanied at any meeting where a protected conversation takes place, as a matter of good practice an employee should be entitled to be accompanied by a work colleague or a trade union representative.
  • The protection will only apply in respect of “ordinary” unfair dismissal claims. Where an employee brings proceedings for automatically unfair dismissal (for example, whistleblowing or health and safety), or any other claim such as discrimination or breach of contract, the protection afforded to pre-termination negotiations will not apply.  This does therefore create inherent uncertainty in the effect of initiating a pre-termination negotiation until an employee commences proceedings, or decides not to do so as settlement terms have been agreed.

If you consider that you may want to have a protected conversation with an employee, it is preferable to take legal advice before doing so.  This will ensure that you are confident that a protected conversation is the right way forward and if not, what other ways there are to managing the situation.

Contact Details

To explore how protected conversations and settlement agreements can provide solutions to workplace problems – please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172 93 22

This update is for general guidance only and does not constitute definitive advice.

When The Office Party Packs a Punch….

Xmas PunchSUMMARY: MBNA Limited v Jones considers the issue of consistent treatment in relation to dismissal where employees are involved in the same misconduct incident.

The office Christmas party season is looming and no doubt plans will already be underway for staff to be able to celebrate the end of the year together; the party season will also be a great opportunity to thank staff for their hard work during 2015.

Undeniably an office party can boost morale. Improved morale can be beneficial to the business but employers are more aware than ever of the potential pitfalls that can arise from their generosity. Previously well behaved employees can become uninhibited and reckless after consuming too much alcohol, forgetting that the same standards of workplace behaviour need to be adhered to at work functions or social events.

How would you deal with an employee who punches a colleague at the office social event? Dismissal will usually be reasonable for this type of behaviour, even if it occurred outside the workplace. Here’s the twist though, the victim subsequently sends threatening texts to their assailant. Would you still dismiss the assailant? Would you also dismiss the victim?

Many employers are aware of the need to treat employees consistently when it comes to dismissal. Otherwise, the dismissal could give rise to a costly unfair dismissal claim in the Employment Tribunal.

In the recent case of MBNA Limited v Jones, the Employment Appeal Tribunal had to consider the scenario described above and whether the dismissal of the assailant was unfair due to inconsistent treatment; the victim was only given a final written warning. The employer was found to have acted reasonably when deciding to dismiss the assailant as the leniency shown to the victim was irrelevant. The justification for this conclusion was that it would have been perverse to have treated a deliberate unprovoked punch as sufficiently similar to the texts subsequently sent as a response to being hit.

Recommendations for dealing fighting and violence in the workplace

When dealing with disciplinary issues and particularly those relating to fighting and violence, employers should be mindful of the following:

  • Ensure that employees know the type of behaviour which is unacceptable in the workplace; violent behaviour should be prohibited. Make it clear that conduct rules are equally applicable at work related functions and social events, even if off site.
  • Whilst it may be tempting to take short cuts where violence is involved and move straight to dismissal without further enquiry, always follow the Disciplinary Procedure. A thorough investigation is essential, particularly where a number of employees are involved in the incident.
  • If considering dismissing only some of the individuals involved, ensure that the difference in treatment can be justified. In the case described above there was a clear distinction.
  • When considering whether dismissal is an appropriate sanction, take into account long service, previous good conduct and provocation.

Case

MBNA Limited v Jones UKEAT/0120/15

Contact details

If you would like advice on any of the issues raised in this article, please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 808 172  93 22

This update is for general guidance only and does not constitute definitive advice.

Is Caste Discrimination a Workplace Consideration?

 

DiscriminationSUMMARY: Chandhok and another v Tirkey establishes that race discrimination can include caste discrimination.

Caste discrimination in the workplace

The recent Employment Appeal Tribunal (“EAT”) decision in Chandhok and another v Tirkey (“the Tirkey case”) caused a bit of a stir. Whilst many of us focused on the significant award of nearly £184,000 made to the claimant, a domestic worker, in relation to her minimum wage claim, the case was of greater importance as it considered the issue of caste discrimination in the workplace. Until now there has been much debate as to whether a worker who had suffered caste discrimination had the right to legal redress.

Caste usually refers to social levels in certain cultures and racial groups. The impact is that individuals’ positions in society are fixed by birth or occupation and are hereditary. For example, an individual’s caste could be determined by the occupation of their forefathers.

In 2010 the Government-commissioned report on caste discrimination (“the 2010 report”) recognised that caste discrimination could be an issue for employers. This was the case even though from a legal perspective the concept was not expressly addressed in the Equality Act 2010, which only makes reference to “race” which includes “colour; nationality; ethnic or national origin”.

Examples of workplace caste discrimination

The 2010 report did however provide examples of workplace caste-based unfair treatment, bullying and harassment. These included:

  • Exclusion from work social events and networks.
  • Humiliating behaviour such as “women of so called upper castes not taking water from the same tap from where the so called lower caste person drinks”.
  • Bullying and harassment by superiors which also affected promotion, task allocation and dismissal.  Examples given included:
    • Not permitting someone of a low caste to take holiday when requested.
    • An individual being promoted to manager but his team not accepting his authority because he was of lower caste than them.
  • Recruitment – if employees are taken on by recommendation, this could be because they are of the same caste.
  • Task allocation – a higher caste manager was alleged to allocate better paid work to higher caste employees.

The equal treatment principal

Whilst employers are fully familiar with the legal requirement that all workers must be treated equally regardless of a protected characteristic under the Equality Act 2010, caste discrimination has always been a grey area.

Caste discrimination is a type of race discrimination

The Tirkey case has however provided some long awaited clarity, confirming that caste discrimination can be classified as a type of race discrimination. This case also provides a clear (if extreme) example of caste discrimination in the UK – on the particular facts it was found that Ms T was the victim of unlawful harassment on the ground of her race (as well as other successful claims).

The facts of this case are as follows:

  • Ms T worked for Mr and Mrs C as a domestic worker. Her caste (which is inherited and immutable) is the Adivasi, which is known as a “servant caste”. Adivasis have been recognised as being at the lowest point of almost every socio-economic indicator, and are frequently equated with Dalits (once known as “untouchables”). Ms T claimed that Mr and Mrs C treated her badly and in a demeaning manner, and that this was in part because of her low status which was infected with considerations of caste.
  • The employment tribunal was told that over a four and a half year period Ms T:
    • worked an 18-hour day, seven days a week;
    • slept on a foam mattress on the floor;
    • was prevented from bringing her Bible to the UK and going to church;
    • had her passport held by Mr and Mrs C and she had no access to it;
    • was not allowed to call her family; and
    • was given second-hand clothing instead of choosing her own clothes.

This is (we hope) an extreme situation which does not involve a normal employer/employee relationship. Employers should however be aware that caste discrimination can and does occur in many business situations.  The 2010 report stated that caste awareness in Britain is concentrated amongst people with roots in the Indian subcontinent, who comprise five per cent of the population.

Equality and diversity initiatives can be beneficial

Employers with robust management initiatives around equality and diversity should be in a position to prevent unlawful discrimination on the grounds of a worker’s caste.  Main considerations for any equality and diversity strategy should involve the following:

  • Having a top level commitment to equality and diversity in the workplace.
  • Ensuring there is an equal opportunities policy in place which makes it clear that discrimination, bullying and harassment will not be tolerated. Employees should be made aware of the existence of the policy and the likely sanctions for breaching it.
  • Making sure equality training is an integral part of any training programme.
  • Analysing business decisions and practices which could have the effect of discriminating on the grounds of any protected characteristic including race (caste).  Areas for review include: discipline and grievances; recruitment; promotion; pay and reward; terms and conditions; and access to training.
  • Investigating complaints of discrimination, bullying and harassment under the grievance procedure or, where relevant, the anti-harassment and bullying policy.
  • Having strategies which ensure that the workforce is diverse and is representative of the areas/communities from which it is drawn.
  • Monitoring the effectiveness of the equal opportunities policy.
  • Taking remedial action where inequality is identified.

Those businesses that strive to remove workplace bias will find themselves much better off in terms of staff morale, productivity and access to untapped talent.

Cases

Chandhok and another v Tirkey [2015] IRLR 195

Contact details

For more details about discrimination in the workplace, developing workplace equality and diversity strategies and training please contact:

fgmedia@floydgraham.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

Carrying over holiday entitlement when on sick leave – how much and when?

HolidaysSUMMARY: In the recent case of Plumb v Duncan Print Group Ltd UKEAT/2015/0071, the EAT dealt with the issue of a sick worker’s right to carry over holiday entitlement.

Holiday is a hot topic for employers – recent decisions on holiday pay have led many employers to re-think how overtime could be taken into account in such payments.

However, an equally vexing problem which employers need to solve is how to deal with the holiday entitlement of those workers who are on sick leave. The EAT considered this in the recent case of Plumb v Duncan Print Group Limited.

Background

As a reminder, there are the following important principles to take into account when considering a sick worker’s entitlement to annual leave:

  1. Workers are generally only entitled to take annual leave in the leave year in respect of which it is due. For example, if the leave year is between January and December, an employee must take all of their annual leave entitlement by the end of December.
  1. An exception to the principle in point 1 is that annual leave may be carried over where the worker was unable or unwilling to take annual leave because he was on sick leave and as a consequence did not exercise his right to annual leave. The worker does not have to have made a request for annual leave in order to carry it over.
  1. On termination of employment, if the worker is entitled to annual leave in respect of any previous leave year which was carried over because of sick leave, the employer should pay the worker in lieu of that annual leave.

When considering carrying over annual leave, we are only referring to carrying over the 4 weeks of annual leave that a worker is entitled to under the (European) Working Time Directive, not the additional 1.6 weeks that a worker is entitled to under the (British) Working Time Regulations or any additional contractual annual leave.

Where clarity was required

There were 2 areas which needed clarity:

  1. How far back should a payment in lieu of holiday go on the employment ending?

In relation to point 3 above, it is clear that a worker should be paid in lieu for holiday they were unable to take because of sick leave.  What was not clear before this case, was how far back a worker could claim holiday for.  To take an extreme example, if they had been off sick for 5 years and had not taken any holiday, if their employment was terminated in the sixth year, could they claim a payment in lieu of all the 5 years of holiday they had been unable to take?

  1. Should a worker unwilling but able to take annual leave be entitled to carry over holiday?

Another point which required clarity was whether a worker who was unwilling to take annual leave during sick leave should be permitted to carry it over, even if he would have been physically able to take the annual leave during the sick leave period, had he chosen to do so.

Facts of the case

Mr P (the employee) was on sick leave between 26 April 2010 and 10 February 2014, when his employment terminated.  Mr P did not take or request any holiday until summer 2013 when he requested permission to take all of his accrued holiday from 2010 onwards.  The employer agreed to pay for accrued holiday for the current leave year (2013/2014) but refused to pay for untaken holiday for the previous 3 leave years.  The leave year ran from 1 February to 31 January.

Mr P brought a claim for payment in lieu of untaken leave for the 2010/2011, 2011/2012 and 2012/2013 leave years. The employment tribunal dismissed his claim and he appealed to the EAT (Employment Appeal Tribunal).

Decision

The EAT allowed Mr P’s appeal in respect of accrued leave for the 2012/2013 holiday year (i.e. he would be entitled to a payment in respect of these years), but dismissed his appeal in respect of accrued leave for the previous two holiday years.

The EAT made it clear that:

  • Sick workers can carry over untaken holiday leave for 18 months after the end of the leave year.
  • Sick workers are not required to demonstrate that they are unable to take their holiday.  They can choose not to take holiday during sick leave.

What does this mean for employers?

  • Employers now have more clarity on how much annual leave an employee can carry over from previous years.  Taking the example given earlier, an employee on the termination of their employment would not be entitled to payment in lieu of annual leave for the entire 5 years they had been off sick.  They could only carry over untaken holiday leave for 18 months after the end of the leave year and on termination would be entitled to a payment in lieu of this holiday.  A practical example of this would be:
    • The leave year runs between 1 January and 31 December.
    • Mr A has a full time contract and is off sick from 1 January 2010 until his dismissal on 1 January 2015.
    • Mr A has not taken any annual leave in this 5 year time period and his contract of employment does not state anything about carrying over annual leave.
    • Mr A would be entitled to a payment in lieu of 8 weeks annual leave on the termination of his employment.  This relates to the annual leave for the leave year ending 31 December 2013 and for the leave year ending 31 December 2014.
  • Employers should check their contracts of employment in relation to the carry-over of holiday entitlement.  If employers allow more carry-over of annual leave than is necessary, employers may want to amend these contracts.  Contracts should also not set out that carry-over of annual leave is never permitted.
  • Employers should permit workers to carry over untaken annual leave while they are on sick leave even if they consider that workers would have been able to take this annual leave had they chosen to do so. Whether to take annual leave during sick leave is a decision for the worker and they are entitled to choose not to take the annual leave even if they would have had the ability to take it.  They are also not required to request the annual leave if they wish to carry it over.

Cases

Plumb v Duncan Print Group Ltd UKEAT/2015/0071

Contact Details

For more details about holiday leave entitlement and its interaction with sick leave please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

When is Anxiety a Disability?

17765960_s[1]
SUMMARY: Employment Appeal Tribunal upholds the decision that an employee with a depressive and anxiety disorder did not have a disability.

Legal background

Legally, an employee is considered to have a disability if they have a physical or mental impairment which has a substantial long-term adverse effect on their ability to carry out normal day-to-day activities.

This is a fairly wide definition and due to its specific reference to “mental” impairment”, can include depressive and anxiety-related impairments.  However, if there is doubt as to whether an employee has a disability, the definition is considered in detail by an employment tribunal.  The tribunal will analyse whether all the parts of the definition are satisfied, which is an activity which the tribunal had carried out in this case.

Part of considering whether the impairment constitutes a disability includes considering the effect on the employee’s ability to cope in their job. 

If an employee is disabled, this will have implications for an employer, including a duty to make reasonable adjustments for the disabled employee.

Facts of the case

In the recent case of Mr R A Saad v University Hospital Southampton NHS Trust and Health Education England Mr Saad had a depressive and general anxiety disorder. 

The employment tribunal held that Mr Saad was not disabled because although he had a mental impairment, this did not have a substantial adverse, nor long-term, effect on his ability to carry out normal day-to-day activities.

The employment tribunal considered Mr Saad’s evidence to be unsatisfactory as to the effect of the impairment on him.  It noted that his oral evidence qualified, or contradicted, his earlier evidence as to the effect of his impairment on his day to day activities.

Mr Saad appealed this decision to the employment appeal tribunal (EAT).  One of his arguments was that the tribunal had not considered his ability to communicate with colleagues, access the work-place and concentrate.  Amongst other things, he referred to his inability to read two medical textbooks. 

The Employment Appeal Tribunal’s (“EAT’s”) decision

The EAT upheld the tribunal’s decision that Mr Saad was not disabled.  The EAT considered that the tribunal had considered the impact on his workplace-related activities including his ability to communication with colleagues, access the work place and concentrate.

What does this mean for employers?

Although in this case it was decided that the depressive and anxiety disorder was not a disability, it is clear that such a disorder can be a disability in some cases.  Each case depends on the specific circumstances of each employee.  In this case, the employment tribunal had concerns about the quality of the employee’s evidence but in other cases, an employee may give more compelling evidence as to the effect of a mental or physical impairment on his day-to-day activities. 

When managing sickness absence, including mental impairments, employers should seek medical evidence and legal advice, especially if there is any uncertainty as to whether there may be a disability.

Contact Details

For more information about this case or managing sickness absence, please contact: 

fgmedia@fgsolicitors.co.uk 

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

Holiday Pay & Overtime – Next Steps

Holiday pay & overtimeSUMMARY: Employers need to consider their next move in the holiday pay saga following the EAT’s recent decision that non-guaranteed overtime must be included in holiday pay.

Reflecting on the highly publicised recent decision of the Employment Appeal Tribunal employers who have not accounted for overtime payments in holiday pay are probably wondering what their next move should be.

Current position

For those who missed the news, the current position in terms of overtime and calculating holiday pay can be summarised as follows:

  • Where the worker works normal working hours, overtime pay arising from the following types of overtime will have to be included in the holiday pay calculation:
  • Guaranteed (compulsory) overtime in relation to the full 5.6 weeks statutory minimum holiday entitlement.
  • Non-guaranteed overtime where the employee is required to work. This applies to the minimum 4 weeks statutory minimum holiday entitlement. This does not apply to the additional 1.6 weeks’ leave under which only guaranteed (compulsory) overtime is taken into account in respect of workers who work normal working hours – see previous bullet point. This principle is subject to appeal – see below.

No definitive conclusion has been reached about voluntary overtime. This is overtime where an employer does not have to offer work and if offered, an employee does not have to accept it. It is therefore open to debate in these circumstances if voluntary overtime it should be included in the calculation. If however there is a settled pattern over a sufficient period of time it may have to be taken into account. An employer’s day-to-day practices in relation to voluntary overtime will be key to identifying if there is a potential liability; employers should keep this under review and if in doubt further advice should be taken.

Normal working hours arise where a worker’s contract sets out a fixed number of hours in a week or specific period.

  • Where there are no normal working hours, pay will be calculated as an average of all the sums earned in the previous 12 working weeks, which will include any overtime payments.

Before the decision, employers should have in any event already been accounting for overtime payments in holiday pay, unless the overtime was purely voluntary where there are normal working hours. Since the decision, overtime payments for non-guaranteed overtime where there are normal working hours must be accounted for.

Grounds of appeal

The matter does not end here as the Employment Appeal Tribunal (“EAT”) has granted leave to appeal to both the employers and the employees. If the further litigation does follow, the Court of Appeal will be asked to consider on behalf of the employers whether the EAT was right to conclude that payments for non-guaranteed overtime should be taken into account when calculating holiday pay where a worker works normal working hours.

The EAT in its decision also limited a workers ability to bring backdated claims for underpaid holiday. This means that workers cannot use each shortfall in holiday pay as part of a series of deductions for the purposes of an unlawful deduction of wages claim where a period of more than three months has elapsed between the deduction (underpayment). The EAT has also granted leave to the employees to appeal this point, noting that it is “arguable as well as in the public interest”.

An uncertain position

There is therefore still some uncertainty as to what the final position will be in terms of whether non-guaranteed overtime where there are normal working hours should be accounted for, and whether concerns about significant retrospective claims for unpaid holiday will again become a live concern.

Employers should assess the risk

What an employer chooses to do in response to this decision will depend upon the level of financial risk in relation to historical and future claims and what the employer’s tolerance would be to that risk.

Before taking any action, a sensible starting point would be to work out the size of the issue in relation to overtime; this would also be a good time to ensure other supplementary payments such as shift allowances, attendance bonuses or commission are also being treated correctly.

Employers can then decide whether they need to make accruals for possible claims and whether they need to or want to make changes.

Some employers may choose to do nothing and wait to see what happens in relation to the appeal. Our view however is that even if the decision is to do nothing this should be on an informed basis, made only following a full legal compliance and financial risk assessment. The worst case scenario for employers is that the Court of Appeal will uphold the EAT’s decision about the inclusion of non-guaranteed overtime being accounted for in holiday pay and that the limit put on backdated claims will be removed.

Cases

Bear Scotland Ltd v Fulton and Baxter

Hertel (UK) Ltd v Woods and others

AMEC Group Ltd v Law and others

Contact Details

For more details about how to deal with the issue of holiday pay, overtime payments and other supplementary payments please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice.

STOP PRESS: Overtime = Holiday Pay

FG Solicitors Stop PressEmployment Appeal Tribunal (“EAT”) Hands down Judgment in Relation to Holiday Pay

Broadly, the appeal involves a determination of the meaning of ‘normal remuneration’ in a number of cases. The European Directive provides that employees are entitled to be paid ‘normal remuneration’ during holidays to which they are entitled under EU Law. This has been interpreted to mean their typical average pay and not only basic pay.

By comparison, the UK law entitles employees with normal working hours to receive basic pay only during any period of holiday.

The conclusion of the EAT in this appeal is that employees are entitled to be paid their average earnings. So by way of example, overtime payments would be accounted for in calculating an employee’s holiday pay.

Potentially, a significant number of UK workers, who have historically received basic pay only, may now have claims for unlawful deduction of wages given that the employers’ appeal in this case has failed.

The employers’ appeal to the EAT has however succeeded on the issue of how far back employees can claim. The position now appears to be that if there is a gap of more than 3 months in any claimed series of deductions, the Employment Tribunal will lose its jurisdiction to hear claims for the earlier deductions.

More to follow…

Cases:

Bear Scotland Ltd v Fulton and Baxter

Hertel (UK) Ltd v Wood and Others

Amec Group Ltd v Law and Others

Please contact FG Solicitors for further information on what employers should be doing now.

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

The Importance of Itemised Payslips and Deductions

Payslip DeductionsSUMMARY:  In the recent case of Ridge v HM Land Registry, the EAT confirmed the position that adjustments on a payslip are deductions and should be itemised.  Following this, we set out tips for dealing with situations where deductions from pay may be made.

Legal background

An employee has a right to an itemised pay statement.  This statement must contain:

  • the gross amount of the wages or salary;
  • the amounts of any variable, and any fixed, deductions from that gross amount and the purposes for which they are made;
  • the net amount of wages or salary payable; and
  • Where different parts of the net amount are paid in different ways, the amount and method of payment of each part-payment.

If an employer does not comply with the requirement to notify the employee of deductions on the payslip, the employee can bring a tribunal claim and the tribunal could:

  • issue a declaration that the payslip does not contain the required particulars; and
  • make an order to pay the employee the total amount of the deductions made in the 13 weeks before the application to the tribunal.

Facts of this case

In this case, the employer paid its employees on the last day of the month and each employee was given a payslip. The gross amount of pay the employee was entitled to receive was set out on the left-hand side of the payslip (as a general rule, one-twelfth of their gross annual salary, plus any allowances they were entitled to) and deductions from that amount were set out on the right-hand side.

The employee, Mr R, had significant periods of sickness absence. After exhausting his sick pay entitlement he continued to be absent from time to time.  This meant that there were months when he was entitled to be paid for some days but not others. This affected the figure for his gross pay in two ways:

  • where absences were reported and processed before the end of a month, the gross amount was reduced appropriately; and
  • where absences were not reported and processed before the end of the month in which they occurred Mr R was overpaid for that month. The overpayment was recovered from his following month’s gross pay.

Reductions to Mr R’s payslips were shown by a figure with a minus sign next to them. However, there were no further details explaining the variation to his gross total pay, whether adjustments were made in the same or following pay period.

Mr R considered that an explanation should appear on his payslips but, while it explained the purpose of the deductions, his employer did not make any changes to its payslips.

The Employment Appeal Tribunal’s (EAT’s) decision

The employment tribunal had dismissed Mr R’s claim and held that the variations to Mr R’s pay were adjustments, not deductions.

The EAT overturned the employment tribunal’s decision and held that where overpayments were recovered from a subsequent month’s gross pay, this was a deduction and the employer had failed to identify the amount and purpose of the deductions on Mr R’s payslip.  Mr R was entitled to a declaration to that effect.

The EAT suggested that some abbreviated words on Mr R’s payslip to make it clear that the sum was recovery of an overpayment would have sufficed.

The EAT also provided some helpful guidance for itemising payslips:

  • deductions must be identified and explained;
  • hidden and unexplained deductions are not permitted; and
  • it is enough to state gross and net salary and to identify the amount of any deductions and the purposes for which they are made; detail of detail is not required.

The EAT did not however order the employer to pay the employee the total amount of deductions as the employee claimed it should.  When making this decision, the factors the EAT took into account included the fact that the deductions were apparent on the payslip and the purpose of the deductions was explained to Mr R before he commenced proceedings.

What does this mean for employers?

This case highlights the importance of correctly itemising payments and deductions on payslips, even where the employee understands the basis for a deduction.  Employers that reduce an employee’s wages to recover an overpayment made in a previous period may be at risk of punitive damages up to the amount that they have deducted if they have not identified the deduction properly.  This is despite the employer being entitled to make the deduction and the employee understanding the reason for the deduction.

Of course, as well as ensuring the deduction is explained on the payslip, it is important to ensure that the employer is permitted to make the deduction in the first place.  Otherwise, employers could also bear the risk of employees bringing a claim for unlawful deductions from wages.  In the event of a series of deductions, the claim could go back much further than the last 13 weeks.

Here are our top 5 tips for successfully deducting sums from employees’ wages:

1. Ensure that you have the employee’s consent  for the deduction.  The usual way to obtain this is in the contract of employment.

2. Think about obtaining consent for all the types of deduction you may wish to make, as well as an overarching statement permitting deduction of monies owed by the employee to the employer.  Usual deductions include:

  • where an employee has taken more holiday than they have accrued;
  • pension contributions;
  • deductions for a float provided at the beginning of employment;
  • where an employee is paid enhanced maternity pay on condition that she returns to work for a set period after her maternity leave, but she does not do so;
  • where an employer has loaned a sum of money (for example for a season ticket loan); and
  • deductions for training costs where an employee leaves shortly after the training.

3. Ensure that the contract of employment, containing clauses referring to the relevant deductions, is signed by the employee before any deductions are made and that you have a copy of this on file.

4. In relation to deductions for specific (perhaps one-off) purposes, have a separate signed agreement before the event leading to the deduction occurs.  For example:

  • In relation to training, have a separate training agreement in relation to specific training courses if you intend to be able to claw back some or all of the training costs from employees, setting out the circumstances in which some or all of the costs may be deducted.  This must be signed in advance of the employee starting the training.
  • In relation to a season ticket loan, have a separate signed agreement before the loan is provided to the employee.
  • In relation to enhanced maternity pay, have a separate signed agreement before the employee commences maternity leave setting out the circumstances in which the employer will be entitled to deduct the enhanced payments from the employee’s wages.

5. Ensure itemised payslips are provided on or before the payment date.

Contact Details

For more details about details to include on payslips and ensuring that you can make the appropriate deductions from wages please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Whistleblowing – The Line Between a Quick Toot and a Vuvuzela Style Blast

vuvuzelaUK Workers who blow the whistle are protected from employers dismissing them or subjecting them to a detriment on the grounds that they have made a protected disclosure.

A protected disclosure is the disclosure of information which, in the reasonable belief of the worker making the disclosure, is made in the public interest and tends to show the existence of one of six particular states of affairs (e.g. failure to comply with a legal obligation).

Although not the subject of this article, following a recent Supreme Court decision, an LLP member is considered as a worker and so has whistleblowing protection.

But what happens if a worker blows the whistle and will not stop?  Will they remain protected or could the continual noise be separated from the initial blast?

This situation was considered in Panayiotou v Kernaghan by the Employment Appeal tribunal (EAT).

Facts:

Mr P was a police officer who made protected disclosures relating to officers’ treatment of victims.  Although an investigation largely upheld his concerns, he continued to campaign to right the wrongs he had identified and which he thought had not been rectified.  This campaign made Mr P increasingly difficult and time-consuming to manage and, after a long term sickness absence, he was eventually dismissed.

Decision:

An employment tribunal (with the EAT upholding its reasoning) held that Mr P’s disclosures were not the reason for his dismissal (or other detrimental treatment).  Rather than the disclosures themselves, it was the way in which the employee pursued his disclosures (i.e. his campaign and his employer’s increasing frustration) which lead to the employer treating him in the manner that it did.  Although these events were related to the disclosures, they were distinct from the disclosures.

What this means for employers:

The way in which Mr P continued to blow the whistle in this case was not acceptable to the employer and it meant that the continual noise was separated from the initial toot drawing the employer’s attention to a matter of concern.  However, this is a fact specific case and it will be rare that an employee’s subsequent actions will be capable of being separated from the initial disclosure (in that they are “in no sense whatsoever connected with the public interest disclosures”, as the employment tribunal had found in this case).  In this case, events occurred over a number of years and the employment tribunal commented “the actions of the claimant were sufficient to try and to exhaust the patience of any organisation”.

Employers should also bear in mind that police officers do not have a statutory right not to be unfairly dismissed and it may well have been that the dismissal of another employee in these circumstances would have been unfair, even if it was not by reason of the employee making protected disclosures.

This is an area where employers should tread carefully and seek advice if they think that an employee has blown the whistle but may subsequently be behaving unreasonably.  An initial investigation into the whistleblowing allegations should always be carried out.

Contact Details

For more details about whistleblowing please contact:

fgmedia@fgsolicitors.co.uk

+44 (0) 1604 871143

This update is for general guidance only and does not constitute definitive advice. 

Illegal working and discrimination claims

right to work evidenceEmployers should be aware that they need to check whether a person has the right to work in the UK prior to employing them.  This is a particularly important step given that the civil penalty for employing a person who does not have the right to work increased from £10,000 to £20,000 per employee from 6 April 2014.

If an employer discovers that they have illegal workers (or have known this since the beginning of their employment) they may believe that such workers will have no right to bring an employment tribunal claim because they are working under an illegal contract.  The Employment Appeal Tribunal (EAT) has held in Wijesundera v Heathrow Logistics (2013) that this is not the case.

In this case, Ms W commenced work before obtaining a work permit and knew that she was working unlawfully.  She was subsequently dismissed and brought a claim for sexual harassment – she claimed that she was seriously sexually assaulted.  The EAT held that the claim for sexual harassment (save for the dismissal) could be considered despite Ms W’s unlawful work status.

A successful sexual harassment claim from an illegal worker is perhaps not the most obvious consequence of failing to check right to work documents.  A discrimination issue which is more likely to arise is that of ethnic minorities suggesting they are being discriminated against if there is not a clear policy for checking right to work documents of all employees.

This could arise because, for example, an employer decides that it is unnecessary to check right to work documents of white workers because they clearly have the right to work.  Even if the white workers do have the right to work (because, for example, they are British citizens), how does the employer decide which other workers’ documents should be checked?  If the employer checks the passport of an individual of Asian ethnicity but who was born in Britain, the only difference between the requirement to provide right to work documents is the employee’s ethnicity.  This could therefore amount to race discrimination.

It is worth providing a quick reminder of what to look for when checking right to work documents of all staff (this is just a brief list which by no means covers all obligations):

  1. Check that the documents have not expired (although UK passports may have expired).
  2. Check that photos in the documents look like the employee.
  3. Check that the date of birth on the document seems consistent with the employee’s appearance.
  4. Check that any visa covers the type of work they will be doing (including any limit on the number of hours they can work).
  5. If 2 documents have different names on, make sure there is a good reason and evidence for this (eg. marriage/divorce).

Ensure that you check the full list of documents required on the Home Office website and ensure that you keep a copy of any documents to evidence that you have carried the above process out for all staff.  This will assist in avoiding both discrimination claims and fines for employing illegal workers.