Breeze & Wyles Solicitors LLP Employment Law Update

BREEZE & WYLES SOLICITORS Employment Law Update July 2012

Dear Employer

The holiday time is upon us, and just to dampen your enthusiasm (as if the recent rain hadn’t already done so), the European Court of Justice has ruled that workers who are ill during paid annual leave are able to interrupt the annual leave and take it at a later date, irrespective of whether the sickness started before or during their holiday. (See below.)

Despite that, we hope that you manage to enjoy a well-earned break this summer, preferably somewhere hot and sunny – assuming you can drag yourself away from the Olympics. As usual, if you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Cases in Employment Law

Annual Leave and Sickness

The ECJ has recently made a decision which will affect all EU members. In a Spanish case the ECJ held that the EU Working Time Directive requires that a worker who is sick during paid annual leave is able to interrupt the annual leave and take it at a later date, irrespective of whether sickness commenced before or during the annual leave. The ECJ (on appeal) reiterated that the right to paid annual leave is an important principle of EU social law. The purpose of it is to enable workers to rest and enjoy a period of relaxation and leisure; on the other hand, the purpose of sick leave is to enable a worker to recover from an illness that has caused him to be unfit for work. The Court had already held in a previous Spanish case that a worker who was on sick leave prior to, and during, a period of previously scheduled annual leave had the right, at his request, to take the annual leave when he had recovered.In this case, the ECJ held that the point at which the temporary incapacity for work arose is irrelevant. A worker can take paid annual leave which coincides with sick leave at a later time, irrespective of the point at which he became incapable for work. Essentially, it means that workers who fall sick when they are on holiday will end up being able to take extra holiday. [Asociacion Nacional de Grandes Empresas de Distribucion (ANGED) v Federacion de Asociaciones Sindicales and ors]

Carrying forward accrued holiday entitlement

Continuing the holiday theme, the question often arises as to how long a sick worker can carry forward accrued holiday entitlement. The lead authority from the European Court of Justice approved a carry forward period of 15 months. (Neidel v Stadt Frankfurt am Main 2012). Employers and vicarious liability Recent judgments by the Court of Appeal have potentially expanded the situations in which employers may be found vicariously liable for the acts of their employees. The current test of whether an employer is vicariously liable focuses on the closeness of the connection between the act of the employee and the duties he or she is engaged to perform, as broadly defined. This test required a value judgment by the Court taking account of all the circumstances of the case and looking at the matter in the round. The recent judgment in two combined appeals has made it clear that it is not sufficient that the employment simply provides the opportunity to commit the wrongful act. An irrational act of violence committed promptly in response to lawful instructions is now likely to suffice. In one of the cases in question, an employee had called his boss, the Deputy Manager of a care home, to report in sick. The claimant followed the usual practice of ringing around to find cover. He telephoned another employee, Mr Marsh, who was drunk and refused to cover the shift. Mr Marsh then went to the care home, saw his boss in the garden and immediately attacked him. At first instance, the Judge found there was no vicarious liability as there was insufficient connection to Mr Marsh’s employment. The Court of Appeal upheld this, saying that the instruction or request was no more than a pretext for an act of violence unconnected with work. [Weddell v Barchester Healthcare Ltd]

In the other case, the Claimant was attacked by Mr Brown, a junior employee, because he had taken Mr Brown to task over performance and asked him to assist with the work task. Mr Brown threw him onto a table, injuring his back. At first instance, the Judge held that Mr Brown was not acting in the course of his employment. However, the Court of Appeal found that the required connection between the act and the employment was present. [Woolbank v Woolbank Fox Designs Ltd]

Employee Status – does it matter who pays the wages?

Just in case anyone was wondering whether lap dancers were employees of the place where they perform, a recent case has shown that a lap dancer was an employee. In Quashie v Stringfellows Restaurants Ltd, the Employment Appeal Tribunal had to consider the situation. The Tribunal had found that in this case the lap dancer was not an employee but the EAT said that although her earnings came entirely from customers rather than from Stringfellows, she was paid for work done. The case showed that employment status is not decided by reference only to the source or the root of the payment, and the Tribunal was wrong to focus narrowly on the “wage/work” bargain, as that does not encompass all forms of bargains within employment relationships.

What’s in the pipeline

Pension Alert

Employers should remember that on 1st October 2012, the first of the stages for the new pension regulations comes into force. An employer’s staging date will be based on the number of people in its PAYE scheme from 1st April 2012. 1st October 2012 will be for employers who have 120,000 or more people in their PAYE scheme; at the other end of the scale, the date for those with 250-349 people will be 1st February 2014.

For smaller companies, the important date will be 1st October 2014. The staging timetable is available on the DWP website.

National minimum wage

On 1st October 2012 this will increase from £6.08 to £6.19 an hour (main rate). The youth rate and the rate for workers aged 16-17 stay the same. The apprentice rate will increase from £2.60 to £2.65 per hour. The accommodation offset increases from £4.73 to £4.82 per day.

Proposed fees for Employment Tribunal Claims

It is the Government’s intention to introduce fees for bringing and continuing Employment Tribunal claims. These would be introduced in the latter half of 2013. They will be charged in two stages: the first at the issue of the claim and the second prior to the hearing. Those on low incomes will be excused payment (following the Civil Courts system). Also, Tribunals will be given a discretionary power to order the losing party to pay any costs that the successful party incurred by way of fees. There will be two levels of fees: Level 1: Straightforward claims, e.g. unauthorised deductions from wages and redundancy payments. There would be a fee of £160 for issuing the claim and a further £230 at the hearing stage. Level 2 claims would involve more complex issues e.g. unfair dismissals and discrimination. Those fees would be £250 and £950. There would also be a fee structure for multiple claims (those involving more than one claimant). The idea is that the fees can encourage people to consider further whether a formal claim needs to be lodged at a Tribunal or whether it can be settled informally e.g. by mediation, conciliation etc. Even if a claim is started, then the further fee to be paid before the hearing would give the parties a chance to consider their position.

The Employer Traps and Other Tips

Pay in lieu of holiday Remember that when employment is terminated an employee must be paid in lieu for statutory holiday accrued but untaken. That applies even if it was because they were off sick (and receiving sick pay). However, the obligation is merely to pay it up to a maximum of 4 weeks (the minimum period under the EU directive), irrespective of any further entitlement allowed by the nation state (e.g. our 8 Bank Holidays).

Misconduct and payments in lieu of notice

A recent case has highlighted the need to ensure that employment contracts and service agreements provide for the employer being able to avoid paying money in lieu of notice where it is subsequently discovered that the employee is guilty of gross misconduct.

Other news from Breeze and Wyles

Debt Recovery Service

We offer a low cost, fixed fee debt recovery service aimed at assisting businesses to chase unpaid invoices. An initial letter to a debtor costs just £2.00 plus VAT. This means that businesses can cost effectively chase their aged debtors. Many businesses now use this service to chase debts that otherwise would have been written off, because it offers such a cost effective and efficient solution.

For further information please contact Rita Wright at: rita.wright@breezeandwyles.co.uk or telephone 01992 558411.

Breeze and Wyles Solicitors LLP are a leading law firm with offices throughout Hertfordshire and Middlesex, providing quality legal service in all of the mainstream areas of the Law for over 90 years. We are one of very few law firms that offer services online.

Check out our services Solution for volume legal instruction at www.breezeplus.co.uk

We have been awarded Lexcel Accreditation and are regulated by the Solicitors Regulation Authority. For further information on any of the issues referred to in this newsletter, or any other employment matter, please contact Jane Dismore at: 2nd Floor, Stag House, Old London Road, Hertford, SG13 7LA

 

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