Monthly Archives: April 2014

Employment Law Update Seminar – June 2014

Employment Law Changes 2014Employment Law Update 2014 – An Employer Focused Update

Date: Thursday 5th June 2014

Time: 8:00-10:00am              Cost: Free

Venue: FG Solicitors Offices, 2 Deanery Court, Grange Farm, Preston Deanery, Northampton, NN7 2DT

If you have managed to keep on top of the numerous employment law changes this year, you are either a genius or you have too much time on your hands.  For everyone else, you will benefit by attending our employer focused seminar on key employment law changes by showing how they would work in practical case-study examples.  The key changes we will cover include:

  • Flexible working – requests for all
  • Employment Tribunals – penalties, fees and mandatory Early Conciliation
  • TUPE – more flexibility
  • Illegal working  – increased penalties
  • Whistleblowing – public interest test
  • And much more…

To avoid disappointment reserve your place by completing the booking form below:

To book your place at our seminar, please contact us using the details below:

+44 (0) 808 172 93 22

We look forward to seeing you at our next seminar.

If you feel this seminar would benefit other colleagues or companies please feel free to forward the details on.

Holiday Pay and Overtime

HolidaySUMMARY: The EAT is due to consider 2 cases in relation to whether overtime  payments should be taken into account when calculating holiday pay on 30 and 31 July 2014.

Legal Background

Employees are entitled to be paid at the rate of a week’s pay in respect of each week of annual leave to which they are entitled in relation to their statutory 5.6 weeks’ (or 28 days’) holiday entitlement (to include public holidays).

A week’s pay is either:

  1. The normal rate of pay, if the employee’s hours or pay for amount of work done does not vary; or
  2. The average remuneration over the previous 12 weeks if the employees’ hours or remuneration due to the time that they work (shift work) or the amount of work done (piece work), varies.

Where a worker does not have normal working hours (for example, they do not have to work a minimum number hours per week), their holiday pay should be calculated to include any overtime payments and commission earned in the past 12 weeks (and then averaged).

This update considers the position in calculating holiday pay in relation to the first category of employees (those with normal working hours).

There are a number of cases which deal with the issue of overtime payment and holiday pay where an employee has normal working hours.  Whilst guidance is given, there is no definitive position as to whether overtime should be taken into account when calculating holiday pay.

Original indications that it is not necessary to take overtime into account

It has been thought that only overtime that is obligatory on both sides (ie the employer is obliged to provide it, and the employee is obliged to work it) constitutes part of the worker’s normal working hours. This triggers the right for it to be taken into account for the purposes of holiday pay.

A Court of Appeal case (Bamsey and ors v Albon Engineering and Manufacturing plc 2004) held that where an employee works compulsory, but not guaranteed, overtime, they are not entitled to be paid an equivalent amount during the holiday period, but just their contractual hours.

An employment contract might state whether overtime is guaranteed or not.  If the contract is silent (or if the reality contradicts the contract) as to overtime being guaranteed, if employees are regularly working overtime, it could be argued that a contractual term has been implied into the contract that overtime is part of their normal hours (and therefore should be taken into account when calculating holiday pay).

More recent cases

It is now however doubtful whether this case (Bamsey) is compliant with EU law and an ECJ decision (British Airways plc v Williams and ors) suggests that supplementary payments should be maintained during annual leave to the extent that they are “intrinsically linked” to the performance of contractual duties.  In principle, such payments might include bonuses, commission, overtime pay, performance-related pay, call-out supplements and anti-social hours allowances.

A recent Employment Tribunal decision has followed the ECJ decision on this point (Neal v Freightliner Ltd).  This case suggests that overtime should be taken into account in calculating holiday pay even where it is voluntary as opposed to compulsory.  It only applies to the first 4 weeks of annual leave.  It should be noted that this is only an Employment Tribunal decision and not binding.

An Employment Tribunal in Scotland also came to a similar decision (Fulton and anor v Bear Scotland Ltd).

However, an employment judge took a different view in Elms v Balfour Beatty Utilities Solutions Ltd.  The judge held that a worker’s holiday pay could be calculated with reference to his basic pay for his 40 “normal working hours” a week.  Overtime payments, standby payments and bonus payments did not need to be taken into account.

The Neal v Freightliner Ltd case and the Scottish case are due to be heard by the Employment Appeal Tribunal (EAT) on 30 and 31 July 2014 (originally these were scheduled for 10 April 2014).  However, the judgment may be delivered on a later date.

Current position

Where overtime is both compulsory and guaranteed it should be taken into account when calculating holiday pay.

However, as you can see, there is significant uncertainty as to whether overtime should be taken into account in other instances when calculating holiday pay, where an employee has normal working hours.  The EAT case in July may resolve this.

In the meantime, employers who are considering whether to take overtime into account should take legal advice.  On the one hand, taking overtime into account may reduce the risk of unlawful deduction from wages claims, on the other it may create an unnecessary contractual entitlement to overtime being taken into account in the future.

If employers await the EAT’s judgment, they should bear in mind that the hearing date could change again, the appeals could be withdrawn, the judgment may be delivered some time after the hearing, and the judgment may be appealed.

Contact Details

For more details about calculating holiday pay please contact:

+44 (0) 1604 871143

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


When does office banter go too far?

A silent office canBullying be a little disturbing; a few jokes can bring the team together and promote a more pleasant environment to work in.

However, not everyone has the same sense of humour.  When should someone’s lack of sense of humour or poor taste in jokes cause an employer concern?  Why should an employer try to prevent banter from going too far and what does “going too far” mean?

We try to answer these questions below by considering some key areas where office banter might amount to discrimination, particularly highlighting a couple of common misconceptions.

Misconception 1 – Employers do not need to be concerned about a team member’s derogatory comments about gay people if no one in the team is gay.

This is not true for the following reasons:

The Equality Act 2010 provides for protection against discrimination of workers with various “protected characteristics”.  These protected characteristics include sexual orientation, but also age, race, disability, sex, gender reassignment, religious or philosophical belief, maternity and pregnancy and marriage and civil partner status.

An employee’s conduct can amount to harassment if it is related to a protected characteristic.  If the conduct is related to a characteristic, a person does not need to actually have that characteristic.  For example, if employees shun a co-worker because they think he is gay or because he has a friend who is gay, even if the co-worker is not gay, the conduct is related to the sexual orientation characteristic, so it could amount to harassment (a type of discrimination).

In the case of English v Thomas Sanderson Limited (2008), an employee’s “tormentors” repeatedly called him names such as “faggot”, because he had attended boarding school and lived in Brighton. The employee was not gay, his “tormentors” did not believe he was gay and he knew his tormentors did not believe him to be gay.  The Court of Appeal held that this “homophobic banter” directed at the employee could be unlawful harassment.

Misconception 2 – if an employee themselves starts the banter they cannot later claim that they were discriminated against.

This is not true for the following reasons:

Part of the definition of sexual harassment is that the conduct is “unwanted”.  An employer may try to argue that the conduct cannot be “unwanted” if the employee themselves has initiated sexual banter.

However, in the case of Munchkins Restaurant and another v Karmazyn and others (2010), the Employment Appeal Tribunal (EAT) made it clear that conduct may be “unwanted” even if an employee has put up with conduct over a number of years, and even if the employee has initiated talk of a sexual nature as a coping strategy.

The unwanted conduct in this case included asking the employees about their sex lives.  The employees initiated banter by asking their boss questions about his love life as they found this made him easier to handle and was a tactic to divert attention away from their own sex lives.

Why should employers do anything about office banter and what can they do?

If comments in the office do amount to discrimination, employers should bear in mind that the offended employee could bring the following employment tribunal claims:

  1. For discrimination, such as harassment (which in theory would have unlimited compensation); and
  1. If the employee resigns because of the discrimination, they could bring a claim for constructive unfair dismissal, arguing that the duty of trust and confidence has been breached.

To avoid such situations arising, employers should ensure that employees are aware of how their comments could be perceived by others.  Harassment can be unintentional or subtle.  It may involve nicknames, teasing or name calling which may not be intended to be malicious.

Sometime a quiet word with an employee whose comments may have over-stepped the mark could be sufficient, but in more serious cases employers should not be reluctant to use their disciplinary policy to enforce non-discriminatory principles.

It is also a good idea to provide employees with training in relation to discrimination both on induction and regularly thereafter.  As part of this, it is a useful reminder that employees can be personally liable for unlawful discrimination committed by them during their employment.

These steps may just make employees think twice before making a discriminatory comment too far during office banter.

This is a featured article from the April 2014 edition of FGazette, the quarterly newsletter for FG Solicitors. To view past editions and to read other similar articles please click on the following link: 

Extending Flexible Working – A Free For All!


SUMMARY: The Children and Families Act 2014 is extending the right to request flexible working.

Current position

Until June 2014 only parents of children under 17, or 18 in the case of parents of disabled children, and those caring for an adult can apply to work flexibly under the statutory flexible working regime.

The Children and Families Act 2014

On 30 June 2014, the Children and Families Act 2014 will extend the right to request flexible working to all employees who have 26 weeks’ continuous service. This means that all employees who satisfy the continuous service requirement will have a statutory right to ask their employer for a change to their terms and conditions of employment to work flexibly. This could for example include homeworking, part time working, flexi time, job sharing or shift work.

A new duty to deal with requests in a “reasonable” manner

Those employers who have managed flexible working requests before will be aware that there is a prescriptive statutory procedure with defined deadlines, which has to be followed. This procedure will be replaced with a duty to deal with requests in a “reasonable” manner.

To support employers in ensuring that requests are dealt with reasonably,   there will be an ACAS Code of Practice (Handling in a reasonable manner requests to work flexibly) and guidance. In summary, the draft Code and guidance suggests as follows:

  • An employer should arrange to meet with the employee to discuss their request once received unless it is happy to accept the proposal.
  • Consideration should be given to allowing the employee to be accompanied by a trade union representative or a work colleague.
  • Employers should weigh up the benefits of the request against any adverse impact on the business. Possible outcomes could be:
    • compromise agreed; or 
    • request rejected, on one of the eight specified “business reasons”.

If the request is rejected employees should be advised of the “business reason” for this:

  1. the burden of additional costs;
  2. an inability to reorganise work amongst existing staff;
  3. an inability to recruit additional staff;
  4. a detrimental impact on performance;
  5. a detrimental impact on quality;
  6. detrimental effect on ability to meet customer demand;
  7. insufficient work for the period the employee proposes to work; and
  8. a planned structural change to the business.

(Notably, these are the eight business reasons provided for under current legislation.)

  • Employees should be advised of the decision in writing together with any right of appeal.
  • The consideration process including the right of appeal must be completed within 3 months. If it is going to take longer any extension should be agreed with the employee.
  • Employers must ensure that in coming to their decision they do not inadvertently discriminate against an employee.

Employees can only make the request once in a 12 month period.

Possibility of a trial period

Usefully the ACAS guidance suggests that where an employer is unsure about the arrangement requested, instead of rejecting the application, it could agree a temporary arrangement or a trial period. So that there is certainty, this must be communicated in writing.

Competing requests

Employers will be required to consider each application on its own merits. One area of concern is that there is no guidance on how employers will deal with competing applications and accusations of unlawful discrimination when an application is rejected. There is also no provision for prioritisation for those who have caring responsibilities.

Next step for employers

The forthcoming changes provide a useful opportunity for employers to refresh their knowledge and reflect on how they will respond to flexible working applications. A good place to start is to introduce a flexible working policy or review of an existing policy, to ensure that there is clear current guidance for both employees and manager employers. Broader operational issues should also not be overlooked. For example, if home working is introduced there should be a health and safety risk assessment and consideration needs to be given to the issue of data security.

The prospect of more employees seeking a different way of working may appear daunting, particularly for smaller organisations.  Employers when deciding how to respond should however not overlook the benefits of allowing staff a better work life balance, which can have a significant and positive effect on attendance, productivity and retention.

Contact Details

For more details about an employee’s right to work flexibly and introducing a Flexible Working Policy please contact:

+44 (0) 1604 871143

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

Changes on April 6 2014

Megaphone - Hot Off the Press (123rf ref 8981071)

SUMMARY: A number of statutory changes come into force on April 6 2014 which employers should be aware of.  A summary of the key changes is set out below.

Mandatory Pre-Claim ACAS Conciliation

A duty on the parties and ACAS to attempt pre-claim conciliation will be introduced, involving a four-stage procedure for early conciliation, which must be attempted before a claim can be pursued.  This will be operational from 6 April 2014 and mandatory from 6 May 2014.

Discrimination Questionnaires

Statutory discrimination questionnaires will be abolished.  Acas has published good practice guidance on how employers should deal with questions regarding discrimination in the workplace after statutory discrimination questionnaires are abolished:

Statutory Sick Pay

The Statutory Sick Pay record-keeping will be abolished in favour of giving employers the discretion to use a system which suits them.

The Percentage Threshold Scheme currently enables employers to reclaim Statutory Sick Pay (SSP) from HMRC, where the total SSP paid in a month exceeds 13% of their Class 1 National Insurance contributions for that month.  This scheme is to be abolished.

Financial Penalties

Financial penalties for losing employers may be imposed by a tribunal.  A tribunal will have the power to order an employer who has lost at tribunal to pay a financial penalty of up to £5,000 to the Secretary of State, where the case has “aggravating features”.

Increased Penalty for employing illegal workers

The maximum civil penalty for illegally employing an immigrant will increase from £10,000 to £20,000.  This provides an additional incentive for employers to check that they have the relevant right to work documents recorded on file.

Unfair dismissal compensatory award

The maximum compensatory award for unfair dismissals where the Effective Date of Termination falls before 6 April 2014 is £74,200. This will be increased to £76,574 (or 52 weeks’ gross pay, if lower) where the Effective Date of Termination falls on or after 6 April 2014.

Week’s pay

The maximum amount of a week’s pay, used to calculate statutory redundancy pay (among other things), is currently £450. This will rise to £464 from 6 April 2014.

Pension protection regime (TUPE)

Transferee employers will have the option to match the transferor’s level of employee pension contributions into a defined contribution scheme, even if they are less than the current minimum of 6%.

This is to avoid the situation where employees could be in a more favourable position than they would have been if they had not transferred.

Contact Details

For more details about these changes please contact:

+44 (0) 1604 871143

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

FGazette April 2014

April 2014 FGazette

Welcome to the latest edition of FGazette! The quarterly newsletter of FG Solicitors – Lawyers for today’s employers.

We are delighted to present the April edition of the FGazette, which focuses on Discrimination.

If you have any problems viewing this link, please contact us on 01604 871143 or